includes an underwriter, insurer or surety company.

(g) "Incident" means a discharge of oil from a vessel that:

(1) Violates applicable water quality standards, or

(2) Causes a film or sheen upon or discoloration of the surface of the water or adjoining shorelines or causes a sludge or emulsion to be deposited beneath the surface of the water or upon adjoining shorelines.

(h) “Oil” means petroleum in any form.

(i) "Operator of the pipeline" means the person or persons to whom payments are made for the costs of transportation of oil through the TransAlaska Pipeline System.

(j) "Owner" means, in the case of oil, the owner of the oil at the time that such oil is loaded on a vessel at the terminal facilities of the pipeline.

(k) "Owner or Operator" means, in the case of a vessel, any person owning, operating, or chartering by demise such vessel.

(1) "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a business trust, an unincorporated organization, or a Government entity.

(m) "Person in Charge" means the individual immediately responsible for the operations of a vessel.

(n) "Permittees" means the holders of the Pipeline right-of-way for the Trans-Alaska Piepline System and includes the Amerada Hess Pipeline Company, ARCO Pipe Line Company, BP Pipelines Inc., Exxon Pipeline Company, Mobil Alaska Pipeline Company, Phillips Petroleum Company, Sohio Pipe Line Company, Union Alaska Pipeline Company, and successors in interest to any one or more of the aforenamed companies.

(o) "Pipeline" means any pipeline in the Trans-Alaska Pipeline System.

(p) "Secretary" means the Secretary of the Interior or his authorized representatives.

(q) "Terminal facilities" means those facilities of the Trans-Alaska Pipeline System at which oil is taken from the pipeline and loaded on vessels or placed in storage for future loading onto vessels.

(r) "Trans-Alaska Pipeline System" or "System" means any pipeline or terminal facilities constructed by the Permittees under the authority of the Act.

(s) "United States" includes the various States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Canal Zone, Guam, the Trust Territory of the Pacific Islands.

(t) "Vessel" means any type of water-craft or other artificial contrivance, used or capable of being used as a means of transportation on water, which is engaged in any segment of transportation between the terminal facilities of the pipeline and ports under the jurisdiction of the United States, and which is carrying oil that has been transported through the Trans-Alaska Pipeline System.

[42 FR 31789, June 23, 1977, as amended at 43 FR 27840, June 27, 1978]

§ 29.2 Creation of the Fund.

(a) The Trans-Alaska Pipeline Liability Fund was created by the Act as a non-profit corporation to be administered by the holders of the TransAlaska Pipeline right-of-way under regulations prescribed by the Secretary.

(b) The Fund shall take all steps necessary to carry out its responsibilities under the Act, including registering or otherwise qualifying to do business in all states and territories of the United States that it may reasonably be expected to do business in.

(c) The Fund shall be subject to the provisions of the Act, these impleto menting regulations, and, the extent consistent with the Act and regulations, to the laws and regulations of the states in which it is registered to do business.

(d) The right to repeal, alter, or amend these regulations is expressly reserved.

§ 29.3 Fund administration.

(a) The Fund shall be administered by a Board of Trustees designated by the Permittees and the Secretary as provided in paragraph (b) of this section.

(b)(1) The Board of Trustees shall be comprised of one member designated by each Permittee and three members designated by the Secretary. At least one member designated by the Secretary shall be chosen from persons nominated by the Governor of the State of Alaska. Each member shall serve for a period of three years and may succeed himself. Each member shall have the right to one vote. If additional persons become holders of rights-of-way, each such additional Permittee shall have the right to designate a trustee, and if any holder of right-of-way sells his interest in such right-of-way, such holder's designated trustee shall resign from the Board. The Board shall elect by a majority vote a Chairman and a Secretary annually.

(2) Where any activity of the Fund creates a conflict of interest, or the appearance of a conflict of interest, on the part of any member of the Board of Trustees, the member involved shall excuse himself or herself from any consideration of such activity by the Board of Trustees.

