Motor Carrier Routing Regulations; Disposition of Loss and Damage Claims and Processing Salvage; Preservation of Records

Federal RegisterJun 12, 1997

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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Parts 356, 370 and 379

RIN 2125-AE12

Motor Carrier Routing Regulations; Disposition of Loss and Damage

Claims and Processing Salvage; Preservation of Records

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Final rule.

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SUMMARY: This document adds to 49 CFR chapter III certain motor carrier

transportation regulations, also codified in 49 CFR chapter X, which

involve functions delegated to both the FHWA and the Surface

Transportation Board (STB). These regulations govern motor carrier

routing, the processing of claims for loss or damage, and the

preservation of records. The Interstate Commerce Commission Termination

Act of 1995 (ICCTA) abolished the Interstate Commerce Commission (ICC)

and transferred certain functions and proceedings to the STB and the

DOT. The Secretary of Transportation delegated to the FHWA certain

motor carrier functions which were transferred to the DOT from the ICC.

On October 21, 1996, the FHWA and the STB issued a final rule which

transferred and redesignated those regulations in 49 CFR chapter X

involving functions exclusively within the jurisdiction of the FHWA. 61

FR 54706. This document completes the transfer process. Technical

changes have been made to the regulations, where appropriate, to

conform with current statutory citations and definitions and the

transfer of regulatory functions to the Department of Transportation.

EFFECTIVE DATE: June 12, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. John F. Grimm, Director, Office of

Motor Carrier Information Analysis, (202) 366-4039, or Mr. Michael

Falk, Motor Carrier Law Division, Office of the Chief Counsel, (202)

366-1384, at 400 Seventh Street, SW., Washington, DC 20590. Office

hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday,

except Federal holidays.

SUPPLEMENTARY INFORMATION: This document adopts certain motor carrier

transportation regulations codified in 49 CFR chapter X and

incorporates them, with appropriate technical changes, into 49 CFR

chapter III. These regulations involve motor carrier routing,

processing of claims for loss and damage, and preservation of records.

The ICCTA, Pub. L. 104-88, 109 Stat. 803, which was enacted on December

29, 1995, and took effect on January 1, 1996, abolished the ICC and

transferred certain functions and proceedings to the STB and the DOT.

Certain motor carrier functions previously under the jurisdiction of

the ICC were transferred to the Secretary of Transportation, who

subsequently delegated those functions to the FHWA. Implementing

regulations for those motor carrier functions delegated exclusively to

the FHWA have already been redesignated and transferred to 49 CFR

chapter III, where regulations under the authority of the FHWA are

codified. 61 FR 54706 (October 21, 1996).

Unlike the transfer and redesignation procedure employed in that

proceeding, the regulations embraced by this proceeding will be added

to chapter III but not removed from chapter X. No substantive changes

are being made to the regulations at this time. Consequently, prior

notice and opportunity for comment are unnecessary.

Summary of Technical Changes From 49 CFR Chapter X Regulations

The regulations being added to chapter III in this proceeding have

been modified to reflect current statutory citations, jurisdictional

delegations, and regulatory responsibilities. Accordingly, references

to the ``Interstate Commerce Act'' in the chapter X regulations have

been changed to ``49 U.S.C. subtitle IV, part B'' and references to the

``ICC'' or ``Commission'' have been changed to either the ``Secretary''

or ``FHWA'', where appropriate. Other differences between the chapter X

regulations and the regulations being added to chapter III in this

proceeding are discussed below.

Interpretations and Routing Regulations (Part 356)

These regulations are currently found in 49 CFR part 1004 and are

being added to chapter III as part 356 with the changes noted below.

All references to ``household goods'' appearing in 49 CFR part 1004

have been deleted from part 356 to reflect the Secretary's registration

jurisdiction, which embraces all freight forwarders. Since the part 356

regulations are essentially interpretive and impose no affirmative

compliance requirements, including all freight forwarders within this

part is not a substantive regulatory change.

The FHWA is not incorporating 49 CFR 1004.26 into part 356 because

that section involves claims and disputes relating to the lawfulness of

shipment routing, matters which are within the jurisdiction of the

Surface Transportation Board under 49 U.S.C. 13701.

