02-17 11:08 S.B. 293
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Trust Business Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Brady Brammer
House Sponsor:
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LONG TITLE
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General Description:
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This bill amends provisions related to trust business.
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Highlighted Provisions:
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This bill:
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▸ defines terms;
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▸ modifies the definition of "trust company" to remove a requirement that a corporation be
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continuously engaged in trust business since 1981 to qualify as a trust business;
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▸ provides that a corporation offering accounts denominated in specie legal tender may
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qualify as a trust company in this state; and
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▸ makes technical and conforming changes.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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AMENDS:
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7-5-1, as last amended by Laws of Utah 2013, Chapter 364
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59-10-202, as last amended by Laws of Utah 2019, Chapter 412
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 7-5-1 is amended to read:
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7-5-1 . Definitions -- Allowable trust companies -- Exceptions.
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(1) As used in this chapter:
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(a) "Business trust" means an entity engaged in a trade or business that is created by a
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declaration of trust that transfers property to trustees, to be held and managed by [
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them] the trustees for the benefit of persons holding certificates representing the
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beneficial interest in the trust estate and assets.
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(b) "Court appointed fiduciary" means a court appointed conservator, guardian, receiver,
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trustee, or other fiduciary that:
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(i) is responsible to the court in the same manner as a personal representative under
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Title 75, Chapter 3, Part 5, Supervised Administration, or as a receiver under Rule
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66, Utah Rules of Civil Procedure; and
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(ii) is a certified public accountant or has qualified for and received a designation as a
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certified financial planner, chartered financial consultant, certified financial
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analyst, or similar designation suitable to the court, that evidences the
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conservator's, guardian's, receiver's, trustee's, or other fiduciary's professional
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competence to manage financial matters.
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[(b)] (c)(i) "Trust business" means[, except as provided in Subsection (1)(c),] a
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business in which [one] a person acts in any agency or fiduciary capacity,
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including that of personal representative, executor, administrator, conservator,
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guardian, assignee, receiver, depositary, or trustee under appointment as trustee
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for any purpose permitted by law, including the definition of "trust" set forth in [
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Subsection 75-1-201(55)] Section 75-1-201.
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[(c)] (d)(i) "Trust business" does not include the following means of holding money,
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assets, or other property:
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[(i)] (A) money held in a client trust account by an attorney authorized to practice
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law in this state;
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[(ii)] (B) money held in connection with the purchase or sale of real estate by a
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person licensed as a principal broker in accordance with Title 61, Chapter 2f,
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Real Estate Licensing and Practices Act;
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[(iii)] (C) money or other assets held in escrow by a person authorized by the
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department in accordance with Chapter 22, Regulation of Independent Escrow
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Agents, or by the Utah Insurance Department to act as an escrow agent in this
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state;
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[(iv)] (D) money held by a homeowners' association or similar organization to pay
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maintenance and other related costs for commonly owned property;
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[(v)] (E) money held in connection with the collection of debts or payments on
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loans by a person acting solely as the agent or representative or otherwise at
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the sole direction of the person to which the debt or payment is owed,
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including money held by an escrow agent for payment of taxes or insurance;
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[(vi)] (F) money and other assets held in trust on an occasional or isolated basis by
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a person who does not represent that the person is engaged in the trust business
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in Utah;
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[(vii)] (G) money or other assets found by a court to be held in an implied,
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resulting, or constructive trust;
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[(viii)] (H) money or other assets held by a court appointed [conservator, guardian,
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receiver, trustee, or other ]fiduciary[ if:] ;
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[(A) the conservator, receiver, guardian, trustee, or other fiduciary is responsible
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to the court in the same manner as a personal representative under Title 75,
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Chapter 3, Part 5, Supervised Administration, or as a receiver under Rule 66,
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Utah Rules of Civil Procedure; and]
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[(B) the conservator, trustee, or other fiduciary is a certified public accountant or
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has qualified for and received a designation as a certified financial planner,
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chartered financial consultant, certified financial analyst, or similar designation
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suitable to the court, that evidences the conservator's, trustee's, or other
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fiduciary's professional competence to manage financial matters;]
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[(ix)] (I) money or other assets held by a credit services organization operating in
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compliance with Title 13, Chapter 21, Credit Services Organizations Act;
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[(x)] (J) money, securities, or other assets held in a customer account in connection
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with the purchase or sale of securities by a regulated securities broker, dealer,
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or transfer agent; or
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[(xi)] (K) money, assets, and other property held in a business trust for the benefit
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of holders of certificates of beneficial interest if the fiduciary activities of the
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business trust are merely incidental to conducting business in the business trust
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form.
