BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA

Transcription

1 BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA F ILED JUL APPLICANT: INTERESTED PARTY: RELIEF SOUGHT: FARRELL JACKSON TRUST ROBYN STRICKLAND, DIRECTOR PETROLEUM STORAGE TANK DIVISION, OKLAHOMA CORPORATION COMMISSION JUDICIAL DETERMINATION OF NON-OWNERSHIP COURT CLERKS OFFICE - OKC CORPORATION COMMISSION OF OKLAHOMA CAUSE NO. PSD Facility Address: Property Address: Hilltop Grocery 1710 E. Washington Idabel, OK Facility ID REPORT OF THE OIL AND GAS APPELLATE REFEREE This Cause came on for hearing before Paul E. Porter, Administrative Law Judge for the Corporation Commission of the State of Oklahoma, on the 25th day of January, 2017, at 8:30 a.m. in the Commission's Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to notice given as required by law and the rules of the Commission for the purpose of taking testimony and reporting to the Commission. APPEARANCES: John Moricoli, Jr. and David R. Gleason, attorneys, appeared on behalf of applicant, Farrell Jackson Trust ("Trust"); Jeffrey Southwick, Deputy General Counsel, Travis Weedn, Assistant General Counsel, Zach Duvall, Assistant General Counsel, and Mark Willingham, Assistant General Counsel, appeared on behalf of Robyn Strickland, Director, Petroleum Storage Tank Division ("PSTD"), Oklahoma Corporation Commission. The Administrative Law Judge ("AI.J") filed his Report of the Administrative Law Judge on the 1 Oth day of April, 2017, to which Exceptions were timely filed and proper notice given of the setting of the Exceptions. The Appellate argument concerning the Oral Exceptions was referred to Patricia D. MacGuigan, Oil and Gas Appellate Referee ("Referee"), on the 12th

2 day of May, After considering the arguments of counsel and the record contained within this Cause, the Referee finds as follows: STATEMENT OF THE CASE PSTD TAKES EXCEPTION to the recommendation of the ALJ that the application of the Trust for an order for determination of non-ownership be granted as the Trust never had any ownership interest in the underground storage tanks ("USTs") and never operated a business at the site, and is best identified as an impacted party. The Trust alleges that the formerly named facility, known as Hilltop Grocery, has USTs which have been abandoned by the owner/operator. The Trust is the property owner but not the owner or operator of the abandoned tanks. The Trust seeks judicial determination of non-ownership of the UST system abandoned by the owner/operator, and seeks authority to proceed with closure activities in accordance with Commission rules as a non-owner/operator, and seeks Indemnity Fund reimbursement as an Impacted Party. PSTD TAKES THE POSITION: 1) The ALJ erred in determining that the Trust was not a tank owner as defined in 17 O.S. Section 303(22). Operation of a fueling facility or business is not a condition of tank ownership. 2) The ALJ erred in not determining that the existing and present USTs were trade fixtures and, thus, attached to the land. 3) The ALJ erred in attempting to separate USTs from the surface estate. 4) The ALJ erred in applying an Indemnity Fund definition for "Eligible Person" [17 O.S. Section 352(6)] to the regulatory question posed in the Application Caption ("Judicial Determination of Non-Ownership") S. Section 303(22). The Trust contends that the proper first determination should be under 17 0.S. Section 303(22), and then the "Eligible Person" status as defined in 17 0.S. Section 352(6) be applied thereafter. The tanks are still on the property and pursuant to Commission rule must be removed. OAC-OAC 165: Staff contends that is the property owner's (the Trust's) responsibility. 5) The ALJ erred in determining "That the person responsible for the release cannot be found." Responsibility for PSTD regulated environmental substances is determined at "Discovery," not when the release occurred, and not who Page No. 2

