[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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