State Facility Air Permits Are Not a Surrogate for SEQRA: 50% HAP Threshold on the EAF Requires a Hard Look and Reasoned Elaboration

Introduction

In Clean Air Action Network of Glens Falls, Inc. v. Town of Moreau Planning Board, the Appellate Division, Third Department, reversed a trial court’s dismissal and annulled a SEQRA negative declaration and associated site plan approval for a biosolids remediation and fertilizer processing facility proposed by Saratoga Biochar Solutions, LLC (SBS). The decision addresses the core obligations of a lead agency under New York’s State Environmental Quality Review Act (SEQRA) when the Environmental Assessment Form (EAF) indicates potentially significant air emissions—specifically hazardous air pollutants (HAPs) at or above 50% of the major source threshold.

The case squarely holds that a planning board cannot short-circuit the SEQRA “hard look” by relying on the existence or anticipated issuance of a state facility air permit or on general third-party monitoring. Instead, where the EAF itself flags a “moderate to large” potential impact—such as HAP emissions at or above 50% of the 25‑ton/year major source threshold—the lead agency must perform and document a reasoned, substantive analysis of those impacts before issuing a negative declaration.

Parties: The petitioner is Clean Air Action Network of Glens Falls, Inc. The respondents are the Town of Moreau Planning Board and the project sponsors, Raymond Apy and SBS. The proceedings arose under CPLR Article 78, challenging the Planning Board’s March 2022 negative declaration and August 2022 site plan approval.

Summary of the Opinion

The Third Department reversed the Supreme Court’s (Kupferman, J.) dismissal of the petition, granted the Article 78 petition, annulled the negative declaration and site plan approval, and remitted the matter to the Town of Moreau Planning Board for further SEQRA-compliant proceedings.

Key holdings:

The Planning Board failed to take the required “hard look” at the project’s HAP emissions (reported by the sponsor at 12.7 tons/year), a level that meets the EAF’s 50% screening threshold for potential “moderate to large” air impacts.
It was arbitrary and capricious to conclude—without a reasoned elaboration—that DEC’s state facility air permit and periodic third-party monitoring would render air impacts non-significant.
A state facility permit is a mid-level license in New York’s air program. It is not, by itself, a proxy for environmental insignificance; indeed, the EAF structure treats emissions at 50% of major source thresholds as potentially “moderate to large,” triggering further analysis.
While DEC guidance may be considered, the lead agency must still analyze and explain why identified impacts will not be significant (or else issue a positive declaration). The threshold for requiring a positive declaration and EIS is “relatively low,” and the standard for a negative declaration is correspondingly high.

Detailed Background

SBS proposed a three‑phase facility that would convert biosolid and wood waste into fertilizer using technology derived from known processes but untested at commercial scale in New York. In August 2021, the Town of Moreau Planning Board declared itself lead agency for SEQRA review, classifying the proposal as an unlisted action. SBS’s Part 1 EAF reported anticipated annual emissions of approximately 96,232 tons of carbon dioxide and 12.7 tons of HAPs. After several meetings, the Planning Board issued a negative declaration in March 2022, concluding potential adverse effects on air would be “mitigated” by DEC permitting and monitoring, and that noise/odor/light issues would be addressed via enclosure, scrubbing, negative pressure, and biofilters.

In July 2022, the Board considered rescinding the negative declaration based on new information including potential PFAS in air and wastewater emissions, but declined to rescind and instead approved the site plan in August 2022, incorporating the March negative declaration. An EAF notation incorrectly suggested a conditioned negative declaration; the record showed a standard negative declaration was issued. Petitioner challenged both determinations, alleging failure to comply with SEQRA. The trial court dismissed; petitioner appealed.

