requirements of the Commission with respect to the matter at issue, such person will be requested to advise the Commission in writing within a time to be specified whether it consents to the disposition of the questions involved under the shortened procedure provided in this Part.

§ 41.3 Facts and argument.

If the person consents to the matter being handled under such shortened procedure, the person and any other parties interested, including representatives of the Commission, shall submit to the Commission, within 30 days after the receipt of notice from the Commission to do so, a memorandum of the facts and, reparately stated, of the argument relied upon, to sustain the position taken respecting the matter at issue together with copies in sufficient number to enable the Commission to retain three copies for its own use and make service in accordance with § 1.17 of this chapter, upon all parties designated in said notice. Twenty days will be allowed in which to file a reply by any party who filed an original memorandum.

the proceeding prior to the submission of the case to the Commission any party in interest requests a hearing, the proceeding will be assigned for hearing as provided for by § 1.20 of this chapter. The Commission may also in its discretion set the proceeding for hearing on its own motion at any stage thereof. § 41.8 Burden of proof.

The burden of proof to justify every accounting entry shall be on the person making, authorizing, or requiring such entry.

CERTIFICATION OF COMPLIANCE WITH
ACCOUNTING REGULATIONS

§ 41.10 Examination of accounts.

(a) All Class A and Class B pubiic utilities and licensees shall secure, for the year 1968 and each year thereafter until December 31, 1975, the services of an independent certified public accountant, or independent licensed public accountant, certified or licensed by a regulatory authority of a State or other political subdivision of the United States, to test compliance in all material respects of those schedules as are indicated in the General Instructions set out in the Annual Report, Form No. 1, with the Commission's applicable Uniform System of Accounts and published accounting releases. The Commission expects that identification of questionable matters by the independent accountant will facilitate their early resolution and that the independent accountant will seek advisory rulings by the Commission on such items. This examination shall be deemed supplementary to periodic Commission examinations of compliance.

(b) Beginning January 1, 1976, and each year thereafter, only independent certified public accountants, or independent licensed public accountants who were licensed on or before December 31, 1970, will be authorized to conduct annual audits and to certify to compliance in all material respects, of those schedules as are indicated in the General Instructions set out in the Annual Report, Form No. 1, with the Commission's applicable Uniform System of Accounts, published accounting releases and all other regulatory matters.

[Order 462, 37 F.R. 26005, Dec. 7, 1972]

§ 41.11 Report of certification.

Each Class A or B public utility or licensee shall file with the Commission a letter or report of the independent accountant certifying approval, together with or within 30 days after the filing of the Annual Report, Form No. 1, covering the subjects and in the form prescribed in the General Instructions of the Annual Report. The letter or report shall also set forth which, if any, of the examined schedules do not conform to the Commission's requirements and shall describe the discrepancies that exist. The Commission shall not be bound by a certification of compliance made by an independent accountant pursuant to this paragraph.

(Sec. 304, 49 Stat. 855; 16 U.S.C. 825c) [Order 356, 33 F.R. 143, Jan. 5, 1968]

§ 41.12

Qualifications of accountants.

The Commission will not recognize any certified public accountant or public accountant through December 31, 1975, who is not in fact independent. Beginning January 1, 1976, and each year thereafter, the Commission will recognize only independent certified public accountants, or independent licensed public accountants who were licensed on or before December 31, 1970, who are in fact independent. For example, an accountant will not be considered independent with respect to any person or any of its parents or subsidiaries in whom he has, or had during the period of report, any direct financial interest. The Commission will determine the fact of independence by considering all the relevant circumstances including evidence bearing on the relationships between the accountant and that person or any affiliate thereof. [Order 462, 37 FR 26006, Dec. 7, 1972]

AUTHORITY: The provisions of this Part 45 Issued under secs. 805(b), 809, 49 Stat. 856, 858; 16 UB.C. 825d (b), 825h.

SOURCE: The provisions of this Part 45 contained in Order 141, 12 F.R. 8501, Dec. 19, 1947, unless otherwise noted.

CROSS REFERENCES: For rules of practice and procedure, see Part 1 of this chapter. For forms under rules of practice and regulations under the Federal Power Act, see Part 131 of this chapter.

NOTE: For an order deferring billing for annual charges due to a Supreme Court ruling, see 38 F.R. 3401, Feb. 6, 1973.

§ 45.1 Who shall file.

An order authorizing the holding of positions as provided by section 305(b) of the Federal Power Act (49 Stat. 856; 16 U.S.C. 825d(b)) will be granted only upon application therefor made as provided in this part by the person seeking to hold such positions (hereinafter referred to as “applicant").

§ 45.2 Positions requiring authorization.

