[Congressional Record Volume 145, Number 158 (Wednesday, November 10, 1999)]
[Senate]
[Pages S14481-S14496]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                BANKRUPTCY REFORM ACT OF 1999--Continued


                    Amendment No. 2516, As Modified

  The PRESIDING OFFICER. Under the previous order, the Kohl amendment 
No. 2516 is modified with the text of the amendment No. 2518.
  The amendment, as modified, is as follows:

       At the appropriate place in title III, insert the 
     following:

     SEC. 3____. LIMITATION.

       (a) Exemptions.--Section 522 of title 11, United States 
     Code, as amended by sections 224 and 307 of this Act, is 
     amended--
       (1) in subsection (b)(3)(A), by inserting ``subject to 
     subsection (n),'' before ``any property''; and
       (2) by adding at the end the following:
       ``(n)(1) Except as provided in paragraph (2), as a result 
     of electing under subsection (b)(3)(A) to exempt property 
     under State or local law, a debtor may not exempt any amount 
     of interest that exceeds in the aggregate $100,000 in value 
     in--
       ``(A) real or personal property that the debtor or a 
     dependent of the debtor uses as a residence;
       ``(B) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
       ``(C) a burial plot for the debtor or a dependent of the 
     debtor.
       ``(2) The limitation under paragraph (1) shall not apply to 
     an exemption claimed under subsection (b)(3)(A) by a family 
     farmer for the principal residence of that farmer.''.
       (b) Adjustment of Dollar Amounts.--Section 104(b) of title 
     11, United States Code, is amended--
       (1) in paragraph (1), by striking ``522(d),'' and inserting 
     ``522 (d) or (n),''; and
       (2) in paragraph (3), by striking ``522(d),'' and inserting 
     ``522 (d) or (n),''.

  The PRESIDING OFFICER. Under the previous order, the amendment No. 
2516, as modified, is now pending.
  The PRESIDING OFFICER. The Senator from Texas.


         Amendment No. 2778 To Amendment No. 2516, As Modified

  (Purpose: To allow States to opt-out of any homestead exemption cap)

  Mrs. HUTCHISON. Mr. President, I offer a second-degree amendment to 
the pending amendment.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Texas [Mrs. Hutchison], for herself, Mr. 
     Brownback, and Mr. Graham, proposes an amendment numbered 
     2778 to amendment No. 2516, as modified.
       Strike the period at the end and insert the following: ``. 
     The provisions of this section shall not apply to debtors if 
     applicable State law provides by statute that such provisions 
     shall not apply to debtors and shall not take effect in any 
     State before the end of the first regular session of the 
     State legislature following the date of enactment of this 
     Act.''

  Mrs. HUTCHISON. Mr. President, if I could take a moment to explain 
the amendment. We have agreed to 30 minutes equally divided. I would 
then turn it over to Senator Kohl to explain the underlying amendment.
  Basically, Senator Kohl and Senator Sessions are going to try to put 
a cap on the homestead exemption that would apply uniformly to every 
State. I think that is a mistake because every State is different. The 
valuation of property is different in every State. This does not make 
any allowance for those variations in property.
  The Kohl-Sessions amendment has a $100,000 cap in bankruptcy 
proceedings on homestead exemptions, but the median value of a home in 
California is over $215,000; in Oklahoma it is $92,500. So right there 
you can see there are differences in America.
  Secondly, 11 homestead exemptions around the country would be 
immediately overturned if we have a Federal standard for a homestead 
exemption. The States of Florida, Iowa, Kansas, South Dakota, Texas, 
Minnesota, Nevada, Oklahoma, California, Massachusetts, and Rhode 
Island would all have their caps lifted in favor of a Federal rule that 
would attempt to be one size fits all.
  In my home State of Texas, it is actually a constitutional provision; 
it is not a statute. It does not refer to money at all. It refers to 
acreage. There is the urban acreage and there is the rural acreage. So 
I think it is very important that we have the ability to address this 
by every individual State.
  For 130 years in our country, the Federal Government has allowed the 
States the ability to set its own laws in this area. The homestead 
exemption does differ State to State. For 130 years, the Federal 
Government has said the States may do this.
  The Kohl-Sessions amendment would overturn the 130 years of 
precedence and have a national standard, a one-size-fits-all approach. 
That reminds me of a lot of other Federal Government programs. I am 
sure it rings true with other Americans because that is the Federal 
approach: One size fits all. We do not need one size fits all. For 130 
years, we have not had it.
  In this country the States have done very well in setting their own 
homestead exemptions--what works for them, what works for the elderly 
in their States, what works for families in my State of Texas--and they 
do not want to take homes away from the elderly who are most 
susceptible to having health crises. That would take away their 
savings. That might put them into financial difficulty. They do not 
want to throw the elderly people out of their homes, even if their 
homestead might be valued at over $100,000, the median value.

  Secondly, what if it is a young family where the wage earner gets 
into financial difficulty? Do we want to put a family out on the 
streets? This has been sacrosanct in my State and in many other States; 
that whatever we were doing to try to make people pay their debts--and 
we do want people to pay their debts--we don't want to make them wards 
of the State. We want their families to be able to continue to have a 
roof over their heads while they are working out of their financial 
difficulties.

[[Page S14482]]

  I support the concept of this bill. I commend Senator Grassley for 
working hard to improve the bankruptcy laws in our country. But the 
amendment that is before us today would take away 130 years of 
preemption by the States to create their own homestead exemptions, 
especially rural States where farms may have a bigger valuation. They 
don't want to make people who are in financial difficulty wards of the 
State.
  Let me show two very important letters from the State leaders of our 
country. The National Governors' Association, in a letter signed by 
Governor Jim Hodges and Governor John Rowland, wrote:

       We also urge you to resist efforts to impose a uniform 
     nationwide cap on homestead exemptions. The ability to 
     determine their own homestead exemptions has been a long-
     standing authority of states. Furthermore, the median price 
     of a single family home varies widely from state to state. A 
     one-size-fits-all approach is simply not appropriate when the 
     median home price may be more than two-and-a-half times as 
     high in one state as it is in another.

  The second letter is from the National Conference of State 
Legislatures. It says:

       The [National Conference of State Legislatures] is 
     concerned, however, that an amendment may be offered during 
     Senate consideration that would preempt state laws by setting 
     a cap of $100,000 on homestead exemptions, thus forcing 
     debtors with over $100,000 in homestead equity to sell their 
     homes and farms. Recent real estate trends have shown that in 
     all but four states, the median price of a single family home 
     is well over $100,000. While state legislators believe that 
     the bankruptcy code should strongly encourage consumers to 
     pay their debts to the extent possible, my colleagues and I 
     would be equally concerned about the disruption to family 
     life, particularly the harsh impact on the children of 
     debtors that may result by the establishment of such a limit 
     on homestead exemptions.

  We have the National Conference of State Legislatures and the 
National Governors' Association speaking for the State leadership 
saying this is an area that should be left to the States. It has been 
left to the States for 130 years. We do not need to overturn 130 years 
of laws that are working in individual States.
  I hope we can pass this bill. I certainly will support the Kohl 
amendment, if we have the State ability to opt out. That is the key. I 
think if we can have that kind of accommodation, then it will be a good 
amendment. Let the States decide for themselves if $100,000 is right 
for them.
  Mr. President, I reserve the remainder of my time.
  Mr. KOHL addressed the Chair.
  The PRESIDING OFFICER (Mr. Crapo). The Senator from Wisconsin.
  Mr. KOHL. Mr. President, I ask unanimous consent that it be in order 
to ask for the yeas and nays on both the Hutchison amendment and the 
Kohl-Grassley-Sessions amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Mr. President, I was diverted. I didn't hear the 
unanimous consent request.
  Mr. KOHL. I asked that it be in order for the yeas and nays on both 
the Hutchison amendment and the Kohl-Grassley-Sessions amendment.
  Mrs. HUTCHISON. I thank the Chair.
  The PRESIDING OFFICER. It is in order that the Senator now make that 
request.
  Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. KOHL. Mr. President, I urge my colleagues to oppose the 
Hutchinson/Brownback ``opt-out'' amendment, then vote for the Kohl/
Sessions/Grassley $100,000 cap. Let me tell you why; an opt-out doesn't 
change a thing. A few states have already basically ``opted out'' of 
reasonable homestead exemptions and that's a problem. This amendment 
would let these states continue to go on like nothing happened. The 
Kohl-Sessions-Grassley amendment, on the other hand, will stop this 
abuse, pure and simple.
  You can not support our cap and also support an opt-out: It's either 
one or the other, Mr. President.
  They say this is really just about states' rights. Nothing could be 
farther from the truth. Anyone who files for bankruptcy is choosing to 
invoke federal law in a federal court to get a ``fresh start,'' which 
is a uniquely federal benefit. In these circumstances, it's only fair 
to impose federal limits.
  And don't take my word for it: just listen to one of Texas' leading 
newspapers, the Austin American-Statesman. It recently editorialized 
that: ``The U.S. Constitution gives the federal government supremacy 
over the states in bankruptcy matters, so arguments that the federal 
government should let states do as the wish on this particular fact of 
bankruptcy law make little sense.'' The editorial goes on to urge 
Congress to limit the homestead exemption.
  Besides, we're only capping the homestead exemptions in states like 
Florida and Texas as they apply to bankruptcy and not for other 
purposes. That is, if you lose a multi million-dollar lawsuit in Texas 
and can't ``pay-up,'' you can still keep your expensive home if you 
don't file for bankruptcy. While that may not seem right, what state 
courts do is a matter of state law--and we do not touch it. On the 
other hand, anyone who wants to take advantage of the federal 
bankruptcy system should live with a federal $100,000 cap.
  Now let's turn to why our proposal is so important to effective 
bankruptcy reform. Our proposal closes an inexcusable loophole that 
allows too many debtors to keep their luxury homes, while their 
legitimate creditors--like children owed child support, ex-spouses 
owned alimony, state governments, small businesses and banks--get left 
out in the cold. Last year, the full Senate unanimously went on record 
in favor of the $100,000 cap and emphasized that ``meaningful 
bankruptcy reform cannot be achieved without capping the homestead 
exemption.''
  Curently, a handful of states allow debtors to protect their homes no 
matter how high their value. And all too often, millionaire debtors 
take advantage of this loophole by moving expensive homes in states 
with unlimited exemptions like Florida and Texas, and declaring 
bankruptcy--and then continue to live in style. Let me give you a few 
of the literally countless examples:
  The owners of a failed Ohio S&L, who was convicted of securities 
fraud, wrote off most of $300 million in bankruptcy claims, but still 
held on to the multi-million dollar ranch be bought in Florida.
  A convicted Wall Street financier filed bankruptcy while owning at 
least $50 million in debts and fines, but still kept his $5 million 
Florida home--with 11 bedrooms and 21 bathrooms.
  And just last year, movies star Burt Reynolds wrote off over $8 
million in debt through bankruptcy, but he still held into his $2.5 
million Florida estate.
  Unfortunately, those examples are just the tip of the iceberg. We 
asked the GAO to study this problem and, based on their estimates, 400 
homeowners in Florida and Texas--all with over one hundred thousand 
dollars in home equity--profit from this unlimited exemption each and 
every year. While they continue to live in luxury, they wrote off 
annually an estimated $120 million debt owned to honest creditors.
  Mr. President, this is not only wrong, I believe it is not 
acceptable. Without our amendment, the pending bill falls far short. 
Instead of a cap, it only imposes a 2-year residency requirement to 
qualify for a State exemption. And while that is a step, it will not 
deter a savvy debtor who plans ahead for bankruptcy, and it won't do 
anything about instate abusers such as Burt Reynolds. This $100,000 cap 
will stop these abuses without affecting the vast majority of States.
  Let me make one final point. Some opt-out supporters have circulated 
misleading information about how many States would be affected by this 
cap. While a few States would be impacted, they are mistaken about 
eight States in particular; they are: Alabama, Colorado, Louisiana, 
Michigan, Mississippi, Nebraska, Oregon, and Rhode Island. We asked the 
Congressional Research Service to take a look, and CRS concluded that 
our cap would have ``no effect'' on these States.
  I ask unanimous consent that the memorandum from CRS be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page S14483]]

                               Memorandum

     To: Sen. Subcommittee on Antitrust, Business Rights, and 
         Competition. Attention: Brian Lee.
     From: Robin Jeweler, Legislative Attorney, American Law 
         Division.
     Subject: Effect of proposed amendments to S. 625 on selected 
         state homestead exemptions.

       This responds to your request for a legal opinion on the 
     effect of language that may be offered as an amendment to S. 
     625, 106th Cong., 1st Sess. 1999, the Bankruptcy Reform Act 
     of 1999.
       The proposed language would add a new subsection (n) to 11 
     U.S.C. Sec. 522 governing bankruptcy exemptions to provide 
     that the aggregate value of homestead exemptions in op-out 
     states may not exceed $100,000 in value.\1\
---------------------------------------------------------------------------
     \1\ Specifically, proposed subsection (n)(1) states:
     Except as provided in paragraph (2), as a result of electing 
     under subsection (b)(3)(A) to exempt property under State or 
     local law, a debtor may not exempt any amount of interest 
     that exceeds in the aggregate $100,000 in value in--
     (A) real or personal property that the debtor or a dependent 
     of the debtor uses as a residence;
     (B) a cooperative that owns property that the debtor or a 
     dependent of the debtor uses as a residence; or
     (C) a burial plot for the debtor or a dependent of the 
     debtor.
---------------------------------------------------------------------------
       You have asked what effect this provision, if enacted, 
     would have on the homestead exemptions in Alabama, Colorado, 
     Louisiana, Michigan, Mississippi, Nebraska, Oregon and Rhode 
     Island. For the reasons discussed below, we conclude that the 
     proposed federal cap on state homestead exemptions would have 
     no effect in these states.
       Several of these states provide for the possible exemption 
     of a substantial amount of real property, for example, up to 
     160 acres of land, which could theoretically exceed $100,000 
     in value. In each case, however, the scope of the exemption 
     is limited by a monetary cap on its aggregate value:
       Alabama Code Sec. 6-10-2 (1993): homestead ``with the 
     improvements and appurtenances, not exceeding in value $5,000 
     and in area 160 acres[.]''
       Colorado Rev. Stat. Sec. 38-41-20 (1997): homestead shall 
     be exempt ``not exceeding in value the sum of thirty thousand 
     dollars in actual cash value in excess of any liens or 
     encumbrances.]''
       Louisiana Rev. Stat Ann., Title 20, Sec. 1 (West. 1999 
     supp.): homestead consists of ``a tract of land or two or 
     more tracts of land with a residence on one tract and a 
     field, pasture, or garden on the other tract or tracts, not 
     exceeding one hundred sixty acres. . . . This exemption 
     extends to fifteen thousand dollars in value[.]''
       Michigan Comp. Laws. Ann. Sec. 600.6023 (West 1999 supp): 
     ``A homestead of not exceeding 40 acres of land and the 
     dwelling house and appurtenances . . . not exceeding in value 
     $3,500.''
       Mississippi Code Ann. Sec. 85-3-21 (West 1999): ``[A] 
     householder shall be entitled to hold exempt . . . the land 
     and buildings owned and occupied as a residence by him, or 
     her, but the quantity of land shall not exceed one hundred 
     sixty (160) acres, nor the value thereof, inclusive of 
     improvements, save as hereinafter provided, the sum of 
     Seventy-five Thousand Dollars ($75,000.00[.]''
       Nebraska Rev. Stat. Sec. 40-101 (1997 supp.): ``A homestead 
     not exceeding twelve thousand five hundred dollars in value 
     shall consist of the dwelling house in which the claimant 
     resides . . . not exceeding 160 acres of land[.]''
       Oregon Rev. Stat. Ann. (1998 supp., part 1) 
     Sec. Sec. 23.240, -250: ``The homestead mentioned in ORS 
     23.240 shall consist, when not located in any town or city 
     laid off into blocks and lots, of any quantity of land not 
     exceeding 160 acres, and when located in any such town or 
     city, of any quantity of land not exceeding one block. 
     However, a homestead under this section shall not exceed in 
     value the sum of $25,000 or $33,000, whichever amount is 
     applicable under ORS 23.240.''
       Rhode Island Gen. Laws Sec. 9-26-4.1 (1998 supp.): In 
     addition to exempt property, ``an estate of homestead to the 
     extent of one hundred thousand dollars ($100,000) in the land 
     and buildings may be acquired[.]''
       Although several of the state provisions cited above couch 
     their exemptions in terms of acreage, in all cases, the 
     monetary cap is a limitation which qualifies the value of the 
     land permissibly exempted. With the exception of Rhode 
     Island, the state laws cited above have monetary caps 
     substantially less than the proposed federal cap of $100,000.
       Several states, such as Florida, Iowa, Kansas, South 
     Dakota, and Texas define their homestead exemptions by 
     reference to quantities of land or acreage without a monetary 
     cap. But those states which define the exemption in terms of 
     land and value do so conjunctively, not disjunctively. Hence, 
     a federal cap of $100,000 on the value of a homestead 
     exemption would not appear to have any effect on the extant 
     state exemptions cited above.

