Title: Excise Tax on Water Extracted for Commercial or Industrial Use

Summary: Creating part III of ch. 211, F.S., entitled "Tax on Water Extracted for Commercial or Industrial Use"; imposing an excise tax upon persons extracting water from waters of the state for commercial or industrial use, except under certain circumstances; requiring that tax proceeds be separately accounted for and be used for certain purposes by the Department of Environmental Protection; specifying requirements for extractors in filing monthly returns with the Department of Revenue; providing criminal penalties for certain violations, etc.

Full Text:
An act relating to an excise tax on water extracted for commercial or industrial use; revising the title of ch. 211, F.S.; creating part III of ch. 211, F.S., entitled  Tax on Water Extracted for Commercial or Industrial Use ; creating s. 211.40, F.S.; defining terms; creating s. 211.41, F.S.; imposing an excise tax upon persons extracting water from waters of the state for commercial or industrial use, except under certain circumstances; specifying the rate of the tax and the trust fund where tax proceeds are to be deposited; requiring that tax proceeds be separately accounted for and be used for certain purposes by the Department of Environmental Protection; creating s. 211.42, F.S.; specifying requirements for extractors in filing monthly returns with the Department of Revenue; authorizing the department to prescribe certain forms by rule; authorizing the department to grant extensions for filing and payment under certain circumstances; creating s. 211.43, F.S.; specifying interest payable on unpaid taxes; specifying the delinquency penalties for failure to timely file a return; specifying the penalty for the substantial underpayment of taxes; providing construction; authorizing the department to settle or compromise taxes in accordance with certain provisions; creating s. 211.44, F.S.; authorizing the department to adopt rules; requiring governmental entities to cooperate with the department and furnish information without cost to the department for certain purposes; specifying recordkeeping requirements for extractors; specifying the department s authority to inspect, examine, and audit extractor books and records, issue subpoenas, require testimony under oath or affirmation of certain persons, and apply for certain judicial orders; specifying requirements and procedures for the department in conducting audits, assessing deficiencies, and crediting or refunding overpayments; specifying procedures and requirements for claiming refunds; providing that amounts due remain a lien on certain property; specifying requirements and procedures for warrants and alias tax executions issued by the department; requiring that suits brought by the department for violations be brought in circuit court; creating s. 211.45, F.S.; providing criminal penalties for certain violations; amending s. 403.890, F.S.; conforming a provision to changes made by the act; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1.  Chapter 211, Florida Statutes, entitled  T ax on Production of Oil and Gas and Severance of Solid Minerals,  is retitled  Tax on Production of Oil and Gas, Severance of Solid Minerals, and Water Extracted for Commercial or Industrial Use.  Section 2.  The Division of Law Revision is directed to create part III of chapter 211, Florida Statutes, consisting of ss. 211.40-211.45, Florida Statutes, to be entitled  Tax on Water Extracted for Commercial or Industrial Use.  Section 3. Section 211.40, Florida Statutes, is created to read: 211.40  Definitions.  As used in this part, the term: (1)    Department  means the Department of Revenue. (2)    Extractor  means a person engaged in the business of extracting water from waters of the state for commercial or industrial use. For purposes of this part, commercial or industrial use does not include water extracted: (a)   For public water supply utilities; (b)   By an agricultural producer for the maintenance of land, crops, or livestock; or (c)   For use within any structure for restroom, sanitation, or kitchen facilities. (3)    Waters of the state  has the same meaning as the term  waters  as defined in s. 403.031(13). Section 4. Section 211.41, Florida Statutes, is created to read: 211.41  Excise tax; distribution and use of tax proceeds.  (1)   An excise tax is levied upon every person who acts as an extractor at a rate of 1/1000 of a cent ($0.001) per gallon of water extracted from waters of the state. (2)   The proceeds of the tax imposed by this section must be deposited in the Water Protection and Sustainability Program Trust Fund under s. 403.890 and must be accounted for separately within the fund. In addition to the purposes specified in s. 403.890(1)(a), (b), and (c), the tax proceeds must be used by the Department of Environmental Protection for geological surveys to monitor the health of waters of the state and for saltwater intrusion prevention and management. Section 5. Section 211.42, Florida Statutes, is created to read: 211.42  Returns; filing requirements.  (1)   Each extractor shall remit tax due and submit to the department a return on or before the 25th day of each month showing the total amount of water extracted from waters of the state during the previous month, the source and county of extraction, the location of all facilities from which taxable water was extracted, and other information required by department rule. The department shall prescribe by rule the form of the return. The return must be filed on or before the last day prescribed for payment of the tax and must be signed and verified under oath by the extractor or the extractor  s authorized representative. (a) The return must include a statement of the tax due under this part and such other information as the department may reasonably require. (b) A return must be filed even though no tax is due. Any tax, penalty, or interest due must be remitted with the return. ( ) If any due date prescribed by this section falls on a Saturday, Sunday, or state or federal holiday, the last date prescribed for filing or payment is the next day that is not a Saturday, Sunday, or holiday. The date of receipt by the department, or the postmark date if mailed, determine sthe timeliness of payment or filing. ( ) The department may grant an extension of time for payment or filing of a return upon written request submitted on or before the due date. Section 6. Section 211.43, Florida Statutes, is created to read: 211.43  Interest and penalties; failure to pay tax or file return.  (1) If any part of the tax imposed by this part is not paid on or before the due date, interest must be added to the amount due at the rate of percent per year from the due date until the date of payment. (2)  An extractor who fail sto file the return required under s. 211.42 by the due date shall pay a delinquency penalty. If tax is due with the return, the delinquency penalty is percent for each month, or portion thereof, of the amount of tax due with the return, not to exceed percent. If no tax is due with the return, the delinquency penalty is $50 for each month, or portion thereof, during which the return was not filed, not to exceed $300 in aggregate. The amount of tax due with a return must be reduced by amounts properly creditable against the tax liability shown on the return on the date the return was due. (3) A nextractor who makes a substantial underpayment of the tax due under this part shall pay a penalty of cents per gallon of water extracted for which tax was not paid.For purposes of this subsection, a substantial underpayment of tax is a deficiency of tax in an amount exceed ing percent of the total tax due for a month. ( ) Any penalty or interest imposed under this section is deemed assessed upon the assessment of the tax and must be collected and paid in the same manner as the tax. ( ) Any penalty imposed by this section may be settled or compromised by the department for reasonable cause in accordance with s. 213.21. The department may settle or compromise i nterest imposed by this section only as authorized by s. 213.21.Section 7. Section 211.44, Florida Statutes, is created to read: 211.44  Administration and enforcement; books and records; refunds.  ( 1) The department may adopt rules to administer this part, including prescrib ing the form and content of returns and reports.(2) All state, county, or municipal agencies, boards, bureaus, departments, or districts shall cooperate with the department and furnish any information the department deems necessary, without cost to the department, for the purposes of administering, collecting, or enforcing the tax imposed under this part. (3)(a) Each extractor shall keep suitable books and records relating to the extraction of taxable waters of the state to enable the department to determine the amount of tax due under this part. Such books and records must be preserved until the time within which the department may make an assessment with respect thereto has expired in accordance with s. 213.35. (b) The department may inspect or examine the books, records, or papers of any extractor which are reasonably required for the purposes of this part and may require the extractor to testify under oath or affirmation or to answer competent questions regarding the extractor  s business or extraction of taxable waters of the state. 1. The department may issue subpoenas to compel third parties to testify or to produce records or other evidence in their possession.2. Any duly authorized representative of the department may adm inister an oath or affirmation. 3. If any person fails to comply with a request of the department for the inspection of records, fails to give testimony or respond to competent questions, or fails to comply with a subpoena, a circuit court having jurisdiction over such person may, upon application by the department, issue orders necessary to secur ecompliance. (c) All books and records required to be kept under this subsection must be available for inspection by the department upon written request during normal business hours. (4) The department may audit or examine the books and records of an extractor to determine whether returns have been properly filed and tax has been properly paid. An audit may be commenced for any month for which the power of the department to make an assessment of amounts due under this part is available. An audit must be commenced by service of a written notice of intent to audit upon the extractor,either in person or by certified mail. The date of personal contact or the date of the notice govern sthe period subject to