[Federal Register: February 8, 2007 (Volume 72, Number 26)]
[Proposed Rules]
[Page 5947-5958]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08fe07-19] ============================================================
----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Parts 371, 375, 386, and 387 [Docket No. FMCSA-2004-17008]
RIN 2126-AA84 Brokers of Household Goods Transportation by Motor Vehicle AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice of proposed rulemaking (NPRM); request for comments. ----------------------------------------------------------------------- SUMMARY: FMCSA proposes to amend its regulations to require brokers who
arrange the transportation of household goods in interstate or foreign
commerce for consumers to comply with additional consumer protection
requirements. 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 educate and inform
consumers and brokers about fair and competitive business practices
proposed by the FMCSA. DATES: FMCSA must receive your comments by May 9, 2007. ADDRESSES: You may submit comments, identified by DOT DMS Docket Number
FMCSA-2004-17008, by any of the following methods: - Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
- Agency Web Site: http://dms.dot.gov. Follow the
instructions for submitting comments on the DOT electronic docket site.
- Fax: 1-202-493-2251.
- Mail: Docket Management Facility; U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590-0001.
- Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
Instructions: All submissions must include the agency name and
docket number (FMCSA-2004-17008) or Regulatory Identification Number
(RIN) for this rulemaking (RIN 2126-AA84). Note that all comments
received will be posted without change to http://dms.dot.gov, including
any personal information provided. Please see the Privacy Act heading
for further information. Docket: For access to the docket to read background documents or
comments received, go to http://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays. Privacy Act: Anyone is able to search the electronic form for all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477) or you may visit http://dms.dot.gov. Comments received after the comment closing date will be included
in the docket and we will consider late comments to the extent
practicable. FMCSA may, however, issue a final rule at any time after
the close of the comment period. FOR FURTHER INFORMATION CONTACT: Ms. Dorothea Grymes, Household Goods
Team, Commercial Enforcement Division, (202) 385-2400, FMCSA,
Department of Transportation, 400 Seventh Street, SW., Washington, DC
20590. SUPPLEMENTARY INFORMATION: Legal Basis for the Rulemaking The Secretary of Transportation's (Secretary) general jurisdiction
to establish regulations concerning the procurement by property brokers
of for-hire transportation in interstate or foreign commerce is found
at 49 U.S.C. 13501. Brokers of household goods are a subset of all
property brokers but specifically register with FMCSA as household
goods brokers. This rulemaking applies only to household goods brokers
procuring 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). Brokers of household goods are required to
register with the Secretary by 49 U.S.C. 13904(a)(1). Section 4142 of
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) (Pub. L. 109-59), which made changes to
certain other registration requirements, did not change registration
requirements [[Page 5948]] for household goods brokers. 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, otherwise known as Title IV, Subtitle B of SAFETEA-LU. 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. FMCSA will address the SAFETEA-LU provisions specifically
directed to household goods motor carriers in separate rulemakings, as
appropriate. While section 4205 of SAFETEA-LU contains estimating requirements
for household goods motor carriers, the general authority cited above
allows FMCSA to establish such requirements for household goods
brokers. Section 4212 of SAFETEA-LU directs the Secretary to require a
household goods broker to provide shippers with the following
information whenever the broker has contact with a shipper or a
potential shipper: 1. The broker's U.S. DOT number. 2. The FMCSA pamphlet titled, "Your Rights and Responsibilities
When You Move." 3. A list of all motor carriers providing transportation of
household goods used by the broker and a statement that the broker is
not a motor carrier providing transportation of household goods. Section 4209 adds new civil penalties for unlawful broker
estimating practices and increases existing civil penalties for
providing motor carrier or broker services subject to FMCSA
jurisdiction without being registered with FMCSA. 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
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 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 time periods. FMCSA can 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. Previous Household Goods Rulemaking FMCSA regulations on household goods motor carriers and the
proposed regulations for household goods brokers are intended for the
protection of individual shippers (as defined in 49 U.S.C. 13102(13)
added by section 4202 of SAFETEA-LU). FMCSA regulations on household
goods motor carriers and the proposed regulations for household goods
brokers do not apply to corporate, government, or military-arranged and
paid moves. The Interstate Commerce Commission (ICC), one of FMCSA's
predecessor agencies, concluded that household goods brokers may not
provide estimates directly to shippers.\1\ The ICC reasoned that
shippers aggrieved by an act or omission of a broker would be
unprotected by the household goods consumer protection regulations
(currently codified at 49 CFR part 375) because only motor carriers
were required to comply with these regulations. This problem was
addressed in the Household Goods; Consumer Protection Regulations
issued by FMCSA in 2003 (68 FR 35064; June 11, 2003), which
substantially revised part 375.\2\
--------------------------------------------------------------------------- \1\ See Entry Control of Brokers, 126 M.C.C. 476 (1977); Exec-
Van Systems, Inc., Broker Application, 128 M.C.C. 669 (1978); and
Ward Moving & Storage Co., Inc., Household Goods Broker Application,
132, M.C.C. 589 (1981). \2\ These regulations were interim final rules. Following
several technical amendments, the regulations became final rules in
July 2005 (70 FR 39949, July 12, 2005).
