Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 207 (2025GS)

Sponsor

Sen. Winterton, Ronald M.

Final action

Governor Signed 3/25/2025

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• imposes a local impact mitigation tax on oil and gas that is produced within the state within a certain period and is saved, sold, or transported;
• provides for certain exemptions from the tax;
• requires quarterly payment of the tax from oil and gas producers;
• requires the State Tax Commission to distribute tax revenue within a certain time to the counties from which the revenue was collected;
• provides for certain tax revenue distribution requirements for a county that receives tax revenue;
• limits the use of tax revenue to certain transportation-related mitigation projects;
• requires the State Tax Commission to collect an administrative charge from the collected tax revenue;
• prohibits counties from imposing certain oil or gas mitigation fees;
• requires any county that receives tax revenue to report to the Legislature regarding the county's use of the tax revenue; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

24
59-1-306
59-32-101
59-32-102
59-32-103
59-32-104
0
Local Impact Mitigation Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Ronald M. Winterton
House Sponsor: R. Neil Walter
LONG TITLE
General Description:
This bill enacts a local impact mitigation tax for oil and gas production.
Highlighted Provisions:
This bill:
defines terms;
imposes a local impact mitigation tax on oil and gas that is produced within the state 
within a certain period and is saved, sold, or transported;
provides for certain exemptions from the tax;
requires quarterly payment of the tax from oil and gas producers;
requires the State Tax Commission to distribute tax revenue within a certain time to the 
counties from which the revenue was collected;
provides for certain tax revenue distribution requirements for a county that receives tax 
revenue;
limits the use of tax revenue to certain transportation-related mitigation projects;
requires the State Tax Commission to collect an administrative charge from the collected 
tax revenue;
prohibits counties from imposing certain oil or gas mitigation fees;
requires any county that receives tax revenue to report to the Legislature regarding the 
county's use of the tax revenue; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
59-1-306
, as last amended by Laws of Utah 2024, Chapter 35
ENACTS:
59-32-101
, Utah Code Annotated 1953
59-32-102
, Utah Code Annotated 1953
59-32-103
, Utah Code Annotated 1953
59-32-104
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1, Section 
59-1-306
 is amended to read:
59-1-306
. Definition -- State Tax Commission Administrative Charge Account -- 
Amount of administrative charge -- Deposit of revenue into the restricted account -- 
Interest deposited into General Fund -- Expenditure of money deposited into the 
restricted account.
(1)
As used in this section, "qualifying tax, fee, or charge" means a tax, fee, or charge the 
commission administers under:
(a)
Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
(b)
Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
(c)
Section 
19-6-714
;
(d)
Section 
19-6-805
;
(e)
Chapter 12, Sales and Use Tax Act, other than a tax under Chapter 12, Part 1, Tax 
Collection, or Chapter 12, Part 18, Additional State Sales and Use Tax Act;
(f)
Section 
59-27-105
;
(g)
Chapter 31, Cannabinoid Licensing and Tax Act;
(h)
Chapter 32, Local Impact Mitigation Tax Act;
(h)
(i)
Section 
63H-1-205
; or
(i)
(j)
Title 69, Chapter 2, Part 4, Prepaid Wireless Telecommunications Service 
Charges.
(2)
There is created a restricted account within the General Fund known as the "State Tax 
Commission Administrative Charge Account."
(3)
Subject to the other provisions of this section, the restricted account shall consist of 
administrative charges the commission retains and deposits in accordance with this 
section.
(4)
For purposes of this section, the administrative charge is a percentage of revenue the 
commission collects from each qualifying tax, fee, or charge of not to exceed the lesser 
of:
(a)
1.5%; or
(b)
an equal percentage of revenue the commission collects from each qualifying tax, 
fee, or charge sufficient to cover the cost to the commission of administering the 
qualifying taxes, fees, or charges.
(5)
The commission shall deposit an administrative charge into the restricted account.
(6)
Interest earned on the restricted account shall be deposited into the General Fund.
(7)
The commission shall expend money appropriated by the Legislature to the commission 
from the restricted account to administer qualifying taxes, fees, or charges.
Section 2, Section 
59-32-101
 is enacted to read:
32. LOCAL IMPACT MITIGATION TAX ACT
59-32-101
. Definitions.
As used in this chapter:
(1)
"Barrel" means an amount equal to 42 gallons of oil at atmospheric pressure and at a 
temperature of 60 degrees Fahrenheit.
(2)
"Condensate" means hydrocarbons, regardless of gravity, that occur naturally in the 
gaseous phase in the reservoir and are separated from the natural gas as liquids through 
the process of condensation either in the reservoir, in the wellbore, or at the surface in 
field separators.
(3)
"Crude oil" means hydrocarbons, regardless of gravity, that occur naturally in the liquid 
phase in the reservoir and are produced at the wellhead in liquid form.
(4)
"Development well" means the same at that term is defined in Section 
59-5-101
.
(5)
(a)
"Gas" means:
(i)
natural gas;
(ii)
natural gas liquids; or
(iii)
any mixture of natural gas and natural gas liquids.
(b)
"Gas" does not include any gaseous or liquid substance processed from coal, oil 
shale, tar sands, or any other hydrocarbon substance that occurs naturally in solid 
form.
(6)
"MCF" means an amount equal to 1,000 cubic feet of gas at a pressure of 14.73 pounds 
per square inch and at a temperature of 60 degrees Fahrenheit.
(7)
"Natural gas" means hydrocarbons, other than oil and natural gas liquids, that occur 
naturally in the gaseous phase in the reservoir and are produced and recovered at the 
wellhead in gaseous form.
(8)
"Natural gas liquids" means hydrocarbons, regardless of gravity, that are separated from 
natural gas as liquids in gas processing plants through the process of condensation, 
absorption, adsorption, or other methods.
(9)
(a)
"Oil" means:
(i)
crude oil;
(ii)
condensate; or
(iii)
any mixture of crude oil and condensate.
(b)
"Oil" does not include any gaseous or liquid substance processed from coal, oil 
shale, tar sands, or any other hydrocarbon substance that occurs naturally in solid 
form.
(10)
(a)
"Oil or gas mitigation fee" means any fee or tax, whether one-time or ongoing, 
that is imposed by a county on oil or gas producers for purposes of mitigating the 
direct impacts of oil or gas production on county roads.
(b)
"Oil or gas mitigation fee" includes:
(i)
a transportation service fee or other fee established under Chapter 27a, County 
Land Use, Development, and Management Act, meeting the requirements of 
Subsection 
(10)(a)
; and
(ii)
an impact fee established under Title 11, Chapter 36a, Impact Fees Act, meeting 
the requirements of Subsection 
(10)(a)
.
(c)
"Oil or gas mitigation fee" does not include the tax imposed by this chapter.
(11)
"Produced" means extracted at the wellhead.
(12)
"Producer" means the operator of the well from which oil or gas is produced.
(13)
"Qualifying road" means a paved public road that is:
(a)
a class B road as described in Section 
72-3-103
; or
(b)
a class C road as described in Section 
72-3-104
.
(14)
"Qualifying special service district" means a special service district under Title 17D, 
Chapter 1, Special Service District Act, that provides construction, repair, maintenance, 
or improvements for public roads.
(15)
"Recipient county" means a county that receives revenue collected from the tax 
imposed by this chapter.
(16)
"Stripper well" means the same as that term is defined in Section 
59-5-101
.
(17)
"Wildcat well" means the same as that term is defined in Section 
59-5-101
.
Section 3, Section 
59-32-102
 is enacted to read:
59-32-102
. Imposition of local impact mitigation tax -- Rate -- Exemptions -- 
Shipment out-of-state -- Stockpiling -- Relation to other taxes -- Prohibition on county 
imposition of oil or gas mitigation fee.
(1)
(a)
Except as provided in Subsection 
(2)
, a local impact mitigation tax is imposed at 
the rate specified in Subsection 
(1)(b)
 on the total volume of oil and gas that is:
(i)
produced within the state on or after January 1, 2026, and before January 1, 2029; 
and
(ii)
(A)
saved;
(B)
sold; or
(C)
transported from the field from which the oil or gas was produced.
(b)
The rate of the tax under this chapter is:
(i)
5 cents per barrel of oil described in Subsection 
(1)(a)
; and
(ii)
1/4 cent per MCF of gas described in Subsection 
(1)(a)
.
(2)
The tax under this chapter does not apply to:
(a)
oil or gas produced by the United States;
(b)
oil or gas produced by the state or a political subdivision of the state;
(c)
oil or gas produced by an Indian or Indian tribe as defined in Section 
9-9-101
 from 
land under the jurisdiction of the United States;
(d)
oil or gas produced from a stripper well;
(e)
oil or gas produced from a wildcat well during the first 12 months of well production;
(f)
oil or gas produced from a development well during the first six months of well 
production; or
(g)
gas produced or consumed for the purpose of processing oil or gas to a marketable 
