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Mr. GEKAS. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5540) to extend for 11 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:
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 ``Chapter 12 Extension and Bankruptcy Judgeship Act of 2000''.
SEC. 2. AMENDMENTS.
(a) EXTENSION OF CHAPTER 12.--Section 149 of title I of division C of Public Law 105-277, as amended by Public Law 106-5 and Public Law 106-70, is amended--
(1) by striking ``July 1, 2000'' each place it appears and inserting ``June 1, 2001''; and
(2) in subsection (a)--
(A) by striking ``September 30, 1999'' and inserting ``June 30, 2000''; and
(B) by striking ``October 1, 1999'' and inserting ``July 1, 2000''.
(b) EFFECTIVE DATE.--The amendments made by subsection (a) shall take effect on July 1, 2000.
SEC. 3. BANKRUPTCY JUDGESHIPS.
(a) TEMPORARY JUDGESHIPS.--
(1) APPOINTMENTS.--The following bankruptcy judges shall be appointed in the manner prescribed in section 152(a)(1) of title 28, United States Code, for the appointment of bankruptcy judges provided for in section 152(a)(2) of such title:
(A) One additional bankruptcy judge for the eastern district of California.
(B) Four additional bankruptcy judges for the central district of California.
(C) One additional bankruptcy judge for the district of Delaware.
(D) Two additional bankruptcy judges for the southern district of Florida.
(E) One additional bankruptcy judge for the southern district of Georgia.
(F) Two additional bankruptcy judges for the district of Maryland.
(G) One additional bankruptcy judge for the eastern district of Michigan.
(H) One additional bankruptcy judge for the southern district of Mississippi.
(I) One additional bankruptcy judge for the district of New Jersey.
(J) One additional bankruptcy judge for the eastern district of New York.
(K) One additional bankruptcy judge for the northern district of New York.
(L) One additional bankruptcy judge for the southern district of New York.
(M) One additional bankruptcy judge for the eastern district of North Carolina.
(N) One additional bankruptcy judge for the eastern district of Pennsylvania.
(O) One additional bankruptcy judge for the middle district of Pennsylvania.
(P) One additional bankruptcy judge for the district of Puerto Rico.
(Q) One additional bankruptcy judge for the western district of Tennessee.
(R) One additional bankruptcy judge for the eastern district of Virginia.
(2) VACANCIES.--The first vacancy occurring in the office of a bankruptcy judge in each of the judicial districts set forth in paragraph (1) shall not be filled if the vacancy--
(A) results from the death, retirement, resignation, or removal of a bankruptcy judge; and
(B) occurs 5 years or more after the appointment date of a bankruptcy judge appointed under paragraph (1).
(b) EXTENSIONS.--
(1) IN GENERAL.--The temporary office of bankruptcy judges authorized for the northern district of Alabama, the district of Delaware, the district of Puerto Rico, the district of South Carolina, and the eastern district of Tennessee under paragraphs (1), (3), (7), (8), and (9) of section 3(a) of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are extended until the first vacancy occurring in the office of a bankruptcy judge in the applicable district resulting from the death, retirement, resignation, or removal of a bankruptcy judge and occurring--
(A) 8 years or more after November 8, 1993, with respect to the northern district of Alabama;
(B) 10 years or more after October 28, 1993, with respect to the district of Delaware;
(C) 8 years or more after August 29, 1994, with respect to the district of Puerto Rico;
(D) 8 years or more after June 27, 1994, with respect to the district of South Carolina; and
(E) 8 years or more after November 23, 1993, with respect to the eastern district of Tennessee.
(2) APPLICABILITY OF OTHER PROVISIONS.--Except as provided in paragraph (1), section 3 of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) shall continue to apply to the temporary office of bankruptcy judges referred to in such paragraph.
