II 

108TH CONGRESS 

1ST SESSION S. 2004

To permanently reenact chapter 12 of title 11, United States Code, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 9, 2003

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

which was read twice and referred to the Committee on the Judiciary 

A BILL

To permanently reenact chapter 12 of title 11, United States 

Code, and for other purposes.

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 ‘‘Protection of Family 

5 Farmers and Family Fisherman Act of 2003’’. 

6 SEC. 2. PERMANENT REENACTMENT OF CHAPTER 12. 

7 (a) REENACTMENT.—

8 (1) IN GENERAL.—Chapter 12 of title 11, 

9 United States Code, as reenacted by section 149 of 

10 division C of the Omnibus Consolidated and Emer-
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1 gency Supplemental Appropriations Act, 1999 (Pub2 lic Law 105–277), is hereby reenacted, and as here 

3 reenacted is amended by this Act. 

4 (2) EFFECTIVE DATE.—Subsection (a) shall 

5 take effect on the date of the enactment of this Act. 

6 (b) CONFORMING AMENDMENT.—Section 302 of the 

7 Bankruptcy Judges, United States Trustees, and Family 

8 Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is 

9 amended by striking subsection (f).

10 SEC. 3. DEBT LIMIT INCREASE. 

11 Section 104(b) of title 11, United States Code, as 

12 amended by section 226, is amended by inserting 

13 ‘‘101(18),’’ after ‘‘101(3),’’ each place it appears. 

14 SEC. 4. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS. 

15 (a) CONTENTS OF PLAN.—Section 1222(a)(2) of title 

16 11, United States Code, is amended to read as follows: 

17 ‘‘(2) provide for the full payment, in deferred 

18 cash payments, of all claims entitled to priority 

19 under section 507, unless—

20 ‘‘(A) the claim is a claim owed to a govern21 mental unit that arises as a result of the sale, 

22 transfer, exchange, or other disposition of any 

23 farm asset used in the debtor’s farming oper24 ation, in which case the claim shall be treated 

25 as an unsecured claim that is not entitled to 
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1 priority under section 507, but the debt shall be 

2 treated in such manner only if the debtor re3 ceives a discharge; or 

4 ‘‘(B) the holder of a particular claim 

5 agrees to a different treatment of that claim;’’. 

6 (b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) 

7 of title 11, United States Code, as so designated by section 

8 719, is amended by striking ‘‘a State or local govern9 mental unit’’ and inserting ‘‘any governmental unit’’. 

10 (c) EFFECTIVE DATE; APPLICATION OF AMEND11 MENTS.—This section and the amendments made by this 

12 section shall take effect on the date of the enactment of 

13 this Act and shall not apply with respect to cases com14 menced under title 11 of the United States Code before 

15 such date.

16 SEC. 5. DEFINITION OF FAMILY FARMER. 

17 Section 101(18) of title 11, United States Code, is 

18 amended—

19 (1) in subparagraph (A)—

20 (A) by striking ‘‘$1,500,000’’ and inserting 

21 ‘‘$3,237,000’’; and 

22 (B) by striking ‘‘80’’ and inserting ‘‘50’’; 

23 and 

24 (2) in subparagraph (B)(ii)—
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1 (A) by striking ‘‘$1,500,000’’ and inserting 

2 ‘‘$3,237,000’’; and 

3 (B) by striking ‘‘80’’ and inserting ‘‘50’’.

4 SEC. 6. ELIMINATION OF REQUIREMENT THAT FAMILY 

5 FARMER AND SPOUSE RECEIVE OVER 50 PER6 CENT OF INCOME FROM FARMING OPER7 ATION IN YEAR PRIOR TO BANKRUPTCY. 

8 Section 101(18)(A) of title 11, United States Code, 

9 is amended by striking ‘‘for the taxable year preceding the 

10 taxable year’’ and inserting the following: 

11 ‘‘for—

12 ‘‘(i) the taxable year preceding; or 

13 ‘‘(ii) each of the 2d and 3d taxable years 

14 preceding; 

15 the taxable year’’.

16 SEC. 7. PROHIBITION OF RETROACTIVE ASSESSMENT OF 

17 DISPOSABLE INCOME. 

18 (a) CONFIRMATION OF PLAN.—Section 1225(b)(1) of 

19 title 11, United States Code, is amended—

20 (1) in subparagraph (A) by striking ‘‘or’’ at the 

21 end; 

22 (2) in subparagraph (B) by striking the period 

23 at the end and inserting ‘‘; or’’; and 

24 (3) by adding at the end the following: 
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1 ‘‘(C) the value of the property to be distributed 

2 under the plan in the 3-year period, or such longer 

3 period as the court may approve under section 

4 1222(c), beginning on the date that the first dis5 tribution is due under the plan is not less than the 

6 debtor’s projected disposable income for such pe7 riod.’’. 

