[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[Senate]
[Pages 6853-6854]
[From the U.S. Government Publishing Office, www.gpo.gov]




               THE FISHERMEN'S BANKRUPTCY PROTECTION ACT

  Ms. COLLINS. Mr. President, recently I introduced S. 684, the 
Fishermen's Bankruptcy Protection Act, a bill to provide family 
fishermen with the same protections and terms as those granted family 
farmers under Chapter 12 of our bankruptcy laws. I would like to take 
this opportunity to explain this legislation to my colleagues in 
anticipation of the Senate's upcoming debate on bankruptcy legislation.
  Like many Americans, I'm appalled by those who live beyond their 
means, and use the bankruptcy code as a tool to cure their self-induced 
financial ills. I have supported and will continue to support 
reasonable reforms to the bankruptcy code that ensure the responsible 
use of its provisions. All consumers bear the burden of irresponsible 
debtors who abuse the system. Therefore, I believe bankruptcy should 
remain a tool of last resort for those in severe financial distress.
  As those familiar with the bankruptcy code know, however, business 
reorganization in bankruptcy is a different creature than the 
forgiveness of debt traditionally associated with bankruptcy. 
Reorganization embodies the hope that by providing a business some 
relief, and allowing debt to be adjusted, the business will have an 
opportunity to get back on sound financial footing and thrive. In that 
vein, Chapter 12 was added to the bankruptcy code in 1986 by the 
Senator from Iowa, Mr. Grassley, to provide for bankruptcy 
reorganization of the family farm and to give family farmers a fighting 
chance to reorganize their debts and keep their land.
  To provide the fighting chance envisioned by the authors of Chapter 
12, Congress provided a distinctive set of rules to govern effective 
reorganization of the family farm. In essence, Chapter 12 was a 
recognition of the unique situation of family-owned businesses and the 
enormous value of the family farmer to the American economy and to our 
cultural heritage.
  Chapter 12 was modeled on bankruptcy Chapter 13 which governs the 
reorganization of individual debt. However, to address the unique 
problems encountered by farmers, Chapter 12 provided for significant 
advantages over the standard Chapter 13 filer. These advantages include 
a longer period of time to file a plan for relief, greater flexibility 
for the debtor to modify the debts secured by their assets, and the 
alteration of the statutory time limit to repay secured debts. The 
Chapter 12 debtor is also given the freedom to sell off parts of his or 
her property as part of a reorganization plan.
  Unlike Chapter 13 which applies solely to individuals, Chapter 12 can 
apply to individuals, partnerships or corporations which fall under a 
$1.5 million debt threshold--a recognition of the common use of 
incorporation even among small family-held farms.
  Chapter 12 has been an enormous success in the farm community. 
According to a recent University of Iowa study, 74 percent of family 
farmers who filed Chapter 12 bankruptcy are still farming, and 61 
percent of farmers who went through Chapter 12 believe the law was 
helpful in getting them back on their feet.
  Recognizing its effectiveness, my bill proposes that Chapter 12 
should be made a permanent part of the bankruptcy code, and equally 
important, my legislation would extend Chapter 12's protections to 
family fishermen.
  In my own state of Maine, fishing is a vital part of our economy and 
our way of life. The commercial fishing industry is made up of proud 
and fiercely independent individuals whose goal is simply to preserve 
their business, family income, and community. My legislation would 
afford fishermen the same protection of business reorganization as is 
provided to family farmers.
  There are many similarities between the family farmer and the family 
fisherman. Like the family farmer, the fisherman should not only be 
valued as a businessman, but also for his or her contributions to our 
way of life and our economy. Like farmers, fishermen face perennial 
threats from nature and the elements, as well as laws and regulations 
which unfortunately threaten their existence. Like family farmers, 
fishermen are not seeking special treatment or a hand-out from the 
federal government, they seek only the fighting chance to remain afloat 
so that they can continue in their way of life.
  Although fishermen do not seek any special treatment from the 
government, they play a special role in seafaring communities on our 
coasts, and they deserve protections granted others who face similar, 
often unavoidable, problems. Fishermen should not

[[Page 6854]]

be denied the bankruptcy protections accorded to farmers solely because 
they harvest the sea and not the land.
  I have proposed not only to make Chapter 12 a permanent part of the 
bankruptcy code, but also to apply its provisions to the family 
fisherman. The bill I have proposed mirrors Chapter 12 with very few 
exceptions. Its protections are restricted to those fishermen with 
regular income who have total debt less than $1.5 million, the bulk of 
which, eighty percent, must stem from commercial fishing. Moreover, 
families must rely on fishing income for these provisions to apply.
  These same protections and flexibility we grant to farmers should 
also be granted to the family fisherman. By making this modest but 
important change to the bankruptcy laws, we will express our respect 
for the business of fishing, and our shared wish that this unique way 
of life--that embodies the state of Maine--should continue.
  Thank you, Mr. President. I yield the floor.
  Mr. President, I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CRAIG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________