[Congressional Record (Bound Edition), Volume 145 (1999), Part 6] [House] [Pages 8498-8509] [From the U.S. Government Publishing Office, www.gpo.gov]PROVIDING FOR CONSIDERATION OF H.R. 833, BANKRUPTCY REFORM ACT OF 1999 Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 158 and ask for its immediate consideration. The Clerk read the resolution, as follows: H. Res. 158 Resolved, That at any time after the adoption of this resolution the Speaker may, pursuant to clause 2(b) of rule XVIII, declare the House resolved into the Committee of the Whole House on the state of the Union for consideration of the bill (H.R. 833) to amend title 11 of the United States Code, and for other purposes. The first reading of the bill shall be dispensed with. Points of order against consideration of the bill for failure to comply with section 302 or section 311 of the Congressional Budget Act of 1974 are waived. General debate shall be confined to the bill and shall not exceed one hour equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary. After general debate the bill shall be considered for amendment under the five-minute rule. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on the Judiciary now printed in the bill. The committee amendment in the nature of a substitute shall be considered as read. All points of order against the committee amendment in the nature of a substitute are waived. No amendment to the committee amendment in the nature of a substitute shall be in order except those printed in the report of the Committee on Rules accompanying this resolution. Each amendment may be offered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question in the House or in the Committee of the Whole. All points of order against the amendments printed in the report are waived. The chairman of the Committee of the Whole may: (1) postpone until a time during further consideration in the Committee of the Whole a request for a recorded vote on any amendment; and (2) reduce to five minutes the minimum time for electronic voting on any postponed question that follows another electronic vote without intervening business, provided that the minimum time for electronic voting on the first in any series of questions shall be 15 minutes. At the conclusion of consideration of the bill for amendment the Committee shall rise and report the bill to the House with such amendments as may have been adopted. Any Member may demand a separate vote in the House on any amendment adopted in the Committee of the Whole to the bill or to the committee amendment in the nature of a substitute. The previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit with or without instructions. The SPEAKER pro tempore (Mr. Miller of Florida). The gentleman from Texas (Mr. Sessions) is recognized for 1 hour. Mr. SESSIONS. Mr. Speaker, for purposes of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Frost), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only. H. Res. 158 is a fair, structured rule providing 1 hour of general debate divided equally between the chairman and ranking member of the Committee on the Judiciary. The rule waives points of order against consideration of the bill for failure to comply with section 302 of the Congressional Budget Act which prohibits consideration of legislation which exceeds a committee's allocation of new spending authority, or section 311 of the Congressional Budget Act which prohibits consideration of legislation that would cause the total level of new budget authority or outlays in the most recent budget resolution to be exceeded or cause revenues to be less. {time} 1100 The rule provides that it shall be in order to consider as an original bill for the purpose of amendment under the 5-minute rule the amendment in the nature of a substitute recommended by the Committee on the Judiciary now printed in the bill. The rule waives all points of order against the committee amendment in the nature of a substitute and amendments thereto. The rule makes in order only those amendments printed in the Committee on Rules report accompanying the resolution. The rule provides that amendments made in order may be offered only in the order printed in the report and may be offered only by a Member designated in the report. These amendments shall be considered as read and be debatable for the time specified in the report equally divided and controlled by the proponent and opponent. They shall not be subject to amendment and shall not be subject to a demand for division of the question in the House or in the Committee of the Whole. The rule allows for the Chairman of the Committee of the Whole to postpone votes during consideration of the bill and to reduce voting time to 5 minutes on a proposed question if the vote follows a 15- minute vote. Finally, the rule provides one motion to recommit with or without instructions. Mr. Speaker, H.R. 833, the Bankruptcy Reform Act of 1999, will fundamentally reform the existing bankruptcy system into a needs-based system. I am proud of the tireless efforts of the House Committee on the Judiciary to address this issue and ensure that our bankruptcy laws operate fairly, efficiently, and free of abuse. This should not be a controversial issue because Congress has spoken on this issue before. Both the House and the Senate overwhelmingly approved bankruptcy reform legislation last year on a bipartisan basis. Although the measure fell short in the waning days of the 105th Congress because the Senate failed to act on the conference report, the House voted by a veto-proof majority of 300 to 125 to pass very similar legislation last year. There is great need for this bill now. A record 1.42 million personal bankruptcy filings were recorded in 1998. This is a stunning increase of 500 percent since 1980. Despite an unprecedented time of economic prosperity, unemployment, and rising disposable income, personal bankruptcies are rising, costing over $40 billion in the past year. Without serious reform of our bankruptcy laws, these trends promise to grow each year, costing businesses and consumers even more in the form of losses and higher costs of credit. As we debate and vote today, we should keep in mind two important tenets of bankruptcy reform. First, the bankruptcy system should provide the amount of debt relief needed that an individual needs, no more and no less. Second, bankruptcy should be a last resort and not a first response to a financial crisis. As a businessman with over 16 years' experience in the private sector and because of many conversations that I have had with leaders, consumers and others who are associated with loan defaults, I am well aware of the problems that are associated with the abuse of our bankruptcy laws. A record 1.4 million personal bankruptcies were filed last year. That is one out of every 75 households in America. The debts that remained unpaid as a result of those bankruptcies each year cost American families that do pay their bills on time $550 a year in the form of higher cost for credit, goods and services. [[Page 8499]] Unfortunately, much of the debt that was eventually passed on to the consumers last year was debt that bankruptcy filers could have avoided by simply repaying those bills because they had the ability. That is why it is so important to pass real bankruptcy reform. Opponents of this bill have tried to divert the discussion away from the merits of the bill and claim that it would make it more difficult for divorced women to obtain child support and alimony payments. However, nothing could be further from the truth. This bankruptcy reform protects the financial security of women and children by giving them a higher priority than under current law. The legislation closes loopholes that allow some debtors to use the current system to delay or even evade child support and alimony payments. The bill recognizes that no obligation is more important than that of a parent to his or her children. Currently, child support payments are the seventh priority, behind such things as attorney's fees. Make no mistake about this, H.R. 833 puts women and children first, at the head of the list. We should provide greater protection to families who are owed child support, and this bill will do just that. The bill also address other problems, including needs-based bankruptcy. The heart of this legislation is a needs-based formula that separates filers into Chapter 7 or Chapter 13 based upon their ability to pay. While many families may face job loss, divorce or medical bills, and therefore legitimately need the protection provided by the Bankruptcy Code, research has shown that some Chapter 7 filers actually have the capacity to repay some of what they owe. The formula directs into Chapter 13 those filers who earn more than the national median income which is roughly $51,000 for a family of four, if they can pay all secured debt and at least 20 percent of unsecured non-priority debt. This bill recognizes the need for consumer education and protection. It includes education provisions that will ensure that debtors are made aware of their options before they file for bankruptcy, including alternatives to bankruptcy such as credit counseling. And the bill cracks down on ``bankruptcy mills,'' law firms and other entities that push debtors into bankruptcy without fully explaining the consequences. I urge my colleagues to support this rule and the underlying legislation. Madam Speaker, I reserve the balance of my time. Mr. FROST. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, as an original cosponsor of H.R. 833, I am pleased that this legislation has come to the floor in a timely manner. However, given the fact that this bill as well as the Defense Supplemental are the only major pieces of business this week, I do think that the Republican leadership should have afforded more Members the opportunity to offer amendments to this important and far-reaching legislation. Madam Speaker, reform of the bankruptcy system in this country is indeed a major initiative. In this decade, the number of personal bankruptcy filings has skyrocketed, more than doubling in the past 8 years and increasing by an astonishing 400 percent since 1980. Last year, more than 1.43 million Americans filed for personal bankruptcy. This is indeed an alarming trend, and it is especially alarming in light of the fact that the U.S. economy is booming and personal incomes are rising. While there are certainly more individuals among these numbers who are seeking Chapter 7 bankruptcy relief as a last resort, there are also many in this number who are using the bankruptcy system to escape debts they are capable of paying. As the gentleman from Illinois (Mr. Hyde) said yesterday in the Committee on Rules, this bill is an attempt to achieve an appropriate balance between debtor and creditor rights. By establishing needs-based bankruptcy standards, this legislation seeks to ensure that those who need a fresh start will be given one but that those consumers who can afford to repay their debts from future income must do so. While similar legislation was passed overwhelmingly by the House last year, there is still controversy surrounding this bill. The Committee on the Judiciary held 5 days of hearings and markup on this bill and took 28 recorded votes