[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[House]
[Pages 22855-22857]
[From the U.S. Government Publishing Office, www.gpo.gov]



  EXTENDING REENACTMENT OF CHAPTER 12 OF TITLE 11, UNITED STATES CODE

  Mr. GEKAS. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 2942) to extend for 6 additional months the period for which 
chapter 12 of title 11 of the United States Code is reenacted, as 
amended.
  The Clerk read as follows:

                               H.R. 2942

       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, is amended--
       (1) by striking ``October 1, 1999'' each place it appears 
     and inserting ``January 1, 2000''; and
       (2) in subsection (a)--
       (A) by striking ``March 31, 1999'' and inserting 
     ``September 30, 1999''; and
       (B) by striking ``April 1, 1999'' and inserting ``October 
     1, 1999''.

     SEC. 2. EFFECTIVE DATE.

       The amendments made by section 1 shall take effect on 
     October 1, 1999.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania (Mr. Gekas) and the gentlewoman from Wisconsin (Ms. 
Baldwin) each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Gekas).


                             General Leave

  Mr. GEKAS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and to 
include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, in 1986 the Congress passed a bankruptcy reform measure 
for that era which included the inclusion therein of a chapter 12 set 
of provisions specifically attuned to the needs of farms and farm 
communities where, when a financial crisis might occur to a farm 
family, the normal avenues of bankruptcy would be probably inadequate 
and unsuited to the needs of a family facing such financial distress on 
the farm.
  Chapter 12 was created to meet those unique needs to allow the 
farming concept to continue while the financial problems in bankruptcy 
would be worked out. That chapter 12 was enacted for only 5 years, then 
it was extended in 1993, and we took it up to 1998. Then in the current 
cycle of our attempts at bankruptcy reform, this House with an 
overwhelming vote passed bankruptcy reform, I think it was 315 votes in 
favor of that reform, which reform included making permanent the 
benefits of chapter 12.
  But because the other body has not yet acted on that legislation, we 
are faced with the end of that temporary extension that took us up to 
this juncture for chapter 12. We are here then today to ask that the 
House and the

[[Page 22856]]

Congress approve a 3-month extension with the idea that perhaps the 
Senate will be working and passing the bankruptcy reform which will 
make this permanent, but in the meantime, we will have cured the 
problem for the moment.
  In this effort, the gentleman from Michigan (Mr. Smith) has played 
the important role of leading the effort to make sure that the Congress 
will not forget the promise that we made under the old chapter 12 so 
that we can keep this concept moving towards the final resolution of 
the overall problem.

