William F. Smith: “I rise in support of the Gekas- McCollum-Smith amendment that preserves the rights of the states to set their own…”

“I rise in support of the Gekas- McCollum-Smith amendment that preserves the rights of the states to set their own individual homestead exemptions. H.R. 3150, the Bankruptcy Reform Act of 1998, is a necessary reform of our Nation's bankruptcy laws. But since 1867, Federal lawmakers have recognized the role of the states in determining what property is exempt under bankruptcy laws. Unfortunately, the language in this bill runs contrary to the Texas Constitution, as well as the Constitution of several other states. The homestead exemption was originally intended to protect families by ensuring that if a family hit hard times, they would retain some means of support. The need to protect families is no less important today. Our amendment simply preserves the right of states to provide a homestead exemption, and maintains a historical balance between the Federal Government and the states. It would also prevent State homestead exemptions from being abused by prohibiting the conversion of nonexempt assets into exempt homestead property within one year of filing for bankruptcy. That is a protection that needs to be emphasized. Mr. Chairman, this amendment both prevents abuses of the exemption and protects states' rights, and I urge my colleagues to support this amendment. The CHAIRMAN pro tempore. The question is on the amendment offered by the gentleman from Pennsylvania (Mr. Gekas).…”