To amend title 11 of the United States Code to protect family farmers and family fishermen.

January 27, 2003

Ms. BALDWIN introduced the following bill; which was referred to the Committee on the Judiciary

To amend title 11 of the United States Code to protect family farmers and family fishermen.

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 `Family Farmers and Family Fishermen Protection Act of 2003'.

SEC. 2. 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), is hereby reenacted, and as here reenacted is amended by this Act.

(2) EFFECTIVE DATE- Subsection (a) shall take effect on the date of the enactment of this Act.

(b) 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).

SEC. 3. DEBT LIMIT INCREASE.

Section 104(b) of title 11, United States Code, is amended by inserting `101(18),' after `sections' 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(d) of title 11, United States Code, is amended by striking `a State or local governmental unit' and inserting `any governmental unit'.

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:

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.).

SEC. 9. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

This Act and the amendments made by this Act 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.

END