Skip to content
Fact
ba
.
se

Senate Floor: THE EDUCATION INFRASTRUCTURE ACT OF 1994

  • Howell Heflin
    Person
  • Thad Cochran
    Person
  • Jim Sasser
    Person
  • Howard Metzenbaum
    Person
  • Joe Biden
    Person
  • Not Labeled
    Person
  • Chuck Grassley
    Person
  • Carol Moseley Braun
    Person
  • Bob Dole
    Person
Unknown

Carol Moseley Braun

Unknown
Madam President, I send to the desk a bill, The Education Infrastructure Act of 1994. 5

Unknown
The PRESIDING OFFICER. The legislation will be referred to at appropriate committee. 7

Unknown
(The remarks of Ms. Moseley-Braun pertaining to the introduction of S. 2034 are printed in today's Record under "Statements on Introduced Bills and Joint Resolutions.") 8

Carol Moseley Braun

Very Positive
Thank you very much. I yield the floor and I thank Senator Heflin and Senator Grassley for their indulgence in allowing me this time on the floor. 10

Unknown
The PRESIDING OFFICER. Who seeks recognition? 12

Howell Heflin

Slightly Positive
I am under the impression Senator Cochran has an amendment. 14

Thad Cochran

Positive
Madam President, I do have an amendment, and I hope to be able to offer it soon. 16

Thad Cochran

Somewhat Positive
I was told the managers would like me to offer the amendment as soon as the distinguished Senator from Illinois completed her remarks. I was here on the floor for that purpose. 17

Thad Cochran

Unknown
I understand now, though, the Senator from Ohio has some questions that he wants answered about the amendment. He is trying to get the answers, and I will be back about 5 o'clock to offer the amendment. 18

Unknown
The PRESIDING OFFICER. The Senator from Ohio. 20

Howard Metzenbaum

Very Positive
Madam President, as I indicated to my friend from Mississippi, I do not know enough about his amendment. I do not think I have any objections to it. I am not trying to stall him in going forward with it. 22

Howard Metzenbaum

Unknown
There are numbers of amendments that are kicking around right at the moment. And by 5 o'clock we will be able to see if we can work it out. If we can do it earlier, I will call him at his office and urge him to come back to the floor if he would. 23

Unknown
The PRESIDING OFFICER. The Senator from Alabama. 25

Howell Heflin

Somewhat Positive
Madam President, I would like to proceed with this bill and get this bill moving. 27

Howell Heflin

Leans Positive
There are a number of amendments that we have that have been cleared by both sides, the Democratic amendments, Republican amendments, and all of this. 28

Howell Heflin

Very Positive
I am afraid we are getting caught up in playing games. I think each amendment ought to be like a barrel and stand on its bottom and on its own merits. 29

Howell Heflin

Slightly Positive
I would hope that as to both sides that indicated some matter pertaining to this we could proceed with the amendments that have been cleared by both sides. For example, there is an amendment by the Senator from California, who is presiding right now. There is no objection to it. 30

Howell Heflin

Slightly Negative
But we are getting into a situation of where because of an amendment that is controversial and may have to be voted on everything else is being held up. It is sort of a leverage situation. 31

Howell Heflin

Very Positive
I would hope that we could start proceeding on this and the amendments that are agreed to and go ahead with them. 32

Thad Cochran

Unknown
Madam President, will the Senator yield for a question? 34

Howell Heflin

Positive
Yes. 36

Thad Cochran

Positive
Is it my understanding from the remarks of the manager of the bill that the managers would like Senators to proceed to offer their amendments? Is that the understanding? 38

Howell Heflin

Very Positive
Yes, we would like to do it. The Senator's amendment, I understood, was cleared by both sides. 40

Howell Heflin

Very Positive
If there are objections to it, do it, but I would like to proceed here and move forward and try to get as many of these amendments either adopted or withdrawn or voted on or in one way or the other if we could. 41

Thad Cochran

Very Positive
If the Senator would yield further, I sympathize with the situation, and I am perfectly happy and prepared to send an amendment to the desk and lay it before the Senate. If there are discussions or questions, I will be happy to try to respond to them. 43

Thad Cochran

Very Positive
So, if that is the view of the managers of the bill, I am certainly happy to oblige and hope that we can answer whatever questions the Senator from Ohio or any other Senator may have about the amendment. 44

Thad Cochran

Unknown
Mr. METZENBAUM addressed the Chair. 45

Unknown
The PRESIDING OFFICER. The Senator from Ohio. 47

Howard Metzenbaum

Neutral
Madam President, I want to say to my colleague -- and all three of us have been around here a long time -- all three of us know the procedures of the Senate are such that it is not too difficult, if you stay on the floor, to delay consideration of a matter. I do not intend to do that and I have no desire to do that. 49

Howard Metzenbaum

Neutral
But it is my understanding that certain amendments of the Senator from Ohio had been cleared. I now understand one of them may be in some controversy or some difficulty. 50

