§ 56.4 Disposal of pledged or treasury securities.

(a) Certificates of notification required by paragraph (5) of section 20a of the Act to be filed with the Commission within 10 days after the sale, pledge, repledge, or other disposition of securities theretofore pledged or held unencumbered in the treasury of the carrier, shall be filed substantially in the form designated as Form BF-21.

(b) As used in paragraph (5) of section 20a, securities described as "pledged or held unencumbered in the treasury of the carrier" are securities theretofore nominally issued, or reacquired and held in the treasury of the carrier, except securities held by trustees in sinking or other funds.

§ 56.5 Issuance of short-term notes.

(a) Certificates of notification required by paragraph (9) of section 20a of the Act to be filed with the Commission within 10 days after the making of short-term notes within the limits within which such notes may be issued without authorization, shall be filed substantially in the form designated as Form BF-22.

(b) The term "short-term notes" means notes maturing not more than two years after the date thereof.

(c) The limits within which short-term notes may be issued without authorization are those specified in paragraph (9) of section 20a and in the proviso of section 214.

(d) Carriers or corporations within the exemptions provided in section 214 are not required to file certificates of notification.

§ 56.6 Reports of securities issued or obligations assumed.

(a) Within 30 days after the initial date of issue of any security or assumption of any obligation or liability authorized, a report showing the issue or assumption shall be filed with the Commission in Form BF-23. An interim report shall be made concurrently with any subsequent application for additional authority filed under sections 20a or 214, showing the action theretofore taken, and any balance previously authorized but not disposed of, in the same form. A final report shall be made upon the completion of the issue or assumption, and may be made in lieu of the initial report within the 30-day period following the initial action.

(b) On or before March 31 of the year following the year to which it relates, the respondent shall report in and as a part of its Annual Report Form to the Commission, concerning the securities issued and obligations assumed during such year.

COMPETITIVE BIDDING EXEMPTION

§ 56.25 Applications for authority to sell securities without competitive bidding.

(a) Special application for exemption from the competitive bidding requirement shall be made in the form designated as Form BF-7 only when for any reason it is not practicable to include the request for exemption in an application filed in Form BF-6, pursuant to the instructions (§ 56.1-56.3) respecting applications filled under section 20a.

(b) The requirement that, with certain specified exceptions, all classes of railroad securities other than equipment, issued under authority granted pursuant to the provisions of section 20a of the Act to be offered for sale at competitive bidding, or its equivalent, set forth in the Commission's report in Ex Parte 158, In Re Competitive Bidding in the Sale of Securities, 257 I.C.C. 129, decided May 8, 1944, and modified by findings in Atlantic Coast Line R. Co. Competitive Bidding Exemption, 282 I.C.C. 513 decided June 18, 1952, and further modified by supplemental report in Ex Parte 158, Ibid., 307 I.C.C. 1, decided August 14, 1958, with respect to securities issued or proposed to be issued incident to a loan guaranteed under the provisions of part V of the Act, is published in an appendix to this section.

(c) The rules and regulations prescribed in Part 51 of this chapter shall govern the execution, filing, and disposition of the application.

APPENDIX TO § 56.25

Pertinent conclusions and the requirement of the Commission in its report of May 8, 1944, in Ex Parte 158, "In the Matter of Competitive Bidding in the Sale of Securities under section 20a of the Interstate Commerce Act," are as follows:

We find that for the proper administration, execution, and enforcement of section 20a of the Interstate Commerce Act we should require as 8 condition to our approval of the sale of railroad securities issued under the provisions of that section that such securities be offered for sale at competitive bidding, or at what we have heretofore considered tantamount thereto, viz., upon invitation of bids for the purchase thereof. Proposals received in response to such invitation should be opened only at such time and place as is specified in the invitation, and the duly authorized representative of any person making any such proposal should be permitted to be present at the opening of such proposals, and to examine each proposal submitted. If the right be reserved in the advertisement or invitation for bids, the railroad proposing the issue may properly reject all bids and call for new bids or seek such relief as the facts and circumstances may warrant.

We further find that such requirement should apply to all classes of railroad securities other than equipment, as to which no change in the present practice is contemplated, except the following:

(1) Common and preferred stocks;

(2) Securities sold or otherwise issued pro rata to existing holders of securities of the issuing company pursuant to any preemptive right or privilege or in exchange for or extension of outstanding securities, or in connection with any liquidation, reorganization, or financial adjustment;

(3) Any note or other security maturing in not more than 3 years;

(4) Securities sold or otherwise issued when the total issue does not exceed $1,000,000, principal amount;

(5) Securities of any railroad company issued in exchange for the securities or properties of any other railroad company acquired pursuant to authority granted under the provisions of section 5(2) of the act, and any securities of such other company to be acquired by any other person pursuant to such authority;

(6) Securities sold or otherwise issued to a railroad company by any of its subsidiary companies pursuant to authority granted under section 20a of the act where such securities are not to be sold by the parent company, but are to be held subject to our further order; and

(7) Any securities as to which we shall find, upon due showing by a railroad company, either upon application under the provisions of section 20a or upon special application preliminary to the filing of such appliction under section 20a, that sale at competitive bidding should not be required.