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[(d)] (e) "Trust company" means[ an institution authorized to engage in the trust business
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under this chapter. Only the following may be a trust company]:
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(i) a Utah depository institution or [its] the Utah depository institution's wholly owned
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subsidiary;
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(ii) an out-of-state depository institution authorized to engage in business as a
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depository institution in Utah or [its] the out-of-state depository institution's
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wholly owned subsidiary;
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(iii) a corporation, including a credit union service organization, owned entirely by
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one or more federally insured depository institutions as that term is defined in [
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Subsection 7-1-103(8)] Section 7-1-103;
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(iv) a direct or indirect subsidiary of a depository institution holding company that
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also has a direct or indirect subsidiary authorized to engage in business as a
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depository institution in Utah; and
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(v) any other corporation [continuously and] that lawfully [engaged] engages in the
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trust business in this state[ since before July 1, 1981] , including a corporation
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offering accounts denominated in specie legal tender.
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(2) Only a trust company may engage in the trust business in this state.
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(3) The requirements of this chapter do not apply to:
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(a) an institution authorized to engage in a trust business in another state that[ is engaged ]
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engages in trust activities in this state solely to fulfill [its] the institution's duties as a
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trustee of a trust created and administered in another state;
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(b) a national bank, federal savings bank, federal savings and loan association, or federal
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credit union authorized to engage in business as a depository institution in Utah, or
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any wholly owned subsidiary of [any of these] a national bank, federal savings bank,
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federal savings and loan association, or federal credit union authorized to engage in
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business as a depository institution in Utah, to the extent the [institution is authorized
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by its primary federal regulator] primary federal regulator authorizes the institution to
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engage in the trust business in this state; or
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(c) a state agency that [is otherwise authorized by statute] a statute authorizes to act as a
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conservator, receiver, guardian, trustee, or in any other fiduciary capacity.
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Section 2. Section 59-10-202 is amended to read:
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59-10-202 . Additions to and subtractions from unadjusted income of a resident
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or nonresident estate or trust.
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(1) There shall be added to unadjusted income of a resident or nonresident estate or trust:
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(a) a lump sum distribution allowable as a deduction under Section 402(d)(3), Internal
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Revenue Code, to the extent deductible under Section 62(a)(8), Internal Revenue
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Code, in determining adjusted gross income;
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(b) except as provided in Subsection (3), for bonds, notes, and other evidences of
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indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and
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other evidences of indebtedness:
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(i) issued by one or more of the following entities:
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(A) a state other than this state;
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(B) the District of Columbia;
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(C) a political subdivision of a state other than this state; or
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(D) an agency or instrumentality of an entity described in Subsections (1)(b)(i)(A)
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through (C); and
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(ii) to the extent the interest is not included in federal taxable income on the
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taxpayer's federal income tax return for the taxable year;
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(c) any portion of federal taxable income for a taxable year if that federal taxable income
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is derived from stock:
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(i) in an S corporation; and
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(ii) that is held by an electing small business trust;
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(d) the amount withdrawn under Title 53B, Chapter 8a, Utah Educational Savings Plan,
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from the account of a resident or nonresident estate or trust that is an account owner
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as defined in Section 53B-8a-102, for the taxable year for which the amount is
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withdrawn, if that amount withdrawn from the account of the resident or nonresident
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estate or trust that is the account owner:
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(i) is not expended for:
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(A) higher education costs as defined in Section 53B-8a-102.5; or
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(B) a payment or distribution that qualifies as an exception to the additional tax
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for distributions not used for educational expenses provided in Sections 529(c)
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and 530(d), Internal Revenue Code; and
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(ii) is:
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(A) subtracted by the resident or nonresident estate or trust:
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(I) that is the account owner; and
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(II) on the resident or nonresident estate's or trust's return filed under this
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chapter for a taxable year beginning on or before December 31, 2007; or
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(B) used as the basis for the resident or nonresident estate or trust that is the
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account owner to claim a tax credit under Section 59-10-1017; and
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(e) any fiduciary adjustments required by Section 59-10-210.
