Florida Senate - 2008 PROPOSED COMMITTEE SUBSTITUTE

Bill No. SB 310

967804

575-04284A-08

Proposed Committee Substitute by the Committee on Agriculture

A bill to be entitled

An act relating to biomass energy production; amending s.

212.08, F.S.; revising the definition of "ethanol";

increasing the limit on the amount of taxes that are

exempt for the sale or use of materials used to distribute

biodiesel and ethanol; limiting the tax exemption to

certain end users; providing that such exemption is

limited to one purchase of an eligible item; amending s.

220.192, F.S.; providing for transfer of the renewable

energy technologies investment tax credit; providing

requirements for such transfer; requiring that the tax

credit be passed through to certain taxpayers; authorizing

the Department of Revenue to adopt rules regarding the

transfer and pass through of such tax credit; amending s.

220.193, F.S.; defining the term "sale" or "sold";

providing that the use of the renewable energy production

credit does not reduce the alternative minimum tax credit;

creating s. 570.956, F.S.; providing definitions;

continuing the Farm-to-Fuel Grants Program within the

Department of Agriculture and Consumer Services; providing

that matching grants be made available for certain

bioenergy projects; requiring the department to adopt

rules; providing certain factors for consideration in

awarding grants; requiring the department to consult with

certain agencies and persons; creating s. 570.958, F.S.;

creating the Biofuel Retail Sales Incentive Program;

providing a purpose; providing that the petroleum

consumption be reduced by certain percentages over a

specified period; providing definitions; providing an

incentive payment to certain retail dealers who sell

biofuel after a certain date; requiring the Department of

Agriculture and Consumer Services to develop an

application form to claim the incentive; requiring that

the application contain certain information; requiring the

department to determine the amount of the incentive;

requiring the department to prorate the amount of

incentives paid to an applicant under certain

circumstances; authorizing the department to adopt rules;

creating s. 570.959, F.S.; creating the Florida Biofuel

Production Incentive Program within the department;

providing a purpose; providing definitions; requiring

persons engaged in biofuel production to meet certain

requirements to receive an economic incentive; providing

the criteria for distributing the incentive, subject to

appropriation; requiring the department to prorate the

amount of incentives to an applicant under certain

circumstances; authorizing the department to adopt rules;

providing an effective date.

Be It Enacted by the Legislature of the State of Florida:

Section 1. Paragraph (ccc) of subsection (7) of section

212.08, Florida Statutes, is amended to read:

212.08 Sales, rental, use, consumption, distribution, and

storage tax; specified exemptions.--The sale at retail, the

rental, the use, the consumption, the distribution, and the

storage to be used or consumed in this state of the following are

hereby specifically exempt from the tax imposed by this chapter.

(7) MISCELLANEOUS EXEMPTIONS.--Exemptions provided to any

entity by this chapter do not inure to any transaction that is

otherwise taxable under this chapter when payment is made by a

representative or employee of the entity by any means, including,

but not limited to, cash, check, or credit card, even when that

representative or employee is subsequently reimbursed by the

entity. In addition, exemptions provided to any entity by this

subsection do not inure to any transaction that is otherwise

taxable under this chapter unless the entity has obtained a sales

tax exemption certificate from the department or the entity

obtains or provides other documentation as required by the

department. Eligible purchases or leases made with such a

certificate must be in strict compliance with this subsection and

departmental rules, and any person who makes an exempt purchase

with a certificate that is not in strict compliance with this

subsection and the rules is liable for and shall pay the tax. The

department may adopt rules to administer this subsection.

(ccc) Equipment, machinery, and other materials for

renewable energy technologies.--

1. As used in this paragraph, the term:

a. "Biodiesel" means the mono-alkyl esters of long-chain

fatty acids derived from plant or animal matter for use as a

source of energy and meeting the specifications for biodiesel and

biodiesel blends with petroleum products as adopted by the

Department of Agriculture and Consumer Services. Biodiesel may

refer to biodiesel blends designated BXX, where XX represents the

volume percentage of biodiesel fuel in the blend.

b. "Ethanol" means an nominally anhydrous denatured alcohol

produced by the conversion of carbohydrates fermentation of plant

sugars meeting the specifications for fuel ethanol and fuel

ethanol blends with petroleum products as adopted by the

Department of Agriculture and Consumer Services. Ethanol may

refer to fuel ethanol blends designated EXX, where XX represents

the volume percentage of fuel ethanol in the blend.

c. "Hydrogen fuel cells" means equipment using hydrogen or

a hydrogen-rich fuel in an electrochemical process to generate

energy, electricity, or the transfer of heat.

