[Congressional Record Volume 148, Number 42 (Tuesday, April 16, 2002)]
[House]
[Pages H1302-H1305]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FAMILY FARMER BANKRUPTCY EXTENSION ACT
Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 4167) to extend for 8 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. 4167
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 Laws 106-5, 106-70, 107-8, and 107-17,
is amended--
(1) by striking ``October 1, 2001'' each place it appears
and inserting ``June 1, 2002''; and
(2) in subsection (a)--
(A) by striking ``May 31, 2001'' and inserting ``September
30, 2001''; and
(B) by striking ``June 1, 2001'' and inserting ``October 1,
2001''.
SEC. 2. EFFECTIVE DATE.
The amendments made by section 1 shall take effect on
October 1, 2001.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Wisconsin (Mr. Sensenbrenner) and the gentleman from Arkansas (Mr.
Ross) each will control 20 minutes.
The Chair recognizes the gentleman from Wisconsin (Mr.
Sensenbrenner).
General Leave
Mr. SENSENBRENNER. 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. 4167, the bill
under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of H.R. 4167. This bill reenacts and
extends Chapter 12, a specialized form of bankruptcy relief for small
family farmers for a period of eight months retroactive to October 1,
2001.
Chapter 12 was enacted on a temporary basis in 1986 and has been
subsequently extended on several occasions over the years. Without
question, the family farmer plays a critical role in our Nation's
health and economic well-being. Unfortunately, bad weather, rising
energy costs, volatile marketplace conditions, competition from large
agri-businesses and economic forces experienced by any small business
affect the financial stability of some family farmers.
Although Chapter 12 addresses the special needs of family farmers, it
is utilized infrequently. While total bankruptcy filings in each of the
past 6 years surpassed more than a million cases, the number of Chapter
12 cases has exceeded 1,000 on only one occasion, and that was back in
1996. In the absence of Chapter 12, family farmers may apply for relief
under the bankruptcy code's other alternative, although these generally
do not work quite as well for farmers as Chapter 12.
As my colleagues know, I have consistently supported prior efforts to
extend Chapter 12 in this Congress. In addition, I have supported a
provision included in both the House and Senate versions of H.R. 333,
the Bankruptcy Abuse Prevention and Consumer Protection Act, that would
make Chapter 12 a permanent component of the bankruptcy code.
H.R. 333 is currently in conference. As the chairman of the
bankruptcy conference, I am pleased to report that the anticipated
bankruptcy conference report will likely include a series of other
provisions that will give family farmers even more enhanced protections
under Chapter 12. These farmer-friendly provisions were included in the
bankruptcy conference as part of complex and an extensively negotiable
effort.
Specifically, the other provisions would, first, increase the debt
eligibility limit and require it to be automatically adjusted for
inflation so that more family farmers would qualify for relief under
Chapter 12.
Second, lower the percentage of income that must be derived from
farming operations which would also ensure that more farmers would be
eligible for Chapter 12 than would be under current law.
Third, give farmers more protection with respect to how they may
treat the claims of creditors.
Fourth, for the first time in the history of Chapter 12, allow
certain family fishermen to be eligible for this form of bankruptcy
relief.
Since August of last year, the House and Senate staff have been
actively working to resolve the differences between the respective
bills. In February of this year, House conferees sent the Senate a
proposed offer resolving all outstanding issues. Although the Senate
did not accept the proffer, only a mere handful of issues remain to be
resolved.
In fact, I have scheduled a meeting of the bankruptcy conferees one
week from today for the purpose of resolving these remaining issues.
Accordingly, I expect to complete the bankruptcy conference well before
the extension of Chapter 12, effectuated by this bill, expires.
H.R. 4167 is good for family farmers because it immediately restores
Chapter 12 and maintains the status quo for an appropriate period of
time. This bill serves to support our efforts in resolving the pending
bankruptcy conference which when completed and enacted will provide
even more protection for family farmers.
Accordingly, I urge my colleagues to support H.R. 4167.