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(2) There shall be subtracted from unadjusted income of a resident or nonresident estate or
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trust:
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(a) the interest or a dividend on obligations or securities of the United States and its
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possessions or of any authority, commission, or instrumentality of the United States,
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to the extent that interest or dividend is included in gross income for federal income
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tax purposes for the taxable year but exempt from state income taxes under the laws
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of the United States, but the amount subtracted under this Subsection (2) shall be
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reduced by any interest on indebtedness incurred or continued to purchase or carry
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the obligations or securities described in this Subsection (2), and by any expenses
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incurred in the production of interest or dividend income described in this Subsection
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(2) to the extent that such expenses, including amortizable bond premiums, are
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deductible in determining federal taxable income;
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(b) income of an irrevocable resident trust if:
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(i) the income would not be treated as state taxable income derived from Utah
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sources under Section 59-10-204 if received by a nonresident trust;
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(ii) the trust first became a resident trust on or after January 1, 2004;
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(iii) no assets of the trust were held, at any time after January 1, 2003, in another
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resident irrevocable trust created by the same settlor or the spouse of the same
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settlor;
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(iv) the trustee of the trust is a trust company as defined in [Subsection 7-5-1(1)(d)]
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Section 7-5-1;
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(v) the amount subtracted under this Subsection (2)(b) is reduced to the extent the
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settlor or any other person is treated as an owner of any portion of the trust under
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Subtitle A, Subchapter J, Subpart E of the Internal Revenue Code; and
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(vi) the amount subtracted under this Subsection (2)(b) is reduced by any interest on
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indebtedness incurred or continued to purchase or carry the assets generating the
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income described in this Subsection (2)(b), and by any expenses incurred in the
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production of income described in this Subsection (2)(b), to the extent that those
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expenses, including amortizable bond premiums, are deductible in determining
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federal taxable income;
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(c) if the conditions of Subsection (4)(a) are met, the amount of income of a resident or
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nonresident estate or trust derived from a deceased Ute tribal member:
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(i) during a time period that the Ute tribal member resided on homesteaded land
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diminished from the Uintah and Ouray Reservation; and
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(ii) from a source within the Uintah and Ouray Reservation;
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(d) any amount:
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(i) received by a resident or nonresident estate or trust;
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(ii) that constitutes a refund of taxes imposed by:
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(A) a state; or
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(B) the District of Columbia; and
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(iii) to the extent that amount is included in total income on that resident or
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nonresident estate's or trust's federal tax return for estates and trusts for that
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taxable year;
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(e) the amount of a railroad retirement benefit:
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(i) paid:
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(A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231
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et seq.;
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(B) to a resident or nonresident estate or trust derived from a deceased resident or
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nonresident individual; and
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(C) for the taxable year; and
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(ii) to the extent that railroad retirement benefit is included in total income on that
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resident or nonresident estate's or trust's federal tax return for estates and trusts;
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(f) an amount:
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(i) received by a resident or nonresident estate or trust if that amount is derived from
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a deceased enrolled member of an American Indian tribe; and
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(ii) to the extent that the state is not authorized or permitted to impose a tax under this
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part on that amount in accordance with:
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(A) federal law;
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(B) a treaty; or
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(C) a final decision issued by a court of competent jurisdiction;
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(g) the amount that a qualified nongrantor charitable lead trust deducts under Section
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642(c), Internal Revenue Code, as a charitable contribution deduction, as allowed on
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the qualified nongrantor charitable lead trust's federal income tax return for estates
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and trusts for the taxable year;
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(h) any fiduciary adjustments required by Section 59-10-210;
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(i) an amount received:
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(i) for the interest on a bond, note, or other obligation issued by an entity for which
