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Reprinted from the November 2004 ABI Journal November 1, 2004

Web posted and Copyright © November 1, 2004, American Bankruptcy Institute.

Last Days of the 108th Congress; Lame Duck Session Looms

Chapter 12

he Family Farmer Bankruptcy Relief Act of 2004 (S. 2864) passed both the Senate and House and has been cleared for the President's expected signature. The bill, sponsored in the Senate by Sen. Charles Grassley (R-Iowa) and Reps. Tammy Baldwin (D-Wis.) and Nick Smith (R-Mich.) in the House, cleared on the final legislative day of the 108th Congress. As in prior extensions of chapter 12, the bill provides an 18-month extension to July 1, 2005, retroactive from Jan. 1 of this year. Chapter 12 first passed in 1986, and this marks its eleventh short-term restoration or extension. Sen. Grassley is the original author of chapter 12. The bipartisan law originally had a five-year sunset; subsequent reenactments have been frequently tied up in the consideration of the larger bankruptcy bill, pending since 1997. A number of family-farmer organizations urged Congress to split chapter 12 from the larger bill due to the financial impact of this year's severe weather conditions. Judiciary Committee Ranking Member Sen. Pat Leahy (D-Vt.) said, "It is time to end this absurdity and make these bankruptcy protections permanent."

November Lame Duck

No other provisions from the larger bankruptcy reform bill have passed both houses of Congress. This includes provisions on "financial contract netting" and new bankruptcy judgeships. While both chambers are scheduled to return after the November election for a lame duck session, it is likely that the only legislation to be considered will deal with homeland security and the recommendations of the September 11 Commission. This plan could change, depending on the outcome of the elections. All 435 seats in the House and one-third of the Senate are up for grabs on Nov. 2. Republicans hold narrow majorities in both chambers, with a number of state races key to the balance of power.

Ninth Circuit Split

The House voted in early October to split up the current Court of Appeals for the Ninth Circuit, creating new Ninth, Twelfth and Thirteenth Circuits. The House approved an amendment by Rep. Mike Simpson (R-Idaho) to keep California, Guam, Hawaii and the Northern Mariana Islands in the Ninth Circuit. The new Twelfth Circuit would consist of Arizona, Nevada, Idaho and Montana, while the new Thirteenth Circuit would include Alaska, Oregon and Washington. The vote was 205-194. This issue arises from concerns that the Ninth Circuit is too large geographically and is too frequently reversed by the Supreme Court. The issue has been controversial for more than 20 years and has little chance to pass the Senate in its current form.


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