II 

112TH CONGRESS 

2D SESSION S. 3545 

To amend title 11 of the United States Code to clarify the rule allowing 

discharge as a nonpriority claim of governmental claims arising from 

the disposition of farm assets under chapter 12 bankruptcies. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 13, 2012 

Mr. GRASSLEY (for himself and Mr. FRANKEN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend title 11 of the United States Code to clarify 

the rule allowing discharge as a nonpriority claim of 

governmental claims arising from the disposition of farm 

assets under chapter 12 bankruptcies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Family Farmer Bank5 ruptcy Tax Clarification Act of 2012’’. 


srobinson on DSK4SPTVN1PROD with BILLS
2 

•S 3545 IS

1 SEC. 2. CLARIFICATION OF RULE ALLOWING DISCHARGE 

2 TO GOVERNMENTAL CLAIMS ARISING FROM 

3 THE DISPOSITION OF FARM ASSETS UNDER 

4 CHAPTER 12 BANKRUPTCIES. 

5 (a) IN GENERAL.—Section 1222(a) of title 11, 

6 United States Code, is amended— 

7 (1) in paragraph (2), by striking ‘‘unless—’’ 

8 and all that follows through ‘‘the holder’’ and insert9 ing ‘‘unless the holder’’; 

10 (2) in paragraph (3), by striking ‘‘and’’ at the 

11 end; 

12 (3) in paragraph (4), by striking the period at 

13 the end and inserting ‘‘; and’’; and 

14 (4) by adding at the end the following: 

15 ‘‘(5) notwithstanding the application of the 

16 rules under subchapter V of chapter 1 of the Inter17 nal Revenue Code of 1986, and without regard to 

18 whether the claim arose before or after the filing of 

19 the petition, provide for the treatment and payment 

20 of any unsecured claim owed to a governmental unit 

21 by the debtor or the estate that arises as a result 

22 of the sale, transfer, exchange, or other disposition 

23 of any farm asset used in the debtor’s farming oper24 ation as an unsecured claim that is not entitled to 

25 priority under section 507.’’. 


srobinson on DSK4SPTVN1PROD with BILLS
3 

•S 3545 IS

1 (b) POSTPETITION CLAIMS RELATING TO SALE, 

2 TRANSFER, EXCHANGE, OR OTHER DISPOSITION OF

3 FARM ASSETS.— 

4 (1) IN GENERAL.—Section 1222 of title 11, 

5 United States Code, is amended by adding at the 

6 end the following: 

7 ‘‘(e)(1) A governmental unit may file a proof of claim 

8 for a claim described in subsection (a)(5) that arises after 

9 the date on which the petition is filed. 

10 ‘‘(2)(A) Except as provided in subparagraph (B), if 

11 a governmental unit has not filed a proof of claim under 

12 paragraph (1) for a claim described in subsection (a)(5), 

13 after the date that is 120 days after the date on which 

14 the claim arises, the trustee or the debtor may file proof 

15 of such claim. 

16 ‘‘(B)(i) For a claim described in subsection (a)(5) 

17 that is a tax for which a return is due, if the debtor or 

18 trustee has provided notice as described in clause (ii) and 

19 the governmental unit has not filed a proof of claim under 

20 paragraph (1), after the date that is 180 days after the 

21 date on which the debtor or trustee provides the notice, 

22 the debtor or the trustee may file proof of such claim. 

23 ‘‘(ii) Notice as described in this clause is notice by 

24 the debtor or the trustee— 


srobinson on DSK4SPTVN1PROD with BILLS
4 

•S 3545 IS

1 ‘‘(I) indicating the intent to file the applicable 

2 claim; 

3 ‘‘(II) setting forth the amount of the claim; 

4 ‘‘(III) that includes a copy of the filed return 

5 relating to the claim; and 

6 ‘‘(IV) that is delivered to the governmental unit 

7 at the address designated for requests made under 

8 section 505(b)(1)(A). 

9 ‘‘(3) A claim filed under paragraph (1) or (2) shall 

10 be allowed or disallowed under section 502, but shall be 

11 determined as of the date such claim arises, and shall be 

12 allowed under section 502 (a), (b), or (c) of this title, or 

13 disallowed under section 502(d) or 502(e) of this title the 

14 same as if such claim had arisen before the date of the 

15 filing of the petition.’’. 

16 (2) MODIFICATION OF PLAN AFTER CONFIRMA17 TION.—Section 1229(a) of title 11, United States 

18 Code, is amended— 

19 (A) in paragraph (2), by striking ‘‘or’’ at 

20 the end; 

21 (B) in paragraph (3), by striking the pe22 riod at the end and inserting ‘‘; or’’; and 

23 (C) by adding at the end the following: 


srobinson on DSK4SPTVN1PROD with BILLS
5 

•S 3545 IS

1 ‘‘(4) provide for the payment of a claim de2 scribed in section 1222(a)(5) that arose after the 

3 date on which the petition is filed.’’. 

4 (c) TECHNICAL CORRECTION.—Section 1228(a) of 

5 title 11, United States Code, is amended in the matter 

6 preceding paragraph (1)— 

7 (1) by inserting a comma after ‘‘all debts pro8 vided for by the plan’’; and 

9 (2) by inserting a comma after ‘‘allowed under 

10 section 503 of this title’’. 

11 (d) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to any bankruptcy case that— 

13 (1) is pending on the date of enactment of this 

14 Act and relating to which an order of discharge 

15 under section 1228 of title 11, United States Code, 

16 has not been entered; or 

17 (2) commences on or after the date of enact18 ment of this Act. 

Æ 


srobinson on DSK4SPTVN1PROD with BILLS