[Congressional Record Volume 148, Number 126 (Tuesday, October 1, 2002)]
[House]
[Pages H6848-H6850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROTECTION OF FAMILY FARMERS ACT OF 2002
Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 5472) to extend for 6 months the period for which
chapter 12 of title 11 of the United States Code is reenacted.
The Clerk read as follows:
H.R. 5472
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protection of Family Farmers
Act of 2002''.
SEC. 2. 6-MONTH EXTENSION OF PERIOD FOR WHICH CHAPTER 12 OF
TITLE 11 OF THE UNITED STATES CODE IS
REENACTED.
(a) Amendments.--Section 149 of title I of division C of
Public Law 105-277 is amended--
(1) by striking ``January 1, 2003'' each place it appears
and inserting ``July 1, 2003''; and
(2) in subsection (a)--
(A) by striking ``May 31, 2002'' and inserting ``December
31, 2002''; and
(B) by striking ``June 1, 2002'' and inserting ``January 1,
2003''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on January 1, 2003.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Wisconsin (Mr. Sensenbrenner) and the gentleman from Pennsylvania (Mr.
Holden) 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
[[Page H6849]]
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on H.R. 5472, the bill
currently 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 have a lengthy statement which I shall put into the
Record; but, basically, this bill reenacts and extends chapter 12 of
the bankruptcy code, which is a specialized form of bankruptcy relief
for family farmers, for a period of 6 months from January 1, 2003 until
July 1, 2003.
Currently, chapter 12 expires on January 1 of next year. There is a
permanent extension and recodification of chapter 12 and the conference
report on H.R. 333, the bankruptcy reform legislation which the
conferees have agreed on, but which have not been scheduled for House
consideration, it is my hope that the House and the Senate will pass
this conference report before adjournment; but, since we do not know
when adjournment will be, and since we do not know whether there will
be a lame duck session, this is an essential safety valve to keep
chapter 12 in place should, for any reason whatsoever, the bankruptcy
conference report fail enactment during the current Congress.
So I would urge my colleagues to support this legislation.
Mr. Speaker, I rise in support of H.R. 5472.
This bill reenacts and extends Chapter 12 of the Bankruptcy Code--a
specialized form of bankruptcy relief for family farmers--for a period
of six months, from January 1, 2003 until July 1, 2003. This extension
is necessary in light of the pending expiration of Chapter 12--due to
occur on January 1st of next year.
Chapter 12 was enacted on a temporary basis in 1986 in response to
the financial upheaval farmers were facing at that time. Owing to the
continued volatility of the agricultural market, Chapter 12 has been
extended on several occasions over the years. The most recent extension
was enacted as part of the Farm Security and Rural Investment Act of
2002, which became law last May.
Without question, family farmers play a critical role in our nation's
health and economic well-being. Unfortunately, recurrent bad weather,
rising energy costs, unpredictable market conditions, and competition
from large agribusinesses and overseas producers are just some of the
economic forces experienced by family farmers across our nation.
Chapter 12 addresses the special needs of family farmers by giving
them the tools, under the protection of bankruptcy, to facilitate their
financial rehabilitation. On the other hand, Chapter 12 is utilized
infrequently. While total bankruptcy filings in each of the past six
years surpassed more than one million cases, the number of Chapter 12
cases exceeded one thousand 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 alternatives, although these
generally do not work quite as well for farmers as Chapter 12.
Nevertheless, Chapter 12 is important for family farmers and--to his
great credit--my colleague from the Commonwealth of Pennsylvania (Mr.
Gekas) should be commended for his leadership and unwavering efforts
over the years to make this form of bankruptcy relief a permanent
component of the Bankruptcy Code. As you know, the conference report on
H.R. 333, the ``Bankruptcy Abuse Prevention and Consumer Protection
Act,'' would not only make Chapter 12 permanent, but amend the current
law to include many other significant farmer-friendly provisions. These
provisions include the following.
First, H.R. 333 would increase the debt eligibility maximum and
require this cap to be automatically adjusted for inflation on a
periodic basis. In addition, H.R. 333 would lower the income percentage
limit so that more family farmers will be able to file for Chapter 12
relief.
