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Ten Things to Know about New York Environmental Law When Planning to Do Business Here

Client Advisory

July 29, 2013
New York has a wide variety of unique laws governing environmental matters, some that tend to streamline reviews (like a consolidated review process for power plants) and others that add additional layers of government oversight (like environmental impact review for virtually all state and local decision-making). This advisory outlines ten important components of this environmental regulatory scheme, including several new and noteworthy legal developments. 
 
1.         Environmental Review
 
New York State is one of about twenty states with “mini NEPAs”-- laws that require government agencies to consider the environmental impacts of their actions prior to issuing approvals or making funding decisions.   The State Environmental Quality Review Act (“SEQRA”) is far-reaching and requires all government entities at the state, county and local level to review the environmental impacts of small and large actions.[1] These actions include land use approvals, permits and finance decisions. Because SEQRA does not permit agencies to condition their contracts on subsequent environmental review, a deal must often await the conclusion of environmental review.
 
The New York State Department of Environmental Conservation (“DEC”) began the process to amend SEQRA regulations in July 2012—the first such amendments in many years.[2] The agency’s goal is to clarify the contents of an environmental impact statement (“EIS”), lower the thresholds for actions that presumptively require an EIS and create new categories of exempt actions related to smart growth and green buildings, which the State wants to encourage. The final date for the regulatory changes is not clear.
 
2.         Freshwater Wetlands
 
New York State has a Freshwater Wetlands Law[3] that is both narrower and broader than the U.S. Clean Water Act. New York’s law is broader in that it extends to inland, isolated wetlands and adjacent buffer zones that are not wetlands; however, it is narrower in that it governs only wetlands of 12.5 acres or more, except for wetlands of “unusual local importance” as determined by DEC.[4] The U.S. Clean Water Act has no such size limitation. 
 
Climate change is impacting the State’s regulation of wetlands in a variety of ways, including encouraging more protections and acquisition of sensitive locations. There is likely to be more sensitivity to the importance of wetlands and more litigation as cities and the State acquire and condemn wetlands for stormwater and flood control or strengthen regulatory protections.[5] At the same time, the State is making it easier for property owners to rebuild existing homes damaged by Hurricane Sandy in wetlands and wetland buffers. In March 2013, the DEC issued a temporary, general permit under the Freshwater Wetlands Law allowing reconstruction of houses in freshwater wetland adjacent areas that were affected by Hurricane Sandy in October 2012.[6]
 
3.         Hazardous Substances
 
New York’s Inactive Hazardous Waste Disposal Sites Act[7] reaches farther than its federal counterpart, the U.S. Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”). Like CERCLA, it imposes strict liability for hazardous substance contamination on current and former owners and operators of land. But unlike CERCLA, it does not have liability protections for innocent parties that did their “due diligence” before purchase or lease. New York’s Navigation Law also strongly regulates petroleum contamination, which is excluded from the coverage of CERCLA.[8]  
 
New York has wide authority to order stringent cleanups. The State’s highest court recently ruled in Matter of New York State Superfund Coalition, Inc. v.  New York State Dept. of Envtl. Conservation[9] that the DEC did not exceed its statutory authority in promulgating regulations requiring inactive hazardous waste disposal sites to be restored to “pre-disposal conditions to the extent feasible.” The one consolation prize in New York for those that qualify, however, is the Brownfield Cleanup Program. Created in 2003, the law provides both liability relief and tax credits for qualifying sites that complete the program.
 
4.         Energy
New York re-authorized Article X of the State Public Service Law in 2011.[10]  The reach of the law was broadened to subject all electric generating stations of 25 megawatts or more to a special review process governed exclusively by the Public Service Commission.[11] This review process is intended, at least in theory, to streamline approvals of new power plants at the state and local level by consolidating those reviews with one quasi-judicial decision maker. It applies broadly to both conventional power plants as well as renewable energy facilities. 
 
5.         Historic Preservation
 
New York is one of a few states with “mini Section 106 processes.” Section 106 refers to that section of the National Historic Preservation Act, which requires all federal agencies to review the “effects” of their undertakings on historic resources. New York’s State Historic Preservation Act is broad and requires all state agencies to determine if an undertaking would have any adverse effect on historic resources, not just a “significant” effect. Although it does not dictate an outcome, the law requires real consideration of alternatives. State agencies must “explore all feasible and prudent alternatives and give due consideration to feasible and prudent plans which avoid or mitigate adverse impacts on such property.”[12]
 
Although Section 14.09 applies only to state agency actions, its reach is otherwise broad. Historic resources include all properties listed or eligible for listing on the state and national registers of historic places. Several recent, high-profile lawsuits have involved challenges to regulatory decisions involving modern buildings that were neither state nor local landmarks but were determined to be “eligible” for the state and national registers.
 
6.         Coastal Zone
 
New York State has implemented the U.S. Coastal Zone Management Act through its law on “Waterfront Revitalization of Coastal Areas and Inland Waterways.”[13] The Department of State implements the law, creates state coastal policies and designates regulated coastal areas and waterways.[14] Federal agencies must seek the Department’s concurrence that a project, action or permit would be consistent with state policies before issuing any federal approvals. State agencies must make their own determination that state actions are similarly consistent.[15] 
 
The Department of State rarely issues denials under the law. It has issued 13 consistency determinations since the beginning of 2013, finding all projects consistent with state coastal policies. The majority of the consistency determinations involve applicants seeking to conduct maintenance dredging in marinas or channels. However, determinations have also involved naval training and testing activities, construction of a natural gas pipeline, and installation of solar panels on a dock.
 
