Utah 2025 Regular Session

Utah Senate Bill SB0207 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy S.B. 207
	1	+	03-03 15:13 3rd Sub. (Ivory) S.B. 207
	2	+	R. Neil Walter proposes the following substitute bill:
2	3		1
3	4		Local Impact Mitigation Amendments
4	5		2025 GENERAL SESSION
5	6		STATE OF UTAH
6	7		Chief Sponsor: Ronald M. Winterton
7	8		House Sponsor: R. Neil Walter
8	9		2
9	10
10	11		3
11	12		LONG TITLE
12	13		4
13	14		General Description:
14	15		5
15	16		This bill enacts a local impact mitigation tax for oil and gas production.
16	17		6
17	18		Highlighted Provisions:
18	19		7
19	20		This bill:
20	21		8
21	22		▸ defines terms;
22	23		9
23	24		▸ imposes a local impact mitigation tax on oil and gas that is produced within the state
24	25		10
25	26		within a certain period and is saved, sold, or transported;
26	27		11
27	28		▸ provides for certain exemptions from the tax;
28	29		12
29	30		▸ requires quarterly payment of the tax from oil and gas producers;
30	31		13
31	32		▸ requires the State Tax Commission to distribute tax revenue within a certain time to the
32	33		14
33	34		counties from which the revenue was collected;
34	35		15
35	36		▸ provides for certain tax revenue distribution requirements for a county that receives tax
36	37		16
37	38		revenue;
38	39		17
39	40		▸ limits the use of tax revenue to certain transportation-related mitigation projects;
40	41		18
41	42		▸ requires the State Tax Commission to collect an administrative charge from the collected
42	43		19
43	44		tax revenue;
44	45		20
45	46		▸ prohibits counties from imposing certain oil or gas mitigation fees;
46	47		21
47	48		▸ requires any county that receives tax revenue to report to the Legislature regarding the
48	49		22
49	50		county's use of the tax revenue; and
50	51		23
51	52		▸ makes technical and conforming changes.
52	53		24
53	54		Money Appropriated in this Bill:
54	55		25
55	56		None
56	57		26
57	58		Other Special Clauses:
58	59		27
59		-	None ~~S.B. 207 Enrolled Copy~~
	60	+	None
60	61		28
61	62		Utah Code Sections Affected:
	63	+	3rd Sub. S.B. 207 3rd Sub. (Ivory) S.B. 207 03-03 15:13
62	64		29
63	65		AMENDS:
64	66		30
65	67		59-1-306, as last amended by Laws of Utah 2024, Chapter 35
66	68		31
67	69		ENACTS:
68	70		32
69	71		59-32-101, Utah Code Annotated 1953
70	72		33
71	73		59-32-102, Utah Code Annotated 1953
72	74		34
73	75		59-32-103, Utah Code Annotated 1953
74	76		35
75	77		59-32-104, Utah Code Annotated 1953
76	78		36
77	79
78	80		37
79	81		Be it enacted by the Legislature of the state of Utah:
80	82		38
81	83		Section 1. Section 59-1-306 is amended to read:
82	84		39
83	85		59-1-306 . Definition -- State Tax Commission Administrative Charge Account --
84	86		40
85	87		Amount of administrative charge -- Deposit of revenue into the restricted account --
86	88		41
87	89		Interest deposited into General Fund -- Expenditure of money deposited into the
88	90		42
89	91		restricted account.
90	92		43
91	93		(1) As used in this section, "qualifying tax, fee, or charge" means a tax, fee, or charge the
92	94		44
93	95		commission administers under:
94	96		45
95	97		(a) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
96	98		46
97	99		(b) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
98	100		47
99	101		(c) Section 19-6-714;
100	102		48
101	103		(d) Section 19-6-805;
102	104		49
103	105		(e) Chapter 12, Sales and Use Tax Act, other than a tax under Chapter 12, Part 1, Tax
104	106		50
105	107		Collection, or Chapter 12, Part 18, Additional State Sales and Use Tax Act;
106	108		51
107	109		(f) Section 59-27-105;
108	110		52
109	111		(g) Chapter 31, Cannabinoid Licensing and Tax Act;
110	112		53
111	113		(h) Chapter 32, Local Impact Mitigation Tax Act;
112	114		54
113	115		[(h)] (i) Section 63H-1-205; or
114	116		55
115	117		[(i)] (j) Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications Service
116	118		56
117	119		Charges.
118	120		57
119	121		(2) There is created a restricted account within the General Fund known as the "State Tax
120	122		58
121	123		Commission Administrative Charge Account."
122	124		59
123	125		(3) Subject to the other provisions of this section, the restricted account shall consist of
124	126		60
125	127		administrative charges the commission retains and deposits in accordance with this
126	128		61
127	129		section.
