H.B. 185 Carbon Credit Amendments

What this bill does

The latest version of H.B. 185 would remove the proposed 5% carbon credit tax, the state's right of first refusal, private reporting requirements, and the attorney general litigation fund. What remains would set parameters for a legislative interim study of carbon credits.

Plain-English summary written by AI from the sponsor’s presentation in committee and on the floor. Check the official text below.

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Every vote

• 7 yes, 0 no, 4 absentHouse Revenue and Taxation Committee: Amendment Recommendation · Feb 12, 2026Who voted how
• 9 yes, 0 no, 2 absentHouse Revenue and Taxation Committee: vote, which it did not pass · Feb 12, 2026Who voted how
• 11 yes, 0 noHouse Revenue and Taxation Committee: vote to change the bill · Feb 27, 2026Who voted how
• 8 yes, 3 noHouse Revenue and Taxation Committee: vote to approve it · Feb 27, 2026Who voted how
• 70 yes, 0 no, 5 absentFinal House vote · Mar 2, 2026Who voted how
• 4 yes, 0 no, 3 absentSenate Revenue and Taxation Committee: vote to approve it · Mar 4, 2026Who voted how
• 19 yes, 6 no, 4 absentFinal Senate vote · Mar 4, 2026Who voted how

Hearings and debates

• Feb 12, 2026 House Revenue and Taxation Committee▶ Watch
  Transcript (77 turns)

  1. Committee chair (presiding)1:25:30

     Okay, we'll go to our next agenda item, which is item number two on the agenda, which is house bill 180 5, second substitute Carbon credit amendments Representative Shelley, who is here. So we'll give him a second to come up and present to his bill.

  2. Rep. Troy Shelley1:26:06

     Thank you, Mr. Chair. Uh, I would like to, uh, speak to the second sub. I have a, a small amendment as well, just which more correctly identifies how the money, any money collected can be spent as well. And that that is online and available. Now, the, the second sub though, was already adopted in rules, correct?

  3. Committee chair (presiding)1:26:27

     Yeah. So, so we won't, we need to take action there, but you say there is an amendment. Okay. So we will need to committee, we'll just need to move that amendment at at the time. So go ahead. Thank You. Are we okay

  4. Rep. Troy Shelley1:26:37

     if I show a PowerPoint? Yes, please. Thank you. Is that your house, pet? What's That? Is that your house pet? Oh, nevermind. Yes, yes, it is. It takes money in the top. Okay. Uh, this is, this is concerning carbon credits and a lot of people have heard about carbon credits. It's kind of hard to understand what the trade is all about and what's going on. I'm hoping that, uh, when we're done with this presentation, uh, most we'll see more clearly exactly how this, uh, how this works. So, carbon dioxide is not a poison in the air. It's simply two parts of oxygen and one part carbon connected with a covalent bond. The important part to understand is what is a carbon sink? And a carbon sink is virtually anything that eliminates or removes carbon dioxide from the atmosphere. So that can be through a pond, through photosynthesis in trees, through carbon injection, carbon sequestration, it has soil recovery. There's multiple ways, but whatever removes carbon dioxide out of the atmosphere to somewhere not in the atmosphere, including soil, um, carbon dioxide will absorb into the soil as well. And so that is all a carbon sink. It's important to understand what a carbon sink is. As we progress through this, this presentation, carbon dioxide, we all understand how it's made. Obviously, I, I probably should have included vehicles 'cause that's one of the main sources, but refineries, uh, oil and gas production, uh, burning coal tilling, uh, we've all heard the, uh, the thing about cows releasing methane and methane causing global warming. Well, every one ton of methane released converts to 2.2 tons of carbon dioxide. So here's the interesting thing. Every ton of carbon dioxide that goes into a sink is issued a digital ID number by the IPCC. The IPCC functions under the role of the United Nations and the IPCC tracks who owns these digital numbers? And, uh, and that's, that's actually controlled by a document called the Kyoto Protocol. One carbon credit equals one metric ton of CO2. So as a ton is into a sink, goes into a sink that creates a carbon credit, which is issued a digital ID number. Those digital ID numbers then become basically a cryptocurrency. They can be traded on a world market. They can also be interchanged with our current cryptocurrency that we understand, which is Bitcoin, Ethereum, and others. Carbon credits are transferred through a document that the Kyoto Protocol, uh, assigns. And this document says, here's who owns it and here's how they want it to be used. And whoever controls that carbon credit or that digital ID number, uh, can tell the IPCC how they want to invest their money. What is CO2? Sometimes you'll see CO2 and then an e The e represents eliminated or avoided. This, this is, uh, for example, let's say that a new coal mine is permitted, that new coal mine has a permit. And so then they do a reservoir or a, uh, uh, an inventory or a study as to how much coal is there. Once they release the study and the mine is permitted, then if a group wants to protest that mine and get it shut down, they can earn carbon credits for shutting down that mine or for terminating anything that could possibly generate carbon dioxide. They, they get credit for that in the, uh, big beautiful bill and I, I mentioned this to Mike Lee, he was quite surprised that it was in there, but in the big beautiful bill, they established a value of carbon credits. Um, I, I am absolutely the first one to say, I, I hate the carbon credit market. It is not something I want the state of Utah to engage in. Um, but what this bill does is it establishes a value that's kind of outside of supply and demand market principles, um, a value of even up to $85 a ton. So, uh, as, as people invest, they can determine where they want to invest their digital currency and how they want it to be paid back, and it can't be audited. The IPCC is a private company and they're not subject to audit. So we have no idea who owns what credits were. So for example, let's say that, uh, we had a coal-fired power plant in Utah that we were to shut down completely. And then it just so happened in this instance that Japan owned a bunch of extra carbon credits. Now, I don't remember how much I, I wish I had the document to show how much it was, but I believe that the plant that they wanted to build in Jakarta was $10 billion. Japan financed that power plant using carbon credits, but that power plant emits zero CO2. Not that it actually doesn't emit the CO2, but they offset the CO2 with the power plant that they shut down here in Utah, or, or as an example. So they shut down a plant somewhere, reduce the carbon dioxide there. Therefore, they can increase the carbon dioxide equally in, in Jakarta, and it's a zero emission plant. However, they have to buy the carbon credits and pay those back. So there's probably around $10 billion worth of carbon credits, $10 billion to build the plant. And Jakarta residents pay that debt back to who knows where and who knows how. So for example, if we take IPP from full production in full, full production, they were burning 14,000 tons of coal a day. Each ton of coal equals 2.5 tons of CO2. That's 3,500 tons of CO2 a day at $85 a ton, which is the new market value that the big beautiful bill established. That's $297,500 a day. The expected life of the plant is 25 years. That means the carbon credit value alone to shut down IPP is $2,000,714,000. Solar works the same way as solar comes into the grid, hydrocarbon power backs down, that creates a carbon credit. That credit is marketable. There's, there's multiple places. There are, there are almost innumerable places in the state of Utah that, uh, that carbon credits are generated. And the state of Utah is a prime market that people are after right now to buy up our carbon credits. So the IPCC in 2022 said, we are in dire straits. We need to get more cash into the market. So our president, Barack Obama, committed $3 billion to the IPCC to stop climate change, and they get a receipt back of who knows what it says. But, uh, $3 billion goes into the IPCC. Joe Biden on his way out said, we are going to do our fair share to stop climate change. We're committing a billion dollars to stop climate change. So one of the results of this whole system is, uh, is it binds third world countries into slavery. And I'll tell you how it does it because, and I actually have the contract that, uh, the United Nations uses with these third world countries. They go in and they say, if you will guarantee to never use hydrocarbon power to power your, your country or this part of your country, then we will build you a wind and solar power generation system. That's nice. It probably gives some of them wind and solar or power that they've never had before. However, you cannot run industry on wind and solar. You have to have hydrocarbon. I think, uh, some of the other power systems that are coming on will will help that. It'll alleviate it such as nuclear and others. But for right now, in the foreseeable future, in order to progress, you have to have hydrocarbon power. So there's a, a couple of ways that this works. There's A-A-C-D-M, which controls 2.4 billion tons of, of carbon credits, and J one controls 0.9 billion tons. Um, if you times that by the dollars in the big beautiful bill, that's a bigger number than your calculator can hold. Um, there is a company that's called the Gold Standard, and they're the ones who come in and establish which carbon credit gets what value. So is it a carbon credit that is permanently sequestered or is it a carbon credit that could come back again? Um, and so they, they establish what the value is and then they register that. And then you'll see down at the bottom it says you've got American Carbon Registry Climate Action Reserve and Verified Carbon Standard. That's just a few of them. It does not include the one that's active in selling right now in Utah, but they, they buy and sell carbon credits and, uh, and there is no accounting for it. Um, in that contract, the United Nations says, every country understands they have a role to play in the world's economy, and they will stay within their respective role. That means if you mine lithium, that does not mean you produce lithium, you mine it and send it to a country who produces it. It's, uh, it's part of the evil that's behind this entire system. The United States in 2022 spent a combined total of $900 billion in climate related, uh, expenses. And I got that number from LRGC, just did a research on that to find out what that number is. Energy is currency, Henry Ford 1921. So carbon dioxide is somewhat similar to how we used to view water back in the early 19 hundreds or the late 18 hundreds, which means we have this much water that flows through the, across the ground, but underneath there's an unlimited supply of water. We now realize that's probably not the case, and I don't know what that means for carbon dioxide either. Um, and so in my bill, there is a first right of refusal to purchase carbon credits if I, I can't imagine the state would ever do this. However, if the state is ever mandated to do a cap and trade program, we have to have that option to protect our industry because without it, we cannot say that we have enough offset to be able to increase industry. We cannot claim the Forest Service and the photosynthesis on the Forest Service because that photosynthesis reaction has already been sold to another country by the federal government. I don't know if all of it has, but I know they're actively selling it. And so it's not like we can just say, Hey, well we have trees here to offset. Nope, they already sold that. In fact, I'll bring up Geneva Steel really quick. When Geneva Steel shut down, um, the air in Utah County while they were operating was kind of a yellow brown. And after they shut down, their air was kind of clean. You would think Utah County could say Hey, look, our air is clean. Nope, they can't, because Southern California Edison bought that right to say that down in the San Fernando Valley. So they advertised that they had reduced particulate matter in the atmosphere by X number of tons. And so they claim it there. So Utah can't claim it here. So carbon credit, you, it's, it's, it's selling out something that's a very valuable, uh, resource to Utah. I, I, I absolutely hate the market. I think it's evil on many levels. I think it binds third world countries into slavery. Um, but, uh, initially my bill had a 25% tax on it to show that I really do hate it, but it was pointed out to me by, there was a company here that's, that's selling car or buying carbon credits right now. They're approaching our state agencies, they're approaching farmers and individuals to buy up their carbon credits. And, and they said, if you have a 25% tax on that, you are taking the ability away from a farmer to be able to monetize his land. And I thought, well, okay, that's fair. I don't, I don't know that we need to do that, even though it's one that I passionately do not like. And, and, and on so many levels distrust. But I thought, okay, let's be fair. So I, I dropped it to 19%, and then one of the industry partners said, you know, would you consider just doing a sliding scale so that if it's, if it's, uh, over 10 years, it's a higher tax, and if it's under, under five years, it's a lower tax. And I thought that's fair. So, so what I did is I, is I put the lower tax at 5%, and 5% is simply kind of a match on oil and gas. So if a farmer wants to lease his land out for an oil well, uh, he gets a royalty on the oil well, but he does pay a 5% severance tax for the oil that comes out of his ground. So that matches with what the oil and gas does. I think that was a fair amount different, uh, different, uh, departments have come to me and said, well, would you consider a 1%? I think, I think it becomes to where it's really kind of insincere to, to just keep trying to chip that away. What, what a portion of that 5% does is it creates a fund for the Attorney General's office to be able to draw from, to defend this state against the cap and trade programs and the environmental programs that are getting shoved on it by not only the United States, but also the world, and forcing us into, into economic collapse through the, the regulations or the, or the control of the carbon dioxide. And so that's, that's why, that's why I created the bill, is to protect the state and, and also to protect each of the departments and, and the individuals. So, Al Gore's famous statement, I tried to follow the science, but the science wasn't there. So I decided to follow the money, and that's where the science was. That's actually not from Al Gore, but, uh, he should have said it. Uh, one, one thing that, uh, I do wanna point out, the state of Washington does a cap and trade program within their state where they keep all of their carbon credits inside the state. They don't allow 'em to be sale sold out outside of the state. Year to date, on December 10th, their last sale closed year to date, they transferred $1.682 billion in carbon credit sales. I, again, I do not want the state of Utah involved in carbon credit sales, but I think we need to be prepared so that, so that we can protect this state so that we can assure economic growth. Um, and that's, that's what my bill does. Um, and, uh, you know, and, and so I want to give some time to, to, uh, treasurer Oaks to, to speak a little bit to it as well.

