author: Kaye, J.

text:
    In the Matter of Gricel Neville et al., Appellants, v Edward I. Koch, as Mayor of the City of New York and Chairperson of the Board of Estimate of the City of New York, et al., Respondents, and Silverstein Properties, Inc. et al., Intervenors-Respondents.
    Argued February 12, 1992;
    decided May 5, 1992

      POINTS OF COUNSEL

      Richard F. Ziegler, Lawrence T. Gresser, Bennette D. Kramer, Amy A. Fraenkel, Wayne G. Hawley, Herbert Semmel and Sam Sue for appellants. I.
    The City’s refusal to consider the actual environmental effects of an actual project violates SEQRA. (Akpan v Koch, 75 NY2d 561; Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400; H.O.M.E.S. v New York State Urban Dev. Corp., 69 AD2d 222; Matter of Schultz, 164 AD2d 252; Matter of Town of Henrietta v Department of Envtl. Conservation, 76 AD2d 215; Lazard Realty v New York State Urban Dev. Corp., 142 Misc 2d 463; Glen Head —Glenwood Landing Civic Council v Town of Oyster Bay, 88 AD2d 484; Matter of People for Westpride v Board of Estimate, 165 AD2d 555; Matter of Kirk-Astor Dr. Neighborhood Assn. v Town Bd., 106 AD2d 868; Matter of City of Ithaca v Tompkins County Bd. of Representatives, 164 AD2d 726.) II. The City’s failure to study or mitigate offsite displacement of low-income tenancies violates SEQRA. (Akpan v Koch, 75 NY2d 561; Chinese Staff & Workers Assn. v City of New York, 68 NY2d 359; Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400.)

      O. Peter Sherwood, Corporation Counsel (Elizabeth S. Natrella, Gabriel Taussig, Pamela Seider Dolgow and Gail Donoghue of counsel), for respondents. I.
    The Board of Estimate’s determination was lawful, given that City respondents identified the relevant areas of environmental concern, took a hard look at them, and made a reasoned elaboration of the bases of their determination. The court below properly affirmed the validly enacted zoning amendment, and dismissed the article 78 petition in its entirety. (Akpan v Koch, 152 AD2d 113, 75 NY2d 561; Matter of Village of Westbury v Department of Transp., 75 NY2d 62; Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400; Matter of Sutton Area Community v Board of Estimate, 78 NY2d 945; Coalition Against Lincoln W. v City of New York, 94 AD2d 483, 60 NY2d 805; Matter of Save the Pine Bush v City of Albany, 70 NY2d 193; Matter of Kirk-Astor Dr. Neighborhood Assn. v Town Bd., 106 AD2d 868, 66 NY2d 896; Matter of Brew v Hess, 124 AD2d 962; Matter of Filmways Communications v Douglas, 106 AD2d 185, 65 NY2d 878; Matter of Schum v City of New York, 161 AD2d 519.) II. Under applicable precedent, including Akpan v Koch (152 AD2d 113, 75 NY2d 561 [1990]), the FEIS secondary displacement analysis was adequate. (Matter of

      Stewart Park & Reserve Coalition v New York State Dept. of Transp., 157 AD2d 1; Chinese Staff & Workers Assn. v City of New York, 68 NY2d 359; Coalition Against Lincoln W. v City of New York, 94 AD2d 483; Matter of Schiff v Board of Estimate, 122 AD2d 57; ABN 51st St. Partners v City of New York, 724 F Supp 1142.)

      Jeffrey L. Braun, Samuel H. Lindenbaum, Richard G. Leland, Jay A. Segal and David A. Slossberg for intervenorsrespondents. I.
    Courts should not use SEQRA as a pretext to usurp the local legislature’s legitimate functions. (Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400; Webster Assocs. v Town of Webster, 59 NY2d 220; Matter of Town of Dryden v Tompkins County Bd. of Represenatives, 78 NY2d 331; Aldrich v Pattison, 107 AD2d 258; Coalition Against Lincoln W. v City of New York, 94 AD2d 483, 60 NY2d 805; Matter of Town of Henrietta v Department of Envtl. Conservation, 76 AD2d 215.) H. There is no legal basis for requiring supplemental environmental review of an actual as-of-right project. (Akpan v Koch, 75 NY2d 561; Matter of Coca-Cola Bottling Co. v Board of Estimate, 72 NY2d 674; Matter of St. Onge v Donovan, 71 NY2d 507; Matter of Dexter v Town Bd., 36 NY2d 102; Asian Ams. for Equality v Koch, 72 NY2d 121; Matter of Save the Pine Bush v City of Albany, 70 NY2d 193; Matter of Brew v Hess, 124 AD2d 962; Matter of Kirk-Astor Dr. Neighborhood Assn. v Town Bd., 106 AD2d 868, 66 NY2d 896; Horn v International Business Machs. Corp., 110 AD2d 87, 67 NY2d 602; Matter of Industrial Liaison Comm. v Williams, 72 NY2d 137.) III. The Board of Estimate took the necessary "hard look” at offsite displacement. (Akpan v Koch, 75 NY2d 561; Matter of Schodack Concerned Citizens v Town Bd., 148 AD2d 130, 75 NY2d 701; Matter of Schiff v Board of Estimate, 122 AD2d 57, 69 NY2d 604; Village of Grand View v Skinner, 947 F2d 651; Chinese Staff & Workers Assn. v City of New York, 68 NY2d 359; Matter of Coca-Cola Bottling Co. v Board of Estimate, 72 NY2d 674; Matter of Stewart Park & Reserve Coalition v New York State Dept. of Transp., 157 AD2d 1, 77 NY2d 970.)
   OPINION OF THE COURT

Kaye, J.

The agency "action” triggering the Environmental Impact Statement (EIS) in issue on this appeal is a legislative act— New York City’s proposed rezoning of a full City block located on West 42nd Street (the Site), from medium-density manufacturing to high-density commercial and residential. Petitioners’ challenge calls upon us to answer two questions. First, where at the time of rezoning there were no actual projects yet proposed for the Site and SEQRA review was premised on hypothetical uses, was it proper to approve the rezoning unconditionally, or should it have been subject to further review based on later specific projects? Second, was the review adequate with respect to offsite displacement?

We conclude that the City’s environmental review in both respects satisfied SEQRA, and that the Appellate Division order approving the rezoning should be affirmed.

I.

Presently a grade-level, 600-car parking lot, the Site is part of the Special Clinton District, a designation created in 1974 in response to community concern over several major projected developments in the area (see, NY City Zoning Resolution § 96.00 et seq.). The 1974 Zoning Resolution creating the special district was intended to preserve the character of the core residential area while promoting the most desirable land use and protecting the City’s tax revenues, by directing future development to underutilized sites at the community’s perimeter (see, "The Special Clinton District: Planning and Zoning Study,” at 1 [1985]; see also, Asian Ams. for Equality v Koch, 72 NY2d 121, 129 [special districts]; Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400, 419).

To accomplish these goals, the district — bounded by Eighth to Twelfth Avenues and 41st to 58th Streets — was subdivided into five areas: preservation, perimeter, mixed use, excluded and "other.” The Site was initially located in the district’s "other” area, governed by the underlying zoning designation M2-3 (medium-density manufacturing), and later included in the "perimeter” area.

In 1984, while the Jacob Javits Convention Center-just two blocks south of the Special Clinton District — was under construction, the Department of City Planning (DCP) issued a study entitled "The Convention Center Area: Recommendations for Land Use, Zoning and Development,” designed to identify land use and development strategies that would support the Convention Center and complement current area land uses. Included in this report was a recommendation that the Site be rezoned from M2-3 to C6-4 (high-density commercial and residential) to allow "mixed-use development at substantially increased density.” Rezoning would complete the "42nd Street Corridor,” an area along 42nd Street running from the East River to the Hudson River, zoned C6-4 or other designation authorizing development of equal or greater density.

After DCP’s recommended rezoning, Silverstein Properties, Inc. acquired the Site and formulated plans for a 1,600-unit residential development, but changes in the real estate market caused it to abandon the proposal. Silverstein had no actual project in April 1988, when it applied for rezoning from M2-3 to C6-4.

The EIS Process

Under the City’s environmental review procedure, DCP and the Department of Environmental Protection (DEP) act as co-lead agencies. The agencies worked with Silverstein’s experts in preparing a 700-page Draft Environmental Impact Statement (DEIS).

The Site’s M2-3 zoning classification entitled the owner to construct a medium manufacturing facility with a floor area ratio (FAR) of two (see, NY City Zoning Resolution § 41-12). A C6-4 classification allows a wide range of retail, commercial, amusement, residential and mixed uses (see, NY City Zoning Resolution § 31-16). If rezoned from M2-3 to C6-4, the Site would have a 10 FAR minimum, with a 12 FAR maximum available if the owner met certain bonus requirements. The rezoning would also entitle Silverstein to receive a building permit "as of right” for any of the C6-4 uses approved in the Zoning Resolution.

When the action subject to environmental review is a rezoning, the City as a matter of policy requires that the EIS include analysis of a project reflecting what the City considers a reasonable full build-out of the allowable floor area. According to the City, this procedure is followed even where the applicant proposes a project that is less dense than allowed as-of-right under the requested zoning. In that event, a conceptual project using the maximum allowable zoning square feet is treated as the project, with the actual proposal viewed as an alternative. In that manner, the City seeks to insure that the full range of what it considers reasonable as-of-right development is subject to environmental review.

Following this policy, DCP and DEP elected to study the environmental impact of four hypothetical "worst case” scenarios. The four conceptual programs described in the EIS comprise two basic designs: a two-tower office plan and a four-tower residential plan, with each plan studied at 10 and 12 FAR levels.

The DEIS addressed the impact the hypothetical projects would have on land use, zoning and neighborhood characteristics; urban design; demographics, economics and secondary displacement; community resources; open space and recreational facilities; waterfront revitalization; transportation; air quality; noise; utilities; and energy resources. In addition to the four full-build hypothetical projects, DCP and DEP included five alternatives showing particular impacts as well as a "no build” hypothetical. Finally, the DEIS included recommended mitigation measures, and discussed irretrievable commitments of resources.

In November 1988, DCP and DEP issued a Notice of Completion of the DEIS and made copies available to the public (6 NYCRR 617.10 [c], [d]). Community resistance to the proposed rezoning was voiced at public hearings held in January and February 1989; the EIS was then expanded to respond to public comments, particularly with respect to offsite displacement. A Notice of Completion of the Final Environmental Impact Statement (FEIS) (6 NYCRR 617.10 [f]) followed several months later. The EIS concluded that "[n]o project allowed in the C6-4 zone would have impacts greater than those discussed in the EIS for the worst case developments.”