2. The sale or use of the following in the state is exempt

from the tax imposed by this chapter:

a. Hydrogen-powered vehicles, materials incorporated into

hydrogen-powered vehicles, and hydrogen-fueling stations, up to a

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limit of $2 million in tax each state fiscal year for all

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taxpayers.

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b. Commercial stationary hydrogen fuel cells, up to a limit

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of $1 million in tax each state fiscal year for all taxpayers.

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c. Materials used in the distribution of biodiesel (B10-

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B100) and ethanol (E10-E100), including fueling infrastructure,

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transportation, and storage, up to a limit of $2 million $1

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million in tax each state fiscal year for all taxpayers. Gasoline

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fueling station pump retrofits for ethanol (E10-E100)

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distribution qualify for the exemption provided in this sub-

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subparagraph.

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3. The Department of Environmental Protection shall provide

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to the department a list of items eligible for the exemption

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provided in this paragraph.

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4. The exemption provided in this paragraph is available

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only to the end user of the equipment, machinery, and other

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materials.

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5.a.4.a. The exemption provided in this paragraph shall be

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available to a purchaser only through a refund of previously paid

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taxes. Only one purchase of an eligible item is subject to

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refund. A purchaser who has received a refund on an eligible item

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shall notify any subsequent purchaser of the item that such item

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is no longer eligible for a refund of paid taxes. The purchaser

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shall provide the notice to the subsequent purchaser on the sales

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invoice or other proof of purchase.

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b. To be eligible to receive the exemption provided in this

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paragraph, a purchaser shall file an application with the

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Department of Environmental Protection. The application shall be

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developed by the Department of Environmental Protection, in

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consultation with the department, and shall require:

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(I) The name and address of the person claiming the refund.

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(II) A specific description of the purchase for which a

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refund is sought, including, when applicable, a serial number or

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other permanent identification number.

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(III) The sales invoice or other proof of purchase showing

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the amount of sales tax paid, the date of purchase, and the name

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and address of the sales tax dealer from whom the property was

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purchased.

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(IV) A sworn statement that the information provided is

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accurate and that the requirements of this paragraph have been

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met.

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c. Within 30 days after receipt of an application, the

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Department of Environmental Protection shall review the

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application and shall notify the applicant of any deficiencies.

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Upon receipt of a completed application, the Department of

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Environmental Protection shall evaluate the application for

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exemption and issue a written certification that the applicant is

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eligible for a refund or issue a written denial of such

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certification within 60 days after receipt of the application.

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The Department of Environmental Protection shall provide the

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department with a copy of each certification issued upon approval

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of an application.

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d. Each certified applicant shall be responsible for

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forwarding a certified copy of the application and copies of all

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required documentation to the department within 6 months after

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certification by the Department of Environmental Protection.

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e. The provisions of s. 212.095 do not apply to any refund

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application made pursuant to this paragraph. A refund approved

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pursuant to this paragraph shall be made within 30 days after

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formal approval by the department.

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f. The department may adopt all rules pursuant to ss.

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120.536(1) and 120.54 to administer this paragraph, including

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rules establishing forms and procedures for claiming this

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exemption.

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g. The Department of Environmental Protection shall be

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responsible for ensuring that the total amounts of the exemptions

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authorized do not exceed the limits as specified in subparagraph

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6.5. The Department of Environmental Protection shall

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determine and publish on a regular basis the amount of sales tax

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funds remaining in each fiscal year.

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7.6. This paragraph expires July 1, 2010.

