Final Certification of TAP Fund (Correspondence, 07/05/2000,
GAO/AIMD/OGC-00-250R).

Pursuant to a legislative requirement, GAO provided information on the
Comptroller General's final certification of the Trans-Alaska Pipeline
Liability Fund's payment of claims and administrative expenses.

GAO noted that: (1) pursuant to section 8102(a)(2)(A) of the Oil
Pollution Act of 1990, the Board of Trustees of the Trans-Alaska Fund
reserved amounts within the fund necessary to pay claims under section
204(c) of the Trans-Alaska Pipeline Authorization (TAP) Act and
administrative expenses necessary for and incidental to the
implementation of section 204(c); (2) the Comptroller General certified
to Congress on December 23, 1994, that the trustees had established the
required reserve; (3) on December 22, 1995, after the trustees reduced
the amounts in reserve, the Comptroller General certified to Congress
that the new reserve satisfied the requirements of section
8102(a)(2)(A); (4) on October 28, 1999, the Comptroller General
certified to Congress that the trustees had paid all claims arising from
the American Trader incident, and established a reserve as required by
section 8102(a)(2)(A) that was more than adequate to pay the
court-ordered fees and administrative expenses related to the Exxon
Valdez oil spill; (5) pursuant to section 8102(a)(2)(B), after each
certification, from amounts in excess of the reserve, the trustees
returned to Alaska its proportionate share of its contributions to the
Trans-Alaska Fund as an owner of oil, and transferred the remaining
amount of the excess to the Oil Spill Liability Trust Fund; (6) based
upon GAO's work for prior certifications and GAO's review of documents
and discussions with Trans-Alaska Funds Administrator, General Counsel,
and independent external auditor, GAO has now concluded that the
Trans-Alaska Fund has made all payments for claims under the TAP Act,
including the amounts held in reserve for court ordered fees in the
Exxon Valdez claims; (7) GAO has also concluded that all actions for
recovery of amounts subject to 43 U.S.C. 1453(c) have been resolved; (8)
all claims and all actions for recovery of amounts have been resolved as
required by section 8102(a)(2)(A)(i)-(ii); (9) the Board of Trustees of
the Trans-Alaska Fund has notified GAO that it paid all administrative
expenses, except for those expenses that are incidental to the final
distribution of the Trans-Alaska Fund's balance and, thus, are payable,
necessarily, only after the date of the certification; (10) the trustees
estimate that the monthly expenses that will be incurred after GAO's
final certification will not exceed $16,500, including legal fees,
salaries, rent, and miscellaneous expenses; and (11) based on GAO's
review of these estimated expenses, GAO concludes that they are
reasonable in comparison to the previous expenses of the Trans-Alaska
Fund, and incidental to the final distribution of the Trans-Alaska
Fund's balance.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD/OGC-00-250R
     TITLE:  Final Certification of TAP Fund
      DATE:  07/05/2000
   SUBJECT:  Oil spills
	     Oil pollution
	     Administrative costs
	     Claims settlement
	     Statutory law
	     Funds management
IDENTIFIER:  Trans-Alaska Pipeline Liability Fund
	     Exxon Valdez
	     Oil Spill Liability Trust Fund
	     Alaska
	     American Trader

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GAO/AIMD/OGC-00-250R

B-285142

July 5, 2000

To the President of the Senate.
and the Speaker of the House of Representatives

Subject: Final Certification of TAP Fund

This letter transmits the Comptroller General's final certification of the
Trans-Alaska Pipeline Liability Fund's payment of claims and administrative
expenses. Section 204(c) of the Trans-Alaska Pipeline Authorization Act (TAP
Act), Pub. L. 93-153, 87 Stat. 576, 586 (1973), codified at 43 U.S.C.
sect. 1653(c), created the Trans-Alaska Pipeline Liability Fund (Fund), a
nonprofit corporation governed by a Board of Trustees. The TAP Act, as
amended, established the Fund to pay certain claims for damages caused by
discharges of Alaska Pipeline oil from ships transporting the oil from the
pipeline's terminals to ports within the jurisdiction of the United States
that occurred before August 18, 1990. The Fund is strictly liable for
covered oil spill damages in excess of $14 million up to $100 million, or
$86 million, per incident. 43 U.S.C. sect. 1653(c)(3). The Board of Trustees of
the Fund determined that the Fund was liable for damages caused by two oil
spills that occurred before August 18, 1990, the Exxon Valdez spill in
Prince William Sound, Alaska in March 1989 and the American Trader spill off
of Huntington Beach, California in February, 1990.