Although acting to assist the Board of Estimate in the review process, the DCP and DEP had no decisionmaking authority. Rather, the Board of Estimate — at that time charged with responsibility as lead agency — had final authority with respect to use, development and improvement of City land, including changes in the Zoning Resolution (see, Akpan v Koch, 75 NY2d 561, 574-575; Matter of Coca-Cola Bottling Co. v Board of Estimate, 72 NY2d 674, 679).

Prior to final determination by the Board of Estimate, Silverstein agreed to a "Restrictive Declaration” imposing certain design restrictions on any future project and obligating it to cooperate in proposed mitigation measures; the owner was also limited to the development bonuses available in the Special Clinton District’s "perimeter” area. In an "Easement and License” agreement, Silverstein granted the City an easement over a portion of the Site for use as a new right-turn lane from Twelfth Avenue onto 42nd Street. On May 4, 1989, at a public hearing before the Board of Estimate, it was revealed that the Manhattan Borough President had secured an additional restriction governing a stepdown in height approaching Twelfth Avenue for any project on the Site, to ensure that development remained consistent with the City’s planned westside roadway and esplanade as well as its general plan for development of the waterfront area.

At the close of the hearing — four years after inception of the environmental review process — the Board of Estimate resolved unanimously to approve the rezoning. As the resolution recites, the actions approved were the ones that minimized or avoided adverse environmental impacts to the maximum extent practicable, and the adverse impacts revealed in the EIS would be minimized or avoided by incorporating as conditions to the decision the mitigation measures identified as practicable (see, 6 NYCRR 617.9 [c] [3], [4]).

The Present Litigation

Petitioners, seven Clinton residents and the owner of a small business in the area, brought this CPLR article 78 proceeding challenging the Board of Estimate’s action. Supreme Court rejected their challenge, concluding that the Board of Estimate had taken the required "hard look” at the potential impact of the rezoning on secondary displacement as well as other environmental concerns required by SEQRA. While refusing to invalidate the action, the court held that no future construction could take place on the Site "that is in any way different from the four conceptual 'worst case’ scenarios set forth in the EIS, other than similar projects smaller in size, unless and until the agency * * * examines the changes between the proposed construction and that considered in the four 'worst case’ scenarios considered in the EIS, and after a 'hard look’ determines whether the changes result in possible adverse consequences that may have a significant impact on the environment, and if so, files a SEIS [Supplemental Environmental Impact Statement].” (150 Misc 2d 103, 108.)

Agreeing that the requisite hard look was taken, the Appellate Division held that Supreme Court erred in requiring the lead agency to take another hard look at zoning changes once actual plans for the Site were formulated. The court concluded that "the ten possibilities considered by the City were designed to represent the full panoply of possible uses to which the Silverstein defendants could put the site, thus covering the full range of environmental impacts, including the most environmentally destructive uses to which the property could be put.” (173 AD2d 323, 325.) We agree.

II.

The applicable standards of judicial review are well settled and require only brief summary.

In a statutory scheme whose purpose is that the agency decisionmakers focus attention on, and mitigate, environmental consequences, it is the role of the court not to weigh the desirability of proposed action or choose among alternatives, but to assure that the agency itself has satisfied SEQRA, procedurally and substantively. Substantively, the courts in this limited adjudicative function must assure that the agency has identified the relevant areas of environmental concern, taken a "hard look” at them, and made a reasoned elaboration of the basis for its determination. An agency’s responsibility under SEQRA must be viewed in light of a "rule of reason”; not every conceivable environmental impact, mitigating measure or alternative, need be addressed in order to meet the agency’s responsibility. The degree of detail — the reasonableness of an agency’s action — will depend largely on the circumstances surrounding the proposed action.

We next apply these standards to the "finality” question, and then to the displacement question.

The Finality Question

Petitioners’ challenge is not so much to the present adequacy of the City’s SEQRA review as to its finality. As both the trial court and the Appellate Division unanimously concluded, the City’s lengthy, extensive environmental review, including public hearings and thousands of pages of analysis, met SEQRA’s standards, in that the lead agency focused attention on and mitigated relevant areas of environmental concern. Rather, looking to the future, petitioners’ challenge is directed at the open-ended nature of the agency action, and it arises from a novel intersection of zoning concerns and environmental concerns.

As a matter of zoning, municipalities generally plan for and define the uses permitted in an area far in advance of particular projects. "The function of land regulation is to implement a plan for the future development of the community”; actual development in accordance with a well-considered plan may not proceed for years (Asian Ams. for Equality v Koch, 72 NY2d, at 131, supra; see, Marcus, 'Neville v. Koch’ Worst Case Analysis Zoning: A Farewell to As of Right% NYLJ, Mar. 6, 1991, at 1, col 1).

By the same token, a mainstay of New York City’s policy for zoning unimproved land is as-of-right development (Department of City Planning, "Zoning Handbook: A Guide to New York City’s Zoning Resolution”,. at 5; see also, Marcus, op. cit.). What is contemplated by this policy is that, so long as the proposed use is one of the "Uses Permitted As of Right” in the City’s Zoning Resolution, a developer who also satisfies the Building Code can simply file its architectural plans with the Department of Buildings and begin construction upon issuance of a building permit. (Id.; see also, Note, Zoning in the Fourth Dimension, 3 Pace Envtl L Rev 75, 81, n 30; Gerrard, Ruzow and Weinberg, Environmental Impact Review in New York § 3.01 [3] [f].) The advantage of as-of-right development is predictability: development can proceed "in accordance with pre-set regulation rather than with case-by-case exercise of discretion by officials.” (Marcus, op. cit., at 1, col 1.)

As a matter of environmental law, rezoning is an "action” subject to SEQRA (see, Matter of Kirk-Astor Dr. Neighborhood Assn. v Town Bd., 106 AD2d 868, appeal dismissed 66 NY2d 896). This is consistent with SEQRA’s goal to incorporate environmental considerations into the decisionmaking process at the earliest opportunity (6 NYCRR 617.1 [c]; see, Matter of Long Is. Pine Barrens Socy. v Planning Bd., 78 NY2d 608, 615). Thus, SEQRA review of a rezoning "action” may take place long before any actual project is proposed. In that event, environmental review may be conducted on a conceptual basis (see, e.g., Matter of Brew v Hess, 124 AD2d 962, 965; Matter of Kirk-Astor Dr. Neighborhood Assn. v Town Bd., supra). In the present case, 10 hypothetical uses were studied in the EIS.

Further, as a matter of environmental law, actions requiring SEQRA review do not include "ministerial acts,” defined as "action[s] performed upon a given state of facts in a prescribed manner imposed by law without the exercise of any judgment or discretion as to the propriety of the act” (6 NYCRR 617.2 [x]; see, ECL 8-0105 [5] [ii]). Issuance of a permit by the New York City Department of Buildings for a use within the Zoning Resolution and the Building Code would be a ministerial act requiring no further SEQRA review (see, Matter of Filmways Communications v Douglas, 106 AD2d 185, affd 65 NY2d 878; Matter of Schum v City of New York, 161 AD2d 519; see also, Matter of Pius v Bletsch, 70 NY2d 920, 922). Thus, once the site is rezoned, under the New York City Zoning Resolution the owner can undertake any of the numerous "Uses Permitted As of Right” by the Zoning Resolution with no further environmental review. The owner will not be bound by or limited to the hypotheticals studied in the EIS.

Petitioners urge that action of this sort is a "blank check” that contravenes SEQRA; they ask that we require — as the trial court did — supplemental environmental review if actual projects, as they materialize, are different from the hypotheticals, other than similar projects smaller in size. Respondents counter that petitioners’ proposed continuing review is not only unauthorized under SEQRA but also invites perpetual litigation and consigns the Site, as well as the City’s zoning policy, to limbo.

We reject petitioners’ proposition. Even assuming the Board of Estimate had authority to impose subsequent environmental review as a condition of its approval, and even assuming in particular cases that circumstances surrounding a proposed action might justify such a condition, there is no hard-and-fast rule requiring supplemental review whenever zoning is "projectless,” and no basis for requiring it here.

Even when agency action involves a specific project, SEQRA review to some extent must take into account unknowns, which are circumscribed by a rule of reason; only environmental effects that can reasonably be anticipated must be considered. That principle applies as well where the agency action does not involve an actual project. We agree with the Appellate Division that, in this case, the agency discharged its statutory responsibility by studying hypothetical projects designated by DCP and DEP as the reasonable "full-build” uses for the Site — a range of worst-case hypothetical that reasonably could be anticipated to be built there. Petitioners now speculate about possibly more environmentally threatening uses that are permitted under the Zoning Resolution, arguing that those must not escape SEQRA review.

There may be instances where the procedure followed here would not be adequate because the future impact of the rezoning could not be forecast from hypothetical projects with reasonable accuracy. We cannot say in this case, however, that the agency’s choice of worst-case scenarios the City experts considered reasonable for the Site — which then became the focus of the EIS — was arbitrary or capricious or a violation of law (see, Matter of Industrial Liaison Comm. v Williams, 72 NY2d 137, 143).

In addition to the conceptual alternatives studied, the Board of Estimate relied on the Restrictive Declaration agreed to by Silverstein (see generally, Collard v Incorporated Vil. of Flower Hill, 52 NY2d 594, 599 [municipal rezoning conditioned on execution of a private declaration of covenants restricted the use to which rezoned parcel might be put]). These restrictions purport to mitigate the adverse environmental effects of any structure erected on the Site by including certain construction requirements and obligating Silverstein to cooperate in proposed mitigation measures. A failure to cooperate in such measures would result in denial of a certificate of occupancy. The Restrictive Declaration, moreover, ensures that the actual project will conform to the City’s over-all plan for the Clinton District, directing development to underutilized sites which could sustain a higher level of construction while encouraging preservation of those areas with a special architectural scale or character (see, "The Special Clinton District: Planning and Zoning Study”, op. cit.).

Thus, we conclude that the lead agency identified and sought to minimize the significant environmental impacts that might result from the proposed rezoning. Its determination was rational, supported by substantial evidence, and legally sufficient.

The Displacement Question

Petitioners contend that, although the City did address offsite displacement at the FEIS stage, only a truncated portion of the geographical area was actually studied for this purpose, and review was therefore inadequate. We agree with both Supreme Court and the Appellate Division that this contention lacks merit.

As the record reflects, DCP initially applied a quarter-mile rule as the geographic boundary within which the displacement of area residents could reasonably be expected to occur, concluding from its study that rezoning the Site would not significantly affect offsite displacement. As the DEIS noted, any offsite displacement would be primarily the result of "the entire area’s overall improvement.”

