Blogging Tulsa Real Estate

Intangible Personal Property Tax Has Been Expanded to Locally Assessed Businesses by Oklahoma Supreme Court

Mike Means of the Oklahoma State Homebuilders Association sent out a legislative update this morning, saying:

In September of 2009, the Oklahoma Supreme Court ruled that with the exception of items listed in Article 10, Section 6A of the Oklahoma Constitution, locally assessed businesses should be paying ad valorem taxes on their intangible personal property.  This means that such things as trademarks, software, patents, contracts, customer lists, company names, etc., are now taxable as intangible personal property.  Talk about full employment for the local assessor!  Currently locally assessed companies do not pay ad valorem taxes on their intangible personal property.  The Supreme Court ruling changes that.

The solution is to look at an in lieu tax.  Our state constitution allows for taxpayers to pay certain taxes in lieu of other taxes.  Presently, Oklahoma businesses are liable for a state franchise tax.  By creating a small business activity tax that would be paid in lieu of ad valorem tax on intangible personal property, we can eliminate the current franchise tax and save Oklahoma businesses from a large tax increase that will inevitably result from the Supreme Court's ruling.  The ultimate details of this solution is being worked out by the legislature but the ultimate goal is that it be revenue neutral.

Without this solution, one tax expert says this will be the biggest tax increase in state history.  We cannot do nothing.

This issue of ad valorem taxation affects all Oklahoma businesses.  It could potentially hurt our economy by scaring business away from Oklahoma.

This is the same Oklahoma Supreme Court that recently ruled that REALTORS® can be sued for fraud if they give inaccurate court house information to buyers regarding residential square footage.

By the way, does anybody know how someone gets on the Oklahoma Supreme Court?  How can we get some new blood on the bench?  We shouldn't have to spend so much time trying to clean up their mess.

Scenic River Properties on Baron Fork Creek For Sale near Tahlequah, Oklahoma don't come on the market very frequently. 

It is hard to find access to the scenic rivers of Northeast Oklahoma, because the little roads leading down to the Illinois River or Baron Fork Creek have been shut off and barricaded.  You really have to know someone who owns land along the river in order to get permission to cross their land to get to the creeks and streams feeding to the Illinois River or it's tributary, Baron Fork Creek, also known as Barren Fork Creek.

Baron Fork Creek flows out of Arkansas through a little valley near the village of Baron, Oklahoma, hence it's name "Baron" Fork Creek.  However, the roadside sign along Oklahoma Highway 51 idicates that "Barren" Fork Creek is an Oklahoma Scenic River.  Go figure.  The creek is known by both spellings:  Baron or Barren.

To find a unique recreational property with frontage on the river is especially unusual. Scenic river properties on Baron Fork Creek with full access to the creek are very hard to find, but to find one for sale at a reasonable price is especially unusual.

There is currently a unique recreational property for sale with frontage on the river.  That property has approximately 32.64 acres with approximately 865 feet of frontage on Baron Fork Creek.

For the past twenty-five years or so the creek has flowed through an oxbow at the bottom of the bluff below the house, however a couple of years ago the creek changed it's main channel to a point further west, leaving the oxbow with less water. 

Since these pictures were taken in December 2009 the creek has begun to flow back through the oxbow to follow its traditional course.

To find other scenic river properties on Baron Fork Creek for sale near Tahlequah, Oklahoma, you could look for residential properties for sale with a creek in Briggs School District or if you are looking to build a camp or second home, you could search for unplatted building lots or vacant land on a creek in Cherokee County Oklahoma.

Eagles soar above Baron Fork Creek at the point where the river flows through the "S" curves of the oxbow about a mile below the Highway 51 Bridge.  If you were to own one of the unique scenic river properties on Baron Fork Creek then you would be able to fish for trophy bass or just sit and sip your coffee while watching the bald eagles soar above Barren Fork Creek as it wends its way toward the Illinois River and the Arkansas River further downstream.

The property that is currently for sale happens to have two homes, both built in 1996.  One home is a "stick-built" home with full brick veneer on the front and vinyl siding on the back.  The other home is a double-wide Oakwood mobile home.  There is a total garage capacity for four cars.  There is also a horse barn and several sheds and outbuildings.  The property is completely fenced and very very private.

