§ 2.2     Brief History, Including “Legislative History,” of BAPCPA
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 2.2, at ¶ ____, LundinOnChapter13.com (last visited __________).

Barely 15 years after the October 1, 1979, effective date of the Bankruptcy Reform Act of 1978, Congress established a Commission to study the bankruptcy laws.2 The duties of the National Bankruptcy Review Commission (NBRC) as stated in the 1994 legislation were more limited than previous bankruptcy commissions:3

(1) to investigate and study issues and problems relating to Title 11, United States Code . . . ; (2) to evaluate the advisability of proposals and current arrangements with respect to such issues and problems; (3) to prepare and submit to the Congress, the Chief Justice, and the President a report . . . ; and (4) to solicit divergent views of all parties concerned with the operation of the bankruptcy system.4

The NBRC was directed to submit a report two years from the date of its first meeting.5


The membership of the Commission was interesting. President Bill Clinton appointed Congressman Mike Synar from Oklahoma as the chairman. Congressman Synar had worked with Senator Chuck Grassley and others in the early 1980s to draft Chapter 12 of the Bankruptcy Code. Synar was a good choice to provide legislative liaison for the Commission. Unfortunately, Congressman Synar passed away before the work of the Commission was fully under way. He was replaced as chair by Brady Williamson, a multi-talented lawyer from Wisconsin with some bankruptcy experience, good Washington contacts and excellent people skills.


The judicial appointments to the NBRC (by then Chief Justice William Rehnquist) were Edith Jones, a judge on the United States Court of Appeals for the Fifth Circuit, and Robert Ginsberg, a judge on the United States Bankruptcy Court in Chicago. Judge Ginsberg was a soft-spoken and highly respected veteran of one of the busiest bankruptcy courts in the country. The appointment of Judge Jones to the Commission would prove to be provocative and divisive. Judge Jones had some practice experience in bankruptcy before her appointment to the Fifth Circuit and came to the NBRC with an aggressively anti-debtor perspective. Through months of public hearings and consultations with experts, Judge Jones was vocally at odds with the work of the Commission staff and ultimately authored a dissenting report with respect to consumer issues.


Former Congressman M. Caldwell Butler was one of the congressional appointments to the NBRC. Congressman Butler had been instrumental in the drafting and passage of the Bankruptcy Reform Act of 1978. He brought much historical perspective to the work of the NBRC.6 John Gose, a real estate lawyer with little bankruptcy experience, Jeffery Hartley, a former congressional staffer, and James Shepard, a tax consultant, rounded out the members of the Commission.


The Reporter for the NBRC was Professor Elizabeth Warren. Principal consultants to the Commission were longtime NYU Professor Lawrence P. King and Stephen H. Case, a lawyer broadly experienced in business reorganizations. Professor Warren brought to the NBRC a great depth of knowledge as the nation’s leading empirical researcher of bankruptcy issues. Professor Warren showered the Commission with data about debtors and creditors in bankruptcy—data that some members of the Commission treated with hostility.


The NBRC was similar to the Burdick Commission of the 1970s that led directly to the Bankruptcy Reform Act of 1978, but there was no congressional mandate to the NBRC to change the basic framework of the bankruptcy system. The NBRC was not “designed to rewrite the entire Bankruptcy Code. Rather, its purpose [was] to allow further thoughtful study of the functions and balances [which were] built into the Bankruptcy Code, and to provide Congress with recommendations to address areas in which the Bankruptcy Code may be improved and modernized.”7


The NBRC held “21 national and regional hearings over 35 days, attracting more than 2,600 attendees, and devoting almost half of its nearly $1.5 million budget to open, public meetings, hearings and communications.”8 The meetings of the NBRC were often contentious. Two relatively equal factions emerged—one favoring maintenance of the status quo with respect to the fundamental debtor-creditor balances in the Bankruptcy Code, and the other (led by Judge Jones) favoring a rewrite of consumer bankruptcy law to address what was characterized as abuse and dysfunction in the bankruptcy courts.