--------------------------------------------------------------------------- In its 2003 rulemaking, FMCSA added a new Sec. 375.409 that
allowed a household goods broker to provide an estimate to a shipper if
the following requirements are met: 1. There must be a written agreement between the broker and the
motor carrier. 2. The written agreement must provide that the motor carrier adopts
the broker's estimate as its own. 3. The motor carrier must ensure compliance with all the
requirements of part 375 pertaining to estimates, including the
requirement that the motor carrier must relinquish possession of the
shipment if the shipper pays the motor carrier 110 percent of a non-
binding estimate at the time of delivery. In the preamble to the 2003 rulemaking FMCSA explained that the
individual shipper would not be deprived of the protections provided in
part 375, even if the broker could not be held directly responsible for
compliance, because the motor carrier would still be held accountable
for complying with part 375. 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 additional
requirements on household goods brokers. 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. AMSA's petition states a significant number of the complaints it
receives involve the same Internet companies, many of which are based
in Florida. AMSA argues the fact these companies are involved in moves
having no connection to Florida as an origin or destination
demonstrates the impact of the Internet on these household goods broker
arrangements and how the Internet is being used to entrap unsuspecting
consumers. AMSA states it often receives complaints from consumers who
have dealt with a Florida-based Internet broker, who in turn arranged a
move from a non-Florida origin to another non-Florida destination. AMSA
states once these brokers establish a business relationship with the
consumer, they require payment of a deposit of several hundred dollars
or more, fade from the picture, and leave the consumer to deal with, in
most cases, a motor carrier who has failed to register with FMCSA. AMSA
believes that a significant network of unscrupulous household goods
brokers and household goods motor carriers is [[Page 5949]]
functioning with the sole purpose of bilking the moving public by
demanding charges that bear no relation to the legitimate costs of
moving, or by collecting charges for services that are not performed. AMSA provided ten additional examples of complaints it has received
to illustrate the nature of the problems being experienced by the
moving public. The examples generally involve circumstances similar to
the Florida example discussed in the previous paragraph. AMSA wants FMCSA to amend our regulations to: Specifically name and include household goods brokers in
49 CFR part 371, Brokers of Property; Require a household goods broker to identify itself as a
broker and provide its location and telephone number; Add a requirement for household goods brokers to provide
consumers with 49 CFR part 375, Appendix A, the pamphlet "Your Rights
and Responsibilities When You Move;" Add a requirement that a household goods broker must only
use FMCSA-registered household goods motor carriers (those with a U.S.
DOT identification number, insurance on file with us, and registered to
transport household goods in interstate or foreign commerce); Add a requirement for full written disclosure concerning
estimates in advance of the move; Add a requirement that the broker will refund consumer
deposits if the consumer cancels the shipment; Add a requirement to advise the consumer about the
existence of the household goods broker's surety bond/trust fund; and Add a requirement to report illegal operations of
household goods carriers to us. FMCSA granted AMSA's petition and issued an Advance Notice of
Proposed Rulemaking (ANPRM) in 2004 (69 FR 76664; December 22, 2004),
which is also available in docket FMCSA-2004-17008. In the ANPRM, FMCSA
sought answers to 36 questions related to household goods broker
issues. The questions sought to determine the extent to which the
public believes a problem exists and, if so, whether regulatory or non-
regulatory solutions would best solve the problem. The ANPRM also
addressed potential cost-benefit estimates, potential information
collection burdens, and other potential impacts. The agency also
requested comments on an array of specific regulatory requirements that
should be considered. Summary of Responses to ANPRM FMCSA received comments from the following nine entities: AMSA; the
Owner-Operator Independent Drivers Association, Inc. (OOIDA), an
international trade association representing independent owner-
operators and professional drivers; the Public Utilities Commission of
Ohio (PUCO), the regulator of intrastate household goods brokers in the
State of Ohio; James Lamb, a household goods broker registered with
FMCSA under the name Carrier Authority.com, Inc.; Tom Kizer, an FMCSA-
registered broker doing business as Absolute Transportation Logistics;
Timothy Walker, owner of the Web site MovingScam.com; Norman S.
Marshall, an attorney; Noble Mountain Tree Farm, a shipper of Christmas
trees; and Roger A. Bauer of Western Wholesale Distributing. Generally, the commenters did not express support for rulemaking
action and they did not address many of the specific questions raised
in the ANPRM. For example, none of the commenters submitted specific
information relating 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 to develop
this proposal. Commenters expressed concern that household goods shippers may not
be aware they are dealing with a household goods broker rather than a
household goods carrier and that FMCSA should require household goods
brokers to disclose their status and provide information to facilitate
contacting household goods brokers in the event of problems with a
shipment. Certain commenters also urged FMCSA to require household
goods brokers to deal solely with FMCSA-registered household goods
motor carriers to minimize potential problems with a move. Timothy Walker recommends FMCSA require household goods brokers to
disclose which household goods carriers they have agreements with or,
at a minimum, which household goods carrier the household goods broker
intends to tender the customer's shipment to before the move so
customers have adequate time to research the carrier's license status
and business history. James Lamb and PUCO believe that although household goods brokers
could play some role in providing written estimates, the primary
responsibility for issuing and honoring estimates should continue to
remain with the household goods carrier and the household goods broker
should be required to advise the customer of this fact. PUCO and AMSA believe household goods brokers should be required to
refund a deposit required by a household goods broker, minus the
reasonable cost of any services provided, if the shipper cancels the
shipment. James Lamb believes that if a household goods broker requests
deposits for a planned shipment, the household goods broker should
disclose the deposit's terms to the shipper. FMCSA has adopted some of the commenters' suggestions in the
proposed rule, as discussed in more detail in the section headed
"Proposed Rule". Continuing Problems With Household Goods Brokers While FMCSA has addressed certain household goods broker issues in
recent years, a number of problems remain. Based on FMCSA's review of
the responses to the ANPRM and complaints about household goods
brokers, the agency believes some household goods brokers are acting
deceptively, particularly on the Internet. These broker operations use
various disguises and facades to mislead vulnerable consumers into
believing that they are complying with FMCSA regulations. For example,
a consumer may visit a Web site and be presented with misleading
information for moving services. The Web sites may list a number of
motor carriers that are performing transportation services, however,
the list on the Web site may include some motor carriers that do not
have operating authority from FMCSA to engage in the interstate
transportation of household goods. There are several factors contributing to the problems experienced
by shippers in using household goods brokers: 1. Minimal or no requirement to disclose contact and nature of
operations information. The Internet has provided an easy way for
companies to advertise; however, it also makes it possible for
unscrupulous companies to effectively conceal their identities, avoid
disclosing the true nature of their operations, make misrepresentations
to consumers, and defraud the moving public. 2. No protection of consumers from unlicensed, illegal motor
carriers. Evidence from complaints filed with FMCSA by some consumers
show household goods brokers have arranged for transportation by
unregistered motor carriers. Such carriers are frequently not
accountable to customers, whose [[Page 5950]] attempts to obtain redress for problems associated with the move may be
