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[House Report 115-130]
[From the U.S. Government Publishing Office]

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115th Congress   }                                   {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                   {        115-130

======================================================================

 
                    BANKRUPTCY JUDGESHIP ACT OF 2017

                                _______
                                

  May 17, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2266]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2266) to amend title 28 of the United States Code to 
authorize the appointment of additional bankruptcy judges; and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     3
Background and Need for the Legislation..........................     4
Hearings.........................................................     8
Committee Consideration..........................................     8
Committee Votes..................................................     8
Committee Oversight Findings.....................................     8
New Budget Authority and Tax Expenditures........................     8
Committee Cost Estimate..........................................     9
Duplication of Federal Programs..................................     9
Disclosure of Directed Rule Makings..............................     9
Performance Goals and Objectives.................................     9
Advisory on Earmarks.............................................     9
Section-by-Section Analysis......................................     9
Changes in Existing Law Made by the Bill, as Reported............    10

                           
                           
                           
                           The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Bankruptcy Judgeship Act of 2017''.

SEC. 2. CONVERSION OF THE TEMPORARY OFFICE OF BANKRUPTCY JUDGE TO THE 
                    PERMANENT OFFICE OF BANKRUPTCY JUDGE IN CERTAIN 
                    JUDICIAL DISTRICTS.

  (a) District of Delaware.--
          (1) The temporary office of 4 bankruptcy judges authorized 
        for the district of Delaware by section 1223(b)(1)(C) of Public 
        Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), and extended by 
        section 2(a)(1)(C) of Public Law 112-121 (126 Stat. 346; 28 
        U.S.C. 152 note), is converted hereby to the permanent office 
        of bankruptcy judge and represented in the amendment made by 
        section 3(1) of this Act, and may be filled.
          (2) The temporary office of bankruptcy judge authorized for 
        the district of Delaware by section 3(a)(3) of Public Law 102-
        361 (106 Stat. 966; 28 U.S.C. 152 note), and extended by 
        section 1223(c)(1) of Public Law 109-8 (119 Stat. 198; 28 
        U.S.C. 152 note) and section 2(b)(1) of Public Law 112-121 (126 
        Stat. 347; 28 U.S.C. 152 note), is converted hereby to the 
        permanent office of bankruptcy judge and represented in the 
        amendment made by section 3(1) of this Act, and may be filled.
  (b) Southern District of Florida.--The temporary office of 2 
bankruptcy judges authorized for the southern district of Florida by 
section 1223(b)(1)(D) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 
note), and extended by section 2(a)(1)(D) of Public Law 112-121 (126 
Stat. 346; 28 U.S.C. 152 note), is converted hereby to the permanent 
office of bankruptcy judge and represented in the amendment made by 
section 3(3) of this Act, and may be filled.
  (c) District of Maryland.--The temporary office of 1 bankruptcy judge 
first appointed as authorized for the district of Maryland by section 
1223(b)(1)(F) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), 
and extended by section 2(a)(1)(F) of Public Law 112-121 (126 Stat. 
346; 28 U.S.C. 152 note), is converted hereby to the permanent office 
of bankruptcy judge and represented in the amendment made by section 
3(4) of this Act, and may be filled.
  (d) Eastern District of Michigan.--The temporary office of bankruptcy 
judge authorized for the eastern district of Michigan by section 
1223(b)(1)(G) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), 
and extended by section 2(a)(1)(G) of Public Law 112-121 (126 Stat. 
346; 28 U.S.C. 152 note), is converted hereby to the permanent office 
of bankruptcy judge and represented in the amendment made by section 
3(5) of this Act, and may be filled.
  (e) District of Nevada.--The temporary office of bankruptcy judge 
authorized for the district of Nevada by section 1223(b)(1)(T) of 
Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), and extended by 
section 2(a)(1)(Q) of Public Law 112-121 (126 Stat. 346; 28 U.S.C. 152 
note), is converted hereby to the permanent office of bankruptcy judge 
and represented in the amendment made by section 3(6) of this Act, and 
may be filled.
  (f) Eastern District of North Carolina.--The temporary office of 
bankruptcy judge authorized for the eastern district of North Carolina 
by section 1223(b)(1)(M) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 
152 note), and extended by section 2(a)(1)(J) of Public Law 112-121 
(126 Stat. 346; 28 U.S.C. 152 note), is converted hereby to the 
permanent office of bankruptcy judge and represented in the amendment 
made by section 3(7) of this Act, and may be filled.
  (g) District of Puerto Rico.--
          (1) The temporary office of bankruptcy judge authorized for 
        the district of Puerto Rico by section 1223(b)(1)(P) of Public 
        Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), and extended by 
        section 2(a)(1)(M) of Public Law 112-121 (126 Stat. 346; 28 
        U.S.C. 152 note), is converted hereby to the permanent office 
        of bankruptcy judge and represented in the amendment made by 
        section 3(8) of this Act, and may be filled.
          (2) The temporary office of bankruptcy judge authorized for 
        the district of Puerto Rico by section 3(a)(7) of Public Law 
        102-361 (106 Stat. 966; 28 U.S.C. 152 note), and extended by 
        section 1223(c)(1) of Public Law 109-8 (119 Stat. 198; 28 
        U.S.C. 152 note) and section 2(b)(1) of Public Law 112-121 (126 
        Stat. 347; 28 U.S.C. 152 note), is converted hereby to the 
        permanent office of bankruptcy judge and is represented in the 
        amendment made by section 3(8) of this Act, and may be filled.
  (h) Eastern District of Virginia.--The temporary office of bankruptcy 
judge authorized for the eastern district of Virginia by section 
1223(b)(1)(R) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), 
and extended by section 2(a)(1)(P) of Public Law 112-121 (126 Stat. 
346; 28 U.S.C. 152 note), is converted hereby to the permanent office 
of bankruptcy judge and is represented in the amendment made by section 
3(9) of this Act, and may be filled.

