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Fighting Fraud in Transportation Act of 2011

Fighting Fraud In Transportation

**FFIT Q&A 

**One Page White Paper 

President Obama Signs Transportation Bill

Last week, the House and Senate Conference Committee members reached an agreement for a 27 month transportation bill (2014). President Obama signed into law the one week extension that was written into the Conference Report to give Congress the time it needs to send the completed conference report to his desk. The Conference Report contains the TIA-OOIDA-ATA compromise language almost exactly.  The major change is that the report reduces the broker/forwarder surety requirement to $75,000.

The Conference Report shows that compromise is not dead in Congress. This is positive development for our republic as the Congress tackles the major issues yet to be addressed.  The compromise between TIA, OOIDA, and ATA shows that industry leaders can come together to address areas of common concern.  This spirit of compromise and cooperation between the leading transportation associations bodes well for our industry as we address the major issues yet to be tackled.

Major transportation provisions of the Transportation Bill:

  1. The broker/forwarder surety requirement is raised to $75,000 – the same as an NVOCC bond – DOT must review six-months after enactment and every 4 years thereafter.  The increase goes into effect one year from enactment.  This is a significant change in the financial security level for brokers and forwarders that TIA, OOIDA, and ATA sought. 

  2. The TIA-OOIDA-ATA language that places strict regulations on broker/forwarder bond/trust companies is in the Conference Report.  This means that the days are numbered for those surety companies that have been cheating motor carriers.  One year after enactment broker/forwarder surety companies will no longer be able to duck and dodge by not paying claims, they will not be able to deduct their attorney’s fees from the bond amount, they will have to pay claims on a pro-rata basis, and they will have to make public on their website which carrier were paid.

  3. The bill makes clear that a motor carrier cannot re-broker freight – whatever they want to call it – without proper broker/broker authority and bond.

  4. The bill maintains the current exemptions for customs brokers and indirect air carriers arranging an incidental move by motor carrier as part of an international or airfreight movement.

  5. The bill mandates EOBRs one year from enactment.  This was not part of the TIA-OOIDA-ATA compromise.  In fact, ATA and OOIDA remain at logger heads on this issue.  OOIDA was successful on passing an amendment through the House that restricting funding for EOBR enforcement is placed on the Transportation Housing and Urban Development (THUD) Appropriations bill.
     
  6. The bill removes language that the Senate had included regarding CSA.  This is significant in that it allows the industry a clean field on which to address CSA and the Safety Fitness Determination with FMCSA.

TIA, within the next few weeks, will release plans to its membership outlining how the Association will offer a new surety solution for all members.

If you have any questions or comments, please contact Nancy O’Liddy at (703) 299-5711 or oliddy@tianet.org or Chris Burroughs at (703) 299-5705 or burroughs@tianet.org.