ignored or otherwise undermined. 3. The practice of quoting estimates of charges without providing
written documents. Unscrupulous brokers often fail to give consumers
written estimates of charges, which permit them to avoid accountability
when conflicts later arise. This is compounded by the fact that
consumers are often persuaded to do business with the broker on the
basis of an unrealistically low estimate, but may be required to pay
substantially higher transportation charges under the tariff of the
motor carrier transporting the shipment. 4. No requirement for brokers to disclose refund policy for
customers' deposits when shipments are cancelled. Shippers have alleged
household goods brokers have consistently not made clear their customer
deposit refund policies. 5. No significant identifiable capital investment, reputation and
standing in the community, or insurance concerns. Because many
household goods brokers make such small investments in their business,
there is a lack of incentive to protect this investment by following
generally accepted business practices of fair and honest dealings with
their customers. 6. Consumer lack of knowledge and experience with moving
transactions. Household goods brokers are dealing with a relatively
unsophisticated group of shippers who may not be familiar with the
applicable regulatory requirements, thus highlighting the need for
specific corrective actions to better educate consumers so they can
better protect themselves against substantial financial and property
losses. 7. Internet brokers providing false or inaccurate information on
their Web sites. A number of Internet brokers are providing false or
misleading information on their Web sites, contrary to current
"advertising" requirements in part 371. The Proposed Rule This proposal addresses the problems identified above and
incorporates requirements mandated by SAFETEA-LU, recommended by AMSA
in its petition, and some of the recommendations made by commenters to
the ANPRM. FMCSA proposes to amend the current broker regulations in
part 371 by adding a new subpart B specifically for household goods
brokers; amending appendix B of part 386 to incorporate the civil
penalties applicable to household goods brokers added by SAFETEA-LU;
and amending part 387 to increase the amount of surety bond or trust
fund currently required for household goods brokers. This proposed rule
is intended to educate and inform consumers and household goods brokers
about fair and competitive business practices the FMCSA believes should
be a part of every transaction between individual shippers and
household goods brokers. Impact on Competition The proposed rule consists of five basic elements: 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 additional requirements governing
estimates, consistent with those statutorily imposed on household goods
motor carriers. It would incorporate new statutory penalties for providing
estimates without a contract 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. The proposed disclosure requirements are intended to result in
better-educated individual shippers who, armed with information about
the household goods moving process, the regulations governing that
process, and household goods broker cancellation, deposit and refund
policies, will be in a better position to evaluate whether a particular
household goods broker or household goods motor carrier best serves
their moving needs. A more sophisticated population of customers
encourages service providers to compete for their business by offering
better quality service, adopting more customer-friendly policies or
offering lower prices. The proposed disclosure requirements, therefore,
would tend to be pro-competitive. The proposal to require household goods brokers to verify that the
motor carriers they use are properly licensed and registered to
transport household goods is intended to ensure that motor carriers
compete on a level playing field and customers receive better service.
Interstate household goods carriers are required by law to register
with FMCSA, maintain minimum levels of public liability and cargo
insurance and charge only published tariff rates. Unregistered carriers
are more likely to lack the necessary insurance and tariff and to
ignore the consumer protection regulations in 49 CFR part 375. It is
generally cheaper to operate if a carrier does not comply with the
regulatory requirements applicable to its industry. Permitting, or
failing to discourage, use of illegal motor carriers penalizes
competitors who comply with the regulations and incur the additional
costs associated with compliance. By requiring household goods brokers
to use registered, compliant carriers, the proposed rule will encourage
non-compliant motor carriers to register with FMCSA, thus creating a
level playing field that should result in better customer service
through the promotion of fair competition and the elimination of
unlawful activity. By requiring household goods brokers to put all estimates in
writing based on a physical survey of the household goods (unless the
household goods broker or its agent is located more than 50 air-miles
from the shipper's location or the shipper waives a physical survey),
the proposed rule intends to subject household goods brokers to the
same estimating requirements imposed by statute on household goods
motor carriers by section 4205 of SAFETEA-LU. Having several written
estimates will allow consumers to make more informed choices and level
the playing field. Household goods brokers commonly provide telephone
estimates without ever viewing the household goods. Experience has
shown that such estimates are less reliable than estimates based on a
physical survey. Many consumers may not realize this and choose a
household goods broker based on a low-ball telephone estimate. However,
the ultimate price, based on the shipment's weight, may be considerably
higher. By promoting more reliable estimates, the proposal will
encourage competition by standardizing the estimating rules and
reducing the "sticker shock" experienced by consumers at their new
residence after receiving and ordering moving services based on
unreasonably low estimates. FMCSA recognizes that SAFETEA-LU did not prescribe estimating
requirements for household goods brokers as it did for household goods
motor carriers. Nevertheless, we believe that we have existing
statutory authority in 49 U.S.C. 13904(c) to do this and 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 also recognize that unlike household goods motor carriers,
who maintain office and/or agency locations [[Page 5951]] in reasonable proximity to most shippers, household good brokers
commonly transact business over the Internet, commonly do not have
agents, and, in most cases, are located more than 50 miles from the
shipping site. Although household goods broker James Lamb commented his
company arranges for on-site inspections as a part of its business
practices, FMCSA believes most household goods brokers do not arrange
for such on-site inspections. The Agency invites public comment on the
impact to shippers, brokers and motor carriers of applying or removing
the 50 air-mile provision for household goods broker estimates. FMCSA
would also like comments on alternatives to the 50-mile requirement.
One such alternative might be to require that all estimates provided by
household goods brokers and motor carriers be based on a physical
survey, regardless of shipper location, unless the individual shipper
specifically waives the physical survey requirement. FMCSA also invites comment on whether permitting individual
shippers to waive a physical survey by checking an "opt-out" box on-
line would satisfy the SAFETEA-LU requirement that physical survey
waivers be in the form of a signed, written agreement. The Agency is
not specifically proposing an opt-out waiver procedure at this time,
but will consider an opt-out waiver or other waiver suggestions aimed
at making the waiver process more flexible and convenient, consistent
with statutory requirements. Comments should also address whether electronic waivers can be
provided consistent with the provisions of 15 U.S.C. 7001 et seq., the
Electronic Signatures in Global and National Commerce Act, Pub. L. 106-
229, 114 Stat. 464 (June 30, 2000). The penalties incorporated by the proposed rule are mandated by
statute and are effective even without rulemaking. They are intended to
make the cost of noncompliance with the statute significantly higher
than the cost of compliance. By encouraging compliance by illegal
operators, they are designed to eliminate unfair competitive
disadvantages to legitimate operators who must bear the cost of
compliance. The inflation adjustment to the household goods broker minimum
financial responsibility requirement applies to all household goods
brokers and is based on the fact that the protection provided by the
current required surety bond or trust agreement has significantly
diminished because the minimum amount has not changed in over 25 years.
