The publication is reproduced in full below:
COVID-19 BANKRUPTCY RELIEF EXTENSION ACT OF 2021
Mr. NADLER. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 1651) to amend the CARES Act to extend the sunset for the definition of a small business debtor, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1651
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``COVID-19 Bankruptcy Relief Extension Act of 2021''.
SEC. 2. EXTENSIONS.
(a) In General.--Section 1113 of the CARES Act (Public Law 116-136) is amended--
(1) in subsection (a)(5) (11 U.S.C. 1182 note), by striking
``1 year'' and inserting ``2 years''; and
(2) in subsection (b)(2)(B) (11 U.S.C. 101 note), by striking ``1 year'' and inserting ``2 years''.
(b) Modification of Plan After Confirmation.--
(1) Section 1329(d)(1) of title 11, United States Code, is amended, in the matter preceding subparagraph (A), by striking ``this subsection'' and inserting ``the COVID-19 Bankruptcy Relief Extension Act of 2021''.
(2) Section 1113(b)(1)(D)(ii) of the CARES Act (11 U.S.C. 1329 note) is amended by striking ``this Act'' and inserting
``the COVID-19 Bankruptcy Relief Extension Act of 2021''.
(c) Bankruptcy Relief.--Section 1001 of division FF of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is amended by striking ``the date that is 1 year after the date of enactment of this Act'' each place the term appears and inserting ``March 27, 2022''.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New York (Mr. Nadler) and the gentleman from California (Mr. Issa) each will control 20 minutes.
The Chair recognizes the gentleman from New York.
General Leave
Mr. NADLER. Madam Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and to include extraneous material on H.R. 1651.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from New York?
There was no objection.
Mr. NADLER. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, H.R. 1651, the COVID-19 Bankruptcy Relief Extension Act of 2021, is bipartisan legislation to temporarily extend, until March 27, 2022, the COVID-19 bankruptcy relief provisions enacted as part of the CARES Act in the December 2020 omnibus appropriations bill.
Since the bankruptcy provisions of the CARES Act will expire next week, it is urgent for Congress to ensure that families and small businesses do not lose access to these economic lifelines.
These provisions were enacted last year to provide critical relief to families and small businesses forced into bankruptcy because of the ongoing pandemic. For example, they help ensure that Federal COVID-
related relief payments are used by families to get through this pandemic instead of being seized by creditors. They also help people stay in their homes and ensure that their utilities are not shut off.
In addition, these provisions protect individuals and creditors alike from the effects of the pandemic derailing the court-ordered repayment plans that promise a way out of chapter 13 bankruptcy.
They will also allow more small businesses to take advantage of the streamlined process established by the Small Business Reorganization Act.
Extending these necessary protections until March of next year will provide much-needed certainty that the bankruptcy system will remain responsive to debtors and creditors alike during this extraordinarily disruptive crisis.
I thank Mr. Cline for his work with me on this bill, and for his work to ensure that small businesses have meaningful access to the bankruptcy process.
Madam Speaker, I urge my colleagues to support this urgently needed bill, and I reserve the balance of my time.
Mr. ISSA. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, this pandemic, everyone knows, has uprooted lives and caused untold destruction to families, to workers, and to small businesses. And many see the partisan behavior as destructive during this time, and they often do not see the bipartisan behavior.
Today's extension, H.R. 1651, is an example of bipartisan behavior on behalf of the American people. Repeated and lengthy government shutdowns in response to the pandemic have devastated the ability of millions to work, pay bills, and support their families, and keep their small businesses afloat.
In my home State of California, the restaurant industry has seen more than one out of four restaurants shutter their doors forever.
In 2020, Congress passed five bipartisan COVID relief packages. The CARES Act allowed a variety of temporary relief measures for families and small businesses. When it was passed, we believed that, in fact, once the vaccine was available, that we would be able to put this behind us. But today, when over 10 percent of Americans have received a vaccine, we now know that the road to full recovery is longer ahead of us even after we begin going to work.
So allowing small businesses to file chapter 11 bankruptcy by increasing the maximum debt ceiling, excluding Federal COVID relief payments from income calculations, and allowing debtors to file chapter 13 to modify their payment plans are only some of the critical items that the CARES Act did. Today we are making sure these will continue until March of 2022.
This bill also extends through 2022 bankruptcy relief provisions included in the December 2020 COVID relief package. This extension will provide individuals and businesses with certainty and simplicity as they look at an economic recovery that, although it is underway, may be long.