Applications under section 20a to sell securities without competitive bidding on the ground that such securities come within one of the foregoing specific exemptions should include a statement of facts relied upon to show that the exemption applies. Special applications for exemption from the competitive biding requirement may be made pursuant to such special instructions as may hereafter be issued.

We further find that for the present no formal rule or regulations requiring the sale of railroad securities at competitive bidding should be promulgated. Railroads applying after June 30, 1944, for authority to issue securities under the provisions of section 20a will be expected to observe these findings. The foregoing requirement was modified by the Commission's report of June 18, 1952, in Finance Docket No. 17748, Atlantic Coast Line R. Co. Competitive Bidding Exemption, 282 I.C.C. 513, as follows:

"It will hereafter be our policy to deny any application for exemption from our competitive bidding requirement when competitive bidding is prima facie required and the applicant has, before obtaining the required exemption from us, entered into any discussions or any negotiations with respect to the terms of sale with any prospective purchaser of its securities. Our competitive bidding requirement is modified to this extent."

The foregoing requirements were further modified by the Commission's supplemental report of August 14, 1958, in Ex Parte 158, (1) to except securities sold or otherwise issued in connection with a loan guaranteed under the provisions of part V of the Interstate Commerce Act from the general requirement set forth in the prior report thereof of May 8, 1944, that railroad securities be offered for sale at competitive bidding or upon invitation of bids for the purchase thereof, and (2) to make the policy expressed in Finance

1 This is not to be construed as prohibiting preliminary discussion of an exploratory nature with prospective purchasers dealing with the availability of money, the general condition of the market for railroad securities and similar matters, or the making of such inquiries or investigation as may be required to determine the probability that two or more bids will be received if a proposed issue is offered at competitive bidding.

Docket No. 17748, Atlantic Coast Line R. Co. Competitive Bidding Exemption, supra, inapplicable to applications for exemption from the Commission's competitive bidding requirements by an applicant which in good faith, and under the belief that a guaranty may or will be required by the Commission in order for it to obtain the needed financing upon reasonable terms, has entered upon discussions or negotiations with respect to the terms of sale with a prospective purchaser of its securities.

(Sec. 12, 24 Stat. 383, as amended; sec. 20a, 41 Stat. 494, as amended; secs. 204, 205, 214, 49 Stat. 546, as amended, 548, as amended, 557, as amended; 49 U.S.C. 12, 20a, 304, 305, and 314.)

It is further ordered, That the order of August 9, 1946, by the Commission, Division 4, as amended, be, and it is hereby, superseded by this order;

It is further ordered, That this order shall become effective on October 1, 1964; and

It is further ordered, That notice of this order shall be given to the general public by depositing a copy in the Office of the Secretary of the Commission and by filing a copy with the Director, Office of the Federal Register. By the Commission, Division 3. [SEAL]

HAROLD D. McCoy,
Secretary.

TITLE 49-TRANSPORTATION

CHAPTER I-INTERSTATE COMMERCE COMMISSION

SUBCHAPTER A-GENERAL RULES AND REGULATIONS

PARTS 51-59-CONSOLIDATION, FINANCE, AND REORGANIZATION

ORDER

At a Session of the Interstate Commerce Commission, Division 3, held at its office in Washington, D.C., on the 20th day of May, A.D. 1964.

There being under consideration rules and regulations governing the filing and handling of applications and reports prescribed, or to be prescribed, under the following parts:

PARTS 52-59: CONSOLIDATION, FINANCE, And ReorganizaATION

52 Railroad consolidation procedure.

53 Interlocking officers.

54 Guaranty of loans to carriers by railroad.

55 Alteration or modification of securities and the provisions of instruments, and filing of certificates and reports.

56 Issuance of securities, assumption of obligations, and filing of certificates and reports.

59 Corporate reorganization of carriers and corporations.

It is ordered, That the table of contents heading of 49 CFR Parts 52-59: Consolidation, Finance, and Reorganization be, and it is hereby, amended to include Part 51 as follows:

PARTS 51-59: CONSOLIDATION, FINANCE, AND REORGANIZATION

It is further ordered, That 49 CFR be, and it is hereby, amended by adding a new Part 51 under the heading Parts 51-59: Consolidation, Finance, and Reorganization as follows:

Sec.

PARTS 51-59: CONSOLIDATION, FINANCE, AND REORGANIZATION

PART 51-GENERAL REQUIREMENTS

51.1 Scope and applicability of rules and regulations.
51.2 Definitions of terms used in the rules and regulations.
51.3 Use of prescribed form.

51.4 Information required; unknown or not available.

$51.1 Scope and applicability of rules and regulations.

(a) These rules and regulations govern the filing and handling of applications and reports, as prescribed in Parts 52 to 59, inclusive, except that any provision in such part covering the same subject matter as any such rule shall be controlling unless otherwise specifically provided herein.

