STAND. COM. REP. NO. 2751

Honolulu, Hawaii

RE: S.B. No. 2126

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2126 entitled:

"A BILL FOR AN ACT RELATING TO SECURITY DEPOSITS,"

begs leave to report as follows:

The purpose and intent of this measure is to require a landlord to accept either rental security insurance or security deposit installment payments in lieu of a traditional security deposit, upon a tenant's request.

Your Committee received testimony in support of this measure from ten individuals.

Your Committee received testimony in opposition to this measure from two individuals.

Your Committee received comments on this measure from the Hawaiʻi Association of REALTORS and American Property Casualty Insurance Association.

Your Committee finds that security deposits generally are a one-time, refundable payment made by a tenant before moving into a property that acts as financial insurance against potential damages, unpaid rent, or cleaning fees upon termination of the tenancy. Despite the justifiable need for security deposits, the availability to provide additional funds up front can be a major hurdle for many low-income renters. Your Committee further finds that new alternatives to traditional security deposits can provide much needed assistance and flexibility to low-income renters, while still providing landlords with a sufficient measure of protection and financial assurance. This measure will therefore help alleviate the financial burden of security deposits to empower tenants and foster a more inclusive housing market.

Your Committee has amended this measure by:

(1) Deleting language that would have required a landlord to accept the option of payment of a security deposit over a series of not less than six equal monthly installments upon a tenant's request;

(2) Inserting language requiring a landlord to accept a surety bond in an amount equal to the total security deposit upon a tenant's request; and

(3) Inserting an effective date of July 1, 2040, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2126, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2126, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

________________________________

JARRETT KEOHOKALOLE, Chair