(c) TECHNICAL AMENDMENTS.--Section 152(a) of title 28, United States Code, is amended--
(1) in paragraph (1) by striking the first sentence and inserting the following:
``Each bankruptcy judge authorized to be appointed for a judicial district as provided in paragraph (2) shall be appointed by the United States court of appeals for the circuit in which such district is located.''; and
(2) in paragraph (2)--
(A) in the item relating to the middle district of Georgia, by striking ``2'' and inserting ``3''; and
(B) in the collective item relating to the middle and southern districts of Georgia, by striking ``Middle and Southern . . . . . . 1''.
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 within which to revise and extend their remarks and to include extraneous material on H.R. 5540.
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, this legislation extends the life of chapter 12 in the Bankruptcy Code as we know it today. Chapter 12 is devoted to a special kind of bankruptcy relief that is granted to the farm community and to farmers who feel the
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What we have at this moment is a kind of a hiatus. We are waiting for the Senate to act on what is euphemistically called the Gekas-Grassley bankruptcy reform bill which contains an extension, a permanent status for chapter 12, actually. What we are doing here is filling a vacuum between last June and the time that we have consumed since then waiting for action by the Senate. This temporary extension will take us into next year and will offer this special relief for our farmers on a continuing basis, as well as the extension of some temporary judgeships that are needed for the current flow of bankruptcy across the Nation, five extensions of temporary judgeships and 23 appointments of temporary judges, all of this in the context of the burgeoning world of bankruptcy which is plaguing our country and which has created a workload that requires special attention.
This legislation has drawn broad support from all those who observe bankruptcy, who work in bankruptcy, who legislate as we do in the arena of bankruptcy, and who are eager to see reforms occur throughout the system.
Mr. Speaker, I reserve the balance of my time.
Ms. BALDWIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 5540, introduced by the gentleman from Michigan (Mr. SMITH), would extend chapter 12 of the bankruptcy code for an additional 11 months. Chapter 12 is the safety net of last resort for our farmers. It expired 4 months ago, on July 1, 2000. That means that if in the last 4 months a family farmer in my State of Wisconsin, or anywhere else in the United States, has needed the protection of chapter 12, they have not had it. Farmers in the most dire of economic circumstances do not have that protection today. Fortunately, this bill takes effect retroactively.
I am pleased that the House earlier passed a permanent and expanded chapter 12 bankruptcy provision as part of H.R. 2415. However, it appears unlikely that the bill will pass into law this session. Therefore, temporary extension of chapter 12 is needed to ensure that farmers are given the economic security that they need.
Chapter 12 is tailored to meet the unique economic realities of family farming during times of severe economic crisis. With chapter 12, Congress created a chapter of the bankruptcy code that provides a framework to prevent family farms from going out of business. At the time of its enactment in 1986, Congress was unable to foresee whether chapter 12 would be needed by America's family farmers indefinitely. Congress has extended chapter 12 four times since then. The law expired, as I said, on July 1, 2000. We must extend this law and ultimately make it permanent. The family farm is the backbone of the rural economy in Wisconsin and all over the Nation. Without chapter 12 protection, a family farmer has little choice but to liquidate all assets, sell the land, equipment, crops and herd to pay off creditors if an economic crisis hits. This means losing the farm. Losing a farm means losing 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 or sprawl.
With chapter 12 in place when an economic disaster 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 in order to keep their farm, they can do so. Chapter 12 must be there for them.
Chapter 12 must also be there for us. In order to protect America's food supply, it is in our country's best interest to protect family farms from foreclosure. Mr. Speaker, family farmers in Wisconsin are having a tough time. Wisconsin dairy farmers continue to be at the same price disadvantage they have been subject to for over 60 years. Wisconsin pork producers, like pork producers everywhere, are losing thousands of dollars every month. Soybean prices are at record lows and have seen a 36 percent decline in 3 years. In the past 6 years alone, Wisconsin has lost over 7,000 family farms at a rate equivalent to five per day.
The picture is similar nationally. In 1950, there were 5.6 million farms averaging 213 acres each in the country. In 1998, there were only 2.2 million farms averaging 432 acres each. Our families must have the assurance that if they are to reorganize their farms to keep their farms, they can do so. Farmers, like all of us, should be able to plan for their futures.