Howard Metzenbaum

Neutral
I came over to the floor in order to try to work out that amendment. Once that amendment is given a green light -- and I do not believe it to be controversial -- then it seems to me we might be able to pass about 15 or 20 amendments, including the amendment of the Senator from Mississippi, a number of the amendments of the Senator from Ohio, and a number of amendments of other Members of this body. 51

Howard Metzenbaum

Very Negative
So if I have to stay here on the floor with reference to the amendment of the Senator from Mississippi, protecting the floor in order to get this -- I am not at liberty and I am not in a position to try to work out the one more controversial amendment that seems to be creating the problem at the moment. 52

Howard Metzenbaum

Very Positive
I am frank to say to both the Senator from Mississippi and the Senator from Alabama that I do not know why the amendment of the Senator from Ohio, which has to do with retiree benefits, is at issue or is a problem. I thought the matter had been worked out. As a matter of fact, the Senator from Ohio has retreated from an earlier position that he had taken with respect to the same matter, and an earlier position that this body adopted. 53

Howard Metzenbaum

Somewhat Negative
But I think that, if given a little time in order to try to work it out, I think that, hopefully, I will be able to do so. I am not sure where the stumbling block is. I do not mean to suggest either the Senator from Mississippi or the Senator from Alabama is the stumbling block, but I do not know that answer. I am waiting to discuss the subject with my staff, whom, I might say, I do not see on the floor at this very moment. They may be in the cloakroom. 54

Howard Metzenbaum

Positive
I just urge both of my colleagues to just give me a little time, and I will be glad to get back in here. I do not have any really basic opposition to the amendment of the Senator from Mississippi. 55

Thad Cochran

Unknown
Will the Senator yield for a question? 57

Howard Metzenbaum

Unknown
Of course. 59

Thad Cochran

Slightly Positive
If I understand what the Senator has said, he is going to obstruct or would be prepared to obstruct the passage of my amendment, which may be meritorious and to which there is no objection on either side for any reason, in an effort to try to get leverage to pass his amendment, which is controversial and with which many Senators may disagree on the merits? I do not know what the Senator's amendment is. 61

Thad Cochran

Unknown
But is my understanding of what the Senator is stating to the Senate correct? 62

Howell Heflin

Unknown
Might I intervene here as a referee? 64

Unknown
The PRESIDING OFFICER. The Senator from Alabama. 66

Howell Heflin

Very Positive
No. 1, Madam President, there are two amendments that I know of which Senator Metzenbaum has offered that are agreeable, but they are being held hostage. There are, on the other hand, because of that, or maybe for other reasons, Senator Cochran's amendment and several other amendments on that side of the aisle which are being held hostage. 68

Howell Heflin

Neutral
Now, what I am saying is, let us quit this leverage and hostage holding. Let us go ahead and pass all amendments, and the amendment that is causing all the fire and creating all the controversy, either work it out or vote it up or down. 69

Howell Heflin

Leans Negative
I do not think we ought to hold hostage these other amendments on either side. And, in effect, maybe Senator Metzenbaum is wrong; but, on the other hand, it started out that they were refusing to allow Senator Metzenbaum's amendment, on which there had been no controversy, to be passed. 70

Howell Heflin

Neutral
So it is a matter of, again, Newton's third law of motion, that there is a corresponding force that is affected. It comes in one side, then the force comes back from the other side. 71

Howell Heflin

Somewhat Positive
So let us try to get it done. I am trying to get the bill passed and to do it as harmoniously as I can. But there are a lot of leverages and there is a lot of hostage holding and that sort of thing. Let us not play games. Let us proceed with the bill. 72

Howell Heflin

Unknown
Mr. METZENBAUM addressed the Chair. 73

Unknown
The PRESIDING OFFICER. The Senator from Ohio. 75

Howard Metzenbaum

Neutral
Madam President, there is sometimes a time to fight; sometimes a time to agree; and sometimes a time to suggest the absence of a quorum, which I do. 77

Unknown
The PRESIDING OFFICER. The absence of a quorum has been suggested. The clerk will call the roll. 79

Joe Biden

Slightly Positive
Madam President, I ask unanimous consent that the order for the quorum call be rescinded. 83

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 85

Joe Biden

Slightly Positive
Madam President, I do not know how many hours, days, months, and years, my friend from Alabama has been on this legislation, or its antecedent legislation. It seems as though every time he gets close, very few people have any disagreement with the underlying substance of what he is attempting to do, and what needs to be done is obvious. And yet he always seems to get himself caught in a crossfire on matters that do not directly relate to the legislation he brings out of the Judiciary Committee, out of his subcommittee, and to the floor. 87

Joe Biden

Very Positive
I hope that whatever ancillary issues there are, unrelated issues there are, could be resolved in another context, because we really should be moving ahead with this legislation. 88