3 owned the property at release occurrence. 17 O.S. Section 309. The release was discovered during the Trust's property ownership. 6) In summary, it is PSTD's contention that the Trust meets the regulatory definition of "Owner" as reflected in 17 O.S. Section 303(22)(a). To be determined a tank owner does not require operation of the storage tank system or being in the fuel sales or storage business. The statute only requires that a person holds title to, controls, or possesses an interest in a storage tank system used for the storage, use or dispensing of regulated substances. Whether the tanks are operable or not, the tank system is a trade fixture as defined by statute (60 O.S. Section 334) and in the instant case, belong to the Trust who owns the real property, not who installed or used them. As a witness for PSTD, Cara Parent correctly explained that storage tank system ownership follows the chain of title. Ms. Parent clarified further for the instant case that if a tank owner is out of business, ownership of the tanks goes to the surface owner. THE ALJ FOUND: 1) The Trust submitted a memorandum brief in support of a judicial determination of non-ownership. In their brief, the Trust argues the permits for USTs at the Hilltop Grocery and all records of the Commission reflect the owner of the tanks as Loveday, Inc. 2) The Trust argues that an impacted party can be an owner whose property has been impacted by release from an onsite storage tank and the impacted party did not own or operate the facility. The Trust states impacted parties have no responsibility under Commission rules. The Trust argues surface owners can be an impacted party primarily because the statute shows that a leak could occur on the surface owners' property. Since the legislature left language about the leak occurring on the property, then the property owner must necessarily be considered as an impacted party. The Trust also notes there was no possibility of a new release prior to the Trust obtaining any interest in the property. 3) PSTD's Memorandum Brief of Interested Party argues the tanks are trade fixtures and may not be removed from the property pursuant to 17 O.S. Section 334. The Trust argues trade fixtures may be owned separately and cites the Oklahoma Court of Civil Appeals as authority. PSTD argues their Staff was not presented with a warranty deed or other conveyance that explicitly reserved the UST system to Loveday Oil from any conveyance. 4) They add that even if Jackson Oil installed the tanks on the Trust's property, no agreement between the two was presented to Commission Staff allowing for removal. PSTD cites several of its own opinions taking the position Page No. 3

4 that tank ownership is tied to the property owner. PSTD argues that an impacted party is a subset of the eligible person definition. An eligible person can be one of four categories. These are the owner/operator, an innocent purchaser, an heir, or an impacted party. The Trust cites the criteria for an heir is a person who acquired tank ownership through an inheritance denoted by an order allowing final account and determination of heirship and decree of final distribution or as responsible for the release by reason of owning the real property through inheritance within which a tank or release is or was located if: a) the release is on the real property on November 8, 1984; b) if a party responsible for the release cannot be found; c) funds are unavailable from the trust fund or the release is not eligible for funds; d) person who is not responsible for the tank system or a release and is not engaged in the petroleum business; and e) the person meets requirements specified in Section 356 of this title. 5) The Trust did not gain ownership through an inheritance as denoted by an order allowing final account and determination of heirship and decree of final distribution. The Trust is also not responsible for release by reason of owning the real property through inheritance within which a tank or release is located. This is true because the Trust owns the surface rights and any inheritance through the Trust is not in an order allowing final account and determination of heirship and decree of final distribution. Generally, in law, property can be conveyed through a trust. The UST was located on this property on November 8, The party responsible for release cannot be found. Oklahoma leak and underground storage tank trust funds are available and the release is eligible for corrective action. The Trust was not responsible for the leak and is not engaged in the petroleum business. 6) The impacted party definition states they are an owner whose property has been impacted by a release from an onsite tank which is not operated or owned by the impacted person and, for which, they have no responsibility. The ALJ agrees with the Trust's Brief. The legislature put the language "onsite release" in the definition of an impacted party for the specific reason that an owner could be an impacted party. The ALJ recommends the Trust is an impacted party as that term is defined in the Oklahoma statutes. POSITIONS OF THE PARTIES PSTD 1) Jeffrey Southwick, Deputy General Counsel, appearing on behalf of PSTD, noted that in 17 O.S. Section 303, Paragraph 22(a) pertains to Tank systems in use after November 4, 1984, and defines "owner" of a tank as "any Page No. 4