On October 20, 1997, the NBRC issued the National Bankruptcy Review Commission Final Report, Bankruptcy: The Next Twenty Years.9 The 1,300 page Final Report contained 170 recommendations. Unlike the Commission empaneled in the 1970s, the NBRC made no attempt to draft legislation to implement its proposals.


Even before the NBRC released its Final Report, the credit industry went public with media attacks on the Commission’s failure to recommend limiting bankruptcy eligibility and failure to address “abuse” in the bankruptcy system.10 Without waiting for the Final Report, a coalition of consumer lenders drafted its own legislation and went directly to Congress.


Perhaps the first discrete legislative predecessor of BAPCPA was introduced in the House of Representatives on September 18, 1997, as the Responsible Borrower Protection Bankruptcy Act.11 In the Senate, Senator Grassley and Senator Dick Durbin introduced a consumer bankruptcy bill one day after the NBRC submitted its final report.12 The Senate Bill contained “only four uncontroversial recommendations of the 32 the Commission proposed, and otherwise took a quite different approach to consumer bankruptcy reform [including means-testing the availability of Chapter 7].”13 Additional bankruptcy bills, mostly addressing nonconsumer issues, were introduced in the 105th Congress.14 In early 1998, another bill was introduced in the House that more comprehensively included consumer, business and tax amendments.15 This bill, known as House Bill 3150, became the core legislation that stumbled through the House and Senate for the next seven years.16


There were committee hearings in 1998 in both the House and Senate on the pending bankruptcy legislation, but as one commentator remarked, “[t]hese legislative hearings were pro forma, . . . and seemed to have little effect on the bill’s development. . . . Sen. Grassley viewed those who voiced opposition to his bill as a ‘fringe element.’”17


The Clinton Administration supported both the House and Senate versions of bankruptcy reform in 1998, though the Administration expressed some opposition to the “rigid and arbitrary means test” for determining debtor ability to pay contained in House Bill 3150.18 The House ultimately passed H.R. 3150 on June 10, 1998, by a vote of 306 to 118. On September 23, 1998, the Senate passed its version (S. 1301) on a vote of 97 to 1.


The House and Senate bills were not identical but not fundamentally different. In hindsight, the conference work that followed could have easily ended with compromise legislation acceptable to both houses. Instead, Democrats were systematically excluded from the Conference Committee process. The Conference Committee issued a report,19 which was really the text of an entirely new bankruptcy bill together with a long Joint Explanatory Statement. The House passed the Conference Report bill by a vote of 300 to 125 in early October 1998. The Senate balked and resolved a threatened filibuster by adjourning. The 105th Congress ended without bankruptcy legislation.


The 106th Congress convened in 1999 and quickly attacked bankruptcy reform. In the House, the Bankruptcy Reform Act of 1999, H.R. 833, was introduced on February 24, 1999. In the Senate, S. 625 followed on March 16, 1999. These bills mirrored the Conference Report of the prior Congress but were not exactly identical. The House approved its bill in May 1999 again by a lopsided vote of 313 to 108. In February of 2000, the Senate passed its version by a vote of 83 to 14.


There followed another Conference Committee, once again “not a model of negotiation and compromise.”20 S. 3186 came out of that Conference, passing the House in October and the Senate in December of 2000. President Clinton pocket-vetoed the bill, insiders say at the urging of Hillary Rodham Clinton.


The 107th Congress—the third Congress to consider bankruptcy legislation after the Report of the NBRC—once again took up bills modeled on the Conference Report from the 105th Congress. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2001, H.R. 333, was introduced in the House on January 31, 2001. In the Senate, S. 420, the Bankruptcy Reform Act of 2001, was nearly identical to the House bill. During the 107th Congress, discussion of bankruptcy legislation focused on limiting homestead exemptions in a few states and on a disputed exception to discharge for debts arising from violation of the Freedom of Access to Clinic Entrances Act.21 These issues tied up bankruptcy legislation until November of 2002, when a last-ditch effort looked like it would succeed before it tripped over the abortion clinic controversy. The 107th Congress ended without bankruptcy legislation.


When the 108th Congress convened in January of 2003, much had changed in Washington. There was a new President, and the House of Representatives quickly reintroduced the “omnibus” bankruptcy legislation from the previous Congress. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2003, H.R. 975, flew through the House on March 19, 2003.


