‘Big, Beautiful’ Law’s Potential Impact on Energy, Environment Agencies

Utah State Officials Share the Impacts of the Federal Budget Bill

Two months have passed since the congressional Republicans enacted their budget bill, often referred to as the “big, beautiful bill,” significantly affecting grants and state program funding. Utah is now beginning to notice the effects of these changes.

Reporting to Interim Committee on the Bill’s Impact

This Wednesday, officials from various Utah departments including environmental quality, oil gas and mining, agriculture and food, and energy development presented to the Natural Resources, Agriculture, and Environment interim committee. They discussed both the negative and positive repercussions the budget bill has brought upon their respective agencies.

The changes include cutbacks on grants used for mitigating radon, increased funding for programs that aid farmers during market downswings, reduced credits for renewable energy, and increased oil and gas production.

Department of Environmental Quality

Tim Davis, director of the Utah Department of Environmental Quality, shared that President Donald Trump’s initial request would have led to a reduction of nearly 55% of the Environmental Protection Agency’s budget. This would have significantly affected state and tribal assistance grants.

Davis collaborated with the state’s congressional delegation to maintain some of the funds originating from the Clean Water and Safe Drinking Water acts. However, Congress ended up eliminating some programs from the Inflation Reduction Act, passed during the Biden administration. This included a $1 million grant that Utah used for radon mitigation in rural homes. Radon, an odorless radioactive gas commonly found in Utah homes, can increase lung cancer risk. Davis plans to challenge this cancellation.

The Utah Division of Water Quality also experienced a funding impact. This negatively affected rangeland and cropland improvement project funds, indirectly affecting the staffing of the Utah Department of Agriculture and Food. They reported that they are currently working to recover these funds.

Utah Division of Agriculture and Food

Connor Peterson, director of legislative and government affairs for the Utah Department of Agriculture and Food, highlighted numerous provisions in the bill that assist the state’s farmers. These include:

• $66 billion directed towards “farm safety net” programs, which provide support for loss, risk coverage, or unpredictable dairy margins.
• An increase in the estate and gift tax exemption, also known as the “death tax,” which will allow farms to remain within families across generations. The exemption is set to increase from $5.5 million per person, or $11 million per couple, to $15 million per person or $30 million per couple.
• An annual block grant for specialty crops will increase from $350,000 to $1.5 million in Utah.
• Payments to farmers whose animals are killed by predators will now cover 100% of the losses, including unborn livestock. Previously, the program only covered 75% of losses.

Utah Office of Energy Development

Jake Garfield, the deputy director of the Utah Office of Energy Development, explained that the bill will significantly impact the state’s energy industry. It will increase funding for traditional energy sources while reducing grants and incentives for renewable energy. The bill stipulates the following:

• Creation of a $1 billion loan program from the U.S. Department of Energy for “traditional energy sources, as well as critical minerals.”
• Phase-out of tax credits for renewable energy — mostly solar and wind — including both production and investment credits.
• Designation of China, Russia, Iran, and North Korea as “foreign entities of concern,” implying that energy projects sourcing materials from these countries will need to find new sources and possibly incur higher costs.
• Elimination of clean energy tax credits and loan programs from the Biden administration, including a greenhouse gas reduction program that funded solar projects.
• Phase-out of electric vehicle and electric vehicle charging incentives.

Utah Division of Oil, Gas and Mining

Mick Thomas, the director of the Utah Division of Oil, Gas and Mining, believes that the budget bill “indicates a shift in federal policy toward a pro-energy, growth mindset,” including a “renewed focus on domestic onshore oil and gas production.” This includes:

• A decrease in the royalty fees paid by oil and gas operators
• An increase in the leases available for onshore oil and gas projects
• The resumption of quarterly lease sales

Coal leases on federal land will also see a decrease in royalty rates.

Utah News Dispatch is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.