Calendar No. 110

106TH CONGRESS

1ST SESSION H. R. 833

AN ACT

To amend title 11 of the United States Code, and

for other purposes.

MAY 12, 1999

Read twice and placed on the calendar
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Calendar No. 110

106TH CONGRESS

1ST SESSION H. R. 833

IN THE SENATE OF THE UNITED STATES

MAY 6, 1999

Received

MAY 12, 1999

Read twice and placed on the calendar

AN ACT

To amend title 11 of the United States Code, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Bankruptcy Reform Act of 1999’’.

4 (b) TABLE OF CONTENTS.—The table of contents of

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—CONSUMER BANKRUPTCY PROVISIONS

Subtitle A—Needs based bankruptcy

Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.

Sec. 103. Notice of alternatives.

Sec. 104. Debtor financial management training test program.

Subtitle B—Consumer Bankruptcy Protections

Sec. 105. Definitions.

Sec. 106. Enforcement.

Sec. 107. Sense of the Congress.

Sec. 108. Discouraging abusive reaffirmation practices.

Sec. 109. Promotion of alternative dispute resolution.

Sec. 110. Enhanced disclosure for credit extensions secured by a dwelling.

Sec. 111. Dual use debit card.

Sec. 112. Enhanced disclosures under an open-end credit plan.

Sec. 113. Protection of savings earmarked for the postsecondary education of

children.

Sec. 114. Effect of discharge.

Sec. 115. Limiting trustee liability.

Sec. 116. Reinforce the fresh start.

Sec. 117. Discouraging bad faith repeat filings.

Sec. 118. Curbing abusive filings.

Sec. 119. Debtor retention of personal property security.

Sec. 120. Relief from the automatic stay when the debtor does not complete intended surrender of consumer debt collateral.

Sec. 121. Giving secured creditors fair treatment in chapter 13.

Sec. 122. Restraining abusive purchases on secured credit.

Sec. 123. Fair valuation of collateral.

Sec. 124. Domiciliary requirements for exemptions.

Sec. 125. Restrictions on certain exempt property obtained through fraud.

Sec. 126. Rolling stock equipment.

Sec. 127. Discharge under chapter 13.

Sec. 128. Bankruptcy judgeships.

Sec. 129. Additional amendments to title 11, United States Code.

Sec. 130. Amendment to section 1325 of title 11, United States Code.

Sec. 131. Application of the codebtor stay only when the stay protects the debtor.

Sec. 132. Adequate protection for investors.

Sec. 133. Limitation on luxury goods.

Sec. 134. Allowing a debtor to retain leased personal property by assumption.
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Sec. 135. Adequate protection of lessors and purchase money secured creditors.

Sec. 136. Automatic stay.

Sec. 137. Extend period between bankruptcy discharges.

Sec. 138. Definition of domestic support obligation.

Sec. 139. Priorities for claims for domestic support obligations.

Sec. 140. Requirements to obtain confirmation and discharge in cases involving

domestic support obligations.

Sec. 141. Exceptions to automatic stay in domestic support obligation proceedings.

Sec. 142. Nondischargeability of certain debts for alimony, maintenance, and

support.

Sec. 143. Continued liability of property.

Sec. 144. Protection of domestic support claims against preferential transfer

motions.

Sec. 145. Clarification of meaning of household goods.

Sec. 146. Nondischargeable debts.

Sec. 147. Monetary limitation on certain exempt property.

Sec. 148. Bankruptcy fees.

Sec. 149. Collection of child support.

Sec. 150. Excluding employee benefit plan participant contributions and other

property from the estate.

Sec. 151. Clarification of postpetition wages and benefits.

Sec. 152. Exceptions to automatic stay in domestic support obligation proceedings.

Sec. 153. Automatic stay inapplicable to certain proceedings against the debtor.

Sec. 154. Disclosures.

Sec. 155. Debtor’s bill of rights.

TITLE II—DISCOURAGING BANKRUPTCY ABUSE

Sec. 201. Reenactment of chapter 12.

Sec. 202. Meetings of creditors and equity security holders.

Sec. 203. Protection of retirement savings in bankruptcy.

Sec. 204. Protection of refinance of security interest.

Sec. 205. Executory contracts and unexpired leases.

Sec. 206. Creditors and equity security holders committees.

Sec. 207. Amendment to section 546 of title 11, United States Code.

Sec. 208. Limitation.

Sec. 209. Amendment to section 330(a) of title 11, United States Code.

Sec. 210. Postpetition disclosure and solicitation.

Sec. 211. Preferences.

Sec. 212. Venue of certain proceedings.

Sec. 213. Period for filing plan under chapter 11.

Sec. 214. Fees arising from certain ownership interests.

Sec. 215. Defaults based on nonmonetary obligations.

Sec. 216. Sharing of compensation.

Sec. 217. Priority for administrative expenses.

Sec. 218. Nondischargeability of certain educational benefits and loans.

TITLE III—GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 301. Definition of disinterested person.

Sec. 302. Miscellaneous improvements.

Sec. 303. Extensions.

Sec. 304. Local filing of bankruptcy cases.

Sec. 305. Permitting assumption of contracts.
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TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS

Sec. 401. Flexible rules for disclosure Statement and plan.

Sec. 402. Definitions.

Sec. 403. Standard form disclosure Statement and plan.

Sec. 404. Uniform national reporting requirements.

Sec. 405. Uniform reporting rules and forms for small business cases.

Sec. 406. Duties in small business cases.

Sec. 407. Plan filing and confirmation deadlines.

Sec. 408. Plan confirmation deadline.

Sec. 409. Prohibition against extension of time.

Sec. 410. Duties of the United States trustee.

Sec. 411. Scheduling conferences.

Sec. 412. Serial filer provisions.

Sec. 413. Expanded grounds for dismissal or conversion and appointment of

trustee or examiner.

Sec. 414. Study of operation of title 11, United States Code, with respect to

small businesses.

Sec. 415. Payment of interest.

TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.

Sec. 502. Applicability of other sections to chapter 9.

TITLE VI—STREAMLINING THE BANKRUPTCY SYSTEM

Sec. 601. Creditor representation at first meeting of creditors.

Sec. 602. Audit procedures.

Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.

Sec. 604. Dismissal for failure to timely file schedules or provide required information.

Sec. 605. Adequate time to prepare for hearing on confirmation of the plan.

Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.

Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the Federal Rules of Bankruptcy Procedure.

Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy cases.

Sec. 609. Study of bankruptcy impact of credit extended to dependent students.

Sec. 610. Prompt relief from stay in individual cases.

Sec. 611. Stopping abusive conversions from chapter 13.

Sec. 612. Bankruptcy appeals.

Sec. 613. GAO study.

Sec. 614. Compensating trustees.

TITLE VII—BANKRUPTCY DATA

Sec. 701. Improved bankruptcy statistics.

Sec. 702. Uniform rules for the collection of bankruptcy data.

Sec. 703. Sense of the Congress regarding availability of bankruptcy data.

TITLE VIII—BANKRUPTCY TAX PROVISIONS

Sec. 801. Treatment of certain liens.

Sec. 802. Effective notice to government.

Sec. 803. Notice of request for a determination of taxes.

Sec. 804. Rate of interest on tax claims.

Sec. 805. Tolling of priority of tax claim time periods.
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Sec. 806. Priority property taxes incurred.

Sec. 807. Chapter 13 discharge of fraudulent and other taxes.

Sec. 808. Chapter 11 discharge of fraudulent taxes.

Sec. 809. Stay of tax proceedings.

Sec. 810. Periodic payment of taxes in chapter 11 cases.

Sec. 811. Avoidance of statutory tax liens prohibited.

Sec. 812. Payment of taxes in the conduct of business.

Sec. 813. Tardily filed priority tax claims.

Sec. 814. Income tax returns prepared by tax authorities.

Sec. 815. Discharge of the estate’s liability for unpaid taxes.

Sec. 816. Requirement to file tax returns to confirm chapter 13 plans.

Sec. 817. Standards for tax disclosure.

Sec. 818. Setoff of tax refunds.

TITLE IX—ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 901. Amendment to add chapter 15 to title 11, United States Code.

Sec. 902. Other amendments to titles 11 and 28, United States Code.

TITLE X—FINANCIAL CONTRACT PROVISIONS

Sec. 1001. Treatment of certain agreements by conservators or receivers of insured depository institutions.

Sec. 1002. Authority of the corporation with respect to failed and failing institutions.

Sec. 1003. Amendments relating to transfers of qualified financial contracts.

Sec. 1004. Amendments relating to disaffirmance or repudiation of qualified financial contracts.

Sec. 1005. Clarifying amendment relating to master agreements.

Sec. 1006. Federal Deposit Insurance Corporation Improvement Act of 1991.

Sec. 1007. Bankruptcy Code amendments.

Sec. 1008. Recordkeeping requirements.

Sec. 1009. Exemptions from contemporaneous execution requirement.

Sec. 1010. Damage measure.

Sec. 1011. Sipc stay.

Sec. 1012. Asset-backed securitizations.

Sec. 1013. Federal Reserve collateral requirements.

Sec. 1014. Effective date; application of amendments.

TITLE XI—TECHNICAL CORRECTIONS

Sec. 1101. Definitions.

Sec. 1102. Adjustment of dollar amounts.

Sec. 1103. Extension of time.

Sec. 1104. Technical amendments.

Sec. 1105. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions.

Sec. 1106. Limitation on compensation of professional persons.

Sec. 1107. Special tax provisions.

Sec. 1108. Effect of conversion.

Sec. 1109. Allowance of administrative expenses.

Sec. 1110. Priorities.

Sec. 1111. Exemptions.

Sec. 1112. Exceptions to discharge.

Sec. 1113. Effect of discharge.

Sec. 1114. Protection against discriminatory treatment.
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Sec. 1115. Property of the estate.

Sec. 1116. Preferences.

Sec. 1117. Postpetition transactions.

Sec. 1118. Disposition of property of the estate.

Sec. 1119. General provisions.

Sec. 1120. Appointment of elected trustee.

Sec. 1121. Abandonment of railroad line.

Sec. 1122. Contents of plan.

Sec. 1123. Discharge under chapter 12.

Sec. 1124. Bankruptcy cases and proceedings.

Sec. 1125. Knowing disregard of bankruptcy law or rule.

Sec. 1126. Transfers made by nonprofit charitable corporations.

Sec. 1127. Prohibition on certain actions for failure to incur finance charges.

Sec. 1128. Protection of valid purchase money security interests.

Sec. 1129. Trustees.

TITLE XII—GENERAL EFFECTIVE DATE; APPLICATION OF

AMENDMENTS

Sec. 1201. Effective date; application of amendments.

1 TITLE I—CONSUMER

2 BANKRUPTCY PROVISIONS

3 Subtitle A—Needs based

4 bankruptcy

5 SEC. 101. CONVERSION.

6 Section 706(c) of title 11, United States Code, is

7 amended by inserting ‘‘or consents to’’ after ‘‘requests’’.

8 SEC. 102. DISMISSAL OR CONVERSION.

9 (a) IN GENERAL.—Section 707 of title 11, United

10 States Code, is amended—

11 (1) by striking the section heading and insert12 ing the following:

13 ‘‘§ 707. Dismissal of a case or conversion to a case

14 under chapter 13’’;

15 and

16 (2) in subsection (b)—
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1 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

2 (B) in paragraph (1), as redesignated by

3 subparagraph (A) of this paragraph—

4 (i) in the first sentence—

5 (I) by striking ‘‘but not at the re6 quest or suggestion of’’ and inserting

7 ‘‘the trustee, or’’;

8 (II) by inserting ‘‘, or, with the

9 debtor’s consent, convert such a case

10 to a case under chapter 13 of this

11 title,’’ after ‘‘consumer debts’’; and

12 (III) by striking ‘‘substantial

13 abuse’’ and inserting ‘‘abuse’’; and

14 (ii) by striking the second and third

15 sentences and inserting the following:

16 ‘‘(2)(A)(i) In considering under paragraph (1) wheth17 er the granting of relief would be an abuse of the provi18 sions of this chapter, the court shall presume abuse exists

19 if the debtor’s current monthly income less estimated ad20 ministrative expenses and reasonable attorneys’ fees, and

21 amounts set forth in clauses (ii) for monthly expenses

22 (which shall include, if applicable, the continuation of ac23 tual expenses of a dependent child under the age of 18

24 for tuition, books, and required fees at a private elemen25 tary or secondary school, not exceeding $10,000 per year,
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1 which amount shall be adjusted pursuant to section

2 104(b)), (iii) for monthly payments on account of secured

3 debts, and (iv) for monthly unsecured priority debt pay4 ments, and multiplied by 60 months is not less than

5 $6,000.

6 ‘‘(ii) The debtor’s monthly expenses shall be the debt7 or’s applicable monthly expense amounts specified under

8 the National Standards and Local Standards, and the

9 debtor’s actual monthly expenses for the categories speci10 fied as Other Necessary Expenses issued by the Internal

11 Revenue Service for the area in which the debtor resides,

12 as in effect on the date of the entry of the order for relief,

13 for the debtor, the dependents of the debtor, and the

14 spouse of the debtor in a joint case, if the spouse is not

15 otherwise a dependent. In addition, if it is demonstrated

16 that it is reasonable and necessary, the debtor may also

17 subtract an allowance of up to 5% of the food and clothing

18 categories as specified by the National Standards issued

19 by the Internal Revenue Service. Notwithstanding any

20 other provision of this clause, the debtor’s monthly ex21 penses shall not include any payments for debts.

22 ‘‘(iii) The debtor’s average monthly payments on ac23 count of secured debts shall be calculated as the total of

24 all amounts scheduled as contractually due to secured
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1 creditors in each month of the 60 months following the

2 date of the petition, and dividing that total by 60 months.

3 ‘‘(iv) The debtor’s monthly unsecured priority debt

4 payments (including payments for priority child support

5 and alimony claims) shall be calculated as the total

6 amount of unsecured debts entitled to priority, and divid7 ing the total by 60 months.

8 ‘‘(v) For the purposes of this subsection, a family or

9 household shall consist of the debtor, the debtor’s spouse,

10 and the debtor’s dependents, but not a legally separated

11 spouse unless the spouse files a joint case with the debtor.

12 ‘‘(B) In any motion filed under this subsection, the

13 presumption of abuse may be rebutted only by dem14 onstrating extraordinary circumstances that require addi15 tional expenses or adjustment of current monthly income.

16 In order to establish extraordinary circumstances, the

17 debtor must itemize each additional expense or adjustment

18 of income and provide documentation for such expenses

19 or adjustment of income and a detailed explanation of the

20 extraordinary circumstances which make such expenses or

21 adjustment of income necessary and reasonable. The debt22 or shall attest under oath to the accuracy of any informa23 tion provided to demonstrate that additional expenses or

24 adjustment to income are required. The presumption of

25 abuse may be rebutted only if such additional expenses
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1 or adjustments to income cause the debtor’s current

2 monthly income less estimated administrative expenses

3 and reasonable attorneys’ fees, and the amounts set forth

4 in clauses (ii), (iii), and (iv) of subparagraph (A) when

5 multiplied by 60 to be less than $6,000.

6 ‘‘(C) No judge, United States trustee, panel trustee,

7 bankruptcy administrator or other party in interest shall

8 bring a motion under this paragraph if the debtor and

9 the debtor’s spouse combined, as of the date of the order

10 for relief, have current monthly total income equal to or

11 less than the regional median household monthly income

12 calculated on a semiannual basis for a household of equal

13 size. However, for a household of more than four individ14 uals, the median income shall be that of a household of

15 four individuals plus $583 for each additional member of

16 that household.

17 ‘‘(3) In considering under paragraph (1) whether the

18 granting of relief would be an abuse of the provisions of

19 this chapter in a case in which the presumption in para20 graph (2)(A)(i) does not apply or has been rebutted, the

21 court shall consider—

22 ‘‘(A) whether the debtor filed the petition in

23 bad faith; or

24 ‘‘(B) the totality of the circumstances (includ25 ing whether the debtor seeks to reject a personal
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1 services contract and the financial need for such re2 jection as sought by the debtor) of the debtor’s fi3 nancial situation demonstrates abuse.

4 ‘‘(4)(A) If a panel trustee appointed under section

5 586(a)(1) of title 28 or bankruptcy administrator brings

6 a motion for dismissal or conversion under this subsection

7 and the court grants that motion and finds that the action

8 of the counsel for the debtor in filing under this chapter

9 violated Rule 9011, the court shall assess damages which

10 may include ordering:

11 ‘‘(i) the counsel for the debtor to reimburse the

12 trustee for all reasonable costs, including reasonable

13 attorneys’ fees.

14 ‘‘(ii) the assessment of an appropriate civil pen15 alty against the counsel for the debtor; and

16 ‘‘(iii) the payment of the civil penalty to the

17 panel trustee, bankruptcy administrator or the

18 United States trustee.

19 ‘‘(B) In the case of a petition filed under sections

20 301, 302, or 303 of this title and supporting lists, sched21 ules and documents filed under section 521(a)(1) of this

22 title, the signature of an attorney on the petition shall con23 stitute a certificate that the attorney has—

24 ‘‘(i) performed a reasonable investigation into

25 the circumstances that gave rise to the petition; and
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1 ‘‘(ii) determined that the petition, lists, sched2 ules, and documents—

3 ‘‘(I) are well grounded in fact; and

4 ‘‘(II) are warranted by existing law or a

5 good faith argument for the extension, modi6 fication, or reversal of existing law and do not

7 constitute an abuse under paragraph (1) of this

8 subsection.

9 ‘‘(5) The court may award a debtor all reasonable

10 costs in contesting a motion filed by a party in interest

11 (not including a trustee or the United States trustee)

12 under this subsection (including reasonable attorneys’

13 fees) if—

14 ‘‘(A) the court does not grant the motion; and

15 ‘‘(B) the court finds that—

16 ‘‘(i) the position of the party that brought

17 the motion was not substantially justified; or

18 ‘‘(ii) the party brought the motion solely

19 for the purpose of coercing a debtor into

20 waiving a right guaranteed to the debtor under

21 this title.

22 ‘‘(6) However, only the court, the United States

23 trustee, or the trustee may file a motion to dismiss or con24 vert a case under this subsection if the current monthly

25 income of the debtor and the debtor’s spouse combined,
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1 as of the date of the order for relief, when multiplied by

2 12, is less than the highest national median family income

3 last reported by the Bureau of the Census for a family

4 of equal or lesser size, or in the case of a household of

5 one person, the national median household income for one

6 earner. Notwithstanding the foregoing, the national me7 dian family income for a family of more than four individ8 uals shall be the national median family income last re9 ported by the Bureau of the Census for a family of four

10 individuals plus $583 for each additional member of the

11 family.

12 ‘‘(7) In making a determination whether to dismiss

13 a case under this section, the court may not take into con14 sideration whether a debtor has made, or continues to

15 make, charitable contributions (that meet the definition

16 of ‘charitable contribution’ under section 548(d)(3)) to

17 any qualified religious or charitable entity or organization

18 (as that term is defined in section 548(d)(4)).

19 ‘‘(8) Not later than 3 years after the date of the en20 actment of the Bankruptcy Reform Act of 1999, the Di21 rector of the Executive Office for United States Trustees

22 shall submit a report, to the Committee on the Judiciary

23 of the House of Representatives and the Committee on

24 the Judiciary of the Senate, containing its findings regard25 ing the utilization of the Internal Revenue Service stand-
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1 ards for determining the current monthly expenses under

2 section 707(b)(1)(A)(ii) of title 11, United States Code,

3 of debtors and the impact that the application of such

4 standards has had on debtors and on the bankruptcy

5 courts. Such report may include recommendations for

6 amendments to such title, consistent with the Director’s

7 findings.’’.

8 (b) DEFINITIONS.—Section 101 of title 11, United

9 States Code, is amended—

10 (1) by inserting after paragraph (10) the fol11 lowing:

12 ‘‘(10A) ‘current monthly income’ means the av13 erage monthly income from all sources derived which

14 the debtor, or in a joint case, the debtor and the

15 debtor’s spouse, receive without regard to whether it

16 is taxable income, in the 180 days preceding the

17 date of determination, and includes any amount paid

18 by anyone other than the debtor or, in a joint case,

19 the debtor and the debtor’s spouse, on a regular

20 basis to the household expenses of the debtor or the

21 debtor’s dependents and, in a joint case, the debtor’s

22 spouse if not otherwise a dependent, but excludes

23 payments to victims of war crimes or crimes against

24 humanity and benefits received under the Social Se25 curity Act;’’; and
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1 (2) by inserting after paragraph (17) the fol2 lowing:

3 ‘‘(17A) ‘estimated administrative expenses and

4 reasonable attorneys’ fees’ means 10 percent of pro5 jected payments under a chapter 13 plan;’’.

6 (c) ADMINISTRATIVE PROVISIONS.—Section 704 of

7 title 11, United States Code, is amended—

8 (1) in paragraph (8) by striking ‘‘and’’ at the

9 end;

10 (2) in paragraph (9) by striking the period at

11 the end and inserting ‘‘; and’’; and

12 (3) by adding at the end the following:

13 ‘‘(10)(A) With respect to an individual debtor,

14 the trustee shall review all materials filed by the

15 debtor, consider all information presented at the

16 first meeting of creditors, and within 10 days after

17 the first meeting of creditors file with the court a

18 statement as to whether or not the debtor’s case

19 should be presumed to be an abuse under section

20 707(b) of this title. The court shall provide a copy

21 of such statement to all creditors within 5 days after

22 such statement is filed. If, based on the filing of

23 such statement with the court, the trustee deter24 mines that the debtor’s case should be presumed to

25 be an abuse under section 707(b) of this title and
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1 if the current monthly income of the debtor and the

2 debtor’s spouse combined, as of the date of the order

3 for relief, when multiplied by 12, is not less than the

4 highest national median family income reported for

5 a family of equal or lesser size, or in the case of a

6 household of one person, the national median house7 hold income for one earner, then the trustee shall

8 within 30 days of the filing of such statement,

9 either—

10 ‘‘(i) file a motion to dismiss or convert

11 under section 707(b) of this title; or

12 ‘‘(ii) file a statement setting forth the rea13 sons the trustee or bankruptcy administrator

14 does not believe that such a motion would be

15 appropriate.

16 ‘‘(B) Notwithstanding subparagraph (A), for

17 purposes of this paragraph the national family in18 come for a family of more than four individuals shall

19 be the national median family income last reported

20 by the Bureau of the Census for a family of four in21 dividuals plus $583 for each additional member of

22 the family.’’.

23 (d) DEBTOR’S DUTIES.—Section 521(a)(1)(B) of

24 title 11, United States Code, as amended by section 603,

25 is amended—
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1 (1) in clause (v) by striking ‘‘and’’ at the end;

2 (2) in clause (vi) by adding ‘‘and’’ at the end;

3 and

4 (3) by inserting the following after clause (vi):

5 ‘‘(vii) a statement of the debtor’s cur6 rent monthly income, and the calculations

7 which determine whether a presumption

8 arises under section 707(b)(2)(A)(i), show9 ing how each amount is calculated.’’.

10 (e) BANKRUPTCY FORMS.—Section 2075 of title 28,

11 United States Code, is amended by adding the following

12 at the end of the first paragraph:

13 ‘‘The bankruptcy rules promulgated under this section

14 shall prescribe a form for the statement referred to in sec15 tion 521(a)(1)(B)(vii) of title 11, United States Code, and

16 may provide general rules on the content of such state17 ment.’’.

18 (f) CHAPTER 13.—Section 1325(a) of title 11, United

19 States Code, is amended—

20 (1) in paragraph (5) by striking ‘‘and’’ at the

21 end;

22 (2) in paragraph (6) by striking the period and

23 inserting ‘‘; and’’; and

24 (3) by inserting the following after paragraph

25 (6):
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1 ‘‘(7) the action of the debtor in filing the peti2 tion under this chapter was in good faith.’’.

3 (g) CLERICAL AMENDMENT.—The table of sections

4 at the beginning of chapter 7 of title 11, United States

5 Code, is amended by striking the item relating to section

6 707 and inserting the following:

‘‘707. Dismissal of a case or conversion to a case under chapter 13.’’.

7 SEC. 103. NOTICE OF ALTERNATIVES.

8 Section 342(b) of title 11, United States Code, is

9 amended to read as follows:

10 ‘‘(b) Before the commencement of a case under this

11 title by an individual whose debts are primarily consumer

12 debts, the clerk shall give to such individual written notice

13 containing—

14 ‘‘(1) a brief description of—

15 ‘‘(A) chapters 7, 11, 12, and 13 and the

16 general purpose, benefits, and costs of pro17 ceeding under each of those chapters; and

18 ‘‘(B) the types of services available from

19 credit counseling agencies; and

20 ‘‘(2) statements specifying that—

21 ‘‘(A) a person who knowingly and fraudu22 lently conceals assets or makes a false oath or

23 statement under penalty of perjury in connec24 tion with a bankruptcy case shall be subject to

25 fine, imprisonment, or both; and
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1 ‘‘(B) all information supplied by a debtor

2 in connection with a bankruptcy case is subject

3 to examination by the Attorney General.’’.

4 SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING

5 TEST PROGRAM.

6 (a) DEVELOPMENT OF FINANCIAL MANAGEMENT

7 AND TRAINING CURRICULUM AND MATERIALS.—The Di8 rector of the Executive Office for United States Trustees

9 (in this section referred to as the ‘‘Director’’) shall consult

10 with a wide range of individuals who are experts in the

11 field of debtor education, including trustees who are ap12 pointed under chapter 13 of title 11, United States Code,

13 and who operate financial management education pro14 grams for debtors, and shall develop a financial manage15 ment training curriculum and materials that can be used

16 to educate individual debtors on how to better manage

17 their finances.

18 (b) TEST—(1) The Director shall select 6 judicial dis19 tricts of the United States in which to test the effective20 ness of the financial management training curriculum and

21 materials developed under subsection (a).

22 (2) For a 18-month period beginning not later than

23 270 days after the date of the enactment of this Act, such

24 curriculum and materials shall be, for the 6 judicial dis25 tricts selected under paragraph (1), used as the instruc-
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1 tional course concerning personal financial management

2 for purposes of section 111 of title 11, United States

3 Code.

4 (c) EVALUATION.—(1) During the 1-year period re5 ferred to in subsection (b), the Director shall evaluate the

6 effectiveness of—

7 (A) the financial management training cur8 riculum and materials developed under subsection

9 (a); and

10 (B) a sample of existing consumer education

11 programs such as those described in the Report of

12 the National Bankruptcy Review Commission (Octo13 ber 20, 1997) that are representative of consumer

14 education programs carried out by the credit indus15 try, by trustees serving under chapter 13 of title 11,

16 United States Code, and by consumer counselling

17 groups.

18 (2) Not later than 3 months after concluding such

19 evaluation, the Director shall submit a report to the

20 Speaker of the House of Representatives and the Presi21 dent pro tempore of the Senate, for referral to the appro22 priate committees of the Congress, containing the findings

23 of the Director regarding the effectiveness of such cur24 riculum, such materials, and such programs and their

25 costs.
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1 Subtitle B—Consumer Bankruptcy

2 Protections

3 SEC. 105. DEFINITIONS.

4 (a) DEFINITIONS.—Section 101 of title 11, United

5 States Code, is amended—

6 (1) by inserting after paragraph (2) the fol7 lowing:

8 ‘‘(3) ‘assisted person’ means any person whose

9 debts consist primarily of consumer debts and whose

10 non-exempt assets are less than $150,000;’’;

11 (2) by inserting after paragraph (4) the fol12 lowing:

13 ‘‘(4A) ‘bankruptcy assistance’ means any goods

14 or services sold or otherwise provided to an assisted

15 person with the express or implied purpose of pro16 viding information, advice, counsel, document prepa17 ration or filing, or attendance at a creditors’ meeting

18 or appearing in a proceeding on behalf of another or

19 providing legal representation with respect to a pro20 ceeding under this title;’’; and

21 (3) by inserting after paragraph (12A) the fol22 lowing:

23 ‘‘(12B) ‘debt relief agency’ means any person

24 who provides any bankruptcy assistance to an as25 sisted person in return for the payment of money or
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1 other valuable consideration, or who is a bankruptcy

2 petition preparer pursuant to section 110 of this

3 title, but does not include any person that is any of

4 the following or an officer, director, employee or

5 agent thereof—

6 ‘‘(A) any nonprofit organization which is

7 exempt from taxation under section 501(c)(3)

8 of the Internal Revenue Code of 1986;

9 ‘‘(B) any creditor of the person to the ex10 tent the creditor is assisting the person to re11 structure any debt owed by the person to the

12 creditor; or

13 ‘‘(C) any depository institution (as defined

14 in section 3 of the Federal Deposit Insurance

15 Act) or any Federal credit union or State credit

16 union (as those terms are defined in section

17 101 of the Federal Credit Union Act), or any

18 affiliate or subsidiary of such a depository insti19 tution or credit union;’’.

