iThe 2012 Florida Legislative Session focused on the redistricting process and passage of the State budget. Despite these challenging priorities, the Legislature passed several bills addressing energy policy, environmental regulation and growth management which are intended to benefit businesses and industries in Florida. While formulation of a Florida energy policy has proven to be elusive, the Legislature succeeded this year in passing energy legislation as the first step toward establishing a State energy policy. Furthermore, the Legislature continued efforts to incorporate streamlining measures into various permitting programs to ease regulatory burdens faced by businesses and industry sectors struggling in Florida to rebound from the difficult economic times. Following the landmark Community Planning Act of 2011, the 2012 Legislature also passed a “glitch bill” addressing comprehensive planning and school coordination, as well as legislation to streamline the Development of Regional Impact (DRI) review process.
I. A ‘Modest’ State Energy Policy
Last year, the Legislature eliminated the Florida Energy and Climate Commission, and transferred its responsibilities from the Executive Office of the Governor to the Department of Agriculture and Consumer Services (DACS). After several years of attempting to build a consensus around a Florida energy bill, the 2012 Legislature adopted energy legislation which reestablishes millions of dollars in renewable energy tax credits and exemptions, and contains several provisions intended to remove regulatory barriers to promote future investments in Florida renewable energy projects. The Legislature adopted many but not all of the January 12, 2012, energy policy recommendations made by the Florida Agriculture Commissioner Adam Putnam.
HB 7117 – ‘The First Step’
Renewable Energy Tax Credits. HB 7117 reestablishes millions of dollars in renewable energy tax credits and exemptions. The renewable energy production credit is reinstated and modified for electricity produced and sold during a certain period. The total tax credit which may be granted for all the tax payers under the energy production credit is $5 million each year for 2012-2013 and $10 million dollars per year for 2013-2014 and 2016-2017 with a cap of $1 million per tax payer. This legislation also reinstates the biofuel portion of the renewable energy technologies investment tax credit for another four years and expands it to include materials used in the distribution of renewable fuels up to a limit of $10 million in taxes per year for all tax payers with a $1 million cap per tax payer. A renewable energy technologies sales and use tax exemption is reinstated in the form of a rebate of $1 million per year for all taxpayers for the sale or use of certain equipment, machinery, and other materials. This legislation also adds a provision allowing proceeds of the local government infrastructure surtax to be used to provide loans, grants, or rebates to property owners who make “energy efficiency improvements” to their residential or commercial property if a local government ordinance authorizing such use is approved by referendum.
Future Studies. The Public Service Commission (PSC) is directed to investigate three different energy policies and submit timely reports to the President of the Senate, the Speaker of the House, and the Executive Office of the Governor. DACS is directed to develop a statewide forest inventory to identify where available biomass is located and submit a report to the Florida Legislature and the Governor by July 1, 2013. The Department of Revenue (DOR) must study the utilization of the renewable energy sales and use tax exemption, renewable energy production credit, and the renewable energy technology investment tax credit and report the results by February 1 of each year to the Florida Legislature and the Governor.
Reducing Regulatory Barriers. HB 7117 also includes several provisions intended to remove regulatory barriers to future investments in renewable energy. Section 366.94, Florida Statutes, is created to clarify that electric vehicle charging stations are a service to the public and not the retail sale of electricity so that providing this service will not be subject to any regulatory fees that may be adopted by the PSC if they were to be considered electricity retailers. Reflecting the 2012 Legislature’s pro-business theme, this legislation streamlines the permitting process for biofuel feedstock crops and revises financial assurance requirements. The renewable fuel standard is expanded to include “alternative fuel,” as statutorily defined in the legislation and clarifies that retail dealers are not prohibited from selling or offering to sell unblended gasoline. In regard to rulemaking authority, DACS is authorized to adopt rules for sales at electric vehicle charging stations and the DOR is authorized to adopt rules for the tax exemption application process.
HB 4001 - Repeal of Florida Climate Protection Act
In 2008, the Legislature enacted HB 7135 authorizing Florida Department of Environmental Protection (FDEP) to adopt rules implementing a mandatory cap-and-trade regulatory program to reduce greenhouse gas emissions from electric utilities which would be required to be ratified by the Legislature. FDEP, which had been restricted on when it could commence the rule-making, subsequently elected not to move forward with that effort. Concurrently, efforts to establish a similar cap-and-trade system at the federal level proved to be unsuccessful. HB 4001 repeals the Florida Climate Protection Act as set forth in Section 403.44, Florida Statutes.