5 person who holds title to, controls, or possesses an interest in a storage tank system..." PSTD adds that the reason for the cutoff date of November 4, 1984 was the increasing Federal regulation over storage tanks. A party who purchases real property must investigate whether the property contains any tanks, whether any tanks on the property have leaked, and must determine who would be responsible for any cleanup efforts associated with the leaks. Staff cites that for tanks out of use before November 4, 1984, a person who used, owned, or operated the tanks prior to the discontinuation is the owner of the tanks and would be responsible for the clean up efforts. 2) PSTD notes that the Commission has overseen cases involving tank ownership where parties never sold gasoline and never operated a tank system. The Commission has consistently determined that not operating a storage tank, not storing gasoline in it, or the lack of activity of the tank on a property are not enough to preclude a finding that a party owns the tank based upon ownership in real property. One does not need to be an operator of the tank to be the owner. The tanks could be idle for 20 years and still be the property of the owner. 3) PSTD also notes the tanks at issue were used after November 4, 1984; therefore, part (a) of 17 O.S. Section 303 (22) applies. The chain of title shows that Jackson Oil Company was the property owner with Jerry Farrell Jackson as the principal. Mr. Jackson operated the property and possibly installed the tanks (although not confirmed), and "supposedly" sold the operating tank system (personal property) to Loveday Oil. Loveday Oil then went bankrupt. Loveday Oil had entered into a financing agreement with the McCurtain County Bank, which listed the storage tanks, dispensers as part of the personal property on the financing statement. 4) The Trust claims the bank owns the tanks, however, the tanks cannot be removed without the permission of the Trust. According to 17 O.S. Section 303 (22)(a), the tanks are considered property of whoever possesses, owns, controls the tanks, and are considered real property of the owners. According to 17 O.S. Section 303 (21) and (22) the chain of title must be followed to determine ownership for tanks used after November Title documents, including the warranty deed from Farrell Jackson to the Trust reserves mineral and easements, but does not contain language reserving the tanks. A further look at the warranty deed shows Farrell Jackson conveyed improvement and appurtenances to the Trust. A storage tank on the property which could be leased for money, increased the valve of the property and could be considered an improvement, and therefore would have been granted to the Trust by the warranty deed. 5) Trade fixture law dictates that once one's property is affixed onto another's, it becomes the other's property. Citing 60 O.S. Section 334. fixtures become property of a lessor unless there is a written agreement allowing for Page No. 5

6 their removal. The ALJ erred in ruling that because they are located below the surface, the tanks were not part of the surface estate. One cannot differentiate between tank systems that have a presence below the ground and those that have a presence above the ground. Had the property been sold with clear indication that the tanks were not to be used by the surface owner, then one could assume the tanks were not part of the surface estate. However, the tanks were not part of the items reserved by Mr. Jackson in his warranty deed to the Trust, and the ALJ failed to see the tanks were part of the estate conveyed. 6) PSTD takes issue with the AL1's finding that the owner at the time of release could not be determined. Anybody in the chain of title is the owner when they discover the release. The discovery of the release is the trigger, and it does not matter who the past owners are, neither does it matter who owns it in the future. The owner is whoever owns the property when the release is discovered S. Section 309 reads "upon discovering such a release." Because of the difficulty of ascertaining the exact time of the release, the legislature used the time of discovery as an easier way to determine ownership. Here, when Mr. Jackson conveyed the property to the Trust he knew that gasoline was stored and sold from the tanks. The warranty deed contained some reservations, but left out the tanks. 7) Ruling the Trust was the tank owner at the time the release was discovered is consistent with the findings of the Commission. The ALJ report puts the parties at a conundrum by stating the Trust is an impacted party and not the owner of the Tank, while the staff is requesting that the tanks be pulled, thus leaving open the question of who is going to pull the tanks. The Report states the Trust is an impacted party, which is contrary to the evidence because 17 O.S. Section 303(21) or (22) must be used first to determine the owner S. Section 352(14) definition of an "owner" also mirrors 17 0.S. Section ) Looking at the facts, PSTD urges that after November 8, 1984, the person in the chain of title is responsible for the release as the tank owner. If the tanks have been out of service for more than twelve months, the Trust has an obligation to remove them. The ALJ noted the Trust is an impacted party, which begs the question whether they are also an owner and responsible for removing the tanks when the party responsible for the release cannot be found. The Trust was the eligible person responsible for the tanks when the release was found. Page No. 6

