Grassley immediately called on Speaker Newt Gingrich to schedule swift action yet this year by the House of Representatives on the Senate-backed proposal. Congress is expected to adjourn for the year by mid-November. Grassley said the administration supports his effort -- which is co-sponsored by Senate Minority Leader Tom Daschle of South Dakota -- so the President would likely sign into law the Grassley Family Farmer Protection Act of 1997.
"Chapter 12 of the bankruptcy code is a proven success. It has enabled family farmers to recover from tough times and prosper. It has proven that common sense policies can make a positive difference. I urge the House to move quickly to make permanent this effective and responsible tool which has helped so many family farmers retain stewardship of the soil and continue in the business of farming," Grassley said.
Grassley introduced the original bill which led to Chapter 12 for farmers in response to the turmoil of the farm crisis in the 1980s. At the time, he said the landmark bankruptcy legislation enacted during the Great Depression specific to farmers had been allowed to lapse. A key provision of Chapter 12 prohibits lenders from foreclosing on property if the farmer is able to make rental payments. In addition, farmers are not required to obtain creditor approval of their reorganization plans upon application. Under previous law, a farmer's reorganization plan was frequently voted down by his lenders and other secured creditors.
The first formal review of Chapter 12 by Iowa State University showed that it helped at least 80 percent of Iowa farmers who filed in 1986 and 1987 to stay involved in farming through 1994.
Grassley serves as chairman of the Judiciary subcommittee with primary jurisdiction over bankruptcy policy. Throughout this year, Grassley has been active in proposing changes to the federal bankruptcy code. In April, he introduced his bill to secure a permanent place in the bankruptcy code for Chapter 12. He won passage of the bill by the Senate Judiciary Committee earlier this month. Grassley also won approval last night from the U.S. Senate for a bill he introduced in September to give school districts and local government a priority in recovering back taxes owed by property owners who are involved in bankruptcy proceedings. The Grassley Investment in Education Act of 1997 was endorsed by the Iowa and the National School Boards Associations, as well as the Clinton administration.
In September, Grassley introduced a bill to protect tithing and charitable giving by individuals who are recovering from bankruptcy. It is called the Religious Liberty and Charitable Donation Protection Act of 1997. This month, Grassley introduced a balanced, bi-partisan consumer bankruptcy reform bill to address the growing problem of consumer debt and bankruptcy.
