Polseno Properties Management, LLC v. Brenda Keeble, in her capacity as Tax Assessor for the Town of Lincoln, Nos. 20

• Court: Supreme Court of Rhode Island
• Decided: February 21, 2023
• Docket: 21-299, 300
• Status: Published

Opinion

February 21, 2023

Supreme Court

Polseno Properties Management, : LLC

v. : No. 2021-299-Appeal. (PC 20-2506) Brenda Keeble, in her capacity as : Tax Assessor for the Town of Lincoln.

v. : No. 2021-300-Appeal. (PC 21-895) Brenda Keeble, in her capacity as : Tax Assessor for the Town of Lincoln.

NOTICE: This opinion is subject to formal revision before publication in the Rhode Island Reporter. Readers are requested to notify the Opinion Analyst, Supreme Court of Rhode Island, 250 Benefit Street, Providence, Rhode Island 02903, at Telephone (401) 222-3258 or Email opinionanalyst@courts.ri.gov, of any typographical or other formal errors in order that corrections may be made before the opinion is published. Supreme Court

v. : No. 2021-299-Appeal. (PC 20-2506) Brenda Keeble, in her capacity as : Tax Assessor for the Town of Lincoln.

v. : No. 2021-300-Appeal. (PC 21-895) Brenda Keeble, in her capacity as : Tax Assessor for the Town of Lincoln.

Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.

OPINION

Justice Robinson, for the Court. In these consolidated appeals, the

plaintiff, Polseno Properties Management, LLC, appeals from a Superior Court

judgment entered in favor of the defendant, Brenda Keeble, in her capacity as the

tax assessor for the Town of Lincoln.1 On appeal, the plaintiff contends that the

1 In both cases, Elaine Mondillo, in her official capacity as tax assessor for the Town of Lincoln, was the initial defendant. On March 8, 2021, the plaintiff moved to amend its complaint in PC 21-895 to reflect the fact that Brenda Keeble had

-1- tax assessor illegally increased the value of its property in light of the development

of a “solar array” (the solar energy development) on a portion of the plaintiff’s

property for tax years 2019 and 2020. The plaintiff also contends that the tax

assessor improperly created a new tax classification not recognized by

G.L. 1956 § 44-5-11.8(b).

These appeals came before the Supreme Court pursuant to an order directing

the parties to appear and show cause why the issues raised in these appeals should

not be summarily decided. After considering the parties’ written and oral

submissions and after reviewing the record, we conclude that cause has not been

shown and that these appeals may be decided without further briefing or argument.

For the reasons set forth in this opinion, we affirm the judgment of the Superior

Court.

I

Facts and Travel

These appeals involve the assessed valuations of property located at 600

George Washington Highway in Lincoln, Rhode Island, where plaintiff owns a

14.6-acre tract of land (the property). As of December 31, 2017, the assessed

become the new tax assessor for the Town of Lincoln. A copy of the amended complaint was attached to the motion to amend; however, the record indicates that the amended complaint was never filed and docketed.

-2- value of the property was $1,084,000 (the 2018 assessment). The property is

classified as being within a “ML 05 Manufacturing Limited” zoning district.

On June 28, 2018, plaintiff entered into a long-term lease with Green

Development, LLC, for the construction and operation of a solar energy

development on approximately ten acres of the property. Thereafter, the property

was “developed with a retail strip mall and a 3.0 megawatt (‘MW’) solar

development.” The solar project was completed on December 28, 2018; and, as of

December 31, 2018, the assessed value of the property was $1,382,000 (the 2019

assessment). That 2019 assessment showed that the assessed value of the

approximately ten acres upon which the solar energy development was located

increased from $7,500 per acre to $40,000 per acre. The 2019 assessment

contained a notation stating: “2018 Adjusted Land to 10 AC for Solar.” As of

December 31, 2019, the assessed value of the property was $1,269,400 (the 2020

assessment). The decrease in value from the 2019 assessment to the 2020

assessment was the result of a change in the valuation of a building (a retail strip

mall) located on the property.