SEC. 3. PERMANENT OFFICE OF BANKRUPTCY JUDGE AUTHORIZED.

  To reflect the conversion of the temporary office of bankruptcy judge 
to the permanent office of bankruptcy judge made by the operation of 
section 2, and to authorize the appointment of additional bankruptcy 
judges, section 152(a)(2) of title 28 of the United States Code is 
amended--
          (1) in the item relating to the district of Delaware by 
        striking ``1'' and inserting ``8'',
          (2) in the item relating to the middle district of Florida by 
        striking ``8'' and inserting ``9'',
          (3) in the item relating to the southern district of Florida 
        by striking ``5'' and inserting ``7'',
          (4) in the item relating to the district of Maryland by 
        striking ``4'' and inserting ``5'',
          (5) in the item relating to the eastern district of Michigan 
        by striking ``4'' and inserting ``6'',
          (6) in the item relating to the district of Nevada by 
        striking ``3'' and inserting ``4'',
          (7) in the item relating to the eastern district of North 
        Carolina by striking ``2'' and inserting ``3'',
          (8) in the item relating to the district of Puerto Rico by 
        striking ``2'' and inserting ``4'', and
          (9) in the item relating to the eastern district of Virginia 
        by striking ``5'' and inserting ``6''.

SEC. 4. BANKRUPTCY FEES.

  (a) Amendments to Title 28 of the United States Code.--Section 
1930(a)(6) of title 28 of the United States Code is amended--
          (1) by striking ``(6) In'' and inserting ``(6)(A) Except as 
        provided in subparagraph (B), in'', and
          (2) by adding at the end the following:
          ``(B) In any fiscal year, the quarterly fee payable for a 
        quarter in which disbursements equal or exceed $1,000,000 shall 
        be 1 percent of such disbursements or $250,000, whichever is 
        less, unless the balance in the United States Trustee System 
        Fund as of September 30 immediately preceding such fiscal year 
        exceeds $200,000,000.''.
  (b) Deposits of Certain Fees for Fiscal Years 2018 Through 2022.--
Notwithstanding section 589a(b) of title 28 of the United States Code, 
for each of the fiscal years 2018 through 2022--
          (1) 97.5 percent of the fees collected under section 
        1930(a)(6) of such title shall be deposited as offsetting 
        collections to the appropriation ``United States Trustee System 
        Fund'', to remain available until expended, and
          (2) 2.5 percent of the fees collected under section 
        1930(a)(6) of such title shall be deposited in the general fund 
        of the Treasury.
  (c) Effective Date; Application Amendments.--
          (1) Effective date.--Except as provided in paragraph (2), 
        this section shall take effect on July 1, 2017, or on the date 
        of the enactment of this Act, whichever is later.
          (2) Application of amendments.--The amendments made by this 
        section shall apply to quarterly fees payable under section 
        1930(a)(6) of title 28 of the United States Code, as amended by 
        this section, for disbursements made in any calendar quarter 
        that begins on or after the effective date of the amendments 
        made by this section.

                          Purpose and Summary

    H.R. 2266, the ``Bankruptcy Judgeship Act of 2017,'' as 
amended, converts 14 temporary bankruptcy judgeships to 
permanent status and authorizes four new bankruptcy judgeships 
for certain federal judicial districts listed in the bill. 
Temporary bankruptcy judgeships were authorized for these 
districts by Pub. L. Nos. 102-361 and 109-8. The lapse date for 
certain of these judgeships was extended by Pub. L. No. 109-8 
and further extended by Pub. L. No. 112-121. All 14 of the 
temporary judgeships converted under this bill are scheduled to 
lapse on May 25, 2017. Additionally, the Bankruptcy Judgeship 
Act provides for an increase in the U.S. Trustee's Quarterly 
Fees for large chapter 11 cases.

