ceives written notice, in a form and manner acceptable to the Board, that he is an incompetent, or a minor, for whom a guardian or other person legally vested with the care of his person or estate has been appointed: Provided, however, That, regardless of the legal competency or incompetency of an individual entitled to a benefit administered by the Board, the Board may, if it finds the interest of such individual to be served thereby, recognize actions by, and conduct transactions with, and make payments to, such individual, or recognize actions by, and conduct transactions with, and make payments to, a relative or some other person for such individual's use and benefit.

(b) Subsection (b) of section 12 of the Railroad Retirement Act of 1974 provides as follows:

Every guardian or other person legally vested with the care of the person or estate of an incompetent or minor who is receiving or claiming benefits, or to whom any right or privilege is extended, under this Act or any other Act of Congress now or hereafter administered, in whole or in part, by the Board shall have power everywhere, in the manner and to the extent prescribed by the Board, but subject to the provisions of the preceding subsection, to take any action necessary or appropriate to perfect any right or exercise any privilege of the incompetent or minor and to conduct all transactions on his behalf under this or any other Act of Congress now or hereafter administered, in whole or in part, by the Board. Any payment made pursuant to the provisions of this section shall be a complete settlement and satisfaction of any claim, right, or interest in and to such payment. [41 FR 22558, June 4, 1976]

§ 266.2 Presumption of competency.

Every individual shall be conclusively presumed to have been competent until the date on which the Board receives a notice in writing that a legal guardian or other person legally vested with the care of the person or estate of an incompetent or a minor has been appointed: Provided, however, That, despite receiving notice in writing that a legal guardian or other person legally vested with the care of the person or estate of an individual has been appointed, the Board may, if it finds the interests of such individual to be served thereby, recognize actions by, conduct transactions with, and make payments to such individual.

[41 FR 22558, June 4, 1976]

§ 266.3 Evidence of authority of legal guardian, etc.

Evidence of the appointment of a legal guardian or other person legally vested with the care of the person or estate of an incompetent or a minor shall be in the form of a certificate executed by the proper official of the court of appointment.

§ 266.4 Effect of matters or actions submitted or taken by guardian, etc.

All matters and actions in connection with an annuity submitted or taken by the guardian or other person legally vested with the care of the person or estate of an incompetent or a minor shall be considered by the Board in the same manner and with the same effect as though such matters or actions had been submitted or taken by the ward, if the ward had capacity to act in his own behalf; Provided, however, That the Board may, if it deems it necessary require the guardian or other

person legally vested with the care of the person or estate of an incompetent or a minor to submit a certified copy of an order from the court of appointment authorizing some particular action which the guardian or other person legally vested with the care of the person or estate desires to take in connection with the application.

§ 266.5 Recognition by the Board of a person to act in behalf of another.

(a) Regardless of the receipt of written notice of the appointment of a guardian or other person legally vested with the care of the person or estate of an incompetent or a minor who is receiving or claiming benefits or to whom any right or privilege is extended under the law, the Board may, in its discretion, validly recognize actions by and conduct transactions with others acting in behalf of the individual found by the Board to be a minor or to be unable to manage his affairs, if the Board finds such actions or transactions to be in the best interest of such individual.

(b) In the absence of a written notice of the appointment of a guardian or other person legally vested with the care of the person or estate of an in

competent or minor, the Board shall, except where special circumstances appear, recognize a person to act on behalf of an individual under the following circumstances:

(1) When the individual has been adjudged mentally incompetent by a court having jurisdiction to do so;

(2) When the individual has been committed to a mental institution by a court having jurisdiction to do so;

(3) When the individual is an inmate of a mental institution;

(4) When the individual is less than 16 years of age;

(5) When the individual is between 16 and 18 years of age and is in the care of another person and does not have the capacity to act on his own behalf.

(c) In the absence of special circumstances, consideration of the proper party with whom to conduct transactions on behalf of an incompetent should be limited to the following persons, who are listed in order of preference: (1) The legal guardian or other person legally vested with the care of the person or estate of the incompetent; (2) the spouse; (3) any relative, individual, or agency caring for the incompetent.