The proposed change in the requirement should not have an anti-
competitive impact. Legitimate household goods brokers who honor their
legal obligations will continue to remain in business. FMCSA invites comments regarding the potential impact of the
proposed rule on competition within the household goods moving
industry. Subpart B--Special Rules for Household Goods Brokers Proposed new subpart B of part 371 for the most part contains new
requirements mandated by SAFETEA-LU or suggested by the AMSA Petition
for Rulemaking. A few of the proposed requirements in part 371 would
echo certain provisions of part 375 applicable to motor carriers of
household goods. Section 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 proposed section requires household goods brokers that operate
in interstate or foreign commerce to comply with all of the provisions
of subpart B. Section 371.103 What are the definitions of terms used in this subpart? This section contains a definition of "household goods broker"
and cross references the definitions of "household goods" and
"individual shipper" in Sec. 375.103. Section 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? This proposed section makes 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 U.S.DOT number and valid operating authority
issued by FMCSA. This proposed 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 degree of
assurance that the household goods motor carrier will comply with
applicable FMCSA regulations. FMCSA will provide household goods
brokers with instructions on the use of the agency's Internet Web site
(http://www.protectyourmove.gov) to help them quickly locate the
registration, insurance, and safety records of household goods motor
carriers before tendering a shipment to a household goods carrier.
These instructions will be provided in compliance guides to implement
this provision, if the agency publishes a final rule. These
instructions may also be provided in small entity compliance guides,\3\
if the agency must publish such guides in accordance with the
Regulatory Flexibility Act.
--------------------------------------------------------------------------- \3\ For each final rule requiring a final regulatory flexibility
analysis, section 212 of the Small Business Regulatory Enforcement
Fairness Act of 1996, Pub. L. No. 104-121, 110 Stat. 857 (codified
at 5 U.S.C. 601 et seq.) requires Federal agencies to publish one or
more small entity compliance guides. FMCSA has determined
preliminarily in its analysis under the Regulatory Flexibility Act
(5 U.S.C. 601-612), discussed later in this NPRM, that this proposed
rule will most likely not have a significant economic impact on all
690 small entity household goods brokers (and any future small
entity household goods brokers), but there remains some uncertainty
as to the impacts to individual brokers. The agency has prepared an
initial regulatory flexibility analysis. FMCSA invites comments on
its initial regulatory flexibility analysis.
--------------------------------------------------------------------------- Section 371.107 What information must I display in my advertisements
and Internet web homepage? Proposed Sec. 371.107 implements the section 4212 of SAFETEA-LU
requirements that household goods brokers disclose to potential
shippers their Department of Transportation number and that they are
not motor carriers providing transportation of household goods. FMCSA
is also proposing that household goods brokers disclose additional
information not required by SAFETEA-LU, but which FMCSA believes is
necessary to properly educate and assist individual shippers. This
section would require a household goods broker to prominently display
in its advertisements and on its Web site the following: 1. The physical location of the business.
2. Its "MC" operating authority number and U.S.DOT registration
number.\4\
------------------------------------------------------------------ \4\ FMCSA has proposed eliminating the "MC'" operating
authority number in its NPRM of May 19, 2005 (70 FR 28990) regarding
the Unified Registration System mandated by the ICC Termination Act
of 1995. Until FMCSA publishes a final rule in that proceeding, we
propose to include a requirement for the household goods broker to
display the "MC" number in its advertisements.
------------------------------------------------------------------- 3. Its status as a household goods broker. 4. A statement that the broker does not transport household goods
but that it can arrange for such transportation. Section 371.109 Must I inform individual shippers which motor carriers
I use? Proposed Sec. 371.109 requires a household goods broker to provide
each [[Page 5952]] shipper or potential shipper who has contact with the household goods
broker with a list of all household goods motor carriers used by the
broker (including their U.S.DOT and MC numbers) and a statement that
the household goods broker is not a motor carrier providing
transportation of household goods. This requirement is specifically
mandated by section 4212(3) of SAFETEA-LU. Section 371.111 Must I provide individual shippers with Federal
consumer protection information? Proposed Sec. 371.111 would require a household goods broker to
provide potential shippers with one copy of each of the two FMCSA
consumer pamphlets: "Your Rights and Responsibilities When You Move,"
and "Ready to Move?--Tips for a Successful Interstate Move." Section
4212 of SAFETEA-LU requires household goods brokers to distribute
publication ESA 03005, entitled "Your Rights and Responsibilities When
You Move". However, the publication number used in the statute
actually refers to "Ready to Move?--Tips for a Successful Interstate
Move". "Your Rights and Responsibilities When You Move" is
publication OCE 100. Section 4205 of SAFETEA-LU requires household
goods motor carriers to distribute both pamphlets and we propose to
impose the same requirement on household goods brokers. Although
section 4212 requires household goods brokers to provide consumer
protection information "whenever they have contact with a shipper or
potential shipper", we do not interpret this language to mean that the
information must be provided every time there is contact. We believe
that Congress intended that this information be furnished to individual
shippers at the time an estimate is given and the shipper may not have
come into contact with a carrier at that stage of the move. This
section permits the household goods broker to make the information
available through an Internet home page hyperlink as suggested by PUCO
in its comments or by physical distribution to each potential shipper.