Analysis

Precedents and Authorities Cited and Their Influence

Matter of Jackson v New York State Urban Dev. Corp. (1986): Establishes standards of judicial review for SEQRA—courts review for violations of lawful procedure, errors of law, or determinations that are arbitrary, capricious, or abuses of discretion. The Third Department applied this framework to evaluate the Planning Board’s negative declaration.
Matter of Murphy v New York State Div. of Hous. & Community Renewal (2013): Defines “arbitrary and capricious” as action taken without sound basis in reason or regard to the facts. The court used this to characterize the Board’s assumption that being under the major source threshold automatically implies non-significance at 50% of that level.
Matter of Chinese Staff & Workers’ Assn. v Burden (2012) and Matter of Holmes v Brookhaven Town Planning Bd. (1988): Reinforce the low threshold for positive declarations; if an action “may” have at least one significant adverse impact, a positive declaration (and EIS) is required. These cases underscore that where the EAF flags potential moderate-to-large impacts, agencies must meaningfully analyze significance rather than default to a negative declaration.
H.O.M.E.S. v New York State Urban Dev. Corp. (1979): One of the earliest articulations that the EIS threshold is “relatively low.” The court invoked this to emphasize how demanding the standard is for issuing a negative declaration.
Matter of Merson v McNally (1997): Clarifies “hard look” and “reasoned elaboration” requirements. The Third Department found the Board’s record lacked both with respect to HAP emissions. Merson also appears in the opinion’s aside distinguishing a conditioned negative declaration (not actually issued here).
Matter of City Council of City of Watervliet v Town Bd. of Town of Colonie (2004) and Matter of Di Veronica v Arsenault (1986): Explain Type I/II/unlisted classifications and the differing presumptions they carry. Here, although the project was unlisted (no presumption of significance), that status did not relieve the Board from a hard look once the EAF indicated potential moderate-to-large impacts.
Matter of Spitzer v Farrell (2003): Agencies may consider DEC standards, but must still provide their own reasoned analysis under SEQRA. The Third Department leaned on this to reject the Board’s unexplained deference to DEC permitting as a substitute for analyzing HAP impacts.
Matter of Camardo v City of Auburn (2012): Annulled a negative declaration where the agency failed to thoroughly analyze identified impacts. The Third Department cited Camardo to exemplify the kind of analytic shortfall present here.
Michigan v EPA (2015): Cited to describe the federal Clean Air Act Title V framework, helping distinguish major sources (Title V permits) from New York’s state facility permits (mid-level) and registrations for minor sources.
Matter of Boise v City of Plattsburgh (2023): Recent Third Department case invalidating a negative declaration for inadequate SEQRA reasoning; used here to reinforce the necessity of a substantive “hard look” and explanation.
Matter of Brunner v Town of Schodack Planning Bd. (2018) and Matter of Green v Planning Bd. of Town of New Castle (1995): Examples where agencies survived SEQRA challenges by actually conducting and documenting the required analysis. The court used these to contrast what was missing in this record.
Matter of LaDelfa v Village of Mt. Morris (1995): Addresses air quality standards and stack design. The court noted SBS’s later stack-height change to meet standards for certain pollutants, illustrating the project’s evolving air emissions profile and the need for robust analysis.

Legal Reasoning

The court began with SEQRA’s architecture for unlisted actions under 6 NYCRR 617.7. A lead agency must:

Identify the relevant areas of environmental concern by reviewing the EAF and applicable criteria (6 NYCRR 617.7[b][2]);
Take a “hard look,” meaning a thorough analysis of whether the action may have a significant adverse impact on the environment (6 NYCRR 617.7[b][3]); and
Document a “reasoned elaboration” for its determination of significance (6 NYCRR 617.7[b][4]).

The EAF Part 2 contains specific screening questions for air emissions. Two are pivotal here:

Whether the action may generate 25 tons/year or more of any combination of designated HAPs (Question 6.b—associated with major source status);
Whether the action may reach 50% of any listed thresholds (Question 6.d), including HAPs (i.e., ≥12.5 tons/year).