The current owner raised walking horses and enjoys riding the horses across the creek and up to the old railway right-of-way that is on the west side of Baron Fork Creek.  The tracks have been taken up and so you can, with permission from landowners, ride your horses for miles along the railway right-of-way where there are no gates.

Thus, you can understand how wonderful and rare these scenic river properties on Baron Fork Creek for sale east of Tahlequah in Cherokee County, Oklahoma are truly unique recreational properties.

This is where equestrians and fisherman can truly co-exist on the banks of scenic rivers.

Horse farms for sale with a pond and a barn in Rogers County Oklahoma may be hard to find if you aren't working with the right REALTOR®. 

However, if you call Debbie Solano, you'll discover quickly that it's easy to find horse property in Northeast Oklahoma, because she has already thought about the problem and figured out exactly how to help you find all the horse farms for sale with a pond and a barn you could possibly want, whether you're looking in Rogers County, or in any other county around Tulsa in northeast Oklahoma.

What's so special about finding horse farms for sale with a pond and a barn?  Most realtors sell houses in subdivisions and don't necessarily specialize in farm and ranch properties. A farm and ranch specialist can narrow the search to find exactly what you are looking for

A realtor specializing in horse properties not only knows the inventory, but he or she can show you how to find horse farms for sale with a pond and a barn if they have been properly coded in the Northeast Oklahoma multilist as having a barn, a pond, and are listed as either a farm and ranch property or as a property that has been zoned "Horse Permitted" in some way.

Farm and Ranch Properties:

There are currently 7 horse farms for sale with a pond and a barn in Rogers County, Oklahoma.  They range in price from $185,000 to $655,00.  These are all the current farm and ranch listings in Rogers County that have a pond and a barn. 

Now if you were to take away the requirement for a barn, you would find that there are currently 17 farm and ranch properties for sale with a pond (but without a barn) in Rogers County, Oklahoma.  These properties range in price from $115,000 to $1,100,000.

Let's try the other way around and you will find that there are 14 farm and ranch properties for sale with a barn (but without a pond) in Rogers County, Oklahoma.  These properties range in price from $179,500 to $655,000.

As you can see, there are all kinds of permutations that will change your property search. If no pond is available on a property, we can always look for farm and ranch properties for sale in Rogers County that have a creek instead.  (There are currently 8 farm and ranch properties in Rogers County Oklahoma that have a creek).  You can always dig a pond if one is not already available on the property.  Add a barn to the search for farm and ranch properties with a barn and a creek and you will find that there are currently 3 properties available.

Or, if there is no barn, then you can always build one later. 

So you can always add a pond and/or a barn, but a creek or a river is difficult to replace.

Oh, for those perfect horse properties that have all three features:  farm and ranch properties with a barn, a pond, and a creek.  Ooops!  There are now only two farm and ranch properties in Rogers County with a barn, a pond, and a creek and they are not the less expensive properties.

Are you beginning to understand why you need a REALTOR who specializes in farm and ranch properties?

Horse Permitted Properties:

"Horse Permitted" addresses a zoning question and has little to do with the description of the property being sold.  Horse farms for sale with a pond and a barn hopefully will be marked as "horse permitted," but when the realtor is filling out the paperwork, there are only a limited number of selections that can be checked on the listing forms.  So if "horse permitted" is missing, the buyer can usually make the assumption that if it is a farm, then it has agricultural zoning -- but not always.

And vice versa.  Perhaps there is a nice house on a lovely piece of land -- perhaps with quite a bit of acreage, that has never been set up as a farm or a ranch. There are many properties in Rogers County that have the potential to become horse farms for sale with a pond and a barn.  These properties may be zoned in such a way that horses are allowed or "permitted" to be there. 

In Rogers County "horse permitted" would mean Agricultural zoning or RS-60 (which is Residential zoning in rural subdivisions with a minimum of 2.5 acres where there is a limit on the number of horses or other livestock).

