Laws by their nature create tension between different economic interests in a democratic society. When the free market system includes environmental laws which affect the marketability and development of contaminated or polluted property, the system must also include a mechanism to protect the owner’s ability to sell and develop such property. Man-made ‘controls’ created by man-made regulations need man-made rules to reduce the affect of these ‘controls’. Environmental laws and regulations are no exception. Contemporary environmental laws contain many restrictions on transfer of property, as well as mandatory hazardous-spill reporting and cleanup requirements. Such laws affect the marketability of property. Local, state and federal agencies in recent years have focused attention on the clean up and redevelopment of contaminated property sites in South Dakota. These sites are called brownfields.

Brownfields are properties the use, expansion or re-development of which is complicated by the presence or potential presence of a hazardous substance. Environmental laws now include financial assistance for the clean up and sale of such properties. Brownfield clean up can address mine-scarred lands, sites contaminated by petroleum, chemicals or sites contaminated as a result of manufacturing.

Environmental issues in South Dakota are primarily the jurisdiction of the state Department of Environment and Natural Resources (DENR). This agency has significant management authority over environmental matters in the state and has had cooperative agreements in place with the U.S. Environmental Protection Agency (EPA) under which the DENR is the principal government agency dealing with environmental matters. The EPA contributed over $47 million in funding programs for South Dakota in 2012 through DENR.

Not all government agencies are created equal. Not all government agencies work effectively and fairly. South Dakotans are fortunate in that the DENR is an agency that is generally accessible and open in its regulatory and management style. Such accessibility is not always the norm among environmental agencies across the country. DENR has established policies that promote the development of environmentally affected properties.

Many South Dakota municipalities, local governments and private owners are missing the boat. Not all environmental regulations are bad. Two useful but underused environmental cleanup programs in the state are:

 1. The state’s Petroleum Tank Removal projects which provide significant if not complete coverage of tank removal costs, and

2. South Dakota’s Brownfields programs.

The first is a set of regulations under which the state oversees and pays for the removal of old and unused petroleum storage tanks. These regulations have had some success in the state, but they are not yet fully used by affected parties. The following tank ‘candidates’ may be removed by the state at no cost to the owners: heating oil tanks, boiler tanks and residential tanks. Other tank removal programs are also available to property owners under DENR rules.

The second set of regulations is the South Dakota Brownfields Revitalization and Economic Development Program. These regulations provide a source of funding for cleaning up and revitalizing brownfield sites throughout the state. As a part of the Brownfields Revitalization Program, the state has the right to participate in an EPA-sanctioned financing project. Access is available to property owners, developers and governmental nonprofits. Under the financing program, eligible property owners can receive financing for the sale or remediation of the property. Separately, the expenses of approved site assessment and environmental testing can be cost free to the property owner; DENR manages and pays for these expenses. The state may also offer low-interest loans to eligible public and private entities that control the affected property. Loan fund activities include financing of a sale as well as financing the cleanup associated with removing, or preventing the release of hazardous substances on private, commercial and mine-damaged properties.

While DENR currently does not participate in the loan fund aspect of the EPA Revolving Loan Fund program, it has the regulations in place that will allow the state to participate. One can be fairly certain that in South Dakota many cities and counties, in both rural and urban areas, have abandoned, underutilized, or potentially contaminated properties.

That environmental problems with properties should remain hidden based upon a public misunderstanding is the old way of doing business. DENR and affected communities, counties and development agencies should partner up and pursue this course of action. It would be in the economic interest of property owners, the communities in which such properties are located and the state.

David Ganje is an attorney with Ganje Law Offices in Rapid City and practices in the areas of commercial law and natural resources law.

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