Jeff Sessions

Mr. SESSIONS

Mr. SESSIONS. Pardon me, that is not the Senator from Arizona.

Mr. SESSIONS. I thank the Senator from Arizona.

Mr. SESSIONS. I will.

Mr. SESSIONS. Mr. President, I will briefly say in response to the comments made by the distinguished senior Senator from Massachusetts that this is a fair and balanced bill. It does a number of good things to help those who have financial difficulties. It closes loopholes and ends unfairness in provisions that are being abused and making a mockery out of legitimate bankruptcy law. For example, children or those who are eligible to receive child support and alimony are raised to the highest possible level, even above attorney fees and trustee fees in bankruptcy. They are the highest possible level. If an individual owes a number of debts and one of those is for child support, the child support is to be paid first. There is nothing in this bill that is harsh. Any American making below the median income level will fundamentally find their bankruptcy filing procedure under the needs-based rule has not changed. It is only for those who make above the median income that a question will be raised as to whether or not they can pay back some of their debts. There are literally thousands of individuals in America today who owe limited debts, who may have incomes of $80,000, $90,000, or $200,000, and choose to file for bankruptcy. Under the current law, they can wipe out all their debts, even those owed to people much less wealthy than they, and not pay any debts. Under this provision of law, if you have an income above the median income level, the bankruptcy court may conclude you can pay some of your debts, and if you can, you are given 5 years to pay some of those debts to somebody from whom you have received a benefit or else you would not have a debt. I thank Senator Grassley for his work on this bill. I am troubled that anyone would say it is unfair and does not help make this system better. I yield the floor. Mr. GRASSLEY addressed the Chair.

Mr. SESSIONS. I believe your concern is reasonable, and I will work with you to see that this issue is addressed in conference. I am confident that we can reach a consensus on the timing issue, and that all sides will be able to accept the change.

Mr. SESSIONS. Mr. President, I would like to address an issue that Senator Reed and I have been working on for many months. We have sought to reform the process of reaffirmations, to fully inform debtors of the details and consequences of reaffirming debts, to prevent abuse of this process by dishonest debtors and creditors, and protect honest individuals who wish to enter a reaffirmation agreement. Senator Reed and I have worked for months to reach this point, and we have tried to craft a balanced amendment that protects the interests of everyone involved. That amendment passed the Senate last year. At this point, Senator Reed and I have agreed on a few technical changes, and identified one substantive issue that remains outstanding. The substantive issue concerns the time limit for reaffirmation agreements to be approved by the court. Current law provides 90 days, and Senator Reed would prefer 50 days. Given the support for the underlying amendment, Senator Reed and I were most concerned with making the technical changes to ensure that the agreement that was reached accurately represented the common intent and to reserve the timing issue for conference.

Mr. SESSIONS. Mr. President, my good friend Senator Reed and I have worked together for quite some time now to adopt a provision involving reaffirmations, amendment No. 2650. We have a few technical corrections to which we have agreed, and we have reached an agreement to make these technical corrections. I send to the desk a modified amendment which includes the technical corrections. I ask unanimous consent that the original amendment No. 2650 be vitiated and that the modified amendment be accepted, substituted, and adopted in its place.

Mr. SESSIONS

Mr. SESSIONS. I believe the pending order of business is the bankruptcy bill.