(c) If at any time there is a tie vote in the consideration of any matter by the Board of Trustees, the member designated by the Secretary with longest service on the Board shall break the tie by voting twice.

(d) The Board of Trustees by a majority vote shall select an Administrator to direct the day-to-day operations of the Fund.

(e) The Board of Trustees shall hold meetings every six months, or more frequently when necessary to consider pressing matters, including pending claims under § 29.9.

(f)(1) Each Board Member and officer of the Fund now or hereafter serving as such, shall be indemnified by the Fund against any and all claims and liabilities to which he has or shall become subject by reason of serving or having served as such Board Member or officer, or by reason of any action alleged to have been taken, omitted, or neglected by him as such Board Member or officer; and the Fund shall reimburse each such person for all legal expenses reasonably incurred by him in connection with any such claim or liability: Provided, however, That

no such person shall be indemnified against, or be reimbursed for any expenses incurred in connection with, any claim or liability arising out of his own willful misconduct or gross negligence.

(2) The amount paid to any officer or Board Member by way of indemnification shall not exceed his actual liabilities and actual, reasonable, and necessary expenses incurred in connection with the matter involved. Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Fund in advance of the final disposition of such action, suit, or proceeding as authorized by the Board in the specific case upon receipt of an undertaking by or on behalf of the Board Member or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Fund as authorized herein.

(3) The indemnification provided by this section shall continue as to a person who has ceased to be a Board Member or officer shall inure to the benefit of the heirs, executors, and administrators of such a person. The right of indemnification hereinabove provided for shall not be exclusive of any rights to which any Board Member or officer of the Fund may otherwise be entitled by law.

[42 FR 31789, June 23, 1977, as amended at 45 FR 1026, Jan. 4, 1980]

§ 29.4 General powers.

The Fund shall have such powers as may be necessary and appropriate for the exercise of the powers herein specifically and impliedly conferred upon the Fund and all such incidental powers as are customary in non-profit corporations generally, including but not limited to the following:

(a) By resolution of the Board of Trustees, the Fund shall adopt a corporate seal.

(b) The Fund may sue and be sued in its corporate name and may employ counsel to represent it.

(c) The Fund shall be a resident of the State of Alaska with its principal place of business in Alaska, and the Board of Trustees shall establish a business office or offices as deemed

necessary for the operation of the Fund.

(d) In any civil action for the recovery of damages resulting from an incident the Fund shall waive personal jurisdiction upon being furnished with a copy of the summons and complaint in the action.

(e) The Board of Trustees of the Fund, by a majority of those present and voting, shall adopt and may amend and repeal by-laws governing the duties.

performance of its statutory

(f) The Fund shall do all things necessary and proper in conducting its activities as Trustee including (1) receipt of fee collections pursuant to section 204(c)(6) of the act; (2) payment of costs and expenses reasonably necessary to the administration of the Fund as well as costs required to satisfy claims against the Fund; (3) investment of all sums not needed for administration and the satisfaction of claims in income producing securities as hereinafter provided; and (4) seeking recovery of any monies to which it is entitled as subrogee under circumstances set forth in section 204(c)(8) of the act.

(g) The Fund shall determine the character of and the necessity for its obligations and expenditures, and the manner in which they shall be incurred, allowed, and paid. The Board of Trustees shall establish an annual budget, subject to the approval of the Secretary.

(h) All costs and expenses reasonably necessary to the administration of the Fund, including costs and expenses incident to the termination, settlement, or payment of claims, are properly chargeable as expenses and payable out of fees or other income of the Fund.

[42 FR 31789, June 23, 1977, as amended at 43 FR 27841, June 27, 1978]

§ 29.5 Officers and employees.

(a) The Administrator is the Chief Executive Officer of the Fund and is responsible for carrying out all executive and administration functions as authorized by the Board of Trustees in accordance with the Act including the receipt and verification of fees collected from Owners of oil pursuant to

§ 29.6(a), the investment of Fund assets in securities according to guidelines approved by the Board of Trustees and the Secretary, and the disbursement of such assets in payment of expenses and approved claims.

