[House Report 108-407]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-407
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  PROVIDING FOR CONSIDERATION OF S. 1920, TO EXTEND FOR 6 MONTHS THE 
 PERIOD FOR WHICH CHAPTER 12 OF TITLE 11 OF THE UNITED STATES CODE IS 
                               REENACTED

                                _______
                                

  January 27, 2004.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Sessions, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 503]

    The Committee on Rules, having had under consideration 
House Resolution 503, by a nonrecord vote, reports the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of S. 1920, To 
extend for 6 months the period for which chapter 12 of title 11 
of the United States Code is reenacted, under a modified closed 
rule. The rule provides one hour of general debate on the bill 
and on amendments made in order, equally divided and controlled 
by the chairman and ranking minority member of the Committee on 
the Judiciary.
    The rule provides that it shall be in order to consider as 
an original bill for the purpose of amendment under the five-
minute rule an amendment in the nature of the substitute 
consisting of H.R. 975 as passed by the House, and that it 
shall be considered as read. The rule waives all points of 
order against that amendment in the nature of a substitute. The 
rule makes in order only those amendments to that amendment in 
the nature of a substitute which are printed in this report, 
and provides that those amendments may be offered only in the 
order printed in this report, may be offered only by a Member 
designated in this report, shall be considered as read, shall 
be debatable for the time specified in this report equally 
divided and controlled by the proponent and an opponent, shall 
not be subject to amendment, and shall not be subject to a 
demand for a division of the question in the House or in the 
Committee of the Whole. The rule waives all points of order 
against the amendments printed in this report. The rule also 
provides one motion to recommit with or without instructions.
    Finally, Section 2 of the rule provides that if the Senate 
bill, as amended, is passed, then it shall be in order to move 
that the House insist on its amendment to S. 1920 and request a 
conference thereon.

                  SUMMARY OF AMENDMENTS MADE IN ORDER

    1. Sensenbrenner No. 2: Manager's Amendment. Makes 
technical changes to the text of H.R. 975 as passed by the 
House, which consist of the following: (1) revising the year of 
the short title (and subsequent references thereto) from 2003 
to 2004 and a Code of Federal Regulations reference from 2002 
to 2003; (2) amending section 1001 to make the reenactment of 
Chapter 12 retroactive to the date on which Chapter 12 was last 
in effect; (3) renumbering titles XIV and XV as titles XV and 
XIV, respectively, to clarify the measure's overall effective 
date; (4) correcting an erroneous drafting instruction in 
section 1201; and (5) adding a new provision (section 1502) 
that corrects statutory cross-references in the Bankruptcy Code 
and the Securities Investment Protection Act with respect to a 
provision of the Bankruptcy Code amended by H.R. 975. (10 
minutes)
    2. Baldwin No. 1: Amendment in the Nature of a Substitute. 
Makes chapter 12 of title 11 of the U.S. Bankruptcy Code, 
dealing with ``family farmer'' reorganization, permanent and 
expands eligibility requirements. (60 minutes)

                    TEXT OF AMENDMENTS MADE IN ORDER

   1. An Amendment To Be Offered by Representative Sensenbrenner of 
          Wisconsin, or His Designee, Debatable for 10 Minutes

  Strike ``Bankruptcy Abuse Prevention and Consumer Protection 
Act of 2003'' each place it appears and insert ``Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2004''.
  In section 204 strike ``2002'' and insert ``2003''.
  Strike section 1001 and insert the following:

SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

  (a) Reenactment.--
          (1) In general.--Chapter 12 of title 11, United 
        States Code, as reenacted by section 149 of division C 
        of the Omnibus Consolidated and Emergency Supplemental 
        Appropriations Act, 1999 (Public Law 105-277), and as 
        in effect on December 31, 2003, is hereby reenacted.
          (2) Effective date of reenactment.--Paragraph (1) 
        shall take effect on January 1, 2004.
  (b) Amendments--Chapter 12 of title 11, United States Code, 
as reenacted by subsection (a), is amended by this Act.
  (c) Conforming Amendment.--Section 302 of the Bankruptcy 
Judges, United States Trustees, and Family Farmer Bankruptcy 
Act of 1986 (28 U.S.C. 581 note) is amended by striking 
subsection (f).
  In section 1201--
          (1) strike paragraph (2) and insert the following:
          (2) in each paragraph (other than paragraph (54A)), 
        by inserting ``The term'' after the paragraph 
        designation;
        and
          (2) strike paragraph (7) and insert the following:
          (7) in paragraph (54A)--
                  (A) by striking ``the term'' and inserting 
                ``The term''; and
                  (B) by indenting the left margin of paragraph 
                (54A) 2 ems to the right; and
  Strike titles XIV and XV, and insert the following:

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

  Section 507(a) of title 11, United States Code, as amended by 
section 212, is amended--
          (1) in paragraph (4) by striking ``90'' and inserting 
        ``180'', and
          (2) in paragraphs (4) and (5) by striking ``$4,000'' 
        and inserting ``$10,000''.

SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS.

  Section 548 of title 11, United States Code, is amended--
          (1) in subsections (a) and (b) by striking ``one 
        year'' and inserting ``2 years'',
          (2) in subsection (a)--
                  (A) by inserting ``(including any transfer to 
                or for the benefit of an insider under an 
                employment contract)'' after ``transfer'' the 
                1st place it appears, and
                  (B) by inserting ``(including any obligation 
                to or for the benefit of an insider under an 
                employment contract)'' after ``obligation'' the 
                1st place it appears, and
          (3) in subsection (a)(1)(B)(ii)--
                  (A) in subclause (II) by striking ``or'' at 
                the end,
                  (B) in subclause (III) by striking the period 
                at the end and inserting ``; or'', and
                  (C) by adding at the end the following:
          ``(IV) made such transfer to or for the benefit of an 
        insider, or incurred such obligation to or for the 
        benefit of an insider, under an employment contract and 
        not in the ordinary course of business.''.

SEC. 1403. PAYMENT OF INSURANCE BENEFITS TO RETIRED EMPLOYEES.

  Section 1114 of title 11, United States Code, is amended--
          (1) by redesignating subsection (l) as subsection 
        (m), and
          (2) by inserting after subsection (k) the following:
  ``(l) If the debtor, during the 180-day period ending on the 
date of the filing of the petition--
          ``(1) modified retiree benefits; and
          ``(2) was insolvent on the date such benefits were 
        modified;
the court, on motion of a party in interest, and after notice 
and a hearing, shall issue an order reinstating as of the date 
the modification was made, such benefits as in effect 
immediately before such date unless the court finds that the 
balance of the equities clearly favors such modification.''.

SEC. 1404. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

  (a) Effective Date.--Except as provided in subsection (b), 
this title and the amendments made by this title shall take 
effect on the date of the enactment of this Act.
  (b) Application of Amendments.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this title shall apply only with 
        respect to cases commenced under title 11 of the United 
        States Code on or after the date of the enactment of 
        this Act.
          (2) Avoidance period.--The amendment made by section 
        1402(1) shall apply only with respect to cases 
        commenced under title 11 of the United States Code more 
        than 1 year after the date of the enactment of this 
        Act.

      TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

  (a) Effective Date.--Except as otherwise provided in this 
Act, this Act and the amendments made by this Act shall take 
effect 180 days after the date of enactment of this Act.
  (b) Application of Amendments.--
          (1) In general.--Except as otherwise provided in this 
        Act and paragraph (2), the amendments made by this Act 
        shall not apply with respect to cases commenced under 
        title 11, United States Code, before the effective date 
        of this Act.
          (2) Certain limitations applicable to debtors.--The 
        amendments made by sections 308, 322, and 330 shall 
        apply with respect to cases commenced under title 11, 
        United States Code, on or after the date of the 
        enactment of this Act.