                Background and Need for the Legislation

          A. BRIEF OVERVIEW OF TEMPORARY BANKRUPTCY JUDGESHIPS

    The United States bankruptcy court is a court of limited 
jurisdiction established pursuant to Article I of the 
Constitution.\1\ The bankruptcy court is constituted to be a 
``unit'' of the United States district court,\2\ which is 
established under Article III of the Constitution.\3\ Pursuant 
to the Bankruptcy Amendments and Federal Judgeship Act of 
1984,\4\ bankruptcy judges are judicial officers of the United 
States district court.\5\ In contrast to Article III judges 
(who are nominated by the President and confirmed by the Senate 
to life-tenured appointment),\6\ bankruptcy judges are 
appointed for 14-year terms by the United States court of 
appeals for the applicable circuit, with eligibility for 
reappointment.\7\
---------------------------------------------------------------------------
    \1\U.S. CONST., art. I, Sec. 8, cl. 4.
    \2\28 U.S.C. Sec. 151.
    \3\U.S. CONST., art. III, Sec.  1.
    \4\Pub. L. No. 98-353, 98 Stat. 333 (1984).
    \5\28 U.S.C. Sec. 151.
    \6\U.S. CONST., art. II, Sec. 2, cl. 2.
    \7\28 U.S.C. Sec. 152(a)(1).
---------------------------------------------------------------------------
    Congress authorizes the number of bankruptcy judgeships.\8\ 
In 1992, Congress authorized the first 10 temporary bankruptcy 
judgeships.\9\ In 2005, 28 additional temporary bankruptcy 
judgeships were created and four of the 1992 temporary 
bankruptcy judgeships were extended, under the Bankruptcy Abuse 
Prevention and Consumer Protection Act (BAPCPA).\10\ Congress 
provided that, at the expiration of the five years, the 
additional judgeships would be lost following the first 
vacancies thereafter, bringing the districts back to their 
prior judgeship levels. After the lapse of these positions, new 
legislation would be necessary to create any new judgeship 
positions. As discussed in more detail below, filings have 
stayed fairly consistent and these temporary judgeships have 
required further extensions over the past several years.\11\ 
Despite these extensions, certain of the temporary bankruptcy 
judgeships have expired prior to Congressional action, 
including one temporary judgeship in the Southern District of 
New York.
---------------------------------------------------------------------------
    \8\28 U.S.C. Sec. 152.
    \9\Pub. L. No. 102-361, 106 Stat. 965 (1992).
    \10\See Pub. L. No. 109-8, 119 Stat. 23 (2005).
    \11\See generally Judicial Conference of the United States, 2017 
Bankruptcy Judgeship Recommendations (on file with Committee).
---------------------------------------------------------------------------
    There are presently 29 temporary bankruptcy judgeships 
scheduled to lapse on May 25, 2017.\12\ These temporary 
judgeships comprise more than eight percent of the current 
bankruptcy judgeships nationwide. A judge sitting in a 
temporary position can sit in that district to fulfill his or 
her term after May 25, 2017, and can seek reappointment. 
However, if any sitting judge in that district retires, dies, 
resigns, or becomes disabled after May 25, 2017, the temporary 
position lapses, permanently reducing the number of judgeships 
in that district.
---------------------------------------------------------------------------
    \12\See Pub. L. No. 112-121, 126 Stat. 349 (2012).
---------------------------------------------------------------------------

                 B. JUDICIAL CONFERENCE RECOMMENDATIONS

    Congressional authorization of bankruptcy judgeships is 
typically premised on recommendations required to be made, from 
time to time, by the Judicial Conference of the United 
States,\13\ the principal policymaking body concerned with the 
administration of the federal judiciary.\14\ On April 3, 2017, 
the Judicial Conference made its most recent recommendation for 
bankruptcy judgeship needs.\15\ The recommendation is for the 
conversion of 14 temporary judgeships to permanent status and 
the authorization of four new bankruptcy judgeships.\16\ The 14 
judgeship conversions include the following: five for the 
District of Delaware; two for the Southern District of Florida; 
one for the District of Maryland; one for the Eastern District 
of Michigan; one for the District of Nevada; one for the 
Eastern District of North Carolina; two for the District of 
Puerto Rico; and one for the Eastern District of Virginia. The 
four additional permanent bankruptcy judgeships include the 
following: two for the District of Delaware; one for the 
Eastern District of Michigan; and one for the Middle District 
of Florida.
---------------------------------------------------------------------------
    \13\28 U.S.C. Sec. 152(b) (2). In addition, the Judicial Conference 
must biennially conduct a ``comprehensive review'' of all judicial 
districts for the purpose of assessing the ``continuing need'' for 
authorized bankruptcy judges as well as for the elimination of any 
authorized position when a vacancy occurs as a result of a judge's 
resignation, retirement, removal, or death. 28 U.S.C. Sec. 152(b) (3). 
For example, a bankruptcy judge may be removed for incompetence, 
misconduct, neglect of duty or physical or mental disability. 28 U.S.C. 
Sec. 152(e).
    \14\See generally 28 U.S.C. Sec. 331.
    \15\Letter from James C. Duff, Secretary, Judicial Conference of 
the United States, to Chairman Bob Goodlatte, H. Comm. on the Judiciary 
(Apr. 3, 2017) (on file with Committee).
    \16\Judicial Conference of the United States, 2017 Bankruptcy 
Judgeship Recommendations (on file with Committee).
---------------------------------------------------------------------------
    The Judicial Conference's recommendation to Congress 
concerning the need for bankruptcy judgeships is the product of 
a multi-step process. First, a bankruptcy court submits a 
request for additional bankruptcy judgeships to the district 
court, which transmits the request to the circuit court. Then, 
the circuit's judicial council considers the request and either 
approves it, with or without modification, or disapproves it. 
Approved requests are then sent to the Judicial Conference's 
Bankruptcy Committee's Subcommittee on Judgeships for 
consideration. The Subcommittee reviews the circuit court's 
recommendation, conducts on-site evaluations of judicial needs, 
and makes a recommendation to the full Bankruptcy Committee. 
The Bankruptcy Committee reviews the Subcommittee's findings 
and makes a recommendation to the full Judicial Conference. 
Upon final approval, the recommendation is then transmitted by 
the Judicial Conference to Congress in a biennial report.
    It is the practice of the Judicial Conference to use a 
``weighted case filing'' method to determine judicial needs. 
This method assigns a case weight to each new case filed based 
on its complexity, the number of parties involved, and other 
data relevant to assessing how the case will affect judicial 
workload. It should be noted that the Judicial Conference's 
policy is to consider additional judgeships only for those 
courts that request them. Thus, if a district's weighted 
caseload would support requesting another judgeship but the 
district does not submit a request, the Judicial Conference 
will not recommend to Congress that the judgeship be created. 
Additionally, if a vacancy arises that could be filled under 
the authorizing statute, but the Judicial Conference determines 
the need is not sufficient to fill that position or an 
alternative approach is available, the Conference does not 
recommend to Congress that it be filled.
    Although bankruptcy filings nationwide have been declining 
in recent years, the districts included in the Conference's 
recommendation generally have experienced a sustained increase 
in filings.\17\ Indeed, since the enactment of BAPCPA, the last 
time additional judgeship resources were authorized for most of 
the courts included in the Conference's recommendation, these 
districts have seen weighted filings increase by more than 55 
percent.\18\ These temporary judgeships have existed for at 
least 12 years and the need does not show signs of abating. 
Moreover, the Judicial Conference has demonstrated that, while 
a district may have a permanent judgeship, it will not be 
filled unless completely necessary. There are currently eight 
vacancies which the Judicial Conference has not sought to be 
filled and another 12 judgeships which may not be filled once a 
vacancy arises.
---------------------------------------------------------------------------
    \17\Letter from James C. Duff, Secretary, Judicial Conference of 
the United States, to Chairman Bob Goodlatte, H. Comm. on the Judiciary 
(Apr. 3, 2017) (on file with Committee).
    \18\Id.
---------------------------------------------------------------------------