The plaintiff appealed the 2019 tax assessed as of December 31, 2018 (the

2019 tax) to the Lincoln tax assessor, who denied plaintiff’s appeal. Thereafter,

plaintiff appealed to the tax review board, which also denied plaintiff’s appeal.

The plaintiff then filed a complaint in the Superior Court on March 19, 2020.

-3- As it had done with respect to the above-referenced 2019 tax, plaintiff

similarly appealed the 2020 tax assessed as of December 31, 2019 (the 2020 tax) to

the Lincoln tax assessor, who denied the appeal. After plaintiff’s appeal was also

denied by the tax review board, plaintiff filed a complaint in the Superior Court on

February 4, 2021. The parties filed an agreed statement of facts on March 12,

2021. An order was entered on March 22, 2021, consolidating the two cases.

A hearing was held in the Superior Court on August 16, 2021. The parties

and the hearing justice first engaged in a consideration of the procedural posture of

the case. Although there was a suggestion by the parties in their filings that the

proceeding was a trial, the hearing justice indicated that it was his view that what

was before him was more in the nature of cross-motions for summary judgment.

The parties, in agreement with each other, stated that they viewed this action as

one for declaratory judgment.

Turning to the merits of the case, the hearing justice determined that

§ 44-5-3, upon which plaintiff’s appeals were predicated, does not “express[] an

intent to exempt from taxation the land upon which [a] renewable energy system is

built.” (Emphasis added.) He proceeded to rule: (1) that the property should be

assessed by the assessor at its full and fair cash value; and (2) that, “[i]f the

assessor may value the land,” then it is relevant that a solar energy development

exists upon it. The hearing justice denied both plaintiff’s and defendant’s motions,

-4- reasoning that he was treating the matter before him as cross-motions for summary

judgment and that determining the full and fair cash value of the land would

require a factual determination. He additionally questioned whether he had the

jurisdiction to enter a declaratory judgment in a tax case, but he stated that he was

willing to give the parties an opportunity to confer with each other before he ruled

on that issue.

On August 24, 2021, defendant filed an assented-to motion for entry of final

judgment “on all counts” set forth in the two complaints. That motion indicated

that the parties had originally convened for a trial and that the court had ruled in

favor of defendant, determining that the taxes assessed by defendant were legal.

On September 24, 2021, judgment entered in favor of defendant, and plaintiff filed

timely notices of appeal on October 5, 2021.2

2 On October 7, 2022, after these cases were scheduled for oral argument, plaintiff filed a “motion for consideration of new law.” The motion indicated that the parties were unable to reach an agreement as to the new law’s specific relevance to the instant case. This Court granted plaintiff’s motion on October 13, 2022.

The new law in question deals with the tax treatment of real property upon which renewable energy resources are located. General Laws 1956 § 44-5-3(c)(6), as amended by P.L. 2022, ch. 268, § 1, now states that municipalities “may only assess a tax on the real property upon which a renewable energy resource is located pursuant to § 44-5-12(a)(5) and § 44-27-10.1(b), as applicable.”

Section 44-5-12(a)(5), as now amended, specifically provides that “[r]enewable energy resources shall only be taxed as tangible property under § 44-5-3(c) and the real property on which they are located shall not be

-5- II

Standard of Review

Questions of statutory interpretation are reviewed “in a de novo manner.”

