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Fla. energy bill becomes law, includes biofuel tax exemptions.
Biodiesel Magazine, April 17, 2012.
http://www.biodieselmagazine.com/articles/8438/fla-energy-bill-becomes-law-includes-biofuel-tax-exemptions


New energy legislation in the state of Florida became law April 14
despite Florida Gov. Rick Scott’s failure to sign the bill. The
legislation, HB 7117, contains several measures aimed to encourage the
development and expansion of the renewable energy sector within the
state, including biofuels production and distribution. The bill also
addresses policies and restrictions for growing certain strains of algae
and cyanobacteria.


The bill specifically addresses biodiesel, ethanol and renewable fuel,
which is defined as a fuel produced from biomass that is used to
displace fossil transportation fuels. Under the legislation, a sales tax
exemption is established for materials used in the distribution of
B10-B100, E10-E100 and other renewables. According to a copy of the bill
published by the state legislature, this includes fueling
infrastructure, transportation and storage materials. A limit of $1
million per year on a statewide basis is set on the tax exemption. The
state’s Department of Agriculture and Consumer Services is tasked with
ensuring the $1 million cap is not surpassed. Bill language also
specifies that approval of the tax exemptions will be made on a
first-come, first-serve basis, and that only complete applications will
be considered. The department is also directed to publish the amount of
sales tax funds remaining on its website on a regular basis. The tax
exemption is scheduled to expire on July 1, 2016.


The legislation also establishes an investment tax credit related to
biofuels production. Under the bill, the credit can apply to up to 75
percent of all capital costs, operation and maintenance costs, and
research and development costs that are incurred between July 1, 2012,
and June 30, 2016. The credit cannot exceed $1 million per fiscal year
for each taxpayer. A limit of $10 million is made per fiscal year for
all tax payers. The credit can be claimed for activities related to the
investment in production, storage and distribution of B10-B100, E10-E100
and other renewable fuel within the state. This includes costs related
to construction, installation and equipment.


In addition, the legislation included provisions related to the
cultivation of some algae species. Under the legislation, a personal may
not cultivate a nonnative plant, algae, or blue-green algae—including
genetically engineered plants, algae and blue-green algae—in plantings
greater in size than two contiguous acres, except under a special
permit. According to the text of the legislation, a permit is not
required to cultivate plants that, based on experience or research data,
do not pose the risk of becoming an invasive species. Plants commonly
grown in the state for the purpose of human food, commercial feed,
feedstock, or forage are not covered by the provision. Additional
exemptions could be made to the permitting requirements based on
consultations with the Institute of Food and Agricultural Sciences at
the University of Florida.

The bill also directs the Florida Department of Agriculture and Consumer
Services to conduct a comprehensive statewide forest inventory analysis
and study in order to identify where available biomass sources are
located, determine the availability of biomass resources, and ensure
forest sustainability. The results of the study are to be presented to
the state House of Representatives and governor by July 1, 2013.

In an letter issued to Florida Secretary of State Ken Detzner, Scott
addressed his reasoning for electing to allow the legislation to become
law under Article III of the Florida Constitution rather than signing it
into law.

“While I support many of the provisions of CS/CS/HB 7117, I am concerned
whether the taxpayers of Florida will receive a return on the targeted
tax credits in the bill,” Scott said in the letter. “In deference to the
support for those tax credits voiced by Florida Commissioner of
Agriculture Adam Putnam and the Legislators who have worked on this
legislation, CS/CS/HB 7117 will become law without my signature. I look
forward to reviewing the analysis of returns to the taxpayers as a
result of these tax credits. In considering this analysis, it is my goal
to ensure that any investment on behalf of Florida taxpayers in
renewable energy would afford them the kind of return they would expect
of their tax dollars. Absent clear documentation that the proposed tax
credits have produced a sufficient return or provided significant cost
savings for the state’s taxpayers, I will request their repeal.”


A full copy of the bill can be downloaded from the Florida House of
Representatives website:

http://www.myfloridahouse.gov/Sections/Bills/billsdetail.aspx?BillId=49043

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