[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.).