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Senate passes Family Farmer Bankruptcy Clarification Act

The Senate has unanimously passed legislation to assist farmers who have fallen on hard times financially.

U.S. Senators Al Franken (Minnesota) and Chuck Grassley (Iowa) introduced the Family Farmer Bankruptcy Clarification Act of 2017 to fix a 2012 Supreme Court ruling that prevented a bankruptcy reform bill from becoming law.

That legislation was passed by Congress in 2005 to address unique financial situations of family farmers who are reorganizing their assets following bankruptcy.

The Supreme Court said as written, the bill failed to achieve Congress’ goal of helping family farmers.

Franken calls the bipartisan Clarification Act a commonsense fix that helps ensure farmers get a fair shake when going through bankruptcy.

He says the bill allows for the reorganization of debts to treat capital gains taxes owed to a governmental unit, arising from the sale of farm assets during a bankruptcy.

It also removes the IRS’ veto power over a bankruptcy reorganization plan’s confirmation, giving the farmer a chance to reorganize successfully.