Joe Biden

Slightly Negative
As I said, he has worked tirelessly on it. No one knows more about the issue than the distinguished senior Senator from Alabama. 89

Joe Biden

Very Positive
And, besides, I do not want it back in the Judiciary Committee again. I would like very much for him to succeed in seeing this moved. 90

Joe Biden

Very Positive
But I never underestimate the tenacity and the ability of my friend from Ohio and those on the Republican side who tend to be his nemesis, or he theirs. 91

Joe Biden

Very Positive
I hope that sooner, rather than later, order will prevail and our friend from Alabama, the manager of this legislation, will be able to move it off his plate, off the Senate floor, to the House, to a conference, and to the President. I suspect that is his desire. 92

Joe Biden

Very Positive
I hope that is what we can do, because I ask the Senator from Alabama a question. How long has this been going on, trying to resolve the underlying issues here? 93

Howell Heflin

Slightly Negative
Well, it has been going on about two Congresses, I would say. The Senate passed it before, unanimously, 97 to zero. We passed the conference report. The House failed to pass the conference report in the last session of the last Congress. 95

Howell Heflin

Positive
We are moving ahead this time, and hopefully the House can move on it. 96

Howell Heflin

Positive
Of course, tactics are part of the game in the parliamentary proceedings, and somebody holds something hostage. But I think we ought to try to determine these things on the merits of each and every individual amendment. 97

Howell Heflin

Slightly Negative
I appreciate the kind remarks of the distinguished chairman of the Judiciary Committee. He has been very tolerant of all of our activities on various and sundry bills. He has to face, many times, filibusters in his own committee -- the only committee that I belong to where usually you will have a filibuster in a committee -- but he always comes through. Somehow or another, we will come through. We will persevere in the long run. But it takes time, and it is a little frustrating. 98

Joe Biden

Very Negative
My mother used an expression that she heard used somewhere else. I think it comes out of some work of literature. When I say, "Mom, in the long run -- " she says, "Honey, in the long run, we'll all be dead." In the long run, we will be here 2 years later still working on this legislation. I hope we can move it. 100

Joe Biden

Neutral
As I said, no one has worked any more tirelessly producing a solid piece of legislation, badly needed, than the Senator from Alabama. I think we should reward his hours and, in this case, years in the vineyard by moving on it quickly. 101

Joe Biden

Slightly Positive
Again, the vast majority of the Congress is for this. The courts are looking for it, and I believe the President is, as well. 102

Joe Biden

Very Positive
So I thank him and again implore my colleagues to let us move on to the merits of the legislation, if we can. 103

Howell Heflin

Unknown
Mr. President, I suggest the absence of a quorum. 105

Unknown
The PRESIDING OFFICER (Mr. Wellstone). The clerk will call the roll. 107

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 111

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 113

Howell Heflin

Very Positive
Mr. President, I ask unanimous consent that the vote ordered for 5:30 p.m. be moved to 5:45 p.m., with all other provisions of the previous agreement remaining in effect. 115

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 117

Howell Heflin

Unknown
The reason for that is I understand there have been several Senators called to the White House and therefore they will be back by that time. 119

Howell Heflin

Unknown
I suggest the absence of a quorum. 120

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 122

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 126

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 128

Howell Heflin

Unknown
Mr. President, I send to the desk an amendment. 131

Unknown
The PRESIDING OFFICER. The clerk will report. 133

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with. 138

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 140

Unknown
(The text of the amendment is located in today's Record under "Amendments Submitted.") 141

Howell Heflin

Unknown
Mr. President, this is a managers' amendment by which we try to make a lot of technical changes. There are some issue changes that have come to the attention of the Subcommittee on Courts after the markup of the bill by the Judiciary Committee. The issues which are included in this amendment are related directly to concerns in bankruptcy that should be addressed in this bill. 143

Howell Heflin

Very Positive
We have included a number of changes which are in response to the letter which the Department of Justice sent to the committee. This letter was a review of S. 540, as well as their suggestions as to form and substance of some of the provisions in the bill. 144

Howell Heflin

Very Positive
First, in response to the Department of Justice concern, the effect of S. 540 regarding curing mortgage arrearage under section 1322 of the code, we offered the suggested changes by adding specific language to the amendment in section 301 of S. 540 to ensure that there is finality to the time period in which a debtor may cure residential mortgage arrearage under chapter 13 plans. Without this language, the present provision could have a detrimental effect on residential mortgage markets in over 17 States. 145

Howell Heflin

Positive
To ensure maximum price at sale for the debtor and to give the purchaser of foreclosed property, as well as the mortgage holder, some sense of finality, we have amended section 301 to include the words "prior to the consummation of a foreclosure sale" after the word "judgment" in paragraph C. 146

Howell Heflin

Very Positive
Second, we have added additional language to the provision which encourages the circuits to set up bankruptcy appellate panels to hear appeals from bankruptcy courts. The Department of Justice voiced concern in its letter over whether the amendments in S. 540 were too restrictive on the circuits. 147

