[Congressional Record (Bound Edition), Volume 149 (2003), Part 12]
[House]
[Pages 15738-15740]
[From the U.S. Government Publishing Office, www.gpo.gov]




              FAMILY FARMER BANKRUPTCY RELIEF ACT OF 2003

  Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 2465) to extend for six months the period for which 
chapter 12 of title 11 of the United States Code is reenacted.
  The Clerk read as follows:

                               H.R. 2465

       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 ``Family Farmer Bankruptcy 
     Relief Act of 2003''.

     SEC. 2. SIX-MONTH EXTENSION OF PERIOD FOR WHICH CHAPTER 12 OF 
                   TITLE 11, UNITED STATES CODE, IS REENACTED.

       (a) Amendments.--Section 149 of title I of division C of 
     Public Law 105-277 (11 U.S.C. 1201 note) is amended--
       (1) by striking ``July 1, 2003'' each place it appears and 
     inserting ``January 1, 2004''; and
       (2) in subsection (a)--
       (A) by striking ``December 31, 2002'' and inserting ``June 
     30, 2003''; and
       (B) by striking ``January 1, 2003'' and inserting ``July 1, 
     2003''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on July 1, 2003.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Sensenbrenner) and the gentlewoman from Wisconsin (Ms. 
Baldwin) 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 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 2465.
  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 rise in support of H.R. 2465, the Family Farmers 
Bankruptcy Relief Act of 2003.
  Earlier this year, the National Oceanic and Atmospheric 
Administration reported that certain parts of our Nation, particularly 
the western and Great Plains States, were experiencing ``one of the 
worst droughts in 108 years.'' Other parts of the country, like the 
Northeast, are currently enduring seemingly unending days of rainy 
weather.
  While bad weather may be merely an inconvenience for some of us, 
uncontrollable weather conditions represent just one of the many 
difficult challenges that confront family farmers. Like many small 
businesses, family farmers must also endure and react to rising energy 
costs, volatile marketplace conditions, and increasing competition from 
larger businesses. Unfortunately, these economic forces can negatively 
affect the financial stability of the family farmer.
  In response to the particularized needs of family farmers in 
financial distress, chapter 12 of the Bankruptcy Code was enacted in 
1986 as a part of the Bankruptcy Judges, United States Trustees, and 
Family Farmer Bankruptcy Act. Although originally enacted on a 
temporary basis to address the farming crisis of the 1980s, chapter 12 
has been extended on nine occasions in recognition of the vital relief 
it offers to family farmers in financial distress. Unless further 
extended, chapter 12 will sunset at the end of this month.
  It is crucial that this specialized form of bankruptcy relief for 
family farmers not be allowed to sunset for two fundamental reasons. 
First, family farmers, absent chapter 12, would be forced to file for 
bankruptcy relief under the Bankruptcy Code's other alternatives, none 
of which work as well for them as does chapter 12.
  Chapter VII of the Bankruptcy Code, for instance, would require a 
farmer to liquidate; that is, sell the family farm to pay the claims of 
the farmer's creditors. Many farmers would be precluded from choosing 
bankruptcy relief under chapter 13 of the Bankruptcy Code because of 
its restrictive eligibility standards. Furthermore, Chapter XI, the 
Bankruptcy Code's business reorganization alternative, is not farmer-
friendly in various respects, as it often entails an expensive and 
time-consuming process that does not readily accommodate the special 
needs of farmers.

[[Page 15739]]