  Mr. KOHL. Mr. President, the facts speak for themselves. Simply put, 
the Hutchison-Brownback amendment is a bad idea, a backdoor way to 
allow rich deadbeats to continue to live as kings while their honest 
creditors go to the poor house. I urge my colleagues to oppose it and 
to support our bipartisan $100,000 cap instead.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, I am proud to join with Senator Kohl on 
this amendment. We have spent over 2 years now working to reform the 
abuses in bankruptcy law. Senator Kohl has served on the Judiciary 
Committee. As we have gone through it, we have tried to eliminate a lot 
of the abuses.
  The PRESIDING OFFICER. Is the Chair correct that the Senator is under 
time yielded by Senator Kohl?
  Mr. SESSIONS. That is correct.
  Mr. President, we have been trying to eliminate abuses that are in 
the bankruptcy system. There are many of them. We have some things in 
this bill that are good and true and honest and fair. It says right now 
that a person making $70,000 a year who owes $100,000, under Federal 
bankruptcy law, can go into chapter 7, wipe out all their debts, and 
still be living with a $100,000-a-year income and not have to pay the 
people from whom they receive benefits and to whom they owe money. We 
are saying if you have a certain level of income, then you ought to pay 
a part of your debt, and you would be required by the judge to develop 
a repayment plan for 30 percent, 50 percent, or 100 percent of the 
money, if you can pay it back. It is not just automatically wiping out 
all your debt.
  Some have said this is abuse on the poor. But it would not affect 
anybody whose income did not fall below the median American income, 
which today for a family of four is $49,000. So this is for high-income 
people, and only if you make above that can you be required to pay back 
some of your debts. We think that is an abuse, and we think it ought to 
be ended.
  Another abuse--one that may be the greatest abuse in the whole 
bankruptcy system--Elizabeth Warren, a Harvard professor, said is ``the 
single biggest scandal in the consumer bankruptcy system.'' It is the 
unlimited homestead exemption. She said it is a scandal, and I agree. 
It is an absolute scandal.

  First of all, bankruptcy law is handled in Federal court. It is all 
done in a Federal bankruptcy court. All the laws and all the rules are 
Federal laws. In one area, the Federal law says, for the purpose of 
bankruptcy homestead exemptions, that will be left to what the State 
law is. But that is a Federal law.
  What we found is that the Bankruptcy Commission, after 3 years of 
study, which included judges and other experts, recommended that we 
take this exemption to $100,000 and it be uniform across the country. 
There is no reason, or history, or logical justification for a State 
having an unlimited bankruptcy exemption--a fact recognized, as the 
Senator said, by the Austin American Statesman newspaper, which said 
this is clearly a matter of Federal law. The scholars do not dispute 
it. All other aspects of bankruptcy law are determined by the Federal 
law. I wanted to say that first.
  Second, we are having serious problems and abuses--a Federal 
bankruptcy judge in Miami, FL, one of the States that has such an 
unlimited exemption, like Texas, has been very critical of this. The 
current system ``is grossly unfair,'' said A. Jay Cristol, the chief 
Federal bankruptcy judge in Miami. ``This law was written to give 
everyone a fresh start after bankruptcy, not to allow people to keep 
luxury homes.''
  How has this abuse been playing out? Here is an article in the New 
York Times listing some of the examples of what we are talking about:

       The First American Bank and Trust Company in Lake Worth, 
     FL, closed in 1989.

  This is in the New York Times of last year:

       . . . its chief executive, Roy Talmo, filed for personal 
     bankruptcy in 1993. Despite owing $6.8 million, Mr. Talmo was 
     able to exempt a bounty of assets.

  Exempt--that means those assets could not be used to pay people to 
whom he lawfully owed debts. It goes on:

       During much of the bankruptcy proceeding, Mr. Talmo drove 
     around Miami in a 1960 Rolls Royce and tended the grounds of 
     his $800,000 tree farm. . . .
       Never one to slum it, Mr. Talmo had a 7,000-square-foot 
     mansion with five fireplaces, 16th-century European doors and 
     a Spanish-style courtyard, all on a 30-acre lot. Yet, in Mr. 
     Talmo's estimation, this was chintzy. He also owned an 
     adjacent 112 acres, and he tried to add those acres to his 
     homestead. The court refused.


[[Page S14484]]


  Another example:

       Talmadge Wayne Tinsley, a Dallas, TX, developer, filed for 
     chapter 7 bankruptcy in 1996 after he incurred $60 million in 
     debt, largely bank loans. Under Texas law, Mr. Tinsley could 
     keep only one acre of his 3.1-acre estate.

  Texas recently had laws up to change that 1-acre limitation if you 
live in a city to which you can exempt from 8 to 10 acres. At any rate, 
he wanted to exempt more than that. He wanted the whole 3.1-acre 
estate.

       His $3.5 million, magnolia-lined estate included a five-
     bedroom, six-and-a-half-bath mansion with two studies, a pool 
     and a guest house. All that fit snugly onto one acre.
       Yet, when the court asked Mr. Tinsley to mark off two acres 
     to be sold to pay off his debts, his facetious offer was for 
     the trustee to come by and peel off two feet around his 
     entire property.

  He signed off for that debt. At any rate, he was able to sell his 
house for $3.5 million, and he used the proceeds of this sale, after 
declaring bankruptcy, to write a $659,000 check to the IRS, whose debt 
still continues to be owed after bankruptcy, and another for $1.8 
million to pay off his mortgage. That left him $700,000 after all his 
expenses, and he could spend that on whatever he wanted to, without 
paying legitimate people to whom he owed money. That is not a fair 
deal, I submit.
  There are other examples of this. There is Dr. Carlos Garcia-Rivera, 
who filed for bankruptcy protection. He lives in Florida. The State law 
gives him an unlimited deduction, and he was able to keep a $500,000 
residence, which is pictured in the newspaper article, free and clear.
  The problem is this. A lot of people can see bankruptcy coming. They 
can see the problems coming down the road. They live in a State such as 
Alabama or New Jersey, where the laws don't give them these values. In 
fact, two-thirds of all the States limit your homestead value to 
$40,000 in equity. So what do they do? They can see the bankruptcy 
coming. They can move to a State such as Texas or Florida, buy a 
beautiful home on the beach, take every asset they have, quit paying 
any of the people to whom they owe money, collect all their money, put 
it in that house, and then file bankruptcy and say: You can't take my 
home. It is my homestead, and I don't have to give you anything.
  That is a problem. That is a national problem, and it is a growing 
problem. We have increased bankruptcies. Lawyers are more 
sophisticated. People are more willing to move today than they used to 
be. That is why Senator Kohl and I feel so strongly about this.

  I want to mention a couple more important things. The New York Times, 
in an editorial in August of 1999, argued against protecting rich 
bankrupts and criticized this very provision in law.
  There were other complaints made in previous remarks suggesting this 
change would require States to change their constitution or their 
existing State law. That is not the case. The homestead exemption in 
Texas or Florida would be valid for every other State law purpose the 
State chose to apply it for. It simply would not be valid in the 
Federal bankruptcy court if that law called for an exemption to exceed 
$100,000, the amount the Bankruptcy Commission, after 3 years' study, 
concluded was the appropriate amount. It certainly strikes me as a fair 
and legitimate amount.
  This is not the sale price of the house but the equity in the house. 
If an individual owned a mansion with $500,000 of equity in that 
mansion, they would not be able to live in that mansion and stop paying 
their creditors, the people they duly and lawfully owed money to, but 
would be able to keep $100,000 of it. They could keep $100,000 in 
equity. They would end up better than a person who files bankruptcy in 
Alabama or most other States who have less than $100,000. We think that 
is fair, just, and appropriate and ought to be confronted. I know some 
believe it is somehow an advantage for a State to not have this cap, to 
have unlimited exemptions, but I argue it hurts local creditors in 
those States, too, because they are not being paid back their debts.
  A man living in a mansion in downtown Dallas who is not paying his 
Dallas creditors and all the people he owes in Dallas, TX, he gets to 
live in the mansion, is not an advantage for Texas. For years, the 
Texas legislators, Members of Congress, have believed passionately they 
should defend this as being a part of their constitution.
  I think that is a misunderstanding of the role of Federal bankruptcy 
law. The goal of a good bankruptcy law is to make sure a person who 
owes debts pays all he can, liquidates all his assets, is able to keep 
a reasonable home, and work in the future without having any debts, but 
that he not be able to abuse the system and defeat creditors who he 
could legitimately pay.
  I enjoyed working with Senator Kohl.
  I yield the floor.
  Mr. KOHL. I thank Senator Sessions.
  I yield 2 minutes to Senator Grassley.
  Mr. GRASSLEY. Mr. President, I thank the Senator for yielding. 
Second, I thank the Senator for being a very cooperative member of the 
Judiciary Committee to help Members move the bill out of committee, 
particularly on this very issue that he has brought to the floor. He 
was hoping to bring this up in committee. It would have been very 
divisive in committee. It probably would have kept Members from getting 
the bill out of committee. He cooperated fully. I said when he brought 
it to the floor I would speak for and support his amendment. I am here 
to do that. But I think it is more important I tell him and his 
constituents who are interested in bankruptcy reform that he has been 
very helpful through this process.
  One of the most unfair aspects of the bankruptcy code is the ability 
of very wealthy people to shield large amounts of assets in homesteads. 
As do many parts of our bankruptcy laws, the homestead exemption has a 
noble purpose. I don't deny that. That noble purpose is to protect the 
poorest of the poor from being thrown out into the streets to pay 
creditors. Everybody is entitled to a roof over their head.
  As so many parts of our bankruptcy laws, this noble idea has been 
perverted by rich scoundrels and well-paid bankruptcy lawyers. 
Obviously, we need to do something about any part of the law that lets 
people hide money while paying nothing to their creditors.
  We said one of the motivations of this legislation is to make sure 
that the people who have the ability to pay who go into bankruptcy are 
not going to get off scot-free. Allowing people to shield assets while 
paying nothing to their creditors creates perverse incentives for 
wealthy scoundrels.
  A recent General Accounting Office study on this subject confirms the 
homestead exemption is used by a select few to avoid paying their 
bills. Unlike other areas where Congress attempts to regulate with very 
little constitutional basis for doing so, the text of the Constitution 
in this instance gives Congress the authority to set uniform bankruptcy 
laws, one of the specific powers of Congress in article I.
  A homestead cap with a provision allowing some States to opt out and 
to have unlimited homestead will continue the unfairness of current law 
and will run counter to our constitutional mandate to have uniform 
bankruptcy laws. I support a strong cap and oppose a State opt-out. I 
urge my colleagues to do the same.
  Our colleagues should also be aware the underlying bill deals with 
very wealthy people in bankruptcy by pushing them in chapter 11 with 
special modifications designed to deal with individuals instead of 
corporations. Allowing the super rich to live high on the hog is a more 
widespread problem than homestead abuse.
  I thank the Senator from Wisconsin for his leadership in this area.
  Mr. KOHL. I thank Senator Grassley.
  I ask unanimous consent to add Senator Harkin as a cosponsor to this 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KOHL. I ask unanimous consent to reserve the remainder of our 
remaining time.
  I yield the floor to Senator Brownback whose time is charged to the 
other side.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. BROWNBACK. Mr. President, how much time remains?
  The PRESIDING OFFICER. Twenty-two minutes.
  Mr. BROWNBACK. I yield myself 10 minutes.

[[Page S14485]]

  Mr. President, I think there are a number of things that need a 
response. Let me first set this in the context of being from Kansas. 
Kansas has in its constitution a provision allowing for the homestead 
to be protected. That homestead is defined in Kansas law as a home in 
town on 1 acre or in the country on 160 acres. It is based on original 
Federal law. That Federal law was the Homestead Act that settled much 
of the Midwest. The Federal Government said the Federal Government 
owned this land, but if you could go out there and work those 160 acres 
and stay there for 5 years, the 160 acres was yours. That was the 
homestead.
  There is a sanctity about the issue of the homestead. That is why it 
was built into our State constitution. That is why it has been so 
protected in the past and why I rise in support of the Hutchison-
Brownback amendment and its amendment to what Senator Kohl would do. I 
will support the Kohl amendment if the Hutchison-Brownback amendment 
passes but not otherwise. This is an important part of our State.
  What is being attempted by Senator Kohl and others--and I have great 
respect for them and their desires for what they are putting forward--
is to take a right away from States that they have had for over 100 
years. Bankruptcy law is in the Federal Constitution, but for over 100 
years they have allowed States to set that homestead provision and said 
they would allow the States to determine the homestead issue.  Now we 
would be taking that right that the States have had for over 100 years 
and federalizing it. That is wrong. It is contrary to the devolution of 
States' rights. It is contrary to the Homestead Act that the Federal 
Government set, and it is harmful to farmers.