Mr. SESSIONS. Madam President, I give my total support to this bill, which is a needed overhaul reform update and modernization of an act that is very important to America. It allows people every day--over a million a year--to totally wipe out debts that they owe, to start afresh and not pay people they have legally obligated themselves to pay. It is part of our historical constitutional process. We venerate that right to start anew. Over the past years, we also have recognized there are a number of problems with the way bankruptcy is being handled. We believe we can make it better. I believe this bill does make it better. As a new Senator who has been here only 3 years, it has been somewhat frustrating to see that we cannot quite get a final vote on the bill. At one time or another, at the most inopportune moments, there has been a group of people who have come up with objections and delays, and we have now been on this for 3 years. It has passed this body with over 90 votes. At one time it came out of the Judiciary Committee with a 16-2 vote. We have a good, broad, bipartisan bill that improves bankruptcy law, and it ought to be passed. The objections to this legislation have only been those of the most complex and minute nature. The overall aspects of this bill are sound. It has very little opposition. Let me point out a few things. Bankruptcies have increased 350 percent since 1980, during a time of great economic expansion. In 1980, there were 287,000 bankruptcies filed. In 1999, as this chart shows, there were 1,300,000 bankruptcies filed. And 1999, as the President told us the other night, was a great year for Americans economically. How is this happening? Is this necessary? Are these all legitimate? What can we do about it? That is what this bill addresses. I believe we do need reform because of an extraordinary increase in filings. Some are saying we do not need this bill. There was an ad run in a local Washington newspaper that said: We do not need the bankruptcy legislation; we had a 7 percent drop last year in filings; so, therefore, you should just stop all the work that you have been doing. I thought that was a silly ad. After a 350 percent increase, we have one of the best economic years ever and had a modest decline of 7 percent, and somehow that suggests we do not have a problem with filings? We do have a problem with filings. The numbers still are well over 1 million filings per year. There is another reason we need bankruptcy reform. I am a lawyer. I served as a U.S. attorney. I am on the Judiciary Committee. I believe that the rule of law ought to be consistent and fair, worthy of respect. I also recognize that lawyers are strong advocates. I respect that. Sometimes they get unscrupulous and abuse the system, but generally what lawyers do is take the law we pass and use it for everything they are worth to benefit their client. That is what has happened with the bankruptcy system. Since 1978,-- the last time we had bankruptcy reform--lawyers have learned how to manipulate the law. They have learned how to do things that have in many ways abused the operation of the system. It leads to hard feelings. It leads to a sense of unfairness and frustration when people feel their just debts are unfairly, without justification, wiped out and not paid because of a technicality in the bankruptcy law. People have to spend extraordinary sums of money to litigate an issue in bankruptcy court that should be decided easily by a clearly written statute. So we do have abuse of the system. No matter how many filings there are, we need a system that is fair for the filings that do occur. That is what we have worked on in these last several years. We have a number of basic principles. If a person can pay the debts he or she justly obligated themselves to pay, that person should pay it or at least that portion of it they are able to pay. If they are unable to pay their debts, they ought to be able to wipe them out in bankruptcy. What we are seeing today--and I am hearing this from people I talk to all over Alabama--is people who are making $80,000, $90,000, $100,000 and could easily pay back all or part of their debts are going into bankruptcy and wiping out every debt they owe. Often they are not paying the people they previously agreed to pay when they undertook the debt and got the loan or the benefits from the gas station or the automobile dealership or the furniture store. When they got those benefits, they agreed to pay them. The creditors or businesses don't make as much money as the debtors do, and they are able to go into court and wipe that out. If you think that is not happening, I can assure you that it happens every day in America. We allow that under present bankruptcy law. There is a section called substantial abuse that a judge can use to reduce the abuses under current law, but what our hearings have found is that it is totally ineffective and is almost never utilized in the American bankruptcy system today. What we are trying to do is legislate precisely what a substantial abuse of the system is. For those who can pay a part of their debts, they ought to pay them. What could be more fair? What we have come up with is a system called needs-based bankruptcy. That is, to the extent to which you need bankruptcy relief, you get it. But if you don't need it and can pay your debts, you ought to pay some of them or part of them. So the way the act is written, if a person can pay 25 percent of their nonpriority unsecured claims--setting aside as a priority child support and alimony--if you can, after paying that, pay 25 percent of your nonpriority unsecured claims, then you ought to pay those or $15,000, whichever is less, and we give the debtor 5 years in which to pay that. That is the kind of thing I think is the right step. To have a bright line rule and to try to make sure we are not clogging the court with too much work, and that we are having a fair system, we have in the act provisions that say, in effect, that if a person makes above the median American income, they can't be forced to pay back some or all of their debt. They can still file, as they always have, in straight bankruptcy. For example, a family of four who makes $44,000 is making