Carbon Credit Amendments

89
67-3-1
67-5-41
79-6-1301
79-6-1302
79-6-1303
4
Carbon Credit Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Troy Shelley
Senate Sponsor: Derrin R. Owens
LONG TITLE
General Description:
This bill addresses requirements related to the sale of a carbon credit.
Highlighted Provisions:
This bill:
defines and modifies terms;
creates the Carbon Credit Litigation Fund and specifies the purpose of the fund;
establishes reporting requirements for a state entity that sells or exchanges a carbon credit;
requires the state auditor to report on the sale of carbon credits by state entities to the
Natural Resources, Agriculture, and Environmental Quality Appropriations
Subcommittee; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
67-3-1
, as last amended by Laws of Utah 2025, First Special Session, Chapter 17
79-6-1301
, as enacted by Laws of Utah 2025, Chapters 146, 375
79-6-1302
, as enacted by Laws of Utah 2025, Chapters 146, 375
79-6-1303
, as enacted by Laws of Utah 2025, Chapters 146, 375
ENACTS:
67-5-41
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
67-3-1
is amended to read:
67-3-1
. Functions and duties.
(1)
(a)
The state auditor is the auditor of public accounts and is independent of any
executive or administrative officers of the state.
(b)
The state auditor is not limited in the selection of personnel or in the determination
of the reasonable and necessary expenses of the state auditor's office.
(2)
The state auditor shall examine and certify annually in respect to each fiscal year,
financial statements showing:
(a)
the condition of the state's finances;
(b)
the revenues received or accrued;
(c)
expenditures paid or accrued;
(d)
the amount of unexpended or unencumbered balances of the appropriations to the
agencies, departments, divisions, commissions, and institutions; and
(e)
the cash balances of the funds in the custody of the state treasurer.
(3)
(a)
The state auditor shall:
(i)
audit each permanent fund, each special fund, the General Fund, and the accounts
of any department of state government or any independent agency or public
corporation as the law requires, as the auditor determines is necessary, or upon
request of the governor or the Legislature;
(ii)
perform the audits in accordance with generally accepted auditing standards and
other auditing procedures as promulgated by recognized authoritative bodies; and
(iii)
as the auditor determines is necessary, conduct the audits to determine:
(A)
honesty and integrity in fiscal affairs;
(B)
accuracy and reliability of financial statements;
(C)
effectiveness and adequacy of financial controls; and
(D)
compliance with the law.
(b)
If any state entity receives federal funding, the state auditor shall ensure that the
audit is performed in accordance with federal audit requirements.
(c)
(i)
The costs of the federal compliance portion of the audit may be paid from an
appropriation to the state auditor from the General Fund.
(ii)
If an appropriation is not provided, or if the federal government does not
specifically provide for payment of audit costs, the costs of the federal compliance
portions of the audit shall be allocated on the basis of the percentage that each
state entity's federal funding bears to the total federal funds received by the state.
(iii)
The allocation shall be adjusted to reflect any reduced audit time required to
audit funds passed through the state to local governments and to reflect any
reduction in audit time obtained through the use of internal auditors working
under the direction of the state auditor.
(4)
(a)
Except as provided in Subsection
(4)(b)
, the state auditor shall, in addition to
financial audits, and as the auditor determines is necessary, conduct performance and
special purpose audits, examinations, and reviews of any entity that receives public
funds, including a determination of any or all of the following:
(i)
the honesty and integrity of all the entity's fiscal affairs;
(ii)
whether the entity's administrators have faithfully complied with legislative intent;
(iii)
whether the entity's operations have been conducted in an efficient, effective, and
cost-efficient manner;
(iv)
whether the entity's programs have been effective in accomplishing the intended
objectives; and
(v)
whether the entity's management, control, and information systems are adequate,
effective, and secure.
(b)
The auditor may not conduct performance and special purpose audits, examinations,
and reviews of any entity that receives public funds if the entity:
(i)
has an elected auditor; and
(ii)
has, within the entity's last budget year, had the entity's financial statements or
performance formally reviewed by another outside auditor.