Second, H.R. 333 gives farmers more protections with respect to how
they may treat the claims of creditors.
For example, it allows certain tax claims to be reclassified in order
to free up assets so that they can be sold. This will enhance a
farmer's ability to propose a plan of repayment to creditors and help
the farmer better effectuate his or her financial ``fresh start.''
Third, H.R. 333 prohibits a farmer from being required, under a
modified plan of reorganization, to make payments that would leave the
farmer with insufficient funds to maintain the farm's operations after
all payments under the modified plan are made.
In addition, H.R. 333--for the first time in the history of Chapter
12--would allow certain family fishermen to be eligible for this
special form of bankruptcy relief.
I ask all of you who say they support Chapter 12 and family farmers
to put your words into action and support final passage of the
conference report on H.R. 333.
H.R. 5472 is good for family farmers because it ensures Chapter 12
will be available in the upcoming months while we continue our efforts
to complete consideration of the bankruptcy conference report, which
will provide even more protections for family farmers when enacted.
Accordingly, I urge my colleagues to support H.R. 5472.
Mr. Speaker, I reserve the balance of my time.
Mr. HOLDEN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise to reluctantly offer my support for H.R. 5472,
the Family Farmer Protection Act of 2002. I say ``reluctantly'' because
the legislation before us today is an incomplete solution to a problem
that has existed for more than 5 years.
In 1997, Mr. Speaker, the National Bankruptcy Review Commission
recommended that chapter 12 of the Federal Bankruptcy Code, the chapter
which contains bankruptcy protections for family farmers, be made
permanent.
The bill we are considering today marks the sixth time we are
ignoring that 1997 recommendation and are instead extending chapter 12
on a temporary basis. It does not make sense. Chapter 12 is by no means
a controversial issue. It was enacted in 1986 as a temporary measure to
allow family farmers to repay their debts according to a plan under
court supervision. Chapter 12 prevents the situation from occurring
where a few bad crop years results in the loss of the family farm. In
the absence of chapter 12, family farmers are forced to file for
bankruptcy relief under the bankruptcy code's other alternatives, none
of which work quite as well for farmers as chapter 12 does. Chapter XI,
for example, will require a farmer to sell the family farm to pay the
claims of creditors. How can a farmer be expected to come up with the
money to pay off his debts when he is out of his farm?
Chapter XI is an expensive process that does not accommodate the
special needs of farmers. This Congress, just as in previous
Congresses, the larger Bankruptcy Reform Act includes a provision that
will permanently extend chapter 12. Also, in this Congress, just as in
previous Congresses, the larger Bankruptcy Reform Act remains a
controversial bill whose enactment is an uncertainty. For 5 years now,
family farmers have been held hostage by the contentious debate
surrounding the larger bankruptcy issue. For years they have been made
to sit on pins and needles waiting to see if Congress will extend these
protections for another few months until we reach the next legislative
hurdle on the larger bankruptcy issue.
Mr. Speaker, family farmers have waited long enough. The games must
stop. Right now, family farmers are making plans to borrow money based
on next year's expected harvest. As these farmers leverage themselves,
they need to have the assurance that chapter 12 family farmer
bankruptcy protections are going to be there for them on a long-term
basis. Sporadic and temporary extensions do not do the job.
Permanently extending chapter 12 will give farmers the kinds of
protections they desperately need, the kind of protections we already
voted for three times in the 107th Congress.
Mr. Speaker, this bill does little more than extend for another 6
months the time when family farmers are, once again, put at risk. I
will support this bill today, because it is the only option available.
But I continue to urge my friends on the other side, let us end this
cliff-hanger once and for all; let us give family farmers the permanent
protection they deserve.
{time} 1645
Mr. Speaker, I have a chart detailing each of the occasions that
Chapter 12 has been extended.
Mr. Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I notice that none of the Committee on the Judiciary
Democrats decided to take the time to come to the floor to manage this
legislation,
[[Page H6850]]
and that the Democratic manager is someone who does not serve on the
Committee on the Judiciary.