Principles and Practices for the Investigation and Voluntary

Disposition of Loss and Damage Claims and Processing Salvage (Part 370)

These regulations are currently found in 49 CFR part 1005 and are

being added to chapter III as part 370 with the changes noted below.

Section 370.1 does not include the words ``railroad'' and ``express

company'', which are contained in 49

[[Page 32041]]

CFR 1005.1. Inasmuch as 49 CFR 1005.7 pertains solely to rail

transportation, it has not been incorporated into part 370.

Preservation of Records (Part 379)

These regulations are currently found in 49 CFR part 1220 and are

being added to chapter III as part 379 with the changes noted below.

The words ``railroad companies'', ``electric railway companies'',

``express companies'', ``persons furnishing cars to railroads'',

``ratemaking organizations'', and ``demurrage and car service bureaus''

which appear in 49 CFR 1220 have not been incorporated into part 379.

Appendix A does not contain requirements regarding the preservation of

records relating to tariffs and rates and rail transportation since

such matters fall within the jurisdiction of the STB.

Rulemaking Analyses and Notices

Because the amendments made by this document relate to departmental

management, organization, procedure, and practice, prior notice and

opportunity for comment are unnecessary under 5 U.S.C. 553(b)(3)(A). In

addition, prior notice and opportunity for comment are unnecessary

pursuant to 5 U.S.C. 553(b)(3)(B) because the process of incorporating

existing regulations into chapter III is merely technical in nature and

proposes no substantive changes to which public comment could be

solicited. Issuing this document as a final rule is also in the public

interest because, once codified in chapter III, the sections now under

the FHWA's jurisdiction may be modified or removed readily to

correspond with the FHWA's new functions.

This final rule is made effective upon publication in the Federal

to be exempt from the 30-day delayed effective date requirement of 5

U.S.C. 553(d) for the above reason and because the process of adding

the motor carrier transportation regulations to chapter III makes no

substantive changes to the regulations. In fact, the sooner the

regulations are incorporated into chapter III, the more quickly the

FHWA can begin the process of updating those regulations and making

necessary changes to them.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this action is not a significant

regulatory action within the meaning of Executive Order 12866 or

significant within the meaning of Department of Transportation

regulatory policies and procedures. It is anticipated that the economic

impact of this rulemaking will be minimal; therefore, a full regulatory

evaluation is not required. This final rule simply provides notice to

the public that certain motor carrier transportation regulations

currently found in 49 CFR chapter X are being incorporated into 49 CFR

chapter III. No substantive changes are being made to the existing

regulations. The regulations are simply being added to chapter III of

title 49 of the Code of Federal Regulations so that the FHWA may

administer and execute those motor carrier functions transferred to it

from the ICC by the ICCTA.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,

5 U.S.C. 601-612), the FHWA has evaluated the effects of this rule on

small entities. Based on the evaluation, the FHWA hereby certifies that

this action will not have a significant economic impact on a

substantial number of small entities. As noted above, this final rule

simply provides notice to the public that certain motor carrier

transportation regulations currently found in 49 CFR chapter X are

being incorporated into 49 CFR chapter III. No substantive changes are

being made to the regulations which will affect small entities.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that this action does not have sufficient federalism implications to

warrant the preparation of a federalism assessment.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.217, Motor

Carrier Safety. The regulations implementing Executive Order 12372

regarding intergovernmental consultation on Federal programs and

activities do not apply to this program.

Paperwork Reduction Act

This action does not contain a collection of information

requirement for purposes of the Paperwork Reduction Act of 1995, 44

U.S.C. 3501 et seq. In the course of its ongoing regulatory review

process, the FHWA will be reviewing these regulations in the near

future and, where appropriate, may propose substantive changes. At that

point in time, the FHWA intends to solicit public comment on the

information collection burdens associated with these regulations, and

to seek and obtain Office of Management and Budget approval.

National Environmental Policy Act

The agency has analyzed this action for the purpose of the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has

determined that this action would not have any effect on the quality of

the environment.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN number contained in the

heading of this document can be used to cross reference this action

with the Unified Agenda.

List of Subjects

49 CFR Part 356

Administrative practice and procedure, Freight forwarders, Highways

and roads, Motor carriers.

49 CFR Part 370

Claims for property transported, Freight forwarders, Motor

carriers.