7 THE TRUST 1) David Gleason, attorney, appearing for the Trust, notes the important point from the AW's Report is that the Trust is an impacted party. PSTD did not cover the definition of impacted party, and the statutes dealing with who an impacted party is and what constitutes an impacted party. 2) The Trust notes the PST Indemnity Fund is set out at the beginning of 17 O.S. Section 351(B). The statute states purpose of the fund is to "provide for rehabilitation of as many pollution sites resulting from releases of petroleum from storage tank systems, as soon as possible, voluntary corrective action should be encouraged." 17 O.S. Section 350(C) reads that the legislature desires the Indemnity Fund to be administered similar to an insurance program. The express purpose is to get the tanks cleaned up, and encourage voluntary action. The Trust claims the Trust or its beneficiaries had nothing to do with the storage tanks. The Trust found themselves in this situation and were trying to take voluntary corrective action, Therefore the Trust applied to be determined as an Indemnity Fund impacted party. PSTD's opposition seems to be at odds with the expressed purpose of the Indemnity Fund Statutes. 3) The Trust disagrees with PSTD's claims that if the property owner is not the owner of the tanks, nobody else would have the ability to go on the property and remove the tanks. The Underground Storage Tank Regulation Act, Title 17 0.S. Section 310 gives the Commission the authority to enter the property of any person, whereon there are regulated tanks after notice is given to the surface owners. The statute reads notice and an opportunity for hearing shall be given to "the surface owner of real property where any corrective action is to be taken, if such person is not the owner or operator of the storage tank system". The Commission has the authority to access the location and remove the tanks without the permission of the surface owner. 4) With respect to the ownership of the tank, PSTD cites 60 O.S. Section 334, which is the trade fixture statute that reads: "When a person affixes his property to the land of another without an agreement permitting him to remove it, the thing affixed belongs to the owner of the land, unless he chooses to require or permit the former to remove it." As an exception, two requirements must be met under the statute before the property affixed to the land becomes the property of the surface owner. First, the property must be put there without an agreement. There is no evidence or findings that there was no agreement to put the property there. Second, the surface owners must determine that they will not permit or require the owner of the property to remove it. The statute does not create ownership in the surface owner unwillingly. It does not foist ownership on them, but allows them to claim Page No. 7