7.         Challenging Government Action
 
New York has created a highly streamlined legal proceeding for challenging almost any government action, called an “Article 78 Proceeding” based on Article 78 of the State’s Civil Practice Law and Rules. Challenges are limited in scope to allegations that the body or officer violated a duty imposed by law; or was arbitrary and capricious, exceeded jurisdiction or abused discretion.[16] There is almost never any discovery and review is based solely on the administrative agency’s record. The statute of limitations for Article 78 proceedings is short. It is generally four months from the challenged government action, though in some cases that period is as short as 30 days. The denial of a wetlands permit, denial of a zoning variance, SEQRA findings and most other environmental determinations may only be challenged in Article 78 proceedings.   
 
8.         State Authorities
 
New York is unique in that much of the work of the State is undertaken by special public benefit corporations created under N.Y. law. There are over 1,000 such entities and they run public transportation systems, create new housing and undertake economic development activities. They can be important partners for the private sector because they often have the ability to issue bonds to fund projects, override local laws and carry out condemnation of private property—with or without the consent of a municipality. The State Comptroller’s March 2013 report on the authorities provides useful background on the topic.[17] Override authority can be extremely useful for certain kinds of private entities, particularly in the energy sector as controversies increase over, for example, local regulation of oil and gas drilling and siting of wind farms.
 
9.         Local Land Use Laws and “Fracking”
 
Like most states, New York allocates most control over local land use matters to its municipalities, which have broad zoning authority. Natural gas is now the most important battle ground in challenges to local zoning. A belt of Marcellus Shale stretches across the southern tier of New York State (and neighboring states) and is likely to contain very substantial amounts of natural gas. Governor Cuomo has been slowly developing state-wide regulations to govern permits to drill in this shale using new drilling and “fracking” (i.e., hydraulic fracturing) techniques. While the state government has delayed issuing these regulations, municipalities are implementing controls and, in some cases, bans.
 
The New York Appellate Division, Third Department recently ruled in two cases that it is within the power of municipalities to create zoning ordinances banning “fracking.”[18] In Matter of Norse Energy Corp. USA v Town of Dryden and Cooperstown Holstein Corp. v Town of Middlefield, companies owning gas and oil leases challenged zoning ordinances in their respective municipalities, arguing that New York’s Oil and Gas and Solution Mining Law (“OGSML”) preempted the local ordinances. However, the court declined to accept these arguments, finding that the supersession clause in the OGSML did not create an express preemption of the local ordinances. Both companies have appealed their cases, seeking review by the New York Court of Appeals.
 
10.       New York City
 
As the only municipality in the State with a population over one million persons (8,336,697 as of July 2012), New York City has a higher level of control over its land use matters than other municipalities. In addition to voluminous building and zoning codes, the City has its own environmental review regulations, energy code, historic preservation ordinance and brownfield program. It also has a comprehensive, multi-step review process for major land-use actions like rezonings and franchise awards. Mayor Michael Bloomberg has used this authority in recent years to enact green building incentives, a local energy code and mandatory energy audits of certain kinds of buildings. Companies doing business in New York City should therefore be aware of these subtle differences before working in New York City.
 
For more information concerning the matters discussed in this publication, please contact the author Christopher Rizzo (212-238-8677, rizzo@clm.com), or your regular CL&M attorney. Summer associate Justin Peters assisted in the preparation of this advisory.


[1] N.Y. Envtl. Conserv. L. §§ 8-0101 et seq.; 6 NYCRR §§ 617.1 et seq.
[2] N.Y. Department of Environmental Conservation, “Generic Environmental Impact Statement (GEIS) on the Proposed Amendments to the State Environmental Quality Review Act (SEQRA),” Nov. 2012, available at http://www.dec.ny.gov/docs/permits_ej_operations_pdf/617finalscope.pdf.
[3] New York also has a Tidal Wetlands Act that governs tidally influenced wetlands. 
[4] 6 NYCRR § 663.2.
[5] See, e.g., Matter of City of New York (South Beach Bluebelt, Phase I), NY Slip Op 51920(U), 2012 WL 4824763 (N.Y. Sup. Ct. Sept. 26, 2012) (City of New York’s condemnation of wetland for stormwater control required fair compensation based on reasonable development of parcel containing wetlands.)
[6] N.Y. Department of Environmental Conservation, “General Permit GP-2-13-001”, March 2013, available at http://www.dec.ny.gov/docs/permits_ej_operations_pdf/gp213001.pdf.
[7] N.Y. Envtl. Conserv. L. §§ 27-1301 et seq.
[8] N.Y. Navigation L. § 173. 
[9] Matter of New York State Superfund Coalition, Inc. v. New York State Dept. of Envtl. Conservation, 18 N.Y.3d 289 (2011).
[10] N.Y. Public Service L. §§ 160 et seq (Power N.Y. Act of 2011).  
[11] Under Article X, the State of New York Board on Electric Siting and the Environment (“Siting Board”) reviews all applications
[12] N.Y. Parks, Preservation & Hist. Pres. L. § 14.09.
[13] N.Y. Exec. L. §§ 901 et seq.
[14] New York also allows localities to assume implementation through the creation of local waterfront revitalization program. Almost 100 municipalities have such programs with their own policies, coastal boundaries and local review process for consistency.
[15] N.Y. Exec. L. § 919.
[16] Other terms are set forth in N.Y. CPLR § 7804.
[17] N.Y. State Comptroller, “Public Authorities by the Numbers,” March 2013, available at https://www.osc.state.ny.us/reports/pubauth/public_authorities_btn_2013.pdf.
 
[18] Matter of Norse Energy Corp. USA v Town of Dryden, 964 N.Y.S.2d 714 (3d Dep’t 2013); Cooperstown Holstein Corp. v Town of Middlefield, 964 N.Y.S.2d 431 (3d Dep’t 2013)


Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion. This document was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. © 2017 Carter Ledyard & Milburn LLP.
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