(5)
The state auditor:
(a)
shall administer any oath or affirmation necessary to the performance of the duties of
the auditor's office; and
(b)
may:
(i)
subpoena witnesses and documents, whether electronic or otherwise; and
(ii)
examine into any matter that the auditor considers necessary.
(6)
The state auditor may require all persons who have had the disposition or management
of any property of this state or its political subdivisions to submit statements regarding
the property at the time and in the form that the auditor requires.
(7)
The state auditor shall:
(a)
except where otherwise provided by law, institute suits in Salt Lake County in
relation to the assessment, collection, and payment of revenues against:
(i)
persons who by any means have become entrusted with public money or property
and have failed to pay over or deliver the money or property; and
(ii)
all debtors of the state;
(b)
collect and pay into the state treasury all fees received by the state auditor;
(c)
perform the duties of a member of all boards of which the state auditor is a member
by the constitution or laws of the state, and any other duties that are prescribed by the
constitution and by law;
(d)
stop the payment of the salary of any state official or state employee who:
(i)
refuses to settle accounts or provide required statements about the custody and
disposition of public funds or other state property;
(ii)
refuses, neglects, or ignores the instruction of the state auditor or any controlling
board or department head with respect to the manner of keeping prescribed
accounts or funds; or
(iii)
fails to correct any delinquencies, improper procedures, and errors brought to the
official's or employee's attention;
(e)
establish accounting systems, methods, and forms for public accounts in all taxing or
fee-assessing units of the state in the interest of uniformity, efficiency, and economy;
(f)
superintend the contractual auditing of all state accounts;
(g)
subject to Subsection
(8)(a)
, withhold state allocated funds or the disbursement of
property taxes from a state or local taxing or fee-assessing unit, if necessary, to
ensure that officials and employees in those taxing units comply with state laws and
procedures in the budgeting, expenditures, and financial reporting of public funds;
(h)
subject to Subsection
(9)
, withhold the disbursement of tax money from any county,
if necessary, to ensure that officials and employees in the county comply with
Section
59-2-303.1
; and
(i)
withhold state allocated funds or the disbursement of property taxes from a local
government entity or a limited purpose entity, as those terms are defined in Section
67-1a-15
if the state auditor finds the withholding necessary to ensure that the entity
registers and maintains the entity's registration with the lieutenant governor, in
accordance with Section
67-1a-15
.
(8)
(a)
Except as otherwise provided by law, the state auditor may not withhold funds
under Subsection
(7)(g)
until a state or local taxing or fee-assessing unit has received
formal written notice of noncompliance from the auditor and has been given 60 days
to make the specified corrections.
(b)
If, after receiving notice under Subsection
(8)(a)
, a state or independent local
fee-assessing unit that exclusively assesses fees has not made corrections to comply
with state laws and procedures in the budgeting, expenditures, and financial reporting
of public funds, the state auditor:
(i)
shall provide a recommended timeline for corrective actions;
(ii)
may prohibit the state or local fee-assessing unit from accessing money held by
the state; and
(iii)
may prohibit a state or local fee-assessing unit from accessing money held in an
account of a financial institution by filing an action in a court with jurisdiction
under Title
78A, Judiciary and Judicial Administration
, requesting an order of the
court to prohibit a financial institution from providing the fee-assessing unit
access to an account.
(c)
The state auditor shall remove a limitation on accessing funds under Subsection
(8)(b)

upon compliance with state laws and procedures in the budgeting, expenditures, and
financial reporting of public funds.
(d)
If a local taxing or fee-assessing unit has not adopted a budget in compliance with
state law, the state auditor:
(i)
shall provide notice to the taxing or fee-assessing unit of the unit's failure to
comply;
(ii)
may prohibit the taxing or fee-assessing unit from accessing money held by the
state; and
(iii)
may prohibit a taxing or fee-assessing unit from accessing money held in an
account of a financial institution by:
(A)
contacting the taxing or fee-assessing unit's financial institution and
requesting that the institution prohibit access to the account; or
(B)
filing an action in a court with jurisdiction under Title
78A, Judiciary and
Judicial Administration
, requesting an order of the court to prohibit a financial
institution from providing the taxing or fee-assessing unit access to an account.