on amendments. In addition, 37 amendments were filed with the Committee on Rules. Yet, this rule only makes in order 11 amendments, including a manager's amendment and an amendment in the nature of a substitute to be offered by the ranking member of the Subcommittee on Commercial and Administrative Law, the gentleman from New York (Mr. Nadler). The Nadler substitute retains much of the work of the committee but differs significantly from H.R. 833 by granting local judicial discretion in the determination about whether a debtor appropriately belongs in Chapter 7 or Chapter 13 bankruptcy. The Nadler substitute eliminates the provisions in the committee bill which establish new grounds for making credit card debt non-dischargeable and offers significantly different child support and alimony payment provisions. Now, before my Republican colleagues jump in and say that this rule provide for 4\1/2\ hours of debate on amendments, including 1 hour on the Nadler substitute, as well as 1 hour of general debate in addition to this hour on the rule, let me note for the record two of the amendments which the Republican majority voted to exclude from consideration: first, an amendment offered by the subcommittee ranking member which would have significantly altered the bill's treatment of child support payments; and, second, an amendment by the gentleman from Massachusetts (Mr. Delahunt), a member of the Committee on the Judiciary, relating to claims on credit card debt in those cases where the debtor had not been informed of the terms of the account agreement. These are not insignificant amendments, Madam Speaker, and I believe the House should have the opportunity to discuss these issues. As such, I would urge Members to vote no on the previous question so that these two amendments might be added to the list of amendments that the House will consider today. I cannot buy the argument that just because the House will have 6 hours and some odd minutes of debate on this bill, we do not have time to consider additional amendments. Madam Speaker, my colleague from Texas (Mr. Sessions) has noted that the bill does contain a provision which would allow States to opt out of the homestead exemption cap imposed by the bill. I realize this is a matter of some controversy; but, for the State of Texas, this is an issue of major and fundamental importance. This matter is far from resolved, but I am pleased that two amendments relating to the effective date of the cap, which were imposed by my colleague from Texas (Mr. Bentsen), were included in the manager's amendment. Madam Speaker, while it is important that the House proceed to the consideration of this important legislative proposal early in the session, it is still early enough for the House to have a complete debate on this matter. I am a strong supporter of this bill, as are many of my colleagues here in this body. Consideration of a few additional amendments would have only added time to this debate, time which would have given the House the opportunity to fully air the issues that affect consumers across the country. Madam Speaker, I reserve the balance of my time. Mr. SESSIONS. Madam Speaker, I yield such time as she may consume to the gentlewoman from Ohio (Ms. Pryce). Ms. PRYCE of Ohio. Madam Speaker, I thank my friend from Texas for yielding me this time. I rise in support of this fair and balanced rule, which governs consideration of the Bankruptcy Reform Act of 1999. This rule is very generous to the minority. Madam Speaker, out of 11 amendments the House will have the opportunity to debate and vote upon today, seven are offered by Democrats, [[Page 8500]] one is bipartisan, and only three are offered by Republicans. All told, the House will have 6\1/2\ hours to debate their bill, which is very similar to legislation that passed the House last year by an overwhelming margin of 300 to 125. Madam Speaker, bankruptcy law is nothing if not complex, but the goals of bankruptcy reform are fairly simple and straightforward. Today, we are seeking to restore the values of personal responsibility and integrity to an abused bankruptcy system. The unfortunate fact is that bankruptcy is no longer a rare occurrence among many American consumers who today are becoming dangerously comfortable with the concept of credit and debt. Last year, more than 1.4 million bankruptcy cases were filed. That is a 500 percent increase since 1980. And the case load is growing, even as our country enjoys economic prosperity and low unemployment. Madam Speaker, we all understand that sometimes unforeseen circumstances, often out of our control, can lead to the financial ruin of an individual, a family or a business. Our bankruptcy laws are designed to help the truly needy, honest citizen when he finds himself in an impossible situation. We all see a societal good in that. That is one of the things that makes this Nation great. However, when intelligent citizens ignore basic common sense by spending outside of their means, we need to establish a reasonable level of accountability and demand some personal responsibility to protect those who have extended credit to them in good faith. That is not to say that creditors do not have some lessons to make about poor decision-making and high-risk lending; and there are some steps we take to urge responsible behavior among creditors. {time} 1115 Madam Speaker, through this legislation we are asking individuals who apply for bankruptcy if at all possible to repay their debts to the extent that they are able. The bill sets up a needs-based mechanism to determine how much debtors can reasonably be expected to pay. This needs-based approach, based on current IRS standards, strengthens existing law to weed out abusers of the system who want all their debts dismissed but actually have the means to pay some of them. These individuals will be directed to a repayment plan so their creditors can collect at least some of what they are owed. This is a fair approach that will not excuse reckless spending but offers needed relief for those who are in a hopeless situation and need a fresh start to get back on their feet. And I am happy to say that the bill puts alimony and child support at the very top of the list. This bill recognizes that a parent's financial responsibility to his or her child takes priority above all other obligations, and I am pleased to report that Ohio's Attorney General supports the child support provisions of the bill, as do many other attorneys general throughout this Nation who are on the front lines, in the trenches, of child support enforcement and collection. Decreasing the number of bankruptcies in America requires more than new standards to guide repayments. We also must address the factors that lead to bad spending decisions in the first place. This act helps to educate consumers by requiring credit card companies to disclose the long-term costs of paying only the minimum balance each month. The bill also directs the Federal Reserve Board to study whether consumers indeed have adequate information about the consequences of borrowing beyond their means. Further, the bill will direct the General Accounting Office to examine whether extending credit to college students is contributing to a large extent to the bankruptcy rate. By combining these consumer protections with requirements that demand personal responsibility, the Bankruptcy Reform Act strikes a balance between the rights of debtors and creditors. At the same time this bill keeps the safety net in place for honest individuals who are in a hole of debt that they cannot climb out of without a helping hand. Madam Speaker, I urge my colleagues to support this fair rule and the underlying legislation which will restore some integrity to our bankruptcy laws. Mr. FROST. Madam Speaker, I yield 5 minutes to the gentleman from Massachusetts (Mr. Delahunt). Mr. DELAHUNT. Madam Speaker, I rise in opposition to the rule. Those who support the so-called means test principle and other provisions of this bill say they wish to end the use of the Bankruptcy Code as a financial planning tool for those who would scam the system. Yet they have denied the House the opportunity to end once and for all the most flagrant and notorious abuse of the Bankruptcy Code. The bill would subject middle-income debtors to elaborate new restrictions. Yet it leaves in place a loophole that allows wealthy debtors to buy expensive homes in one of the handful of States such as Texas or Florida with an unlimited homestead exemption, declare bankruptcy and continue to enjoy a life of luxury while their creditors get little or nothing. If we are truly serious about curtailing abuse of the bankruptcy system, this is the place to start: With the owner of the failed Ohio S&L who paid off only a fraction of $300 million in bankruptcy claims while keeping his multimillion dollar ranch in Florida. Or with the convicted Wall Street financier who filed bankruptcy while owing billions of dollars in debts and fines but still kept his $3 million beach front mansion. Or the movie actor, Burt Reynolds, who was more than $10 million in debt but kept his $2.5 million home while his creditors received 20 cents on the dollar. Now, I do not suggest that these abuses happen every day. But every time they occur, they bring the fairness and rationality of the bankruptcy system into disrepute. That is why the National Bankruptcy Review Commission urged Congress to place a uniform national cap on the amount of equity that could be claimed under the homestead exemption. At subcommittee I offered an amendment to cap the exemption at $250,000. My amendment was adopted by an overwhelming vote but it was not allowed to stand. When the full committee took up the bill, the provision was amended to permit individual States to opt out, in effect returning us to the current law. Supporters of the opt-out provision argued that a Federal cap on the homestead exemption would violate States rights. This is certainly ironic, Madam Speaker, because by setting the cap at $250,000, we had expressly left in place the lower thresholds in effect in every one of the 45 States that have established a cap of their own. In other words, those 45 States, in effect, will be subsidizing deadbeats in the remaining five States if this bill passes. To say the Congress should set no cap at all is to say we must stand by while a handful of States undermine the uniform enforcement of a Federal statutory scheme. That is like legislating a Federal income tax and leaving it to the State legislatures to determine what will count as a business deduction. By refusing to fix this problem, the authors of this bill have revealed the double standards by which they have gone about these so- called reforms. They ask us to perpetuate the current inequities in the treatment of debtors who live in different States, and they ask us to create new inequities in the treatment of debtors of different financial means. This is unfair, Madam Speaker, and it is poor public policy. I urge my colleagues to oppose this rule. Mr. SESSIONS. Madam Speaker, I yield such time as he may consume to the gentleman from Ohio (Mr. Chabot), a member of the Committee on the Judiciary. Mr. CHABOT. I thank the gentleman for yielding me this time. Madam Speaker, despite