Hawaii Senate Bill SB2338

Hawaii 2022 Regular Session

• Introduced: 1/21/22
• Refer: 1/24/22

Caption

Relating To Homestead Exemptions.

Impact

The proposed study outlined in SB2338 will assess the adequacy of the current homestead exemption by comparing it to similar states in terms of size and tax structure. It seeks to explore the fiscal implications for the state and private sectors associated with an increased exemption. Additionally, the study will evaluate how often residents claim the homestead exemption and the frequency of its application. The intent is to provide data-driven recommendations to enhance financial protections for homeowners in bankruptcy situations.

Summary

SB2338, introduced in the Hawaii legislature, aims to address concerns surrounding the state's homestead exemption, which has not been adjusted since 1978. This bill arises from economic pressures exacerbated by the COVID-19 pandemic, which led to a significant increase in unemployment rates and financial stress among residents. Many households have faced declines in income, and there is an expectation of increasing foreclosure rates due to the economic climate. The bill mandates a study to evaluate the appropriate amount of an increase to the homestead exemption under the United States Bankruptcy Code, reflecting the need to modernize the exemption amid changing economic conditions.

Contention

Notably, the discussion around SB2338 highlights concerns regarding property rights and the economic landscape in Hawaii. Critics may argue that adjusting the homestead exemption could have repercussions for state and local tax revenues, potentially impacting funding for essential services. On the other hand, supporters emphasize that an increase in the exemption could offer much-needed relief to struggling homeowners and contribute to housing stability in Hawaii's high-cost living environment.