Howell Heflin

Neutral
To address this concern, we have added an additional standard for the circuit council to consider when determining whether or not to adopt a bankruptcy appellate panel service. 148

Howell Heflin

Very Positive
Third, we offer in this amendment some other changes suggested by the Department of Justice: 149

Howell Heflin

Very Positive
To amend section 105 by replacing the word "subsection" with "section" in the two places it appears in subsection (D); To amend subsection 204 of S. 540 to list the correct subsection, 365(D)(3), which is being amended; To correct the reference to the subparagraph in section 216 of S. 540; To amend section 302 of S. 540, to avoid confusion with an existing statute, 18 U.S.C. section 3613(F), which provides no fine imposed under the Sentencing Reform Act is dischargeable in bankruptcy. Thus, we offer the additional language "unless otherwise provided by 18 U.S.C. section 3613(F)," be inserted after the words "extent such fine exceeds $500." A significant part of this amendment is the deletion of the entire chapter 10 provisions in S. 540. We still firmly believe there is a need in the code to allow small business to reorganize cheaply and expeditiously. After much time and discussion with interested parties, we have crafted amendments to chapter 11 which will accomplish much of what we set out to accomplish in chapter 10. 150

Howell Heflin

Unknown
The next addition that we have included in the managers' amendment standardizes the treatment of residential home mortgages throughout the code. A debtor is not allowed to cram down such a mortgage in proceedings under chapter 13 and 7. This same protection of the home mortgage industry is not provided under chapter 11 of the code. 151

Howell Heflin

Positive
We propose to extend to chapter 11 the same language that is included in section 306 of S. 540. By extending this same language to apply to home mortgages under chapter 11, we make sure the congressional intent that a debtor not be allowed to modify the contract on their home mortgage is sustained throughout the code. 152

Howell Heflin

Very Positive
Next, we have introduced substitute language to amend section 207 of S. 540 which deals with antialienation of retirement plans. This language makes clear Congress's intent to protect and provide fair treatment for pension plans and their members. In this substitute amendment, we have included the teachers and public employees retirement systems which provide retirement disability and other benefits to nearly 9 million active retired teachers and other public employees. 153

Howell Heflin

Slightly Positive
The amendment to section 110 of this bill, premerger notification, is an accepted compromise of all parties concerned. The changes in this section are designed to put bankrupt mergers on the same fast track that cash tender offers have outside of bankruptcy. As you know, time is an important factor in the sale or reorganization of a bankrupt company, and this amendment will make sure that sales of these companies move swiftly. 154

Howell Heflin

Very Positive
There is also a provision in this amendment which will assure the court that it has the power to issue an injunction and create a trust which is used for the payment of claims and demands pursuant to a reorganization plan. 155

Howell Heflin

Somewhat Positive
The amendment contains a modification of section 113, service of process, in the bill. The new language addresses the need to serve by certified mail federally insured deposit institutions. This will ensure that the cost of administering the estate will be kept at a minimum. 156

Howell Heflin

Very Positive
We have also extended for bankruptcy and other nonlife-tenured judges similar life insurance benefits now available to all article III judges. This provision was included in S. 1673 and passed as a part of S. 1569 but was deleted by the House for jurisdictional reasons. It allows these judges the option of continuing to pay premiums throughout their retirement and thus maintain the value of their life insurance and provide security for their families. 157

Howell Heflin

Very Positive
The amendment will address needed changes in section 365 of the code. This provision will protect the leasehold mortgagee as well as the tenants in the development of a ground lease property. The language is to simply make clear the intent of the section to protect the rights of lessees and mortgage lenders. 158

Howell Heflin

Very Positive
The amendment contains noncontroversial provisions that have been crafted with input from bankruptcy experts. I am confident that the inclusion of these provisions in the bill will help to create a bill that will address many important bankruptcy issues. 159

Howell Heflin

Unknown
Mr. GRASSLEY addressed the Chair. 160

Unknown
The PRESIDING OFFICER. The Senator from Iowa is recognized. 162

Chuck Grassley

Positive
If I could, and I cannot do better than the chairman has done on the explanation of this amendment, I would take just a little bit of time to stress a couple of points within it that I think need to be explained because these are things, at least one of them on the original amendment coming out of committee, where some concerns were expressed and probably the way they have been addressed here in the rewrite makes the final product even better than when it came out of committee because, as passed by the committee, the bill would have created a separate chapter 10 pilot program relating to the bankruptcy procedures for small business. 164

Chuck Grassley

Unknown
The managers' amendment deletes those provisions. Instead, the managers' amendment will modify chapter 11 and streamline the process of small business bankruptcies. At the same time, these changes will take effect on a nationwide basis immediately upon enactment. 165

