[Congressional Record Volume 146, Number 82 (Monday, June 26, 2000)]
[House]
[Pages H5101-H5103]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




EXTENDING PERIOD FOR WHICH CHAPTER 12 OF TITLE 11 OF UNITED STATES CODE 
                              IS REENACTED

  Mr. COBLE. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 4718) to extend for 3 additional months the period for which 
chapter 12 of title 11 of the United States Code is reenacted.
  The Clerk read as follows:

                               H.R. 4718

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

     SECTION 1. AMENDMENTS.

       Section 149 of title I of division C of Public Law 105-277, 
     as amended by Public Law 106-5 and Public Law 106-70, is 
     amended--
       (1) by striking ``July 1, 2000'' each place it appears and 
     inserting ``October 1, 2000''; and
       (2) in subsection (a)--
       (A) by striking ``September 30, 1999'' and inserting ``June 
     30, 2000''; and
       (B) by striking ``October 1, 1999'' and inserting ``July 1, 
     2000''.

     SEC. 2. EFFECTIVE DATE.

       The amendments made by section 1 shall take effect on July 
     1, 2000.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. Coble) and the gentleman from California (Mr. 
George Miller) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina (Mr. Coble).

                              {time}  1445


                             General Leave

  Mr. COBLE. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on H.R. 4718, the bill under 
consideration.
  The SPEAKER pro tempore (Mr. Petri). Is there objection to the 
request of the gentleman from North Carolina?

[[Page H5102]]

