Does the SEQRA authorize mitigation fees?

• Author: Munkwitz, Kelly L.
• Position: New York State Environmental Quality Review Act

1. Introduction

   The inadequacy of state and federal funds to meet developing infrastructure needs has left local governments searching for ways to accommodate new growth without raising taxes.(1) Recognizing that new development necessitates capital improvements, municipalities attempt to shift the burden of financing such improvements to developers.(2) New York courts are reluctant to uphold such measures.(3)

   In 1989, for example, the New York Court of Appeals, in Albany Area Builders Ass'n v. Town of Guilderland,(4) invalidated the Town of Guilderland's Transportation Impact Fee Law (TIFL)(5) which was enacted in response to the projected growth of the town and the expected impact on the transportation network.(6) An "impact fee" is a payment, generally made prior to the issuance of a permit, which is levied against a developer to pay for its proportionate share of roads, sewers, and other facilities necessitated by the new development.(7) Guilderland deemed its revenue sources "insufficient to fund the necessary ... improvements," and the TIFL was enacted to fill the gap.(8) The Court of Appeals, while expressly not ruling on the validity of impact fees in New York,(9) held the TIFL was implicitly preempted by the Legislature's "uniform scheme to regulate" highway funding, found in New York's Town and Highway Law.(10)

   Impact fees are typically enacted to fund municipal improvements like roads,(11) sewers,(12) and water hook ups.(13) Municipalities have traditionally funded such improvements.(14) Increased costs and suburban sprawl, however, have increased the burden on localities.(15) The Guilderland TIFL represented an attempt by a municipality to shift the increased financial burden from the taxpayers to the developers.

   While municipalities, such as Guilderland, contend that new development should pay for the improvements it necessitates,(16) the developers argue that such a scheme unfairly burdens the new homeowner.(17) Improvements necessitated by existing development were funded by the municipalities.(18) To require new development to fund these improvements is, in the opinion of the developers, an inequitable burden which will "significantly affect the affordability of new home construction."(19)

   The Guilderland decision essentially eliminated the use of impact fees to shift the financial burden of new development to developers. Roads, sewers, and water hook ups, the most common sources of impact fees, are also highly regulated by the state.(20) Thus, under Guilderland, an impact fee enacted to cover such costs is preempted.

   The Guilderland decision leaves municipalities with the choices of paying for municipal improvements through increased taxes, halting development, or devising new ways, not preempted by state statute, to mandate developer contributions. The Town of Colonie, which adjoins Guilderland in Albany County, New York, has formulated just such a revenue-generating scheme.

   Instead of imposing impact fees, Colonie imposes mitigation fees on new development through its Joint Findings Statement of the Albany Airport Final Generic Impact Statement (Joint Findings Statement).(21) These fees are collected and intended to be applied towards mitigating transportation Costs,(22) as well as water, solid waste, and recreation costs.(23) The application of impact and mitigation fees appears to be the same. Colonie's fees are imposed on developers "to pay for the infrastructure improvements that new development necessitates,"(24) while Guilderland's impact fees were meant to impose on the developer its "fair share cost of improved roadways necessitated by ... new development."(25) The essential difference between the two fees is the claimed grant of authority from the state to impose fees. While Guilderland claims authority to enact the TIFL under New York's Municipal Home Rule Law [Sub-section] 10(1),(26) Colonie claims authority for its fees under the New York State Environmental Quality Review Act (SEQRA).(27) Neither Municipal Home Rule Law, nor SEQRA expressly authorizes the imposition of fees.

   Colonie's mitigation fees are based on its Airport Area Final Generic Environmental Impact Statement (FGEIS),(28) which was prepared in response to "development pressures" in the Study Area and in recognition of the "need to develop a comprehensive policy for future growth."(29) The Airport Area FGEIS, based on current and projected development, analyzed "future growth trends, associated impacts, and appropriate mitigation for a 15-year planning period."(30) It identified both existing deficiencies and future adverse impacts expected to result from the projected development.(31)

   While developer-based groups are prepared to challenge Colonie's mitigation fees, a plaintiff must first be found.(32) From a challenger's point of view, the "ideal" plaintiff would be "a developer with a project in Colonie ... willing to take the town to court, and ... hope[fully], have the mitigation fees declared illegal."(33) Until that plaintiff is found and the Colonie fees are tested by the judiciary,(34) the question remains whether, in light of the Court of Appeals decision in Guilderland,(35) SEQRA authorizes the collection of mitigation fees for mandated mitigation.

