State Debt Collection Amendments

19
59-7-522
63A-3-301
63A-3-302
63A-3-307
63A-3-501
63A-3-502
63A-3-505
78A-2-214
78B-5-505
0
State Debt Collection Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jefferson S. Burton
Senate Sponsor: Keven J. Stratton
LONG TITLE
General Description:
This bill modifies provisions related to government debt collection.
Highlighted Provisions:
This bill:
directs the State Tax Commission to apply an overpayment of corporate income tax to
any amounts the taxpayer owes under the Crime Victims Restitution Act;
provides that a governmental entity may engage in collection activity regardless of
whether the amount due has been reduced to a judgment;
makes consistent the definitions of certain terms related to collections;
allows the Office of State Debt Collection to maintain up to one year of expenses in the
State Debt Collection Fund at the end of each fiscal year; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
59-7-522
, as last amended by Laws of Utah 2018, Second Special Session, Chapter 3
63A-3-301
, as last amended by Laws of Utah 2024, Chapter 398
63A-3-302
, as last amended by Laws of Utah 2022, Chapter 261
63A-3-307
, as last amended by Laws of Utah 2024, Chapter 398
63A-3-501
, as last amended by Laws of Utah 2021, Chapter 260
63A-3-502
, as last amended by Laws of Utah 2025, Chapters 59, 526
63A-3-505
, as last amended by Laws of Utah 2024, Chapter 398
78A-2-214
, as last amended by Laws of Utah 2025, Chapter 526
78B-5-505
, as last amended by Laws of Utah 2025, First Special Session, Chapter 11
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
59-7-522
is amended to read:
59-7-522
. Overpayments.
(1)
As used in this section, "overpayment" means the same as that term is defined in
Section
59-1-1409
.
(2)
(a)
Subject to Subsection
(2)(b)
, a claim for credit or refund of an overpayment that is
attributable to a Utah net loss carry forward shall be filed within three years from the
due date of the return for the taxable year of the Utah net loss.
(b)
The three-year period described in Subsection
(2)(a)
shall be extended by any
extension of time provided in statute for filing the return described in Subsection
(2)(a)
.
(3)
The commission shall make a credit against or refund of any overpayment of a tax
under this chapter for a taxable year if, in accordance with Section
59-7-519
:
(a)
(i)
a corporation agrees with the commissioner of internal revenue for an
extension, or a renewal of an extension, of the period for proposing and assessing
a deficiency in federal income tax for that taxable year; or
(ii)
there is a change in or correction of federal taxable income for that taxable year;
and
(b)
the corporation files a claim for the credit or refund before the expiration of the time
period within which the commission may assess a deficiency.
(4)
The commission shall make a credit or refund within a 30-day period after the day on
which a court's decision to require the commission to credit or refund the amount of an
overpayment to a taxpayer is final.
(5)
The commission shall credit an overpayment in the following order:
(a)
against the taxpayer's liability under this chapter; and
(b)
against the amount of a judgment against a taxpayer, including a final judgment or
order requiring payment of a fine or of restitution to a victim under Title 77, Chapter
38b, Crime Victims Restitution Act, obtained through due process of law by an entity
of state or local government.
(6)
If a balance remains after an overpayment is credited in accordance with Subsection
(5)
,the balance shall be refunded to the taxpayer.
Section 2. Section
63A-3-301
is amended to read:
63A-3-301
. Definitions.
As used in this part:
(1)
"Account receivable" or "receivable" means any amount due the state or any other
governmental entity within the state as a result of a judgment, citation, tax, or
administrative order, or for which materials or services have been provided but for
which payment has not been received by the servicing unit.
(1)
(a)
"Accounts receivable" or "receivables" means any amount due to a governmental
entity from an entity for which payment has not been received by the governmental
entity that is servicing the debt, regardless of whether the amount due has been
reduced to a judgment.
(b)
"Accounts receivable" or "receivables" includes:
(i)
unpaid fees, licenses, taxes, loans, overpayments, fines, restitution, forfeitures,
surcharges, costs, contracts, interest, penalties, third-party claims, sale of goods,
sale of services, claims, and damages;
(ii)
a civil accounts receivable;
(iii)
a civil judgment of restitution; and
(iv)
a criminal accounts receivable.
(2)
"Civil accounts receivable" means the same as that term is defined in Section
77-32b-102
.