Section 8102 of the Oil Pollution Act of 1990, Pub. L. 101-380, 104 Stat.
484, 565 (1990), provides that the Fund's statutory authority, 43 U.S.C.
sect. 1653(c), "is repealed, effective as provided in paragraph (5)," and the
Fund extinguished sixty days after the Comptroller General certifies to the
Congress that under Section 8102(a)(5)(A):

"(i) all claims arising under section 204(c) of the Trans-Alaska Pipeline
Authorization Act (43 U.S.C. sect. 1653(c)) have been resolved, (ii) all actions
for the recovery of amounts subject to section 204(c) of the Trans-Alaska
Pipeline Authorization Act have been resolved, and (iii) all administrative
expenses reasonably necessary for and incidental to the implementation of
section 204(c) of the Trans-Alaska Pipeline Authorization Act have been
paid."

Section 8102(a)(2)(C) requires the trustees, after payment of all claims and
certification by the Comptroller General of the payment of all claims, to
distribute any remaining amounts by (1) rebating the pro rata share of the
balance to Alaska for its contributions as an owner of oil, and then (2)
transferring and depositing the remainder of the balance into the Oil Spill
Liability Trust Fund.

Pursuant to section 8102(a)(2)(A) of the Oil Pollution Act of 1990, the
Board of Trustees of the Fund reserved amounts within the fund necessary to
pay claims under section 204(c) of the TAP Act and administrative expenses
necessary for and incidental to the implementation of section 204(c). The
Comptroller General certified to the Congress on December 23, 1994, that the
trustees had established the required reserve. On December 22, 1995, after
the trustees reduced the amounts in reserve, the Comptroller General
certified to the Congress that the new reserve satisfied the requirements of
section 8102(a)(2)(A).

On October 28, 1999, the Comptroller General certified to the Congress that
the trustees had paid all claims arising from the American Trader incident,
and established a reserve as required by section 8102(a)(2)(A) that was more
than adequate to pay the court-ordered fees and administrative expenses
related to the Exxon Valdez oil spill. Pursuant to section 8102(a)(2)(B),
after each certification, from amounts in excess of the reserve, the
trustees returned to the State of Alaska its proportionate share of its
contributions to the Fund as an owner of oil, and transferred the remaining
amount of the excess to the Oil Spill Liability Trust Fund. Based upon our
work for prior certifications and our review of documents and discussions
with the Fund's Administrator, General Counsel, and independent external
auditor, we have now concluded that the Fund has made all payments for
claims under the Act, including the amounts held in reserve for court
ordered fees in the Exxon Valdez claims. We have also concluded that all
actions for recovery of amounts subject to 43 U.S.C. sect. 1453 (c) have been
resolved. Thus, all claims and all actions for recovery of amounts have been
resolved as required by section 8102(a)(2)(A)(i)-(ii).

The Board of Trustees of the Fund has notified this Office that it has paid
all administrative expenses, except for those expenses that are incidental
to the final distribution of the Fund's balance and, thus, are payable,
necessarily, only after the date of the certification. The trustees estimate
that the monthly expenses that will be incurred after our final
certification will not exceed $16,500, including legal fees, salaries, rent,
and miscellaneous expenses. Based on our review of these estimated expenses,
we conclude that they are reasonable in comparison to the previous expenses
of the Fund, and incidental to the final distribution of the Fund's balance.

The trustees request that the Comptroller General issue the final
certification pursuant to section 8102(a)(5)(A) of the Oil Pollution Act of
1990. I have reviewed the bases for the trustees' request. Pursuant to
section 8102(a)(5)(A) of the Oil Pollution Act, I hereby certify that (1)
all claims arising under the Act have been resolved, (2) all actions for
recovery of amounts have been resolved, and (3) that all administrative
expenses have been paid, except those that will be incurred necessarily only
after this final certification. Once those expenses have been paid,

the Fund will be extinguished pursuant to section 8102(a)(5)(A) of the Oil
Pollution Act of 1990, and any balances distributed to the state of Alaska
and the Oil Spill Liability Trust Fund pursuant to section 8102(a)(2)(C).

/s/Comptroller General

of the United States
  
*** End of document. ***