[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3545 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 3545

    To amend title 11 of the United States Code to clarify the rule 
   allowing discharge as a nonpriority claim of governmental claims 
     arising from the disposition of farm assets under chapter 12 
                             bankruptcies.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 13, 2012

  Mr. Grassley (for himself and Mr. Franken) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend title 11 of the United States Code to clarify the rule 
   allowing discharge as a nonpriority claim of governmental claims 
     arising from the disposition of farm assets under chapter 12 
                             bankruptcies.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Farmer Bankruptcy Tax 
Clarification Act of 2012''.

SEC. 2. CLARIFICATION OF RULE ALLOWING DISCHARGE TO GOVERNMENTAL CLAIMS 
              ARISING FROM THE DISPOSITION OF FARM ASSETS UNDER CHAPTER 
              12 BANKRUPTCIES.

    (a) In General.--Section 1222(a) of title 11, United States Code, 
is amended--
            (1) in paragraph (2), by striking ``unless--'' and all that 
        follows through ``the holder'' and inserting ``unless the 
        holder'';
            (2) in paragraph (3), by striking ``and'' at the end;
            (3) in paragraph (4), by striking the period at the end and 
        inserting ``; and''; and
            (4) by adding at the end the following:
            ``(5) notwithstanding the application of the rules under 
        subchapter V of chapter 1 of the Internal Revenue Code of 1986, 
        and without regard to whether the claim arose before or after 
        the filing of the petition, provide for the treatment and 
        payment of any unsecured claim owed to a governmental unit by 
        the debtor or the estate that arises as a result of the sale, 
        transfer, exchange, or other disposition of any farm asset used 
        in the debtor's farming operation as an unsecured claim that is 
        not entitled to priority under section 507.''.
    (b) Postpetition Claims Relating to Sale, Transfer, Exchange, or 
Other Disposition of Farm Assets.--
            (1) In general.--Section 1222 of title 11, United States 
        Code, is amended by adding at the end the following:
    ``(e)(1) A governmental unit may file a proof of claim for a claim 
described in subsection (a)(5) that arises after the date on which the 
petition is filed.
    ``(2)(A) Except as provided in subparagraph (B), if a governmental 
unit has not filed a proof of claim under paragraph (1) for a claim 
described in subsection (a)(5), after the date that is 120 days after 
the date on which the claim arises, the trustee or the debtor may file 
proof of such claim.
    ``(B)(i) For a claim described in subsection (a)(5) that is a tax 
for which a return is due, if the debtor or trustee has provided notice 
as described in clause (ii) and the governmental unit has not filed a 
proof of claim under paragraph (1), after the date that is 180 days 
after the date on which the debtor or trustee provides the notice, the 
debtor or the trustee may file proof of such claim.
    ``(ii) Notice as described in this clause is notice by the debtor 
or the trustee--
            ``(I) indicating the intent to file the applicable claim;
            ``(II) setting forth the amount of the claim;
            ``(III) that includes a copy of the filed return relating 
        to the claim; and
            ``(IV) that is delivered to the governmental unit at the 
        address designated for requests made under section 
        505(b)(1)(A).
    ``(3) A claim filed under paragraph (1) or (2) shall be allowed or 
disallowed under section 502, but shall be determined as of the date 
such claim arises, and shall be allowed under section 502 (a), (b), or 
(c) of this title, or disallowed under section 502(d) or 502(e) of this 
title the same as if such claim had arisen before the date of the 
filing of the petition.''.
            (2) Modification of plan after confirmation.--Section 
        1229(a) of title 11, United States Code, is amended--
                    (A) in paragraph (2), by striking ``or'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(4) provide for the payment of a claim described in 
        section 1222(a)(5) that arose after the date on which the 
        petition is filed.''.
    (c) Technical Correction.--Section 1228(a) of title 11, United 
States Code, is amended in the matter preceding paragraph (1)--
            (1) by inserting a comma after ``all debts provided for by 
        the plan''; and
            (2) by inserting a comma after ``allowed under section 503 
        of this title''.
    (d) Effective Date.--The amendments made by this section shall 
apply to any bankruptcy case that--
            (1) is pending on the date of enactment of this Act and 
        relating to which an order of discharge under section 1228 of 
        title 11, United States Code, has not been entered; or
            (2) commences on or after the date of enactment of this 
        Act.
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