the median income in America. If they are making $43,000, the presumption that they ought to and they can pay back some of their debt, does not apply to them because they will be making below the median income. So the new rule change only affects those who are making above the median income in America today. We think that is fair and reasonable. If you are making above the median income and you can pay back some of your debts, many times to people who make less than you do, you ought to pay those debts. I think that is a good step in the right direction. There are a number of other abuses in the system. I mentioned child support and alimony. Under current law, half a dozen categories of debt are given repayment priority over child support and alimony. The sponsors of this bill, Senators Grassley and Hatch, made clear at the very beginning we were going to move child support and alimony up to No. 1--there would not be any debate about that--even higher than lawyers fees. Of course, the lawyers are not too happy about that, but that is what we think about it: child support ought to be tops. So how anybody could go around and suggest, as some have, that this legislation is unfair to women and children is beyond my comprehension. It is baffling to me. I wonder how anyone can make that complaint and not be doing it with the most deliberate intent to smear this legislation. I think they need to read the bill. It gives the highest, unprecedented priority to child support. If an individual files bankruptcy and they owe alimony or child support, the moneys they have will go first to pay alimony and child support before it even pays the lawyer and the bankruptcy trustees. I know that Senator Grassley felt strongly about another reform in this bill. Many of the people who are owed money, creditors, by people who have filed bankruptcy get a legal notice that they are to appear in court. They have to go out and hire a lawyer to send them to the courthouse and fight over a $2,000, $3,500 claim. Oftentimes the lawyer's fees cost more than the person actually collects. This legislation makes clear that if you have a claim, you can go to court and represent yourself without having to hire a lawyer. I am quite confident that in most cases for smaller claims the bankruptcy judges are going to give a fair hearing to those people. Many times they will not need to hire an attorney to represent them in bankruptcy court. That is going to save a lot of money, in my view, for people who need it and don't need to be wasting it on unnecessary court hearings and fees. There has been a real problem with repeat filers. People are repeatedly filing in bankruptcy. That is extraordinarily frustrating to people who observe the system. We have a Federal bankruptcy commission made up of Federal judges and top bankruptcy experts that has expressed its concern about these repeat filings. We have good provisions that will eliminate some of the abuses in repeat filings, something that is long overdue. I felt strongly about, and debated with Senator Kohl and others, the reform of the unlimited homestead exemption. In several States--Texas, Florida, for example--no matter how much money you owe, you can keep your house, no matter how valuable that house is. It is quite clever that some people realize this and go out and buy multimillion-dollar mansions, pour all their assets into those homes and call it their homestead. Then they go bankrupt and don't pay their accountant, their doctor, their lawyer or anybody else, and they are sitting in a multimillion-dollar home. That is not right. Why should people who are living in modest houses not get paid by somebody who is living in a house worth several million dollars? We have had hearings about that. We have newspaper articles that actually identify people by name who have moved to Florida, moved to Texas, buy these mansions, and don't pay the people they owe. So we have at least capped that exemption at the level of $100,000. I think that is a bit high. However, the States can lower it. Some States have $15,000 as all you can keep in a homestead; others have $50,000. But the maximum now is $100,000, instead of just allowing quite a number of States to have unlimited homesteads. In fact, they will do things such as move out of a State where they owe a lot of debt, pump all their money into a homestead in another State, declare bankruptcy, and pay nobody back home where they left. That is an abuse we have eliminated in the legislation as it is today. We had a common problem with landlord-tenant. If anybody has managed an apartment duplex, or maybe has had a garage apartment or a few housing units, and rented those, you know how difficult the eviction process is. Each State in this country has a complex system of eviction procedures so that tenants cannot be unfairly removed from their premises. Sometimes these laws are pretty complex and it takes a good bit of effort before somebody can be removed if they don't pay their rent, or if they are using drugs on the premises, or destroying the property, or disrupting the neighborhood. It is very difficult sometimes. But there is a procedure for it, and you can go to State court and evict someone. We are finding that lawyers are running ads in the paper such as this: ``Seven months free rent. Call me if you have a problem paying your rent. We guarantee you can live rent free for seven months.'' We have ads on that: ``Seven months free rent, 100 percent guaranteed in writing. We guarantee you can stay in your apartment or house 2 to 7 months more without paying a penny of rent.'' How can they do that? They are doing it because they get the person in and tell them to file bankruptcy, and usually they tell them to wait until the last step of the eviction process is about to be taken in State court, when the judge has heard the case and they are about to rule that you can be evicted, presumably. Then they file for bankruptcy. What happens when you file an action in bankruptcy? It stays, or stops, automatically, all the proceedings in State court. So this stops the eviction proceeding, no matter how close it is to finality. And then the poor landlords--who opponents of the bill like to suggest are usually big