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Florida's Proposed First-In-Nation Water Excise Tax Bottled Up By Legal - Procedural Questions

Water bottles with copy: excise tax for Florida water?

TALLAHASSEE, FL – A proposal to impose a first-in-the-nation excise tax on companies extracting water from Florida aquifers was postponed Tuesday to resolve constitutionality questions and address industry objections.

Sen. Anne Taddeo’s Senate Bill 1112 Tuesday survived an attempt before the Senate Commerce & Tourism Committee to replace the tax with penalties, but could not advance without clarifying if it needs a two-thirds vote in both chambers and violates the 1972 Florida Water Resources Act, which declares springs, rivers and lakes state property but does not have a provision for setting a price on its extracted value.

“We have a lot of work to do,” Taddeo, D-Miami, said. “This is a conversation we absolutely need to have.”

SB 1112 would slap a 12.5 cent per gallon tax on extracted water with revenues dedicated to the state’s Wastewater Treatment & Stormwater Management Revolving Loan Trust Fund.

Taddeo said state water policies, unchanged since the 1990s, are exploited by corporations “making a tremendous amount of money” while paying as little as $115 for consumptive use permits (CUPs) granted by the state’s five water management districts.

“Our state imposes extraction taxes on oil, gas and other minerals but we do not impose taxes on our most valuable, precious resource – water,” she said. “Water is Florida’s oil.”

Committee chair Sen. Joe Gruters, R-Sarasota, the state GOP chair, called the 12.5 cent per gallon levy “a massive tax increase” and proposed replacing it with a 12.5 cent penalty per gallon above amounts allowed in CUPs.

Gruters said SB 1112 was “probably good public policy” but a tax is “going to be very tough” to approve.

“This bill will fundamentally change Florida law. It would be the first of its kind in the United States to impose a fee on extracted water,” he said.

Gruters’ amendment failed, but panel members acknowledged concern about the measure’s legality in meeting the one-topic requirement, among other issues.

The bill is supported by environmental interests, including Sierra Club Florida and the Florida Springs Council.

“This bill provides a market mechanism to protect against over-use,” Sierra Club Florida’s Dave Cullen said, calling for a CUP moratorium until regulations are updated

Florida Springs Council’s Ryan Smart said state waters “are already significantly overdrawn. There is no evidence of exceeding (CUPs) because the permit system isn’t working.”

The bill is opposed by business groups, including Associated Industries of Florida and Nestlé Waters North America.

Nestlé has contracted with Seven Springs Water Co., which has a pending five-year permit renewal before the Suwannee River Water Management District to extract 1 million gallons daily from Ginnie Springs.

Nestlé spokesman Lane Stevens said “contrary to social medial speculation, 95 percent of the water bottled in Florida is sold and used in Florida.”

He said Nestlé employs more than 920 Floridians with an annual payroll of $52 million and pays $7 million in taxes to local governments.

“No other state in the country has concluded it is in that state’s best interest to tax water. If adopted, water production will shift out of Florida,” Stevens said, noting Nestlé would pay more in taxes than in wages. “I don’t think there is any other business in Florida that pays more in taxes than its payroll.”

Taddeo’s bill is among a bevy of proposed water-extraction legislation, including a House companion, House Bill 861, filed by Rep. Matt Willhite, D-Wellington; SB 1798, filed by Sen. Rob Bradley, R-Fleming Island, to require a specified fee for CUPs granted to water bottlers; and SBs 1096 and 1098, filed by Sen. Janet Cruz, D-Tampa, requiring CUPs be state-monitored and levy a 5 cent per gallon surcharge.

This piece appeared in the The Center Square and was reprinted by the Columbia County Observer with permission or license.

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