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Posts Tagged ‘Natural Resources Law’

To Trust Or Not To Trust

Posted on: July 28th, 2014
by David Ganje

To Trust Or Not To Trust

Placing mineral interests and mineral royalty rights or interests in a “mineral trust” is an economic and efficient way for a current or future transfer of mineral rights to family members or beneficiaries in order to independently own and manage such rights.  Mineral trusts are sometimes called a ‘Family Mineral Trust’ but can be used for more than conveyances to family members. When one creates a mineral trust one is creating it to convey to the trust all or a portion of one’s ownership in mineral rights.  A mineral trust has a number of advantages over a traditional last will and testament.  Assets held in a mineral trust are not included in an individual’s taxable estate.  These trust assets are in effect owned and managed independent of any other property of the granting owners.  The value of mineral interests, due to production increases or the changing market value of the minerals, may also increase dramatically.  If a mineral trust is to be considered, it is important that these assets are included in a mineral trust as early as possible. This is done ideally prior to an increase in value in any royalties to avoid estate taxes.  Mineral trusts may also take advantage of gift tax rules by gifting early in the ownership or value of the mineral interest and thereby shifting income and value to the trust rather than the original grantor.

A trustee is the “manager” of the trust property.  The trustee is given his marching orders by the written terms of the trust instrument. It is said, ‘The trust controls the trustee.’   A designated trustee in a mineral trust handles all decision making concerning multiple mineral interests or multiple beneficiaries as a single operating unit.  This can make for more efficient decision making and collection of royalty rights.

Fractionalized mineral interests (smaller multiple interests) can often be lost in the shuffle and sometimes forgotten by later generations of beneficiaries.   When a mineral trust is created, the earnings from royalties, leases and other income based payments, are held in perpetuity if an heir is lost, until that heir is located.  Unlike abandoned property, with privately created mineral trusts beneficiaries are able to collect on past proceeds when they claim ownership.

Mineral trusts keep the beneficiaries invested in the asset(s).  Without a mineral trust, ownership sometimes becomes unmanageably fractionalized.  In a large family situation, or when the ownership transfers to third and fourth generation, an individual ownership percentage may be small. The cost of managing minerals can also increase when each individual must be consulted or when multiple small beneficiaries are receiving separate royalties based on their individual ownership.  However when a trustee is managing the unit as a whole, the cost of managing is less expensive and the individuals usually have a better ability to monitor the trust asset.

Reconstructing and consolidating several divided mineral interests is an onerous process.  This may be avoided by creating a mineral trust early on.  It is also intended beneficiaries by proper drafting of the ownership terms in a mineral trust.  Creating sound asset management to eliminate disagreement or confusion among owners and beneficiaries, a mineral trust agreement enables the trust maker to detail explicit rules.  All beneficiaries are placed on notice of the trust terms which will designate how the trustee will manage the assets and income derived from royalties or income.  Unlike a will, a trust does not have to be filed publicly. Using this type of trust allows individuals to maintain privacy.

Missouri River & Ogallala Aquifer Indian Water Rights Conference 2014

Posted on: July 11th, 2014
by David Ganje

Missouri River & Ogallala Aquifer Indian Water Rights Conference 2014

Hosted by:          Great Plains Tribal Water Alliance

Event Sponsors:         Standing Rock Sioux Tribe..Ogala Sioux Tribe..Rosebud Sioux Tribe



Presentation:          Tribal Water Codes – Their Administration and Enforcement

Part 1

Historical And Legal Context As Well As Some Relevant Case Law Affecting Tribal Water Codes

Part 2

Issues, Strategy And Recommendations For Writing And Maintaining Successful Tribal Water Codes


Presentation by:

David L Ganje

Ganje Law Offices                                                                              Web:

Water Systems: A Twofold Look into Physical Security & Cyber Security

Posted on: July 6th, 2014
by David Ganje

Water Systems: A Twofold Look into Physical Security & Cyber Security WEBINAR IEPA# 0000—Illinois Section, American Water Works Association

