Mandatory ABP Recalculation for Post–Taxable Status Demolition in Special Assessing Units: National Grid Generation, LLC v. Nassau County

Introduction

This appellate decision from the New York Appellate Division, Second Department, addresses how Nassau County must calculate class-wide property tax shares when a major utility facility is decommissioned and demolished after the taxable status date. The plaintiffs—National Grid Generation, LLC (owner of the Glenwood Power Plant) and KeySpan Gas East Corporation (a natural gas utility)—claimed that Nassau County and its assessment authorities miscalculated the adjusted base proportion (ABP) for class three utility properties after the Glenwood Power Plant ceased operations in 2012 and was demolished between 2012 and 2015. The alleged errors, they contended, inflated class three property tax burdens from the 2014/2015 tax year onward.

The case turns on the interpretation and mandatory application of Real Property Tax Law (RPTL) article 18 in a “special assessing unit” (including Nassau County), particularly RPTL 1803-a(5)’s requirement that the legislative body “shall adjust” current base proportions to reflect certain physical or classification changes—including demolition—occurring after the taxable status date. The decision also rejects constitutional equal protection claims premised on miscalculation of class shares absent evidence of invidious discrimination.

Summary of the Judgment

The Appellate Division modified the trial court’s order and held that Nassau County failed to establish, as a matter of law, that it properly calculated ABPs and class three shares following the decommissioning/demolition of the Glenwood Power Plant. Accordingly, the court
- Denied the County’s motion for summary judgment dismissing the first, third, fourth, and fifth causes of action, and
- Granted plaintiffs’ motion for summary judgment solely to the extent of declaring that the County’s tax calculation for the 2016/2017 tax year failed to accurately reflect the demolition.
The court affirmed dismissal of the second cause of action (Equal Protection under the U.S. and New York Constitutions), finding the statutory framework rational and the alleged miscalculations not tantamount to invidious discrimination.
The matter was remitted for entry of a judgment with appropriate declarations consistent with the appellate ruling.

Statutory Background and Key Concepts

Nassau County is a “special assessing unit” under RPTL article 18. In such units, property is classified into four classes:

Class one: one-, two-, and three-family residential
Class two: all other residential
Class three: utility real property (the focus here)
Class four: all other property

The share of the total tax levy borne by each class is determined by statutory formulas and capped shifts (RPTL 1803-a), while parcel-level assessment increases have separate caps (RPTL 1805). Two class-wide proportions are pivotal:

Current Base Proportion (CBP): a class’s share adjusted for market value changes.
Adjusted Base Proportion (ABP): the CBP adjusted to reflect physical additions/removals, improvements, or quantitative changes within a class, including demolition after the taxable status date (RPTL 1803[2]; 1803-a[5]).

The legislative body of a special assessing unit “shall adjust” CBPs to ABPs to reflect the full or partial removal of property from the roll due to “fire, demolition, destruction or new exemption,” or class re-designation occurring after the relevant taxable status date (RPTL 1803-a[5]). Those ABPs feed into class shares and the class tax rates ultimately billed to owners.

Analysis

Precedents Cited and Their Role

New York Tel. Co. v Nassau County, 1 NY3d 485 (2004) and Matter of New York Tel. Co. v Nassau County, 267 AD2d 629 (2d Dept 1999): These cases describe Nassau County’s status as a special assessing unit and explain CBP/ABP mechanics. The Appellate Division relied on these to frame the legal obligation to adjust class shares via ABP when class-wide physical changes occur.
Tax Equity Now NY LLC v City of New York, 42 NY3d 1: Cited for the statewide framework of article 18, including class definitions, class-share caps, and parcel caps, and for equal protection principles (statutes enjoy a presumption of constitutionality; rational basis review applies absent suspect classifications or fundamental rights).
Foss v City of Rochester, 65 NY2d 247 (1985): Clarifies that equal protection requires uniform treatment of similarly situated taxpayers, not identical treatment across dissimilar classes; different tax treatment is permissible if rationally related to a legitimate purpose.
Matter of Long Is. Light. Co. v Assessor of Town of Brookhaven, 154 AD2d 188 (2d Dept 1990): Reinforces rational-basis review in tax classification challenges.
Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 (1985) and Zuckerman v City of New York, 49 NY2d 557 (1980): Set out summary judgment burdens—failure to make a prima facie showing mandates denial regardless of opposition; triable issues preclude judgment.
Lanza v Wagner, 11 NY2d 317 (1962): In a declaratory judgment action, courts must render a declaration of rights; the case guides the remand for entry of appropriate declarations.