SEC. 1502. TECHNICAL CORRECTIONS.

  (a) Conforming Amendments to Title 11 of the United States 
Code.--Title 11 of the United States Code, as amended by the 
preceding provisions of this Act, is amended--
          (1) in section 507--
                  (A) in subsection (a)--
                          (i) in paragraph (5)(B)(ii) by 
                        striking ``paragraph (3)'' and 
                        inserting ``paragraph (4)''; and
                          (ii) in paragraph (8)(D) by striking 
                        ``paragraph (3)'' and inserting 
                        ``paragraph (4)'';
                  (B) in subsection (b) by striking 
                ``subsection (a)(1)'' and inserting 
                ``subsection (a)(2)''; and
                  (C) in subsection (d) by striking 
                ``subsection (a)(3)'' and inserting 
                ``subsection (a)(1)'';
          (2) in section 523(a)(1)(A) by striking ``507(a)(2)'' 
        and inserting ``507(a)(3)'';
          (3) in section 752(a) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)'';
          (4) in section 766--
                  (A) in subsection (h) by striking 
                ``507(a)(1)'' and inserting ``507(a)(2)''; and
                  (B) in subsection (i) by striking 
                ``507(a)(1)'' each place it appears and 
                inserting ``507(a)(2)'';
          (5) in section 901(a) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)'';
          (6) in section 943(b)(5) by striking ``507(a)(1)'' 
        and inserting ``507(a)(2)'';
          (7) in section 1123(a)(1) by striking ``507(a)(1), 
        507(a)(2)'' and inserting ``507(a)(2), 507(a)(3)'';
          (8) in section 1129(a)(9)--
                  (A) in subparagraph (A) by striking 
                ``507(a)(1) or 507(a)(2)'' and inserting 
                ``507(a)(2) or 507(a)(3)''; and
                  (B) in subparagraph (B) by striking 
                ``507(a)(3)'' and inserting ``507(a)(1)'';
          (9) in section 1226(b)(1) by striking ``507(a)(1)'' 
        and inserting ``507(a)(2)''; and
          (10) in section 1326(b)(1) by striking ``507(a)(1)'' 
        and inserting ``507(a)(2)''.
  (b) Related Conforming Amendment.--Section 6(e) of the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78fff(e)) 
is amended by striking ``507(a)(1)'' and inserting 
``507(a)(2)''.
  In the table of contents strike the items relating to titles 
XIV and XV, and insert the following items:

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

Sec. 1401. Employee wage and benefit priorities.
Sec. 1402. Fraudulent transfers and obligations.
Sec. 1403. Payment of insurance benefits to retired employees.
Sec. 1404. Effective date; application of amendments.

       TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1501. Effective date; application of amendments.
Sec. 1502. Technical corrections.

 2. An Amendment To Be Offered by Representative Baldwin of Wisconsin, 
               or Her Designee, Debatable for 60 Minutes

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Protection of Family Farmers 
and Family Fisherman Act of 2004''.

SEC. 2. PERMANENT REENACTMENT OF CHAPTER 12.

  (a) Permanent Reenactment.--
          (1) Reenactment.--Chapter 12 of title 11, United 
        States Code, as reenacted by section 149 of division C 
        of the Omnibus Consolidated and Emergency Supplemental 
        Appropriations Act, 1999 (Public Law 105-277), and as 
        in effect on December 31, 2003, is hereby reenacted.
          (2) Conforming amendment.--Section 302 of the 
        Bankruptcy Judges, United States Trustees, and Family 
        Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is 
        amended by striking subsection (f).
  (b) Effective Date of Reenactment.--Subsection (a) shall take 
effect on January 1, 2004.

SEC. 3. DEBT LIMIT INCREASE.

