On March 19, 2003, the House passed the Bankruptcy Abuse Prevention and Consumer Act of 2003, (H.R. 975), the “Bankruptcy Reform Legislation” that included 27 new bankruptcy judgeships approved by the Judicial Conference of the United States several years ago. The bill was sent to the Senate, but no action was taken on it.
Congressman Jack Kingston (R-Ga.) introduced the Bankruptcy Judgeship Act of 2003, H.R. 1428, a “free standing” bill containing 36 new bankruptcy judgeships, recently approved by the Judicial Conference. A hearing was held on this bill before the House Judiciary Subcommittee on Commercial and Administrative Law, chaired by Congressman Chris Cannon (R-Utah), relative to the number of judgeships being requested and the reliability of the methodology utilized to demonstrate the need for additional judicial positions. Senator Joseph Biden (D-Del.) introduced a similar bill in the Senate as an amendment to S. 878. It authorizes several district judgeships in addition to the 36 bankruptcy judgeships. It cleared the Senate Judiciary Committee by a vote of 13 - 6 and passed the full Senate by unanimous consent.
Chairman Sensenbrenner has been reluctant to move either of the aforementioned judgeship bills because of the perception that the passage of the judgeships separately would dilute the effort to pass the more comprehensive bankruptcy reform legislation (H.R. 975). The reluctance to “break out” sections of H.R. 975 also affects the permanent extension of chapter 12, the “financial netting” legislation, as well as several “cross-border” insolvency provisions.
No one is quite sure what the Senate will do with the House “package.” According to Congressional Quarterly, Senate Minority Leader Tom Daschle (D-S.D.) could be under particular pressure to force a resolution of the issue. Farmers and credit card firms are two important constituencies in his home state. However, Daschle may be confronted, once again, by fellow Senate Democrat, Charles E. Schumer of New York, who intends to offer language that would prevent anti-abortion protesters from filing for bankruptcy protection in order to escape fines or civil judgments. The inclusion of similar language, which had been negotiated by Senator Schumer and Congressman Henry Hyde (R-Ill.), resulted in the previous defeat of the reform bill in the House at the end of the 107th Congress at the hands of anti-abortion law makers.
Senate Majority Leader Bill Frist (R-Tenn.), was non-committal about the House tactic, saying that he did not know what the chances were of finding time to take up bankruptcy reform. Senator Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee, has been anxious to move bankruptcy legislation, which has actually been stalled in Congress since 1997. He expressed a willingness to have the Senate take up the issue without his committee’s formal consideration. Senate Finance Chairman Charles E. Grassley (R-Iowa), author of the original chapter 12 language and the Senate’s chief backer of the bankruptcy reform legislation, said it was “high time” to complete bankruptcy reform on a permanent basis. A group of senators, including Grassley, recently wrote to Sen. Frist urging Senate floor action.
Taking a contrary position, Rep. John Conyers (D-Mich.), the ranking Democrat on the House Judiciary Committee, termed the House maneuver as “disgraceful,” asserting that it could mean that the farm bankruptcy bill would be held up in order to pass legislation he called a “special interest bonanza” for bank and credit card companies.
Since this is an election year, the legislative time available to consider bankruptcy reform is indeed limited. Stay tuned.