Bill Summary – FastDemocracy

       Florida Senate - 2024                                     SB 510
       
       
        
       By Senator Stewart
       
       
       
       
       
       17-00220-24                                            2024510__
                      A bill to be entitled                      
       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; specifying the
       rate of the tax; requiring tax proceeds to be
       deposited in a specified trust fund; requiring that
       tax proceeds be separately accounted for and used for
       specified 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; requiring the
       department to prescribe by rule the form of such
       returns; providing requirements for the returns;
       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 or interest 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; authorizing the
       department to inspect or examine an extractor’s books
       and records and to require testimony under oath or
       affirmation of certain persons; authorizing the
       department to issue certain subpoenas; authorizing
       certain representatives of the department to
       administer an oath or affirmation; authorizing a
       circuit court to issue orders of compliance under
       certain circumstances; requiring books and records to
       be available for inspection by the department;
       authorizing the department to inspect or examine an
       extractor’s 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 and assets; 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 ss. 213.05,
       213.053, and 403.890, F.S.; conforming provisions 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 “Tax 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 in connection
with any of the following:
       (a) Public water supply utilities.
       (b) Maintenance of land, crops, or livestock, when
extracted by an agricultural producer.
       (c) 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.
       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 one one-thousandth of a dollar 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 established under s. 403.891, subject to the
requirements of s. 403.890, and must be accounted for separately
within the trust fund. In addition to the purposes specified in
s. 403.890(1)(a), (b), and (c), such 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
which shows 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 used in the
extraction of taxable water, 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.
       (2) 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 state or federal holiday. The date of
receipt by the department, or the postmark date if mailed,
determines the timeliness of payment or filing.
       (3) 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 12 percent per year from the due date until
the date of payment.
       (2) An extractor who fails to file the return required
under s. 211.42 by the due date must pay a delinquency penalty.
If tax is due with the return, the delinquency penalty is 10
percent for each month, or portion thereof, of the amount of tax
due with the return, not to exceed 50 percent of the tax due. 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) An extractor who makes a substantial underpayment of
the tax due under this part must pay a penalty of 10 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 exceeding 35 percent of the
total tax due for a month.
       (4) 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.
       (5) The department may settle or compromise any penalty
imposed by this section for reasonable cause in accordance with
s. 213.21. The department may settle or compromise interest
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 rules necessary to prescribe the form and content of
returns and reports.
       (2) All state, county, and municipal agencies, boards,
bureaus, departments, and 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, and enforcing the tax imposed under
this part.
       (3)(a) Each extractor shall maintain suitable books and
records relating to the extraction of 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 has expired during which the department may make an
assessment with respect thereto, 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 or the extractor’s authorized representative to
testify under oath or affirmation or to answer pertinent
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
administer an oath or affirmation.
       3. If any person fails to comply with a request of the
department for the inspection of records or with a subpoena or
fails to give testimony or respond to pertinent questions, a
circuit court having jurisdiction over such person, upon
application by the department, may issue orders necessary to
secure compliance.
       (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 department is authorized
to make an assessment of amounts due under this part. An audit
must be commenced by service upon the extractor, either in
person or by certified mail, of a written notice of intent to
audit. The date of personal contact or the date of the notice
governs the 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 in s. 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 notice 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. If an extractor
fails to file a return, files a grossly incorrect or fraudulent
return, or refuses to allow inspection of records, the
department may make an assessment based upon an estimate of
amounts due under this part. An assessment of the amounts due
under this part is deemed prima facie correct, and the extractor
has the burden of showing any error in calculating 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 timeframe
specified in s. 215.26(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
determine the 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 under 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 30 days.
Thereafter, any interested person may compel the department to
satisfy the lien of record.
       (c) An alias 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
the original.
       (d) An alias tax execution may be levied upon any third
party that is in possession or control of any assets of a
delinquent extractor or that 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 discharges the third
party completely to the extent of the debt paid or assets
surrendered to the department.
       (e) When an alias tax execution becomes void, the
department may cancel it of record and must do so upon the
request of any interested person.
       (8) Any employee of the department may be designated by the
executive director to make and sign assessments, tax warrants,
or 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