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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.

May 3, 2022

New York State Supreme Court, Albany County, Judge Grants Temporary Restraining Order Prohibiting Implementation of State-Issued Appraisal Model for Solar and Wind Energy Systems

We previously reported on the solar and wind appraisal model from the NYS Department of Taxation and Finance (Tax Department), which utilizes a discounted cash flow (DCF) approach for appraising solar and wind energy systems with a nameplate capacity equal to or greater than 1 megawatt. Since its official publication in January 2022, local assessors have begun applying the DCF model to solar and wind energy systems in preparation of the 2022 tentative assessment rolls. However, on April 29, 2022, a New York State Supreme Court, Albany County, judge granted a temporary restraining order (the Order) prohibiting the implementation of the DCF model by the New York State Department of Tax and Finance or any assessor or assessing unit. 

The Order stems from an Article 78 petition submitted by a nine-town coalition (Petitioners) claiming the model was not lawfully promulgated under the State Administrative Procedure Act (SAPA) and the New York State Constitution. The Petitioners claim that the DCF model is an official rule or regulation and therefore subject to SAPA rulemaking requirements, while the State claims that the model is merely interpretative of an underlying statute and therefore not subject to SAPA. 
 
Following oral argument, the Court ruled against the State finding that:

  • The Petitioners demonstrated a likelihood of success that the DCF model constitutes a rule or regulation and was likely subject to the procedural requirements under SAPA and the New York State Constitution.
  • Irreparable harm would be caused to the Petitioners in the absence of a temporary injunction due to the potential of the model to result in decreased tax revenue and a corresponding reduction of municipal services available to the affected towns.
  • The equities balance in favor of retaining the status quo during the pendency of the Article 78 proceeding.

The Order came on the eve of local taxing jurisdictions releasing their 2022 tentative assessment rolls, which were due on May 1, 2022. However, as a practical matter, local assessors submit their tentative rolls several days earlier, so the tentative rolls were effectively set prior to the issuance of the Order. As a result, pending wind and solar assessments are in a state of flux. The State now has an opportunity to show cause and argue against further relief for the Petitioners at a hearing tentatively set for May 27, 2022. 

Attorneys in Barclay Damon’s Project Development Practice Area will continue to monitor this and other developments affecting the renewable energy industry in New York State.

If you have any questions regarding the content of this alert, please contact Mark McNamara, Property Tax & Condemnation Practice Area chair, a mmcnamara@barclaydamon.com; Kevin McAuliffe, Project Development Practice Area co-chair, at kmcauliffe@barclaydamon.com; Genevieve Trigg, partner, at gtrigg@barclaydamon.com; or Dan Krzykowski, associate, at dkrzykowski@barclaydamon.com; or another member of the firm’s Property Tax & Condemnation or Project Development Practice Areas. 

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