IN RE: SOLAR ADVOCATE DEVELOPMENT (2026)

MEMORANDUM AND ORDER

It is hereby ORDERED that the judgment so appealed from is unanimously reversed on the law and in the interest of justice without costs and the amended petition against respondent County of Ontario is dismissed.

Memorandum: Petitioner, an owner of real property in respondent Town of East Bloomfield, Ontario County, commenced this combined proceeding pursuant to RPTL article 7 and CPLR article 78 challenging the assessment of its property for tax purposes on the ground that its application for a property tax exemption under RPTL 487 (2) was wrongly denied. Respondent County of Ontario (County) appeals from a judgment that, inter alia, granted the amended petition insofar as it sought relief related to the County's assessment roll, directed respondents to enter petitioner's property “on the assessment roll for the 2021-2022 taxable year for the County of Ontario pursuant to RPTL § 487 (7),” and directed respondents to refund to petitioner any overpayment of taxes. We reverse.

RPTL 487 (2) provides that real property that includes a solar energy system, among other energy systems, “shall be exempt from taxation to the extent of any increase in the value thereof by reason of the inclusion of such solar ․ energy system ․ for a period of fifteen years.” Pursuant to RPTL 487 (8) (a), however, a local government may, by local law, opt out of the tax exemption set forth in the statute. RPTL 487 (8) (a) further provides that “a copy of any such local law ․ shall be filed with” the Commissioner of the Department of Taxation and Finance (DOTF) and the President of the New York State Energy and Research Development Authority (NYSERDA).

In February 1997, the County adopted a local law pursuant to RPTL 487 (8) (a) opting out of the tax exemption for properties with eligible energy systems and filed that local law with the New York Secretary of State and the DOTF. The local law was posted on the DOTF website, which identifies for the public all opting-out jurisdictions. There is no evidence in the record, however, that the County filed its opting-out law with NYSERDA. Petitioner purchased the subject property in late 2018 and, within a few months, constructed a $3.1 million solar energy system thereon. In February 2021, petitioner applied for a partial exemption under RPTL 487 (2). The application was denied, prompting petitioner to commence this proceeding.

As a preliminary matter, we note that, with certain exceptions not applicable here, “ ‘the proper vehicle for challenging an allegedly wrongful denial of a partial [property tax] exemption is a tax certiorari proceeding pursuant to RPTL article 7, and not a CPLR article 78 proceeding’ ” (Matter of LAPC Lofts, LLC v City of Buffalo Dept. of Assessment & Taxation, 155 AD3d 1539, 1540 [4th Dept 2017]). Thus, this is properly only an RPTL article 7 tax certiorari proceeding (see id.).

Petitioner asserted below, as it does on appeal, that the County did not properly opt out of RPTL 487 (2) because it failed to file its local law with NYSERDA. The County argued that the filing requirements of RPTL 487 (8) (a) are merely directory and that the County's alleged failure to file the local law with NYSERDA does not render the local law invalid. In granting the amended petition, Supreme Court relied on Matter of Laertes Solar, LLC v Assessor of the Town of Harford (182 AD3d 826 [3d Dept 2020], lv dismissed in part & denied in part 35 NY3d 1119 [2020] [hereinafter Laertes]). In Laertes, the Third Department determined that, to be effective under RPTL 487 (8) (a), an opting-out law must be filed with both DOTF and NYSERDA (Laertes, 182 AD3d at 828). The Court thus concluded that the property owner was entitled to an exemption under RPTL 487 (2) inasmuch as the municipality filed its opting-out law with the DOTF but not NYSERDA (Laertes, 182 AD3d at 829).

On appeal, the County relies on RPTL 497 (2), which became effective three months before petitioner commenced this proceeding (see L 2021, ch 59, part W, § 10), in support of its contention that the court erred in concluding that it did not validly opt out of the exemption under RPTL 487 (8) (a). RPTL 497, entitled “Construction of certain local option provisions in exemption statutes,” provides, in pertinent part, that “[w]hen an exemption statute makes one or more options available to some or all municipal corporations, and further provides that a municipal corporation adopting a local law or resolution exercising such an option shall file a copy thereof with one or more state agencies other than the department of state, but if such statute does not expressly provide that a local law or resolution exercising such an option shall not take effect until a copy thereof is filed with the specified state agency or agencies, then a failure to comply with such filing provision shall not render such local law or resolution ineffective or invalid” (RPTL 497 [2]).

We note that RPTL 497 was enacted just one year after the Third Department issued its decision in Laertes and that the statutory notes for RPTL 497 (2) state that, although the statute shall take effect immediately, the decision in Laertes “shall remain binding upon the parties thereto” (L 2021, ch 59, part W, § 10). In our view, it is implicit that the law was enacted in response to the decision in Laertes.