(3)
"Civil judgment of restitution" means the same as that term is defined in Section
77-32b-102
.
(4)
"Criminal accounts receivable" means the same as that term is defined in Section
77-32b-102
.
(2)
(5)
"Debtor" means a party that owes, or is alleged to owe, an
account
accounts

receivable.
(3)
(6)
"Division" means the Division of Finance, created in Section
63A-3-101
.
(7)
(a)
"Governmental entity" means any federal, state, or local government entity,
including any agency, department, division, board, commission, committee, council,
or similar government subdivision.
(b)
"Governmental entity" includes:
(i)
an institution of higher education listed in Section
53H-1-102
;
(ii)
an interlocal entity, as defined in Section
11-13-103
; and
(iii)
a local building authority, as defined in Section
17D-2-102
.
(4)
(8)
"Lien" means the lien described in Section
63A-3-307
.
(5)
(9)
"Local agency" means a nonprofit entity organized by participating political
subdivisions to act on behalf of the participating political subdivisions with respect to
the office's efforts to collect accounts receivable of participating political subdivisions
through administrative offsets.
(6)
(10)
"Mail" means United States Postal Service first class mail to the intended
recipient's last known address.
(7)
(11)
"Participating political subdivision" means a political subdivision that has entered
into an agreement with a local agency authorizing the local agency to act on behalf of
the political subdivision with respect to the office's efforts to collect accounts receivable
of the political subdivision through administrative offsets.
(8)
(12)
"Political subdivision" means the same as that term is defined in Section
63G-7-102
.
Section 3. Section
63A-3-302
is amended to read:
63A-3-302
. Unpaid accounts receivable -- Political subdivision agreement with
local agency.
(1)
(a)
Except as provided in Subsections
(1)(b)
and
(c)
, if any
account
accounts

receivable at any point has been unpaid for 90 days or more, any agency or other
authority of the state, or any political subdivision responsible for collection of the
account may proceed under this part to collect the delinquent amount.
(b)
A governmental entity within the state that is a health care provider may not proceed
under this part when the
account
accounts
receivable is for a medical material or
service and the debtor:
(i)
has made a payment arrangement with the health care provider; and
(ii)
is current on payments under the payment arrangement.
(c)
The state, a governmental entity within the state, or a local agency acting on behalf
of a political subdivision within the state may proceed under this part on an
account
accounts
receivable that is for a property tax imposed under
Title 59, Chapter 2,
Property Tax Act
, only if the
account
accounts
receivable is three or more years
delinquent.
(2)
(a)
A political subdivision may enter into an agreement with a local agency under
which the local agency, for a reasonable fee that the political subdivision and local
agency agree upon, prepares and submits the political subdivision's accounts
receivable for collection as provided in this part.
(b)
Notwithstanding an agreement under Subsection
(2)(a)
, a participating political
subdivision shall:
(i)
establish an agreement with the division for submitting delinquent accounts
receivable under this part; and
(ii)
with respect to the accounts receivable that the participating political subdivision
submits through a local agency for collection under this part:
(A)
receive and respond to an administrative hearing requested under Section
63A-3-305
; and
(B)
administer an adjudicative proceeding required under Section
63A-3-306
.
Section 4. Section
63A-3-307
is amended to read:
63A-3-307
. Liens.
(1)
The following shall constitute a lien in the amount of the receivable plus interest,
penalties, and collection costs allowed by law against any state income tax overpayment,
refund, or other funds in possession of the state or other governmental entity, that are
due or to become due the debtor:
(a)
a
an accounts receivable,
judgment, citation, tax, or administrative order issued by
any agency, court, or other authority of the state, or by any political subdivision;
(b)
an amount, that has at any point been unpaid for 90 days or more, due the state or
other governmental entity for which materials or services have been provided but for
which payment has not been received by the servicing unit; or
(c)
an amount, that:
(i)
the debtor is statutorily required to pay to the state or other governmental entity;
and
(ii)
has, at any point, been unpaid for at least 90 days.
(2)
The lien created by this section shall, for the purposes of
Section
Sections
59-7-522
and

59-10-529
only, be considered a judgment.
(3)
Nothing under Title 63G, Chapter 7, Part 6, Legal Actions Under this Chapter -
Procedures, Requirements, Damages, and Limitations on Judgments, prohibits the state
or other governmental entity from executing on a lien under this section.