Almost a year followed in which nothing happened in the Senate. The House became frustrated with inaction by the Senate and, on January 28, 2004, the House “amended the Senate’s one-page proposal to extend the Family Farmer provisions in the bankruptcy bill to add the whole 400-plus page Bankruptcy Reform Act. . . . [T]he move was designed to force the Senate to act on the bill which had passed the House but had been stalled in the Senate since early 2003.”22 The ploy backfired, and the 108th Congress closed without bankruptcy legislation.


The 109th Congress convened in January 2005 with enhanced Republican majorities in both houses and bankruptcy reform on the short list of leadership imperatives. Bankruptcy reform bills—nearly identical to those of the previous Congress—were immediately introduced in both houses. The divisive abortion clinic provisions had been stripped out of the legislation. S. 256 and H.R. 685 were both entitled Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.


S. 256 was assigned a fast track by Senate Majority Leader Bill Frist with a hearing on the bill on February 10, 2005. S. 256 passed the Senate by a vote of 74 to 25 on March 10, 2005. It went to committee in the House of Representatives with instructions that S. 256 was not to be amended. The House Committee on the Judiciary quickly reported the bill after rejecting numerous amendments and on April 13, 2005, S. 256 passed the House on a vote of 302 to 126. On April 20, 2005, President George W. Bush signed S. 256, and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) became law. Appendix Q contains the signing statement by President Bush. Some courts have cited this Statement as evidence of intent, legislative or otherwise.23


Because the 2005 legislation originated in the Senate, there were some odd problems with S. 256. The bill authorized 28 new bankruptcy judgeships that required funding from Congress.24 To solve this fiscal problem, Senate staffers added a provision to increase the filing fee for Chapter 7 cases.25 Someone in the Senate was math challenged and increased the filing fees by more than was needed for the additional bankruptcy judgeships.26 This rendered the entire bankruptcy bill “revenue positive”—in other words, the bankruptcy bill as passed by the Senate actually raised money for the federal treasury.


Because revenue bills must originate in the House, the House repeatedly tinkered with the filing fee before and after BAPCPA was signed by the President. Ultimately, the House increased the filing fee in Chapter 7 cases even more than the original mistake passed by the Senate.27


The stutter-steps by which bankruptcy legislation made its way through five Congresses between 1997 and 2005 raise difficult barriers to legislative history research. Although the Committee on the Judiciary of the House of Representatives produced a report to accompany S. 256,28 there was no Conference Committee of the 109th Congress that considered bankruptcy legislation.


But bits and pieces of what became BAPCPA in 2005 have knocked around Congress since at least the Responsible Borrower Protection Bankruptcy Act, H. 2500, introduced in September of 1997. Tracing a particular provision from the 105th Congress to the 109th Congress is tricky. There are decent published law review articles to help with this tracing.29 Working through the footnotes in these articles, a determined researcher can locate the prior bills that passed and floor statements and submissions from individual members of the House and Senate with respect to many aspects of what became BAPCPA.


Appendix P is an effort to pull together the Chapter 13 pieces of bankruptcy bills, committee reports, floor statements and Congressional Record submissions between 1997 and the passage of BAPCPA in 2005. These materials are organized by section of Chapter 13 and in reverse chronological order within each section. Citations to original bills, reports and other source materials are provided to facilitate research and retrieval of the BAPCPA trail.


A word of caution: the legislative materials gathered in Appendix P will not always be accepted by courts as “legislative history.” Bills passed by Congresses prior to the 109th—and the committee reports and commentary to those prior bills—may have “some” weight or no weight as guides to legislative intent, depending on how nearly identical the provisions at issue are from the prior bills to the final enactment.30


The uncertainty about what is and isn’t “legislative history” for BAPCPA has already inspired Supreme Court of the United States repartee. In Milavetz, Gallop & Milavetz, P.A. v. United States,31 the Supreme Court took up the important issue whether attorneys are “debt relief agencies” for purposes of provisions in BAPCPA regulating the conduct of those who give bankruptcy advice.32 The Supreme Court determined that attorneys are DRAs33 and on the way there, Justice Sonia Sotomayor said this in a footnote about the legislative history of BAPCPA:

Although reliance on legislative history is unnecessary in light of the statute’s unambiguous language, we note the support that record provides for the Government’s reading. Statements in a Report of the House Committee on the Judiciary regarding the Act’s purpose indicate concern with abusive practices undertaken by attorneys as well as other bankruptcy professionals. See, e.g., H.R. Rep. No. 109-31, pt. 1, p. 5 (2005) (hereinafter H.R. Rep.). And the legislative record elsewhere documents misconduct by attorneys. See, e.g., Hearing on H.R. 3150 before the Subcommittee on Commercial and Administrative Law of the House Committee on the Judiciary, 105th Cong., 2d Sess., pt. III, p. 95 (1998) (hereinafter 1998 Hearings). (While the 1998 Hearings preceded the BAPCPA’s enactment by several years, they form part of the record cited by the 2005 House Report. See H.R. Rep., at 7.)34

Justice Antonin Scalia joined the majority in Milavetz, concurring in all of Justice Sotomayor’s opinion except footnote three. This quote from Justice Scalia’s concurring opinion in Milavetz well frames the problem with the “legislative history” of BAPCPA:

I join the opinion of the Court, except for footnote 3, which notes that the legislative history supports what the statute unambiguously says. The Court first notes that statements in the Report of the House Committee on the Judiciary “indicate concern with abusive practices undertaken by attorneys.” Ante, at 1332 n. 3. Perhaps, but only the concern of the author of the Report. Such statements tell us nothing about what the statute means, since (1) we do not know that the members of the Committee read the Report, (2) it is almost certain that they did not vote on the Report (that is not the practice), and (3) even if they did read and vote on it, they were not, after all, those who made this law. The statute before us is a law because its text was approved by a majority vote of the House and the Senate, and was signed by the President. Even indulging the extravagant assumption that Members of the House other than members of its Committee on the Judiciary read the Report (and the further extravagant assumption that they agreed with it), the Members of the Senate could not possibly have read it, since it did not exist when the Senate passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. And the President surely had more important things to do.
The footnote’s other source of legislative history is truly mystifying. For the proposition that “the legislative record elsewhere documents misconduct by attorneys” which was presumably the concern of Congress, the Court cites a reproduction of a tasteless advertisement that was (1) an attachment to the written statement of a witness, (2) in a hearing held seven years prior to this statute’s passage, (3) before a subcommittee of the House considering a different consumer bankruptcy reform bill that never passed. “Elsewhere” indeed.35

Judge Scalia’s concerns in Milavetz about misuse of the nontraditional (nonexistent?) legislative history of BAPCPA are not unfounded. Consider this “factual record” generated by a panel of the United States Court of Appeals for the Second Circuit in support of the constitutionality of the disclosures required of debt relief agencies by § 527(a) and (b):36

In late 1990s congressional hearings, judges, scholars, and debtors provided evidence indicating that these problems derived largely from consumer debtors’ inadequate access to information about the bankruptcy process. Fifth Circuit Judge Edith Hollan Jones, a member of the National Bankruptcy Review Commission, testified that debtor ignorance and confusion were pervasive: “Most debtors never see a judge. Many bankruptcy lawyers never talk to their clients. The first time they see their clients often is when they are in a herd of people in bankruptcy courts and the lawyer raises a hand, and says, ‘Anyone who’s my client needs to step forward right now.’” Bankruptcy Reform Act of 1998: Part I, Hearing on H.R. 3150 Before House Judiciary Comm., 105th Cong. 15 (1998) (testimony of Hon. Edith H. Jones). This view was reinforced by a survey of debtors conducted by Dr. Tahira K. Hira of Iowa State University, see Consumer Bankruptcy Reform Act: Seeking Fair and Practical Solutions to the Bankruptcy Crisis, Hearing on S. 1301 Before Senate Judiciary Comm., 105th Cong. 28-34 (1998) (testimony of Dr. Tahira K. Hira), as well as by anecdotal evidence, see Bankruptcy Reform Act of 1998: Part I, Hearing on H.R. 3150 Before House Judiciary Comm., 105th Cong. 94 (1998) (testimony of Nicholl J. Russell) (recounting that bankruptcy attorney never advised debtor witness of availability of chapter 13 filing or credit counseling). Bankruptcy Judge Carol J. Kenner explained how such ignorance and confusion made for easy deception, with debtors persuaded to reaffirm their debts in “intimidating circumstances,” “without understanding the legal effect of what they are doing” and “without understanding their alternatives.” Bankruptcy Reform: Joint Hearing before House Judiciary Comm. and Senate Judiciary Comm., 106th Cong. 35 (1999) (testimony of Hon. Carol J. Kenner).37