Mr. Speaker, I reserve the balance of my time.
Mr. ROSS. Mr. Speaker, I yield myself such time as I may consume.
This bill today is important to my congressional district back home
in rural Arkansas, and quite frankly, it is important to farm families
all across America. Family farmers injured by low commodity prices are
being held hostage by the lack of certainty of whether or not Chapter
12 is going to be there for them.
Just last week, the House and Senate both voted to make Chapter 12
permanent through bankruptcy reform legislation. Yet that legislation
remains in conference committee, and it is an issue that has been going
on since 1997, and I do not know that it is going to be resolved
anytime soon.
I support bankruptcy reform. As a member of the House Committee on
Financial Services, I have fought hard to see that bill to the floor. I
fought hard to see it passed on the floor of the United States House of
Representatives, and I am as frustrated as anyone else that we have
been trying to get bankruptcy reform since 1997, and yet it remains in
the conference committee with an awful lot of amendments attached to it
that have nothing in the world to do with bankruptcy reform, and I am
perhaps a little less optimistic than the Chairman that we may see
bankruptcy reform come our way soon.
I believe the gentleman from Wisconsin raises some very good points
about what we need to do for our farm families as it relates to Chapter
12 bankruptcy reform, and I would, in fact, offer to sign on as a
Democratic sponsor with him to write a bill that addresses the aspects
that are in the overall bankruptcy reform legislation that is stuck in
the conference committee. Let us take that, let us extract those ideas
that will help our farm families out of that bill that has been around
since 1997 in one form, fashion or the other, and let us really try to
file a bill tomorrow that will really help, that will really help our
farm families in an important way.
[[Page H1303]]
I think it is also important to note that although we have not had a
lot of farm families file Chapter 12 bankruptcy, I think the ability to
do that has helped a lot of our farm families be able to negotiate
rather than simply file for bankruptcy. I do not think there is any
dispute that Chapter 12 has worked well in saving our farm families by
protecting the needs of both our financially struggling farm families
as well as protecting their creditors.
Our farmers cannot afford to continue to be left hanging out in the
wind and held hostage by bankruptcy legislation that is stuck in
conference committee. I am not opposing the bankruptcy reform bill. I
support it. I supported it in the House Committee on Financial
Services. I supported it on the floor of the United States House of
Representatives. I hope it is enacted and I hope it is enacted soon.
I also hope a new farm bill is enacted soon. I am on the House
Committee on Agriculture. We wrote and passed that bill last October.
It went to the Senate. They put some amendments on it that have really
caused a lot of problems for farm families in my district. That, too,
is now in conference committee. It seems like these conference
committees are really causing a lot of havoc for our farm families,
everything from bankruptcy reform to a new farm bill.
Our farm families, they need help and they need it now. I think it is
important to note that farm families are the backbone of our rural
communities, of rural America, and when we lose farm families, it has a
devastating impact on the economy of rural America. Unfortunately, our
farmers are under increasing financial pressure each year to make ends
meet due to low crop prices, added debt simply to get their crops
planted and increasing competition from imports from other countries.
We have seen that with commodities, with Canadian soft wood lumber.
We have even seen it with the dumping of the so-called catfish that are
being raised in cages in polluted rivers in Vietnam.
When Chapter 12 of the bankruptcy code was first enacted, there was
legitimate concern over whether it would work. We now know that it has
worked, and there is no reason why our farmers should have to wait to
know that this safety net is there for them. Yet it has not been there
for them since October 1 of last year.
We must move forward in helping our farm families. This measure
extends Chapter 12 for 8 months, retroactively starting on October 1
and ending on May 31. While this is only a temporary fix, while the
conference committee continues to do what they have done since the mid
to late 1990s and, that is, try to work out a bankruptcy reform bill
that can pass both the House and Senate and gain the President's
signature, it is desperately needed for our farmers, for rural America.
It is needed now and that is why this temporary fix is so very, very
important.