Section 5. Section
63A-3-501
is amended to read:
63A-3-501
. Definitions.
As used in this part:
(1)
(a)
"Accounts receivable" or "receivables" means any amount due to a state agency
from an entity for which payment has not been received by the state agency that is
servicing the debt
, regardless of whether the amount due has been reduced to a
judgment
.
(b)
"Accounts receivable"
or "receivables"
includes:
(i)
unpaid fees, licenses, taxes, loans, overpayments, fines,
restitution,
forfeitures,
surcharges, costs, contracts, interest, penalties, third-party claims, sale of goods,
sale of services, claims, and damages;
(ii)
a civil accounts receivable; and
(iii)
a civil judgment of restitution.
(c)
"Accounts receivable"
or "receivables"
does not include a criminal accounts
receivable.
(2)
"Administrative offset" means:
(a)
a reduction of an individual's tax refund or other payments due to the individual to
reduce or eliminate accounts receivable that the individual owes to a state agency; and
(b)
a reduction of an entity's tax refund or other payments due to the entity to reduce or
eliminate accounts receivable that the entity owes to a state agency.
(3)
"Civil accounts receivable" means the same as that term is defined in Section
77-32b-102
.
(4)
"Civil judgment of restitution" means the same as that term is defined in Section
77-32b-102
.
(5)
"Criminal accounts receivable" means the same as that term is defined in Section
77-32b-102
.
(6)
"Entity" means an individual, a corporation,
a
partnership, or other organization that
pays taxes to, or does business
, with
within
the state.
(7)
"Office" means the Office of State Debt Collection created in Section
63A-3-502
.
(8)
"Past due" means any accounts receivable that the state has not received by the payment
due date.
(9)
"Political subdivision" means the same as that term is defined in Section
63G-7-102
.
(10)
"Restitution" means the same as that term is defined in Section
77-38b-102
.
(11)
(a)
"State agency" includes:
(i)
an executive branch agency;
(ii)
the legislative branch of state government; and
(iii)
the judicial branches of state government, including justice courts.
(b)
"State agency" does not include:
(i)
any institution of higher education;
(ii)
except in Subsection
63A-3-502(7)(g)
, the State Tax Commission; or
(iii)
the administrator of the Uninsured Employers' Fund appointed by the Labor
Commissioner under Section
34A-2-704
, solely for the purposes of collecting
money required to be deposited into the Uninsured Employers' Fund under:
(A)
Section
34A-1-405
;
(B)
Title 34A, Chapter 2, Workers' Compensation Act
; or
(C)
Title 34A, Chapter 3, Utah Occupational Disease Act
.
(12)
"Writing-off" means the removal of an accounts receivable from an agency's accounts
receivable records but does not necessarily eliminate further collection efforts.
Section 6. Section
63A-3-502
is amended to read:
63A-3-502
. Office of State Debt Collection created -- Duties.
(1)
The state and each state agency shall comply with:
(a)
the requirements of this chapter; and
(b)
any rules established by the Office of State Debt Collection.
(2)
There is created the Office of State Debt Collection in the Division of Finance.
(3)
The office shall:
(a)
have overall responsibility for collecting and managing state receivables;
(b)
oversee and monitor state receivables to ensure that state agencies are:
(i)
implementing all appropriate collection methods;
(ii)
following established receivables guidelines; and
(iii)
accounting for and reporting receivables in the appropriate manner;
(c)
assist the Division of Finance to develop policies, procedures, and guidelines for
accounting, reporting, and collecting money owed to the state;
(d)
write an inclusive receivables management and collection manual for use by each
state agency;
(e)
prepare quarterly and annual reports of the state's receivables;
(f)
create or coordinate a state accounts receivable database;
(g)
assist the Division of Finance to establish procedures for writing off accounts
receivable for accounting and collection purposes;
(h)
establish standard time limits after which an agency will delegate responsibility to
collect state receivables to the office or the office's designee;
(i)
be a real party in interest for:
(i)
an
account
accounts
receivable referred to the office by any state agency; and
(ii)
a civil judgment of restitution entered on a civil judgment docket by a court;
(j)
allocate money collected for a judgment entered on the civil judgment docket under
Section
77-18-114
in accordance with Sections
51-9-402
,
63A-3-506
, and
78A-5-110
;
(k)
if a criminal accounts receivable is transferred to the office under Subsection
77-32b-103(2)(a)(ii)
, receive, process, and distribute payments for the criminal
accounts receivable;
(l)
provide a debtor online access to the debtor's accounts receivable or criminal
accounts receivable in accordance with Section
63A-3-502.5
;
(m)
establish a written policy for each of the following:
(i)
the settling of an accounts receivable, including any amount of restitution owed to
a victim in a civil judgment of restitution if the victim approves of the settlement;
(ii)
allowing a debtor to pay off a single debt as part of an accounts receivable even if
the debtor has a balance on another debt as part of an accounts receivable or
criminal accounts receivable;
(iii)
setting a payment deadline for settlement agreements and for obtaining an
extension of a settlement agreement deadline; and
(iv)
reducing administrative costs when a settlement has been reached;
(n)
consult with a state agency on whether:
(i)
the office may agree to a settlement for an amount that is less than the debtor's
principal amount; and
(ii)
the state agency may retain authority to negotiate a settlement with a debtor; and
(o)
provide the terms and conditions of any payment arrangement that the debtor has
made with a state agency or the office when:
(i)
the payment arrangement is created; or
(ii)
the debtor requests a copy of the terms and conditions.
