Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Severance Revenue Trust topic
No spam. Unsubscribe anytime.
Senate approves trust fund to reserve oil, gas and metal severance revenue
Summary
The Utah Senate passed a bill creating a statutory trust to set aside severance-tax revenues above multi-year baselines ($41M for oil & gas, $9M for metals) to stabilize budgets and invest for future generations; supporters say it protects nonrenewable resources, opponents warn about removing funds from current uses.
SALT LAKE CITY — The Utah Senate voted to create a nonlapsing trust to hold excess severance-tax revenue from oil, gas and certain metal mining, approving a second substitute to Senate Bill 18 on Jan. 26.
Senator L. Hilliard, sponsor of the bill, said the measure would set a base amount and place amounts above that baseline in a trust to preserve principal and spend only the earnings. “These are nonrenewable resources,” Hilliard said in floor remarks, urging the Senate to avoid treating severance receipts as recurring revenue. He described a five-year average baseline for oil and gas set at $41,000,000 and a separate $9,000,000 base for copper and other metal severance receipts.
Supporters said the approach smooths volatile revenue streams and creates a permanent source of interest earnings to help future budgets. Senator Stevenson said he would support moving even more into a trust, and later signaled plans to propose lowering the threshold to reflect recent lows in severance revenues. Senator Bell cited other Western states’ large trust balances as an argument for building a corpus.
Opponents questioned whether setting aside that much money is prudent while current needs exist. Senator Jenkins said he remained unconvinced that building annuity-like accounts should become routine and urged caution about constraining available funds for present priorities.
The second substitute — which added copper to the coverage and adjusted names to emphasize capital and economic diversification uses — was reported to carry an amended fiscal note of roughly $39,000,000 (the transcript notes the fiscal estimate is amended). The Senate read the bill for the third time and recorded a final tally of 24 yes, 2 no and 3 absent on the motion to read for third time; the bill was advanced for third-reading consideration and referred for further processing.
What happens next: The bill will proceed through the legislative process and return to the House as amended for further action. Sponsors said they plan separate constitutional amendment language later to make a permanent constitutional trust if the Legislature wishes to entrench protections.
Votes and procedural note: The Senate recorded multiple roll calls during debate and ultimately advanced the second substitute for third reading; the bill’s fiscal note and exact allocation language were discussed on the floor.