49 CFR Part 379

Brokers, Freight forwarders, Motor carriers, Recordkeeping

requirements.

Issued on: June 4, 1997.

Jane Garvey,

Acting Federal Highway Administrator.

In consideration of the foregoing, the FHWA amends title 49, Code

of Federal Regulations, chapter III, by adding parts 356, 370 and 379

as set forth below:

1. Chapter III is amended by adding part 356 to read as follows:

PART 356--MOTOR CARRIER ROUTING REGULATIONS

Sec.

356.1 Authority to serve a particular area--construction.

356.3 Regular route motor passenger service.

356.5 Traversal authority.

356.7 Tacking.

356.9 Elimination of routing restrictions--regular route carriers.

356.11 Elimination of gateways--regular and irregular route

carriers.

356.13 Redesignated highways.

Authority: 49 U.S.C. 13301 and 13902; 5 U.S.C. 553; 49 CFR 1.48.

Sec. 356.1 Authority to serve a particular area--construction.

(a) Service at municipality. A motor carrier of property, motor

passenger

[[Page 32042]]

carrier of express, and freight forwarder authorized to serve a

municipality may serve all points within that municipality's commercial

zone not beyond the territorial limits, if any, fixed in such

authority.

(b) Service at unincorporated community. A motor carrier of

property, motor passenger carrier of express, and freight forwarder,

authorized to serve an unincorporated community having a post office of

the same name, may serve all points in the United States not beyond the

territorial limits, if any, fixed in such authority, as follows:

(1) All points within 3 miles of the post office in such

unincorporated community if it has a population of less than 2,500;

within 4 miles if it has a population of 2,500 but less than 25,000;

and within 6 miles if it has a population of 25,000 or more;

(2) At all points in any municipality any part of which is within

the limits described in paragraph (b)(1) of this section; and

(3) At all points in any municipality wholly surrounded, or so

surrounded except for a water boundary, by any municipality included

under the terms of paragraph (b)(2) of this section.

Sec. 356.3 Regular route motor passenger service.

(a) A motor common carrier authorized to transport passengers over

regular routes may serve:

(1) All points on its authorized route;

(2) All municipalities wholly within one airline mile of its

authorized route;

(3) All unincorporated areas within one airline mile of its

authorized route; and

(4) All military posts, airports, schools, and similar

establishments that may be entered within one airline mile of its

authorized route, but operations within any part of such establishment

more than one airline mile from such authorized route may not be over a

public road.

(b) This section does not apply to those motor passenger common

carriers authorized to operate within:

(1) New York, NY;

(2) Rockland, Westchester, Orange, or Nassau Counties, NY;

(3) Fairfield County, CT; and

(4) Passaic, Bergen, Essex, Hudson, Union, Morris, Somerset,

Middlesex, or Monmouth Counties, NJ.

Sec. 356.5 Traversal authority.

(a) Scope. An irregular route motor carrier may operate between

authorized service points over any reasonably direct or logical route

unless expressly prohibited.

(b) Requirements. Before commencing operations, the carrier must,

regarding each State traversed:

(1) Notify the State regulatory body in writing, attaching a copy

of its operating rights;

(2) Designate a process agent; and

(3) Comply with 49 CFR 387.315.

Sec. 356.7 Tacking.

Unless expressly prohibited, a motor common carrier of property

holding separate authorities which have common service points may join,

or tack, those authorities at the common point, or gateway, for the

purpose of performing through service as follows:

(a) Regular route authorities may be tacked with one another;

(b) Regular route authority may be tacked with irregular route

authority;

the authorities were granted pursuant to application filed on or before

November 23, 1973, and the distance between the points at which service

is provided, when measured through the gateway point, is 300 miles or

less; and

(d) Irregular route authorities may be tacked with one another if

the authorities involved contain a specific provision granting the

right to tack.

Sec. 356.9 Elimination of routing restrictions--regular route

carriers.

(a) Regular route authorities--construction. All certificates that,

either singly or in combination, authorize the transportation by a

motor common carrier of property over:

(1) A single regular route or;

(2) Over two or more regular routes that can lawfully be tacked at

a common service point, shall be construed as authorizing

transportation between authorized service points over any available

route.

