This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0769c.WMC
DATE: 2/9/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 769 Assessment of Renewable Energy Source Devices
SPONSOR(S): Ways & Means Committee, Energy, Communications & Cybersecurity Subcommittee,
Bankson
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Energy, Communications & Cybersecurity
Subcommittee
14 Y, 0 N, As CS Phelps Keating
2) Ways & Means Committee 22 Y, 1 N, As CS Berg Aldridge
3) Commerce Committee
SUMMARY ANALYSIS
The Florida Constitution authorizes local governments to impose ad valorem taxes on real property and
tangible personal property and to assess such property for tax purposes. The Florida Constitution also
authorizes the Legislature to implement limitations and exemptions to ad valorem taxes. Specifically, the
Constitution authorizes the Legislature to implement limitations and exemptions to ad valorem taxes for the
assessment of solar or renewable energy source devices in determining the assessed value of real property
and the taxable value of tangible personal property.
The Legislature has implemented this authority by prohibiting a property appraiser who is determining the
assessed value of real property from considering any increase in the just value of residential property
attributable to the installation of a renewable energy source device, or 80 percent of the just value of non-
residential property attributable to the installation of a renewable energy source device. Current law also
provides an ad valorem tax exemption of 80 percent of the assessed value of a renewable energy source
device that is considered tangible personal property.
The bill expands the ad valorem tax benefits for solar and renewable energy source devices to include
infrastructure and equipment used in the collection, transmission, storage, or usage of energy derived from
biogas for conversion into renewable natural gas. In order to qualify for the benefits, the equipment must
convert biogas into renewable natural gas suitable for pipeline injection.
The bill does not appear to impact state government revenues or state or local government expenditures. The
Revenue Estimating Conference estimated that the bill will have a recurring impact on local government
revenues of -$1.3 million in fiscal year 2024-25 (-$0.5 million school taxes; -$0.8 million non-school taxes).
The bill takes effect upon becoming law.
STORAGE NAME: h0769c.WMC PAGE: 2
DATE: 2/9/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
The Florida Constitution authorizes local governments to impose ad valorem taxes on real property and
tangible personal property
1
and to assess such property for tax purposes.
2
The ad valorem tax is an
annual tax levied by counties, cities, school districts, and some special districts based on the value of
real and tangible personal property as of January 1 of each year.
3
The Florida Constitution requires that
all property be assessed at just value for ad valorem tax purposes.
4
Under Florida law, “just valuation”
is synonymous with “fair market value,” and is defined as what a willing buyer would pay a willing seller
for property in an arm’s length transaction.
5
The Florida Constitution also provides for specified assessment limitations, property classifications, and
exemptions for ad valorem taxes.
6
Among the limitations and exemptions is authorization for the
Legislature to:
Prohibit a property appraiser from considering the installation of a solar or renewable energy
source device in determining the assessed value of real property for the purpose of ad valorem
taxation;
7
and
Exempt from ad valorem taxation the assessed value of such devices subject to tangible
personal property tax.
8
The Legislature has passed laws implementing this authority as discussed below.
9
Limitations on Assessment of Real Property
Current law prohibits a property appraiser who is determining the assessed value of real property from
considering any increase in the just value of residential property or 80 percent of the just value of non-
residential property attributable to the installation of a renewable energy source device.
10
This law
applies to a renewable energy source device installed on or after January 1, 2013, on new and existing
residential real property, and to a renewable energy source device installed on or after January 1,
2018, to all other real property.
11
The statute defines the term “renewable energy source device” to
mean any of the following equipment that collects, transmits, stores, or uses solar energy, wind energy,
or energy derived from geothermal deposits:
Solar energy collectors, photovoltaic modules, and inverters;
Storage tanks and other storage systems, excluding swimming pools used as storage tanks;
1
Fla. Const. art. VII, s.9.
2
Fla. Const. art. VII, s.4.
3
Section 192.001(12), F.S., defines “real property” as land, buildings, fixtures, and all other improvements to land. The
terms “land,” “real estate,” “realty,” and “real property” may be used interchangeably. Section 192.001(11)(d), F.S., defines
“tangible personal property” as all goods, chattels, and other articles of value (but does not include the vehicular items
enumerated in article VII, section 1(b) of the Florida Constitution and elsewhere defined) capable of manual possession
and whose chief value is intrinsic to the article itself.
