Representative Casey Snider proposes the following substitute bill:


1     
ENVIRONMENTAL QUALITY AMENDMENTS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Casey Snider

5     
Senate Sponsor: Scott D. Sandall

6     

7     LONG TITLE
8     General Description:
9          This bill addresses the Environmental Quality Code.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     requires meetings between the Federalism Commission and the Department of
14     Environmental Quality;
15          ▸     repeals the Air Quality Policy Advisory Board;
16          ▸     addresses sales and use tax exemptions and certifications related to pollution
17     control;
18          ▸     addresses the powers and duties of the Board of Oil, Gas, and Mining, including
19     rulemaking, and the Division of Oil, Gas, and Mining; and
20          ▸     makes technical and conforming amendments.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:

26     AMENDS:
27          19-12-102, as last amended by Laws of Utah 2018, Chapter 120
28          19-12-202, as enacted by Laws of Utah 2014, Chapter 24
29          19-12-305, as enacted by Laws of Utah 2014, Chapter 24
30          40-6-5, as last amended by Laws of Utah 2022, Chapter 62
31          40-6-16, as last amended by Laws of Utah 2022, Chapter 108
32          63C-4a-303, as last amended by Laws of Utah 2023, Chapter 71
33     ENACTS:
34          19-1-110, Utah Code Annotated 1953
35     REPEALS:
36          19-2a-102, as last amended by Laws of Utah 2021, Chapter 69
37     

38     Be it enacted by the Legislature of the state of Utah:
39          Section 1. Section 19-1-110 is enacted to read:
40          19-1-110. Department discussions with the Federalism Commission.
41          (1) As used in this section, "commission" means the Federalism Commission created in
42     Section 63C-4a-302.
43          (2) The department shall meet with the commission as scheduled by the chairs of the
44     commission and consistent with the usual schedule of the commission.
45          (3) The commission may discuss with the department:
46          (a) needs of industries that are subject to regulation under this title;
47          (b) needs of the department;
48          (c) policy and rulemaking changes or implementation;
49          (d) United States Environmental Protection Agency regulations and other federal
50     regulations that affect industries regulated under this title or the department; and
51          (e) any other issue that is related to the environment or the functioning of the
52     department.
53          Section 2. Section 19-12-102 is amended to read:
54          19-12-102. Definitions.
55          As used in this chapter:
56          (1) "Air pollutant" means the same as that term is defined in Section 19-2-102.

57          (2) "Air pollutant source" means the same as that term is defined in Section 19-2-102.
58          (3) "Air pollution" means the same as that term is defined in Section 19-2-102.
59          (4) (a) ["Director] Except as provided in Subsection (4)(b), "director" means:
60          [(a)] (i) for purposes of an application or certification under this chapter related to air
61     pollution, the director of the Division of Air Quality; or
62          [(b)] (ii) for purposes of an application or certification under this chapter related to
63     water pollution, the director of the Division of Water Quality.
64          (b) For purposes of an application or certification under this chapter related to property
65     within the jurisdiction of the Board of Oil, Gas, and Mining under Section 40-6-5, "director"
66     means the director of the Division of Oil, Gas, and Mining.
67          (5) (a) "Freestanding pollution control property" means tangible personal property
68     located in the state, regardless of whether a purchaser purchases the tangible personal property
69     voluntarily or to comply with a requirement of a governmental entity, if:
70          (i) the primary purpose of the tangible personal property is the prevention, control, or
71     reduction of air or water pollution by:
72          (A) the disposal or elimination of, or redesign to eliminate, waste, and the use of
73     treatment works for industrial waste; or
74          (B) the disposal, elimination, or reduction of, or redesign to eliminate or reduce, air
75     pollutants, air pollution, or air contamination sources, and the use of one or more air cleaning
76     devices; and
77          (ii) the tangible personal property is not used at, in the construction of, or incorporated
78     into a pollution control facility.
79          (b) "Freestanding pollution control property" does not include:
80          (i) a consumable:
81          (A) chemical that is not reusable;
82          (B) cleaning material that is not reusable; or
83          (C) supply that is not reusable;
84          (ii) the following used for human waste:
85          (A) a septic tank; or
86          (B) other property;
87          (iii) property installed, constructed, or used for the moving of sewage to a collection

