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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 ▸ make technical changes.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 None
19 Utah Code Sections Affected:
20 AMENDS:
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
23
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
28 purposes.
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
32 expenses.
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
41 court.
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;
56 or
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) The dollar amounts in this Subsection (2) are for May 14, 2019, through
61 December 30, 2019, and for the calendar year 2020. For a calendar year after the calendar year
62 2020, the Division of Finance shall calculate the dollar amount as the amount for the previous
63 year, plus an amount calculated by multiplying the amount for the previous year by the greater
64 of zero or the actual percent change in the previous fiscal year of the Consumer Price Index for
65 All Urban Consumers as published by the Bureau of Labor Statistics of the United States
66 Department of Labor.
67 (ii) The Division of Finance shall publish on the Utah Public Finance website the
68 amount calculated under Subsection (2)(e)(i) by no later than January 1 of the applicable
69 calendar year.
70 (3) A homestead is exempt from judicial lien and from levy, execution, or forced sale
71 except for:
72 (a) statutory liens for property taxes and assessments on the property;
73 (b) security interests in the property and judicial liens for debts created for the purchase
74 price of the property;
75 (c) judicial liens obtained on debts created by failure to provide support or maintenance
76 for dependent children; and
77 (d) consensual liens obtained on debts created by mutual contract.
78 (4) (a) Except as provided in Subsection (4)(b), water rights and interests, either in the
79 form of corporate stock or otherwise, owned by the homestead claimant are exempt from
80 execution to the extent that those rights and interests are necessarily employed in supplying
81 water to the homestead for domestic and irrigating purposes.
82 (b) Those water rights and interests are not exempt from calls or assessments and sale
83 by the corporations issuing the stock.
84 (5) (a) When a homestead is conveyed by the owner of the property, the conveyance
85 may not subject the property to any lien to which [
86 hands of the owner.
87 (b) The proceeds of any sale, to the amount of the exemption existing at the time of
88 sale, is exempt from levy, execution, or other process for one year after the receipt of the
89 proceeds by the person entitled to the exemption.
90 (6) The sale and disposition of one homestead does not prevent the selection or
91 purchase of another.
92 (7) For purposes of any claim or action for taxes brought by the United States Internal
93 Revenue Service, a homestead exemption claimed on real property in this state is considered to
94 be a property right.
95 Section 2. Section 78B-5-505 is amended to read:
96 78B-5-505. Property exempt from execution.
97 (1) (a) An individual is entitled to exemption of the following property:
98 (i) a burial plot for the individual and the individual's family;
99 (ii) health aids reasonably necessary to enable the individual or a dependent to work or
100 sustain health;
101 (iii) benefits the individual or the individual's dependent have received or are entitled
102 to receive from any source because of:
103 (A) disability;
104 (B) illness; or
105 (C) unemployment;
106 (iv) benefits paid or payable for medical, surgical, or hospital care to the extent they are
107 used by an individual or the individual's dependent to pay for that care;
108 (v) veterans benefits;
109 (vi) money or property received, and rights to receive money or property for child
110 support;
111 (vii) money or property received, and rights to receive money or property for alimony
112 or separate maintenance, to the extent reasonably necessary for the support of the individual
113 and the individual's dependents;
114 (viii) (A) one:
115 (I) clothes washer and dryer;
116 (II) refrigerator;
117 (III) freezer;
118 (IV) stove;
119 (V) microwave oven; and
120 (VI) sewing machine;
121 (B) all carpets in use;
122 (C) provisions sufficient for 12 months actually provided for individual or family use;
123 (D) all wearing apparel of every individual and dependent, not including jewelry or
124 furs; and
125 (E) all beds and bedding for every individual or dependent;
126 (ix) except for works of art held by the debtor as part of a trade or business, works of