8 (b) MODIFICATION OF PLAN.—Section 1229 of title 

9 11, United States Code, is amended by adding at the end 

10 the following: 

11 ‘‘(d) A plan may not be modified under this section—

12 ‘‘(1) to increase the amount of any payment 

13 due before the plan as modified becomes the plan; 

14 ‘‘(2) by anyone except the debtor, based on an 

15 increase in the debtor’s disposable income, to in16 crease the amount of payments to unsecured credi17 tors required for a particular month so that the ag18 gregate of such payments exceeds the debtor’s dis19 posable income for such month; or 

20 ‘‘(3) in the last year of the plan by anyone ex21 cept the debtor, to require payments that would 

22 leave the debtor with insufficient funds to carry on 

23 the farming operation after the plan is completed.’’.
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1 SEC. 8. FAMILY FISHERMEN. 

2 (a) DEFINITIONS.—Section 101 of title 11, United 

3 States Code, is amended—

4 (1) by inserting after paragraph (7) the fol5 lowing:

6 ‘‘(7A) ‘commercial fishing operation’ means—

7 ‘‘(A) the catching or harvesting of fish, 

8 shrimp, lobsters, urchins, seaweed, shellfish, or 

9 other aquatic species or products of such spe10 cies; or 

11 ‘‘(B) for purposes of section 109 and chap12 ter 12, aquaculture activities consisting of rais13 ing for market any species or product described 

14 in subparagraph (A); 

15 ‘‘(7B) ‘commercial fishing vessel’ means a ves16 sel used by a family fisherman to carry out a com17 mercial fishing operation;’’; and 

18 (2) by inserting after paragraph (19) the fol19 lowing: 

20 ‘‘(19A) ‘family fisherman’ means—

21 ‘‘(A) an individual or individual and spouse 

22 engaged in a commercial fishing operation—

23 ‘‘(i) whose aggregate debts do not ex24 ceed $1,500,000 and not less than 80 per25 cent of whose aggregate noncontingent, liq26 uidated debts (excluding a debt for the 
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1 principal residence of such individual or 

2 such individual and spouse, unless such 

3 debt arises out of a commercial fishing op4 eration), on the date the case is filed, arise 

5 out of a commercial fishing operation 

6 owned or operated by such individual or 

7 such individual and spouse; and 

8 ‘‘(ii) who receive from such commer9 cial fishing operation more than 50 percent 

10 of such individual’s or such individual’s 

11 and spouse’s gross income for the taxable 

12 year preceding the taxable year in which 

13 the case concerning such individual or such 

14 individual and spouse was filed; or 

15 ‘‘(B) a corporation or partnership—

16 ‘‘(i) in which more than 50 percent of 

17 the outstanding stock or equity is held 

18 by—

19 ‘‘(I) 1 family that conducts the 

20 commercial fishing operation; or 

21 ‘‘(II) 1 family and the relatives 

22 of the members of such family, and 

23 such family or such relatives conduct 

24 the commercial fishing operation; and 
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1 ‘‘(ii)(I) more than 80 percent of the 

2 value of its assets consists of assets related 

3 to the commercial fishing operation; 

4 ‘‘(II) its aggregate debts do not ex5 ceed $1,500,000 and not less than 80 per6 cent of its aggregate noncontingent, liq7 uidated debts (excluding a debt for 1 

8 dwelling which is owned by such corpora9 tion or partnership and which a share10 holder or partner maintains as a principal 

11 residence, unless such debt arises out of a 

12 commercial fishing operation), on the date 

13 the case is filed, arise out of a commercial 

14 fishing operation owned or operated by 

15 such corporation or such partnership; and 

16 ‘‘(III) if such corporation issues stock, 

17 such stock is not publicly traded; 

18 ‘‘(19B) ‘family fisherman with regular annual 

19 income’ means a family fisherman whose annual in20 come is sufficiently stable and regular to enable such 

21 family fisherman to make payments under a plan 

22 under chapter 12 of this title;’’. 

23 (b) WHO MAY BE A DEBTOR.—Section 109(f) of title 

24 11, United States Code, is amended by inserting ‘‘or fam25 ily fisherman’’ after ‘‘family farmer’’. 
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1 (c) CHAPTER 12.—Chapter 12 of title 11, United 

2 States Code, is amended—

3 (1) in the chapter heading, by inserting ‘‘OR 

4 FISHERMAN’’ after ‘‘FAMILY FARMER’’; 

5 (2) in section 1203, by inserting ‘‘or commer6 cial fishing operation’’ after ‘‘farm’’; and 

7 (3) in section 1206, by striking ‘‘if the property 

8 is farmland or farm equipment’’ and inserting ‘‘if 

9 the property is farmland, farm equipment, or prop10 erty used to carry out a commercial fishing oper11 ation (including a commercial fishing vessel)’’. 

12 (d) CLERICAL AMENDMENT.—In the table of chap13 ters for title 11, United States Code, the item relating to 

14 chapter 12, is amended to read as follows:

‘‘12. Adjustments of Debts of a Family Farmer or Family 

Fisherman with Regular Annual Income ..... 1201’’.

15 (e) APPLICABILITY.—Nothing in this section shall 

16 change, affect, or amend the Fishery Conservation and 

17 Management Act of 1976 (16 U.S.C. 1801, et seq.).

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