Currently there are 8 "horse permitted" properties for sale with a pond and a barn in Rogers County Oklahoma.  They may or may not necessarily be horse farms for sale with a pond and a barn; they simply have the correct zoning to be horse farms for sale with a pond and a barn. 

A barn does not a farm maketh.

Is the farm registered with the U.S. Department of Agriculture?  Is there a farm number?  Has the owner been filing a Schedule F?  Do the Sellers drive a truck with a Farm tag?  Do the Sellers pay sales tax on their horse feed?  All of these questions are valid, but irrelevant when a realtor is checking Farm and Ranch on the listing documentation.

What is a barn?

When you are looking for horse farms for sale with a pond and a barn you will find that your idea of a barn may be quite a bit different from the listing realtor's interpretation of a "barn."  In our Northeast Oklahoma multilist there are a few very nice garden sheds that are coded as barns. 

Then again, is there a distinction between "barn" and "stable?"  Not in our multilist.  A stable with horse stalls of any kind is a barn.  A large hay barn is a barn too. 

Run-in sheds and equipment sheds are usually classified as "sheds," but sometimes are labeled as "barns" by different realtors.

What is a pond?

Some farm ponds are small lakes, but in the Northeast Oklahoma multilist they are all ponds.  If they have a name on a map, then they are lakes.  Otherwise they are ponds.

A lagoon is not a pond.  It is a hole in the ground into which sewage is retained when the land does not "percolate" or "perk."  Lagoons have been largely superseded by aerobic septic systems.

Look at the pictures

Confused?  Join the club!  Just be sure when you are looking for horse farms for sale with a pond and a barn, that you search for farm and ranch properties separately from "horse permitted" properties.

In other words, do separate searches for both categories.

Then again, skip the searches for farm and ranch properties and "horse permitted" properties altogether, since many listing realtors do not check either box when they are filling out the paperwork on a particular property.

The broadest search would be to search for acres.  Well, scratch that too.  Some realtors don't even list the property size. 

Just look at the pictures and decide for yourself if what you are looking at are indeed horse farms for sale with a pond and a barn.

Can the Federal Government Tell Us What We Can and Cannot Do with Our Personal Property?  -- That's Exactly  What The Obama Administration is Doing by Imposing a Moratorium on Drilling in the Allegheny National Forest Has Implications for Oklahoma and Other States.

There is a very quiet battle going on about which most real estate professionals are unaware.  However, its outcome has far reaching consequences underpinning everything we sell, no matter where we sell real estate in these United States, be it Pennsylvania or Oklahoma.  I’m talking about the struggle for the acquisition and control of the severed mineral estate which underlies the surface estate -- the chocolate cake under the icing -- personal property underneath the real estate.  The issues at stake are the erosion of private property rights and the freedom to do what we want with our own personal property.

Keep in mind that oil, gas, and minerals are considered to be real estate until they are severed from the surface estate.  Once the oil, gas and other minerals are severed from the surface estate, they have become personal property.

Far from the stimulating the economy, the Obama administration has chosen instead to eliminate jobs and stifle economic productivity in one of the more economically depressed areas of the country at a time when jobs are scarce.

In a blog which I posted back in October, I described the gradual erosion of property rights and the federal government’s attempt to seize power from the Commonwealth of Pennsylvania.  Today’s blog is an update to that previous blog. 

The Obama administration has admitted defeat, settled the lawsuit over the exploration of minerals in the Allegheny National Forest (the ANF), and has imposed a moratorium on energy exploration in the ANF.  The article entitled,  “Feds Settle ‘Sweetheart Suit’ – Kill Search for Energy,” was written by William Perry Pendley of the Mountain States Legal Foundation and is found on pages 17-18 of the November 2009 issue of Landman 2 (Vol. 7, no. 6).  With the permission of the American Association of Professional Landmen (AAPL), I have reprinted the entire article.  What follows are the words of Mr. Perry: 

"August 27 marked 150 years since the first successful commercial oil well was drilled in Titusville, Pa. --  thus beginning an oil and gas industry that has thrived across the country as well as within 40 miles of Titusville in the Allegheny National Forest (ANF).  Not long ago, The Wall Street Journal reported renewed interest in the region’s Marcellus Shale given massive gas discoveries in the Barnett Shale in Texas, Fayetteville Shale in Arkansas and Haynesville Shale in Louisiana. 