(a) The positions subject to this part shall include those of any person elected or appointed to perform the duties or functions ordinarily performed by a president, vice president, secretary, treasurer, general manager, comptroller, chief purchasing agent, director or partner, or to perform any other similar executive duties or functions, in any corporation' within the purview of section 305(b) of the act. With respect to positions not herein specifically mentioned which applicant holds and which are invested with executive authority, applicant shall state in the application the source of such executive authority, whether by bylaws, action of the board of directors, or otherwise.

(b) Corporations' within the purview of section 305(b) of the act include:

(1) Any public utility under the act, which means any person who owns or operates facilities for the transmission

1 "Corporation" means any corporation, Joint-stock company, partnership, association, business trust, organized group of persons, whether incorporated or not, or a receiver or receivers, trustee or trustees of any of the foregoing. It shall not include “municipalities" as defined in the Federal Power Act (sec. 3, 49 Stat. 838; 13 U.S.C. 796).

of electric energy in interstate commerce. or any person who owns or operates facilities for the sale at wholesale of electric energy in interstate commerce.

(2) Any bank, trust company, banking association, or firm that is authorized by law to underwrite or participate in the marketing of public utility securities; this includes any corporation when so authorized whether or not same may also be a public utility and/or a holding company. (See 12 U.S.C. 378.)

(3) Any company that supplies electrical equipment to a public utility in which applicant seeks authorization to hold a position, whether the supplying company be a manufacturer, or dealer, or one supplying electrical equipment pursuant to a construction, service, agency, or other contract.

(c) Regardless of any action which may have been taken by the Commission upon a previous application under section 305(b) of the act, an application for approval under such section is required with reference to any position or positions not previously authorized which are within the purview of said section. § 45.3 Time of filing application.

(a) Anticipatory application. An application may be made in anticipation of election or appointment to a position or positions within the purview of section 305(b) of the act.

(b) Application after election or appointment. Section 305(b) of the act provides that the holding of positions within the purview of that section shall be unlawful unless the holding shall have been authorized by order of the Commission. Nothing in this Part shall be construed as authorizing the holding of positions prior to the order of the Commission on application therefor. Applications shall be filled within 30 days after election or appointment to any positions within the purview of section 305(b) of the act.

§ 45.4 Supplemental applications.

(a) New positions. In the event of a change or changes in the information set forth in an application, by the applicant's election or appointment to another position or other positions in corporations within the purview of section 305(b) of the act, the application shall

be supplemented by the applicant's setting forth all the data with respect to the new position or positions in accordance with the requirements of this Part.

(b) Old positions. After applicant has been authorized to hold a particular position, further application in connection with each successive term so long as he continues in uninterrupted tenure of such position will not be required except as ordered by the Commission. If the term of office or the holding of any position for which authorization has been given shall be interrupted and the applicant shall subsequently be reelected or reappointed thereto, further authorization will be required.

§ 45.5 Supplemental information.

(a) Required by Commission. Applicants under this Part shall upon request of the Commission and within such time as may be allowed, supplement any application or any supplemental application with any information required by the Commission.

(b) Notice of changes. In the event of the applicant's resignation, withdrawal, or failure of reelection or appointment in respect to any of the positions for which authorization has been granted by the Commission, or in the event of any other material or substantial change therein, the applicant shall within 30 days after any such change occurs, give notice thereof to the Commission setting forth the position corporation, and date of termination therewith, or other material or substantial change.

(c) Reports. All persons holding positions by authorization of the Commission under section 305(b) of the act may be required to file such periodic or special reports as the Commission may deem necessary.

§ 45.6 Termination of authorization.

(a) By the Commission. Orders of authorization under section 305(b) of the act are subject to revocation by the Commission after due notice to applicant and opportunity for hearing. In any such proceeding the burden of proof shall be upon the applicant to show that neither public nor private interests will be adversely affected by the holding of such positions.

(b) Without action of the Commission. Whenever a person shall cease to hold a position theretofore authorized to be held by the Commission or such position shall cease to be within the purview of section 305(b) of the Federal Power Act, the Commission's authorization to hold such position shail terminate without further action by the Commission. If upon such termination of authorization as aforesaid, such person does not continue to hold at least two positions authorized and then requiring authorization pursuant to said section 305(b) of the act, all authorization theretofore given by the Commission shall thereupon terminate. $ 45.7

Form of application; number of copies.

An original and two copies of each application, supplemental application, statement of supplemental information, notice of change and report required to this Part, together with on additional copy for each interested State commission, shall be filed with the Commission. Each original shall be dated, signed by the applicant and verified under oath in accordance with § 131.60 of this chapter. Each copy shall bear the date and signature that appear on the original and shall be complete in itself, but the signature in the copies may be stamped or typed and the notarial seal may be omitted. The application shall conform to § 1.15 of this chapter.

§ 45.8 Contents of application; filing fee.

Each application shall be accompanied by the fee prescribed in Part 36 of this subchapter and shall state the following:

(a) Identification of applicant. (1) Full name, business address, and place of residence.

(2) Major business or professional activity.

