To amend title 11 of the United States Code to exempt for a limited period, from the application of the means-test presumption of abuse under Chapter 7, qualifying members of reserve components of the Armed Forces and members of the National Guard who, after September 11, 2001, are called to active duty or to perform a homeland defense activity for not less than 90 days.

Summary: National Guard and Reservists Debt Relief Act of 2008 - Amends federal bankruptcy law to prohibit the bankruptcy court from dismissing or converting a case based on means testing while the debtor: (1) is either on active duty in the military service of the United States or performing a homeland defense activity for at least 90 days, and during the 540 days following the end of such period; and (3) was called to such active duty or performed such homeland defense activity after September 11, 2001, as a member of a reserve component of the Armed Forces or the National Guard.

Directs the Comptroller General of the United States to study and report to Congress on whether and to what degree members of reserve components of the Armed Forces and the National Guard: (1) avail themselves of the benefits of this Act; (2) are debtors in federal bankruptcy cases substantially related to service that qualifies such members for such benefits of this Act; and (3) are debtors in federal bankruptcy cases materially related to such service.

Requires such study to include the effects that the use by such members of this Act has upon: (1) the bankruptcy system; (2) creditors; and (3) the debt-incurrence practices of such members.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Guard and Reservists Debt 
Relief Act of 2008''.

SEC. 2. AMENDMENTS.

    Section 707(b)(2)(D) of title 11, United States Code, is amended--
            (1) in clauses (i) and (ii)--
                    (A) by indenting the left margin of such clauses 2 
                ems to the right, and
                    (B) by redesignating such clauses as subclauses (I) 
                and (II), respectively,
            (2) by striking ``if the debtor is a disabled veteran'' and 
        inserting the following:
``if--
            ``(i) the debtor is a disabled veteran'',
            (3) by striking the period at the end and inserting ``; 
        or'', and
            (4) by adding at the end the following:
            ``(ii) while--
                    ``(I) the debtor is--
                            ``(aa) on, and during the 540-day period 
                        beginning immediately after the debtor is 
                        released from, a period of active duty (as 
                        defined in section 101(d)(1) of title 10) of 
                        not less than 90 days; or
                            ``(bb) performing, and during the 540-day 
                        period beginning immediately after the debtor 
                        is no longer performing, a homeland defense 
                        activity (as defined in section 901(1) of title 
                        32) performed for a period of not less than 90 
                        days; and
                    ``(II) if after September 11, 2001, the debtor 
                while a member of a reserve component of the Armed 
                Forces or a member of the National Guard, was called to 
                such active duty or performed such homeland defense 
                activity.''.

SEC. 3. GAO STUDY.

    (a) Comptroller General Study.--Not later than 2 years after the 
effective date of this Act, the Comptroller General shall complete and 
transmit to the Speaker of the House of Representatives and the 
President pro tempore of the Senate, a study of the use and the effects 
of the provisions of law amended (and as amended) by this Act. Such 
study shall address, at a minimum--
            (1) whether and to what degree members of reserve 
        components of the Armed Forces and members of the National 
        Guard avail themselves of the benefits of such provisions,
            (2) whether and to what degree such members are debtors in 
        cases under title 11 of the United States Code that are 
        substantially related to service that qualifies such members 
        for the benefits of such provisions,
            (3) whether and to what degree such members are debtors in 
        cases under such title that are materially related to such 
        service, and
            (4) the effects that the use by such members of section 
        707(b)(2)(D) of such title, as amended by this Act, has on the 
        bankruptcy system, creditors, and the debt-incurrence practices 
        of such members.
    (b) Factors.--For purposes of subsection (a)--
            (1) a case shall be considered to be substantially related 
        to the service of a member of a reserve component of the Armed 
        Forces or a member of the National Guard that qualifies such 
        member for the benefits of the provisions of law amended (and 
        as amended) by this Act if more than 33 percent of the 
        aggregate amount of the debts in such case is incurred as a 
        direct or indirect result of such service,
            (2) a case shall be considered to be materially related to 
        the service of a member of a reserve component of the Armed 
        Forces or a member of the National Guard that qualifies such 
        member for the benefits of such provisions if more than 10 
        percent of the aggregate amount of the debts in such case is 
        incurred as a direct or indirect result of such service, and
            (3) the term ``effects'' means--
                    (A) with respect to the bankruptcy system and 
                creditors--
                            (i) the number of cases under title 11 of 
                        the United States Code in which members of 
                        reserve components of the Armed Forces and 
                        members of the National Guard avail themselves 
                        of the benefits of such provisions,
                            (ii) the aggregate amount of debt in such 
                        cases,
                            (iii) the aggregate amount of debt of such 
                        members discharged in cases under chapter 7 of 
                        such title,
                            (iv) the aggregate amount of debt of such 
                        members in cases under chapter 7 of such title 
                        as of the time such cases are converted to 
                        cases under chapter 13 of such title,
                            (v) the amount of resources expended by the 
                        bankruptcy courts and by the bankruptcy 
                        trustees, stated separately, in cases under 
                        title 11 of the United States Code in which 
                        such members avail themselves of the benefits 
                        of such provisions, and
                            (vi) whether and to what extent there is 
                        any indicia of abuse or potential abuse of such 
                        provisions, and
                    (B) with respect to debt-incurrence practices--
                            (i) any increase in the average levels of 
                        debt incurred by such members before, during, 
                        or after such service,
                            (ii) any indicia of changes in debt-
                        incurrence practices adopted by such members in 
                        anticipation of benefitting from such 
                        provisions in any potential case under such 
                        title; and
                            (iii) any indicia of abuse or potential 
                        abuse of such provisions reflected in the debt-
                        incurrence of such members.

SEC. 4. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect 60 days after the 
date of the enactment of this Act.
    (b) Application of Amendments.--The amendments made by this Act 
shall apply only with respect to cases commenced under title 11 of the 
United States Code in the 3-year period beginning on the effective date 
of this Act.

            Passed the House of Representatives June 23, 2008.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.