In response to public comments, a field study was undertaken of a portion of the initial area studied and the EIS expanded to reflect the results; the study confirmed that there was little low-income residential use in the immediate vicinity of the Site, that virtually all the apartments were rent-protected, and that as to the 14 unprotected apartments the rezoning would not contribute appreciably to the risk of displacement. The FEIS also explained the choice of a more limited field study area, noting that beyond its borders other factors — including the Convention Center and the Times Square redevelopment — "eclipse the displacement impacts of development” at the Site. That conclusion was based in part on earlier sections of the FEIS.

The City Planning Commission thereafter conducted its own study of offsite diplacement and issued a lengthy report, concluding that the rezoning would be unlikely to have significant impact on offsite displacement. Finally, the issue was again raised at the hearing before the Board of Estimate, where the field study was discussed.

Petitioners’ assertion that the review of offsite displacement was improperly truncated must be rejected. The geographical area selected for the field study was consistent with the initial study and was used only for confirmation purposes. When placed in context of the City’s over-all review of offsite displacement, it is clear that the City conducted the requisite investigation and reasonably exercised its discretion (see, Akpan v Koch, 75 NY2d, at 571, supra).

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Simons, Titone, Hancock, Jr., and Bellacosa concur.

Order affirmed, with costs.

      . "Offsite” or "secondary” displacement refers to the potential displacement of local residents other than that caused by actual construction on the site (see, Chinese Staff & Workers Assn. v City of New York, 68 NY2d 359, 367).00

      . Silverstein Properties, Inc., the owner, and its affiliate Silverstein 42nd Associates, a real estate development firm, are intervenors in the present action. "Silverstein” refers to both the owner and the developer of the Site.

      . FAR expresses the relationship between the amount of floor area permitted in a building and the size of the lot on which the building stands. For example, a 10 FAR designation would allow 100,000 square feet of floor space on a 10,000 square-foot lot (see, NY City Zoning Resolution § 12-10).

      . In many cases, rezoning a parcel does not of itself permit physical development, as further regulatory approvals will likely be required prior to construction. "As-of-right” building describes a development which complies with the local zoning requirement and for which the Building Department may issue a permit without having to refer to the Planning Commission or the Board of Standards and Appeals (see, Gerrard, Ruzow and Weinberg, Environmental Impact Review in New York § 3.01 [3] [f]; Note, Zoning in the Fourth Dimension, 3 Pace Envtl L Rev 75, 81, n 30 [1985]).

      . Numerous additional challenges to the City’s environmental review process were made in the article 78 proceeding, but are not pursued on this appeal. Additionally, petitioners brought a plenary action attacking amendment of the Zoning Resolution as not pursuant to a well-considered plan. Both the trial court and the Appellate Division rejected that argument, a ruling petitioners do not challenge.

      . Of course, requests for variances and special permits for uses not permitted as of right, as well as other discretionary actions, would not be "ministerial acts” and would call for further review (see, Matter of E.F.S. Ventures Corp. v Foster, 71 NY2d 359; Matter of Parkview Assocs. v City of New York, 71 NY2d 274).

      . This appeal does not require us to determine whether the City would have the authority to require supplemental environmental review in the future if it learned of a significant adverse effect omitted from the FEIS (see, Gerrard, Ruzow and Weinberg, Environmental Impact Review in New York § 3.13 [4]; see also, Snider and Levine, A Prolegomenon to Understanding the Developer’s True Statutory Responsibilities Under SEQRA, 5 Touro L Rev 255 [1989]).

      . As Supreme Court noted, the rezoning is not an action that authorizes a generic EIS, which would require the filing of an SEIS under certain circumstances (see, 6 NYCRR 617.15). This regulation should not be used to graft a supplemental review requirement onto "analogous” situations.

      . Of petitioners’ examples on appeal, construction of an amusement park is not permitted in a C6-4 zone, although a small amusement park could have been built on the Site prior to rezoning (see, Zoning Resolution §§ 32-22, 32-24, 32-32, 42-12, 73-26, 74-44). Petitioners also posit "the tallest building in the world,” which the City’s expert noted could not be built on the Site. The EIS contained — as a reasonable single-structure alternative — a 70-story single tower conceptual project.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    In the Matter of Pearl Leather Finishers, Inc., Respondent, v Gloversville-Johnstown Joint Sewer Board, Appellant.
    Argued April 1, 1992;
    decided May 7, 1992

      POINTS OF COUNSEL

      Deborah H. Karalunas and Thomas R. Smith for appellant.
    Section 17-707 (B) (1) of the Johnstown City Code, which authorizes revocation of discharge permits for nonpayment of sewer rents, is not contrary to law. (Belle v Town Bd., 61 AD2d 352.)
    Respondent precluded.
   OPINION OF THE COURT

Per Curiam.

Respondent Pearl Leather Finishers is a leather finishing and painting business located in the City of Johnstown. Pursuant to General Municipal Law § 452, the City of Johnstown has enacted a sewer use law, which is contained at article 17 of the Johnstown City Code. Johnstown’s sewer use law requires that each significant industrial user and each major contributing industry obtain an industrial wastewater discharge permit from the appellant Gloversville-Johnstown Joint Sewer Board. Effective November 25, 1985, the respondent, a major contributing industry as defined at section 17-201 (23) of the City Code, was granted a permit to discharge industrial wastewater into the public sewers served by the Gloversville-Johnstown Jointly Owned Wastewater Treatment Facility.

Respondent disputed the sewer rents assessed by the appellant Sewer Board and did not pay its sewer use bills for the period between August 1986 until November 1987. Respondent was served with a notice of violation and after a hearing, the Sewer Board determined that respondent owed $8,388.05 in sewer rents. The Sewer Board ordered payment within 14 days or else respondent’s discharge permit would be revoked. Respondent commenced this CPLR article 78 proceeding challenging the Sewer Board’s determination.

The Appellate Division, based on its review of the record, concluded that there was a rational basis for the Sewer Board’s calculation of sewer rents due from respondent. The court agreed with respondent, however, that the Sewer Board lacked the authority to revoke its discharge permit. The Sewer Board appealed from that portion of the Appellate Division’s judgment, and we granted leave to appeal to consider whether the Sewer Board possessed the power to revoke the discharge permit.

While General City Law § 20 (26-a) authorizes cities to establish and impose sewer rents, this must be undertaken in accordance with article 14-F of the General Municipal Law. Section 452 (4) lists several ways in which a locality can recover unpaid sewer rents. The local legislative body may maintain an action "as upon contract for sewer rents in arrears, including penalties and interest” or may "foreclose liens for such sewer rents” (§ 452 [4] [a], [b]). Alternatively, the local legislative body may draw up an annual statement showing the properties in arrears, which statement "shall be presented to the board or body empowered to levy city, county or town taxes * * * [and] [s]uch board or body shall levy the amounts contained in such statement against the real property liable at the same time and in the same manner as city, county or town taxes * * * [and] [t]he amounts so levied shall be collected and enforced in the same manner and at the same time as may be provided by law for the collection and enforcement of city, county or town taxes” (§ 452 [4]).

This statute speaks directly to the problem of recovering past due sewer rents and gives localities the authority to pursue three different options. In our opinion, given the explicit nature of these remedies, the power of revocation must be deemed to have been excluded (see generally, McKinney’s Cons Laws of NY, Book 1, Statutes § 240). Thus, the Appellate Division was correct in holding that the Sewer Board’s authority was derived from a statutory scheme that does not permit revocation as a method of collecting unpaid sewer rents and that the Board’s revocation of respondent’s discharge permit should therefore be annulled.

Finally, we also agree with the Appellate Division that the term "penalties” as used in the statute refers to monetary penalties, and that, consequently, General Municipal Law § 452 (5) (d), which states that local sewer laws "[m]ay provide for penalties for sewer rents in arrears,” does not give the Sewer Board the authority to revoke discharge permits.

Accordingly, the judgment of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Kaye, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion; Judge Simons taking no part.

Judgment affirmed, with costs.


author: Chief Judge Wachtler.

text:
    19th Street Associates et al., Respondents, v State of New York et al., Defendants, and Barbara Sommerfield et al., Appellants.
    Argued March 26, 1992;

    decided May 7, 1992

      POINTS OF COUNSEL

      Jack L. Lester for Barbara Sommerfield and others, appellants. I.
    Laws of 1989 (ch 473) does not deprive plaintiffs of due process by abrogating a fixed and unreviewable judgment. (Matter of Hodes v Axelrod, 70 NY2d 364; I. L. F. Y. Co. v Temporary State Hous. Rent Commn., 10 NY2d 263; Matter of Bueno Realty Corp. v Berman, 30 AD2d 860; Oriental Blvd. Co. v Heller, 58 Misc 2d 920, 34 AD2d 811, 27 NY2d 212, 401 US 986; La Guardia v Cavanaugh, 53 NY2d 67; Tegreh Realty Corp. v Joyce, 88 AD2d 820; Gordon & Gordon v Madavin, Ltd., 108 Misc 2d 349; 465 Greenwich St. Assocs. v Schmidt, 116 Misc 2d 62; CPC Intl. v McKesson Corp., 70 NY2d 268; Green v Santa Fe Indus., 70 NY2d 244.) II. The Act does not violate plaintiffs’ right to equal protection. (Eastlake v Forest City Enters., 426 US 668; Hadacheck v Los Angeles, 239 US 394; Nectow v Cambridge, 277 US 183; Exxon Corp. v Governor of Md., 437 US 117; Mourning v Family Publs. Serv., 411 US 356; Williamson v Lee Opt. Co., 348 US 483; Lighthouse Shores v Town of Islip, 41 NY2d 7; Vance v Bradley, 440 US 93; Dandridge v Williams, 397 US 471; Cleburne v Cleburne

      Living Center, 473 US 432.) III. The Act does not violate New York State Constitution, article III, § 17. (Matter of Union Ferry Co., 98 NY 139; Blaikie v Lindsay, 49 Misc 2d 612; Hotel Dorset Co. v Trust for Cultural Resources, 46 NY2d 358; Matter of McAneny v Board of Estimate & Apportionment, 232 NY 377; Lighthouse Shores v Town of Islip, 41 NY2d 7; Wein v Beame, 43 NY2d 326.) IV. The Act does not function as an improper regulatory taking without compensation. (United States v Causby, 328 US 256; Penn Cent. Transp. Co. v New York City, 438 US 104; Nectow v Cambridge, 277 US 183; Pennell v San Jose, 485 US 1; Bowles v Willingham, 321 US 503; Levy Leasing Co. v Siegel, 258 US 242; Block v Hirsh, 256 US 135; Seawall Assocs. v City of New York, 74 NY2d 92, 493 US 976; Loretto v Teleprompter Manhattan CATV Corp., 458 US 419; Federal Communications Commn. v Florida Power Corp., 480 US 245.) V. The Act does not unconstitutionally impair plaintiffs’ right to the consent judgment. (Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101; United States Trust Co. v New Jersey, 431 US 1; East N. Y. Bank v Hahn, 326 US 230; Matter of Freeport Randall Co. v Herman, 83 AD2d 812, 56 NY2d 832; Matter of Farrell v Drew, 19 NY2d 486; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398; Levy Leasing Co. v Siegel, 258 US 242; Block v Hirsh, 256 US 135; People ex rel. Durham Realty Corp. v La Fetra, 230 NY 429; Spring Realty Co. v New York City Loft Bd., 127 Misc 2d 1090, 117 AD2d 1029, 69 NY2d 657, 482 US 911.) VI. The IAS court improperly converted the State defendants’ motion to dismiss the complaint to a motion for summary judgment without giving adequate notice to the tenants defendants. (Guggenheimer v Ginzburg, 43 NY2d 268; Rovello v Orofino Realty Co., 40 NY2d 633; Four Seasons Hotels v Vinnik, 127 AD2d 310.)