I support the passage of H.R. 5540 and hope that it becomes law quickly. I also look forward to assuring that chapter 12 becomes a permanent protection so that family farmers do not again face expiration of bankruptcy protection.
Mr. Speaker, I reserve the balance of my time.
Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
I want the RECORD to show that Susan Jensen-Conklin, the resident expert on bankruptcy, assisted us in not just this but on all phases of our work in bankruptcy; and Ray Smietanka, the chief counsel of our subcommittee, has also contributed handily to all of this.
Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. SMITH).
Mr. SMITH of Michigan. Mr. Speaker, the gentlewoman from Wisconsin (Ms. BALDWIN) talked to me going out the hall here maybe 3 weeks ago and I said, Shall we introduce the bill to last another 6 months? The gentlewoman from Wisconsin said, No, let's do it at least till June. This is somewhat of a frustration for us, I think, because there have been some that thought by only temporarily extending chapter 12 bankruptcy, which is vital for farmers that happen to be down on their luck, if we leave that out and only do it temporarily, somehow it is going to encourage the passage of the full bankruptcy package. I would hope something could happen on that package. Tomorrow morning the Senate is voting on cloture. The odds are that the bill will go to the President. Then the President has got to make a decision. But somehow there have got to be changes, that people that borrow money are not burdened by yet higher interest rates, because it is too easy to go into bankruptcy.
Likewise, talking to the gentleman from New York (Mr. NADLER), it is reasonable to conclude that some of those lenders probably are more eager to loan because they usually can go into the assets of that individual and end up making money at whatever interest rate they might be charging. Chapter 12 of the bankruptcy code is a very special provision available to America's family farmers in times of hardship. It allows family farms to reorganize their assets rather than liquidate them under the bankruptcy code. Without chapter 12, Mr. Speaker, many farmers would be forced to sell their farming equipment, which would mean that the farmer no longer has the plow and the planter and the disc and the cultivator and the milking machines that they need to make money on the farm. So without chapter 12, to file under chapter 11 or 13, it is a particular hardship on this kind of family farm business.
It is limited to family farmers, because under the provisions of this law, it specifically limits these chapter 12 provisions to a definition of the family farmer; and it eliminates many of the barriers that family farmers face when they seek to reorganize under chapter 11 or chapter 13.
Some have thought, as I mentioned, that continuing this as a temporary would somehow motivate the passage of the full bill. However, this is my fourth bill that has temporarily extended the chapter 12 bankruptcy for farmers that has passed through this Chamber. So I am not sure it is the motivator that some would hope.
In terms of amending this bill to add the judges, I objected to that simply because I do not want provisions in the bill that some Senators have indicated that they disagree with to slow down and reduce by any way the assurance that this bill is going to pass into law.
Let me say again, this relief is narrowly tailored to family farmers. Family farmers are those with debts less than $1.5 million, with 80 percent of their assets consisting of farm assets
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Again, hopefully sometime we are going to be able to make this permanent.
Mr. Speaker, Chapter 12 of the bankruptcy code is a special provision available to America's family farmers in times of hardship. It allows family farms to reorganize their assets rather than liquidate them under our bankruptcy code. Without Chapter 12, Mr. Speaker, many farmers would be forced to sell off their farming equipment, which would mean that the farmer could no longer reorganize and farm in order to pay debtors.
Chapter 12 eliminates many of the barriers that family farmers face when seeking to reorganize under either Chapter 11 or Chapter 13 of the bankruptcy code. Unlike these others, however, Chapter 12 expired last June and needs to be renewed. Leaders in both the House and the Senate have hoped a total bankruptcy reform bill would become law with provisions to make chapter 12 permanent. My bill, H.R. 5540, would extend it, retroactively, through May of 2001. My preference and what this Congress should pass, is to make Chapter 12 permanent. Some have thought that continuing Chapter 12 as a temporary provision would somehow encourage Congress and the President to pass the complete bankruptcy reform package into law. However, we have now passed four of my bills for temporary extension out of this chamber. So Chapter 12 as a motivator has failed.