  Second, recent statistics demonstrate that there is not only a 
continuing need for chapter 12, but that this need is apparently 
increasing. According to the Administrative Office of the United States 
Courts, chapter 12 bankruptcy filings jumped by more than 62 percent 
over the past year. I introduced H.R. 2465 to extend chapter 12 for an 
additional 6 months through December 31, 2003, and thereby maintain the 
status quo while the Congress completes its consideration of 
comprehensive bankruptcy reform.
  As my colleagues may recall, last March the House overwhelmingly 
passed H.R. 975, the Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2003, which is now awaiting consideration in the 
other body. H.R. 965 contains many farmer-friendly provisions that 
would make chapter 12 a permanent fixture of the Bankruptcy Code for 
family farmers and generally make it easier for farmers in financial 
distress to be eligible for this form of bankruptcy relief. In 
addition, H.R. 975 would raise the debt limit and lower the income 
threshold so that many more family farmers could avail themselves of 
chapter 12. Also, this bill, for the first time, would extend the 
benefits of this specialized form of bankruptcy relief to family 
fishermen.
  It is my sincere hope that in the very near future, we will see 
comprehensive bankruptcy reform legislation finally enacted, together 
with the permanent extension of chapter 12. Thus, I urge my colleagues 
to vote for H.R. 2465.
  Mr. Speaker, I reserve the balance of my time.
  Ms. BALDWIN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, chapter 12 bankruptcy protection expires in 7 days. Once 
again, we are forced to approve a temporary extension of this vital 
protection.
  Since I was first elected to Congress just 4\1/2\ years ago, we have 
passed seven temporary extensions of this bill. It is high time that we 
make this very noncontroversial program permanent. That is the bill we 
should be debating and passing today.
  Mr. Speaker, chapter 12 provides an important backstop for our 
Nation's struggling family farmers by allowing them to reorganize their 
debts and keep their farms. What we do here in Washington directly 
affects the lives of real people facing real financial challenges.
  I want to try to put a human face on this issue. In Wisconsin 
recently, a Columbus, Wisconsin farmer filed for chapter 12 bankruptcy. 
He works night and day to make his farm a success. Unfortunately, like 
many farmers, the weather and the market conspired to disrupt his cash 
flow. Filing chapter 12 gave his family time to negotiate with his 
creditors, while he switched from corn and soybean production to 
vegetable production, with local market sales. He sells his produce at 
farmers' markets in the Cities of Madison and Princeton. He is paying 
his debts. Under chapter 12, it was not only the Columbus farmer that 
benefited. His creditors got their money, and the people in my district 
can purchase his bounty.
  Chapter 12 does not just provide a direct benefit to those using its 
protections. Many farmers who face possible bankruptcy never get to a 
court filing. The very existence of the option of filing for chapter 12 
bankruptcy promotes negotiations between farmers and their creditors.
  There is a great consensus that chapter 12 bankruptcy protections 
work well. It is for that reason that we have included a permanent 
authorization in the comprehensive bankruptcy reform bill for the past 
three sessions of Congress. In fact, it is considered so popular that 
it has been held hostage to the larger bill. Every time we come to the 
floor to extend chapter 12, we are told that permanent extension cannot 
be passed separately from the big bill because taking out a popular 
item might slow that bill's momentum. We were told we had to strip the 
permanent extension of chapter 12 from last year's farm bill because it 
would slow down the bankruptcy bill. Well, here we are again, passing 
yet another temporary extension, and still the permanent extension 
languishes with about as much momentum as the continental drift.
  Mr. Speaker, the House should pass this bill today, and I urge my 
colleagues to do just that. But we should also be voting on making 
chapter 12 permanent. Let us end these uncertainties that the extension 
causes. Let us end this chapter 12 extension dance.
  Since the current authorization will expire within a few days, 
farmers do need the immediate relief provided by this extension. With 
the current year's crops in the ground, farmers need to know that they 
can reorganize and keep their farming operations. This bill would 
provide the security that family farmers in financial crisis need to 
decide whether to stay in business for one more year.
  I urge my colleagues to support this legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield such time as he may consume 
to the gentleman from Nebraska (Mr. Bereuter).
  Mr. BEREUTER. Mr. Speaker, I rise in support of H.R. 2465.
  Mr. Speaker, this Member rises today to express his support for H.R. 
2465, which extends Chapter 12 bankruptcy for family farms and ranches 
to January 1, 2004. Chapter 12 bankruptcy once again is set to expire 
on July 1, 2003. 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. 2465. 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 in hurting.
  In closing, this Member urges his colleagues to support H.R. 2465.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of the 
time.
  Mr. Speaker, no one is as frustrated as I am at the lack of progress 
on the overall bankruptcy reform bill, which is comprehensive and which 
will make this economy work better and more efficiently, particularly 
for those people who pay their bills and obligations on time. Without 
the overall bankruptcy reform bill being enacted into law, there will 
be those that use bankruptcy reform as a financial planning tool. That 
is absolutely wrong. Bankruptcy should exist for people and 
organizations that are genuinely down and out and who need to go 
through bankruptcy in order to get a fresh start, and the bill that is 
in the other body which this House passed by an overwhelming margin 
does just that.
  I can understand the desire of people who are opposed to an overall 
bankruptcy reform bill to try to cherry-pick the popular items out of 
it and pass them piecemeal so that their opposition will end up sinking 
the overall bankruptcy reform bill once and for all. I do not go along 
with that, and I do not think the majority of this House will either.
  The reason we have a temporary extension of chapter 12 here is to 
make sure that these protections for family

[[Page 15740]]

farmers are maintained. But if chapter 12 and other issues are cherry-
picked out, then the $44 billion a year of debt that is written off in 
bankruptcy will be passed on to those who pay their bills, including 
farmers who pay their bills in the form of higher goods and services.
  That is why the overall bankruptcy reform bill ought to be enacted 
into law. And while the gentlewoman from Wisconsin might be prepared to 
give up on that issue, I am not, and that is why this bill is a 
temporary extension. We are going to do the job that needs to be done 
for the farmers today, and then, hopefully, later on this year, when 
the other body passes the overall bankruptcy reform bill, we will be 
able to do the job that needs to be done for people who pay their bills 
on time and, as agreed, to prevent this huge shift of costs from those 
who do not pay their bills to those who do.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. 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. 2465.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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