   This Comment examines whether mitigation fees may be imposed under SEQRA, using the Town of Colonie Airport Area FGEIS and its Joint Findings Statement as a model. New York case law on a municipality's authority to regulate its growth and to collect fees suggests conflicting outcomes to a mitigation fee challenge. For example, SEQRA regulations, in conjunction with the wide latitude the courts give to municipalities in SEQRA decisions,(36) indicate that such fees may be upheld on a challenge. The Guilderland case and the Court of Appeals's restrictive decision in Long Island Pine Barrens Society, Inc. v. Planning Board,(37) on the other hand, suggest that mitigation fees will be struck down.

   This Comment considers the arguments in favor of upholding mitigation fees under SEQRA, but ultimately concludes that such arguments will not be successful because of an alternative approach upheld by the New York Court of Appeals in Golden v. Planning Board of Ramapo.(38) Part II gives an overview of SEQRA and the Airport Area FGEIS.(39) Part III examines the latitude the courts give to municipalities in SEQRA decisions, particularly regarding mitigation measures.(40) Part IV examines a municipality's authority to impose fees, including impact fees, and distinguishes the Town of Guilderland's impact fees from the Town of Colonie's mitigation fees.(41) Part V discusses Ramapo, as well as land use planning in New York, its relationship to SEQRA, and its possible influence on a decision regarding the validity of mitigation fees.(42)

2. An Overview of Seqra(43) and Colonie's Airport Area FGEIS

   1. SEQRA

      SEQRA was enacted in 1975(44)to "declare a state policy ... which will prevent or eliminate damage to the environment and enhance human and community resources."(45) As described by the New York Court of Appeals, SEQRA is "an attempt to strike a balance between social and economic goals and concerns about the environment."(46) More than merely a procedural statute, SEQRA "imposes ... `action forcing' or `substantive' requirements on state and local decision-makers."(47) It mandates mitigation of adverse environmental impacts by "all practicable means."(48)

      Patterned after the National Environmental Policy Act of 1969 (NEPA),(49) SEQRA was enacted to make environmental protection "a concern of every agency."(50) Unlike NEPA, however, SEQRA is not merely procedural; it creates a substantive impact.(51) Prior to undertaking or approving an action, an agency must "certify that consistent with social, economic and other essential considerations from among the reasonable alternatives available, the action is one that avoids or minimizes adverse environmental impacts to the maximum extent practicable."(52)

      "Environment" includes not only natural surroundings such as air, water, flora and fauna, but places or objects of historic or aesthetic significance, as well as "existing patterns of population concentration, distribution or growth, [and] existing community or neighborhood character."(53) Thus, an impact on the residential character of a neighborhood,(54) neighborhood aesthetics,(55) and/or traffic(56) must all be considered before an agency may approve a project.

      Under the SEQRA process, an agency, upon a request for funding or approval of a project, or upon the formulation of its own action, must first determine the classification of the project.(57) Type II projects(58) are not subject to SEQRA and an agency's responsibilities under the statute are complete upon finding that a project qualifies as Type II.(59) Type I(60) and Unlisted projects(61) require the project sponsor and the lead agency(62) to complete an Environmental Assessment Form (EAF).(63) Should the EAF reveal "the potential for at least one significant adverse environmental impact," the lead agency must require an Environmental Impact Statement (EIS).(64)

      The EIS is the "heart of SEQRA" and the statute dictates its preparation both procedurally and substantively.(65) First, the lead agency or project sponsor must prepare or have prepared a Draft Environmental Impact Statement (DEIS).(66) Upon acceptance of the DEIS, the lead agency must file the document and allow at least thirty days for public comment, which may or may not include a public hearing.(67) After public comments have been addressed and considered, and the applicable period of time has elapsed,(68) the lead agency must prepare or have prepared a Final Environmental Impact Statement (FEIS).(69) The FEIS need not be prepared if the proposed action has been withdrawn(70) or, "on the basis of the [DEIS], and comments made thereon, the lead agency has determined that the action will not have a significant adverse impact on the...