                         C. LEGISLATIVE HISTORY

    The Bankruptcy Judgeship Act of 2017 is very similar to a 
bill introduced during the 111th Congress by then Judiciary 
Chairman Lamar Smith (R-TX), Judiciary Ranking Member John 
Conyers, Jr. (D-MI) and Rep. Steve Cohen (D-TN), which would 
have authorized new permanent judgeships, converted some 
temporary judgeships to permanent status, and extended some 
temporary judgeships.\19\
---------------------------------------------------------------------------
    \19\H.R. 4506, (111th Congress).
---------------------------------------------------------------------------
    When a majority of the temporary judgeships were first 
created, they were paid for through an increase in chapter 11 
filing fees.\20\ However, through a unique interpretation by 
the Congressional Budget Office, the funding from the fee 
increases was not able to be used to offset the conversion or 
further extension of the temporary judgeships once they hit 
their initial expiration date.\21\ As such, when the temporary 
judgeships were set to expire in 2011, a similar funding issue 
arose. To offset the cost, H.R. 4506 increased filing fees in 
chapter 7 and 13 bankruptcy cases by one dollar and in chapter 
11 cases by $42.\22\ The bill passed the House by a vote of 
345-5. The Senate did not vote on the bill.
---------------------------------------------------------------------------
    \20\See Pub. L. No. 109-8, 119 Stat. 23 (2005).
    \21\CBO's reasoning is based on the fact that the fee increases 
were permanent but the judgeships were temporary. They focus on what 
the law is at the time of the request. Because the current law includes 
the permanent fee increase, it cannot be used to pay for the 
conversions.
    \22\H.R. 4506, 111th Congress.
---------------------------------------------------------------------------
    During the 112th Congress, Reps. Smith, Conyers and Cohen 
introduced a scaled back bill which did not create any new 
judgeships or convert any temporary judgeships, but extended 
the existing temporary judgeships for an additional five 
years.\23\ The extension was paid for once again by increasing 
the filing fees in chapter 11 cases by $167.\24\ The bill 
passed the House under suspension of the rules by voice vote, 
passed the Senate by unanimous consent, and was signed into 
law.\25\
---------------------------------------------------------------------------
    \23\H.R. 1021, 112th Congress.
    \24\Id.
    \25\Pub. L. No. 112-121, 126 Stat. 349 (2012).
---------------------------------------------------------------------------
    In addition, the Judicial Conference previously requested 
consideration of a one-year extension of seven judgeships in 
the Fiscal Year 2017 appropriations bill. The Judicial 
Conference identified districts that combine high caseloads 
with even higher likelihood of judicial vacancies soon after 
the lapse date. This group included two positions in the 
District of Delaware, two in the Southern District of Florida, 
one in the Eastern District of Virginia, one in the Eastern 
District of Michigan and one in the District of Puerto Rico. 
This request was made again in the Fiscal Year 2018 
appropriations bill, for the same judgeships, but with a 
corresponding two-year extension.

               D. INCREASE IN QUARTERLY U.S. TRUSTEE FEES

    Historically, the U.S. Trustee Program has been funded by 
fees collected in bankruptcy cases.\26\ However, the manner in 
which the fees are routed to the U.S. Trustee Program is a bit 
circuitous. Simply, the U.S. Trustee Program gets appropriated 
funds every year. Those appropriated funds are offset by past 
fees collected through bankruptcy cases that are deposited into 
a fund at Treasury. Most years, the fees collected exceed the 
appropriated funds. However, in recent years, due to overall 
declining bankruptcy filings nationwide, the appropriations 
have exceeded the fees collected and the surplus created by 
years past has been dwindling. However, as mentioned 
previously, the districts included in the Conference's 
recommendation generally have experienced a sustained increase 
in filings. In response, over the past couple of years the U.S. 
Trustee has proposed to increase one of the fees collected in 
chapter 11 bankruptcy cases that is collected quarterly and 
corresponds with the size of the company in bankruptcy. More 
recently, this type of fee increase was included in the 
President's ``skinny'' budget.\27\
---------------------------------------------------------------------------
    \26\28 U.S.C. 589a. Approximately 38 percent of the Program's 
revenue is derived from filing fees paid in chapters 7, 11, 12, and 13 
cases while about 61 percent comes from quarterly fees in chapter 11 
cases.
    \27\See America First, A Budget Blueprint to Make America Great 
Again, Office of Management and Budget, at 30, available at https://
www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/
2018_blueprint.pdf
---------------------------------------------------------------------------

