The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Environment and Natural Resources
BILL: SB 650
INTRODUCER: Senator Rodriguez
SUBJECT: Alternative Fuel Fleet Vehicle Rebates
DATE: January 9, 2023
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Barriero Rogers EN Favorable
2. AEG
3. FP
I. Summary:
SB 650 expands the state’s rebate program for natural gas powered fleet vehicles to also include
rebates for hybrid and electric fleet vehicles placed into service on or after July 1, 2024. The bill
requires the Department of Agriculture and Consumer Services (DACS) to update its rules by
December 31, 2024, to provide for the changes required under this bill. The bill also provides
that by October 1, 2026, and each year thereafter that the program is funded, DACS must
provide an annual assessment of the use of the rebate program during the previous fiscal year to
the Governor and Legislature.
II. Present Situation:
Florida’s Natural Gas Fuel Fleet Vehicle Rebate Program
In 2013, the Legislature created the natural gas fuel fleet vehicle rebate program within the
Department of Agriculture and Consumer Services (DACS) to help reduce transportation costs
and encourage freight mobility investments that contribute to the economic growth of the state.
1
The program provides a rebate of up to 50 percent of the eligible costs of a natural gas fuel fleet
vehicle
2
with a dedicated or bi-fuel natural gas fuel operating system placed into service
3
on or
after July 1, 2013.
4
“Natural gas fuel” includes any liquefied petroleum gas product, compressed
natural gas product, or combination thereof used in a motor vehicle.
5
It includes, but is not
1
Ch. 2013-198, s. 17, Laws of Fla.; section 377.810(1), F.S.
2
“Fleet vehicles” means three or more motor vehicles registered in this state and used for commercial business or
governmental purposes. Section 377.810(2)(d), F.S.
3
“Placed into service” means the date a vehicle is purchased, leased, or converted. Fla. Admin. Code R. 5O-4.001(2)(a).
4
Section 377.810(3), F.S.
5
Section 377.810(2)(f), F.S. “Motor vehicle” means any vehicle, machine, or mechanical contrivance which is propelled by
any form of engine or motor which utilizes motor or diesel fuel and is required, or would be required, to be licensed if owned
by a resident. Section 206.01(23), F.S.
REVISED: BILL: SB 650 Page 2
limited to, all forms of fuel commonly or commercially known or sold as natural gasoline,
butane gas, propane gas, or any other form of liquefied petroleum gas, compressed natural gas,
or liquefied natural gas.
6
The term does not include natural gas or liquefied petroleum placed in a
separate tank of a motor vehicle for cooking, heating, water heating, or electric generation.
7
Eligible costs under the program include conversion
8
or other incremental costs
9
related to the
conversion, purchase, or lease
10
of a natural gas fleet vehicle placed into service on or after July
1, 2013.
11
Costs for project development, fueling stations, or other fueling infrastructure are not
covered under the rebate program.
12
To be eligible for a rebate, fleet vehicles must comply with
applicable United States Environmental Protection Agency emission standards.
13
Of the funds available for these rebates, 40 percent is reserved for government applicants, with
the remaining funds allocated to commercial applicants.
14
DACS allocates rebates to eligible
applicants on a first-come, first-served basis.
15
Eligible applicants may receive a maximum
rebate of $25,000 per vehicle, up to a total of $250,000 per applicant per fiscal year.
16
However,
between June 1 and June 30 of each fiscal year, applicants who have reached the $250,000 per
year maximum may apply for additional funds for vehicles that have not received a rebate.
17
Each year the program is funded DACS must provide an annual assessment of the use of the
rebate program during the previous fiscal year to the Governor, Legislature, and the Office of
Program Policy Analysis and Government Accountability (OPPAGA).
18
The assessment must
include, at a minimum, the following information:
The name of each applicant awarded a rebate;
The amount of the rebates awarded to each applicant;
The type and description of each eligible vehicle for which each applicant applied for a
rebate; and
The aggregate amount of funding awarded for all applicants claiming rebates under the
program.
