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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:
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).
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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 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: 17:30]
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
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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 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 asked and was given permission to revise and extend his remarks.)
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.
END