“The search in the ANF will have to wait, however, thanks to a “sweetheart lawsuit” by environmental groups and a decision by the Obama Administration to admit defeat, settle that lawsuit and impose a moratorium on energy exploration in the ANF.

“In June 2009, the Pennsylvania Oil and Gas Association (POGAM), Minard Run Oil Co. – the nation’s oldest family-owned and operated independent oil producer – and others sued Attorney General Eric Holder, the U.S. Forest Service and its officials, and three environmental organizations. At stake in the case are private property rights, high-paying jobs in one of the most depressed regions of the country and the search for energy in one of the hottest gas prospects nationwide. 

“The ANF covers 500,000 acres in Elk, Forest, McKean and Warren counties in northwestern Pennsylvania.  Because the lands within the ANF were once privately owned and were purchased during the 1920s and because the United States bought only the surface, most oil, gas and mineral (OGM) rights in the ANF (93 percent) are privately owned.  Thus, there is no basis for any federal government regulatory authority over those rights.  In fact, federal law, Forest Service regulations and federal and state court rulings say the agency has no such authority!

“Under Pennsylvania law, owners of OGM rights may go on the surface to access their property and may occupy so much of the surface as necessary to do so; however, the law provides for accommodation.  OGM rights must be exercised with “due regard” for surface owners’ interests.  That the United States owns the surface does not change the law:  Like every other surface owner, the United States can do nothing – short of a lawsuit – to deny OGM owners access to their property.  This was affirmed, as to a state agency, in a 2009 Supreme Court of Pennsylvania ruling.  Therefore, the Forest Service has few options in dealing with OGM rights in the ANF, which is in accordance with the agency’s longstanding practice set forth in the Forest Service Manual.  OGM rights must be exercised with “due regard” for surface owners’ interests.  That the United States owns the surface does not change the law:  Like every other surface owner, the United States can do nothing – short of a lawsuit – to deny OGM owners access to their property.  This was affirmed, as to a state agency, in a 2009 Supreme Court of Pennsylvania ruling.  Therefore, the Forest Service has few options in dealing with OGM rights in the ANF, which is in accordance with the agency’s longstanding practice set forth in the Forest Service Manual.  This was recognized by a 1980 Pennsylvania federal district court ruling, which Congress adopted in the Energy Policy Act of 1992.   

“For decades, the Forest Service adhered to the law and responded to an operator’s 60-day notice of its plans with consultations and a “notice to proceed,” which is not a decision by the Forest Service to allow OGM activity because, again, the Forest Service has no power over OGM rights.  Nonetheless, in March 2007 the Forest Service announced its decision to conduct National Environmental Policy Act (NEPA) studies on any plans to develop OGM rights in the ANF.  NEPA only applies to “major federal actions,” which means issues as to which the agency has discretion; the Forest Service has no such discretion regarding OGM rights.  The Forest Service’s decision is now the subject of litigation.

 “Meanwhile, in November 2008 environmental groups – recognizing that the Forest Service would lose its attempt to impose NEPA on its own – sued the Forest Service and asserted that a “notice to proceed” is subject to NEPA.  After OGM owners intervened, federal lawyers signed a hastily executed “Settlement Agreement,” and the lawsuit was dismissed.

"The resultant lawsuit by POGAM and Minard Run is just beginning; however, it may well reach the U.S. Supreme Court where a favorable ruling is essential to the preservation of freedom, not to mention the search for energy in the United States!"

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Help!  I'm Getting Addicted to Twitter!

Years ago it was eBay.  A year ago it was Active Rain.  Now it's Twitter. 

When will I ever find time to write those thank you notes for the Open House I held ten days ago?  Probably never!  I just cannot pull away. 

I cannot help it.  The stumbling upon, serendipitous, sleuthing, finding, discovering, repeating, sharing, and connecting is somehow enjoying.

