Bill > SB0207

This bill establishes a Local Impact Mitigation Tax on oil and gas production in Utah, effective from January 1, 2026, to January 1, 2029. The tax will be levied at 5 cents per barrel of oil and 1/4 cent per thousand cubic feet (MCF) of gas produced, with several important exemptions including production from stripper wells, wildcat wells in their first year, development wells in their first six months, and production by government entities or Native American tribes. The revenue collected from this tax will be distributed directly to the county where the oil or gas was produced within 60 days, and must be used exclusively for transportation projects that mitigate the direct impacts of oil and gas production on qualifying class B and C roads. If a county has created a qualifying special service district for road maintenance, the tax revenue will be transferred to that district; otherwise, it will be deposited in a special revenue fund separate from the county's general fund. Each recipient county will be required to submit a detailed report to the Natural Resources, Agriculture, and Environment Interim Committee by September 1, 2029, explaining how the funds were used and providing recommendations for potential future legislative action. The bill also prohibits counties from imposing additional oil or gas mitigation fees beyond this tax and specifies that this tax is separate from and in addition to existing severance taxes.

Agriculture and Natural Resources, Budget and Finance

https://le.utah.gov/~2025/bills/static/SB0207.html