[The U.S. Senate late last night (Thursday night) passed legislation to renew family farmer bankruptcy protections that expired July 1.  The bill now goes to the desk of President Bush, who will sign it.  The House had passed the bill last month.  The bipartisan Senate effort has been led by Sen. Charles Grassley (R-Iowa) and Sen. Patrick Leahy (D-Vt.), who had introduced S.1323, the companion to the House bill.  The legislation will retroactively renew and extend family farmer bankruptcy protections until Jan. 1, 2004.  Following is Senator Leahy’s explanation of the bill from Senate discussion before the vote at about 11 p.m. Thursday night.]

Statement Of Patrick Leahy
Family Farmer Bankruptcy Protection, H.R. 2465
July 31, 2003

Mr. President, I am pleased that the Senate is finally considering legislation to renew family farmer bankruptcy protection, which expired on July 1. 

More than a month ago, on June 23, the House of Representatives passed H.R. 2465 by an overwhelming vote of 379-3.  This legislation will retroactively renew and extend family farmer bankruptcy protection until January 1, 2004.  Senator Feingold, Senator Grassley and I have been urging for weeks that the Senate majority leadership bring up this House-passed bill to retroactively renew Chapter 12 of the Bankruptcy Code. 

Senator Grassley and I introduced S. 1323, the companion bill to this legislation to temporarily extend these protections that our farmers have come to rely upon.  But this is just a short term fix.  We need to stop playing politics and permanently reauthorize the Chapter 12 family farmer protections.

Too many family farmers have been left in legal limbo in bankruptcy courts across the country because Chapter 12 of the Bankruptcy Code is still a temporary measure. This is the sixth time that Congress must act to restore or extend basic bankruptcy safeguards for family farmers because Chapter 12 is still a temporary provision despite its first passage into law in 1986. Our family farmers do not deserve these lapses in bankruptcy law that could mean the difference between foreclosure and farming.

In 2000 and 2001, for example, the Senate -- then as now controlled by the other party -- failed to take up a House-passed bill to retroactively renew Chapter 12.  As a result, family farmers lost Chapter 12 bankruptcy protection for eight months.  Another lapse of Chapter 12 lasted more than six months in the previous Congress.  At the end of June, Chapter 12 lapsed once again.  Enough is enough. It is time for Congress to make Chapter 12 a permanent part of the Bankruptcy Code to provide a stable safety net for our nation's family farmers.

Last year, I strongly supported former Senator Carnahan’s bipartisan amendment to make Chapter 12 permanent as part of the Senate-passed farm bill. The Senate unanimously approved the Carnahan amendment by a 93-0 vote. Unfortunately, the House majority objected to including the Carnahan amendment in the farm bill conference report and agreed to an extension of Chapter 12 only through the end of 2002.  Thus, at the tail end of the last Congress, we had to pass yet another six-month extension of basic bankruptcy protection for family farmers.

In the bipartisan bankruptcy reform conference, we again tried to make Chapter 12 permanent and update and expand its coverage. During our conference negotiations, we adopted most of the Senate-passed provisions, including those authored by Senator Grassley to make Chapter 12 permanent and those authored by Senator Feingold to strengthen Chapter 12 to help our family farmers with the difficulties they face.

Unfortunately, the House majority again scuttled our bipartisan efforts by failing to pass the rule to consider the bipartisan conference report on the Bankruptcy Abuse Prevention and Consumer Protection Act.

It is time to end this absurdity and make these bankruptcy protections permanent.  Everyone agrees that Chapter 12 has worked.  When this bill passed in the House, Chairman Sensenbrenner praised Chapter 12, but then only proposed reauthorizing it for 12 months.  He admitted that the only reason his bill, which we are finally passing today, did not permanently reauthorize Chapter 12 was because it is being used as leverage for the controversial larger bankruptcy reform bill.  That is unfortunate.

I will continue to work hard with Senator Grassley, Senator Feingold and others on both sides of the aisle to pass legislation that once and for all assures our farmers of permanent bankruptcy protection to keep their farms.  In the meantime, we should quickly pass this legislation and end another lapse in this basic bankruptcy protection for our family farmers.

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