[Congressional Record Volume 145, Number 46 (Tuesday, March 23, 1999)]
[Senate]
[Pages S3134-S3135]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS:
  S. 684. A bill to amend title 11, United States Code, to provide for 
family fishermen, and to make chapter 12 of title 11, United States 
Code, permanent; to the Committee on the Judiciary.


               THE FISHERMEN'S BANKRUPTCY PROTECTION ACT

 Ms. COLLINS. Mr. President, today I am introducing a bill to 
make reorganization under Chapter 12 of the Bankruptcy Code applicable 
to family fishermen. In brief, the bill would allow family fishermen 
the opportunity to apply for the protections of reorganization in 
bankruptcy and provide to them the same protections and terms as those 
granted the family farmer who enters bankruptcy.
  Like many Americans, I'm appalled by those who live beyond their 
means, and use the bankruptcy code as a tool to cure their self-induced 
financial ills. I have supported and will continue to support 
alterations to the bankruptcy code that ensure the responsible use of 
its provisions. All consumers bear the burden of irresponsible debtors 
who abuse the system. Therefore, I believe bankruptcy should remain a 
tool of last resort for those in severe financial distress.
  As those familiar with the bankruptcy code know, business 
reorganization in bankruptcy is a different creature than the 
forgiveness of debt traditionally associated with bankruptcy. 
Reorganization embodies the hope that by providing business a break 
from creditors, and allowing debt to be adjusted, the business will 
have an opportunity to get back on sound financial footing and thrive. 
In that vein, Chapter 12 was added to the bankruptcy code in 1986 by 
the Senator from Iowa, Mr. Grassley, to provide for bankruptcy 
reorganization of the family farm and to give family farmers a 
``fighting chance to reorganize their debts and keep their land''.
  To provide the ``fighting chance'' envisioned by the authors of 
Chapter 12, Congress provided a distinctive set of substantive and 
procedural rules to govern effective reorganization of the family farm. 
In essence, Chapter 12 was a recognition of the unique situation of 
family owned businesses and the enormous value of the family farmer to 
the American economy and our cultural heritage.
  Chapter 12 was modeled on bankruptcy Chapter 13 which governs the 
reorganization of individual debt. However, to address the unique 
problems encountered by farmers, Chapter 12 provided for significant 
advantages over the standard Chapter 13 filer. These advantages include 
a longer period of time to file a plan for relief, greater flexibility 
for the debtor to modify the debts secured by their assets, and 
alteration of the statutory time limit to repay secured debts. The 
Chapter 12 debtor is also given the freedom to sell off parts of his or 
her property as part of a reorganization plan.
  Unlike Chapter 13, which applies solely to individuals, Chapter 12 
can

[[Page S3135]]

apply to individuals, partnerships or corporations which fall under a 
$1.5 million debt threshold--a recognition of the common use of 
incorporation even among small family held farms.
  Without getting too technical, I should also mention that Chapter 12 
also contains significant advantages over corporate reorganization 
which is governed by Chapter 11 of the Bankruptcy Code. For example, 
Chapter 12 creditors generally may not challenge a payment plan that is 
approved by the Court.

  Chapter 12 has been considered an enormous success in the farm 
community. According to a recent University of Iowa study, 74 percent 
of family farmers who filed Chapter 12 bankruptcy are still farming, 
and 61 percent of farmers who went through Chapter 12 believe that 
Chapter 12 was helpful in getting them back on their feet.
  Recognizing its effectiveness, my bill proposes that Chapter 12 
should be made a permanent part of the bankruptcy code, and equally 
important, my bill would extend Chapter 12's protections to family 
fishermen.
  In my own state of Maine, fishing is a vital part of our economy and 
our way of life. The commercial fishing industry is made up of proud 
and fiercely independent individuals whose goal is simply to preserve 
their business, family income and community.
  In my opinion, for too long the fishing industry has been treated 
like an oddity, rather than a business through which courses the life's 
blood of families and communities. This bill attempts to bridge that 
gap and afford fishermen the protection of business reorganization as 
it is provided to family farmers.
  There are many similarities between the family farmer and the family 
fisherman. Like the family farmer, the fisherman should not only be 
respected as a businessman, but for his or her independence in the best 
tradition of our democracy. Like farmers, fishermen face perennial 
threats from nature and the elements, as well as changes to laws which 
threaten their existence. Like family farmers, fishermen are not 
seeking special treatment or a hand-out from the federal government, 
they seek only ``the fighting chance'' to remain afloat so that they 
can continue in their way of life.
  Although fishermen do not seek special treatment from the government, 
they play a special role in seafaring communities on our coasts, and 
they deserve protections granted others who face similar, often 
unavoidable, problems. Fishermen should not be denied the bankruptcy 
protections accorded to farmers solely because they harvest the sea and 
not the land.
  I have proposed not only to make Chapter 12 a permanent part of the 
bankruptcy code, but also to apply its provisions to the family 
fisherman. The bill I have proposed mirrors Chapter 12 with very few 
exceptions. Its protections are restricted to those fishermen with 
regular income who have total debt less than $1.5 Million, the bulk of 
which, eighty percent, must stem from commercial fishing. Moreover, 
families must rely on fishing income for these provisions to apply.
  Those same protections and flexibility we grant to farmers should 
also be granted to the family fisherman. By making this modest but 
important change to the bankruptcy code, we will express our respect 
for the business of fishing, and our shared wish that this unique way 
of life should continue.
                                 ______