20 (b) CONFORMING AMENDMENT.—In section

21 104(b)(1) by inserting ‘‘101(3),’’ after ‘‘sections’’.

22 SEC. 106. ENFORCEMENT.

23 (a) ENFORCEMENT.—Subchapter II of chapter 5 of

24 title 11, United States Code, is amended by adding at the

25 end the following:
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1 ‘‘§ 526. Debt relief agency enforcement

2 ‘‘(a) A debt relief agency shall not—

3 ‘‘(1) fail to perform any service which the debt

4 relief agency has told the assisted person or prospec5 tive assisted person the agency would provide that

6 person in connection with the preparation for or ac7 tivities during a case or proceeding under this title;

8 ‘‘(2) make any statement, or counsel or advise

9 any assisted person to make any statement in any

10 document filed in a case or proceeding under this

11 title, which is untrue and misleading or which upon

12 the exercise of reasonable care, should be known by

13 the debt relief agency to be untrue or misleading;

14 ‘‘(3) misrepresent to any assisted person or pro15 spective assisted person, directly or indirectly, af16 firmatively or by material omission, what services

17 the debt relief agency can reasonably expect to pro18 vide that person, or the benefits an assisted person

19 may obtain or the difficulties the person may experi20 ence if the person seeks relief in a proceeding pursu21 ant to this title; or

22 ‘‘(4) advise an assisted person or prospective

23 assisted person to incur more debt in contemplation

24 of that person filing a case under this title or in

25 order to pay an attorney or bankruptcy petition pre26 parer fee or charge for services performed as part of
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1 preparing for or representing a debtor in a case

2 under this title.’’.

3 ‘‘(b) ASSISTED PERSON WAIVERS INVALID.—Any

4 waiver by any assisted person of any protection or right

5 provided by or under this section shall not be enforceable

6 against the debtor by any Federal or State court or any

7 other person, but may be enforced against a debt relief

8 agency.

9 ‘‘(c) NONCOMPLIANCE.—

10 ‘‘(1) Any contract between a debt relief agency

11 and an assisted person for bankruptcy assistance

12 which does not comply with the material require13 ments of this section shall be treated as void and

14 may not be enforced by any Federal or State court

15 or by any other person.

16 ‘‘(2) Any debt relief agency shall be liable to an

17 assisted person in the amount of any fees or charges

18 in connection with providing bankruptcy assistance

19 to such person which the debt relief agency has re20 ceived, for actual damages, and for reasonable attor21 neys’ fees and costs if the debt relief agency is

22 found, after notice and hearing, to have—

23 ‘‘(A) intentionally or negligently failed to

24 comply with any provision of this section with
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1 respect to a bankruptcy case or related pro2 ceeding of the assisted person;

3 ‘‘(B) provided bankruptcy assistance to an

4 assisted person in a case or related proceeding

5 which is dismissed or converted because of the

6 debt relief agency’s intentional or negligent fail7 ure to file bankruptcy papers, including papers

8 specified in section 521 of this title; or

9 ‘‘(C) intentionally or negligently dis10 regarded the material requirements of this title

11 or the Federal Rules of Bankruptcy Procedure

12 applicable to such debt relief agency.

13 ‘‘(3) In addition to such other remedies as are

14 provided under State law, whenever the chief law en15 forcement officer of a State, or an official or agency

16 designated by a State, has reason to believe that any

17 person has violated or is violating this section, the

18 State—

19 ‘‘(A) may bring an action to enjoin such

20 violation;

21 ‘‘(B) may bring an action on behalf of its

22 residents to recover the actual damages of as23 sisted persons arising from such violation, in24 cluding any liability under paragraph (2); and
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1 ‘‘(C) in the case of any successful action

2 under subparagraph (A) or (B), shall be award3 ed the costs of the action and reasonable attor4 ney fees as determined by the court.

5 ‘‘(4) The United States District Court for any

6 district located in the State shall have concurrent ju7 risdiction of any action under subparagraph (A) or

8 (B) of paragraph (3).

9 ‘‘(5) Notwithstanding any other provision of

10 Federal law and in addition to any other remedy

11 provided under Federal or State law, if the court, on

12 its own motion or on the motion of the United

13 States trustee or the debtor, finds that a person in14 tentionally violated this section, or engaged in a

15 clear and consistent pattern or practice of violating

16 this section, the court may—

17 ‘‘(A) enjoin the violation of such section; or

18 ‘‘(B) impose an appropriate civil penalty

19 against such person.

20 ‘‘(c) RELATION TO STATE LAW.—This section shall

21 not annul, alter, affect or exempt any person subject to

22 those sections from complying with any law of any State

23 except to the extent that such law is inconsistent with

24 those sections, and then only to the extent of the inconsist25 ency.’’.
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1 (b) CONFORMING AMENDMENT.—The table of sec2 tions for chapter 5 of title 11, United States Code, is

3 amended by inserting after the item relating to section

4 527, the following:

‘‘526. Debt relief agency enforcement.’’.

5 SEC. 107. SENSE OF THE CONGRESS.

6 It is the sense of the Congress that States should de7 velop curricula relating to the subject of personal finance,

8 designed for use in elementary and secondary schools.

9 SEC. 108. DISCOURAGING ABUSIVE REAFFIRMATION PRAC10 TICES.

11 Section 524 of title 11, United States Code, is

12 amended—

13 (1) in subsection (c)—

14 (A) in paragraph (2)—

15 (i) in subparagraph (A) by striking

16 ‘‘and’’ at the end;

17 (ii) in subparagraph (B) by adding

18 ‘‘and’’ at the end; and

19 (iii) by adding at the end the fol20 lowing:

21 ‘‘(C) if the consideration for such agreement is

22 based on a wholly unsecured consumer debt (except

23 for debts owed to creditors defined in section

24 461(b)(1)(A)(iv) of title 12, United States Code),
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1 such agreement contains a clear and conspicuous

2 statement which advises the debtor—

3 ‘‘(i) that the debtor is entitled to a hearing

4 before the court at which the debtor shall ap5 pear in person and at which the court will de6 cide whether the agreement is an undue hard7 ship, not in the debtor’s best interest, and not

8 the result of a threat by the creditor to take

9 any action that cannot be legally taken or that

10 is not intended to be taken; and

11 ‘‘(ii) that if the debtor is represented by

12 counsel, the debtor may waive the debtor’s right

13 to such a hearing by signing a statement

14 waiving the hearing, stating that the debtor is

15 represented by counsel, and identifying such

16 counsel;’’; and

17 (B) in paragraph (6)(A)—

18 (i) by striking ‘‘and’’ at the end of

19 clause (i);

20 (ii) by striking the period at the end

21 of clause (ii) and inserting ‘‘; and’’; and

22 (iii) by adding at the end thereof the

23 following:

24 ‘‘(iii) not entered into by the debtor as the

25 result of a threat by the creditor to take any
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1 action that cannot be legally taken or that is

2 not intended to be taken.’’; and

3 (2) in the third sentence of subsection (d)—

4 (A) by striking ‘‘of this section’’ and in5 serting a comma; and

6 (B) by inserting after ‘‘such agreement’’

7 the following:

8 ‘‘or if the consideration for such agreement is based on

9 a wholly unsecured consumer debt (except for debts owed

10 to creditors defined in section 461(b)(1)(A)(iv) of title 12,

11 United States Code) and the debtor has not waived the

12 debtor’s right to a hearing on the agreement in accordance

13 with subsection (c)(2)(C) of this section’’.

14 SEC. 109. PROMOTION OF ALTERNATIVE DISPUTE RESOLU15 TION.

16 (a) REDUCTION OF CLAIM.—Section 502 of title 11,

17 United States Code, is amended by adding at the end the

18 following:

19 ‘‘(k)(1) The court, on the motion of the debtor and

20 after a hearing, may reduce a claim filed under this sec21 tion based wholly on unsecured consumer debts by not

22 more than 20 percent, if the debtor can prove by clear

23 and convincing evidence that the claim was filed by a cred24 itor who unreasonably refused to negotiate a reasonable

25 alternative repayment schedule proposed by an approved
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1 credit counseling agency acting on behalf of the debtor,

2 and if—

3 ‘‘(A) such offer was made within the period be4 ginning 60 days before the filing of the petition;

5 ‘‘(B) such offer provided for payment of at least

6 60 percent of the amount of the debt over a period

7 not to exceed the repayment period of the loan, or

8 a reasonable extension thereof; and

9 ‘‘(C) no part of the debt under the alternative

10 repayment schedule is nondischargeable, is entitled

11 to priority under section 507 of this title, or would

12 be paid a greater percentage in a chapter 13 pro13 ceeding than offered by the debtor.

14 ‘‘(2) The debtor shall have the burden of proving that

15 the proposed alternative repayment schedule was made in

16 the 60-day period specified in subparagraph (A) and that

17 the creditor unreasonably refused to consider the debtor’s

18 proposal.’’.

19 (b) LIMITATION ON AVOIDABILITY.—Section 547 of

20 title 11, United States Code, is amended by adding at the

21 end the following:

22 ‘‘(h) The trustee may not avoid a transfer if such

23 transfer was made as a part of an alternative repayment

24 plan between the debtor and any creditor of the debtor

25 created by an approved credit counseling agency.’’.
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1 SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTEN2 SIONS SECURED BY A DWELLING.

3 (a) STUDY REQUIRED.—During the period beginning

4 180 days after the date of the enactment of this Act and

5 ending 18 months after the date of the enactment, the

6 Board of Governors of the Federal Reserve System (in this

7 section referred to as the ‘‘Board’’) shall conduct a study

8 and submit to Congress a report (including recommenda9 tions for any appropriate legislation) regarding—

10 (1) whether a consumer engaging in an open11 end credit transaction (as defined pursuant to sec12 tion 103 of the Truth in lending Act) secured by the

13 consumer’s principal dwelling is provided adequate

14 information under Federal law, including under sec15 tion 127A of the Truth in Lending Act, regarding

16 the tax deductibility of interest paid on such trans17 action; and

18 (2) whether a consumer engaging in a closed19 end credit transaction (as defined pursuant to sec20 tion 103 of the Truth in Lending Act) secured by

21 the consumer’s principal dwelling is provided ade22 quate information regarding the tax deductibility of

23 interest paid on such transaction.

24 In conducting such study, the Board shall specifically con25 sider whether additional disclosures are necessary with re26 spect to such open-end or closed-end credit transactions
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1 in which the amount of the credit extended exceeds the

2 fair market value of the dwelling.

3 (b) REGULATIONS.—If the Board determines that ad4 ditional disclosures are necessary in connection with trans5 actions described in subsection (a), the Board, pursuant

6 to its authority under the Truth in Lending Act, may pro7 mulgate regulations that would require such additional

8 disclosures. Any such regulations promulgated by the

9 Board under this section shall not take effect before the

10 end of the 36-month period after the date of the enact11 ment of this Act.

12 SEC. 111. DUAL USE DEBIT CARD.

13 (a) STUDY REQUIRED.—The Board of Governors of

14 the Federal Reserve System (in this section referred to

15 as the ‘‘Board’’) shall conduct a study of existing protec16 tions provided to consumers to limit their liability for un17 authorized use of a debit card or similar access device.

18 (b) SPECIFIC CONSIDERATIONS.—In conducting the

19 study required by subsection (a), the Board shall specifi20 cally consider the following—

21 (1) the extent to which existing provisions of

22 section 909 of the Electronic Fund Transfer Act and

23 the Board’s implementing regulations provide ade24 quate unauthorized use liability protection for con25 sumers;
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1 (2) the extent to which any voluntary industry

2 rules have enhanced the level of protection afforded

3 consumers in connection with such unauthorized use

4 liability; and

5 (3) whether amendments to the Electronic

6 Funds Transfer Act or the Board’s implementing

7 regulations thereto are necessary to provide ade8 quate protection for consumers in this area.

9 (c) REPORT AND REGULATIONS.—Not later than 2

10 years after the date of the enactment of this Act, the

11 Board shall make public a report on its findings with re12 spect to the adequacy of existing protections afforded con13 sumers with respect to unauthorized-use liability for debit

14 cards and similar access devices. If the Board determines

15 that such protections are inadequate, the Board, pursuant

16 to its authority under the Electronic Funds Transfer Act,

17 may issue regulations to address such inadequacy. Any

18 regulations issued by the Board shall not be effective be19 fore 36 months after the date of the enactment of this

20 Act.

21 SEC. 112. ENHANCED DISCLOSURES UNDER AN OPEN-END

22 CREDIT PLAN.

23 (a) INITIAL AND ANNUAL MINIMUM PAYMENT DIS24 CLOSURE.—Section 127(a) of the Truth in Lending Act
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1 (15 U.S.C. 1637(a)) is amended by adding at the end the

2 following:

3 ‘‘(9) In the case of any credit or charge card

4 account under an open-end consumer credit plan on

5 which a minimum monthly or periodic payment will

6 be required, other than an account described in

7 paragraph (8)—

8 ‘‘(A) the following statement: ‘The min9 imum payment amount shown on your billing

10 statement is the smallest payment which you

11 can make in order to keep the account in good

12 standing. This payment option is offered as a

13 convenience and you may make larger payments

14 at any time. Making only the minimum pay15 ment each month will increase the amount of

16 interest you pay and the length of time it takes

17 to repay your outstanding balance.’;

18 ‘‘(B) if the plan provides that the con19 sumer will be permitted to forgo making a min20 imum payment during a specified billing cycle,

21 a statement, if applicable, that if the consumer

22 chooses to forgo making the minimum payment,

23 finance charges will continue to accrue; and

24 ‘‘(C) the following examples:
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1 ‘‘(i) if the average account balance

2 under a creditor’s open-end consumer cred3 it plan, taken as an average of the account

4 balances for all consumer accounts under

5 that open-end consumer credit plan, is

6 $1,000 or less, two examples, based on an

7 annual percentage rate and method for de8 termining minimum periodic payments re9 cently in effect for that creditor, and based

10 on outstanding balances of $250 and $500,

11 showing the estimated minimum periodic

12 payments, and the estimated period of time

13 it would take to repay those outstanding

14 balances of $250 and $500, if the con15 sumer paid only the minimum periodic

16 payment on each monthly or periodic state17 ment and obtained no additional extensions

18 of credit; or

19 ‘‘(ii) if the average account balance

20 under a creditor’s open-end consumer cred21 it plan, taken as an average of the account

22 balances for all consumer accounts under

23 that open-end consumer credit plan, is

24 more than $1,000, three examples, based

25 on an annual percentage rate and method
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1 for determining minimum periodic pay2 ments recently in effect for that creditor,

3 and outstanding balances of $1,000,

4 $1,500 and $2,000, showing the estimated

5 minimum periodic payments, and the esti6 mated period of time it would take to

7 repay those outstanding balances of

8 $1,000, $1,500 and $2,000 if the con9 sumer paid only the minimum periodic

10 payment on each monthly or periodic state11 ment and obtained no additional extensions

12 of credit.

13 ‘‘(10) With respect to one billing cycle per cal14 endar year, the creditor shall transmit to each con15 sumer to whom the creditor is required to transmit

16 a statement pursuant to subsection (b) for such bill17 ing cycle the following information:

18 ‘‘(A) the following statement: ‘The min19 imum payment amount shown on your billing

20 statement is the smallest payment which you

21 can make in order to keep the account in good

22 standing. This payment option is offered as a

23 convenience and you may make larger payments

24 at any time. Making only the minimum pay25 ment each month will increase the amount of
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1 interest you pay and the length of time it takes

2 to repay your outstanding balance.’;

3 ‘‘(B) if the plan provides that the con4 sumer will be permitted to forgo making a min5 imum payment during a specified billing cycle,

6 a statement, if applicable, that if the consumer

7 chooses to forgo making the minimum payment,

8 finance charges will continue to accrue;

9 ‘‘(C) an example, based on an annual per10 centage rate and method for determining min11 imum periodic payments recently in effect for

12 that creditor, and a $500 outstanding balance,

13 showing the estimated minimum periodic pay14 ment, and the estimated period of time it would

15 take to repay the $500 outstanding balance if

16 the consumer paid only the minimum periodic

17 payment on each monthly or periodic statement

18 and obtained no additional extensions of credit;

19 and

20 ‘‘(D) a worksheet prescribed by the Board

21 to assist the consumer in determining the con22 sumer’s household income and debt obliga23 tions.’’.
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1 (b) PERIODIC MINIMUM PAYMENT DISCLOSURES.—

2 Section 127(b) of the Truth in Lending Act (15 U.S.C.

3 1637(b)) is amended by adding at the end the following:

4 ‘‘(11) The following statement: ‘The minimum

5 payment amount shown on your billing statement is

6 the smallest payment which you can make in order

7 to keep the account in good standing. This payment

8 option is offered as a convenience and you may

9 make larger payments at any time. Making only the

10 minimum payment each month will increase the

11 amount of interest you pay and the length of time

12 it takes to repay your outstanding balance.’.

13 ‘‘(12) the required minimum payment amount

14 represented as a dollar figure.

15 ‘‘(13) the date by which or the period within

16 which the required minimum payment must be

17 made.’’.

18 (c) DISCLOSURES RELATED TO INTRODUCTORY

19 RATES.—Section 127(c)(1)(A)(i) of the Truth in Lending

20 Act (15 U.S.C. 1637(c)(1)(A)(i)) is amended by inserting

21 the following at the end of subclause (III):

22 ‘‘(IV) Where the initial rate is tem23 porary and will expire within a period of

24 less than 1 year, and is lower than the rate
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1 that will apply after the temporary rate

2 expires—

3 ‘‘(A) the time period during

4 which the initial rate will remain in

5 effect; and

6 ‘‘(B) the annual percentage rate

7 that will apply to the account after

8 the temporary rate expires, or if that

9 rate is a variable rate, the fact that

10 the rate is variable, the rate at the

11 time of mailing, and how the rate is

12 determined.

13 ‘‘(V)(A) Subject to subclauses (C) and

14 (D), where the initial rate may increase

15 upon the occurrence of one or more spe16 cific events, the following information:

17 ‘‘(i) the initial rate and the in18 creased rate that may apply;

19 ‘‘(ii) if the increased rate is a

20 variable rate, the fact that the in21 creased rate is variable, the rate at

22 the time of mailing, and how the rate

23 is determined; and
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1 ‘‘(iii) the specific event or events

2 that may result in imposing the in3 creased rate.

4 ‘‘(B) At the creditor’s option, the

5 creditor may disclose the period for which

6 the increased rate will remain in effect.

7 ‘‘(C) If the increased rate cannot be

8 determined at the time disclosures are

9 given, an explanation of the specific event

10 or events that may result in an increased

11 rate must be disclosed.

12 ‘‘(D) A creditor is not required to dis13 close an increased rate that is imposed

14 when credit privileges are permanently ter15 minated.’’.

16 (d) INTERNET-BASED CREDIT CARD SOLICITA17 TIONS.—(1)––Section 127(c) of the Truth in Lending Act

18 (15 U.S.C. 1637(c)) is amended by inserting after para19 graph (5) the following:

20 ‘‘(6)(A) Any application to open a credit card

21 account for any person under an open-end consumer

22 credit plan, and any solicitation to open such an ac23 count without requiring an application, that is made

24 available through the Internet or an interactive com25 puter service, shall disclose the following:
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1 ‘‘(i) the information.—

2 ‘‘(I) described in paragraph (1)(A) in

3 the form required under section 122(c) of

4 this chapter, subject to subsection (e); and

5 ‘‘(II) described in paragraph (1)(B) in

6 a clear and conspicuous form, subject to

7 subsections (e) and (f);

8 ‘‘(ii) a statement, in a conspicuous and

9 prominent location on or with the application or

10 solicitation, that—

11 ‘‘(I) the information is accurate as of

12 the date the application or solicitation was

13 posted;

14 ‘‘(II) the information contained in the

15 application or solicitation is subject to

16 change after such date;

17 ‘‘(III) the applicant should contact the

18 creditor for information on any change in

19 the information presented on or with the

20 application or solicitation since it was post21 ed;

22 ‘‘(iii) a clear and conspicuous disclosure of

23 the date the application or solicitation was post24 ed and how frequently the information de25 scribed in subclause (i) is updated; and
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1 ‘‘(iv) a disclosure, in a conspicuous and

2 prominent location on or with the application or

3 solicitation, of a toll-free telephone number or

4 e-mail address at which the applicant may con5 tact the creditor to obtain any change in the in6 formation provided on or with the application or

7 solicitation since it was posted.

8 ‘‘(B) The disclosures required under subparagraph

9 (A) may be contained either:

10 ‘‘(i) on the webpage which contains the applica11 tion or solicitation; or

12 ‘‘(ii) on a separate webpage which can be di13 rectly accessed using a hypertext link which is con14 tained on the webpage which contains the applica15 tion or solicitation.

16 ‘‘(C) Upon receipt of a request for any of the infor17 mation referred to in subparagraph (A), the creditor or

18 its agent shall promptly disclose any change in the infor19 mation required to be disclosed under subparagraph (A).

20 ‘‘(D) For purposes of this paragraph (6)—

21 ‘‘(i) the term ‘Internet’ means the international

22 computer network of both Federal and non-Federal

23 interoperable packets switched data networks; and

24 ‘‘(ii) the term ‘interactive computer service’

25 means any information service system, or access
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1 software provider that provides or enables computer

2 access by multiple users to a computer server, in3 cluding specifically a service or system that provides

4 access to the Internet and such systems operated or

5 services offered by libraries or educational institu6 tions.’’.

7 (2) Section 122(c)(1) of the Truth in Lending Act

8 (15 U.S.C. 1632(c)(1)) is amended by striking ‘‘and

9 (4)(C)(i)(I)’’ and inserting ‘‘, (4)(C)(i)(I) and

10 (6)(A)(i)(I)’’.

11 (e) ENFORCEMENT.—Section 127 of the Truth in

12 Lending Act (15 U.S.C. 1637) is amended by adding at

13 the end the following:

14 ‘‘(h) In promulgating regulations to implement the

15 disclosure of an example required under subsection

16 (a)(9)(C) and (a)(10), the Board shall set forth a model

17 disclosure to accompany the example stating that the cred18 it features shown are only an example which does not obli19 gate the creditor, but is intended to illustrate the approxi20 mate length of time it could take to repay using the as21 sumptions set forth in subsection (a)(9)(C) without regard

22 to any other factors that could impact an approximate re23 payment period, including other credit features or the con24 sumer’s payment or other behavior with respect to the ac25 count. Compliance with the disclosures required under
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1 subsection (a)(9)(C) and (a)(10) shall be enforced exclu2 sively by the Federal agencies set forth in section 108.’’.

3 (f) REGULATORY IMPLEMENTATION.—The Board of

4 Governors of the Federal Reserve System (in this section

5 referred to as the ‘‘Board’’) shall promulgate regulations

6 implementing the amendments made by subsections (a)

7 and (b). Such regulations shall take effect no earlier than

8 the end of the 36-month period beginning on the date of

9 the enactment of this Act.

10 (g) STUDY REQUIRED.—The Board shall conduct a

11 study to determine whether consumers have adequate in12 formation about borrowing activities which may result in

13 financial problems. In studying this issue, the Board shall

14 consider the extent to which—

15 (1) consumers, in establishing new credit ar16 rangements, are aware of their existing payment ob17 ligations, the need to consider those obligations in

18 deciding to take on new credit, and how taking on

19 excessive credit can result in financial difficulty;

20 (2) minimum periodic payment features offered

21 in connection with open-end credit plans impact con22 sumer default rates;

23 (3) consumers always make only the minimum

24 payment throughout the life of the plan;
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1 (4) consumers are aware that making only min2 imum payments will increase the cost and repayment

3 period of an open-end loan; and

4 (5) the availability of low minimum payment

5 options is a cause of consumers experiencing finan6 cial difficulty.

7 (h) REPORT TO CONGRESS.—Before the end of the

8 2-year period beginning on the date of the enactment of

9 this Act, the Board shall submit to Congress a report con10 taining the findings of the Board in connection with the

11 study required under subsection (g).

12 (i) REGULATIONS.—The Board shall, by regulation

13 promulgated pursuant to its authority under the Truth in

14 Lending Act, require additional disclosures to consumers

15 regarding minimum payment features, including periodic

16 statement disclosures, if the Board determines that such

17 disclosures are necessary based on its findings. Any such

18 regulations promulgated by the Board shall not take effect

19 earlier than January 1, 2002.

20 SEC. 113. PROTECTION OF SAVINGS EARMARKED FOR THE

21 POSTSECONDARY EDUCATION OF CHILDREN.

22 Section 522 of title 11, United States Code, is

23 amended—

24 (1) in subsection (b)(2)—
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1 (A) in subparagraph (A) by striking ‘‘and’’

2 at the end;

3 (B) in subparagraph (B) by striking the

4 period at the end and inserting ‘‘; and’’; and

5 (C) by adding at the end the following:

6 ‘‘(C) except as provided in paragraph (n), funds

7 placed in an education individual retirement account

8 (as defined in section 530(b)(1) of the Internal Rev9 enue Code of 1986) not less than 365 days before

10 the date of entry of the order of relief but only to

11 the extent such funds—

12 ‘‘(i) are not pledged or promised to any en13 tity in connection with any extension of credit;

14 and

15 ‘‘(ii) are not excess contributions (as de16 scribed in section 4973(e) of the Internal Rev17 enue Code of 1986).’’; and

18 (2) by adding at the end the following:

19 ‘‘(n) For purposes of subsection (b)(3)(C), funds

20 placed in an education individual retirement account shall

21 not be exempt under this subsection—

22 ‘‘(1) unless the designated beneficiary of such

23 account was a dependent child of the debtor for the

24 taxable year for which the funds were placed in such

25 account; and
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1 ‘‘(2) to the extent such funds exceed—

2 ‘‘(A) $50,000 in the aggregate in all such

3 accounts having the same designated bene4 ficiary; or

5 ‘‘(B) $100,000 in the aggregate in all such

6 accounts attributable to all such dependent chil7 dren of the debtor.’’.

8 SEC. 114. EFFECT OF DISCHARGE.

9 Section 524 of title 11, United States Code, is

10 amended by adding at the end the following:

11 ‘‘(i) The willful failure of a creditor to credit pay12 ments received under a plan confirmed under this title (in13 cluding a plan of reorganization confirmed under chapter

14 11 of this title) in the manner required by the plan (in15 cluding crediting the amounts required under the plan)

16 shall constitute a violation of any injunction under sub17 section (a)(2) which has arisen at the time of the failure.

18 ‘‘(j)(1) An individual who is injured by the willful fail19 ure of a creditor to comply with the requirements for a

20 reaffirmation agreement under subsections (c) and (d), or

21 by any willful violation of the injunction under subsection

22 (a)(2), shall be entitled to recover—

23 ‘‘(A) the greater of—

24 ‘‘(i) the amount of actual damages; or

25 ‘‘(ii) $1,000; and
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1 ‘‘(B) costs and attorneys’ fees.