Chuck Grassley

Very Positive
There were concerns raised during the time that this bill came out of committee and the present about the constitutional requirement for uniformity of bankruptcy laws around the United States. Obviously, the pilot programs would not be uniform, and so we felt we had to satisfy the constitutional requirements that they be uniform, and we should particularly express our appreciation to Senator Hatch for his cooperation in working on this issue as well as Senator Heflin's efforts. 166

Chuck Grassley

Very Positive
The managers' amendment will also prohibit cramdowns of residential mortgages in chapter 11. The bill was always designed to prevent these cramdowns and was originally drafted to prohibit individual residential cramdowns in all chapters open to individual debtors. However, the Supreme Court unexpectedly ruled that chapter 11 filings could be brought by individuals as well as by business debtors. To ensure that a loophole that would otherwise exist be closed, this managers' amendment includes provisions extending the same cramdown language to Chapter 11 as well. 167

Chuck Grassley

Very Positive
So I fully support this amendment and feel it is a good addition to the original legislation. 168

Chuck Grassley

Unknown
I yield the floor. 169

Howell Heflin

Neutral
Mr. President, the manager's amendment also includes a provision passed by the Senate last Congress to rectify a serious inequity in the current retirement system for Federal judges. This provision was included in S. 1673, and passed as part of S. 1569, last Congress, but delete by the other body for jurisdictional reasons. I believe it is crucial to correct this injustice. 171

Howell Heflin

Very Positive
In 1984, Congress sought to compensate Federal judges in some way for the fact that they, unlike all other Federal employees, may not retire at age 55, but must wait until 65. At age 65, life insurance options are fairly limited and expensive. Thus we granted Federal judges the option of maintaining their optional life insurance, at cost to them. Unfortunately, article I judges were not included. This amendment provides these valuable members of the Federal judiciary the same opportunity as article III judges currently enjoy. 172

Howell Heflin

Very Positive
Under the current system all Federal employees receive basic life insurance in an amount equal to their annual salary. All employees may opt to pay for additional life insurance at a value equivalent to one to five times their annual salary. The monthly insurance premiums vary depending on the level of coverage they choose and their age. Upon retirement article I judges no longer pay life insurance premiums, but they witness a decrease in their policy value by 2 percent per month. The security they have built up for their family and the substantial premiums they have paid for years of dedicated service essentially dwindles to nothing within 4 years. This amendment would give bankruptcy and other non-life-tenured judges the option of continuing to pay premiums throughout their retirement, and thus maintaining the value of their life insurance and providing security for their family. Upon the death of a judge, the full value of the life insurance policy would be available for his or her survivor. 173

Howell Heflin

Very Negative
This amendment would eliminate the discrepancy between retiring article III judges and retiring article I judges, at little, if any, cost to the Government. The Congressional Budget Office has done an initial analysis on the cost of this program and concluded that if there is low participation by article I retirees, there could be a net savings to the Government of $1 to $5 million. At worst, there would be a cost of $1 to $5 million. Despite our extending this option to article III judges in 1984, rates have gone down over the past decade and the Office of Personnel Management reports a current significant surplus in the fund. 174

Howell Heflin

Very Positive
The men and women who choose to serve as U.S. bankruptcy, magistrate and claims court judges are dedicated, intelligent, and talented individuals. They represent 45 percent of the Federal judiciary. Most have given up lucrative careers in the private sector to devote their lives to public service -- improving the administration of justice throughout the United States. We need to maintain this level of excellence by providing programs that continue to attract strong candidates to the Federal bench. I hope that you join Senator Sasser and myself in support of this mission and its goal of providing retiring article I judges with a fair and cost-effective life insurance program. 175

Jim Sasser

Very Positive
Mr. President, I would like to thank my distinguished colleague from Alabama for including in his substitute amendment a provision passed by the Senate during the last Congress to rectify a serious inequity in the current retirement system for Federal judges. As a member of the Subcommittee on Civil Service, I am acutely aware of the need to maintain an equitable benefits package for all Federal employees. 177

Jim Sasser

Negative
Currently, Federal judges are alone among Federal employees unable to retire at age 55, under the so-called rule of 80. We sought to offset this inequity by enacting, in 1984, the Bankruptcy Amendments and Federal Judgeship Act. This legislation allowed federal judges to maintain their optional additional life insurance after retirement, recognizing the limited availability of insurance options -- and the costliness of them -- to 65-year-old retirees. 178

Jim Sasser

Somewhat Negative
Unfortunately, article I judges -- non-life-tenured judges were not included. Today we will redress this oversight. 179

Jim Sasser

Slightly Positive
The current system provides article III judges with a valuable option -- to continue their optional additional life insurance upon retirement. Article I judges -- and those article III's who do not take advantage of this option -- cease to pay premiums upon retirement, but see the value of their policy drop two percent per month. Thus, by age 69, despite their years of service and payments in the FEGLI fund, these retired judges are left without this valuable financial protection for their spouse. 180