From this quote, it appears that at least one panel of the Second Circuit considers testimony before the 105th Congress to be part of the legislative history for BAPCPA, passed by the 109th Congress. The Second Circuit used this “factual predicate” to support its finding of a rational basis for the disclosures mandated by § 527(a) and (b).38


Appendix P is what there is outside the statute that might shed light on legislative intent with respect to Chapter 13 of BAPCPA. Sometimes doing the best you can is all you can do—not a bad summary of the History of BAPCPA.


1  Many thanks to Sharron B. Lane, former law clerk for the United States Bankruptcy Court for the Middle District of Tennessee, for collecting the material in this section and in App. P.


2  See Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, §§ 602–610, 108 Stat. 4107 (Oct. 22, 1994). See § 2.1  Brief History of Chapter 13 before 2005.


3  See § 2.1  Brief History of Chapter 13 before 2005.


4  Pub. L. No. 103-394, § 603.


5  Pub. L. No. 103-394, § 608.


6  At one of the public meetings of the NBRC, Congressman Butler eloquently argued that student loans were a sort of “Marshall Plan” for America’s youth and that student loans should always be dischargeable in bankruptcy.


7  137 Cong. Rec. S17,044, S17,047 (daily ed. Nov. 19, 1991) (statement of Sen. Heflin); 137 Cong. Rec. S17,044, S17,057–58 (daily ed. Nov. 19, 1991) (statement of Sen. Grassley). See also 140 Cong. Rec. S14,461 (daily ed. Oct. 6, 1994) (statement of Sen. Grassley); 140 Cong. Rec. H10,752, H10,771 (daily ed. Oct. 4, 1994) (section-by-section description).


8  Nancy Lazar, Striking a “Balance” in U.S. Bankruptcy Law, 10 Loy. Consumer L. Rev. 13 (1998).


9  The Final Report of the NBRC is available at National Bankruptcy Review Commission Final Report: Bankruptcy: The Next Twenty Years (Oct. 20, 1997), reprinted in http://govinfo.library.unt.edu/nbrc/.


10  See Melissa B. Jacoby, Negotiating Bankruptcy Legislation Through the News Media, 41 Hous. L. Rev. 1091, 1098 (2004) [hereinafter Jacoby].


11  H.R. 2500, 105th Cong. (1997).


12  See Consumer Bankruptcy Reform Act of 1997, S. 1301, 105th Cong. (1997).


13  George J. Wallace, The National Bankruptcy Review Commission and Consumer Bankruptcy: Proposals in Search of a Rationale, 5 Am. Bankr. Inst. L. Rev. 341 (1997).


14  These included: Single Asset Bankruptcy Reform Act of 1997, H.R. 73, 105th Cong. (Jan. 7, 1997); Bankruptcy Abuse Reform Act of 1997, S. 530, 105th Cong. (Apr. 9, 1997) (to limit the value of real and personal property that a debtor could claim as exempt under state or local law); Business Bankruptcy Reform Act, S. 1914 (Apr. 2, 1998).