wealthy people, but normally most of the landlords in America have smaller units of housing and don't have legal staffs and an ability to respond--now they have to go to bankruptcy court. The case is docketed, the judge sets a hearing, and somebody asks for a continuance, and they have to hire a lawyer. Now the tenant is fussing and saying he wasn't using drugs anyway and should not be kicked out. Now we have another trial going in Federal court over whether or not this person should be evicted. We found that, in California, 3,886 bankruptcy cases were filed simply to stop eviction proceedings by the sheriff's office in Los Angeles. That is an astounding number from just one county in America. It is this kind of ad that generates this kind of action. I don't know for sure, but a lot of these people probably didn't need to file bankruptcy, but we are giving them a priority and advantages that other people who don't file bankruptcy don't get. It seems to me that, in effect, we are saying to a landlord: You have to be a private charity. You have to let this person stay in your premises for 7 months without paying rent before we can get him out of there, and we in the law can't do anything about it. That is the way the law is written. Well, it is our job as Senators and Members of Congress to fix laws that have those kinds of loopholes. We are going to fix that one. We are not going to have that kind of abuse continuing to occur in America. It is not right. It is our responsibility to end this abuse. You can blame the lawyers all you want, but if the law allows them to do it, they can do it. It is our job to make the law, not the lawyers who are using it. We have another idea that I thought about and believe in strongly. I have visited, in my hometown of Mobile, AL, a credit counseling agency. I spent nearly a full day there. These agencies are in existence virtually in every town in this country. They are very popular. People, more than you know, have financial troubles. It is the leading cause of family breakup in America--financial disputes among spouses. What we need more than we need bankruptcy relief in America is a system to encourage people to be good money managers, to recognize what their income is, to set a budget, and have the whole family agree to it and stand by it. When that occurs, we can avoid many of the problems we now see. I will note that I don't dispute at all that quite a number--perhaps well over half of bankruptcies that are filed--are filed because of things beyond people's ability to control. Maybe it is because of an automobile accident, or a serious medical bill, or a business failure, or maybe a mental illness or something else in the family. So there are reasons. But for a large number of Americans, they don't need to be this bad off in this time of economic growth. A lot of it is just a simple inability to understand how to manage their money. A credit counseling agency will bring the entire family in, and they will sit around the table and prepare a budget for the family and help them agree to it and have them sign that agreement. They will help them decide what debts to pay first. The credit counseling agency will call creditors demanding payment and say: We are here working with this couple. If you will give us 3 months to take care of some other bills, we will start paying you. We will start paying you so much a month, and we will pay this debt down. Give us that chance. Creditors are able to do that on a regular basis. They work out things for these families and help them to not only avoid bankruptcy, they help them to pay off their debts and help them to generate a lifestyle of good money management, which will continue in the future and perhaps cause them to avoid filing bankruptcy again in the future. We like that idea. Our legislation says that before you file bankruptcy, you must at least visit and talk with a credit counseling agency to see if they may be able to help you with an alternative to bankruptcy. Frankly, lawyers are not doing that. Basically, what is happening with lawyers today is, they are running ads in the paper, and people are coming in and meeting with paralegals who fill out the form, and they file the bankruptcy; they tell them how much the fee is going to be, and then they tell them how to get the money for the fee, to use credit cards and everything else, and don't pay any debts, take the money you make and give it to me as a lawyer fee, and I will file for you as soon as the money is there. That is basically what is happening. It is not good. We need to be concerned about families and try to get them on the right track of thinking about financial obligations and the need to repay them. So there are some other matters in this bill--many more matters of great import. I am excited about it. I think it is overdue. I want to express my appreciation again for the leadership of Senator Grassley. He has steadfastly, fairly, and in a bipartisan way, worked to move this bill to final passage. I am convinced we are on the verge of that now. I thought we were previously. It slipped away from us. But we passed it twice in this body I think with overwhelming votes--one time, I believe with only one ``no'' vote. We are going to pass this bill. It is a good bill. It will make our bankruptcy system a form of Federal court in which people who are unable to pay their debt can choose to go in and have those wiped out. We are going to create a system that is better than the current system. The vast majority of filers will be able to wipe out all of the debt like they always have. But for those who can pay, they ought to be made to pay some of it and to allow the other abuses and costs that go with it to be eliminated. Attorney fees and litigation can be eliminated. Some people are going to find maybe there is an alternative through a credit counseling agency rather than going through the process of filing bankruptcy. I think that will be a good step. I am proud to have worked on this. I am proud to have worked with Senator Grassley, whom I admire so greatly. I look forward to final passage and signing by the President of this important legislation. Thank you, Madam President. I suggest the absence of a quorum.

