In community after community where industrial-scale "wind farms" have been proposed, mundane and sparsely-attended board meetings have been transformed into standing-room-only affairs. Residents and property owners are anxious to know whether rumored plans to construct twenty, fifty or even a hundred of the 400-foot tall wind turbines are "a done deal." Most significantly, the electorate wants to know the extent to which their town has the power to decide whether or not wind farms will dominate their rural landscape.
Town officials are often unable or unwilling to fully and accurately respond to the inquiries. This article will present a brief review of commonly asked legal questions in hopes of facilitating meaningful dialog between local officials and their constituents. Before addressing the substantive topics, however, a threshold question needs to be asked: Do any of the local decision-makers have a conflict of interest requiring recusal from discussions and votes on matters relating to wind farm development?
Conflicts of Interest
In a various towns throughout upstate New York, elected and appointed officials (or members of their families) have been or will be approached by wind farm developers and offered option agreements or long-term lease or easement agreements to place wind turbine facilities on their land. The payments offered in these contracts clearly create a situation where local officials have, or could potentially have, a direct or indirect pecuniary interest in decisions the town makes, or chooses not to make, regarding wind farm development.
New York courts have stressed how critical it is that the public be assured that their officials are free to exercise their best judgment without any hint or suggestion of self-interest or partiality, especially if a matter under consideration is particularly controversial. Failure of town officials to openly address potential conflicts of interest undermines the people's confidence in the legitimacy of the proceedings and the integrity of the municipal government. Decisions tainted by even the appearance of a conflict of interest are also vulnerable to reversal in a subsequent court challenge.
Can a town use its zoning laws to prohibit or significantly restrict large-scale wind farm development? Municipalities have broad latitude under New York law. If they choose, they can allow and even encourage wind farms, using "incentive zoning" or other planning tools. Or they can place significant restrictions on the location of wind farms, requiring substantial setbacks from "non-participating" property lines, or prohibiting the generation of off-premises noise above a specific decibel level.
Municipalities also have the power to exclude industrial-scale wind farms altogether. The prohibition against "exclusionary zoning", which the New York Court of Appeals used 30 years ago to prevent socioeconomic or racial discrimination in housing, has not been applied to industrial uses. Additionally, as representatives of New York's Department of State explained at a recent workshop, wind farms appear to lack the characteristics of "public utilities," and, therefore, appear ineligible for special treatment reserved for utilities under local zoning laws.
Two caveats deserve mentioning. First, any effort to enact or amend a town's zoning laws to address wind farm development must be consistent with the town's long-term goals and priorities as set forth in its "comprehensive plan." If a community's comprehensive plan is silent regarding wind farms, a town board should consider updating the plan, or assessing whether or not the goals expressed in it (such as preserving rural character and aesthetic resources, protecting residential property values, and attracting new businesses that are compatible with neighboring uses) are consistent with wind farm development.
Second, the State Department of Agriculture and Markets can be expected to oppose any effort to prohibit a farmer in a designated "agricultural district" from constructing a wind turbine on his or her property to generate electricity for use on that farm. For that reason, a town wishing to prohibit wind farms should distinguish between "commercial" windmills, which provide power primarily to a farm or single commercial enterprise, and "industrial" windmills or series of windmills generating electricity that is fed into a power grid for sale.
Can a town lawfully enact a moratorium AFTER it has received an application to approve a wind farm project? New York's courts have consistently upheld moratoria enacted after a municipality has received an application, as long as the town is not acting in "bad faith" and unduly delaying acting on the application. To be valid, moratoriums must be enacted for a legitimate purpose, such as to update a comprehensive plan or to study the need for zoning changes. They must also be "reasonable" in length. Courts have frequently upheld six-month moratoriums, even where they are subsequently extended an additional time to allow further study of an issue.
If a town is considering a moratorium, two points are worth noting. The same procedures utilized by a town when amending its zoning ordinance or law must be followed when enacting a moratorium. However, a town does not have to conduct an environmental review under SEQRA prior to approving a moratorium.
Are wind farms exempt from real property taxes? The substantial increase in value that would accompany installation of wind turbines on a piece of property is exempt from taxation for 15 years under the State's Real Property Tax Law. However, the statute also authorizes a county, city, town, village or school district to opt-out of the tax exemption and fully tax the wind farm development. Once again, two caveats deserve mentioning. The RPTL provisions concerning wind energy tax exemption are due to expire on December 31, 2005, so the status of that law must be checked. Also, if a local Industrial Development Agency is financing a wind farm project, IDA involvement provides a separate basis for property tax exemption, and often involves sales tax and mortgage tax relief.
Can a town put the question of wind farm development up for a vote by the electorate? No. New York State provides no statutory or constitutional authority allowing a referendum on wind farm development, zoning amendments or a municipality's comprehensive plan.