Powers v. Warwick Public Schools, 204 A.3d 1078, 1082 (R.I. 2019). This Court

has indicated that, “when the language of a statute is clear and unambiguous, this

Court must interpret the statute literally and must give the words of the statute their

plain and ordinary meanings.” DeMarco v. Travelers Insurance Company, 26 A.3d

585, 616 (R.I. 2011) (quoting State v. DiCicco, 707 A.2d 251, 253 (R.I. 1998)). In

situations where “a statute is susceptible of more than one meaning, we employ our

well-established maxims of statutory construction in an effort to glean the intent of

the Legislature.” Olsen v. DeMayo, 210 A.3d 431, 435 (R.I. 2019) (quoting Town

reclassified, revalued, or reassessed due to the presence of renewable energy resources, excepting only reclassification of farmland as addressed in § 44-27-10.1.” Section 44-5-12(a)(5) goes on to state that “all assessments of real property with renewable energy resources thereon shall revert to the last assessed value immediately prior to the renewable developer’s purchasing, leasing * * * or otherwise acquiring any interest in the real property.” Lastly, the revised § 44-5-12(a)(5) states that “notwithstanding the above, but without any limitation on taxpayer rights under § 44-5-26, no municipality shall be liable or otherwise responsible for any rebates, refunds, or any other reimbursements for taxes previously collected for real property with renewable energy resources thereupon.”

Although the General Assembly has now prospectively addressed the tax status of renewable energy resources, the statutory interpretation issue now before us remains viable in the present consolidated cases. The new law became effective on July 2, 2022; it was to take effect upon passage, and it is to be applicable to property assessed on and after December 31, 2022. See P.L. 2022, ch. 268, § 3. For those reasons, the new law has no bearing on this case.

-6- of Warren v. Bristol Warren Regional School District, 159 A.3d 1029, 1039 (R.I.

2017)).

III

Analysis

On appeal, plaintiff contends that § 44-5-3(c) prohibits municipalities from

increasing the valuation of real property due to the presence of renewable energy

projects. The plaintiff asserts that the only tax permitted on solar projects is the

tangible property tax imposed in accordance with the rules and regulations

established by Rhode Island’s Office of Energy Resources. The plaintiff argues

that, except for that tax on tangibles, a solar energy development is tax-exempt and

that it should not be appraised. Consequently, plaintiff claims that the tax assessor

erroneously took into consideration tax-exempt property when assessing the value

of plaintiff’s real property.

The plaintiff further suggests that the hearing justice’s interpretation of

§ 44-5-3(c) “nullifies the legislature’s intent,” which plaintiff posits was to create

“consistent and foreseeable tax treatment” for renewable energy. Moreover,

plaintiff avers that the hearing justice “erred in holding that § 44-5-12 allows

municipalities to assess exempt renewable energy equipment as part of the value of

real property.” The plaintiff asserts that a municipality must determine “the full

-7- and fair cash value of real property separate and apart from the valuation of

tangible property.”

The defendant counters plaintiff’s argument with the contention that

plaintiff’s property, part of which is used for the generation of solar power, “must

be taxed at its full and fair cash value” in accordance with § 44-5-12. The

defendant further contends that the land upon which the solar energy development

is located is not subject to the limitation on taxation set forth in § 44-5-3(c)

because, in defendant’s view, land is not a renewable energy resource. The

defendant argues that plaintiff has assumed “without evidentiary support” that the

increase in valuation of its property was the result of “improper consideration of

tangible property as part of the real property valuation.”

Section 44-5-3(c) reads in relevant part as follows:

“Notwithstanding any exemption provided by this section, and except for the exemptions created by §§ 44-3-3(a)(22), 44-3-3(a)(48) and 44-3-3(a)(49), which exemptions shall remain intact, cities and towns may, by ordinance or resolution, tax any renewable energy resources, as defined in § 39-26-5, and associated equipment only pursuant to rules and regulations that will be established by the office of energy resources in consultation with the division of taxation after the rules are adopted, no later than November 30, 2016. The rules will provide consistent and foreseeable tax treatment of renewable energy to facilitate and promote installation of grid-connected generation of renewable energy and shall consider the following criteria in adopting appropriate and reasonable, tangible property tax rates for

-8- commercial renewable energy systems[.]” (Emphasis added.)3

The plaintiff’s argument focuses on the term “only” that appears in the statute,

suggesting that the General Assembly intended to prohibit municipalities from

increasing the assessment of real property upon which those solar energy elements

are located.

