7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to exemptions.
10 Highlighted Provisions:
11 This bill:
12 ▸ addresses the value of a homestead exemption;
13 ▸ includes certain savings plans; and
14 ▸ makes technical changes.
15 Money Appropriated in this Bill:
17 Other Special Clauses:
19 Utah Code Sections Affected:
21 78B-5-503, as last amended by Laws of Utah 2013, Chapter 192
22 78B-5-505, as last amended by Laws of Utah 2016, Chapter 262
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 78B-5-503 is amended to read:
26 78B-5-503. Homestead exemption -- Definitions -- Excepted obligations -- Water
27 rights and interests -- Conveyance -- Sale and disposition -- Property right for federal tax
29 (1) For purposes of this section:
30 (a) "Household" means a group of persons related by blood or marriage living together
31 in the same dwelling as an economic unit, sharing furnishings, facilities, accommodations, and
33 (b) "Mobile home" [
34 (c) "Primary personal residence" means a dwelling or mobile home, and the land
35 surrounding it, not exceeding one acre, as is reasonably necessary for the use of the dwelling or
36 mobile home, in which the individual and the individual's household reside.
37 (d) "Property" means:
38 (i) a primary personal residence;
39 (ii) real property; or
40 (iii) an equitable interest in real property awarded to a person in a divorce decree by a
42 (2) (a) An individual is entitled to a homestead exemption consisting of property in this
43 state in an amount not exceeding:
44 (i) $5,000 in value if the property consists in whole or in part of property [
45 is not the primary personal residence of the individual; or
46 (ii) [
47 of the individual.
48 (b) If the property claimed as exempt is jointly owned, each joint owner is entitled to a
49 homestead exemption[
50 (i) for property exempt under Subsection (2)(a)(i), the maximum exemption may not
51 exceed $10,000 per household; or
52 (ii) for property exempt under Subsection (2)(a)(ii), the maximum exemption may not
53 exceed [
54 (c) A person may claim a homestead exemption in either or both of the following:
55 (i) one or more parcels of real property together with appurtenances and improvements;
57 (ii) a mobile home in which the claimant resides.
58 (d) A person may not claim a homestead exemption for property that the person
59 acquired as a result of criminal activity.
60 (e) (i) As used in this Subsection (2)(e):
61 (A) "Average index number" means the average of the 12 most recent Consumer Price
62 Index numbers that are available in December in the year previous to the calendar year that is
63 calculated in Subsection (2)(e)(iii).
64 (B) "Consumer Price Index number" means a monthly number for the unadjusted
65 Consumer Price Index for All Urban Consumers for all items as published each month by the
66 Bureau of Labor Statistics of the United States Department of Labor.
67 (ii) The dollar amounts in Subsections (2)(a) and (b) are for May 14, 2019, through
68 December 31, 2019.
69 (iii) For the calendar year 2020 and a calendar year after the calendar year 2020, the
70 state auditor shall:
71 (A) calculate new dollar amounts for each dollar amount in Subsection (2)(a) and (b)
72 by multiplying the dollar amount in Subsections (2)(a) and (b) by the average index number,
73 dividing the result by 251, and rounding to the nearest 100 dollars; and
74 (B) publish on the Office of the State Auditor website the new dollar amounts
75 calculated under Subsection (2)(e)(iii) no later than January 1 of the applicable calendar year.
76 (3) A homestead is exempt from judicial lien and from levy, execution, or forced sale
77 except for:
78 (a) statutory liens for property taxes and assessments on the property;
79 (b) security interests in the property and judicial liens for debts created for the purchase
80 price of the property;
81 (c) judicial liens obtained on debts created by failure to provide support or maintenance
82 for dependent children; and
83 (d) consensual liens obtained on debts created by mutual contract.
84 (4) (a) Except as provided in Subsection (4)(b), water rights and interests, either in the
85 form of corporate stock or otherwise, owned by the homestead claimant are exempt from
86 execution to the extent that those rights and interests are necessarily employed in supplying
87 water to the homestead for domestic and irrigating purposes.
88 (b) Those water rights and interests are not exempt from calls or assessments and sale
89 by the corporations issuing the stock.
90 (5) (a) When a homestead is conveyed by the owner of the property, the conveyance
91 may not subject the property to any lien to which [
92 hands of the owner.
93 (b) The proceeds of any sale, to the amount of the exemption existing at the time of
94 sale, is exempt from levy, execution, or other process for one year after the receipt of the
95 proceeds by the person entitled to the exemption.
96 (6) The sale and disposition of one homestead does not prevent the selection or
97 purchase of another.
98 (7) For purposes of any claim or action for taxes brought by the United States Internal
99 Revenue Service, a homestead exemption claimed on real property in this state is considered to
100 be a property right.
101 Section 2. Section 78B-5-505 is amended to read:
102 78B-5-505. Property exempt from execution.
