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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Farmers and Family Fishermen 
Protection Act of 2002''.

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(b) of title 11, United 
States Code, as so designated by this Act, 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:

``12. Adjustments of Debts of a Family Farmer or Family         1201''.
                            Fisherman with Regular Annual 
                            Income.
    (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.

Summary: Family Farmers and Family Fishermen Protection Act of 2002 - Amends the Federal Bankruptcy Code to reenact Chapter 12, Adjustment of Debts of a Family Farmer with Regular Annual Income . Provides periodic adjustments for inflation of the debt limit for family farmers. Cites circumstances under which the claim of a governmental unit that arises from the disposition of a farm asset used in the debtor's farming operation shall be treated as an unsecured claim not entitled to priority. Increases from $1.5 million to $3.237 million the maximum aggregate debt that permits a farming operation to qualify as a family farming operation for debt adjustment purposes. Decreases from 80 percent to 50 percent the minimum percentage of aggregate, noncontingent liquidated debts arising out of such farming operation. Repeals the requirement that a family farmer and spouse receive over 50 percent of income from farming operations in the year before a bankruptcy petition is filed. Prohibits: (1) retroactive assessment of disposable income. And (2) post-confirmation modification of a bankruptcy plan that would increase the amount of payments that were due before such modification. Requires debtor's consent for post-confirmation increase in payments. Extends Chapter 12 coverage to family fishermen whose aggregate debts do not exceed $1.5 million, of which at least 80 percent of aggregate noncontingent, liquidated debts arise out of a commercial fishing operation.