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Section 2. Subsection (7) of section 220.192, Florida

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Statutes, is amended, present subsections (6) and (7) of that

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section are redesignated as subsections (7) and (8),

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respectively, and a new subsection (6) is added to that section,

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to read:

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220.192 Renewable energy technologies investment tax

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credit.--

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(6) TRANSFERABILITY OF CREDIT.--

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(a) Any corporation and any subsequent transferee who

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receives the tax credit may transfer such tax credit, in whole or

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in part, to any taxpayer by written agreement without

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transferring any ownership interest in the property generating

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the tax credit or any interest in the entity that owns the

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property. Transferees are entitled to apply the credit against

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the tax, which has the same effect as if the transferee had

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incurred the eligible costs.

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(b) To complete the transfer, the transferor shall send a

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written statement to the Department of Revenue as notice of the

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assignor's intent to transfer the tax credit to the assignee. The

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written statement must include the date the transfer is

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effective; the assignee's name, address, federal taxpayer

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identification number and tax period; and the amount of tax

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credit to be transferred. The Department of Revenue shall issue,

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upon receipt of such statement, a certificate to the assignee

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reflecting the tax credit amounts transferred. The assignee shall

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attach a copy of the certificate to each tax return in which the

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tax credit is used.

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treated as a corporation pursuant to this section but is not

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transferred by such entity to a taxpayer pursuant to this

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subsection, the tax credit must be passed through to a taxpayer

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designated as a partner, member, or owner, respectively, in a

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manner agreed to by such person, regardless of whether any

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portion of the federal energy tax credit relating to eligible

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costs is allocated to such person.

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(7)(6) RULES.--The Department of Revenue shall have the

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authority to adopt rules relating to:

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(a) The forms required to claim a tax credit under this

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section, the requirements and basis for establishing an

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entitlement to a credit, and the examination and audit procedures

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required to administer this section.

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(b) The implementation and administration of a transfer of

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a tax credit, including the forms, reporting requirements, and

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the specific procedures, guidelines, and requirements necessary

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to transfer the tax credit.

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of a tax credit to an owner, member, or partner, including the

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forms, reporting requirements, and the specific procedures,

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guidelines, and requirements necessary for the pass through of

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credit.

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Section 3. Paragraph (f) is added to subsection (2) of

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section 220.193, Florida Statutes, and paragraph (j) is added to

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subsection (3) of that section, to read:

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220.193 Florida renewable energy production credit.--

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(2) As used in this section, the term:

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(f) "Sale" or "sold" means the use of electricity by the

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producer of such electricity which decreases the amount of

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electricity that the producer would otherwise have to purchase.

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(3) An annual credit against the tax imposed by this

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section shall be allowed to a taxpayer, based on the taxpayer's

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production and sale of electricity from a new or expanded Florida

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renewable energy facility. For a new facility, the credit shall

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be based on the taxpayer's sale of the facility's entire

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electrical production. For an expanded facility, the credit shall

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be based on the increases in the facility's electrical production

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that are achieved after May 1, 2006.

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(j) A taxpayer's use of the credit granted pursuant to this

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section does not reduce the amount of any credit available to

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such taxpayer under s. 220.186.

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Section 4. Section 570.956, Florida Statutes, is created to

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read:

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570.956 Farm-to-Fuel Grants Program.--

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(1) As used in this section, the term:

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(a) "Bioenergy" means energy produced from organic matter

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which is available on a renewable or recurring basis, including

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crops and trees, agricultural food and feed crop residues, wood

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and wood wastes and residues, aquatic plants, grasses, animal

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wastes and residues, and other organic waste materials.

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(b) "Department" means the Department of Agriculture and

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Consumer Services.

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venture, private or public corporation, association, firm, public

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service company, or any other public or private entity.

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(2) The Farm-to-Fuel Grants Program is established within

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the department to provide matching grants for bioenergy projects.

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Such grants may be made for research, demonstration, or

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commercialization projects relating to the production of

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bioenergy or feedstocks used in bioenergy production.

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(a) Matching grants for bioenergy demonstration,

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commercialization, research, and development projects may be made

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to any of the following:

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1. Municipalities and county governments.

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2. Established for-profit companies licensed to do business

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in the state.

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3. Universities and colleges in the state.

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4. Utilities located and operating within the state.

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5. Not-for-profit organizations.

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6. Other qualified persons, as determined by the

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department.

