[Congressional Record Volume 167, Number 49 (Tuesday, March 16, 2021)]
[House]
[Pages H1389-H1390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            COVID-19 BANKRUPTCY RELIEF EXTENSION ACT OF 2021

  Mr. NADLER. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 1651) to amend the CARES Act to extend the sunset for the 
definition of a small business debtor, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1651

       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 ``COVID-19 Bankruptcy Relief 
     Extension Act of 2021''.

     SEC. 2. EXTENSIONS.

       (a) In General.--Section 1113 of the CARES Act (Public Law 
     116-136) is amended--
       (1) in subsection (a)(5) (11 U.S.C. 1182 note), by striking 
     ``1 year'' and inserting ``2 years''; and
       (2) in subsection (b)(2)(B) (11 U.S.C. 101 note), by 
     striking ``1 year'' and inserting ``2 years''.
       (b) Modification of Plan After Confirmation.--
       (1) Section 1329(d)(1) of title 11, United States Code, is 
     amended, in the matter preceding subparagraph (A), by 
     striking ``this subsection'' and inserting ``the COVID-19 
     Bankruptcy Relief Extension Act of 2021''.
       (2) Section 1113(b)(1)(D)(ii) of the CARES Act (11 U.S.C. 
     1329 note) is amended by striking ``this Act'' and inserting 
     ``the COVID-19 Bankruptcy Relief Extension Act of 2021''.
       (c) Bankruptcy Relief.--Section 1001 of division FF of the 
     Consolidated Appropriations Act, 2021 (Public Law 116-260) is 
     amended by striking ``the date that is 1 year after the date 
     of enactment of this Act'' each place the term appears and 
     inserting ``March 27, 2022''.

     SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in the Congressional Record by the 
     Chairman of the House Budget Committee, provided that such 
     statement has been submitted prior to the vote on passage.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Nadler) and the gentleman from California (Mr. Issa) each 
will control 20 minutes.
  The Chair recognizes the gentleman from New York.


                             General Leave

  Mr. NADLER. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
to include extraneous material on H.R. 1651.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. NADLER. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, H.R. 1651, the COVID-19 Bankruptcy Relief Extension 
Act of 2021, is bipartisan legislation to temporarily extend, until 
March 27, 2022, the COVID-19 bankruptcy relief provisions enacted as 
part of the CARES Act in the December 2020 omnibus appropriations bill.
  Since the bankruptcy provisions of the CARES Act will expire next 
week, it is urgent for Congress to ensure that families and small 
businesses do not lose access to these economic lifelines.
  These provisions were enacted last year to provide critical relief to 
families and small businesses forced into bankruptcy because of the 
ongoing pandemic. For example, they help ensure that Federal COVID-
related relief payments are used by families to get through this 
pandemic instead of being seized by creditors. They also help people 
stay in their homes and ensure that their utilities are not shut off.
  In addition, these provisions protect individuals and creditors alike 
from the effects of the pandemic derailing the court-ordered repayment 
plans that promise a way out of chapter 13 bankruptcy.
  They will also allow more small businesses to take advantage of the 
streamlined process established by the Small Business Reorganization 
Act.
  Extending these necessary protections until March of next year will 
provide much-needed certainty that the bankruptcy system will remain 
responsive to debtors and creditors alike during this extraordinarily 
disruptive crisis.
  I thank Mr. Cline for his work with me on this bill, and for his work 
to ensure that small businesses have meaningful access to the 
bankruptcy process.
  Madam Speaker, I urge my colleagues to support this urgently needed 
bill, and I reserve the balance of my time.
  Mr. ISSA. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, this pandemic, everyone knows, has uprooted lives and 
caused untold destruction to families, to workers, and to small 
businesses. And many see the partisan behavior as destructive during 
this time, and they often do not see the bipartisan behavior.
  Today's extension, H.R. 1651, is an example of bipartisan behavior on 
behalf of the American people. Repeated and lengthy government 
shutdowns in response to the pandemic have devastated the ability of 
millions to work, pay bills, and support their families, and keep their 
small businesses afloat.
  In my home State of California, the restaurant industry has seen more 
than one out of four restaurants shutter their doors forever.
  In 2020, Congress passed five bipartisan COVID relief packages. The 
CARES Act allowed a variety of temporary relief measures for families 
and small businesses. When it was passed, we believed that, in fact, 
once the vaccine was available, that we would be able to put this 
behind us. But today, when over 10 percent of Americans have received a 
vaccine, we now know that the road to full recovery is longer ahead of 
us even after we begin going to work.
  So allowing small businesses to file chapter 11 bankruptcy by 
increasing the maximum debt ceiling, excluding Federal COVID relief 
payments from income calculations, and allowing debtors to file chapter 
13 to modify their payment plans are only some of the critical items 
that the CARES Act did. Today we are making sure these will continue 
until March of 2022.
  This bill also extends through 2022 bankruptcy relief provisions 
included in the December 2020 COVID relief package. This extension will 
provide

