Honolulu, Hawaii

, 2021


RE: S.B. No. 566

S.D. 1

H.D. 1





Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii




Your Committee on Housing, to which was referred S.B. No. 566, S.D. 1, entitled:




begs leave to report as follows:


The purpose of this measure is to increase the homestead exemption in bankruptcy proceedings for all persons to $350,000 and require that the real property be the principal residence.


Your Committee received testimony in support of this measure from Maui Brewing Co.; Cain & Herren, ALC; Abelmann Peterson LLLC; and three individuals. Your Committee received testimony in opposition to this measure from Hawaii Bankers Association, Hawaii Credit Union League, and Hawaii Financial Services Association.


Your Committee finds that the amount of the homestead exemption in bankruptcy proceedings has not been adjusted since 1978; however, the coronavirus disease 2019 (COVID-19) pandemic has emphasized the need to raise the exemption as the percentage of those who are not current on their mortgage loans doubled from 2019 to 2020. Your Committee further finds that the exemption should be raised to more accurately reflect the effects of inflation, the economic impacts of the COVID-19 pandemic, and keep families in their homes. Your Committee notes, however, that any change should represent a balanced approach that carefully considers the various potential impacts for all affected parties.


Your Committee has amended this measure by:


(1) Removing the provisions that would have increased the homestead exemption in bankruptcy proceedings;


(2) Requiring the Legislative Reference Bureau to conduct a study to determine the appropriate amount of an increase to the homestead exemption;


(3) Changing the effective date to December 1, 2050, to encourage further discussion; and


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


As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 566, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 566, S.D. 1, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.



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