Jim Sasser

Somewhat Positive
The provision that the chairman has included in S. 540 would eliminate the discrepancy between retiring article III judges and retiring article I judges, at little, if any, cost to the government. As Chairman Heflin has indicated, there could even be a net savings to the Government. As a member of Civil Service Subcommittee, I believe there is a need for this legislation and that it is essential to maintaining a fair life insurance and retirement package for Federal employees. 181

Jim Sasser

Very Positive
I want to tell you all about a distinguished constituent of mine, Judge Ralph Kelley, of Chattanooga. He began his career at age 14 as a page to one of the greatest men to ever serve in Congress, Sam Rayburn. He went on to serve as assistant Attorney General for Hamilton County, TN, as a member of the Tennessee House of Representatives, and was elected mayor of Chattanooga in 1962. He was a mayor of Chattanooga during the time that the civil rights movement reached its peak, and guided that city wisely through some very rough times. 182

Jim Sasser

Very Positive
In 1969, Ralph Kelley went on to serve eastern Tennessee as a bankruptcy judge, a position he had held now for 25 years. He has dedicated his career to public service. He has enjoyed a successful career, the respect of his colleagues, and the appreciation of his fellow Tennesseans. 183

Jim Sasser

Very Positive
I tell my colleagues this because Judge Kelley is an example of the kind of dedicated and compassionate public servants who are disadvantaged by the current system. He has opted to protect his wife and family by investing -- for 25 years -- in a life insurance policy with the Federal Government. 184

Jim Sasser

Very Positive
However, as soon as he retires, the value of his life insurance will decrease by 2 percent per month, and in 4 years, he will have nothing to leave his wife in the way of financial security. This provision will not affect a lot of people, but it will dramatically affect a few, such as Ralph Kelley, who have devoted their lives to public service. 185

Jim Sasser

Very Positive
I thank the chairman for including this valuable provision and I urge my colleagues to support it. 186

Howell Heflin

Unknown
Mr. President, I urge adoption of this amendment. 188

Neutral
The PRESIDING OFFICER. If there is no further debate, the question is on agreeing to the amendment. 190

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 194

Chuck Grassley

Unknown
I move to lay that motion on the table. 196

Chuck Grassley

Slightly Positive
The motion to lay on the table was agreed to. 197

Howell Heflin

Unknown
Mr. President, I suggest the absence of a quorum. 199

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 201

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 205

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 207

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that Senator Campbell of Colorado be added as a cosponsor to the amendment offered previously today by Senator Brown of Colorado dealing with the supplemental injunction. 209

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 211

Howell Heflin

Unknown
Mr. President, I suggest the absence of a quorum. 213

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 215

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 219

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 221

Howell Heflin

Positive
Mr. President, I will ask unanimous consent that a letter from the Congressional Budget Office, dated February 2, 1994, be printed in the Record, along with the attachments therein. This basically shows that the savings over the year for 1994 will amount to about $52 million savings by the adoption of this bill. 223

Howell Heflin

Slightly Positive
I ask unanimous consent that this material be printed in the Record. 224

Howell Heflin

Unknown
Mr. President, I suggest the absence of a quorum. 261

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 263

Thad Cochran

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 267

Unknown
The PRESIDING OFFICER (Mr. Conrad). Without objection, it is so ordered. 269

Thad Cochran

Unknown
Mr. President, I send an amendment to the desk and ask that it be reported. 272

Unknown
The PRESIDING OFFICER. The clerk will report the amendment. 274

Thad Cochran

Slightly Positive
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 279

Unknown
The PRESIDING OFFICER. Without objection it is so ordered. 281

Thad Cochran

Unknown
Mr. President, this amendment establishes the priority for expenses and claims of bankruptcy as it relates to independent sales representatives. 292

Thad Cochran

Very Negative
Section 507 of title 11 of the Bankruptcy Code provides for the priority order for expenses and claims in bankruptcy. The third priority set out in this section, specifically section 507(a)3, is for unsecured claims up to $2,000 for wages, salaries or commissions, including vacation, severance and sick leave pay earned by individuals within 90 days before the bankruptcy petition was filed or the date of cessation of the debtor's business, whichever comes first. 293

Thad Cochran

Somewhat Positive
The purpose of this priority is to ensure that employees, including those who work on commission, are provided a minimum degree of protection when their employer files for bankruptcy. 294

Thad Cochran

Somewhat Negative
Under current law, other individuals who derive their income as independent sales representatives by selling products or goods for the debtor firm are not provided any protection for their loss of income when the firm files for bankruptcy. 295

Thad Cochran

Very Positive
My amendment would amend this section to include the independent sales representatives and permit them to enjoy the same status as a commissioned sales employee of a debtor firm which goes into bankruptcy. In some instances, corporations exist in the name of one employee truly acting as an independent contractor for the debtor firm in the sale of goods and services, and in those instances the corporation would be included under the terms of my amendment. 296