(b) The Fund may employ such other persons as may be necessary to carry out its functions.

§ 29.6 Financing, acounting, and audit.

(a)(1) The Operator of the pipeline shall collect a fee of five cents per barrel from the Owner of the oil at the time it is loaded on a vessel at the terminal facilities of the pipeline. Such fees shall be transferred forthwith to the Fund for receipt and verification by the Administrator. Collection of fees shall cease at the end of the month following the month in which $100,000,000 has been accumulated in the Fund from any source. Collection of fees shall be resumed when the accumulation falls below $100,000,000. The Administrator shall notify the pipeline carriers by the fifteenth of the month whether fees are to be collected during the following month.

(2) The value of the Fund shall be the current market value of the Fund on the day at the end of each month or other agreed upon accounting period, when the value is to be determined.

(b) Costs of administration shall be paid from the money received by the Fund, and all sums not needed for administration and the satisfaction of claims shall be invested in accordance with § 29.11. The interest on and the proceeds from the sale of any obligations held in the Fund shall be credited to and form a part of the Fund. Income from such securities shall be added to the principal of the Fund if not used for costs of administration or settlement of claims.

(c) At the end of each month, or other agreed upon accounting period, the Operator of the pipeline shall provide the Fund with a statement of the respective volumes of crude oil transported by the Operator of the pipeline and delivered to vessels, the amount of fees charged and collected, and the Owners from whom such fees were col

lected. The Administrator shall provide a copy of the statement to the Owners, and to the State of Alaska.

(d) The Fund shall undertake an annual accounting.

(e) The Fund shall be audited annually by the Comptroller General, in coordination with the Administrator and the Secretary. Authorized representatives of the Comptroller General and the Secretary shall have complete access, for purposes of the audit or otherwise, to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Fund and they shall be afforded full facilities for verifying among other things, transactions with the balances on securities held by depositories, fiscal agents, and custodians. A report of each audit made by the Comptroller General Shall be submitted to the Congress.

§ 29.7 Imposition of strict liability.

(a) Notwithstanding the provisions of any other law, where a vessel is engaged in any segment of transportation between the terminal facilities of the pipeline and ports under the jurisdiction of the United States, and is carrying oil which has been transported through the Trans-Alaska Pipeline System, the owner and operator of the vessel (jointly and severally), and the Fund established by section 204(c) of the act, shall be strictly liable without regard to fault in accordance with that section for all damages, including clean-up costs, sustained by any person or entity, public or private, including residents of Canada, as a result of any discharge of oil from such vessel. Strict liability under this section shall cease when the oil has first been brought ashore at a port under the jurisdiction of the United States.

(b) Strict liability shall not be imposed under this part if the owner or operator of the vessel, or the Fund, can prove that the damages were caused by an act of war or by the negligence of the United States or other governmental agency. Strict liability shall not be imposed under the act with respect to the claim of a damaged party if the owner or operator of the

vessel, or the Fund, can prove that the damage was caused by the negligence of such damaged party.

(c) Strict liability for all claims arising out of any one incident shall not exceed $100,000,000. The owner and operator of the vessel shall be jointly and severally liable for the first $14,000,000 of such claims that are allowed. The Fund shall be liable for the balance of the claims that are allowed up to $100,000,000. If thee total claims allowed exceed $100,000,000, they shall be reduced proportionately. The unpaid portion of any claim may be asserted and adjudicated under other applicable Federal or State law.

(d)(1) Each owner or operator of a vessel shall obtain from the Federal Maritime Commission a "Certificate of Financial Responsibility (Alaska Pipeline)" demonstrating compliance with the provisions of section 311(p) of the Federal Water Pollution Control Act, as amended (33 U.S.C. 1321(p)), and regulations promulgated pursuant to such act (46 CFR Part 543). Notwithstanding inconsistent language in such act, financial responsibility in the amount of $14,000,000 for all such vessels must be established.