(b) Service at authorized points. A common carrier departing from

its authorized service routes under paragraph (a) of this section shall

continue to serve points authorized to be served on or in connection

with its authorized service routes.

operations under paragraph (a) of this section may serve points on, and

within one airline mile of, an alternative route it elects to use if

all the following conditions are met:

(1) The carrier is authorized to serve all intermediate points

(without regard to nominal restrictions) on the underlying service

route;

(2) The alternative route involves the use of a superhighway (i.e.,

a limited access highway with split-level crossings);

(3) The alternative superhighway route, including highways

connecting the superhighway portion of the route with the carrier's

authorized service route,

(i) Extends in the same general direction as the carrier's

authorized service route and

(ii) Is wholly within 25 airline miles of the carrier's authorized

service route; and

(4) Service is provided in the same manner as, and subject to any

restrictions that apply to, service over the authorized service route.

Sec. 356.11 Elimination of gateways--regular and irregular route

carriers.

A motor common carrier of property holding separate grants of

authority (including regular route authority), one or more of which

authorizes transportation over irregular routes, where the authorities

have a common service point at which they can lawfully be tacked to

perform through service, may perform such through service over any

available route.

Sec. 356.13 Redesignated highways.

Where a highway over which a regular route motor common carrier of

property is authorized to operate is assigned a new designation, such

as a new number, letter, or name, the carrier shall advise the FHWA by

letter, and shall provide information concerning the new and the old

designation, the points between which the highway is redesignated, and

each place where the highway is referred to in the carrier's authority.

The new designation of the highway will be shown in the carrier's

certificate when the FHWA has occasion to reissue it.

2. Chapter III is amended by adding part 370 to read as follows:

PART 370--PRINCIPLES AND PRACTICES FOR THE INVESTIGATION AND

VOLUNTARY DISPOSITION OF LOSS AND DAMAGE CLAIMS AND PROCESSING

SALVAGE

Sec.

370.1 Applicability of regulations.

370.3 Filing of claims.

370.5 Acknowledgment of claims.

370.7 Investigation of claims.

370.9 Disposition of claims.

370.11 Processing of salvage.

Authority: 49 U.S.C. 13301 and 14706; 49 CFR 1.48.

Sec. 370.1 Applicability of regulations.

The regulations set forth in this part shall govern the processing

of claims for loss, damage, injury, or delay to property transported or

accepted for transportation, in interstate or foreign commerce, by each

motor carrier, water

[[Page 32043]]

carrier, and freight forwarder (hereinafter called carrier), subject to

49 U.S.C. subtitle IV, part B.

Sec. 370.3 Filing of claims.

(a) Compliance with regulations. A claim for loss or damage to

baggage or for loss, damage, injury, or delay to cargo, shall not be

voluntarily paid by a carrier unless filed, as provided in paragraph

(b) of this section, with the receiving or delivering carrier, or

carrier issuing the bill of lading, receipt, ticket, or baggage check,

or carrier on whose line the alleged loss, damage, injury, or delay

occurred, within the specified time limits applicable thereto and as

otherwise may be required by law, the terms of the bill of lading or

other contract of carriage, and all tariff provisions applicable

thereto.

(b) Minimum filing requirements. A written or electronic

communication (when agreed to by the carrier and shipper or receiver

involved) from a claimant, filed with a proper carrier within the time

limits specified in the bill of lading or contract of carriage or

transportation and:

(1) Containing facts sufficient to identify the baggage or shipment

(or shipments) of property,

(2) Asserting liability for alleged loss, damage, injury, or delay,

and

(3) Making claim for the payment of a specified or determinable

amount of money, shall be considered as sufficient compliance with the

provisions for filing claims embraced in the bill of lading or other

contract of carriage; Provided, however, That where claims are

electronically handled, procedures are established to ensure reasonable

carrier access to supporting documents.

reports of damage, notations of shortage or damage, or both, on freight

bills, delivery receipts, or other documents, or inspection reports

issued by carriers or their inspection agencies, whether the extent of

loss or damage is indicated in dollars and cents or otherwise, shall,

standing alone, not be considered by carriers as sufficient to comply

with the minimum claim filing requirements specified in paragraph (b)

of this section.