  I used to practice agricultural law. I taught agricultural law. I 
have written books on this subject. The homestead provision in my State 
and many others has helped save family farmers.
  These are not cases that make the newspaper or that are quoted here 
on the floor. Those, unfortunately, have happened as well. But listen 
to some of these cases that have occurred in Kansas.
  A farm couple--the husband is age 52, and the wife is age 66--are 
cattle ranchers in eastern Kansas. They have been farming the same 
ranch since 1965. In 1997, the husband was cleaning out a swine lagoon 
and received a staph infection in his eye. He lost nearly 80 percent of 
his vision and became legally blind. At this time, his wife was also 
forced to take her mother in for health care reasons. She had to stay 
with them. This brought on numerous hardships for the family. It forced 
them into chapter 12 bankruptcy in December 1997. It doesn't sound very 
glitzy or a high-profile, newspaper-type case at this point.
  Under chapter 12, they were not required to sell the homestead and 
160 acres because of that homestead provision. These were paid for. 
They had these paid for. They were entitled to them under Kansas 
statute and under the Kansas Constitution. If not for this exemption, 
this family would have been forced to sell everything and would have 
been forced out onto the street and from their farm for which they 
worked so hard. The wife's exact words describing the homestead 
exemption were ``a godsend.''
  After an extensive reorganization, they are rebuilding their cattle 
herd. They are still repaying debts from the bankruptcy according to 
the reorganization. They have currently applied for a loan from Farm 
Credit to purchase more cattle and are very optimistic about the 
future.
  That doesn't sound like a case that would make the newspaper.
  This is a very practical thing that has happened throughout the 
history of Kansas that I can cite for you at various times. Typically, 
when we have the prices of farm commodities dropping and dropping 
substantially, farmers are caught with too much credit and too low 
prices. They will get in the squeeze, and the only thing they can save 
is the homestead. I have read abstracts of land titles across the State 
of Kansas, where this has been used time and time again, and none of 
those make the newspaper. Yet it is a part of their being able to build 
back. In this case, and many others, it is a part of them being able to 
pay their creditors in the future. This isn't about them moving to 
Florida or to Texas to bilk this law.
  Here is another case. I will read to you about a farming couple from 
eastern Kansas. He is now 71. The wife is 55. They declared chapter 12 
bankruptcy. They had trouble with their bank because of low commodity 
prices and many other typical struggles of a family farm. This is a 
typical case. Their homestead-exempted property consists of 160 acres 
valued at approximately $800 an acre, including the house and 
buildings. With the exemption, they were able to retain all of  their 
property for use as equity to start farming again.

  Listen to what happened. The situation 3 years later is that this 
couple is about to pay off all of their creditors under the chapter 12 
plan within the next few months and are now able to continue profitably 
with their farming operation. It is a happy ending that would have 
sadly ended without this sort of homestead provision.
  There is a lot of talk about fraud that has taken place. I want to 
point out something in addressing this issue.
  Currently in bankruptcy law, if there is a fraudulent transaction of 
taking money that should go to a creditor and placing it in an exempt 
property, the court can come in and set that aside and get that money 
back. That is under current bankruptcy law.
  Also, in the base bill there is a provision that if you purchase a 
home within 2 years of bankruptcy, that can be brought back into the 
creditor estate so that the creditors can get hold of that.
  There is a lot already built into the bankruptcy law as it is 
currently practiced, and as it has been interpreted by the courts. I 
have practiced in front of bankruptcy courts. There is also built into 
this change that within 2 years of purchasing a homestead, you can come 
back and get those assets.
  What about some of these high-profile cases? In many of those cases, 
I think you will find that the courts go after and later set aside the 
transaction as a fraudulent transaction. But particularly, let's look 
at the case of Burt Reynolds, who has become kind of a poster boy in 
this situation.
  He has not filed under chapter 7 bankruptcy. He is not in chapter 7 
where you have this homestead provision. He is in chapter 11, which is 
a reorganization in bankruptcy usually reserved for corporations. But 
there are also some higher income individuals who can qualify for 
chapter 11.
  An amendment offered in the Judiciary Committee by Senator Grassley 
would close this chapter 11 loophole for wealthy individuals. 
Fortunately, that much needed amendment was passed during the markup 
despite some opposition from the others.
  Mr. President, my simple plea is on a couple of fronts.
  No. 1, this is contrary to what this Congress has been committed to 
do, which is devolution of power and authority to States and local 
units of government. Here we have an area of law that has been devolved 
to the States for over 100 years, and we are going to grab it. And we 
are going to pull it up here back from the States that built it into 
their constitutions, such as Kansas and Texas. We are going to grab it. 
The Federal Government is going to say this is ours. We are taking it 
away. That is completely contrary to devolution.
  No. 2, this is very harmful to family farmers, many of whom have used 
these homestead provisions during times of bad commodity prices--in my 
State, and in others--to protect that 160-acre homestead, which is, as 
I mentioned at the outset, the sacrosanct unit--the family farm, to be 
able to protect it.
  No. 3, it is already taken care of if these are fraudulent 
transactions that are occurring, that can be set aside by the 
bankruptcy judge under current law. If they were planning to go into 
bankruptcy and move those assets, they can come within 2 years and 
still get that asset back. So this has taken care of it.
  It is harmful to family farmers. It is against devolution. It is 
against States rights, and this is the wrong way for us to go. It is 
going to hurt a lot of family farmers who use this day in and day out 
and don't make the newspaper but are just simply trying to make a 
decent living and they get caught in a bad commodity cycle.

[[Page S14486]]

  During the 1980s, I worked with a lot of family farmers who got 
caught in a bad commodity cycle and used this homestead provision. They 
did not make the newspaper. But today, many of them are still farming 
simply because of the possibility of doing this, and they worked extra 
hard to pay their creditors even over and above what was required in 
bankruptcy law because they felt this is the honorable thing to do.
  There are abuses under bankruptcy law. I would like to be able to 
support this bill at the end of the day. But this is not the right way 
to go for us. It is harmful for us to do this to family farmers and to 
States.
  I support strongly the Hutchison-Brownback amendment and hope that it 
can be added to the Kohl amendment so that we can press forward with 
this bankruptcy reform. Otherwise, this Senator will certainly have to 
oppose the amendment.
  Mr. President, I reserve the remainder of our time.
  Mr. President, may I inquire as to how much time remains on our side?
  The PRESIDING OFFICER. The Hutchison amendment has 11 minutes 46 
seconds under the control of the Senator from Texas, and Senator Kohl 
has 7\1/2\ minutes.
  The Senator from Wisconsin.
  Mr. KOHL. Mr. President, I yield 4 minutes to Senator Sessions.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, one thing we have raised is the 
situation of the farm person.
  First of all, Senator Grassley has been a champion of the new 
bankruptcy laws. And we have made those permanent in this bill to give 
added protections to farmers, unlike the kind of protections that are 
given a manager of a restaurant, a gas station, or a small factory that 
goes bankrupt. They have a number of good protections.
  But what I want to say to you is that a person who owes a lot of 
debt, who has received legal benefits and owes money, and then goes 
into bankruptcy, will be able to keep up to $100,000 in equity. The 
house can be a $500,000 house. The farm can be $1 million farm--
whatever. But the equity simply has to be no more than $100,000. I 
think that is as generous as we can possibly be. I don't see how we 
could be more generous than that. Why should a businessman, or any 
person, be able to have unlimited assets?
  Let me make no mistake about it, the Hutchison amendment that is 
filed today would allow an individual in Texas or Florida to maintain a 
$50 million mansion and not pay the people they owe just debts to--$50 
million in equity that they own and paid into that house, and not pay 
people they owe. That is the kind of disparity I do not believe we can 
accept and is what the Bankruptcy Commission has rejected. That is what 
professors have called a national scandal.
  I have been pleased to work on this because I believe we owe it to 
the working Americans who go through bankruptcy, who will never ever 
have the possibility of claiming these kinds of great equities and do 
not live in mansions--I don't see why we need to be providing special 
protections for the rich in these circumstances. It is time to end this 
process. It is time for Congress to act.
  I yield back my time and yield the floor.
  Mr. KOHL. I reserve the remainder of our time.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I would like to be notified in 5 
minutes because I have two other speakers who have asked for time. I 
know we are running the clock down now.
  Let me just refute a couple of the points that have been made. First 
of all, for over 100 years in this country, States have been able to 
determine what the homestead exemption would be. In some States a 
homestead would be valued at $15,000 while in other States it might be 
$215,000. California and Florida have higher valuations on homesteads. 
So I think a one-size-fits-all approach is not in anyone's best 
interests.
  The Senator from Alabama, who is my friend, talks about a $50 million 
mansion. I do not know of anyone who has a $50 million mansion on one 
acre of land, because the standard in Texas happens to be on the number 
of acres rather than on valuations. That was put in our Constitution.
  This would be overriding our Constitution. It would override the 
Kansas Constitution. There are other States that believe so strongly in 
the right of a person to be able to keep a homestead for children or 
for an elderly person that they do not put in a dollar valuation, they 
put in an acreage valuation. In Texas, it is one acre. That is for 
urban homesteads. I think you can talk about a $50 million mansion, but 
that is not reality here.
  What I think we ought to do, when we are making policy that is this 
important, is say: How much damage are we going to do to people who are 
trying to restructure their lives in order to get a few people who may 
abuse the system? We have had GAO studies, we have had all kinds of 
studies, that have showed that maybe 1 percent of the people are not 
doing right by the system. But we have taken one important step to stop 
that abuse, which will apply in this bill if it is passed, and that is 
that you cannot declare a homestead exemption on a home that is bought 
within 2 years of declaring bankruptcy.
  So the idea is if someone is going to leave all their debts in 
Florida and move to Alabama to buy a house and claim bankruptcy, there 
are safeguards against that by requiring that the person live there 2 
years before they can declare bankruptcy. So they cannot flee 
bankruptcy to go buy a homestead and be protected. And, second, the 
bankruptcy laws today and in the new law always provide for fraud, that 
you can go after someone who has fraudulently transferred assets. I do 
think we have fraud addressed in this bill.
  We get down, though, to the bottom line. That is, this has been a 
States rights issue for 132 years. People in Alabama may do it 
differently from people in Florida. People in Wisconsin may do it 
differently from the way they do it in Texas. What is wrong with that? 
What is wrong with people in Idaho having the ability to set their own 
standards for homestead exemptions? What is wrong with a rural-
dominated State having a different standard from an urban-dominated 
State? This country was formed with the thought that States would have 
the right to make State laws where they are closest to the people. Only 
a very few laws are made at the Federal level. I think that is a good 
standard. I think it is good the Federal Government has allowed the 
States, for over 132 years, to set homestead exemptions.
  I hope we will keep that 132-year precedent. I think it has worked. I 
would love to support this bill. I want debtors to have to pay the 
people they owe. I have been in a small business, and I have had people 
stiff me. I know what it is. I know what it is to have to pay my 
workers regardless of the fact that I am not being paid by people to 
whom I have supplied products.
  I will not support this bill unless we allow the States the right to 
have the homestead exemption be set State by State. I want to tighten 
up the laws. I think that is the right thing to do. But we do not have 
to preempt the States rights in this area. I think it will be a better 
bill if we do not.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Kansas.
  Mr. BROWNBACK. I inquire of the Senator from Texas if I could have 
just 2 minutes to explain an item that has been coming up in this 
debate.
  Mrs. HUTCHISON. Mr. President, how many minutes remain on our side?
  The PRESIDING OFFICER. The Senator has 6 and a half minutes.
  Mrs. HUTCHISON. I yield 2 minutes.
  Mr. BROWNBACK. Mr. President, I wanted to point out two things. No. 
1, there is a recent study of U.S. bankruptcy filings by the Executive 
Office of the United States Trustees. The Trustees are the people who 
actually do the bankruptcies. They are the ones who handle the 
financial transactions. They concluded that the homestead abuse is--and 
this is their quote--``a rare phenomenon.'' That was a quote from the 
United States Trustees, Executive Office of the United States Trustees.
  The second point I wanted to make is, my State of Kansas has a 
homestead provision under the State constitution that dates back to 
1859. Kansans have

[[Page S14487]]

used this for a long time. However, in the U.S. bankruptcy code, many 
small family farmers would not qualify for what is defined as a family 
farmer because they or their spouse have earned off-farm income. 
Because of that, under this particular provision, in farming States 
such as mine with similar homestead provisions, they would be impacted 
because they would not be able to qualify there. I want to make the 
point, that adds doubly to the difficulty we have here.
  I reserve the remainder of our time.
  The PRESIDING OFFICER. Who yields time?
  Mrs. HUTCHISON. Mr. President, let me inquire of the Senator from 
Wisconsin if he is ready to finish. I will go ahead and close out the 
debate if we are ready to close earlier. What was his intention?
  Mr. KOHL. I say to the Senator from Texas, we have, I think, 5 
minutes. I will not use all of it. If the Senator wants to conclude, I 
will speak for a couple of minutes, Senator Sessions for 1 minute, and 
then we are finished. If the Senator would like to go first.
  Mrs. HUTCHISON. Would it be possible for the Senator to let me have 2 
minutes, perhaps, toward the end, in case Senator Graham of Florida and 
Senator Grams from Minnesota, who have both requested time, arrive? We 
are getting down to the end, so I do not want to foreclose them if they 
do show. If they do not, I think we should go forward.
  Mr. KOHL. I will be happy to wait.
  The PRESIDING OFFICER. Is the Senator requesting an additional 2 
minutes at the end reserved from her time?
  Mrs. HUTCHISON. No. I am only saying I will stop 2 minutes ahead in 
order to reserve that time for the Senator from Florida or the Senator 
from Minnesota. If they are not able to come, then I think we should 
close the debate because Members are waiting to vote.
  The PRESIDING OFFICER. The Chair will notify the Senator when 2 
minutes remain.
  Mrs. HUTCHISON. Mr. President, let me say, the Governors of our 
country have written a very powerful letter saying: Do not do this. Do 
not set a Federal standard for homestead exemptions. The Governors 
wrote very clearly:
       We urge you to resist efforts to impose a uniform 
     nationwide cap on homestead exemptions. The ability to 
     determine their homestead exemptions has been a longstanding 
     authority of States. Furthermore, the median price of a 
     single family home varies from State to State.