Thad Cochran

Unknown
The intent and the effect of the amendment is to provide equitable treatment -- we consider it equitable -- tantamount to that which is provided for employees of a firm, even though they may be called independent sales representatives and they may not technically be considered a direct employee. 297

Thad Cochran

Somewhat Positive
To ensure that that is the only class that would be described by the amendment, the amendment provides that the employee or the sales representative would have to earn at least 75 percent of his income during the previous year from the debtor firm. 298

Thad Cochran

Slightly Positive
Only upon meeting that threshold of 75 percent for the previous 12 months would an independent sales representative share in the bankruptcy estate in this priority order and, of course, then only up to the amount of $2,000, as provided for others in this same class, which would have been earned in the 90-day period prior to the bankruptcy filing. 299

Thad Cochran

Very Positive
We have submitted this amendment for comment and consideration to the National Bankruptcy Conference, and we have received a favorable report. I am reading from a memorandum now, addressed to Members of the U.S. Senate, and included here is the amendment offered by this Senator, priority for independent sales representatives. The comment of the National Bankruptcy Conference is; "Senator Cochran's language is an excellent clarification of existing law." The independent sales representatives amendment will allow certain independent sales agents or independent contractors to enjoy the same priority in the bankruptcy estate as the employees of the bankrupt debtor. 300

Thad Cochran

Very Negative
Until recently, section 507(a)(3), which gives employees of a bankrupt firm priority for a limited amount of wages and benefits they have earned was narrowly interpreted to only be available to employees of the bankrupt debtor and not to independent sales representatives. 301

Thad Cochran

Very Negative
This interpretation is unfair in many circumstances and has led to inequitable results where independent contractors who make their living as independent contractors -- particularly as sales agents have been unable to recover lost income from the bankruptcy estate. 302

Thad Cochran

Very Negative
Typically, the work performed by an independent sales representative is similar to, and in many cases identical to, the work performed by an employee of a firm, but such an individual may be excluded under the Bankruptcy Code for no other reason than the characterization of his or her work status. 303

Thad Cochran

Leans Negative
While some independent sales representatives may derive their income from a number of firms which limits the effect of a single firm's bankruptcy, those who derive most of their earnings from a single firm are not so fortunate, as they cannot recover even the limited amount that is currently available to firm employees. 304

Thad Cochran

Slightly Negative
The Cochran amendment is intended to address the latter circumstance where an independent sales representative stands to lose a significant amount of income due to the bankruptcy of a single firm. 305

Thad Cochran

Unknown
The amendment requires that the independent sales representative must have derived at least 75 percent of his or her income during the previous 12-month period from the single firm filing a bankruptcy petition. 306

Thad Cochran

Leans Negative
Even after meeting that significant income threshold, an independent sales representative would not receive any windfall from the provision, and in fact, could receive no more than an employee currently receives -- priority for a claim of up to $2,000 that may have been earned during the 90-day period prior to the bankruptcy filing. 307

Thad Cochran

Negative
Every year, thousands of sales agents lose money owed to them because they do not fit into the priority classification's definition of employee. 308

Thad Cochran

Very Positive
The unfairness of this situation is amplified because independent contractors work without the security of many employee benefits such as health insurance, profit sharing plans, life insurance, and other benefits available to employees, but not to independent sales representatives. 309

Thad Cochran

Slightly Negative
The amendment would codify the inclusion of independent contractors in the priority section 507(a)(3) that has historically been limited to employees. 310

Thad Cochran

Slightly Negative
The amendment would also eliminate another inequitable result of the current exclusion of independent contractors under the priority section of the Bankruptcy Code. 311

Thad Cochran

Very Negative
Under current interpretations of section 507(a)(3), an individual or mom-and-pop business incorporated to limit potential liability, but run as an unincorporated sole-proprietorship is excluded from coverage. 312

Thad Cochran

Positive
The judicial interpretation that this section is an exclusive remedy for natural persons, excluding all corporations, has the effect of putting form over substance. 313

Thad Cochran

Unknown
Individuals who are incorporated or incorporated mom-and-pop businesses are being shut out from the priority due to the form in which they run their business not as a result of the way the business is actually run. 314

Thad Cochran

Slightly Negative
The amendment is narrowly drawn to provide an exception for only those corporations which are in fact individuals conducting business and would exclude from the priority all businesses with more than one employee. 315

Thad Cochran

Very Positive
The amendment will establish a fair priority in the Bankruptcy Code for those independent sales representatives who, like employees, derive all or most of their income from a single firm in bankruptcy. 316

Thad Cochran

Slightly Positive
This amendment will be especially helpful to the most vulnerable manufacturers agent who is on his own and can least afford to have his manufacturer declare bankruptcy. 317