(d) Claims filed for uncertain amounts. Whenever a claim is

presented against a proper carrier for an uncertain amount, such as

``$100 more or less,'' the carrier against whom such claim is filed

shall determine the condition of the baggage or shipment involved at

the time of delivery by it, if it was delivered, and shall ascertain as

nearly as possible the extent, if any, of the loss or damage for which

it may be responsible. It shall not, however, voluntarily pay a claim

under such circumstances unless and until a formal claim in writing for

a specified or determinable amount of money shall have been filed in

accordance with the provisions of paragraph (b) of this section.

(e) Other claims. If investigation of a claim develops that one or

more other carriers has been presented with a similar claim on the same

shipment, the carrier investigating such claim shall communicate with

each such other carrier and, prior to any agreement entered into

between or among them as to the proper disposition of such claim or

claims, shall notify all claimants of the receipt of conflicting or

overlapping claims and shall require further substantiation, on the

part of each claimant of his/her title to the property involved or his/

her right with respect to such claim.

Sec. 370.5 Acknowledgment of claims.

(a) Each carrier shall, upon receipt in writing or by electronic

transmission of a proper claim in the manner and form described in the

regulations in the past, acknowledge the receipt of such claim in

writing or electronically to the claimant within 30 days after the date

of its receipt by the carrier unless the carrier shall have paid or

declined such claim in writing or electronically within 30 days of the

receipt thereof. The carrier shall indicate in its acknowledgment to

the claimant what, if any, additional documentary evidence or other

pertinent information may be required by it further to process the

claim as its preliminary examination of the claim, as filed, may have

revealed.

(b) The carrier shall at the time each claim is received create a

separate file and assign thereto a successive claim file number and

note that number on all documents filed in support of the claim and all

records and correspondence with respect to the claim, including the

acknowledgment of receipt. At the time such claim is received the

carrier shall cause the date of receipt to be recorded on the face of

the claim document, and the date of receipt shall also appear in the

carrier's acknowledgment of receipt to the claimant. The carrier shall

also cause the claim file number to be noted on the shipping order, if

in its possession, and the delivery receipt, if any, covering such

shipment, unless the carrier has established an orderly and consistent

internal procedure for assuring:

(1) That all information contained in shipping orders, delivery

receipts, tally sheets, and all other pertinent records made with

respect to the transportation of the shipment on which claim is made,

is available for examination upon receipt of a claim;

(2) That all such records and documents (or true and complete

reproductions thereof) are in fact examined in the course of the

investigation of the claim (and an appropriate record is made that such

examination has in fact taken place); and

(3) That such procedures prevent the duplicate or otherwise

unlawful payment of claims.

Sec. 370.7 Investigation of claims.

(a) Prompt investigation required. Each claim filed against a

carrier in the manner prescribed in this part shall be promptly and

thoroughly investigated if investigation has not already been made

prior to receipt of the claim.

(b) Supporting documents. When a necessary part of an

investigation, each claim shall be supported by the original bill of

lading, evidence of the freight charges, if any, and either the

original invoice, a photographic copy of the original invoice, or an

exact copy thereof or any extract made therefrom, certified by the

claimant to be true and correct with respect to the property and value

involved in the claim; or certification of prices or values, with trade

or other discounts, allowance, or deductions, of any nature whatsoever

and the terms thereof, or depreciation reflected thereon; Provided,

however, That where property involved in a claim has not been invoiced

to the consignee shown on the bill of lading or where an invoice does

not show price or value, or where the property involved has been sold,

or where the property has been transferred at bookkeeping values only,

the carrier shall, before voluntarily paying a claim, require the

claimant to establish the destination value in the quantity, shipped,

transported, or involved; Provided, further, That when supporting

documents are determined to be a necessary part of an investigation,

the supporting documents are retained by the carriers for possible FHWA

inspection.

entire package or an entire shipment cannot be otherwise authenticated

upon investigation, the carrier shall obtain from the consignee of the

shipment involved a certified statement in writing that the property

for which the claim is filed has not been received from any other

source.

Sec. 370.9 Disposition of claims.