                              {time}  1730

  He is to be commended for his persistence in this matter.
  Mr. Speaker, I reserve the balance of my time.
  Ms. BALDWIN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in somewhat reluctant support of H.R. 2942. This 
bill would extend Chapter 12 of the Bankruptcy Code for only 3 months. 
Under current law, this section of the Bankruptcy Code will expire on 
October 1. This bill will extend the section until January 1 of the 
year 2000.
  Although I am hopeful that Congress will permanently extend this very 
needed section of the Bankruptcy Code, I realize that this extension is 
needed now. The reason for my reluctance is that this bill was modified 
at the very last minute from 6 months to 3 months.
  Six months would have allowed Congress the time to work out our 
differences on the larger bankruptcy overhaul bill in which Chapter 12 
is permanently extended. Now, however, this bill has been amended to be 
only a 3-month extension. I think that is a little shortsighted. But, 
without this bill, Chapter 12 will expire by the end of this week, so I 
reluctantly support this bill.
  Chapter 12 is similar to Chapter 11 and Chapter 13 of the Bankruptcy 
Code. Chapter 12 is the part of the Bankruptcy Code that is tailored to 
meet the unique economic realities of family farming, especially during 
times of severe economic crisis. With Chapter 12, Congress sought to 
create a chapter of the Bankruptcy Code that provided the framework to 
prevent family farms from going out of business completely.
  At the time of its first enactment in 1986 during a severe farm 
crisis, Congress was unable to foresee whether Chapter 12 would be 
needed indefinitely by America's farmers. Congress has extended Chapter 
12 now three times. Chapter 12 is the safety net of last resort for our 
farmers, and we must extend it and ultimately make it permanent.
  The family farm is the backbone of the rural economy in Wisconsin and 
all over this Nation. Without Chapter 12, if economic crisis hits a 
family farm, that family has no choice but to liquidate the land, the 
equipment, the crops and the herd to pay off creditors. This means 
losing the farm, a supplier of food and a way of life.
  When a family decides it can no longer afford to farm, many times 
that farm is lost forever to development and sprawl. With Chapter 12 in 
place, when an economic crisis hits America's farmers, a family's 
farmland and other farm-related resources cannot be seized by 
creditors. A bankruptcy judge for the Western District of Wisconsin 
notes that Chapter 12 has been used in his jurisdiction more than 50 
times over the past year.
  Obviously in this time of severe economic farm crisis, Chapter 12 is 
needed. Our farmers must have the assurance that if they must 
reorganize their farm to keep their farm, that they can do so. Chapter 
12 must be there for them and for us to protect America's supply of 
food. It is in our country's best interest to protect family farms from 
foreclosure.
  Mr. Speaker, family farmers in Wisconsin have been facing a tough 
time. If the dairy bill that this House passed last week becomes law, 
Wisconsin dairy farmers will continue to be at the same price 
disadvantage that they have been subject to for over 60 years. If dairy 
compacts are extended and expanded, my farmers will continue to have to 
compete against artificially inflated prices in other regions of the 
country. In the past 6 years alone, Wisconsin has lost over 7,000 
family farms.
  I was successful in committee earlier this year in extending Chapter 
12 until this period of time. I believe that it needs to be permanently 
extended. It is frustrating to me that we must come to the floor every 
few months to extend this important protection for farmers.
  Individuals in this country and businesses in this country who must 
consider filing for bankruptcy under Chapters 7, 11 or 13 do not have 
to worry about whether that part of the Bankruptcy Code will still be 
there, because it is permanent. I believe we should do no less for our 
family farmers, and make Chapter 12 permanent. I believe farmers, like 
all of us, should be able to plan for their futures.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEKAS. Mr. Speaker, it is appropriate at this time, given the 
spark that he has given to this legislation, to yield 4 minutes to the 
gentleman from Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Speaker, the reason that the chairman, the 
gentleman from Pennsylvania (Mr. Gekas), the gentlewoman from Wisconsin 
(Ms. Baldwin), the gentleman from Nebraska (Mr. Bereuter), the 
gentleman from Mississippi (Mr. Pickering) and the gentleman from 
California (Mr. Chambliss) are cosponsoring this bill is because 
together we feel it is very important, especially at this time, with 
agriculture facing up to some very difficult challenges.
  Mr. Speaker, American agriculture is in a serious situation right 
now. Times are tough in farm country. While the rest of the economy is 
booming, American farmers and ranchers have been left out. 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 many producers who just will not be able to make ends 
meet and are going to be forced into bankruptcy.
  Bankruptcy filing by farmers has become too regular an occurrence. I 
visited last week with a hog producer from my district. He is the 
fourth generation on that farm, as smart as most any entrepreneur that 
I have known. Yet, because of prices, even with his business-like 
efforts to lay off workers, to increase his hours that he spends per 
week on that farm, he is still challenged as to whether he can survive 
on that farm. Again, fourth generation. That means his great-
grandfather, his grandfather, his dad, all were able to preserve that 
farm, and now he is challenged, simply because we have a system of 
international competition that has resulted in the very low commodity 
prices.
  Chapter 12 of title 11 of the Bankruptcy Code is only available, I 
would like to point out, to family farmers. Chapter 12 is now set to 
expire, as the gentlewoman suggested, in three days, on September 30. 
H.R. 2942, as amended, will temporarily extend Chapter 12 for another 3 
months so that this critical option for America's family farmers does 
not expire.
  Mr. Speaker, Chapter 12 allows family farmers the option to 
reorganize debt rather than having to liquidate when declaring 
bankruptcy. The logic is that a farmer should not be forced to sell his 
tractor and his plow and his planter and his tools of production when 
he is reorganizing, trying to make sure that he is paying off those 
debts, because if we force him to sell those tools of production, then 
we have almost taken away any possible opportunity for him to 
reorganize and pay his debts.
  I am very pleased that the gentleman from Pennsylvania (Chairman 
Gekas) and this body is taking action on this legislation today. With 
three days to go before expiration, time is very short. Senator 
Grassley and other Senators are aggressively pursuing this effort over 
in the Senate and moving ahead on this legislation.
  I realize that many of us would prefer to see Chapter 12 extended 
permanently. I trust that as the general bankruptcy reform is debated, 
a permanent fix for Chapter 12 is going to be accomplished, because 
that is what is in the bill that the gentleman from