  This is not something that should be a Federal approach. It has not 
been a Federal approach. Every Governor in our country is saying: Let 
us handle it.
  If the people of Wisconsin do not like the way they handle it in 
Texas, that does not hurt the people of Wisconsin. That should be a 
decision made at the local level based on local value, local 
traditions, and local law.
  Secondly, the National Conference of State Legislatures has written a 
letter along the same lines saying they are concerned that setting a 
law that would preempt State laws on homestead exemptions would not be 
in the best interest of the American people.
  I hope our Members will not break 130 years of precedent in this 
country to set yet another one-size-fits-all Federal solution. This is 
something very important to States, so important that some States have 
put it in their constitutions, and today voting against the Hutchison 
amendment for the Kohl-Sessions amendment will most certainly damage 
our ability to let the States make these determinations.
  Senator Brownback, Senator Graham of Florida, and Senator Rod Grams 
from Minnesota are cosponsors of this amendment. Many people are very 
concerned about this 130 years of precedent being overturned.
  I yield 2 minutes to Senator Grams.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized for 2 
minutes.
  Mr. GRAMS. Mr. President, I thank the Senator from Texas and also the 
Senator from Kansas for their work on this issue.
  Mr. President, I rise today to speak in opposition to the bankruptcy 
homestead cap proposed as an amendment to the bankruptcy bill. I 
appreciate the fact that the sponsors of this amendment are attempting 
to curb abuse of the system, but I fear that in these difficult times 
for family farmers the homestead cap amendment could disproportionately 
impact struggling producers.
  I will remind my colleagues that the Senate recently unanimously 
approved extension of chapter 12 of the bankruptcy code, which in part 
allows farmers to stay on their land if they are able to make rental 
payments to creditors. Just as farmers have needed extension of chapter 
12 to weather the current economic downturn, they also need an adequate 
bankruptcy homestead exemption that will protect their homes and 
livelihoods from foreclosure as well.
  I am aware that the Sessions/Kohl amendment exempts ``family 
farmers'' from the homestead provision, but many farmers will not 
qualify because of off-farm income earned by the family. This off-farm 
income has become necessary for survival for may farm families, and as 
long as such families are not eligible for the exclusion, I must oppose 
the amendment.
  As the Senator from Texas mentioned, in Minnesota, the current 
homestead exemption is $200,000 property value and 160 acres. This is a 
reasonable, time-tested level of protection. We must remember that this 
property is not merely where the farmers make their home, but also 
where they earn their living. Congress recently passed $8.7 billion in 
emergency farm assistance to help family farmers continue the tradition 
of producing America's most basic needs, and we should not 
simultaneously undermine the position of these same farm families by 
denying them important bankruptcy protections.
  Again, I know that the amendment sponsors are trying to stop abuse of 
the system by those who have irresponsibly accumulated debt, but I am 
afraid many hard working Minnesota farmer who are barely covering their 
families necessities may be adversely impacted.
  I urge my colleagues to support the Hutchison-Brownback amendment 
allowing states to affirmatively opt out of the cap on the homestead 
exemption.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. KOHL. Mr. President, I do not think we should be misled by the 
Hutchison-Brownback amendment that it will save the family farm. No one 
has done more for family farmers, as we all know, than Senator Grassley 
and Senator Harkin, and they are supportive and cosponsors of our 
amendment.
  Our amendment does have a specific exemption for farmers in each 
State so that the family farmer, whether they come from Texas, Iowa, or 
Wisconsin, can be specifically dealt with in that State in the event of 
a bankruptcy.
  If we are serious about reform, now is the time to stop the most 
egregious abuse of our bankruptcy laws--by capping the homestead 
exemption and supporting the Kohl-Sessions-Grassley amendment. But 
don't take my word for it. Listen to voices from across the country.
  For example, the New York Times recently editorialized that: ``Like a 
bill that passed the House, [the Senate bill] would do nothing to limit 
the ways that the formerly wealthy have of stiffing creditors, of which 
the unlimited homestead exemption is only the best known. . . . [If the 
bill] is to be passed, it should at least be amended to keep Texas and 
Florida from providing such blatant protection to once-wealthy 
deadbeats.''
  Of course, the New York Times may not be the most unbiased source. So 
I took a look at my home state paper, the Wisconsin State Journal. That 
newspaper says the same thing. According to its recent editorial, the 
House and Senate bankruptcy bills: ``deserve criticism for what they 
fail to include. Neither bill took a step toward closing the loophole 
that allows bankrupt' wealthy to shelter assets in an expensive home. 
Irresponsible but shrewd debtors sneak assets through bankruptcy via a 
provision permitting them to take advantage of state homestead 
exemptions.'' It adds that our $100,000 cap is a ``sound'' measure.
  Finally, even leading papers from Texas and Florida--the two states 
most invested in this issue--find the case for reigning in the 
unlimited homestead exemption compelling. In an editorial earlier this 
year, the Austin American-Statesman praised the recent GAO report for 
pointing out

[[Page S14488]]

that the unlimited homestead exemption: ``[p]rimarily . . . is the 
refuge of a few high-living debtors, not the schoolteachers and small 
farmers it was intended to protect.''
  The Austin newspaper went on to dismiss appeals to states' rights as 
a false defense for the unlimited exemption, explaining that: ``The 
U.S. Constitution gives the federal government supremacy over the 
states in bankruptcy matters, so arguments that the federal government 
should let states do as they wish on this particular facet of 
bankruptcy law makes little sense.''
  Indeed, even this Texas opinion-maker is supportive of reform, 
declaring that: ``State officials in Austin and Washington should be at 
least willing to discuss limiting homestead protection. A few well-
heeled and clever bankruptcy filers shouldn't be able to mess over a 
state law designed to protect average Texans. That mocks the state's 
much-celebrated populist image.''
  And the Tampa Tribune echoed these sentiments, complaining that the 
Senate bill does not go ``far enough toward closing the loophole that 
allows debtors unlimited homestead exemptions that protect the 
wealthiest from having to repay a significant portion of their debt.''
  Everyone recognizes that this abuse must be stopped, including 
leading papers from the two states that traditionally have stood by the 
unlimited exemption. I ask unanimous consent that these editorials be 
printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered. (See 
Exhibit 1.)
  Mr. KOHL. Mr. President, indeed, even Senator Grassley and Senator 
Harkin, who have cosponsored our $100,000 cap, also recognize that we 
are in the right, even though their home state of Iowa is one of the 
few states with an unlimited exemption.
  Let me make one final point: some opt-out supporters, especially 
those from Texas, cite history as a justification for their position. 
But just because something has historical ``significance'' doesn't mean 
it's right. For example, we don't have debtors' prison anymore. We 
don't have sweatshops for children anymore. And Texas, as a matter of 
fact, is no longer part of Mexico. All of these changes altered 
something of ``historical significance;'' all were for the better. And 
getting rid of the unlimited homestead exemption in bankruptcy would 
also be a change--a dramatic change--for the better.
  Mr. President, you can't support our cap and also support an opt-out: 
It's one or the other. I urge my colleagues to oppose the Hutchison/
Brownback amendment and to support our bipartisan $100,000 cap instead.
  I yield the floor.

                               Exhibit 1

                [From the New York Times, Aug. 13, 1999]

                       Protecting Rich Bankrupts

       If you are going to go bankrupt in America, the best places 
     to do it are in Florida and Texas. Both states have unlimited 
     homestead exemptions, meaning that bankrupts can protect 
     their homes from creditors no matter how much they are worth.
       Now, with the little public debate, Texas is on the verge 
     of making its bankruptcy protections even more generous. 
     Currently a bankrupt person can shelter from creditors a home 
     and no more than one acre of land in an urban area. But a 
     proposed amendment to the Texas Constitution would raise that 
     limit to 10 acres. The limit would remain at 200 acres in 
     rural areas.
       Even more generously, the amendment, which has passed the 
     Texas legislature and goes to the voters in November, 
     provides that if you operate your business from your home, 
     the business property is also protected. Advocates say that 
     would protect small family businesses, but it is written so 
     broadly that it could allow a Houston property developer to 
     shelter a huge office building, so long as he lived in an 
     apartment in it.
       In Washington, the Senate is expected to consider a 
     bankruptcy reform bill next month. Like a bill that passed 
     the House, it would do nothing to limit the ways that the 
     formerly wealthy have of stiffing creditors, of which the 
     unlimited homestead exemptions is only the best known. But 
     the bill would be a boon to the credit card companies, which 
     have pushed hard to get it enacted. It would help them by 
     making it much harder for bankrupts to get our from under 
     credit card debt. That would primarily affect middle-income 
     and poor people forced into bankruptcy by a job loss or large 
     medical bills.
       The bill deserves to be defeated, but if it is to be 
     passed, it should be at least be amended to keep Texas and 
     Florida from providing such blatant protection to once-
     wealthy deadbeats.
                                  ____


           [From the Wisconsin State Journal, Sept. 7, 1999]

                       Bankruptcy Bill Needs Work

       If credit card issuers want to protect themselves from 
     deadbeats, let them do it with sound lending practices--not 
     by rigging federal bankruptcy law in their favor. It's time 
     for Congress to stop letting the credit card industry call 
     the shots on legislation to reform federal bankruptcy law.
       It's time instead to listen to a couple of guys from 
     Wisconsin: Senator Herb Kohl, sponsor of an amendment to the 
     reform bill that would close an outrageous loophole, and 
     Madison lawyer Brady Williamson, chairman of the National 
     Bankruptcy Review Commission, which spent two years studying 
     the state of bankruptcy.
       Unless Congress pays attention to Kohl, Williamson and 
     others who speak up for balance in bankruptcy law, Americans 
     are going to get a law tilted to give the credit card 
     industry carte blanche.
       The House already has passed such a proposal, and the 
     Senate is to consider its version this month.
       The campaign to reform bankruptcy law is based on evidence 
     showing that the number of people filing for protection from 
     creditors under bankruptcy law has been skyrocketing, despite 
     a strong economy. In 1981 about 300,000 consumers filed 
     petitions for bankruptcy. Last year the total was 1.4 
     million.
       Furthermore, there is evidence that a few people are 
     abusing the law to escape debts while they live it up on 
     wealth protected from creditors' reach.
       In response, Congress began work on bankruptcy reform 
     legislation. For guidance, the House and Senate had before 
     them 172 recommendations from the National Bankruptcy Review 
     Commission, led by Madison's Williamson. But the senators and 
     representatives were also heavily influenced by the lobbying 
     of the credit card industry.
       The industry's goal was selfish. The banks and retailers 
     that  issue credit cards make money when their card holders 
     run up large balances and pay the cards' high interest 
     rates. That's why the card issuers try to put their cards 
     in the hands of as many people as possible, even people 
     who are poor credit risks.
       But there's a consequence for credit card issuers: 
     Sometimes people file for bankruptcy protection, and their 
     debts are reduced or discharged.
       The credit card industry wants to escape that consequence. 
     Card issuers want to design the law to keep people out of 
     bankruptcy court, so the debts can be collected and, 
     moreover, so the issuers can escape the expense of being 
     careful about whom they issue cards to.
       To satisfy the credit industry, the House and Senate 
     included in their bills provisions to make it harder for 
     people to file under Chapter 7 of the bankruptcy law, which 
     basically allows a filer to wipe away debts and start fresh, 
     or harder to file for bankruptcy at all.
       By caving in to the credit card industry, the Senate and 
     House violated a principle of bankruptcy law that Williamson 
     of the Bankruptcy Review Commission has championed: Balance. 
     The law must work for creditors and debtors. It should not 
     become a creditors' collection aid.
       For including the pet provisions of the credit card 
     industry, the House and Senate bills deserve rebuke. But the 
     bills also deserve criticism for what they fail to include. 
     Neither bill took a step toward closing the loophole that 
     allows the ``bankrupt'' wealthy to shelter assets in an 
     expensive home.
       Irresponsible but shrewd debtors sneak assets through 
     bankruptcy via a provision permitting them to take advantage 
     of state homestead exemptions. Wisconsin's homestead 
     exemption is a modest $40,000. But five states--Texas, 
     Florida, Iowa, Kansas and South Dakota--have unlimited 
     exemptions. That's how actor Burt Reynolds, former Major 
     League Baseball Commissioner Bowie Kuhn and others have held 
     on to luxurious homes while leaving millions in unpaid bills.
       Sen. Kohl, D-Wis., has offered an amendment to limit 
     homestead exemptions to $100,000. The amendment allows states 
     to offer an exception for family farms.
       Kohl's provision is sound. The Senate ought to take its 
     bankruptcy bill back to the drawing board, incorporate the 
     homestead exemption limit and revise other provisions until 
     the result is balanced between the interests of creditors and 
     debtors.
       If credit card issuers want to protect themselves, let them 
     do it with sound lending practices, not by rigging the law in 
     their favor.
                                  ____


          [From the Austin American-Statesman, July 25, 1999]

               Homestead Protection Popular, Not Populist

       When it comes to their homesteads, don't mess with Texans.
       Texas congressional leaders vigorously oppose federal 
     attempts to limit an unusual state law that prevents debtors 
     from losing the equity in their homes in bankruptcy 
     proceedings.
       Texas is one of five states that offers unlimited homestead 
     protection to the bankrupt. The century-old constitutional 
     exemption reflects Texas' historic support of private 
     property rights and its populist past.

[[Page S14489]]

       But a recent federal study by the federal General 
     Accounting Office indicates that the exemption is more 
     popular than populist. Primarily it is the refuge of a few 
     high-living debtors, not the schooteachers and small farmers 
     it was intended to protect.
       Texas political leaders need to heed the report and 
     consider some limits.
       Last year, the Task Force congressional delegation helped 
     defeat a $100,000 limit on the home equity (market value 
     minus mortgage debt) that could be sheltered during 
     bankruptcy. A uniform limit, of $100,000, is being proposed 
     in the U.S. Senate. Such a limit would adequately protect all 
     but a tiny percentage of Texas debtors.
       Of the approximately 14,000 Chapter 7 bankruptcy cases 
     closed in the Northern District of Texas in 1998, about half 
     involved a homestead exemption claim, GAO found. But only 83 
     of those claims, or just over 1 percent, involved more than 
     $100,000 in home equity.
       Texas' unlimited protection is subject to abuses, such as 
     the case of a bankruptcy attorney who protected $386,000 in 
     homestead assets while seeking to escape $1.5 million in 
     debts. Some debtors who plan to file for bankruptcy 
     preemptively shield assets from seizure by investing in an 
     expensive home.
       While even the bankrupt need and deserve a roof over their 
     heads, gross abuses of the bankruptcy system shouldn't be 
     tolerated. Besides the unfairness, overly generous state laws 
     threaten lenders, who then raise lending rates for other 
     consumers.
       The U.S. Constitution gives the federal government 
     supremacy over the state in bankruptcy matters, so arguments 
     that the federal government should let states do as they wish 
     on this particular facet of bankruptcy law make little sense.
       Congress has long declared reform of federal bankruptcy 
     laws, which debt-happy consumers have been using in large 
     numbers. American consumer debt totals more than $1 trillion, 
     according to the Federal Reserve. And uncollected debt is 
     rising.
       Consumer advocates have criticized bankruptcy reform 
     legislation for being skewed in favor of creditors and high-
     rolling debtors.
       Though he supports the state exemption for homesteads, Sen. 
     Phil Gramm, R-Texas, says it should be modernized to prevent 
     abuses. ``I do not support allowing people to go by real 
     estate office to buy a $7 million house before they go by the 
     law office to declare bankruptcy,'' he said in an interview 
     with the American-Statesman last week.
       Gramm says one solution would be to allow the exemption 
     only if the home purchase preceded the bankruptcy filing by a 
     certain length of time.
       The state's homestead protection law has bipartisan 
     support, from Gov. George W. Bush to U.S. Rep. Sheila Jackson 
     Lee, D-Houston.
       State officials in Austin and Washington should at least be 
     willing to discuss limiting homestead protection. A few well-
     heeled and clever bankruptcy filers shouldn't be able to mess 
     over a state law designed to protect average Texans.
       That mocks the state's much celebrated populist image.