Providing an Internet home page hyperlink as an option to physical
distribution will reduce regulatory burdens on the small entities
subject to this proposal. The household goods broker may distribute
each of the two publications in the form published by FMCSA or in a
modified format published by the household goods motor carrier the
household goods broker intends to use to provide the transportation,
provided the modifications comply with 49 CFR 375.213. This section would also require a household goods broker to obtain
and retain for three years an electronic or paper receipt showing that
the shipper received copies of both documents. This will enable
household goods brokers to demonstrate compliance with the distribution
requirement. Section 371.113 May I provide individual shippers with a written
estimate? This proposed section requires 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. This proposed section is consistent with 49 U.S.C. 14104(b), as
amended by section 4205 of SAFETEA-LU. In accordance with section 4209
of SAFETEA-LU, proposed Sec. 371.113(a) also requires the household
goods broker to prepare the estimate in accordance with a signed
written agreement with the motor carrier who will actually transport
the shipper's household goods. Proposed Sec. 371.113(b) requires household goods brokers to base
their estimates upon the published tariffs of the authorized household
goods motor carriers they use. Proposed Sec. 371.113(c) permits shippers to waive the physical
survey requirement. Proposed Sec. 371.113(d) requires that the records of transactions
conducted under this section be retained for as long as a household
goods broker provides estimates on behalf of an authorized household
goods motor carrier and for three years thereafter for shipments
actually arranged for the individual shipper. Section 371.115 Must I maintain agreements with motor carriers before
providing written estimates on behalf of these carriers? Proposed Sec. 371.115(a) requires 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. Proposed Sec. 371.115(b) states that the signed written agreement
required under the section is considered to be public information to be
produced on reasonable request of the public. Proposed Sec. 371.115(c) requires that the agreements required by
this section be retained for as long as a household goods broker
provides estimates on behalf of the authorized household goods motor
carrier and for three years thereafter. Section 371.117 Must I provide individual shippers with my policies for
canceling a shipment? This proposed section requires a household goods broker to disclose
its cancellation policy, deposit policy, and refund policy on its Web
site and in its customer agreements. The proposed section also requires
the household goods broker to maintain records that document requests
for cancellation and the disposition of cancellations, i.e., proof of
refunds when made. FMCSA has found that household goods brokers have consistently
retained customer deposits even when the customer cancels the shipment
well in advance of the planned moving date. In its Petition for
Rulemaking and comments to the ANPRM, AMSA proposed that, before a
deposit can be demanded by the household goods broker, the broker must
make full disclosure of the terms governing deposits and forfeitures in
the event of cancellations. This would add an additional layer of
protection for the consumer. FMCSA does not believe it should mandate the specifics of a
household goods broker's refund policies nor require household goods
brokers to refund deposits, as the household goods broker may have
incurred legitimate costs on behalf of shippers who subsequently decide
to not use the household goods broker's services. Section 371.119 What must I do before I arrange with a motor carrier to
transport household goods in interstate or foreign commerce? This proposed section requires that each household goods broker
must "inspect, verify, and document" the household goods motor
carrier's U.S.DOT registration and MC operating authority validity each
month. The household goods broker would comply with this requirement by
using FMCSA's Internet Web site (http://www.protectyourmove.gov) to
check whether the motor carrier has active for-hire authority to
transport household goods and evidence of the necessary financial
responsibility on file with FMCSA. The household goods broker must
print or electronically save a copy of the on-line report(s) showing
the information it has verified and must maintain the information for
at least three years. FMCSA will provide detailed instructions on how
[[Page 5953]] http://www.protectyourmove.gov) in its compliance guides to implement this
provision, if the agency publishes a final rule. These instructions may
also be provided in small entity compliance guides.\5\
--------------------------------------------------------------------------- \5\ See footnote 3 above for a discussion of the small entity
compliance guide.
----------------------------------------------------------------------- In developing this proposal, FMCSA considered requiring household
goods brokers to inspect, verify, and document each household goods
motor carrier's U.S.DOT registration and MC operating authority numbers
before giving a shipper every estimate and before arranging any
shipment with a household goods motor carrier. The agency decided not
to propose this option because the costs to the 690 registered
household goods brokers would increase from approximately $42,400 to
about $220,000 per year. The agency is proposing to minimize costs
imposed on responsible small household goods brokers to the extent
practicable by proposing the checks be made on a monthly basis. See the
agency's draft Regulatory Evaluation in docket FMCSA-2004-17008 for
more information. FMCSA encourages comments and data, including cost
data, on whether any potential final rule on checking carriers'
registrations should be more or less frequent than this proposal. Section 371.121 What penalties may FMCSA impose for violations of this
part? This proposed section states that household goods brokers who
violate the provisions of subpart B would be subject to the penalty
provisions of 49 U.S.C. chapter 149. It also confirms that these
penalty provisions would not deprive a shipper of any other remedies
provided by law. Section 4209 of SAFETEA-LU amended 49 U.S.C. 14901(d)
by adding new penalties and increasing existing penalties applicable to
household goods brokers. See the discussion below under part 386,
appendix B. Proposed Sec. 371.121 would parallel current Sec.
375.901. Part 375--transportation of Household Goods in Interstate Commerce;
Consumer Protection Regulations Section 375.409 May household goods brokers provide estimates? We propose changing Sec. 375.409 to state that the written
agreement between the household goods broker and the household goods
motor carrier must contain all of the items required in proposed Sec.