  Section 104(b) of title 11, United States Code, as amended by 
section 226, is amended by inserting ``101(18),'' after 
``101(3),'' each place it appears.

SEC. 4. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

  (a) Contents of Plan.--Section 1222(a)(2) of title 11, United 
States Code, is amended to read as follows:
          ``(2) provide for the full payment, in deferred cash 
        payments, of all claims entitled to priority under 
        section 507, unless--
                  ``(A) the claim is a claim owed to a 
                governmental unit that arises as a result of 
                the sale, transfer, exchange, or other 
                disposition of any farm asset used in the 
                debtor's farming operation, in which case the 
                claim shall be treated as an unsecured claim 
                that is not entitled to priority under section 
                507, but the debt shall be treated in such 
                manner only if the debtor receives a discharge; 
                or
                  ``(B) the holder of a particular claim agrees 
                to a different treatment of that claim;''.
  (b) Special Notice Provisions.--Section 1231(b) of title 11, 
United States Code, as so designated by section 719, is amended 
by striking ``a State or local governmental unit'' and 
inserting ``any governmental unit''.
  (c) Effective Date; Application of Amendments.--This section 
and the amendments made by this section shall take effect on 
the date of the enactment of this Act and shall not apply with 
respect to cases commenced under title 11 of the United States 
Code before such date.

SEC. 5. DEFINITION OF FAMILY FARMER.

  Section 101(18) of title 11, United States Code, is amended--
          (1) in subparagraph (A)--
                  (A) by striking ``$1,500,000'' and inserting 
                ``$3,237,000''; and
                  (B) by striking ``80'' and inserting ``50''; 
                and
          (2) in subparagraph (B)(ii)--
                  (A) by striking ``$1,500,000'' and inserting 
                ``$3,237,000''; and
                  (B) by striking ``80'' and inserting ``50''.

SEC. 6. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND SPOUSE 
                    RECEIVE OVER 50 PERCENT OF INCOME FROM FARMING 
                    OPERATION IN YEAR PRIOR TO BANKRUPTCY.

  Section 101(18)(A) of title 11, United States Code, is 
amended by striking ``for the taxable year preceding the 
taxable year'' and inserting the following:
        ``for--
                  ``(i) the taxable year preceding; or
                  ``(ii) each of the 2d and 3d taxable years 
                preceding;
        the taxable year''.

SEC. 7. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE INCOME.

  (a) Confirmation of Plan.--Section 1225(b)(1) of title 11, 
United States Code, is amended--
          (1) in subparagraph (A) by striking ``or'' at the 
        end;
          (2) in subparagraph (B) by striking the period at the 
        end and inserting ``; or''; and
          (3) by adding at the end the following:
          ``(C) the value of the property to be distributed 
        under the plan in the 3-year period, or such longer 
        period as the court may approve under section 1222(c), 
        beginning on the date that the first distribution is 
        due under the plan is not less than the debtor's 
        projected disposable income for such period.''.
  (b) Modification of Plan.--Section 1229 of title 11, United 
States Code, is amended by adding at the end the following:
  ``(d) A plan may not be modified under this section--
          ``(1) to increase the amount of any payment due 
        before the plan as modified becomes the plan;
          ``(2) by anyone except the debtor, based on an 
        increase in the debtor's disposable income, to increase 
        the amount of payments to unsecured creditors required 
        for a particular month so that the aggregate of such 
        payments exceeds the debtor's disposable income for 
        such month; or
          ``(3) in the last year of the plan by anyone except 
        the debtor, to require payments that would leave the 
        debtor with insufficient funds to carry on the farming 
        operation after the plan is completed.''.

SEC. 8. FAMILY FISHERMEN.