some of the rhetoric on the other side of the aisle, H.R. 833 is a pro-consumer piece of legislation. That is, pro- responsible consumer. H.R. 833 protects individuals [[Page 8501]] and businesses from having to pick up the tab for irresponsible debtors, some of whom are capable of paying off a significant portion of their debts. This legislation establishes a clear causal link between a debtor's ability to pay and the availability of Chapter 7 bankruptcy remedies. In other words, it makes those who can afford to pay their debts pay. There are, of course, some people who truly have a legitimate need to declare bankruptcy. At times, hardworking people come up against extraordinary circumstances. Family illness, disability, or the loss of spouse may necessitate the need to seek relief. H.R. 833 protects these individuals. Too frequently, however, people who have the financial ability or earnings potential to repay their debts are seeking an easy way out. While this may prove convenient for the debtor, it is not fair to their friends and neighbors who are stuck with their bills. The average American family pays $550 per year in a bad debt tax in the form of higher prices and increased interest rates to cover the economic cost associated with excessive bankruptcy filings. I am so concerned about the shifting of financial obligations from neighbor to neighbor that I introduced language at the subcommittee level that will relieve at least some of the burden for the 42 million Americans who live in our Nation's cooperatives and condominiums and homeowner associations. With all too much regularity, bankrupt individuals have been abandoning their homes to avoid paying their share of community assessments. Vacant or occupied, the unit continues to receive a wide spectrum of benefits that enhance the inherent value of the property while neighbors are left to pick up the tab through an increase in association fees. Nationally, consumer bankruptcies reached a record 1.4 million filings in 1997 and are projected to be even higher this year. What makes these numbers significant and particularly alarming is the fact that this trend began in 1994, during a time of solid economic growth, low inflation and low unemployment. The primary culprit for this dramatic increase is a system that allows consumers to evade personal responsibility for their debts too easily. People who make above the national median income and can afford to pay off a significant portion of their debt should not be allowed to file under Chapter 7 bankruptcy. This bill puts those individuals where they belong, in Chapter 13, where they will be given a generous 5 years to establish a fair repayment plan and get their financial house in order. Opponents of H.R. 833 are offering a substitute today that will do little or nothing to curb the abuses prevalent in our current system. For instance, the substitute would strike from the bill key provisions that prevent debtors from loading up on credit card debt just before declaring bankruptcy and obtaining a complete discharge of that debt upon filing. These opponents actually think that individuals should not be held responsible for taking huge cash advances and purchasing luxury goods just prior to filing bankruptcy. Unfortunately, this practice has become far too common as more and more individuals have begun using bankruptcy as a financial planning tool. Madam Speaker, I fully support H.R. 833 and urge my colleagues to do the same and vote ``yes'' for fair and balanced bankruptcy reform. Mr. FROST. Madam Speaker, I yield 6 minutes to the gentleman from New York (Mr. Nadler). Mr. NADLER. Madam Speaker, I rise in opposition to this closed rule. Although for the second Congress in a row, the gentleman from Illinois (Mr. Hyde), the chairman of the Committee on the Judiciary, has promised to seek the most open rule possible, this certainly is not it. Of the 37 amendments filed, only 11 were made in order. Of those only four, including the Hyde-Conyers bipartisan amendment, can be said to come from Members who have expressed problems with the bill. Four out of 37. We will not have a real debate on consumer protection or on requiring creditor as well as debtor responsibility because the Delahunt-LaFalce amendment was not made in order. We will not have a real debate on child and family support--which this bill murders--because my amendment, which was written with the help of the National Women's Law Center and which would have placed debts to the family higher than debts to the government, and would have prevented the government from blocking a Chapter 13 reorganization plan if it provided for payments to family and other creditors but not payment in full in arrears to the government, was not made in order. We cannot debate those issues. We will not be allowed to vote on whether people who terrorize and murder women and their doctors should be allowed to discharge their civil debts as a result of such terrorist actions. Their civil penalties, should they be able to discharge their penalties in bankruptcy? We had such an amendment, but evidently clinic bombers and people who harass women seeking health care services and who violate the law to push their political agenda have more influence at the Committee on Rules than the bipartisan supporters of this amendment. The gentlewoman from Maryland (Mrs. Morella) and I had asked that in a bill which makes drunk boating debts nondischargeable, we could at least have a vote on making debts of clinic bombers nondischargeable. Madam Speaker, the gentleman from Massachusetts (Mr. Delahunt) spoke of the fact that this bill allows the homestead exemption in essence to continue, in some States unlimited. I think it is unfair but that is what the bill does. But we will not have a vote on my amendment that would have said, well, if you are going to allow States to have an unlimited homestead exemption for the rich, how about requiring that you have at least a limited homestead exemption for the poor? In my own State of New York, the homestead exemption is $9,500. Try to buy a house for $9,500. {time} 1130 The Federal homestead exemption is 16,150, not exactly princely, but we are not going to have a debate or a vote on the amendment that would have said, ``If you're going to allow millionaires to have unlimited homestead exemptions in some States, at least require that all States allow the use of the Federal minimum homestead exemption of $16,000.'' We have to be fair to the rich, but we cannot be fair to the middle income and the poor. Madam Speaker, this bill hurts families, it hurts businesses, it will increase costs to the system, and it is opposed by most of the Nation's bankruptcy experts. We will not have a vote on the amendment to stop the provisions of this bill from killing small businesses. That amendment was not made in order. Many small businesses today, Madam Speaker, go bankrupt, they go into a Chapter 11 reorganization, they are entitled to try to be protected from their debts for a while while they work things out, and then they are saved, and they get on with it, they pay their debts, and a business and jobs are saved. Some businesses do not make it. They are liquidated. This bill puts so many new restrictions and burdens on small businesses, not big businesses, small businesses in bankruptcy proceedings, that we are told by the Small Business Administration and by others that it will result in a lot of small businesses that could have been saved going bankrupt. We had an amendment in committee defeated on a party line vote, an amendment in the committee that said that if the judge makes a finding of fact that imposing those restrictions would cost five or more jobs, the judge would have the discretion not to have these new restrictions on the small business so that the jobs could be saved and the business could be saved. That was voted down. The Committee on Rules thinks we should not have a [[Page 8502]] chance to debate and vote on that provision on the floor. Should tractors and other farm implements in a family farm going bankrupt, should those tractors and farm implements be saved to help keep the farm in running order, or must they be surrendered to the government for payment of back taxes? Madam Speaker, we are not going to have a vote or a discussion of that either because, apparently, the Committee on Rules does not think saving family farms is important, or allowing the farmer in bankruptcy to keep his tractor, or his hoe, or whatever else it may be. The government's claim comes first, and to heck with the farmers. This bill, as I said, hurts families, it hurts small businesses, it hurts farmers, it hurts child support collectors, it hurts children, it will increase costs to the system, and it is opposed by most of the Nation's bankruptcy experts. The administration will veto the bill unless it is moderated, and we should support the administration's efforts to negotiate a good bill. That can only happen if we deny the sponsors of this bill the supermajority they need to roll the special interest legislation through unmodified. They have crafted this rule to avoid the really tough issues, so we must insist that those issues be considered today by rejecting the previous question. If the previous question is rejected, the minority will ask the two amendments be made in order, one which will protect child and spousal support, which the gentlewoman from Texas (Ms. Jackson-Lee) and I had hoped to offer, and one which would hold credit card lenders accountable and put an end to some of the most abusive practices which would have been offered by the gentleman from Massachusetts (Mr. Delahunt) and the gentleman from New York (Mr. LaFalce). We must defeat the previous question or we will not have an opportunity to consider placing some balance in this bill. So, Madam Speaker, I urge a no vote on the previous question, on the rule and on the bill. Madam Speaker, this rule is part of a pattern of silencing debate, of rushing through a bad bill with no serious consideration, a bill which will have implications for many, many years, and this rule deserves to be defeated. Mr. SESSIONS. Madam Speaker, I yield such time as he may consume to the gentleman from Georgia (Mr. Linder), who is subcommittee chairman of the Subcommittee on Rules and Organization of the House. Mr. LINDER. Madam Speaker, I thank the gentleman for yielding this time to me. Madam Speaker, I rise in strong support of H. Res. 158, a fair, structured rule for consideration of the Bankruptcy Reform Act of 1999. The Committee on Rules has done its best to accommodate Members who filed amendments with the committee. As has been stated, we have been more than fair in permitting seven Democrat amendments, three Republican amendments and one bipartisan amendment. We faced numerous amendments in the Committee on Rules, and we did our best to allow an open debate on most key issues in dispute. On the substance of the bill, the statistics on U.S. bankruptcy filings are frightening. Bankruptcies have increased more than 400 percent since 1980. In the past, it was possible to blame many bankruptcies on recessions or poor economic situation. Today, however, we face record numbers of bankruptcy filings at a time of economic growth and low unemployment. If