371.115. Part 386--Rules of Practice for Motor Carrier, Broker, Freight
Forwarder, and Hazardous Materials Proceedings Appendix B to Part 386--Penalty Schedule; Violations and Maximum
Monetary Penalties FMCSA proposes to amend paragraph (g) of appendix B by adding two
new provisions to specify the minimum civil penalties for: (1)
household goods brokers who make estimates without the necessary
contracts with household goods motor carriers in effect; and (2)
household goods brokers and household goods motor carriers who operate
in interstate commerce without the necessary FMCSA registration. These
proposed new paragraphs incorporate into our rules the penalties
established in section 4209 of SAFETEA-LU. Part 387--Minimum Levels of Financial Responsibility for Motor Carriers Section 387.307 Property broker surety bond or trust fund FMCSA proposes to add specific language to Sec. 387.307(a) to
require household goods brokers to have a surety bond or trust fund in
effect for $25,000. The ICC created the financial responsibility
requirements for household goods brokers in 1980. The requirement was
set at $10,000 to ensure shippers or motor carriers would be paid if
the household goods broker failed to carry out its contracts,
agreements, or arrangements for the supplying of transportation by
authorized household goods motor carriers. Although commenters to the
ANPRM stated that the $10,000 requirement for the surety bond/trust
fund should be raised, FMCSA does not have adequate data to determine
the appropriate amount of increase necessary for the protection of
carriers or shippers. Accordingly, FMCSA is proposing to raise the
surety bond/trust fund requirement for household goods brokers from
$10,000 to $25,000, based on adjustments for inflation. Adjusting the
$10,000 minimum figure for inflation as measured by the Consumer Price
Index, results in purchasing power of $24,490.29 in 2006. Because a
final rule based on this NPRM may not be in effect until 2008, it is
reasonable to round up to $25,000. When FMCSA obtains adequate data to
propose raising the limit higher than $25,000, FMCSA will consider
proposing that higher limit in a future rulemaking or supplemental
proposal. We invite public comment on the appropriate level of the
surety bond or trust fund. Regulatory Analyses Executive Order 12866 (Regulatory Planning and Review); DOT Regulatory
Policies and Procedures FMCSA has determined that this action is 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) because there is substantial public interest
in the interstate transportation of household goods and related
consumer protection regulations. FMCSA estimates that the maximum first-year discounted costs to the
industry of the proposed rule would be about $1.691 million, while
maximum first-year discounted costs to society of the proposed rule
would be about $1.841 million. Costs in additional years would be
dependent on new household goods brokers entering the marketplace, but
would be less than incurred during the first year. As such, the costs
of this proposal do not exceed the $100 million annual threshold as
defined in Executive Order 12866. FMCSA's full draft Regulatory Evaluation is in the docket for this
NPRM. It explains in detail how we estimated cost impacts of the
proposal. This proposal would establish additional consumer protection
regulations specifically for household goods brokers to supplement the
regulations at 49 CFR part 375, which apply to motor carriers
transporting household goods by commercial motor vehicle in interstate
commerce. FMCSA estimates these regulatory changes will produce three primary
cost impacts on household goods brokers: (1) Costs of training certain
employees on the proper application of the regulatory changes; (2)
costs to revise broker marketing materials, forms, and orders for
service, including technical writing and printing costs associated with
incorporating mandated consumer information pamphlets; and (3)
additional information collection burdens associated with the new
regulations, especially information collection burdens to travel to and
perform on-site physical surveys for written estimates, information
collection burdens to make written agreements with household goods
motor carriers, and information collection burdens to verify household
goods motor carrier authority/insurance validity. [[Page 5954]] Regulatory Flexibility Act, as Amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), as amended
by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub.
L. 104-121, 110 Stat. 857), requires Federal agencies, as a part of
each rulemaking, to consider regulatory alternatives that minimize the
impact on small entities while achieving the objectives of the
rulemaking. FMCSA has evaluated the effects of this proposed rule on
small entities as required by the RFA. This proposed rule directly
affects all household goods brokers required to register with FMCSA, of
which there are approximately 690 active, registered household goods
brokers. FMCSA estimates 100 percent of these registered household
goods brokers are small entities. FMCSA believes, based on its draft
Regulatory Evaluation, that this proposed rule will not have a
significant impact on a substantial number of small entities, but there
remains some uncertainty as to the impacts to individual household
goods brokers. FMCSA has prepared an Initial Regulatory Flexibility
Analysis. A copy of the Initial Regulatory Flexibility Analysis can be
found attached to the draft Regulatory Evaluation in docket FMCSA-2004-
17008. (See the last three pages of the Regulatory Evaluation.) FMCSA
has chosen not to certify at this stage of the rulemaking that a
significant impact will not occur and welcomes comments on our analysis
and findings. Unfunded Mandates Reform Act This proposed 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 $128.1 million or more in any
one year (2 U.S.C. 1531 et seq.). National Environmental Policy Act The agency analyzed this proposed 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 (CE) 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 proposed 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 would not result
in any emissions increase nor would 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 would not increase total CMV mileage, change the routing of
CMVs, how CMVs operate, or the CMV fleet-mix of motor carriers. This
action merely establishes regulations applicable to the business
practices of household goods brokers, who do not operate CMVs. We seek comment on these determinations. Privacy Impact Assessment FMCSA conducted a privacy impact assessment of this proposed rule
as required by Section 522(a)(5) of the FY 2005 Omnibus Appropriations
Act, Pub. L. 108-447, 118 Stat. 3268 (Dec. 8, 2004) [set out as a note
to 5 U.S.C. Sec. 552a]. The assessment considers any impacts of the
proposed rule on the privacy of information in an identifiable form and
related matters. FMCSA has determined this proposal contains 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 will seek
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.
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 may be generated by this proposal. Assumptions used for calculation of the information collection
burden include the following: (1) There are currently approximately 690
interstate household goods brokers; and (2) FMCSA estimates 125 new
household goods brokers will register with FMCSA each year, making them
subject to FMCSA regulations. Table 1 summarizes the information collection burden hours by
correlating the information collection activities with the sections of
part 371 in which they appear. See attachment A of the supporting
statement for the Paperwork Reduction Act Submission in docket FMCSA-
2004-17008 for the detailed FMCSA analysis. The table shows whether
each information collection activity was required under ICC regulations
in 1995.
Table 1
----------------------------------------------------------------------------------------------------------------
First yr. Annual hourly
Type of burden Proposed section burden burden New burden?
----------------------------------------------------------------------------------------------------------------
Household Goods Broker Old 371.3............... 41,400 41,400 No.
Transactions.
Separate accounting system \6\.. Old 371.13.............. 1,000 1,000 No.
Web site and Advertisement 371.107................. 173 32 Yes.
Information.
List and Statement.............. 371.109................. 173 32 Yes.
[[Page 5955]]
Adding Hyperlinks on Household 371.111(a)(1)........... 311 57 Yes.
Goods Broker Web site to FMCSA
Booklet Information "Ready to
Move" and "Your Rights and
Responsibilities When You
Move".
Distribute FMCSA's Booklets..... 371.111(a)(2)........... 1,250 1,250 Yes.
Distribute Household Goods Motor 371.111(a)(3)........... 1,250 1,250 Yes.
Carrier's Booklets.
Shipper's Signed and Dated 371.111(b)&(c).......... 29,140 29,140 Yes.
Statement.