8 ownership if they want to, and is therefore permissive. If the surface owner wants to require removal, the property does not become his. The surface owner also has the ability to claim ownership. No evidence from the record suggests that the Trust wanted to claim the property. The Oklahoma court of Civil Appeals in McGraw Oil Company v. Pierce, 83 P.3d 907 (Okl.Civ.App. 2004), determined that the owner of the tanks was not the surface owner. The court noted the owner of the tanks could remove the tanks separately from the surface owner of the estate. 5) The Commission has also previously recognized that the owner of the tanks may not be the same as the owner of the surface. The Tank Registration Program and the certificate of ownership show the tanks belong to a party other than the surface owners. Here, the facility report says Loveday is the owner. Loveday Oil had been to the Commission before for matters pertaining to tanks that were part of Loveday Oil's McClain County Bank, although unrelated to the Trust. See Case Number PSD , Order The bank hired a third party to operate the tanks, and after bankruptcy all of Loveday Oil's assets were surrendered to the bank who had a security interest in all fixtures and other assets. The issue was whether the tank owner, who was on the record as the tank registrant and had the certificate of registration, was the owner of the tanks, or whether the surface property was the owner of the tanks. The Commission took the position that whoever had registered the tanks, and had the certificate of registration was the owner of the tanks for the purpose of the statute. The Commission took the position that because Donald Sharrock was registered as operator of the tanks, he was the owner of the tanks and it was his responsibility to remove them. He had claimed not to own the tanks at all. 6) Here, the Trust's first exception was taken to challenge the ALJ's finding that the Trust is not a tank owner. The Trust is not the tank owner because the Trust had never committed any operations of the fueling facility or business, or had never used the tank. The ALJ Report does not find that one must own or operate the tanks to be the tank owners. Whether the Trust operated or used the tanks is important because the definition of impacted party as found at 17 O.S. Section 352(9) reads that an impacted party is a person who has never or did not own or operate the tanks. Had the Trust operated the tanks the Commission could not have found that the Trust is an impacted party. 17 O.S. Section 352(9) defines an impacted party as "an owner whose property has been impacted by a release from an on-site or off-site petroleum storage tank, which the impacted person did not own or operate and for which the impacted person has no responsibility under Commission rules." It is the Trust's position that the term "on-site" in that definition suggests the Trust falls within the definition of the impacted party as an owner whose property has been impacted from an on-site tank. That means legislature intended that a person who is the surface owner, as long as they do not own Page No. 8

9 the tanks or claim title to the tanks could be the imparted party. Otherwise, the on-site portion of the statute would not have any impact. Statutory construction dictates that every word be given a meaning. The meaning the ALJ gave to the term "on-site" is supported by the fact that the Applicant/Trust or someone in Applicant/Trust's position could be an impacted party. 7) The definition of "impacted party" prompted the determination that the Trust was an impacted party, and could be eligible for the Indemnity Fund. The definition of impacted party requires that the party not own or operate the tank, however, it does not use the term "owner." Neither does it include terms such as "has never owned" or "is not the owner". The definition seems to be saying you are an impacted party if you did not cause the release. Although the term "owner" is defined, it would not make sense to import the definition of owner in the definition of "own." It would make sense to interpret the statute and interpret the word "own" in its ordinary sense. The ALJ correctly found the Trust did not own the tanks and never exercised control over them. The definition of "did not own" seems to refer to when the release occurred. Simply put, if one was one in some way responsible for the release, when the tanks were there, but has come into the property and is more or less an innocent party, the indemnity fund serves as an encouragement to take voluntary corrective action 8) Finally, PSTD testified that if the registered owner of the tank is out of business, then one must look to the surface owner to be the new owner, and to clean up the release. The issue with it from a regulatory standpoint is that there's no clear definition pointing to, or timeline when the surface owner becomes responsible or becomes the owner. PSTD has taken the position that because Loveday Oil could not be held accountable, the surface owner should be accountable, but there is no clear point when the surface owner becomes accountable. There is no exact moment when the surface owners must acquiesce when the such duties are imposed on them under the new statute, or when the surface owner might be required to register as the owner, or be required to take some action. There is no single point in time one can point to because there are no rules regarding what constitutes "out of business." RESPONSE OF PSTD 1) Nothing in the statutory scheme in 17 0.S. Section 310 gives the Commission the obligation, responsibility, or authority to remove the tanks. The Commission will only have access to the real property if the Commission cannot reach an agreement with a property owner, and after they have filed an access agreement after notice and a hearing. When Farrell Jackson conveyed Page No. 9