(b) These rules and regulations shall apply to applications and reports under the enumerated parts at such time as the Commission may designate as to each part.

§ 51.2 Definitions of terms used in the rules and regulations.

(a) The term "applicant" means a person filing an application.

(b) The term "respondent" means a person filing a report required by the Interstate Commerce Act or the rules and regulations.

(c) Unless otherwise specifically provided, the terms used in the rules and regulations have the meanings defined in the Act.

§ 51.3 Use of prescribed form.

The prescribed form is to be used as a guide in the preparation of the application or report. Each application required to be served as provided in § 51.7 shall include a caption clearly and concisely describing the applicant or applicants and the authority sought. Other parts of the application and reports shall contain full and complete responses. Each part shall contain all of the item numbers and headings, but the text of any item may be omitted if all of the information required by such item is clearly set forth thereunder or in exhibits attached or referred to under the respective item number and heading. Where an item is not applicable, the application or report shall so state.

§ 51.4 Information required; unknown or not available.

All information required must be given unless neither known nor available to the applicant or respondent. In such case, however, specific statement to such effect shall be made in the application or report in lieu of the omitted material, setting forth the reasons why the information is neither known nor available.

§ 51.5 Typographical specifications.

The application or report shall be submitted in typewritten or similar form specified in § 1.15 of this chapter, on paper approximately 81⁄2 inches wide and not more than 13 inches long, with a lefthand margin of 11⁄2 inches and, if typewritten, the impression must be on only one side of the paper. Exhibits may be in any convenient size but shall be folded to conform to the size of the application or report.

The original application or report shall bear the date of execution and be signed with ink by or on behalf of each applicant or respondent. Execution shall be by the applicant or respondent if an individual, by all partners if a partnership, unless satisfactory evidence is furnished of the authority of a partner to bind the partnership, and, if a corporation, an association or other similar form of organization, by its president or other executive officer having knowledge of the matters therein set forth. Each person signing the application or report shall also sign a certificate showing, among other things, that such person has knowledge of the matters therein set forth and is duly authorized to verify and file the application or report. A false statement in an application or report is punishable under section 35 of the Criminal Code, 18 U.S.C. 1091. Additional signatures and certificates shall be furnished as directed by the Commission.

851.7 Filing; number of copies; service.

(a) The original and six copies of each application shall be filed with the Secretary, Interstate Commerce Commission, Washington, D.C. 20423.

(b) Copies of each application shall be served in the manner and upon the persons specified in the prescribed form or instructions. Proof of service of copies of the application shall be made in connection with and as part of the original application filed with the Commission.

(c) Each report shall be filed in duplicate with the Secretary of the Commission. No service of copies is required.

(d) Each copy shall conform in all respects to the original and, except as otherwise specifically provided, shall be complete in itself, but the signature in the copies may be stamped or typed.

§ 51.8 Notice to interested persons.

The Commission will give notice of the filing of applications under sections 5(2), 20a except (12), 20b, and 214 by publication of a summary of the authority sought in the FEDERAL REGISTER. The summary will be prepared principally from the caption, and it shall be the responsibility of applicant promptly to advise the Commission if the summary does not properly describe the authority sought. Such notice will specify the time, not less than 15 days, within which protests may be filed as provided in § 1.40 of this chapter. § 51.9 Additional information.

The applicant or respondent shall submit such additional information to support its application or report as the Commission may require.

§ 51.10 Incorporation by reference.

(a) If any required document shall have been previously filed in connection with another proceeding, it will be sufficient to refer to the docket number under which previously filed, provided that any change or changes which have occurred in any such document subsequent to the previous filing thereof shall be shown in an exhibit identified to correspond with the specific required exhibit.

(b) Except as in any form of application or report otherwise specifically provided, income statements, balance sheets or supporting detail for items therein may not be incorporated by referenec to annual or quarterly reports filed with the Commission or to other proceedings.

§ 51.11 Waiver of rules.

If unusual difficulties arise in, or undue burden would result from, the furnishing of the information required in or in connection with any application or report, the Commission may, upon appropriate showing, modify such requirement.

§ 51.20 List of forms.

(a) Application forms:

BF-6, Application under section 20a or 214, Interstate Commerce Act, for authority to issue securities, or to assume obligation or liability in respect of securities of another.

BF-7, Special application for authority to sell securities without competitive bidding.

(b) Report forms:

BF-21, Certificate of notification under section 20a (5), Interstate Commerce Act: Disposal of pledged or treasury securities.

BF-22, Certificate of notification under section 20a (9), Interstate Commerce Act: Issuance of short-term notes.

BF-23, Special report under section 20a (10), Interstate Commerce Act: Issuance of securities or assumption of obligations.

It is further ordered, That this order shall become effective with respect to applications and reports filed under Part 56, Issuance of Securities, Assumption of Obligations, and Filing of Certificates and Reports, on and after October 1, 1964; and

It is further ordered, That notice of this order shall be given to the general public by depositing a copy in the Office of the Secretary of the Commission and by filing a copy with the Director, Office of the Federal Register.