The County contends that, applied here, RPTL 497 (2) compels reversal of the judgment inasmuch as RPTL 487 (8) (a) does not “expressly provide” that a local law opting out of the tax exemption “shall not take effect until a copy thereof is filed with the specified state agency or agencies” (RPTL 497 [2]). Petitioner asserts that the County failed to preserve that contention for our review and that, in any event, RPTL 497 (2) does not apply retroactively to this case.

Regarding preservation, we note that, although the County did not cite RPTL 497 (2) below, it did argue that any failure to file the local opting-out law with NYSERDA did not render the local law ineffective. In essence, the County contended that Laertes was wrongly decided, and the County's reliance on RPTL 497 (2) on appeal is an argument in support of that general contention. Notably, when it enacted RPTL 497 (2), the Legislature did not amend RPTL 487 (8) (a), which directs municipalities to file opting-out laws with both the DOTF and NYSERDA. Instead, the Legislature merely clarified, via RPTL 497 (2), that a municipality's failure to comply with the filing requirements of a provision such as RPTL 487 (8) (a) does not vitiate a duly enacted local law opting out of the tax exemption.

Inasmuch as Laertes was the apparent impetus for the enactment of RPTL 497 (2), it is clear that the Legislature believed that the Third Department misconstrued RPTL 487 (8) (a) in holding that a local law opting out of the RPTL 487 (2) exemption must be filed with both DOTF and NYSERDA to be effective. Although the County admittedly did not learn of the existence of RPTL 497 (2) until after this appeal was filed, we conclude that the County preserved for our review its contention that its local opting-out law is effective even if not filed with NYSERDA.

Even assuming, arguendo, that the County's contention regarding the effect of RPTL 497 (2) is unpreserved and does not fit within the exception to the preservation rule recognized in Telaro v Telaro (25 NY2d 433, 439 [1969], rearg denied 26 NY2d 751 [1970]; see also Sabine v State of New York, 43 NY3d 1015, 1018 [2024]), we exercise our power to address the contention in the interest of justice (see Sabine, 43 NY3d at 1017; Hecker v State of New York, 20 NY3d 1087, 1087 [2013], rearg denied 21 NY3d 987 [2013]; Bingham v New York City Tr. Auth., 99 NY2d 355, 359 [2003]). In doing so, we note that whether RPTL 497 (2) applies to this case is a strictly legal issue that has been fully briefed by both parties on appeal (see Edwards v Siegel, Kelleher & Kahn, 26 AD3d 789, 790 [4th Dept 2006]; see generally Oram v Capone, 206 AD2d 839, 840 [4th Dept 1994]). We also note that petitioner had no expectation when it built its solar energy system that it would receive a tax exemption under RPTL 487 (2), and petitioner did not seek an exemption until after the Third Department's decision in Laertes.

With respect to the merits, petitioner contends that, although RPTL 497 (2) was enacted before this proceeding was commenced, the County's local law opting out of the RPTL 487 (2) exemption was adopted in 1997 and there is no basis on which to apply RPTL 497 (2) retroactively to cure the County's failure to file the local law with NYSERDA. We disagree. To begin with, we note that, contrary to the holding in Laertes, which we do not find persuasive even without consideration of RPTL 497 (2), there was no defect to cure inasmuch as validity of the County's local law is not contingent on the filing of that law with NYSERDA. Thus, petitioner was not entitled to an exemption for its solar energy system even before the legislature enacted RPTL 497 (2). Moreover, RPTL 497 (2) does not represent a substantive change in the law, nor did it affect the substantive rights of any party; instead, the statute merely clarifies how an existing statute should be construed (see generally Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583-584 [1998]; Ruth v Elderwood at Amherst, 209 AD3d 1281, 1284-1285 [4th Dept 2022]). Most importantly, by stating in the statutory notes that the decision in Laertes “shall remain binding upon the parties thereto” (L 2021, ch 59, part W, § 10), the Legislature evinced an intent for RPTL 497 (2) to apply retroactively (see generally Ruth, 209 AD3d at 1285). If the Legislature intended for the statute to apply prospectively only, there would have been no need to create a carve-out for the Laertes parties.

Applied here, there can be no doubt that RPTL 497 (2) mandates reversal inasmuch as RPTL 487 (8) (a) does not “expressly provide that a local [opting-out] law or resolution ․ shall not take effect until a copy thereof is filed with the specified state agency or agencies” (RPTL 497 [2]). Because the County adopted a local law opting out of RPTL 487 (2) before petitioner constructed its solar energy system, petitioner is not entitled to a partial tax exemption under the statute, and the court thus erred in granting the amended petition insofar as it sought relief related to the County's assessment roll. We therefore reverse the judgment and dismiss the amended petition against the County. In light of our determination, we do not address the County's remaining contentions.

Entered: July 24, 2026

Ann Dillon Flynn

Clerk of the Court