(a) Each carrier subject to 49 U.S.C. subtitle IV, part B which

receives a

[[Page 32044]]

written or electronically transmitted claim for loss or damage to

baggage or for loss, damage, injury, or delay to property transported

shall pay, decline, or make a firm compromise settlement offer in

writing or electronically to the claimant within 120 days after receipt

of the claim by the carrier; Provided, however, That, if the claim

cannot be processed and disposed of within 120 days after the receipt

thereof, the carrier shall at that time and at the expiration of each

succeeding 60-day period while the claim remains pending, advise the

claimant in writing or electronically of the status of the claim and

the reason for the delay in making final disposition thereof and it

shall retain a copy of such advice to the claimant in its claim file

thereon.

(b) When settling a claim for loss or damage, a common carrier by

motor vehicle of household goods as defined in Sec. 375.1(b)(1) of this

chapter shall use the replacement costs of the lost or damaged item as

a base to apply a depreciation factor to arrive at the current actual

value of the lost or damaged item: Provided, That where an item cannot

be replaced or no suitable replacement is obtainable, the proper

measure of damages shall be the original costs, augmented by a factor

derived from a consumer price index, and adjusted downward by a factor

depreciation over average useful life.

Sec. 370.11 Processing of salvage.

(a) Whenever baggage or material, goods, or other property

transported by a carrier subject to the provisions in this part is

damaged or alleged to be damaged and is, as a consequence thereof, not

delivered or is rejected or refused upon tender thereof to the owner,

consignee, or person entitled to receive such property, the carrier,

after giving due notice, whenever practicable to do so, to the owner

and other parties that may have an interest therein, and unless advised

to the contrary after giving such notice, shall undertake to sell or

dispose of such property directly or by the employment of a competent

salvage agent. The carrier shall only dispose of the property in a

manner that will fairly and equally protect the best interests of all

persons having an interest therein. The carrier shall make an itemized

record sufficient to identify the property involved so as to be able to

correlate it to the shipment or transportation involved, and claim, if

any, filed thereon. The carrier also shall assign to each lot of such

property a successive lot number and note that lot number on its record

of shipment and claim, if any claim is filed thereon.

(b) Whenever disposition of salvage material or goods shall be made

directly to an agent or employee of a carrier or through a salvage

agent or company in which the carrier or one or more of its directors,

officers, or managers has any interest, financial or otherwise, that

carrier's salvage records shall fully reflect the particulars of each

such transaction or relationship, or both, as the case may be.

processed in the manner prescribed in this section, the carrier shall

record in its claim file thereon the lot number assigned, the amount of

money recovered, if any, from the disposition of such property, and the

date of transmittal of such money to the person or persons lawfully

entitled to receive the same.

3. Chapter III is amended by adding part 379 to read as follows:

PART 379--PRESERVATION OF RECORDS

Sec.

379.1 Applicability.

379.3 Records required to be retained.

379.5 Protection and storage of records.

379.7 Preservation of records.

379.9 Companies going out of business.

379.11 Waiver of requirements of the regulations in this part.

379.13 Disposition and retention of records.

Appendix A to Part 379--Schedule of Records and Periods of Retention

Authority: 49 U.S.C. 13301, 14122 and 14123; 49 CFR 1.48.

Sec. 379.1 Applicability.

(a) The preservation of record rules contained in this part shall

apply to the following:

(1) Motor carriers and brokers;

(2) Water carriers; and

(3) Household goods freight forwarders.

(b) This part applies also to the preservation of accounts, records

and memoranda of traffic associations, weighing and inspection bureaus,

and other joint activities maintained by or on behalf of companies

listed in paragraph (a) of this section.

Sec. 379.3 Records required to be retained.

Companies subject to this part shall retain records for the minimum

retention periods provided in appendix A to this part. After the

required retention periods, the records may be destroyed at the

discretion of each company's management. It shall be the obligation of

the subject company to maintain records that adequately support

financial and operational data required by the Secretary. The company

may request a ruling from the Secretary on the retention of any record.

The provisions of this part shall not be construed as excusing

compliance with the lawful requirements of any other governmental body

prescribing longer retention periods for any category of records.

Sec. 379.5 Protection and storage of records.

(a) The company shall protect records subject to this part from

fires, floods, and other hazards, and safeguard the records from

unnecessary exposure to deterioration from excessive humidity, dryness,

or lack of ventilation.

(b) The company shall notify the Secretary if prescribed records

are substantially destroyed or damaged before the term of the

prescribed retention periods.