(2) The certificate obtained in accordance with this subsection shall be carried on board the vessel, and a copy shall be filed with the Fund. No oil may be loaded on any vessel which has not been issued a valid certificate which is still in effect at the time of loading.

§ 29.8 Notification and advertisement.

(a) The person in charge of a vessel, as soon as he has knowledge of an inciIdent in which the vessel is involved, shall immediately notify the Fund of the incident using the fastest available method of communication. Notification under this section is in addition to any notification required of the owner or operator of the vessel under section 311 (b)(5) of the Federal Water Pollution Control Act Amendments of 1972 and the regulations of the U.S. Coast Guard promulgated pursuant to such Act (33 CFR 153.203).

(b) When the Fund receives information pursuant to paragraph (a) of this section or otherwise of an incident,

the Fund shall, where possible, designate the source or sources of oil pollution and shall immediately notify the owner and operator of such source designation. In making the designation, the Fund may ask the assistance and cooperation of the U.S. Coast Guard.

(c)(1) In all cases where there is any likelihood of damages from an incident, the Fund shall advertise the designation, if such designation has been made, the procedures by which claims may be presented, and the information which must be included in such claims.

(2) The Fund shall establish, subject to the approval of the Secretary, uniform procedures and forms for advertisement under this section.

(d) Advertisement under this section shall commence no later than fifteen days from the date of the designation under paragraph (b) of this section, and in any event no later than twenty days from the date the Fund learns of the incident. The advertisement shall continue for a period of not less than thirty days.

[42 FR 31789, June 23, 1977, as amended at 43 FR 27841, June 27, 1978]

§ 29.9 Claims, settlement and adjudication.

(a)(1) Claims in accordance with this section may be submitted by any damaged party, his duly authorized agent, or his successor in interest.

(2) Claims submitted in accordance with this section must contain the following information:

(i) A detailed statement of the circumstances, if known, by which the claimed loss occurred.

(ii) A detailed listing of damages incurred, categorized according to the type of damage involved (§ 29.1(d)), and including a monetary claim for each type of damage listed.

(iii) Where documentation, where available, of all monetary claims asserted.

(b)(1) All claims arising out of an incident shall be initially presented to the Fund.

(2) Where designation under § 29.8(b)(1) has been accomplished and where the owner or operator does not deny the designation, the Fund shall

transmit all related claims to the owner or operator. The Fund shall transmit such claims within 5 days after their receipt by the Fund.

(3) Where the Fund is unable to designate the source or sources of discharge under § 29.8(b), all related claims shall be processed and adjudicated by the Fund.

(c) In the case of a claim transmitted under paragraph (b)(2) of this section not submitted to arbitration under paragraph (h) of this section, and in which:

(1) The owner, operator or guarantor to whom the claim is presented denies all liability for the claim, for any reason, or

(2) The claim is not settled by any person by payment to the claimant within ninety days of the date upon which the claim was presented to the owner or operator or upon which advertising was commenced, whichever is later, the claimant may elect to commence an action in court against the owner or operator or to present the claim to the Fund, that election to be irrevocable and exclusive.

(d) In the case of a claim transmitted in accordance with paragraph (b)(2) of this section, any person intending to pay or settle any such claim shall notify the Fund of such intention, and of all terms of the intended settlement, at least twenty days before such payment or settlement is made final. Whenever the Fund objects, for any reason, to the intended payment or settlement, it may request modification of such payment or settlement, or it may seek appropriate relief in Federal District Court in order to halt or modify such payment or settlement.

(e) In the case of a claim transmitted in accordance with paragraph (b)(2) of this section, where full and adequate compensation is unavailable, either because the claim exceeds the $14,000,000 limit of liability, or because the owner, operator, or guarantor is financially incapable of meeting his obligations in full, a claim for the amount not compensated may be presented to the Fund.

(f) Where any part of the first $14,000,000 of claims arising from an incident is paid by the Fund, for any reason, the owner and operator of the