Last night while I was tweeting, someone started to follow me and I knew her!  It was my daughter-in-law's mother.  So I immediately followed her and thanked her for her follow.

Email seems slow.  Not quite as slow as snail mail.

Is there any recovery?  Is there any hope?

I can justify my tweeting now that Google is indexing Twitter.  I can say it is good for my SEO -- and it is. 

I can connect with people in my geographic area.  I can connect with people in my company.  I can connect with people in specific areas of interest.

In short, Twitter is fantastic!

I check my Klout and I check what people in my town are tweeting about.  Every day there are new exciting Twitter applications.Help!  I'm Getting Addicted to Twitter!

 If you don't believe me, follow me on Twitter at http://Twitter.com/dsolano

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How Would You Improve the Title of  the Worker, Homeownership and Business Assistance Act of 2009?

Worker, Homeownership and Business Assistance Act of 2009 has a terrible ring to it.  Who's writing these titles anyway?

What ever happened to grammatical parallelism?  We should be embarrassed by this as English-speaking citizens of the world!

Am I the only one who is bothered by the sequence of nouns in the title of this long-awaited law?  If I were queen of the world, or president, my pen would have scratched this out before I signed my name to it. 

Isn't there someone on Capitol Hill with a degree in English?  I know journalism is dead, but is legislative bill-writing no longer an art form?

What ever happened to freshman composition as part of a college education?  Or perhaps the people who wrote this bill never went to class.

An entire industry has been watching this bill because of its impact on our economic security.  Couldn't they have tried a little harder to synchonize the words a bit better by making them parallel?

OK!  OK!  I admit it!  I am a snob.  I am over-educated, arrogant, nit-picking, abrasive, unfocused real estate sales associate with nothing better to do than to pick apart the work of our legislators.

What title would have been better?

Worker, Homeowner and Small Businessman's Assistance Act of 2009?  -- Too sexist.

Worker, Homeowner and Small Business Person's Assistance Act of 2009?

Laborer, Homemaker and Entrepreneur Assistance Act of 2009?

Labor, Residential Real Estate and Business Assistance Act of 2009?

I feel like I'm looking at #oneletteroffmovies on Twitter.  Give me your ideas!

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Mineral Rights and Surface Rights in Oklahoma -- Do What Your Client Wants

If you have been following my blogs, you know I am passionate about my clients getting the mineral rights -- putting the chocolate cake back under the icing.

I showed property this week in Osage County, Rogers County, Tulsa County, Okmulgee County, Okfuskee County, and Pittsburg County to two different sets of clients.

In every case the realtors said the minerals did not come with the property, that the sellers were only selling the surface rights. 

However, when meeting and speaking with the sellers directly, in half the cases the sellers owned the minerals and were willing to convey the minerals with the property.  These sellers had minerals that were not in production.  When they sell with the "old" Oklahoma contracts used by GTAR, these sellers will be conveying the entire bundle of rights -- whether or not the realtors know what that bundle of rights contains or not.  The attorneys will be probably be using a General Warranty Deed conveying the entire chocolate cake in fee simple  or even if unbeknownst to them there is a piece or two already eaten out of the cake or not, they are planning to sell 100% of what they have, thereby conveying the property through a General Warranty Deed.

However, one seller this week refused to sell the minerals because the gas under his land was being produced and he wanted his descendants to get the little royalty checks in the future.  His land had been unitized already.  That particular property was out in the country near McAlester where a lot of gas has been being produced in the last few years.  My buyers were comfortable with not getting the minerals because they loved the house and the land.  They did not seem to really understand that just because the property is already being produced doesn't mean the D6 dozers and drilling rigs won't come onto the property in the future.  If they had bought that place they would only have been purchasing the icing on the cake because the seller wanted to sever the mineral estate from the surface estate, making the minerals personal property.

We couldn't get the deal together anyway, and so the minerals ended up being a moot point.  In the offer I put:  "Seller shall retain 100% of the minerals under this property."   To me that language using the "old" Oklahoma contract still being used by GTAR would allow the buyers to acquire the entire bundle of rights without the minerals, while still retaining air and water rights and any other rights that go along with the surface. 

