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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

February 2, 2021

How Amendments to the NYS Real Property Tax Law and General Municipal Law Will Affect Taxation of Solar and Wind Farms

Among the legislative amendments included in the 2022 NYS Executive Budget Bill are amendments to the New York Real Property Tax Law (RPTL) and General Municipal Law (GML) that will affect how solar and wind farms will be assessed and their eligibility for financial assistance from industrial development agencies (IDAs).

Real Property Tax Law

Currently, there is no guidance for assessors in the real property tax law related to how solar and wind energy projects should be assessed. However, the Budget Bill creates a new RPTL Section 575-b, which provides that the assessed value for solar and wind energy facilities equal to or greater than 1 MW shall be determined by an income capitalization or discounted cash flow approach that considers an appraisal model. The New York State Department of Tax and Finance (NYSDTF), in consultation with the New York State Energy Research and Development Authority (NYSERDA), is tasked with generating and publishing this model within 180 days of the effective date of Section 575-b. The NYSDTF is also directed to annually publish a discount rate for solar and wind energy systems. In order to facilitate the development and maintenance of the appraisal model and discount rate, owners and operators of wind and solar energy systems may be and likely will be called upon to file annual reports.

The Budget Bill also proposes to amend RPTL Section 487 to modify renewable energy developers’ notice requirements to local taxing jurisdictions concerning the developers’ intent to negotiate payment in lieu of tax (PILOT) agreements with each local taxing jurisdiction. Written notification of intent to enter into a PILOT agreement is now defined as a hard copy letter addressed to the highest ranking official, and must include the specific reference to RPTL Section 487(9), as well as a clear statement that the taxing jurisdiction has 60 days to respond. However, the taxing jurisdiction may, either by local law or resolution, announce its ongoing intent to enter into PILOT agreements for renewable energy projects, rather than individually respond to each owner/developer directly. The exemption under RPTL 487 is also extended to 2030, as opposed to 2025 under the current law.

General Municipal Law

Proposed amendments to Article 18 of the GML expressly include a definition of “renewable energy project” and incorporate such defined term within the broader definition of “project.” Under section 854 of the GML, “renewable energy project” would be added and “shall mean any project and associated real property on which the project is situated, that utilizes any system or equipment as set forth in section four hundred eighty-seven of the real property tax law or as defined pursuant to paragraph b of subdivision one of section sixty-six-p of the public service law.” By expressly including “renewable energy project” in the definition of “project,” this would unequivocally qualify renewable energy projects for financial assistance from an IDA. Further, the proposed amendment to Section 859-a(7)(b) of the GML includes consideration of “the project to the state’s renewable energy goals and emission reduction targets” under the Climate Leadership and Community Protection Act (CLCPA), among the criteria for granting financial assistance.

Our Project Development Practice Area will continue to monitor the state’s adoption of these amendments and will continue to distribute timely legal alerts.

If you have any questions regarding the content of this alert, please contact Genevieve Trigg, special counsel, at gtrigg@barclaydamon.com; David Solimeno, associate, at dsolimeno@barclaydamon.com; Kevin McAuliffe, Project Development Practice Area co-chair, at kmcauliffe@barclaydamon.com; Jeff Davis, Project Development Practice Area co-chair, at jdavis@barclaydamon.com; or another member of the firm’s Project Development Practice Area.

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