                 [From the Tampa Tribune, July 6, 1999]

   Congress is on the Right Track in Acting to Reform Bankruptcy Law

       Even during the unprecedented economic good times of the 
     past year, some 1.39 million individuals and 44,000 
     businesses have sought protection from creditors in federal 
     bankruptcy courts--more than ever before. The majority of 
     these debtors, faced with medical emergencies or other 
     crisis, had no other choice. Others, however, used the system 
     to escape debts they knowingly built up, costing the average 
     family $550 a year and American companies billions.
       That's why it is time to reform the nation's bankruptcy 
     laws and return the concepts of fairness and responsibility 
     to the system. Last year, with elections looming, Congress 
     failed to reach an agreement. This year, however, it looks 
     like Congress will finally act, potentially by a veto-proof 
     margin. The House passed its version of reform in May, and 
     the Senate is scheduled to take up its bill this month. There 
     is bipartisan support among the senators for reform, and 
     compromise with the House is likely to result in new law. 
     That is good news for all of us.
       Those supporting reform include retailers, banks and other 
     lenders, as well as many responsible consumers sick of having 
     to pick up the tab for those who default on their debts. 
     Those opposed include some in the bankruptcy bar, who contend 
     the legislation favors big business at the expense of 
     consumers who truly need help, and consumer groups, which 
     blame the ease with which consumers receive credit for 
     increased bankruptcy filings.
       Much has been written and said about who is to blame for 
     this ``bankruptcy crisis.'' Consumer groups blame banks, 
     credit card companies and retailers who tempt borrowers to 
     live beyond their means. Indeed most Americans, whether they 
     can afford credit cards or not, know what it's like to open a 
     mailbox filled with applications guaranteeing lines of 
     credit.
       ``Credit-card issuers are shameless to lobby for personal 
     bankruptcy restrictions while they aggressively market and 
     extend credit,'' says Stephen Brobeck, the Consumer 
     Federation's executive director.
       But access to credit has not been altogether bad. For 
     decades the federal government has encouraged industry to 
     make credit and financial services available to a broader 
     segment of society. As a result, strapped Americans have been 
     able to buy what they need when they need it. It has allowed 
     for emergency purchases and long-term investments. Ultimately 
     it has benefited the American economy.
       But the benefits of credit are not free, and that is what 
     Congress has recognized in pushing reform of the bankruptcy 
     system.
       Consumers share the blame. Filings are up in part because 
     bankruptcy no longer carries with it a sense of shame, and 
     debtors have failed to act fiscally responsible. Too many of 
     these debtors equate plastic with money-in-hand. They use one 
     credit card to pay off another or play a continuing and 
     sloppy game with balance transfers, all the while watching 
     their debts increase. For them, walking away from their 
     responsibilities is an easy answer.
       The parallel bills making their way through Congress would 
     make it harder for debtors to escape scot-free. Both 
     encourage personal responsibility by requiring those who are 
     able to pay their debts to do so. At the same time no 
     suggested changes are so drastic as to crush hard-working 
     debtors who have had a run of bad luck.
       The most controversial part of the House bill would block 
     most middle- and upper-in-come debtors from using the 
     bankruptcy courts to walk away from their debts. Those with 
     annual family incomes above $51,000 who have the resources to 
     pay at least 20 percent of what they owe over five years 
     would be prohibited from wiping the slate clean. This means 
     they would have to restructure their debts under Chapter 13 
     of the bankruptcy code rather than the more lenient Chapter 
     7, which erases debts.
       Significantly, the bill allows bankruptcy judges to take 
     into account a debtor's account a debtor's ``extraordinary 
     circumstances,'' such as a decline in income or unexpected 
     medical expenses, before making the decision to shift a 
     debtor into Chapter 13.
       Nevertheless, opponents say the provision is unfair because 
     the debtor has the burden of proving those circumstances 
     exist. In our view that is not unfair. The debtor is the one 
     receiving the benefit of the bankruptcy.
       The Senate bill is less stringent and would give greater 
     discretion in the matter to the bankruptcy judge, who would 
     have to consider a debtor's ability to repay his debts. The 
     Senate's version requires only a showing of ``special 
     circumstances'' for a debtor to avoid a transfer to Chapter 
     13.
       Both bills recognize the obligation of a parent to pay 
     child support. Both make sure a debtor cannot put off 
     collection efforts or delay making child support payments 
     simply by filing for bankruptcy. And child support payments 
     have been made a top priority when determining which debts 
     will be paid first.
       Unfortunately, neither bill goes far enough toward closing 
     the loophole that allows debtors unlimited homestead 
     exemptions that protect the wealthiest from having to repay a 
     significant portion of their debt. Last year's Senate bill 
     would have made it impossible for states to let a bankrupt 
     person keep more than $100,000 equity in a home, which would 
     certainly hurt a lot of debtors who headed to Florida to live 
     in their multimillion-dollar mansions.
       But the conference committees threw out the provision and 
     instead said simply that states could let a bankrupt person 
     retain any house owned for at least two years before filing, 
     no matter what its value. Both 1999 versions retain this 
     language. We would prefer Congress cap the amount of equity a 
     debtor can retain in a home.
       In a consumer-friendly mode, House lawmakers adopted an 
     amendment requiring credit-card companies to clearly disclose 
     their fees for late payments and how long it would take 
     customers to pay off balances when they make only minimum 
     monthly payments. The House would also require companies to 
     clearly reveal the expiration dates of introductory ``teaser 
     rates'' and the higher interest rates replacing them.
       Although we have only mentioned some of the proposed 
     changes, the basic thrust of the legislation in both the 
     House and Senate is the same--requiring at least some 
     repayment by those who have the ability to pay. The 
     differences in the two measures are not beyond compromise, 
     and either approach would be an improvement over current law.
       As we said last year, the goal of the bankruptcy system is 
     to match bankruptcy relief to debtor need. Chapter 13 
     repayment plans accomplish this objective and restore 
     personal responsibility to the system.

  The PRESIDING OFFICER. Who yields time?
  Mr. KOHL. I yield 1 minute to Senator Sessions.
  The PRESIDING OFFICER. One minute remains.
  Mr. SESSIONS. Mr. President, Senator Kohl and I asked earlier this 
year for a GAO report on these cases. According to the Washington Post, 
``Homestead exemptions aid well-off feud'':

       Findings suggest the unlimited homestead exemption is not 
     the popular shield it has often been cracked up to be but a 
     convenient protection for a few affluent people.

  Judge Edith Jones on the Fifth Circuit Court of Appeals from Texas 
said recently as a member of the Bankruptcy Commission:


[[Page S14490]]


       I agree with cap supporters that debtors have used liberal 
     homestead laws, like that of my home State Texas, to shelter 
     large amounts of wealth from their creditors.

  She went on to add:

       In principle, I do not oppose a $100,000 cap on homestead 
     exemptions, particularly if it were indexed to account for 
     inflation.

  This will be indexed, and I think Judge Jones is correct.
  I yield the floor.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mrs. HUTCHISON. How much time is on our side?
  The PRESIDING OFFICER. One minute 8 seconds.
  Mrs. HUTCHISON. Mr. President, let me make a statement and then I am 
going to yield the remainder of my time to the cosponsor of the 
amendment, Senator Graham of Florida.
  The GAO report said that 1 percent may be trying to use the 
bankruptcy laws. Are we going to throw seniors out on the streets? 
Eighty-one percent of Americans 65 years or older are homeowners. Are 
we going to throw them out on the streets to try to get one person who 
is not using the system fairly? I do not think that is good policy.
  I yield the remainder of my time to the Senator from Florida.
  The PRESIDING OFFICER. The Senator is recognized for 30 seconds.
  Mr. GRAHAM. Mr. President, it has been said that the core issues in 
politics are: Who wins, who loses, and who decides. Historically, the 
decision as to the level of exemption of a person's homestead has been 
set by the States.
  In my State, it has been set in a constitutional amendment which 
required a vote of a majority of the citizens of Florida. I believe 
that is where the decision should continue to rest.
  The amendment that is being offered by the Senator from Texas, and 
her supporters, would provide for the States to continue to exercise 
that authority, by making an affirmative election to opt out of the 
arbitrary $100,000 limit which is being proposed by the advocates of 
the underlying amendment.
  I urge adoption of the second-degree amendment.
  The PRESIDING OFFICER. All time has expired.


                       Vote On Amendment No. 2778

  The PRESIDING OFFICER. Under the previous order, the question now is 
on agreeing to the Hutchison second-degree amendment No. 2778. The yeas 
and nays have been ordered. The clerk will call the roll.
  The legislative assistant called the roll.
  Mr. FITZGERALD (when his name was called). Present.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is 
necessarily absent.
  The result was announced--yeas 29, nays 69, as follows:

                      [Rollcall Vote No. 363 Leg.]

                                YEAS--29

     Allard
     Bennett
     Brownback
     Bunning
     Burns
     Campbell
     Craig
     Crapo
     Domenici
     Graham
     Gramm
     Grams
     Gregg
     Hagel
     Helms
     Hutchison
     Inhofe
     Lautenberg
     Mack
     Nickles
     Roberts
     Shelby
     Smith (NH)
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli

                                NAYS--69

     Abraham
     Akaka
     Ashcroft
     Baucus
     Bayh
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Bryan
     Byrd
     Chafee, L.
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Daschle
     DeWine
     Dodd
     Dorgan
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Frist
     Gorton
     Grassley
     Harkin
     Hatch
     Hollings
     Hutchinson
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Schumer
     Sessions
     Smith (OR)
     Snowe
     Voinovich
     Warner
     Wellstone
     Wyden

                        ANSWERED ``PRESENT''--1

       
     Fitzgerald
       

                             NOT VOTING--1

       
     McCain
       
  The amendment (No. 2778) was rejected.
  Mr. NICKLES. I move to reconsider the vote and to lay that motion on 
the table.
  The motion to lay on the table was agreed to.


                       Vote On Amendment No. 3516

  The PRESIDING OFFICER (Mr. Bunning). The question is on agreeing to 
amendment No. 2516. The yeas and nays have been ordered. The clerk will 
call the roll.
  The legislative clerk called the roll.
  Mr. FITZGERALD (when his name was called). Present.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is 
necessarily absent.
  The result was announced--yeas 76, nays 22, as follows:

                      [Rollcall Vote No. 364 Leg.]

                                YEAS--76

     Abraham
     Akaka
     Ashcroft
     Baucus
     Bayh
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Bryan
     Bunning
     Burns
     Byrd
     Campbell
     Chafee, L.
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Frist
     Gorton
     Grassley
     Harkin
     Hatch
     Hollings
     Hutchinson
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (OR)
     Snowe
     Stevens
     Voinovich
     Warner
     Wellstone
     Wyden

                                NAYS--22

     Allard
     Bennett
     Brownback
     Craig
     Crapo
     Graham
     Gramm
     Grams
     Gregg
     Hagel
     Helms
     Hutchison
     Lautenberg
     Mack
     Nickles
     Roberts
     Smith (NH)
     Specter
     Thomas
     Thompson
     Thurmond
     Torricelli

                        ANSWERED ``PRESENT''--1

       
     Fitzgerald
       

                             NOT VOTING--1

       
     McCain
       
  The amendment (No. 3514) was agreed to.
  Mr. LOTT. I move to reconsider the vote.
  Mr. GRASSLEY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER (Mr. Sessions). Under the previous order, the 
Senator from Minnesota, Mr. Wellstone, is recognized to offer an 
amendment relative to agriculture, and there are 4 hours of debate 
provided.
  Mr. WELLSTONE. Mr. President, my understanding is--let me see if I 
get this right--that we are in the process of trying to work out some 
kind of arrangement which may work better for colleagues in terms of 
their schedules, in which case soon we would start on this debate. We 
might very well finish up when we come back with a final vote.
  If that is the case, I would agree to Senator Ashcroft speaking now 
for 7 minutes while we are working out this agreement; with the 
understanding that after Senator Ashcroft speaks for 7 minutes, then 
the pending business would be this amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. GRASSLEY. Reserving the right to object, and when people 
understand what we are up to, there will not be any objection. We have 
a unanimous consent request on the managers' amendment that will take 
30 seconds. I would like to get that out of the way.
  Mr. REID. Mr. President, I ask unanimous consent that the Wellstone 
amendment be set aside for purposes of this managers' amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Iowa is recognized to offer his amendment.


                    Amendment No. 2515, As Modified

 (Purpose: To make technical and conforming amendments, and for other 
                               purposes)

  Mr. GRASSLEY. Mr. President, I will be somewhat repetitive of what 
Senator Reid has said, but I ask unanimous consent that the pending 
amendment be laid aside, and that the Senate now proceed to amendment 
No. 2515, and following the reporting by the clerk, the amendment be 
modified with the text I now send to the desk, and that the amendment 
be agreed to, and the motion to reconsider be laid upon the table.

[[Page S14491]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley] for himself, Mr. 
     Torricelli, and Mr. Leahy, proposes an amendment numbered 
     2515, as modified.

  The amendment, as modified, is as follows:

       On page 6, line 12, insert ``11 or'' after ``chapter''.
       On page 6, line 24, insert ``11 or'' after ``chapter''.
       On page 12, lines 21 and 22, strike ``was not substantially 
     justified'' and insert ``was frivolous''.
       On page 14, strike lines 8 through 14 and insert the 
     following:
       ``(C)(i) No judge, United States trustee, panel trustee, 
     bankruptcy administrator, or other party in interest shall 
     bring a motion under section 707(b)(2) if the debtor and the 
     debtor's spouse combined, as of the date of the order for 
     relief, have current monthly total income equal to or less 
     than the national or applicable State median household 
     monthly income calculated (subject to clause (ii)) on a 
     semiannual basis of a household of equal size.
       ``(ii) For a household of more than 4 individuals, the 
     median income shall be that of a household of 4 individuals, 
     plus $583 for each additional member of that household.''.
       On page 14, in the matter between lines 18 and 19, insert 
     ``11 or'' after ``chapter''.
       On page 14, after the matter between lines 18 and 19, 
     insert the following:

     SEC. 103. FINDINGS AND STUDY.