This relief is narrowly tailored to family farmers. Family farmers are those with debt less than $1.5 million, with 80% of their assets consisting of farm assets and 50% of their income from farm income. This ensures that it is only family farmers that qualify for these provisions.
Again, hopefully, we'll be able to enact Chapter 12 permanently when we pass much needed bankruptcy overhaul legislation. But we need to make sure that Chapter 12 is available to our constituents in the interim and it's vital that we pass this legislation before Congress adjourns.
Ms. BALDWIN. Mr. Speaker, I yield 4 minutes to the distinguished gentleman from New York (Mr. NADLER), the ranking member of the Subcommittee on Commercial and Administrative Law.
Mr. NADLER. Mr. Speaker, today we consider legislation to give family farmers another reprieve from the brinkmanship the Republican majority has been playing with the protection available under chapter 12 of the bankruptcy code. While I seriously doubt that anyone will vote against this bill, it is unfortunate that we are still playing politics with the future of family farmers in America. I do want to commend the gentlewoman from Wisconsin (Ms. BALDWIN), who has consistently and energetically fought to protect family farmers, sometimes against enormous odds. In the Committee on the Judiciary, on the floor of the House and in discussions with leadership and with her colleagues, she has been a powerful voice for the family farmer and truly one of their best advocates.
The legislation we are considering today is the result of her bipartisan efforts along with the efforts of the gentleman from Michigan (Mr. SMITH), whose commitment to family farmers is similarly without question. Yet despite this bipartisan support, we go on with temporary extension after temporary extension. In fact, the political games being played with family farmers have been so extreme that chapter 12 was actually permitted to go out of existence last July 1. Each time, every year we have extended chapter 12 by a scant few months. This bill does so for 11 months. This has been going on for years.
Why do we continue to string family farmers along? Why not finally pass a permanent extension? What policy justification can there possibly be to enact the permanent extension of chapter 12 when there is bipartisan agreement in both Houses that we should do so? I have yet to hear any policy justification. So it would be preferable to pass a permanent extension bill today. But this temporary bill is the best we can get in this Congress, so I urge everyone to approve it.
This legislation will also extend, finally, a number of temporary bankruptcy judgeships and provide for additional bankruptcy judgeships in areas where increasing workloads necessitate them. This judgeship legislation has always been noncontroversial in this House. It was passed by the House in the form of a bill sponsored by the gentleman from Illinois (Mr. HYDE), the gentleman from Pennsylvania (Mr. GEKAS), the gentleman from Michigan (Mr. CONYERS), and myself 4 years ago.
There has been no disagreement that these additional judgeships are absolutely necessary. In fact, the gentleman from Georgia (Mr. KINGSTON), who has introduced his own bill on this subject, has joined me and the gentleman from Michigan (Mr. DINGELL) as cosponsors of this legislation. As with chapter 12, there is no policy argument against providing the necessary judicial resources to process cases fairly and in a timely manner. Delay costs everyone, debtors and creditors alike. We owe it to families and businesses in our communities to ensure that our courts can function fairly and normally. No additions to the bankruptcy bench have been made since 1992 despite the many speeches delivered on this floor concerning the large rise in bankruptcy filings. These additions to the bench are long overdue and should be approved.
Mr. Speaker, if we do not pass this bill, cases will be delayed in overcrowded courts and families will lose their farms. We should do the people's business and pass this bipartisan, noncontroversial bill today.
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Ms. BALDWIN. Mr. Speaker, I yield back the balance of my time.
Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume, only for the purpose of also extending my gratitude to the gentleman from South Carolina (Mr. GRAHAM), to the gentleman from Georgia (Mr. KINGSTON), to the gentleman from Delaware (Mr. CASTLE), for continuously contributing to the final outcome in the passage of this bill.