SBS’s own EAF reported 12.7 tons/year of HAPs—exceeding 50% of the 25‑ton major source threshold. Under the EAF’s structure, that level of potential emissions is identified as having the potential for “moderate to large” adverse environmental impacts. This trigger required the Board to analyze the nature, extent, and significance of HAP impacts.

Instead, the Board concluded that because the project would not be a major source and would operate under a state facility permit with periodic monitoring, air impacts would not be significant. The court found this conclusion deficient for multiple reasons:

It lacked “reasoned elaboration” connecting the mid-level state facility permit—and generic monitoring—to a finding of no significant adverse impact. The record did not show any substantive analysis of HAP composition, dispersion, exposure pathways, health benchmarks, or cumulative effects.
It reflected an unsound logical leap: that mitigation sufficient to avoid major source status (25 tons/year) necessarily proves no significant impact at 12.7 tons/year. SEQRA significance is not defined solely by federal or state permitting thresholds.
It improperly treated DEC’s permitting regime as a proxy for SEQRA significance. Although an agency may use DEC standards as reference points, it must still independently assess and explain why impacts are insignificant or fully mitigated.

The court underscored that a state facility permit is not an insignificance signal; it occupies a middle tier between Title V major source permits and mere registrations. Far from dispelling concern, the need for a state facility permit, combined with EAF acknowledgments, indicates potentially “moderate to large” impacts requiring analysis.

By contrast, the record reflected a more cogent discussion of carbon dioxide, where a DEC official advised that greenhouse gas impacts are evaluated globally and that the project’s CO2 would not have direct local human-health effects relative to Title V‑regulated facilities. That comparative information underscored the gulf between the record on CO2 and the absence of comparable analysis for HAPs.

Because SEQRA requires a positive declaration if there “may” be at least one significant adverse impact, and because the standard for a negative declaration is relatively stringent, the Board’s failure to take a hard look at HAPs rendered its negative declaration arbitrary and capricious. The court therefore annulled the negative declaration and dependent site plan approval and remitted for further proceedings consistent with its decision.

Impact and Practical Implications

This decision meaningfully clarifies several important aspects of SEQRA practice:

State facility permits are not a shortcut to negative declarations. A lead agency cannot rely on the existence or expectation of a state facility air permit—or the mere prospect of third-party monitoring—to avoid analyzing air impacts flagged by the EAF. The agency must connect the dots with a reasoned, evidence‑based explanation.
EAF 50% screening thresholds matter. When a project may reach 50% of a major source threshold for HAPs (or other listed thresholds), the EAF itself designates the potential impact as “moderate to large,” triggering the hard look and reasoned elaboration requirements. Absent a persuasive explanation that the impacts will not be significant, a positive declaration will often be the more defensible path.
Unlisted action ≠ lenient review. Although unlisted actions do not carry a presumption of significance, they still demand rigorous analysis once potential moderate-to-large impacts are identified. The low threshold for a positive declaration is alive and well.
Novel technologies heighten the need for analysis. Where a project uses technology untested at scale, uncertainty is high and the record must transparently grapple with potential impacts. Reliance on later “stack tests” or adaptive adjustments (e.g., post‑hoc stack height changes) cannot substitute for upfront SEQRA analysis.
Record-building is critical. Agencies must compile and cite data, modeling, exposure and health benchmarks, and mitigation effectiveness. “We will monitor” is not analysis; it is a condition without an impact finding.
Litigation posture. For challengers, pointing to EAF 50% thresholds and gaps in the agency’s written “reasoned elaboration” remains a potent strategy. For sponsors and agencies, front‑load air emissions analysis, including HAP speciation, dispersion modeling, and health risk context against applicable guide values or standards.
Regulatory ecosystem alignment. While not outcome‑determinative here, the court noted DEC’s subsequent denial of SBS’s permits for insufficient data on PFAS destruction and inadequate greenhouse gas analysis under the Climate Leadership and Community Protection Act (CLCPA). This underscores the convergence of SEQRA review with evolving air toxics and climate frameworks—a warning that data gaps can imperil both permitting and SEQRA defensibility.