Travel to location within 50 air 371.113................. 37,500 37,500 Yes.
miles of broker and physically
survey household goods.
Written agreement with household 371.115................. 13,800 2,500 Yes.
goods motor carrier.
Disclose cancellation, deposit, 371.117(a).............. 173 32 Yes.
and refund policies.
Disposition of shipper's cancel 371.117(b).............. 250 250 Yes.
request.
Carrier monthly operating 371.119................. 1,400 1,400 Yes.
authority status check.
--------------------------------
"Old" Burden Hours........ ........................ 42,400 42,400
New Burden Hours............ ........................ 85,420 73,450
----------------------------------------------------------
Total Burden Hours for ........................ 127,820 115,850
This Information
Collection.
-----------------------------------------------------------------------------------------------
\6\ FMCSA believes setting up the first accounting system for a new business is a usual and customary business
practice. The PRA regulations at 5 CFR 1320.3(b)(2) allows 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.
The supporting statement in the docket demonstrates that setting up and accounting system is a usual and
customary practice when starting a new business. FMCSA seeks comment on whether setting up the first
accounting system for a new business is a usual and customary business practice. Executive Order 12988 (Civil Justice Reform) This rulemaking meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, entitled "Civil Justice Reform," to
minimize litigation, eliminate ambiguity, and reduce burden. Executive Order 13045 (Protection of Children) FMCSA has analyzed this proposal under Executive Order 13045,
entitled "Protection of Children from Environmental Health Risks and
Safety Risks." The agency does not believe this proposed rulemaking
would be economically significant, nor does it concern an environmental
risk to health or safety that may disproportionately affect children. Executive Order 12630 (Taking of Private Property) This proposed rule would not effect a taking of private property or
otherwise have taking implications under Executive Order 12630,
entitled "Governmental Actions and Interference with Constitutionally
Protected Property Rights." Executive Order 13132 (Federalism) This proposed action has been analyzed in accordance with the
principles and criteria contained in Executive Order 13132. The FMCSA
has determined that this rulemaking would not have a substantial direct
effect on States, nor would it limit the policy-making discretion of
the States. Executive Order 13211 (Energy Effects) FMCSA has analyzed this proposed 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., a cost of more
than $100 million in a single year) based upon analyses performed at
this stage of the rulemaking process, and is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy. Executive Order 12372 (Intergovernmental Review) The regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this program. List of Subjects 49 CFR Part 371 Brokers, Motor carriers, Reporting and recordkeeping requirements. 49 CFR Part 375 Advertising, Arbitration, Consumer protection, Freight, Highways
and roads, Insurance, Motor carriers, Moving of household goods,
Reporting and recordkeeping requirements. 49 CFR Part 386 Administrative practice and procedure, Brokers, Freight forwarders,
Hazardous materials transportation, Highway safety, Motor carriers,
Motor vehicle safety, Penalties. 49 CFR Part 387 Buses, Freight, Freight forwarders, Hazardous materials
transportation, Highway safety, Insurance, Intergovernmental relations,
Motor carriers, Motor vehicle safety, Moving of household goods,
Penalties, Reporting and recordkeeping requirements, Surety bonds. For the reasons discussed above, FMCSA proposes to amend title 49,
Code of Federal Regulations, chapter III, subchapter B, as set forth
below: PART 371--BROKERS OF PROPERTY 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. 2. Amend part 371, by adding 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? [[Page 5956]] 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 for
canceling a shipment? 371.119 What must I do before I arrange with a motor carrier to
transport household goods in interstate or foreign commerce? 371.121 What penalties may FMCSA impose for violations of this part? Subpart B--Special Rules for Household Goods Brokers Sec. 371.101 If I operate as a household goods broker in interstate
or foreign commerce, must I comply with subpart B of this part? Yes, you must comply with all regulations in this subpart if you
operate as a household goods broker in interstate or foreign commerce. Sec. 371.103 What are the definitions of terms used in this subpart? Household goods has the same meaning as the term is defined in
Sec. 375.103 of this subchapter. Household goods broker means a person, other than a motor carrier
or an employee or bona fide agent of a motor carrier, that as a
principal or agent sells, offers for sale, negotiates for, or holds
itself out by solicitation, advertisement, or otherwise as selling,
providing, or arranging for, transportation of household goods by motor
carrier for compensation. Individual shipper has the same meaning as the term is defined in
Sec. 375.103 of this subchapter. Sec. 371.105 Must I use a motor carrier that has a valid U.S. DOT
number and valid operating authority issued by FMCSA to transport
household goods in interstate or foreign commerce? You may only act as a household goods broker for a motor carrier
that has a valid U.S. DOT number and valid operating authority issued
by FMCSA to transport household goods in interstate or foreign
commerce. Sec. 371.107 What information must I display in my advertisements and
Internet web homepage? (a) You must prominently display in your advertisements and
Internet web homepage(s) the physical location(s) (street or highway
address) 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 your status as a household goods
broker in your advertisements and Internet web homepage(s). (d) You must prominently display in your advertisements and
Internet web homepage(s) that you will not transport an individual
shipper's household goods, but that you will arrange for the
transportation of the household goods by an FMCSA-authorized household
goods motor carrier, whose charges will be determined by its published
tariff. Sec. 371.109 Must I inform individual shippers which motor carriers I use? (a) You must provide to each potential individual shipper who
contacts you a list of all authorized household goods motor carriers
you use, including their U.S. DOT registration number(s) and MC license
numbers. (b) You must provide to each potential individual shipper who
contacts you a statement stating 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. Sec. 371.111 Must I provide individual shippers with Federal consumer
protection information? (a) You must provide potential individual shippers with Federal
consumer protection information by one of the following three methods: (1) Provide a hyperlink on your Internet web home page to the FMCSA
Web page containing the information in FMCSA's publications "Ready to
Move?--Tips for a Successful Interstate Move" and "Your Rights and
Responsibilities When You Move." (2) Distribute to each shipper and potential shipper at the time
you provide an estimate, copies of FMCSA's publications "Ready to
Move?--Tips for a Successful Interstate Move" and "Your Rights and
Responsibilities When You Move." (3) Distribute to each shipper and potential shipper at the time
you provide an estimate, copies of "Ready to Move?--Tips for a
Successful Interstate Move" and "Your Rights and Responsibilities
When You Move" as modified and produced by the authorized, lawful
motor carrier you intend to provide the shipment to under your written
agreement required by Sec. 371.115. (b) You must obtain a signed, dated electronic or paper receipt
showing the individual shipper has received both booklets. (c) You must maintain the signed receipt required by paragraph (b)
of this section for three years from the date the individual shipper
signs the receipt. Sec. 371.113 May I provide individual shippers with a written
estimate? (a) You may provide each individual shipper with an estimate of
transportation and accessorial charges. If you provide an estimate, it
must be in writing and must be based on a physical survey of the
household goods if the household goods are located within a 50 air-mile
radius of your or your agent's location. The estimate must be prepared
in accordance with a signed, written agreement, as specified in Sec.