we take these factors into account, we can realistically come to only one conclusion: bankruptcies of convenience have provided a loophole for those who are financially able to pay their debts but simply have found a way to avoid personal responsibility and escape their financial responsibilities. This bill is a continuation of our efforts to advance the values of personal responsibility. In the welfare bill, we thought that helping the poor escape the welfare trap, restoring the dignity of work and reviving individual responsibility would help people rise from generation after generation of despair. This bankruptcy bill is the Congress' next step in cultivating personal responsibility and accountability. I expect that we will hear more hollow charges that we are being heartless and cruel. Nonetheless, the abusers of the bankruptcy laws need to receive a message that Federal bankruptcy laws are not a haven for personal fiscal irresponsibility. If a debtor has the ability to pay the debts that have been accumulated, then they must be held accountable. Under this bill, effective and compassionate bankruptcy relief will continue to be available for Americans who need it. But we cannot condone, however, those who file for bankruptcy relief under Chapter 7 and have the capacity to pay at least some of their debts. In order to ensure that those who can pay actually do pay, this legislation set in motion a needs-based mechanism. The gentleman from Pennsylvania (Mr. Gekas) and the Committee on the Judiciary have done their legislative duty in crafting a bill that ensures the debtor's rights to a fresh start and protects the system from flagrant abuses from those who can pay their bills. This is a great opportunity to equalize the needs of the debtor and the rights of the creditor. Madam Speaker, I urge my colleagues to support this rule so that we may pass this important legislation. Mr. FROST. Madam Speaker, I yield 3 minutes to the gentleman from North Carolina (Mr. Watt). Mr. WATT of North Carolina. Madam Speaker, I thank the gentleman for yielding time. I rise in opposition to the rule. I have concerns about the bill, but I will reserve a discussion of those concerns for the debate on the bill. But my concerns are about the rule itself and the terms under which we will conduct this debate. Here is the copy of the bill that we are considering today. It is 314 pages long. Here is a list of the amendments that have been offered to this bill that Members of this House would like to offer as amendments to this major important piece of legislation. There are 37 amendments, proposed amendments, on this list. The Committee on Rules decided that it would make in order only 11 of those amendments. Now one of those 11 is an amendment by the manager who has had this bill under his control from the very day it was filed. So for all practical purposes the Committee on Rules has seen fit to allow only 10 other Members to offer amendments on this important bill, and so we cannot have a full and fair and democratic debate and allow our constituents to bring their concerns about the content of this bill to the floor of the House. Madam Speaker, that is really what this rules debate is about. Some of the amendments that were not made in order by the Committee on Rules were amendments that were voted on in the Committee on the Judiciary, on which I sit, and the Committee on the Judiciary divided half and half. There are three of those amendments on the list, and we did not even have an affirmative opinion of the Committee on the Judiciary members about whether those were good or bad amendments, and now we cannot bring those amendments to the floor of the House and have a full and fair debate among our colleagues to allow all of the members to work their will on those amendments. So in a sense this debate on the rule is about what rights we have as Members of this House to have our voices heard and have the voices of our constituents heard on important legislation. Three hundred and some pages long; only 10 amendments. Mr. SESSIONS. Madam Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Gekas), the subcommittee chairman of the Subcommittee on Commercial and Administrative Law. Mr. GEKAS. Madam Speaker, we say that we are happy with the crafting by the Committee on Rules of the procedure by which this debate will go forward. We should all be happy with it [[Page 8503]] because it reflects in a grand way the bipartisan manner in which this entire issue was promulgated from the start. In the last term the cosponsorship alone of a vehicle in that stage of these proceedings was substantially bipartisan. The votes that were undertaken, both in the House and in the general debate and then later in the conference report, reflected a gigantic bipartisan vote, 300 votes plus. By any measure, that turns out to be bipartisan. Now when we reintroduced the bill this year, it has, still does have, substantial numbers of the minority as part of the cosponsorship. It is, indeed, a bipartisan vehicle in this term that we are visiting. On top of that, in the hearings that were held, some eight of them by the subcommittee and with over 70 witnesses to supplement the some 50 or 60 witnesses that we had last term, all of them gave testimony from which was drawn here and there special features which we put into the bill showing not just bipartisanship thus far but nonpartisanship; that is, drawing from the witnesses' actual phraseology and suggestions that became part of this bill. That makes it a balanced, well-apportioned bill from a policy standpoint and from a partisan standpoint, if we want to allow it to be described as that. On top of that, in the subcommittee we adopted proposals made by the minority. We did so in the full committee on the basis of assertions and offerings made by the minority. So some of the provisions that are in this bill already are born of the opposite view side that expressed itself during the subcommittee and the full committee markups. This is a balanced bill in many, many respects, in most all respects. What the Committee on Rules did in crafting this particular rule was to patiently reflect that bipartisanship, that balanced approach. Our colleagues' voices have been heard already in subcommittee and full committee in many different ways. They have been heard through their cohorts who have cosponsored this bill, and the final outcome will be a bipartisan one. Mr. FROST. Madam Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Bentsen). Mr. BENTSEN. Madam Speaker, I rise today in support of H. Res. 158, the rule providing for consideration of H.R. 833, the bankruptcy reform legislation. While I am supportive of the rule, I want to compliment my colleague from Texas (Mr. Frost) and my colleague from Texas (Mr. Sessions) for their assistance in allowing the manager's amendment to include two amendments which I had brought before the Committee on Rules yesterday. {time} 1145 I am concerned that this bill in particular, the underlying bill that we are going to consider later today if the rule is adopted, the bill includes section 147, which would establish a new Federal standard for homestead exemptions, which I believe is both unnecessary and unfair. It includes two provisions, one which would require a resident to reside in their homestead for 2 years before they can enjoy protections afforded by State law, and it would prohibit them from transferring assets into their homestead during that period. Additionally, the bill, during consideration of the bill in the full committee two more amendments were added, one which would supersede State homestead laws and overturn more than 200 years of precedent of allowing States the right to make determinations about what property can be exempted under bankruptcy filings. The first amendment added a new provision that would cap the amount of equity that a consumer can protect during a bankruptcy at $250,000. This would affect the States of Texas, Florida, Kansas, Minnesota, Oklahoma and South Dakota. Now, the second amendment, which was a compromise, would allow States to opt out of this new Federal standard. While I appreciate that this provision will provide States with an opportunity to preserve their State homestead laws, I am concerned that the opt-out provision raises new problems. In particular, those States where the legislatures meet only periodically, homeowners would be subject to this new cap until the next legislative session. For instance, in the State of Texas our session ends on May 30 this year and does not meet again until January of 2001. The Committee on Rules yesterday agreed to accept the second Bentsen amendment which would make the date of enactment of the cap at the end of the next legislative session of the State, and for that I am appreciative. The third amendment that I offered, which the committee accepted and put in the manager's amendment, would allow States to prospectively opt out of the homestead cap prior to the bill being enacted in law. I want to commend the Members of the committee for accepting these amendments. I think it is appropriate. Again, there is no empirical evidence of abuse or any problem, substantial problems, with the homestead laws as the States have designed them. This is something that has been left up to the States. It is their prerogative and we ought to continue it that way. I would just say in the State of Texas our homestead laws go back prior to Texas becoming part of the Union, when we were a Republic. It has been in the State constitution since we have been a State. It is something that ought to be left up to the State of Texas. This is supported by Governor Bush, our current Lieutenant Governor Perry and the Speaker of the House Pete Laney. I encourage my colleagues to vote to adopt the rule and the manager's amendment. Mr. SESSIONS. Madam Speaker, I yield 3 minutes to the gentleman from Tennessee (Mr. Bryant), who is the vice chairman of the Subcommittee on Commercial and Administrative Law. Mr. BRYANT. Madam Speaker, I want to just add an echo to what our chairman, the gentleman from Pennsylvania (Mr. Gekas), said about the rule. I think it is a very good rule in this case. This bill itself, H.R. 833, is a product of a number of years of work, including last session up to the point of actually getting a conference report, an agreement on a bankruptcy bill, together with the renewed debate this year in this Congress in the full committee, something like 5 or 6 days of debate, healthy debate on the merits and some would say lack of merits of this bankruptcy reform bill. H.R. 833 is a necessary bill, and this is a good rule to support to move that bill forward. H.R. 833 restores fairness and common sense and personal responsibility to a bankruptcy code that, in many ways, is out of control. Current bankruptcy filings are about triple the level of the early 1980s, when the rates of interest and unemployment were significantly higher than today. In other words, even in the robust economy that we are living in today, bankruptcies are more than triple what they were in past times. To make the situation worse, many of the petitioners who file under Chapter 7, which is the straight bankruptcy, doing away with all the debts provision, many of these are simply walking