I urge my colleagues not to delay any further, pass the Chapter 12
bankruptcy extension. Please let us pass it today for our farm
families, so that they can do what they do best, and that is, feed
America and feed much of the world.
Mr. Speaker, I yield as much time as he may consume to the gentleman
from Texas (Mr. Sandlin), whose district joins mine in Texarkana.
{time} 1530
Mr. SANDLIN. Mr. Speaker, the well-being of family farms in America
is critical to our economy and to the American way of life. Family
farmers deserve certainty in pricing. They deserve certainty in legal
protections. This legislation and bankruptcy reform is a part of that
critical protection for American families and American farmers.
Last year both the House and the Senate voted to make Chapter 12
permanent, and yet here we sit. No decision, no reform, no protection;
and uncertainty reigns supreme. We all recognize that it is important
to protect both the family farmer and the creditor who provides needed
and necessary capital. Neither the farmer nor the creditors can afford
endless uncertainty.
Mr. Speaker, it is critical to help farmers now. We need a legitimate
farm bill that is truly pro-agriculture. Additionally, we need
legitimate protections for farmers as provided by this bill. Family
farmers face uncertainty every day; it is nothing new. Weather, foreign
markets, increasing competition from big corporate farmers, the list
goes on and on. They should not face another uncertainty. We can
prevent it. We can do something about it. We can pass this bill. We can
tell American farmers and their families that their well-being is
important to us.
Now this bill is not the be-all and the end-all. It is a temporary
fix; but one that is critical, nevertheless. Haul this safety net up
for our farmers and their children. Extend Chapter 12 for 8 months
starting on October 1 and ending on May 31. Let us pass this bill and
support our family farmers in America.
Mr. Speaker, I thank the gentleman from Wisconsin (Mr. Sensenbrenner)
and the gentleman from Arkansas (Mr. Ross) for calling attention to
this issue and presenting it to us today. Our farmers deserve our
attention and our respect.
Mr. ROSS. Mr. Speaker, I yield such time as he may consume to the
gentleman from Illinois (Mr. Phelps).
Mr. PHELPS. Mr. Speaker, I rise to support H.R. 4167, which extends
Chapter 12 bankruptcy protection. However, I have concerns that this
legislation will only temporarily extend Chapter 12 bankruptcy
protection, by being retroactive to October 12 and extending through
the end of May. Our farmers need this legislation to be made permanent,
the point we made about a week ago.
When Chapter 12 was enacted in 1986, there were some questions
whether it would work properly, so Congress made it temporary. The idea
behind Chapter 12 is very straightforward. Other forms of bankruptcy
relief are either too costly or do not fit the particular circumstances
of a family farm. If one is out in the small hamlets and villages, they
will make that very clear.
Last week I offered a motion to instruct the conferees on the farm
bill; and my motion to instruct, which passed overwhelmingly, asked the
conferees on the farmer bill to accept the language in the Senate bill
that would make Chapter 12 of the bankruptcy code permanent. I do not
think there is any controversy whatsoever that Chapter 12 works well
and that it protects our family farmers who are in distress, or that it
properly balances the legitimate needs of financially troubled farmers
and their creditors, and that it preserves the family farm, which is
our whole intent, our whole point.
It is our hope that the farm bill conferees will include Chapter 12
bankruptcy protection in the farm bill and that we will finally be able
to offer this to our family farmers. Chapter 12 bankruptcy protection
is also included in the bankruptcy bill which is currently in
conference. Again, it is my hope we are able to pass this legislation
and that it does not remain tied up in conference. Our farmers need
this option; and I hope that we see through all of this, that we can
simplify, cut to the chase and equip the family farms with what they
need to face the terrible situation that was not brought on through any
fault of their own.
Mr. SENSENBRENNER. Mr. Speaker, I yield 2 minutes to the gentleman
from Michigan (Mr. Smith).