  5. Marlo Oaks, State Treasurer1:44:13

     Okay. Thank you. Um, thank you Chair. Uh, well, vice Chair Eliason, uh, and members of the committee for the opportunity to talk to, uh, to speak to this bill this morning. Um, my comments, focus pri sorry. My name is Marlow Oaks State Treasurer of Utah. Uh, my comments focus primarily on the selling of credit from a Utah based party to an out-of-state entity. Over the past several years, we have seen growing efforts to turn natural and environmental attributes into financial products. The debate, the debate surrounding natural asset companies brought national attention to an idea intended to stop economic activity on public and private lands. Carbon based buying and selling is another example of potentially stopping economic activity in state and exporting it out of state. These transactions have largely grown outside of public view, yet they increasingly entice public and private actors to sell credits based on the dollars involved. Oftentimes, little thought is given to the long-term ramifications in the case of out-of-state buyers, the transfer of potential economic activity to those entities that buy the carbon credit. HB 1 0 5 helps bring transparency to interactions that have largely operated unseen. Utah already taxes and regulates other economic transactions. And this activity should be treated no differently when a transaction is completed, particularly where public resources or state involvement are part of the exchange. Taxpayers should be able to see that activity and receive credit for the public resources committed. This bill does not prevent transactions from occurring. It simply ensures that taxes are collected and decisions are transparent and aligned with the financial interests of taxpayers. The lesson from the Natural Asset Company proposal was clear. When new financial structures emerge around natural resources, states need visibility. Early sunlight helps to prevent unintended consequences later. HB 180 5 provides that visibility, and I encourage your support. Thank you. Does that, uh, complete Your presentation? Yes. One thought I wanted to do just bring up is, uh, let's take IPP for example. I, I use that as an example here. If, if it's value to shut it down is, is, uh, $1.2 billion? Who gets that money? We don't know. That's why we're establishing this fund. So the attorney general can, can go back and say, we own IPP, we own those carbon credits, we're reclaiming our asset, and whoever they have assigned that carbon credit to, that's up to the IPCC to figure out. But, but you can't sell state assets and claim it as your own. So that's what this bill does. Thank you.

  6. Committee chair (presiding)1:47:09

     Okay. We do have some, uh, uh, comments or questions from the committee. I don't know who is first. We will go you were first. Okay. Um, representative Daley Proco.

  7. Rep. Jennifer Dailey-Provost1:47:18

     Thank you, Mr. Chair. Um, so last comment inspired, uh, another question. I've got a few. So you, you talk about IPP and it being a public asset, but we're also talking about farmers who own private land. So I want to make sure that we're clear about what the, the target is. I don't disagree that a publicly owned asset should be taxed and have some transparency, but if we're talking about private landowners, um, I, I, I don't think it's appropriate to complete the two. So, um, I'll, I'd like you to come back to that, but some, some other sim some more simpler things. You mentioned changing it to 5%, you said, you said in your presentation that you had negotiated a 5%, but the bill is of 19% tax, correct? No, it's a 5%. Okay. So I'm looking at first sub and line 10 says, imposes a 19%. Oh, assessment. We're on second Sub. I'm, I'm sorry, second sub. Okay. Alright. Thank you. I apologize. Has it second sub already been adopted? It was in rules. Okay. Thank you. I apologize for, thanks for clarifying.

  8. Rep. Jennifer Dailey-Provost1:48:27

     Um, one of the concerns that I, I would like, I I'd like you to address as well as the private versus public ownership. If we're gonna tax farmers, um, for selling carbon credits and then tax them again, if they sell their land, do you, do you have any concern about double taxation there? Because they could be charged, you know, income tax if they sold their land later. So they would be paying taxes twice on that if they sold the carbon credits and then later sold their, If I could ask you to clarify this. So if, if a farmer has an oil well on his property and the oil well produces oil, but the state taxes a 5% severance tax on that oil, is the state also double taxing if the farmer sells his land? Well, that's what I'd like you to address.

  9. Rep. Troy Shelley1:49:23

     I, I mean, we're talking about the carbon tax credits, so that that's A different issue. Yeah. So, so keep in mind the 5% carbon tax is, is it, one thing it does is it establishes a fund for the attorney general to defend the very people who may be opposed to paying that tax. But we have to protect, we have to protect the state, whether it's state assets or individual assets against federal and worldwide overreach. And that's, that's what this tax does.

  10. Rep. Jennifer Dailey-Provost1:49:55

      Okay. Do you have any concerns that this would put Utah farmers at a competitive disadvantage to farmers in other states who, where they do have that this as an option?

  11. Rep. Troy Shelley1:50:05

      None. Okay. Uh, the state of Washington, out of that, uh, $1.4 billion, the state of Washington kept 50% and gave the other 50% to those who own the carbon credits. So five percent's quite substantially lower than the state of Washington, thank goodness. Okay,

  12. Rep. Jennifer Dailey-Provost1:50:24

      Thank you, Mr. Chair.

  13. Committee chair (presiding)1:50:26

      Thank you, uh, Representative Gwynn.

  14. Unknown speaker1:50:28speaker not certain

      Thank you, Mr. Vice Chair. So, how, so how often are carbon credits being sold in Utah right now? It's a good question. Is that a pretty regularly traded commodity here? Currently? It's Utah is new to, so, so the group that I met with, um, I, I don't remember the name of the group, but they're funded by BlackRock, and the idea is to come in and, and buy up carbon credits because then they can take Utah's carbon credits, reduce our offset here and sell it to a foreign country or another state or whatever, but it reduces our offset. Um, and so looking ahead, if we ever get forced into any kind of a cap and trade, if we don't have the access to our carbon credits, we cannot outgrow industry. We don't know. That's, that's what this bill does, is it establishes a framework so that we know what carbon credits are being sold and, and so we have an understanding so that we don't get caught blindsided down the road. Okay. So if we don't know what would necessarily happen here in Utah, and I know some states are unique with, with how their, um, commerce, how their agriculture works. So then why, why do we have a need for all this regulation and how do we expect all the different departments to be able to regulate what they don't know yet?

  15. Rep. Troy Shelley1:52:00speaker not certain

      Uh, let me just read, uh, this is from the attorney Judge General's office. We have several ongoing lawsuits pertaining to air quality and the EPA and the environment that are, that are continually coming into the state of Utah.

  16. Unknown speaker1:52:15speaker not certain

      So how many other states are being currently under these types of lawsuits, litigation right now?

  17. Rep. Troy Shelley1:52:20

      Well, uh, for example, if Utah has, uh, what do they call 'em? Rogue particulate matter or something to that effect, and it gets into other states. Other states are starting to sue their neighboring states for the particulate matter that drifts into their atmosphere. So we don't know how crazy this world could be, but we know that in the state of Utah, we have to, we have to have some parameters. That's all this does is it sets the parameters. 5% does not break any bank. It's, it's 5%. Let let me use one example there. There is a farm, uh, who, and, and this is what was told to me by these marketers that are here. They, they bought up the, not only the carbon credits, but the particulate matter and the, the control of the soils and everything else. It was 30,000 acres and they paid them, I believe, was it nine, $947,000 a year to tie that up.

  18. Unknown speaker1:53:26speaker not certain

      Unreal. Disproportionate to reality. I I would say 5% sometimes can be a make or break for some businesses.

  19. Unknown speaker1:53:37speaker not certain

      But if I have just one more question. Sure. Mr. Vice Chair, um, on line two 17 where it says the attorney general expenses related to litigation, um, does this also make it so that the fund that's created would be able to fight environmental protection, uh, groups who are bringing litigation to, to different organizations that if they find that there is a cause

  20. Rep. Troy Shelley1:54:01

      For no, if, if there's state and federal law, we follow state and federal law. This is, this is to fight against new regulations that that could come based on whatever happens to, to be in the, in the, the, you know, the attitude of someone. At some point, they may just come back and say, you know, we don't like the way you're doing X, Y, Z, and they're using the environment as their tool. But, but as far as, uh, EPA, we follow EPA standards.

  21. Committee chair (presiding)1:54:30

      Okay. Thank you. Thank you representative. We have, uh, Representative Koford.

  22. Rep. Jordan Koford1:54:36

      Thank you, Mr. Chair. I just wanted to clarify, you said that it, you changed it to a 5% tax, which I see on line 4 47, but on lines 4 49, it says that it's a 10% tax on certain sales.

  23. Rep. Troy Shelley1:54:51

      That's, that's if they committed for over 10 years. So it's not just a 5% Tax, it's, it's 5% if it's, if it's under the 10 years, but it's 10% if it's over. And, and I'll tell you, the reason that we do that is if we're committing the carbon, our carbon offset for greater than 10 years, uh, some of these go in forever. And, and if we, if we lose our offset and we, we end up in some kind of a, of a cap and trade scenario, we will not have the ability to increase industry without having that right of first refusal. That's not something that I anticipate while I'm here. But at some point, if we need to have a right of first refusal, we don't have a right of first refusal if somebody sells it permanently. So it's a higher tax for that. But if, but those who sell 'em on a five year or so basis, 5%.

  24. Rep. Jill Koford1:55:55

      Okay. And then just a little clarification, you're creating this carbon tax litigation fund, but only 5% of the proceeds are growing there and the other 5% are going to a degree granting institution in a rural county. What's your intention with that?

  25. Rep. Troy Shelley1:56:12

      Okay. Um, that is so that, uh, that some of the focus gets pushed to the rural counties because the rural counties are the ones who are most affected by these coal, coal fired power plants, the oil and gas, the, uh, the power generation, the, uh, the coal mines, that type of stuff. So what it does is it creates a competitive environment for the colleges to go after the rural kids and educate them so that they don't have to rely on environmentally based industry.

  26. Rep. Jill Koford1:56:46

      Thank you, Mr. Chair. Thank you. And I just needed to make a quick point of order, um, just to the presenter. Um, it is not appropriate for you to ask a question of the committee in, in the questioning, So withdrawn.

  27. Rep. Troy Shelley1:56:59speaker not certain

      Yeah.

  28. Committee chair (presiding)1:57:01

      Okay. Representative Christofferson,

  29. Rep. Kay J. Christofferson1:57:04

      Uh, thank you, Mr. Chair, and I apologize if you've answered this. I came in a little bit late. So, uh, so these credits that can be purchased and taken other places, is there a way you can just say, you, you can't sell these to outta state, uh, you know, they can't be transferred out of the state.

  30. Rep. Troy Shelley1:57:25

      Absolutely. I would love to. However, I don't know that that's fair to a private individual who decides that they want to do to, to market it.

  31. Rep. Kay J. Christofferson1:57:35

      Um, I, I, I'm with you on that point. I just, I just don't want to, I mean, that was, that was where my original appeal started, but, uh, yeah, it's, it's a great point. Okay. Thank you. Appreciate it.

  32. Unknown speaker1:57:51speaker not certain

      Thank you. Um, I do have one just quick question. When you say rural, um, colleges, that was a question I had. Do we have a definition for what that actually means? And does that need to be defined in here? Or is there somewhere? I don't know.

  33. Rep. Troy Shelley1:58:03

      Yeah, it, it's defined the, the, uh, rural counties or counties with 50,000 people or less. So if, if the colleges go after those rural kids, um, then it creates a competitive environment so that, so that those kids are, are promoted to go into a college, into some type of a profession.

  34. Unknown speaker1:58:21speaker not certain

      Okay. Perfect. Thank you.

