As pointed out by the majority, the State Environmental Quality Review Act (SEQRA) and the regulations promulgated thereunder do not precisely define the point which an agency may not reach before an Environmental Impact Statement (EIS) must be prepared. Research indicates that this precise question is one of first impression in the New York courts. However, an examination of the purpose for which SEQRA was enacted, as revealed by its provisions, the regulations enacted thereunder and the Governor’s Memorandum issued when legislation was signed into law, makes it abundantly clear that the spirit and intent of SEQRA demand that an EIS, or at least a draft environmental statement, was required to be prepared before the board passed the resolutions herein challenged by petitioners (ECL 8-0103, subd 7; 8-0109, subds 2,4; 6 NYCRR 617.1; Governor’s Memorandum, NY Legis Ann, 1975, p 438; see, also, Matter of Town of Henrietta v Department of Environmental Conservation of State of N. Y., 76 AD2d 215).
Moreover, we note that the statute requires that when an agency determines “as early as possible in the formulation of a proposal for an action” that an EIS is required, it must prepare a draft environmental statement or terminate its review of the proposed action (ECL 8-0109, subd 4). The purpose of the draft statement is to relate environmental considerations to the inception of the planning process and to inform the public and other agencies as early as possible about proposed actions (ECL 8-0109, subd 4).
In the instant proceeding, the respondent town board has *341prepared neither a draft environmental statement nor an EIS. Respondents argue that because funding from State and Federal agencies has not yet been committed to this project and because authorization for the project can be rescinded at any time prior to entry into binding legal commitments, the town is not yet committed “to a definite course of future decisions” and, thus, its activities do not constitute an “action” within SEQRA. We agree with the majority that this argument is without merit. The planning herein had already reached the stage where the Legislature intended that environmental considerations be taken into account and alternatives be discussed (see, also, 41 Albany L Rev 293, 304). However, while we agree with the majority that the procedures followed by the town board frustrated the intent and purposes of SEQRA, we conclude that the proper remedy is to declare the resolutions and other actions of the town board invalid and illegal.
Additionally, we do not agree with Special Term’s finding that petitioners’ challenge to resolution 319, which adopted provisions related to financing the project, is barred as untimely under the provisions of sections 80.00, 81.00 and 82.00 of the Local Finance Law. Moreover, even if petitioners’ challenge to resolution 319 could be considered to be untimely, there was a timely and valid challenge to the other four resolutions, one of which adopted the same financing plan later readopted by resolution 319, and to the referendum. Since these four resolutions and the referendum should be declared null and void for failure to comply with the provisions of SEQRA, the foundation for resolution 319 is eroded and it is without effect as it was expressly conditioned on the valid establishment of Queensbury Sewer District No. 1.
The judgment dismissing the petitions should be reversed and the relief requested in the petition dated October 29, 1979 should be granted to the extent that (1) resolutions 228, 229, 230, 318 and 319 of the Town Board of the Town of Queensbury should be declared null and void, (2) the special town election held on August 17, 1979 to vote upon Queensbury Sewer District No. 1 should be declared null and void, and (3) the approval of the Comptroller for *342establishment of Queensbury Sewer District No. 1 should be declared null and void.
Casey and Herlihy, JJ., concur with Kane, J.; Main and Mikoll, JJ., concur in part and dissent in part in an opinion by Mikoll, J.
Judgment reversed, on the law and the facts, without costs; petitions granted to the extent that respondents are directed to comply with ECL article 8 before taking any further steps or proceedings in connection with the construction of a sewer system in the Town of Queensbury.