Question of the Week
The 2008 Florida Legislature passed a comprehensive energy package addressing reduction of greenhouse gas emissions and the development of renewable energy sources in Florida. How will this new energy law affect my business practices in Florida?
Governor Crist is expected to sign into law one of the most progressive energy and climate change laws in the U.S. The bill (HB 7135) puts Florida and Florida's business community at the forefront of addressing the critical issues of renewable energy sources and reduction of greenhouse gases. The bill, slated to become law on July 1, 2008, establishes aggressive goals for implementing renewable energy sources at numerous levels within our economy. Below is a summary of the key aspects of the bill and how they may affect certain businesses:
The "Greening" of the Building Industry
The bill contains numerous requirements aimed at increasing the sustainability of development in Florida, affecting developers, contractors and businesses involved in the construction industry. For example, all new construction or renovation projects undertaken by the state, or financed by the state, will now meet one of the nationally recognized green building certifications, such as LEED certification by the U.S. Green Building Council. The law applies to new buildings constructed by counties, municipalities, school districts, universities the state court system or any water management district. As the popularity and demand for green building continues to skyrocket, the development community will be increasingly charged with understanding and applying these green principles in their construction projects.Affecting hotels and the tourism industry is the State's plan to formally adopt a "Green Lodging" program. The program will now add specificity to the standards a hotel must demonstrate in order to be designated as green. This effort will increase the marketability of having a green designation but will also increase the competitiveness to obtain such designations. The lodging industry should consider monitoring the State's rulemaking process to provide input to the state on the feasibility and impacts of the program.
Tax Breaks and Credits
The bill provides for a property tax exemption for real property if the owner installs a "renewable energy source" device. The exemption applies to any devices installed after January 1, 2009. The exemption amount includes the cost of the device including labor. Renewable energy devices can include devices using solar or wind energy. The bill also clarifies new opportunities for businesses to avail themselves of sales tax exemptions for purchasing renewable energy technologies such as biodiesel and ethanol, and more businesses will now be eligible to receive a tax credit for investing in or producing renewable energy.The Carbon Trading Market
The bill authorized the State to develop a "cap and trade" program for greenhouse gases (GHG). The development of such a program is cutting edge for Florida and the beginnings of a new market in carbon trading.While Florida's cap and trade program is currently directed to reducing GHG from electric utilities, all businesses that emit GHG should monitor the development of this program. Nationally, the federal government is discussing implementing a similar program to cover emissions from many sectors, and many states are currently researching and developing their own programs. With this law, Florida has entered a new era in its regulation of GHG. This legislation is just the beginning of a growing new market for carbon with significant marketability and business opportunities.
Undoubtedly, this law creates a strategy to secure Florida's green energy future and create new business opportunities and markets. Stay tuned next month for Part II of this question as we focus specifically on the new "Cap and Trade" Program.
For more information, please contact Luna Phillips.