Mr. SMITH of Michigan. Mr. Speaker, this legislation is very
important to farmers. I have been working on it for the last 6 years,
trying to make Chapter 12 permanent so farmers are not put in the
predicament of kind of an on-and-off situation, and also the bankruptcy
courts holding pending some of those farm applications. I am glad that
we are bringing it up to date and extending the Chapter 12 provisions
until June 1, 2002.
Chapter 12 was originally enacted in 1986. We had a lot of farm
bankruptcies. There was a problem. The other chapters were putting
farmers at a disadvantage, making them sell their equipment which made
it impossible for them to reorganize and start developing the kind of
farm operation that could pay back some of those loans.
I appreciate that this is important legislation. It is an important
piece of bankruptcy law. I am hopeful that we can make Chapter 12
permanent as the chairman's bankruptcy bill provides for. There are
more than 12,000 farmers that have filed for Chapter 12 bankruptcy
since it went into effect in 1986,
[[Page H1304]]
and they have been able to restructure their debts without having to
liquidate property. The continued low commodity prices, the financial
stresses facing farmers further exacerbate the importance of extending
Chapter 12.
Mr. Speaker, I have introduced several bills. I would have preferred
that we were going ahead with my bill, but I appreciate the chairman
helping to make sure that this law is current for those farmers
desperately needing bankruptcy protection.
Why is Chapter 12 so important to farmers--especially small, family
farmers? Chapter 12 contains special provisions that allows farmers to
use bankruptcy laws in the manner that is available to others seeking
bankruptcy.
Under the bankruptcy laws, debtors must only have a certain level of
debt to reorganize rather than liquidate. Many farmers have too many
assets to do this, primarily because of the value of their farm
equipment--their tractors, plows, combines, and tools. Obviously, this
equipment is essential to the farm operation. If this equipment were
used to pay off debts, how would the farmer then be able to operate the
farm and reconstruct the business? Chapter 12 recognizes this fact of
farm life and lets these farmers reorganize their debts rather than
liquidate their property.
Extending this provision is especially critical today. There are many
farmers who have filed for bankruptcy since the last Chapter 12
extension expired last fall. The courts are waiting for Congress to act
and change the law to allow these farmers to re-file under Chapter 12.
These farmers need the options available under Chapter 12 now.
I have introduced legislation that would make Chapter 12 protection
permanent, and working with the Gentle Lady from Wisconsin, Tammy
Baldwin, I have offered many bills extending these protections, most
recently H.R. 2914.
Like many other Members, I am hoping that we can free the logjam that
is holding up permanent Chapter 12 protections for farmers. I
understand that the House and Senate conferees will be meeting soon on
H.R. 3333, the bankruptcy reform bill. Let's hope that an agreement can
be reached soon so that we do not have to come to the floor of the
House to extend once again a provision that should be a permanent
fixture in law.
I would like to express my support for the Gentleman for Wisconsin,
Mr. Sensenbrenner, the Chairman of the Judiciary Committee, not only
for this bill, but also for his efforts to get the other body moving on
a bankruptcy reform compromise that will make Chapter 12 permanent.
Mr. Speaker, Chapter 12 is critically important if we are to help
family farmers maintain farms that, for many, have been in their
families for generations. I urge my colleagues to support this very
important piece of legislation.
Mr. ROSS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would simply close in support of the bill by saying
that this weekend I was driving across my congressional district, as I
do every weekend, some 75,000 miles we traveled across those 29
counties over the past 16 months. There is a lot of row crop land not
planted because our farm families do not know what to do. They do not
know what to do because they are waiting on Chapter 12 bankruptcy
protection; they are waiting on a new farm bill, both of which are tied
up in conference committees.
Our farm families do not need more conference committees. They need
Chapter 12 bankruptcy reform, and they need it permanent and they need
it today. They need a new farm bill today. When that bill got gutted
with amendments in the Senate and went to conference committee, in my
district we began to see three-, four-, and five-generation farm
families selling out. The price of equipment at those auctions dropped
35 percent overnight after those amendments were attached to the farm
bill in the Senate and it was sent to the conference committee.