12/12/14 Water Systems: A Twofold Look into Physical Security & Cyber Security WEBINAR IEPA# 0000

When: Thursday September 4th, 2014

From 12:00 -1:00 PM CDT

Where: Your home or office computer

Presenter: David Ganje

Contact: Marianne Perino

Phone: 866-521-3595


Registration Information: Online registration is available until: 12/12/2014




Water Systems: A Twofold Look into Physical Security & Cyber Security

CEU TYPE: Technical


IEPA#: 0000

Summary: A security threat to a water system may include the deliberate elimination/destruction of the safe water supply or the disruption of the delivery of the safe water supply for residential, commercial, industrial and agricultural purposes. System threats can come from within a water systems organization or from the outside. External threats include terrorist activities and civil disobedience. Threats may range from trespassing, tampering and vandalism to sabotage, theft and terrorism; these threats may be of a physical nature or they could be non-physical such as a cyber attack. Terrorist threats have been made against water systems. In most instances, the specifics of such attacks are unknown to most systems operators. Hazards from these threats include loss of power and communications, SCADA (supervisory control and data) cyber attack, explosions, intentional fires, chlorine release, broken water mains, chemical or biological contamination, pump failure, dam failure or storage tower failure. The focus of this presentation will address: conducting an on-site security audit using recommended national systems as well as local public and private resources. David Ganje, Ganje Law Offices

REGISTRATION & HOURS: This webinar will begin at 12:00pm and conclude by 1:00pm CST. Earn up to 1 PDH or RTC hour. After registering with Illinois Section AWWA, attendees will be furnished via email with all materials and links needed to participate in the webinar. Questions? Call 866-521-3595 Ext. 3

Midwest Water Technology Conference

Posted on: May 29th, 2014
by David Ganje

 Midwest Water & Wastewater Technology Conference





When: Thursday,   June 5, 2014
Visit Exhibitors from 7:30 to 8:30 AM
Where: Map this event »
College of Lake County, C-Building
19351 West Washington Street
Grayslake, Illinois  60030
United States
Contact: Lisa   Hoffhines
Phone:      866-521-3595 ext. 2






T-CON:   Midwest Water & Wastewater Technology ConferenceABOUT   THE CONFERENCE:The   Midwest Water & Wastewater Technology Conference is the new and improved   technology conference for industry professionals sponsored by the Illinois   Section AWWA, Central States Water Environment Association, Illinois Water   Environment Association and the College of Lake County. The Technology   Conference incorporates multiple learning tracks related to the planning,   design, implementation, and operation of water and wastewater-based   technologies. The multi-track approach makes the conference ideal for utility   managers, IT professionals, as well as operations and field staff. If you can   only attend one technology conference this year, this is the one to attend!


7:00-7:30am C006 Exhibitor     Set-up
7:30-8:15am C006 Breakfast     | Registration | Visit Exhibit Booths
8:15-8:30am C005 T-CON     Welcome and Opening Remarks
8:30-9:30am C002,     C003, C005 Technical     Sessions
9:30-10:00am C006 Morning     Break | Visit Exhibit Booths
10:00-12:00pm C002,     C003, C005 Technical     Sessions
12:00-1:00pm C002,     C003, C006 Lunch     | Visit Exhibit Booths
1:00-2:00pm C002,     C003, C005 Technical     Sessions
2:00-2:30pm C006 Afternoon     Break | Visit Exhibit Booths
2:30-3:15pm C005 Keynote     Speaker
3:15-3:30pm C005 Raffle     for iPad Air and MORE! | Closing Remarks