10 the property to the Trust, the Trust should have been on inquiry notice of the lease, or at least that there are storage tanks on the property. This principle is rooted in the Environmental Protection Agency's intent to make property owners aware that they might be acquiring environmental liabilities with the property, and would need to investigate it. 2) It is PSTD's opinion that if one does not want trade fixtures on the property one can ask for them to be removed. No evidence was presented showing that Mr. Jackson, the Jackson Trust, or Jackson Oil Company requested Loveday Oil remove the tanks. Neither was there presented evidence that McCurtain County Bank has been demanded to remove the tanks. Without a demand to remove the tanks, it is uncertain whether Mr. Jackson, Jackson Oil could have been a party who put the tank in. But Mr. Jackson was in business and ran the station before it was sold to Loveday Oil. 3) The McGraw case involved a dispute between two private parties where the property owner had an agreement with the previous tank owner to possibly own the tanks under certain conditions. The court focused on the fact that the tanks were registered with the Commission and the registrant would pay $10,000 a day for a fine. The case was a dispute between two private parties whereas here we are dealing with a regulatory agency. CONCLUSIONS The Referee finds the Report of the Administrative Law Judge should be reversed. 1) The question that should be determined is whether the Trust should be denominated as an impacted party or as an owner. The ALJ states in his Report on page 1, under B. Recommendations: The Trust does not meet the PST definition of an heir and the confirmed release is on property where the Trust owns the surface estate. The Trust never operated a business at the site and never had any ownership interest in the tanks. Although the tanks are attached to the land, the Trust is best identified as an impacted party. 2) 17 O.S. Section 352(9) provides: 9. "Impacted party" means an owner whose property has been impacted by a release from an on-site or offsite petroleum storage tank which the impacted person Page No. 10

11 did not own or operate and for which the impacted person has had no responsibility under Commission rules. An impacted party may apply for an eligibility determination on reimbursement from the Petroleum Storage Tank Indemnity Fund. An impacted party is not subject to the Petroleum Storage Tank Indemnity Fund deductible; 3) This particular case concerns the definition of owner found in 17 O.S. Section 303(22) which states: 22. "Owner" means: a. In the case of a storage tank system in use on November 8, 1984, or brought into use after that date, any person who holds title to, controls, or possesses an interest in a storage tank system, used for the storage, use or dispensing of regulated substances, or b. In the case of a storage tank system in use before November 8, 1984, but no longer in service on that date, any person who holds title to, controls or possesses an interest in a storage tank system immediately before the discontinuation of its use. The term "owner" does not include a person who holds an interest in a tank system solely for financial security, unless through foreclosure or other related actions the holder of a security interest has taken possession of the tank system; 4) These tanks were in use after November 8, Jackson Oil and/or Farrell Jackson dispensed fuel from the Hilltop Grocery property. Farrell Jackson/Jackson Oil conveyed his equipment and trade name to Al Loveday, Inc. Later Farrell Jackson conveyed the property to the Farrell Jackson Trust on March 15, ) 60 O.S. Section 334 provides: Section 334. Fixture may not be moved - Exceptions. When a person affixes his property to the land of another without an agreement permitting him to Page No. 11

12 remove it, the thing affixed belongs to the owner of the land, unless he chooses to require or permit the former to remove it: Provided, that a tenant may remove from the demised premises at any time during the continuance of his term any thing affixed thereto for purpose of trade, manufacture, ornament or domestic use, if the removal can be effected without injury to the premises, unless that thing has, by the manner in which it is affixed, become an integral part of the premises. 6) The general principle of this particular statute is that upon installation the fixtures become affixed to the land. The statute does deal with when fixtures may be moved. 7) PSTD states in both of its briefs filed on February 13, 2017, page two, first full paragraph and on May 26, 2017 on page four, second full paragraph: The statute addresses when fixtures may be removed, but acknowledges the general principal that on installation, they become affixed to the land. Upon review of the documents presented to staff, the facts of this case indicate Applicant's predecessor in title (Jackson Oil, Farrell Jackson, or both) dispensed fuel from the property. At a later date, Jackson Oil or Farrell Jackson purportedly sold the tanks to Loveday Oil. Sometime later, Farrell Jackson conveyed the real property to Applicant, the Farrell Jackson Trust. The Petroleum Storage Tank Division ("PSTD") staff was not presented any Warranty Deed or other conveyance that explicitly reserved the UST system to Loveday Oil from the conveyance. Farrell Jackson had been in the business of the sale or storage of petroleum and could not avail himself of the exception to the 'fixtures may not be moved' set forth above. It is assumed Jackson Oil and Farrell Jackson installed the tanks in question, so they did not affix the property to another person, but to their own property. Even if Jackson Oil installed the tanks on Farrell Jackson's property, no agreement between the two was presented to PSTD staff that allowed removal. Assuming arguendo that the tanks belonged to Loveday Oil, no evidence has been presented to staff that (a) there was a lease between Loveday and Farrell Jackson; (b) if there was a lease that the Loveday Oil lease was in full force and effect when this cause was filed and not extinguished Page No. 12