The time for action on bankruptcy reform, the time for action on a
new farm bill for our struggling farm families is now. I think it is
important to note that this bill sunsets 45 days from today. This is a
temporary fix, and our farm families need it; but they need a long-term
solution so they can continue to do what they do best, generation after
generation after generation, and that is simply feed America and feed
the world. I am proud today to stand in support of our farm families.
Mr. Speaker, I yield back the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I have been listening with great interest to the three
speakers on behalf of my bill on the Democratic side of the aisle, and
each of them complained about how long the bankruptcy conference has
taken. Believe me, as the chairman of that conference, I am even more
frustrated than they are because I have to deal with attempting to
negotiate out very complex issues.
Mr. Speaker, let me tell the gentleman that we have made Chapter 12
permanent in that bankruptcy conference, and we have made it better for
farmers so farmers will get a better deal by having the bankruptcy
conference passed and signed into law, not only in Chapter 12, but also
on the entire economic effect of bankruptcies on our economy.
In the last several years, bankruptcy courts have written off $44
billion of debt every year, and that amounts to $400 of additional cost
of goods and services, in effect, a $400 hidden tax on people all
throughout this country who pay their bills as agreed.
I think practically every farm family, let alone every other family
in this country, would rather have that $400 in their pocket rather
than having to pay more for goods and services because debts have been
written off. One of the purposes of the bankruptcy bill that we have
been dealing with has been to drive that $44 billion down so that the
hidden tax on every American family would not be as great as $400 a
year.
Last February I sent an offer to the Senate conferees. They rejected
it. They never came back with their own offer; and I have called a
meeting of the bankruptcy conference for Tuesday, April 23, 2002. I
would like to ask the three Democratic speakers on behalf of Chapter 12
if they would do me a favor, and that is to write the Democratic Senate
conferees and ask them to reach an agreement on the bankruptcy bill.
If we reach that agreement, I can assure the gentlemen that we can
bring that bill to the floor the end of this month or the first part of
next month and beat the farm bill conference to the President's desk.
I regret even having to talk about this because both Houses of
Congress did pass bankruptcy reform legislation in the last Congress
that included a permanent extension of Chapter 12, and guess what
happened? The former President, Mr. Clinton, pocket vetoed the bill. If
he had not done so, we would not be talking about this issue at all.
Mr. ROSS. Mr. Speaker, will the gentleman yield?
Mr. SENSENBRENNER. I yield to the gentleman from Arkansas.
Mr. ROSS. Mr. Speaker, I am in the House of Representatives. I am
proud to be a conservative, small-town-value kind of Democrat that is
standing before the gentleman today, and I am appalled that for some
reason a Member of the House has some control over what happens in a
Senate conference committee. I have no more control over the Democrats
in the Senate than the gentleman from Wisconsin does.
Mr. Speaker, I think the American people are sick and tired of the
partisan bickering that goes on in the Nation's Capitol. It should not
be what makes the Republicans or Democrats look good or bad; it ought
to be about doing what is right and providing a strong, effective voice
for the people who sent us here to represent them.
Mr. SENSENBRENNER. Mr. Speaker, absolutely. I sent an offer over to
the Senate 2 months ago to resolve all of the issues in the bankruptcy
conference. They rejected it, but they never came back with a
counterproposal of their own. So whatever we send over there, they
appear not to like; but they do not have a counterproposal.
One of the things I think we are supposed to do in reconciling bills
is to go back and forth until something is reached in the middle. I
want to bring this matter to a head. I want to get the bankruptcy bill
off the national table. I want to get Chapter 12 made better and made
permanent, and I want to do it by getting H.R. 333 passed through both
Houses and signed by the President of the United States. All I am doing
is enlisting the gentleman's help and the help of the two other
speakers to write a letter to those folks over there and tell them to
be constructive, because they have not been that constructive to date.
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his
support for H.R.
[[Page H1305]]
4167, which retroactively extends Chapter 12 bankruptcy for family
farms and ranches to June 1, 2002. Chapter 12 bankruptcy expired on
October 1, 2001. This legislation is very important to the nation's
agriculture sector.