2 ‘‘(2) An action to recover for a violation specified in

3 paragraph (1) may not be brought as a class action.’’.

4 SEC. 115. LIMITING TRUSTEE LIABILITY.

5 (a) QUALIFICATION OF TRUSTEE.—Section 322 of

6 title 11, United States Code, is amended—

7 (1) in subsection (a) by adding at the end the

8 following:

9 ‘‘The trustee in a case under this title is not liable

10 personally or on such trustee’s bond for acts taken

11 within the scope of the trustee’s duties or authority

12 as delineated by other sections of this title or by

13 order of the court, except to the extent that the

14 trustee acted with gross negligence. Gross negligence

15 shall be defined as reckless indifference or deliberate

16 disregard of the trustee’s fiduciary duty.’’; and

17 (2) in subsection (c) by inserting ‘‘for any acts

18 within the scope of the trustee’s authority defined in

19 subsection (a)’’ before the period at the end.

20 (b) ROLE AND CAPACITY OF TRUSTEE.—Section 323

21 of title 11, United States Code, is amended—

22 (1) in subsection (b) by inserting at the end the

23 following: ‘‘in the trustee’s official capacity as rep24 resentative of the estate’’ before the period at the

25 end; and
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1 (2) by adding at the end the following:

2 ‘‘(c) The trustee in a case under this title may not

3 be sued, either personally, in a representative capacity, or

4 against the trustee’s bond in favor of the United States—

5 ‘‘(1) for acts taken in furtherance of the trust6 ee’s duties or authority in a case in which the debtor

7 is subsequently determined to be ineligible for relief

8 under the chapter in which the trustee was ap9 pointed; or

10 ‘‘(2) for the dissemination of statistics and

11 other information regarding a case or cases, unless

12 the trustee has actual knowledge that the informa13 tion is false.

14 ‘‘(d) The trustee in a case under this title may not

15 be sued in a personal capacity without leave of the bank16 ruptcy court in which the case is pending.’’.

17 SEC. 116. REINFORCE THE FRESH START.

18 (a) RESTORATION OF AN EFFECTIVE DISCHARGE.—

19 Section 523(a)(17) of title 11, United States Code, is

20 amended—

21 (1) by striking ‘‘by a court’’ and inserting ‘‘by

22 any court’’;

23 (2) by striking ‘‘section 1915(b) or (f)’’ and in24 serting ‘‘subsection (b) or (f)(2) of section 1915’’;

25 and
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1 (3) by inserting ‘‘(or a similar non-Federal

2 law)’’ after ‘‘title 28’’ each place it appears.

3 SEC. 117. DISCOURAGING BAD FAITH REPEAT FILINGS.

4 Section 362(c) of title 11, United States Code, is

5 amended—

6 (1) in paragraph (1) by striking ‘‘and’’ at the

7 end;

8 (2) in paragraph (2) by striking the period at

9 the end and inserting a semicolon; and

10 (3) by adding at the end the following new

11 paragraphs:

12 ‘‘(3) If a single or joint case is filed by or

13 against an individual debtor under chapter 7, 11, or

14 13 (other than a case refiled under a chapter other

15 than chapter 7 after dismisssal under section 707(b)

16 of this title), and if a single or joint case of the debt17 or was pending within the previous 1-year period but

18 was dismissed, the stay under subsection (a) with re19 spect to any action taken with respect to a debt or

20 property securing such debt or with respect to any

21 lease will terminate with respect to the debtor on the

22 30th day after the filing of the later case. Upon mo23 tion by a party in interest for continuation of the

24 automatic stay and upon notice and a hearing, the

25 court may extend the stay in particular cases as to
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1 any or all creditors (subject to such conditions or

2 limitations as the court may then impose) after no3 tice and a hearing completed before the expiration of

4 the 30-day period only if the party in interest dem5 onstrates that the filing of the later case is in good

6 faith as to the creditors to be stayed. A case is pre7 sumptively filed not in good faith (but such pre8 sumption may be rebutted by clear and convincing

9 evidence to the contrary)—

10 ‘‘(A) as to all creditors if—

11 ‘‘(i) more than one previous case

12 under any of chapter 7, 11, or 13 in which

13 the individual was a debtor was pending

14 within such 1-year period;

15 ‘‘(ii) a previous case under any of

16 chapters 7, 11, or 13 in which the indi17 vidual was a debtor was dismissed within

18 such 1-year period, after the debtor failed

19 to file or amend the petition or other docu20 ments as required by this title or the court

21 without substantial excuse (but mere inad22 vertence or negligence shall not be sub23 stantial excuse unless the dismissal was

24 caused by the negligence of the debtor’s at25 torney), failed to provide adequate protec-
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1 tion as ordered by the court, or failed to

2 perform the terms of a plan confirmed by

3 the court; or

4 ‘‘(iii) there has not been a substantial

5 change in the financial or personal affairs

6 of the debtor since the dismissal of the

7 next most previous case under any of chap8 ters 7, 11, or 13 of this title, or there is

9 not any other reason to conclude that the

10 later case will be concluded, if a case under

11 chapter 7 of this title, with a discharge,

12 and if a chapter 11 or 13 case, a con13 firmed plan which will be fully performed;

14 ‘‘(B) as to any creditor that commenced an

15 action under subsection (d) in a previous case

16 in which the individual was a debtor if, as of

17 the date of dismissal of such case, that action

18 was still pending or had been resolved by termi19 nating, conditioning, or limiting the stay as to

20 actions of such creditor.

21 ‘‘(4) If a single or joint case is filed by or

22 against an individual debtor under this title (other

23 than a case refiled under a chapter other than chap24 ter 7 after a dismissal under section 707(b) of this

25 title), and if two or more single or joint cases of the
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1 debtor were pending within the previous year but

2 were dismissed, the stay under subsection (a) will

3 not go into effect upon the filing of the later case.

4 On request of a party in interest, the court shall

5 promptly enter an order confirming that no stay is

6 in effect. If a party in interest requests within 30

7 days of the filing of the later case, the court may

8 order the stay to take effect in the case as to any

9 or all creditors (subject to such conditions or limita10 tions as the court may impose), after notice and

11 hearing, only if the party in interest demonstrates

12 that the filing of the later case is in good faith as

13 to the creditors to be stayed. A stay imposed pursu14 ant to the preceding sentence will be effective on the

15 date of entry of the order allowing the stay to go

16 into effect. A case is presumptively not filed in good

17 faith (but such presumption may be rebutted by

18 clear and convincing evidence to the contrary)—

19 ‘‘(A) as to all creditors if—

20 ‘‘(i) two or more previous cases under

21 this title in which the individual was a

22 debtor were pending within the 1-year pe23 riod;

24 ‘‘(ii) a previous case under this title in

25 which the individual was a debtor was dis-
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1 missed within the time period stated in

2 this paragraph after the debtor failed to

3 file or amend the petition or other docu4 ments as required by this title or the court

5 without substantial excuse (but mere inad6 vertence or negligence shall not be sub7 stantial excuse unless the dismissal was

8 caused by the negligence of the debtor’s at9 torney), failed to provide adequate protec10 tion as ordered by the court, or failed to

11 perform the terms of a plan confirmed by

12 the court; or

13 ‘‘(iii) there has not been a substantial

14 change in the financial or personal affairs

15 of the debtor since the dismissal of the

16 next most previous case under this title, or

17 there is not any other reason to conclude

18 that the later case will be concluded, if a

19 case under chapter 7, with a discharge,

20 and if a case under chapter 11 or 13, with

21 a confirmed plan that will be fully per22 formed; or

23 ‘‘(B) as to any creditor that commenced an

24 action under subsection (d) in a previous case

25 in which the individual was a debtor if, as of
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1 the date of dismissal of such case, such action

2 was still pending or had been resolved by termi3 nating, conditioning, or limiting the stay as to

4 action of such creditor.’’.

5 SEC. 118. CURBING ABUSIVE FILINGS.

6 (a) IN GENERAL.—Section 362(d) of title 11, United

7 States Code, is amended—

8 (1) in paragraph (2), by striking ‘‘or’’ at the

9 end;

10 (2) in paragraph (3), by striking the period at

11 the end and inserting ‘‘; or’’; and

12 (3) by adding at the end the following:

13 ‘‘(4) with respect to a stay of an act against

14 real property under subsection (a), by a creditor

15 whose claim is secured by an interest in such real

16 estate, if the court finds that the filing of the bank17 ruptcy petition was part of a scheme to delay,

18 hinder, and defraud creditors that involved either—

19 ‘‘(A) transfer of all or part ownership of,

20 or other interest in, the real property without

21 the consent of the secured creditor or court ap22 proval; or

23 ‘‘(B) multiple bankruptcy filings affecting

24 the real property.
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1 If recorded in compliance with applicable State laws gov2 erning notices of interests or liens in real property, an

3 order entered pursuant to this subsection shall be binding

4 in any other case under this title purporting to affect the

5 real property filed not later than 2 years after that record6 ing, except that a debtor in a subsequent case may move

7 for relief from such order based upon changed cir8 cumstances or for good cause shown, after notice and a

9 hearing. Any Federal, State, or local governmental unit

10 which accepts notices of interests or liens in real property

11 shall accept any certified copy of an order described in

12 this subsection for indexing and recording.’’.

13 (b) AUTOMATIC STAY.—Section 362(b) of title 11,

14 United States Code, is amended—

15 (1) in paragraph (17), by striking ‘‘or’’ at the

16 end;

17 (2) in paragraph (18) by striking the period at

18 the end and inserting a semicolon; and

19 (3) by inserting after paragraph (18) the fol20 lowing:

21 ‘‘(19) under subsection (a), of any act to en22 force any lien against or security interest in real

23 property following the entry of an order under sec24 tion 362(d)(4) of this title as to that property in any

25 prior bankruptcy case for a period of 2 years after
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1 entry of such an order. The debtor in a subsequent

2 case, however, may move the court for relief from

3 such order based upon changed circumstances or for

4 other good cause shown (consistent with the stand5 ards for good faith in subsection (c)), after notice

6 and a hearing; or

7 ‘‘(20) under subsection (a), of any act to en8 force any lien against or security interest in real

9 property—

10 ‘‘(A) if the debtor is ineligible under sec11 tion 109(g) of this title to be a debtor in a

12 bankruptcy case; or

13 ‘‘(B) if the bankruptcy case was filed in

14 violation of a bankruptcy court order in a prior

15 bankruptcy case prohibiting the debtor from

16 being a debtor in another bankruptcy case.’’.

17 SEC. 119. DEBTOR RETENTION OF PERSONAL PROPERTY

18 SECURITY.

19 Title 11, United States Code, is amended—

20 (1) in section 521—

21 (A) in paragraph (4) by striking ‘‘, and’’

22 at the end and inserting a semicolon;

23 (B) in paragraph (5) by striking the period

24 at the end and inserting ‘‘; and’’; and

25 (C) by adding at the end the following:
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1 ‘‘(6) in an individual case under chapter 7 of

2 this title, not retain possession of personal property

3 as to which a creditor has an allowed claim for the

4 purchase price secured in whole or in part by an in5 terest in that personal property unless, in the case

6 of an individual debtor, the debtor takes one of the

7 following actions within 45 days after the first meet8 ing of creditors under section 341(a)—

9 ‘‘(A) enters into an agreement with the

10 creditor pursuant to section 524(c) of this title

11 with respect to the claim secured by such prop12 erty; or

13 ‘‘(B) redeems such property from the secu14 rity interest pursuant to section 722 of this

15 title.

16 ‘‘If the debtor fails to so act within the 45-day pe17 riod, the stay under section 362(a) of this title is

18 terminated with respect to the personal property of

19 the estate or of the debtor which is affected, such

20 property shall no longer be property of the estate,

21 and the creditor may take whatever action as to

22 such property as is permitted by applicable nonbank23 ruptcy law, unless the court determines on the mo24 tion of the trustee brought before the expiration of

25 such 45-day period, and after notice and a hearing,
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1 that such property is of consequential value or ben2 efit to the estate, orders appropriate adequate pro3 tection of the creditor’s interest, and orders the

4 debtor to deliver any collateral in the debtor’s pos5 session to the trustee.’’; and

6 (2) in section 722 by inserting ‘‘in full at the

7 time of redemption’’ before the period at the end.

8 SEC. 120. RELIEF FROM THE AUTOMATIC STAY WHEN THE

9 DEBTOR DOES NOT COMPLETE INTENDED

10 SURRENDER OF CONSUMER DEBT COLLAT11 ERAL.

12 Title 11, United States Code, is amended as

13 follows—

14 (1) in section 362—

15 (A) by striking ‘‘(e), and (f)’’ in subsection

16 (c) and inserting in lieu thereof ‘‘(e), (f), and

17 (h)’’; and

18 (B) by redesignating subsection (h) as sub19 section (i) and by inserting after subsection (g)

20 the following:

21 ‘‘(h) In an individual case pursuant to chapter 7, 11,

22 or 13 the stay provided by subsection (a) is terminated

23 with respect to personal property of the estate or of the

24 debtor securing in whole or in part a claim, or subject

25 to an unexpired lease, and such personal property shall
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1 no longer be property of the estate if the debtor fails with2 in the applicable time set by section 521(a)(2) of this

3 title—

4 ‘‘(1) to file timely any statement of intention

5 required under section 521(a)(2) of this title with

6 respect to that property or to indicate therein that

7 the debtor will either surrender the property or re8 tain it and, if retaining it, either redeem the prop9 erty pursuant to section 722 of this title, reaffirm

10 the debt it secures pursuant to section 524(c) of this

11 title, or assume the unexpired lease pursuant to sec12 tion 365(p) of this title if the trustee does not do

13 so, as applicable; or

14 ‘‘(2) to take timely the action specified in that

15 statement of intention, as it may be amended before

16 expiration of the period for taking action, unless the

17 statement of intention specifies reaffirmation and

18 the creditor refuses to reaffirm on the original con19 tract terms;

20 unless the court determines on the motion of the trustee

21 filed before the expiration of the applicable time set by

22 section 521(a)(2), and after notice and a hearing, that

23 such property is of consequential value or benefit to the

24 estate, orders appropriate adequate protection of the

25 creditor’s interest, and orders the debtor to deliver any
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1 collateral in the debtor’s possession to the trustee. If the

2 court does not so determine an order, the stay shall termi3 nate upon the conclusion of the proceeding on the mo4 tion.’’; and

5 (2) in section 521, as amended by sections 603

6 and 604—

7 (A) in paragraph (2) by striking ‘‘con8 sumer’’;

9 (B) in paragraph (2)(B)—

10 (i) by striking ‘‘forty-five days after

11 the filing of a notice of intent under this

12 section’’ and inserting ‘‘30 days after the

13 first date set for the meeting of creditors

14 under section 341(a) of this title’’; and

15 (ii) by striking ‘‘forty-five day’’ the

16 second place it appears and inserting ‘‘30-

17 day’’;

18 (C) in paragraph (2)(C) by inserting ‘‘ex19 cept as provided in section 362(h) of this title’’

20 before the semicolon; and

21 (D) by inserting after subsection (b) the

22 following:

23 ‘‘(c) If the debtor fails timely to take the action speci24 fied in subsection (a)(6) of this section, or in paragraphs

25 (1) and (2) of section 362(h) of this title, with respect
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1 to property which a lessor or bailor owns and has leased,

2 rented, or bailed to the debtor or as to which a creditor

3 holds a security interest not otherwise voidable under sec4 tion 522(f), 544, 545, 547, 548, or 549 of this title, noth5 ing in this title shall prevent or limit the operation of a

6 provision in the underlying lease or agreement which has

7 the effect of placing the debtor in default under such lease

8 or agreement by reason of the occurrence, pendency, or

9 existence of a proceeding under this title or the insolvency

10 of the debtor. Nothing in this subsection shall be deemed

11 to justify limiting such a provision in any other cir12 cumstance.’’.

13 SEC. 121. GIVING SECURED CREDITORS FAIR TREATMENT

14 IN CHAPTER 13.

15 Section 1325(a)(5)(B)(i) of title 11, United States

16 Code, is amended to read as follows:

17 ‘‘(i) the plan provides that the holder of

18 such claim retain the lien securing such claim

19 until the earlier of payment of the underlying

20 debt determined under nonbankruptcy law or

21 discharge under section 1328 of this title, and

22 that if the case under this chapter is dismissed

23 or converted without completion of the plan,

24 such lien shall also be retained by such holder
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1 to the extent recognized by applicable nonbank2 ruptcy law; and’’.

3 SEC. 122. RESTRAINING ABUSIVE PURCHASES ON SECURED

4 CREDIT.

5 Section 506 of title 11, United States Code, is

6 amended by adding at the end the following:

7 ‘‘(e) In an individual case under chapter 7, 11, 12,

8 or 13—

9 ‘‘(1) subsection (a) shall not apply to an al10 lowed claim to the extent attributable in whole or in

11 part to the purchase price of personal property ac12 quired by the debtor within 5 years of the filing of

13 the petition, except for the purpose of applying para14 graph (3) of this subsection;

15 ‘‘(2) if such allowed claim attributable to the

16 purchase price is secured only by the personal prop17 erty so acquired, the value of the personal property

18 and the amount of the allowed secured claim shall

19 be the sum of the unpaid principal balance of the

20 purchase price and accrued and unpaid interest and

21 charges at the contract rate;

22 ‘‘(3) if such allowed claim attributable to the

23 purchase price is secured by the personal property so

24 acquired and other property, the value of the secu25 rity may be determined under subsection (a), but the
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1 value of the security and the amount of the allowed

2 secured claim shall be not less than the unpaid prin3 cipal balance of the purchase price of the personal

4 property acquired and unpaid interest and charges

5 at the contract rate; and

6 ‘‘(4) in any subsequent case under this title

7 that is filed by or against the debtor in the 2-year

8 period beginning on the date the petition is filed in

9 the original case, the value of the personal property

10 and the amount of the allowed secured claim shall

11 be deemed to be not less than the amount provided

12 under paragraphs (2) and (3) less any payments ac13 tually received.’’.

14 SEC. 123. FAIR VALUATION OF COLLATERAL.

15 Section 506(a) of title 11, United States Code, is

16 amended by adding at the end the following:

17 ‘‘In the case of an individual debtor under chapters 7 and

18 13, such value with respect to personal property securing

19 an allowed claim shall be determined based on the replace20 ment value of such property as of the date of filing the

21 petition without deduction for costs of sale or marketing.

22 With respect to property acquired for personal, family, or

23 household purpose, replacement value shall mean the price

24 a retail merchant would charge for property of that kind
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1 considering the age and condition of the property at the

2 time value is determined.’’.

3 SEC. 124. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

4 Section 522(b)(2)(A) of title 11, United States Code,

5 is amended—

6 (1) by striking ‘‘180’’ and inserting ‘‘730’’; and

7 (2) by striking ‘‘, or for a longer portion of

8 such 180-day period than in any other place’’ and

9 inserting ‘‘or if the debtor’s domicile has not been

10 located at a single State for such 730-day period,

11 the place in which the debtor’s domicile was located

12 for 180 days immediately preceding the 730-day pe13 riod or for a longer portion of such 180-day period

14 than in any other place’’.

15 SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT PROPERTY

16 OBTAINED THROUGH FRAUD.

17 Section 522 of title 11, United States Code, as

18 amended by section 113, is amended—

19 (1) in subsection (b)(2)(A) by inserting ‘‘sub20 ject to subsection (o),’’ before ‘‘any property’’; and

21 (2) by adding at the end the following:

22 ‘‘(o) For purposes of subsection (b)(3)(A) and not23 withstanding subsection (a), the value of an interest in—

24 ‘‘(1) real or personal property that the debtor

25 or a dependent of the debtor uses as a residence;
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1 ‘‘(2) a cooperative that owns property that the

2 debtor or a dependent of the debtor uses as a resi3 dence; or

4 ‘‘(3) a burial plot for the debtor or a dependent

5 of the debtor,

6 shall be reduced to the extent such value is attributable

7 to any portion of any property that the debtor disposed

8 of in the 730-day period ending of the date of the filing

9 of the petition, with the intent to hinder, delay, or defraud

10 a creditor and that the debtor could not exempt, or that

11 portion that the debtor could not exempt, under subsection

12 (b) if on such date the debtor had held the property so

13 disposed of.’’.

14 SEC. 126. ROLLING STOCK EQUIPMENT.

15 (a) IN GENERAL.—Section 1168 of title 11, United

16 States Code, is amended to read as follows:

17 ‘‘§ 1168. Rolling stock equipment

18 ‘‘(a)(1) The right of a secured party with a security

19 interest in or of a lessor or conditional vendor of equip20 ment described in paragraph (2) to take possession of such

21 equipment in compliance with an equipment security

22 agreement, lease, or conditional sale contract, and to en23 force any of its other rights or remedies under such secu24 rity agreement, lease, or conditional sale contract, to sell,

25 lease, or otherwise retain or dispose of such equipment,
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1 is not limited or otherwise affected by any other provision

2 of this title or by any power of the court, except that the

3 right to take possession and enforce those other rights and

4 remedies shall be subject to section 362 of this title, if—

5 ‘‘(A) before the date that is 60 days after the

6 date of commencement of a case under this chapter,

7 the trustee, subject to the court’s approval, agrees to

8 perform all obligations of the debtor under such se9 curity agreement, lease, or conditional sale contract;

10 and

11 ‘‘(B) any default, other than a default of a kind

12 described in section 365(b)(2) of this title, under

13 such security agreement, lease, or conditional sale

14 contract—

15 ‘‘(i) that occurs before the date of com16 mencement of the case and is an event of de17 fault therewith is cured before the expiration of

18 such 60-day period;

19 ‘‘(ii) that occurs or becomes an event of

20 default after the date of commencement of the

21 case and before the expiration of such 60-day

22 period is cured before the later of—

23 ‘‘(I) the date that is 30 days after the

24 date of the default or event of the default;

25 or
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1 ‘‘(II) the expiration of such 60-day

2 period; and

3 ‘‘(iii) that occurs on or after the expiration

4 of such 60-day period is cured in accordance

5 with the terms of such security agreement,

6 lease, or conditional sale contract, if cure is per7 mitted under that agreement, lease, or condi8 tional sale contract.

9 ‘‘(2) The equipment described in this paragraph—

10 ‘‘(A) is rolling stock equipment or accessories

11 used on rolling stock equipment, including super12 structures or racks, that is subject to a security in13 terest granted by, leased to, or conditionally sold to

14 a debtor; and

15 ‘‘(B) includes all records and documents relat16 ing to such equipment that are required, under the

17 terms of the security agreement, lease, or conditional

18 sale contract, that is to be surrendered or returned

19 by the debtor in connection with the surrender or re20 turn of such equipment.

21 ‘‘(3) Paragraph (1) applies to a secured party, lessor,

22 or conditional vendor acting in its own behalf or acting

23 as trustee or otherwise in behalf of another party.

24 ‘‘(b) The trustee and the secured party, lessor, or

25 conditional vendor whose right to take possession is pro-
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1 tected under subsection (a) may agree, subject to the

2 court’s approval, to extend the 60-day period specified in

3 subsection (a)(1).

4 ‘‘(c)(1) In any case under this chapter, the trustee

5 shall immediately surrender and return to a secured party,

6 lessor, or conditional vendor, described in subsection

7 (a)(1), equipment described in subsection (a)(2), if at any

8 time after the date of commencement of the case under

9 this chapter such secured party, lessor, or conditional ven10 dor is entitled pursuant to subsection (a)(1) to take pos11 session of such equipment and makes a written demand

12 for such possession of the trustee.

13 ‘‘(2) At such time as the trustee is required under

14 paragraph (1) to surrender and return equipment de15 scribed in subsection (a)(2), any lease of such equipment,

16 and any security agreement or conditional sale contract

17 relating to such equipment, if such security agreement or

18 conditional sale contract is an executory contract, shall be

19 deemed rejected.

20 ‘‘(d) With respect to equipment first placed in service

21 on or prior to October 22, 1994, for purposes of this

22 section—

23 ‘‘(1) the term ‘lease’ includes any written agree24 ment with respect to which the lessor and the debt25 or, as lessee, have expressed in the agreement or in
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1 a substantially contemporaneous writing that the

2 agreement is to be treated as a lease for Federal in3 come tax purposes; and

4 ‘‘(2) the term ‘security interest’ means a pur5 chase-money equipment security interest.

6 ‘‘(e) With respect to equipment first placed in service

7 after October 22, 1994, for purposes of this section, the

8 term ‘rolling stock equipment’ includes rolling stock equip9 ment that is substantially rebuilt and accessories used on

10 such equipment.’’.

11 (b) AIRCRAFT EQUIPMENT AND VESSELS.—Section

12 1110 of title 11, United States Code, is amended to read

13 as follows:

14 ‘‘§ 1110. Aircraft equipment and vessels

15 ‘‘(a)(1) Except as provided in paragraph (2) and sub16 ject to subsection (b), the right of a secured party with

17 a security interest in equipment described in paragraph

18 (3), or of a lessor or conditional vendor of such equipment,

19 to take possession of such equipment in compliance with

20 a security agreement, lease, or conditional sale contract,

21 and to enforce any of its other rights or remedies, under

22 such security agreement, lease, or conditional sale con23 tract, to sell, lease, or otherwise retain or dispose of such

24 equipment, is not limited or otherwise affected by any

25 other provision of this title or by any power of the court.
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1 ‘‘(2) The right to take possession and to enforce the

2 other rights and remedies described in paragraph (1) shall

3 be subject to section 362 of this title if—

4 ‘‘(A) before the date that is 60 days after the

5 date of the order for relief under this chapter, the

6 trustee, subject to the approval of the court, agrees

7 to perform all obligations of the debtor under such

8 security agreement, lease, or conditional sale con9 tract; and

10 ‘‘(B) any default, other than a default of a kind

11 specified in section 365(b)(2) of this title, under

12 such security agreement, lease, or conditional sale

13 contract—

14 ‘‘(i) that occurs before the date of the

15 order is cured before the expiration of such 60-

16 day period;

17 ‘‘(ii) that occurs after the date of the order

18 and before the expiration of such 60-day period

19 is cured before the later of—

20 ‘‘(I) the date that is 30 days after the

21 date of the default; or

22 ‘‘(II) the expiration of such 60-day

23 period; and

24 ‘‘(iii) that occurs on or after the expiration

25 of such 60-day period is cured in compliance
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1 with the terms of such security agreement,

2 lease, or conditional sale contract, if a cure is

3 permitted under that agreement, lease, or con4 tract.

5 ‘‘(3) The equipment described in this paragraph—

6 ‘‘(A) is—

7 ‘‘(i) an aircraft, aircraft engine, propeller,

8 appliance, or spare part (as defined in section

9 40102 of title 49) that is subject to a security

10 interest granted by, leased to, or conditionally

11 sold to a debtor that, at the time such trans12 action is entered into, holds an air carrier oper13 ating certificate issued pursuant to chapter 447

14 of title 49 for aircraft capable of carrying 10 or

15 more individuals or 6,000 pounds or more of

16 cargo; or

17 ‘‘(ii) a documented vessel (as defined in

18 section 30101(1) of title 46) that is subject to

19 a security interest granted by, leased to, or con20 ditionally sold to a debtor that is a water car21 rier that, at the time such transaction is en22 tered into, holds a certificate of public conven23 ience and necessity or permit issued by the De24 partment of Transportation; and
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1 ‘‘(B) includes all records and documents relat2 ing to such equipment that are required, under the

3 terms of the security agreement, lease, or conditional

4 sale contract, to be surrendered or returned by the

5 debtor in connection with the surrender or return of

6 such equipment.

7 ‘‘(4) Paragraph (1) applies to a secured party, lessor,

8 or conditional vendor acting in its own behalf or acting

9 as trustee or otherwise in behalf of another party.

10 ‘‘(b) The trustee and the secured party, lessor, or

11 conditional vendor whose right to take possession is pro12 tected under subsection (a) may agree, subject to the ap13 proval of the court, to extend the 60-day period specified

14 in subsection (a)(1).

