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Federal Register / Vol. 86, No. 239 / Thursday, December 16, 2021 / Notices 20590, between 9 a.m. and 5 p.m., ET, Monday through Friday, except Federal holidays. To be sure someone is there to help you, please call 202 3669317 or 202 3669826 before visiting Dockets Operations.
II. Legal Basis Under 49 U.S.C. 13541a, the Secretary of Transportation Secretary shall exempt a person, class of persons, or a transaction or service from the application, in whole or in part, of a provision of 49 U.S.C. subtitle IV, part B chapters 131149, or use this exemption authority to modify the application of a provision of 49 U.S.C.
subtitle IV, part B chapters 131149 as it applies to such person, class, transaction, or service, when the Secretary . . . finds that the application of that provision 1 is not necessary to carry out the transportation policy of 49 U.S.C.
section 13101;
2 is not needed to protect shippers from the abuse of market power or that the transaction or service is of limited scope; and 3 is in the public interest.
The Secretary may begin a section 13541 exemption proceeding on the application of an interested party or on the Secretarys own initiative. The Secretary may specify the period of time during which an exemption is effective and may revoke the exemption to the extent specified, on finding that application of a provision of 49 U.S.C.
chapters 131149 to the person, class, or transportation is necessary to carry out the transportation policy of 49
U.S.C. section 13101. 49 U.S.C.
13541c, d. In addition, the exemption authority provided by section 13541
may not be used to relieve a person from the application of, and compliance with, any law, rule, regulation, standard, or order pertaining to cargo loss and damage or insurance. . . .
49 U.S.C. 13541e1.
The Administrator of FMCSA has been delegated authority under 49 CFR
1.87 to carry out the functions vested in the Secretary by 49 U.S.C. 13541.

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III. Current Legal Requirements Under 49 U.S.C. 13906b and c, as amended by section 32918 of the Moving Ahead for Progress in the 21st Century Act, Public Law 112141, 126
Stat. 405 MAP21, all brokers and freight forwarders subject to FMCSAs jurisdiction must maintain $75,000 in financial security. The financial security must be in the form of a surety bond or trust fund in accordance with 49 CFR
387.307a, 387.403Tc.

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IV. Background On December 26, 2013, FMCSA
requested public comment on AIPBAs August 14, 2013 application for an exemption for all property brokers and freight forwarders from the requirement for a $75,000 surety bond or trust fund.
78 FR 78472. Specifically, FMCSA
requested comments on whether the Agency should grant or deny AIPBAs application, in whole or in part. The Agency also requested comments on how it should apply 49 U.S.C.
13541a13 to AIPBAs request. Id.
at 78473.1
On March 31, 2015, FMCSA
published a Federal Register notice denying AIPBAs request. 80 FR 17142.
The Agency concluded that the exemption should be denied on the basis that 49 U.S.C. 13541 does not give FMCSA the authority essentially to nullify a statutory provision by exempting the entire class of persons subject to the provision. Id. at 17145.
Furthermore, even if the Agency had the authority to issue such a blanket exemption, FMCSA found that the $75,000 bond requirement was necessary to carry out the transportation policy of section 13101, was needed to protect shippers from the abuse of market power, and that an exemption was not in the public interest. Id. AIPBA did not appeal FMCSAs decision to federal court within the 60-day limitations period of 28 U.S.C. 2344.
V. Applicants Request In its application,2 SBTC seeks a 5year exemption from the $75,000
financial security requirements of 49
1 In 2013, AIPBA also sought judicial review in the U.S. Court of Appeals for the Eleventh Circuit of the FMCSA final rule that implemented MAP
21s $75,000 bond requirement. AIPBA alleged that FMCSA had improperly promulgated the rule without notice and comment. The court dismissed the petition, holding that AIPBA lacked standing.
Assn of Indep. Prop. Brokers and Agents v. Secy, U.S. Dept of Transp., et al. 11th Cir. Mar. 18, 2016.
2 As noted in FMCSAs Federal Register publication, SBTC styled its request as a resubmission of an exemption request pursuant to 49 U.S.C. 31315b3 and 49 CFR 381.317. As SBTCs request did not fall within those provisions, FMCSA had no jurisdiction to entertain SBTCs request under that authority. 85 FR 20334, 20335
n.2. Rather than dismissing SBTCs request, the Agency treated SBTCs request as a new request for exemption under Section 13541, the provision under which AIPBAs request was filed and which SBTCs should have been filed as well. SBTC has had ample opportunity to contest FMCSAs decision to treat its request as a new exemption application and it has not done so. SBTCs application, which applies to a more limited set of brokers and freight forwarders and a more limited time period than AIPBAs did, is a new request for exemption, rather than a resubmission, and will be assessed on that basis.

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U.S.C. 13906b and c, specifically for brokers and freight forwarders with annual revenues below $15.010
million.3 SBTC believes granting the exemption is in the public interest as it will ensure an uninterrupted supply chain. 4 Moreover, SBTC indicates that the current bond level impedes small motor carriers from adding brokerage operations to their business.5 Further, SBTC states that FMCSA needs to address the fact that 10,000 small business intermediaries, including members of the minority brokerage community, were revoked in the first two weeks of December 2013 and there are anti-competitive obstacles to entry currently in place due to a bond obviously set too high for over 40% of the brokerage industry to handle in 2013. 6 Finally, SBTC argues that its exemption request should be granted to give FMCSA more time to develop its comprehensive enforcement program 7 to enforce the licensing and bonding requirement. 8
During the public comment period on this request, SBTC submitted a comment in response to a comment filed by the Transportation Intermediaries Association TIA. SBTC
indicated that the increase in the number of FMCSA-registered transportation intermediaries since December 2013 is attributable to a separate MAP21 requirement mandating motor carriers to obtain brokerage licenses before performing brokerage services, rather than to broker licenses being issued to new mom and pop small business brokers. . . . 9
Moreover, SBTC indicated that the factoring industry alleviates concerns pertaining to underfunded brokers.
SBTC asserts that most factors actually pay the carriers directly before paying their broker clients making a bond not needed for the smallest of brokers. 10
3 SBTC
4 Id.

Application at 10.
at 5.

5 Id.
6 Id.

at 14.
a 2013 Federal Register Notice, FMCSA
indicated it would phase in its enforcement of the broker registration requirements for motor carriers that also broker loads. 78 FR 54720, 54722 Sept.
5, 2013. MAP21 required motor carriers to obtain broker authority for their brokerage operations. Id.
at 54720.
8 SBTC Application, at 4.
9 SBTC May 29 comments, at 3.
10 Id. at 4. SBTC also sought leave to late file a comment dated June 5, 2020 to respond to comments filed by the Motor Carrier Regulatory Reform Coalition. FMCSA accepts the late-filed comment for consideration but does not believe its contents, which pertain to dispatch services, are relevant to this proceeding. MCRR late filed a June 10, 2020 response to SBTCs letter and FMCSA will accept that letter in the docket as well.
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