(e)
If the local taxing or fee-assessing unit adopts a budget in compliance with state law,
the state auditor shall eliminate a limitation on accessing funds described in
Subsection
(8)(d)
.
(9)
The state auditor may not withhold funds under Subsection
(7)(h)
until a county has
received formal written notice of noncompliance from the auditor and has been given 60
days to make the specified corrections.
(10)
(a)
The state auditor may not withhold funds under Subsection
(7)(i)
until the state
auditor receives a notice of non-registration, as that term is defined in Section
67-1a-15
.
(b)
If the state auditor receives a notice of non-registration, the state auditor may
prohibit the local government entity or limited purpose entity, as those terms are
defined in Section
67-1a-15
, from accessing:
(i)
money held by the state; and
(ii)
money held in an account of a financial institution by:
(A)
contacting the entity's financial institution and requesting that the institution
prohibit access to the account; or
(B)
filing an action in a court with jurisdiction under Title
78A, Judiciary and
Judicial Administration
, requesting an order of the court to prohibit a financial
institution from providing the entity access to an account.
(c)
The state auditor shall remove the prohibition on accessing funds described in
Subsection
(10)(b)
if the state auditor received a notice of registration, as that term is
defined in Section
67-1a-15
, from the lieutenant governor.
(11)
Notwithstanding Subsection
(7)(g)
,
(7)(h)
,
(7)(i
),
(8)(b)
,
(8)(d)
, or
(10)(b
), the state
auditor:
(a)
shall authorize a disbursement by a local government entity or limited purpose entity,
as those terms are defined in Section
67-1a-15
, or a state or local taxing or
fee-assessing unit if the disbursement is necessary to:
(i)
avoid a major disruption in the operations of the local government entity, limited
purpose entity, or state or local taxing or fee-assessing unit; or
(ii)
meet debt service obligations; and
(b)
may authorize a disbursement by a local government entity, limited purpose entity,
or state or local taxing or fee-assessing unit as the state auditor determines is
appropriate.
(12)
(a)
The state auditor may seek relief under the Utah Rules of Civil Procedure to take
temporary custody of public funds if an action is necessary to protect public funds
from being improperly diverted from their intended public purpose.
(b)
If the state auditor seeks relief under Subsection
(12)(a)
:
(i)
the state auditor is not required to exhaust the procedures in Subsection
(7)
or
(8)
;
and
(ii)
the state treasurer may hold the public funds in accordance with Section
67-4-1
if
a court orders the public funds to be protected from improper diversion from their
public purpose.
(13)
The state auditor shall:
(a)
establish audit guidelines and procedures for audits of local mental health and
substance abuse authorities and their contract providers, conducted
pursuant to
in
accordance with
Title
17, Chapter 77
, Local Health and Human
Services
Service
,
Title
26B, Chapter 5
, Health Care - Substance Use and Mental Health, and Title
51,
Chapter 2a
, Accounting Reports from Political Subdivisions, Interlocal
Organizations, and Other Local Entities Act; and
(b)
ensure that those guidelines and procedures provide assurances to the state that:
(i)
state and federal funds appropriated to local mental health authorities are used for
mental health purposes;
(ii)
a private provider under an annual or otherwise ongoing contract to provide
comprehensive mental health programs or services for a local mental health
authority is in compliance with state and local contract requirements and state and
federal law;
(iii)
state and federal funds appropriated to local substance abuse authorities are used
for substance abuse programs and services; and
(iv)
a private provider under an annual or otherwise ongoing contract to provide
comprehensive substance abuse programs or services for a local substance abuse
authority is in compliance with state and local contract requirements, and state and
federal law.
(14)
(a)
The state auditor may, in accordance with the auditor's responsibilities for
political subdivisions of the state as provided in Title
51, Chapter 2a
, Accounting
Reports from Political Subdivisions, Interlocal Organizations, and Other Local
Entities Act, initiate audits or investigations of any political subdivision that are
necessary to determine honesty and integrity in fiscal affairs, accuracy and reliability
of financial statements, effectiveness, and adequacy of financial controls and
compliance with the law.