Mr. SESSIONS. I would like to talk about the pending bankruptcy bill and give my full and total support to the work of Senator Grassley and others.

Mr. SESSIONS

Mr. SESSIONS. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I don't think I mentioned about Senator Hatch, when he came to Alabama, and there were 2,000 delegates there at a State convention voting for President, he came within a few votes of being the winner. He had a great showing in our home State of Alabama.

Mr. SESSIONS. I had a question about the amendment but I don't think it is necessary to pursue it today at this time.

Mr. SESSIONS. Mr. President, it is great to be back in session this morning and see my chairman, Senator Hatch. I know today he made a big announcement. He has given his heart over the last several months and offered himself to the American people as our next President. He did so with integrity. Throughout the year, he chaired the Judiciary Committee. We never slacked in our committee hearings. He was here and missed hardly any votes. So many of our candidates seem to give up their responsibilities in the House or the Senate, but he did not do so. He regularly cast his votes day after day. This is the first real business of the Senate, a day in which he made an announcement. I know it was very important to him that he would not continue his seeking of the Presidency, and he is introducing and leading the fight for a very important and historic bankruptcy reform bill that is long overdue. Senator Hatch and Senator Grassley have worked exceedingly hard to make this bill a reality. We are on the verge of it becoming a reality. It has been frustrating. The last time we passed this bill in the last hours of the last Congress, it had over 95 votes and only 1 or 2 opposing votes. It came out of committee last year 16-2, with almost that many votes this time in Judiciary Committee. It is a bill whose time has come. I am glad we are bringing it up. I thank the majority leader, Senator Trent Lott, for saying we need to bring this to a conclusion and calling it up for debate at the beginning. There has been some suggestion and some comments recently about a decline in bankruptcy filings this past year. One full-page ad--I suppose designed to influence this body--was in one of the local Washington papers. The headline was, ``The Incredible Disappearing Bankruptcy Problem.'' Let's talk about the numbers. Chairman Hatch mentioned those earlier. In 1980, when we had an economy that was weaker than it is today, there were only 287,000 bankruptcy filings. In 1998, less than 20 years later, with the economy one of the strongest we have ever had, the number of personal bankruptcy filings has skyrocketed to 1,398,000--a 386-percent increase. That is a stunning fact. In 1999 when the economy was even stronger--we had an even stronger economy last year than in 1998--we had a modest 7-percent reduction in bankruptcy filings. Some are saying we don't need to have any bankruptcy reform, that it is a disappearing problem. I hardly think anybody can believe that a 7-percent reduction, after a 386-percent increase, suggests in any way that we don't continue to have a bankruptcy problem. The Consumer Federation of America, which is really hard left in my view, issued a press release saying the crisis is over. That certainly is not the fact. In 1997, the National Bankruptcy Review Commission, with Federal judges and bankruptcy experts on it, issued a report that stated the most visible and disturbing fact about consumer bankruptcy has been the extraordinary increase in filings in the last two decades. Since 1980, the rate of consumer bankruptcies has risen nearly threefold. These are the words of the official report of the Commission. Certainly nothing has happened since that report was issued in 1997 to indicate we have had any significant permanent reduction. In 1996, the number of consumer bankruptcy filings was 1.1 million. In 1999, the estimated number of filings is 1.3 million. Thus, since the Bankruptcy Review Commission complained about the alarming number of filings, the filings have increased 16 percent. So since the official report's conclusion criticizing and complaining and expressing concern about the large number of filings, it has increased 16 percent since then. I believe we do have a problem. We have a deep problem of abusive and repeat filers, people whose lawyers tell them clever ways to beat their legitimate debts. There are a lot of abuses in this system. So while we are happy we have had a modest decrease in filings, we have not dealt with the fundamental problem. The reason we have a bankruptcy reform bill is not because there are a large number of filings. The reason we have this bankruptcy reform bill is that the system is not working fairly. Too many people with high incomes--$70,000, $80,000, $90,000-- are filing bankruptcy and are not paying their debts when they could easily do so. The moral question arises because the person they owe may have far less income than they do--maybe it is their neighborhood garage mechanic who worked on their car. They may have greater income than the people they owe, who they are not repaying. So we want to make sure the historic principle of bankruptcy is alive and well: That a person can wipe out his debts and start over again and not be burdened with unpayable debts. But when a person can reasonably pay a substantial part of those debts, we believe he ought to do so. That is what we will be talking about today. The purpose of bankruptcy reform is--hopefully, we will have some reduction in filings. I do not expect we will have much of a reduction as a result of this reform, but our basic goal in bankruptcy reform is to have a system that works better to reduce litigation, to reduce the cost. We make it so you do not have to have a lawyer to represent yourself on a matter in bankruptcy court. We required that persons be at least knowledgeable of and have an opportunity to talk with a credit counseling agency. They are in every locality in America. They help people deal with their financial crises, short of declaring bankruptcy on many occasions. Sometimes they will tell them, ``You cannot handle it, you have to go to bankruptcy.'' Or they may say they need to have a budget and get the family in and deal with the fundamental problems, where they are in debt, and start first paying the debts off with the highest interest rates. Our goal is not primarily to reduce bankruptcy filings. Our goal primarily is to end abuses and problems that have made themselves clear over the past 30 years since we last reviewed bankruptcy. The lawyers have learned how to work the system well. We need to create a legal system that has integrity and efficiency and that everyone can respect.

Mr. SESSIONS. Mr. President, will the Senator yield?