                    E. THE BANKRUPTCY JUDGESHIP ACT

    In the 115th Congress, Judiciary Ranking Member Conyers and 
Senator Chris Coons (D-DE) introduced companion bills that 
sought to implement the then-current recommendation of the 
Judicial Conference for 16 conversions and 6 new 
authorizations.\28\ Importantly, the bills did not include an 
offset for the judgeships.
---------------------------------------------------------------------------
    \28\See H.R. 136, 115th Cong.; S. 632, 115th Cong.
---------------------------------------------------------------------------
    On May 1, 2017, Mr. Conyers, Judiciary Chairman Bob 
Goodlatte (R-VA), Tom Marino (R-PA), and David N. Cicilline (D-
RI), introduced a new version of the Bankruptcy Judgeship Act 
that contained the following changes: (a) alignment of the bill 
with the Judicial Conference's latest recommendation of 14 
conversions and four new appointments, which the committee 
believe to be a sound recommendation; and, (b) inclusion of an 
increase in the quarterly U.S. Trustee fees for large chapter 
11 cases to serve as a funding offset for the cost of the 
judgeships. The affected districts, number of judgeship 
conversions, and new appointments under H.R. 2266 are as 
follows:

------------------------------------------------------------------------
                                            Judgeships     New Judgeship
            Judicial District                Converted     Authorization
------------------------------------------------------------------------
District of Puerto Rico.................               2
District of Delaware....................               5               2
District of Maryland....................               1  ..............
Eastern District of North Carolina......               1
Eastern District of Virginia............               1
Eastern District of Michigan............               1               1
District of Nevada......................               1
Middle District of Florida..............  ..............               1
Southern District of Florida............               2
------------------------------------------------------------------------

    The Bankruptcy Judgeship Act of 2017 also provides for an 
increase in the U.S. Trustee fees for the largest chapter 11 
debtors (i.e., excluding small businesses). The fee increase is 
directly tied to the balance of the United States Trustee 
System Fund and will only be applied when the balance of the 
fund falls below a $200 million threshold. The funds generated 
by the fee increase will cover both the costs of this bill and 
separately needed funds for the operations of the U.S. Trustee 
Program.

                                Hearings

    The Committee on the Judiciary held no hearings on H.R. 
2266.

                        Committee Consideration

    On May 3, 2017, the Committee met in open session to 
consider the bill H.R. 2266. Ranking Member Conyers offered an 
amendment to correct certain typographical errors, clarify that 
notwithstanding an intervening vacancy in an authorized 
judgeship, the position can nevertheless be filled, and ensure 
the U.S. Trustee fee increase will offset the cost of the new 
and converted judgeships. Mr. Conyers' amendment was agreed to 
by voice vote and H.R. 2266 was favorably reported, by voice 
vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that there 
were no recorded votes during the Committee's consideration of 
H.R. 2266.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

                        Committee Cost Estimate

    A Congressional Budget Office cost estimate was not 
available at the time of filing of this report. In compliance 
with clause 3(d) of Rule XIII of the Rules of the House of 
Representatives, the Committee estimates, based on informal 
estimations made available to it by CBO, that enacting H.R. 
2266 would increase direct spending by approximately $20 
million over the next ten years. Therefore, pay-as-you-go 
procedures apply. The Committee also expects, based on informal 
estimates by CBO, that enacting H.R. 2266 would increase 
revenues from quarterly U.S. Trustee filing fees by an amount 
sufficient to fully offset the increases in direct spending 
caused by the bill.

                    Duplication of Federal Programs

    No provision of H.R. 2266 establishes or reauthorizes a 
program of the Federal government known to be duplicative of 
another Federal program, a program that was included in any 
report from GAO to Congress pursuant to section 21 of Public 
Law 111-139, or a program related to a program identified in 
the most recent Catalog of Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 2266 specifically directs 
to be completed no specific rule makings within the meaning of 
5 U.S.C. 551.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
2266 converts 14 temporary bankruptcy judgeships to permanent 
status, authorizes four new bankruptcy judgeships, and 
increases the U.S. Trustee's Quarterly Fees for large chapter 
11 cases.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2266 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.

Section 1. Short Title.

    Section 1 sets forth the short title of the bill as the 
``Bankruptcy Judgeship Act of 2017.''

Section 2. Conversion of the Temporary Office of Bankruptcy Judge to 
        the Permanent Office of Bankruptcy Judge in Certain Judicial 
        Districts.

    Section 2(a) converts to permanent status the five 
temporary judgeships in the District of Delaware. Section 2(b) 
converts to permanent status the two temporary judgeships in 
the Southern District of Florida. Section 2(c) converts to 
permanent status the temporary bankruptcy judgeship for the 
District of Maryland. Section 2(d) converts to permanent status 
the temporary bankruptcy judgeship for the Eastern District of 
Michigan. Section 2(e) converts to permanent status the 
temporary bankruptcy judgeship for the District of Nevada. 
Section 2(f) converts to permanent status the temporary 
bankruptcy judgeship for the Eastern District of North 
Carolina. Section 2(g) converts to permanent status the two 
temporary bankruptcy judgeships for the District of Puerto 
Rico. Section 2(h) converts to permanent status the bankruptcy 
judgeship for the Eastern District of Virginia.