This Court has held that our duty is to “strictly construe statutory tax

exemptions in favor of the taxing authority.” Delta Airlines, Inc. v. Neary, 785

A.2d 1123, 1126 (R.I. 2001). We have noted that “the rule of strict construction is

not to be applied so as to defeat a clear legislative intent to grant a particular

exemption.” Preservation Society of Newport County v. Assessor of Taxes of City

of Newport, 104 R.I. 559, 565, 247 A.2d 430, 434 (1968). Nevertheless, “the party

claiming the tax exemption bears the burden of demonstrating that the statute

reveals such an intent.” Delta Airlines, Inc., 785 A.2d at 1126.

We agree with plaintiff’s contention that the General Assembly’s overall

objective in enacting § 44-5-3(c) is clearly stated within that section—that

objective being the “consistent and foreseeable tax treatment of renewable

3 The statute continues, listing the criteria referenced in the last sentence of the quoted portion of § 44-5-3(c). Section 44-5-3(c).

-9- energy[.]”4 Notwithstanding the General Assembly’s general desire to deal

creatively with renewable energy resources, it is undisputed that § 44-5-3(c) makes

absolutely no mention of real property.5 Prior to the 2022 amendment, the statute

without question speaks to tangible property taxes to which solar energy equipment

is subject, and it is utterly silent as to real property. Section 44-5-3(c) even states

that the rules “shall consider the * * * [specified] criteria in adopting appropriate

and reasonable, tangible property tax rates for commercial renewable energy

systems[.]” The unambiguous language of the statute clearly indicates that the

statute does not address the real property upon which a solar energy development

is located. We therefore see no error in including the presence of a solar energy

development as an element of value assessed to real property.

Furthermore, we are unpersuaded by plaintiff’s argument that, if renewable

energy resources and equipment are included in the value of real property, the

assessment will exceed the full and fair cash value of the property because, as

4 Section 44-5-3(c) is consistent with the General Assembly’s overall objective alluded to in the text. But it is the actual words of the statute that must be our focus—not the objective that motivated the enactment of those words. 5 We are mindful of the venerable principle of statutory interpretation that “statutory intent is to be found in the words of a statute, if they are free from ambiguity and express a reasonable meaning.” Little v. Conflict of Interest Commission, 121 R.I. 232, 237, 397 A.2d 884, 887 (1979); see also State v. Menard, 888 A.2d 57, 60 (R.I. 2005) (“The best evidence of [the General Assembly’s] intent can be found in the plain language used in the statute.”) (quoting Martone v. Johnston School Committee, 824 A.2d 426, 431 (R.I. 2003)).

- 10 - plaintiff contends, the solar energy development is a tax-exempt asset that can be

taxed only as a tangible asset. Moreover, we view plaintiff’s reliance on St. Clare

Home v. Donnelly, 117 R.I. 464, 368 A.2d 1214 (1977), in making this argument

as misplaced. The plaintiff, in citing St. Clare Home, argues that “[t]ax-exempt

property is not property capable of being appraised.” St. Clare Home, 117 R.I. at

468, 368 A.2d at 1217. It further contends that “[a]pplication of the tax levy to a

valuation which included tax-exempt property would necessarily result in a

malapportionment of taxes.” Id. The plaintiff further emphasizes that property

“not capable of being assessed should not be included on the list of property to be

valued by the assessor.” Id.

In St. Clare Home, the plaintiff operated “a home for the aged,” which was

scheduled to be sold at a tax sale. St. Clare Home, 117 R.I. at 465, 368 A.2d at

1215. The plaintiff in that case, seeking to enjoin the tax sale, claimed that the

property was tax-exempt. Id. The plaintiff, however, opted against “pursu[ing] the

remedy provided in § 44-5-26[,]” and the Superior Court dismissed the suit due to

noncompliance with the applicable statutes. Id. at 466, 368 A.2d at 1215-16. The

plaintiff argued on appeal that the three-month statute of limitations in § 44-5-27

did not apply because the property in question was tax-exempt. Id. at 466, 368

A.2d at 1216. This Court agreed. Id. We stated that “tax-exempt property is not

ratable property and that § 44-5-27 does not apply to limit the remedies of a

- 11 - taxpayer who possesses no ratable estate at all because the property is tax-exempt.”