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I will be interested in the Senator's pipeline safety bill. That is a matter that is important. The pipelines are so much safer than trucks and other forms of distribution of fossil fuel. We are moving toward the use of natural gas, which burns so much cleaner than coal, fossil fuel, and other fuels. I think we will be having more pipelines around the country. I think it will be essential. It will be a positive environmental step to move forward with it. I have been somewhat discouraged that the Vice President has indicated he opposes drilling for natural gas off the gulf coast where it can be done so much more safely than drilling for liquid gas. We have had very few problems of any kind drilling off the coast. In fact, it produces the cleanest burning fuel we have. We have the Vice President opposing nuclear power, and now we are shutting off our capacity to reach natural gas which we are now using to generate electricity at a fraction of the environmental pollutants that other forms of energy generate. We are reaching a point of boxing ourselves in. We are supposed to reach cleaner air goals under the Kyoto agreement. The President and Vice President say we should go forward, but we are boxing ourselves in. We need to maintain an efficient gas pipeline system in America to generate the energy for the needs we have while continuing to reduce pollutants in the atmosphere. It has to be safe, too. I am willing to look at that. I certainly don't favor additional regulations, but if it promotes safety, I think it is something we ought to talk about.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I will be interested in the Senator's pipeline safety bill. That is a matter that is important. The pipelines are so much safer than trucks and other forms of distribution of fossil fuel. We are moving toward the use of natural gas, which burns so much cleaner than coal, fossil fuel, and other fuels. I think we will be having more pipelines around the country. I think it will be essential. It will be a positive environmental step to move forward with it. I have been somewhat discouraged that the Vice President has indicated he opposes drilling for natural gas off the gulf coast where it can be done so much more safely than drilling for liquid gas. We have had very few problems of any kind drilling off the coast. In fact, it produces the cleanest burning fuel we have. We have the Vice President opposing nuclear power, and now we are shutting off our capacity to reach natural gas which we are now using to generate electricity at a fraction of the environmental pollutants that other forms of energy generate. We are reaching a point of boxing ourselves in. We are supposed to reach cleaner air goals under the Kyoto agreement. The President and Vice President say we should go forward, but we are boxing ourselves in. We need to maintain an efficient gas pipeline system in America to generate the energy for the needs we have while continuing to reduce pollutants in the atmosphere. It has to be safe, too. I am willing to look at that. I certainly don't favor additional regulations, but if it promotes safety, I think it is something we ought to talk about.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I rise to ask my colleagues to join Senator Jeffords and me in supporting the enactment of the pending bill which clarifies the status of church welfare plans under state insurance law. These plans provide health and other benefits to ministers and lay workers at churches and church-controlled institutions. It is estimated that more than 1 million individuals rely on these programs for their health benefits. Today, the status of these programs under state insurance laws is uncertain. This legislation merely provides that church welfare plans are not engaged in the business of insurance for purposes of state insurance laws that relate to licensing, solvency, or insolvency. In addition, this legislation clarifies that a church plan is single employer plan for purposes of applying state insurance laws. The language in the bill is intended to eliminate concerns by network providers and insurance companies about the legal status of a church plan under state insurance law. By enacting this legislation, networks and insurance companies otherwise doing business in a state will be able to offer to church plans the same services they offer to corporate benefit programs. Mr. President, I first became aware of the need for this legislation when I heard from Bishop Morris from my own state of Alabama. He explained that too frequently church plans are denied access to network providers that offer discounted rates. He also explained that from time-to-time questions arise about the legal right of church plans to provide coverage under state insurance law. He asked me to look into what I could do help clarify the legal status of health plans maintained by churches and synagogues. It seemed like a reasonable request since Congress has authorized churches to maintain denominational benefit programs. However, this is also a technical area of the law that involves constitutional issues of separation of church and state. It also involves technical issues regarding insurance and benefit laws. This legislation has been carefully crafted with the help of the church benefits community represented by the Church Alliance, a coalition of more than 30 denominational benefit programs. While they may differ on questions of theology, it is obvious that they are united in their efforts to serve those who serve their respective churches and synagogues. I also want to commend the National Association of Insurance Commissioners for their assistance in helping to work out the language of this bill. It is obvious that State Insurance Commissioners respect the right of churches to maintain benefit programs that serve clergy and lay workers. Mr. President, churches should be commended for the commitment they have demonstrated, in some cases for more than a hundred years, to offer comprehensive benefit programs to their employees. These programs have many unique design and structural features reflecting the fact that they are maintained by denominations. As we consider health care legislation in Congress, I believe that it is important for all of us to recognize these unique features and to be mindful of the important role these church-maintained programs perform within their respective churches. In order to give my colleagues and the public a better understanding of this legislation, I ask unanimous consent that a section-by-section of the bill appear immediately after my remarks. Mr. President, on behalf of ministers, rabbis, and church lay workers across this country who receive benefit coverage from church plans, I urge passage of this legislation. Clarification of Church Welfare Plan Status Under State Insurance Law Section 1 provides a statement of purpose. This section provides that the only purpose of this Act is to clarify the status of church welfare plans under certain specified state insurance law requirements and the status of a church welfare plan as a plan sponsored by a single employer. This Act clarified the status of church plans under state law. It also addresses the problem of health insurance issuers refusing to do business with church plans because of concern that church plans could be classified as unlicensed entities. Subsection 2(a) provides that a church welfare plan is deemed to be sponsored by a single employer that does not engage in the business of insurance for the purposes of state insurance laws described in subsection (b). This subsection permits network providers and insurance companies to establish the same contractual relationships with a church plan as they are allowed to establish with any single employer plan covered under the Employee Retirement Income Security Act (ERISA) in such state. Subsection 2(b) describes state insurance laws that (1) would require a church welfare plan or an entity that can administer or fund such a plan (only to the extent that it engages in such activity) to be licensed; or (2) relate to solvency or insolvency (including participation in guaranty funds and associations). For example, state insurance laws that impose reserve requirements or require posting of security would be described in this subsection. Similarly the plan is deemed to satisfy the licensing requirements of state insurance law. Subsection 2(c)(1) defines the term ``church plan.'' Subsection 2(c)(2) defines the term ``reimburses costs from general church assets.'' The affect of this definition is to provide that church welfare plans are not engaging in the business of insurance for certain state insurance law provisions otherwise described in this subsection 2(b). Subsection 2(c)(3) defines the term ``welfare plan.'' This subsection clarifies that the term ``welfare plan'' only includes church plans and does not include HMOs, health insurance issuers and other entities doing business with church plans or organizations sponsoring or maintaining the plan. Subsection 2(d) provides that while the Act exempts church welfare plans from state licensing requirements, states preserve authority to enforce state insurance law provisions that remain applicable to church plans. This subsection deems welfare plans to be licensed for purposes of all other insurance laws not specifically excluded in subsection 2(b). This subsection is necessary because under some state insurance laws, only entities that are actually licensed can be subject to enforcement action under any provision of such law. Subsection 2(e) provides that while subsections (a) and (b) deem that a church plan reimburses costs or provides insurance from general church assets for the purpose of determining its status under certain state insurance laws, the rights of plan participants and beneficiaries, including those who actually make plan contributions, are not otherwise affected by the application of section 2.