Be that as it may, I appreciate the support for my bill.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Pennsylvania (Mr. Gekas), who has spent much more time in the
vineyards of trying to pass bankruptcy reform than our newfound convert
over on the other side of the aisle.
Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, it is true that from the very first moment that we began
the movement for bankruptcy reform, farmers in Chapter 12 were always
one of the priorities, and not a day passed in the formation of the new
bankruptcy reform bill that we did not insist that the final version
that we were going to pass in this House and hopefully in the Senate
and sign into law would contain Chapter 12 permanency for our farmers.
What happened was that even though we made measured progress by
passing the bankruptcy reform bill overwhelmingly in the House and
overwhelmingly in the Senate at different times, the conference that
was then formed never came to fruition. When it finally did, and we did
pass it and presented it to the then incumbent President, Bill Clinton,
he allowed it to fade into oblivion through a pocket veto.
So we are back at it again. We passed another bankruptcy reform bill.
Again, we had the farmers in mind in Chapter 12, because we made it
permanent. It is a permanent solution to a vexing problem, and it is in
bankruptcy reform.
Now we have again at hand a conference report that treats our farmers
in Chapter 12 the way they deserve to be treated, along with many other
elements of our society who are protected and whose lives are enhanced
by the other provisions in the bankruptcy reform measure. We await now
the dissolution of that one little quarter-inch problem that vexes us
that keeps us from final passage of bankruptcy reform.
In the meantime, we will continue with our vigilance for the farmers
under Chapter 12 by passing this legislation.
Mr. HOLDEN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I say to my friend, the gentleman from Wisconsin, he is
right, I do not serve on the Committee on the Judiciary, but I proudly
serve on the Committee on Agriculture, and have done so for the past 10
years.
During that time period, I have worked very closely with my farmers
in my congressional district, as well as farmers throughout the
Commonwealth of Pennsylvania. I can tell the Members that they want to
have us permanently extend or to make permanent Chapter 12 of the
bankruptcy code. They do not want us to continually just do it as we go
along, giving them an extension; they want it to be made permanent.
I am here to lend my support to that. I will support this bill today,
but hopefully we will be able to make Chapter 12 permanent in the very
near future.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, we would not be here today talking about Chapter 12 or
the whole issue of bankruptcy reform had not former President Clinton
pocket-vetoed the bankruptcy reform bill introduced by the gentleman
from Pennsylvania (Mr. Gekas) in the last Congress, which passed both
Houses, and then President Clinton decided that he would let the 10
days go by after the adjournment of Congress, and the bill did not
become law because of a pocket veto. Because of that pocket veto, we
have been struggling with bankruptcy reform again during this Congress.
Now, the gentleman from Pennsylvania (Mr. Gekas) has been a leader
since 1998 in bankruptcy reform. He introduced the first bill to make
Chapter 12 permanent. He introduced a bill in the last Congress to make
Chapter 12 permanent. He has been the principal author of the bill in
this Congress to make Chapter 12 permanent.
Now, maybe my other friend, the gentleman from Pennsylvania, maybe
his farmers are a little different from Wisconsin farmers. Wisconsin
farmers do not want to go bankrupt. Chapter 12 is not a very commonly
used provision in the bankruptcy law, but it is a necessary provision
in the bankruptcy law.
I appreciate the recent interest of the gentleman from Pennsylvania
(Mr. Holden) in this issue. Unlike the other the gentleman from
Pennsylvania (Mr. Gekas), he has not introduced a single bill on
Chapter 12. He has cosponsored one, but that was just very recently.
So I hope that we can have a groundswell of support, and I welcome
him aboard.
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his
support for H.R. 5472, which extends Chapter 12 bankruptcy for family
farms and ranches to July 1, 2002. Chapter 12 bankruptcy once again is
set to expire on January 1, 2002. 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. 5472. 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 the 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.
Mr. Speaker, in closing, this Member urges his colleagues to support
H.R. 5472.
Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Gilchrest). 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. 5472.
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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