15 ‘‘(c)(1) In any case under this chapter, the trustee

16 shall immediately surrender and return to a secured party,

17 lessor, or conditional vendor, described in subsection

18 (a)(1), equipment described in subsection (a)(3), if at any

19 time after the date of the order for relief under this chap20 ter such secured party, lessor, or conditional vendor is en21 titled pursuant to subsection (a)(1) to take possession of

22 such equipment and makes a written demand for such pos23 session to the trustee.

24 ‘‘(2) At such time as the trustee is required under

25 paragraph (1) to surrender and return equipment de-
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1 scribed in subsection (a)(3), any lease of such equipment,

2 and any security agreement or conditional sale contract

3 relating to such equipment, if such security agreement or

4 conditional sale contract is an executory contract, shall be

5 deemed rejected.

6 ‘‘(d) With respect to equipment first placed in service

7 on or before October 22, 1994, for purposes of this

8 section—

9 ‘‘(1) the term ‘lease’ includes any written agree10 ment with respect to which the lessor and the debt11 or, as lessee, have expressed in the agreement or in

12 a substantially contemporaneous writing that the

13 agreement is to be treated as a lease for Federal in14 come tax purposes; and

15 ‘‘(2) the term ‘security interest’ means a pur16 chase-money equipment security interest.’’.

17 SEC. 127. DISCHARGE UNDER CHAPTER 13.

18 Section 1328(a) of title 11, United States Code, is

19 amended by striking paragraphs (1) through (3) and in20 serting the following:

21 ‘‘(1) provided for under section 1322(b)(5) of

22 this title;

23 ‘‘(2) of the kind specified in paragraph (2), (4),

24 (3)(B), (5), (8), or (9) of section 523(a) of this title;
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1 ‘‘(3) for restitution, or a criminal fine, included

2 in a sentence on the debtor’s conviction of a crime;

3 or

4 ‘‘(4) for restitution, or damages, awarded in a

5 civil action against the debtor as a result of willful

6 or malicious injury by the debtor that caused per7 sonal injury to an individual or the death of an indi8 vidual.’’.

9 SEC. 128. BANKRUPTCY JUDGESHIPS.

10 (a) SHORT TITLE.—This section may be cited as the

11 ‘‘Bankruptcy Judgeship Act of 1999’’.

12 (b) TEMPORARY JUDGESHIPS.—

13 (1) APPOINTMENTS.—The following judgeship

14 positions shall be filled in the manner prescribed in

15 section 152(a)(1) of title 28, United States Code, for

16 the appointment of bankruptcy judges provided for

17 in section 152(a)(2) of such title:

18 (A) One additional bankruptcy judgeship

19 for the eastern district of California.

20 (B) Four additional bankruptcy judgeships

21 for the central district of California.

22 (C) One additional bankruptcy judgeship

23 for the southern district of Florida.

24 (D) Two additional bankruptcy judgeships

25 for the district of Maryland.
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1 (E) One additional bankruptcy judgeship

2 for the eastern district of Michigan.

3 (F) One additional bankruptcy judgeship

4 for the southern district of Mississippi.

5 (G) One additional bankruptcy judgeship

6 for the district of New Jersey.

7 (H) One additional bankruptcy judgeship

8 for the eastern district of New York.

9 (I) One additional bankruptcy judgeship

10 for the northern district of New York.

11 (J) One additional bankruptcy judgeship

12 for the southern district of New York.

13 (K) One additional bankruptcy judgeship

14 for the eastern district of Pennsylvania.

15 (L) One additional bankruptcy judgeship

16 for the middle district of Pennsylvania.

17 (M) One additional bankruptcy judgeship

18 for the western district of Tennessee.

19 (N) One additional bankruptcy judgeship

20 for the eastern district of Virginia.

21 (2) VACANCIES.—The first vacancy occurring in

22 the office of a bankruptcy judge in each of the judi23 cial districts set forth in paragraph (1) that—

24 (A) results from the death, retirement, res25 ignation, or removal of a bankruptcy judge; and
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1 (B) occurs 5 years or more after the ap2 pointment date of a bankruptcy judge ap3 pointed under paragraph (1),

4 shall not be filled.

5 (c) EXTENSIONS.—

6 (1) IN GENERAL.—The temporary bankruptcy

7 judgeship positions authorized for the northern dis8 trict of Alabama, the district of Delaware, the dis9 trict of Puerto Rico, the district of South Carolina,

10 and the eastern district of Tennessee under section

11 3(a)(1), (3), (7), (8), and (9) of the Bankruptcy

12 Judgeship Act of 1992 (28 U.S.C. 152 note) are ex13 tended until the first vacancy occurring in the office

14 of a bankruptcy judge in the applicable district re15 sulting from the death, retirement, resignation, or

16 removal of a bankruptcy judge and occurring—

17 (A) 8 years or more after November 8,

18 1993, with respect to the northern district of

19 Alabama;

20 (B) 10 years or more after October 28,

21 1993, with respect to the district of Delaware;

22 (C) 8 years or more after August 29,

23 1994, with respect to the district of Puerto

24 Rico;
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1 (D) 8 years or more after June 27, 1994,

2 with respect to the district of South Carolina;

3 and

4 (E) 8 years or more after November 23,

5 1993, with respect to the eastern district of

6 Tennessee.

7 (2) APPLICABILITY OF OTHER PROVISIONS.—

8 All other provisions of section 3 of the Bankruptcy

9 Judgeship Act of 1992 remain applicable to such

10 temporary judgeship position.

11 (d) TECHNICAL AMENDMENT.—The first sentence of

12 section 152(a)(1) of title 28, United States Code, is

13 amended to read as follows: ‘‘Each bankruptcy judge to

14 be appointed for a judicial district as provided in para15 graph (2) shall be appointed by the United States court

16 of appeals for the circuit in which such district is lo17 cated.’’.

18 (e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—

19 Section 156 of title 28, United States Code, is amended

20 by adding at the end the following new subsection:

21 ‘‘(g)(1) In this subsection, the term ‘travel

22 expenses’—

23 ‘‘(A) means the expenses incurred by a bank24 ruptcy judge for travel that is not directly related to

25 any case assigned to such bankruptcy judge; and
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1 ‘‘(B) shall not include the travel expenses of a

2 bankruptcy judge if—

3 ‘‘(i) the payment for the travel expenses is

4 paid by such bankruptcy judge from the per5 sonal funds of such bankruptcy judge; and

6 ‘‘(ii) such bankruptcy judge does not re7 ceive funds (including reimbursement) from the

8 United States or any other person or entity for

9 the payment of such travel expenses.

10 ‘‘(2) Each bankruptcy judge shall annually submit

11 the information required under paragraph (3) to the chief

12 bankruptcy judge for the district in which the bankruptcy

13 judge is assigned.

14 ‘‘(3)(A) Each chief bankruptcy judge shall submit an

15 annual report to the Director of the Administrative Office

16 of the United States Courts on the travel expenses of each

17 bankruptcy judge assigned to the applicable district (in18 cluding the travel expenses of the chief bankruptcy judge

19 of such district).

20 ‘‘(B) The annual report under this paragraph shall

21 include—

22 ‘‘(i) the travel expenses of each bankruptcy

23 judge, with the name of the bankruptcy judge to

24 whom the travel expenses apply;
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1 ‘‘(ii) a description of the subject matter and

2 purpose of the travel relating to each travel expense

3 identified under clause (i), with the name of the

4 bankruptcy judge to whom the travel applies; and

5 ‘‘(iii) the number of days of each travel de6 scribed under clause (ii), with the name of the bank7 ruptcy judge to whom the travel applies.

8 ‘‘(4)(A) The Director of the Administrative Office of

9 the United States Courts shall—

10 ‘‘(i) consolidate the reports submitted under

11 paragraph (3) into a single report; and

12 ‘‘(ii) annually submit such consolidated report

13 to Congress.

14 ‘‘(B) The consolidated report submitted under this

15 paragraph shall include the specific information required

16 under paragraph (3)(B), including the name of each bank17 ruptcy judge with respect to clauses (i), (ii), and (iii) of

18 paragraph (3)(B).’’.

19 SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED

20 STATES CODE.

21 Section 507(a) of title 11, United States Code, is

22 amended by inserting after paragraph (9) the following:

23 ‘‘(10) Tenth, allowed claims for death or per24 sonal injuries resulting from the operation of a

25 motor vehicle or vessel if such operation was unlaw-
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1 ful because the debtor was intoxicated from using al2 cohol, a drug or another substance.’’.

3 SEC. 130. AMENDMENT TO SECTION 1325 OF TITLE 11,

4 UNITED STATES CODE.

5 Section 1325(b) of title 11, United States Code, is

6 amended—

7 (1) in paragraph (1), by inserting ‘‘to unse8 cured creditors’’ after ‘‘to make payments’’;

9 (2) in paragraph (2)—

10 (A) by inserting ‘‘current monthly’’ before

11 ‘‘income’’;

12 (B) by striking ‘‘and which is not’’ and in13 serting ‘‘less amounts’’;

14 (C) by inserting after ‘‘received by the

15 debtor’’, ‘‘(other than child support payments,

16 foster care payments, or disability payments for

17 a dependent child made in accordance with ap18 plicable nonbankruptcy law and which is rea19 sonably necessary to be expended)’’; and

20 (D) in subparagraph (A) by inserting after

21 ‘‘dependent of the debtor’’ the following: ‘‘, as

22 determined in accordance with section

23 707(b)(2)(A) and if applicable 707(b)(2)(B)’’.
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1 SEC. 131. APPLICATION OF THE CODEBTOR STAY ONLY

2 WHEN THE STAY PROTECTS THE DEBTOR.

3 Section 1301(b) of title 11, United States Code, is

4 amended—

5 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

6 (2) by adding at the end the following:

7 ‘‘(2)(A) Notwithstanding subsection (c) and except as

8 provided in subparagraph (B), in any case in which the

9 debtor did not receive the consideration for the claim held

10 by a creditor, the stay provided by subsection (a) shall

11 apply to that creditor for a period not to exceed 30 days

12 beginning on the date of the order for relief, to the extent

13 the creditor proceeds against—

14 ‘‘(i) the individual that received that consider15 ation; or

16 ‘‘(ii) property not in the possession of the debt17 or that secures that claim.

18 ‘‘(B) Notwithstanding subparagraph (A), the stay

19 provided by subsection (a) shall apply in any case in which

20 the debtor is primarily obligated to pay the creditor in

21 whole or in part with respect to a claim described in sub22 paragraph (A) under a legally binding separation or prop23 erty settlement agreement or divorce or dissolution decree

24 with respect to—

25 ‘‘(i) an individual described in subparagraph

26 (A)(i); or
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1 ‘‘(ii) property described in subparagraph (A)(ii).

2 ‘‘(3) Notwithstanding subsection (c), the stay pro3 vided by subsection (a) shall terminate as of the date of

4 confirmation of the plan, in any case in which the plan

5 of the debtor provides that the debtor’s interest in per6 sonal property subject to a lease with respect to which the

7 debtor is the lessee will be surrendered or abandoned or

8 no payments will be made under the plan on account of

9 the debtor’s obligations under the lease.’’.

10 SEC. 132. ADEQUATE PROTECTION FOR INVESTORS.

11 (a) DEFINITION.—Section 101 of title 11, United

12 States Code, is amended by inserting after paragraph (48)

13 the following:

14 ‘‘(48A) ‘securities self regulatory organization’

15 means either a securities association registered with

16 the Securities and Exchange Commission pursuant

17 to section 15A of the Securities Exchange Act of

18 1934 or a national securities exchange registered

19 with the Securities and Exchange Commission pur20 suant to section 6 of the Securities Exchange Act of

21 1934;’’.

22 (b) AUTOMATIC STAY.—Section 362(b) of title 11,

23 United States Code, as amended by section 118, is

24 amended—
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1 (1) in paragraph (19) by striking ‘‘or’’ at the

2 end;

3 (2) in paragraph (20) by striking the period at

4 the end and a inserting ‘‘; or’’; and

5 (3) by inserting after paragraph (20) the fol6 lowing:

7 ‘‘(21) under subsection (a), of the commence8 ment or continuation of an investigation or action by

9 a securities self regulatory organization to enforce

10 such organization’s regulatory power; of the enforce11 ment of an order or decision, other than for mone12 tary sanctions, obtained in an action by the securi13 ties self regulatory organization to enforce such or14 ganization’s regulatory power; or of any act taken by

15 the securities self regulatory organization to delist,

16 delete, or refuse to permit quotation of any stock

17 that does not meet applicable regulatory require18 ments.’’.

19 SEC. 133. LIMITATION ON LUXURY GOODS.

20 Section 523(a)(2)(C) of title 11, United States Code,

21 is amended to read as follows:

22 ‘‘(C)(i) for purposes of subparagraph (A),

23 consumer debts owed to a single creditor and

24 aggregating more than $250 for ‘luxury goods

25 or services’ incurred by an individual debtor on
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1 or within 90 days before the order for relief

2 under this title, or cash advances aggregating

3 more than $250 that are extensions of con4 sumer credit under an open end credit plan ob5 tained by an individual debtor on or within 90

6 days before the order for relief under this title,

7 are presumed to be nondischargeable; and

8 ‘‘(ii) for purposes of this subparagraph—

9 ‘‘(I) the term ‘luxury goods or serv10 ices’ does not include goods or services rea11 sonably necessary for the support or main12 tenance of the debtor or a dependent of the

13 debtor; and

14 ‘‘(II) the term ‘an extension of con15 sumer credit under an open end credit

16 plan’ has the same meaning such term has

17 for purposes of the Consumer Credit Pro18 tection Act;’’.

19 SEC. 134. ALLOWING THE DEBTOR TO RETAIN LEASED PER20 SONAL PROPERTY BY ASSUMPTION.

21 Section 365 of title 11, United States Code, is

22 amended by adding at the end the following:

23 ‘‘(p)(1) If a lease of personal property is rejected or

24 not timely assumed by the trustee under subsection (d),

25 the leased property is no longer property of the estate and
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1 the stay under section 362(a) of this title is automatically

2 terminated.

3 ‘‘(2) In the case of an individual under chapter 7,

4 the debtor may notify the creditor in writing that the debt5 or desires to assume the lease. Upon being so notified,

6 the creditor may, at its option, notify the debtor that it

7 is willing to have the lease assumed by the debtor and

8 may, at its option, condition such assumption on cure of

9 any outstanding default on terms set by the contract. If

10 within 30 days of the notice from the creditor the debtor

11 notifies the lessor in writing that the lease is assumed,

12 the liability under the lease will be assumed by the debtor

13 and not by the estate. The stay under section 362 of this

14 title and the injunction under section 524(a) of this title

15 shall not be violated by notification of the debtor and ne16 gotiation of cure under this subsection. Nothing in this

17 paragraph shall require a debtor to assume a lease, or a

18 creditor to permit assumption.

19 ‘‘(3) In a case under chapter 11 of this title in which

20 the debtor is an individual and in a case under chapter

21 13 of this title, if the debtor is the lessee with respect

22 to personal property and the lease is not assumed in the

23 plan confirmed by the court, the lease is deemed rejected

24 as of the conclusion of the hearing on confirmation. If the

25 lease is rejected, the stay under section 362 of this title
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1 and any stay under section 1301 is automatically termi2 nated with respect to the property subject to the lease.’’.

3 SEC. 135. ADEQUATE PROTECTION OF LESSORS AND PUR4 CHASE MONEY SECURED CREDITORS.

5 (a) IN GENERAL.—Chapter 13 of title 11, United

6 States Code, is amended by adding after section 1307 the

7 following:

8 ‘‘§ 1307A. Adequate protection in chapter 13 cases

9 ‘‘(a)(1)(A) On or before the date that is 30 days after

10 the filing of a case under this chapter, the debtor shall

11 make cash payments in an amount determined under

12 paragraph (2), to—

13 ‘‘(i) any lessor of personal property; and

14 ‘‘(ii) any creditor holding a claim secured by

15 personal property to the extent that the claim is at16 tributable to the purchase of that property by the

17 debtor.

18 ‘‘(B) The debtor or the plan shall continue making

19 the adequate protection payments required under subpara20 graph (A) until the earlier of the date on which—

21 ‘‘(i) the creditor begins to receive actual pay22 ments under the plan; or

23 ‘‘(ii) the debtor relinquishes possession of the

24 property referred to in subparagraph (A) to—

25 ‘‘(I) the lessor or creditor; or
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1 ‘‘(II) any third party acting under claim of

2 right, as applicable.

3 ‘‘(2) The payments referred to in paragraph (1)(A)

4 shall be the contract amount and shall reduce any amount

5 payable under section 1326(a) of the title.

6 ‘‘(b)(1) Subject to the limitations under paragraph

7 (2), the court may, after notice and hearing, change the

8 amount and timing of the dates of payment of payments

9 made under subsection (a).

10 ‘‘(2)(A) The payments referred to in paragraph (1)

11 shall be payable not less frequently than monthly.

12 ‘‘(B) The amount of payments referred to in para13 graph (1) shall not be less than the amount of any weekly,

14 biweekly, monthly, or other periodic payment scheduled as

15 payable under the contract between the debtor and cred16 itor.

17 ‘‘(c) Notwithstanding section 1326(b), the payments

18 referred to in subsection (a)(1)(A) shall be continued in

19 addition to plan payments under a confirmed plan until

20 actual payments to the creditor begin under that plan, if

21 the confirmed plan provides—

22 ‘‘(1) for payments to a creditor or lessor de23 scribed in subsection (a)(1); and
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1 ‘‘(2) for the deferral of payments to such cred2 itor or lessor under the plan until the payment of

3 amounts described in section 1326(b).

4 ‘‘(d) Notwithstanding sections 362, 542, and 543, a

5 lessor or creditor described in subsection (a) may retain

6 possession of property described in that subsection that

7 was obtained in accordance with applicable law before the

8 date of filing of the petition until the first payment under

9 subsection (a)(1)(A) is received by the lessor or creditor.

10 ‘‘(e) On or before 60 days after the filling of a case

11 under this chapter, a debtor retaining possession of per12 sonal property subject to a lease or securing a claim attrib13 utable in whole or in part to the purchase price of such

14 property shall provide each creditor or lessor reasonable

15 evidence of the maintenance of any required insurance

16 coverage with respect to the use or ownership of such

17 property and continue to do so for so long as the debtor

18 retains possession of such property.’’.

19 (b) CLERICAL AMENDMENT.—The table of sections

20 at the beginning of chapter 13 of title 11, United States

21 Code, is amended by inserting after the item relating to

22 section 1307 the following:

‘‘1307A. Adequate protection in chapter 13 cases.’’.

23 SEC. 136. AUTOMATIC STAY.

24 Section 362(b) of title 11, United States Code, as

25 amended by sections 118 and 132, is amended—
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1 (1) in paragraph (20), by striking ‘‘or’’ at the

2 end;

3 (2) in paragraph (21), by striking the period at

4 the end and inserting a semicolon; and

5 (3) by inserting after paragraph (21) the fol6 lowing:

7 ‘‘(22) under subsection (a) of any transfer that

8 is not avoidable under section 544 of this title and

9 that is not avoidable under section 549 of this title;

10 ‘‘(23) under subsection (a)(3), of the continu11 ation of any eviction, unlawful detainer action, or

12 similar proceeding by a lessor against a debtor in13 volving residential real property in which the debtor

14 resides as a tenant under a rental agreement and

15 the debtor has not paid rent to the lessor pursuant

16 to the terms of the lease agreement or applicable

17 State law after the commencement and during the

18 course of the case;

19 ‘‘(24) under subsection (a)(3), of the com20 mencement or continuation of any eviction, unlawful

21 detainer action, or similar proceeding by a lessor

22 against a debtor involving residential real property

23 in which the debtor resides as a tenant under a rent24 al agreement that has terminated pursuant to the

25 lease agreement or applicable State law;
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1 ‘‘(25) under subsection (a)(3), of any eviction,

2 unlawful detainer action, or similar proceeding, if

3 the debtor has previously filed within the last year

4 and failed to pay post-petition rent during the

5 course of that case; or

6 ‘‘(26) under subsection (a)(3), of eviction ac7 tions based on endangerment to property or person

8 or the use of illegal drugs.’’.

9 SEC. 137. EXTEND PERIOD BETWEEN BANKRUPTCY DIS10 CHARGES.

11 Title 11, United States Code, is amended—

12 (1) in section 727(a)(8) by striking ‘‘six’’ and

13 inserting ‘‘8’’; and

14 (2) in section 1328 by adding at the end the

15 following:

16 ‘‘(f) Notwithstanding subsections (a) and (b), the

17 court shall not grant a discharge of all debts provided for

18 by the plan or disallowed under section 502 of this title

19 if the debtor has received a discharge in any case filed

20 under this title within 5 years of the order for relief under

21 this chapter.’’.

22 SEC. 138. DEFINITION OF DOMESTIC SUPPORT OBLIGA23 TION.

24 Section 101 of title 11, United States Code, is

25 amended—
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1 (1) by striking paragraph (12A); and

2 (2) by inserting after paragraph (14) the fol3 lowing:

4 ‘‘(14A) ‘domestic support obligation’ means a

5 debt that accrues before or after the entry of an

6 order for relief under this title that is—

7 ‘‘(A) owed to or recoverable by—

8 ‘‘(i) a spouse, former spouse, or child

9 of the debtor or that child’s legal guardian;

10 or

11 ‘‘(ii) a governmental unit;

12 ‘‘(B) in the nature of alimony, mainte13 nance, or support (including assistance provided

14 by a governmental unit) of such spouse, former

15 spouse, or child, without regard to whether such

16 debt is expressly so designated;

17 ‘‘(C) established or subject to establish18 ment before or after entry of an order for relief

19 under this title, by reason of applicable provi20 sions of—

21 ‘‘(i) a separation agreement, divorce

22 decree, or property settlement agreement;

23 ‘‘(ii) an order of a court of record; or
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1 ‘‘(iii) a determination made in accord2 ance with applicable nonbankruptcy law by

3 a governmental unit; and

4 ‘‘(D) not assigned to a nongovernmental

5 entity, unless that obligation is assigned volun6 tarily by the spouse, former spouse, child, or

7 parent solely for the purpose of collecting the

8 debt.’’.

9 SEC. 139. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP10 PORT OBLIGATIONS.

11 Section 507(a) of title 11, United States Code, is

12 amended—

13 (1) by striking paragraph (7);

14 (2) by redesignating paragraphs (1) through

15 (6) as paragraphs (2) through (7), respectively;

16 (3) in paragraph (2), as redesignated, by strik17 ing ‘‘First’’ and inserting ‘‘Second’’;

18 (4) in paragraph (3), as redesignated, by strik19 ing ‘‘Second’’ and inserting ‘‘Third’’;

20 (5) in paragraph (4), as redesignated, by strik21 ing ‘‘Third’’ and inserting ‘‘Fourth’’;

22 (6) in paragraph (5), as redesignated, by strik23 ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;

24 (7) in paragraph (6), as redesignated, by strik25 ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;
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1 (8) in paragraph (7), as redesignated, by strik2 ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and

3 (9) by inserting before paragraph (2), as redes4 ignated, the following:

5 ‘‘(1) First, allowed claims for domestic support

6 obligations to be paid in the following order on the

7 condition that funds received under this paragraph

8 by a governmental unit in a case under this title be

9 applied:

10 ‘‘(A) Claims that, as of the date of entry

11 of the order for relief, are owed directly to a

12 spouse, former spouse, or child of the debtor, or

13 the parent of such child, without regard to

14 whether the claim is filed by the spouse, former

15 spouse, child, or parent, or is filed by a govern16 mental unit on behalf of that person.

17 ‘‘(B) Claims that, as of the date of entry

18 of the order for relief, are assigned by a spouse,

19 former spouse, child of the debtor, or the par20 ent of that child to a governmental unit or are

21 owed directly to a governmental unit under ap22 plicable nonbankruptcy law.’’.
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1 SEC. 140. REQUIREMENTS TO OBTAIN CONFIRMATION AND

2 DISCHARGE IN CASES INVOLVING DOMESTIC

3 SUPPORT OBLIGATIONS.

4 Title 11, United States Code, is amended—

5 (1) in section 1129(a), by adding at the end the

6 following:

7 ‘‘(14) If the debtor is required by a judicial or

8 administrative order or statute to pay a domestic

9 support obligation, the debtor has paid all amounts

10 payable under such order or statute for such obliga11 tion that become payable after the date on which the

12 petition is filed.’’;

13 (2) in section 1325(a)—

14 (A) in paragraph (5), by striking ‘‘and’’ at

15 the end;

16 (B) in paragraph (6), by striking the pe17 riod at the end and inserting ‘‘; and’’; and

18 (C) by adding at the end the following:

19 ‘‘(7) if the debtor is required by a judicial or

20 administrative order or statute to pay a domestic

21 support obligation, the debtor has paid all amounts

22 payable under such order for such obligation that

23 become payable after the date on which the petition

24 is filed.’’; and

25 (3) in section 1328(a), as amended by section

26 127, in the matter preceding paragraph (1), by in-
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1 serting ‘‘, and with respect to a debtor who is re2 quired by a judicial or administrative order to pay

3 a domestic support obligation, certifies that all

4 amounts payable under such order or statute that

5 are due on or before the date of the certification (in6 cluding amounts due before or after the petition was

7 filed) have been paid’’ after ‘‘completion by the debt8 or of all payments under the plan’’.

9 SEC. 141. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC

10 SUPPORT OBLIGATION PROCEEDINGS.

11 Section 362(b) of title 11, United States Code, as

12 amended by sections 118, 132, and 136, is amended—

13 (1) by striking paragraph (2) and inserting the

14 following:

15 ‘‘(2) under subsection (a)—

16 ‘‘(A) of the commencement or continuation

17 of an action or proceeding for—

18 ‘‘(i) the establishment of paternity; or

19 ‘‘(ii) the establishment or modification

20 of an order for domestic support obliga21 tions; or

22 ‘‘(B) the collection of a domestic support

23 obligation from property that is not property of

24 the estate;’’;
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1 (2) in paragraph (25), by striking ‘‘or’’ at the

2 end;

3 (3) in paragraph (26), by striking the period at

4 the end and inserting a semicolon; and

5 (4) by inserting after paragraph (26) the fol6 lowing:

7 ‘‘(27) under subsection (a) with respect to the

8 withholding of income pursuant to an order as speci9 fied in section 466(b) of the Social Security Act (42

10 U.S.C. 666(b)); or

11 ‘‘(28) under subsection (a) with respect to—

12 ‘‘(A) the withholding, suspension, or re13 striction of drivers’ licenses, professional and

14 occupational licenses, and recreational licenses

15 pursuant to State law, as specified in section

16 466(a)(16) of the Social Security Act (42

17 U.S.C. 666(a)(16)) or with respect to the re18 porting of overdue support owed by an absent

19 parent to any consumer reporting agency as

20 specified in section 466(a)(7) of the Social Se21 curity Act (42 U.S.C. 666(a)(7));

22 ‘‘(B) the interception of tax refunds, as

23 specified in sections 464 and 466(a)(3) of the

24 Social Security Act (42 U.S.C. 664 and

25 666(a)(3)); or
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1 ‘‘(C) the enforcement of medical obliga2 tions as specified under title IV of the Social

3 Security Act (42 U.S.C. 601 et seq.).’’.

4 SEC. 142. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR

5 ALIMONY, MAINTENANCE, AND SUPPORT.

6 Section 523 of title 11, United States Code, is

7 amended—

8 (1) in subsection (a), by striking paragraph (5)

9 and inserting the following:

10 ‘‘(5) for a domestic support obligation;’’;

11 (2) in subsection (a)(15)—

12 (A) by inserting ‘‘or’’ after ‘‘court of

13 record,’’; and

14 (B) by striking ‘‘unless—’’ and all that fol15 lows through ‘‘debtor’’ the last place it appears;

16 and

17 (3) in subsection (c), by striking ‘‘(6), or (15)’’

18 each place it appears and inserting ‘‘or (6)’’.