15  See Bankruptcy Reform Act of 1998, H.R. 3150, 105th Cong. (Feb. 8, 1998).


16  See Jacoby, at 1099.


17  Jacoby, at 1099 (citing 144 Cong. Rec. S9093 (1998) (statement of Sen. Grassley)).


18  Jacoby, at 1101 (citing statement of Administration Policy on H.R. 3150).


19  See H.R. Rep. No. 105-794, 144 Cong. Rec. H9945-01 (daily ed. Oct. 7, 1998).


20  Jacoby, at 1102.


21  Jacoby, at 1104–05.


22  Elizabeth Warren, The Phantom $400, 13 J. Bankr. L. & Prac. 2 (2004).


23  See, e.g., In re Liverman, 383 B.R. 604, 612 (Bankr. D.N.J. Mar. 5, 2008) (Wizmur) (“Similarly, the Presidential Signing Statement accompanying the BAPCPA amendments ‘make[s] clear that Congress intended to require debtors to “make a good-faith effort to repay as much as they can afford.”’”) (quoting Pak v. eCast Settlement Corp. (In re Pak), 378 B.R. 257, 265 (B.A.P. 9th Cir. Nov. 7, 2007) (Dunn, Carroll, Klein) (citing to Presidential Signing Statement at http://georgewbush-whitehouse.archives.gov/news/releases/2005/04/print/20050420-5.html#)); In re Phillips, 382 B.R. 153, 172 n.17 (Bankr. D. Mass. Feb. 7, 2008) (Feeney) (citing BAPCPA Presidential Signing Statement, http://georgewbush-whitehouse.archives.gov/news/releases/2005/04/print/20050420-5.html#).


24  See Pub. L. No. 109-8, § 1223.


25  See Pub. L. No. 109-8, § 325.


26  There were also errors in the allocation of the new money.


27  See Emergency Supplemental Appropriations Act for Defense, the Global War on Terror and Tsunami Relief 2005, Pub. L. No. 109-13, 119 Stat. 231 (2005).


28  See H.R. Rep. No. 109-31, 109th Cong., 1st Sess. (2005).


29  See, e.g., Susan Jensen, A Legislative History of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 79 Am. Bankr. L.J. 485 (2005); Melissa B. Jacoby, Negotiating Bankruptcy Legislation Through the News Media, 41 Hous. L. Rev. 1091 (2004); Catherine E. Vance & Paige Barr, The Facts & Fiction of Bankruptcy Reform, 1 DePaul Bus. & Com. L.J. 361 (2003); Ann Morales Olazábal & Andrew J. Foti, Consumer Bankruptcy Reform and 11 U.S.C. § 707(b): A Case-Based Analysis, 12 B.U. Pub. Int. L.J. 317 (2003).


30  See United States v. Enmons, 410 U.S. 396, 405 n.14, 93 S. Ct. 1007, 35 L. Ed. 2d 379 (1973) (“[A]n interpretation placed by the sponsor of a bill on the very language subsequently enacted . . . cannot be dismissed out of hand . . . simply because the interpretation was given two years earlier.”); Bailey v. United States, 52 Fed. Cl. 105, 112 (2002) (“The Supreme Court considers the legislative history of an unenacted bill ‘wholly relevant to an understanding of’ a subsequently enacted statute containing the same operative language.”) (citations omitted); Huffman v. Office of Pers. Mgmt., 263 F.3d 1341 (Fed. Cir. 2001) (proper to look to legislative history of bill vetoed after 100th Congress when same language was enacted in 101st Congress); Arizona v. Atchison, Topeka & Santa Fe R.R. Co., 656 F.2d 398 (9th Cir. 1981) (give “some weight” to legislative history of prior bills that are identical to law enacted).


31  559 U.S. 229, 130 S. Ct. 1324, 176 L. Ed. 2d 79 (Mar. 8, 2010).


32  See 11 U.S.C. §§ 526, 527 and 528, discussed in § 4.1  WARNING! You Are a Debt Relief Agency.


33  See § 4.1  WARNING! You Are a Debt Relief Agency.


34  Milavetz, 559 U.S. at 236 n.3.


35  Milavetz, 559 U.S. at 253–54 (footnotes omitted) (Scalia, J., concurring).


36  The disclosures mandated by 11 U.S.C. § 527(a) and (b) are discussed in § 4.1  WARNING! You Are a Debt Relief Agency.


37  Connecticut Bar Ass’n v. United States, 620 F.3d 81, 97 (2d Cir. Sept. 7, 2010) (Leval, Raggi, Gleeson).


38  See Connecticut Bar Ass’n v. United States, 620 F.3d at 96–98.