128		-	- 2 - Enrolled Copy S.B. 207
129	130		62
130	131		(4) For purposes of this section, the administrative charge is a percentage of revenue the
	132	+	- 2 - 03-03 15:13 3rd Sub. (Ivory) S.B. 207
131	133		63
132	134		commission collects from each qualifying tax, fee, or charge of not to exceed the lesser
133	135		64
134	136		of:
135	137		65
136	138		(a) 1.5%; or
137	139		66
138	140		(b) an equal percentage of revenue the commission collects from each qualifying tax,
139	141		67
140	142		fee, or charge sufficient to cover the cost to the commission of administering the
141	143		68
142	144		qualifying taxes, fees, or charges.
143	145		69
144	146		(5) The commission shall deposit an administrative charge into the restricted account.
145	147		70
146	148		(6) Interest earned on the restricted account shall be deposited into the General Fund.
147	149		71
148	150		(7) The commission shall expend money appropriated by the Legislature to the commission
149	151		72
150	152		from the restricted account to administer qualifying taxes, fees, or charges.
151	153		73
152	154		Section 2. Section 59-32-101 is enacted to read:
153	155		74
154	156
155	157		CHAPTER 32. LOCAL IMPACT MITIGATION TAX ACT
156	158		75
157	159		59-32-101 . Definitions.
158	160		76
159	161		As used in this chapter:
160	162		77
161	163		(1) "Barrel" means an amount equal to 42 gallons of oil at atmospheric pressure and at a
162	164		78
163	165		temperature of 60 degrees Fahrenheit.
164	166		79
165	167		(2) "Condensate" means hydrocarbons, regardless of gravity, that occur naturally in the
166	168		80
167	169		gaseous phase in the reservoir and are separated from the natural gas as liquids through
168	170		81
169	171		the process of condensation either in the reservoir, in the wellbore, or at the surface in
170	172		82
171	173		field separators.
172	174		83
173	175		(3) "Crude oil" means hydrocarbons, regardless of gravity, that occur naturally in the liquid
174	176		84
175	177		phase in the reservoir and are produced at the wellhead in liquid form.
176	178		85
177	179		(4) "Development well" means the same at that term is defined in Section 59-5-101.
178	180		86
179	181		(5)(a) "Gas" means:
180	182		87
181	183		(i) natural gas;
182	184		88
183	185		(ii) natural gas liquids; or
184	186		89
185	187		(iii) any mixture of natural gas and natural gas liquids.
186	188		90
187	189		(b) "Gas" does not include any gaseous or liquid substance processed from coal, oil
188	190		91
189	191		shale, tar sands, or any other hydrocarbon substance that occurs naturally in solid
190	192		92
191	193		form.
192	194		93
193	195		(6) "MCF" means an amount equal to 1,000 cubic feet of gas at a pressure of 14.73 pounds
194	196		94
195	197		per square inch and at a temperature of 60 degrees Fahrenheit.
196	198		95
197	199		(7) "Natural gas" means hydrocarbons, other than oil and natural gas liquids, that occur
198		-	- 3 - S.B. 207 Enrolled Copy
199	200		96
200	201		naturally in the gaseous phase in the reservoir and are produced and recovered at the
	202	+	- 3 - 3rd Sub. (Ivory) S.B. 207 03-03 15:13
201	203		97
202	204		wellhead in gaseous form.
203	205		98
204	206		(8) "Natural gas liquids" means hydrocarbons, regardless of gravity, that are separated from
205	207		99
206	208		natural gas as liquids in gas processing plants through the process of condensation,
207	209		100
208	210		absorption, adsorption, or other methods.
209	211		101
210	212		(9)(a) "Oil" means:
211	213		102
212	214		(i) crude oil;
213	215		103
214	216		(ii) condensate; or
215	217		104
216	218		(iii) any mixture of crude oil and condensate.
217	219		105
218	220		(b) "Oil" does not include any gaseous or liquid substance processed from coal, oil
219	221		106
220	222		shale, tar sands, or any other hydrocarbon substance that occurs naturally in solid
221	223		107
222	224		form.
223	225		108
224	226		(10)(a) "Oil or gas mitigation fee" means any fee or tax, whether one-time or ongoing,
225	227		109
226	228		that is imposed by a county on oil or gas producers for purposes of mitigating the
227	229		110
228	230		direct impacts of oil or gas production on county roads.
229	231		111
230	232		(b) "Oil or gas mitigation fee" includes:
231	233		112
232	234		(i) a transportation service fee or other fee established under Chapter 27a, County
233	235		113
234	236		Land Use, Development, and Management Act, meeting the requirements of
235	237		114
236	238		Subsection (10)(a); and
237	239		115
238	240		(ii) an impact fee established under Title 11, Chapter 36a, Impact Fees Act, meeting
239	241		116
240	242		the requirements of Subsection (10)(a).