      Arthur Silverman and another, appellants, pro se. I.
    The IAS court improperly permitted the Attorney-General’s motion to dismiss to be converted to one for summary judgment at oral argument on January 26, 1990, with the consent of only respondents and Attorney-General as attorney for State defendants, and without giving adequate notice to appellants, or to their attorneys, and without giving them an appropriate opportunity to submit papers in opposition, in violation of CPLR 3211 (c) and in violation of appellants’ rights to due process and equal protection of the laws, as guaranteed by the 14th Amendment of the Federal Constitution. (Rich v Lefko

      vits, 56 NY2d 276; 211 W. 56th St. Assocs. v Department of Hous. Preservation & Dev., 78 AD2d 793; Best v City of New York, 101 AD2d 847; Mihlovan v Grozavu, 72 NY2d 506.) II. In holding that the conversion was proper as to the non-State defendants-appellants, the court below erred in that there was never an appellate review of the facts, and where appellants pro se had set forth grounds (in their briefs to the court below) warranting equitable estoppel of the IAS court’s decision and sufficient to remand to the IAS court for fact-finding hearings for appellants. (Lazarus v Bowery Sav. Bank, 16 NY2d 793; Federal Deposit Ins. Corp. v Harrison, 735 F2d 408; Rose v Bowen, 710 F Supp 1357; Glus v Brooklyn E. Term., 359 US 231; Simcuski v Saeli, 44 NY2d 442; Robinson v City of New York, 24 AD2d 260; Beverage v Harvey, 456 F Supp 1044, 602 F2d 657; USLIFE Corp. v U.S. Life Ins. Co., 560 F Supp 1302.) III. The court below erred in determining that there were no issues of material fact while simultaneously excluding the applicability of CPLR 3211 (c) to appellants and by failing to provide an appellate review of the facts, sufficient to violate appellants’ rights to due process and equal protection of the laws, as guaranteed by the 14th Amendment of the Federal Constitution. (Four Seasons Hotels v Vinnik, 127 AD2d 310.) IV. Laws of 1989 (ch 473) does not violate the due process guarantees of the State and Federal Constitutions. The IAS court erred by not examining the tenant defendants’ possessory rights, which have a statutory origin in rent-stabilization law. (CPC Intl. v McKesson Corp., 70 NY2d 268; Green v Santa Fe Indus., 70 NY2d 244; Loengard v Santa Fe Indus., 70 NY2d 262; I. L. F. Y. Co. v Temporary State Hous. Rent Commn., 10 NY2d 263; Matter of Bueno Realty Corp. v Berman, 30 AD2d 860; Matter of Hodes v Axelrod, 70 NY2d 364; Oriental Blvd. Co. v Heller, 58 Misc 2d 920, 34 AD2d 811, 27 NY2d 212, 401 US 986; 465 Greenwich St. Assocs. v Schmidt, 116 Mise 2d 349; People ex rel. Durham Realty Corp. v La Fetra, 230 NY 429.) V. Laws of 1989 (ch 473) does not constitute an unconstitutional taking of private property for public use without just compensation. (Federal Communications Commn. v Florida Power Corp., 480 US 245; de St. Aubin v Flacke, 68 NY2d 66; Penn Cent. Transp. Co. v New York City, 438 US 104; Pompa Constr. Corp. v City of Saratoga Springs, 706 F2d 418; Haas & Co. v City & County of San Francisco, 605 F2d 1117, 445 US 928; French Investing Co. v City of New York, 39 NY2d 587.) VI. Laws of 1989 (ch 473) did not grant an exclusive privilege to appellants in violation of article III, § 17 of the State Constitution. (Hotel Dorset Co. v Trust for Cultural Resources, 46 NY2d 358; American Consumers Indus, v City of New York, 28 AD2d 38.) VII. The court below overlooked the strong presumption in favor of the constitutional validity of a State statute. (Hadacheck v Los Angeles, 239 US 394; Lighthouse Shores v Town of Islip, 41 NY2d 7.) VIII. Laws of 1989 (ch 473) satisfies all of the requirements of equal protection. (Long Is. Oil Prods. Co. v Local 553 Pension Fund, 777 F2d 24; Matter of Engelsher v Jacobs, 5 NY2d 370; People ex rel. Durham Realty Corp. v La Fetra, 230 NY 429; New Orleans v Dukes, 427 US 297; Vance v Bradley, 440 US 93; Williamson v Lee Opt. Co., 348 US 483; Nollan v California Coastal Commn., 483 US 825; Pennell v San Jose, 485 US 1; American Consumers Indus. v City of New York, 28 AD2d 38.) IX. Laws of 1989 (ch 473) does not violate article I, § 10 of the Federal Constitution, which prohibits laws impairing the obligations of contracts. (East N. Y. Bank v Hahn, 326 US 230; Matter of Freeport Randall Co. v Herman, 83 AD2d 812, 56 NY2d 832; Matter of Farrell v Drew, 19 NY2d 486; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398; Spring Realty Co. v New York City Loft Bd., 127 Misc 2d 1090, 117 AD2d 1029, 69 NY2d 657, 482 US 911; People v Beakes Dairy Co., 222 NY 416; City of New York v Town of Colchester, 66 Misc 2d 83; United States Trust Co. v New Jersey, 431 US 1.)

      Jay R. Fialkoff, Charles G. Moerdler and Regan A. Shulman for respondents. I.
    The court below properly held that the challenged statute violates the due process guarantees of the State and Federal Constitutions because it is arbitrary and retroactively impairs vested property rights and improperly interferes with a final judgment of the court. (French Investing Co. v City of New York, 39 NY2d 587, 429 US 990; Matter of Board of Educ. v City of Buffalo, 57 Misc 2d 472, 32 AD2d 98; Church v Church, 58 Misc 2d 753; Christian v County of Ontario, 92 Misc 2d 51; Periconi v State of New York, 91 Misc 2d 823; People ex rel. Reibman v Warden, 242 App Div 282; Gilman v Tucker, 128 NY 190; Matter of Slewett & Farber v Board of Assessors, 80 AD2d 186, 54 NY2d 547; Phillips v Agway, Inc., 88 Misc 2d 1087; Canisius Coll. v United States, 799 F2d 18, 481 US 1014.) II. The court below properly held that the Act was unconstitutional in that it violates the equal protection guarantees of the Federal and State Constitutions. (Plyler v Doe, 457 US 202, 458 US 1131; Schweiker v Wilson, 450 US 221; United States R. R. Retirement Bd. v Fritz, 449 US 166, 450 US 960; New Orleans v Dukes, 427 US 297; Reiner-Kaiser Assocs. v McConnachie, 104 Misc 2d 750; Budhu v Grosso, 125 Misc 2d 284; Walters v City of St. Louis, 347 US 231; People v Beakes Dairy Co., 222 NY 416; Cleburne v Cleburne Living Center, 473 US 432.) III. The court below properly held that the Act was unconstitutional in that it violates article III, § 17 of the New York State Constitution. (Matter of Mayor of City of N. Y. [Elm St.], 246 NY 72; People ex rel. Clauson v Newburgh & Shawangunk Plank Rd. Co., 88 NY 1; Stapleton v Pinckney, 293 NY 330; Matter of Church, 92 NY 1; Matter of Henneberger, 155 NY 420; Matter of Decker v Pouvailsmith Corp., 252 NY 1; Fox v Mohawk & Hudson Riv. Humane Socy., 165 NY 517; Bush v New York Life Ins. Co., 135 App Div 447; Blaikie v Lindsay, 49 Misc 2d 612.) IV. The court below properly held that the Act was unconstitutional in that it violates article I, § 10, clause (1) of the Federal Constitution. (Matter of Diamond v Temporary State Rent Commn., 24 Misc 2d 160; City of Yonkers v Yonkers R. R. Co., 169 Misc 102, 257 App Div 964, 282 NY 783; Preston Co. v Funkhouser, 261 NY 140, 639, 290 US 163; Carder Realty Corp. v State of New York, 260 App Div 459, 285 NY 803; United States Trust Co. v New Jersey, 431 US 1, 975; Trustees of Dartmouth Coll. v Woodward, 4 Wheat [17 US] 518; Allied Structural Steel Co. v Spannaus, 438 US 234; Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101.) V. The court below properly held that the Act was unconstitutional in that it violates the Takings Clauses of the 5th Amendment of the Federal Constitution and article I, § 7 (a) of the New York State Constitution. (Seawall Assocs. v City of New York, 74 NY2d 92, 493 US 976; Armstrong v United States, 364 US 40; First Lutheran Church v Los Angeles County, 482 US 304; Forster v Scott, 136 NY 577; Lutheran Church v City of New York, 35 NY2d 121; City of Buffalo v Clement Co., 28 NY2d 241; Matter of Keystone Assocs. v Moerdler, 19 NY2d 78; Kaiser Aetna v United States, 444 US 164; Loretto v Teleprompter Manhattan CATV Corp., 458 US 419.) VI. The Act is unconstitutional in that it violates article IX, § 2 of the New York State Constitution. (Pero v City of Batavia, 99 AD2d 668, 63 NY2d 971; Adler v Deegan, 251 NY 467; Schieffelin v McLaughlin, 127 Misc 56; Matter of Henneberger, 155 NY 420; Matter of Kelley v McGee, 57 NY2d 522.) VII. The Act is invalid as a bill of attainder. (Cummings v State of Missouri, 4 Wall [71 US] 277; Fletcher v Peck, 6 Cranch [10 US] 87; United States v Brown, 381 US 437; Nixon v Administrator of Gen.