Presentation Title
Can You Recover After A Disaster With     Your Control System?
Comparison of Ammonia And DO Aeration     Control Strategies To Optimize Energy And Process At Low Capital Cost: A     Case Study
Drawing The Curtains On Windows XP –     What Does The End Of Win XP Mean For SCADA Systems?
Geocentric Web Mapping Solutions In     GIS
Going Beyond The Meter: Expanding     Traditional Data Collection Methodology To Increase Revenues
How GIS Has Helped The City Of     Chicago And The Department Of Water Management (DWM) Embark On A Very     Aggressive Plan To Replace 880 Mile Of Water Main In 10 Years!
How To Select An Economical And     Secure Remote Terminal Unit (RTU) Delivery System For WWTPs And Pump     Stations
Identifying And Locating Existing     Backflow Prevention Devices Inside A Building Using Bluetooth Smart     Technology
Increasing The Resiliency: Standby     Power Generation
Integrating SCADA with Other Plant     Systems
Internet of Things – Enabling A New     Level Of Control, Reporting And Efficiency
Making Your Water Department     Paperless With Laserfiche ECM
Master Metering Using A SCADA System
Mobile Data Collection, Visualization     And Execution
Mobile Interfacing Within     Water/Wastewater
Quick Tour Of ArcGIS Online And     Practical Uses For Water / Wastewater
SharePoint 2013 – Technical Overview
Speaking Their Language: Public     Engagement Through Social Media For Public Works
Understanding Pressure, Temperature,     And Flow Instrumentation
Using SCADA To Reduce Energy     Consumption And Operate More Efficiently
Water Systems: A Twofold Look Into     Physical Security And Cyber Security
Water/Wastewater Tablet Success For     Less Than $1000




Water Systems Security

by David Ganje


INTRODUCTION……………………………………………………………………………………………………….. 1

BRIEF HISTORICAL OVERVIEW……………………………………………………………………………… 1

WATER SECURITY……………………………………………………………………………………………………. 2

  1. Physical Security …………………………………………………………………………………………..      3
    1. i.              Milwaukee & Cryptosporidium…………………………………………………………….. 4
    2. ii.            WaterWorks: Physcial Security…………………………………………………………….. 6
  2. Cyber-Security……………………………………………………………………………………………….      9
    1. i.              WaterWorks: Cyber-Security………………………………………………………………… 11



Ass’n of State Water Admins., Security Vulnerability Self-Assessment Guide for Small Drinking Water Systems, Nat’l Rural Water Ass’n (May 30, 2002), available at



Presentation to the Illinois Chapter of the American Water Works Association.


© 2014. All Rights Reserved. David L. Ganje.


I. Introduction

This article discusses current security issues surrounding water treatment and waste facilities. The sources of attack are myriad, but manifest via physical attacks and cyber-attacks. A physical attack on a water treatment and waste facility occurs when an individual or group causes physical damage to the facilities, structures infrastructure, systems, or the water itself on site. A cyber-attack occurs remotely and disrupts the computer systems that control the treatment and waste facility. Whether the attack be physical, cyber, or some combination, the goal is the same: to harm, even kill, the local population and cause panic. This article will give a brief historical overview of American water systems, discuss the current water security concerns of both physical and cyber-security, and make some practical recommendations for enhanced security.


South Dakota Weighs in on the Dormant Mineral Laws

Posted on: May 21st, 2014
by David Ganje

A recent South Dakota Supreme Court decision, Holsti v. Kimber, 2014 S.D. 21, has shed light on two areas of the state’s dormant or abandoned mineral interests act (see South Dakota Codified Laws § 43-30A et. al.): first, what constitutes “use” (S.D.C.L. § 43-30A-3) and “nonuse” (S.D.C.L. § 43- 30A-2) of a mineral interest in order for a claimant to keep ownership; and second, who may claim and exercise that “use.”    North and South  Dakota’s Dormant/Lapsed Mineral Act are substantially similar.  This case adds to the body of case law discussing this important natural resources law. Though some questions remain unanswered following the decision, the Court’s decision discusses what a mineral interest owner may do to prevent lapse of one’s mineral interest and what a mineral interest owner may do to maintain his interest in a mineral estate. This case is the first time the South Dakota Court has addressed head on the state’s dormant mineral interest law.