Enacting this bill will assist debtors and businesses of all sorts, as Americans and their firms continue to address economic realities. This bill is bipartisan, and the bill recognizes that even businesses which have remained up and running often find themselves in a ripple effect of other bankruptcies or failures by companies that have been shut down.
Madam Speaker, I strongly recommend the passage of this bill, and I reserve the balance of my time.
Mr. NADLER. Madam Speaker, I reserve the balance of my time.
Mr. ISSA. Madam Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Cline), one of the coauthors of this bill.
Mr. CLINE. Madam Speaker, I thank the gentleman from California, my friend, for his work on this issue, and I thank the chairman for his work on this issue and their great leadership on this important initiative.
Madam Speaker, in 2010, the National Bankruptcy Conference Small Business Working Group released and presented to Congress a report that identified a problem regarding small businesses and the bankruptcy law, and recommended amendments to the code to add a new chapter for small business reorganizations.
As a result of this recommendation, I introduced the Small Business Reorganization Act, which was signed into law in August of 2019, and I am pleased to say it has been a great success for small businesses.
It is my understanding that 80 percent of small business debtors have chosen to proceed under subchapter V, and preliminary data indicates that these cases are achieving confirmation far more often than small businesses who filed prior to SBRA.
However, the Small Business Reorganization Act implemented only a month before the COVID-19 pandemic caused the State-mandated temporary closure of thousands of businesses.
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Seeing the need to ensure that this new lifeline would be even more impactful, the CARES Act passed in March 2020 increased the amount of debt a business can have to be eligible for small business bankruptcy procedures from $2.7 million to $7.5 million and allowed debtors experiencing hardship because of COVID-19 to modify bankruptcy reorganization plans entered into before the law was enacted.
I have heard from bankruptcy judges and lawyers in the Western District of Virginia who have said that their experience with the Small Business Reorganization Act has been extremely positive. According to the American Bankruptcy Institute, as of last Sunday, 1,651 cases have been filed.
In addition, according to the Federal Judicial Center's Integrated Database, as of September 30, 2020, there were 759 subchapter V cases filed in the 6 months from the time the debt limit was raised to the end of fiscal year 2020, with information on liabilities available for 548 of these cases. Of those, 28 percent involved debtors whose liabilities exceeded the original limit of $2.7 million. These debtors would not have been eligible for subchapter V without the temporary increase provided by the CARES Act.
Without this bill to keep the debt limit at $7.5 million for another year while we continue to navigate this pandemic, about 30 percent of businesses that would choose to use it would no longer be eligible.
Preservation of the business benefits both the creditor, which should receive a higher recovery because of the debtor's restructuring than they would if the business liquidated, and the debtor, who will now be able to remain in business rather than liquidating.
Our districts depend on their small businesses. They are hotels, convenience stores, restaurants, and pharmacies. Those who endeavor to open and run a small business are proud of their work and their standing in our communities.
Unfortunately, they also take on a sometimes-insurmountable financial burden. As we have seen over the last year, when they are forced to close, it has a great impact on the rest of us. That is why the year-
end spending and relief package omitted recovery rebate payments from bankruptcy estates and blocked utilities from stopping or denying service to some individuals in bankruptcy. This bill would extend those provisions by 3 months but wouldn't affect other provisions in that law that are already scheduled to expire later in 2022.
I am proud to have introduced this legislation along with Chairman Nadler to support our small businesses and our families, and I urge its passage.
Mr. NADLER. Madam Speaker, I have no further speakers.
Mr. ISSA. Madam Speaker, both sides of the aisle are united behind this good, sensible extension of law.
Madam Speaker, I strongly recommend that all of our Members vote for it, and I yield back the balance of my time.
Mr. NADLER. Madam Speaker, this bill will provide critical relief to the small businesses and families forced into bankruptcy because of the ongoing pandemic. These provisions help make sure that the pandemic does not derail the path to a fresh start that the bankruptcy code promises for individuals and businesses alike.
As Mr. Issa said, this is bipartisan legislation. I am aware of no opposition to it whatsoever.
Madam Speaker, I hope all of my colleagues will support this urgently needed bill, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the gentleman from New York (Mr. Nadler) that the House suspend the rules and pass the bill, H.R. 1651, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds being in the affirmative, the ayes have it.
Mrs. GREENE of Georgia. Madam Speaker, on that I demand the yeas and nays.
The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 8, the yeas and nays are ordered.
Pursuant to clause 8 of rule XX, further proceedings on this motion are postponed.
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SOURCE: Congressional Record Vol. 167, No. 49
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