241	243		117
242	244		(c) "Oil or gas mitigation fee" does not include the tax imposed by this chapter.
243	245		118
244	246		(11) "Produced" means extracted at the wellhead.
245	247		119
246	248		(12) "Producer" means the operator of the well from which oil or gas is produced.
247	249		120
248	250		(13) "Qualifying road" means a paved public road that is:
249	251		121
250	252		(a) a class B road as described in Section 72-3-103; or
251	253		122
252	254		(b) a class C road as described in Section 72-3-104.
253	255		123
254	256		(14) "Qualifying special service district" means a special service district under Title 17D,
255	257		124
256	258		Chapter 1, Special Service District Act, that provides construction, repair, maintenance,
257	259		125
258	260		or improvements for public roads.
259	261		126
260	262		(15) "Recipient county" means a county that receives revenue collected from the tax
261	263		127
262	264		imposed by this chapter.
263	265		128
264	266		(16) "Stripper well" means the same as that term is defined in Section 59-5-101.
265	267		129
266	268		(17) "Wildcat well" means the same as that term is defined in Section 59-5-101.
267		-	- 4 - Enrolled Copy S.B. 207
268	269		130
269	270		Section 3. Section 59-32-102 is enacted to read:
	271	+	- 4 - 03-03 15:13 3rd Sub. (Ivory) S.B. 207
270	272		131
271	273		59-32-102 . Imposition of local impact mitigation tax -- Rate -- Exemptions --
272	274		132
273	275		Shipment out-of-state -- Stockpiling -- Relation to other taxes -- Prohibition on county
274	276		133
275	277		imposition of oil or gas mitigation fee.
276	278		134
277	279		(1)(a) Except as provided in Subsection (2), a local impact mitigation tax is imposed at
278	280		135
279	281		the rate specified in Subsection (1)(b) on the total volume of oil and gas that is:
280	282		136
281	283		(i) produced within the state on or after January 1, 2026, and before January 1, 2029;
282	284		137
283	285		and
284	286		138
285	287		(ii)(A) saved;
286	288		139
287	289		(B) sold; or
288	290		140
289	291		(C) transported from the field from which the oil or gas was produced.
290	292		141
291	293		(b) The rate of the tax under this chapter is:
292	294		142
293	295		(i) 5 cents per barrel of oil described in Subsection (1)(a); and
294	296		143
295	297		(ii) 1/4 cent per MCF of gas described in Subsection (1)(a).
296	298		144
297	299		(2) The tax under this chapter does not apply to:
298	300		145
299	301		(a) oil or gas produced by the United States;
300	302		146
301	303		(b) oil or gas produced by the state or a political subdivision of the state;
302	304		147
303	305		(c) oil or gas produced by an Indian or Indian tribe as defined in Section 9-9-101 from
304	306		148
305	307		land under the jurisdiction of the United States;
306	308		149
307	309		(d) oil or gas produced from a stripper well;
308	310		150
309	311		(e) oil or gas produced from a wildcat well during the first 12 months of well production;
310	312		151
311	313		(f) oil or gas produced from a development well during the first six months of well
312	314		152
313	315		production; or
314	316		153
315	317		(g) gas produced or consumed for the purpose of processing oil or gas to a marketable
316	318		154
317	319		state by removing natural gas liquids or contaminants.
318	320		155
319	321		(3) If oil or gas is shipped outside the state:
320	322		156
321	323		(a) the shipment constitutes a sale; and
322	324		157
323	325		(b) the oil or gas is subject to the tax imposed by this chapter.
324	326		158
325	327		(4)(a) Except as provided in Subsection (4)(b), if oil or gas is stockpiled, the tax under
326	328		159
327	329		this chapter is not imposed until the oil or gas is:
328	330		160
329	331		(i) sold;
330	332		161
331	333		(ii) transported; or
332	334		162
333	335		(iii) delivered.
334	336		163
335	337		(b) If oil or gas is stockpiled for more than two years, the oil or gas is subject to the tax
336		-	- 5 - S.B. 207 Enrolled Copy
337	338		164
338	339		imposed by this chapter.
	340	+	- 5 - 3rd Sub. (Ivory) S.B. 207 03-03 15:13
339	341		165
340	342		(5) The tax under this chapter:
341	343		166
342	344		(a) is separate from and in addition to all other taxes provided by law, including the
343	345		167
344	346		severance tax imposed under Chapter 5, Part 1, Oil and Gas Severance Tax;
345	347		168
346	348		(b) does not affect the requirements applicable to the severance tax imposed under
347	349		169
348	350		Chapter 5, Part 1, Oil and Gas Severance Tax, including the requirements for the
349	351		170
350	352		disposition of severance tax revenue under Sections 59-5-116 and 59-5-119; and
351	353		171
352	354		(c) is not a severance tax for purposes of Utah Constitution, Article XIII, Section 5,
353	355		172
354	356		Subsection (9).