(b)
If the state auditor receives notice under Subsection
11-41-104(7)
from the
Governor's Office of Economic Opportunity on or after July 1, 2024, the state auditor
may initiate an audit or investigation of the public entity subject to the notice to
determine compliance with Section
11-41-103
.
(15)
(a)
The state auditor may not audit work that the state auditor performed before
becoming state auditor.
(b)
If the state auditor has previously been a responsible official in state government
whose work has not yet been audited, the Legislature shall:
(i)
designate how that work shall be audited; and
(ii)
provide additional funding for those audits, if necessary.
(16)
The state auditor shall:
(a)
with the assistance, advice, and recommendations of an advisory committee
appointed by the state auditor from among special district boards of trustees, officers,
and employees and special service district boards, officers, and employees:
(i)
prepare a Uniform Accounting Manual for Special Districts that:
(A)
prescribes a uniform system of accounting and uniform budgeting and
reporting procedures for special districts under Title
17B, Limited Purpose
Local Government Entities - Special Districts
, and special service districts
under Title
17D, Chapter 1
, Special Service District Act;
(B)
conforms with generally accepted accounting principles; and
(C)
prescribes reasonable exceptions and modifications for smaller districts to the
uniform system of accounting, budgeting, and reporting;
(ii)
maintain the manual under this Subsection
(16)(a)
so that the manual continues to
reflect generally accepted accounting principles;
(iii)
conduct a continuing review and modification of procedures in order to improve
them;
(iv)
prepare and supply each district with suitable budget and reporting forms; and
(v)
(A)
prepare instructional materials, conduct training programs, and render other
services considered necessary to assist special districts and special service
districts in implementing the uniform accounting, budgeting, and reporting
procedures; and
(B)
ensure that any training described in Subsection
(16)(a)(v)(A)
complies with
Title
63G, Chapter 22
, State Training and Certification Requirements; and
(b)
continually analyze and evaluate the accounting, budgeting, and reporting practices
and experiences of specific special districts and special service districts selected by
the state auditor and make the information available to all districts.
(17)
(a)
The following records in the custody or control of the state auditor are protected
records under Title
63G, Chapter 2
, Government Records Access and Management
Act:
(i)
records that would disclose information relating to allegations of personal
misconduct, gross mismanagement, or illegal activity of a past or present
governmental employee if the information or allegation cannot be corroborated by
the state auditor through other documents or evidence, and the records relating to
the allegation are not relied upon by the state auditor in preparing a final audit
report;
(ii)
records and audit workpapers to the extent the workpapers would disclose the
identity of an individual who during the course of an audit, communicated the
existence of any waste of public funds, property, or manpower, or a violation or
suspected violation of a law, rule, or regulation adopted under the laws of this
state, a political subdivision of the state, or any recognized entity of the United
States, if the information was disclosed on the condition that the identity of the
individual be protected;
(iii)
before an audit is completed and the final audit report is released, records or
drafts circulated to an individual who is not an employee or head of a
governmental entity for the individual's response or information;
(iv)
records that would disclose an outline or part of any audit survey plans or audit
program; and
(v)
requests for audits, if disclosure would risk circumvention of an audit.
(b)
The provisions of Subsections
(17)(a)(i)
,
(ii)
, and
(iii)
do not prohibit the disclosure
of records or information that relate to a violation of the law by a governmental entity
or employee to a government prosecutor or peace officer.
(c)
The provisions of this Subsection
(17)
do not limit the authority otherwise given to
the state auditor to classify a document as public, private, controlled, or protected
under Title
63G, Chapter 2
, Government Records Access and Management Act.
(d)
(i)
As used in this Subsection
(17)(d)
, "record dispute" means a dispute between
the state auditor and the subject of an audit performed by the state auditor as to
whether the state auditor may release a record, as defined in Section
63G-2-103
,
to the public that the state auditor gained access to in the course of the state
auditor's audit but which the subject of the audit claims is not subject to disclosure
under Title
63G, Chapter 2
, Government Records Access and Management Act.