19 SEC. 143. CONTINUED LIABILITY OF PROPERTY.

20 Section 522 of title 11, United States Code, is

21 amended—

22 (1) in subsection (c), by striking paragraph (1)

23 and inserting the following:

24 ‘‘(1) a debt of a kind specified in paragraph (1)

25 or (5) of section 523(a) (in which case, notwith-
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1 standing any provision of applicable nonbankruptcy

2 law to the contrary, such property shall be liable for

3 a debt of a kind specified in section 523(a)(5);’’; and

4 (2) in subsection (f)(1)(A), by striking the dash

5 and all that follows through the end of the subpara6 graph and inserting ‘‘of a kind that is specified in

7 section 523(a)(5); or’’.

8 SEC. 144. PROTECTION OF DOMESTIC SUPPORT CLAIMS

9 AGAINST PREFERENTIAL TRANSFER MO10 TIONS.

11 Section 547(c)(7) of title 11, United States Code, is

12 amended to read as follows:

13 ‘‘(7) to the extent such transfer was a bona fide

14 payment of a debt for a domestic support obligation;

15 or’’.

16 SEC. 145. CLARIFICATION OF MEANING OF HOUSEHOLD

17 GOODS.

18 Section 101 of title 11, United States Code, is

19 amended by inserting after paragraph (27) the following:

20 ‘‘(27A) ‘household goods’ includes tangible per21 sonal property normally found in or around a resi22 dence, but does not include motorized vehicles used

23 for transportation purposes;’’.
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1 SEC. 146. NONDISCHARGEABLE DEBTS.

2 Section 523(a) of title 11, United States Code, is

3 amended by inserting after paragraph (14) the following:

4 ‘‘(14A) incurred to pay a debt that is non5 dischargeable by reason of section 727, 1141,

6 1228(a), 1228(b), or 1328(c), or any other provision

7 of this subsection, if the debtor incurred the debt to

8 pay such a nondischargeable debt with the intent to

9 discharge in bankruptcy the newly-created debt, ex10 cept that all debts incurred to pay nondischargeable

11 debts, without regard to intent, are nondischargeable

12 if incurred within 90 days of the filing of the peti13 tion;’’.

14 SEC. 147. MONETARY LIMITATION ON CERTAIN EXEMPT

15 PROPERTY.

16 (a) AMENDMENT.—Section 522 of title 11, United

17 States Code, as amended by section 125, is amended—

18 (1) in subsection (b)(2)(A) by striking ‘‘sub19 section (o)’’ and inserting ‘‘subsections (o) and (p)’’

20 before ‘‘any property’’; and

21 (2) by adding at the end the following:

22 ‘‘(p)(1) Except as provided in paragraphs (2) and

23 (3), as a result of electing under subsection (b)(3)(A) to

24 exempt property under State or local law, a debtor may

25 not exempt any interest that exceeds $250,000 in value,

26 in the aggregate, in—
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1 ‘‘(A) real or personal property that the debtor

2 or a dependent of the debtor uses as a residence;

3 ‘‘(B) a cooperative that owns property that the

4 debtor or a dependent of the debtor uses as a resi5 dence; or

6 ‘‘(C) a burial plot for the debtor or a dependent

7 of the debtor.

8 ‘‘(2) The limitation under paragraph (1) shall not

9 apply to an exemption claimed under subsection (b)(3)(A)

10 by a family farmer for the principal residence of that

11 farmer.

12 ‘‘(3) Paragraph (1) shall not apply to debtors if appli13 cable State law provides by statute that such paragraph

14 shall not apply to debtors.’’.

15 (b) APPLICATION OF AMENDMENT TO INDIVIDUAL

16 STATES.—(1) Section 522(p) of title 11, United States

17 Code, as added by subsection (a), shall not apply with re18 spect to a State before the end of the first regular session

19 of the State legislature following the date of the enactment

20 of this Act.

21 (2) For purposes of paragraph (1), the term ‘‘State’’

22 has the meaning given such term in section 101 of title

23 11, United States Code.
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1 SEC. 148. BANKRUPTCY FEES.

2 Section 1930 of title 28, United States Code, is

3 amended—

4 (1) in subsection (a) by striking ‘‘Notwith5 standing section 1915 of this title, the’’ and insert6 ing ‘‘The’’; and

7 (2) by adding at the end the following:

8 ‘‘(f)(1) Pursuant to procedures prescribed by the Ju9 dicial Conference of the United States, the district court

10 or the bankruptcy court may waive the filing fee in a case

11 under chapter 7 of title 11 for an individual debtor who

12 is unable to pay such fee in installments. For purposes

13 of this paragraph, the term ‘filing fee’ means the filing

14 fee required by subsection (a), or any other fee prescribed

15 by the Judicial Conference under subsections (b) and (c)

16 that is payable to the clerk upon the commencement of

17 a case under chapter 7 of title 11, United States Code.

18 ‘‘(2) The district court or the bankruptcy court may

19 also waive for such debtors other fees prescribed pursuant

20 to subsections (b) and (c).

21 ‘‘(3) This subsection does not restrict the district

22 court or the bankruptcy court from waiving, in accordance

23 with Judicial Conference policy, fees prescribed pursuant

24 to such subsections for other debtors and creditors.’’.
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1 SEC. 149. COLLECTION OF CHILD SUPPORT.

2 (a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec3 tion 704 of title 11, United States Code, as amended by

4 section 102, is amended—

5 (1) by inserting ‘‘(a)’’ before ‘‘The trustee’’;

6 (2) in paragraph (9) by striking ‘‘and’’ at the

7 end;

8 (3) in paragraph (10) by striking the period

9 and inserting ‘‘; and’’; and

10 (4) by adding at the end the following:

11 ‘‘(11) if, with respect to an individual debtor,

12 there is a claim for support of a child of the debtor

13 or a custodial parent of such child entitled to receive

14 priority under section 507(a)(1) of this title, provide

15 the applicable notification specified in subsection (b).

16 ‘‘(b)(1) In any case described in subsection (a)(11),

17 the trustee shall—

18 ‘‘(A)(i) notify in writing the holder of the claim

19 of the right of such holder to use the services of a

20 State child support enforcement agency established

21 under sections 464 and 466 of the Social Security

22 Act for the State in which the holder resides; and

23 ‘‘(ii) include in the notice under this paragraph

24 the address and telephone number of the child sup25 port enforcement agency; and
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1 ‘‘(B)(i) notify in writing the State child support

2 agency of the State in which the holder of the claim

3 resides of the claim;

4 ‘‘(ii) include in the notice under this paragraph

5 the name, address, and telephone number of the

6 holder of the claim; and

7 ‘‘(iii) at such time as the debtor is granted a

8 discharge under section 727 of this title, notify the

9 holder of such claim and the State child support

10 agency of the State in which such holder resides

11 of—

12 ‘‘(I) the granting of the discharge;

13 ‘‘(II) the last recent known address of the

14 debtor; and

15 ‘‘(III) with respect to the debtor’s case, the

16 name of each creditor that holds a claim that

17 is not discharged under paragraph (2), (4), or

18 (14A) of section 523(a) of this title or that was

19 reaffirmed by the debtor under section 524(c)

20 of this title.

21 ‘‘(2)(A) If, after receiving a notice under paragraph

22 (1)(B)(iii), a holder of a claim or a State child support

23 agency is unable to locate the debtor that is the subject

24 of the notice, such holder or such agency may request from
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1 a creditor described in paragraph (1)(B)(iii)(III) the last

2 known address of the debtor.

3 ‘‘(B) Notwithstanding any other provision of law, a

4 creditor that makes a disclosure of a last known address

5 of a debtor in connection with a request made under sub6 paragraph (A) shall not be liable to the debtor or any

7 other person by reason of making such disclosure.’’.

8 (b) DUTIES OF TRUSTEE UNDER CHAPTER 13.—

9 Section 1302 of title 11, United States Code, is

10 amended—

11 (1) in subsection (b)—

12 (A) in paragraph (4) by striking ‘‘and’’ at

13 the end;

14 (B) in paragraph (5) by striking the period

15 and inserting ‘‘; and’’; and

16 (C) by adding at the end the following:

17 ‘‘(6) if, with respect to an individual debtor,

18 there is a claim for support of a child of the debtor

19 or a custodial parent of such child entitled to receive

20 priority under section 507(a)(1) of this title, provide

21 the applicable notification specified in subsection

22 (d).’’; and

23 (2) by adding at the end the following:

24 ‘‘(d)(1) In any case described in subsection (b)(6),

25 the trustee shall—
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1 ‘‘(A)(i) notify in writing the holder of the claim

2 of the right of such holder to use the services of a

3 State child support enforcement agency established

4 under sections 464 and 466 of the Social Security

5 Act for the State in which the holder resides; and

6 ‘‘(ii) include in the notice under this paragraph

7 the address and telephone number of the child sup8 port enforcement agency; and

9 ‘‘(B)(i) notify in writing the State child support

10 agency of the State in which the holder of the claim

11 resides of the claim; and

12 ‘‘(ii) include in the notice under this paragraph

13 the name, address, and telephone number of the

14 holder of the claim;

15 ‘‘(iii) at such time as the debtor is granted a

16 discharge under section 1328 of this title, notify the

17 holder of the claim and the State child support

18 agency of the State in which such holder resides

19 of—

20 ‘‘(I) the granting of the discharge;

21 ‘‘(II) the last recent known address of the

22 debtor; and

23 ‘‘(III) with respect to the debtor’s case, the

24 name of each creditor that holds a claim that

25 is not discharged under paragraph (2), (4), or
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1 (14A) of section 523(a) of this title or that was

2 reaffirmed by the debtor under section 524(c)

3 of this title.

4 ‘‘(2)(A) If, after receiving a notice under paragraph

5 (1)(B)(iii), a holder of a claim or a State child support

6 agency is unable to locate the debtor that is the subject

7 of the notice, such holder or such agency may request from

8 a creditor described in paragraph (1)(B)(iii) the last

9 known address of the debtor.

10 ‘‘(B) Notwithstanding any other provision of law, a

11 creditor that makes a disclosure of a last known address

12 of a debtor in connection with a request made under sub13 paragraph (A) shall not be liable to the debtor or any

14 other person by reason of making such disclosure.’’.

15 SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI16 PANT CONTRIBUTIONS AND OTHER PROP17 ERTY FROM THE ESTATE.

18 (a) IN GENERAL.—Section 541(b) of title 11, United

19 States Code, is amended—

20 (1) by striking ‘‘or’’ at the end of paragraph

21 (4)(B)(ii);

22 (2) by striking the period at the end of para23 graph (5) and inserting ‘‘; or’’; and

24 (3) by inserting after paragraph (5) the fol25 lowing:
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1 ‘‘(7) any amount or interest in property to the

2 extent that an employer has withheld amounts from

3 the wages of employees for contribution to an em4 ployee benefit plan subject to title I of the Employee

5 Retirement Income Security Act of 1974, or to the

6 extent that the employer has received amounts as a

7 result of payments by participants or beneficiaries to

8 an employer for contribution to an employee benefit

9 plan subject to title I of the Employee Retirement

10 Income Security Act of 1974.’’.

11 (b) APPLICATION OF AMENDMENT.—The amendment

12 made by this section shall not apply to cases commenced

13 under title 11, United States Code, before the expiration

14 of the 180-day period beginning on the date of the enact15 ment of this Act.

16 SEC. 151. CLARIFICATION OF POSTPETITION WAGES AND

17 BENEFITS.

18 Section 503(b)(1)(A) of title 11, United States Code,

19 is amended to read as follows:

20 ‘‘(A) the actual, necessary costs and expenses of

21 preserving the estate, including wages, salaries, or

22 commissions for services rendered after the com23 mencement of the case, and wages and benefits at24 tributable to any period of time after commencement

25 of the case as a result of the debtor’s violation of
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1 Federal law, without regard to when the original un2 lawful act occurred or to whether any services were

3 rendered;’’.

4 SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC

5 SUPPORT OBLIGATION PROCEEDINGS.

6 Section 362(b)(2) of title 11, United States Code, is

7 amended—

8 (1) in subparagraph (A) by striking ‘‘or’’ at the

9 end;

10 (2) in subparagraph (B) by adding ‘‘or’’ at the

11 end; and

12 (3) by adding at the end the following:

13 ‘‘(C) under subsection (a) of—

14 ‘‘(i) the withholding of income for

15 payment of a domestic support obligation

16 pursuant to a judicial or administrative

17 order or statute for such obligation that

18 first becomes payable after the date on

19 which the petition is filed; or

20 ‘‘(ii) the withholding of income for

21 payment of a domestic support obligation

22 owed directly to the spouse, former spouse

23 or child of the debtor or the parent of such

24 child, pursuant to a judicial or administra25 tive order or statute for such obligation
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1 that becomes payable before the date on

2 which the petition is filed unless the court

3 finds, after notice and hearing, that such

4 withholding would render the plan infeasi5 ble;’’.

6 SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN

7 PROCEEDINGS AGAINST THE DEBTOR.

8 Section 362(b)(2) of title 11, United States Code, as

9 amended by section 153, is amended—

10 (1) in subparagraph (B) by striking ‘‘or’’ at the

11 end;

12 (2) by inserting after subparagraph (C) the fol13 lowing:

14 ‘‘(D) the commencement or continuation of

15 a proceeding concerning a child custody or visi16 tation;

17 ‘‘(E) the commencement or continuation of

18 a proceeding alleging domestic violence; or

19 ‘‘(F) the commencement or continuation of

20 a proceeding seeking a dissolution of marriage,

21 except to the extent the proceeding concerns

22 property of the estate;’’.
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1 SEC. 154. DISCLOSURES.

2 (a) DISCLOSURES.—Subchapter II of chapter 5 of

3 title 11, United States Code, as amended by section 106,

4 is amended by adding at the end the following:

5 ‘‘§ 527. Disclosures

6 ‘‘(a) A debt relief agency providing bankruptcy assist7 ance to an assisted person shall provide the following no8 tices to the assisted person:

9 ‘‘(1) the written notice required under section

10 342(b)(1) of this title; and

11 ‘‘(2) to the extent not covered in the written no12 tice described in paragraph (1) of this section and

13 no later than three business days after the first date

14 on which a debt relief agency first offers to provide

15 any bankruptcy assistance services to an assisted

16 person, a clear and conspicuous written notice advis17 ing assisted persons of the following—

18 ‘‘(A) all information the assisted person is

19 required to provide with a petition and there20 after during a case under this title must be

21 complete, accurate and truthful;

22 ‘‘(B) all assets and all liabilities must be

23 completely and accurately disclosed in the docu24 ments filed to commence the case, and the re25 placement value of each asset as defined in sec26 tion 506 of this title must be stated in those
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1 documents where requested after reasonable in2 quiry to establish such value;

3 ‘‘(C) current monthly income, the amounts

4 specified in section 707(b)(2) and, in a chapter

5 13 case, disposable income (determined in ac6 cordance with section 707(b)(2)) must be stated

7 after reasonable inquiry; and

8 ‘‘(D) that information an assisted person

9 provides during their case may be audited pur10 suant to this title and that failure to provide

11 such information may result in dismissal of the

12 proceeding under this title or other sanction in13 cluding, in some instances, criminal sanctions.

14 ‘‘(b) A debt relief agency providing bankruptcy assist15 ance to an assisted person shall provide each assisted per16 son at the same time as the notices required under sub17 section (a)(1) with the following statement, to the extent

18 applicable, or one substantially similar. The statement

19 shall be clear and conspicuous and shall be in a single

20 document separate from other documents or notices pro21 vided to the assisted person:

22 ‘‘ ‘IMPORTANT INFORMATION ABOUT BANK23 RUPTCY ASSISTANCE SERVICES FROM AN AT24 TORNEY OR BANKRUPTCY PETITION PRE25 PARER.
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1 ‘‘ ‘If you decide to seek bankruptcy relief, you can

2 represent yourself, you can hire an attorney to represent

3 you, or you can get help in some localities from a bank4 ruptcy petition preparer who is not an attorney. THE

5 LAW REQUIRES AN ATTORNEY OR BANKRUPTCY

6 PETITION PREPARER TO GIVE YOU A WRITTEN

7 CONTRACT SPECIFYING WHAT THE ATTORNEY

8 OR BANKRUPTCY PETITION PREPARER WILL DO

9 FOR YOU AND HOW MUCH IT WILL COST. Ask to

10 see the contract before you hire anyone.

11 ‘‘ ‘The following information helps you understand

12 what must be done in a routine bankruptcy case to help

13 you evaluate how much service you need. Although bank14 ruptcy can be complex, many cases are routine.

15 ‘‘ ‘Before filing a bankruptcy case, either you or your

16 attorney should analyze your eligibility for different forms

17 of debt relief made available by the Bankruptcy Code and

18 which form of relief is most likely to be beneficial for you.

19 Be sure you understand the relief you can obtain and its

20 limitations. To file a bankruptcy case, documents called

21 a Petition, Schedules and Statement of Financial Affairs,

22 as well as in some cases a Statement of Intention need

23 to be prepared correctly and filed with the bankruptcy

24 court. You will have to pay a filing fee to the bankruptcy

25 court. Once your case starts, you will have to attend the
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1 required first meeting of creditors where you may be ques2 tioned by a court official called a ‘‘trustee’’ and by credi3 tors.

4 ‘‘ ‘If you choose to file a chapter 7 case, you may be

5 asked by a creditor to reaffirm a debt. You may want help

6 deciding whether to do so and a creditor is not permitted

7 to coerce you into reaffirming your debts.

8 ‘‘ ‘If you choose to file a chapter 13 case in which

9 you repay your creditors what you can afford over three

10 to five years, you may also want help with preparing your

11 chapter 13 plan and with the confirmation hearing on your

12 plan which will be before a bankruptcy judge.

13 ‘‘ ‘If you select another type of relief under the Bank14 ruptcy Code other than chapter 7 or chapter 13, you will

15 want to find out what needs to be done from someone fa16 miliar with that type of relief.

17 ‘‘ ‘Your bankruptcy case may also involve litigation.

18 You are generally permitted to represent yourself in litiga19 tion in bankruptcy court, but only attorneys, not bank20 ruptcy petition preparers, can give you legal advice.’.

21 ‘‘(c) Except to the extent the debt relief agency pro22 vides the required information itself after reasonably dili23 gent inquiry of the assisted person or others so as to ob24 tain such information reasonably accurately for inclusion

25 on the petition, schedules or statement of financial affairs,
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1 a debt relief agency providing bankruptcy assistance to an

2 assisted person, to the extent permitted by nonbankruptcy

3 law, shall provide each assisted person at the time re4 quired for the notice required under subsection (a)(1) rea5 sonably sufficient information (which shall be provided in

6 a clear and conspicuous writing) to the assisted person

7 on how to provide all the information the assisted person

8 is required to provide under this title pursuant to section

9 521, including—

10 ‘‘(1) how to value assets at replacement value,

11 determine current monthly income, the amounts

12 specified in section 707(b)(2)) and, in a chapter 13

13 case, how to determine disposable income in accord14 ance with section 707(b)(2) and related calculations;

15 ‘‘(2) how to complete the list of creditors, in16 cluding how to determine what amount is owed and

17 what address for the creditor should be shown; and

18 ‘‘(3) how to determine what property is exempt

19 and how to value exempt property at replacement

20 value as defined in section 506 of this title.

21 ‘‘(d) A debt relief agency shall maintain a copy of

22 the notices required under subsection (a) of this section

23 for two years after the date on which the notice is given

24 the assisted person.’’.
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1 (b) CONFORMING AMENDMENT.—The table of sec2 tions for chapter 5 of title 11, United States Code, as

3 amended by section 106, is amended by inserting after the

4 item relating to section 526 the following:

‘‘527. Disclosures.’’.

5 SEC. 155. DEBTOR’S BILL OF RIGHTS.

6 Subchapter II of chapter 5 of title 11, United States

7 Code, as amended by sections 106 and 154, is amended

8 by adding at the end the following:

9 ‘‘§ 528. Debtor’s bill of rights

10 ‘‘(a) A debt relief agency shall—

11 ‘‘(1) no later than five business days after the

12 first date on which a debt relief agency provides any

13 bankruptcy assistance services to an assisted person,

14 but prior to such assisted person’s petition under

15 this title being filed, execute a written contract with

16 the assisted person specifying clearly and conspicu17 ously the services the agency will provide the as18 sisted person and the basis on which fees or charges

19 will be made for such services and the terms of pay20 ment, and give the assisted person a copy of the

21 fully executed and completed contract in a form the

22 person can keep;

23 ‘‘(2) disclose in any advertisement of bank24 ruptcy assistance services or of the benefits of bank25 ruptcy directed to the general public (whether in
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1 general media, seminars or specific mailings, tele2 phonic or electronic messages or otherwise) that the

3 services or benefits are with respect to proceedings

4 under this title, clearly and conspicuously using the

5 following statement: ‘We are a debt relief agency.

6 We help people file Bankruptcy petitions to obtain

7 relief under the Bankruptcy Code.’ or a substantially

8 similar statement. An advertisement shall be of

9 bankruptcy assistance services if it describes or of10 fers bankruptcy assistance with a chapter 13 plan,

11 regardless of whether chapter 13 is specifically men12 tioned, including such statements as ‘federally super13 vised repayment plan’ or ‘Federal debt restructuring

14 help’ or other similar statements which would lead

15 a reasonable consumer to believe that help with

16 debts was being offered when in fact in most cases

17 the help available is bankruptcy assistance with a

18 chapter 13 plan; and

19 ‘‘(3) if an advertisement directed to the general

20 public indicates that the debt relief agency provides

21 assistance with respect to credit defaults, mortgage

22 foreclosures, lease eviction proceedings, excessive

23 debt, debt collection pressure, or inability to pay any

24 consumer debt, disclose conspicuously in that adver25 tisement that the assistance is with respect to or
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1 may involve proceedings under this title, using the

2 following statement: ‘We are a debt relief agency.

3 We help people file Bankruptcy petitions to obtain

4 relief under the Bankruptcy Code.’ or a substantially

5 similar statement.’’.

6 (b) CONFORMING AMENDMENT.—The table of sec7 tions for chapter 5 of title 11, United States Code, as

8 amended by sections 106 and 154, is amended by inserting

9 after the item relating to section 527, the following:

‘‘528. Debtor’s bill of rights.’’.

10 TITLE II—DISCOURAGING

11 BANKRUPTCY ABUSE

12 SEC. 201. REENACTMENT OF CHAPTER 12.

13 (a) REENACTMENT.—Chapter 12 of title 11, United

14 States Code, as in effect on March 31, 1999, is hereby

15 reenacted.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall take effect on March 31, 1999.

18 SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY

19 HOLDERS.

20 Section 341 of title 11, United States Code, is

21 amended by adding at the end the following:

22 ‘‘(e) Notwithstanding subsections (a) and (b), the

23 court, on the request of a party in interest and after notice

24 and a hearing, for cause may order that the United States

25 trustee not convene a meeting of creditors or equity secu-
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1 rity holders if the debtor has filed a plan as to which the

2 debtor solicited acceptances prior to the commencement

3 of the case.’’.

4 SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANK5 RUPTCY.

6 (a) IN GENERAL.—Section 522 of title 11, United

7 States Code, as amended by sections 113, 125, and 147

8 is amended—

9 (1) in subsection (b)—

10 (A) in paragraph (2)—

11 (i) by striking ‘‘(2)(A)’’ and inserting:

12 ‘‘(3) Property listed in this paragraph is—

13 ‘‘(A) subject to subsections (o) and (p),’’;

14 (ii) in subparagraph (B), by striking

15 ‘‘and’’ at the end;

16 (iii) in subparagraph (C), by striking

17 the period at the end and inserting ‘‘;

18 and’’; and

19 (iv) by adding at the end the fol20 lowing:

21 ‘‘(D) retirement funds to the extent that those

22 funds are in a fund or account that is exempt from

23 taxation under section 401, 403, 408, 408A, 414,

24 457, or 501(a) of the Internal Revenue Code of

25 1986.’’;
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1 (B) by striking paragraph (1) and insert2 ing:

3 ‘‘(2) Property listed in this paragraph is property

4 that is specified under subsection (d), unless the State law

5 that is applicable to the debtor under paragraph (3)(A)

6 specifically does not so authorize.’’;

7 (C) in the matter preceding paragraph

8 (2)—

9 (i) by striking ‘‘(b)’’ and inserting

10 ‘‘(b)(1)’’;

11 (ii) by striking ‘‘paragraph (2)’’ both

12 places it appears and inserting ‘‘paragraph

13 (3)’’;

14 (iii) by striking ‘‘paragraph (1)’’ each

15 place it appears and inserting ‘‘paragraph

16 (2)’’; and

17 (iv) by striking ‘‘Such property is—’’;

18 and

19 (D) by adding at the end of the subsection

20 the following:

21 ‘‘(4) For purposes of paragraph (3)(D) and sub22 section (d)(12), the following shall apply:

23 ‘‘(A) If the retirement funds are in a retirement

24 fund that has received a favorable determination

25 pursuant to section 7805 of the Internal Revenue
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1 Code of 1986, and that determination is in effect as

2 of the date of the commencement of the case under

3 section 301, 302, or 303 of this title, those funds

4 shall be presumed to be exempt from the estate.

5 ‘‘(B) If the retirement funds are in a retirement

6 fund that has not received a favorable determination

7 pursuant to such section 7805, those funds are ex8 empt from the estate if the debtor demonstrates

9 that—

10 ‘‘(i) no prior determination to the contrary

11 has been made by a court or the Internal Rev12 enue Service; and

13 ‘‘(ii) the retirement fund is in substantial

14 compliance with the applicable requirements of

15 the Internal Revenue Code of 1986.

16 ‘‘(C) A direct transfer of retirement funds from

17 one fund or account that is exempt from taxation

18 under section 401, 403, 408, 408A, 414, 457, or

19 501(a) of the Internal Revenue Code of 1986, pur20 suant to section 401(a)(31) of the Internal Revenue

21 Code of 1986, or otherwise, shall not cease to qualify

22 for exemption under paragraph (3)(D) or subsection

23 (d)(12) by reason of that direct transfer.

24 ‘‘(D)(i) Any distribution that qualifies as an eli25 gible rollover distribution within the meaning of sec-
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1 tion 402(c) of the Internal Revenue Code of 1986 or

2 that is described in clause (ii) shall not cease to

3 qualify for exemption under paragraph (3)(D) or

4 subsection (d)(12) by reason of that distribution.

5 ‘‘(ii) A distribution described in this clause is

6 an amount that—

7 ‘‘(I) has been distributed from a fund or

8 account that is exempt from taxation under sec9 tion 401, 403, 408, 408A, 414, 457, or 501(a)

10 of the Internal Revenue Code of 1986; and

11 ‘‘(II) to the extent allowed by law, is de12 posited in such a fund or account not later than

13 60 days after the distribution of that amount.’’;

14 and

15 (2) in subsection (d)—

16 (A) in the matter preceding paragraph (1),

17 by striking ‘‘subsection (b)(1)’’ and inserting

18 ‘‘subsection (b)(2)’’; and

19 (B) by adding at the end the following:

20 ‘‘(12) Retirement funds to the extent that those

21 funds are in a fund or account that is exempt from

22 taxation under section 401, 403, 408, 408A, 414,

23 457, or 501(a) of the Internal Revenue Code of

24 1986.’’.
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1 (b) AUTOMATIC STAY.—Section 362(b) of title 11,

2 United States Code, as amended by sections 118, 132,

3 136, and 141 is amended—

4 (1) in paragraph (27), by striking ‘‘or’’ at the

5 end;

6 (2) in paragraph (28), by striking the period

7 and inserting ‘‘; or’’;

8 (3) by inserting after paragraph (28) the fol9 lowing:

10 ‘‘(29) under subsection (a), of withholding of

11 income from a debtor’s wages and collection of

12 amounts withheld, pursuant to the debtor’s agree13 ment authorizing that withholding and collection for

14 the benefit of a pension, profit-sharing, stock bonus,

15 or other plan established under section 401, 403,

16 408, 408A, 414, 457, or 501(a) of the Internal Rev17 enue Code of 1986 that is sponsored by the em18 ployer of the debtor, or an affiliate, successor, or

19 predecessor of such employer—

20 ‘‘(A) to the extent that the amounts with21 held and collected are used solely for payments

22 relating to a loan from a plan that satisfies the

23 requirements of section 408(b)(1) of the Em24 ployee Retirement Income Security Act of 1974
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1 or is subject to section 72(p) of the Internal

2 Revenue Code of 1986; or

3 ‘‘(B) in the case of a loan from a thrift

4 savings plan described in subchapter III of title

5 5, that satisfies the requirements of section

6 8433(g) of such title.’’; and

7 (4) by adding at the end of the flush material

8 following paragraph (29) the following: ‘‘Paragraph

9 (29) does not apply to any amount owed to a plan

10 referred to in that paragraph that is incurred under

11 a loan made during the 1-year period preceding the

12 filing of a petition. Nothing in paragraph (29) may

13 be construed to provide that any loan made under

14 a governmental plan under section 414(d), or a con15 tract or account under section 403(b), of the Inter16 nal Revenue Code of 1986 constitutes a claim or a

17 debt under this title.’’.

