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Senate approves homestead-exemption changes, adds CPI indexing and 529-plan protection
Summary
After substitution and floor discussion about a consumer-price-index adjustment, the Senate approved a substitute for House Bill 230 that creates a CPI-based adjustment to the homestead exemption and adds protections for 529 plans from general creditor collection; sponsor said the Office of State Auditor will publish the annually adjusted amount.
The Senate considered and ultimately passed a substituted version of House Bill 230, described by the floor sponsor as two technical corrections: indexing the homestead exemption to the consumer price index (CPI) and clarifying that certain 529 plans are exempt from collection in bankruptcy for funds deposited at least 18 months before default.
"The reason for the index ... the $30,000 was put in when the average price of a home in Utah was, I think, somewhere around 80 to a hundred thousand dollars," Senator Bramble said, arguing that indexing is necessary to keep the exemption meaningful as home prices have risen. He told colleagues that even with indexing, Utah would still have a comparatively low homestead exemption but that the change responds to inflation.
The sponsor explained the bill directs the Office of the State Auditor to publish the CPI-adjusted dollar amount annually so practitioners and the public can find the current exemption. The substitute also aligns 529 college-savings plans with other retirement plans regarding creditor access, shielding certain funds from collection in bankruptcy where specified.
Senators asked for clarifications about how the CPI figure will be communicated and whether the annual adjustment could create uncertainty in statutory text; the sponsor said the auditor’s office publication will provide the annual figure and that bankruptcy attorneys will be familiar with the adjusted exemption.
The Senate considered the substitute for second and third reading and recorded a roll-call vote yielding 28 yeas, 0 nays, 1 absent; the bill was returned to the House for further consideration.