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(b) The department may adopt rules to provide for

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allocation of grant funds by project type, application

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requirements, ranking of applications, and awarding of grants

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under this program.

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include, but are not limited to, the degree to which:

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1. The project produces bioenergy from Florida-grown crops

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or biomass.

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2. The project demonstrates efficient use of energy and

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material resources.

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3. Matching funds and in-kind contributions from an

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applicant are available.

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4. The project has a reasonable assurance of enhancing the

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value of agricultural products or will expand agribusiness in the

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state.

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5. Preliminary market and feasibility research has been

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conducted by the applicant or others and shows there is a

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reasonable assurance of a potential market.

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6. The project stimulates in-state capital investment and

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economic development in metropolitan and rural areas, including

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the creation of jobs and the future development of a commercial

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market for bioenergy.

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7. The project incorporates an innovative new technology or

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an innovative application of an existing technology.

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(d) In evaluating and awarding grants under this section,

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the department shall consult with and solicit input from the

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Department of Environmental Protection.

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(e) In determining the technical feasibility of grant

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applications, the department shall coordinate and actively

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consult with persons having expertise in renewable energy

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technologies.

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(f) In determining the economic feasibility of bioenergy

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grant applications, the department shall consult with the Office

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of Tourism, Trade, and Economic Development.

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Section 5. Section 570.958, Florida Statutes, is created to

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read:

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570.958 Biofuel Retail Sales Incentive Program.--

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(1) The purpose of this section is to encourage the retail

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sale of biofuels and replace petroleum consumption in the state

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by the following percentages over the specified periods:

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(a) Three percent from January 1, 2009, through December

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31, 2009.

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(b) Five percent from January 1, 2010, through December 31,

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2010.

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31, 2011.

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(d) Ten percent from January 1, 2012, through December 31,

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2012.

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(2) As used in this section, the term:

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(a) "Biodiesel" means the mono-alkyl esters of long-chain

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fatty acids derived from plant or animal matter for use as a

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source of energy and meeting the specifications for biodiesel and

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biodiesel blended with petroleum products adopted by the

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department.

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(b) "Biofuel" means E85 fuel ethanol, E10 motor fuel,

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biodiesel, and diesel blended fuel.

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10 percent or more biodiesel or renewable diesel fuel with the

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balance comprised of diesel fuel and meeting the specifications

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for diesel blends as adopted by the department.

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(d) "E85 fuel ethanol" means ethanol blended with gasoline

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and formulated with a nominal percentage of 85 percent ethanol by

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volume and meeting the applicable fuel quality specifications as

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adopted by the department.

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(e) "E10 motor fuel" means a motor fuel blend consisting of

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nominal percentages of 90 percent gasoline by volume and 10

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percent ethanol by volume and meeting the fuel quality

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specifications for gasoline as adopted by the department.

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(f) "Ethanol or fuel ethanol" means an anhydrous denatured

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alcohol produced by the conversion of carbohydrates and meeting

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the specifications for fuel ethanol as adopted by the department.

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(g) "Fuel dispenser" means a pump, meter, or similar device

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used to measure and deliver motor fuel or diesel fuel on a retail

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basis.

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(h) "Renewable diesel fuel" means a fuel that meets the

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registration requirements for fuels and fuel additives

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established by the Environmental Protection Agency in the Clean

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Air Act; is not a mono-alkyl ester; is intended for use in

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engines that are designed to run on conventional petroleum-

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derived diesel fuel; is derived from nonpetroleum renewable

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resources, including, but not limited to, vegetable oils, animal

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wastes, including fats and wastes materials from poultry and

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other animals, or municipal solid wastes, sludges, and oils

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derived from wastewater and the treatment of wastewater; and

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meets the specifications for diesel fuel as adopted by the

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department.

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(i) "Retail dealer" means a person who is engaged in the

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business of selling fuel at retail at posted retail prices.

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(j) "Retail motor fuel site" means a geographic location in

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this state where a retail dealer sells or offers for sale motor

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fuel, diesel fuel, or biofuel to the general public.

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(3)(a) Subject to specific appropriation, a retail dealer

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who sells biofuel through fuel dispensers at retail motor fuel

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sites is entitled to an incentive payment of:

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1. One cent for each gallon of E10 motor fuel sold through

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a fuel dispenser.