Sec. 379.7 Preservation of records.

(a) All records may be preserved by any technology that is immune

to alteration, modification, or erasure of the underlying data and will

enable production of an accurate and unaltered paper copy.

(b) Records not originally preserved on hard copy shall be

accompanied by a statement executed by a person having personal

knowledge of the facts indicating the type of data included within the

records. One comprehensive statement may be executed in lieu of

individual statements for multiple records if the type of data included

in the multiple records is common to all such records. The records

shall be indexed and retained in such a manner as will render them

readily accessible. The company shall have facilities available to

locate, identify and produce legible paper copies of the records.

a particular medium will not preserve shall be clearly indicated at the

beginning of the applicable records as appropriate.

(d) The printed side of forms, such as instructions, need not be

preserved for each record as long as the printed matter is common to

all such forms and an identified specimen of the form is maintained on

the medium for reference.

Sec. 379.9 Companies going out of business.

The records referred to in the regulations in this part may be

destroyed after business is discontinued and the company is completely

liquidated. The records may not be destroyed until dissolution is final

and all pending transactions and claims are completed. When a company

is merged with another company under

[[Page 32045]]

jurisdiction of the Secretary, the successor company shall preserve

records of the merged company in accordance with the regulations in

this part.

Sec. 379.11 Waiver of requirements of the regulations in this part.

A waiver from any provision of the regulations in this part may be

made by the Secretary upon his/her own initiative or upon submission of

a written request by the company. Each request for waiver shall

demonstrate that unusual circumstances warrant a departure from

prescribed retention periods, procedures, or techniques, or that

compliance with such prescribed requirements would impose an

unreasonable burden on the company.

Sec. 379.13 Disposition and retention of records.

The schedule in appendix A to this part shows periods that

designated records shall be preserved. The descriptions specified under

the various general headings are for convenient reference and

identification, and are intended to apply to the items named regardless

of what the records are called in individual companies and regardless

of the record media. The retention periods represent the prescribed

number of years from the date of the document and not calendar years.

Records not listed in appendix A to this part shall be retained as

determined by the management of each company.

Appendix A to Part 379

Schedule of Records and Periods of Retention

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Item and category of records Retention period

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A. Corporate and General

1. Incorporation and

reorganization:

(a) Charter or Note A.

certificate of

incorporation and

amendments.

(b) Legal documents Note A.

related to mergers,

consolidations,

reorganization,

receiverships and

similar actions which

affect the identity or

organization of the

company.

2. Minutes of Directors, Note A.

Executive Committees,

Stockholders and other

corporate meetings.

3. Titles, franchises and

authorities:

(a) Certificates of Until expiration or cancellation.

public convenience and

necessity issued by

regulating bodies.

(b) Operating Until expiration or cancellation.

authorizations and

exemptions to operate.

orders of regulatory

bodies served upon the

company.

(d) Deeds, charters, and Until disposition of property.

other title papers.

(e) Patents and patent Note A.

records.

4. Annual reports or 3 years.

statements to stockholders.

5. Contracts and agreements:

(a) Service contracts, Until expiration or termination plus 3

such as for operational years.

management, accounting,

financial or legal

services, and agreements

with agents.

(b) Contracts and other Until expiration or termination plus 3

agreements relating to years.

the construction,

acquisition or sale of

real property and

equipment except as

otherwise provided in

(a) above.

purchase or sale of

material and supplies

except as provided in

(a) above.

(d) Shipping contracts Until expiration.

for transportation or

caretakers of freight.

(e) Contracts with Until expiration.

employees and employee

bargaining groups.

(f) Contracts, leases and Until expiration or termination plus 1

agreements, not year.

specifically provided

for in this section.

6. Accountant's auditor's,

and inspector's reports:

(a) Certifications and 3 years.

reports of examinations

and audits conducted by

public accountants.

(b) Reports of 3 years.

examinations and audits

conducted by internal

auditors, time

inspectors, and others.

7. Other..................... Note A.

B. Treasury

1. Capital stock records:

(a) Capital stock ledger. Note A.

(b) Capital stock Note A.

certificates, records of

or stubs of.

2. Long-term debt records:

(a) Bond indentures, Until redemption plus 3 years.

underwritings,

mortgages, and other

long-term credit

agreements.