(d) In the absence of special circumstances, the proper party with whom to conduct transactions, including the certifying of payments, on behalf of a minor beneficiary should be one of the following, who are listed in order of preference: (1) The legal guardian or other person legally vested with the care of the person or estate of the minor beneficiary; (2) a parent (including an adopting parent), or stepparent with whom the minor beneficiary is living; (3) any relative, individual, or agency caring for the minor beneficiary.

[41 FR 22558, June 4, 1976]

itant, and in a manner and for purposes which are in the annuitant's best interests.

[41 FR 22559, June 4, 1976]

§ 266.7 Use of benefits for current mainte

nance.

as

Payments made to an individual as representative payee on behalf of an annuitant shall be considered having been applied for the use and benefit of the annuitant when they are used for the annuitant's current maintenance, that is, to replace current income lost because of the disability, retirement, or death of the insured individual. Where an annuitant is receiving care in an institution, current maintenance shall include the customary charges made by the institution to individuals to whom it provides care and services substantially similar to those which it provides to the annuitant and charges made for current and foreseeable needs of the annuitant which are not met by the institution.

[41 FR 22559, June 4, 1976]

§ 266.8 Conservation and investment of

payments.

Payments made to an individual as representative payee on behalf of an annuitant which are not needed for the current maintenance of the annuitant, except as they may be used pursuant to § 266.10 or used to pay current creditors consistent with § 266.11, shall be conserved or invested on the annuitant's behalf. Such funds must be invested in accordance with the rules applicable to investment of trust estates by trustees. For example, surplus funds may be deposited in an interest or dividend-bearing account in a bank or trust company or in a savings and loan association if the account is either federally insured or is otherwise insured in accordance with the requirements of State law. Surplus funds deposited in an interest or dividend-bearing account in a bank or trust company or in a savings and loan association must be in a form of account which clearly shows that the representative payee has only a fiduciary, and not a personal, interest in

(Name of (Social Security

annuitant), No.), an incapacitated adult beneficiary, for whom (Name of payee) has been designated representative payee by the Railroad Retirement Board.

A representative payee who is the legally appointed guardian or fiduciary of the annuitant may also register United States Savings Bonds purchased with funds from railroad retirement payments in accordance with applicable regulations of the United States Treasury Department (31 CFR 315.5 through 315.8). Any other approved investment of the annuitant's funds made by the representative payee must clearly show that the payee holds the property in trust for the annuitant.

[41 FR 22559, June 4, 1976]

§ 266.9 Use of benefits for annuitant in institution.

Where an annuitant is confined in a Federal, State or private institution because of mental or physical incapacity, the individual to whom payments are made as representative payee on behalf of the annuitant shall give the highest priority to expenditure of the payments for the current maintenance needs of the annuitant, including the customary charges made by the institution in providing care and maintenance. It is considered to be in the best interests of the annuitant for the individual to whom payments are made on the annuitant's behalf to al

so made in a manner which will facilitate the annuitant's earliest possible rehabilitation or release from the institution, or which otherwise will help him live as normal a life as practicable in the institutional environment. [41 FR 22559, June 4, 1976)

§ 266.10 Support of legally dependent spouse, child, or parent.

If the current maintenance needs of an annuitant are being reasonably met, an individual to whom payments are made as representative payee on behalf of the annuitant may use part of the payments so made for the support of the legally dependent spouse, a legally dependent child, or a legally dependent parent of the annuitant. [41 FR 22559, June 4, 1976]

§ 266.11 Claims of creditors.

An individual to whom payments are made as representative payee on behalf of an annuitant may not be required to use such payments to discharge an indebtedness of the annuitant which was incurred before the first month for which payments are made to a representative payee on the annuitant's behalf. In no case, however, may such payee use such payments to discharge such indebtedness of the annuitant unless the current and reasonably foreseeable future needs of the annuitant are otherwise provided for.

[41 FR 22559, June 4, 1976]

§ 266.12 Accountability.