(4)
The office may:
(a)
recommend to the Legislature new laws to enhance collection of past-due accounts
by state agencies;
(b)
collect
accounts receivables for higher education entities, if the higher education
entity
accounts receivables for an institution of higher education as though the
institution of higher education were a state agency, if the institution of higher
education
agrees;
(c)
prepare a request for proposal for consulting services to:
(i)
analyze the state's receivable management and collection efforts; and
(ii)
identify improvements needed to further enhance the state's effectiveness in
collecting the state's receivables;
(d)
contract with private or state agencies to collect past-due accounts;
(e)
perform other appropriate and cost-effective coordinating work directly related to
collection of state receivables;
(f)
provide information, training, and technical assistance to each state agency on
various collection-related topics;
(g)
prepare a written receivables management and collection policy and make the policy
available for use by state agencies;
(h)
develop reasonable criteria to gauge state agencies' efforts in maintaining an
effective accounts receivable program;
(i)
identify any state agency that is not making satisfactory progress toward
implementing collection techniques and improving accounts receivable collections;
(j)
coordinate information, systems, and procedures for each state agency to maximize
the collection of past-due accounts receivable;
(k)
obtain access to records and databases of any state agency that are necessary to the
duties of the office by following the procedures and requirements of Section
63G-2-206
, including the financial declaration form described in Section
77-38b-204
;
(l)
at rates authorized by the Legislature or set in statute, assess and collect the following
interest and fees:
(i)
a fee to cover the administrative costs of collection on accounts administered by
the office;
(ii)
a late penalty fee that may not be more than 10% of the
account
accounts

receivable on accounts administered by the office;
(iii)
an interest charge that is:
(A)
the postjudgment interest rate established by Section
15-1-4
in judgments
established by the courts; or
(B)
not more than 2% above the prime rate as of July 1 of each fiscal year for
accounts receivable for which no court judgment has been entered; and
(iv)
fees to collect accounts receivable for higher education;
(m)
collect reasonable attorney fees and reasonable costs of collection that are related to
the collection of receivables under this chapter;
(n)
for a case that is referred to the office or in which the office is a judgment creditor,
file a motion or other document related to the office or the accounts receivable in that
case, including a satisfaction of judgment, in accordance with the Utah Rules of Civil
Procedure;
(o)
ensure that judgments for which the office is the judgment creditor are renewed, as
necessary;
(p)
notwithstanding Section
63G-2-206
, share records obtained under Subsection
(4)(k)

with private sector vendors under contract with the state to assist state agencies in
collecting debts owed to the state agencies without changing the classification of any
private, controlled, or protected record into a public record;
(q)
enter into written agreements with other governmental agencies to obtain and share
information for the purpose of collecting state accounts receivable;
(r)
collect accounts receivable for a political subdivision of the state if the political
subdivision enters into an agreement or contract with the office under Title 11,
Chapter 13, Interlocal Cooperation Act, for the office to collect the political
subdivision's accounts receivable; and
(s)
notwithstanding Section
63A-5b-303
, hold title to real property if doing so is
incidental to execution or collection proceedings.