  35. Committee chair (presiding)1:58:23

      I don't see another, uh, questions from the committee. We will go to public comment. How many people are here to speak to this bill? Uh, 1, 2, 3, 4. Okay, folks, uh, and two online. Okay. We do have, we have a hard stop at nine 50. We're gonna ask you to keep your comments to about one minute. If you would please, uh, please state your name, uh, who you represent, and please sign the role if you would. Um, go ahead, sir. Time's yours.

  36. Kelly Pehrson, Commissioner, Utah Department of Agriculture and Food1:58:53

      This is Han. Good morning. Uh, Mr. Chair and committee. My name is Kelly Pearson. I'm the Commissioner of Agriculture for the State of Utah. I appreciate you having me at this committee. It's my first time. Um, I've been with the Department of Ag now for six years, and I can paint you a picture of how dire it is right now in, in agriculture. If you're not selling beef, your commodity is losing money. So I, I vote a strong opposition to this bill to tax our ag community anymore. Um, one thing about our ag community in Utah, they're resilient. They find a way every year to continue to farm, and this is a tool that they can find used to continue to stay in farming, such as agritourism, such as, uh, direct to sells markets, don't tax them anymore. And this is a tool that may keep them farming for one more year or hopefully another decade. So I, I strongly hope that you'll oppose this bill.

  37. Committee chair (presiding)2:00:00

      Thank you. Go ahead, sir.

  38. Terry Camp, Vice President of Public Policy, Utah Farm Bureau Federation2:00:01

      Hi, good morning. My name's Terry Camp. I'm the Vice President of Public Policy for the Utah Farm Bureau Federation. Uh, we have serious concerns about this bill. Uh, Utah Farm Bureau supports voluntary incentive-based programs that keep farms and ranches in production. Uh, our farmers operate on thin margins. Uh, this bill adds new licensing requirements, criminal penalties, extensive reporting, bonding, and a new state right of first refusal before a landowner can complete an in-state carbon credit sale. Uh, we don't understand why this new level of bureaucracy and regulation is necessary and what has been a voluntary market driven space. Um, we, this bill also imposes a new carbon credit assessment on each sale, adding cost and complexity, and taking money out of farmers' pockets that could otherwise be reinvested in their operations. Um, finally, we believe the bill restricts private property rights by limiting how and when landowners can contract, um, delaying time sensitive transactions, and even voiding sales that do not comply with the new structure. And so we'd urge the committee to oppose the bill. Thank you.

  39. Committee chair (presiding)2:01:00

      Thank you. Go ahead.

  40. Tammy Pearson, Commissioner, Beaver County2:01:04

      Good morning. I'm, uh, commissioner Tammy Pearson from Beaver County. I'm also a farmer and rancher. Um, I serve on the Lee Ray McAllister fund, and so we're 100% pro agriculture on both my private and my, uh, professional life. Uh, we live in rural Utah. We're worried about the, not only the next decade, but also the lifetime and the legacy of our, of our families in agriculture. And so y tax ag producers twice for a potential revenue stream on private property. They will get taxed for the income, and then your bill taxes them another 5%. This is going after private property rights and carbon credits could be a revenue source that keeps farmers farming forever. Um, I realize there is a bad easement programs out there in certain things similar to carbon credit contacts, the, the devil's in the details. So thank you. Hope you vote against this.

  41. Committee chair (presiding)2:02:04

      Thank you. Um, go ahead, ma'am.

  42. Sierra Neilson, Executive Director, Utah Wool Growers Association2:02:07

      Good morning. My name's Sierra Nelson. I'm the Executive Director for the Utah Wool Growers Association, and I also sit on the LiRo and McAllister board among others. And I would echo what the Farm Bureau and Commissioner Pearson and other Commissioner Pearson had to say. We'd urge you strongly to vote against this bill. The sheep industry is bleeding. Don't cut us again. Thank you so much.

  43. Committee chair (presiding)2:02:30

      Thank you. Go ahead, sir.

  44. Dave Freiss, resident2:02:32

      Yeah, my name is, uh, Dave Price. I represent the, uh, CWMU Association. I'm the current president of that association. We represent, uh, the largest landowners in the state. Uh, probably 500 of 'em over two and a half million acres. And we, we feel the same way. We feel like this is a taking, we feel like if the state wants to regulate carbon credits, they can do it in a different way than taxing ranchers and farmers and landowners, uh, to create something that, uh, we really don't understand.

  45. Committee chair (presiding)2:03:05

      Right. Um, I get the preventative idea, thank you. But I don't think this is the way to do it. Thank you. Go ahead, Joel.

  46. Joel Ferry, Executive Director, Utah Department of Natural Resources2:03:14

      Yes. Uh, good morning and, uh, thank you, Mr. Chairman. Uh, Joel Ferry. I'm the director, executive Director of the Department of Natural Resources. I'll keep my comments brief because, uh, a lot of what I was, uh, going to say as a, as a private landowner myself has been said. But I'll just say from the department level, uh, there's a few concerns with the bill. Um, it creates a divergence of funds. We, we, a lot of the work that we do, WRI program, um, forest treatments, uh, large landscape scale habitat improvement projects, we partner, we receive federal money. Um, every time we sell a license, we receive a portion of that in, in additional revenue, uh, back for the state of Utah. We put then put that to work on the ground. If that money, uh, we use it to buy land, uh, that's what a WMA program is, right? The water, uh, water or the Wildlife Management Program, I'm out of time. Uh, the divergence of funds creates a problem because it, it, it would restrict our ability to access federal money to help enhance and incentivize or increase and improve the work that we're doing on these public lands throughout the state of Utah. We don't wanna put that in jeopardy. Um, certainly we want to protect private property rights as well. I think it's fundamentally God-given right? To be able to decide what to do, when to do it on your land, and nothing more important than that. So thank you.

  47. Committee chair (presiding)2:04:26

      Thank you. Okay, Sir, go ahead, Mr. Chairman.

  48. Tom Carter, Vice President, Rocky Mountain Power2:04:29

      Uh, members of the committee, Tom Carter with Rocky Mountain Power. Um, I was able to meet with a sponsor late yesterday, and we're asking, we are, as a company, we're, uh, lurking to better understand the goals of the second sub. So we're getting there. Um, we have a different perspective. We still have concerns, but we don't, we don't play in the carbon credit, credit, uh, market. It's not something we do. But there are other issues within this bill that we're working with this sponsor on to, to better understand. We do have concerns. Um, we want to understand that, uh, if the, there's potential changes that are proposed here, could have financial risk for our comp customers could have administrative burdens to our, uh, company and then to our customers. And we aren't sure. We currently aren't sure. And so we've committed to work with the sponsor, if that's, uh, that moves forward. Thank you.

  49. Committee chair (presiding)2:05:14

      Great. Thank you. Okay. We've got, uh, Brandon Yardley online. If you would, uh, turn on your camera and unmute yourself. And, and please state who you are and who you represent.

  50. Brandon Yardley, Commissioner, Beaver County2:05:28

      I'm Brandon Yardley, uh, Beaver County Commissioner, and also farm and Ranch here in Beaver County. And thanks to the sponsor of the bill. I learned more about carbon credits than I cared to know two weeks ago. But, um, one thing I've learned is carbon credits are not something I'm currently using, but they are something that I could utilize in the future and it could make a difference on keeping a family farm or, or selling to big business. Um, but one thing I about this bill that I don't like is I do think on the ag side it creates a solution for a problem that does not exist. Um, one thing that I'd like to talk to the sponsor of the bill about is, um, there are more carbon credits than just farming. Um, I would like to see if we can maybe exempt the carbon credits at this time, uh, just so we can keep a low cost safe food supply for the people here in, in Utah. Thank you.

  51. Committee chair (presiding)2:06:24

      Thank you. We have Taylor Payne again. Uh oh. You, you're there. Okay. Go ahead.

  52. Taylor Payne, Regional Coordinator, Utah Department of Agriculture and Food2:06:34

      Up here in Rich County, we've been developing a carbon project for the last four years. We are, sir,

  53. Committee chair (presiding)2:06:38

      Can you state your name and who you represent, please?

  54. Taylor Payne, Regional Coordinator, Utah Department of Agriculture and Food2:06:41

      I'm Taylor Payne. I'm with the Utah Department of Agriculture and Food, along with Dale Lambourne, which is the president of the Three Creeks Grazing Association. We have been working in, in, uh, rich County developing a carbon project. We, we've developed a, a, an answer to a bunch of issues that were environmental. And we found the carbon sequestration process as a way to pay for long-term maintenance across public and private lands that benefit the public here in this end of the state. Uh, we, we, uh, feel that this is a, a bill that is going to, uh, negatively affect our process and, and, uh, take away some of the funds that we have been excited to use that we've never had access to before. And I think, uh, in addition to the tax concern, the, uh, larger concern is all the regulation and time for right of first refusal. Uh, the paperwork would be involved in the selling, uh, I think becomes cumbersome as I read the bill.

  55. Committee chair (presiding)2:07:45

      Thank you gentlemen. Okay. That I believe is all from the public. We will bring it back to the committee for action. Yeah, we do have an amendment, so if somebody wants to, uh, make a motion there. Okay. Representative Christofferson, I move that we adopt the amendment Perfectly. Like to

  56. Rep. Kay J. Christofferson2:08:09

      I move that we adopt the amendment Perfectly. Like to

  57. Committee chair (presiding)2:08:12

      speak to that? No. Okay. To the, uh, to the maker of, or the bill sponsor. This is for the amendment. We're looking to adopt the amendment.

  58. Unknown speaker2:08:20speaker not certain

      Number one, I would like to adopt the amendment as well.

  59. Committee chair (presiding)2:08:25

      Okay. Any, uh, discussion to the, uh, motion from the committee? Okay. Back to the maker. I'll waive. Okay. So the motion before us is to adopt amendment number one to house bill 180 5. Second substitute. All in favor say aye. Aye. Aye. All opposed? Okay. I rule that passes. Do you wanna keep going? Okay. Sure.

  60. Rep. Kay J. Christofferson2:08:47

      I, I move that we hold the bill.

  61. Committee chair (presiding)2:08:49

      Okay. You object to speak to that?

  62. Rep. Kay J. Christofferson2:08:50

      Yeah, I think there's some real problems that need to be, uh, addressed that the sponsor's bringing up. And, uh, but I think, I think there, I think the solutions that are proposed cause some other problems. And I think this is worth maybe looking at in the interim and really discussing it because I, I think I can see two worlds colliding here and, and we really need to get to the bottom of it. Maybe there's another solution that can solve some of the, uh, carbon credit problems, but not affect so many others in, in a negative way. So I'd like to keep exploring that.

  63. Committee chair (presiding)2:09:30

      Okay. Very good. So the motion before us is that we hold, we will go to the, um, bill sponsor for, uh, uh, bill. Yeah, we'll go to the bill sponsor. Then we go to the committee. Yeah, go ahead.

  64. Rep. Troy Shelley2:09:44

      So I, I think I would resist the, the, the hold for, for this, this simple explanation. So this is the, the opposition that spoke is speaking against a 5%, not, not the 95% that they get, the 5% that the state brings in. And, and all of, all of the people who spoke were, were talking like, this kills the entire, their entire plan because the state has 5%. And yet, if we were to say, well, if we exclude you, do you want to be excluded from the protections of the lawsuits that come? No. They're, they're not gonna want to be excluded from that. They just want to be excluded from paying into it. That's this whole discussion. Ev everyone who spoke here was about the 5%, not the 90%. And, and in oil and gas, we tax a severance tax on a private landowner who pulls minerals out of the ground. They pay a 5% severance tax. That doesn't go to protect the landowner. That just goes into the general fund. But this, this 5% actually creates a fund. We are, we are already in lawsuits concerning this type of stuff. And, and there is, there is no tracking mechanism. I asked Tina Cannon, I said, have you had any reports of any of our departments who have said they've sold carbon credits? Is is that a report that's on a line item? Never. She's never seen it. There's no way to track it. This is like, if I sell your address and tell somebody, don't tell anybody where you got it. You have no way of tracking it. That's what carbon credits are. This, this establishes the structure. I I am, I am open to working through some, to some changes through the summer, but I think we need to get some structure. 'cause we're, we're this, we're going to end up committing state property in perpetuity this year if we don't get some structure in place. That's, that's the only reason I resist. I've talked with, with everyone, well, not everyone who spoke here, but those who spoke most adamantly, I've spoke with them, those who, who say, well, um, it could affect our federal funding. I asked them to get with our attorney and explain that. 'cause our attorney says, I don't see where that's at. I asked them to speak with them. They, they haven't, uh, if it, if it, if it affects their funding, that's something that we can do in the, in the interim and, and get another bill that, that releases. It, it just, it just makes it so that this year they don't, they don't, at least on a department level, they don't sell it. But individuals and, and there's the, the, the only thing encumbering is, is there's, if, if somebody wants to sell or if somebody wants to market carbon credits, we need them to register in the state. If we're going to buy carbon credits, we need to wait for a legislative action in order to buy the credits. And that's why there's the 45 day waiting period to make sure that the legislators have a chance to meet together and decide whether they want to expend the funds to do it. I, I wouldn't expect we would do that unless we get into a cap and trade scenario, which, which may or may not happen. So, so that, that's, I mean, I, I understand your, your motion for holding, but I think we need to get something in place, or these marketers that are here now are going to take advantage of the whole while they've got it.