(ii)
The state auditor may submit a record dispute to the director of the Government
Records Office, created in Section
63A-12-202
, for a determination of whether the
state auditor may, in conjunction with the state auditor's release of an audit report,
release to the public the record that is the subject of the record dispute.
(iii)
The state auditor or the subject of the audit may seek judicial review of the
director's determination, described in Subsection
(17)(d)(ii)
, as provided in
Section
63G-2-404
.
(18)
If the state auditor conducts an audit of an entity that the state auditor has previously
audited and finds that the entity has not implemented a recommendation made by the
state auditor in a previous audit, the state auditor shall notify the Legislative
Management Committee through the Legislative Management Committee's Audit
Subcommittee that the entity has not implemented that recommendation.
(19)
The state auditor shall, with the advice and consent of the Senate, appoint the state
privacy auditor described in Section
67-3-13
.
(20)
Except as provided in Subsection
(21)
, the state auditor shall report, or ensure that
another government entity reports, on the financial, operational, and performance
metrics for the state system of higher education and the state system of public education,
including metrics in relation to students, programs, and schools within those systems.
(21)
(a)
Notwithstanding Subsection
(20)
, the state auditor shall conduct regular audits of:
(i)
the scholarship granting organization for the Carson Smith Opportunity
Scholarship Program, created in Section
53E-7-402
;
(ii)
the State Board of Education for the Carson Smith Scholarship Program, created
in Section
53F-4-302
; and
(iii)
the scholarship program manager for the Utah Fits All Scholarship Program,
created in Section
53F-6-402
, including an analysis of the cost effectiveness of the
program, taking into consideration the amount of the scholarship and the amount
of state and local funds dedicated on a per-student basis within the traditional
public education system.
(b)
Nothing in this subsection limits or impairs the authority of the State Board of
Education to administer the programs described in Subsection
(21)(a)
.
(22)
The state auditor shall, based on the information posted by the Office of Legislative
Research and General Counsel under Subsection
36-12-12.1(2)
, for each policy, track
and post the following information on the state auditor's website:
(a)
the information posted under Subsections
36-12-12.1(2)(a)
through
(e)
;
(b)
an indication regarding whether the policy is timely adopted, adopted late, or not
adopted;
(c)
an indication regarding whether the policy complies with the requirements
established by law for the policy; and
(d)
a link to the policy.
(23)
(a)
A legislator may request that the state auditor conduct an inquiry to determine
whether a government entity, government official, or government employee has
complied with a legal obligation directly imposed, by statute, on the government
entity, government official, or government employee.
(b)
The state auditor may, upon receiving a request under Subsection
(23)(a)
, conduct
the inquiry requested.
(c)
If the state auditor conducts the inquiry described in Subsection
(23)(b)
, the state
auditor shall post the results of the inquiry on the state auditor's website.
(d)
The state auditor may limit the inquiry described in this Subsection
(23)
to a simple
determination, without conducting an audit, regarding whether the obligation was
fulfilled.
(24)
The state auditor shall:
(a)
ensure compliance with Title
63G, Chapter 31
, Distinctions on the Basis of Sex, in
accordance with Section
63G-31-401
; and
(b)
report to the Legislative Management Committee, upon request, regarding the state
auditor's actions under this Subsection
(24)
.
(25)
The state auditor shall report compliance with Sections
67-27-107
,
67-27-108
, and
67-27-109
by:
(a)
establishing a process to receive and audit each alleged violation; and
(b)
reporting to the Legislative Management Committee, upon request, regarding the
state auditor's findings and recommendations under this Subsection
(25)
.
(26)
The state auditor shall ensure compliance with Section
63G-1-704
regarding the
display of flags in or on government property.
(27)
(a)
On or before January 31 each year, the state auditor shall prepare a report that
states, for each entity that holds public funds as defined in Section
51-7-3
, the entity's
total balance, as of the last day of the immediately preceding fiscal year, of cash, cash
equivalents, and investments, as those terms are defined under the standards
established by the Governmental Accounting Standards Board.
(b)
The state auditor shall make the report described in Subsection
(27)(a)
publicly
available on a website that the state auditor maintains.