88     facility of a public or quasi-public sewerage system;
89          (iv) the following used for the comfort of personnel:
90          (A) an air conditioner;
91          (B) a fan; or
92          (C) an item similar to Subsection (5)(b)(iv)(A) or (B); or
93          (v) office equipment or an office supply if the primary purpose of the office equipment
94     or office supply is not the prevention, control, or reduction of air or water pollution by:
95          (A) the disposal or elimination of, or redesign to eliminate, waste, and the use of
96     treatment works for industrial waste; or
97          (B) the disposal, elimination, or reduction of, or redesign to eliminate or reduce, air
98     pollutants, air pollution, or air contamination sources, and the use of one or more air cleaning
99     devices.
100          (6) (a) "Pollution control facility" means real property in the state, regardless of
101     whether a purchaser purchases the real property voluntarily or to comply with a requirement of
102     a governmental entity, if the primary purpose of the real property is the prevention, control, or
103     reduction of air pollution or water pollution by:
104          (i) the disposal or elimination of, or redesign to eliminate, waste and the use of
105     treatment works for industrial waste; or
106          (ii) (A) the disposal, elimination, or reduction of, or redesign to eliminate or reduce, air
107     pollutants, air pollution, or air contamination sources; and
108          (B) the use of one or more air cleaning devices.
109          (b) "Pollution control facility" includes:
110          (i) an addition to real property described in Subsection (6)(a);
111          (ii) the reconstruction of real property described in Subsection (6)(a); or
112          (iii) an improvement to real property described in Subsection (6)(a).
113          (c) "Pollution control facility" does not include:
114          (i) a consumable:
115          (A) chemical that is not reusable;
116          (B) cleaning material that is not reusable; or
117          (C) supply that is not reusable;
118          (ii) the following used for human waste:

119          (A) a septic tank; or
120          (B) another facility;
121          (iii) property installed, constructed, or used for the moving of sewage to a collection
122     facility of a public or quasi-public sewerage system;
123          (iv) the following used for the comfort of personnel:
124          (A) an air conditioner;
125          (B) a fan; or
126          (C) an item similar to Subsection (6)(c)(iv)(A) or (B); or
127          (v) office equipment or an office supply if the primary purpose of the office equipment
128     or office supply is not the prevention, control, or reduction of air or water pollution by:
129          (A) the disposal or elimination of, or redesign to eliminate waste, and the use of
130     treatment works for industrial waste; or
131          (B) the disposal, elimination, or reduction of, or redesign to eliminate or reduce, air
132     pollutants, air pollution, or air contamination sources, and the use of one or more air cleaning
133     devices.
134          (7) "Treatment works" means the same as that term is defined in Section 19-5-102.
135          (8) "Waste" means the same as that term is defined in Section 19-5-102.
136          (9) "Water pollution" has the same meaning as "pollution" under Section 19-5-102.
137          Section 3. Section 19-12-202 is amended to read:
138          19-12-202. Certification required before claiming a sales and use tax exemption.
139          (1) Before a person may claim a sales and use tax exemption under Section 19-12-201,
140     the person shall obtain certification issued in accordance with Section 19-12-303.
141          (2) [For] Except as provided in Subsection (4), for purposes of Subsection (1), if a
142     certification relates to air pollution:
143          (a) a person shall submit an application under Section 19-12-301 or 19-12-302 to the
144     director of the Division of Air Quality; and
145          (b) the director of the Division of Air Quality shall perform the duties described in:
146          (i) Section 19-12-303 related to certification; and
147          (ii) Section 19-12-304 related to revocation of certification.
148          (3) [For] Except as provided in Subsection (4), for purposes of Subsection (1), if a
149     certification relates to water pollution:

150          (a) a person shall submit an application under Section 19-12-301 or 19-12-302 to the
151     director of the Division of Water Quality; and
152          (b) the director of the Division of Water Quality shall perform the duties described in:
153          (i) Section 19-12-303 related to certification; and
154          (ii) Section 19-12-304 related to revocation of certification.
155          (4) For purposes of Subsection (1), if a certification relates to property within the
156     jurisdiction of the Board of Oil, Gas, and Mining under Section 40-6-5:
157          (a) a person shall submit an application under Section 19-12-301 or 19-12-302 to the
158     director of the Division of Oil, Gas, and Mining; and
159          (b) the director of the Division of Oil, Gas, and Mining shall perform the duties
160     described in:
161          (i) Section 19-12-303 related to certification; and
162          (ii) Section 19-12-304 related to revocation of certification.
163          Section 4. Section 19-12-305 is amended to read:
164          19-12-305. Rulemaking authority.
165          (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
166     purposes of a certification related to air pollution, other than air pollution related to property
167     described in Subsection (3), the Air Quality Board may make rules establishing procedures for:
168          (a) processing and evaluating an application for certification; and
169          (b) the issuance and revocation of a certification.
170          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
171     purposes of a certification related to water pollution, other than water pollution related to
172     property described in Subsection (3), the Water Quality Board may make rules establishing
173     procedures for:
174          (a) processing and evaluating an application for certification; and
175          (b) the issuance or revocation of a certification.
176          (3) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
177     purposes of a certification related to property within the jurisdiction of the Board of Oil, Gas,
178     and Mining under Section 40-6-5, the Board of Oil, Gas and Mining may make rules
179     establishing procedures for:
180          (a) processing and evaluating an application for certification; and