An individual to whom payments are certified as representative payee on behalf of an annuitant shall submit a written report in such form and at such times as the Board may require, accounting for the payments certified to him on behalf of the annuitant unless such payee is a court-appointed fiduciary and, as such, is required to make an annual accounting to the court, in which case a true copy of each such account filed with the court may be submitted in lieu of the accounting form prescribed by the Board. If any representative payee fails to submit the required accounting within a reasonable period of time

after it is requested, no further payments shall be made to him on behalf of the annuitant unless for good cause shown, the default of the representative payee is excused by the Board, and the required accounting is thereafter submitted.

[41 FR 22559, June 4, 1976]

§ 266.13 Transfer of accumulated benefit payments.

A representative payee who has con

served or invested funds from railroad retirement payments made to him on behalf of an annuitant shall, upon direction of the Board, transfer any such funds (including interest earned from investment of such funds) to a successor payee appointed by the Board, or, at the option of the Board, shall transfer such funds, including interest, to the Board for payment to a successor payee or to the annuitant. [41 FR 22559, June 4, 1976]

PART 300-DEFINITIONS

§ 300.1 Words and phrases.

For the purposes of the regulations in this part, except where the language or context indicates otherwise:

(a) The term "act" means the Railroad Unemployment Insurance act.

(b) The term "employer" means an employer as defined in the act and Part 201 of this chapter.

(c) The term "Board" means the Railroad Retirement Board.

(d) The term "person" includes an individual, trust, estate, partnership, association, joint stock company, company, corporation, and institution.

(e) The term "United States", when used in a geographical sense, means the States and the District of Columbia.

(f) The term "State" means any of the States or the District of Columbia.

(g) The term "employment" means service performed as an employee.

(h) The term "local lodges and divisions" and the term "local lodge or division" as used in section 1(a) and 1(d), respectively, of the act, shall be construed to include any subordinate unit of a national railway labor organization defined as an "employer" under the act, which unit functions in the same manner as, or similar to "local lodges" as that term is ordinarily used, irrespective of the designation of such unit by its national organization.

(Sec. 12, 52 Stat. 1107, as amended; 45 U.S.C. 362. Interprets or applies sec. 1, 52 Stat. 1094, as amended; 45 U.S.C. 351) [Board Order 40-368 and Board Order 40385, 5 FR 2717, Aug. 1, 1940, as amended by Board Order 68-72, 33 FR 11114, Aug. 6, 1968]

PART 301-EMPLOYERS UNDER THE ACT

Sec.

301.1 Statutory provisions. 301.4 Who are employers.

§ 301.1 Statutory provisions.

(a) The term "employer" means any carrier (as defined in subsection (b) of this section), and any company which is directly or indirectly owned or controlled by one or more such carriers or under common control therewith, and which operates any equipment or facility or performs any service (except trucking service, casual service, and the casual operation of equipment or facilities) in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad, and any receiver, trustee, or other individual or body, judicial or otherwise, when in the possession of the property or operating all or any part of the business of any such employer: Provided, however, That the term "employer" shall not include any street, interurban, or suburban electric railway, unless such railway is operating as a part of a general steam-railroad system of transportation, but shall not exclude any part of the general steam-railroad system of transportation now or hereafter operated by any other motive power. The Interstate Commerce Commission is hereby authorized and directed upon request of the Board, or upon complaint of any party interested, to determine after hearing whether any line operated by electric power falls within the terms of this proviso. The term "employer" shall also include railroad associations, traffic associations, tariff bureaus, demurrage bureaus, weighing and inspection bureaus, collection agencies, and other associations. bureaus, agencies, or organizations controlled and maintained wholly or principally by two or more employers as hereinbefore defined and engaged in the performance of services in connection with or incidental to railroad transportation; and railway labor organizations, national in scope, which have been or may be organized in accordance with the provisions of the Railway Labor Act, and their State and National legislative committees and their general committees and their insurance departments and their local lodges and divisions, established pursuant to the constitution and bylaws of such organizations.

The term "employer" shall not include any company by reason of its being engaged in the mining of coal, the supplying of coal to an employer where delivery is not beyond the mine tipple, and the operation of equip