Section 3. Permanent Office of Bankruptcy Judge Authorized.

    Section 3 amends section 152(a)(2) of title 28 of the 
United States Code to reflect the changes in temporary to 
permanent status as effectuated by section 2 of the bill. Also, 
section 3 authorizes two additional permanent bankruptcy 
judgeships for the District of Delaware, one additional 
permanent bankruptcy judgeship for the Eastern District of 
Michigan, and one additional permanent bankruptcy judgeship for 
the Middle District of Florida.

Section 4. Bankruptcy Fees.

    Section 4(a) amends section 1930(a)(6) of title 28 of the 
United States Code to provide that the chapter 11 fee payable 
for a quarter in which a debtor's disbursements equal or exceed 
$1 million must be either one percent of such disbursements or 
$250,000, whichever is less, in a fiscal year unless the 
balance in the United States Trustee System Fund as of 
September 30 preceding such fiscal year exceeds $200 million.
    Section 4(b) provides that, notwithstanding section 589a(b) 
of title 28 of the United States Code, for each of the fiscal 
years 2018 through 2012, 97.5 percent of the quarterly U.S. 
Trustee fees shall be deposited as offsetting collections to 
the United States Trustee System Fund and 2.5 percent of the 
quarterly U.S. Trustee fees shall be deposited in the general 
fund of the Treasury.
    Section 4(c)(1) provides that section 4 takes effect on 
July 1, 2017, or the date of enactment, whichever is later, 
subject to subsection 4(c)(2). Section 4(c)(2) provides that 
section 4 applies to quarterly fees payable for any quarter 
that begins on or after the effective date of this legislation.

         Changes in Existing Law Made by the Bill, as Reported

   In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *
PART I--ORGANIZATION OF COURTS

           *       *       *       *       *       *       *

CHAPTER 6--BANKRUPTCY JUDGES

           *       *       *       *       *       *       *

Sec. 152. Appointment of bankruptcy judges

   (a)(1) Each bankruptcy judge to be appointed for a judicial 
district, as provided in paragraph (2), shall be appointed by 
the court of appeals of the United States for the circuit in 
which such district is located. Such appointments shall be made 
after considering the recommendations of the Judicial 
Conference submitted pursuant to subsection (b). Each 
bankruptcy judge shall be appointed for a term of fourteen 
years, subject to the provisions of subsection (e). However, 
upon the expiration of the term, a bankruptcy judge may, with 
the approval of the judicial council of the circuit, continue 
to perform the duties of the office until the earlier of the 
date which is 180 days after the expiration of the term or the 
date of the appointment of a successor. Bankruptcy judges shall 
serve as judicial officers of the United States district court 
established under Article III of the Constitution.
           (2) The bankruptcy judges appointed pursuant to this 
        section shall be appointed for the several judicial 
        districts as follows:

 
----------------------------------------------------------------------------------------------------------------
                                             Districts                                                  Judges
----------------------------------------------------------------------------------------------------------------
Alabama:
Northern                                                                                                       5
Middle                                                                                                         2
Southern                                                                                                       2
Alaska                                                                                                         2
Arizona                                                                                                        7
Arkansas:
Eastern and Western                                                                                            3
California:
Northern                                                                                                       9
Eastern                                                                                                        6
Central                                                                                                       21
Southern                                                                                                       4
Colorado                                                                                                       5
Connecticut                                                                                                    3
Delaware                                                                                                   [1] 8
District of Columbia                                                                                           1
Florida:
Northern                                                                                                       1
Middle                                                                                                     [8] 9
Southern                                                                                                   [5] 7
Georgia:
Northern                                                                                                       8
Middle                                                                                                         3
Southern                                                                                                       2
Hawaii                                                                                                         1
Idaho                                                                                                          2
Illinois:
Northern                                                                                                      10
Central                                                                                                        3
Southern                                                                                                       1
Indiana:
Northern                                                                                                       3
Southern                                                                                                       4
Iowa:
Northern                                                                                                       2
Southern                                                                                                       2
Kansas                                                                                                         4
Kentucky:
Eastern                                                                                                        2
Western                                                                                                        3
Louisiana:
Eastern                                                                                                        2
Middle                                                                                                         1
Western                                                                                                        3
Maine                                                                                                          2
Maryland                                                                                                   [4] 5
Massachusetts                                                                                                  5
Michigan:
Eastern                                                                                                    [4] 6
Western                                                                                                        3
Minnesota                                                                                                      4
Mississippi:
Northern                                                                                                       1
Southern                                                                                                       2
Missouri:
Eastern                                                                                                        3
Western                                                                                                        3
Montana                                                                                                        1
Nebraska                                                                                                       2
Nevada                                                                                                     [3] 4
New Hampshire                                                                                                  1
New Jersey                                                                                                     8
New Mexico                                                                                                     2
New York:
Northern                                                                                                       2
Southern                                                                                                       9
Eastern                                                                                                        6
Western                                                                                                        3
North Carolina:
Eastern                                                                                                    [2] 3
Middle                                                                                                         2
Western                                                                                                        2
North Dakota                                                                                                   1
Ohio:
Northern                                                                                                       8
Southern                                                                                                       7
Oklahoma:
Northern                                                                                                       2
Eastern                                                                                                        1
Western                                                                                                        3
Oregon                                                                                                         5
Pennsylvania:
Eastern                                                                                                        5
Middle                                                                                                         2
Western                                                                                                        4
Puerto Rico                                                                                                [2] 4
Rhode Island                                                                                                   1
South Carolina                                                                                                 2
South Dakota                                                                                                   2
Tennessee:
Eastern                                                                                                        3
Middle                                                                                                         3
Western                                                                                                        4
Texas:
Northern                                                                                                       6
Eastern                                                                                                        2
Southern                                                                                                       6
Western                                                                                                        4
Utah                                                                                                           3
Vermont                                                                                                        1
Virginia:
Eastern                                                                                                    [5] 6
Western                                                                                                        3
Washington:
Eastern                                                                                                        2
Western                                                                                                        5
West Virginia:
Northern                                                                                                       1
Southern                                                                                                       1
Wisconsin:
Eastern                                                                                                        4
Western                                                                                                        2
Wyoming                                                                                                        1
 