(b) Registered bonds and Until redemption plus 3 years.

debenture ledgers.

records of bonds or

other long-term debt

issued.

3. Authorizations from Note A.

regulatory bodies for

issuance of securities

including applications,

reports, and supporting

papers.

4. Records of securities Until the securities are sold, redeemed

owned, in treasury, or held or otherwise disposed of.

by custodians, detailed

ledgers and journals, or

their equivalent.

5. Other..................... Note A.

C. Financial and Accounting

1. Ledgers:

(a) General and Until discontinuance of use plus 3 years.

subsidiary ledgers with

indexes.

(b) Balance sheets and 3 years.

trial balance sheets of

general and subsidiary

ledgers.

2. Journals:

(a) General journals..... Until discontinuance of use plus 3 years.

(b) Subsidiary journals 3 years.

and any supporting data,

except as otherwise

provided for, necessary

to explain journal

entries.

3. Cash books:

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(a) General cash books... Until discontinuance of use plus 3 years.

(b) Subsidiary cash books 3 years.

4. Vouchers:

(a) Voucher registers, 3 years.

indexes, or equivalent.

(b) Paid and canceled 3 years.

vouchers, expenditure

authorizations, detailed

distribution sheets and

other supporting data

including original bills

and invoices, if not

provided for elsewhere.

checks, and receipts for

cash paid out.

5. Accounts receivable:

(a) Record or register of 3 years after settlement.

accounts receivable,

indexes thereto, and

summaries of

distribution.

(b) Bills issued for 3 years after settlement.

collection and

supporting data.

writing off receivables.

(d) Reports and 1 year.

statements showing age

and status of

receivables.

6. Records of accounting 3 years after discontinuance.

codes and instructions.

7. Other..................... Note A.

D. Property and Equipment

Note.--All accounts, records, and memoranda necessary for making a

complete analysis of the cost or value of property shall be retained for

the periods shown. If any of the records elsewhere provided for in this

schedule are of this character, they shall be retained for the periods

shown below, regardless of any lesser retention period assigned.

1. Property records:

(a) Records which 3 years after disposition of property.

maintain complete

information on cost or

other value of all real

and personal property or

equipment.

(b) Records of additions 3 years after disposition of property.

and betterments made to

property and equipment.

retirements and

replacements of property

and equipment.

(d) Records pertaining to 3 years after disposition of property.

depreciation.

(e) Records of equipment 3 years after disposition of property.

number changes.

(f) Records of motor and 3 years after disposition of property.

engine changes.

(g) Records of equipment Only current or latest records.

lightweighed and

stenciled.

2. Engineering records of 3 years after disposition of property.

property changes actually

made.

3. Other..................... Note A.

E. Personnel and Payroll

1. Personnel and payroll 1 year.

records.

F. Insurance and Claims

1. Insurance records:

(a) Schedules of Until expiration plus 1 year.

insurance against fire,

storms, and other

hazards and records of

premium payments.

(b) Records of losses and 1 year after settlement.

recoveries from

insurance companies and

supporting papers.

2. Claims records:

(a) Claim registers, card 1 year after settlement.

or book indexes, and

other records which

record personal injury,

fire and other claims

against the company,

together with all

supporting data.

(b) Claims registers, 1 year after settlement.

card or book indexes,

and other records which

record overcharges,

damages, and other

claims filed by the

company against others,

together with all

supporting data.

details of authorities

issued to agents,

carriers, and others for

participation in freight

claims.

(d) Reports, statements 3 years.

and other data

pertaining to personal

injuries or damage to

property when not

necessary to support

claims or vouchers.

(e) Reports, statements, 1 year.

tracers, and other data

pertaining to unclaimed,

over, short, damaged,

and refused freight,

when not necessary to

support claims or

vouchers.

(f) Authorities for 3 years.

disposal of unclaimed,

damaged, and refused

freight.

3. Other..................... Note A.

G. Taxes

1. Taxes..................... Note A.

H. Purchases and Stores

1. Purchases and stores...... Note A.

I. Shipping and Agency

Documents

1. Bills of lading and

releases:

(a) Consignors' shipping 1 year.

orders, consignors'

shipping tickets, and

copies of bills of

lading, freight bills

from other carriers and