audit. If there is jeopardy to the revenue and jeopardy is asserted in or with an assessment, the department must proceed in the manner specified for jeopardy assessment i ns. 213.732. (5)(a) The department may assess, with or without an audit, any deficiency resulting from nonpayment or underpayment of the tax, interest, or penalties imposed by this part. The department shall inform the extractor by written noti ce of the amount of any deficiency or overpayment revealed by an audit, including the tax, interest, or penalties due, and shall explain the basis for the determination. (b) The department may make an assessment under this part based upon the best information available to it. The department may make an assessment based upon an estimate of amounts due under this part if an extractor fails to file a return, files a grossly incorrect or fraudulent return, or refuses to allow inspection of records. An assessment of the amounts due under this part is deemed prima facie correct, and the extractor has the burden of showing a ny error in it. (c) In the event of a deficiency, the department shall issue its written notice to an extractor for the tax, penalties, or interest due. Full payment of the total amount assessed must be made in the manner prescribed by the department in its notice. (6)(a) The department may credit or refund any overpayments of amounts due under this part which are revealed by an audit or for which a timely claim for refund has been properly filed. (b) A claim for refund may be filed within the period specified in s. 5.26(2). (c) A claim for refund must be signed by the extractor or the extractor  s duly authorized representative, successor, or assignee and must include information the department requires to determin ethe correctness of the claim. (7)(a) Amounts due under this part remain a lien upon the property, assets, and effects of an extractor until paid or until collection thereof is barred under s. 95.091. Amounts due may be recovered by the department, on behalf of the state, by an action in any county where the property, assets, or effects of the extractor are located. (b) When any tax imposed by this part becomes delinquent or is otherwise in jeopardy, the department may issue a warrant for the full amount due or estimated to be due, including the tax, penalties, interest, and costs of collection. The warrant must be directed to each sheriff and may be recorded with the clerk of the circuit court in any county where the extractor  s property is located. Upon recording, the clerk of the circuit court shall execute the warrant in the same manner prescribed by law for executions upon judgments and is entitled to the same fees for this service. Upon payment of the warrant, the department shall satisfy the lien of record within days. Thereafter, any interested person may compel the department to satisfy the lien of record. (c)  A nalias tax execution may be issued whenever the department deems it necessary.Each alias tax execution must be so designated on its face and has the same force and effect as th eoriginal. (d) Tax executions may be levied upon any third party who is in possession or control of any assets of a delinquent extractor or who is indebted to a delinquent extractor.Such tax executions have the force and effect of a writ of garnishment. The third party shall pay the debt or deliver the assets of the delinquent extractor to the department, and receipt by the department discharge sthe third party completely to the extent of the debt paid or assets surrende red to the department. (e) When any tax execution becomes void, the department may cancel it of record and shall do so upon the re quest of any interested person. (8) Any employee of the department may be designated by the executive director to make and sign assessments, tax warrants, and satisfactions of tax warrants. (9) Any suit brought by the department against any person for violating this part must be brought in circuit court. Section 8. Section 211.45, Florida Statutes, is created to read: 211.45  Criminal penalties.  (1) A person who willfully fails to file a return or keep books or records on the extraction of waters of the state which is taxable under this part,who files a fraudulent return, who willfully fails or refuses to produce books or records, or who willfully violates any provision of this part or any rule adopted by the department under this part commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083. (2) A person who withholds tax due under this part and willfully fails to make remi ttance as required by this part or who purports to make payments due under this part but willfully fails to do so because the remittance fails to clear the bank or depository instit ution against which it is drawn commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. Section 9. Paragraph (d) is added to subsection (1) of section 403.890, Florida Statutes, to read: 403.890 Water Protection and Sustainability Program.  (1) Revenues deposited into or appropriated to the Water Protection and Sustainability Program Trust Fund shall be distributed by the Department of Environmental Protection for the following purposes: (d)  From revenues of the tax collected under s. 211.41,the purposes specified in s. 211.41(2). Section 10. This act shall take effect July 1, 2023.