HB 7087 - Oil Severance Tax for Existing On-Shore Oil Fields
HB 7087, a budget conforming bill, expands coverage for an oil severance tax system which could stimulate further production of existing on-shore oil fields utilizing new recovery technology and play a role in Florida's ability to become more energy independent.
II. Environmental Permit Streamlining and Regulatory Reform Measures
Several bills passed this Legislative Session which further streamline environmental permitting programs and implement regulatory reform measures benefiting Florida businesses and industries. Included below are key components for some of these significant bills.
HB 503 - Permit Streamlining and Permit Extension Opportunity
Passage of HB 503, a comprehensive permit streamlining bill, has been a two-year journey. Similar legislation (HB 991) ultimately died last year as it was not considered by any of its assigned Senate committees. HB 503 contains many permit streamlining measures and also revives a permit extension opportunity for eligible permittees. Key aspects of HB 503 include:
- Reducing the amount of time, from 90 to 60 days, that the FDEP and Water Management Districts (WMDs) have to approve a permit upon the receipt of a complete application or last timely requested additional material.
- Restricting a state agency from requiring, as a condition of approval or an item of application completion, that the applicant obtain a permit or approval from any other local, state, or federal agency without explicit statutory authority to require such permit approval.
- Authorizing FDEP to obtain issuance from the U.S. Army Corps of Engineers (ACOE) of an expanded State Programmatic General Permit (SPGP) or series of regional general permits to further eliminate state-federal agency wetland/surface water permitting duplication for activities having only minimal adverse environmental effects separately and minimal adverse effects cumulatively.
- Authorizing both the FDEP and the WMDs to implement a voluntary SPGP for dredge and fill activities impacting 3 acres or less of wetlands or other surface waters subject to agreement with the ACOE. ?Requiring FDEP to grant a new general permit for the construction, alteration, and maintenance of stormwater management systems serving a total project area of up to 10 acres.
- Prohibiting local governments from requiring, as a condition of approval for a local development permit application filed after July 1, 2012, that the applicant must first obtain approved permits from any other state or federal agencies.
- Directing FDEP and the WMDs to expedite State permitting for intermodal logistics centers receiving or sending cargo to or from Florida Ports.
- Clarifying that a permittee eligible for an extension under Section 73 or Section 79 of Chapter 2011, Laws of Florida (Community Planning Act, HB 7207) or Section 24 of HB 503 is not required to make a payment to the authorizing agency and this nonpayment directive is to be applied retroactively and is effective as of June 2, 2011.
- Reviving a two-year permit extension for local government-issued development orders or building permits and permits issued by the FDEP or WMDs pursuant to Part IV of Chapter 373, Florida Statutes, that have expiration dates from January 1, 2012, through January 1, 2014, provided the permittee submits the requisite notice to the authorizing agency by December 31, 2012. This extension will benefit those permittees that failed to timely provide notice under the extension opportunity created by HB 7207 last year, however DRI development order extensions are further limited under HB 503's permit extension.
HB 7003 - Statewide Environmental Resource Permit (ERP) Rule Development
HB 7003 directs the FDEP in coordination with WMDs to adopt statewide ERP rules by October 1, 2012, in order to improve consistency amongst the FDEP and the WMDs in the statewide application of the ERP program. The statewide ERP rules must be based upon existing FDEP and WMD rules but allows for differences in the rules for geographical, physical or natural characteristics of individual WMDs. HB 7003 also provides that local governments can adopt or implement regulations that are stricter than the ERP rules adopted pursuant to this legislation. Local governments with delegated local pollution control programs must conform their ordinances within one year from the effective date of the adopted statewide ERP rules.
HB 691 - Coastal Construction Permit Streamlining
HB 691 streamlines the requirements and process for an applicant seeking a coastal construction permit from the FDEP. Under HB 691, FDEP is authorized to issue coastal construction permits in advance of the issuance of an incidental take authorization under the Endangered Species Act, and is directed to adopt rules to address mixing zone and antidegradation requirements in connection with beach management and inlet bypassing projects. FDEP is also required to provide statutory and rule authorities for specific items set forth in a FDEP Request For Additional Information and is prohibited from issuing guidelines and enforcing them as standards for beach management, inlet management, and other erosion control projects without adopting guidelines by rule. FDEP is further directed to amend its existing rules to streamline the joint coastal permitting process for beach nourishment and inlet management projects. In particular, joint coastal permits for these projects are to be allowed two maintenance dredging disposal events or a permit life of 15 years, whichever is greater. Local governments reliant on tourism-driven economies and property owners seeking FDEP approval for shore protection structures and activities, including beach restoration/renourishment projects, will benefit from adoption of HB 691.