Thad Cochran

Unknown
Mr. HEFLIN addressed the Chair. 318

Unknown
The PRESIDING OFFICER. The Senator from Alabama. 320

Howell Heflin

Very Positive
Mr. President, I believe that the services that are provided by independent sales representatives of this country are equally as important to the survival of a company as is the work performed by the employees at the factories of those companies. It is in that same vein that I support the idea behind this amendment to give priority to certain claims of the independent sales representative. Senator Cochran's amendment would make the claim of the independent sales representative equal to the claim presently allowed, under the Bankruptcy Code, for an employee. 322

Howell Heflin

Very Positive
The Bankruptcy Code specifies the kinds of claims that are entitled to priority in distribution, as well as the order of priority. This system was designed to address special circumstances or special needs which warrant certain exceptions. In particular, wages, salaries, or commissions of employees, which without the priority exception would be unsecured claims, are accorded a third priority in distribution of the estate. 323

Howell Heflin

Very Positive
The purpose behind this third place in priority is, in part, to insure that employees will not abandon a failing business for fear of not being paid; thus, they will contribute to the rehabilitation of the company. This same rationale also holds true for the independent sales representatives. He or she plays a major part in the rehabilitation of a company by making sure that company's goods are marketed throughout the country and that the orders for those goods continue. 324

Howell Heflin

Very Positive
I support this amendment and the provisions which limit its applicability to independent sales representatives who derive at least 75 percent of their previous year's income from the debtor corporation. By limiting the applicability of the amendment, we assure that those people who can really affect the rehabilitation of the debtor company are rewarded for their perseverance. 325

Howell Heflin

Very Positive
The independent sales representatives who will be greatly affected by the bankruptcy of a company are the type of employees which the drafters of the code intended to benefit from the special priority employees are granted in section 507 of the code. 326

Howell Heflin

Leans Positive
For these reasons I support this amendment with the provision with the limitation language. 327

Howell Heflin

Slightly Positive
The impasse we have been in with regard to the submission of other amendments is present. But Senator Metzenbaum has agreed that Senator Cochran lay down his amendment, and that we not vote on it at this time, or not pass it. 328

Howell Heflin

Very Positive
I do not think there are any objections to his amendment. The amendment was submitted. There have been a lot of negotiations going on. Senator Cochran has been amenable to working out an amendment that meets the agreement of both Senator Grassley and myself and our staffs, as well as interested parties like the National Bankruptcy Conference, and I think maybe the American Bankruptcy Institute. They have helped in regard to looking at some of these matters. 329

Howell Heflin

Very Positive
We appreciate very much Senator Cochran's working with us and working out an agreement. I think it is a good amendment. Basically, it applies where a sales representative derives at least -- I believe -- 75 percent of his income from one employer, and therefore he really is almost in the position of being an employee. It does not allow for those sales representatives who maybe have 6 or 7, and maybe get 10 percent here and that sort of thing. That would certainly be an abuse if that were to be allowed. But I think this limits it and limits it properly. 330

Howell Heflin

Very Positive
It is a good amendment, and I think we ought to adopt it. But at this time, I ask unanimous consent that further proceedings on this amendment be set aside, subject to it being called back before the floor with the agreement of Senator Cochran, Senator Grassley, and myself. 331

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 333

Howell Heflin

Somewhat Negative
I further ask unanimous consent that no second-degree amendment be in order to the Cochran amendment, No. 1639. 335

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 337

Howell Heflin

Unknown
I suggest the absence of a quorum. 339

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 341

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 345

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 347

Howell Heflin

Very Positive
Mr. President, I ask unanimous consent that the vote ordered for 5:45 be moved to 6 p.m., with all other provisions of the previous agreement remaining in effect. 349

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 351

Howell Heflin

Unknown
Mr. President, I suggest the absence of a quorum. 353

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 355

Howell Heflin

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 359

Howell Heflin

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 360

Howell Heflin

Very Positive
Mr. President, in regard to the Cochran amendment which we laid aside and delayed, Senator Cochran is now agreeable to passing it. My understanding is Senator Grassley is agreeable, and I am agreeable. Senator Metzenbaum has no objection to it. 363

Howell Heflin

Slightly Positive
So I ask unanimous consent that the Cochran amendment dealing with independent sales representatives now be in order to be considered. 364

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 366

Howell Heflin

Unknown
Mr. President, I urge adoption of the Cochran amendment. 368

Somewhat Positive
The PRESIDING OFFICER. Is there further debate on the amendment? If not, the question is on agreeing to the amendment of the Senator from Mississippi. 370

Howell Heflin

Slightly Positive
Mr. President, I move to reconsider the vote by which the amendment was agreed to. 374

Chuck Grassley

Unknown
I move to lay that motion on the table. 376

Chuck Grassley

Slightly Positive
The motion to lay on the table was agreed to. 377

Howell Heflin

Unknown
Mr. President, I suggest the absence of a quorum. 379

Unknown
The PRESIDING OFFICER. The clerk will call the roll. 381

Bob Dole

Slightly Positive
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 385

Unknown
The PRESIDING OFFICER. Without objection, it is so ordered. 387