This Member would express his appreciation to the distinguished
gentleman from Wisconsin (Mr. Sensenbrenner), the Chairman of the House
Judiciary Committee, for introducing H.R. 4167. In addition, this
Member would like to express his appreciation to the distinguished
gentleman from Michigan (Mr. Smith) for his efforts in getting this
measure to the House Floor for consideration.
This extension of Chapter 12 bankruptcy is supported by this Member
as it allows family farmers to reorganize their debts as compared to
liquidating their assets. The use of the Chapter 12 bankruptcy
provision has been an important and necessary option for family farmers
throughout the nation. 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, it will be another very painful blow to an agricultural sector
already reeling from low commodity prices. Not only will many family
farmers have no viable option other than to end their operations, but
it will also cause land values to likely plunge. Such a decrease in
value of farmland will negatively affect the ability of family farmers
to earn a living. In addition, the resulting decrease in farmland value
will impact the manner in which banks conduct their agricultural
lending activities. Furthermore, this Member has received many contacts
from his constituents supporting extension of Chapter 12 bankruptcy
because of the situation now being faced by our nation's farm
families--it is clear that the agricultural sector is hurting.
I closing, this Member urges his colleagues to support H.R. 4167.
Mr. GEKAS. Mr. Speaker, I rise today to lend my strong support for
H.R. 4167 and for farmers in financial distress. Extension of Chapter
12 is necessary to insure that these financially distressed farmers are
granted the protection they need.
I would doubt that there is any one of us who does not want to aid a
farmer in distress. Mr. Speaker, I am sure that H.R. 4167 will be
approved today because the vast majority of this body recognizes the
difficulty and risk inherent in farming and want to give farmers a
fail-safe net of bankruptcy in case they become distressed. I have
consistently supported efforts to extend Chapter 12. Since the
bankruptcy reform movement started five years ago, there was not one
moment in which we did not consider making Chapter 12 permanent.
Chapter 12 of the Bankruptcy code is a specialized form of bankruptcy
relief available to family farmers. The special attributes of Chapter
12 makes it better suited to meet the particularized needs of family
farmers in financial distress than other forms of bankruptcy relief,
such as Chapter 11 (business reorganization) or Chapter 13 (individual
reorganization). Chapter 12 allows family farmers to keep essential
farm assets and reorganize their debts.
Chapter 12 was enacted on a temporary seven-year basis as part of the
Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy
Act of 1986 in response to the farm financial crisis of the 1980's. It
has subsequently been extended on several occasions. H.R. 333, the
Bankruptcy Abuse Prevention and Consumer Protection Act, would make
Chapter 12 permanent.
But isn't there more we can do? Of course farmers want a fail-safe
net of bankruptcy in case they go into distress, but more than that,
they want expanded markets, and an end to the federal death tax. We
stand here today debating the merits of a bill that will aid failing
farms, but we can't stop here--we must keep fighting to help American
farms succeed. The best farmers in the world, American farmers, want a
fair chance to compete with other farmers around the world and they
want a legitimate chance to make a profit. I will continue to support
Trade Promotion Authority and death tax repeal to help insure that
American farmers have less need for the bankruptcy protections we vote
to advance here today.
Mr. Speaker, I support H.R. 4167 for distressed farmers, but I urge
my colleagues to grant the president Trade Promotion Authority so that
markets for our agricultural goods will be opened from which our
farmers will profit. I also ask that my colleagues permanently abolish
the federal death tax, which is a specter that hangs over every family
farmer who looks forward to passing his farm on to the next generation.
Action on these pieces of legislation sends a message that the United
States Congress recognizes the importance of the hard work, pride and
competitive nature of the American agriculturalist.
Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Pence). The question is on the motion
offered by the gentleman from Wisconsin (Mr. Sensenbrenner) that the
House suspend the rules and pass the bill, H.R. 4167.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________