away without any responsibility for any of their debts. This, despite the fact that many have the ability to repay at least a portion of the debts they owe. It is because of these figures and trends that this reform is needed to handle the increasing number of petitions. This bill also creates a way to determine the amount of relief a debtor needs, and requires individuals to repay what they can. There is a formula it establishes there. Under the compromise between the House and Senate versions of this bill last year, this legislation combines the best aspects of both the approaches of this means testing, a bright line standard for measuring the repayment capacity and preserving the right of a debtor in bankruptcy to have a judge review its case if there are unique circumstances that can be taken into account. The bill also establishes child support and alimony priorities. The bill significantly improves current law by [[Page 8504]] raising child support and alimony payments to the first priority in a bankruptcy proceeding, thus putting the needs of the family and children where they belong, ahead of others. In addition, after bankruptcy, the bill requires all child support and alimony obligations to be paid before unsecured debt. There is also a debtor's bill of rights. This protects consumers from law firms and other entities that might inappropriately steer consumers into filing bankruptcy petitions without adequately informing them of the other options that may be available to them. This is sound legislation. It offers protection to both the debtors and creditors. I very much appreciate the efforts of our chairman, the gentleman from Pennsylvania (Mr. Gekas), and other colleagues who are helping move this bill along. Again, I would urge my colleagues to vote for this rule and later on for the bill as it moves forward. Mr. FROST. Madam Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Jackson-Lee). Ms. JACKSON-LEE of Texas. Madam Speaker, this legislation and the underlying rule, the rule that we are addressing right now, have the capacity of being a bipartisan piece of legislation. I remind my colleagues that when we reformed the Bankruptcy Code in the 1970s we took 5 years, and I think we had a legislative initiative that lasted until this time, 1999. I am concerned about this rule because I think we would have been better off if we had maintained or had an open rule to answer some of the concerns that many of us have expressed. I am delighted to see the Hyde-Conyers amendment that alters the very mean-spirited means test, which the Bankruptcy Review Commission did not support itself, because the means test provides a difficult hurdle for debtors who are truly suffering from catastrophic illnesses and other unfortunate times that would result in them filing for bankruptcy. It is an enormous hurdle for them to overcome. In addition, the Committee on Rules did not allow an amendment that I proposed that would take out Social Security income in the accounting for current monthly income. So that means, for example, Madam Speaker, that in fact one would have the Social Security as a part of determining whether or not they would move from Chapter 13 to Chapter 7. At the same time, they did not protect those individuals who would sue HMOs for fraudulent activities, to protect against the HMOs filing for bankruptcy. The other portion, Madam Speaker, that I think is extremely important, I am grateful for the amendment we had in committee that dealt with the homestead issue in the State of Texas, where at least we have the ability to opt out. I certainly join in the fact that that has helped the State of Texas by the Bentsen amendments, in that now they can opt out as opposed to waiting until the bill's enactment. But we would have done better if we had allowed this bill to be an open rule, because even with some of the amendments we have not yet answered the full question dealing with the child support, which really still raises its ugly head inasmuch as we still have the custodial parent, male or female, fighting the government in order to get child support payments. I think this rule could have been improved. I think we should vote ``no'' on this rule, and I wish we had committed ourselves to an open discussion by having an open rule. Madam Speaker, I rise today to speak against this rule, which frames the debate on H.R. 833, the Bankruptcy Reform Act of 1999. In my estimation, the modified closed rule that has been recommended by the Committee merely gives us another instance in which House leadership has steam-rolled a bill, filled with perks for corporate America, through the House in the name of ``reform''. I would like to tell you, this bill in no way reforms bankruptcy, rather, it merely changes the rules of the game so that consumers will be even more helpless to defend themselves from multi-million dollar creditors practicing unhealthy and reckless lending practices. As a Member of the Judiciary Committee, I have been privileged enough to watch the development of this bill from its inception. I have seen the bill undergo no substantial changes after a week and a half of markups. I have seen meaningful amendments promoted by the Chairman of the Committee rebuffed by the Members of his own party. I have seen the good work of many of my Democratic colleagues be summarily dismissed. Having just come out of Committee just this Tuesday, I remember the votes well. I remember the Republicans saying no to an amendment I offered to protect the recipients of federal disaster assistance. A vote saying no to the recipients of Social Security. A vote saying no to children who receive child support. A vote saying no to veterans. And all the while, the Republicans were quick to cast their votes to protect tobacco companies that are poisoning our children. They voted to protect credit card companies from reasonable reporting requirements that would have been required under an amendment offered by Congressman Delahunt. They moved the bill along despite an amendment I would have offered that would have held HMOs and other managed care entities responsible in cases where they have committed fraud. Even worse, this bill has been moved along without its inspection by the Banking and Financial Services Committee. This is true even though this bill touches and concerns issues that directly relate to the practices employed by lenders and creditors of all sorts. And now here we are today debating the rule of debate for this bill. It is a bill that limits amendments, which is unacceptable for a bill this far-reaching. Furthermore, it is a rule that omitted a great number of important amendments that were presented to the Rules Committee yesterday. Those include amendments that would have allowed the exclusion of social security from ``current monthly income'', thereby making bankruptcy less onerous to our seniors, and one which would have kept tobacco companies from manipulating the bankruptcy system. Other very good and important amendments were also left at the table, such as the Nadler-Morella Amendment that would have gone after those terrorists that intentionally utilize the bankruptcy system to protect them from liability when they bomb women's health clinics. We will also not get to discuss any of the amendments that would have removed the new protections available to credit card companies under this bill when they engaged in reckless lending. This is not the way that we should proceed on this bill, and therefore, I urge my colleagues to vote against this rule. Debate on this bill should be focused squarely on the issues that hurt it the most, so that it can be improved to a level where we can all vote for it. As reported by the Congressional Research Service, this bill is opposed by Public Citizen, the Consumer's Union, the AFL- CIO, the Consumer Federation of America, UAW, UNITE, the National Partnership, the American Association of Retired Persons (AARP), and the National Women's Law Center. How can we move forward without addressing any of the issues that these groups are clamoring about? How can we ignore amendments aimed squarely at improving the way this bill handles domestic support, or social security, or credit counseling? Thankfully, the rule does provide for a Democratic Substitute to this bill being offered by Congressmen Conyers, Nadler, and Meehan. This will give many of us the opportunity to vote for a bill that truly reforms bankruptcy without destroying its very principles. That substitute provides a realistic means test that takes into account the debtor's actual income and expenses; modifies the child support provisions in this bill to take away the new special rights given to credit-card companies; requires credit card lenders to provide the necessary information to its customers that they need to make informed decisions about their finances; and eliminates the new grounds for making credit card debts nondischargeable. We ought to pass this substitute if we are going to have a real bankruptcy reform, and I ask each of you to support it when it comes to a vote later this afternoon. Even then, I hope that every Member will vote against this rule, and send it back to the Rules Committee so that we can have a meaningful debate on the issues that will make this a bill worthy of being signed into law. Mr. SESSIONS. Madam Speaker, I yield 2 minutes to the gentleman from Orlando, Florida (Mr. McCollum), the chairman of the Subcommittee on Crime. Mr. McCOLLUM. Madam Speaker, I thank the gentleman from Texas (Mr. Sessions) for yielding me this time. Madam Speaker, I rise today to support the rule and the underlying bill. I [[Page 8505]] think what is important for us to understand as we consider this bankruptcy bill today is that the heart of this bill is needs-based reform. It needs to be kept as strong as possible. What is needs-based reform? It is simple. If someone can reasonably repay some of their debts, they should. Does this mean the debtor cannot declare bankruptcy? Not at all. It only means that the debtor has to use Chapter 13 to repay some debt if he can afford to do it, rather than Chapter 7. Let me make it clear. If someone is in Chapter 13, they are in bankruptcy. The needs-based test does not affect their ability to declare bankruptcy. The needs-based test asks can a person reasonably repay some of their debts while they are in bankruptcy. How does the test determine what is reasonable? We do the obvious and compare the debtor's income with other debts and living expenses, and if the debtor has a little income and a lot of debt the needs-based test will not affect them. For those who suffer catastrophic illness or lose their jobs or experience other catastrophic events, this reform will not affect them, but those who can afford to pay back their debt, it will affect them. Many, unfortunately, are using the Bankruptcy Code for financial planning or mere convenience. It will affect upper-income individuals who declare bankruptcy not because they have to but because they want to. Even for these folks, they will still be able to declare bankruptcy but they will have to repay some of their debt, what they can. This is such common sense that many Americans think this is already the way the bankruptcy system works, but it does not work that