13 by the bankruptcy. None of the exceptions set forth in 60 Okla. Stat. 334 are available to Applicant. The Appellate Referee agrees with the determination of PSTD based upon the fact that the exceptions set forth in 60 O.S. Section 334 are not available to the Trust. The Appellate Referee agrees that the case of McGraw Oil Company v. Pierce, 83 P.3d 907 (Okl.Civ.App. 2004) is not relevant in the present proceeding. The McGraw case involved two parties in a civil action each claiming ownership in USTs. The facts in the present case are totally distinguishable from the facts in the McGraw case. You cannot expand the interpretation of impacted party as a person who goes out and buys a piece of property and at the time knows the storage tank system is there. 8) In the Hall Oil Company ("Hall") case (PSD Order No ) an additional determination was sought concerning an above ground storage tank ownership and responsibility for activities pursuant to 17 O.S. Section 301 et seq. Hall was an above ground storage tank owner and operator in Guthrie and his tanks were installed on a railroad right of way. Hall abandoned the property and some years later the railroad, Burlington Northern and Santa Fe Railway Company ("BNSF") sold the property they owned to the Oklahoma Department of Transportation ("ODOT") in The ODOT knew that the tanks had been left on the property but claimed that Hall was the responsible person that owned the tanks. The Commission found that: 1. Neither BNSF nor Hall owns the subject AST system at this time, or did own the subject AST system at the time of the discovery of the petroleum release in this case. Furthermore BNSF did not own the subject AST system at any time, and ceased to be a fee title holder of the real estate on which the AST system is located in Neither BNSF nor Hall is a potentially responsible party under the Oklahoma Storage Tank Regulation Act, 17 0.S. Section concerning the subject AST system. 2. ODOT is the owner of the subject AST system. The Corporation Commission further found in the Hall case that: 1. That ODOT is the owner of the subject AST system and ODOT is responsible for environmental investigation and/or for any remediation work as may be required by the Petroleum Storage Tank Division at the referenced facility. Page No. 13

14 The Corporation Commission cites in support of its decision in the Hall case the Oklahoma Corporation Commission case of Jackson v. Walker, OCC Cause PSD , where the Commission found that possession of the real property on which the tanks were located evidences ownership. 9) For the above stated reasons, the Referee would recommend that the recommendation of the ALJ as to the determination of the Trust as an impacted party should be reversed and the Trust should be determined to be the owner as provided by the applicable statutes listed above, 17 0.S. Sections , 17 0.S. Sections PM:ac RESPECTFULLY SUBMITTED THIS 19th day of July, igtuo L, ( (AstAi Patricia D. MacGuigan OIL 86 GAS APPELLATE REFEREE xc: Commissioner Murphy Commissioner Hiett Commissioner Anthony ALJ Paul E. Porter John Moricoli, Jr. David R. Gleason Jeffrey Southwick Travis Weedn Zach Duvall Mark Willingham Maribeth Snapp, J86LS Director Oil Law Records Court Clerks - 1 Commission Files Page No. 14