Senate Passes Two Bills Protecting Family-owned Farms and Local School Districts
The first measure, S. 1024, would make chapter 12 of the U.S. Bankruptcy Code permanent. The code allows farmers to reorganize their debts after filing for bankruptcy while still holding on to their land. As long as a farmer could continue making payments on rental equipment, banks would be prohibited from foreclosing on a family-owned farm.
The second measure, S. 1149, prevents local school districts from having to return any funds already received in cases where local bankruptcies lower the assessed valuations and the amount of money received from property taxes.
A Trainwreck Waiting to Happen? Many Suggest Amtrak Is Drifting Toward Bankruptcy
In a letter to House Budget Committee Chairman John Kasich, dated Oct. 20, 1997, the General Accounting Office says that the "United States would not be liable for the labor protection obligations arising from a partial or complete discontinuance of passenger service, and that modifications to Amtrak's labor protection obligations would require legislation. ... Further, we do not believe that the United States would be liable for Amtrak's pending non-labor protection obligations in the event of a bankruptcy."
Amtrak, a public corporation having already received approximately $19 billion in federal subsidies over the past 26 years, intends to be independent of federal funding by the year 2002. But in fiscal 1997, it covered daily expenses only by supplementing its subsidies with $83 million in bank loans.
Chemical Weapons Treaty & Broadened Police Powers Exempt from the Stay Passes House in Final Days of First Session
On November 12, the House passed H.R. 2709, a chemical weapons sanction bill, which includes the full text of S. 610, "The Chemical Weapons Convention Implementation Act", which includes a broad increase in the current exemptions from the stay for governmental entities seeking to enforce any police or regulatory power. S. 610 passed the Senate in May, but has not been acted upon by the House since then, and has generated great debate in the bankruptcy community about the impact of the provision affecting the stay. Under current law under section 362, a governmental entity is not restricted in enforcing its police or regulatory powers, notwithstanding the stay, so long as it does not try to take possession or exercise control over estate property.
The new language in S. 610 (and now H.R. 2709) appears to permit the government to take such action if it believes it is necessary to further its police and regulatory powers. Though the House and Senate have now passed identical provisions, the language is in different bills. Procedurally, for the provision to become law, either the Senate would have to adopt H.R. 2709 or the House would still have to pass S. 610. The Clinton administration is said to be opposed to H.R. 2709 for other reasons and may veto the bill.