      Servs., 433 US 425; Selective Serv. v Minnesota Pub. Interest Research Group, 468 US 841; Flemming v Nestor, 363 US 603; Kennedy v Mendoza-Martinez, 372 US 144; Long Is. Light. Co. v Cuomo, 666 F Supp 370.) VIII. The court below correctly held that the LAS court properly converted the State defendants’ motion to dismiss the complaint to a motion for summary judgment. (Four Seasons Hotels v Vinnik, 127 AD2d 310; O’Hara v Del Bello, 47 NY2d 363; Kaswan v Aponte, 160 AD2d 324; Five Boro Elec. Contrs. Assn. v City of New York, 37 AD2d 807, 33 NY2d 676; Schieffelin v McLaughlin, 127 Misc 56.)
   OPINION OF THE COURT

Chief Judge Wachtler.

In this case, we consider the constitutionality of a statute that extends protection against eviction to the appellants, who are nonpurchasing tenants currently in occupancy of apartment units in the cooperative apartment building located at 205 Third Avenue in New York City. Respondents are the owners and holders of the unsold shares and related proprietary leases in 205 Third Avenue Owners Corporation.

The building in question underwent cooperative conversion in 1981. In 1982, the Attorney-General commenced an action against respondents alleging violations of the Martin Act (General Business Law art 23-A). The parties agreed to a settlement of this action, the terms of which settlement were contained in a consent judgment dated May 26, 1982. The consent judgment required respondents to rescind certain purchase agreements and to permit all nonpurchasing tenants to remain in their apartments through December 31, 1989. Further, the respondents were enjoined from transferring or conveying any interest in realty for the apartments of the nonpurchasing tenants until the nonpurchasing tenant ceased to occupy the apartment or until December 31, 1989, whichever came sooner. In return, the offering plan remained an eviction plan, provided that the nonpurchasing tenants were given all the rights of rent stabilized tenants.

Following the consent judgment, the Attorney-General filed two more suits arising out of the same set of facts. In State of New York v Rachmani Corp. (71 NY2d 718), this Court held that the selling agent for the cooperative had not committed actionable fraud. In State of New York v 19th St. Assocs. (index No. 6000/86), Supreme Court granted the respondents’ motion to dismiss the Attorney-General’s complaint, again premised on Martin Act violations, on the grounds of res judicata.

In 1989, the Legislature passed Senate Bill 630 (Assembly Bill 1071), which was entitled "An Act to provide continued tenancy for certain non-purchasing tenants in the city of New York” (L 1989, ch 473). This measure granted protection from eviction to "non-purchasing tenants currently residing in multiple dwellings subject to a cooperative or condominium conversion eviction plan * * * who remain in occupancy of unsold units by virtue of a judgment entered in the supreme court prior to December thirty-first, nineteen hundred eighty-two.” (L 1989, ch 473, § 1.) In his memorandum to the Governor, the Attorney-General conceded that "[t]his bill would principally benefit a small number of non-purchasing tenants who reside in an apartment building located at 205 Third Avenue in New York City * * * who remain in occupancy of unsold units by virtue of a judgment in an action brought by my office which was entered in State Supreme Court prior to December 31,1982.”

By summons and complaint dated October 9, 1989, the respondents commenced this action for a declaratory judgment that the Act was an unconstitutional attempt to nullify the terms of the 1982 consent judgment. Supreme Court treated the Attorney-General’s subsequent motion to dismiss as a motion for summary judgment and granted summary judgment in the respondents’ favor. Specifically, the court found that the statute (1) deprived the respondents of due process in violation of article I, § 6 of the New York Constitution and the 5th and 14th Amendments of the United States Constitution; (2) violated respondents’ rights to equal protection of the laws as guaranteed by article I, § 11 of the New York Constitution and the 14th Amendment of the United States Constitution; (3) was a private or local law that granted the appellants "an exclusive privilege, immunity or franchise” in violation of article III, § 17 of the New York Constitution; (4) violated the Home Rule Amendment (art IX, § 2 [b]) of the New York Constitution; (5) constituted a taking of respondents’ property for a public use without just compensation, in violation of article I, § 7 of the New York Constitution and the 5th and 14th Amendments of the United States Constitution; (6) violated article I, § 10, clause (1) of the United States Constitution prohibiting laws impairing the obligations of contracts and bills of attainder; and (7) violated the principle of separation of powers contained in the New York Constitution. The nonpurchasing tenants appealed to the Appellate Division. The Attorney-General took no appeal.

The Appellate Division affirmed, concluding that the law deprived the respondents of due process and equal protection of the laws, granted the nonpurchasing tenants an exclusive privilege, functioned as an improper taking and impaired the respondents’ contractual rights. We agree with the Appellate Division that the respondents’ contractual rights have been unconstitutionally impaired and affirm on that ground. As a result, it is not necessary to reach the appellants’ other constitutional arguments.

Both lower courts found, and both sides apparently agree, that the consent judgment constitutes a contract. We too conclude that the consent judgment, which represents a settlement of the claims against the respondents, is in the nature of a contractual obligation since it contains a number of promises that are supported by valid consideration, and is legally enforceable according to its terms (see generally, Farnsworth, Contracts § 1.1; see also, Home Bldg. & Loan Assn. v Blaisdell, 290 US 398, 429; Cook v City of Binghamton, 48 NY2d 323, 329-330).

Having decided as a preliminary matter that the consent judgment is in the nature of a contract, we must next decide whether the statute at issue has unconstitutionally impaired this contract in violation of article I, § 10 of the United States Constitution, which states that "[n]o state shall * * * pass any * * * law impairing the obligation of contracts.” The Supreme Court has repeatedly held that this language should not be read literally and that the States retain the power "to safeguard the vital interests of [their] people” (Home Bldg. & Loan Assn. v Blaisdell, supra, at 434; see also, Keystone Bituminous Coal Assn. v DeBenedictis, 480 US 470, 502; Energy Reserves Group v Kansas Power & Light, 459 US 400, 410; Worthen Co. v Thomas, 292 US 426, 433).

"The threshold inquiry is 'whether the state law has, in fact, operated as a substantial impairment of a contractual relationship’ ” (Energy Reserves Group v Kansas Power & Light, supra, at 411, quoting Allied Structural Steel Co. v Spannaus, 438 US 234, 244). In agreeing to the terms of the consent judgment, the respondents expected that after December 31, 1989, they would be permitted to evict the remaining nonpurchasing tenants and sell the shares allocated to their apartments. This expectancy has been substantially, if not completely destroyed by the 1989 statute. Thus, we conclude that the State law has certainly impaired a preexisting contractual relationship.

But the inquiry does not end there. Even if a contract has in fact been impaired, the State may avoid a finding of unconstitutional impairment by demonstrating the existence of "a significant and legitimate public purpose * * * such as the remedying of a broad and general social or economic problem” (Energy Reserves Group v Kansas Power & Light, supra, at 411-412; see also, Crane Neck Assn. v New York City/ Long Is. County Servs. Group, 61 NY2d 154, 167). "The requirement of a legitimate public purpose guarantees that the State is exercising its police power, rather than providing a benefit to special interests” (Energy Reserves Group v Kansas Power & Light, supra, at 412). Once a legitimate public purpose is identified, the inquiry shifts to whether the legislation at issue is based " 'upon reasonable conditions and [is] of a character appropriate to the public purpose justifying [the legislation’s] adoption’ ” (id., at 412, quoting United States Trust Co. v New Jersey, 431 US 1, 22). In other words, "an impairment may be constitutional if it is reasonable and necessary to serve an important public purpose” (United States Trust Co. v New Jersey, supra, at 25; see also, Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101, 109-110; Patterson v Carey, 41 NY2d 714, 722-723). Although courts ordinarily defer to legislative assessment of the reasonableness or necessity of a particular measure, where the State is a party to the underlying contract, "complete deference * * * is not appropriate because the State’s self-interest is at stake” (United States Trust Co. v New Jersey, supra, at 26; see also, Patterson v Carey, supra, at 722).

Applying these principles to the case now before us, we conclude that although the State has identified a legitimate and important public purpose, the statute was neither reasonable nor necessary to serve that purpose.

The statute was premised on a finding that "due to the housing emergency in the city of New York, a greater degree of care must be taken in preserving the homes of certain tenants threatened with eviction.” CL 1989, ch 473, § 1.) The sentiment that the State should act to alleviate New York City’s housing crisis and to protect tenants from its effects is certainly unobjectionable. This is an important public purpose.

We conclude, however, that the legislation at issue here was not of a character appropriate to this important public purpose. This statute does not alleviate the housing crisis or afford any meaningful protection to the public or to New York City tenants at large. By its terms, it greatly circumscribes the class of tenants that is benefited; indeed, the respondents contend that only the nonpurchasing tenants in this particular building fall within the statute’s reach. This argument is borne out by the Attorney-General’s memorandum to the Governor, which states that "[t]his bill would protect those few tenants in the aforementioned building [205 Third Avenue] who — as a result of a court order in an action brought by the Attorney General against the sponsor of the conversion plan — have not yet been evicted.” As noted above, after execution of the consent judgment but before enactment of this law, the Attorney-General brought two additional actions to vindicate the rights of these tenants. This statute was passed a little more than two years after the second action was dismissed on the grounds of res judicata.

In the guise of protecting New York City tenants from the effects of a housing emergency, this statute is in reality drawn so restrictively as to benefit only a handful. Although the Legislature invoked the New York City housing crisis as justification for enacting the statute, there is only the most tenuous connection between that crisis and the not insubstantial protections afforded the nonpurchasing tenants in this case. In short, this statute has all the indicia of special interests legislation. As a result, we cannot conclude that the statute is either necessary or reasonable to serve the purpose identified in the statute. It is, therefore, an unconstitutional impairment of the contract between the respondents and the State of New York and must fall.

We have considered appellants’ remaining nonconstitutional arguments and we find them to be without merit. Accordingly, the order of the Appellate Division should be affirmed, with costs.

Judges Kaye, Titone, Hancock, Jr., Bellacosa and Yesawich, Jr., concur; Judge Simons taking no part.

Order affirmed, with costs.

       Designated pursuant to NY Constitution, article VI, § 2.


author: Kaye, J. Bellacosa, J.

text:
    The People of the State of New York, Respondent, v Felix Rodriguez, Also Known as Francisco Jaurequi, Appellant.
    Argued February 11, 1992;
    decided May 7, 1992

      POINTS OF COUNSEL

      Alexandra E. Trinkoff and E. Joshua Rosenkranz for appellant.
    The court below erred in holding that appellant was not entitled to a Wade hearing merely because the People submitted the eyewitness’ Grand Jury testimony — disputed by appellant and proven false at trial — that the witness was familiar with appellant. (United States v Wade, 388 US 218; People v Wharton, 74 NY2d 921; People v Tas, 51 NY2d 915; People v Gissendanner, 48 NY2d 543; People v Mosley, 136 AD2d 500; People v Johnson, 148 AD2d 304; People v Werner, 55 AD2d 317; People v Del Giorno, 19 AD2d 849; People v Pavesi, 144 AD2d 392; People v Jackson, 159 AD2d 640, 76 NY2d 790.)

