No. 36210 UNIFORM SYSTEMS OF ACCOUNTS, DESTRUCTION OF RECORDS: RECORDS AND REPORTS PRESERVATION OF RECORDS Decided June 21, 1976 On reconsideration, regulations governing preservation of records by carriers (49 CFR 1220-1239) and ratemaking organizations (49 CFR 1253) subject to the Interstate Commerce Act revised. Appropriate order entered and proceeding discontinued. C. L. Packard for Georgia Highway Express, Inc. Robert C. Uecke for Terminal Transport Co., Inc. Hollis G. Duensing for Association of American Railroads. J. Alan Royal for Middle Atlantic Conference. Joseph P. Wolonsky and Charles F. Schumacher for Central States Motor Freight Bureau, Inc. Charles Munsch for Central and Southern Motor Freight Tariff Association. REPORT OF THE COMMISSION BY THE COMMISSION: By order dated October 14, 1975, published in Federal Register on October 29, 1975, (40 FR 50384), the Interstate Commerce Commission issued revised and consolidated regulations governing preservation of records. Because the consolidated and revised regulations allowed immediate microfilming of records and generally reduced retention periods, they were thought to essentially ease recordkeeping and accordingly were issued without giving the public prior notice and an opportunity to comment. Subsequent petitions for reconsideration of that decision, however, pointed out that the regulations adopted therein included at least two instances of new substantive requirements. In view of those petitions, the order entered October 14, 1975, was stayed December 4, 1975. Subsequently, by notice of proposed rulemaking dated March 12, 1976, served March 16, 1976, and published in the Federal Register March 19, 1976, (41 FR 11565), the Commission announced that petitions for reconsideration of the order of October 14, 1975, be granted. All interested parties wishing to comment on the proposed revised regulations were given the opportunity to submit their views and comments in writing by April 19, 1976; and that the matters raised by petitioners were deemed resubmitted. BACKGROUND Currently, there are eight separate destruction of records regulations. This sometimes results in a different retention period for the same record for different modes. The Commission found that by consolidating the present eight regulations into a single set of general instructions and recordretention schedules, allowing the immediate miscrofilming of any record, and reducing retention periods where possible, the burden of recordkeeping on companies under the jurisdiction of the Commission would be reduced. REPRESENTATIONS The notice of proposed rulemaking provided that any person desiring to participate could do so by filing, within a prescribed time, written statements of facts, views or arguments. Comments were received from six participants and are summarized below: Terminal Transport Company, Inc. (TTC) and Georgia Highway Express, Inc. (GHE) take exception to Section 1220.3, Index of Records. This section would require an index of records to be maintained at each office, and a master index to be maintained in the company's general office showing the physical location of the various classes of records, the period to which they relate and the locations, names and titles of the custodians. Respondents argue that the requirement for an index of records is unnecessary, burdensome, time consuming and costly. They maintain that there has been no business reason for maintaining a master index, and that there are specific practical reasons for not attempting to compile the type of master index required by the new regulations. They request that this section be deleted from the preservation of records regulations. Association of American Railroads (AAR) also objects to the requirement of the maintenance of a master index of records. In addition, AAR objects to the requirement of the appointment of an officer to supervise the preservation of records. They maintain that the existing recordkeeping system has not been less efficient nor has the review of records been hampered by the lack of a requirement that each railroad appoint an officer or other responsible employee to supervise the preservation of records. Middle Atlantic Conference (MAC), Central States Motor Freight Bureau (CENTRAL) and Central and Southern Motor Freight Tariff Association (C&S) all point out that under the proposed retention requirements general ledgers and general journals must be retained for a period of 50 years, whereas, under the former retention requirements for ratemaking organizations, only a 10-year retention period was required for these same items. They point out that in view of the former 10-year provisions, most general ledgers and general journals beyond 10 years old have been destroyed. MAC, CENTRAL, and C&S also contend that as to records required to be maintained by Section 1253.20 (49 CFR 1253.20) Other Records, the provisions of the new regulations are unclear, indefinite, and ambiguous. They also aver that they are unable to determine the specific point at which the two-year retention period is to begin for tariff records. DISCUSSION AND CONCLUSIONS The issues raised by the parties will be discussed in topical fashion. Section 1220.3, Index of Records.-TTC, GHE, and AAR all requested this entire section be deleted from the regulations. We do not agree that it should be deleted in its entirety. However, we do believe there is merit in a modification that would still allow Commission representatives adequate access to the carriers' records. The section will be modified to require only that at each office of the carrier or rate bureau where records are kept or stored, records be arranged and filed so that they may be readily identified and made available to representatives of the Commission. We believe this requirement is a necessary aid to Commission representatives in expeditiously locating records they deem necessary to the performance of their audits and investigation functions. Designation of Supervisory Official.-AAR requests that the Commission not require the appointment of an officer to supervise the preservation of records. Instead, it urges retention of the existing regulations under which the Commission requires railroads to maintain a record of the destruction of all carrier records and documents for which there is a prescribed retention period. We would point out, however, that designation of a supervisory official is not a new requirement. All of the current destruction of records regulations contain the requirement that an official be appointed to supervise the destruction of records and documents. Specifically, 49 CFR 1220.4(a) reads "Within six months after the effective date of the regulations in this subpart, or within six months after becoming subject to this provision, each carrier shall appoint an officer or other responsible employee to supervise the destruction of records and documents." We see no merit in AAR's argument and the requirement should not be modified. Increase in Retention Requirements for Rate Bureaus.-Retention requirements for general ledgers and general journals were increased from 10 to 50 years. An easing of the new requirement and a return to the original 10-year retention period for these particular records for rate bureaus is warranted. Rate bureaus are not carriers. They neither have transportation equipment or facilities nor provide transportation service. The current 10-year retention period for general ledgers and general journals has proven to be satisfactory. Accordingly, we will require rate bureaus to preserve these two records 10 years. Recordkeeping on Tariff Information.—MAC, CENTRAL, and C&S argue that recordkeeping for tariff information is unclear. We believe this argument has merit and therefore have added an item clarifying the recordkeeping of Section 1253.20 information. FINDINGS We find that Parts 1201-1210, 1220-1239, and 1253 of Chapter X of Title 49 of the Code of Federal Regulations should be amended to reflect the modifications as set forth in the order entered herein; that such modifications are reasonable and necessary to the effective enforcement of the provisions of the Interstate Commerce Act, as amended; that such rules, as modified, are otherwise lawful and consistent with the public interest; and the National Transportation Policy; and that this is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969. An appropriate order will be entered. COMMISSIONER CORBER did not participate. APPENDIX Part 1220-Preservation of Records, as published in the October 29, 1975 Federal Register (40 FR 50384) is amended as follows: (1) 1220.3, Index of records, appearing under the title PART 1220-PRESERVATION OF RECORDS, is amended to read: 1220.3 Availability of records. (2) The tile and text of Section 1220.3, Index of records, is revised to read: 1220.3 Availablity of records. At each office where records are kept or stored, such records as are herein required to be preserved shall be so arranged and filed so that they may be readily identified as made available to representatives of the Commission. Items 1 and 2 under Section 1220.10(c) are amended and item 7 under Section 1220.10(k) is added, to read as follows: |