Mr. CONYERS. Mr. Speaker, I rise in support of this legislation before us today. This bill extends the period in which family farmers may recognize their debts for ten additional months. H.R. 5540 will meet the needs of financially distressed family farmers by giving them a chance to keep their farms. In addition, this legislation will provide much needed bankruptcy judgeships several states including Alabama, California, Delaware, Georgia, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, and Virginia.
While I do support this legislation, I would be remiss if I did not raise the issue that this legislation continuously has been extended because we have not yet brought forth acceptable bankruptcy reform legislation. Although we all agree that H.R. 5540 is necessary to aid our nation's farmers who are facing financial distress, we are constantly faced with the task of renewing this legislation instead of making it permanent. And it is well noted that the bankruptcy court system is overwrought with a backlog of cases and too few judges to handle the caseload. Despite the need to pass a bill that addresses important issues such as the needs of our farmers and our children as well as our nation's citizens and our bankruptcy courts, the leadership established a stealth process allowing wealthy creditors to severely undermine the goal of protecting the ability of small businesses to get a fresh start. The process questioned the integrity of the legislative process of the House. While conferees were appointed, no conference took place. Instead, a bankruptcy bill conference report was negotiated by a small group of staff working for a handful of Members in a closed door process, although the rules dictate that conference meetings must held in public. The most contentious issues were considered by the Republican leadership, excluding Democrats. This legislation was attached to an unrelated conference report and passed with minimal public scrutiny. Thankfully, the President has threatened a veto of this unjust legislation.
With H.R. 5540, we can ensure that for at least the next ten months, the family farmers are given the ability to engage in reorganization efforts. We also will make strides towards curing our nation's bankruptcy court system of serious backlog. I urge a ``yes'' vote.
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his support for H.R. 5540, which extends Chapter 12 of the Bankruptcy Code to June 1, 2001. Chapter 12 bankruptcy, which allows family farmers to reorganize their debts as compared to liquidating their assets, was scheduled to expire last year, but it has been extended through enactment of separate legislation.
This Member would thank the distinguished gentleman from Michigan (Mr. NICK SMITH) for introducing H.R. 5540. In addition, this Member would like to express his appreciation to the distinguished chairman of the Judiciary Committee from Illinois (Mr. HENRY HYDE), and the distinguished ranking minority member of the Judiciary Committee from Michigan (Mr.
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Chapter 12 bankruptcy has been a viable option for family farmers nationwide. 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, this will have a drastic impact on an agricultural sector already reeling from low commodity prices. Not only will many family farmers have to end their operations, but also land values will likely plunge downward. Such a decrease in land values will affect both the ability of family farmers to earn a living and the manner in which banks, making agricultural loans, conduct their lending activities. This Member has received many contacts from his constituents regarding the extension of Chapter 12 bankruptcy because of the serious situation now being faced by our nation's farm families--although the U.S. economy is generally healthy, it is clear that agricultural sector is hurting.
The gravity of this situation for family farmers nationwide makes it imperative that Chapter 12 bankruptcy is extended. Moreover, it is this Member's hope that Chapter 12 bankruptcy is extended permanently as provided in the conference report of the Bankruptcy Reform Act of 1999, which passed the House by a vote of 237-174, with this Member's support, on October 26, 2000. Unfortunately, the Senate has yet to pass this conference report. Furthermore, this Member is an original cosponsor of the Bankruptcy Reform Act, that was introduced by the distinguished chairman of the Judiciary Subcommittee on Commercial and Administrative Law from Pennsylvania (Mr. GEORGE GEKAS).
In closing, this Member would encourage his colleagues support for H.R. 5540, which extends Chapter 12 bankruptcy until June 1, 2001.
Mr. GEKAS. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. SHIMKUS). 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. 5540, 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 of the bill was amended so as to read:
``A bill to extend for 11 additional months the period for which chapter 12 of title 11 of the United States Code is reenacted; to provide for additional temporary bankruptcy judges; and for other purposes.''
A motion to reconsider was laid on the table.
END