127 art:
128 (A) depicting the debtor or the debtor and [
129 (B) produced by the debtor or the debtor and [
130 (x) proceeds of insurance, a judgment, or a settlement, or other rights accruing as a
131 result of bodily injury of the individual or of the wrongful death or bodily injury of another
132 individual of whom the individual was or is a dependent to the extent that those proceeds are
133 compensatory;
134 (xi) the proceeds or benefits of any life insurance contracts or policies paid or payable
135 to the debtor or any trust of which the debtor is a beneficiary upon the death of the spouse or
136 children of the debtor, provided that the contract or policy has been owned by the debtor for a
137 continuous unexpired period of one year;
138 (xii) the proceeds or benefits of any life insurance contracts or policies paid or payable
139 to the spouse or children of the debtor or any trust of which the spouse or children are
140 beneficiaries upon the death of the debtor, provided that the contract or policy has been in
141 existence for a continuous unexpired period of one year;
142 (xiii) proceeds and avails of any unmatured life insurance contracts owned by the
143 debtor or any revocable grantor trust created by the debtor, excluding any payments made on
144 the contract during the one year immediately preceding a creditor's levy or execution;
145 (xiv) except as provided in Subsection (1)(b), any money or other assets held for or
146 payable to the individual as a participant or beneficiary from or an interest of the individual as
147 a participant or beneficiary in a retirement plan or arrangement that is described in Section
148 401(a), 401(h), 401(k), 403(a), 403(b), 408, 408A, 409, 414(d), 414(e), or 457, Internal
149 Revenue Code;
150 (xv) the interest of or any money or other assets payable to an alternate payee under a
151 qualified domestic relations order as those terms are defined in Section 414(p), Internal
152 Revenue Code;
153 (xvi) unpaid earnings of the household of the filing individual due as of the date of the
154 filing of a bankruptcy petition in the amount of 1/24 of the Utah State annual median family
155 income for the household size of the filing individual as determined by the Utah State Annual
156 Median Family Income reported by the United States Census Bureau and as adjusted based
157 upon the Consumer Price Index for All Urban Consumers for an individual whose unpaid
158 earnings are paid more often than once a month or, if unpaid earnings are not paid more often
159 than once a month, then in the amount of 1/12 of the Utah State annual median family income
160 for the household size of the individual as determined by the Utah State Annual Median Family
161 Income reported by the United States Census Bureau and as adjusted based upon the Consumer
162 Price Index for All Urban Consumers; [
163 (xvii) except for curio or relic firearms, as defined in Section 76-10-501, any three of
164 the following:
165 (A) one handgun and ammunition for the handgun not exceeding 1,000 rounds;
166 (B) one shotgun and ammunition for the shotgun not exceeding 1,000 rounds; and
167 (C) one shoulder arm and ammunition for the shoulder arm not exceeding 1,000
168 rounds[
169 (xviii) a tax-advantaged method of saving for higher education costs on behalf of a
170 particular individual that meets the requirements of Section 529, Internal Revenue Code.
171 (b) The exemption granted by Subsection (1)(a)(xiv) does not apply to:
172 (i) an alternate payee under a qualified domestic relations order, as those terms are
173 defined in Section 414(p), Internal Revenue Code; or
174 (ii) amounts contributed or benefits accrued by or on behalf of a debtor within one year
175 before the debtor files for bankruptcy[
176 over from other funds [
177 (2) The exemptions in Subsections (1)(a)(xi), (xii), and (xiii) do not apply to proceeds
178 and avails of any matured or unmatured life insurance contract assigned or pledged as collateral
179 for repayment of a loan or other legal obligation.
180 (3) Disability benefits, as described in Subsection (1)(a)(iii)(A), and veterans benefits,
181 as described in Subsection (1)(a)(v), may be garnished on behalf of a child victim if the person
182 receiving the benefits has been convicted of a felony sex offense against a child and ordered by
183 the convicting court to pay restitution to the victim. The exemption from execution under this
184 section shall be reinstated upon payment of the restitution in full.
185 (4) Exemptions under this section do not limit items that may be claimed as exempt
186 under Section 78B-5-506.