state by removing natural gas liquids or contaminants.
(3)
If oil or gas is shipped outside the state:
(a)
the shipment constitutes a sale; and
(b)
the oil or gas is subject to the tax imposed by this chapter.
(4)
(a)
Except as provided in Subsection (4)(b), if oil or gas is stockpiled, the tax under 
this chapter is not imposed until the oil or gas is:
(i)
sold;
(ii)
transported; or
(iii)
delivered.
(b)
If oil or gas is stockpiled for more than two years, the oil or gas is subject to the tax 
imposed by this chapter.
(5)
The tax under this chapter:
(a)
is separate from and in addition to all other taxes provided by law, including the 
severance tax imposed under Chapter 5, Part 1, Oil and Gas Severance Tax;
(b)
does not affect the requirements applicable to the severance tax imposed under 
Chapter 5, Part 1, Oil and Gas Severance Tax, including the requirements for the 
disposition of severance tax revenue under Sections 
59-5-116
 and 
59-5-119
; and
(c)
is not a severance tax for purposes of Utah Constitution, Article XIII, Section 5, 
Subsection (9).
(6)
Unless specifically authorized by statute, a county may not impose an oil or gas 
mitigation fee.
Section 4, Section 
59-32-103
 is enacted to read:
59-32-103
. Payment of tax -- Revenue distribution -- Expenditure of tax revenue 
-- Administration.
(1)
(a)
The tax imposed by this chapter shall be paid:
(i)
by the producer of oil or gas subject to the tax to the commission; and
(ii)
on a quarterly basis on or before the last day of the month following each 
calendar quarterly period electronically in a manner prescribed by the commission.
(b)
For purposes of this Subsection 
(1)
, the commission may require necessary 
information from producers regarding oil or gas production.
(2)
The commission shall distribute the revenue collected from the tax under this chapter:
(a)
to the county within which the revenue is collected from oil or gas production; and
(b)
within 60 days from the date on which the tax is paid.
(3)
(a)
(i)
If a county has created a qualifying special service district, the county 
treasurer shall transfer the revenue distributed to the county under Subsection 
(2)
to the qualifying special service district.
(ii)
A qualifying special service district described in Subsection 
(3)(a)(i)
 shall expend 
the revenue as provided in Subsection 
(4)
.
(b)
(i)
If a county has not created a qualifying special service district, the county 
treasurer shall deposit the revenue distributed to the county under Subsection 
(2)
into a special revenue fund that is created to hold the revenue and is separate from 
the county's general fund.
(ii)
A county described in Subsection 
(3)(b)(i)
 shall expend the revenue as provided 
in Subsection 
(4)
.
(4)
The revenue collected from the tax under this chapter may only be expended for 
transportation projects that mitigate the direct impacts of oil or gas production on 
qualifying roads located within the recipient county.
(5)
The commission shall:
(a)
administer, collect, and enforce the tax under this chapter in accordance with Chapter 
1, General Taxation Policies; and
(b)
retain and deposit an administrative charge in accordance with Section 
59-1-306
from the revenue the commission collects from the tax under this chapter.
Section 5, Section 
59-32-104
 is enacted to read:
59-32-104
. County report to Legislature.
(1)
Each recipient county shall submit a written report to the Natural Resources, 
Agriculture, and Environment Interim Committee on or before September 1, 2029.
(2)
The report described in Subsection 
(1)
 shall include:
(a)
an accounting of the county's use of revenue received by the county from the tax 
under this chapter, including information regarding each transportation project for 
which the revenue has provided funding;
(b)
for each transportation project described under Subsection 
(2)(a)
:
(i)
an explanation as to how the transportation project mitigates the direct impacts of 
oil or gas production on qualifying roads located within the county; and
(ii)
a description of any other funding sources in addition to the revenue from the tax 
under this chapter; and
(c)
any recommendations for legislative action to reauthorize the tax for the purpose 
described in Subsection 
59-32-103(4)
.
(3)
The Natural Resources, Agriculture, and Environment Interim Committee shall:
(a)
study any recommendations provided by a recipient county under Subsection 
(2)(c)
; 
and
(b)
if the Natural Resources, Agriculture, and Environment Interim Committee decides 
to recommend legislative action to the Legislature, prepare legislation for 
consideration by the Legislature in the next general session.
Section 6. 
Effective Date.
This bill takes effect on 
May 7, 2025
.
3-11-25 3:49 PM