181          (b) the issuance or revocation of a certification.
182          Section 5. Section 40-6-5 is amended to read:
183          40-6-5. Jurisdiction of board -- Rules.
184          (1) The board has jurisdiction over all persons and property necessary to enforce this
185     chapter. The board shall make rules in accordance with Title 63G, Chapter 3, Utah
186     Administrative Rulemaking Act.
187          (2) The board shall make rules and orders as necessary to administer the following
188     provisions:
189          (a) Ownership of all facilities for the production, storage, treatment, transportation,
190     refining, or processing of oil and gas shall be identified.
191          (b) Well logs, directional surveys, and reports on well location, drilling, and production
192     shall be made and filed with the division. Logs of wells marked "confidential" shall be kept
193     confidential for one year after the date on which the log is required to be filed, unless the
194     operator gives written permission to release the log at an earlier date. Production reports shall
195     be:
196          (i) filed monthly;
197          (ii) accurate; and
198          (iii) in a form that reasonably serves the needs of state agencies and private fee owners.
199          (c) Monthly reports from gas processing plants shall be filed with the division.
200          (d) Wells shall be drilled, cased, cemented, operated, and plugged in such manner as to
201     prevent:
202          (i) the escape of oil, gas, or water out of the reservoir in which they are found into
203     another formation;
204          (ii) the detrimental intrusion of water into an oil or gas reservoir;
205          (iii) the pollution of fresh water supplies by oil, gas, or salt water;
206          (iv) blowouts;
207          (v) cavings;
208          (vi) seepages;
209          (vii) fires; and
210          (viii) unreasonable:
211          (A) loss of a surface land owner's crops on surface land;

212          (B) loss of value of existing improvements owned by a surface land owner on surface
213     land; and
214          (C) permanent damage to surface land.
215          (e) The drilling of wells may not commence without an adequate and approved supply
216     of water as required by Title 73, Chapter 3, Appropriation. This Subsection (2)(e) is not
217     intended to impose additional legal requirements, but to assure that existing legal requirements
218     concerning the use of water have been met before the commencement of drilling.
219          (f) Subject to Subsection (9), an operator shall furnish a reasonable performance bond
220     or other good and sufficient surety, conditioned for the performance of the duty to:
221          (i) plug each dry or abandoned well;
222          (ii) repair each well causing waste or pollution;
223          (iii) maintain and restore the well site; and
224          (iv) except as provided in Subsection (8), protect a surface land owner against
225     unreasonable:
226          (A) loss of a surface land owner's crops on surface land;
227          (B) loss of value of existing improvements owned by a surface land owner on surface
228     land; and
229          (C) permanent damage to surface land.
230          (g) Production from wells shall be separated into oil and gas and measured by means
231     and upon standards that are prescribed by the board and reflect current industry standards.
232          (h) Crude oil obtained from any reserve pit, disposal pond or pit, or similar facility, and
233     any accumulation of nonmerchantable waste crude oil shall be treated and processed, as
234     prescribed by the board.
235          (i) Any person who produces, sells, purchases, acquires, stores, transports, refines, or
236     processes oil or gas or injects fluids for cycling, pressure maintenance, secondary or enhanced
237     recovery, or salt water disposal in this state shall maintain complete and accurate records of the
238     quantities produced, sold, purchased, acquired, stored, transported, refined, processed, or
239     injected for a period of at least six years. The records shall be available for examination by the
240     board or the board's agents at any reasonable time. Rules enacted to administer this Subsection
241     (2)(i) shall be consistent with applicable federal requirements.
242          (j) Any person with an interest in a lease shall be notified when all or part of that