19
Pursuant to s. 377.810(8), F.S., OPPAGA published a report on the probate program in
November 2015.
20
OPPAGA found that in the program’s first two years, DACS awarded $9.1
6
Section 377.810(2)(f), F.S.
7
Section 377.810(2)(f), F.S.
8
“Conversion costs” means the excess cost associated with retrofitting a diesel or gasoline powered motor vehicle to a
natural gas fuel powered motor vehicle. Section 377.810(2)(a), F.S.
9
“Incremental costs” means the excess costs associated with the purchase or lease of a natural gas fuel motor vehicle as
compared to an equivalent diesel- or gasoline-powered motor vehicle. Section 377.810(2)(e), F.S.
10
Leases must be for at least five years. Section 877.810(2)(c), F.S.
11
Section 377.810(2)(c), F.S.
12
Id.
13
Section 377.810(3), F.S.
14
Id.
15
Id.
16
Id.
17
Id.
18
Section 377.810(7), F.S.
19
Id.
20
OPPAGA, Natural Gas Rebate Recipients Are Satisfied; Improved Economic Benefits Data Is Needed, (2015), available at
https://www.oppaga.fl.gov/Products/ReportDetail?rn=15-09. BILL: SB 650 Page 3
million in rebates for 790 vehicles.
21
Program applicants included both large and small
businesses and local governments.
22
Commercial applicants included national delivery services
(e.g., FedEx and United Parcel Service), and telecommunication and sanitation companies (e.g.,
AT&T and Waste Management), as well as smaller, local businesses.
23
Cities, counties, and
school districts typically obtained rebates for purchasing natural gas utility trucks, law
enforcement vehicles, and school buses.
24
Electric and Hybrid Vehicles
Electric vehicles (EVs) utilize batteries to store electrical energy, which is then used to power the
vehicle’s motor.
25
EV batteries are charged by plugging the vehicle into an electric power source.
Plug-in hybrid electric vehicles (PHEVs) are powered by an internal combustion engine that can
run on conventional or alternative fuels and an electric motor that uses energy stored in batteries.
The vehicle can be plugged into an electric power source to charge the batteries. EVs and
PHEVs also take advantage of regenerative braking to capture the energy that would otherwise
be lost during braking.
26
Hybrid electric vehicles combine a primary power source, an energy storage system, and an
electric motor to achieve a combination of emissions, fuel economy, and range benefits.
27
Hybrid
vehicles use less petroleum-based fuel and capture energy created during braking and idling.
This collected energy is used to propel the vehicle during normal drive cycles. The batteries
supply additional power for acceleration and hill climbing.
28
Transportation electrification has gained significant momentum in recent years.
29
Global EV
sales—including battery EVs and PHEVs—exceeded 10 million in 2022.
30
A total of 14 percent
of all new cars sold in 2022 were electric, up from approximately 9 percent in 2021 and less than
5 percent in 2020. EV sales in the United States, which is the third largest market following
China and Europe, increased by 55 percent in 2022.
31
U.S. EV sales vary substantially at the
state, regional, and local levels, as do government actions and support policies.
32
21
Id. at 2.
22
Id.
23
Id. at 3.
24
Id.
25
National Renewable Energy Laboratory (NREL), Electric and Plug-In Hybrid Electric Fleet Vehicles,
https://www.nrel.gov/transportation/fleettest-electric.html (last visited Jan. 4, 2024).
26
Id.
27
NREL, Hybrid Electric Fleet Vehicles, https://www.nrel.gov/transportation/fleettest-hybrid.html (last visited Jan. 4, 2024).
28
Id.
29
National Conference of State Legislatures (NCSL), State Policies Promoting Hybrid and Electric Vehicles,
https://www.ncsl.org/energy/state-policies-promoting-hybrid-and-electric-vehicles (last visited Jan. 4, 2024).
30
International Energy Agency, Global EV Outlook 2023, 8, 14 (2023), available at
https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf.
31
Id.