  There was no objection.
  Mr. COBLE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, Chapter XII is a specialized form of bankruptcy relief 
only available to family farmers. It was first extended on a temporary 
basis in 1986 to respond to the particularized needs of farmers in 
financial distress as part of the Bankruptcy Judges, United States 
Trustees and Family Farmer Bankruptcy Act. Following its initial 
extension in 1993 to September 30, 1998, it has been further extended 
on several occasions and is currently due to expire on July 1 in the 
year 2000.
  As we know, the House more than a year ago passed H.R. 833, the 
Bankruptcy Reform Act of 1999, with an overwhelmingly bipartisan vote 
of 313 to 108. As one of its key provisions, H.R. 833 would make 
Chapter XII a permanent form of bankruptcy relief for family farmers.
  The Senate counterpart to H.R. 833, which also passed with a strong 
bipartisan vote of 83 to 14, contains a nearly identical provision. 
While significant progress has been made in reconciling the House and 
Senate bills, final action is still required.
  As we await final passage of H.R. 833, it is clear that certain 
sectors of the farming industry continue to suffer financial distress 
resulting from devastating weather conditions or other factors.
  We also note, however, that the current extension of Chapter XII is 
due to expire on July 1. If Chapter XII is not available, farmers will 
be forced to seek relief under the Bankruptcy Code's other 
alternatives. No other form of bankruptcy relief works quite as well 
for farmers as does Chapter XII.
  Chapter VII would require the farmer to liquidate his or her farming 
operation. Many farmers would simply be ineligible to file under 
Chapter XIII because of its debt limits.
  Chapter XI is an expensive process that does not accommodate the 
special needs of farmers. H.R. 4718 would simply extend Chapter XII for 
a 3-month period, which expires on October 1, 2000. This extension will 
provide important protections, at least on an interim basis, to family 
farmers.
  Upon final passage and enactment of H.R. 833, however, Chapter XII 
would become a permanent fixture of the Bankruptcy Code. I commend my 
colleague, the gentleman from Michigan (Mr. Smith) for his continuing 
leadership on this matter and long-standing commitment to family 
farmers. I urge my colleagues to vote in favor of H.R. 4718.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, on behalf of the members of the Committee on the 
Judiciary on this side, today we rise in strong support of this 
legislation but we must also say that we consider this legislation an 
insult in the sense that it provides only 3 additional months for 
protection under Chapter XII of the Bankruptcy Code.
  While I seriously doubt anyone will vote against this bill, it is 
shameful that we are being asked to play games yet again with the 
future of family farmers in America as we are witnessing one of the 
worst farm crisis since the birth of Chapter XII more than a decade 
ago.
  No one disagrees that Chapter XII should be made permanent. No one. 
Bipartisan legislation was introduced in the other body by Senators 
Grassley and Daschle and in the House by our colleagues, the gentleman 
from Minnesota (Mr. Minge) and the gentleman from Michigan (Mr. Smith).
  Those bills also increase the eligibility of threshold from the 
current $1.5 million in aggregate debt to $3 million and give certain 
tax debts nonpriority status if the debtor completes the plan.
  The National Bankruptcy Review Commission recommended increasing the 
threshold and making Chapter XII permanent, and all three provisions in 
those bills have been endorsed in a joint statement by the Commercial 
Law League of America, and National Bankruptcy Conference and the 
National College of Bankruptcy.
  Unfortunately, it seems that the secret shadow conference has 
betrayed family farmers and will not include all of these provisions in 
the final bankruptcy legislation that is now lumbering through the 
process.
  This stealth conference, which excludes the minority and makes 
decisions with industry lobbyists outside public view will, we are 
told, attempt to sneak its work into an unrelated conference report. No 
member of the public will have an opportunity to review this secret 
bill before the vote. Anything could be in it. We will not know until 
it is too late.
  In fact, the sponsor of this legislation introduced a measure earlier 
in this Congress which would have extended Chapter XII by 6 months past 
the sunset date rather than merely by the 3 months in this legislation. 
He then introduced a bill granting only an additional 3 months. 
Evidently this more modest effort found favor with the Republican 
leadership. It attracted the cosponsorship of the chairman of the 
Subcommittee on the Commercial and Administrative Law and was given a 
fast track. Today we are repeating that farce by extending Chapter XII 
for another 3 months.
  The gentlewoman from Wisconsin (Ms. Baldwin) attempted to make 
Chapter XII permanent when the legislation was considered in the 
Committee on the Judiciary and was stopped by a procedural 
technicality, and that is the reason that we have this legislation here 
today. I urge my colleagues to support this legislation but I must say 
it is simply inadequate to address the farm crisis that is confronting 
so many families in America today.
  Mr. Speaker, I yield back the balance of my time.
  Mr. COBLE. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Michigan (Mr. Smith), who has worked endlessly on this 
legislation.
  (Mr. SMITH of Michigan asked and was given permission to revise and 
extend his remarks.)
  Mr. SMITH of Michigan. Mr. Speaker, the gentleman from North Carolina 
(Mr. Coble) and the gentleman from California (Mr. George Miller) make 
very good points. Agriculture is in a very precarious situation right 
now. Many farmers are facing bankruptcy; and of course, that is why it 
is so important that we do not let the provisions in the bankruptcy law 
expire in 5 days as they would under existing law.
  The question of whether this should be 3 months or 6 months or 9 
months or permanent is a question, and I think everybody agrees that in 
the long run it should be permanent.
  Let me explain to my colleagues why we are going ahead with my bill 
that calls for 3 months. It is because the bankruptcy bill itself is 
moving through the House and the Senate right now. There are hopes from 
many parties that we will conclude a bankruptcy bill and have it signed 
into law within the next 3 months. There is a concern from some of the 
House Members and some of the Senators that if we start passing 
legislation such as the continuation of these provisions for family 
farmers, it will start a lot of the other parts of the bankruptcy law 
that is agreed to by everybody to come to the floor to get rid of that 
particular problem and make those solutions permanent.
  There is a hope that we can do everything and hopefully we will do it 
this year.
  Mr. Speaker, just a comment. As a farmer from Michigan, let me 
comment just for a minute on the seriousness of the plight facing 
American agriculture, the farmers and ranchers of this Nation.
  These are people that have lived most of their life getting up at 
sunrise and finishing work 12, 14 hours later at sunset. They have been 
called the backbone of our society because it has been the 
industriousness of hard-working family farmers that has allowed people 
to move off the farm and into manufacturing production that has made 
this country so great and so strong economically.
  We are looking at an agriculture that is faced with prices that are 
at 30-year lows in terms of the commodity prices they are receiving for 
many different reasons. We are just starting to develop new farm policy 
to try to help farmers. This is simply one of the many tools that we 
give to farmers, and the provisions of Chapter XII simply say to 
farmers they do not have to sell their tractor and their plow and their 
drag

[[Page H5103]]