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2. Five cents for each gallon of E85 fuel ethanol sold

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through a fuel dispenser.

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3. One cent for each gallon of diesel blended fuel sold

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through a fuel dispenser.

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4. Three cents for each gallon of biodiesel sold through a

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fuel dispenser.

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(b) The incentive may be claimed for biofuel sold on or

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after January 1, 2009. Beginning in 2010, each applicant who

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claims an incentive under this section must first apply to the

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department by February 1 of each year for an allocation of the

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available incentive for the preceding calendar year. The

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department shall develop an application form. The application

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form shall, at a minimum, require a sworn affidavit from each

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retail dealer certifying:

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1. The name and principal address of the retail dealer.

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2. The address of the retail dealer's retail motor fuel

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sites from which it sold biofuels during the preceding calendar

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year.

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3. The total gallons of E10 ethanol sold through fuel

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dispensers.

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4. The total gallons of E85 ethanol sold through fuel

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dispensers.

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5. The total gallons of diesel blended fuel sold through

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fuel dispensers.

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6. The total gallons of biodiesel sold through fuel

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dispensers.

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7. Any other information the department considers is

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necessary to adequately ensure that the incentive allowed under

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this section is made only to qualified retail dealers in the

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state.

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incentive allowed under this section.

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(4) If the amount of incentives applied for each year

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exceeds the amount appropriated, the department shall pay to each

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applicant a prorated amount based on the gallonage of biofuel

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sold and dispensed by each applicant who is eligible for the

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incentive under this section.

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(5) The department may adopt rules pursuant to ss.

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120.536(1) and 120.54 to administer this section, including rules

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prescribing forms, the documentation needed to substantiate a

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claim for the incentive, and the specific procedures and

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guidelines for claiming the incentive.

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Section 6. Section 570.959, Florida Statutes, is created to

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read:

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570.959 Florida Biofuel Production Incentive Program.--

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(1) The purpose of this section is to provide economic

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incentives that encourage the development and expansion of

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facilities that produce biofuels in this state from crops,

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agricultural waste and residues, and other biomass produced in

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this state.

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(2) As used in this section, the term:

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(a) "Biodiesel" means the mono-alkyl esters of long-chain

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fatty acids derived from plant or animal matter for use as a

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source of energy and meeting the specifications for biodiesel and

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biodiesel blended with petroleum products as adopted by the

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department.

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(b) "Biofuel" means ethanol or biodiesel.

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denatured alcohol produced by the conversion of carbohydrates and

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meeting the specifications for fuel ethanol adopted by the

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department.

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(d) "Florida biofuel production" means production of

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biofuel in this state from crops, agricultural waste and

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residues, and other biomass produced in this state.

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(3) In order to be eligible for the incentive provided in

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this section, a person engaged in Florida biofuel production must

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have registered and have met the requirements in chapter 206.

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(4) An incentive, subject to appropriation, shall be paid

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to a producer based on Florida biofuel production as follows:

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(a) The incentive shall be 5 cents for each gallon of

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unblended Florida biofuel produced, exclusive of denaturant,

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during a given calendar year and sold to an unrelated blender of

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biofuel.

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(b) The incentive may be earned for production on or after

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January 1, 2009. Beginning in 2010, each producer who claims an

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incentive under this section must first apply to the department

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by February 1 of each year for an allocation of available

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incentives. The department shall develop an application form

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that, at a minimum, requires a sworn affidavit from each producer

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certifying the production that forms the basis of the application

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and certifying that all information in the application is true

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and correct.

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production is eligible for the incentive under this section.

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(d) If the amount of incentives applied for each year

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exceeds the amount appropriated, the department shall pay to each

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applicant a prorated amount based on the percentage of biofuel

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produced that is eligible for the incentive under this section.

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(5) The department may adopt rules pursuant to ss.

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120.536(1) and 120.54 to administer this section, including rules

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prescribing forms, the documentation needed to substantiate a

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claim for the incentive, and the specific procedures and

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guidelines for claiming the incentive.

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Section 7. This act shall take effect July 1, 2008.