      Robert M. Morgenthau, District Attorney (Eleanor J. Ostrow and Mark Dwyer of counsel), for respondent.
    In view of the People’s unrebutted factual showing that the eyewitness had seen defendant 48 times before the murder, the trial court properly refused to conduct a hearing on the suggestiveness of the eyewitness’ photographic identification. (People v Gissendanner, 48 NY2d 543; People v Tas, 51 NY2d 915; People v Collins, 60 NY2d 214; People v Wharton, 74 NY2d 921; People

      v Williamson, 79 NY2d 799; People v Chipp, 75 NY2d 327; People v Peterkin, 75 NY2d 985; People v Giles, 73 NY2d 666; People v Russell, 71 NY2d 1016; People v Mosley, 136 AD2d 500.)
   OPINION OF THE COURT

Kaye, J.

This appeal centers on the "confirmatory identification” exception to the notice and hearing requirements of the Criminal Procedure Law for suggestive pretrial identification procedures. We conclude that, where a citizen eyewitness claimed to have seen the defendant numerous times in a store, it was error to deny defendant’s Wade hearing motions summarily, because the witness’ assertion did not establish such familiarity with defendant that the danger of police suggestiveness was eliminated as a matter of law.

I.

On August 22, 1986, David Benito — employed as a clerk in the grocery store across the street from his Manhattan apartment — woke up late for work, looked out his fourth-floor window to see if his boss was waving him down, and noticed a group of about seven people gathered in the street below. Two men were arguing. One shoved the other, whereupon the latter drew a gun, shot the first man to death and fled.

Within two hours Benito reported his observations at the local stationhouse. He was shown two or three photographs, but did not recognize any as the assailant. Three days later, on August 25, a detective presented a single photograph to Benito, and he identified the person depicted — defendant—as the gunman.

Defendant was thereafter arrested in an unrelated incident and charged with the August 22 murder. Shortly after indictment, defendant filed a motion requesting a Wade hearing to explore the suggestiveness of the photo showup. The People opposed the hearing, alleging by affirmation that Benito was "very familiar” with defendant from the neighborhood and suggestiveness therefore was not an issue. In support, the People relied on Benito’s Grand Jury testimony, in which he testified that he had seen defendant "[a]t least four dozen times” as a customer in the grocery store. The court summarily denied defendant’s motion.

Some time thereafter, defendant’s investigator contacted Benito. At the conclusion of a pretrial Mapp hearing, defense counsel orally renewed the application for a Wade hearing, stating that he had questioned his client and that his client was "not familiar with” Benito, and moreover that it appeared Benito was a longtime police informant. The People conceded that Benito did not have a "relationship familiarity” with defendant, but claimed that nevertheless, as demonstrated by the Grand Jury testimony, there was sufficient prior familiarity to justify summary denial of the motion. The court agreed.

Defendant later moved a third time for a Wade hearing, supported by his attorney’s affirmation and a memorandum of law. Defendant again denied "personally knowing or having any prior familiarity with the witness,” and added that defense investigators learned that a criminal case pending against Benito had been adjourned in contemplation of dismissal on the day of defendant’s arrest. The memorandum of law distinguished this Court’s confirmatory identification cases. The motion again was summarily denied, and the case proceeded to trial.

At trial, Benito — the sole identification witness — recounted the shooting and made an in-court identification of defendant. In contrast to his Grand Jury testimony, however, Benito testified that he had seen defendant "a few times” prior to the crime as one of the "guys from the block” who "mingled with the fellows.” He also admitted that he was not a friend or acquaintance of defendant. The jury heard testimony about the August 25 photo showup, and the People presented physical evidence connecting defendant to the shooting. Defendant was convicted of second degree murder and weapons possession.

On appeal, defendant argued that the trial court erred in summarily denying his motions for a Wade hearing. The Appellate Division disagreed, holding that Benito’s Grand Jury testimony established that the photo display was "merely confirmatory,” and thus there was no potential suggestiveness in the procedure. We now modify and remit for a hearing.

II.

In criminal investigations, the police employ a variety of identification procedures — including lineups, one-on-one show-ups, photo arrays, and (as in this case) single-photo displays. While such techniques help assure that the right person has been or will be arrested, if tainted by suggestion they can lead to irreparable misidentification. "The influence of improper suggestion upon identifying witnesses probably accounts for more miscarriages of justice than any other single factor— perhaps it is responsible for more such errors than all other factors combined.” (Wall, Eye-Witness Identification in Criminal Cases, at 26; see also, United States v Wade, 388 US 218, 229.)

The legislative recognition of the importance of testing the reliability of identification testimony before trial is codified in CPL article 710 (see, People v Newball, 76 NY2d 587, 590-591; People v Gissendanner, 48 NY2d 543, 552). Under CPL 710.20 (6), a defendant may move to suppress identification testimony on the ground that it is tainted by "an improperly made previous identification.” CPL 710.30 requires the People to inform defendant that they intend to offer identification testimony at trial, putting defendant on notice of the potential need to make a motion to suppress. And CPL 710.60 governs the procedure for initiating the motion, specifying when the court may summarily dispose of such a motion without a hearing.

Beginning with People v Gissendanner (48 NY2d 543), this Court carved out a narrow exception to the notice and hearing requirements of article 710 for suggestive pretrial identification procedures. "In cases in which the defendant’s identity is not in issue, or those in which the protagonists are known to one another, 'suggestiveness’ is not a concern and, hence, [CPL 710.30] does not come into play” (People v Gissendanner, 48 NY2d, at 552, supra [emphasis added]; see also, People v Tas, 51 NY2d 915; People v Collins, 60 NY2d 214).

Though first articulated in Gissendanner, this "known to one another” exception — the "confirmatory identification” exception — was not applied in that case because identity was not an issue, nor was there a police-arranged identification procedure (48 NY2d, at 552). Our first actual application of the exception was in Tas, where we concluded that there was no CPL 710.30 violation because the victim and the perpetrators "were known to each other,” having resided together as inmates in the same cell tier for at least one month (51 NY2d, at 916 [emphasis added], citing People v Gissendanner).

As we thereafter recognized in Collins, whether the exception applies depends on the extent of the prior relationship, which is necessarily a question of degree. As then-Judge Wachtler wrote:

"When a crime has been committed by a family member, former friend or long-time acquaintance of a witness there is little or no risk that comments by the police, however suggestive, will lead the witness to identify the wrong person. * * * But in cases where the prior relationship is fleeting or distant it would be unrealistic to ignore the possibility that police suggestion may improperly influence the witness in making an identification.” (60 NY2d, at 219 [emphasis added]; see also, People v Newball, 76 NY2d 587, 591.)

A court’s invocation of the "confirmatory identification” exception is thus tantamount to a conclusion that, as a matter of law, the witness is so familiar with the defendant that there is "little or no risk” that police suggestion could lead to a misidentification. This is so because, as a consequence of applying the exception, the defendant will be denied a Wade hearing to explore suggestiveness. In effect, it is a ruling that however suggestive or unfair the identification procedure might be, there is virtually no possibility that the witness could misidentify the defendant.

The exception may be confidently applied where the protagonists are family members, friends or acquaintances (People v Collins, supra) or have lived together for a time (People v Tas, supra). At the other extreme, it clearly does not apply where the familiarity emanates from a brief encounter (see, People v Newball, 76 NY2d 587, 591-592, supra).

Benito’s alleged prior familiarity with defendant falls within these two extremes. It is indeed possible that a store clerk, having seen a customer "four dozen” times, would be immune to police suggestion. It is also conceivable, however, that such a witness could be influenced by suggestiveness to make a misidentification. Without more information, the trial court had no basis for ruling, in essence, that this witness was impervious to suggestion. The court therefore should have granted defendant’s request for a hearing, at least to explore Benito’s alleged prior familiarity with him.

We recently emphasized the importance of adversary testing of claims that an identification was "merely confirmatory.” In People v Williamson (79 NY2d 799, supra), the trial court held a hearing to determine whether a Wade hearing was necessary. The complainant, a victim of a knife-point robbery, testified on direct that she had seen defendant more than 10 times in the grocery store where she worked, and had seen him in excess of 20 times in the neighborhood where they both lived. The hearing court cut off cross-examination and ruled that a photo array was merely confirmatory. We remitted for a new hearing:

"The issue central to the hearing was the extent of the complainant’s prior familiarity with the defendant and that issue became crucial at trial in this single-witness identification case. Thus, the preclusion of an adequate opportunity to cross-examine on that key issue eliminated any supportable basis upon which to find that the photo identification was the product of prior familiarity and, therefore, merely confirmatory” (79 NY2d, at 800-801).

Benito’s Grand Jury testimony was strikingly like the Williamson complainant’s hearing testimony: both were sworn accounts of having seen the defendant on numerous occasions in a grocery store where each respective witness worked, and both assertions were untested by cross-examination. The trial court in Williamson had no basis for summarily concluding that the identification procedure was "merely confirmatory,” and the trial court had no basis for reaching that same conclusion here. As in Williamson, we therefore remit for an evidentiary hearing on this issue.

At a hearing, the court might consider factors such as the number of times Benito viewed defendant prior to the crime, the duration and nature of the encounters, the setting, the period of time over which the viewings occurred, the time elapsed between the crime and the previous viewings, and whether the two had any conversations. Whether Benito told the police prior to being shown defendant’s photograph that he recognized the shooter from the grocery store might also be relevant.

The People bear the burden in any instance they claim that a citizen identification procedure was "merely confirmatory.” The unusual treatment accorded such identifications — no CPL 710.30 notice or Wade hearing is necessary — requires that the exception be narrowly confined to situations where " 'suggestiveness’ is not a concern” (People v Gissendanner, 48 NY2d, at 552, supra). Thus, the People must show that the protagonists are known to one another, or where (as here) there is no mutual relationship, that the witness knows defendant so well as to be impervious to police suggestion.

Contrary to the People’s argument, prior familiarity should not be resolved at trial in the first instance. The Legislature mandates pretrial resolution of the admissibility of identification testimony where it is alleged that an improper procedure occurred (see, CPL 710.20 [6]; 710.60). Moreover, when the defendant’s theory at trial is mistaken identity, the exploration of prior familiarity on cross-examination may actually bolster the People’s case (compare, People v Dodt, 61 NY2d 408, 418).

III.