4
Fla. Const. art. VII, s. 4.
5
S. 193.011, F.S. See also, Walter v. Shuler, 176 So. 2d 81, 85-86 (Fla. 1965).
6
Fla. Const. art. VII, ss. 3, 4, and 6.
7
Fla. Const. art. VII, s.4(i)2.
8
Fla. Const. art. VII, s.3(e)2.
9
See s. 193.624, F.S. (prohibiting the assessment of solar or renewable energy source device in determining the value of
real property); s. 196.182, F.S. (exempting eighty percent of the assessed value of a renewable energy source device that
is considered TPP).
10
S. 193.624(2), F.S.
11
S. 193.624(3), F.S. STORAGE NAME: h0769c.WMC PAGE: 3
DATE: 2/9/2024
Rockbeds;
Thermostats and other control devices;
Heat exchange devices;
Pumps and fans;
Roof ponds;
Freestanding thermal containers;
Pipes, ducts, refrigerant handling systems, and other equipment used to interconnect such
systems; however, such equipment does not include conventional backup systems of any
type;
Windmills and wind turbines;
Wind-driven generators;
Power conditioning and storage devices that use wind energy to generate electricity or
mechanical forms of energy; and
Pipes and other equipment used to transmit hot geothermal water to a dwelling or structure
from a geothermal deposit.
12
Partial Exemption of Tangible Personal Property
Tangible personal property (TPP) taxes apply to persons conducting business operations. Anyone who
owns TPP and has a proprietorship, partnership, corporation, who leases, lends, or rents property, or
who is a self-employed agent or contractor, must file a TPP return to the property appraiser by April 1
each year.
13
Each tangible personal property tax return is eligible for an exemption from ad valorem
taxation of up to $25,000 of assessed value.
14
A single return must be filed for each site in the county
where the owner of tangible personal property transacts business.
15
Current law provides an ad valorem tax exemption of 80 percent of the assessed value of a renewable
energy source device that is considered TPP, so long as the renewable energy source device
16
:
Is installed on real property on or after January 1, 2018;
Was installed before January 1, 2018, to supply a municipal electric utility located within a
consolidated government; or
Was installed after August 30, 2016, on municipal land as part of a project incorporating other
renewable energy source devices under common ownership on municipal land for the sole
purpose of supplying a municipal electric utility with specified megawatts of power.
Biogas and Renewable Natural Gas
Renewable Natural Gas (RNG) is biogas
17
that has been upgraded or refined for use in place of fossil
natural gas. Under Florida Law, RNG is defined in s. 366.91(f) F.S., as “anaerobically generated
biogas, landfill gas, or wastewater treatment gas refined to a methane content of 90 percent or greater
which may be used as a transportation fuel or for electric generation or is of a quality capable of being
injected into a natural gas pipeline.”
18
12
S. 193.624(1), F.S.
13
S. 193.062, F.S.; see also FLA. DEP’T OF REVENUE, Tangible Personal Property,
https://floridarevenue.com/property/Pages/Taxpayers_TangiblePersonalProperty.aspx (last visited February 4, 2024).
14
S. 196.183(1), F.S.
15
S. 196.183(1), F.S.
16
S. 196.182(1), F.S.; However, s. 196.182(2), F.S., does not allow an exemption on a device installed in a fiscally
constrained county if there was an application for a comprehensive plan amendment or planned unit development zoning
filed with the county on or before December 31, 2017.
17
Section 366.91(2)(a), F.S. defines biogas as “a mixture of gases produced by the biological decomposition of organic
materials which is largely comprised of carbon dioxide, hydrocarbons, and methane gas.”
18
See also s. 212.08(5)(v)1., F.S. STORAGE NAME: h0769c.WMC PAGE: 4
DATE: 2/9/2024
Sources of biogas that are later refined to produce RNG include organic waste from food, agriculture,
wastewater treatment and landfills.
