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Oil and gas companies pay a severance tax on what they produce in Utah. In good years, when that tax brings in more than the long-term average, the extra ("above-trend") money has to go somewhere.
The Senate's version of this bill sent that extra money to a new fund built specifically for counties and cities dealing with the effects of oil and gas drilling — road damage from trucks, strain on local services, that kind of thing.
Before the bill became law, the House swapped that fund out entirely. The same money — up to $20 million a year, capped at $88.5 million total — now goes into Utah's statewide highway fund instead.
The tax itself didn't change. Companies pay exactly what they paid before. What changed is who the extra money is guaranteed to help.
What Changed, Version by Version
| Senate-Passed Version (2nd Substitute) | |
|---|---|
| New fund | Creates the Severance Mitigation Projects Fund |
| Who it's for | Loans and grants to counties, cities, and special districts economically impacted, directly or indirectly, by oil and gas extraction |
| Who decides | The Permanent Community Impact Fund Board |
| Funding source | Above-trend oil and gas severance tax revenue |
| Enacted Version (4th Substitute) | |
| New fund | None — the mitigation fund was removed and never created in law |
| Where the money goes instead | The statewide Transportation Investment Fund of 2005 |
| Cap | Up to $20 million a year, until $88.5 million total is transferred |
| Who decides how it's spent | The Legislature and UDOT, through the existing statewide transportation budget process |
Passed With Opposition On Record at Every Stage — Then Swapped Anyway
(fund intact)
(fund intact)
(fund intact)
fund → TIF
19-7-3
- Jan 25, 2023Senate Revenue and Taxation Committee substitutes the bill (original → 1st Substitute) 5-0-3. This version still contains the mitigation fund. Four groups testify against the bill: the Nine Mile Canyon Coalition's chair, the Utah Chapter of the Sierra Club, the Center for Biological Diversity, and the Western Wildlife Conservancy. The reason for their opposition isn't recorded in the minutes. The committee passes it favorably 5-0-3 anyway.
- Feb 6, 2023Senate 2nd reading: substituted again (1st → 2nd Substitute) by voice vote, then passes 2nd reading 23-1-5. The fund is still in the bill.
- Feb 7, 2023Senate passes 3rd reading 21-6-2 and sends the fund-intact version to the House.
- Feb 27, 2023House Revenue and Taxation Committee substitutes it again (2nd → 3rd Substitute) 12-0-1, still with the mitigation fund. Sen. Winterton presents alongside Rikki Hrenko-Browning, President of the Utah Petroleum Association. The Nine Mile Canyon Coalition's chair speaks again, but this time takes no recorded position. The committee passes it favorably 8-4-1 (Nays: Reps. Briscoe, Eliason, Owens, Snider).
- Mar 1, 2023On the House floor, the bill is substituted a final time (3rd → 4th Substitute), proposed by Rep. Mike Schultz. This version removes the Severance Mitigation Projects Fund entirely and redirects the same above-trend revenue — up to $20 million a year, capped at $88.5 million total — into the Transportation Investment Fund instead. The House passes this version 54-14-7. Every recorded Nay comes from a Democrat; every Republican present votes yes.
- Mar 2, 2023The Senate concurs with the House's fund-removed version 19-7-3. Again, every recorded Nay is a Democrat and every Republican present votes yes. Sen. Winterton, the bill's sponsor throughout, votes yes.
- Mar 20, 2023Signed by the Governor. Effective May 3, 2023.
Graded against the standing rubric
This isn't a personal opinion of the bill. The grade below asks two questions, applied the same way to every bill in this series — not whether any one person likes the outcome: 1. Power — does it add or remove a check on power that the public, collectively, would otherwise have no say over? 2. Transparency — does it add or remove what the public can actually see about the process, regardless of who ends up holding the final decision? Design and outcome are graded separately because a bill can be structurally sound and still change substantially before it becomes law — collapsing the two into one score would hide which one actually happened.