The People contend that defendant was not entitled to a hearing because, as a pleading matter, he did not create a factual issue as to Benito’s familiarity with him. True, defendant did not deny being seen by Benito four dozen times — that would have been impossible for anyone who had frequented the grocery store or neighborhood; it is also true that defendant did not concede the People’s point. Defendant argues that in this posture, and in view of his specific allegations that he did not know Benito, a hearing should have been held. We conclude that given the facts, a hearing was required before the trial court could rule, as a matter of law, that Benito’s identification was merely confirmatory.

CPL 710.60 governs the procedure for initiating and deciding motions to suppress evidence. It clearly and explicitly provides that the court must hold a hearing unless it summarily grants or denies the motion in accordance with subdivision (2) or (3) of CPL 710.60 (CPL 710.60 [4]; People v Weaver, 49 NY2d 1012, 1013). A summary denial is permitted only if no legal basis for suppression is presented or if the factual predicate for the motion is insufficient as a matter of law (CPL 710.60 [3]; People v Weaver, supra).

As originally enacted, however, the Criminal Procedure Law expressly relieved a defendant of the obligation to plead facts in support of a motion to suppress an involuntary statement (L 1970, ch 996, adding CPL 710.60 [3] [former (b)]). A hearing is thus required "whenever defendant claims his statement was involuntary no matter what facts he puts forth in support of that claim.” (People v Weaver, supra, at 1013.)

In 1986, the Legislature extended this special pleading rule to Wade motions (L 1986, ch 776, amending CPL 710.60 [3] [b]), likely for the reason that in many instances a defendant simply does not know the facts surrounding a pretrial identification procedure and thus cannot make specific factual allegations (see, Preiser, 1986 Supp Practice Commentaries, McKinney’s Cons Laws of NY, Book 11 A, 1992 Pocket Part, CPL 710.60, at 132). The effect of the amendment was to eliminate summary denial of Wade hearings on the ground that defendant had not pleaded sufficient facts.

The People here seek to do just this. Defendant was presumptively entitled to the Wade hearing on alleging that the police display of a single photo to Benito was suggestive. The People then invoked the confirmatory identification exception to the hearing requirement, but did not allege that Benito and the defendant were known to one another; the People merely alleged that the witness had seen defendant numerous times in a grocery store. Defendant responded by specifically denying "personally knowing or having any prior familiarity” with Benito.

To summarily deny a Wade hearing, the trial court had to conclude that, as a matter of law, Benito knew defendant so well that no amount of police suggestiveness could possibly taint the identification. Under the circumstances presented— the People did not allege a mutual relationship, and defendant specifically denied having any familiarity with Benito — the court should not have applied the Gissendanner-Tas exception without first having had a hearing.

Thus, the case should be remitted to Supreme Court for a hearing to determine whether the identification procedure was confirmatory. If, after that hearing, the court concludes that the People have not sustained their burden, a Wade hearing should be held and further proceedings, including a new trial, should be had as the circumstances may warrant. If the court concludes that a Wade hearing is not required, the judgments should be amended to reflect that result.

Accordingly, the order of the Appellate Division should be modified by remitting to Supreme Court for further proceedings in accordance with this opinion and, as so modified, affirmed.

Bellacosa, J.

(dissenting). I vote to affirm the order of the Appellate Division upholding this murder and weapons possession conviction, because the trial court’s denial of defendant’s motion for a Wade hearing was proper under CPL 710.60 (3) and this Court’s governing precedents. The Court, in my view, extends the governing procedural protections too far based on an unsupportable interpretation of this record.

The grocery store clerk, whose testimony is at issue, witnessed a murder. He promptly and voluntarily reported the crime to the local police precinct, and eventually identified defendant as the shooter based on a photograph shown to him by an investigating detective. The eyewitness thereafter testified before the Grand Jury that he had previously seen defendant "[a]t least four dozen times” as a customer in the grocery store where the eyewitness worked.

Defendant, conclusorily asserting suggestiveness of the out-of-court identification, sought a pretrial Wade hearing based on his counsel’s oral representations and affidavit. Defense counsel claimed that the eyewitness’s assertion of familiarity with defendant was unfounded because defendant did not “personally know * * * or hav[e] any prior familiarity with” the eyewitness.

This inversion of who knew or did not know whom, asserted secondhand by the defense lawyer, does not, standing alone, create an issue entitling defendant to a pretrial hearing on suggestiveness (see, People v Collins, 60 NY2d 214; People v Tas, 51 NY2d 915; People v Gissendanner, 48 NY2d 543; see also, People v Wharton, 74 NY2d 921). Defendant’s finessed indication that he was not personally familiar with the eyewitness is irrelevant to the issue at hand and does not imply or support the inference that the eyewitness did not know defendant very well. Moreover, counsel’s assertion does not contradict, overcome or cast the slightest doubt on the formidable predicate assertion by the eyewitness of extensive and neutral familiarity with the defendant. Indeed, defendant through his counsel studiously avoided joining issue with respect to the Grand Jury testimony of the eyewitness concerning his multiple observations of defendant. There was not even any assertion that the witness lacked a basis or source of knowledge, for example, on the ground that defendant did not frequent the grocery store or neighborhood.

The Court’s rule in this case not only rewards defendant for procedural cleverness but, in addition, charts a pro forma pleadings guide to unnecessary, unwarranted and automatic pretrial hearings. Henceforth, a defendant’s unsubstantiated and sophistic claim, solely through counsel, of unfamiliarity with an eyewitness who uncontrovertedly asserts extensive familiarity with the defendant will nevertheless require a hearing. The unfortunate practical consequence for a host of cases and unnecessarily harassed voluntary witnesses is evident (contrast, People v Gruden, 42 NY2d 214; see, CPL 710.60 [3] [summary denial authorization]). The parallel observations in People v Chipp (75 NY2d 327) in this regard are particularly apt and perhaps may even be undermined, i.e., "as at trial, any right of compulsory process at a Wade hearing may be outweighed by countervailing policy concerns, properly within the discretion and control of the hearing Judge. To hold otherwise would, in our view, only encourage the misuse of Wade hearings. To accord every defendant an absolute right to call an identifying witness at a Wade hearing would enable defendants to harass identifying witnesses and to transform the hearing into a discovery proceeding neither authorized nor contemplated by the Legislature” (id., at 337).

The Court also appears to tender an equally untenable alternative dispositional rationale. The People are found to have failed to meet a new, amorphous, initial burden of showing, in the context of a case such as this, that "the witness knows defendant so well as to be impervious to police suggestion” (majority opn, at 452 [emphasis added]). If four dozen viewings by a disinterested store clerk who voluntarily went to the police after witnessing a murder do not qualify as sufficiently "impervious to police suggestion”, I cannot imagine any circumstances that will. So the rule in this respect is really no rule at all. What emerges instead is an artificially rigid requirement that the People must establish either mutuality of "protagonists” (majority opn, at 452) or an unquantified and undefined kind of close, prior relationship (majority opn, at 450). Our precedents to date have not so restricted the scope of the "confirmatory identification” exception, and I see no reason to do so in this case and under these circumstances. Moreover, the witness’s assertions were searchingly explored in cross-examination at the trial, where the witness also made a positive in-court sworn identification of the defendant as the murderer.

It is precisely because the pretrial matters at issue here turn on numerous "factors” (majority opn, at 451) and reduce to a "question of degree” (majority opn, at 450) that the better course and rule in these kinds of circumstances and cases would be for this Court to allow a sensible exercise of discretion and judgment, under the prevailing precedents, concerning the need for a pre-Wade or Wade hearing (compare, People v Williamson, 79 NY2d 799 [where a trial court prudently held a hearing, albeit erroneously circumscribing the cross-examination of the witness once underway]; see also, People v Chipp, 75 NY2d, at 337, supra). New, de facto, per se rules and exclusively delineated relationships, generating unnecessary pretrial hearings in the confirmatory identification Wade category, do not fairly and well serve all the protagonists in the process.

Chief Judge Wachtler and Judges Simons, Titone and Hancock, Jr., concur with Judge Kaye; Judge Bellacosa dissents and votes to affirm in a separate opinion.

Order modified and case remitted to Supreme Court, New York County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed.

       There are actually two very different classes of identifications that have been labeled "merely confirmatory”: those made by an undercover officer in a buy-and-bust operation to confirm that the backup team apprehended the right suspect (see, People v Wharton, 74 NY2d 921, 923), and those by a citizen who knows the defendant (see, People v Williamson, 79 NY2d 799; People v King, 172 AD2d 562). This cáse concerns only the latter situation. In either situation, the label "confirmatory” does not aid analysis and is perhaps more accurately a conclusion that no Wade hearing is necessary (see, People v Gordon, 76 NY2d 595, 601; People v Wharton, 74 NY2d, at 923, supra; id., at 923 [Titone, J., dissenting]).


author: Yesawich, Jr., J.

text:
    In the Matter of Bankers Trust New York Corporation et al., Appellants, v Department of Finance of the City of New York et al., Respondents.
    Argued March 25, 1992;
    decided May 12, 1992

      POINTS OF COUNSEL

      David Sachs for appellants. I.
    The City Financial Corporation Tax is not a franchise tax within the meaning of former 31 USC § 742. (American Bank & Trust Co. v Dallas County, 463 US 855, 1250; People v Eulo, 63 NY2d 341; Home Ins. Co. v New York, 134 US 594; Macallen Co. v Massachusetts, 279 US 620; Pacific Co. v Johnson, 285 US 480; Missouri v Gehner, 281 US 313; Matter of Byrn v Chu, 105 AD2d 963, 64 NY2d 606; Matter of Scobey v New York State Tax Commn., 95 AD2d 905; Matter of Bower v New York State Tax Commn., 86 AD2d 932; Matter of Berardino v New York State Tax Commn., 78 AD2d 936.) II. The City Financial Corporation Tax is not in lieu of a franchise tax. (Western Air Lines v Board of Equalization, 480 US 123; Allstate Ins. Co. v United States, 419 F2d 409.)

      O. Peter Sherwood, Corporation Counsel (Amy F. Nogid, Edith I. Spivack, Edward F.X. Hart and Stanley Buchsbaum of counsel), for respondents. I.
    Since the City Financial Corporation Tax is either a franchise tax or a nonproperty tax in lieu thereof, interest from United States obligations is properly includable in measuring the liability under that tax. (Woodside Sav. & Loan Assn. v Gallman, 34 NY2d 674, 419 US 810; Matter of Atlas Tel. Co., 273 NY 51; People v Cook, 34 NY2d 100; Matter of Kesbec, Inc. v McGoldrick, 278 NY 293; New York Steam Corp. v City of New York, 268 NY 137; Matter of Northern Bank, 85 Misc 594, 163 App Div 974, 212 NY 608; Bank of Rome v Village of Rome, 18 NY 38; Bank of Chenango v Brown, 26 NY 467; Roosevelt Raceway v County of Nassau, 18 NY2d 30, 385 US 453; Hotel Dorset Co. v Trust for Cultural Resources, 46 NY2d 358.) II. Assuming, arguendo, that the tax is found to be neither a franchise tax nor a nonproperty tax in lieu thereof, the scope of the exemption must be examined. (Chevron Oil Co. v Huson, 404 US 97; Foss v City of Rochester, 65 NY2d 247; Rockford Life Ins. Co. v Illinois Dept. of Revenue, 482 US 182; First Natl. Bank v Bartow County Tax Assessors, 470 US 583.)
   OPINION OF THE COURT

Yesawich, Jr., J.