There is no way I will use a "Surface Only"  contract.  Thankfully, the Greater Tulsa Association of Realtors (GTAR) has not approved the use of the new Oklahoma contracts.

Nevertheless, if I have a Single-Party Broker's agreement, I am legally bound to obey my clients and do what they want, even if I think it is not in their best interest.  You bet in such a case that I will be documenting that I inform them of the negative consequences of not getting the mineral rights.

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The unintended consequences of the new Oklahoma real estate contract forms are numerous and complex. On Friday the Oklahoma Real Estate Commission (OREC) unveiled the new real estate contract forms. The OREC has recommended that licensed real estate brokers and their associates begin using the new forms on November 1, 2009. It's not too late to comment and request that changes be made. Our future economic well being and our national security could potentially be at risk.

The new forms will put into limbo all mineral rights that are not now active or leased, because unproduced oil & gas rights are not tracked nor taxed. Mineral rights will be put in limbo where no one will know what is going on until the State of Oklahoma comes along and takes them as unclaimed property, thereby depriving the landowners of the State of Oklahoma of a significant portion of their wealth.

The county tax assessors only track and tax the surface owners. Oil & gas producers track producing mineral holders in order to distribute royalty checks. Because they are never taxed and do not receive royalty checks, descendants of unproduced mineral holders are unaware of their ownership of severed oil & gas rights. Moreover, privacy laws make it difficult for landmen to find heirs. Detailed census data is closed for seventy years -- that's three generations of tough genealogical work for anyone trying to find holders of mineral rights.

The lawyers, the landmen, the abstract companies, and the title insurance companies will be the big winners of the new contract forms. The consumers, landowners, undeclared mineral holders, and real estate brokers who do not broker oil & gas rights will be the biggest losers.

Potentially the economic engine of the State of Oklahoma will be crippled to the extent that the state may eventually have to quiet title undeclared mineral holders in order to prevent foreign investors from quietly investing in these precious personal property rights that will be regularly severed through the use of the new contract forms.

Only the Osage Nation, who already owns most of the mineral rights in Osage County (all but about 800 acres or so) will be able to conduct business unimpeded by legal problems.

Those of us who sell rural land have been aware of the problems caused by the previous Vacant Land contract forms and have been hoping to get them changed so that the personal property rights would no longer be severed by the vacant land contract forms for "surface rights only." Instead we were shocked to discover that all the new contract forms are written for the purchase of surface rights only. Knowlegable brokers and associates will be crossing out certain words in the new contracts. However, that will not prevent damage being done by ignorant real estate sales associates who will not be realizing that they are not representing the best interests of their buyers and their descendants.

Does this mean that the OREC wants all real estate brokers and associates using these new forms to be representing their clients as transaction brokers? This must be the case, because by law a single party broker must advocate for and work in the best interest of their clients. Any buyer's broker using the new forms without alteration will not be representing the best interest of their buyers and therefore will be leaving themselves open for legal action if they act as a single party broker.

Yeah, yeah, yeah, how can that be? Just wait until the D6 dozers and the drilling rigs start pulling up on your buyer's land! They'll cry when they realize that the mineral estate is dominant over the surface estate. Then they'll call their lawyer who will then call you. You will be responsible for not having explained to your buyer the unintended consequences of their having purchased only the surface rights.

At least with the old forms our buyers were able to purchase all of the rights owned by the seller -- however many and kind of rights those may have been.

Moreover, we can all kiss goodbye to the concept of quiet enjoyment.

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Mineral Rights and States' Rights Issues -- The Gradual Erosion of Property Rights and the Seizure of Power From a State By the Federal Government

Who has jurisdiction when there is a conflict between the surface owners and the owners of the mineral estate?  Can the Federal Government constitutionally use it's police powers to restrict access to private property in the form of mineral rights or is this a right of the states and the people under the constitutional principle of federalism?