HB 639 - Exemption of Reclaimed Water from WMD Consumptive Use Permitting
HB 639 amends existing law to include FDEP’s rule definition of “reclaimed water” and “reclaimed water distribution system.” Most importantly, HB 639 provides that reclaimed water is not subject to regulation under statutory authorities governing declaration of water shortage emergencies or FDEP/WMD consumptive use permitting requirements.
HB 7051 - Numeric Nutrient Criteria Rule
This legislation exempts FDEP’s proposed numeric nutrient criteria rules from the legislative ratification requirement, thereby breaking a procedural “deadlock” to allow proposed state water quality standards aimed at replacing federal regulations to move forward for consideration by the U.S. Environmental Protection Agency (EPA). HB 7051 addresses the dispute between Florida and the federal government over measuring the amount of nitrogen and phosphorous in our waters and the State’s effort to create its own rules on the issue. Prior to adoption of HB 7051, the Legislature had been precluded from approving the FDEP’s proposed numeric nutrient criteria rules because of a pending administrative rule challenge filed by environmental groups. This legislation directs FDEP to timely submit its proposed numeric nutrient criteria rules to the EPA for review under the federal Clean Water Act (CWA). In 2009, the EPA determined that Florida’s regulation of nitrogen and phosphorus (nutrients) pollution in state waters was insufficient to protect the water quality as required by the CWA. In 2010, the EPA imposed federal rules on lakes and springs throughout the State which are scheduled to take effect in March 2012 unless an extension is granted. However, the CWA allows for withdrawal of the EPA rules if Florida adopts its own rules imposing nutrient limits, and the EPA finds those rules consistent with the CWA. This legislation will allow FDEP to adopt the proposed final rules and will facilitate FDEP’s submittal of the rules to EPA. This bill was signed by the Governor on February 16, 2012, and has, therefore, become law.
HB 1263 - Repeal of Statewide Septic Tank Inspection Program
HB 1263, a Department of Health reorganization bill, was amended to include language from HB 999 which repeals a statewide septic tank inspection requirement passed by the Legislature in 2010 (SB 550). It also requires a local government with a first magnitude spring to develop and adopt by local ordinance a septic system evaluation and assessment program, unless the local government opts out. All other local governments may opt in. Existing septic system inspection programs are grandfathered in unless they contain a mandatory inspection at the point of sale in a real estate transaction.
HB 13 - Sovereignty Submerged Lands for Private Residential Docks and Piers
HB 13 extends the maximum initial term of a standard sovereignty submerged lands lease (Lease) from five years to 10 years for a private residential single-family dock or pier, private residential multifamily dock or pier, or private residential multislip dock. Leases for such structures may be renewed for successive terms of up to 10 years provided the lessee is in compliance with all Lease conditions. FDEP is required to inspect such structures once every 10 years. Private residential multifamily docks and piers and private residential multislip docks are exempt form having to pay Lease fees if it is demonstrated they otherwise meet the current Lease fee exemption criteria for single-family docks. A lessee whose upland property qualifies for a homestead exemption is not required to pay a Lease fee on revenue derived from the transfer of fee simple or beneficial ownership.
III. Growth Management
As summarized in the recent GT Alert “The Future of Growth Management in Florida,” the 2011 Community Planning Act substantially reformed the comprehensive planning process, focusing state review on important statewide issues and incentivizing preferred development through DRI exemptions for urban areas and certain types of development. The 2012 Legislature continued efforts to streamline various review processes and provide additional incentives for development. The following summary highlights the more significant aspects of these bills.
HB 7081 - Growth Management ‘Glitch Bill’
Military Base Coordination. Base commanders must limit “advisory” comments on local comprehensive plans/amendments to concerns regarding impacts on the mission of the base, public safety and economic considerations.
Rescinding Optional Concurrency. The Community Planning Act made transportation and school concurrency optional, but required local governments that elect not to implement optional concurrency to first amend the comprehensive plan to delete the applicable policies. This bill allows those local governments to utilize the expedited plan amendment review process, pursuant to Section 163.3184(3), Florida Statutes, to rescind optional concurrency provisions.