way and that is why we are here today, to restore integrity and responsibility and common sense to the system. Why should Americans care? Because bankruptcy will cost our Nation more than $50 billion in 1998 alone. That translates into over $550 for every household in higher costs for goods and services and credit. It hurts responsible consumers who pay the price in the form of higher costs for goods, services and credit. Bankruptcies have increased about 400 percent since 1980. Last year there were more than 1.4 million filings. That is more than one bankruptcy in every 100 American households. This rate of increase is occurring not in the midst of a recession but during what are by all accounts great economic times. From 1986 to the present time, real per capita annual disposable income grew by over 13 percent but personal bankruptcies more than doubled. We need to have this bankruptcy reform. We need the needs-based reform. We need to adopt this rule and get on with the bill today. Mr. FROST. Madam Speaker, I yield 2\1/2\ minutes to the gentleman from Texas (Mr. Doggett). Mr. DOGGETT. Madam Speaker, I have supported this bankruptcy legislation in the past. I believe that it is important to exercise personal responsibility. There have been some abuses of the system. While the bill was not perfect and needed further perfection, I thought it was generally in the right direction. I am troubled about the bill, however, in its form today, because while most of the focus has been on individuals who did not engage in personal responsibility, there have also been instances in this country of corporate citizens who did not demonstrate any sense of responsibility. Indeed, since the consideration of this bill in the last session, I was particularly troubled by the problem of Dorothy Doyle. I do not know Dorothy but I have read some of her plight. I know that she is not the only one who suffered from this situation. Dorothy is an 87-year-old widow, a retired Pentagon secretary, who required about $240 a day in nursing care because of her physical condition. Fortunately for her, her younger sister decided that there was a solution to her problems and that together they would purchase a continuing care living arrangement, and they did that. They moved into the Park Regency Retirement Center out in Scottsdale, Arizona, and they invested a substantial amount of their life savings and received, in turn, a lifetime guarantee. Within 9 months of paying their entrance fees, they were faced with a meeting in the dining room at the Park Regency where the owner declared that he had lost a lot of money in his offshore investments and that he was filing for bankruptcy. Well, Dorothy and her sister Creta, like a number of other seniors who have invested their lifetime savings in these facilities, of which there are some 2,700 across the country, found themselves in a situation where they had no good remedy. {time} 1200 They had advanced this money as an interest-free loan to get into the facility, their life's savings, and they were unsecured creditors. So to address the plight of Dorothy and Creta and other seniors across the country, I advanced an amendment that simply says, let us treat them as priority creditors. Let us recognize that if someone has invested their life's savings in an effort to try to get the health care and the nursing care that they need in our society, that they deserve some protection also. Unfortunately, the Committee on Rules decided to not make that amendment in order. Apparently responsibility does not apply to everyone, does not apply to such irresponsible corporate citizens. I would urge a vote against the rule. Mr. FROST. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I urge Members to vote no on the previous question. If the previous question is defeated, I will offer an amendment to the rule that will make in order two amendments. The first amendment would be the Nadler/Jackson-Lee amendment, that addresses treatment of child support payments in bankruptcy. The second amendment would be the Delahunt/LaFalce/Watt/Roybal- Allard amendment, which would disallow bankruptcy claims for consumer credit card debt if, at the time of solicitation to open an account, the debtor was not informed in writing of certain disclosure factors. These amendments were offered in the Committee on Rules last night and, unfortunately, were defeated on a party-line vote. Madam Speaker, these are important amendments and deserve to be considered by the entire House. Madam Speaker, this vote, the vote on whether to order the previous question on a special rule, is not merely a procedural vote. A vote against ordering the previous question is a vote against the Republican majority agenda and a vote to allow the opposition, at least for the moment, to offer an alternative plan. It is a vote about what the House should be debating. Mr. Clarence Cannon's Precedents of the House of Representatives, (VI, 308-311) describes the vote on the previous question on the rule as ``a motion to direct or control the consideration of the subject before the House being made by the Member in charge.'' To defeat the previous question is to give the opposition a chance to decide the subject before the House. Cannon cites the Speaker's ruling of January 13, 1920, to the effect that ``the refusal of the House to sustain the demand for the previous question passes the control of the resolution to the opposition'' in order to offer an amendment. On March 15, 1909, a member of the majority party offered a rule resolution. The House defeated the previous question and a member of the opposition rose to a parliamentary inquiry, asking who was entitled to recognition. Speaker Joseph G. Cannon (R-Illinois) said: ``The previous question having been refused, the gentleman from New York, Mr. Fitzgerald, who had asked the gentleman to yield to him for an amendment, is entitled to the first recognition.'' Because the vote today may look bad for the Republican majority they will say ``the vote on the previous question is simply a vote on whether to proceed to an immediate vote on adopting the resolution . . . [and] has no substantive legislative or policy implications whatsoever.'' But that is not what they have always said. Listen to the Republican Leadership Manual on the Legislative Process in the United States House of Representatives, (6th edition, page 135). Here's how the Republicans describe the previous question vote in their own manual: Although it is generally not possible to amend the rule because the majority Member controlling the time will not yield for [[Page 8506]] the purpose of offering an amendment, the same result may be achieved by voting down the previous question on the rule . . . When the motion for the previous question is defeated, control of the time passes to the Member who led the opposition to ordering the previous question. That Member, because he then controls the time, may offer an amendment to the rule, or yield for the purpose of amendment.'' Deschler's Procedure in the U.S. House of Representatives, the subchapter titled ``Amending Special Rules'' states: ``a refusal to order the previous question on such a rule [a special rule reported from the Committee on Rules] opens the resolution to amendment and further debate.'' (Chapter 21, section 21.2) Section 21.3 continues: Upon rejection of the motion for the previous question on a resolution reported from the Committee on Rules, control shifts to the Member leading the opposition to the previous question, who may offer a proper amendment or motion and who controls the time for debate thereon.'' The vote on the previous question on a rule does have substantive policy implications. It is one of the only available tools for those who oppose the Republican majority's agenda to offer an alternative plan. Madam Speaker, I include for the Record the text of the amendment and extraneous materials. The material referred to is as follows: Previous Question on H. Res. 158--H.R. 833--Bankruptcy Reform Act At the end of the resolution add the following new sections: ``Sec. 2. Notwithstanding any other provision of this resolution, it shall be in order to consider the amendments specified in section 3 of this resolution as though they were after the amendment numbered 11 in House Report 106-126. The amendment numbered 12 may be offered only by Representative Nadler or Representative Jackson-Lee or a designee and shall be debatable for 30 minutes. The amendment numbered 13 may be offered only be Representative Delahunt or Representative LaFalce or Representative Watt or Representative Roybal- Allard or a designee and shall be debatable for 40 minutes. ``Sec. 3. The amendments described in section 2 are as follows: Amendment to H.R. 833, As Reported; Offered by Mr. Nadler of New York Page 15, strike lines 18 and 19, and insert the following (and make such technical and conforming changes as may be appropriate): not otherwise a dependent, but excludes-- ``(A) payments to victims of war crimes or crimes against humanity; and ``(B) payments received in satisfaction of a domestic support obligation;''; Beginning on page 81, strike line 15 and all that follows through line 10 on page 82 (and make such technical and conforming changes as may be appropriate). Beginning on page 83, strike line 1 and all that follows through line 7 on page 84 (and make such technical and conforming changes as may be appropriate). Beginning on page 86, strike line 1 and all that follows through line 7 on page 90, and insert the following (and make such technical and conforming changes as may be appropriate): SEC. 140. DEFINITION OF DOMESTIC SUPPORT OBLIGATION. Section 101 of title 11, United States Code, is amended-- (1) by striking paragraph (12A); and (2) by inserting after paragraph (14) the following: (14A) `domestic support obligation' means a debt that accrues before or after the entry of an order for relief under this title that is-- ``(A) owed to or recoverable by-- ``(i) a spouse, former spouse, or child of the debtor or that child's legal guardian; or ``(ii) a governmental unit; ``(B) in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child, without regard to whether such debt is expressly so designated; ``(C) established or subject to establishment before or after entry of an order for relief under this title, by reason of applicable provisions of-- ``(i) a separation agreement, divorce decree, or property settlement agreement; ``(ii) an order of a court of record; or ``(iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and ``(D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child, or parent solely for the purpose of collecting the debt.''. SEC. 141. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES INVOLVING DOMESTIC SUPPORT OBLIGATIONS. Title 11, United States Code, is amended-- (1) in section 1129(a), by adding at the end the following: ``(14) If the debtor is required by a judicial or administrative order or statute to pay a domestic support obligation, the debtor has paid all amounts payable under such order or statute for such obligation that first become payable after the date on which the petition is filed.''; (2) in section 1325(a)-- (A) in paragraph (5), by striking ``and'' at the end; (B) in paragraph (6), by striking the period at the end and inserting ``; and''; and (C) by adding at the end the following: ``(7) if the debtor is required by a judicial or administrative order or statute to pay a domestic support obligation, the debtor has paid all amounts payable under such order for such obligation that become payable after the date on which the petition is filed.''; and (3) in section 1328(a) in the matter preceding paragraph (1), by inserting ``, after a debtor who is required by a judicial or administrative order to pay a domestic support obligation certifies that all amounts payable under such order that are due on or after the date the petition was filed have been paid, and after a debtor who is required by a judicial or administrative order to pay a domestic support obligation, certifies that all amounts payable under such order that are due before the date on which the petition was filed if such amounts are due solely to a spouse, former spouse or child of the debtor or the parent of such child pursuant to a judicial or administrative order, unless the holder of such claim agrees to a different treatment of such claim'' after ``completion by the debtor of all payments under the plan''. SEC. 142. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION PROCEEDINGS. Section 362(b) of title 11, United States Code, as amended by sections 104 and 606, is amended-- (1) amending paragraph (2) to read as follows: ``(2) under subsection (a)-- ``(A) of the commencement or continuation of an action or proceeding for-- ``(i) the establishment of paternity as a part of an effort to collect domestic support obligations; or ``(ii) the establishment or modification of an order for domestic support obligations; or ``(B) the collection of a domestic support obligation from property that is not property of the estate; or ``(C) under subsection (a) of-- ``(i) the withholding of income for payment of a domestic support obligation pursuant to a judicial or administrative order or statute for such obligation that first becomes payable after the date on which the petition is filed; or ``(ii) the withholding of income for payment of a domestic support obligation owed directly to the spouse, former spouse or child of the debtor or the parent of such child, pursuant to a judicial or administrative order or statute for such obligation that becomes payable before the date on which the petition is filed unless the court finds, after notice and hearing, that such withholding would render the plan infeasible;''; (2) in paragraph (19), by striking ``or'' at the end; (3) in paragraph (20), by striking the period at the end and inserting a semicolon; and (4) by inserting after paragraph (20) the following: ``(21) under subsection (a) with respect to-- ``(A) the withholding, suspension, or restriction of drivers' licenses, professional and occupational licenses, and recreational licenses pursuant to State law, as specified in section 466(a)(16) of the Social Security Act (42 U.S.C. 666(a)(16)) or with respect to the reporting of overdue support owed by an absent parent to any consumer reporting agency as specified in section 466(a)(7) of the Social Security Act (42 U.S.C. 666(a)(7)) if such debt is payable solely to a spouse, former spouse or child of the debtor or the parent of such child pursuant to a judicial or administrative order or statute, unless the holder of such claim agrees to waive such withholding, suspension or restriction; ``(B) the interception of tax refunds, as specified in sections 464 and 466(a)(3) of the Social Security Act (42 U.S.C. 664 and 666(a)(3)) if such tax refund is payable solely to a spouse, former spouse or child of the debtor or the parent of such child pursuant to a judicial or administrative order or statute; or ``(C) the enforcement of medical obligations as specified under title IV of the Social Security Act (42 U.S.C. 601 et seq.).''. SEC. 143. EXEMPTION FOR RIGHT TO RECEIVE CERTAIN ALIMONY, MAINTENANCE, OR SUPPORT. Section 522(b)(3) of title 11, United States Code, as so redesignated and amended by sections 115 and 203, is amended-- (1) in subparagraph (C) by striking ``and'' at the end, (2) in subparagraph (D) by striking the period at the end and inserting ``; and'', and (3) by inserting after subparagraph (D) the following: ``(E) the right to receive-- ``(i) alimony, maintenance , support, or property traceable to alimony, maintenance , support; or ``(ii) amounts payable as a result of a property settlement agreement with the debtor's spouse or former spouse; or of an interlocutory or final divorce decree; [[Page 8507]] to the extent reasonably necessary for the support of the debtor or a dependent of the debtor.''. SEC. 144. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS AGAINST THE DEBTOR. Section 362(b)(2) of title 11, United States Code, as amended by section 144, is amended-- (1) in subparagraph (A) by striking ``or'' at the end; (2) by inserting after subparagraph (B) the following: ``(C) the commencement or continuation of a proceeding concerning a child custody or visitation; ``(D) the commencement or continuation of a proceeding alleging domestic violence; or ``(E) the commencement or continuation of a proceeding seeking a dissolution of marriage, except to the extent the proceeding concerns property of the estate;''. SEC. 145. CERTAIN POSTDISCHARGE PAYMENTS HELD IN TRUST. Section 523 of title 11, United States Code, is amended by adding at the end the following: ``(f) A creditor that receives a payment, or collects money or property, in satisfaction of all or part of any debt excepted from discharge under paragraphs (2) and (14A) of section 523(a) of this title shall hold such payment, such money, or such property in trust and, not later than 20 days after receiving such payment or collecting such money or property, shall distribute such payment, such money, or such property ratably to individuals who then hold debts in the nature of a domestic support obligation. Not later than 5 years after receiving such payment or collecting such money or property, such creditor shall make the distribution required by this section to all individuals whose identity is known to such creditor, or is reasonably ascertainable by such creditor, at the time of distribution.''. ____ Amendment to H.R. 833, As Reported; Offered by Mr. Delahunt of Massachusetts, Mr. LaFalce of New York, Mr. Watt of North Carolina, and Ms. Roybal-Allard of California Page 101, after line 9, insert the following (and make such technical and conforming changes as may be appropriate): SEC. 154. DISCOURAGING RECKLESS LENDING PRACTICES. (a) Limiting Claims Arising From Irresponsible Lending Practices.--Section 502(b) of title 11, United States Code, is amended-- (1) in paragraph (8) by striking ``or'' at the end, (2) in paragraph (9) by striking the period at the end and inserting ``; or''; and (3) by adding at the end the following: ``(10) the claim is for a consumer debt under an open end credit plan (as defined in section 103 of the Truth in Lending Act) and before incurring such debt under such plan the debtor was not informed in writing in a clear and conspicuous manner (or in the case of a worldwide web-based solicitation to open a credit card account under such plan, at the time of solicitation by the person making the solicitation to open such account)-- ``(A) of the method of determining the required minimum payment amount, if a minimum payment is required that is different from the amount of any finance charge, and the charges or penalties, if any, which may be imposed for failure by the obligor to pay the required finance charge or minimum payment amount; ``(B) of repayment information that would apply to the outstanding balance of the consumer under the credit plan, including-- ``(i) the required minimum monthly payment on that balance, represented as both a dollar figure and a percentage of that balance; ``(ii) the number of months (rounded to the nearest month) that it would take to pay the entire amount of that current balance if the consumer pays only the required minimum monthly payments and if no further advances are made; ``(iii) the total cost to the consumer, including interest and principal payments, of paying that balance in full if the consumer pays only the required minimum monthly payments and if no further advances are made; and (iv) the following statement: `If your current rate is a temporary introductory rate, your total costs may be higher.' ; ``(C) of the method for determining the required minimum payment amount to be paid for each billing cycle, and the charge or penalty, if any, to be imposed for any failure by the obligor to pay the required minimum payment amount; ``(D) of any charge that may be imposed due to the failure of the obligor to make payment on or before a required payment due date, the date that payment is due or, if different, the date on which a late payment fee will be charged, and that the terms and conditions of such charge will be stated prominently in a conspicuous location on each billing statement, together with the amount of the charge to be imposed if payment is made after such date; ``(E) in any application or solicitation for a credit card issued under such plan that offers, during an introductory period of less than 1 year, an annual percentage rate of interest that-- ``(i) is less than the annual percentage rate of interest which will apply after the end of such introductory period, of such rate in a statement that includes the following: `The annual percentage rate of interest applicable during the introductory period is not the annual percentage rate which will apply after the end of the introductory period. The permanent annual percentage rate will apply after [insert applicable date] and will be [insert applicable percentage rate].' ; or ``(ii) varies in accordance with an index, which is less than the current annual percentage rate under the index which will apply after the end of such period, of such rate in a statement that includes the following: `The annual percentage rate of interest applicable during the introductory period is not the annual percentage rate which will apply after the end of the introductory period. The permanent annual percentage rate will be determined by an index and will apply after [insert date]. If the index which will apply after such date were applied to your account today, the annual percentage rate would be [insert applicable percentage rate].' ; ``(F) in the case of any credit card account issued under such plan, that a creditor may not impose a fee based on inactivity for the account during any period in which no advances are made if the obligor maintains any outstanding balance and is charged a finance charge applicable to such balance; ``(G) that a credit card may not be issued to or on behalf of, any individual who has not attained 21 years of age except in response to a written request or application to the card issuer to open a credit card account containing-- ``(i) the signature of the parent or guardian of such individual indicating joint liability for debts incurred by such individual in connection with the account before such individual reaches the age of 21; or ``(ii) a submission by such individual of financial information indicating an independent means of