32
Peter Slowik and Nic Lutsey, White Paper: The Continued Transition to Electric Vehicles in U.S. Cities, 2 (2018),
available at https://theicct.org/wp-content/uploads/2021/06/Transition_EV_US_Cities_20180724.pdf. BILL: SB 650 Page 4
In an effort to reduce emissions and diversify fuel sources, many states are promoting the use of
alternative fuels such as electricity, natural gas, hydrogen, and biofuels.
33
Forty-five states and
the District of Columbia have implemented incentives to promote the adoption of EVs, including
PHEVs and battery EVs, either through a specific utility operating in the state or through state
legislation.
34
The incentives range from tax credits or rebates to fleet acquisition goals,
exemptions from emissions testing or utility time-of-use rate reductions.
35
In addition, in 2021,
the federal government issued an executive order providing that all federal fleet purchases must
be zero-emission by 2035.
36
III. Effect of Proposed Changes:
Section 1 amends s. 377.810, F.S., regarding the rebate program for natural gas fuel fleet
vehicles. The bill expands the program to include rebates for fleet vehicles powered by
alternative fuel. The bill defines “alternative fuel” to include hybrid and electric power sources,
as well as fuels covered under the current rebate program (i.e., liquefied petroleum gas products,
compressed natural gas products, or any combination thereof).
37
The bill defines “hybrid” as a
power source that draws propulsion energy from onboard sources of stored energy in the form of
an internal combustion or a heat engine using combustible fuel and a rechargeable energy-
storage system to power a motor vehicle. The bill defines “electric” as a power source that uses
electricity produced by rechargeable storage batteries to power a motor vehicle.
Currently, conversion costs covered under the rebate program only pertain to the conversion into
a natural gas powered motor vehicle.
38
The bill amends the definition of “conversion costs” to
include excess costs associated with retrofitting a diesel or gasoline powered motor vehicle to an
alternative fuel powered motor vehicle.
The bill provides that the rebate program applies to fleet vehicles with a dedicated alternative
fuel operating system placed into service on or after July 1, 2024.
The bill requires the Department of Agriculture and Consumer Services (DACS) to update its
rules by December 31, 2024, to provide for the changes required under this bill. The bill also
provides that by October 1, 2026, and each year thereafter that the program is funded, DACS
must provide an annual assessment of the use of the rebate program during the previous fiscal
year to the Governor and Legislature. Consistent with the current requirements, the assessment
must include, at a minimum, the following information:
The name of each applicant awarded a rebate;
The amount of the rebates awarded to each applicant;
33
NCSL, State Policies Promoting Hybrid and Electric Vehicles, https://www.ncsl.org/energy/state-policies-promoting-
hybrid-and-electric-vehicles (last visited Jan. 4, 2024).
34
Id.
35
Id.
36
Office of the White House, Executive Order on Catalyzing Clean Energy Industries and Jobs Through Federal
Sustainability, s. 102(a)(ii), available at https://www.whitehouse.gov/briefing-room/presidential-
actions/2021/12/08/executive-order-on-catalyzing-clean-energy-industries-and-jobs-through-federal-sustainability/.
37
See section 377.810(2)(f) and (3), F.S.
38
Section 377.810(2)(a), F.S. BILL: SB 650 Page 5
The type and description of each eligible vehicle for which each applicant applied for a
rebate; and
The aggregate amount of funding awarded for all applicants claiming rebates under the
program.
39
The bill also removes an obsolete provision of s. 377.810, F.S., which required the Office of
Program Policy Analysis and Government Accountability to provide a report on the rebate
program by January 31, 2016.
Section 2 provides an effective date of July 1, 2024.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
None.
C. Government Sector Impact:
The bill is likely to have a negative fiscal impact on the state. The expansion of the rebate
program to include electric and hybrid vehicles is likely to increase rebate applications.
The Department of Agriculture and Consumers Services may incur costs to implement
the expanded fleet vehicle rebate program and update its rules.
39
See section 377.810(7), F.S. BILL: SB 650 Page 6
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends s. 377.810 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.