Legal Reasoning

Statutory duty to adjust ABPs for post-status demolition. The court emphasized the mandatory language of RPTL 1803-a(5): the legislative body “shall adjust” CBPs to reflect the removal of property by demolition after the taxable status date. The demolition of the Glenwood Power Plant, a substantial class three facility, required an ABP adjustment so that class three’s share of the levy matched the reduced class base.
County’s failure to establish proper ABP computations. On the core, non-constitutional claims (first, third, fourth, and fifth causes of action), the County failed to demonstrate prima facie that it correctly calculated ABPs and class three shares from 2014/2015 forward. Critically, the County acknowledged a miscalculation for the 2016/2017 year—an admission that undercut its entitlement to summary judgment and, conversely, supported plaintiffs’ targeted request for declaratory relief for that year.
Targeted relief: 2016/2017 established; other years not proven by plaintiffs. While plaintiffs proved the 2016/2017 miscalculation, they did not make a prima facie showing of miscalculation for other tax years. The Appellate Division therefore granted summary judgment declaring a miscalculation for 2016/2017 only, and left the remaining years to be litigated or otherwise resolved, denying plaintiffs’ broader summary judgment request.
Equal Protection claim dismissed under rational-basis review. The court reaffirmed that article 18’s class-based taxation is designed to avoid abrupt tax shifts and is rational. A mistake in class-share computation—even if it results in higher bills—does not, without more, amount to invidious discrimination. As a result, the equal protection claim failed as a matter of law.
Procedural posture matters. Applying Winegrad and Zuckerman, the court refused to grant the County summary judgment where it failed to meet its initial burden, and refused to grant plaintiffs broader relief where they failed to meet theirs, illustrating orthodox summary judgment discipline in complex tax matters.

Impact

Administrative practice in special assessing units. The decision underscores a non-discretionary obligation: when demolition or other qualifying physical changes occur after the taxable status date, the legislative body must adjust ABPs before setting class shares and rates. Failure to do so is a legal error susceptible to declaratory relief.
Utility property and class three sensitivity. Because class three often involves large-value utility assets, the removal or decommissioning of a plant can materially shrink the class base. If ABPs are not promptly adjusted, remaining class three taxpayers can shoulder an inflated share of the levy. This case signals heightened judicial scrutiny of ABP compliance when major utility facilities are retired.
Litigation strategy and proof. Plaintiffs succeeded where their proof was concrete (2016/2017), but failed to obtain relief for other years without year-specific evidence. Future challenges will likely require detailed, year-by-year ABP computations, class equalization rates, and audit-grade support. Conversely, municipal defendants must be prepared to show their ABP arithmetic and the statutory inputs for each challenged year, not merely invoke statutory caps or broad assurances of compliance.
Constitutional claims are a high bar. The court reaffirms that misapplication or even acknowledged mistakes in tax computation do not alone establish an equal protection violation. Litigants should focus first on statutory compliance and declaratory/mandamus-type remedies rather than constitutional theories absent evidence of discriminatory intent or invidious treatment among similarly situated taxpayers.
Budgetary and refund implications. A judicial declaration of miscalculation can pave the way for re-computation of class shares and potential refunds or credits, with downstream effects on municipal budgeting. The remand for entry of declaratory judgment leaves open the specific remedial contours (e.g., refunds, prospective injunctive relief), but it plainly requires corrective action for 2016/2017 and preserves plaintiffs’ non-constitutional claims for other years.