243     interest in the lease is sold or transferred.
244          (k) The assessment and collection of administrative penalties is consistent with Section
245     40-6-11.
246          (3) The board has the authority to regulate:
247          (a) all operations for and related to the production of oil or gas including:
248          (i) drilling, testing, equipping, completing, operating, producing, and plugging of
249     wells; and
250          (ii) reclamation of sites;
251          (b) the spacing and location of wells;
252          (c) operations to increase ultimate recovery, such as:
253          (i) cycling of gas;
254          (ii) the maintenance of pressure; and
255          (iii) the introduction of gas, water, or other substances into a reservoir;
256          (d) the disposal of salt water and oil-field wastes;
257          (e) the underground and surface storage of oil, gas, or products; and
258          (f) the flaring of gas from an oil well.
259          (4) For the purposes of administering this chapter, the board may designate:
260          (a) wells as:
261          (i) oil wells; or
262          (ii) gas wells; and
263          (b) pools as:
264          (i) oil pools; or
265          (ii) gas pools.
266          (5) The board has exclusive jurisdiction over:
267          (a) class II injection wells, as defined by the federal Environmental Protection Agency
268     or a successor agency;
269          (b) pits and ponds in relation to these injection wells;
270          (c) when granted primacy by the Environmental Protection Agency, class VI injection
271     wells, as defined by the Environmental Protection Agency or a successor agency; and
272          (d) storage facilities, as that term is defined in Section 40-11-1.
273          (6) The board has jurisdiction:

274          (a) to hear questions regarding multiple mineral development conflicts with oil and gas
275     operations if there:
276          (i) is potential injury to other mineral deposits on the same lands; or
277          (ii) are simultaneous or concurrent operations conducted by other mineral owners or
278     lessees affecting the same lands; and
279          (b) to enter the board's order or rule with respect to those questions.
280          (7) The board has enforcement powers with respect to operators of minerals other than
281     oil and gas as are set forth in Section 40-6-11, for the sole purpose of enforcing multiple
282     mineral development issues.
283          (8) Subsection (2)(f)(iv) does not apply if the surface land owner is a party to, or a
284     successor of a party to:
285          (a) a lease of the underlying privately owned oil and gas;
286          (b) a surface use agreement applicable to the surface land owner's surface land; or
287          (c) a contract, waiver, or release addressing an owner's or operator's use of the surface
288     land owner's surface land.
289          (9) (a) The board shall review rules made under Subsection (2)(f) to determine whether
290     the rules provide adequate fiscal security for the fiscal risks to the state related to oil and gas
291     operations.
292          (b) During the board's review under this Subsection (9), the board may consider the
293     bonding schemes of other states.
294          (10) The board may make rules, in accordance with Title 63G, Chapter 3, Utah
295     Administrative Rulemaking Act, related to procedures under Title 19, Chapter 12, Pollution
296     Control Act, for certification by the director of the division.
297          Section 6. Section 40-6-16 is amended to read:
298          40-6-16. Duties of division.
299          In addition to the duties assigned by the board, the division shall:
300          (1) develop and implement an inspection program that will include [but not be limited
301     to] production data, pre-drilling checks, and site security reviews;
302          (2) publish a monthly production report;
303          (3) publish a monthly gas processing plant report;
304          (4) review and evaluate, [prior to] before a hearing, evidence submitted with the

305     petition to be presented to the board;
306          (5) require adequate assurance of approved water rights in accordance with rules and
307     orders enacted under Section 40-6-5;
308          (6) notify the county executive of the county in which the drilling will take place in
309     writing of the issuance of a drilling permit;
310          (7) complete the verification of natural gas to hydrogen conversion plants required by
311     Section 59-5-102; [and]
312          (8) issue tax credit certificates in accordance with Section 40-6-24[.]; and
313          (9) through the division's director, implement Title 19, Chapter 12, Pollution Control
314     Act.
315          Section 7. Section 63C-4a-303 is amended to read:
316          63C-4a-303. Federalism Commission to evaluate federal law -- Curriculum on
317     federalism -- Environment discussions.
318          (1) (a) In accordance with Section 63C-4a-304, the commission may evaluate a federal
319     law:
320          (i) as agreed by a majority of the commission;
321          (ii) submitted to the commission by a council member; or
322          (iii) reported to the commission in accordance with Subsection (1)(b).
323          (b) (i) To assist the commission in the evaluation of federal law as required in this
324     section and Section 63C-4a-304, the commission may contract with a third party that is a Utah
325     institution of higher education to monitor federal law for possible implications on the
326     principles of federalism.
327          (ii) A third party contracted to monitor federal law as described in Subsection (1)(b)(i)
328     shall:
329          (A) monitor federal law for possible implications on the principles of federalism and
330     state sovereignty; and
331          (B) report to the commission any law or action by the federal government that may
332     implicate the principles of federalism or state sovereignty.
333          (c) (i) As used in this Subsection (1)(c), "interim committee" means the same as that
334     term is defined in Section 36-12-1.
335          (ii) The commission shall provide an annual report to each interim committee