  65. Committee chair (presiding)2:13:38

      Okay. Thank you. Uh, we are going to bring it back to committee for discussion to the motion. So the motion before us is the motion to hold. Are you looking to speak to that motion? Is that what you're, okay. We got, uh, representative Daley Provo.

  66. Rep. Jennifer Dailey-Provost2:13:51

      Thank you, Mr. Chair. I'd like to make a substitute motion.

  67. Committee chair (presiding)2:13:53

      Okay. That is in order. I'd like to make motion

  68. Rep. Jennifer Dailey-Provost2:13:55

      to table, and I will speak to that briefly. Um, I think that the motion to hold was a friendly opportunity to continue to work on the bill for the next couple of days because clearly there's a lot in the industry, a lot of people in the industry that don't feel that they've been at the table for the discussions. And, um, I think a motion to hold provides that opportunity. And, um, I also have concerns that despite all the best intentions in the legislation, this does tow a couple of concerning lines. That is, um, the, the takings issue. And also we are prohibited as a legislature to pro, we are not allowed to prohibit future legislators to do statutory things. And I'm concerned that this actually tows that line. And so I think that, um, the intent of the bill could certainly move forward. Um, this bill is not there. Um, and absent a motion to hold and a willingness to continue to work on it, I think the next best step is to table the bill.

  69. Committee chair (presiding)2:14:58

      Okay. So to the bill sponsor to that motion, Back to The, to the Make. Oh, oh, I'm sorry. Back to the make. Oh, that's right. Yeah.

  70. Rep. Troy Shelley2:15:06

      Thank you. Excuse me. Uh, no, I appreciate the sentiment there. I, the thing, the thing I like about holding, it does give the sponsor a chance to look at, maybe there's a substitution that will take care of some immediate needs, uh, for reporting or whatever to work on that. It still has to come back to the committee if he wants to bring it back again. And we can look at it. But if it's substantive, there's still a chance to do something, uh, temporarily, we can decide that on our own. If, if the sponsor decides that he can't do that in time, then it just sits, uh, sits there till the end of the session. But I think at least it gives a chance for more discussion and possibly some, uh, interim, uh, resolutions or, or, or remedies. And if we don't like it, we can carry it into the interim.

  71. Committee chair (presiding)2:15:59

      Okay. Perfect. Now we go to the maker or to the bill sponsor to the substitute motion, which is to table the bill.

  72. Rep. Troy Shelley2:16:09

      I would like not to table it and have an opportunity to see if we can get it to a good place.

  73. Committee chair (presiding)2:16:17

      Okay. Back to the committee for discussion to that motion.

  74. Unknown speaker2:16:22speaker not certain

      Um, I would like to speak to that motion. I am inclined to, to agree with, with Representative Christofferson on a personal level, I think the whole, 'cause I, I do think there might be some, some discussion that could happen maybe with some of these stakeholders to maybe help some clarification there. I I do think that's important. I'm not an expert in this field, but I do know that there's probably not a lot of folks that understand the, the big consequence to this long term as it pertains to the, to the autonomy and the safety and protection globally as a state, I think we need to be very, very careful, because I do agree there's a lot happening on the horizon. There is a, and, and this kind of stuff moves very, very quickly. I'd like to have him have the opportunity to discuss and, and have a conversation with some of these stakeholders. Maybe that has happened, I don't know, but, and, and then if it doesn't happen and we, and we bring it back, uh, uh, and it comes back and say, Hey, we're not, we're not at a space yet, then we don't move forward. But to table it means that we're done with this conversation. And I, I mean, this is now on the radar folks. Um, that means that whoever is opposing this idea, if it truly is a global movement, that means they're gonna move twice as fast and twice as hard. And they're gonna come in and try to clamp down what they can as fast as they can. So I would personally, I'm, I'm in favor of, of the underlying motion.

  75. Committee chair (presiding)2:17:45

      Um, so we'll go to that, uh, back to the maker of the substitute motion.

  76. Rep. Jennifer Dailey-Provost2:17:50

      Thank you, Mr. Vice Chair. I would like to withdraw my substitute motion and would speak in strong support of the underlying motion. Thank you.

  77. Committee chair (presiding)2:17:58

      Okay, thank you. So the motion before us then is that we, um, we hold the bill. Any other discussion from the committee? Okay. I see none. So, back to the maker of the motion. I'll waive. Okay. So the motion before us is that we hold the bill, um, uh, so to the committee for a vote. All in favor of that say aye. Aye. Any opposed? Okay. Rule that passes. Okay. Thank you. Um, look forward to seeing you hopefully again. Yep. Thank you. So for the audience, uh, we do apologize. Those of you that were here to listen to, um, house Bill 3 37, unfortunately we do have a hard break in about one minute, so that the bill sponsors asked that we just simply put that onto a subsequent agenda. So we will notify the public. Again, apologize for those of you that were here to, to listen to that, to that bill. Uh, one final motion. That motion is in order. Un debatable. All in favor say aye. Any opposed? Then we are adjourned.

• Feb 27, 2026 House Revenue and Taxation Committee▶ Watch
  Transcript (70 turns)

  1. Committee chair30:12

     Uh, and we have, uh, one item on the agenda today. Uh, and that's HB 180 5. Uh, and you'll be looking at substitute two carbon credit amendments. And Representative Troy Shelley is, uh, doing that. He's, uh, we've discussed this once and then he's made some adjustments and we'll hear from you now. So go ahead, Representative Shelley.

  2. Rep. Troy Shelley30:43

     Thank you, Representative Christofferson. I would like to speak actually to the third sub.

  3. Committee chair30:49

     Okay. We'll follow through on that.

  4. Rep. Troy Shelley30:51

     Thank you. So, so let me just go back and recap what carbon credits are because this is, this is a mysterious market for a lot of people. I've, I've paid attention to this market for, uh, well over 10 years, um, and collected data that's almost more than my computer can hold. Um, and, uh, you know, I, I've had, I've had multiple people say, well, why don't we hold this for an interim study? Well, um, there, there are no parameters on the carbon market. And so, so what this bill will, will do is it will give us the parameters so that we can study it during the interim. And, and that's exactly the intent in the bill. It, uh, it actually identifies that we'll put together a, uh, a study group to start to identify, um, where this is. Um, so, so just to, to briefly explain how the carbon credit market works is, uh, there's, there's some countries who do what's called a cap and trade. So if they want to increase their production of something and it's going to emit more carbon dioxide than they currently do, then they have to find a place somewhere else in the world to reduce their carbon dioxide output. And so, so that becomes valuable to that company who wants to increase. So they will go to, um, you know, another industry and say, Hey, uh, if you let, let me use Geneva Steel as an example. When Geneva Steel shut down, um, they were emitting not only particulate matter, but carbon dioxide into the atmosphere. And, and so then Southern California Edison in the San Fernando Valley, which is why I have a little cough all the time, is that's where I spent, uh, two years of my life. And I got Valley Fever from the San Fernando Valley. But they were able to advertise that they have reduced particulate matter in the atmosphere by x number of thousands of tons per year. And isn't it nice that our atmosphere is so much cleaner? But it was actually, they bought that right from Geneva Steel. And so that's kind of how the carbon credit market works, is if you want to increase your carbon dioxide output in one place, then you have to reduce it somewhere else in the world. So that's what creates value. And then how does, how does that convert into cash? Let's say that that, uh, um, a a power plant wants to be built or, or that somebody wants to build a power plant, it's going to emit carbon dioxide, but they can advertise that it's going to have zero carbon dioxide output because they will buy carbon credit from somewhere else in the world and reduce it by that amount. And then, and then when they repay that loan, that loan is repaid back in whatever currency the loan or the, the lender determines. And, and there's no transparency on this. So it's all tracked by the IPCC, which, which operates under the United Nations. So, so they keep track of it on a spreadsheet as to who owns what carbon credits, but they don't keep track on the spreadsheet how it's repaid, because that's between, that's between the owner of the carbon credits and the person who's repaying the debt. So that's generally how the, the carbon credit trade works. Um, so I, I, I appreciate you taking the time to let me come back and, and present, 'cause there was, there was quite a bit of, uh, there o opposition or certainly questions that, that people had raised. So we took note of every single opposition that there was, and we addressed those. So, uh, we removed, we removed the tax portion from, from the bill entirely. Uh, private, uh, reporting requirements have been eliminated. The substitute does not at all regulate anything other than state entity assets. Uh, private parties who wish to participate in the carbon market using their own resources. Nothing in this bill stops them or prevents that the state's right of first refusal has been removed. And, and I'll address that if, if we're ever forced into a cap and trade scenario in this state, future legislators are going to have to look at that because, because then if we're selling off our carbon credits, it's going to restrict the ability for the state to, to increase the industry. But that's not today. And now, so it's removed from the bill. The bill no longer requires a state entity that sells a carbon credit to deposit the revenue from the sale into the general fund. And the bill does not, and never has permit prohibited carbon markets, nor has it ever restricted voluntary agreements. Finally, it does not. Nor has it ever proposed taking, transferring or encumbering private property. One question that's been raised to repeatedly is how often this is actually happening. We don't know, but we do know it is happening. Um, and, uh, there, there was a provision in the bill as well, uh, that, that created a fund for the Attorney General's office to be able to defend against, against, uh, any kind of a, um, environmental, um, lawsuits and stuff. We, by necessity had to remove that fund. But just to be clear, I just, I asked the attorney General yesterday, or the, their office yesterday, if they're dealing with any lawsuits concerning this right now. And they said, oh, there's numerous, but let me send you a few. So they sent me the Utah versus EPA good neighbor rule. Robert Sources, DNR, the youths, the youth are claiming or youth want to stop all oil and coal production. Um, they've joined suits with New York and Vermont on climate change super funds. And the Great Salt Lake litigation is directly about climate change in indirectly Oh, in indirectly about climate change. So, so it's, it's active, it's alive, it's well, the fa the state's facing it, I understand that it's that it's an absolute new concept and it, and it, it blows all of our mind how, how controlling this is and what it does to our state. It's, it's something that we need to understand as a state. If we can get this bill past the finish line, we now have the parameters so that we can begin to do an interim study, which my bill also addresses to create a voluntary committee to be able to start to study it. I've got Treasurer Oaks here. Um, I'd like to turn some time over to him.