repaying any obligation arising from the proposed extension of credit in connection with the account; ``(H) that no creditor may cancel an account, impose a minimum finance charge for any period (including any annual period), impose any fee in lieu of a minimum finance charge, or impose any other charge or penalty with regard to such account or credit extended under such account solely on the basis that any credit extended has been repaid in full before the end of any grace period applicable with respect to the extension of credit, but may impose a flat annual fee which may be imposed on the consumer in advance of any annual period to cover the cost of maintaining a credit card account during such annual period without regard to whether any credit is actually extended under such account during such period, or the actual finance charge applicable with respect to any credit extended under such account during such annual period at the annual percentage rate disclosed to the consumer in accordance with this title for the period of time any such credit is outstanding; ``(I) that no increase in any annual percentage rate of interest (other than an increase due to the expiration of any introductory percentage rate of interest or due solely to a change in another rate of interest to which such rate is indexed) applicable to any outstanding balance of credit under such plan may take effect before the beginning of the billing cycle which begins not less than 15 days after the obligor receives notice of such increase; ``(J) that if an obligor referred to in subparagraph (I) cancels the credit card account before the beginning of the billing cycle referred to in such paragraph-- ``(i) an annual percentage rate of interest applicable after the cancellation with respect to such outstanding balance on such account as of the date of cancellation may not exceed any annual percentage rate of interest applicable with respect to such balance under the terms and conditions in effect before the increase referred to in subparagraph (I); and ``(ii) the repayment of such outstanding balance after the cancellation shall be subject to all other terms and conditions applicable with respect to such account before the increase referred to in such paragraph; ``(K) that obligor has the right-- ``(i) to cancel the account before the effective date of the increase; and ``(ii) after such cancellation, to pay any balance outstanding on such account at the time of cancellation in accordance with the terms and conditions in effect before the cancellation; ``(L) that a creditor may not provide the obligor with any negotiable or transferable instrument for use in making an extension of credit to the obligor for the purpose of making a transfer to a third party, unless the creditor has with respect to such instrument provided to an obligor, at the same time any such instrument is provided, a notice which prominently and specifically describes-- ``(i) the amount of any transaction fee which may be imposed for making an extension of credit through the use of such instrument, including the exact percentage rate to [[Page 8508]] be used in determining such amount if the amount of the transaction fee is expressed as a percentage of the amount of the credit extended; and ``(ii) any annual percentage rate of interest applicable in determining the finance charge for any such extension of credit, if different from the finance charge applicable to other extensions of credit under such account; and ``(M) that a creditor may not impose any fees on the obligor for any extension of credit in excess of the amount of credit authorized to be extended with respect to such account if the extension of credit is made in connection with a credit transaction which the creditor approves in advance or at the time of the transaction.''. (b) Definition.--Section 101 of title 11, United States Code, is amended by inserting after paragraph (9) the following: ``(9A) `credit card' includes any dual purpose or multifunction card, including a stored-value card, debit card, check card, check guarantee card, or purchase-price discount card, that is connected with an open end credit plan (as defined in section 103 of the Truth in Lending Act) and can be used, either on issuance or upon later activation, to obtain credit directly or indirectly;''. Madam Speaker, I urge Members to vote no on the previous question so we may add these amendments, and I yield back the balance of my time. Mr. SESSIONS. Madam Speaker, I yield the balance of my time to the gentleman from California (Mr. Dreier), the chairman of the Committee on Rules, to close debate. The SPEAKER pro tempore (Mrs. Emerson). The gentleman from California (Mr. Dreier) is recognized for 1\1/2\ minutes. Mr. DREIER. Madam Speaker, I thank my friend, the gentleman from Texas, for yielding time to me. I want to congratulate him on the fine job that he has done in working out this rule, which, as he said and as others have said, is a very fair and balanced rule dealing with the minority's concerns. I look at my friend, the gentleman from Michigan (Mr. Conyers) here, and I was pleased we were able to make one of his amendments in order. It is among the seven Democratic amendments, including an amendment in the nature of a substitute to be offered by the gentleman from New York (Mr. Nadler), and it is basically a 7-to-3 ratio. And then there is a bipartisan amendment that will be offered by the chairman and ranking minority member of the Committee on the Judiciary, and two additional Democratic amendments submitted were accommodated in the manager's amendment. So that stresses the fairness of it. What we tried to do, and I believe have done successfully in crafting this rule, is we have not made in order amendments that are singling out one or two industries or interest groups simply to score political points. Basically, the bill provides comprehensive bankruptcy reform, and allows individuals and businesses very broad protection to reorganize so that their creditors are protected. Enactment of the bill will greatly reduce abuses of the bankruptcy system. By providing predictable standards to be used in bankruptcy proceedings, it will be reducing frivolous litigation in which debtors gamble on the uncertainty in the current system. This will dramatically reduce the cost of credit for all Americans. It is a very good rule, fair to everyone concerned, and I believe the measure itself is worthy of a very strong bipartisan vote of support. I look forward to consideration of that. Mr. SESSIONS. Madam Speaker, I move the previous question on the resolution. The SPEAKER pro tempore (Mrs. Emerson). The question is on ordering the previous question. The question was taken; and the Speaker pro tempore announced that the noes appeared to have it. Mr. SESSIONS. Madam Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present. The SPEAKER pro tempore. Evidently a quorum is not present. The Sergeant at Arms will notify absent Members. The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair will reduce to five minutes the time for electronic voting, if ordered, on the question of agreeing to the resolution. The vote was taken by electronic device, and there were--yeas 227, nays 190, not voting 16, as follows: [Roll No. 109] YEAS--227 Aderholt Archer Armey Bachus Baker Ballenger Barcia Barr Barrett (NE) Bartlett Barton Bass Bateman Bereuter Biggert Bilbray Bilirakis Blunt Boehlert Boehner Bonilla Bono Boucher Boyd Brady (TX) Bryant Burr Burton Buyer Callahan Calvert Camp Campbell Canady Cannon Castle Chabot Chambliss Chenoweth Coble Coburn Collins Combest Cook Cooksey Cox Cramer Crane Cubin Cunningham Davis (VA) Deal DeLay DeMint Diaz-Balart Dickey Doolittle Dreier Duncan Dunn Ehlers Ehrlich Emerson English Eshoo Everett Ewing Fletcher Foley Forbes Fossella Fowler Franks (NJ) Frelinghuysen Gallegly Ganske Gekas Gibbons Gilchrest Gillmor Gilman Goode Goodlatte Goodling Goss Graham Granger Green (WI) Greenwood Gutknecht Hansen Hastings (WA) Hayes Hayworth Hefley Herger Hill (MT) Hilleary Hobson Hoekstra Horn Hostettler Houghton Hulshof Hunter Hutchinson Hyde Isakson Jenkins John Johnson (CT) Johnson, Sam Jones (NC) Kasich Kelly King (NY) Kingston Kleczka Knollenberg Kolbe Kuykendall LaHood Largent Latham LaTourette Lazio Leach Lewis (CA) Lewis (KY) Linder LoBiondo Lucas (OK) Manzullo McCollum McCrery McHugh McInnis McIntosh McKeon Metcalf Mica Miller (FL) Miller, Gary Moran (KS) Moran (VA) Morella Myrick Nethercutt Ney Northup Norwood Nussle Ose Oxley Packard Paul Pease Peterson (PA) Petri Pickering Pitts Pombo Porter Portman Pryce (OH) Quinn Radanovich Ramstad Regula Reynolds Riley Rogan Rogers Rohrabacher Ros-Lehtinen Rothman Roukema Royce Ryan (WI) Ryun (KS) Salmon Sanford Saxton Scarborough Schaffer Schakowsky Sensenbrenner Sessions Shadegg Shaw Shays Sherwood Shimkus Shuster Skeen Smith (MI) Smith (NJ) Smith (TX) Souder Spence Stearns Stump Sununu Sweeney Talent Tancredo Tauzin Taylor (NC) Terry Thomas Thornberry Thune Toomey Traficant Upton Velazquez Walden Walsh Wamp Weldon (FL) Weldon (PA) Weller Whitfield Wicker Wilson Wolf Young (AK) NAYS--190 Abercrombie Ackerman Allen Andrews Baird Baldacci Baldwin Barrett (WI) Bentsen Berkley Berry Bishop Blagojevich Blumenauer Bonior Borski Boswell Brady (PA) Brown (FL) Brown (OH) Capps Capuano Cardin Clay Clayton Clement Clyburn Condit Conyers Costello Coyne Crowley Cummings Danner Davis (IL) DeFazio DeGette Delahunt DeLauro Deutsch Dicks Dingell Dixon Doggett Dooley Doyle Edwards Engel Etheridge Evans Farr Fattah Filner Ford Frank (MA) Frost Gejdenson Gephardt Gonzalez Gordon Green (TX) Gutierrez Hall (OH) Hall (TX) Hastings (FL) Hill (IN) Hilliard Hinchey Hinojosa Hoeffel Holden Holt Hooley Hoyer Inslee Jackson (IL) Jackson-Lee (TX) Jefferson Johnson, E. B. Jones (OH) Kanjorski Kaptur Kennedy Kildee Kilpatrick Kind (WI) Klink Kucinich LaFalce Lampson Lantos Larson Lee Levin Lewis (GA) Lipinski Lofgren Lowey Lucas (KY) Luther Maloney (CT) Maloney (NY) Markey Martinez Mascara Matsui McCarthy (MO) McCarthy (NY) McDermott McGovern McIntyre McKinney McNulty Meehan Meek (FL) Meeks (NY) Menendez Millender-McDonald Miller, George Minge Mink Moakley Moore Murtha Nadler Napolitano Neal Oberstar Obey Olver Ortiz Owens Pallone Pascrell Pastor Payne Pelosi Peterson (MN) Phelps Pickett Pomeroy Price (NC) Rahall Rangel Reyes Rivers Rodriguez Roemer Roybal-Allard Rush Sabo Sanchez Sanders Sandlin Sawyer Scott Serrano Sherman Shows Sisisky Skelton Smith (WA) Snyder [[Page 8509]] Spratt Stabenow Stark Stenholm Strickland Stupak Tanner Tauscher Taylor (MS) Thompson (CA) Thompson (MS) Thurman Tierney Towns Turner Udall (CO) Udall (NM) Vento Visclosky Waters Watt (NC) Weiner Wexler Weygand Wise Woolsey Wu NOT VOTING--16 Becerra Berman Bliley Brown (CA) Carson Davis (FL) Istook Mollohan Simpson Slaughter Tiahrt Watkins Watts (OK) Waxman Wynn Young (FL) {time} 1222 Messrs. HALL of Ohio, HOLDEN and BALDACCI changed their vote from ``yea'' to ``nay.'' Mr. ROTHMAN changed his vote from ``nay'' to ``yea.'' So the previous question was ordered. The result of the vote was announced as above recorded. The SPEAKER pro tempore (Mrs. Emerson). The question is on the resolution. The resolution was agreed to. A motion to reconsider was laid on the table. ____________________