(28)
The state auditor shall:
(a)
maintain a list of carbon credit transaction information reported to the state auditor
under Subsection
79-6-1302(1)
; and
(b)
report carbon credit transaction information to the Natural Resources, Agriculture,
and Environmental Quality Appropriations Subcommittee in accordance with
Subsection
79-6-1302(2)
.
Section 2. Section
67-5-41
is enacted to read:
67-5-41
. Carbon Credit Litigation Fund -- Report.
(1)
As used in this section:
(a)
"Carbon credit" means the same as that term is defined in Section
79-6-1301
.
(b)
"Fund" means the Carbon Credit Litigation Fund created in Subsection
(2)
.
(c)
"Greenhouse gas" means the same as that term is defined in Section
79-6-1301
.
(2)
There is created an expendable special revenue account called the Carbon Credit
Litigation Fund.
(3)
The fund consists of:
(a)
money deposited into the fund as a result of any judgment, settlement, or
compromise of claims under Subsection
(5)
;
(b)
interest and dividends earned on money in the fund; and
(c)
money appropriated to the fund by the Legislature.
(4)
The state treasurer shall:
(a)
invest money in the fund in accordance with Title
51, Chapter
7
, State Money
Management Act; and
(b)
deposit interest or other earnings derived from investment of fund money into the
fund.
(5)
Notwithstanding Section
67-5-40
, the following shall be deposited into the fund after
reimbursement to the attorney general for expenses related to the litigation described in
Subsection
(5)(a)
or
(b)
:
(a)
all money received by the attorney general as a result of any judgment, settlement, or
compromise of claims pertaining to alleged violations of law related to the sale or
marketing of carbon credits; and
(b)
all money received by the attorney general as a result of any judgment, settlement, or
compromise of claims pertaining to alleged violations of law under Title
79, Chapter
6, Part
13
, Carbon Credit Transactions.
(6)
(a)
The attorney general or the attorney general's designee shall authorize the
expenditure of fund money in accordance with this section.
(b)
The money in the fund may not be used for an administrative expense of the Office
of the Attorney General, unless the administrative expense is directly related to a
purpose described in Subsection
(7)
.
(7)
The attorney general may use money in the fund to:
(a)
prevent a federal requirement for the state to adopt or participate in:
(i)
a cap and trade program for carbon credits;
(ii)
mandatory carbon emissions reporting;
(iii)
a claim against the state related to greenhouse gas emissions; or
(iv)
a climate remediation program; and
(b)
recover a carbon credit or the profit of a carbon credit transferred out of the state in a
fraudulent sale.
(8)
(a)
By November 30 of each year, the attorney general shall submit an annual report
to the Natural Resources, Agriculture, and Environmental Quality Appropriations
Subcommittee regarding the status of the fund.
(b)
The report shall include:
(i)
contributions received, expenditures made, and programs and services funded; and
(ii)
if the attorney general establishes a task force t
o study an issue related to this
section, activities and programs initiated through the task force.
Section 3. Section
79-6-1301
is amended to read:
13. Carbon Credit Transactions
79-6-1301
. Definitions.
As used in this part:
(1)
(a)
"Carbon credit" means a payment or offer of payment, or other financial
compensation or benefit, for a carbon emission offset.
(b)
"Carbon credit" includes a natural asset credit.
(c)
"Carbon credit" does not include a payment or offer of payment related to:
(i)
a right or interest associated with a regulated pollutant, as that term is defined in
Title V of the 1990 Clean Air Act; or
(ii)
an industrial or commercial use of liquefied carbon dioxide.
(2)
"Carbon emission offset" means:
(a)
a reduction in the amount of greenhouse gas present in the atmosphere; or
(b)
an amount of greenhouse gas prevented from entering the atmosphere.
(1)
(3)
"Digital identification number" means an identification number assigned to
an
environmental commodity
a carbon credit
by a governmental or accredited third-party
verification entity that certifies or registers
an environmental commodity
a carbon credit

for sale or exchange.
