On the eve of the New York State Energy Research & Development Authority’s (NYSERDA) deadline for final proposals for its ninth annual Renewable Energy Standard RFP, Senate Bill S8012, which revises New York Real Property Tax Law (RPTL) § 575-b, was signed into law by Governor Kathy Hochul.
In March 2025, the Albany County Supreme Court held RPTL § 575-b to be an unconstitutional delegation of the NYS legislature’s taxing authority.i Under the original version of the statute that was challenged, the New York State Department of Taxation and Finance (DTF), in consultation with NYSERDA and the New York State Assessors Association, was tasked with developing an appraisal model and discount rates for solar and wind energy systems with a nameplate capacity of at least 1 MW in order to determine fair market value for assessment purposes. The appraisal model created by the DTF made property taxation of solar and wind energy projects more predictable.
RPTL § 575-b required the DTF to implement an appraisal model utilizing a discounted cash flow approach to calculate the market value of solar or wind energy systems. The statute empowered the DTF to consider economic and cost considerations of systems based on location and “regionalized market pressures.” The court found that the delegation of authority to the DTF by the NYS legislature did not sufficiently limit the DTF’s discretion. The court emphasized the lack of guidance in the statute “as to what constitutes income, revenue, or expenses.”
RPTL § 575-b, as revised, seeks to resolve concerns of “what constitutes income, revenue, or expenses” and guides the DTF’s formulation of an appraisal model for solar and wind energy systems that includes operating expenses associated with host community benefit payments, the decommissioning of solar and wind energy systems, and community solar subscriber-management costs. The revised statute also requires that intangible assets, including federal investment tax credits, federal production tax credits, and state renewable energy credits, be excluded from revenue streams in the discounted cash flow analysis.
The revisions to RPTL § 575-b address the constitutional infirmity raised by the Airey decision and ensure that the DTF appraisal model will apply to wind and solar projects. Owners and developers of those projects now have more certainty regarding potential property tax obligations and can better manage ongoing and projected expenses.
If you have any questions regarding the content of this alert, please contact Stephen Almy, counsel, at salmy@barclaydamon.com; Lauryn Fulton, associate, at lfulton@barclaydamon.com; Matt Moses, Project Development Practice Area co-chair, at mmoses@barclaydamon.com; or another member of the firm’s Energy, Regulatory, or Property Tax & Condemnation Practice Areas.
iSee Airey v. State of NY, 87 Misc 3d 323, 324 (Sup Ct, Albany County 2025).