STAND. COM. REP. NO. 597

Honolulu, Hawaii

RE: S.B. No. 566

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 566 entitled:

"A BILL FOR AN ACT RELATING TO HOMESTEAD EXEMPTIONS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Increase the homestead exemption for all persons to $2,000,000; and

(2) Require that the exempted real property be the principal residence.

Your Committee received testimony in support of this measure from the Maui Brewing Co. and two individuals. Your Committee received testimony in opposition to this measure from the Hawai‘i Bankers Association and Hawaii Financial Services Association. Your Committee received comments on this measure from the Collection Law Section of the Hawaii State Bar Association.

Your Committee finds that the coronavirus disease 2019 (COVID-19) pandemic and the governmental responses to contain the spread of COVID-19 have precipitated an economic contraction on global, national, and local levels. Your Committee further finds that this contraction has dramatically increased the unemployed population in Hawai‘i and resulted in a decline in income for almost half of the households in the State. Your Committee additionally finds that the percentage of persons who are not current on their mortgage loans more than doubled from 2019 to 2020. Your Committee also finds that, since the amount of the homestead exemption has not been adjusted since 1978, increasing it to better reflect the effects of inflation and the economic impacts of the pandemic will benefit homeowners in the State.

Your Committee has amended this measure by:

(1) Changing the exemption amount from $2,000,000 to $350,000; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 566, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 566, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

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KARL RHOADS, Chair