(5)
The office shall ensure that:
(a)
a record obtained by the office or a private sector vendor under Subsection
(4)(p)
:
(i)
is used only for the limited purpose of collecting accounts receivable; and
(ii)
is subject to federal, state, and local agency records restrictions; and
(b)
any individual employed by, or formerly employed by, the office or a private sector
vendor as referred to in Subsection
(4)(p)
is subject to:
(i)
the same duty of confidentiality with respect to the record imposed by law on
officers and employees of the state agency from which the record was obtained;
and
(ii)
any civil or criminal penalties imposed by law for violations of lawful access to a
private, controlled, or protected record.
(6)
(a)
The office shall have authority to collect a civil accounts receivable or a civil
judgment of restitution ordered by a court as a result of prosecution for a criminal
offense that have been transferred to the office under Subsection
77-18-114(1)
or
(2)
.
(b)
The office may not assess:
(i)
the interest charge established by the office under Subsection
(4)(g)(iii)(B)
on an
account
(4)(l)(iii)(B) on accounts
receivable that
is
are
subject to the
postjudgment interest rate established by Section
15-1-4
; and
(ii)
an interest charge on an amount from a criminal accounts receivable until the
amount is entered on the civil judgment docket.
(7)
The office may require a state agency to:
(a)
transfer collection responsibilities to the office or the office's designee according to
time limits established by the office;
(b)
make annual progress towards implementing collection techniques and improved
accounts receivable collections;
(c)
use the state's accounts receivable system or develop systems that are adequate to
properly account for and report the state's receivables;
(d)
develop and implement internal policies and procedures that comply with the
collections policies and guidelines established by the office;
(e)
provide internal accounts receivable training to staff involved in the management and
collection of receivables as a supplement to statewide training;
(f)
bill for and make initial collection efforts of the state agency's receivables up to the
time the accounts must be transferred; and
(g)
submit quarterly receivable reports to the office that identify the age, collection
status, and funding source of each receivable.
(8)
All interest, fees, and other amounts authorized to be collected by the office under
Subsection
(4)(l)
:
(a)
are penalties that may be charged by the office;
(b)
do not require an order from a court for the office to assess or collect;
(c)
are not compensation for actual pecuniary loss;
(d)
for a civil accounts receivable:
(i)
begin to accrue on the day on which the civil accounts receivable is entered on the
civil judgment docket under Subsection
77-18-114(1)
or
(2)
; and
(ii)
may be collected as part of the civil accounts receivable;
(e)
for a civil judgment of restitution:
(i)
begin to accrue on the day on which the civil judgment of restitution is entered on
the civil judgment docket under Subsection
77-18-114(1)
; and
(ii)
may be collected as part of the civil judgment of restitution;
(f)
for all other accounts receivable:
(i)
begin to accrue on the day on which the accounts receivable is transferred to the
office, even if there is no court order on the day on which the accounts receivable
is transferred; and
(ii)
may be collected as part of the accounts receivable; and
(g)
may be waived by:
(i)
the office; or
(ii)
if the interest, fee, or other amount is charged in error, the court.
Section 7. Section
63A-3-505
is amended to read:
63A-3-505
. State Debt Collection Fund.
(1)
There is created an expendable special revenue fund entitled the "State Debt Collection
Fund."
(2)
The fund consists of:
(a)
all amounts appropriated to the fund under this chapter;
(b)
fees and interest described in Subsection
63A-3-502
(4)(g)
63A-3-502(4)(l)
; and
(c)
except as otherwise provided by law, all postjudgment interest collected by the office
or the state, except postjudgment interest on a civil judgment of restitution.
(3)
Money in this fund shall be overseen by the office and may be used to pay for:
(a)
the costs of the office in the performance of the office's duties;
(b)
a civil judgment of restitution for which debt is owed;
(c)
interest accrued that is associated with the debt;
(d)
principal on the debt to the state agencies or other entities that placed the receivable
for collection;
(e)
other legal obligations including those ordered by a court; and
(f)
deputy court clerks who work exclusively on debt collection activities.
(4)
(a)
The fund may collect interest.
(b)
All interest earned from the fund shall be deposited into the General Fund.
(5)
(a)
The
Except as provided in Subsection
(5)(b)
, the
office shall ensure that money
remaining in the fund at the end of the fiscal year that is not committed under the
priorities established under Subsection
(3)
is deposited into the General Fund.
(b)
At the end of each fiscal year, the office may retain in the fund an amount equal to
up to one year of the office's operating expenses.