Clarifying Timeframes. The time periods required by Section 120.569, Florida Statutes, shall apply to the Administration Commission in issuing final orders and to the State Land Planning Agency in referring recommended orders to the Administration Commission. The State Land Planning Agency must also issue cumulative notices of intent for remedial comprehensive plans/amendments within 20 days of receiving the plans/amendments from the local government.
Population Projections. The Legislative Office of Economic and Demographic Research, rather than the Bureau of Economic and Business Research, shall be responsible for producing statewide population projections, which are utilized for many purposes in the planning process. In determining “minimum” land use needs pursuant to Section 163.3177(6)(a), Florida Statutes, local governments must ensure population projections allocate countywide population on a proportionate basis among cities and unincorporated areas, taking into account any physical limitations that exist within those jurisdictions. While this provision was intended to provide a more predicable process, we anticipate potential difficulties due to the technical language that was utilized. Greenberg Traurig has been actively involved in addressing population projection methodology issues due to the impact on land use plan amendments and will continue to monitor this process.
School Planning. In 2011, school concurrency was made optional. This year, the Legislature granted more discretion to local governments and school boards by eliminating state review of interlocal agreements and deleting detailed requirements regarding the content of interlocal agreements. Recognizing that certain municipalities have de-minimis impacts on schools, Section 163.31777, Florida Statutes, previously exempted those jurisdictions from the requirement to enter into interlocal agreements. This bill requires exempt municipalities to re-confirm eligibility for the exemption during the evaluation and appraisal review of the comprehensive plan, and enter into an interlocal agreement within one year following the adoption of a five-year district facilities work plan that proposes a new school within the municipality’s jurisdiction.
HB 979 - DRI Review Procedures/Agricultural Enclaves
DRI Exemption. As an incentive for targeted industry businesses, Section 380.06(24), Florida Statutes, has been amended to include an additional DRI exemption for projects located outside of a Dense Urban Land Area which undergo the State Coordinated Review amendment process for related comprehensive plan amendments and are “the subject of an agreement” pursuant to Section 288.106(5), Florida Statutes (tax credit agreement for Targeted Industry Businesses). The exemption becomes effective upon execution of an agreement between the landowner, Department of Economic Opportunity (DEO) and the local government, subject to DEO finding that the local government has “capacity” to adequately assess the impacts of the proposed development and provided that the governing body meets certain procedural requirements.
Non-Substantial Deviations. Section 380.06(19), Florida Statutes, defines procedural requirements for determining whether a proposed change to a DRI creates a substantial deviation, requiring a more extensive review process. Section 380.06(19)(e)2 provides a list of changes that are defined as non-substantial deviations and, therefore, do not require agency review prior to the local government scheduling a public hearing to approve the change. The bill expands this list to define as a “non-substantial deviation” proposed changes that “do not increase external peak hour trips and do not reduce open space and conserved acres within the project.” While this provision should prove beneficial, it may not supersede other provisions of the statute that define presumptive thresholds for substantial deviations or that define specific thresholds that trigger substantial deviations.
Rescinding DRI Development Orders. Section 380.115, Florida Statutes, previously allowed existing DRIs to seek a rescission if the project was no longer defined as a DRI due to changes in the DRI guidelines and thresholds. This bill further clarifies that existing DRIs which qualify as exempt based on Section 380.06(24), Florida Statutes, may also file a letter with the local government to rescind the development order. In filing for a rescission, developers may rely on existing permit conditions to satisfy remaining DRI mitigation requirements for existing development as of the date of the rescission.
Agricultural Enclaves. This bill also creates Section 163.3165, Florida Statutes, to establish alternative criteria (as an option to Sections 163.3162 and 163.3164) for the designation of agricultural enclaves in unincorporated areas, supported by a rebuttable presumption that a comprehensive plan amendment to convert an agricultural enclave to a surrounding urban land use is not urban sprawl. Such plan amendments must be approved, unless the County finds by clear and convincing evidence that the plan amendment will be detrimental to the public health, safety and welfare. In order to qualify, an owner must apply for re-designation as an agricultural enclave by January 1, 2014.
Next Steps
As of the date of this Alert, only HB 7051 had been signed by the Governor and become law. All other bills must be transmitted to the Governor for consideration. Upon receipt of a bill, the Governor has 15 days to veto the bill. If not vetoed, the bill will become law upon the Governor signing the bill or after 15 days if the Governor does not sign the bill.
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