and their welder, and then try to pay off their debts. It says, look, 
they can keep some of that equipment and try to work it out themselves 
within a limited period of time.
  The provisions of this bill only apply to family farmers. Chapter XII 
of title XI of the Bankruptcy Code is only available to these kind of 
family farmers. Congress temporarily extended Chapter XII for 9 months. 
Now we are looking at another extension of 3 months. The logic is that 
a farmer, like anybody else, needs particular tools to survive.
  I am pleased that the gentleman from Pennsylvania (Mr. Gekas) and 
this body are taking action on this legislation today. With 5 days to 
go before expiration, time is very short. We need to get this over to 
the Senate, and we need to get it to the President for his signature.
  Mr. Speaker, agriculture continues to be in serious condition right 
now. It is the 3rd consecutive year of such hardship. Times are tough 
in farm country. While the rest of the economy is booming, American 
farmers and ranchers have not been invited to the party. Commodity 
prices are at record lows, export markets are weak, and no relief is 
expected any time soon. While the farm credit system is currently 
sound, there are some producers who just will not be able to make it in 
the short term. Bankruptcy filings by farmers have become regular 
occurrence.
  I have visited with a lot of farmers from my district. Many are as 
smart as most any entrepreneur of small business. Yet because of 
prices, even with their efforts to lay off workers and dramatically 
expand their working week, their family farms may not make it.
  Chapter 12 of the title 11 bankruptcy code is only available to 
family farmers. Last September, Congress temporarily extended chapter 
12 for 9 months. Now we are looking at another extension because 
chapter 12 now is set to expire in five days, on July 1, 2000. H.R. 
4718, will temporarily extend chapter 12 for another 3 months so that 
this critical option for America's family farmers does not expire.
  Chapter 12 allows family farmers the option to reorganize debt rather 
than having to liquidate when declaring bankruptcy.
  The logic is that a farmer, like anybody else that needs particular 
tools to survive, needs the temporary allowance to keep those farm 
tools. In this case, Chapter 12 allows a farmer to continue to have 
some of those tools of production in order to keep farming while they 
are reorganizing finances. I think it is important that these 
provisions only apply to a family farm. That is characterized under 
current law by a debt that does not exceed $1.5 million, 80 percent or 
more of the debt must be agricultural, and users of Chapter 12 must 
have over 50 percent of their individual gross income from agriculture 
and their farming operation.
  I am pleased that Chairman Gekas and this body is taking action on 
this legislation today. With five days to go before expiration, time is 
very short. Pending bankruptcy legislation (H.R. 833) now in conference 
between the House and Senate will make chapter 12 permanent. We hear 
that this bill could come to the floor any week. However, issues such 
as abortion and other issues are delaying any final resolve of the 
bankruptcy bill. Until enactment of that legislation, H.R. 4718 is 
necessary to extend the law beyond July 1st, its current expiration 
date. This legislation is needed to assure producers that this risk 
management tool is available to them.
  Again, I thank both sides of the aisle and the chairman for moving 
ahead.
  Mr. BEREUTER. Mr. Speaker, this Member rises today to express his 
support for H.R. 4718, which extends Chapter 12 of the Bankruptcy Code 
for three additional months until October 1, 2000. Chapter 12 
bankruptcy, which allows family farmers to reorganize their debts as 
compared to liquidating their assets, will expire on July 1, 2000, 
without the passage of this measure.
  This Member would thank the distinguished gentleman from Michigan 
(Mr. Nick Smith) for introducing H.R. 4718. In addition, this Member 
would like to express his appreciation to the distinguished Chairman of 
the Judiciary Committee from Illinois (Mr. Henry Hyde), and the 
distinguished Ranking Minority Member of the Judiciary Committee from 
Michigan (Mr. John Conyers, Jr.) for their efforts in expediting this 
measure to the House Floor today.
  Chapter 12 bankruptcy has been a viable option for family farmers 
nationwide. It has allowed family farmers to reorganize their assets in 
a manner which balances the interests of creditors and the future 
success of the involved farmer. If Chapter 12 bankruptcy provisions are 
not extended for family farmers, this will have a drastic impact on an 
agricultural sector already reeling from low commodity prices. Not only 
wail many family farmers have to end their operations, but also land 
values will likely plunge downward. Such a decrease in land values will 
affect both the ability of family farmers to earn a living and the 
manner in which banks, making agricultural loans, conduct their lending 
activities. This Member has received many contacts from his 
constituents regarding the extension of Chapter 12 bankruptcy because 
of the serious situation now being faced by our nation's farm 
families--although the U.S. economy is generally healthy, it is clear 
that agricultural sector is hurting.
  The gravity of this situation for family farmers nationwide makes it 
imperative that Chapter 12 bankruptcy is extended for at least this 
three-month period. Beyond this extension, it is this Member's hope 
that Chapter 12 bankruptcy is extended permanently as provided in the 
Bankruptcy Reform Act of 1999 (H.R. 833) which on May 5, 1999, passed 
the House by vote of 313-108, with my support. This Member is an 
original cosponsor of the Bankruptcy Reform Act, that was introduced by 
the distinguished Chairman of the Judiciary Subcommittee on Commercial 
and Administrative Law from Pennsylvania (Mr. George Gekas). Moreover, 
the Senate also passed a version of bankruptcy reform. Unfortunately, 
at this time, bankruptcy reform is caught in the tangled web of an 
informal conference; therefore, the three-month extension for Chapter 
12 bankruptcy is a necessity for our family farmers
  I closing, this Member would encourage his colleagues support for 
H.E. 1718, which provides a three-month extension of Chapter 12 
bankruptcy
  Mr. COBLE. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from North Carolina (Mr. Coble) that the House suspend the 
rules and pass the bill, H.R. 4718.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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