New York’s Real Property Tax Law (“RPTL”) § 487 provides a tax exemption for qualifying renewable energy systems, including wind and solar projects. Taxing jurisdictions that have not opted out of the exemption can require a payment-in-lieu-of-taxes (“PILOT”) agreement, but must respond to a developer’s notice. A recent appellate court case reviewed the obligations of project developers, owners, and taxing jurisdictions, holding that a developer had properly given notice to a school district.
Under RPTL § 487(9)(a), written notice must be sent to the highest-ranking official of the taxing jurisdiction (the applicable city, town, village, county, and school district) where the project will be built. This written notice must also include language that explicitly references RPTL § 487(9) and states that the project is not obligated to enter into a PILOT agreement unless the taxing jurisdiction responds to the notice within 60 days.
Suppose a developer sends the required written notice to the superintendent of the correct school district, but inadvertently addresses it to the wrong name. Does that notice still comply with the RPTL § 487? The Fourth Department recently determined that it does in Union Springs Cent. School Dist. v. Norbut Solar Farms, LLC, 2025 NY Slip Op 03443 (4th Dep’t June 6, 2025). A solar energy developer, Norbut Solar, built four solar farms located within the Union Springs Central School District (“USCSD”). Norbut Solar delivered a notice of its intent to construct the solar farms to USCSD via certified mail, addressed to “Superintendent Dennis” at USCSD’s administrative offices, including the language required by RPTL § 487(9)(a). However, the actual superintendent’s last name was “Powers.” A mailroom clerk at USCSD received the letter, but it was never delivered to Superintendent Powers. More than three months later, and beyond the 60-day response period, USCSD’s attorney notified Norbut Solar of USCSD’s intent to require a PILOT agreement.
The dispute hinged on the letter addressed to the superintendent’s incorrect surname. USCSD argued that strict compliance with RPTL § 487 is required for adequate notice, so the mistake rendered the notice defective. Norbut Solar argued that a “fair notice” standard is consistent with achieving the statute’s purpose. The trial court agreed with Norbut Solar, holding that the notice, despite containing an incorrect surname, was sufficient in this situation. On appeal, the Fourth Department agreed.
In its holding, the Court reasoned that although a tax exemption statute like RPTL § 487 “is to be construed strictly against the taxpayer, the interpretation should not be so narrow and literal as to defeat its settled purpose.” The Court seemingly accepted Norbut Solar’s common-sense argument that, given the fact that USCSD only has one superintendent, the incorrect surname did not prevent identification of the district’s highest ranking official or invalidate the notice provided to him. Furthermore, this factual inaccuracy was not fatal to the statutory notice requirement, because the inaccuracy “did not involve information required" under the statute.
Hodgson Russ Insights. Identifying the highest-ranking official in a particular tax jurisdiction can sometimes be challenging, as elections and board turnover can complicate who is the current highest-ranking official, and websites may contain outdated information. While an internet search revealed USCSD’s actual superintendent, the Court ultimately did not penalize Norbut Solar for its technical oversight. The purpose of RPTL § 487(9)(a), as amended, is to ensure taxing jurisdictions receive adequate notice to exercise their option to require a PILOT agreement. Since there was no dispute that the notice was indeed sent to and received by the USCSD and included the highest-ranking official’s title, the Court held that this constituted substantial compliance with the statute and was legally sufficient. The holding suggests courts are inclined to be lenient when confronted with minor factual inaccuracies concerning a notice of this nature. But this assumes the notice is sent to the right jurisdiction. While the wrong surname may not be fatal, sending a notice to the wrong jurisdiction may well be, and the courts may not be so forgiving in that situation. Project developers and owners should exercise caution when reviewing notice letters to ensure the statutorily required information is accurate.
If you have any questions about the application of tax exemptions for renewable energy projects, or the requirements under RPTL § 487, or about renewable energy projects generally, please contact Daniel Spitzer (716.848.1420), Amy D’Ambrogio (585.613.3955), Henry Zomerfeld (716.848.1370), or a member of the Hodgson Russ Renewable Energy Practice.
Hodgson Russ Law Clerk Aidan Barczak contributed to this client alert.
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