19
In order to complete the process of converting biogas into RNG,
facilities capture the biogas, “clean” it to pipeline standards, and then inject it into the pipeline for
customer use.
20
At least three facilities in Florida are converting biogas into RNG,
21
with more in
development.
22
Effect of Proposed Changes
The bill expands the ad valorem tax benefits for renewable energy source devices to include facilities
used to capture and convert biogas to RNG. Specifically, it expands the definition of “renewable energy
source device” used by both ss. 193.624 and 196.182, F.S., to include equipment that collects,
transmits, stores or uses energy derived from biogas, as defined in s. 366.91, F.S. Under the bill, such
equipment includes pipes, equipment, structural facilities, structural support, and any other machinery
integral to the interconnection, production, storage, compression, transportation, processing, and
conversion of biogas from landfill waste, livestock farm waste, including manure, food waste, or treated
wastewater into renewable natural gas as defined in s. 366.91, F.S.
The bill clarifies that equipment on the distribution or transmission side of the point at which a
renewable energy source device is interconnected to a natural gas pipeline or distribution system is not
a renewable energy source device
The expanded benefits affect existing facilities that otherwise meet the timing requirements of current
law and facilities under construction, along with future facilities.
The bill takes effect upon becoming law.
B. SECTION DIRECTORY:
Section 1. Amends s. 193.624, F.S., relating to renewable energy source devices.
Section 2. Provides that the bill takes effect upon becoming law.
19
U.S. Environmental Protection Agency, An Overview of Renewable Natural Gas from Biogas, available at
https://www.epa.gov/sites/default/files/2020-07/documents/lmop_rng_document.pdf (last visited February 4, 2024).
20
Presentation on Florida’s Energy Future (Liquefied Natural Gas, Renewable Natural Gas, and Small Modular Reactors),
Tampa Electric Company (Dec. 6, 2023), slide 5, available at
https://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?PublicationType=Committees&CommitteeId=3226&S
ession=2024&DocumentType=Meeting+Packets&FileName=ecc+12 -6-23.pdf (last visited February 4, 2024).
21
Id. at slide 10, 12-16.
22
Nasdaq, Chesapeake Utilities Corporation to Develop its First RNG Facility in Florida (Feb. 21, 2023),
https://www.nasdaq.com/press-release/chesapeake-utilities-corporation-to-develop-its-first-rng-facility-in-florida-2023-02
(last visited February 4, 2024) (Chesapeake Utilities Corporation is installing a dairy manure renewable natural gas facility
in Madison County, Florida). STORAGE NAME: h0769c.WMC PAGE: 5
DATE: 2/9/2024
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimated that the bill will have a recurring impact on local
government revenues of -$1.3 million in fiscal year 2024-25 (-$0.5 million school taxes; -$0.8 million
non-school taxes).
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Lower ad valorem taxes for taxpayers who install RNG facilities may facilitate private capital investment
into developing RNG production.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Article VII, section 18, of the Florida Constitution, may
apply because this bill reduces local government authority to raise revenue by reducing ad valorem
tax bases compared to that which would exist under current law. An exemption may apply if the fiscal
impact is insignificant.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not require or authorize rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 19, 2024, the Energy, Communications & Cybersecurity Subcommittee adopted an
amendment and reported the bill favorably as a committee substitute. The amendment: STORAGE NAME: h0769c.WMC PAGE: 6
DATE: 2/9/2024
Specified that “structural facilities” used in the production, storage, compression, transportation,
processing, and conversion of biogas into renewable natural gas are considered a renewable energy
source device.
Clarified that livestock farm waste used to produce biogas includes manure.
Clarified that equipment on the distribution or transmission side of the point at which a renewable
energy source device is interconnected to a natural gas pipeline or distribution system is not a
renewable energy source device.
On February 8, 2024, the Ways & Means Committee adopted an amendment and reported the bill
favorably as a committee substitute. The amendment:
Specified that the terms “biogas” and “renewable natural gas” as used in the bill align with existing
statutory definitions in s. 366.91, F.S.
Made wording changes for clarity.
This analysis is drafted to the committee substitute as passed by the Ways & Means Committee.