Id.

The case at bar presents a factually distinguishable scenario from that at

issue in St. Clare Home. This is not a case in which tax-exempt property has been

taxed. The underlying real estate here is not tax-exempt, and plaintiff even

acknowledges the important point that the real property is taxable. It is therefore

reasonable for an assessor to consider the existence of a solar energy development

when assessing the fair market value of the underlying real property in accordance

with § 44-5-12. See Harvard Pilgrim Health Care of New England, Inc. v. Gelati,

865 A.2d 1028, 1035 (R.I. 2004) (stating that “[t]he assessor, in determining fair

market value, ‘is not bound by any particular formula, rule or method * * * to

ascertain the fair market value of real estate’” (quoting Ferland Corp. v. Bouchard,

626 A.2d 210, 215 (R.I. 1993))). Accordingly, in applying the statute’s plain and

unambiguous terms to the particular facts of this case, we are of the opinion that

plaintiff has failed to demonstrate that § 44-5-3(c) was designed to exclude a solar

energy development when assessing the real estate upon which it is located.

The plaintiff additionally argues that the tax assessor “effectively created a

new tax classification” for property upon which a solar energy development is

located, in direct contravention of § 44-5-11.8(b). The plaintiff maintains that the

tax assessor created a new property classification because the assessments after

- 12 - 2018 contained the notation that they had been adjusted due to the solar energy

development. The defendant contends that plaintiff does not cite any part of the

record in making this argument, relying only on evidence that is not in the record.

We consider the plaintiff’s argument in this regard to be unpersuasive. The

plaintiff points only to the defendant’s “new classification – ‘Solar A’” and to the

notation on the 2019 assessment (viz., “2018 Adjusted Land to 10 AC for Solar”)

to contend that the defendant created a new tax classification. Section

44-5-11.8(b) establishes the following four classes of property for tax classification

purposes: (1) residential real estate; (2) commercial and industrial real estate; (3)

ratable, tangible personal property; and (4) motor vehicle and trailers subject to

excise tax. The plaintiff has completely failed to convince us how the 2019

assessment notation somehow reflects the creation of a new tax classification. The

real estate was not being assessed as though it fell outside one of the four classes of

property delineated in § 44-5-11.8(b). The notation merely advises how the

assessment of the real property was adjusted—i.e., as a result of the solar energy

development located on the real property. For that reason and because the plaintiff

points to no other evidence in support of its claim, we deem the plaintiff’s

argument in this regard as unavailing.

- 13 - IV

Conclusion

For the reasons set forth in this opinion, we affirm the judgment of the

Superior Court. The record may be returned to that tribunal.

- 14 - STATE OF RHODE ISLAND SUPREME COURT – CLERK’S OFFICE Licht Judicial Complex 250 Benefit Street Providence, RI 02903

OPINION COVER SHEET

Polseno Properties Management, LLC v. Brenda Keeble, in her capacity as Tax Assessor for the Town of Lincoln. Title of Case Polseno Properties Management, LLC v. Brenda Keeble, in her capacity as Tax Assessor for the Town of Lincoln. No. 2021-299-Appeal. (PC 20-2506) Case Number No. 2021-300-Appeal. (PC 21-895)

Date Opinion Filed February 21, 2023

Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Justices Long, JJ.

Written By Associate Justice William P. Robinson III

Source of Appeal Providence County Superior Court

Judicial Officer from Lower Court Associate Justice Richard A. Licht

For Plaintiff:

Seth H. Handy, Esq. Attorney(s) on Appeal For Defendant:

Anthony DeSisto, Esq.

SU-CMS-02A (revised November 2022)