  5. Marlo Oaks, State Treasurer38:54

     Thank you, uh, Representative Shelley and thank you Chair Lyson and committee. Uh, my name is Marlow Oaks State Treasurer. Uh, and just clarification on those lawsuits. Um, those are all tied to climate change, which is, you know, part kind of the underlying, uh, concept behind carbon markets. It's all based on climate change, um, uh, catastrophizing as, as I say. But just the idea that unless we address, uh, carbon dioxide emissions, that, um, there are going to be catastrophic outcomes, um, on all of us. So that the, that's kind of the, the common theme with those lawsuits. And, and so carbon markets are part of that. But I wanna step back from the broader debate about carbon markets and talk more about financial stewardship quickly. So if a, if an activity generates a financial asset and that activity involves state funding or resources, the state should know about it. Right now, carbon credits tied to public lands, public programs or taxpayer supported initiatives are not tracked or auditable, uh, by the state. There's no standard mechanism that ensures policy makers can see what is being created, where it is being assigned, or what long-term obligations may accompany those transactions. It is a visibility and a transparency issue. Carbon credits are increasingly treated as financial instruments. They can be sold, transferred, and in some cases attached to long-term commitments. If credits generated from taxpayer supported activity are assigned or claimed, without the state's awareness, policymakers lose the ability to evaluate the long-term fiscal and economic implications. This bill does not prevent private transactions. It does not prohibit carbon markets. It does not regulate private landowners. It simply says when public funds or public resource sources are involved, there should be transparency. Um, this is about financial governance and stewardship. If a public resource generates financial value, the public should be able to see it. If a transaction affects long-term economic capacity, policy makers should understand it. Transparency is not regulation for regulation's sake. It is responsible stewardship. HB 180 5 gives the state the ability to track and understand what is happening when public resources are involved. That is a prudent step. Thank you for your consideration.

  6. Committee chair41:27

     Thank you. Does that conclude your presentation representative?

  7. Rep. Troy Shelley41:30

     It does. We're open to questions from the committee.

  8. Committee chair41:33

     Okay, great. Uh, we will bring it back to the committee, uh, Representative Christofferson.

  9. Rep. Kay J. Christofferson41:42

     Uh, thank you, Mr. Chair. I have a few questions if I may. You may. Thank You. Um, so, uh, do you know how much, uh, carbon dioxide is manmade in the world?

  10. Rep. Troy Shelley41:57

      Do, do you know what percentage of carbon dioxide is manmade for The, the total amount of, uh, carbon dioxide in the atmosphere is about one fourth of 1% of the atmosphere. And of that they estimate maybe a hundredth of that is manmade. Very, very small amount. Yes.

  11. Rep. Kay J. Christofferson42:19

      Uh, another question I had is, uh, okay, it's important for the state to know what's happening. So, you know, so that people aren't claiming, um, credits that may not be there, I guess. But you'd mentioned that the UN keeps track of that. Is that right? Is are they the ones that keep track of that worldwide?

  12. Rep. Troy Shelley42:42

      That's correct. So do they report that or do they have, is there like a spreadsheet of who owns those and which ones they are and how they're traded? Yes. Yes, there is. And the UN says we're a private organization and we do not submit to audits. So there, so you never know what's happening then if they're not being transparent? No, the reason for this bill, at least it gives us the parameters to begin. So the only way to be able to track carbon dioxide or the, the credit carbon credits is for the state of Utah to claim ownership of its carbon credits. And at that point, the United Nations is very vigilant of making sure that carbon credits are not double counted. So when the state comes back and says, those are ours, and we have proof, those are ours, then the IPCC has a dilemma they're gonna have to deal with. That's the only, that's the only way, that's the only way you can find out where they're at.

  13. Rep. Kay J. Christofferson43:47

      Okay, thanks. And then, then the last question is, uh, is, you've mentioned that, and, and Treasure Oaks had mentioned that you, you've really taken out any, anything in the bill that would be an imposition on the state or private property owners in and being able to trade these credits. Is that right? Yes. Every single obstacle that was addressed in the last meeting we have addressed. Okay. Thank you Mr. Chair. Appreciate it.

  14. Committee chair44:23

      Okay. Thank you. Uh, see no further lights from the committee. We will, oh, excuse me. Representative, uh, or vice chair Eliason. I see your hand is up.

  15. Rep. Steve Eliason44:32

      Uh, thank you Mr. Chair. So I just wanna make sure that I have a couple questions for you, Representative Shelley. 'cause I wanna make sure that this is very, very clear for the record because we're gonna look back on this committee meeting, um, years from now. And I think wish we had made a different decision. And I appreciate where you've taken the bill because we need to get this bill passed. But I just wanna make sure a couple things are, are abundantly clear. So, number one, the fund that we were going to tax individuals who sold their carbon credits, um, that was gonna create a, a litigation fund that is no longer part of this bill. Is that correct?

  16. Rep. Troy Shelley45:10

      Correct. Not only that, but also on a state level, it's no longer part of the bill.

  17. Rep. Steve Eliason45:15

      Okay. I think that's important that, that is abundantly clear in this committee right now. Number two, those individuals who do sell a carbon credit, they are going to be taxed as income. Is that correct? Yes. And will the entity that they bought the carbon credit from Purdue a 10 99 so that the state of Utah as well as the federal government, knows that they have that as taxable income?

  18. Rep. Troy Shelley45:40

      Yes, they should. Okay.

  19. Rep. Steve Eliason45:44

      And, um, and, and I'm, I'm gonna come back, uh, before you sum at the end, 'cause I do wanna say a couple things, but I wanted to just make sure those questions were asked and that was abundantly clear on the record.

  20. Committee chair45:55

      Thank you. Uh, thank you representative. Um, okay. Seeing no further lights in the committee, we'll go to the public. How many here from the public is wanting to speak to this bill? Okay. Uh, go ahead and come forward. You can stay the representative.

  21. Terry Camp, Vice President of Public Policy, Utah Farm Bureau Federation46:26

      Hi, good morning. Members of the committee. Um, my name is Terry Camp. I'm the Vice President of Public Policy for the Utah Farm Bureau Federation. Um, I'd first like to say we, we've appreciated Representative Shelley engaging with us. He, we had a sit down meeting with, um, him and Treasurer Oaks to try to sort through some of this and understand concerns and what they're trying to solve for. And we've appreciated that. And the bill has, um, come a long way. Um, we, we don't oppose reporting and some of these mechanisms for making sure we know, you know, where carbon credits are being created in the state. Um, but we still have some concerns about this third sub. Um, one of the main concerns I have is, is just a little bit of confusion around like lines one 50, um, through 1 65, where it talks about state and state entities and owning proportional shares if state money's expended. We don't know whether this is applying to only state lands and state entities, or if it's applying to private lands that state monies are being spent on. Um, so that's, uh, a little bit confusing to us. And then we have some questions about the definitions. Our, our, the biggest thing we wanted to urge the committee is basically, this is a complex area and I, I just think it needs more study. And so we'd encourage the committee to maybe just hold it, have your policy analysts, study it over interim, you know, take a deep dive into it, compare other states and the frameworks they have, and then, and then address this next session. Thanks.

  22. Committee chair47:58

      Th Thank you. And the witnesses can kind of just come up and take the stand there in order.

  23. Dale Lamborn, Three Creeks Grazing LLC48:08

      I am Dale Lambourne. I'm representing Three Creeks Grazing, uh, which is a grazing association up in Rich County. We have put together a LLC where we combined 30 permit holders under a large, uh, single LLC, so that we can make some significant improvements on grazing on public lands. Um, it's been a novel thing. We bought BLM together, we brought Forest Service together, tla uh, GIP through the Grazing Improvement Program. And through that process, we've made significant, um, improvements in the resource, both in terms of water quality and forage. Uh, the increase in biomass is leading to what we hope from the reporting that we've got so far as increased sequestration of, of carbon in the soil. We are right now in the, uh, process of negotiating with a private, uh, carbon credit group, which has been an incredible learning process and kind of a new, uh, process to go through. It's been difficult enough without a lot of of stipulations. I appreciate so much, uh, what's been done in the third substitute because a lot of the timelines, right of first refusal, all of those things that were in the initial bill would've been very problematic. However, the, I I would second the, the recommendation was just made that we think about it and look at it more closely in interim because even the, we, uh, took get money, we took money from water quality, we, you know, we've gone after the money to, to make the improvements for the resource. Um, now to go back and repay that, if we get carbon credits, I think there's some questions of how that would look and, and how it would be, and does it make it less marketable in the open market if they have to deal with two or three things? So I would e encourage the, the same thing that the, the last gentleman did. I, I think in agriculture to make significant improvements in the landscape, you have to make significant financial investment. This is a way for producers to recoup some of that investment if we can actually take advantage of the carbon credit. And it's a win-win because we're improving the environment, we're improving the profit profitability of, of agriculture. And, uh, certainly we wanna make transparency available. But, uh, a lot of additional things, like I said, our negotiation process has been strenuous at best. I'd hate anything to make it more strenuous. Uh, sir, I believe that one

  24. Committee chair51:02

      of our committee members has a question for you. Uh, Representative Strong. You're on mute. Is that better? Can you hear me? Yes. Okay.

  25. Rep. Mark A. Strong51:16

      This could be a question for, uh, the, the gentleman there, or even the one before. And I don't claim to understand all the details of carbon credits, like, like, uh, the treasurer Representative Shelley does, but, and others, but it, in my somewhat ignorant view of this, it seems to be like made up property rights. Um, they seem to be driven by an environmental push. And how do you, what's your thought on this as far as it actually being a property? Right. Um, you know, so my wife, she grew up on a farm. They have five, 6,000 acres of farm up in Idaho. And, you know, physical property is a real thing. We believe in that, I believe in property rights. But this seems to be kind of, and, and I might be using the wrong word, please forgive me if, if I am, but made up or fake, um, why, if, if I'm seeing this right and correct me if I'm not, um, why should there be such protection of this as regards to say your farmland when it, this is something that can be sold to, uh, Europe or Africa or, um, Colorado? Or am I missing something here? Did Anybody can answer that question? I Think he was, yeah, that's, Yeah.

  26. Dale Lamborn, Three Creeks Grazing LLC52:53

      I think you're correct. And I'm not sure I understand exactly what you're saying, so I better not respond. I, I think as, as Representative Shelley said in his initial statement, the selling of carbon is something that few of us understand because it's such a new concept. When we first got negotiating this, my initial reaction is how do I sell something I don't have, I can't touch, but, um, it's happening. Uh, Exxon Oil, which is across the border very close to us in Wyoming, is making a whole lot of money selling carbon credits. Uh, the people, Delta Airlines is making a whole bunch of money selling carbon credits. I haven't ex explored the market much past those two entities. I just would hate to do anything that excluded agriculture from taking advantage of the same things that big businesses currently taking advantage of.

  27. Rep. Mark A. Strong53:56

      Yeah. And, and I guess to that, I would say, um, I wish, I guess there's a part of me, again, not understanding this entirely, that wishes that you couldn't sell those or monetize those because they can put Utah, if I, again, please, I may be speaking totally out of turn, but it can put Utah at a terrible disadvantage at some point for some property, right? With my air quotes that is, is, is completely made up. And I realize it's made up, but it's also real. I, I mean, I say make believe, but maybe also real. Um, and it just concerns me that people could be selling off, uh, an asset that could be extremely valuable to the state at some point. Anyway, that's just my thought.

  28. Dale Lamborn, Three Creeks Grazing LLC54:52

      And I think you just articulated why we as private landowners are concerned about the bill because we, we would like to maintain some ownership in that that profit not just all go to the state.

  29. Rep. Mark A. Strong55:06

      If I understood what you were saying, Well, I'm not, not necessarily, I'm not saying that there shouldn't be some ownership, but, um, I would be concerned somebody that has vast numbers of acres could sell this off and, and put, put the state at a really difficult spot. Um, I do understand property rights though, and, and I'm just really have a hard time understanding how this is a property, right. Um, it's associated with acreage and it's, I don't know, it's interesting to me.

  30. Committee chair55:38

      Th Thank you representative. We'll go to our next, uh, witness Director Ferry.

