S. 3545 (112th): Family Farmer Bankruptcy Tax Clarification Act of 2012

112th Congress, 2011–2013. Text as of Sep 13, 2012 (Introduced).

Status & Summary | PDF | Source: GPO

II

112th CONGRESS

2d Session

S. 3545

IN THE SENATE OF THE UNITED STATES

September 13, 2012

(for himself and Mr. Franken) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title 11 of the United States Code to clarify the rule allowing discharge as a nonpriority claim of governmental claims arising from the disposition of farm assets under chapter 12 bankruptcies.

1.

Short title

This Act may be cited as the Family Farmer Bankruptcy Tax Clarification Act of 2012.

2.

Clarification of rule allowing discharge to governmental claims arising from the disposition of farm assets under chapter 12 bankruptcies

(a)

In general

Section 1222(a) of title 11, United States Code, is amended—

(1)

in paragraph (2), by striking unless— and all that follows through the holder and inserting unless the holder;

(2)

in paragraph (3), by striking and at the end;

(3)

in paragraph (4), by striking the period at the end and inserting ; and; and

(4)

by adding at the end the following:

(5)

notwithstanding the application of the rules under subchapter V of chapter 1 of the Internal Revenue Code of 1986, and without regard to whether the claim arose before or after the filing of the petition, provide for the treatment and payment of any unsecured claim owed to a governmental unit by the debtor or the estate that arises as a result of the sale, transfer, exchange, or other disposition of any farm asset used in the debtor's farming operation as an unsecured claim that is not entitled to priority under section 507.

.

(b)

Postpetition claims relating to sale, transfer, exchange, or other disposition of farm assets

(1)

In general

Section 1222 of title 11, United States Code, is amended by adding at the end the following:

(e)
(1)

A governmental unit may file a proof of claim for a claim described in subsection (a)(5) that arises after the date on which the petition is filed.

(2)
(A)

Except as provided in subparagraph (B), if a governmental unit has not filed a proof of claim under paragraph (1) for a claim described in subsection (a)(5), after the date that is 120 days after the date on which the claim arises, the trustee or the debtor may file proof of such claim.

(B)
(i)

For a claim described in subsection (a)(5) that is a tax for which a return is due, if the debtor or trustee has provided notice as described in clause (ii) and the governmental unit has not filed a proof of claim under paragraph (1), after the date that is 180 days after the date on which the debtor or trustee provides the notice, the debtor or the trustee may file proof of such claim.

(ii)

Notice as described in this clause is notice by the debtor or the trustee—

(I)

indicating the intent to file the applicable claim;

(II)

setting forth the amount of the claim;

(III)

that includes a copy of the filed return relating to the claim; and

(IV)

that is delivered to the governmental unit at the address designated for requests made under section 505(b)(1)(A).

(3)

A claim filed under paragraph (1) or (2) shall be allowed or disallowed under section 502, but shall be determined as of the date such claim arises, and shall be allowed under section 502 (a), (b), or (c) of this title, or disallowed under section 502(d) or 502(e) of this title the same as if such claim had arisen before the date of the filing of the petition.

.

(2)

Modification of plan after confirmation

Section 1229(a) of title 11, United States Code, is amended—

(A)

in paragraph (2), by striking or at the end;

(B)

in paragraph (3), by striking the period at the end and inserting ; or; and

(C)

by adding at the end the following:

(4)

provide for the payment of a claim described in section 1222(a)(5) that arose after the date on which the petition is filed.

.

(c)

Technical correction

Section 1228(a) of title 11, United States Code, is amended in the matter preceding paragraph (1)—

(1)

by inserting a comma after all debts provided for by the plan; and

(2)

by inserting a comma after allowed under section 503 of this title.

(d)

Effective date

The amendments made by this section shall apply to any bankruptcy case that—

(1)

is pending on the date of enactment of this Act and relating to which an order of discharge under section 1228 of title 11, United States Code, has not been entered; or

(2)

commences on or after the date of enactment of this Act.