       (a) Findings.--Congress finds that the Secretary of the 
     Treasury has the inherent authority to alter the Internal 
     Revenue Service standards established to set guidelines for 
     repayment plans as needed to accommodate their use under 
     section 707(b) of title 11, United States Code.
       (b) Study.--
       (1) In general.--Not later than 3 years after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Director of the Executive Office of 
     United States Trustees, shall submit a report to the 
     Committee on the Judiciary of the Senate and the Committee on 
     the Judiciary of the House of Representatives containing the 
     findings of the Secretary concerning the utilization of 
     Internal Revenue Service standards for determining--
       (A) the current monthly expenses of a debtor under section 
     707(b) of title 11, United States Code; and
       (B) the impact that the application of those standards has 
     had on debtors and on the bankruptcy courts.
       (2) Recommendation.--The report under paragraph (1) may 
     include recommendations for amendments to title 11, United 
     States Code, that are consistent with the findings of the 
     Secretary of the Treasury under paragraph (1).
       On page 14, line 19, strike ``103'' and insert ``104''.
       On page 15, line 12, strike ``104'' and insert ``105''.
       On page 15, lines 9 and 10, strike ``credit counseling 
     service'' and insert ``nonprofit budget and credit counseling 
     agency''.
       On page 17, line 19, strike ``105'' and insert ``106''.
       On page 18, lines 3 and 4, strike ``credit counseling 
     service'' and insert ``budget and credit counseling agency''.
       On page 18, line 5, insert ``(including a briefing 
     conducted by telephone)'' after ``briefing''.
       On page 18, line 12, strike ``credit counseling services'' 
     and insert ``budget and credit counseling agency''.
       On page 18, line 12, strike ``are'' and insert ``is''.
       On page 18, line 15, strike ``those programs'' and insert 
     ``that agency''.
       On page 18, line 21, insert after the period the following: 
     ``Notwithstanding the preceding sentence, a nonprofit budget 
     and credit counseling service may be disapproved by the 
     United States trustee or bankruptcy administrator at any 
     time.''.
       On page 19, lines 4 and 5, strike ``credit counseling 
     service'' and insert ``budget and credit counseling agency''.
       On page 21, lines 6 and 7, strike ``credit counseling 
     service'' and insert ``approved nonprofit budget and credit 
     counseling agency''.
       On page 21, lines 10 and 11, strike ``credit counseling 
     service'' and insert ``approved nonprofit budget and credit 
     counseling agency''.
       On page 21, line 16, strike ``Credit counseling services'' 
     and insert ``Nonprofit budget and credit counseling 
     agencies''.
       On page 21, line 19, strike ``credit counseling services'' 
     and insert ``nonprofit budget and credit counseling 
     agencies''.
       On page 21, line 25, strike the quotation marks and the 
     final period.
       On page 21, after line 25, insert the following:
       ``(b) For inclusion on the approved list under subsection 
     (a), the United States trustee or bankruptcy administrator 
     shall require the credit counseling service, at a minimum--
       ``(1) to be a nonprofit budget and credit counseling 
     agency, the majority of the board of directors of which--
       ``(A) are not employed by the agency; and
       ``(B) will not directly or indirectly benefit financially 
     from the outcome of a credit counseling session;
       ``(2) if a fee is charged for counseling services, to 
     charge a reasonable fee, and to provide services without 
     regard to ability to pay the fee;
       ``(3) to provide for safekeeping and payment of client 
     funds, including an annual audit of the trust accounts and 
     appropriate employee bonding;
       ``(4) to provide full disclosures to clients, including 
     funding sources, counselor qualifications, and possible 
     impact on credit reports;
       ``(5) to provide adequate counseling with respect to client 
     credit problems that includes an analysis of their current 
     situation, what brought them to that financial status, and 
     how they can develop a plan to handle the problem without 
     incurring negative amortization of their debts; and
       ``(6) to provide trained counselors who receive no 
     commissions or bonuses based on the counseling session 
     outcome.
       ``(c)(1) In this subsection, the term `credit counseling 
     service'--
       ``(A) means--
       ``(i) a nonprofit credit counseling service approved under 
     subsection (a); and
       ``(ii) any other consumer education program carried out 
     by--
       ``(I) a trustee appointed under chapter 13; or
       ``(II) any other public or private entity or individual; 
     and
       ``(B) does not include any counseling service provided by 
     the attorney of the debtor or an agent of the debtor.
       ``(2)(A) No credit counseling service may provide to a 
     credit reporting agency information concerning whether an 
     individual debtor has received or sought instruction 
     concerning personal financial management from the credit 
     counseling service.
       ``(B) A credit counseling service that willfully or 
     negligently fails to comply with any requirement under this 
     title with respect to a debtor shall be liable for damages in 
     an amount equal to the sum of--
       ``(i) any actual damages sustained by the debtor as a 
     result of the violation; and
       ``(ii) any court costs or reasonable attorneys' fees (as 
     determined by the court) incurred in an action to recover 
     those damages.''.
       On page 22, strike the matter between lines 3 and 4, and 
     insert the following:

``111. Nonprofit budget and credit counseling agencies; financial 
              management instructional courses.''.

       On page 30, line 11, insert ``, including interest that 
     accrues on that debt as provided under applicable 
     nonbankruptcy law notwithstanding any other provision of this 
     title,'' after ``under this title''.
       On page 30, lines 14 and 15, strike ``or legal guardian; 
     or'' and insert ``, legal guardian, or responsible relative; 
     or''.
       On page 30, line 21, strike ``or legal guardian''.
       On page 31, line 10, strike ``or legal guardian'' and 
     insert ``, legal guardian, or responsible relative''.
       On page 32, line 9, strike all through line 3 on page 33 
     and insert the following:
       ``(1) First:
       ``(A) Allowed unsecured claims for domestic support 
     obligations that, as of the date of the filing of the 
     petition, are owed to or recoverable by a spouse, former 
     spouse, or child of the debtor, or the parent, legal 
     guardian, or responsible relative of such child, without 
     regard to whether the claim is filed by such person or is 
     filed by a governmental unit on behalf of that person, on the 
     condition that funds received under this paragraph by a 
     governmental unit under this title after the date of filing 
     of the petition shall be applied and distributed in 
     accordance with applicable nonbankruptcy law.
       ``(B) Subject to claims under subparagraph (A), allowed 
     unsecured claims for domestic support obligations that, as of 
     the date the petition was filed are assigned by a spouse, 
     former spouse, child of the debtor, or such child's parent, 
     legal guardian, or responsible relative to a governmental 
     unit (unless such obligation is assigned voluntarily by the 
     spouse, former spouse, child, parent, legal guardian, or 
     responsible relative of the child for the purpose of 
     collecting the debt) or are owed directly to or recoverable 
     by a government unit under applicable nonbankruptcy law, on 
     the condition that funds received under this paragraph by a 
     governmental unit under this title after the date of filing 
     of the petition be applied and distributed in accordance with 
     applicable nonbankruptcy law.''.
       On page 33, line 4, strike all through page 37, line 6 and 
     insert the following:

     SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE 
                   IN CASES INVOLVING DOMESTIC SUPPORT 
                   OBLIGATIONS.

       Title 11, United States Code, is amended--
       (1) in section 1129(a), by adding at the end the following:
       ``(14) If the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order or statute for such obligation that first become 
     payable after the date on which the petition is filed.'';
       (2) in section 1208(c)--
       (A) in paragraph (8), by striking ``or'' at the end;
       (B) in paragraph (9), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(10) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed.'';

[[Page S14492]]

       (3) in section 1222(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period, 
     beginning on the date that the first payment is due under the 
     plan, will be applied to make payments under the plan.'';
       (4) in section 1222(b)--
       (A) by redesignating paragraph (10) as paragraph (11); and
       (B) by inserting after paragraph (9) the following:
       ``(10) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1328(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims;'';
       (5) in section 1225(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid all amounts payable under 
     such order for such obligation that first become payable 
     after the date on which the petition is filed.'';
       (6) in section 1228(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order to pay a 
     domestic support obligation, after such debtor certifies that 
     all amounts payable under such order or statute that are due 
     on or before the date of the certification (including amounts 
     due before the petition was filed, but only to the extent 
     provided for in the plan) have been paid'' after ``completion 
     by the debtor of all payments under the plan'';
       (7) in section 1307(c)--
       (A) in paragraph (9), by striking ``or'' at the end;
       (B) in paragraph (10), by striking the period at the end 
     and inserting ``; or''; and
       (C) by adding at the end the following:
       ``(11) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed.'';
       (8) in section 1322(a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding in the end the following:
       ``(4) notwithstanding any other provision of this section, 
     a plan may provide for less than full payment of all amounts 
     owed for a claim entitled to priority under section 
     507(a)(1)(B) only if the plan provides that all of the 
     debtor's projected disposable income for a 5-year period 
     beginning on the date that the first payment is due under the 
     plan will be applied to make payments under the plan.'';
       (9) in section 1322(b)--
       (A) in paragraph (9), by striking ``; and'' and inserting a 
     semicolon;
       (B) by redesignating paragraph (10) as paragraph (11); and
       (C) inserting after paragraph (9) the following:
       ``(10) provide for the payment of interest accruing after 
     the date of the filing of the petition on unsecured claims 
     that are nondischargeable under section 1328(a), except that 
     such interest may be paid only to the extent that the debtor 
     has disposable income available to pay such interest after 
     making provision for full payment of all allowed claims; 
     and'';
       (10) in section 1325(a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(7) if the debtor is required by a judicial or 
     administrative order or statute to pay a domestic support 
     obligation, the debtor has paid amounts payable after the 
     date on which the petition is filed.''; and
       (11) in section 1328(a), in the matter preceding paragraph 
     (1), by inserting ``, and in the case of a debtor who is 
     required by a judicial or administrative order to pay a 
     domestic support obligation, after such debtor certifies that 
     all amounts payable under such order or statute that are due 
     on or before the date of the certification (including amounts 
     due before the petition was filed, but only to the extent 
     provided for in the plan) have been paid'' after ``completion 
     by the debtor of all payments under the plan''.
       On page 37, strike lines 10 and 11 and insert ``amended by 
     striking paragraph (2) and inserting the''.
       On page 37, lines 14 and 15, strike ``of an action or 
     proceeding for--'' and insert ``or continuation of a civil 
     action or proceeding--''.
       On page 37, line 16, insert ``for'' after ``(i)''.
       On page 37, line 19, insert ``for'' after ``(ii)''.
       On page 37, line 21, strike ``or''.
       On page 37, between lines 21 and 22, insert the following:
       ``(iii) concerning child custody or visitation;
       ``(iv) for the dissolution of a marriage except to the 
     extent that such a proceeding seeks to determine the division 
     of property which is property of the estate; or
       ``(v) regarding domestic violence;
       On page 37, line 24, strike the quotation marks and second 
     semicolon.
       On page 37, after line 24, add the following:
       ``(C) with respect to the withholding of income that is 
     property of the estate or property of the debtor for payment 
     of a domestic support obligation pursuant to a judicial or 
     administrative order;
       ``(D) the withholding, suspension, or restriction of 
     drivers' licenses, professional and occupational licenses, 
     and recreational licenses under State law, as specified in 
     section 466(a)(16) of the Social Security Act (42 U.S.C. 
     666(a)(16));
       ``(E) the reporting of overdue support owed by a parent to 
     any consumer reporting agency as specified in section 
     466(a)(7) of the Social Security Act (42 U.S.C. 666(a)(7));
       ``(F) the interception of tax refunds, as specified in 
     sections 464 and 466(a)(3) of the Social Security Act (42 
     U.S.C. 664 and 666(a)(3)) or under an analogous State law; or
       ``(G) the enforcement of medical obligations as specified 
     under title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.).'';
       On page 38, line 12, strike all through page 39, line 25.
       On page 40, between lines 13 and 14, insert the following:
       (i) by inserting ``to a spouse, former spouse, or child of 
     the debtor and'' before ``not of the kind''.
       On page 40, line 14, strike ``(i)'' and insert ``(ii)''.
       On page 40, line 16, strike ``(ii)'' and insert ``(iii)''.
       On page 40, insert between lines 18 and 19 the following:
       (C) by striking paragraph (18); and
       On page 41, line 4, strike ``(5)'' and insert ``(4)''.
       On page 41, line 7, strike ``(5)'' and insert ``(4)''.
       On page 41, line 12, strike ``(5)'' and insert ``(4)''.
       On page 43, strike lines 16 through 20 and insert the 
     following: Section 1225(b)(2)(A) of title 11, United States 
     Code, is amended by inserting ``or for a domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed'' after ``dependent of the debtor''.
       On page 43, strike line 22 through page 44, line 2, and 
     insert the following:

     Section 1325(b)(2)(A) of title 11, United States Code, is 
     amended by inserting ``or for a domestic support obligation 
     that first becomes payable after the date on which the 
     petition is filed'' after ``dependent of the debtor''.
       On page 44, line 14, strike ``for support'' through line 
     16, and insert ``for a domestic support obligation,''.
       On page 45, line 23, strike ``and''.
       On page 45, between lines 23 and 24, insert the following:
       ``(III) the last recent known name and address of the 
     debtor's employer; and
       On page 45, line 24, strike ``(III)'' and insert ``(IV)''.
       On page 46, strike lines 6 through 11 and insert the 
     following:
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       On page 46, line 19, strike ``(b)'' and insert ``(a)''.
       On page 46, line 20, strike ``(5)'' and insert ``(6)''.
       On page 46, line 22, strike ``(6)'' and insert ``(7)''.
       On page 47, strike lines 1 through 6 and insert the 
     following:
       ``(8) if, with respect to an individual debtor, there is a 
     claim for a domestic support obligation, provide the 
     applicable notification specified in subsection (c).''; and
       On page 47, line 8, strike ``(b)(7)'' and insert 
     ``(a)(7)''.
       On page 48, line 7, strike ``and''.
       On page 48, insert between lines 7 and 8 the following:

       ``(III) the last recent known name and address of the 
     debtor's employer; and''

       On page 48, line 8, strike ``(III)'' and insert ``(IV)''.
       On page 48, line 11, strike ``(4), or (14A)'' and insert 
     ``(3), or (14)''.
       On page 48, strike lines 15 through 20 and insert the 
     following:
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       On page 49, strike lines 9 through 14 and insert the 
     following:
       ``(6) if, with respect to an individual debtor, there is a 
     claim for a domestic support obligation, provide the 
     applicable notification specified in subsection (c).''; and
       On page 50, line 16, strike ``and''.
       On page 50, insert between lines 16 and 17 the following:

       ``(III) the last recent known name and address of the 
     debtor's employer; and''.

       On page 50, line 17, strike ``(III)'' and insert ``(IV)''.
       On page 50, line 20, strike ``(4), or (14A)'' and insert 
     ``(3), or (14)''.
       On page 50, strike line 24 and all that follows through 
     page 51, line 4 and insert the following:
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.

[[Page S14493]]

       On page 51, strike lines 19 through 24 and insert the 
     following:
       ``(6) if, with respect to an individual debtor, there is a 
     claim for a domestic support obligation, provide the 
     applicable notification specified in subsection (d).''; and
       On page 52, line 24, strike ``and''.
       On page 52, after line 24, add the following:
       ``(III) the last recent known name and address of the 
     debtor's employer; and''.
       On page 53, line 1, strike ``(III)'' and insert ``(IV)''.
       On page 53, line 4, strike ``(4), or (14A)'' and insert 
     ``(3), or (14)''.
       On page 53, strike lines 8 through 12 and insert the 
     following:
       ``(2)(A) A holder of a claim or a State child support 
     agency may request from a creditor described in paragraph 
     (1)(B)(iii)(IV) the last known address of the debtor.
       On page 76, line 15, strike ``523(a)(9)'' and insert 
     ``523(a)(8)''.
       On page 82, strike lines 4 through 9 and insert ``title 11, 
     United States Code, is amended by adding at the end the 
     following:''.
       On page 82, line 10, strike ``(19)'' and insert ``(18)''.
       On page 83, between lines 4 and 5, insert the following:

     SEC. 225. PROTECTION OF EDUCATION SAVINGS.