18 (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of

19 title 11, United States Code, is amended—

20 (1) by striking ‘‘or’’ at the end of paragraph

21 (17);

22 (2) by striking the period at the end of para23 graph (18) and inserting ‘‘; or’’; and

24 (3) by adding at the end the following:
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1 ‘‘(19) owed to a pension, profit-sharing, stock

2 bonus, or other plan established under section 401,

3 403, 408, 408A, 414, 457, or 501(c) of the Internal

4 Revenue Code of 1986, pursuant to—

5 ‘‘(A) a loan permitted under section

6 408(b)(1) of the Employee Retirement Income

7 Security Act of 1974) or subject to section

8 72(p) of the Internal Revenue Code of 1986; or

9 ‘‘(B) a loan from the thrift savings plan

10 described in subchapter III of title 5, that satis11 fies the requirements of section 8433(g) of such

12 title.

13 Paragraph (19) does not apply to any amount owed to

14 a plan referred to in that paragraph that is incurred under

15 a loan made during the 1-year period preceding the filing

16 of a petition. Nothing in paragraph (19) may be construed

17 to provide that any loan made under a governmental plan

18 under section 414(d), or a contract or account under sec19 tion 403(b), of the Internal Revenue Code of 1986 con20 stitutes a claim or a debt under this title.’’.

21 (d) PLAN CONTENTS.—Section 1322 of title 11,

22 United States Code, is amended by adding at the end the

23 following:

24 ‘‘(f) A plan may not materially alter the terms of a

25 loan described in section 362(b)(29) of this title.’’.
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1 SEC. 204. PROTECTION OF REFINANCE OF SECURITY IN2 TEREST.

3 Subparagraphs (A), (B), and (C) of section 547(e)(2)

4 of title 11, United States Code, are amended by striking

5 ‘‘10’’ each place it appears and inserting ‘‘30’’.

6 SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED

7 LEASES.

8 Section 365(d)(4) of title 11, United States Code, is

9 amended to read as follows:

10 ‘‘(4)(A) Subject to subparagraph (B), in any case

11 under any chapter in this title, an unexpired lease of non12 residential real property under which the debtor is the les13 see shall be deemed rejected, and the trustee shall imme14 diately surrender such property to the lessor, if the trustee

15 does not assume or reject the unexpired lease by the ear16 lier of—

17 ‘‘(i) the date that is 120 days after the date of

18 the order for relief; or

19 ‘‘(ii) the date of the entry of an order con20 firming a plan.

21 ‘‘(B)(i) The court may extend the period determined

22 under subparagraph (A) for 120 days upon motion of the

23 trustee or the lessor for cause.

24 ‘‘(ii) If the court grants an extension under clause

25 (i), the court may grant a subsequent extension only upon

26 prior written consent of the lessor.’’.
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1 SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS

2 COMMITTEES.

3 (a) APPOINTMENT.—Section 1102(a)(2) of title 11,

4 United States Code, is amended by inserting before the

5 first sentence the following: ‘‘On its own motion or on re6 quest of a party in interest, and after notice and hearing,

7 the court may order a change in the membership of a com8 mittee appointed under this subsection, if the court deter9 mines that the change is necessary to ensure adequate rep10 resentation of creditors or equity security holders. The

11 court may expand the membership of a committee to in12 clude a creditor that is small business if the court deter13 mines that such creditor holds claims of the kind rep14 resented by such committee that are, in the aggregate, dis15 proportionately large when compared to the annual gross

16 revenue of such creditor.’’.

17 (b) INFORMATION.—Section 1102(b) of title 11,

18 United States Code, is amended by adding at the end the

19 following:

20 ‘‘(3) A committee appointed under subsection (a)

21 shall provide access to information for creditors who hold

22 claims of the kind represented by such committee and who

23 are not appointed such committee, shall to be open for

24 comment from such creditors, and shall be subject to a

25 court order compelling additional reports or disclosure to

26 be made to such creditors.’’.
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1 SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11,

2 UNITED STATES CODE.

3 Section 546 of title 11, United States Code, is

4 amended by inserting at the end thereof:

5 ‘‘(i) Notwithstanding section 545 (2) and (3) of this

6 title, the trustee may not avoid a warehouseman’s lien for

7 storage, transportation or other costs incidental to the

8 storage and handling of goods, as provided by section 7–

9 209 of the Uniform Commercial Code.’’.

10 SEC. 208. LIMITATION.

11 Section 546(c)(1)(B) of title 11, United States Code,

12 is amended by striking ‘‘20’’ and inserting ‘‘45’’.

13 SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11,

14 UNITED STATES CODE.

15 Section 330(a) of title 11, United States Code, is

16 amended—

17 (1) in paragraph (3)—

18 (A) in subparagraph (A) after ‘‘awarded’’,

19 by inserting ‘‘to an examiner, chapter 11 trust20 ee, or professional person’’; and

21 (B) by redesignating subdivisions (A)

22 through (E) as clauses (i) through (iv), respec23 tively; and

24 (2) by adding at the the following:

25 ‘‘(B) In determining the amount of reasonable

26 compensation to be awarded a trustee, the court
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1 shall treat such compensation as a commission based

2 on the results achieved.’’.

3 SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.

4 Section 1125 of title 11, United States Code, is

5 amended by adding at the end the following:

6 ‘‘(g) Notwithstanding subsection (b), an acceptance

7 or rejection of the plan may be solicited from a holder

8 of a claim or interest if such solicitation complies with ap9 plicable nonbankruptcy law and if such holder was solic10 ited before the commencement of the case in a manner

11 complying with applicable nonbankruptcy law.’’.

12 SEC. 211. PREFERENCES.

13 Section 547(c) of title 11, United States Code, is

14 amended—

15 (1) by amending paragraph (2) to read as fol16 lows:

17 ‘‘(2) to the extent that such transfer was in

18 payment of a debt incurred by the debtor in the or19 dinary course of business or financial affairs of the

20 debtor and the transferee, and such transfer was—

21 ‘‘(A) made in the ordinary course of busi22 ness or financial affairs of the debtor and the

23 transferee; or

24 ‘‘(B) made according to ordinary business

25 terms;’’;
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1 (2) in paragraph (7) by striking ‘‘or’’ at the

2 end;

3 (3) in paragraph (8) by striking the period at

4 the end and inserting ‘‘; or’’; and

5 (4) by adding at the end the following:

6 ‘‘(9) if, in a case filed by a debtor whose debts

7 are not primarily consumer debts, the aggregate

8 value of all property that constitutes or is affected

9 by such transfer is less than $5,000.’’.

10 SEC. 212. VENUE OF CERTAIN PROCEEDINGS.

11 Section 1409(b) of title 28, United States Code, is

12 amended by inserting ‘‘, or a nonconsumer debt against

13 a noninsider of less than $10,000,’’ after ‘‘$5,000’’.

14 SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

15 Section 1121(d) of title 11, United States Code, is

16 amended—

17 (1) by striking ‘‘On’’ and inserting ‘‘(1) Subject

18 to paragraph (1), on’’; and

19 (2) by adding at the end the following:

20 ‘‘(2)(A) Such 120-day period may not be extended

21 beyond a date that is 18 months after the date of the order

22 for relief under this chapter.

23 ‘‘(B) Such 180-day period may not be extended be24 yond a date that is 20 months after the date of the order

25 for relief under this chapter.’’.
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1 SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP IN2 TERESTS.

3 Section 523(a)(16) of title 11, United States Code,

4 is amended—

5 (1) by striking ‘‘dwelling’’ the first place it ap6 pears;

7 (2) by striking ‘‘ownership or’’ and inserting

8 ‘‘ownership,’’;

9 (3) by striking ‘‘housing’’ the first place it ap10 pears; and

11 (4) by striking ‘‘but only’’ and all that follows

12 through ‘‘such period,’’, and inserting ‘‘or a lot in a

13 homeowners association, for as long as the debtor or

14 the trustee has a legal, equitable, or possessory own15 ership interest in such unit, such corporation, or

16 such lot,’’.

17 SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGA18 TIONS.

19 (a) EXECUTORY CONTRACTS AND UNEXPIRED

20 LEASES.—Section 365 of title 11, United States Code, is

21 amended—

22 (1) in subsection (b)—

23 (A) in paragraph (1)(A) by striking the

24 semicolon at the end and inserting the fol25 lowing:
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1 ‘‘other than a default that is a breach of a provision

2 relating to—

3 ‘‘(i) the satisfaction of any provision (other

4 than a penalty rate or penalty provision) relat5 ing to a default arising from any failure to per6 form nonmonetary obligations under an unex7 pired lease of real property, if it is impossible

8 for the trustee to cure such default by per9 forming nonmonetary acts at and after the time

10 of assumption; or

11 ‘‘(ii) the satisfaction of any provision

12 (other than a penalty rate or penalty provision)

13 relating to a default arising from any failure to

14 perform nonmonetary obligations under an ex15 ecutory contract (excluding executory contracts

16 that transfer a right or interest under a filed or

17 issued patent, copyright, trademark, trade

18 dress, or trade secret), if it is impossible for the

19 trustee to cure such default by performing non20 monetary acts at and after the time of assump21 tion and if the court determines, based on the

22 equities of the case, that this subparagraph

23 should not apply with respect to such default;’’;

24 and
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1 (B) by amending paragraph (2)(D) to read

2 as follows:

3 ‘‘(D) the satisfaction of any penalty rate or

4 penalty provision relating to a default arising from

5 a failure to perform nonmonetary obligations under

6 an executory contract (excluding executory contracts

7 that transfer a right or interest under a filed or

8 issued patent, copyright, trademark, trade dress, or

9 trade secret) or under an unexpired lease of real or

10 personal property.’’;

11 (2) in subsection (c)—

12 (A) in paragraph (2) by adding ‘‘or’’ at the

13 end;

14 (B) in paragraph (3) by striking ‘‘; or’’ at

15 the end and inserting a period; and

16 (C) by striking paragraph (4);

17 (3) in subsection (d)—

18 (A) by striking paragraphs (5) through

19 (9); and

20 (B) by redesignating paragraph (10) as

21 paragraph (5); and

22 (4) in subsection (f)(1) by striking ‘‘; except

23 that’’ and all that follows through the end of the

24 paragraph and inserting a period.
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1 (b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec2 tion 1124(2) of title 11, United States Code, is

3 amended—

4 (1) in subparagraph (A) by inserting ‘‘or of a

5 kind that section 365(b)(2) of this title expressly

6 does not require to be cured’’ before the semicolon

7 at the end;

8 (2) in subparagraph (C) by striking ‘‘and’’ at

9 the end;

10 (3) by redesignating subparagraph (D) as sub11 paragraph (E); and

12 (4) by inserting after subparagraph (C) the fol13 lowing:

14 ‘‘(D) if such claim or such interest arises

15 from any failure to perform a nonmonetary ob16 ligation, compensates the holder of such claim

17 or such interest (other than the debtor or an in18 sider) for any actual pecuniary loss incurred by

19 such holder as a result of such failure; and’’.

20 SEC. 216. SHARING OF COMPENSATION.

21 Section 504 of title 11, United States Code, is

22 amended by adding at the end the following:

23 ‘‘(c) This section shall not apply with respect to shar24 ing, or agreeing to share, compensation with a bona fide

25 public service attorney referral program that operates in
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1 accordance with non-Federal law regulating attorney re2 ferral services and with rules of professional responsibility

3 applicable to attorney acceptance of referrals.’’.

4 SEC. 217. PRIORITY FOR ADMINISTRATIVE EXPENSES.

5 Section 503(b) of title 11, United States Code, is

6 amended—

7 (1) by deleting ‘‘and’’ at the end of paragraph

8 (5);

9 (2) by striking the period at the end of para10 graph (6) and inserting ‘‘; and’’; and

11 (3) by inserting the following after paragraph

12 (6):

13 ‘‘(7) with respect to a nonresidential real prop14 erty lease previously assumed under section 365,

15 and subsequently rejected, a sum equal to all mone16 tary obligations due, excluding those arising from or

17 relating to a failure to operate or penalty provisions,

18 for the period of one year following the later of the

19 rejection date or date of actual turnover of the

20 premises, without reduction or setoff for any reason

21 whatsoever except for sums actually received or to be

22 received from a nondebtor; and the claim for remain23 ing sums due for the balance of the term of the lease

24 shall be a claim under section 502(b)(6).’’.
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1 SEC. 218. NONDISCHARGEABILITY OF CERTAIN EDU2 CATIONAL BENEFITS AND LOANS.

3 Section 523(a)(8) of title 11, United States Code, is

4 amended to read as follows:

5 ‘‘(8) for—

6 ‘‘(A) an educational benefit overpayment

7 or loan made, insured or guaranteed by a gov8 ernmental unit, or made under any program

9 funded in whole or in part by a governmental

10 unit or nonprofit institution, or for an obliga11 tion to repay funds received as an educational

12 benefit, scholarship or stipend; or

13 ‘‘(B) any other education loan incurred by

14 an individual debtor that meets the definition of

15 ‘Qualified Education Loan’ under section

16 221(e)(1) of the Internal Revenue Code,

17 unless excepting such debt from discharge under this

18 paragraph will impose an undue hardship on the

19 debtor and a debtor’s dependents;’’.

20 TITLE III—GENERAL BUSINESS

21 BANKRUPTCY PROVISIONS

22 SEC. 301. DEFINITION OF DISINTERESTED PERSON.

23 Section 101(14) of title 11, United States Code, is

24 amended to read as follows:

25 ‘‘(14) ‘disinterested person’ means a person

26 that—
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1 ‘‘(A) is not a creditor, an equity security

2 holder, or an insider;

3 ‘‘(B) is not and was not, within 2 years be4 fore the date of the filing of the petition, a di5 rector, officer, or employee of the debtor; and

6 ‘‘(C) does not have an interest materially

7 adverse to the interest of the estate or of any

8 class of creditors or equity security holders, by

9 reason of any direct or indirect relationship to,

10 connection with, or interest in, the debtor, or

11 for any other reason;’’.

12 SEC. 302. MISCELLANEOUS IMPROVEMENTS.

13 (a) WHO MAY BE A DEBTOR.—Section 109 of title

14 11, United States Code, is amended by adding at the end

15 the following:

16 ‘‘(h)(1) Subject to paragraphs (2) and (3) and not17 withstanding any other provision of this section, an indi18 vidual may not be a debtor under this title unless that

19 individual has, during the 90-day period preceding the

20 date of filing of the petition of that individual, received

21 credit counseling, including, at a minimum, participation

22 in an individual or group briefing that outlined the oppor23 tunities for available credit counseling and assisted that

24 individual in performing an initial budget analysis,

25 through a credit counseling program (offered through an
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1 approved credit counseling service described in section

2 111(a)).

3 ‘‘(2)(A) Paragraph (1) shall not apply with respect

4 to a debtor who resides in a district for which the United

5 States trustee or bankruptcy administrator of the bank6 ruptcy court of that district determines that the approved

7 credit counseling services for that district are not reason8 ably able to provide adequate services to the additional

9 individuals who would otherwise seek credit counseling

10 from those programs by reason of the requirements of

11 paragraph (1).

12 ‘‘(B) Each United States trustee or bankruptcy ad13 ministrator that makes a determination described in sub14 paragraph (A) shall review that determination not later

15 than one year after the date of that determination, and

16 not less frequently than every year thereafter.

17 ‘‘(3)(A) Subject to subparagraph (B), the require18 ments of paragraph (1) shall not apply with respect to

19 a debtor who submits to the court a certification that—

20 ‘‘(i) describes exigent circumstances that merit

21 a waiver of the requirements of paragraph (1);

22 ‘‘(ii) states that the debtor requested credit

23 counseling services from an approved credit coun24 seling service, but was unable to obtain the services

25 referred to in paragraph (1) during the 5-day period
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1 beginning on the date on which the debtor made

2 that request or that the exigent circumstances re3 quire filing before such 5-day period expires; and

4 ‘‘(iii) is satisfactory to the court.

5 ‘‘(B) With respect to a debtor, an exemption under

6 subparagraph (A) shall cease to apply to that debtor on

7 the date on which the debtor meets the requirements of

8 paragraph (1), but in no case may the exemption apply

9 to that debtor after the date that is 30 days after the debt10 or files a petition.’’.

11 (b) CHAPTER 7 DISCHARGE.—Section 727(a) of title

12 11, United States Code, is amended—

13 (1) in paragraph (9), by striking ‘‘or’’ at the

14 end;

15 (2) in paragraph (10), by striking the period

16 and inserting ‘‘; or’’; and

17 (3) by adding at the end the following:

18 ‘‘(11) after the filing of the petition, the debtor

19 failed to complete an instructional course concerning

20 personal financial management described in section

21 111 unless the debtor resides in a district for which

22 the United States trustee or bankruptcy adminis23 trator of the bankruptcy court of that district deter24 mines that the approved instructional courses are

25 not adequate to provide service to the additional in-
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1 dividuals who would be required to compete the in2 structional course by reason of the requirements of

3 this section. Each United States trustee or bank4 ruptcy administrator that makes such a determina5 tion shall review that determination not later than 1

6 year after the date of that determination, and not

7 less frequently than every year thereafter.’’.

8 (c) CHAPTER 13 DISCHARGE.—Section 1328 of title

9 11, United States Code, as amended by section 137, is

10 amended by adding at the end the following:

11 ‘‘(g) The court shall not grant a discharge under this

12 section to a debtor, unless after filing a petition the debtor

13 has completed an instructional course concerning personal

14 financial management described in section 111.

15 ‘‘(h) Subsection (g) shall not apply with respect to

16 a debtor who resides in a district for which the United

17 States trustee or bankruptcy administrator of the bank18 ruptcy court of that district determines that the approved

19 instructional courses are not adequate to provide service

20 to the additional individuals who would be required to

21 complete the instructional course by reason of the require22 ments of this section.

23 ‘‘(i) Each United States trustee or bankruptcy ad24 ministrator that makes a determination described in sub25 section (h) shall review that determination not later than
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1 1 year after the date of that determination, and not less

2 frequently than every year thereafter.’’.

3 (d) DEBTOR’S DUTIES.—Section 521 of title 11,

4 United States Code, as amended by sections 604 and 120,

5 is amended by adding at the end the following:

6 ‘‘(d) In addition to the requirements under subsection

7 (a), an individual debtor shall file with the court—

8 ‘‘(1) a certificate from the credit counseling

9 service that provided the debtor services under sec10 tion 109(h); and

11 ‘‘(2) a copy of the debt repayment plan, if any,

12 developed under section 109(h) through the credit

13 counseling service referred to in paragraph (1).’’.

14 (e) GENERAL PROVISIONS.—

15 (1) IN GENERAL.—Chapter 1 of title 11, United

16 States Code, is amended by adding at the end the

17 following:

18 ‘‘§ 111. Credit counseling services; financial manage19 ment instructional courses

20 ‘‘(a) The clerk of each district shall maintain a pub21 licly available list of credit counseling agencies and of pro22 grams described in section 109(h) and instructional

23 courses offered by such agencies currently approved by—

24 ‘‘(1) the United States Trustee; or
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1 ‘‘(2) the bankruptcy administrator for the dis2 trict.

3 ‘‘(b) The United States Trustee or bankruptcy ad4 ministrator shall only approve credit counseling agencies

5 which satisfy standards set in regulations promulgated by

6 the Federal Trade Commission and which are accredited

7 by the Council on Accreditation or an equivalent third

8 party nonprofit accrediting organization.

9 ‘‘(c) The United States Trustee or bankruptcy ad10 ministrator shall only approve programs or courses under

11 subsection (a) if they satisfy standards set in regulations

12 promulgated by the Executive Office of the United States

13 Trustees. The Executive Office of the United States

14 Trustee is authorized to promulgate regulations setting

15 such standards.

16 ‘‘(d) The Federal Trade Commission shall have au17 thority to promulgate regulations setting standards for

18 credit counseling agencies for the purposes of subsection

19 (b). Such standards shall establish minimum requirements

20 for such agencies with respect to providing qualified coun21 selors, safekeeping and payment of client funds, disclosure

22 to clients, adequate counseling with respect to client credit

23 problems, and such other matters as relate to the quality

24 and financial security of such programs. Nothing in this

25 provision shall limit the authority of the Federal Trade
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1 Commission pursuant to the Federal Trade Commission

2 Act (15 U.S.C. 45 et seq.).

3 ‘‘(e) The United States Trustee or bankruptcy ad4 ministrator may notify the clerk that a credit counseling

5 agency, or a program or course, is no longer approved,

6 in which case the clerk shall remove it from the list main7 tained under subsection (a).’’.

8 (2) REGULATIONS.—The Federal Trade Com9 mission and the Executive Office of United States

10 Trustees shall promulgate regulations pursuant to

11 the power delegated in this section within 180 days

12 of the date of the enactment of this Act.

13 (3) CLERICAL AMENDMENT.—The table of sec14 tions at the beginning of chapter 1 of title 11,

15 United States Code, is amended by adding at the

16 end the following:

‘‘111. Credit counseling services; financial management instructional courses.’’.

17 (e) DEFINITIONS.—Section 101 of title 11, United

18 States Code, is amended—

19 (1) by inserting after paragraph (13) the fol20 lowing:

21 ‘‘(13A) ‘debtor’s principal residence’ means a

22 residential structure including incidental property

23 when the structure contains 1 to 4 units, whether or

24 not that structure is attached to real property, and

25 includes, without limitation, an individual condo-
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1 minium or cooperative unit or mobile or manufac2 tured home or trailer;’’;

3 (2) by inserting after paragraph (27A), as

4 added by section 318 of this Act, the following:

5 ‘‘(27B) ‘incidental property’ means property in6 cidental to such residence including, without limita7 tion, property commonly conveyed with a principal

8 residence where the real estate is located, window

9 treatments, carpets, appliances and equipment lo10 cated in the residence, and easements, appur11 tenances, fixtures, rents, royalties, mineral rights, oil

12 and gas rights, escrow funds and insurance pro13 ceeds;’’;

14 (3) in section 362(b), as amended by sections

15 117, 118, 132, 136, 141, 203, 818, and 1007—

16 (A) in paragraph (28) by striking ‘‘or’’ at

17 the end thereof;

18 (B) in paragraph (29) by striking the pe19 riod at the end and inserting ‘‘; or’’; and

20 (C) by inserting after paragraph (29) the

21 following:

22 ‘‘(30) under subsection (a), until a prepetition

23 default is cured fully in a case under chapter 13 of

24 this title by actual payment of all arrears as re25 quired by the plan, of the postponement, continu-
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1 ation or other similar delay of a prepetition fore2 closure proceeding or sale in accordance with appli3 cable nonbankruptcy law, but nothing herein shall

4 imply that such postponement, continuation or other

5 similar delay is a violation of the stay under sub6 section (a).’’; and

7 (4) by amending section 1322(b)(2) to read as

8 follows:

9 ‘‘(2) modify the rights of holders of secured

10 claims, other than a claim secured primarily by a se11 curity interest in property used as the debtor’s prin12 cipal residence at any time during 180 days prior to

13 the filing of the petition, or of holders of unsecured

14 claims, or leave unaffected the rights of holders of

15 any class of claims;’’.

16 (f) LIMITATION.—Section 362 of title 11, United

17 States Code, is amended by adding at the end the fol18 lowing:

19 ‘‘(j) If one case commenced under chapter 7, 11, or

20 13 of this title is dismissed due to the creation of a debt

21 repayment plan administered by a credit counseling agen22 cy approved pursuant to section 111 of this title, then for

23 purposes of section 362(c)(3) of this title the subsequent

24 case commenced under any such chapter shall not be pre25 sumed to be filed not in good faith.’’.
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1 (g) RETURN OF GOODS SHIPPED.—Section 546(g) of

2 title 11, United States Code, as added by section 222(a)

3 of Public Law 103–394, is amended to read as follows:

4 ‘‘(h) Notwithstanding the rights and powers of a

5 trustee under sections 544(a), 545, 547, 549, and 553 of

6 this title, if the court determines on a motion by the trust7 ee made not later than 120 days after the date of the order

8 for relief in a case under chapter 11 of this title and after

9 notice and hearing, that a return is in the best interests

10 of the estate, the debtor, with the consent of the creditor,

11 and subject to the prior rights, if any, of third parties in

12 such goods, may return goods shipped to the debtor by

13 the creditor before the commencement of the case, and the

14 creditor may offset the purchase price of such goods

15 against any claim of the creditor against the debtor that

16 arose before the commencement of the case.’’.

17 SEC. 303. EXTENSIONS.

18 Section 302(d)(3) of the Bankruptcy, Judges, United

19 States Trustees, and Family Farmer Bankruptcy Act of

20 1986 (28 U.S.C. 581 note) is amended—

21 (1) in subparagraph (A), in the matter fol22 lowing clause (ii), by striking ‘‘or October 1, 2002,

23 whichever occurs first’’; and

24 (2) in subparagraph (F)—

25 (A) in clause (i)—
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1 (i) in subclause (II), by striking ‘‘or

2 October 1, 2002, whichever occurs first’’;

3 and

4 (ii) in the matter following subclause

5 (II), by striking ‘‘October 1, 2003, or’’;

6 and

7 (B) in clause (ii), in the matter following

8 subclause (II)—

9 (i) by striking ‘‘before October 1,

10 2003, or’’; and

11 (ii) by striking ‘‘, whichever occurs

12 first’’.

13 SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.

14 Section 1408 of title 28, United States Code, is

15 amended—

16 (1) by striking ‘‘Except’’ and inserting ‘‘(a) Ex17 cept’’; and

18 (2) by adding at the end the following:

19 ‘‘(b) For the purposes of subsection (a), if the debtor

20 is a corporation, the domicile and residence of the debtor

21 are conclusively presumed to be where the debtor’s prin22 cipal place of business in the United States is located.’’.

23 SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.

24 (a) Section 365(c) of title 11, United States Code,

25 is amended to read as follows:
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1 ‘‘(c)(1) The trustee may not assume or assign an ex2 ecutory contract or unexpired lease of the debtor, whether

3 or not the contract or lease prohibits or restricts assign4 ment of rights or delegation of duties, if—

5 ‘‘(A)(i) applicable law excuses a party to the

6 contract or lease from accepting performance from

7 or rendering performance to an assignee of the con8 tract or lease, whether or not the contract or lease

9 prohibits or restricts assignment of rights or delega10 tion of duties; and

11 ‘‘(ii) the party does not consent to the assump12 tion or assignment; or

13 ‘‘(B) the contract is a contract to make a loan,

14 or extend other debt financing or financial accom15 modations, to or for the benefit of the debtor, or to

16 issue a security of the debtor.

