WHITE HOUSE OPPOSES LIMITING HOMESTEAD
August 7, 2001
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Office of Management and Budget Director Mitch Daniels yesterday sent identical letters to the 13 Senate bankruptcy conferees that said the Bush Administration “strongly opposes” the Senate language on homestead exemptions and “strongly urges” the conferees to instead adopt the homestead provisions included in the House bill (H.R. 333), CongressDaily reported.
The Senate bill (S. 420) contains a number of requirements making it more difficult for debtors to shield the value of their homes from bankruptcy and places a hard $125,000 cap on all homestead exemptions. The House bill imposes no limit and requires only that that value in excess of $100,000 added to the homestead during the two years preceding the bankruptcy filing be deducted from the exemption — unless it was transferred from another homestead in the same state.
Under both bills, debtors must have had a residence for two years before being eligible to claim the exemption of their place of domicile. Texas, which is home to President Bush, House Majority Leader Richard Armey and House Majority Whip Tom DeLay, is one of a handful of states that currently provides an unlimited homestead exemption.
The other specific issue Daniels mentioned in his letter was a section of H.R. 333 designed to aid a small number of U.S. underwriters at Lloyd’s of London insurance market, who have defaulted on their underwriting obligations and have sought to sue Lloyd’s in U.S. court on grounds of fraud. Daniels said the Bush administration opposes that section, which the Senate cut from its version of the bill, “because it has the potential to undercut the rule of law as it applies across international borders.” Aides to the House and Senate conferees will hold their first meeting this week to begin laying the groundwork for the conference.