[[Page H1390]]

individuals and businesses with certainty and simplicity as they look 
at an economic recovery that, although it is underway, may be long.
  Enacting this bill will assist debtors and businesses of all sorts, 
as Americans and their firms continue to address economic realities. 
This bill is bipartisan, and the bill recognizes that even businesses 
which have remained up and running often find themselves in a ripple 
effect of other bankruptcies or failures by companies that have been 
shut down.
  Madam Speaker, I strongly recommend the passage of this bill, and I 
reserve the balance of my time.
  Mr. NADLER. Madam Speaker, I reserve the balance of my time.
  Mr. ISSA. Madam Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Cline), one of the coauthors of this bill.
  Mr. CLINE. Madam Speaker, I thank the gentleman from California, my 
friend, for his work on this issue, and I thank the chairman for his 
work on this issue and their great leadership on this important 
initiative.
  Madam Speaker, in 2010, the National Bankruptcy Conference Small 
Business Working Group released and presented to Congress a report that 
identified a problem regarding small businesses and the bankruptcy law, 
and recommended amendments to the code to add a new chapter for small 
business reorganizations.
  As a result of this recommendation, I introduced the Small Business 
Reorganization Act, which was signed into law in August of 2019, and I 
am pleased to say it has been a great success for small businesses.
  It is my understanding that 80 percent of small business debtors have 
chosen to proceed under subchapter V, and preliminary data indicates 
that these cases are achieving confirmation far more often than small 
businesses who filed prior to SBRA.
  However, the Small Business Reorganization Act implemented only a 
month before the COVID-19 pandemic caused the State-mandated temporary 
closure of thousands of businesses.

                              {time}  1615

  Seeing the need to ensure that this new lifeline would be even more 
impactful, the CARES Act passed in March 2020 increased the amount of 
debt a business can have to be eligible for small business bankruptcy 
procedures from $2.7 million to $7.5 million and allowed debtors 
experiencing hardship because of COVID-19 to modify bankruptcy 
reorganization plans entered into before the law was enacted.
  I have heard from bankruptcy judges and lawyers in the Western 
District of Virginia who have said that their experience with the Small 
Business Reorganization Act has been extremely positive. According to 
the American Bankruptcy Institute, as of last Sunday, 1,651 cases have 
been filed.
  In addition, according to the Federal Judicial Center's Integrated 
Database, as of September 30, 2020, there were 759 subchapter V cases 
filed in the 6 months from the time the debt limit was raised to the 
end of fiscal year 2020, with information on liabilities available for 
548 of these cases. Of those, 28 percent involved debtors whose 
liabilities exceeded the original limit of $2.7 million. These debtors 
would not have been eligible for subchapter V without the temporary 
increase provided by the CARES Act.
  Without this bill to keep the debt limit at $7.5 million for another 
year while we continue to navigate this pandemic, about 30 percent of 
businesses that would choose to use it would no longer be eligible.
  Preservation of the business benefits both the creditor, which should 
receive a higher recovery because of the debtor's restructuring than 
they would if the business liquidated, and the debtor, who will now be 
able to remain in business rather than liquidating.
  Our districts depend on their small businesses. They are hotels, 
convenience stores, restaurants, and pharmacies. Those who endeavor to 
open and run a small business are proud of their work and their 
standing in our communities.
  Unfortunately, they also take on a sometimes-insurmountable financial 
burden. As we have seen over the last year, when they are forced to 
close, it has a great impact on the rest of us. That is why the year-
end spending and relief package omitted recovery rebate payments from 
bankruptcy estates and blocked utilities from stopping or denying 
service to some individuals in bankruptcy. This bill would extend those 
provisions by 3 months but wouldn't affect other provisions in that law 
that are already scheduled to expire later in 2022.
  I am proud to have introduced this legislation along with Chairman 
Nadler to support our small businesses and our families, and I urge its 
passage.
  Mr. NADLER. Madam Speaker, I have no further speakers.
  Mr. ISSA. Madam Speaker, both sides of the aisle are united behind 
this good, sensible extension of law.
  Madam Speaker, I strongly recommend that all of our Members vote for 
it, and I yield back the balance of my time.
  Mr. NADLER. Madam Speaker, this bill will provide critical relief to 
the small businesses and families forced into bankruptcy because of the 
ongoing pandemic. These provisions help make sure that the pandemic 
does not derail the path to a fresh start that the bankruptcy code 
promises for individuals and businesses alike.
  As Mr. Issa said, this is bipartisan legislation. I am aware of no 
opposition to it whatsoever.
  Madam Speaker, I hope all of my colleagues will support this urgently 
needed bill, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. Nadler) that the House suspend the rules 
and pass the bill, H.R. 1651, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mrs. GREENE of Georgia. Madam Speaker, on that I demand the yeas and 
nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this motion 
are postponed.

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