As Senate-Passed
A real, targeted mechanism local governments could actually apply to, even if the final decision sat with a state board rather than the county itself.
As It Happened
The tax is unchanged and the money is still tracked and capped — but local governments lost their only access point to it, without a hearing on that specific change.
Graded by the Collective Rubric
This is The Weber County Hive's standing five-part rubric, applied the same way across every piece: Power — does it add or remove a check on power the public would otherwise have no say over? Transparency — can the public actually see the process? Financial Accountability — who actually pays, and is that disclosed plainly? Environmental Impact — is the effect on water, wetlands, and wildlife treated as a real constraint or a box to check? Community Impact — who bears the cost or holds a stake in this decision, and did they get real standing to be heard?
| Criterion | Grade | Assessment |
|---|---|---|
| Power | D | The Senate-passed version gave extraction-impacted counties and cities a real, if board-mediated, path to apply for this revenue through the Permanent Community Impact Fund Board. The House swap eliminated that path entirely — the enacted version gives local governments no access point to the above-trend revenue at all, folding it into the state's general highway budget instead. This is not just the Legislature keeping control; it's the removal of the one door local governments had into this money. |
| Transparency | D | The bill's short title and general description ("modifies provisions related to oil and gas severance tax") stayed the same through all four substitutes, even as the fund was added, then removed, then replaced with the TIF language — a reader following the title alone would not catch the swap. |
| Financial Accountability | C | The above-trend revenue is still tracked and capped ($20M/year, $88.5M total) — it's simply redirected from a community-specific program to a statewide one. |
| Environmental Impact | N/A | The bill is a revenue-disposition statute; it doesn't itself regulate extraction or its environmental effects. |
| Community Impact | D | Counties and cities carrying the direct costs of extraction — road damage, service strain — lost the one mechanism in this bill built to fund those costs specifically. A separate, older fund (the Uintah Basin Revitalization Fund) still exists, but only covers production on Ute tribal trust land, not extraction-impacted communities generally. |
The severance tax itself is unchanged. What changed is where the state's above-trend share of it is guaranteed to go — and the communities that carry the physical costs of extraction lost the version of this bill built specifically for them.
How This Could Have Actually Helped the Public
The Senate-passed version was the stronger public-benefit design. If lawmakers wanted to also fund transportation, there were ways to do both:
- Split the above-trend revenue between the mitigation fund and the Transportation Investment Fund, rather than choosing one over the other entirely
- Require a substitute that removes a bill's central funding mechanism to get its own committee hearing, specifically on that removal, before reaching a floor vote
- If the mitigation fund needed refinement rather than removal — a clearer "impacted subdivision" standard, tighter board oversight — amend it rather than eliminate it
Sources
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Sources
Show sources ▸Hide sources ▾- S.B. 107, official bill text — Introduced, 1st, 2nd, 3rd, and 4th Substitutes, and Enrolled — le.utah.gov
- S.B. 107 official bill status and vote record page — le.utah.gov
- Senate Revenue and Taxation Standing Committee, official minutes, Jan. 25, 2023
- House Revenue and Taxation Standing Committee, official minutes, Feb. 21 and Feb. 27, 2023
- Senate 2nd Reading vote (23-1-5), Feb. 6, 2023; Senate 3rd Reading vote (21-6-2), Feb. 7, 2023; House 3rd Reading final passage vote (54-14-7), Mar. 1, 2023; Senate concurrence final passage vote (19-7-3), Mar. 2, 2023 — le.utah.gov
- Utah Code §59-5-115, current version (effective 1/1/2026) and as enacted by S.B. 107 (2023) — le.utah.gov
- "The Severance Reference: Mapping Oil, Gas, and Mining Taxes in the Budget," Office of the Legislative Fiscal Analyst — budget.utah.gov
- Uintah Basin Revitalization Fund program description — jobs.utah.gov