South Dakota defines a mineral interest as “any interest, in oil, gas, coal, clay, gravel, uranium, and all other minerals of any kind and nature, whether created by grant, assignment, exception, reservation, or otherwise, owned by a person other than the owner of the surface estate.” (S.D.C.L. § 43-30A-1 (emphasis added)). A mineral interest is considered abandoned if it is “unused” for twenty-three years (twenty years in North Dakota) and a statement of claim is not recorded within that time. (S.D.C.L. § 43-30A-2; N.D.C.C. § 38-18.1-02). Upon abandonment, the surface estate owner may succeed to the mineral interest of another claimant, and unite the two estates. (S.D.C.L. § 43-30A-6).

In order to maintain ownership of a mineral interest and avoid lapse, the mineral interest must be “used.” (See S.D.C.L. § 43-30A-3). “Use” under the statute may include any one of eight statutorily defined “uses.” (Id.) One such “use” relevant to this case, includes:


Any conveyance, valid lease, mortgage, assignment, order in an estate settlement proceeding, inheritance tax determination affidavit, termination of life estate affidavit, or any judgment or decree that makes specific reference to the mineral interest is recorded . . . .


(S.D.C.L. § 43-30A-3(4)). It is the burden of the mineral interest holder to maintain his interest. (See Holsti, 2014 S.D. 21 at ¶ 12 (citing Texaco, Inc. v. Short, 454 U.S. 516, 529-30 (1982)). Upon lapse, the burden shifts to the surface estate owner (the landowner) to take steps to succeed in the mineral interest. (See S.D.C.L. § 43-30A-6). In Holsti, the issue before the Court was whether the mineral interest holders fulfilled their burden to maintain their interest in the mineral estate. (See ¶ 11).

The facts of the case: in 1967, Severt Kvalhein (“Kvalhein”) conveyed real property to Gordan Holsti and recorded the deed. (Holsti at ¶ 2). In the sale, Kvalhein reserved fifty percent of the mineral rights for himself. (Id.). Two years later, in 1969, Kvalhein died and his estate was devised to eight heirs, each heir taking a one-eighth interest in the minerals. (Id.).

In 2007, Mr. Holsti conveyed his surface estate to his sons (“the Holstis”). (Id. at ¶ 3). In December 2011, the Holstis published a notice of lapse of mineral interest in the official county newspaper in accordance with the statutes to recover mineral interests. (Id.; see S.D.C.L. § 43-30A-6.). No one responded by recording a statement of claim asserting ownership of the mineral interest. (Holsti, at ¶ 3). The Holstis filed a quiet title action in May 2012 alleging abandonment of the mineral interest due to “nonuse.” (Id. at ¶ 4).

Kvalhein heirs (“the heirs”) answered and rejected the argument that the mineral interest was abandoned. (Id. at ¶ 5). In their defense, the heirs referenced several 1978 oil and gas leases, a 1994 statement of claim by one of the heirs, and two mineral deeds recorded by one of the heirs in 1998 and 2011. (Id.).

The Court looked to whether the Kvalheim heirs had a valid mineral interest at all. The trial court had decided they did not have a valid interest because no document was recorded evidencing transfer of the mineral interests to the heirs and reasoned that “use” of a mineral interest could only be done by a “record owner.” (See id. at ¶ 9). The Supreme Court rejected that reading of the statute, and found that the heirs did not need a recorded written document conveying Kvalheim’s mineral interest to them. (Id. at ¶ 15).  The Court found the Kvalheim’s last will and testament, though unrecorded, was sufficient to convey the mineral interest to the heirs upon Kvalheim’s death. (Id., at ¶ 15; S.D.C.L. § 43-30A-1).