       (a) Exclusions.--Section 541 of title 11, United States 
     Code, as amended by section 903, is amended--
       (1) in subsection (b)--
       (A) by redesignating paragraph (6) as paragraph (8); and
       (B) by inserting after paragraph (5) the following:
       ``(6) funds placed in an education individual retirement 
     account (as defined in section 530(b)(1) of the Internal 
     Revenue Code of 1986) not later than 365 days before the date 
     of filing of the petition, but--
       ``(A) only if the designated beneficiary of such account 
     was a son, daughter, stepson, stepdaughter, grandchild, or 
     step-grandchild of the debtor for the taxable year for which 
     funds were placed in such account;
       ``(B) only to the extent that such funds--
       ``(i) are not pledged or promised to any entity in 
     connection with any extension of credit; and
       ``(ii) are not excess contributions (as described in 
     section 4973(e) of the Internal Revenue Code of 1986); and
       ``(C) in the case of funds placed in all such accounts 
     having the same designated beneficiary not earlier than 720 
     days nor later than 365 days before such date, only so much 
     of such funds as does not exceed $5,000;
       ``(7) funds used to purchase a tuition credit or 
     certificate or contributed to an account in accordance with 
     section 529(b)(1)(A) of the Internal Revenue Code of 1986 
     under a qualified State tuition program (as defined in 
     section 529(b)(1) of such Code) not later than 365 days 
     before the date of filing of the petition, but--
       ``(A) only if the designated beneficiary of the amounts 
     paid or contributed to such tuition program was a son, 
     daughter, stepson, stepdaughter, grandchild, or step-
     grandchild of the debtor for the taxable year for which funds 
     were paid or contributed;
       ``(B) with respect to the aggregate amount paid or 
     contributed to such program having the same designated 
     beneficiary, only so much of such amount as does not exceed 
     the total contributions permitted under section 529(b)(7) of 
     such Code with respect to such beneficiary, as adjusted 
     beginning on the date of the filing of the petition by the 
     annual increase or decrease (rounded to the nearest tenth of 
     1 percent) in the education expenditure category of the 
     Consumer Price Index prepared by the Department of Labor; and
       ``(C) in the case of funds paid or contributed to such 
     program having the same designated beneficiary not earlier 
     than 720 days nor later than 365 days before such date, only 
     so much of such funds as does not exceed $5,000; or''; and
       (2) by adding at the end the following:
       ``(g) In determining whether any of the relationships 
     specified in paragraph (6)(A) or (7)(A) of subsection (b) 
     exists, a legally adopted child of an individual (and a child 
     who is a member of an individual's household, if placed with 
     such individual by an authorized placement agency for legal 
     adoption by such individual), or a foster child of an 
     individual (if such child has as the child's principal place 
     of abode the home of the debtor and is a member of the 
     debtor's household) shall be treated as a child of such 
     individual by blood.''.
       (b) Debtor's Duties.--Section 521 of title 11, United 
     States Code, as amended by sections 105(d), 304(c)(1), 
     305(2), 315(b), and 316 of this Act, is amended by adding at 
     the end the following:
       ``(k) In addition to meeting the requirements under 
     subsection (a), a debtor shall file with the court a record 
     of any interest that a debtor has in an education individual 
     retirement account (as defined in section 530(b)(1) of the 
     Internal Revenue Code of 1986) or under a qualified State 
     tuition program (as defined in section 529(b)(1) of such 
     Code).''.
       On page 91, between lines 18 and 19, insert the following:
       (c) Modification of a Restriction Relating to Waivers.--
     Section 522(e) of title 11, United States Code, is amended--
       (1) in the first sentence, by striking ``subsection (b) of 
     this section'' and inserting ``subsection (b), other than 
     under paragraph (3)(C) of that subsection''; and
       (2) in the second sentence--
       (A) by inserting ``(other than property described in 
     subsection (b)(3)(C))'' after ``property'' each place it 
     appears; and
       (B) by inserting ``(other than a transfer of property 
     described in subsection (b)(3)(C))'' after ``transfer'' each 
     place it appears.
       On page 91, line 23, strike ``105(d)'' and insert 
     ``106(d)''.
       On page 92, line 17, strike ``(C)'' and insert ``(D)''.
       On page 92, line 18, strike ``(b)'' and insert ``(c)''.
       On page 94, line 25, strike ``105(d)'' and insert 
     ``106(d)''.
       On page 95, line 16, strike ``(c)'' and insert ``(d)''.
       On page 109, line 13, strike ``by adding at the end'' and 
     insert ``by inserting after subsection (e)''.
       On page 111, line 18, insert ``(a) In General.--'' before 
     ``Section''.
       On page 112, line 14, insert a dash after the period.
       On page 112, line 19, strike ``(4)'' and insert ``(3)''.
       On page 112, line 20, strike ``(3)(B), (5), (8), or (9) of 
     section 523(a)'' and insert ``(4), (7), or (8) of section 
     523(a)''.
       On page 116, line 16, strike ``(d)(1)'' and insert 
     ``(e)(1)''.
       On page 117, line 5, strike ``(e)'' and insert ``(f)''.
       On page 118, line 1, strike ``(A) beginning'' and insert 
     the following:
       ``(A) beginning''.
       On page 118, line 5, strike ``(B) thereafter,'' and insert 
     the following:
       ``(B) thereafter,''.
       On page 118, line 8, strike ``(f)(1)'' and insert 
     ``(g)(1)''.
       On page 118, strike line 23 and insert the following: 
     ``subsection (h)''.
       On page 118, line 24, strike ``(g)(1)'' and insert 
     ``(h)(1)''.
       On page 119, line 21, strike ``(h)'' and insert ``(i)''.
       On page 120, line 11, strike ``(i)'' and insert ``(j)''.
       On page 124, strike lines 7 through 14 and insert the 
     following:

     SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

       (a) Property of the Estate.--
       (1) In general.--Subchapter I of chapter 11 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 1115. Property of the estate

       ``In a case concerning an individual, property of the 
     estate includes, in addition to the property specified in 
     section 541--
       ``(1) all property of the kind specified in section 541 
     that the debtor acquires after the commencement of the case 
     but before the case is closed, dismissed, or converted to a 
     case under chapter 7, 12, or 13, whichever occurs first; and
       ``(2) earnings from services performed by the debtor after 
     the commencement of the case but before the case is closed, 
     dismissed, or converted to a case under chapter 7, 12, or 13, 
     whichever occurs first.''.
       (2) Clerical amendment.--The table of sections for chapter 
     11 of title 11, United States Code, is amended by adding at 
     the end of the matter relating to subchapter I the following:

``1115. Property of the estate.''.

       (b) Contents of Plan.--Section 1123(a) of title 11, United 
     States Code, is amended--
       (1) in paragraph (6), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(8) in a case concerning an individual, provide for the 
     payment to creditors through the plan of all or such portion 
     of earnings from personal services performed by the debtor 
     after the commencement of the case or other future income of 
     the debtor as is necessary for the execution of the plan.''.
       (c) Confirmation of Plan.--
       (1) Requirements relating to value of property.--Section 
     1129(a) of title 11, United States Code, is amended by adding 
     at the end the following:
       ``(14) In a case concerning an individual in which the 
     holder of an allowed unsecured claim objects to the 
     confirmation of the plan--
       ``(A) the value of the property to be distributed under the 
     plan on account of such claim is, as of the effective date of 
     the plan, not less than the amount of such claim; or
       ``(B) the value of the property to be distributed under the 
     plan is not less than the debtor's projected disposable 
     income (as that term is defined in section 1325(b)(2)) to be 
     received during the 3-year period beginning on the date that 
     the first payment is due under the plan, or during the term 
     of the plan, whichever is longer.''.
       (2) Requirement relating to interests in property.--Section 
     1129(b)(2)(B)(ii) of title 11, United States Code, is amended 
     by inserting before the period at the end the following: ``, 
     except that in a case concerning an individual, the debtor 
     may retain property included in the estate under section 
     1115, subject to the requirements of subsection (a)(14)''.
       (d) Effect of Confirmation--Section 1141(d) of title 11, 
     United States Code, is amended--
       (1) in paragraph (2), by striking ``The confirmation of a 
     plan does not discharge an individual debtor'' and inserting 
     ``A discharge under this chapter does not discharge a 
     debtor''; and
       (2) by adding at the end the following:
       ``(5) In a case concerning an individual--

[[Page S14494]]

       ``(A) except as otherwise ordered for cause shown, the 
     discharge is not effective until completion of all payment 
     under the plan; and
       ``(B) at any time after the confirmation of the plan and 
     after notice and a hearing, the court may grant a discharge 
     to a debtor that has not completed payments under the plan 
     only if--
       ``(i) for each allowed unsecured claim, the value as of the 
     effective date of the plan, of property actually distributed 
     under the plan on account of that claim is not less than the 
     amount that would have been paid on such claim if the estate 
     of the debtor had been liquidated under chapter 7 of this 
     title on such date; and
       ``(ii) modification of the plan under 1127 of this title is 
     not practicable.''.
       (e) Modification of Plan.--Section 1127 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(e) In a case concerning an individual, the plan may be 
     modified at any time after confirmation of the plan but 
     before the completion of payments under the plan, whether or 
     not the plan has been substantially consummated, upon request 
     of the debtor, the trustee, the United States trustee, or the 
     holder of an allowed unsecured claim, to--
       ``(1) increase or reduce the amount of payments on claims 
     of a particular class provided for by the plan;
       ``(2) extend or reduce the time period for such payments; 
     or
       ``(3) alter the amount of the distribution to a creditor 
     whose claim is provided for by the plan to the extent 
     necessary to take account of any payment of such claim made 
     other than under the plan.
       ``(f)(1) Sections 1121 through 1128 of this title and the 
     requirements of section 1129 of this title apply to any 
     modification under subsection (a).
       ``(2) The plan, as modified, shall become the plan only 
     after there has been disclosure under section 1125, as the 
     court may direct, notice and a hearing, and such modification 
     is approved.''.
       Beginning on page 135, strike line 19 and all that follows 
     through page 136, line 2, and insert the following:

     SEC. 406. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

       (a) Appointment.--Section 1102(a)(2) of title 11, United 
     States Code, is amended by inserting before the first 
     sentence the following: ``On its own motion or on request of 
     a party in interest, and after notice and hearing, the court 
     may order a change in the membership of a committee appointed 
     under this subsection, if the court determines that the 
     change is necessary to ensure adequate representation of 
     creditors or equity security holders. The court may increase 
     the number of members of a committee to include a creditor 
     that is a small business concern (as described in section 
     3(a)(1) of the Small Business Act (15 U.S.C. 632(a)(1))), if 
     the court determines that the creditor holds claims (of the 
     kind represented by the committee) the aggregate amount of 
     which, in comparison to the annual gross revenue of that 
     creditor, is disproportionately large.''.
       (b) Information.--Section 1102(b) of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(3) A committee appointed under subsection (a) shall--
       ``(A) provide access to information for creditors who--
       ``(i) hold claims of the kind represented by that 
     committee; and
       ``(ii) are not appointed to the committee;
       ``(B) solicit and receive comments from the creditors 
     described in subparagraph (A); and
       ``(C) be subject to a court order that compels any 
     additional report or disclosure to be made to the creditors 
     described in subparagraph (A).''.
       On page 145, between lines 15 and 16, insert the following:

     SEC. 420. MORE COMPLETE INFORMATION REGARDING ASSETS OF THE 
                   ESTATE.

       (a) In General.--
       (1) Disclosure.--The Advisory Committee on Bankruptcy Rules 
     of the Judicial Conference of the United States, after 
     consideration of the views of the Director of the Executive 
     Office for the United States Trustees, shall propose for 
     adoption amended Federal Rules of Bankruptcy Procedure and 
     Official Bankruptcy Forms directing debtors under chapter 11 
     of title 11, United States Code, to disclose the information 
     described in paragraph (2) by filing and serving periodic 
     financial and other reports designed to provide such 
     information.
       (2) Information.--The information referred to in paragraph 
     (1) is the value, operations, and profitability of any 
     closely held corporation, partnership, or of any other entity 
     in which the debtor holds a substantial or controlling 
     interest.
       (b) Purpose.--The purpose of the rules and reports under 
     subsection (a) shall be to assist parties in interest taking 
     steps to ensure that the debtor's interest in any entity 
     referred to in subsection (a)(2) is used for the payment of 
     allowed claims against debtor.
       On page 147, line 15, strike ``title)'' and insert ``title 
     and excluding a person whose primary activity is the business 
     of owning and operating real property and activities 
     incidental thereto)''.
       On page 150, line 14, insert ``and other required 
     government filings'' after ``returns''.
       On page 150, line 19, insert ``and other required 
     government filings'' after ``returns''.
       On page 152, strike lines 19 through 21 and insert the 
     following:
       (a) Duties in Chapter 11 Cases.--Subchapter I of title 11, 
     United States Code, as amended by section 321 of this Act, is 
     amended by adding at the end the following:
       On page 153, line 1, strike ``1115'' and insert ``1116''.
       On page 153, line 7, strike ``3'' and insert ``7''.
       On page 154, line 9, strike the semicolon and insert ``and 
     other required government filings; and''.
       On page 154, strike lines 14 through 25.
       On page 155, strike line 7 and all that follows through the 
     matter between lines 9 and 10 and insert the following:
       (b) Clerical Amendment.--The table of sections for chapter 
     11 of title 11, United States Code, is amended by adding at 
     the end of the matter relating to subchapter I the following:

``1116. Duties of trustee or debtor in possession in small business 
              cases.

       On page 156, line 19, strike ``150'' and insert ``175''.
       On page 156, line 20, strike ``150-day'' and insert ``175-
     day''.
       On page 162, strike lines 14 through 20 and insert the 
     following:
       ``(A) a plan with a reasonable possibility of being 
     confirmed will be filed within a reasonable period of time; 
     and
       On page 162, line 21, strike ``reason is'' and insert 
     ``grounds include''.
       On page 162, line 22, strike ``that''.
       On page 162, line 23, insert ``for which'' before ``there 
     exists''.
       On page 163, line 1, strike ``(ii)(I)'' and insert 
     ``(ii)''.
       On page 163, line 1, strike ``that act or omission'' and 
     insert ``which''.
       On page 163, line 3, strike ``, but not'' and all that 
     follows through line 8 and insert a period.
       On page 163, line 22, insert after ``failure to maintain 
     appropriate insurance'' the following: ``that poses a risk to 
     the estate or to the public''.
       On page 164, line 3, insert ``repeated'' before 
     ``failure''.
       On page 165, line 2, strike ``and''.
       On page 165, line 3, insert ``confirmed'' before ``plan''.
       On page 165, line 4, strike the period and insert ``; 
     and''.
       On page 165, between lines 4 and 5, insert the following:
       ``(P) failure of the debtor to pay any domestic support 
     obligation that first becomes payable after the date on which 
     the petition is filed.
       On page 165, line 23, insert ``or an examiner'' after 
     ``trustee''.
       On page 167, after line 21, insert the following:

     SEC. 435. TECHNICAL CORRECTION.