Complex Concepts Simplified

Special assessing unit: A jurisdiction (like Nassau County) that uses a class-based system to apportion the total tax levy among four classes of real property with statutory caps and formulas.
Class three property: Utility real property (power plants, transmission equipment, and related utility assets).
Taxable status date: The snapshot date when property’s physical condition and ownership are measured for the assessment roll. Changes after this date typically would affect a future roll; however, article 18 requires class-wide ABP adjustments to reflect certain post-date changes to avoid distortions.
Current Base Proportion (CBP): Each class’s share of the levy adjusted for relative market value changes.
Adjusted Base Proportion (ABP): The CBP further adjusted to reflect additions/removals, improvements, or other quantitative changes within a class, including demolition after the taxable status date. ABP is what ultimately drives each class’s tax share and rate.
Class equalization rate (RPTL 1803-b): A factor applied to ensure comparability of assessments across classes and over time; feeds into the CBP/ABP calculations.
Summary judgment, prima facie showing: The moving party must initially show it is entitled to judgment as a matter of law with admissible proof; if it fails to do so, the motion must be denied regardless of the other side’s papers.
Equal Protection (rational basis): Tax classifications are constitutional if rationally related to legitimate governmental purposes; unequal outcomes from administrative error do not, without more, show invidious discrimination.

What the Decision Does—and Doesn’t—Decide

Decides: Nassau County’s 2016/2017 class three tax calculation failed to reflect the demolition of the Glenwood Power Plant; the County is not entitled to judgment dismissing non-constitutional claims regarding other years; the equal protection claim fails.
Doesn’t decide: Whether miscalculations occurred in years other than 2016/2017; the precise monetary or injunctive remedies to be awarded; any statute-of-limitations or other defenses not addressed in the opinion.

Practical Guidance

For assessors and legislative bodies:
- Institute a formal, documented ABP adjustment protocol specifically keyed to RPTL 1803-a(5) triggers (demolition, fire, destruction, new exemption, class changes) occurring after the taxable status date.
- Maintain year-by-year worksheets showing inputs: class equalization rates, CBP calculations, ABP adjustments, and resulting class shares/rates.
- Where a major class three asset is removed, verify that ABP adjustments precede rate-setting for the affected levy year.
For taxpayers (especially utilities):
- Assemble evidence of the timing and scope of physical changes (e.g., decommissioning/demolition records) relative to taxable status dates.
- Obtain and analyze the jurisdiction’s ABP workpapers, class equalization rates, and class-share computations for each challenged year.
- Calibrate claims to specific levy years, seeking declaratory relief where proof is strongest; reserve broader relief for trial if needed.
For litigators:
- Frame claims under article 18 first; constitutional claims will rarely succeed absent discriminatory intent or targeted treatment.
- Use admissions or concessions (as occurred here for 2016/2017) to secure partial summary judgment and create momentum for remediation.

Conclusion

National Grid Generation, LLC v. Nassau County clarifies and enforces a core feature of New York’s class-based property tax system in special assessing units: when significant physical changes—such as the demolition of a major utility facility—occur after the taxable status date, the legislative body must adjust ABPs to prevent distortions in class shares and tax rates. The Appellate Division’s declaration that Nassau County miscalculated the 2016/2017 class three share, coupled with its refusal to dismiss non-constitutional claims for other years, sends a clear message that compliance with RPTL 1803-a(5) is mandatory and reviewable.

Equally important, the court reaffirms that article 18’s class structure is constitutionally sound under rational-basis review and that computational errors, without evidence of invidious discrimination, do not amount to equal protection violations. The decision will likely prompt more rigorous administrative practices for ABP adjustments, more focused year-specific challenges by taxpayers, and careful judicial scrutiny when large, high-value class three assets leave the roll. Ultimately, it strengthens the integrity of the class-share regime by insisting that post-status physical changes be accurately and timely reflected in the tax calculus.