Hi Robin. I stumbled on your post while doing an internet search, and I'm glad I did. This looks like a great board!
I think NY state law is supposed to accept owner-trainers of service-dogs-in-training. It's a little unclear because in one place they say the trainer has to be "qualified" and in another they say that a service dog in training is one that is being trained by the person with a disability or for the person with a disability.
I'm kind of a nut about service dog laws and collect them. I've dumped my law files on my own website for anyone to use. The section on NY laws is at
http://servicedogcentral.org/content/node/32
I suggest you write a letter to your county asking what is required for a dog to be considered a service-dog-in-training, and a similar letter to your state's Attorney General. On most of the states I've been able to include info on contacting that state's Attorney General, as well as any other SD related tidbits I found for that state.
I suggest doing it in writing so there is no question about what is being said and by whom should you choose to pursue this with a request for mediation from your state's Human Rights Commission.
Good luck!