371.115 of this subpart. (b) You must base your estimate upon the published tariffs of the
authorized motor carrier who will transport the shipper's household
goods. (c) 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. A copy of the waiver agreement
must be retained as an addendum to the bill of lading and is subject to
the same record inspection and preservation requirements as are
applicable to bills of lading. (d) You must keep the records required by this section for three
years following the date you provide the written estimate for an
individual shipper who accepts the estimate and has you procure the
transportation. Sec. 371.115 Must I maintain agreements with motor carriers before
providing written estimates on behalf of these carriers? (a) In order to provide estimates of charges for the transportation
of household goods, you must do so in accordance with the written
agreement required by Sec. 375.409 of this subchapter. Your written
agreement with the motor carrier(s) must include the following items: (1) Your broker name as shown on your FMCSA registration, your
physical address, and your U.S. DOT registration number or 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 or quote to the individual shipper: (i) Will be exclusively on behalf of the authorized household goods
motor carrier; [[Page 5957]] (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 relinquish possession of the shipment upon payment
of no more than 110 percent of the 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 (6) A notary public's signature, date, and seal notarizing and
attesting to the validity of the signatures on the agreement between
the household goods broker and household goods motor carrier. (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 or quotes on behalf of the
authorized household goods motor carrier and for three years
thereafter. Sec. 371.117 Must I provide individual shippers with my policies for
canceling a shipment? (a) You must disclose prominently on your Internet Web site and in
your agreements with prospective shippers your cancellation policy,
deposit policy, and policy for refunding deposited funds in the event
the shipper cancels an order for service before the date an authorized
household goods motor carrier has been scheduled to pick up the
shipper's property. (b) You must maintain records showing each individual shipper's
request to cancel a shipment and the disposition of each request for a
period of three years after the date of a shipper's cancellation
request. If you refunded a deposit, your records must include: (1) Proof that the individual shipper cashed or deposited the check
or money order, if the financial institution provides documentary
evidence; or (2) Proof that you delivered the refund check or money order to the
individual shipper. Sec. 371.119 What must I do before I arrange with a motor carrier to
transport household goods in interstate or foreign commerce? (a) Using the FMCSA's database systems, you must verify and
document each month that household goods motor carriers with whom you
arrange transportation have an active U.S. DOT registration number,
active for-hire operating authority from FMCSA to transport household
goods in interstate or foreign commerce, and that the household goods
motor carrier has evidence of the necessary insurance coverage on file
with FMCSA. (b) You must maintain the verification documents in paragraph (a)
of this section for three years from the date you arrange for a
shipment on behalf of an individual shipper by a household goods motor
carrier. Sec. 371.121 What penalties may FMCSA impose for violations of this
part? The penalty provisions of 49 U.S.C. Chapter 149, Civil and Criminal
Penalties apply to this subpart. These penalties do not overlap.
Notwithstanding these civil penalties, nothing in this section deprives
an individual shipper of any remedy or right of action under existing
law. PART 375--TRANSPORTATION OF HOUSEHOLD GOODS IN INTERSTATE COMMERCE;
CONSUMER PROTECTION REGULATIONS 3. Revise the authority citation for part 375 to read as follows: Authority: 5 U.S.C. 553; 49 U.S.C. 13301, 13704, 13707, 14104,
14706; subtitle B, title IV of Pub. L. 109-59; and 49 CFR 1.73. 4. Revise Sec. 375.409 to read as follows: Sec. 375.409 May household goods brokers provide estimates? (a) Household goods brokers may provide estimates provided there is
a written agreement between the broker and you, the motor carrier,
adopting the broker's estimate as your own estimate. If you, the motor
carrier, make such an agreement with a household goods broker, you must
ensure compliance with all requirements of this part pertaining to
estimates, including the requirement that you must relinquish
possession of the shipment if the shipper pays you no more than 110
percent of a non-binding estimate at the time of delivery. (b) Your written agreement with the household goods broker(s) must
include the items required in Sec. 371.115(a) of this subchapter. PART 386--RULES OF PRACTICE FOR MOTOR CARRIER, BROKER, FREIGHT
FORWARDER, AND HAZARDOUS MATERIALS PROCEEDINGS 5. 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. 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. 6. Amend appendix B to part 386 by revising the heading and by
adding paragraphs (g)(21) and (22) to read as follows: Appendix B to Part 386--Penalty Schedule; Violations and Monetary
Penalties * * * * * (g) * * * (21) 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. (22) 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 7. The Authority citation for part 387 continues to read as
follows: Authority: 49 U.S.C. 13101, 13301, 13906, 14701, 31138, and
31139; and 49 CFR 1.73. 8. Amend Sec. 387.307 by redesignating paragraph (a) as paragraph
(a)(1) and adding new paragraph (a)(2) to read as follows: Sec. 387.307 Property broker surety bond or trust fund. (a) Security. (1) * * * (2) A household goods broker must have a surety bond or trust fund
in effect for $25,000. The FMCSA will not issue a household goods
broker license until a surety bond or trust fund for the full limits of
liability prescribed herein is in effect. The household goods broker
license remains valid or effective only as long as a surety bond or
trust fund remains in effect and ensures the financial responsibility
of the household goods broker.
* * * * * [[Page 5958]] Issued on: February 2, 2007.
John H. Hill,
Administrator.
[FR Doc. E7-2106 Filed 2-7-07; 8:45 am] BILLING CODE 4910-EX-P
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