Once the Court determined the heirs had an interest in the mineral estate, it next turned to whether or not that interest had been abandoned due to “nonuse,” or if the heirs had satisfied the law’s “use” requirements. (Holsti, at ¶ 16). The circuit court found the 1978 oil and gas leases recorded by the heirs were insufficient because they did not make specific reference to the mineral deed recorded by Kvalheim in 1967. (Id.). The Supreme Court disagreed. (Id.). Because the language of the statute does not specifically use the words “record holder” or “original deed” the Court held the only two requirements for a recorded oil and gas lease to satisfy “use” were: 1) a specific reference to the mineral interest in question and 2) recording in the county register of deeds office. (Id.). Because the heirs’ oil and gas leases specifically referred to the legal description of the minerals and because the leases were recorded in the proper county’s register of deeds office, the Court found the leases to be sufficient as “use.” (Id.). (In a similar 2013 case decided by the North Dakota Supreme Court, Estate of Christeson v. Gilstad, the North Dakota Court also found that a legal mineral interest owner by inheritance, but not a record owner, could record an oil and gas lease to preclude abandonment of the mineral interest. (829 N.W.2d 453 (N.D. 2013)).

By exercising their rights as mineral interest holders and recording oil and gas leases in 1978, the Kvalheim heirs reset the clock back to zero on the twenty-three year test for abandonment. (See SDCL 43-30A-2). Therefore, from the last recorded lease in 1978, the heirs had twenty-three years in which the surface estate owners could not claim abandonment. Before the expiration of this twenty-three years (1978-2001), two Kvalheim heirs recorded documents sufficient to toll the clock again: in 1994, one heir recorded a valid statement of claim (Holsti, at ¶ 18); and in 1998 and 2011 two mineral deeds were recorded conveying the mineral interest between heirs. (Id. at ¶ 17). The Court found both the statement of claim and mineral deeds constituted a “use” under the law and precluded abandonment. (Id. at ¶ 17-18). The Court did not decide and instead remanded to the circuit court an additional issue: whether these two “uses” by some of the Kvalhein heirs were sufficient to preserve the other six heir’s mineral interests. (Id. at ¶ 19).

In their holding, the Court discussed who may be a mineral interest holder and what they may do to satisfy the burden of “using” their mineral estate. This clarification is to the benefit of mineral interest holders because non-record holders, that is parties who claim mineral interest rights but have no deed of record, may still protect their interests (it nevertheless a better practice to record an interest).


Chronological Timeline of Events

Kvalheim & heirs/Defendants


1967: Severt Kvalhein conveyed real property to Gordan Holsti, but reserved 50% of the mineral rights for himself. The deed was recorded in Harding County, South Dakota.
1969: Severt Kvalhein died, and devised his estate to his eight heirs; therefore, each heir individually inherited 6.25% of the property’s total mineral interest.
1978: Multiple oil and gas leases were recorded in Harding County by several of Kvalhein’s heirs (including: Nina Grev and Sylvia & Jerome Hjelmeland).
1994: Nina Grev, a Kvalhein heir, filed and recorded in Harding County a statement of claim related to the mineral interest.
1996: Gordon Holsti published a notice of lapse of mineral interest in the official Harding County newspaper once a week for three weeks, which notices and affidavit were recorded in the Harding County Register of Deeds Office.
1998: Jerome Hjelmeland, a Kvalhein heir, conveyed his 6.25% mineral interest to his wife, Sylvia Hjelmeland, by “Mineral Deed” which was recorded in Harding County.
2007: Gordon Holsti conveyed his surface estate to his sons, John and Mark (“the Holstis).
June 2011: Sylvia Hjelmeland conveyed her 6.25% mineral interest to her two children, Katherine and Gregory, and recorded the deed in Harding County.
December 2011: The Holstis published a notice of lapse of mineral interest in the official Harding County newspaper, once a week for three weeks, as required. No notice was mailed to Kvalheim, because he died in 1969 a single man. No inquiry was made into who was the owner of Kvalheim’s mineral interest following his death.
May 2012: The Holstis brought a quiet title action alleging Kvalheim’s mineral interest lapsed due to nonuse and that Gordan had succeeded Kvalheim’s mineral interest in 1996 due to his published notice of lapse; or, alternatively, that they had succeeded Kvalheim’s mineral interest in 2011 based on their publication of the notice of lapse.