355	357		173
356	358		(6) Unless specifically authorized by statute, a county may not impose an oil or gas
357	359		174
358	360		mitigation fee.
359	361		175
360	362		Section 4. Section 59-32-103 is enacted to read:
361	363		176
362	364		59-32-103 . Payment of tax -- Revenue distribution -- Expenditure of tax revenue
363	365		177
364	366		-- Administration.
365	367		178
366	368		(1)(a) The tax imposed by this chapter shall be paid:
367	369		179
368	370		(i) by the producer of oil or gas subject to the tax to the commission; and
369	371		180
370	372		(ii) on a quarterly basis on or before the last day of the month following each
371	373		181
372	374		calendar quarterly period electronically in a manner prescribed by the commission.
373	375		182
374	376		(b) For purposes of this Subsection (1), the commission may require necessary
375	377		183
376	378		information from producers regarding oil or gas production.
377	379		184
378	380		(2) The commission shall distribute the revenue collected from the tax under this chapter:
379	381		185
380	382		(a) to the county within which the revenue is collected from oil or gas production; and
381	383		186
382	384		(b) within 60 days from the date on which the tax is paid.
383	385		187
384	386		(3)(a)(i) If a county has created a qualifying special service district, the county
385	387		188
386	388		treasurer shall transfer the revenue distributed to the county under Subsection (2)
387	389		189
388	390		to the qualifying special service district.
389	391		190
390	392		(ii) A qualifying special service district described in Subsection (3)(a)(i) shall expend
391	393		191
392	394		the revenue as provided in Subsection (4).
393	395		192
394	396		(b)(i) If a county has not created a qualifying special service district, the county
395	397		193
396	398		treasurer shall deposit the revenue distributed to the county under Subsection (2)
397	399		194
398	400		into a special revenue fund that is created to hold the revenue and is separate from
399	401		195
400	402		the county's general fund.
401	403		196
402	404		(ii) A county described in Subsection (3)(b)(i) shall expend the revenue as provided
403	405		197
404	406		in Subsection (4).
405		-	- 6 - Enrolled Copy S.B. 207
406	407		198
407	408		(4) The revenue collected from the tax under this chapter may only be expended for
	409	+	- 6 - 03-03 15:13 3rd Sub. (Ivory) S.B. 207
408	410		199
409	411		transportation projects that mitigate the direct impacts of oil or gas production on
410	412		200
411	413		qualifying roads located within the recipient county.
412	414		201
413	415		(5) The commission shall:
414	416		202
415	417		(a) administer, collect, and enforce the tax under this chapter in accordance with Chapter
416	418		203
417	419		1, General Taxation Policies; and
418	420		204
419	421		(b) retain and deposit an administrative charge in accordance with Section 59-1-306
420	422		205
421	423		from the revenue the commission collects from the tax under this chapter.
422	424		206
423	425		Section 5. Section 59-32-104 is enacted to read:
424	426		207
425	427		59-32-104 . County report to Legislature.
426	428		208
427	429		(1) Each recipient county shall submit a written report to the Natural Resources,
428	430		209
429	431		Agriculture, and Environment Interim Committee on or before September 1, 2029.
430	432		210
431	433		(2) The report described in Subsection (1) shall include:
432	434		211
433	435		(a) an accounting of the county's use of revenue received by the county from the tax
434	436		212
435	437		under this chapter, including information regarding each transportation project for
436	438		213
437	439		which the revenue has provided funding;
438	440		214
439	441		(b) for each transportation project described under Subsection (2)(a):
440	442		215
441	443		(i) an explanation as to how the transportation project mitigates the direct impacts of
442	444		216
443	445		oil or gas production on qualifying roads located within the county; and
444	446		217
445	447		(ii) a description of any other funding sources in addition to the revenue from the tax
446	448		218
447	449		under this chapter; and
448	450		219
449	451		(c) any recommendations for legislative action to reauthorize the tax for the purpose
450	452		220
451	453		described in Subsection 59-32-103(4).
452	454		221
453	455		(3) The Natural Resources, Agriculture, and Environment Interim Committee shall:
454	456		222
455	457		(a) study any recommendations provided by a recipient county under Subsection (2)(c);
456	458		223
457	459		and
458	460		224
459	461		(b) if the Natural Resources, Agriculture, and Environment Interim Committee decides
460	462		225
461	463		to recommend legislative action to the Legislature, prepare legislation for
462	464		226
463	465		consideration by the Legislature in the next general session.
464	466		227
465	467		Section 6. Effective Date.
466	468		228
467	469		This bill takes effect on May 7, 2025.
468	470		- 7 -