----------------------------------------------------------------------------------------------------------------

           (3) Whenever a majority of the judges of any court 
        of appeals cannot agree upon the appointment of a 
        bankruptcy judge, the chief judge of such court shall 
        make such appointment.
           (4) The judges of the district courts for the 
        territories shall serve as the bankruptcy judges for 
        such courts. The United States court of appeals for the 
        circuit within which such a territorial district court 
        is located may appoint bankruptcy judges under this 
        chapter for such district if authorized to do so by the 
        Congress of the United States under this section.
   (b)(1) The Judicial Conference of the United States shall, 
from time to time, and after considering the recommendations 
submitted by the Director of the Administrative Office of the 
United States Courts after such Director has consulted with the 
judicial council of the circuit involved, determine the 
official duty stations of bankruptcy judges and places of 
holding court.
           (2) The Judicial Conference shall, from time to 
        time, submit recommendations to the Congress regarding 
        the number of bankruptcy judges needed and the 
        districts in which such judges are needed.
           (3) Not later than December 31, 1994, and not later 
        than the end of each 2-year period thereafter, the 
        Judicial Conference of the United States shall conduct 
        a comprehensive review of all judicial districts to 
        assess the continuing need for the bankruptcy judges 
        authorized by this section, and shall report to the 
        Congress its findings and any recommendations for the 
        elimination of any authorized position which can be 
        eliminated when a vacancy exists by reason of 
        resignation, retirement, removal, or death.
   (c)(1) Each bankruptcy judge may hold court at such places 
within the judicial district, in addition to the official duty 
station of such judge, as the business of the court may 
require.
           (2)(A) Bankruptcy judges may hold court at such 
        places within the United States outside the judicial 
        district as the nature of the business of the court may 
        require, and upon such notice as the court orders, upon 
        a finding by either the chief judge of the bankruptcy 
        court (or, if the chief judge is unavailable, the most 
        senior available bankruptcy judge) or by the judicial 
        council of the circuit that, because of emergency 
        conditions, no location within the district is 
        reasonably available where the bankruptcy judges could 
        hold court.
                   (B) Bankruptcy judges may transact any 
                business at special sessions of court held 
                outside the district pursuant to this paragraph 
                that might be transacted at a regular session.
                   (C) If a bankruptcy court issues an order 
                exercising its authority under subparagraph 
                (A), the court--
                           (i) through the Administrative 
                        Office of the United States Courts, 
                        shall--
                                   (I) send notice of such 
                                order, including the reasons 
                                for the issuance of such order, 
                                to the Committee on the 
                                Judiciary of the Senate and the 
                                Committee on the Judiciary of 
                                the House of Representatives; 
                                and
                                   (II) not later than 180 days 
                                after the expiration of such 
                                court order submit a brief 
                                report to the Committee on the 
                                Judiciary of the Senate and the 
                                Committee on the Judiciary of 
                                the House of Representatives 
                                describing the impact of such 
                                order, including--
                                           (aa) the reasons for 
                                        the issuance of such 
                                        order;
                                           (bb) the duration of 
                                        such order;
                                           (cc) the impact of 
                                        such order on 
                                        litigants; and
                                           (dd) the costs to 
                                        the judiciary resulting 
                                        from such order; and
                           (ii) shall provide reasonable notice 
                        to the United States Marshals Service 
                        before the commencement of any special 
                        session held pursuant to such order.
   (d) With the approval of the Judicial Conference and of each 
of the judicial councils involved, a bankruptcy judge may be 
designated to serve in any district adjacent to or near the 
district for which such bankruptcy judge was appointed.
   (e) A bankruptcy judge may be removed during the term for 
which such bankruptcy judge is appointed, only for 
incompetence, misconduct, neglect of duty, or physical or 
mental disability and only by the judicial council of the 
circuit in which the judge's official duty station is located. 
Removal may not occur unless a majority of all of the judges of 
such council concur in the order of removal. Before any order 
of removal may be entered, a full specification of charges 
shall be furnished to such bankruptcy judge who shall be 
accorded an opportunity to be heard on such charges.