In a recent article by Robert J. Keir, Appalachian Basin Land Manager, entitled, "The Battle for the ANF is Really a States Rights Issue," this very issue is explored. With the permission of the American Association of Professional Landmen (AAPL), I have reprinted the entire article which recently appeared on pages 13-14 in the September 2009 issue of Landman 2 (Vol. 7, no. 5).  What follows are the words of Mr. Keir, with emphases added by me:

The battle between oil and gas owners and the federal government in the form of the U.S. Forest Service regarding drilling rights in the Allegheny National Forest (ANF) has raised a great deal of Constitutional fuss. The argument is focused mostly on Fifth Amendment concerns: "nor shall private property be taken for public use, without just compensation." However, the 10th Amendment issues are more threatening to our liberty and potentially more sinister as the Obama Administration claws power back from the states. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The 10th Amendment reaffirms the principle of federalism by providing that powers not granted to the national government nor prohibited to the states are reserved to the states or the people.

In Pennsylvania [as in Oklahoma and in many other states, I must add], the mineral estate is the dominant estate, the surface estate is the subservient estate and the mineral owner has an implied right to use so much of the surface as is reasonably necessary in order to develop these minerals. The surface owner is forbidden to interfere with any reasonable use of the surface by the mineral owner. The term "reasonable" is a bit nebulous, but the Commonwealth of Pennsylvania in the form of statutes, regulations and more than 100 years of case law has established a pretty firm definition of reasonable use.

In fact, the Pennsylvania Supreme Court, in Belden and Blake v. Pennsylvania Department of Conservation and Natural Resources (2009), forcefully reaffirmed the rights of the mineral owner and that the surface owner -- ironically in this case the commonwealth of Pennsylvania -- cannot impose preconditions or control reasonable access to state lands for the purpose of oil and gas development. In a nutshell, the court said that even Pennsylvania was simply just another landowner without a mineral interest underlying the surface and that it -- like any other landowner -- could not impose unreasonable surface access restrictions to the owners of the mineral estate.

The ANF property covers more than a half-million acres spread over four counties. However, in 1923 when the Forest Service started to acquire land parcels for the forest, a decision was made, for economic reasons, not to purchase the sub-surface rights of the properties then being assembled. Therefore, the Forest Service only owns about 7 percent of the oil, gas and minerals under the forest. Private parties own the remaining 93 percent.

The recent settlement reached between the Forest Service, the ADF, the Sierra Club and the Forest Service Employess for Environmental Ethics requires drilling companies to conduct an environmental review in the form of a National Environmental Policy Act (NEPA) analysis, which addresses such issues as road construction near streams, reforestation, landscaping after a well is completed and a biological and heritage resource review. NEPA would also grant third-party input on drilling projects within the ANF.

All of these issues are already regulated by the commonwealth of Pennsylvania in the Oil and Gas Act. As the May 2009 issue of the IOGA newsletter neatly describes, Section 102 of the Act provides:

The purposes of this act are to

(1) Permit the optimal development of the oil and gas resources of Pennsylvania consistent with the protection of the health, safety, environment and property of the citizens of the commonwealth.

(2) Protect the safety of personnel and facilities employed in the exploration, development, storage and production of natural gas or oil or the mining of coal.

(3) Protect the safety and property rights of persons residing in areas where such exploration, development, storage or production occurs.

There is nothing in the NEPA analysis that Pennsylvania does not already cover or forbid.  These powers are reserved for the commonwealth because they were not delegated to Uncle Sam by the Constitution.

The ANF is just another large landowner and has no extra special rights compared to other landowners in Pennsylvania.  Any attempt by the Forest Service to impose surface use restrictions on oil and gas development in the ANF violates Pennsylvania law and the Fifth Amendment.

On the surface, this conflict is about the restriction of access to private property by a government agency.  But ultimately, it is about the seizure of power from a state by the federal government, which makes it a 10th Amendment issue as well.

We should be concerned about this gradual erosion of property rights as the ANF intrudes on individual liberties.  But all -- including the most ardent environmentalists -- should be especially alarmed at Uncle Sam's attempt to snatch power away from the states, because if this is allowed to continue, our federalist system as designed by the framers is in severe jeopardy.

This is not the change people voted for, and it is not for the good.

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