Florida offers tax incentives, repeals ethanol blending mandate

By Holly Jessen | April 18, 2012

An energy bill that contains tax incentives for biofuels recently passed the desk of Florida Gov. Rick Scott—although he warned it could be repealed if there isn't sufficient return to taxpayers. “While I support many of the provisions of [the bill,] I am concerned whether the taxpayers of Florida will receive a return on the targeted tax credits in the bill,” he said. “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, [it] will become law without my signature.”

The law also opens it up for retailers to sell or offer to sell gasoline that doesn’t contain ethanol, or E10, which the state’s renewable fuel standard had required. A list of retail fuel stations that sell straight gasoline will be compiled and provided online to inform consumers of options for purchasing unblended gasoline. Florida’s RFS previously dictated “the appropriate level of investment in renewable energy without the influence of the free market,” Scott said.

The bill, which will take effect July 1, 2012, also contains measures to promote conservation and efficiency as well as renewable electricity. The biofuels-related parts of the bill include:

* A sales tax exemption for biofuels distribution equipment, including ethanol, biodiesel and other renewable fuels. It is capped at $1 million per fiscal tax year.

* An investment tax credit against the corporate income tax for renewable energy technologies. It’s for investment in equipment that will be used in production, storage or distribution of renewable fuels. The definition of renewable fuels includes fuels other than ethanol, such as biobutanol. It is capped at $1 million per corporation and $10 million total in a fiscal year.

* A provision to permit algae as a feedstock for renewable fuels.

Putnam called it a smart, long-term energy policy. “Rooted in common sense, this bill was developed to expand energy production in Florida and create much-needed jobs for Floridians,” he said. “It garnered bipartisan support from an overwhelming 156 members of the Florida Legislature.”

Putnam’s office also released an independent economic analysis of the bill. “The combination of [the tax incentives in the bill] are projected to generate an annual average of $28.7 million in new tax revenue over the fiscal year 2012-’16 and support as many as 3,350 new jobs in all sectors of the Florida economy by 2017,” said John Urbanchuk, technical director of environmental economics of Cardno Entrix.