17 ‘‘(2) Notwithstanding paragraph (1)(A) and applica18 ble nonbankruptcy law, in a case under chapter 11 of this

19 title, a trustee in a case in which a debtor is a corporation,

20 or a debtor in possession, may assume an executory con21 tract or unexpired lease of the debtor, whether or not the

22 contract or lease prohibits or restricts assignment of rights

23 or delegation of duties.

24 ‘‘(3) The trustee may not assume or assign an unex25 pired lease of the debtor of nonresidential real property,
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1 whether or not the contract or lease prohibits or restricts

2 assignment of rights or delegation of duties, if the lease

3 has been terminated under applicable nonbankruptcy law

4 before the order for relief.’’.

5 (b) Section 365(d) of title 11, United States Code,

6 is amended by striking paragraphs (5), (6), (7), (8), and

7 (9), and redesignating paragraph (10) as paragraph (5).

8 (c) Section 365(e) of title 11, United States Code,

9 is amended to read as follows:

10 ‘‘(e)(1) Notwithstanding a provision in an executory

11 contract or unexpired lease, or in applicable law, an execu12 tory contract or unexpired lease of the debtor may not be

13 terminated or modified, and any right or obligation under

14 such contract or lease may not be terminated or modified,

15 at any time after the commencement of the case solely

16 because of a provision in such contract or lease that is

17 conditioned on—

18 ‘‘(A) the insolvency or financial condition of the

19 debtor at any time before the closing of the case;

20 ‘‘(B) the commencement of a case under this

21 title; or

22 ‘‘(C) the appointment of or taking possession by

23 a trustee in a case under this title or a custodian be24 fore such commencement.
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1 ‘‘(2) Paragraph (1) does not apply to an executory

2 contract or unexpired lease of the debtor if the trustee

3 may not assume or assign, and the debtor in possession

4 may not assume, the contract or lease by reason of the

5 provisions of subsection (c) of this section.’’.

6 (d) Section 365(f)(1) of title 11, United States Code,

7 is amended by striking the semicolon and all that follows

8 through ‘‘event’’.

9 TITLE IV SMALL BUSINESS

10 BANKRUPTCY PROVISIONS

11 SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT

12 AND PLAN.

13 (a) Section 1125(a)(1) of title 11, United States

14 Code, is amended by inserting before the semicolon fol15 lowing:

16 ‘‘and in determining whether a disclosure statement pro17 vides adequate information, the court shall consider the

18 complexity of the case, the benefit of additional informa19 tion to creditors and other parties in interest, and the cost

20 of providing additional information’’.

21 (b) Section 1125(f) of title 11, United States Code,

22 is amended to read as follows:

23 ‘‘(f) Notwithstanding subsection (b)—
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1 ‘‘(1) the court may determine that the plan

2 itself provides adequate information and that a sepa3 rate disclosure statement is not necessary;

4 ‘‘(2) the court may approve a disclosure state5 ment submitted on standard forms approved by the

6 court or adopted pursuant to section 2075 of title

7 28, United States Code; and

8 ‘‘(3)(A) the court may conditionally approve a

9 disclosure statement subject to final approval after

10 notice and a hearing;

11 ‘‘(B) acceptances and rejections of a plan may

12 be solicited based on a conditionally approved disclo13 sure statement if the debtor provides adequate infor14 mation to each holder of a claim or interest that is

15 solicited, but a conditionally approved disclosure

16 statement shall be mailed not less than 20 days be17 fore the date of the hearing on confirmation of the

18 plan; and

19 ‘‘(C) the hearing on the disclosure statement may be

20 combined with the hearing on confirmation of a plan.’’.

21 SEC. 402. DEFINITIONS.

22 (a) DEFINITIONS. Section 101 of title 11, United

23 States Code, is amended by striking paragraph (51C) and

24 inserting the following:
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1 ‘‘(51C) ‘small business case’ means a case filed

2 under chapter 11 of this title in which the debtor is

3 a small business debtor; and

4 ‘‘(51D) ‘small business debtor’ means (A) a

5 person (including affiliates of such person that are

6 also debtors under this title) that has aggregate non7 contingent, liquidated secured and unsecured debts

8 as of the date of the petition or the order for relief

9 in an amount not more than $4,000,000 (excluding

10 debts owed to one or more affiliates or insiders), ex11 cept that if a group of affiliated debtors has aggre12 gate noncontingent liquidated secured and unsecured

13 debts greater than $4,000,000 (excluding debt owed

14 to one or more affiliates or insiders), then no mem15 ber of such group is a small business debtor;’’.

16 (b) CONFORMING AMENDMENT.—Section 1102(a)(3)

17 of title 11, United States Code, is amended by inserting

18 ‘‘debtor’’ after ‘‘small business’’ .

19 SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND

20 PLAN.

21 The Advisory Committee on Bankruptcy Rules of the

22 Judicial Conference of the United States shall, within a

23 reasonable period of time after the date of the enactment

24 of this Act, propose for adoption standard form disclosure

25 statements and plans of reorganization for small business
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1 debtors (as defined in section 101 of title 11, United

2 States Code, as amended by this Act), designed to achieve

3 a practical balance between—

4 (1) the reasonable needs of the courts, the

5 United States trustee, creditors, and other parties in

6 interest for reasonably complete information; and

7 (2) economy and simplicity for debtors.

8 SEC. 404. UNIFORM NATIONAL REPORTING REQUIRE9 MENTS.

10 (a) REPORTING REQUIRED.—

11 (1) Title 11, United States Code, is amended by

12 inserting after section 307 the following:

13 ‘‘§ 308. Debtor reporting requirements

14 ‘‘A small business debtor shall file periodic financial

15 and other reports containing information including—

16 ‘‘(1) the debtor’s profitability, that is, approxi17 mately how much money the debtor has been earn18 ing or losing during current and recent fiscal peri19 ods;

20 ‘‘(2) reasonable approximations of the debtor’s

21 projected cash receipts and cash disbursements over

22 a reasonable period;

23 ‘‘(3) comparisons of actual cash receipts and

24 disbursements with projections in prior reports; and

25 ‘‘(4) whether the debtor is—
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1 ‘‘(A) in compliance in all material respects

2 with postpetition requirements imposed by this

3 title and the Federal Rules of Bankruptcy Pro4 cedure; and

5 ‘‘(B) timely filing tax returns and paying

6 taxes and other administrative claims when due,

7 and, if not, what the failures are and how, at

8 what cost, and when the debtor intends to rem9 edy such failures; and

10 ‘‘(5) such other matters as are in the best inter11 ests of the debtor and creditors, and in the public

12 interest in fair and efficient procedures under chap13 ter 11 of this title.’’.

14 (2) The table of sections of chapter 3 of title

15 11, United States Code, is amended by inserting

16 after the item relating to section 307 the following:

‘‘308. Debtor reporting requirements.’’.

17 (b) EFFECTIVE DATE.—The amendments made by

18 subsection (a) shall take effect 60 days after the date on

19 which rules are prescribed pursuant to section 2075, title

20 28, United States Code to establish forms to be used to

21 comply with section 308 of title 11, United States Code,

22 as added by subsection (a).
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1 SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR

2 SMALL BUSINESS CASES.

3 (a) PROPOSAL OF RULES AND FORMS.—The Advi4 sory Committee on Bankruptcy Rules of the Judicial Con5 ference of the United States shall propose for adoption

6 amended Federal Rules of Bankruptcy Procedure and Of7 ficial Bankruptcy Forms to be used by small business

8 debtors to file periodic financial and other reports con9 taining information, including information relating to—

10 (1) the debtor’s profitability;

11 (2) the debtor’s cash receipts and disburse12 ments; and

13 (3) whether the debtor is timely filing tax re14 turns and paying taxes and other administrative

15 claims when due.

16 (b) PURPOSE.—The rules and forms proposed under

17 subsection (a) shall be designed to achieve a practical bal18 ance between—

19 (1) the reasonable needs of the bankruptcy

20 court, the United States trustee, creditors, and other

21 parties in interest for reasonably complete informa22 tion;

23 (2) the small business debtor’s interest that re24 quired reports be easy and inexpensive to complete;

25 and
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1 (3) the interest of all parties that the required

2 reports help the small business debtor to understand

3 its financial condition and plan its future.

4 SEC. 406. DUTIES IN SMALL BUSINESS CASES.

5 (a) DUTIES IN CHAPTER 11 CASES.—Title 11,

6 United States Code, is amended by inserting after section

7 1114 the following:

8 ‘‘§ 1115. Duties of trustee or debtor in possession in

9 small business cases

10 ‘‘(a) In a small business case, a trustee or the debtor

11 in possession, in addition to the duties provided in this

12 title and as otherwise required by law, shall—

13 ‘‘(1) append to the voluntary petition or, in an

14 involuntary case, file within 3 days after the date of

15 the order for relief—

16 ‘‘(A) its most recent balance sheet, state17 ment of operations, cash-flow statement, Fed18 eral income tax return; or

19 ‘‘(B) a statement made under penalty of

20 perjury that no balance sheet, statement of op21 erations, or cash-flow statement has been pre22 pared and no Federal tax return has been filed;

23 ‘‘(2) attend, through its responsible individual,

24 meetings scheduled by the court or the United

25 States trustee, including initial debtor interviews
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1 and meetings of creditors convened under section

2 341 of this title;

3 ‘‘(3) timely file all schedules and statements of

4 financial affairs, unless the court, after notice and a

5 hearing, grants an extension, which shall not extend

6 such time period to a date later than 30 days after

7 the date of the order for relief, absent extraordinary

8 and compelling circumstances;

9 ‘‘(4) file all postpetition financial and other re10 ports required by the Federal Rules of Bankruptcy

11 Procedure or by local rule of the district court;

12 ‘‘(5) subject to section 363(c)(2) of this title,

13 maintain insurance customary and appropriate to

14 the industry;

15 ‘‘(6)(A) timely file tax returns;

16 ‘‘(B) subject to section 363(c)(2) of this title,

17 timely pay all administrative expense tax claims, ex18 cept those being contested by appropriate pro19 ceedings being diligently prosecuted; and

20 ‘‘(C) subject to section 363(c)(2) of this title,

21 establish one or more separate deposit accounts not

22 later than 10 business days after the date of order

23 for relief (or as soon thereafter as possible if all

24 banks contacted decline the business) and deposit

25 therein, not later than 1 business day after receipt
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1 thereof or a responsible time set by the court, all

2 taxes payable for periods beginning after the date

3 the case is commenced that are collected or withheld

4 by the debtor for governmental units unless the

5 court waives this requirement after notice and hear6 ing; and

7 ‘‘(7) allow the United States trustee, or its des8 ignated representative, to inspect the debtor’s busi9 ness premises, books, and records at reasonable

10 times, after reasonable prior written notice, unless

11 notice is waived by the debtor.’’.

12 (b) TECHNICAL AMENDMENT.—The table of sections

13 of chapter 11, United States Code, is amended by insert14 ing after the item relating to section 1114 the following:

‘‘1115. Duties of trustee or debtor in possession in small business cases.’’.

15 SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

16 Section 1121(e) of title 11, United States Code, is

17 amended to read as follows:

18 ‘‘(e) In a small business case—

19 ‘‘(1) only the debtor may file a plan until after

20 90 days after the date of the order for relief, unless

21 a trustee has been appointed under this chapter, or

22 unless the court, on request of a party in interest

23 and after notice and hearing, shortens such time;

24 ‘‘(2) the debtor shall file a plan, and any nec25 essary disclosure statement, not later than 90 days
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1 after the date of the order for relief, unless the

2 United States Trustee has appointed under section

3 1102(a)(1) of this title a committee of unsecured

4 creditors that the court has determined, before the

5 90 days has expired, is sufficiently active and rep6 resentative to provide effective oversight of the debt7 or; and

8 ‘‘(3) the time periods specified in paragraphs

9 (1) and (2) of this subsection and the time fixed in

10 section 1129(e) of this title for confirmation of a

11 plan, may be extended only as follows:

12 ‘‘(A) On request of a party in interest

13 made within the respective periods, and after

14 notice and hearing, the court may for cause

15 grant one or more extensions, cumulatively not

16 to exceed 60 days, if the movant establishes—

17 ‘‘(i) that no cause exists to dismiss or

18 convert the case or appoint a trustee or ex19 aminer under subparagraphs (A) (I) of

20 section 1112(b) of this title; and

21 ‘‘(ii) that there is a reasonable possi22 bility the court will confirm a plan within

23 a reasonable time;

24 ‘‘(B) On request of a party in interest

25 made within the respective periods, and after
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1 notice and hearing, the court may for cause

2 grant one or more extensions in excess of those

3 authorized under subparagraph (A) of this

4 paragraph, if the movant establishes:

5 ‘‘(i) that no cause exists to dismiss or

6 convert the case or appoint a trustee or ex7 aminer under subparagraphs (A) (I) of

8 section 1112(b)(3) of this title; and

9 ‘‘(ii) that it is more likely than not

10 that the court will confirm a plan within a

11 reasonable time; and

12 ‘‘(C) a new deadline shall be imposed

13 whenever an extension is granted.’’.

14 SEC. 408. PLAN CONFIRMATION DEADLINE.

15 Section 1129 of title 11, United States Code, is

16 amended by adding at the end the following:

17 ‘‘(e) In a small business case, the debtor shall confirm

18 a plan not later than 150 days after the date of the order

19 for relief unless—

20 ‘‘(1) the United States Trustee has appointed,

21 under section 1102(a)(1) of this title, a committee

22 of unsecured creditors that the court has deter23 mined, before the 150 days has expired, is suffi24 ciently active and representative to provide effective

25 oversight of the debtor; or
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1 ‘‘(2) such 150-day period is extended as pro2 vided in section 1121(e)(3) of this title.’’.

3 SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

4 Section 105(d) of title 11, United States Code, is

5 amended—

6 (1) in paragraph (2)(B)(vi) by striking the pe7 riod at the end and inserting ‘‘; and’’; and

8 (2) by adding at the end the following:

9 ‘‘(3) in a small business case, not extend the

10 time periods specified in sections 1121(e) and

11 1129(e) of this title except as provided in section

12 1121(e)(3) of this title.’’.

13 SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.

14 Section 586(a) of title 28, United States Code, is

15 amended—

16 (1) in paragraph (3)—

17 (A) in subparagraph (G) by striking ‘‘and

18 at the end’’;

19 (B) by redesignating subparagraph (H) as

20 subparagraph (I); and

21 (C) by inserting after subparagraph (G)

22 the following:

23 ‘‘(H) in small business cases (as defined in

24 section 101 of title 11), performing the addi-
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1 tional duties specified in title 11 pertaining to

2 such cases’’;

3 (2) in paragraph (5) by striking ‘‘and at the

4 end’’;

5 (3) in paragraph (6) by striking the period at

6 the end and inserting ‘‘; and’’; and

7 (4) by inserting after paragraph (7) the fol8 lowing:

9 ‘‘(7) in each of such small business cases—

10 ‘‘(A) conduct an initial debtor interview as

11 soon as practicable after the entry of order for

12 relief but before the first meeting scheduled

13 under section 341(a) of title 11 at which time

14 the United States trustee shall begin to inves15 tigate the debtor’s viability, inquire about the

16 debtor’s business plan, explain the debtor’s obli17 gations to file monthly operating reports and

18 other required reports, attempt to develop an

19 agreed scheduling order, and inform the debtor

20 of other obligations;

21 ‘‘(B) when determined to be appropriate

22 and advisable, visit the appropriate business

23 premises of the debtor and ascertain the state

24 of the debtor’s books and records and verify

25 that the debtor has filed its tax returns; and
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1 ‘‘(C) review and monitor diligently the

2 debtor’s activities, to identify as promptly as

3 possible whether the debtor will be unable to

4 confirm a plan; and

5 ‘‘(8) in cases in which the United States trustee

6 finds material grounds for any relief under section

7 1112 of title 11, the United States trustee shall

8 apply promptly to the court for relief.’’.

9 SEC. 411. SCHEDULING CONFERENCES.

10 Section 105(d) of title 11, United States Code, is

11 amended—

12 (1) in the matter preceding paragraph (1) by

13 striking ‘‘, may’’;

14 (2) by amending paragraph (1) to read as fol15 lows:

16 ‘‘(1) shall hold such status conferences as are

17 necessary to further the expeditious and economical

18 resolution of the case; and’’; and

19 (3) in paragraph (2) by striking ‘‘unless incon20 sistent with another provision of this title or with

21 applicable Federal Rules of Bankruptcy Procedure’’,

22 and inserting ‘‘may’’.

23 SEC. 412. SERIAL FILER PROVISIONS.

24 Section 362 of title 11, United States Code, as

25 amended by section 302, is amended—
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1 (1) in subsection (i) as so redesignated by sec2 tion 122—

3 (A) by striking ‘‘An’’ and inserting ‘‘(1)

4 Except as provided in paragraph (2), an’’; and

5 (B) by adding at the end the following:

6 ‘‘(2) If such violation is based on an action taken by

7 an entity in the good-faith belief that subsection (h) ap8 plies to the debtor, then recovery under paragraph (1)

9 against such entity shall be limited to actual damages.’’;

10 and

11 (2) by inserting after subsection (j), as added

12 by section 302, the following:

13 ‘‘(k)(1) Except as provided in paragraph (2) of this

14 subsection, the provisions of subsection (a) of thissection

15 shall not apply in a case in which the debtor—

16 ‘‘(A) is a debtor in a case under this title pend17 ing at the time the petition is filed;

18 ‘‘(B) was a debtor in a case under this title

19 which was dismissed for any reason by an order that

20 became final in the 2-year period ending on the date

21 of the order for relief entered with respect to the pe22 tition;

23 ‘‘(C) was a debtor in a case under this title in

24 which a chapter 11, 12, or 13 plan was confirmed
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1 in the 2-year period ending on the date of the order

2 for relief entered with respect to the petition; or

3 ‘‘(D) is an entity that has succeeded to sub4 stantially all of the assets or business of a debtor de5 scribed in subparagraph (A), (B), or (C).

6 ‘‘(2) This subsection shall not apply—

7 ‘‘(A) to a case initiated by an involuntary peti8 tion filed by a creditor that is not an insider or affil9 iate of the debtor; or

10 ‘‘(B) after such time as the debtor, after notice

11 and a hearing, demonstrates by a preponderance of

12 the evidence, that the filing of such petition resulted

13 from circumstances beyond the control of the debtor

14 and not foreseeable at the time the earlier case was

15 filed; and that it is more likely than not that the

16 court will confirm a plan, other than a liquidating

17 plan, within a reasonable time.’’.

18 SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CON19 VERSION AND APPOINTMENT OF TRUSTEE

20 OR EXAMINER.

21 (a) EXPANDED GROUNDS FOR DISMISSAL OR CON22 VERSION.—Section 1112(b) of title 11, United States

23 Code, is amended to read as follows:

24 ‘‘(b)(1) Except as provided in paragraphs (2) and (4)

25 of this subsection, and in subsection (c) of this section,
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1 on request of a party in interest, and after notice and a

2 hearing, the court shall convert a case under this chapter

3 to a case under chapter 7 of this title or dismiss a case

4 under this chapter, or appoint a trustee or examiner under

5 section 1104(e) of this title, whichever is in the best inter6 est of creditors and the estate, if the movant establishes

7 cause.

8 ‘‘(2) The court may decline to grant the relief speci9 fied in paragraph (1) of this subsection if the debtor or

10 another party in interest objects and establishes by a pre11 ponderance of the evidence that—

12 ‘‘(A) it is more likely than not that a plan will

13 be confirmed within a time as fixed by this title or

14 by order of the court entered pursuant to section

15 1121(e)(3), or within a reasonable time if no time

16 has been fixed; and

17 ‘‘(B) if the cause is an act or omission of the

18 debtor that—

19 ‘‘(i) there exists a reasonable justification

20 for the act or omission; and

21 ‘‘(ii) the act or omission will be cured with22 in a reasonable time fixed by the court not to

23 exceed 30 days after the court decides the mo24 tion, unless the movant expressly consents to a

25 continuance for a specific period of time, or
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1 compelling circumstances beyond the control of

2 the debtor justify an extension.

3 ‘‘(3) For purposes of this subsection, cause

4 includes—

5 ‘‘(A) substantial or continuing loss to or dimi6 nution of the estate;

7 ‘‘(B) gross mismanagement of the estate;

8 ‘‘(C) failure to maintain insurance that poses a

9 material risk to the estate or the public;

10 ‘‘(D) unauthorized use of cash collateral harm11 ful to one or more creditors;

12 ‘‘(E) failure to comply with an order of the

13 court;

14 ‘‘(F) failure timely to satisfy any filing or re15 porting requirement established by this title or by

16 any rule applicable to a case under this chapter;

17 ‘‘(G) failure to attend the meeting of creditors

18 convened under section 341(a) of this title;

19 ‘‘(H) failure timely to provide information or

20 attend meetings reasonably requested by the United

21 States trustee or bankruptcy administrator;

22 ‘‘(I) failure timely to pay taxes due after the

23 date of the order for relief or to file tax returns due

24 after the order for relief;
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1 ‘‘(J) failure to file a disclosure statement, or to

2 file or confirm a plan, within the time fixed by this

3 title or by order of the court;

4 ‘‘(K) failure to pay any fees or charges required

5 under chapter 123 of title 28, United States Code;

6 ‘‘(L) revocation of an order of confirmation

7 under section 1144 of this title;

8 ‘‘(M) inability to effectuate substantial con9 summation of a confirmed plan;

10 ‘‘(N) material default by the debtor with re11 spect to a confirmed plan; and

12 ‘‘(O) termination of a plan by reason of the oc13 currence of a condition specified in the plan.

14 ‘‘(4) The court may grant relief under this subsection

15 for cause as defined in subparagraphs C, F, G, H, or K

16 of paragraph 3 of this subsection only upon motion of the

17 United States trustee or bankruptcy administrator or

18 upon the courts own motion.

19 ‘‘(5) The court shall commence the hearing on any

20 motion under this subsection not later than 30 days after

21 filing of the motion, and shall decide the motion within

22 15 days after commencement of the hearing, unless the

23 movant expressly consents to a continuance for a specific

24 period of time or compelling circumstances prevent the
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1 court from meeting the time limits established by this

2 paragraph.’’.

3 (b) ADDITIONAL GROUNDS FOR APPOINTMENT OF

4 TRUSTEE OR EXAMINER.—Section 1104 of title 11,

5 United States Code, is amended by adding at the end the

6 following:

7 ‘‘(e) If grounds exist to convert or dismiss the case

8 under section 1112 of this title, the court may instead ap9 point a trustee or examiner, if it determines that such ap10 pointment is in the best interests of creditors and the es11 tate.’’.

12 SEC. 414. STUDY OF OPERATION OF TITLE 11, UNITED

13 STATES CODE, WITH RESPECT TO SMALL

14 BUSINESSES.

15 Not later than 2 years after the date of the enact16 ment of this Act, the Administrator of the Small Business

17 Administration, in consultation with the Attorney General,

18 the Director of the Administrative Office of United States

19 Trustees, and the Director of the Administrative Office

20 of the United States Courts, shall—

21 (1) conduct a study to determine—

22 (A) the internal and external factors that

23 cause small businesses, especially sole propri24 etorships, to become debtors in cases under title

25 11, United States Code, and that cause certain
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1 small businesses to successfully complete cases

2 under chapter 11 of such title; and

3 (B) how Federal laws relating to bank4 ruptcy may be made more effective and efficient

5 in assisting small businesses to remain viable;

6 and

7 (2) submit to the President pro tempore of the

8 Senate and the Speaker of the House of Representa9 tives a report summarizing that study.

10 SEC. 415. PAYMENT OF INTEREST.

11 Section 362(d)(3) of title 11, United States Code, is

12 amended—

13 (1) by inserting ‘‘or 30 days after the court de14 termines that the debtor is subject to this para15 graph, whichever is later’’ after ‘‘90-day period)’’;

16 and

17 (2) by amending subparagraph (B) to read as

18 follows:

19 ‘‘(B) the debtor has commenced monthly

20 payments (which payments may, in the debtor’s

21 sole discretion, notwithstanding section

22 363(c)(2) of this title, be made from rents or

23 other income generated before or after the com24 mencement of the case by or from the property)

25 to each creditor whose claim is secured by such
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1 real estate (other than a claim secured by a

2 judgment lien or by an unmatured statutory

3 lien), which payments are in an amount equal

4 to interest at the then-applicable nondefault

5 contract rate of interest on the value of the

6 creditor’s interest in the real estate; or’’.

7 TITLE V—MUNICIPAL

8 BANKRUPTCY PROVISIONS

9 SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI10 TION.

11 (a) TECHNICAL AMENDMENT RELATING TO MUNICI12 PALITIES.—Section 921(d) of title 11, United States

13 Code, is amended by inserting ‘‘notwithstanding section

14 301(b)’’ before the period at the end.

15 (b) CONFORMING AMENDMENT.—Section 301 of title

16 11, United States Code, is amended—

17 (1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;

18 and

19 (2) by amending the last sentence to read as

20 follows:

21 ‘‘(b) The commencement of a voluntary case under

22 a chapter of this title constitutes an order for relief under

23 such chapter.’’.
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1 SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP2 TER 9.

3 Section 901(a) of title 11, United States Code, is

4 amended—

5 (1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and

6 (2) by inserting ‘‘559, 560, 561, 562’’ after

7 ‘‘557,’’.

8 TITLE VI—STREAMLINING THE

9 BANKRUPTCY SYSTEM

10 SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING

11 OF CREDITORS.

12 Section 341(c) of title 11, United States Code, is

13 amended by inserting after the first sentence the fol14 lowing: ‘‘Notwithstanding any local court rule, provision

15 of a State constitution, any other Federal or State law

16 that is not a bankruptcy law, or other requirement that

17 representation at the meeting of creditors under sub18 section (a) be by an attorney, a creditor holding a con19 sumer debt or any representative of the creditor (which

20 may include an entity or an employee of an entity and

21 may be a representative for more than one creditor) shall

22 be permitted to appear at and participate in the meeting

23 of creditors and activities related thereto in a case under

24 chapter 7 or 13, either alone or in conjunction with an

25 attorney for the creditor. Nothing in this subsection shall
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1 be construed to require any creditor to be represented by

2 an attorney at any meeting of creditors.’’.

3 SEC. 602. AUDIT PROCEDURES.

4 (a) AMENDMENTS.—Section 586 of title 28, United

5 States Code, is amended—

6 (1) in subsection (a) by amending striking

7 paragraph (6) to read as follows:

8 ‘‘(6) make such reports as the Attorney General

9 directs, including the results of audits performed

10 under subsection (f); and’’; and

11 (2) by adding at the end the following:

12 ‘‘(f)(1)(A) The Attorney General shall establish pro13 cedures to determine the accuracy, veracity, and complete14 ness of petitions, schedules, and other information which

15 the debtor is required to provide under sections 521 and

16 1322 of title 11, and, if applicable, section 111 of title

17 11, in individual cases filed under chapter 7 or 13 of such

18 title. Such audits shall be in accordance with generally ac19 cepted auditing standards and performed by independent

20 certified public accountants or independent licensed public

21 accountants.

22 ‘‘(B) Those procedures shall—

23 ‘‘(i) establish a method of selecting appropriate

24 qualified persons to contract to perform those au25 dits;
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1 ‘‘(ii) establish a method of randomly selecting

2 cases to be audited, except that not less than 1 out

3 of every 250 cases in each Federal judicial district

4 shall be selected for audit;

5 ‘‘(iii) require audits for schedules of income and

6 expenses which reflect greater than average

7 variances from the statistical norm of the district in

8 which the schedules were filed; and

9 ‘‘(iv) establish procedures for providing, not less

10 frequently than annually, public information con11 cerning the aggregate results of such audits includ12 ing the percentage of cases, by district, in which a

13 material misstatement of income or expenditures is

14 reported.

