As this newsletter goes to press the Utah legislature is in the very final days of session, which will close at the stroke of midnight Friday, March fifth. Thanks to COVID-19 safety precautions, this has been the most open and also most opaque session with hybrid online and in person participation options, lots of masks and obsessive hand sanitizing. While there is still much that can happen to determine the fate of many bills yet to work their way through the process, we can confidently share a number of highlights. 

Despite the COVID-induced global recession, the state of Utah will close the fiscal year with a $1.5B surplus, even larger than the estimate at the close of 2020. The session started with Senate President Adams declaring this to be the year of the tax cut, and the legislature is set to deliver with nearly $100M in tax relief to residents through three targeted areas — families (SB 153), veterans (SB 11) and elderly Utahns (HB 86). This surplus and tax cut again puts Utah at the front of the pack in terms of states’ economic rankings. 

In the natural resource and energy space, between the perfect storm of COVID impacts and aggressive federal policy changes, there has been much discussion around the value of our state’s oil, natural gas, and minerals and the need to support and protect these industries that drive our low energy prices and undergird our continued economic growth. UPA was successful in passing SB 133, which shifts a portion of the severance tax that industry already pays to support the budgets of key oil and gas regulatory agencies. This not only reduces pressure to increase fees paid by industry, it helps align the regulatory budgets to the industry success and can provide for additional funding to keep the agencies equipped to efficiently address industry issues. Also look for several supportive bills (HB 415, SJR 15, SCR 8) around the value of Utah’s oil, gas and mining sectors, the need for the federal government to recognize the state’s right to energy and economic sovereignty, and efforts to limit the implementation of executive orders related to land use, natural resources, or the financial sector through the imposition of environmental, social, or governance standards. 

Several other energy-related bills have passed or look likely to do so, including a pre-emptive ban on municipalities prohibiting the connection of utility services to customers on the basis of the type of energy (HB 17) so that we don’t see communities banning natural gas hookups. There was also much discussion around the potential of hydrogen (HB 223, HB 388, HB 320), and UPA worked to ensure that all forms of hydrogen production will be treated equally, paving the way for increased natural gas utilization. The building blocks continued to be laid to transition the state away from the declining gas tax to a road user charge (SB 82). Bills are also in the works to open up various financial incentives (SB 202, SB 239), including tax increment financing incentives to rural Utah and traditional energy and mineral industries (HB 356), to provide clarity on the types of expenditures CIB funds can be used for (SB 176) and to regulate above ground petroleum storage tanks (SB 40). Also, look for structural changes to DNR (HB 346), PLPCO (HB 368), and GOED (HB 348, HB 217) and an increased focus on cooperation and coordination in the executive branch. Suffice it to say; it has been another very busy but successful session for UPA!