[[Page 22857]]

Pennsylvania (Chairman Gekas) and the committee and this body sent over 
to the Senate. This legislation is needed to assure producers that this 
risk management tool is available.
  Again, I thank both sides of the aisle, both sides of the Capitol 
Building, and especially the chairman for moving ahead on this 
legislation.
  Mr. GEKAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Nebraska (Mr. Bereuter).
  Mr. BEREUTER. Mr. Speaker, I thank the gentleman for yielding me 
time.
  Mr. Speaker, I rise in strong support of H.R. 2942. I would also note 
my cosponsorship of this legislation and legislation introduced by 
several Members, including the distinguished gentleman from Michigan 
(Mr. Smith), which would either extend or make permanent these Chapter 
12 bankruptcy provisions. I thank the distinguished gentleman from 
Pennsylvania for expediting it, as well as the chairman and the ranking 
member of the full committee. I appreciate the supportive comments of 
the gentlewoman from Wisconsin.
  Chapter 12 bankruptcy has been a necessary and responsible and viable 
option for family farmers nationwide. It has allowed family farmers to 
reorganize their assets in a manner which balances the interests of the 
creditors and the future success of the involved farmer.
  If Chapter 12 bankruptcy provisions are not extended for family 
farmers, it will have a drastic effect on the agricultural sector, 
already reeling from low commodity prices. Not only will many family 
farmers have to end their operations, but also land values will plunge 
downward. Such a decrease in land values will affect both the ability 
of the family farmer to earn a living and the manner in which banks 
making agricultural loans conduct their lending activities.
  This gentleman represents a premier agriculture district, and, as a 
member of the Committee on Banking and Financial Services, I am 
concerned about those agricultural loans out there and their customers.
  This is a very important piece of legislation. Like my colleagues, 
like the words expressed by the gentleman from Michigan, I would very 
much like to see this permanently extended. But the House passed this 
earlier, as the gentleman from Pennsylvania indicated, by actually 313 
to 108, with my support. Unfortunately, the other body failed to act on 
the Bankruptcy Reform Act. Therefore, a 3 month extension is absolutely 
necessary for our family farmers and other small agri-business 
families.
  Mr. Speaker, in closing I encourage my colleagues to support H.R. 
2942, which provides a 3 month extension.
  Ms. BALDWIN. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. GEKAS. Mr. Speaker, I have no futher requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Upton). The question is on the motion 
offered by the gentleman from Pennsylvania (Mr. Gekas) that the House 
suspend the rules and pass the bill, H.R. 2942, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  The title was amended so as to read: ``A bill to extend for 3 
additional months the period for which chapter 12 of title 11 of the 
United States Code is enacted.''
  A motion to reconsider was laid on the table.

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