Broker and Freight Forwarder Financial Responsibility; Extension of Compliance Date

<RULE> DEPARTMENT OF TRANSPORTATION <SUBAGY>Federal Motor Carrier Safety Administration</SUBAGY> <CFR>49 CFR Parts 386 and 387</CFR> <DEPDOC>[Docket No. FMCSA-2024-0280]</DEPDOC> <RIN>RIN 2126-AC76</RIN> <SUBJECT>Broker and Freight Forwarder Financial Responsibility; Extension of Compliance Date</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective December 31, 2024. <E T="03">Expiration dates:</E> 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. <E T="03">Compliance dates:</E> Brokers, freight forwarders, surety providers, and financial institutions must comply with all the provisions of § 387.307 beginning on January 16, 2026. <E T="03">Petition submittal date:</E> Petitions for reconsideration of this final rule must be submitted to the FMCSA Administrator no later than January 30, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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; <E T="03">ana.alvarez@dot.gov.</E> If you have questions on viewing or submitting material to the docket, call Dockets Operations at (202) 366-9826. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> FMCSA organizes this final rule as follows: <EXTRACT> <FP SOURCE="FP-2">I. Availability of Rulemaking Documents</FP> <FP SOURCE="FP-2">II. Executive Summary</FP> <FP SOURCE="FP1-2">A. Purpose and Summary of the Regulatory Action</FP> <FP SOURCE="FP1-2">B. Costs and Benefits</FP> <FP SOURCE="FP-2">III. Abbreviations</FP> <FP SOURCE="FP-2">IV. Legal Basis</FP> <FP SOURCE="FP-2">V. Discussion of Proposed Rulemaking and Comments</FP> <FP SOURCE="FP1-2">A. Proposed Rulemaking</FP> <FP SOURCE="FP1-2">B. Comments and Responses</FP> <FP SOURCE="FP1-2">C. Effective Date</FP> <FP SOURCE="FP-2">VI. Regulatory Analyses</FP> <FP SOURCE="FP1-2">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</FP> <FP SOURCE="FP1-2">B. Congressional Review Act</FP> <FP SOURCE="FP1-2">C. Regulatory Flexibility Act (Small Entities)</FP> <FP SOURCE="FP1-2">D. Assistance for Small Entities</FP> <FP SOURCE="FP1-2">E. Unfunded Mandates Reform Act of 1995</FP> <FP SOURCE="FP1-2">F. Paperwork Reduction Act</FP> <FP SOURCE="FP1-2">G. E.O. 13132 (Federalism)</FP> <FP SOURCE="FP1-2">H. Privacy</FP> <FP SOURCE="FP1-2">I. E.O. 13175 (Indian Tribal Governments)</FP> <FP SOURCE="FP1-2">J. National Environmental Policy Act of 1969</FP> </EXTRACT> <HD SOURCE="HD1">I. Availability of Rulemaking Documents</HD> To view any documents mentioned as being available in the docket, go to <E T="03">https://www.regulations.gov/docket/FMCSA-2024-0280/document</E> 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. <HD SOURCE="HD1">II. Executive Summary</HD> <HD SOURCE="HD2">A. Purpose and Summary of the Regulatory Action</HD> 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. <HD SOURCE="HD2">B. Costs and Benefits</HD> 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. <HD SOURCE="HD1">III. Abbreviations</HD> <EXTRACT> <FP SOURCE="FP-1">CE Categorical exclusion</FP> <FP SOURCE="FP-1">CFR Code of Federal Regulations</FP> <FP SOURCE="FP-1">DOT Department of Transportation</FP> <FP SOURCE="FP-1">E.O. Executive Order</FP> <FP SOURCE="FP-1">FMCSA Federal Motor Carrier Safety Administration</FP> <FP SOURCE="FP-1">FR Federal Register</FP> <FP SOURCE="FP-1">NOOA National Owner Operators Association</FP> <FP SOURCE="FP-1">NPRM Notice of proposed rulemaking</FP> <FP SOURCE="FP-1">OMB Office of Management and Budget</FP> <FP SOURCE="FP-1">OOIDA Owner-Operator Independent Drivers Association</FP> <FP SOURCE="FP-1">PIA Privacy Impact Assessment</FP> <FP SOURCE="FP-1">PTA Privacy Threshold Assessment</FP> <FP SOURCE="FP-1">SBTC Small Business in Transportation Coalition</FP> <FP SOURCE="FP-1">URS Unified Registration System</FP> <FP SOURCE="FP-1">UMRA Unfunded Mandates Reform Act</FP> <FP SOURCE="FP-1">U.S.C. United States Code</FP> </EXTRACT> <HD SOURCE="HD1">IV. Legal Basis</HD> 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 requirement ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 38k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━