  31. Joel Ferry, Executive Director, Utah Department of Natural Resources55:43

      Yes. Uh, thank you, Mr. Chairman. Um, Joel Ferry, I'm the Executive Director of the Department of Resources, also a farmer and rancher in Northern Utah, fifth generation. Um, and I have some thoughts, um, may not be germane or appropriate for me to respond to Representative Strong, but I'll, I'll, I'll, I'll give my thoughts on the, the, the legislation first. Um, first I wanna commend, um, and thank Representative Shelley. Uh, we spent hours together this past week working and, and talking and discussing this legislation and just understanding better, um, uh, the concerns, the, the, the direction and trying to find positive outcome, um, to, uh, to this very complicated and, uh, kind of novel concept As we look forward. Um, the, uh, the, the, the changes that have been made, uh, I I believe significantly improved the bill, um, as, uh, as was pointed out by the two previous two, um, testimonies. Uh, so, so, well I'll back up just a little bit. I got a copy of the, um, this third sub just this morning. And as I reviewed it, um, most of the changes that we had requested or included, um, there was the, the, as the previous testimony mentioned, um, a little bit of concern over. So it's, it's, if state money is used, it's these, in that one 50 area of the build. If state money is used, then the state takes a proportional ownership of if a carbon credit is created by the utilization of state revenue or state funds. So, for example, I, um, we in the Department of Natural Resources run a lot of programs because we're tasked with managing large, large, vast quantities of land, both state ownership, but also we're the, the agency that interacts with the federal government. And in fact, those, most of those lawsuits that were mentioned against the state are against the Department of Natural Resources or divisions within the department. So we're, we're really the tip of the spear when we're talking about dealing with issues associated with, um, kind of this environmental movement and trying to force the state to do certain things, whether it's decisions associated with how we're issuing permits on mining, um, what we're doing associated with, uh, our responsibilities and obligations on the Great Salt Lake or other places. Um, and so we're, we're dealing with this on a daily basis. And some of the programs that we run, such as the Watershed Restoration Initiative, right? It's a, a program where it's a public and private partnership where we utilize revenues that come off of the sale of, of hunting licenses, um, big game tags and, and and other things. Um, revenue sources. We partner and match those with private funds to go out and invest in these public lands, whether they are or in the lands of Utah, not, not just public, but private state, federal lands. We look at, at these resources, a a, a line on the, on the map doesn't make a difference to a watershed, doesn't make a difference to a migrating species, whether it's a mammal, a bird, um, whatever it may be, a fish as they move across these landscapes. And so our job and our task is to make sure we have healthy, vibrant, productive, ecologically productive landscapes. And that's what we do with these programs. And so we would wanna make sure that we're not doing something that would cause say, a private landowner to say, I'm not gonna participate 'cause you guys are going to take this, my ability to participate in something in the future. So that would be really the only, um, kind of, I guess as we, as we look at this bill, the only, um, um, issue that, that we have as I spoke with my, uh, division of Wildlife Resource, um, uh, folks that are here, they're the ones that manage a lot of this, these programs. And, um, we would just hope that, uh, is this, if this, if when this bill moves forward, we can address some of those types of concerns because, um, it is a concern, uh, because whether it's, I can tell you whether it's Washington DC telling the state of Utah what to do, or it's Salt Lake City telling the residents of rural Utah what to do. We have concerns in rural communities, um, and we wanna make sure that we're, we have the flexibility, freedom, and, and opportunity to manage our lands and utilize the resources that come off of our lands in an appropriate manner in, in a way that we see fit, um, decisions made. There's nothing more local than you as an individual, and decisions made on that local level are always the best decisions because we're the ones that are most impacted. Um, that concludes my testimony, Mr. Chairman. I just, and I have a thought for Representative Strong, if it's appropriate. It's part of your testimony. You can say whatever you want. Okay, well, I'll be quick then. Uh, representative, and he's given me a thumbs up. All right. This is just my, my take on this. So whether it's, uh, when we talk about someone getting like this, this carbon credit, yes, it is new, yes, it is kind of this, how does this impact private property rights? And I think ultimately, if, you know, what is the value there, right? There's, there's studies that show that healthy and viable plant production will pull carbon out, that, I mean, plants use carbon to grow, right? That's what, that's the vegetative material they're pulling, like we, we need carbon is life, and it's a, it's a building block of life. So those plants will pull that carbon down, put it into their roots and store that they sequester that, if you will, into the soil. And so if someone says, Hey, farmer Joel, I will pay you to change your tillage practice so you're not just plowing your field and releasing all that carbon back into the atmosphere. Do a no-till practice and I'll pay you 10 bucks an acre. And I say, okay, great. And they pay me. And that creates that form of a, say a quote unquote carbon credit or some practice that might lead to that. That's the type of value that we're talking about. It's not just a nebulous do this, do that. It is identified practice with an identified result that can be measured and delivered upon. So just like if someone in Africa or Saudi Arabia or California or Delta or local in Salt Lake wanted to pay me to grow hay, I will do that, right? As a farmer, it's my choice, or I won't, I can, you know, it's my land. I can do what I want with it to a certain extent. And so that creation of an opportunity is what we're talking about when we talk about a private property, right? Or elimination of that opportunity. And so truly what we're talking about is do you ultimately want to limit someone's ability to do something with their land that they feel is highest and best use or not? So it's, it's, when we talk about that, right, it's the right to utilize your property the way you see fit as the owner of that property. Uh, thank you.

  32. Committee chair1:02:53

      We do have a question from, uh, Representative Christofferson.

  33. Rep. Kay J. Christofferson1:02:57

      Uh, thank you. So on that, when that transaction's made, and I agree they can do that if they want, but is that, does that transaction get reported that goes up to the UN so that they can keep track of that? I mean, I'm just saying, I'm just asking how's that tracked? I, I don't know. I'm not familiar with that process.

  34. Joel Ferry, Executive Director, Utah Department of Natural Resources1:03:18

      Um, the, I I, I know, uh, you know, as far as tracking it up to the un, I don't, I think that's, that's taking this kind of numerous degrees down the pathway of is it happening, is it not? I don't know. I I'm, I I don't, I'm not aware of any instances where it is happening specific to That. Yeah.

  35. Rep. Kay J. Christofferson1:03:43

      And then, uh, if, and kind of what Representative Strong was saying, if these credits are used for operations out of state or out of country, can that affect what we do with our land in Utah?

  36. Joel Ferry, Executive Director, Utah Department of Natural Resources1:04:02

      Um, so I, I guess specifically my opinion here on the land, if, if something like this were to occur, there would be a contract in place and that contract would govern what would and would not happen. Um, and so it's, it's like any contract you're agreeing to perform a certain task for a certain compensation or there's an exchange of goods or services that occurs. So that would all be enumerated and spec specified, and there would be a deliverable that would occur because of that. And so, um, the, the ult ultimately our, I mean the state of Utah, we are adamantly opposed to any sort of a, a cap and trade system. And that's where I think this, you know, ultimately does that, does this lead to some sort of a cap and trade type system? And that's, that's the concern. And that's something that we will and continually, um, are opposed to and will continually fight against, adamantly fight against to prevent that from occurring here.

  37. Rep. Kay J. Christofferson1:05:04

      Okay. Thank you, Mr. Chair.

  38. Committee chair1:05:05

      Thank you. Uh, Representative Strong has a question.

  39. Rep. Mark A. Strong1:05:09

      Yeah. Um, it kinda goes back to what, uh, um, Representative Christofferson was saying. I mean, we've, we've made some moves here to keep foreign entities from purchasing land in Utah. Um, I'm actually running a bill right now that would put some handcuffs on a county that wants to buy property in another county. And here we have a, again, I got my air quotes, you know, property of some type, and we, we have no idea you could sell it to China or Russia or Kazakhstan or, or, you know, or even a crazy place like California. So that, that's kind of my concern is we have this, this property, it's, it's, if it is property and we don't allow foreign entities to purchase our physical property, I, I kind of, there's part of me that's like, okay, this isn't physical property, but it is property and it's, it's highly politicized. And so I, I, I don't know, I don't know if that's even a question. It's more of a comment. And, and Joel, um, you, you own a, a number of acres, you or your family, you know, there's a number of acres and, and, um, I, I mean, I could see financially how this could be profitable for, uh, you personally. And I, I'm not suggesting at all that that, uh, persuades you one way or another. Uh, it would me, 'cause you know, we could see maybe, oh, I can utilize this property for additional, additional ways to profit. So anyway, it's just, it just adds to the concern of who's this going to? Uh, are we selling property to China? I don't know. Maybe we just won't know that unless we can track it. Uh, I don't know if that's a question or not. You can determine that. I, yeah, I didn't know if it was either.

  40. Committee chair1:07:08

      I was a question for you a Question. I'm okay. If somebody wants to respond to that, you know, it's up to you.

  41. Joel Ferry, Executive Director, Utah Department of Natural Resources1:07:13

      Ha, happy to respond if it's appropriate. Was Sure. Go, go ahead. Okay. Um, I think that fundamentally the difference is you, you're not selling property. You're selling a product that's, or an item that's produced off of your property, right? Um, and so for me personally, it's just more I have experience associated with, it's not something that I am looking to benefit from personally. So certainly that's not part of the discussion here. But ultimately, um, whether we're growing a crop, 'cause you're not, you're, again, what you're talking about is, um, a derivative of your property, right? Just you've, you have, uh, you have talked about, uh, in, in the legislation preventing say, China or a foreign entity from acquiring land here in the state of Utah. It's totally appropriate. And so, and, and I have no, I, I don't see there's any qualms. And I think that the bill creates a ability to track some of this, um, not a concern, right? From, from my perspective. But ultimately what we want is, is, uh, just to, to raise the awareness that these actions can have a quelling effect on the ability for us to perform some of the functions and tasks that we've been tasked to do. And there's, there's, there's, it's fine to place, um, safeguards associated with that and to create parameters. And that, that's, that's the opportunity and the obligation of I think, the legislature to do that. So ultimately, um, we're, this is kind of uncharted territory, so we're just trying to navigate this in the highest and best way possible. Just one other, just quick comment to that. If we talk about producing things on a property, so my wife's family, they grow potatoes and they can grow potatoes and then alfalfa and then different crops over and over and over. It seems like when this is sold, it's gone forever. And so it's, it's maybe a little different than, than a, a product that your property produces. I suppose it would maybe more like a mineral or something. Uh, 'cause once you pull it out, it's gone. Um, unless somehow you can buy it back. And I'm guessing that as things get tighter, it's gonna be extremely difficult and the price is going to go through the roof or major corporations that are, that maybe have the money to, to purchase those back or, or to trade 'em around or, and I don't know if we as a state have quite the political clout to do that. And again, I might be picturing this wrong, but that it is, it's a great discussion and I'm thrilled to be a part of it. So, and there's, there's not a question there, it's just a comment, so,

  42. Committee chair1:09:49

      Okay. Uh, thank

  43. Unknown speaker1:09:50speaker not certain

      you. Actually, I do have a question, and it could be for the sponsor or, uh, any of our esteemed witnesses here. Um, I'm gonna go back to last century to one of my tax professors, Dr. Kanosh Haney, who said everything is taxable unless the government has given you an exemption for that. Like say, you know, prescription medications, different things that we have in the tax code. So sounds like this is happening in Utah, and this is the revenue and taxation committee. And maybe this is part of the point of the bill, but for individuals that are currently, you know, maybe engaged in this practice, are, is this reportable income? Is it taxed just like, uh, if you're doing crops or livestock?

  44. Rep. Troy Shelley1:10:41

      Yes, it's reportable income. All we want do is put parameters around it so we understand what's happening.

  45. Unknown speaker1:10:47speaker not certain

      Okay. Alright. Thank you.

  46. Committee chair1:10:50

      Um, I think, is there anybody else in the public, in person that would like to testify? Okay, I think we have one person. Oh, they put their hand down. All right. Okay. Uh, we will close, uh, public thank you, close public comment and bring it back to the committee for further discussion or action. And we do have a third sub Representative, Koford.

  47. Rep. Jill Koford1:11:23

      Thank you, Mr. Chair. Make a motion that we adopt third sub.

  48. Committee chair1:11:25

      Would you like to speak to that? No, I'll wait. Okay. Uh, to the sponsor. I appreciate that. Okay. He appreciates that. Okay. All in favor of adopting the third sub, say aye. Aye. Aye. Aye. And he opposed? Okay. Chair rules, that passes unanimously.

  49. Committee chair1:11:45

      We have the third sub in front of us. Representative Christofferson.