Section 8. Section
78A-2-214
is amended to read:
78A-2-214
. Collection of accounts receivable.
(1)
As used in this section:
(a)
"Accounts receivable" means any amount due the state from an entity for which
payment has not been received by the state agency that is servicing the debt.
(b)
"Accounts receivable" includes unpaid fees, licenses, taxes, loans, overpayments,
fines, forfeitures, surcharges, costs, contracts, interest, penalties, restitution to
victims, third party claims, sale of goods, sale of services, claims, and damages.
(2)
If a defendant is sentenced before July 1, 2021, and the Department of Corrections, or
the Office of State Debt Collection, is not responsible for collecting an accounts
receivable for the defendant, the district court shall collect the accounts receivable for
the defendant.
(3)
(a)
In the juvenile court, money collected by the court from past-due accounts
receivable may be used to offset system, administrative, legal, and other costs of
collection.
(b)
The juvenile court shall allocate money collected above the cost of collection on a
pro rata basis to the various revenue types that generated the accounts receivable.
(4)
The interest charge described in Subsection
63A-3-502(4)(g)(iii)(B)
63A-3-502(4)(l)(iii)(B)
may not be assessed on
an account receivable that is
accounts
receivable that are
subject to the postjudgment interest rate established by Section
15-1-4
.
Section 9. Section
78B-5-505
is amended to read:
78B-5-505
. Property exempt from execution.
(1)
(a)
An individual is entitled to exemption of the following property:
(i)
a burial plot for the individual and the individual's family;
(ii)
health aids reasonably necessary to enable the individual or a dependent to work
or sustain health;
(iii)
benefits that the individual or the individual's dependent have received or are
entitled to receive from any source because of:
(A)
disability;
(B)
illness; or
(C)
unemployment;
(iv)
benefits paid or payable for medical, surgical, or hospital care to the extent that
the benefits are used by an individual or the individual's dependent to pay for that
care;
(v)
veterans benefits;
(vi)
money or property received, and rights to receive money or property for child
support;
(vii)
money or property received, and rights to receive money or property for alimony
or separate maintenance, to the extent reasonably necessary for the support of the
individual and the individual's dependents;
(viii)
(A)
one:
(I)
clothes washer and dryer;
(II)
refrigerator;
(III)
freezer;
(IV)
stove;
(V)
microwave oven; and
(VI)
sewing machine;
(B)
all carpets in use;
(C)
provisions sufficient for 12 months actually provided for individual or family
use;
(D)
all wearing apparel of every individual and dependent, not including jewelry
or furs; and
(E)
all beds and bedding for every individual or dependent;
(ix)
except for works of art held by the debtor as part of a trade or business, works of
art:
(A)
depicting the debtor or the debtor and the debtor's resident family; or
(B)
produced by the debtor or the debtor and the debtor's resident family;
(x)
proceeds of insurance, a judgment, or a settlement, or other rights accruing as a
result of bodily injury of the individual or of the wrongful death or bodily injury
of another individual of whom the individual was or is a dependent to the extent
that those proceeds are compensatory;
(xi)
the proceeds or benefits of any life insurance contracts or policies paid or
payable to the debtor or any trust of which the debtor is a beneficiary upon the
death of the spouse or children of the debtor, provided that the contract or policy
has been owned by the debtor for a continuous unexpired period of one year;
(xii)
the proceeds or benefits of any life insurance contracts or policies paid or
payable to the spouse or children of the debtor or any trust of which the spouse or
children are beneficiaries upon the death of the debtor, provided that the contract
or policy has been in existence for a continuous unexpired period of one year;
(xiii)
proceeds and avails of any unmatured life insurance contracts owned by the
debtor or any revocable grantor trust created by the debtor, excluding any
payments made on the contract during the one year immediately preceding a
creditor's levy or execution;
(xiv)
except as provided in Subsection
(1)(b)
, and except for a judgment described in
Subsection
75B-2-503(2)(c)
or (d)
, any money or other assets held for or payable
to the individual as an owner, participant, or beneficiary from or an interest of the
individual as an owner, participant, or beneficiary in a fund or account, including
an inherited fund or account, in a retirement plan or arrangement that is described