       Section 365(b)(2)(D) of title 11, United States Code, is 
     amended by striking ``penalty rate or provision'' and 
     inserting ``penalty rate or penalty provision''.
       On page 183, line 20, strike all through line 13 on page 
     187.
       On page 187, line 14, strike ``703'' and insert ``702''.
       On page 187, line 20, strike ``704'' and insert ``703''.
       On page 189, line 9, strike ``705'' and insert ``704''.
       On page 190, line 13, strike ``706'' and insert ``705''.
       On page 190, line 17, strike ``707'' and insert ``706''.
       On page 190, line 22, strike ``708'' and insert ``707''.
       On page 191, line 8, strike ``709'' and insert ``708''.
       On page 192, line 3, strike ``710'' and insert ``709''.
       On page 193, line 13, strike ``711'' and insert ``710''.
       On page 193, line 21, strike ``712'' and insert ``711''.
       On page 196, line 1, strike ``713'' and insert ``712''.
       On page 196, line 11, strike ``714'' and insert ``713''.
       On page 197, line 12, strike ``715'' and insert ``714''.
       On page 197, line 15, strike ``703'' and insert ``702''.
       On page 197, line 18, strike ``716'' and insert ``715''.
       On page 201, line 3, insert a semicolon after 
     ``following''.
       On page 202, line 4, strike ``717'' and insert ``716''.
       On page 202, line 18, strike ``718'' and insert ``717''.
       On page 248, line 15, strike ``718'' and insert ``717''.
       On page 266, line 13, insert ``and family fishermen'' after 
     ``farmers''.
       On page 268, insert between lines 16 and 17 the following:

     SEC. 1005. FAMILY FISHERMEN.

       (a) Definitions.--Section 101 of title 11, United States 
     Code, is amended--
       (1) by inserting after paragraph (7) the following:
       ``(7A) `commercial fishing operation' includes--
       ``(A) the catching or harvesting of fish, shrimp, lobsters, 
     urchins, seaweed, shellfish, or other aquatic species or 
     products; and
       ``(B) for purposes of section 109 and chapter 12, 
     aquaculture activities consisting of raising for market any 
     species or product described in subparagraph (A);'';
       ``(7B) `commercial fishing vessel' means a vessel used by a 
     fisherman to carry out a commercial fishing operation;'';
       (2) by inserting after paragraph (19) the following:

[[Page S14495]]

       ``(19A) `family fisherman' means--
       ``(A) an individual or individual and spouse engaged in a 
     commercial fishing operation (including aquiculture for 
     purposes of chapter 12)--
       ``(i) whose aggregate debts do not exceed $1,500,000 and 
     not less than 80 percent of whose aggregate noncontingent, 
     liquidated debts (excluding a debt for the principal 
     residence of such individual or such individual and spouse, 
     unless such debt arises out of a commercial fishing 
     operation), on the date the case is filed, arise out of a 
     commercial fishing operation owned or operated by such 
     individual or such individual and spouse; and
       ``(ii) who receive from such commercial fishing operation 
     more than 50 percent of such individual's or such 
     individual's and spouse's gross income for the taxable year 
     preceding the taxable year in which the case concerning such 
     individual or such individual and spouse was filed; or
       ``(B) a corporation or partnership--
       ``(i) in which more than 50 percent of the outstanding 
     stock or equity is held by--

       ``(I) 1 family that conducts the commercial fishing 
     operation; or
       ``(II) 1 family and the relatives of the members of such 
     family, and such family or such relatives conduct the 
     commercial fishing operation; and

       ``(ii)(I) more than 80 percent of the value of its assets 
     consists of assets related to the commercial fishing 
     operation;
       ``(II) its aggregate debts do not exceed $1,500,000 and not 
     less than 80 percent of its aggregate noncontingent, 
     liquidated debts (excluding a debt for 1 dwelling which is 
     owned by such corporation or partnership and which a 
     shareholder or partner maintains as a principal residence, 
     unless such debt arises out of a commercial fishing 
     operation), on the date the case is filed, arise out of a 
     commercial fishing operation owned or operated by such 
     corporation or such partnership; and
       ``(III) if such corporation issues stock, such stock is not 
     publicly traded;''; and
       (3) by inserting after paragraph (19A) the following:
       ``(19B) `family fisherman with regular annual income' means 
     a family fisherman whose annual income is sufficiently stable 
     and regular to enable such family fisherman to make payments 
     under a plan under chapter 12 of this title;''.
       (b) Who May Be a Debtor.--Section 109(f) of title 11, 
     United States Code, is amended by inserting ``or family 
     fisherman'' after ``family farmer''.
       (c)  Chapter 12.--Chapter 12 of title 11, United States 
     Code, is amended--
       (1) in the chapter heading, by inserting ``OR FISHERMAN'' 
     after ``FAMILY FARMER'';
       (2) in section 1201, by adding at the end the following:
       ``(e)(1) Notwithstanding any other provision of law, for 
     purposes of this subsection, a guarantor of a claim of a 
     creditor under this section shall be treated in the same 
     manner as a creditor with respect to the operation of a stay 
     under this section.
       ``(2) For purposes of a claim that arises from the 
     ownership or operation of a commercial fishing operation, a 
     co-maker of a loan made by a creditor under this section 
     shall be treated in the same manner as a creditor with 
     respect to the operation of a stay under this section.'';
       (3) in section 1203, by inserting ``or commercial fishing 
     operation'' after ``farm'';
       (4) in section 1206, by striking ``if the property is 
     farmland or farm equipment'' and inserting ``if the property 
     is farmland, farm equipment, or property of a commercial 
     fishing operation (including a commercial fishing vessel)''; 
     and
       (5) by adding at the end the following:

     ``Sec. 1232. Additional provisions relating to family 
       fishermen

       ``(a)(1) Notwithstanding any other provision of law, except 
     as provided in subsection (c), with respect to any commercial 
     fishing vessel of a family fisherman, the debts of that 
     family fisherman shall be treated in the manner prescribed in 
     paragraph (2).
       ``(2)(A) For purposes of this chapter, a claim for a lien 
     described in subsection (b) for a commercial fishing vessel 
     of a family fisherman that could, but for this subsection, be 
     subject to a lien under otherwise applicable maritime law, 
     shall be treated as an unsecured claim.
       ``(B) Subparagraph (A) applies to a claim for a lien 
     resulting from a debt of a family fisherman incurred on or 
     after the date of enactment of this chapter.
       ``(b) A lien described in this subsection is--
       ``(1) a maritime lien under subchapter III of chapter 313 
     of title 46, United States Code, without regard to whether 
     that lien is recorded under section 31343 of title 46, United 
     States Code; or
       ``(2) a lien under applicable State law (or the law of a 
     political subdivision thereof).
       ``(c) Subsection (a) shall not apply to--
       ``(1) a claim made by a member of a crew or a seaman 
     including a claim made for--
       ``(A) wages, maintenance, or cure; or
       ``(B) personal injury; or
       ``(2) a preferred ship mortgage that has been perfected 
     under subchapter II of chapter 313 of title 46, United States 
     Code.
       ``(d) For purposes of this chapter, a mortgage described in 
     subsection (c)(2) shall be treated as a secured claim.''.
       (d) Clerical Amendments.--
       (1) Table of chapters.--In the table of chapters for title 
     11, United States Code, the item relating to chapter 12, is 
     amended to read as follows:

``12. Adjustments of Debts of a Family Farmer or Family Fisherman with 
    Regular Annual Income...................................1201''.....

       (2) Table of sections.--The table of sections for chapter 
     12 of title 11, United States Code, is amended by adding at 
     the end the following new item:

``1232. Additional provisions relating to family fishermen.''.

       On page 277, line 22, insert ``(a) In general.--'' before 
     ``Section''.
       On page 281, line 21, strike ``714'' and insert ``713''.
       Beginning on page 292, strike line 10 and all that follows 
     through page 294, line 11.
       On page 294, insert between lines 11 and 12 the following:
       (d) Rights and Powers of the Trustee.--Section 546(c) of 
     title 11, United States Code, is amended to read as follows:
       ``(c)(1) Except as provided in subsection (d) of this 
     section, and except as provided in subsection (c) of section 
     507, the rights and powers of the trustee under sections 
     544(a), 545, 547, and 549 are subject to the right of a 
     seller of goods that has sold goods to the debtor, in the 
     ordinary course of the business of the seller, to reclaim 
     such goods if the debtor has received such goods within 45 
     days prior to the commencement of a case under this title, 
     but such seller may not reclaim any such goods unless the 
     seller demands in writing the reclamation of such goods--
       ``(A) before 45 days after the date of receipt of such 
     goods by the debtor; or
       ``(B) if such 45-day period expires after the commencement 
     of the case, before 20 days after the date of commencement of 
     the case.
       ``(2) Notwithstanding the failure of the seller to provide 
     notice in a manner consistent with this subsection, the 
     seller shall be entitled to assert the rights established in 
     section 503(b)(7) of this title.''.
       (e) Administrative Expenses.--Section 503(b) of title 11, 
     United States Code, is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(7) the invoice price of any goods received by the debtor 
     within 20 days of the date of filing of a case under this 
     title where the goods have been sold to the debtor in the 
     ordinary course of such seller's business.''.
       On page 147, line 19 strike ``4,000,000'' and insert 
     ``3,000,000''.

  The PRESIDING OFFICER. Without objection, the amendment is agreed to 
and the motion to reconsider is laid upon the table.
  The amendment (No. 2515), as modified, was agreed to.
  Mr. REED. Mr. President, I rise in strong support of the Reed-
Sessions amendment to the manager's amendment to S. 625, the bankruptcy 
reform legislation we have been considering over the past few days. I 
urge my colleagues to support the passage of this important amendment.
  The Reed-Sessions amendment deals with the reaffirmation of one's 
debt, and it reflects a compromise that has been worked out at length 
between myself, Senator Sessions, the Treasury Department and 
consumers. I believe it is a fair and balanced amendment that seeks to 
treat those who enter into reaffirmation agreements with their 
creditors in a fair and just manner, and to provide them--as well as 
the bankruptcy courts--with the greatest amount of information they 
need in order to make the wisest decisions possible.
  For those of my colleagues unfamiliar with these agreements, a 
reaffirmation is an agreement between a debtor and a creditor in which 
the debtor reaffirms his or her debt and willingness to pay the 
creditor back, even after many of the other debts may have been 
discharged during bankruptcy. The creditor must then file this 
reaffirmation agreement with the bankruptcy court. The court then has 
the opportunity to review this agreement, but in most cases, for one 
reason or another, does not.
  Recently, there have been some documented cases in which creditors 
have used coercive and abusive tactics with consumers in order to 
persuade them to reaffirm their debt, when in many of these cases there 
is no question that the individual can in no way afford to do so. The 
most visible of these cases occurred with Sears, in which the company 
did not even file these reaffirmation agreements with the court, 
therefore negating even the option of the court to review these cases.
  The Reed-Sessions amendment would essentially provide for clear and 
concise disclosures when a debtor chooses to enter into a reaffirmation 
agreement with a creditor. Our amendment would create a uniform 
disclosure form, whereby everyone who is filing a

[[Page S14496]]

reaffirmation agreement must fill this form out. Based on the 
information provided on the form, certain situations will then obligate 
the court to review such agreements in order to determine if the 
reaffirmation agreement is truly within the debtor's best interests.
  In constructing this compromise amendment, I think we have achieved 
some very important goals. First and foremost, we want everyone to 
recognize that a reaffirmation agreement is a very weighty decision, 
and that the individual needs to understand--whether they are 
represented by counsel or not--all the ramifications of the agreement 
into which he or she is entering. In fact, the individual needs to 
understand that they in no way need to file a reaffirmation agreement.
  Another vital issue is to have the court review such cases in which 
the debtor wants to reaffirm his or her debt, but in calculating the 
difference between the person's income and all their monthly expenses, 
it remains impossible for the debtor to do so. In other words, there 
exists a presumption of undue hardship upon the person. It is at that 
point that we want the court to have the ability to step in and say to 
this person, that either they have the ability to repay some of this 
debt because of other sources of funds--such as a gift from the 
family--or that they do not, and therefore the reaffirmation cannot be 
approved by the court.
  Without this amendment, we are concerned that the abuses in the 
reaffirmation system that we have seen will continue to occur, and the 
courts may continue to be left in the dark with respect to the 
existence of these agreements, let alone have the option to review 
them. This amendment is not perfect, and if given the choice, I 
probably would have preferred to go even further than we have in our 
language. With that said, I think it's still important to note that 
with this amendment, we have given our courts and consumers the 
appropriate tools that will provide them with the necessary information 
to make decisions that are in the individual's best interests, not the 
creditor's. That is a crucial point that I wanted to emphasize.
  I appreciate all the efforts of those involved in the process that 
went into constructing this compromise amendment, and I am confident 
that it strengthens the hands of our courts, and more importantly, the 
minds of our consumers as they make decisions that will weigh upon them 
for the rest of their lives.
  The PRESIDING OFFICER. Without objection, the Senator from Minnesota 
yields to the Senator from Missouri for 7 minutes.
  Mr. WYDEN. Parliamentary inquiry, Mr. President.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I would like to ask unanimous consent to 
speak for up to 5 minutes after the Senator from Missouri has spoken.
  Mr. WELLSTONE. Mr. President, I am going to have to object. I am 
willing to let some people speak, but I have been waiting for 3 days to 
get this amendment up and to get this debated.
  The PRESIDING OFFICER. Objection is heard.
  Mr. REID. Mr. President, if I could direct an inquiry, through the 
Chair, to the manager of the bill, it is my understanding that the 
majority leader has asked--and he has spoken to the Senator from 
Minnesota--that his amendment be set aside for purposes of the senior 
Senator from Connecticut to offer an amendment. The debate time on that 
would be----
  Mr. GRASSLEY. Five minutes on our side and 5 minutes on the other 
side.
  Mr. REID. Following the disposition and a vote on the Dodd amendment, 
Senator Wellstone, who has been waiting all week to offer his 
amendment, would get the floor to which he is now entitled.
  The PRESIDING OFFICER. At the present time, there is a unanimous 
consent agreement for the Senator from Missouri to speak for 7 minutes.
  Mr. REID. Objection. I object, and I do so, Mr. President, on the 
basis of----
  The PRESIDING OFFICER. That was already agreed to.
  Mr. REID. No, it wasn't.
  The PRESIDING OFFICER. I am afraid it was. Senator Ashcroft has 7 
minutes.
  Mr. REID. OK, the Senator from Missouri.
  Following that, is Senator Dodd going to be recognized? Has the 
unanimous consent request been accepted?
  The PRESIDING OFFICER. There has not been an agreement to that 
effect. The Chair will entertain one.
  Mr. WELLSTONE. I would object. The only thing I agreed to is Senator 
Aschroft being allowed to speak for 7 minutes; then I retain the floor.
  The PRESIDING OFFICER (Mr. Gorton). The Senator from Missouri is 
recognized for 7 minutes.
  Mr. ASHCROFT. I thank the Chair. And I thank my colleagues for 
allowing me this time.

                          ____________________