Mr. SESSIONS

Mr. SESSIONS. I wish to say that I know a lot of hard work has gone into this very contentious issue. Some said this had happened in the dead of night. What happened in the dead of night--I serve on the health committee that should be dealing with this--this 42-day rule went in. Our committee never voted on that or had hearings on it. This at least gives our committee a narrow window of opportunity to try to deal with it. It won't be a full 90 days because we will be out half of that. It will be a narrow opportunity with Senator Bill Frist chairing it and maybe we can work out some things that make sense. Right now I am very troubled. The overwhelming majority of the transplant centers are not happy with these rules as they are being developed. I think the Congress must speak. I yield the floor.

Mr. SESSIONS. Mr. President, is it your expectation following the 90- day period during which the Secretary reviews the public comments that as of today we have not had a formal comment period, as I understand it; that the Secretary should inform the Congress of her reasons behind any final decision she would make?

Mr. SESSIONS. Mr. President, I thank the Senator from Delaware, and I thank him particularly for his interest on this issue and so many other issues that have been before this Senate, including all of the major tax cuts in our country in the last number of years. He has been a key player in that. The issue before us today involves many different aspects. I believe very strongly that the organ transplant issue is critical for our Nation. We have made such magnificent progress in enhancing the availability of organs, helping people who receive those organs, and increasing the success rate of organ transplants. It has been a continual series of advancements--whether it is medication to avoid rejection, or the skill of a surgeon, and so forth. The key to that has been the magnificent services rendered by organ transplant centers all over the country. The plan that has been directed and proposed by Secretary Shalala of HHS, which gives her, in fact, the total ability to void and dictate the regulations, that plan has been opposed and is not supported by the overwhelming number of organ transplant centers in this country. They do not believe it will save lives. They do not believe it will help the system to have Washington decide who gets organ transplants. We have a system that is working and getting better on a daily basis, which is something of which we can be extraordinarily proud. In Alabama, the University of Alabama at Birmingham is No. 1 in the world in kidney transplants. They are exceptionally skilled at that procedure, and is one of the great organ transplant centers in the world. Others are similar around the country. They are very uneasy about and object to this consolidation of power in the Secretary's office--a person who is not elected by the people, and yet is about to impose regulations on the dispersement of organs in America. This is a matter that ought to be and by law and right should be done in the U.S. Congress. The House passed a bill quite different from the Secretary's proposal. The committee met in the appropriations, and several Senators who had a view on this came up with a bill giving a 42-day window to change any rule she might pass. We will hardly be in session. We will not be in session in 42 days. Ninety days is the minimum time we can have so that this Congress can fulfill its responsibility to the health and safety of this country by having hearings and passing legitimate legislation on organ transplantation. I would point out that the chairman of that subcommittee of the committee of which I am a member, Senator Frist, Dr. Frist, is one of the great organ transplant surgeons in America. He did the first organ- lung transplant in the history of the State of Tennessee. He will chair that committee. He is going to be fair on this issue. But there is a congressional responsibility, and the minimum time we can accept is the 90 days that has been proposed. I thank the Chair. I hope and I am confident that will be part of this legislation.