in Section 401(a), 401(h), 401(k), 403(a), 403(b), 408, 408A, 409, 414(d), 414(e),
or 457, Internal Revenue Code, including an owner's, a participant's, or a
beneficiary's interest that arises by inheritance, designation, appointment, or
otherwise;
(xv)
the interest of or any money or other assets payable to an alternate payee under a
qualified domestic relations order as those terms are defined in Section 414(p),
Internal Revenue Code;
(xvi)
unpaid earnings of the household of the filing individual due as of the date of
the filing of a bankruptcy petition in the amount of 1/24 of the Utah State annual
median family income for the household size of the filing individual as
determined by the Utah State Annual Median Family Income reported by the
United States Census Bureau and as adjusted based upon the Consumer Price
Index for All Urban Consumers for an individual whose unpaid earnings are paid
more often than once a month or, if unpaid earnings are not paid more often than
once a month, then in the amount of 1/12 of the Utah State annual median family
income for the household size of the individual as determined by the Utah State
Annual Median Family Income reported by the United States Census Bureau and
as adjusted based upon the Consumer Price Index for All Urban Consumers;
(xvii)
except for curio or relic firearms, any three of the following:
(A)
one handgun and ammunition for the handgun not exceeding 1,000 rounds;
(B)
one shotgun and ammunition for the shotgun not exceeding 1,000 rounds; and
(C)
one shoulder arm and ammunition for the shoulder arm not exceeding 1,000
rounds; and
(xviii)
money, not exceeding $200,000, in the aggregate, that an individual deposits,
more than 18 months before the day on which the individual files a petition for
bankruptcy or an action is filed by a creditor against the individual, as applicable,
in all tax-advantaged accounts for saving for higher education costs on behalf of a
particular individual that meets the requirements of Section 529, Internal Revenue
Code.
(b)
(i)
Any money, asset, or other interest in a fund or account that is exempt from a
claim of a creditor of the owner, beneficiary, or participant under Subsection
(1)(a)(xiv)
does not cease to be exempt after the owner's, participant's, or
beneficiary's death by reason of a direct transfer or eligible rollover to an inherited
individual retirement account as defined in Section 408(d)(3), Internal Revenue
Code.
(ii)
Subsections
(1)(a)(xiv)
and
(1)(b)(i)
apply to all inherited individual retirement
accounts without regard to the date on which the account was created.
(c)
(i)
The exemption granted by Subsection
(1)(a)(xiv)
does not apply to:
(A)
an alternate payee under a qualified domestic relations order, as those terms
are defined in Section 414(p), Internal Revenue Code; or
(B)
amounts contributed or benefits accrued by or on behalf of a debtor within one
year before the debtor files for bankruptcy, except amounts directly rolled over
from other funds that are exempt from attachment under this section.
(ii)
The exemptions in Subsections
(1)(a)(xi)
,
(xii)
, and
(xiii)
do not apply to the
secured creditor's interest in proceeds and avails of any matured or unmatured life
insurance contract assigned or pledged as collateral for repayment of a loan or
other legal obligation.
(2)
(a)
Disability benefits, as described in Subsection
(1)(a)(iii)(A)
, and veterans benefits,
as described in Subsection
(1)(a)(v)
, may be garnished on behalf of a victim who is a
child if the person receiving the benefits has been convicted of a felony sex offense
against the victim and ordered by the sentencing court to pay restitution to the victim.
(b)
The exemption from execution under this Subsection
(2)
shall be reinstated upon
payment of the restitution in full.
(3)
The exemptions under this section do not limit items that may be claimed as exempt
under Section
78B-5-506
.
(4)
(a)
The exemptions described in Subsections
(1)(a)(iii)
,
(iv)
,
(vi)
,
(vii)
,
(x)
,
(xii)
,
(xiii)
,
(xiv)
,
(xv)
,
(xvii)
, and
(xviii)
do not apply to a civil accounts receivable or a civil
judgment of restitution for an individual who is found in contempt under Section
78B-6-317
.
(b)
Subsection
(4)(a)
does not apply to the benefits described in Subsection
(1)(a)(iii)
if
the individual's dependent received, or is entitled to receive, the benefits.
Section 10.
Effective Date.
This bill takes effect:
(1)
except as provided in Subsection (2),
May 6, 2026
; or
(2)
if approved by two-thirds of all members elected to each house:
(a)
upon approval by the governor;
(b)
without the governor's signature, the day following the constitutional time limit of
Utah Constitution, Article VII, Section 8; or
(c)
in the case of a veto, the date of veto override.
2-12-26 9:56 AM