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state statute provides an exemption of interest on its bonds from state individual
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income tax;
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(ii) by a resident or nonresident estate or trust;
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(iii) for the taxable year; and
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(iv) to the extent the amount is included in federal taxable income on the taxpayer's
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federal income tax return for the taxable year;
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(j) for a taxable year beginning on or after January 1, 2019, but beginning on or before
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December 31, 2019, only:
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(i) the amount of any FDIC premium paid or incurred by the resident or nonresident
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estate or trust that is disallowed as a deduction for federal income tax purposes
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under Section 162(r), Internal Revenue Code, on the resident's or nonresident
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estate's or trust's 2018 federal income tax return; plus
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(ii) the amount of any FDIC premium paid or incurred by the resident or nonresident
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estate or trust that is disallowed as a deduction for federal income tax purposes
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under Section 162(r), Internal Revenue Code, for the taxable year; and
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(k) for a taxable year beginning on or after January 1, 2020, the amount of any FDIC
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premium paid or incurred by the resident or nonresident estate or trust that is
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disallowed as a deduction for federal income tax purposes under Section 162(r),
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Internal Revenue Code, for the taxable year.
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(3) Notwithstanding Subsection (1)(b), interest from bonds, notes, and other evidences of
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indebtedness issued by an entity described in Subsections (1)(b)(i)(A) through (D) may
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not be added to unadjusted income of a resident or nonresident estate or trust if, as
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annually determined by the commission:
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(a) for an entity described in Subsection (1)(b)(i)(A) or (B), the entity and all of the
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political subdivisions, agencies, or instrumentalities of the entity do not impose a tax
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based on income on any part of the bonds, notes, and other evidences of indebtedness
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of this state; or
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(b) for an entity described in Subsection (1)(b)(i)(C) or (D), the following do not impose
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a tax based on income on any part of the bonds, notes, and other evidences of
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indebtedness of this state:
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(i) the entity; or
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(ii)(A) the state in which the entity is located; or
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(B) the District of Columbia, if the entity is located within the District of
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Columbia.
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(4)(a) A subtraction for an amount described in Subsection (2)(c) is allowed only if:
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(i) the income is derived from a deceased Ute tribal member; and
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(ii) the governor and the Ute tribe execute and maintain an agreement meeting the
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requirements of this Subsection (4).
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(b) The agreement described in Subsection (4)(a):
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(i) may not:
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(A) authorize the state to impose a tax in addition to a tax imposed under this
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chapter;
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(B) provide a subtraction under this section greater than or different from the
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subtraction described in Subsection (2)(c); or
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(C) affect the power of the state to establish rates of taxation; and
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(ii) shall:
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(A) provide for the implementation of the subtraction described in Subsection
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(2)(c);
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(B) be in writing;
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(C) be signed by:
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(I) the governor; and
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(II) the chair of the Business Committee of the Ute tribe;
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(D) be conditioned on obtaining any approval required by federal law; and
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(E) state the effective date of the agreement.
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(c)(i) The governor shall report to the commission by no later than February 1 of each
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year regarding whether or not an agreement meeting the requirements of this
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Subsection (4) is in effect.
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(ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
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subtraction permitted under Subsection (2)(c) is not allowed for taxable years
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beginning on or after the January 1 following the termination of the agreement.
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(d) For purposes of Subsection (2)(c) and in accordance with Title 63G, Chapter 3, Utah
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Administrative Rulemaking Act, the commission may make rules:
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(i) for determining whether income is derived from a source within the Uintah and
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Ouray Reservation; and
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(ii) that are substantially similar to how adjusted gross income derived from Utah
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sources is determined under Section 59-10-117.
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Section 3. Effective Date.
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This bill takes effect on May 7, 2025.
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