103 (1) (a) An individual is entitled to exemption of the following property:
104 (i) a burial plot for the individual and the individual's family;
105 (ii) health aids reasonably necessary to enable the individual or a dependent to work or
106 sustain health;
107 (iii) benefits the individual or the individual's dependent have received or are entitled
108 to receive from any source because of:
109 (A) disability;
110 (B) illness; or
111 (C) unemployment;
112 (iv) benefits paid or payable for medical, surgical, or hospital care to the extent they are
113 used by an individual or the individual's dependent to pay for that care;
114 (v) veterans benefits;
115 (vi) money or property received, and rights to receive money or property for child
117 (vii) money or property received, and rights to receive money or property for alimony
118 or separate maintenance, to the extent reasonably necessary for the support of the individual
119 and the individual's dependents;
120 (viii) (A) one:
121 (I) clothes washer and dryer;
122 (II) refrigerator;
123 (III) freezer;
124 (IV) stove;
125 (V) microwave oven; and
126 (VI) sewing machine;
127 (B) all carpets in use;
128 (C) provisions sufficient for 12 months actually provided for individual or family use;
129 (D) all wearing apparel of every individual and dependent, not including jewelry or
130 furs; and
131 (E) all beds and bedding for every individual or dependent;
132 (ix) except for works of art held by the debtor as part of a trade or business, works of
134 (A) depicting the debtor or the debtor and [
135 (B) produced by the debtor or the debtor and [
136 (x) proceeds of insurance, a judgment, or a settlement, or other rights accruing as a
137 result of bodily injury of the individual or of the wrongful death or bodily injury of another
138 individual of whom the individual was or is a dependent to the extent that those proceeds are
140 (xi) the proceeds or benefits of any life insurance contracts or policies paid or payable
141 to the debtor or any trust of which the debtor is a beneficiary upon the death of the spouse or
142 children of the debtor, provided that the contract or policy has been owned by the debtor for a
143 continuous unexpired period of one year;
144 (xii) the proceeds or benefits of any life insurance contracts or policies paid or payable
145 to the spouse or children of the debtor or any trust of which the spouse or children are
146 beneficiaries upon the death of the debtor, provided that the contract or policy has been in
147 existence for a continuous unexpired period of one year;
148 (xiii) proceeds and avails of any unmatured life insurance contracts owned by the
149 debtor or any revocable grantor trust created by the debtor, excluding any payments made on
150 the contract during the one year immediately preceding a creditor's levy or execution;
151 (xiv) except as provided in Subsection (1)(b), any money or other assets held for or
152 payable to the individual as a participant or beneficiary from or an interest of the individual as
153 a participant or beneficiary in a retirement plan or arrangement that is described in Section
154 401(a), 401(h), 401(k), 403(a), 403(b), 408, 408A, 409, 414(d), 414(e), or 457, Internal
155 Revenue Code;
156 (xv) the interest of or any money or other assets payable to an alternate payee under a
157 qualified domestic relations order as those terms are defined in Section 414(p), Internal
158 Revenue Code;
159 (xvi) unpaid earnings of the household of the filing individual due as of the date of the
160 filing of a bankruptcy petition in the amount of 1/24 of the Utah State annual median family
161 income for the household size of the filing individual as determined by the Utah State Annual
162 Median Family Income reported by the United States Census Bureau and as adjusted based
163 upon the Consumer Price Index for All Urban Consumers for an individual whose unpaid
164 earnings are paid more often than once a month or, if unpaid earnings are not paid more often
165 than once a month, then in the amount of 1/12 of the Utah State annual median family income
166 for the household size of the individual as determined by the Utah State Annual Median Family
167 Income reported by the United States Census Bureau and as adjusted based upon the Consumer
168 Price Index for All Urban Consumers; [
169 (xvii) except for curio or relic firearms, as defined in Section 76-10-501, any three of
170 the following:
171 (A) one handgun and ammunition for the handgun not exceeding 1,000 rounds;
172 (B) one shotgun and ammunition for the shotgun not exceeding 1,000 rounds; and
173 (C) one shoulder arm and ammunition for the shoulder arm not exceeding 1,000
175 (xviii) money, not exceeding $200,000, in the aggregate, that an individual deposits,
176 more than 18 months before the day on which the individual files a petition for bankruptcy or
177 an action is filed by a creditor against the individual, as applicable, in all tax-advantaged
178 accounts for saving for higher education costs on behalf of a particular individual that meets
179 the requirements of Section 529, Internal Revenue Code.
180 (b) The exemption granted by Subsection (1)(a)(xiv) does not apply to:
181 (i) an alternate payee under a qualified domestic relations order, as those terms are
182 defined in Section 414(p), Internal Revenue Code; or
183 (ii) amounts contributed or benefits accrued by or on behalf of a debtor within one year
184 before the debtor files for bankruptcy[
185 over from other funds [
186 (2) The exemptions in Subsections (1)(a)(xi), (xii), and (xiii) do not apply to proceeds
187 and avails of any matured or unmatured life insurance contract assigned or pledged as collateral
188 for repayment of a loan or other legal obligation.
189 (3) Disability benefits, as described in Subsection (1)(a)(iii)(A), and veterans benefits,
190 as described in Subsection (1)(a)(v), may be garnished on behalf of a child victim if the person
191 receiving the benefits has been convicted of a felony sex offense against a child and ordered by
192 the convicting court to pay restitution to the victim. The exemption from execution under this
193 section shall be reinstated upon payment of the restitution in full.
194 (4) Exemptions under this section do not limit items that may be claimed as exempt
195 under Section 78B-5-506.