           *       *       *       *       *       *       *

PART V--PROCEDURE

           *       *       *       *       *       *       *

CHAPTER 123--FEES AND COSTS

           *       *       *       *       *       *       *

Sec. 1930. Bankruptcy fees

   (a) The parties commencing a case under title 11 shall pay 
to the clerk of the district court or the clerk of the 
bankruptcy court, if one has been certified pursuant to section 
156(b) of this title, the following filing fees:
           (1) For a case commenced under--
                   (A) chapter 7 of title 11, $245, and
                   (B) chapter 13 of title 11, $235.
           (2) For a case commenced under chapter 9 of title 
        11, equal to the fee specified in paragraph (3) for 
        filing a case under chapter 11 of title 11. The amount 
        by which the fee payable under this paragraph exceeds 
        $300 shall be deposited in the fund established under 
        section 1931 of this title.
           (3) For a case commenced under chapter 11 of title 
        11 that does not concern a railroad, as defined in 
        section 101 of title 11, $1,167.
           (4) For a case commenced under chapter 11 of title 
        11 concerning a railroad, as so defined, $1,000.
           (5) For a case commenced under chapter 12 of title 
        11, $200.
           [(6) In] (6) (A) Except as provided in subparagraph 
        (B), in addition to the filing fee paid to the clerk, a 
        quarterly fee shall be paid to the United States 
        trustee, for deposit in the Treasury, in each case 
        under chapter 11 of title 11 for each quarter 
        (including any fraction thereof) until the case is 
        converted or dismissed, whichever occurs first. The fee 
        shall be $325 for each quarter in which disbursements 
        total less than $15,000; $650 for each quarter in which 
        disbursements total $15,000 or more but less than 
        $75,000; $975 for each quarter in which disbursements 
        total $75,000 or more but less than $150,000; $1,625 
        for each quarter in which disbursements total $150,000 
        or more but less than $225,000; $1,950 for each quarter 
        in which disbursements total $225,000 or more but less 
        than $300,000; $4,875 for each quarter in which 
        disbursements total $300,000 or more but less than 
        $1,000,000; $6,500 for each quarter in which 
        disbursements total $1,000,000 or more but less than 
        $2,000,000; $9,750 for each quarter in which 
        disbursements total $2,000,000 or more but less than 
        $3,000,000; $10,400 for each quarter in which 
        disbursements total $3,000,000 or more but less than 
        $5,000,000; $13,000 for each quarter in which 
        disbursements total $5,000,000 or more but less than 
        $15,000,000; $20,000 for each quarter in which 
        disbursements total $15,000,000 or more but less than 
        $30,000,000; $30,000 for each quarter in which 
        disbursements total more than $30,000,000. The fee 
        shall be payable on the last day of the calendar month 
        following the calendar quarter for which the fee is 
        owed.
           (B) In any fiscal year, the quarterly fee payable 
        for a quarter in which disbursements equal or exceed 
        $1,000,000 shall be 1 percent of such disbursements or 
        $250,000, whichever is less, unless the balance in the 
        United States Trustee System Fund as of September 30 
        immediately preceding such fiscal year exceeds 
        $200,000,000.
           (7) In districts that are not part of a United 
        States trustee region as defined in section 581 of this 
        title, the Judicial Conference of the United States may 
        require the debtor in a case under chapter 11 of title 
        11 to pay fees equal to those imposed by paragraph (6) 
        of this subsection. Such fees shall be deposited as 
        offsetting receipts to the fund established under 
        section 1931 of this title and shall remain available 
        until expended.
An individual commencing a voluntary case or a joint case under 
title 11 may pay such fee in installments. For converting, on 
request of the debtor, a case under chapter 7, or 13 of title 
11, to a case under chapter 11 of title 11, the debtor shall 
pay to the clerk of the district court or the clerk of the 
bankruptcy court, if one has been certified pursuant to section 
156(b) of this title, a fee of the amount equal to the 
difference between the fee specified in paragraph (3) and the 
fee specified in paragraph (1).
   (b) The Judicial Conference of the United States may 
prescribe additional fees in cases under title 11 of the same 
kind as the Judicial Conference prescribes under section 
1914(b) of this title.
   (c) Upon the filing of any separate or joint notice of 
appeal or application for appeal or upon the receipt of any 
order allowing, or notice of the allowance of, an appeal or a 
writ of certiorari $5 shall be paid to the clerk of the court, 
by the appellant or petitioner.
   (d) Whenever any case or proceeding is dismissed in any 
bankruptcy court for want of jurisdiction, such court may order 
the payment of just costs.
   (e) The clerk of the court may collect only the fees 
prescribed under this section.
   (f)(1) Under the procedures prescribed by the Judicial 
Conference of the United States, the district court or the 
bankruptcy court may waive the filing fee in a case under 
chapter 7 of title 11 for an individual if the court determines 
that such individual has income less than 150 percent of the 
income official poverty line (as defined by the Office of 
Management and Budget, and revised annually in accordance with 
section 673(2) of the Omnibus Budget Reconciliation Act of 
1981) applicable to a family of the size involved and is unable 
to pay that fee in installments. For purposes of this 
paragraph, the term ``filing fee'' means the filing fee 
required by subsection (a), or any other fee prescribed by the 
Judicial Conference under subsections (b) and (c) that is 
payable to the clerk upon the commencement of a case under 
chapter 7.
   (2) The district court or the bankruptcy court may waive for 
such debtors other fees prescribed under subsections (b) and 
(c).
   (3) This subsection does not restrict the district court or 
the bankruptcy court from waiving, in accordance with Judicial 
Conference policy, fees prescribed under this section for other 
debtors and creditors.

           *       *       *       *       *       *       *

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