Mr. SESSIONS

Mr. SESSIONS. Under most State eviction proceedings, a tenant who desires to stay on the property can maintain possession of that rental property 45 to 60 days. There are many rights and remedies for tenants. But at some point, the ability to stay without paying rent has to be ended. When you take that 45 to 60 days, and then file a bankruptcy petition, and then get another 6 weeks on top of that--and that is assuming everything goes smoothly, that the landlord can find a lawyer who will go to bankruptcy the first day he calls one, and who can get down there and file the proper petition or get his certificate filed. Maybe the landlord's lawyer does not understand how to file one of these certificates, and ends up billing him $250 or $300 for filing the darn thing, when, in fact, as the Senator, who is an excellent lawyer, knows, bankruptcy court has jurisdiction over property. It is the estate of the person who is filing. If there is no property, there is no estate, which is the case where the lease has expired, or the case where the lease has been breached by lack of payment. Then the bankruptcy court can't legitimately issue an order affecting that property. The bankruptcy judge can never issue an order under those circumstances. So why make somebody go to bankruptcy court to file these petitions if it will not do anything other than cost the landlord more money to delay the eviction and cost that person money? If we in the Congress want to fund people who can't pay their rents and give them emergency funding, something like that, that is a matter to debate. I don't think we ought to tax private citizens to support individuals in this fashion when their contractual rights have been ended. We have to make sure our bankruptcy system is a good, tight, legal system and not a social service agency. We give certain rights and benefits to debtors under bankruptcy law. We allow a person who has tremendous debts to walk in and wipe out every one of those debts. Unless their income is above the median income and they can pay back at least 25 percent of their debts, they can go in bankruptcy court and never pay anybody they owe. They do not have to pay their garage mechanic who fixed their automobile for them, not their brother-in-law who loaned their family money when they needed it, not their mother, not their credit card company, not their bank, not their doctor, not their hospital, just wipe them all out because we believe people ought not be crushed under a weight of debt. I do not believe we would expect the gas station to give free gasoline to somebody who has filed bankruptcy. I don't believe we would expect the grocery store to give free groceries to somebody who filed bankruptcy. Neither should somebody who has violated his lease, is subject to eviction under the appropriate State law, be given free rent, even for a month and a half, perhaps more. That is what our concern is. I understand the Senator's great passion for this circumstance, but I believe this would be a step backward. It would allow an abuse to continue which we need to eliminate. I hope the Members of this body will reject the amendment.

Mr. SESSIONS. Mr. President, I appreciate the statements of the distinguished Senator from Wisconsin. I will offer for the record three advertisements that are not particularly unusual. One I read from earlier, how they can stop the sheriff and get you more time. Call us if you lost in court. Don't give up. Call us. We will give you more time. In other words, if you have had your eviction proceedings that every other citizen gets, come down and file bankruptcy and we can get you more time, even though we can wipe out all your debts. A person can then begin to find another place to live, he has no other debt, no old debts to pay. He can afford to make the rent payments, and maybe a landlord will let him stay. Here is another advertisement, from Los Angeles: Stop this eviction, from 1 to 6 months. I know under the Senator's amendment it might not take quite as long. He would cut that time down. But he said from 1 to 6. But under his amendment I just went through, wouldn't the Senator agree, it is at least a month to 6 weeks?

Mr. SESSIONS. Not if you depend on the rent every month, as many people do who rent out their garage.

Mr. SESSIONS. My concern is that there is fundamentally no legal basis for a stay in bankruptcy court of a lease that has expired or a lease that has been breached by lack of payment--since there is none, then the landlord ought not to have to hire a lawyer and go to bankruptcy court. So I continue to have that concern. But the Senator from Wisconsin has repeatedly said the tenant would be able to remain on the property, but only if they paid rent. Let me give you a hypothetical. On October 1, the tenant's rent is due. The tenant does not pay. On October 11, he files bankruptcy. On November 1, the rent is due; and it is not paid. On November 1, the landlord immediately files his notice in the bankruptcy court. And then 15 days are allowed to go by, presumably so the tenant could file some other complaint in bankruptcy court, some other delay or motion. And 15 days go by; and on November 16, the stay of the eviction proceedings is lifted. Then the landlord has to go back to the State court again to pursue his eviction notice, which has been stopped, which has probably fallen behind the 10,000 other cases in that State court system. And now the landlord has a hard time bringing it up. So I would suggest to you, it is quite possible that the tenant could have 6 weeks rent free. I made the comment about ``rent free'' because I will show this advertisement right here in San Bernadino: ``7 months free rent.'' That is what is being advertised in the paper: No matter how far you are behind in your rent. We guarantee you can stay in your apt. or house for 2-7 months more without paying a penny!!! Find out how. We can stop the Sheriff or Marshall and get you more time.