  (a) Definitions.--Section 101 of title 11, United States 
Code, is amended--
          (1) by inserting after paragraph (7) the following:
          ``(7A) `commercial fishing operation' means--
                  ``(A) the catching or harvesting of fish, 
                shrimp, lobsters, urchins, seaweed, shellfish, 
                or other aquatic species or products of such 
                species; or
                  ``(B) for purposes of section 109 and chapter 
                12, aquaculture activities consisting of 
                raising for market any species or product 
                described in subparagraph (A);
          ``(7B) `commercial fishing vessel' means a vessel 
        used by a family fisherman to carry out a commercial 
        fishing operation;''; and
          (2) by inserting after paragraph (19) the following:
          ``(19A) `family fisherman' means--
                  ``(A) an individual or individual and spouse 
                engaged in a commercial fishing operation--
                          ``(i) whose aggregate debts do not 
                        exceed $1,500,000 and not less than 80 
                        percent of whose aggregate 
                        noncontingent, liquidated debts 
                        (excluding a debt for the principal 
                        residence of such individual or such 
                        individual and spouse, unless such debt 
                        arises out of a commercial fishing 
                        operation), on the date the case is 
                        filed, arise out of a commercial 
                        fishing operation owned or operated by 
                        such individual or such individual and 
                        spouse; and
                          ``(ii) who receive from such 
                        commercial fishing operation more than 
                        50 percent of such individual's or such 
                        individual's and spouse's gross income 
                        for the taxable year preceding the 
                        taxable year in which the case 
                        concerning such individual or such 
                        individual and spouse was filed; or
                  ``(B) a corporation or partnership--
                          ``(i) in which more than 50 percent 
                        of the outstanding stock or equity is 
                        held by--
                                  ``(I) 1 family that conducts 
                                the commercial fishing 
                                operation; or
                                  ``(II) 1 family and the 
                                relatives of the members of 
                                such family, and such family or 
                                such relatives conduct the 
                                commercial fishing operation; 
                                and
                          ``(ii)(I) more than 80 percent of the 
                        value of its assets consists of assets 
                        related to the commercial fishing 
                        operation;
                          ``(II) its aggregate debts do not 
                        exceed $1,500,000 and not less than 80 
                        percent of its aggregate noncontingent, 
                        liquidated debts (excluding a debt for 
                        1 dwelling which is owned by such 
                        corporation or partnership and which a 
                        shareholder or partner maintains as a 
                        principal residence, unless such debt 
                        arises out of a commercial fishing 
                        operation), on the date the case is 
                        filed, arise out of a commercial 
                        fishing operation owned or operated by 
                        such corporation or such partnership; 
                        and
                          ``(III) if such corporation issues 
                        stock, such stock is not publicly 
                        traded;
          ``(19B) `family fisherman with regular annual income' 
        means a family fisherman whose annual income is 
        sufficiently stable and regular to enable such family 
        fisherman to make payments under a plan under chapter 
        12 of this title;''.
  (b) Who May Be a Debtor.--Section 109(f) of title 11, United 
States Code, is amended by inserting ``or family fisherman'' 
after ``family farmer''.
  (c)  Chapter 12.--Chapter 12 of title 11, United States Code, 
is amended--
          (1) in the chapter heading, by inserting ``OR 
        FISHERMAN'' after ``FAMILY FARMER'';
          (2) in section 1203, by inserting ``or commercial 
        fishing operation'' after ``farm''; and
          (3) in section 1206, by striking ``if the property is 
        farmland or farm equipment'' and inserting ``if the 
        property is farmland, farm equipment, or property used 
        to carry out a commercial fishing operation (including 
        a commercial fishing vessel)''.
  (d) Clerical Amendment.--In the table of chapters for title 
11, United States Code, the item relating to chapter 12, is 
amended to read as follows:

``12. Adjustments of Debts of a Family Farmer or Family Fisherman 
              with Regular Annual Income.........................1201''.
  (e) Applicability.--Nothing in this section shall change, 
affect, or amend the Fishery Conservation and Management Act of 
1976 (16 U.S.C. 1801, et seq.).

                                
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