Complex Concepts Simplified

SEQRA “hard look.” The lead agency must identify potential environmental impacts, thoroughly analyze them, and explain its reasoning in writing. It is a process-and-reasoning requirement, not a predetermined outcome.
Negative vs. positive declaration. A negative declaration ends SEQRA review, signifying that no adverse environmental impacts will occur or that they will not be significant. A positive declaration means at least one potential significant adverse impact may occur; it triggers preparation of an Environmental Impact Statement (EIS). The legal threshold to require a positive declaration is “relatively low.”
EAF Part 2 air thresholds (6 NYCRR 617.20 Appendix A). The EAF asks if a project will approach or exceed specified emission levels (e.g., HAPs at 25 tons/year; or at least 50% of that). Hitting 50% is a red flag for “moderate to large” potential impacts that must be analyzed for significance.
Hazardous air pollutants (HAPs). A set of pollutants designated under federal and state law for their toxicity and health risks. Examples include benzene, formaldehyde, naphthalene, and others. Quantity matters, but so does composition, local dispersion, exposure duration, and cumulative impacts.
Air permitting tiers.
- Title V Major Source Permit: For facilities with potential emissions at or above major source thresholds (e.g., >25 tpy combined HAPs). Most stringent.
- State Facility Permit: Mid‑level permit for facilities with potential emissions below major source thresholds but above registration levels (e.g., ≥50% of a major source threshold).
- Minor Facility Registration/Exemption: For small sources or trivial activities.
A state facility permit does not imply environmental insignificance.
Arbitrary and capricious. A legal standard for reviewing agency actions. A decision is arbitrary if it lacks a rational basis or an adequate connection between facts and conclusions.
Conditioned Negative Declaration (CND). A SEQRA tool available only for unlisted actions, where a negative declaration is issued contingent on specific enforceable conditions that mitigate impacts below significance. Despite an EAF reference, no CND was actually issued here; the record shows a standard negative declaration.

Practice Pointers

When an EAF flags HAP emissions at or above 50% of the major source threshold, prepare dispersion modeling, identify HAP species and concentrations, compare to relevant short‑term/annual guideline concentrations or standards, and evaluate health risk and cumulative impacts.
If key data are unavailable or technology is unproven at scale, lean toward a positive declaration and EIS to develop a robust record, rather than relying on after‑the‑fact monitoring promises.
Where relying on DEC standards, explain in writing how those standards and specific permit conditions mitigate particular impacts to non‑significance, with citations to modeling, mitigation efficacy, and enforceable limits.
Do not equate “below major source” with “no significant impact.” Significance under SEQRA is not defined exclusively by regulatory thresholds.

Conclusion

The Third Department’s decision establishes a clear and practical rule for SEQRA practice statewide: a state facility air permit and generic monitoring do not, by themselves, justify a negative declaration when the EAF indicates potentially “moderate to large” air impacts, including HAP emissions at or above 50% of the major source threshold. Lead agencies must take a genuine hard look, supported by a reasoned elaboration grounded in data and analysis that address pollutant composition, dispersion, exposure, and mitigation efficacy.

By elevating the importance of the EAF’s 50% screening threshold and rejecting rote deference to air permitting as a stand‑in for SEQRA analysis, this opinion both reaffirms the “low” bar for positive declarations and raises the standard agencies must meet to sustain negative declarations. On remand, the Planning Board must either conduct and document the missing analysis—potentially culminating in a positive declaration and EIS—or otherwise provide a robust, evidence‑based rationale demonstrating why the project’s air impacts, including HAPs, will not be significant.

In the broader legal context, the decision harmonizes SEQRA’s analytical rigor with New York’s evolving environmental priorities, signaling that uncertain or novel emissions profiles require a fuller inquiry. The takeaway is straightforward: permits regulate; SEQRA evaluates. Agencies must do both.