The New York City Financial Corporation Tax is imposed on financial corporations for the privilege of doing business in the City in a corporate or organized capacity. The issue presented is whether this tax is a franchise tax or a nonproperty tax in lieu thereof, thus allowing the City to take into account when calculating the tax, income petitioners received from Federal securities without violating the Federal Public Debt Statute (former 31 USC § 742, as amended 31 USC § 3124 [a]). We agree with the Appellate Division that the City Financial Corporation Tax functions as a franchise tax, making its application to the interest income earned by petitioners on Federal obligations held by them proper.

(I)

In 1976, petitioners Bankers Trust New York Corporation, a bank holding company, and its principal New York subsidiary, Bankers Trust Company, which are organized under the laws of New York State and maintain their principal offices in New York City, earned interest in an aggregate amount of $47,701,000 on certain debt obligations of the Federal Government and its agencies that they held in inventory and for investment purposes. This amount was included in full in their consolidated 1976 New York City Financial Corporation Tax return; all expenses incurred by petitioners to produce such interest income were deducted. The tax was ultimately paid in 1983 and in June 1984 petitioners filed a claim for a refund of $3,997,479 plus interest, the portion of the City Financial Corporation Tax imposed on interest earned on these Government obligations. They claimed that subjecting this income to the Financial Corporation Tax is precluded by the Federal Public Debt Statute (Rev Stat of US § 3701, former 31 USC § 742), which exempted United States Government obligations and interest thereon from State or municipal taxation "except nondiscriminatory franchise or other nonproperty taxes in lieu thereof imposed on corporations.”

In August 1984, respondent Department of Finance issued a notice of disallowance, stating that the City Financial Corporation Tax (which is measured by a corporation’s entire net income) prohibited deductions or exclusions for "any part of any income from * * * interest on any kind of stock, securities or indebtedness” (Administrative Code of City of New York former § R46-37.3 [b] [1] [recodified at § 11*641 (b) (1) (B)]). After a hearing, respondent Commissioner of Finance sustained the notice of disallowance and denied petitioners’ refund claim, concluding that the City Financial Corporation Tax was a franchise tax, or at the very least a nonproperty tax in lieu of a franchise tax, within the meaning of the Federal Public Debt Statute.

This CPLR article 78 proceeding, timely commenced by petitioners, challenges the Commissioner’s determination. Upon transfer of the proceeding by Supreme Court, the Appellate Division unanimously confirmed the determination and dismissed the petition, holding that, although the City Financial Corporation Tax does not employ the words "franchise tax” and is measured by income, it nonetheless functions as a franchise tax, not an income tax, and therefore is immune from the provisions of the Federal Public Debt Statute. This appeal ensued.

(II)

Petitioners’ principal arguments are that (1) the City of New York has no authority to impose a corporate franchise tax, only the State can do so and it already does (Tax Law § 1451; 20 NYCRR 16-1.1) and (2) even were the City so empowered, its Financial Corporation Tax is not in fact a franchise tax. For the reasons that follow, we conclude that petitioners’ arguments are unpersuasive.

(1)

There are two types of franchise taxes, "organization taxes” (taxes established for the privilege of existing as a corporation) and "doing business” taxes (taxes imposed on the corporation’s privilege of doing business within the boundaries of the taxing authority) (see, Werner Mach. Co. v Director of Div. of Taxation, 17 NJ 121, 125-126, 110 A2d 89, 91, affd 350 US 492). That the State Legislature circumscribed the authority it has granted to the City to that of merely setting "doing business” taxes (Administrative Code of City of New York former § R4637.1), while retaining solely unto itself the prerogative to impose "organization taxes”, is a seductive but hardly compelling reason to conclude, as petitioners suggest, that the tax at issue is not a franchise tax.

The State is empowered to grant franchises allowing corporations to exist as well as to do business here (see, People ex rel. Bass, Ratcliff & Gretton v State Tax Commn., 232 NY 42, affd 266 US 271). Pursuant to New York Laws of 1966 (ch 772) and the accompanying Model Local Law § 12 (l), the State Legislature authorized New York City as its agent to levy a franchise tax on corporations for the privilege of doing business in the City, with the revenue collected remaining in the City’s control (see, NY Const, art IX, § 2 [c] [ii] [8]; see, e.g., Sonmax, Inc. v City of New York, 43 NY2d 253, 257; Matter of Kesbec, Inc. v McGoldrick, 278 NY 293, 295; New York Steam Corp. v City of New York, 268 NY 137, 145; City of Schenectady v State of New York, 80 Misc 2d 223, 225; cf, Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d 372, 379). Collection of this tax by the City does not make it any less a State authorized franchise tax. The further answer to petitioners’ argument in this regard is the fact that a State may collect a franchise tax on national banking associations or banks incorporated under the laws of other jurisdictions (see, Tradesmens Bank v Tax Commn., 309 US 560, 563-565; see also, State Dept. of Assessments & Taxation v Maryland Natl. Bank, 310 Md 664, 665, 531 A2d 294, 295, appeal dismissed 486 US 1048), even though it does not possess the power to grant such corporations the license "to exist” in the State.

Moreover, the presence of the coexisting State franchise tax does not require the conclusion that the City’s Financial Corporation Tax is not a franchise tax. A number of acceptable forms of taxation can be imposed within the nondiscriminatory franchise tax exemption; the Federal Public Debt Statute does not limit the State to condition the exercise of corporate powers upon the payment of only one tax (see, First Am. Natl. Bank v Olsen, 751 SW2d 417, 421 [Tenn], appeal dismissed sub nom. First Am. Natl. Bank v Taylor, 485 US 1001).

(2)

Whether the City Financial Corporation Tax is a bona fide franchise tax, is a matter to be "determined by its operation rather than by particular descriptive language which may have been applied to it” (Educational Films Corp. v Ward, 282 US 379, 387). That the tax does not contain the word "franchise” in its title or text is not determinative (see, e.g., Reuben L. Anderson-Cherne, Inc. v Commissioner of Taxation, 303 Minn 124, 126-127, 226 NW2d 611, 614, appeal dismissed sub nom. Reuben L. Anderson-Cherne, Inc. v Commissioner of Revenue, 423 US 886; Pacific First Fed. Sav. Bank v Department of Revenue, 308 Ore 332, 334, 779 P2d 1033). And, the Supreme Court has repeatedly recognized that simply because a tax on a franchise is measured by income, as is the tax at hand, does not connote that it cannot qualify as a franchise tax within the meaning of the statute (see, e.g., Werner Co. v Director of Taxation, 350 US 492, 493-494; Pacific Co. v Johnson, 285 US 480, 489; Educational Films Corp. v Ward, supra, at 387-391; Home Ins. Co. v New York, 134 US 594, 600, affg 92 NY 328).

A true distinction between an income or property tax and a bona fide franchise tax imposed upon a corporation for the privilege of doing business in the State is that a franchise tax —unlike an income or property tax — requires the earning of income, or the possession of property, to coincide with the prerogative of doing business in the corporate form (see, Educational Films Corp. v Ward, supra, at 388; Reuben L. Anderson-Cherne, Inc. v Commissioner of Taxation, supra, at 614-615; Savings League v Wisconsin Dept. of Revenue, 141 Wis 2d 918, 924-925, 416 NW2d 650, review denied 144 Wis 2d 956, 428 NW2d 554, appeal dismissed 488 US 806). If the taxpayer could still be liable for the tax despite corporate dissolution or the complete cessation of business, it is a tax on property or income, not on the franchise of doing business.

That the New York City Financial Corporation Tax is indeed a franchise tax is borne out by the fact that, tracking the language of the enabling statute’s Model Local Law § 12 (1), it is levied "[f]or the privilege of doing business in the city in a corporate or organized capacity” and if petitioners were to dissolve or cease doing business in the City they would no longer be subject to the tax (Administrative Code of City of New York former § R46-37.1 [a] [recodified at § 11-639]).

The New York City Financial Corporation Tax being a franchise tax within the meaning of the Federal Public Debt Statute, inclusion of interest on Federal Government obligations to determine the amount owed by petitioners for the tax year 1976 under such tax was expedient. Accordingly, the judgment of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Kaye, Titone, Hancock, Jr., and Bellacosa concur; Judge Simons taking no part.

Judgment affirmed, with costs.

       Designated pursuant to NY Constitution, article VI, § 2.

      . In 1982, United States Revised Statutes of 1878 § 3701 (31 USC § 742) was reformulated without substantive change as 31 USC § 3124 (a) (American Bank & Trust Co. v Dallas County, 463 US 855, 859, n 1, reh denied 463 US 1250).

      . New York Laws of 1966 (ch 772, § 1) authorizes "any city having a population of one million or more * * * to adopt and amend local laws imposing * * * taxes on * * * financial corporations”.

      . The enabling legislation’s Model Local Law § 12 provides that a "[t]ax based on net income” be imposed "[f]or the privilege of doing business in the city” (L 1966, ch 772, § 1).

      . Tax Law § 1451 (a) imposes a tax on every banking corporation "[f]or the privilege of exercising its franchise or doing business in this state in a corporate or organized capacity.” The amount of the tax owed is measured by the "taxpayer’s entire net income” with certain adjustments not relevant here (Tax Law § 1455).

      . Insofar as petitioners advert to the fact that the New York City unincorporated business tax has consistently been held to be an income tax (see, Matter of Byrn v Chu, 105 AD2d 963, lv denied, 64 NY2d 606), we note that tax is "expressly imposed on the 'taxable income of every unincorporated business’ ” (Matter of Berardino v New York State Tax Commn., 78 AD2d 936, 937, quoting Administrative Code of City of New York § S46-3.0 [emphasis added]).

      . The Department of Finance correctly observes that we previously affirmed on the opinion of Supreme Court a decision stating that the New York City Financial Corporation Tax was a franchise tax (see, Woodside Sav. & Loan Assn. v Gallman, 73 Misc 2d 357, 360, affd on opn of Special Term 34 NY2d 674, appeal dismissed 419 US 810). However, that case did not involve whether the Financial Corporation Tax was a franchise tax within the meaning of the Federal Public Debt Statute.