336     concerning any law or action by the federal government that implicates the principles of
337     federalism or state sovereignty.
338          (iii) The commission may notify the appropriate interim committee of any law or
339     action by the federal government that implicates the principles of federalism or state
340     sovereignty.
341          (2) The commission may request information regarding a federal law under evaluation
342     from a United States senator or representative elected from the state.
343          (3) If the commission finds that a federal law is not authorized by the United States
344     Constitution or violates the principle of federalism as described in Subsection 63C-4a-304(2), a
345     commission cochair or the commission may:
346          (a) request from a United States senator or representative elected from the state:
347          (i) information about the federal law; or
348          (ii) assistance in communicating with a federal governmental entity regarding the
349     federal law;
350          (b) (i) give written notice of an evaluation made under Subsection (1) to the federal
351     governmental entity responsible for adopting or administering the federal law; and
352          (ii) request a response by a specific date to the evaluation from the federal
353     governmental entity;
354          (c) request a meeting, conducted in person or by electronic means, with the federal
355     governmental entity, a representative from another state, or a United States Senator or
356     Representative elected from the state to discuss the evaluation of federal law and any possible
357     remedy; or
358          (d) give written notice of an evaluation and the conclusions of the commission to any
359     other relevant entity.
360          (4) The commission may recommend to the governor that the governor call a special
361     session of the Legislature to give the Legislature an opportunity to respond to the commission's
362     evaluation of a federal law.
363          (5) A commission cochair may coordinate the evaluation of and response to federal law
364     with another state as provided in Section 63C-4a-305.
365          (6) The commission shall keep a current list on the Legislature's website of:
366          (a) a federal law that the commission evaluates under Subsection (1);

367          (b) an action taken by a cochair of the commission or the commission under
368     Subsection (3);
369          (c) any coordination undertaken with another state under Section 63C-4a-305; and
370          (d) any response received from a federal government entity that was requested under
371     Subsection (3).
372          (7) (a) The commission shall develop curriculum for a seminar on the principles of
373     federalism.
374          (b) The curriculum under Subsection (7)(a) shall be available to the general public and
375     include:
376          (i) fundamental principles of federalism;
377          (ii) the sovereignty, supremacy, and jurisdiction of the individual states, including their
378     police powers;
379          (iii) the history and practical implementation of the Tenth Amendment to the United
380     States Constitution;
381          (iv) the authority and limits on the authority of the federal government as found in the
382     United States Constitution;
383          (v) the relationship between the state and federal governments;
384          (vi) methods of evaluating a federal law in the context of the principles of federalism;
385          (vii) how and when challenges should be made to a federal law or regulation on the
386     basis of federalism;
387          (viii) the separate and independent powers of the state that serve as a check on the
388     federal government;
389          (ix) first amendment rights and freedoms contained therein; and
390          (x) any other issues relating to federalism the commission considers necessary.
391          (8) The commission may apply for and receive grants, and receive private donations to
392     assist in funding the creation, enhancement, and dissemination of the curriculum.
393          (9) The commission shall submit a report on or before November 30 of each year to the
394     Government Operations Interim Committee and the Natural Resources, Agriculture, and
395     Environment Interim Committee that:
396          (a) describes any action taken by the commission under Section 63C-4a-303; and
397          (b) includes any proposed legislation the commission recommends.

398          (10) The commission shall comply with Section 19-1-110 in discussions with the
399     Department of Environmental Quality on issues related to the environment or the functioning
400     of the Department of Environmental Quality.
401          Section 8. Repealer.
402          This bill repeals:
403          Section 19-2a-102, Air Quality Policy Advisory Board created -- Composition --
404     Responsibility -- Terms of office -- Compensation.
405          Section 9. Effective date.
406          This bill takes effect on May 1, 2024.