The Texas Shred Law
Governor Perry signed House Bill 698 and it became effective in Texas September 1, 2005.
This law requires the destruction off all records containing personal information, and imposes
a $500 fine per record on violators. Texas ranks second in the nation with 26,000 identity
theft complaints filed with the Federal Trade Commission in 2004. A Better Business Bureau
report filed in 2005 revealed that the vast majority of ID theft occurs by stealing physical
documents through mail tampering or digging through someone’s trash.
Federal Regulations
The Fair and Accurate Credit Transaction Act (FACTA) requires the destruction
of employee and consumer information before it is discarded. All documents and material that contain
sensitive employee and consumer information are considered private and confidential.
Health Insurance Portability and Accountability Act (HIPAA) established privacy
rule guidelines to covered entities to implement “appropriate administrative, technical and physical
safeguards” for Protected Health Information in all forms.
Some of the other notable laws and regulations include Gramm/Leach/Bliley, Privacy Act,
Economic Espionage Act, Trade Secret Protection Act and Implied Contract Breach.
IDENTITY THEFT and information-based fraud is the fastest growing crime in the US.
The U.S. Supreme Court ruled that you give up ownership of information when it is
casually discarded into the trash.
Record Management
The Information Listed Below Should Only Be Used As Guide to Document Retention.
Retention Schedules May Vary According To Laws in Your State.
Accident reports/claims (settled cases) 7 years
Accounts payable: invoices, ledgers, and schedules 4 years
Actuarial reports Permanently
Articles of incorporation Permanently
Audit reports Permanently
Bank reconciliations 4 years
Bank statements 4 years
Bills of lading 3 years
Budgets - projections 2 years
Bylaws Permanently
Capital stock and bond records:
ledgers, transfer registers, stubs coupons, options, etc. Permanently
Cash books Permanently
Chart of accounts Permanently
Checks (canceled - see exception below) 4 years
Checks (canceled for important payments, i.e.
taxes, purchases of property, special contracts, etc.
Checks should be filed with the papers pertaining
to the underlying transaction) Permanently
Contracts, mortgages, notes and leases (expired) 4 years
Copyrights/trademarks Permanently
Correspondence (general) 2 years
Correspondence (legal and important matters only ) Permanently
Correspondence (routine) with customers and/or vendors 2 years
Deeds, mortgages, and bills of sale Permanently
Depreciation schedules Permanently
Directives - exclusive Permanently
Duplicate deposit slips 2 years
Employee expense records 3 years
Employment applications 2 years
Expense analysis/expense distribution schedules 4 years
Expense reports 4 years
Financial statements (year end) Permanently
Freight bills 3 years
Garnishments 7 years
General/private ledgers, year-end trial balance Permanently
IRS determination/ approval letters Permanently
Insurance policies (expired) 3 years
Insurance records, current accident reports,
claims, policies, etc. Permanently
Internal audit reports
(longer retention periods may be desirable) 3 years
Internal reports (miscellaneous) 3 years
Inventories of products, materials and supplies 4 years
Invoices for property Permanently
Journals - all types Permanently
Minute books of directors, stockholders, bylaws, and charter Permanently
Notes receivable ledgers and schedules 4 years
Note register Permanently
Option records (expired) 7 years
Patents and related papers Permanently
Payroll records and summaries 7 years
Pension/profit sharing plan/ trust documents Permanently
Personnel files (terminated) 7 years
Petty cash vouchers 3 years
Plant cost ledgers 4 years
Procedure records Permanently
Property appraisals by outside appraisers Permanently
Property records, including costs, depreciation reserves,
year-end trial balances, depreciation schedules,
blueprints, and plans Permanently
Purchase invoices 4 years
Purchase orders (except purchasing department copy) 1 year
Purchase orders (purchasing department copy) 4 years
Receiving sheets 1 year
Retirement and pension records Permanently
Requisitions 1 year
Sales Commission reports 3 years
Sales invoices 4 years
Sales records 4 years
Scrap and salvage records (inventories, sales, etc.) 4 years
Stenographers' notebooks 1 year
Stockroom withdrawal forms 1 year
Subsidiary ledgers 4 years
System records 4 years
Tax returns and worksheets, revenue agents' reports,
and other documents relating to determination of
income tax liability Permanently
Time books/cards 7 years
Trademark registrations and copyrights Permanently
Training manuals Permanently
Union agreements Permanently
Voucher register and schedules 4 years
Vouchers for payments to vendors, employees, etc.
(includes allowances and reimbursements) 4 years
Withholding tax statements 7 years