  50. Rep. Kay J. Christofferson1:11:54

      Yeah, I'd like to move that we pass out HB 180 5 third sub with a favorable recommendation. Okay. Would you like to speak to that? Yeah, I think, I think this will help us kinda wrap our arms around what is being sold and have some accountability that way. But it also doesn't inhibit, uh, those who are in that market from doing, you know, from continuing to do that. I think that there might be still one or two little questions on, uh, on the bill, but I think there's still, still opportunity to adjust that if they, uh, want to. And now, now that we can see what's happening with this third, third sub. So I'd like to see it move forward and, uh, and if we need to do some more things in the interim, we can adjust that.

  51. Committee chair1:12:50

      Okay. Uh, thank you discussion to that motion representative Erland.

  52. Rep. Erland (unidentified)1:12:57speaker not certain

      Thank you, Mr. Chair. I don't know that I've ever voted against getting more information or creating a study or, or any similar type of thing, but it's just, it's property rights to me and to me, this is a, something that's really, uh, concerning to me when I hear other people talk about how concerning it is to them. And so, uh, I, I, I think I support getting more information, but some of the other things in the bill, um, are gonna be non-starters for me on this one. And I'm sorry.

  53. Committee chair1:13:34

      Okay. Thank you. Uh, rep, uh, vice Chair Lyon. Did I say your name correctly?

  54. Rep. Karianne Lisonbee1:13:42speaker not certain

      You did cousin. Uh, so I want to, uh, I wanna just share a couple of of things and I, I hope to not take too much time. I am in complete support of this bill. Uh, I do believe it's, it's critical that we get our hands around this as quickly as possible, and it is very timely. And the reason why it's timely is because if we don't act on this sooner than later, this is gonna get away from us. And I wanna just point out a couple of things. Um, it wasn't said, and I wanna make sure that we have a couple things on the record. So when these carbon credits are being purchased around the country, there are third parties that actually handle the transactions. But this all came through, um, a, a an, it was actually adopted in 1992, and I won't go into all the detail, but basically who oversees this? It's an entity called U-N-F-C-C-C, which stands for United Nations Framework Convention on Climate Change. And this was all part of the Paris agreements, the Climate Accord agreements that, that the world is buying into on climate change and manmade climate change. And I think that's important that, that is on the record, that this is what is driving this whole conversation. And the couple things that we need to keep in mind, number one, my heart goes out to our farming community. I grew up on a farm, as you all know, I think this is an awesome opportunity for them to have additional cash flow and new cash flow that they didn't have before. And if they choose to not, uh, engage in certain farming practices in order to create a new cash flow, I think it's fantastic. I think part of the concern is, and, and might, might be addressed by a couple of others, uh, concerns, is if they're selling, say, a, a five year or a 10 year contract that, you know, obviously that's a, that's no bigger deal. But I do believe at some point, and, and perhaps in the interim, when we do have these discussions, we do have a, a, a way to say, wait a minute, um, before this is sold off in perpetuity, that's where I have a real challenge is let's say a farmer decides, Hey, I'm gonna sell this off into perpetuity, and we don't give somebody, either the state or somebody within the state of Utah, the opportunity to have first ride on that, then that does start to handcuff our future economic capacity in the state because we are now selling off an opportunity for productivity and economic driver within our state. So I don't believe that this bill ever was intended to harm or hinder, um, private property owners at in any way. I think it was designed to, to just put some guardrails and to give us some information to know, you know, are we, are we selling the farm, so to speak? Um, but, but the thing we need to make sure is very abundantly clear. There are global interests that are looking to control economic outcomes throughout the world. And there's, there are global interests that would have a very happy day if they could handcuff and cripple the United States, and especially Utah, because of all of our resources that we have. I think we need to keep that very much in in mind. So having the guardrails around this and getting, kind of getting our hands on this early is, is super important to protect private property as well as the state's, um, interests. Um, so the challenge is, um, we do need to protect, we do need to protect our economic viability by having these guardrails, by making sure that everybody understands better the way these markets work. Because I'm telling you right now, um, this is gonna be a pivotal, I believe this is a pivotal day in Utah history because us getting in front of this now versus holding this bill and waiting until sometime down the road is gonna be a mistake. I think we need to jump into this right away, get as many guardrails as we can without hurting private property owners and making sure that we direct and control the future of this state. Because I'm telling you right now that there are people of ill intent that are looking to cripple the United States through these carbon credits. I will go on the record to saying that, and I think that's important. That is on the record. Thank you, Mr. Chair.

  55. Committee chair1:17:43

      Thank you. Uh, further discussion to the motion Representative.

  56. Rep. Mark A. Strong1:17:47

      Strong. Yeah. Thank you. I I couldn't agree more with rep Representative Eliason, right? Did I pronounce that right? No. Um, oh, sorry. Um, you know, I have an app on my phone, it's called Reg Grid, and there's probably other apps like this too. And I can open up my phone and look at any property, most any property. There's a few that can be private and I can see who owns that property. Um, and, and the physical, and it shows the boundaries around the property. I can look at, you know, the, my property and my neighbors and all of yours, unless you've hidden it somehow. And, and I think this kind of gives us an opportunity. I'd love to see an app that says, oh, here's this property and here's the, the associated carbon credits, or, you know, whatever that are associated with it. I think this is good policy and I'm, I'm really in favor of it, and I've, I've spoken too much today, so thank you, Mr. Chair.

  57. Committee chair1:18:45

      Okay. Thank you, representative. Um, alright. Uh, seeing no further discussion to that, to the, sorry. Okay. No further discussion to the motion. We'll go to the sponsor for summation.

  58. Rep. Troy Shelley1:19:04

      Thank you. Um, representative Erland, I'm hoping to flip your, uh, opinion on this. So, so the third sub eliminates all regulation, all reporting requirements, everything from private property owners entirely. All this is, is saying if the state owns carbon credits, we want reporting of those carbon credits. Any revenue generated by the state for carbon credits stays in the department that generated the carbon credit. But when you're sitting in an appropriations meeting and you understand that there's, you know, $3 million that came in on the sale of a carbon credit, appropriation should understand that that money is there. And, uh, and so a study, interim study, absolutely it needs to happen, but we have to have parameters to be able to study it. That's what this bill does, is it gives us some parameters. So we have something to work with. If we don't have this bill, you have nothing to work with. Um, this, this gives us the parameters, it gives us the outline so that we can start to understand what's happening with the carbon credits. Um, I just wanted to address a couple of things. Um, and, and that is, uh, you know, when, when he spoke, um, of, of these conservation easements that are looking ahead and, and, and doing this, this, this does not affect private property. Again, it just, it just puts parameters on the state funds so that we know that if state funds are generating carbon credits, that we understand that the state has generated income from those carbon credits. That's what this does. Um, and, and one other thing I wanted to point out, um, I don't remember who mentioned it, but, uh, um, Exxon Oil is generating carbon credits. The way they generate carbon credits is they're paid by the, this, who knows where this money's coming from. That's the big question. There's massive amounts of money, where is it coming from? But Exxon Oil is making carbon credits by going in and plugging their, their low producing oil wells, and they get paid enough to plug those low producing oil wells that it's very well worth it for them to just plug those oils rather than to continue to produce them. That's great for Exxon Oil, that's terrible for the country because it takes that much energy out of the market. And then Delta Airlines does not sell carbon credits. They actually purchase carbon credits because in order to fly into other countries, they have to buy carbon credits in order to land their planes. So that's, that's what's going on in the market. Um, I appreciate, uh, Representative Eliason, uh, pointing out the, the obvious. I, I so much appreciate the, the, uh, the deep dive he's taken into it. I didn't realize he was that adept to what's going on, but, but I, I support everything he's saying is this is, this is what we're facing and the ultimate goal is to control our food supply through this market. Um, so I, I appreciate, uh, I so much appreciate you bringing it back to the committee, and I would very much appreciate you, uh, moving this forward. Thank you.

  59. Committee chair1:22:47

      Thank you to Representative Christofferson for summation on his motion.

  60. Rep. Kay J. Christofferson1:22:51

      Uh, I'll waive. Thanks. Okay. Um, thank you. Um,

  61. Committee chair1:23:02

      okay. Okay. Uh, we'll go to a roll call. Vote.

  62. Rep. Jill Koford1:23:08

      Okay. Point, point of order. Representative Koford, I, I do have a point of order. Is there a physical note on the third sub?

  63. Unknown staff1:23:14speaker not certain

      Um, I don't know what the physical note was. There was an initial physical note, but now that everything stripped out, including the, the tax portion was the biggest part of the physical note before. So, um, I don't know what the physical note is, is, but, uh, it, there's nothing left in it, so there's probably not Much. They just stand up the reporting process.

  64. Rep. Jill Koford1:23:34

      Will there be a need for a physical note?

  65. Unknown staff1:23:38speaker not certain

      Uh, OED already reports from a bill last year. Okay.

  66. Committee chair1:23:43

      Thank, thank you. Okay, we'll, we'll go to Calvin for a roll call vote. And this is on the motion to pass out favorably.

  67. Committee chair1:23:53

      Representative Barlow. Representative Christofferson? Yes. Representative Daley Provo. No. Representative Koford? Yes. Representative Kyle? Yes. Representative Nguyen? No. Representative Oland? No. Representative Shepherd? Yes. Representative Strong? Yes. Vice chair? Yes. Chair? Yes.

  68. Committee chair1:24:35

      Okay. That passes eight to three. Congratulations. Thank you. Okay. And since Representative Christopher's microphone's still on, I'm gonna ask him for one more motion.

  69. Rep. Kay J. Christofferson1:24:47

      I move to adjourn. Motion to adjourn in favor, say aye. Aye.

  70. Committee chair1:24:51

      Aye. We stand adjourned.

• Mar 2, 2026 House floor debate▶ Watch
  Transcript (16 turns)

  1. Speaker (presiding)1:14:35

     Third substitute House bill 180 5, carbon credit amendments by Representative Shelley. This bill was served in revenue and taxation with the vote of 8 3 0. Representative Shelley.

  2. Rep. Troy Shelley1:14:48

     Thank you Mr. Speaker. Uh, I move to adopt the fourth sub.

  3. Speaker (presiding)1:14:54

     Thank you representative. That motion is an order. Would you like to speak to it?

  4. Rep. Troy Shelley1:14:58

     I would. So the, the fourth sub, it's been through multiple subs, um, but the fourth sub, uh, basically just does a little correction to, to determine which agencies, uh, can, can do what with carbon credits. Um, and then we, we, uh, decided since it's no longer a tax bill, that we would have it under the auditor's office since it's more about, uh, reporting that it is anything else. And that's what the four sub does.

  5. Speaker (presiding)1:15:31

     Thank you Representative Shelley. Discussion to the motion to adopt four substitute on HB 180 5. Seeing none will go ahead and place the motion, the motion before us the house adopt four sub substitute on HB 180 5. All in favor say aye. Aye. Any opposed? Will that motion passes? The bills substitute and before the body for its consideration to you. Representative Shelley.

  6. Rep. Troy Shelley1:15:55

     Thank you. So, uh, understanding carbon credits is pretty complex. Um, I've, I've researched it and studied it for well over 10 years. It's something that I've paid close attention to and I've, I've, uh, had lots of discussions with people here in the body. Um, basically it's, you would, you would think it's tinfoil hat type of legislation until you realize that it's actually happening and people are actually selling it. And it's kind of like saying that we're here in the state capitol and we're breathing oxygen, however, we don't own the oxygen because France owns our oxygen. That's how bizarre this carbon credit market is. And, and it's absolutely crazy if it weren't happening. Um, there's no way right now to track who's selling carbon credits or where they're going, what country they belong to. There's just no way to track any of that. What this bill does is it at least gives us some, uh, some parameters and some guidelines so that we can begin to track the state's interest in its carbon credits. Uh, this does not reach into private property rights. It does not, uh, it does not affect private, private property owners. There's no requirement for private property owners to register or, or anything. If they do generate revenue from it, that would be reported on their personal income tax. But, uh, but this is simply getting our arms around the state entities and the reporting requirements of the state. And with that, I'm open to questions.

  7. Speaker (presiding)1:17:38

     Thank you Representative Shelley. Discussion to the bill Representative Daley Pro Bowl.

  8. Rep. Jennifer Dailey-Provost1:17:44

     Thank you, Mr. Speaker. I appreciate, uh, the opportunity to rise and express my support and appreciation for the sponsor. Um, he was very engaged in making sure that a lot of, uh, opinions were at the table, addressed a incredible number of concerns and, um, including mine and just wanted to thank him for his hard work and his willingness to continue to work on this complex policy area going forward.