(3) If former application or applications under section 305(b) of the Act have been made by the applicant, give date and docket number of the last application filed.

(4) If application is not filed with the Commission within 30 days after election or appointment, state reasons in full for the delay.

(b) List of positions within the purview of section 305(b) of the act for

(c) Data as to positions with each public utility mentioned in paragraph (b) of this section. (The format should be adapted to the information submitted, In keeping with completeness and conciseness. In the case of public utilities of the same holding company system, brevity will generally be promoted by submitting the information for all of the utilities involved under each subsection progressively in the order of the subsections, utilizing tables when feasible.)

(1) Name, principal place of business, and a brief description of operations.

(2) Date elected or appointed, or anticipated date of election or appointment, to each position not previously authorized.

(3) Names of officers and directors; number of vacancies, if any, on Board of Directors.

(4) Description of applicant's duties: Approximate amount of time devoted thereto; and, if applicant seeks authorization as a director, when and where directors meetings have been held during the past 12 months and number of such meetings attended by applicant.

(5) All other professional, contractual, or business relationships of applicant with the public utility, either directly or through other corporations or firms.

(6) Extent of applicant's direct or indirect ownership, control of, or beneficial interest in the public utility or the securities thereof. If ownership or interest is held in a name other than that of applicant, state name and address of the holder.

(7) Extent of applicant's indebtedness to the public utility, how and when incurred, and consideration therefor.

(8) All money or property received by applicant from the public utility or any affiliate during the past 12 months, and expected during the ensuing 12 months, whether for services, reimbursement of expenses, or otherwise. Specify in detail

the amount thereof and the basis therefor. If applicant's compensation for services to the public utility is not paid directly by the public utility, give name of the corporation which does pay same, the amount allocated or allocable to the public utility or any affiliate, and the basis or reason for such allocation.

(9) Name and address of principal place of business of any corporation which renders management, construction or other service to the public utility pursuant to contract or other continuing arrangement.

(10) Whether during the past 5 years the public utility or any affiliate thereof or any security holders of either have commenced any suit against the officers or directors thereof for alleged waste, mismanagement or violation of duty, to which suit applicant was a party defendant. If so, give date of commencement of suit, court in which commenced, and present status.

(11) Whether the public utility or any affiliate thereof, during the past 5 years and while applicant held a position therein, has either voluntarily or involuntarily been the subject of any proceeding in bankruptcy (including 77(b), 48 Stat. 912; 11 U.S.C. 207), insolvency or equity receivership, either Federal or State. If so, give date of commencement of proceeding, court in which commenced, and present status.

(d) Data as to positions with each bank, trust company, banking association or firm, mentioned in paragraph (b) of this section, that is authorized by law to underwrite or participate in the marketing of securities of a public utility. (The applicant shall use a separate sheet for each corporation.)

(1) Name of corporation, State, and date of incorporation (if any) and address of principal place of business.

(2) States in which corporation is doing business or has qualified to do business.

(3) Positions which applicant holds or seeks authorization to hold therein and when and by whom elected or appointed to each position.

(4) Description of applicant's duties In each position and approximate amount of time devoted thereto, and, if applicant seeks authorization as director, where directors meetings are held.

(5) Extent of applicant's direct or indirect ownership, or control of, or bene

ficial interest in, the company or in the securities thereof, including common stock, preferred stock, bonds, or other securities. If such ownership or interest is held in a name other than that of applicant, state name and address of such holder.

(6) All money or property received by applicant from the company during the past 12 months, and expected during the ensuing 12 months whether for services, reimbursement for expenses, or otherwise. Specify in detail the amount thereof and the basis therefor.

(7) Names, titles, and residence addresses of directors, officers, or partners.

(8) Whether the corporation is now engaged in underwriting or participating in the marketing of the securities of a public utility; if so, to what extent.

(9) Whether the corporation, during applicant's connection therewith, has underwritten or participated in the marketing of the security issue of any public utility with which applicant was also connected; if so, the details with respect to every such transaction.

(10) (If the answer to subparagraph (8) of this paragraph is in the negative.) Give excerpts from the charter, declaration of trust, or articles of partnership which authorize the underwriting or participating in the marketing of securities of a public utility.

(11) (If the answer to subparagraph (8) of this paragraph is in the negative.) Give general requirements of and appropriate reference to, the laws of the State of organization and of States in which corporation is doing business or has qualified to do business, with which it must comply in order to engage in the business of underwriting or participating in the marketing of the securities of a public utility.

(12) What steps, if any, have been taken to comply with laws mentioned in subparagraph (11) of this paragraph.

(13) In lieu of subparagraphs (10), (11), and (12) of this paragraph, an opinion by counsel to the same effect and including the information in respect thereto may be filled with the application.

(14) Whether the corporation has registered with the Securities and Exchange Commission; if so, when and under what section of what act.

(e) Data as to positions with each company, mentioned in paragraph (b)