(2)
(a)
"Environmental commodity" means a representation of the financial value of:
(i)
a reduction in the amount of greenhouse gas present in the atmosphere; or
(ii)
an amount of greenhouse gas prevented from entering the atmosphere.
(b)
"Environmental commodity" does not include a right or interest associated with a
regulated pollutant, as that term is defined in Title V of the 1990 Clean Air Act.
(3)
(4)
"Greenhouse gas" means
:

(a)
carbon dioxide or
a gas emission converted into a carbon dioxide equivalent; or
(b)
methane.
(5)
"Natural asset company" means the same as that term is defined in Section
63L-13-101
.
(6)
(a)
"Natural asset credit" means a payment or offer of payment, or other financial
compensation or benefit:
(i)
for the preservation of a natural and biological process on a parcel of land; or
(ii)
by a natural asset company for an activity described in Section
63L-13-203
.
(b)
"Natural asset credit" does not include:
(i)
the commercial extraction, production, or sale of a natural or agricultural resource;
or
(ii)
a right or interest associated with the beneficial use or appropriation of water.
(4)
(7)
"State entity" means a department, commission, board, council, agency, institution
of higher education, officer, corporation, fund, division, office, committee, authority,
laboratory, library, unit, bureau, panel, or other administrative unit of the state.
(5)
(8)
(a)
"State funds" means
:

(i)
money appropriated by the Legislature
.
; and
(ii)
a bond issued by a state entity that creates a carbon emission offset.
(b)
"State funds" does not include money or financial benefit in the form of:
(i)
a tax incentive;
(ii)
a permit or an activity related to the development of a permit issued by a state
entity; or
(iii)
a federal grant administered by a state entity.
Section 4. Section
79-6-1302
is amended to read:
79-6-1302
. Requirements for sale by state entity -- Administration by state
auditor -- Report.
(1)
Except as provided in Subsection
(2)
, before a state entity may sell or exchange an
environmental commodity, the state entity shall:
(a)
obtain a digital identification number for the environmental commodity;
(b)
report a digital identification number for the environmental commodity to the office;
and
(c)
report to the office any state funds that the state entity used for the creation of the
environmental commodity.
(1)
Before a state entity may sell or exchange a carbon credit, the state entity shall:
(a)
obtain a digital identification number for the carbon credit; and
(b)
report to the state auditor, in a form and manner approved by the state auditor:
(i)
a digital identification number for the carbon credit;
(ii)
a description of the carbon emission offset, including the source of the carbon
emission offset, that is the subject of the carbon credit; and
(iii)
the terms of a negotiated sale or exchange of the carbon credit with an attempted
buyer.
(2)
Before November 30 of each year, the state auditor shall report to the Natural
Resources, Agriculture, and Environmental Quality Appropriations Subcommittee:
(a)
the revenue generated from the sale of carbon credits by state entities reported under
Subsection
(1)(b)
; and
(b)
a summary of the carbon credit transactions reported to the state auditor under
Subsection
(1)(b)
.
(2)
This section does not apply to an environmental commodity created from an activity on
school and institutional trust lands, as that term is defined in Section
53C-1-103
.
Section 5. Section
79-6-1303
is amended to read:
79-6-1303
. Management.
(1)
If the state or a state entity appropriates or expends state funds for the creation of an
environmental commodity, the state owns a portion of an environmental commodity that
is proportional to the amount of state funds appropriated or expended for the creation of
the environmental commodity.
(2)
(a)
Except as provided in Subsection
(3)
, the state treasurer may sell, exchange, or
hold an environmental commodity, or any portion thereof, owned by the state in
accordance with Subsection
(2)(b)
.
(b)
The state treasurer shall ensure that an environmental commodity owned by the
state is sold, exchanged, or held:
(i)
for the benefit of the citizens of the state;
(ii)
to promote energy independence for the state;
(iii)
to maximize the natural resources of the state; and
(iv)
consistent with Part
3, State Energy Policy
.
(3)
An environmental commodity
A carbon credit
created or purchased by a state entity
shall remain under the control of the state entity.
Section 6.
Effective Date.
This bill takes effect on
May 6, 2026
.
3-6-26 10:48 AM