  9. Speaker (presiding)1:18:11

     Thank you, representative Daley Provo. Further discussion to the bill. Seeing none. Back to your Representative Shelley. For summation, I'll waive Summation has been waived. Voting will now be open on four. Substitute h all present having voted, voting is now closed. Four. Substitute HB 180 5 passes this body with 70 yes votes zero, no votes will be sent to the Senate for its consideration. Representative Pucci

  10. Rep. Candice B. Pierucci1:19:43

      Thank you Mr. Speaker. Motion to saunter.

  11. Speaker (presiding)1:19:46

      Thank you representative. Uh, would you like how Long? Yeah, for five minutes would Great. Five minutes. Uh,

  12. Rep. Candice B. Pierucci1:19:51

      thank you.

  13. Speaker (presiding)1:19:51

      Would you like to speak to that motion?

  14. Rep. Candice B. Pierucci1:19:52

      Yeah, just briefly. We need to let the circle catch up.

  15. Speaker (presiding)1:19:56

      Thank you representative. That motion is order will go and place the motion. The motion is the house. Uh, saunter for five minutes. All in favor say aye. Aye. Any opposed? Will that motion passes? Will saunter until 5 35. Thank you Representative Stoddard.

  16. Rep. Andrew Stoddard1:20:09speaker not certain

      Thank you.

• Mar 2, 2026 House floor debate▶ Watch
  Transcript (12 turns)

  1. Speaker (presiding)1:14:54

     Thank you representative. That motion is an order. Would you like to speak to it?

  2. Rep. Troy Shelley1:14:58

     I would. So the, the fourth sub, it's been through multiple subs, um, but the fourth sub, uh, basically just does a little correction to, to determine which agencies, uh, can, can do what with carbon credits. Um, and then we, we, uh, decided since it's no longer a tax bill, that we would have it under the auditor's office since it's more about, uh, reporting that it is anything else. And that's what the four sub does.

  3. Speaker (presiding)1:15:31

     Thank you Representative Shelley. Discussion to the motion to adopt four substitute on HB 180 5. Seeing none will go ahead and place the motion, the motion before us the house adopt four sub substitute on HB 180 5. All in favor say aye. Aye. Any opposed? Will that motion passes? The bills substitute and before the body for its consideration to you. Representative Shelley.

  4. Rep. Troy Shelley1:15:55

     Thank you. So, uh, understanding carbon credits is pretty complex. Um, I've, I've researched it and studied it for well over 10 years. It's something that I've paid close attention to and I've, I've, uh, had lots of discussions with people here in the body. Um, basically it's, you would, you would think it's tinfoil hat type of legislation until you realize that it's actually happening and people are actually selling it. And it's kind of like saying that we're here in the state capitol and we're breathing oxygen, however, we don't own the oxygen because France owns our oxygen. That's how bizarre this carbon credit market is. And, and it's absolutely crazy if it weren't happening. Um, there's no way right now to track who's selling carbon credits or where they're going, what country they belong to. There's just no way to track any of that. What this bill does is it at least gives us some, uh, some parameters and some guidelines so that we can begin to track the state's interest in its carbon credits. Uh, this does not reach into private property rights. It does not, uh, it does not affect private, private property owners. There's no requirement for private property owners to register or, or anything. If they do generate revenue from it, that would be reported on their personal income tax. But, uh, but this is simply getting our arms around the state entities and the reporting requirements of the state. And with that, I'm open to questions.

  5. Speaker (presiding)1:17:38

     Thank you Representative Shelley. Discussion to the bill Representative Daley Pro Bowl.

  6. Rep. Jennifer Dailey-Provost1:17:44

     Thank you, Mr. Speaker. I appreciate, uh, the opportunity to rise and express my support and appreciation for the sponsor. Um, he was very engaged in making sure that a lot of, uh, opinions were at the table, addressed a incredible number of concerns and, um, including mine and just wanted to thank him for his hard work and his willingness to continue to work on this complex policy area going forward.

  7. Speaker (presiding)1:18:11

     Thank you, representative Daley Provo. Further discussion to the bill. Seeing none. Back to your Representative Shelley. For summation, I'll waive Summation has been waived. Voting will now be open on four. Substitute h all present having voted, voting is now closed. Four. Substitute HB 180 5 passes this body with 70 yes votes zero, no votes will be sent to the Senate for its consideration. Representative Pucci

  8. Rep. Candice B. Pierucci1:19:43

     Thank you Mr. Speaker. Motion to saunter.

  9. Speaker (presiding)1:19:46

     Thank you representative. Uh, would you like how Long? Yeah, for five minutes would Great. Five minutes. Uh, thank you. Would you like to speak to that motion?

  10. Rep. Candice B. Pierucci1:19:52

      Yeah, just briefly. We need to let the circle catch up.

  11. Speaker (presiding)1:19:56

      Thank you representative. That motion is order will go and place the motion. The motion is the house. Uh, saunter for five minutes. All in favor say aye. Aye. Any opposed? Will that motion passes? Will saunter until 5 35. Thank you Representative Stoddard.

  12. Rep. Andrew Stoddard1:20:09speaker not certain

      Thank you.

• Mar 4, 2026 Senate floor debate▶ Watch
  Transcript (7 turns)

  1. Sen. Derrin R. Owens2:30:47

     Thank you President. This, uh, this bill deals with a newly evolving financial concept that attempts to place value on a concept called ecosystem services. Each credit is assigned a unique digital identifier and track through international registries associated with frameworks developed through the intergovernmental panel on climate change. These credits can be bought, sold, transferred, tokenized, or traded through digital asset platforms and converted to cash. However, Utah has no visibility on into when carbon credits may be generated using state funds or public resources and who ultimately claims them or what long-term obligations may be placed on those resources. So House Bill 85 is a transparency bill, protecting tax taxpayers. It's just really a, a, a recording element now where, um, if activity generates financial asset, that activity involves state funding or state resources. The state should know about it. And this bill ensures that when carbon credits are generated using taxpayer supported resources, the state can identify those credits and determine whether they should be claimed on behalf of taxpayers. It doesn't do anything, um, uh, in the line of private parties, private parties can remain free to participate in these arrangements using their own resources. That's what the bill does. President, I'd be open to questions.

  2. Senate President (presiding)2:32:25

     Thank you Senator Owens for the presentation. I'm not seeing discussion, so I'm gonna go to you.

  3. Sen. Derrin R. Owens2:32:30

     Thank you. I'll call the question President.

  4. Senate President (presiding)2:32:32

     Question is, under suspension, the rule shall force substitute house bill one eighty five Pass. Roll call vote.

  5. Senate clerk2:32:40

     Senator Vickers Baldy Lewin b Brammer Bus Comore. We don't want to Escamilla Fillmore. Exactly. Grover Harper Kinins Aye. Ipson Johnson. Juab McKay. Mikel Milner Musselman Owens pitcher Plum Rebi Sandal Stevenson Stratton ERs Weiler Wilson Winterton. President Adams A four. Substitute house Bill 180 5 Having received 19 yay votes, six nay votes, four being absent, passes his body and will be signed by the president. Returned to the house for the signature of the speaker.

  6. Senate President (presiding)2:34:35

     Family law modifications. Senator Mikel. Senator Mikel.

  7. Sen. Michael K. McKell2:34:40speaker not certain

     Thank you Mr. President. I feel like that was a strategy to get this built. Bill heard. Um, this bill makes six small changes to try to make our system for getting child support work better. And I, and it just enhances what we can do. So the first thing allows for the, or for OS to continue to collect spousal support or alimony after child support ends. I think that's, that's the important part of the bill. Um, second part is for the Office of Recovery Services, who found it difficult for them to get feedback from people on the front lines to create a system where they have, they have meetings throughout the year. Third thing the bill does is this allows a portion of child support held when receiving a TANF grant

• Mar 4, 2026 Senate Revenue and Taxation Committee▶ Watch
  Transcript (15 turns)

  1. Committee chair36:27

     to House four, substitute house Bill 180 5, carbon Credit Amendments Representative Shelley, welcome.

  2. Rep. Troy Shelley36:35

     Thank you, Mr. Chair. Um, so yeah, I'll be speaking to the fourth sub and there are four subs because we've been absolutely through a work in progress with this. But, uh, um, let me just briefly explain to you what carbon credits are. I don't want to take a lot of your time, but, uh, if it weren't so crazy and actually happening, you would never believe this. But, uh, it's almost like you're sitting here on state property, breathing state oxygen, and it's possible that somebody has already sold this oxygen to another country. That is how bizarre this is. And it has to do with carbon dioxide. So they transfer any carbon dioxide credit that the state of Utah creates, or that's created in the state of Utah. Those credits for the carbon dioxide absorption can actually be transferred to other countries and sold. And, uh, and, and the only way to really track what's happening, uh, is to claim ownership. There's no other way to say, Hey, give us some kind of a ledger. Uh, it's tracked by the IPCC, um, which is under the United Nations. They keep track of where these carbon credits go. Um, every carbon credit, as soon as as soon as it's removed from the atmosphere, is, is issued a digital ID number. And then the, uh, the IPCC keeps track of those digital ID numbers. And whoever owns those digital ID numbers can actually use them to buy and sell assets anywhere in the world. And so, what, what this bill does is specific to the state of Utah, it just says, if the state of Utah has carbon credits, we are going to claim ownership of our carbon credits. This does not interfere in any way with private property ownership. This is only state of Utah assets. So if the state of Utah owns the carbon credits, we're going to claim them. And this offers us a framework so that we can have a, uh, we can actually create some kind of a working committee this summer to, to further, uh, meld this out and figure out how it has to work. But right now, there's no structure, there's no accountability, there's no way to do it. What this does is it basically says, look, if if, if there's an entity in the state of Utah that is selling carbon credits, the state of Utah needs to know about it. Um, I've got, uh, treasure Oaks with me. Do you have anything to add?

  3. Marlo Oaks, State Treasurer39:32

     Sure. Thank you. Uh, Marlo Oaks State Treasurer, uh, thank you committee. Um, for, so from the per perspective of a financial officer, this bill really addresses a simple governance issue. Policy makers should be able to see when public resources are used to generate financial assets. Today without this Bill, Utah has no reliable way to identify when carbon credits arise from taxpayer supported activity, who ultimately receives them, or whether long-term commitments may be affecting public resources. HB 180 5 simply provides the information policymakers need to understand what is occurring and to guide future policy decisions. If public resources generate financial value, taxpayers deserve transparency, and policy makers should be able to understand the implications. Thank you.

  4. Committee chair40:20

     Thank you. Does that conclude your presentation? Yes,

  5. Rep. Troy Shelley40:23

     I'm open to any questions.

  6. Committee chair40:24

     Okay. To the committee for, uh, clarifying questions. Senator Brammer,

  7. Sen. Brady Brammer40:32

     I mean, but should, shouldn't we just trust the IPCC with whatever they say?

  8. Rep. Troy Shelley40:37

     I don't know why not. They operate under the control of the United Nations, so that seems reasonable.

  9. Sen. Brady Brammer40:42

     And aren't all of their projections, haven't they always been found to be true and spot on accurate?

  10. Unknown speaker40:48speaker not certain

      Worn out, spot out on accurate. Okay. Thanks.

  11. Unknown speaker40:52speaker not certain

      Actually, not just for the record,

  12. Committee chair40:56

      Further discussion from the committee. Seeing none, who in the public wishes to address this bill? If you raise your hand, I see none in the room. Any online. Okay. We'll bring it back to the committee for discussion or action.

  13. Committee chair41:11

      Senator Fillmore, move a favorable recommendation. Okay. Discussion to that motion from the committee. Seeing none, Representative Shelley for summation,

  14. Rep. Troy Shelley41:21speaker not certain

      I waive Senator Fillmore Waive.

  15. Committee chair41:24

      Okay. All in favor of passing out four. Substitute house Bill 180 5 to the floor with a favorable recommendation. Say aye. Aye. Aye. Any opposed? All rule that passes four to zero. Thank you. Okay.