15 ‘‘(2) The United States trustee for each district is

16 authorized to contract with auditors to perform audits in

17 cases designated by the United States trustee according

18 to the procedures established under paragraph (1).

19 ‘‘(3)(A) The report of each audit conducted under

20 this subsection shall be filed with the court and trans21 mitted to the United States trustee. Each report shall

22 clearly and conspicuously specify any material

23 misstatement of income or expenditures or of assets iden24 tified by the person performing the audit. In any case

25 where a material misstatement of income or expenditures
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1 or of assets has been reported, the clerk of the bankruptcy

2 court shall give notice of the misstatement to the creditors

3 in the case.

4 ‘‘(B) If a material misstatement of income or expend5 itures or of assets is reported, the United States trustee

6 shall—

7 ‘‘(i) report the material misstatement, if appro8 priate, to the United States Attorney pursuant to

9 section 3057 of title 18, United States Code; and

10 ‘‘(ii) if advisable, take appropriate action, in11 cluding but not limited to commencing an adversary

12 proceeding to revoke the debtor’s discharge pursuant

13 to section 727(d) of title 11, United States Code.’’.

14 (b) AMENDMENTS TO SECTION 521 OF TITLE 11,

15 U.S.C.—Section 521(a) of title 11, United States Code,

16 as amended by section 603, is amended in paragraphs (3)

17 and (4) by adding ‘‘or an auditor appointed pursuant to

18 section 586 of title 28, United States Code’’ after ‘‘serving

19 in the case’’.

20 (c) AMENDMENTS TO SECTION 727 OF TITLE 11,

21 U.S.C.—Section 727(d) of title 11, United States Code,

22 is amended—

23 (1) by deleting ‘‘or’’ at the end of paragraph

24 (2);
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1 (2) by substituting ‘‘; or’’ for the period at the

2 end of paragraph (3); and

3 (3) by adding the following at the end the fol4 lowing:

5 ‘‘(4) the debtor has failed to explain

6 satisfactorily—

7 ‘‘(A) a material misstatement in an audit

8 performed pursuant to section 586(f) of title

9 28, United States Code; or

10 ‘‘(B) a failure to make available for inspec11 tion all necessary accounts, papers, documents,

12 financial records, files, and all other papers,

13 things, or property belonging to the debtor that

14 are requested for an audit conducted pursuant

15 to section 586(f) of title 28, United States

16 Code.’’.

17 (d) EFFECTIVE DATE.—The amendments made by

18 this section shall take effect 18 months after the date of

19 the enactment of this Act.

20 SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7

21 AND 13 CASES.

22 (a) NOTICE.—Section 342 of title 11, United States

23 Code, is amended—

24 (1) in subsection (c)—
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1 (A) by striking ‘‘, but the failure of such

2 notice to contain such information shall not in3 validate the legal effect of such notice’’; and

4 (B) by adding the following at the end:

5 ‘‘If the credit agreement between the debtor and the cred6 itor or the last communication before the filing of the peti7 tion in a voluntary case from the creditor to a debtor who

8 is an individual states an account number of the debtor

9 which is the current account number of the debtor with

10 respect to any debt held by the creditor against the debtor,

11 the debtor shall include such account number in any notice

12 to the creditor required to be given under this title. If the

13 creditor has specified to the debtor an address at which

14 the creditor wishes to receive correspondence regarding

15 the debtor’s account, any notice to the creditor required

16 to be given by the debtor under this title shall be given

17 at such address. For the purposes of this section, ‘notice’

18 shall include, but shall not be limited to, any correspond19 ence from the debtor to the creditor after the commence20 ment of the case, any statement of the debtor’s intention

21 under section 521(a)(2) of this title, notice of the com22 mencement of any proceeding in the case to which the

23 creditor is a party, and any notice of the hearing under

24 section 1324 of this title.’’;

25 (2) by adding at the end the following:
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1 ‘‘(d) At any time, a creditor in a case of an individual

2 debtor under chapter 7 or 13 may file with the court and

3 serve on the debtor a notice of the address to be used to

4 notify the creditor in that case. After 5 days following re5 ceipt of such notice, any notice the court or the debtor

6 is required to give the creditor shall be given at that ad7 dress.

8 ‘‘(e) An entity may file with the court a notice stating

9 its address for notice in cases under chapters 7 and 13.

10 After 30 days following the filing of such notice, any notice

11 in any case filed under chapter 7 or 13 given by the court

12 shall be to that address unless specific notice is given

13 under subsection (d) with respect to a particular case.

14 ‘‘(f) Notice given to a creditor other than as provided

15 in this section shall not be effective notice until it has been

16 brought to the attention of the creditor. If the creditor

17 has designated a person or department to be responsible

18 for receiving notices concerning bankruptcy cases and has

19 established reasonable procedures so that bankruptcy no20 tices received by the creditor will be delivered to such de21 partment or person, notice will not be brought to the at22 tention of the creditor until received by such person or

23 department. No sanction under section 362(h) of this title

24 or any other sanction which a court may impose on ac25 count of violations of the stay under section 362(a) of this
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1 title or failure to comply with section 542 or 543 of this

2 title may be imposed on any action of the creditor unless

3 the action takes place after the creditor has received notice

4 of the commencement of the case effective under this sec5 tion.’’.

6 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

7 United States Code, as amended by sections 604, 120, and

8 302, is amended—

9 (1) by inserting ‘‘(a)’’ before ‘‘The debtor

10 shall—’’;

11 (2) by striking paragraph (1) and inserting the

12 following:

13 ‘‘(1) file—

14 ‘‘(A) a list of creditors; and

15 ‘‘(B) unless the court orders otherwise—

16 ‘‘(i) a schedule of assets and liabil17 ities;

18 ‘‘(ii) a schedule of current monthly in19 come and current expenditures prepared in

20 accordance with section 707(b)(2);

21 ‘‘(iii) a statement of the debtor’s fi22 nancial affairs and, if applicable, a

23 certificate—

24 ‘‘(I) of an attorney whose name

25 is on the petition as the attorney for
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1 the debtor or any bankruptcy petition

2 preparer signing the petition pursuant

3 to section 110(b)(1) of this title indi4 cating that such attorney or bank5 ruptcy petition preparer delivered to

6 the debtor any notice required by sec7 tion 342(b) of this title; or

8 ‘‘(II) if no attorney for the debt9 or is indicated and no bankruptcy pe10 tition preparer signed the petition, of

11 the debtor that such notice was ob12 tained and read by the debtor;

13 ‘‘(iv) copies of any Federal tax re14 turns, including any schedules or attach15 ments, filed by the debtor for the 3-year

16 period preceding the order for relief;

17 ‘‘(v) copies of all payment advices or

18 other evidence of payment, if any, received

19 by the debtor from any employer of the

20 debtor in the period 60 days prior to the

21 filing of the petition; and

22 ‘‘(vi) a statement disclosing any rea23 sonably anticipated increase in income or

24 expenditures over the 12-month period fol25 lowing the date of filing;’’; and
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1 (3) by adding at the end the following:

2 ‘‘(e)(1) At any time, a creditor, in the case of an indi3 vidual under chapter 7 or 13, may file with the court no4 tice that the creditor requests the petition, schedules, and

5 a statement of affairs filed by the debtor in the case and

6 the court shall make those documents available to the

7 creditor who requests those documents at a reasonable

8 cost within 5 business days after such request.

9 ‘‘(2) At any time, a creditor in a case under chapter

10 13 may file with the court notice that the creditor requests

11 the plan filed by the debtor in the case, and the court

12 shall make such plan available to the creditor who requests

13 such plan at a reasonable cost and not later than 5 days

14 after such request.

15 ‘‘(f) An individual debtor in a case under chapter 7

16 or 13 shall file with the court—

17 ‘‘(1) at the time filed with the taxing authority,

18 all tax returns, including any schedules or attach19 ments, with respect to the period from the com20 mencement of the case until such time as the case

21 is closed;

22 ‘‘(2) at the time filed with the taxing authority,

23 all tax returns, including any schedules or attach24 ments, that were not filed with the taxing authority

25 when the schedules under subsection (a)(1) were
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1 filed with respect to the period that is 3 years before

2 the order for relief;

3 ‘‘(3) any amendments to any of the tax returns,

4 including schedules or attachments, described in

5 paragraph (1) or (2); and

6 ‘‘(4) in a case under chapter 13, a statement

7 subject to the penalties of perjury by the debtor of

8 the debtor’s current monthly income and expendi9 tures in the preceding tax year and current monthly

10 income less expenditures for the month preceding

11 the statement prepared in accordance with section

12 707(b)(2) that shows how the amounts are

13 calculated—

14 ‘‘(A) beginning on the date that is the

15 later of 90 days after the close of the debtor’s

16 tax year or 1 year after the order for relief, un17 less a plan has been confirmed; and

18 ‘‘(B) thereafter, on or before the date that

19 is 45 days before each anniversary of the con20 firmation of the plan until the case is closed.

21 ‘‘(g)(1) A statement referred to in subsection (f)(4)

22 shall disclose—

23 ‘‘(A) the amount and sources of income of the

24 debtor;
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1 ‘‘(B) the identity of any persons responsible

2 with the debtor for the support of any dependents of

3 the debtor; and

4 ‘‘(C) the identity of any persons who contrib5 uted, and the amount contributed, to the household

6 in which the debtor resides.

7 ‘‘(2) The tax returns, amendments, and statement of

8 income and expenditures described in paragraph (1) shall

9 be available to the United States trustee, any bankruptcy

10 administrator, any trustee, and any party in interest for

11 inspection and copying, subject to the requirements of

12 subsection (h).

13 ‘‘(h)(1) Not later than 30 days after the date of the

14 enactment of the Consumer Bankruptcy Reform Act of

15 1999, the Director of the Administrative Office of the

16 United States Courts shall establish procedures for safe17 guarding the confidentiality of any tax information re18 quired to be provided under this section.

19 ‘‘(2) The procedures under paragraph (1) shall in20 clude reasonable restrictions on creditor access to tax in21 formation that is required to be provided under this sec22 tion to verify creditor identity and to restrict use of the

23 information except with respect to the case.

24 ‘‘(3) Not later than 1 year after the date of the enact25 ment of the Consumer Bankruptcy Reform Act of 1999,
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1 the Director of the Administrative Office of the United

2 States Courts shall prepare, and submit to Congress a re3 port that—

4 ‘‘(A) assesses the effectiveness of the proce5 dures under paragraph (1) to provide timely and

6 sufficient information to creditors concerning the

7 case; and

8 ‘‘(B) if appropriate, includes proposed

9 legislation—

10 ‘‘(i) to further protect the confidentiality of

11 tax information or to make it better available to

12 creditors; and

13 ‘‘(ii) to provide penalties for the improper

14 use by any person of the tax information re15 quired to be provided under this section.

16 ‘‘(i) If requested by the United States trustee or a

17 trustee serving in the case, the debtor provide a document

18 that establishes the identity of the debtor, including a

19 driver’s license, passport, or other document that contains

20 a photograph of the debtor and such other personal identi21 fying information relating to the debtor that establishes

22 the identity of the debtor.’’.

23 (c) Section 1324 of title 11, United States Code, is

24 amended—

25 (1) by inserting ‘‘(a)’’ before ‘‘After’’; and
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1 (2) by inserting at the end thereof—

2 ‘‘(c) Whenever a party in interest is given notice of

3 a hearing on the confirmation or modification of a plan

4 under this chapter, such notice shall include the informa5 tion provided by the debtor on the most recent statement

6 filed with the court pursuant to section 521(a)(1)(B)(ii)

7 or (f)(4) of this title.’’.

8 SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED9 ULES OR PROVIDE REQUIRED INFORMATION.

10 Section 521 of title 11, United States Code, as

11 amended by section 603 is amended by inserting after sub12 section (a) the following:

13 ‘‘(b)(1) Notwithstanding section 707(a) of this title,

14 and subject to paragraph (2), if an individual debtor in

15 a voluntary case under chapter 7 or 13 fails to file all

16 of the information required under subsection (a)(1) within

17 45 days after the filing of the petition commencing the

18 case, the case shall be automatically dismissed effective

19 on the 46th day after the filing of the petition.

20 ‘‘(2) With respect to a case described in paragraph

21 (1), any party in interest may request the court to enter

22 an order dismissing the case. The court shall, if so re23 quested, enter an order of dismissal not later than 5 days

24 after such request.
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1 ‘‘(3) Upon request of the debtor made within 45 days

2 after the filing of the petition commencing a case de3 scribed in paragraph (1), the court may allow the debtor

4 an additional period not to exceed 45 days to file the infor5 mation required under subsection (a)(1) if the court finds

6 justification for extending the period for the filing.’’.

7 SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON

8 CONFIRMATION OF THE PLAN.

9 (a) HEARING.—Section 1324 of title 11, United

10 States Code, is amended—

11 (1) by striking ‘‘After’’ and inserting the fol12 lowing:

13 ‘‘(a) Except as provided in subsection (b) and after’’;

14 and

15 (2) by adding at the end the following:

16 ‘‘(b) The hearing on confirmation of the plan may

17 be held not earlier than 20 days, and not later than 45

18 days, after the meeting of creditors under section 341(a)

19 of this title.’’.

20 SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION

21 IN CERTAIN CASES.

22 Title 11, United States Code, is amended—

23 (1) by amending section 1322(d) to read as fol24 lows:
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1 ‘‘(d) If the current monthly income of the debtor and

2 the debtor’s spouse combined, when multiplied by 12, is

3 not less than the highest national median family income

4 last reported by the Bureau of the Census for a family

5 of equal or lesser size or, in the case of a household of

6 one person, not less than the national median household

7 income for one earner, the plan may not provide for pay8 ments over a period that is longer than 5 years. If the

9 current monthly income of the debtor and the debtor’s

10 spouse combined, when multiplied by 12, is less than the

11 highest national median family income for a family of

12 equal or lesser size, or in the case of a household of one

13 person, the national median household income for one

14 earner, the plan may not provide for payments over a pe15 riod that is longer than 3 years, unless the court, for

16 cause, approves a longer period, but the court may not

17 approve a period that is longer than 5 years. Notwith18 standing the foregoing, the national median family income

19 for a family of more than four individuals shall be the

20 national median family income last reported by the Bu21 reau of the Census for a family of four individuals plus

22 $583 for each additional member of the family.’’;

23 (2) in section 1325(b)(1)(B) as amended by

24 section 130—
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1 (A) by striking ‘‘three year period’’ and in2 serting ‘‘applicable commitment period’’; and

3 (B) by inserting at the end of subpara4 graph (B) the following: ‘‘The ‘applicable com5 mitment period’ shall be not less than 5 years

6 if the current monthly income of the debtor and

7 the debtor’s spouse combined, when multiplied

8 by 12, is not less than the highest national me9 dian family income last reported by the Bureau

10 of the Census for a family of equal or lesser

11 size, or in the case of a household of one per12 son, the national median household income for

13 one earner. Notwithstanding the foregoing, the

14 national median family income for a family of

15 more than four individuals shall be the national

16 median family income last reported by the Bu17 reau of the Census for a family of four individ18 uals plus $583 for each additional member of

19 the family.’’; and

20 (3) in section 1329—

21 (A) by striking in subsection (c) ‘‘three

22 years’’ and inserting ‘‘the applicable commit23 ment period under section 1325(b)(1)(B)’’; and

24 (B) by inserting at the end of subsection

25 (c) the following:
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1 ‘‘The duration period shall be 5 years if the current

2 monthly income of the debtor and the debtor’s spouse

3 combined, when multiplied by 12, is not less than the high4 est national median family income last reported by the Bu5 reau of the Census for a family of equal or lesser size or,

6 in the case of a household of one person, the national me7 dian household income for one earner, as of the date of

8 the modification and shall be 3 years if the current month9 ly total income of the debtor and the debtor’s spouse com10 bined, when multiplied by 12, is less than the highest na11 tional median family income last reported by the Bureau

12 of the Census for a family of equal or lesser size or, in

13 the case of a household of one person, less than the na14 tional median household income for one earner as of the

15 date of the modification. Notwithstanding the foregoing,

16 the national median family income for a family of more

17 than four individuals shall be the national median family

18 income last reported by the Bureau of the Census for a

19 family of four individuals plus $583 for each additional

20 member of the family.’’.

21 SEC. 607. SENSE OF THE CONGRESS REGARDING EXPAN22 SION OF RULE 9011 OF THE FEDERAL RULES

23 OF BANKRUPTCY PROCEDURE.

24 It is the sense of the Congress that rule 9011 of the

25 Federal Rules of Bankruptcy Procedure (11 U.S.C. App)
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1 should be modified to include a requirement that all docu2 ments (including schedules), signed and unsigned, sub3 mitted to the court or to a trustee by debtors who rep4 resent themselves and debtors who are represented by an

5 attorney be submitted only after the debtor or the debtor’s

6 attorney has made reasonable inquiry to verify that the

7 information contained in such documents is well grounded

8 in fact, and is warranted by existing law or a good-faith

9 argument for the extension, modification, or reversal of

10 existing law.

11 SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN

12 CHAPTER 11 BANKRUPTCY CASES.

13 (a) AMENDMENTS.—Section 1930(a)(6) of title 28,

14 United States Code, is amended—

15 (1) in the first sentence by striking ‘‘until the

16 case is converted or dismissed, whichever occurs

17 first’’; and

18 (2) in the second sentence—

19 (A) by striking ‘‘The’’ and inserting ‘‘Until

20 the plan is confirmed or the case is converted

21 (whichever occurs first) the’’; and

22 (B) by striking ‘‘less than $300,000;’’ and

23 inserting ‘‘less than $300,000. Until the case is

24 converted, dismissed, or closed (whichever oc-
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1 curs first and without regard to confirmation of

2 the plan) the fee shall be’’.

3 (b) DELAYED EFFECTIVE DATE.—The amendments

4 made by subsection (a) shall take effect on October 1,

5 1999.

6 SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX7 TENDED TO DEPENDENT STUDENTS.

8 Not later than 1 year after the date of the enactment

9 of this Act, the Comptroller General of the United States

10 shall—

11 (1) conduct a study regarding the impact that

12 the extension of credit to individuals who are—

13 (A) claimed as dependents for purposes of

14 the Internal Revenue Code of 1986; and

15 (B) enrolled in post-secondary educational

16 institutions,

17 has on the rate of cases filed under title 11, United

18 States Code; and

19 (2) submit to the Speaker of the House of Rep20 resentatives and the President pro tempore of the

21 Senate a report summarizing such study.

22 SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL

23 CASES.

24 Section 362(e) of title 11, United States Code, is

25 amended—
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1 (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and

2 (2) by adding at the end the following:

3 ‘‘(2) Notwithstanding paragraph (1), in the case of

4 an individual filing under chapter 7, 11, or 13, the stay

5 under subsection (a) shall terminate on the date that is

6 60 days after a request is made by a party in interest

7 under subsection (d), unless—

8 ‘‘(A) a final decision is rendered by the court

9 during the 60-day period beginning on the date of

10 the request; or

11 ‘‘(B) that 60-day period is extended—

12 ‘‘(i) by agreement of all parties in interest;

13 or

14 ‘‘(ii) by the court for such specific period

15 of time as the court finds is required by for

16 good cause as described in findings made by the

17 court.’’.

18 SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAP19 TER 13.

20 Section 348(f)(1) of title 11, United States Code, is

21 amended—

22 (1) in subparagraph (A), by striking ‘‘and’’ at

23 the end;

24 (2) in subparagraph (B)—
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1 (A) by striking ‘‘in the converted case,

2 with allowed secured claims’’ and inserting

3 ‘‘only in a case converted to chapter 11 or 12

4 but not in a case converted to chapter 7, with

5 allowed secured claims in cases under chapters

6 11 and 12’’; and

7 (B) by striking the period and inserting ‘‘;

8 and’’; and

9 (3) by adding at the end the following:

10 ‘‘(C) with respect to cases converted from chap11 ter 13—

12 ‘‘(i) the claim of any creditor holding secu13 rity as of the date of the petition shall continue

14 to be secured by that security unless the full

15 amount of such claim determined under appli16 cable nonbankruptcy law has been paid in full

17 as of the date of conversion, notwithstanding

18 any valuation or determination of the amount

19 of an allowed secured claim made for the pur20 poses of the chapter 13 proceeding; and

21 ‘‘(ii) unless a prebankruptcy default has

22 been fully cured pursuant to the plan at the

23 time of conversion, in any proceeding under this

24 title or otherwise, the default shall have the ef-
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1 fect given under applicable nonbankruptcy

2 law.’’.

3 SEC. 612. BANKRUPTCY APPEALS.

4 (a) APPEALS.—Title 28, United States Code, is

5 amended by inserting after section 1292 the following:

6 ‘‘§ 1293. Bankruptcy appeals

7 ‘‘(a) The courts of appeals (other than the United

8 States Court of Appeals for the Federal Circuit) shall have

9 jurisdiction of appeals from the following:

10 ‘‘(1) Final orders and judgments entered by

11 bankruptcy courts and district courts in cases under

12 title 11, in proceedings arising under title 11, and

13 in proceedings arising in or related to a case under

14 title 11, including final orders in proceedings regard15 ing the automatic stay of section 362 of title 11,

16 United States Code.

17 ‘‘(2) Interlocutory orders entered by bankruptcy

18 courts and district courts granting, continuing,

19 modifying, refusing or dissolving injunctions, or re20 fusing to dissolve or modify injunctions in cases

21 under title 11, in proceedings arising under title 11,

22 and in proceedings arising in or related to a case

23 under title 11, other than interlocutory orders in

24 proceedings regarding the automatic stay of section

25 362 of title 11, United States Code.
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1 ‘‘(3) Interlocutory orders of bankruptcy courts

2 and district courts entered under section 1104(a) or

3 1121(d) of title 11, or the refusal to enter an order

4 under such section.

5 ‘‘(4) An interlocutory order of a bankruptcy

6 court or district court entered in a case under title

7 11, in a proceeding arising under title 11, or in a

8 proceeding arising in or related to a case under title

9 11, if the court of appeals that would have jurisdic10 tion of an appeal of a final order entered in such

11 case or such proceeding permits, in its discretion,

12 appeal to be taken from such interlocutory order.

13 ‘‘(5) Final decisions, judgments, orders, and de14 crees entered by a bankruptcy appellate panel under

15 subsection (b) of this section.

16 ‘‘(b)(1) The judicial council of a circuit may establish

17 a bankruptcy appellate panel composed of bankruptcy

18 judges in the circuit who are appointed by the judicial

19 council, which panel shall exercise the jurisdiction to re20 view orders and judgments of bankruptcy courts described

21 in paragraphs (1) through (5) of subsection (a) of this

22 section unless—

23 ‘‘(A) the appellant elects at the time of filing

24 the appeal; or
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1 ‘‘(B) any other party elects, not later than 10

2 days after service of the notice of the appeal,

3 to have such jurisdiction exercised by the court of appeals.

4 ‘‘(2) An appeal to be heard by a bankruptcy appellate

5 panel under paragraph (1) shall be heard by three mem6 bers of the bankruptcy appellate panel, provided that a

7 member of such panel may not hear an appeal originating

8 in the district for which such member is appointed or des9 ignated under section 152 of this title.

10 ‘‘(3) If authorized by the Judicial Conference of the

11 United States, the judicial councils of two or more circuits

12 may establish a joint bankruptcy appellate panel.’’.

13 (b) PROCEDURAL RULES.—Until rules of practice

14 and procedure are promulgated or amended pursuant to

15 the Rules Enabling Act (28 U.S.C. 2071–77) to govern

16 appeals to a bankruptcy appellate panel or to a court of

17 appeals exercising jurisdiction pursuant to section 1293

18 of title 28, as added by this Act, the following shall apply:

19 (1) A notice of appeal with respect to an appeal

20 from an order or judgment of a bankruptcy court to

21 a court of appeals or a bankruptcy appellate panel

22 must be filed within the time provided in Rule 8002

23 of the Federal Rules of Bankruptcy Procedure.

24 (2) An appeal to a bankruptcy appellate panel

25 shall be taken in the manner provided in Part VIII
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1 of the Federal Rules of Bankruptcy Procedure and

2 local court rules.

3 (3) An appeal from an order or judgment of a

4 bankruptcy court directly to a court of appeals shall

5 be governed by the rules of practice and procedure

6 that apply to a civil appeal from a judgment of a

7 district court exercising original jurisdiction, as if

8 the bankruptcy court were a district court, except as

9 provided in paragraph (1) regarding the time to ap10 peal or by local court rules.

11 (4) An appeal to a court of appeals from a deci12 sion, judgment, order, or decree entered by a bank13 ruptcy appellate panel exercising appellate jurisdic14 tion shall be taken in the manner provided by Rule

15 6(b) of the Federal Rules of Appellate Procedure.

16 (c) REPEALER.—(1) Section 158 of title 28, United

17 States Code, is repealed.

18 (2) The table of sections of chapter 6 of title 28,

19 United States Code, is amended by striking the item relat20 ing to section 158.

21 SEC. 613. GAO STUDY.

22 (a) STUDY.—Not later than 270 days after the date

23 of the enactment of this Act, the Comptroller General of

24 the United States shall conduct a study of the feasibility,

25 effectiveness, and cost of requiring trustees appointed
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1 under title 11, United States Code, or the bankruptcy

2 courts, to provide to the Office of Child Support Enforce3 ment promptly after the commencement of cases by indi4 vidual debtors under such title, the names and social secu5 rity numbers of such debtors for the purposes of allowing

6 such Office to determine whether such debtors have out7 standing obligations for child support (as determined on

8 the basis of information in the Federal Case Registry or

9 other national database).

10 (b) REPORT.—Not later than 300 days after the date

11 of the enactment of this Act, the Comptroller General shall

12 submit to the Speaker of the House of Representatives

13 and the President pro tempore of the Senate, a report con14 taining the results of the study required by subsection (a).

15 SEC. 614. COMPENSATING TRUSTEES.

16 Title 11, United States Code, is amended—

17 (1) in section 104(b)(1) in the material pre18 ceding subparagraph (A)—

19 (A) by striking ‘‘and’’; and

20 (B) by inserting ‘‘, 1326(b)(3)’’ before

21 ‘‘immediately’’;

22 (2) in section 326, by inserting at the end the

23 following:

24 ‘‘(e) Notwithstanding any other provision of this sec25 tion, the court shall allow reasonable compensation under
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1 section 330(a) of this title for the services and expenses

2 of the trustee in taking the actions described in para3 graphs (1) and (2) if—

4 ‘‘(1) a trustee in a chapter 7 case commences

5 a motion to dismiss or convert under section 707(b)

6 and such motion is granted; or

7 ‘‘(2) the trustee demonstrates by a preponder8 ance of the evidence that the case was converted or

9 dismissed because of the trustee’s actions.’’; and

10 (3) in section 1326(b)—

11 (A) in paragraph (1), by striking ‘‘and’’;

12 (B) in paragraph (2), by striking the pe13 riod at the end thereof and inserting ‘‘; and’’;

14 and

15 (C) by adding at the end the following:

16 ‘‘(3)(A) the amount of the compensation de17 scribed in subclauses (I) and (II) which is unpaid at

18 the time of each such payment, prorated over the re19 maining duration of the plan—

20 ‘‘(i) and which has been allowed in a

21 case—

22 ‘‘(I) converted to this chapter; or

23 ‘‘(II) dismissed from chapter 7 in

24 which the debtor in this case was a debtor,

25 whether dismissed voluntarily by the debt-
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1 or or on motion of the trustee under sec2 tion 707(b);

3 ‘‘(ii) but only to the extent such compensa4 tion has been allowed to a chapter 7 trustee

5 under section 326(e);

6 ‘‘(B) the compensation payable to the chapter 7

7 trustee in the case under this chapter shall not ex8 ceed the greater of the trustee fee allowed pursuant

9 to section 330 of this title plus—

10 ‘‘(i) $25 per month; or

11 ‘‘(ii) the amount payable to unsecured non12 priority creditors as provided by the plan multi13 plied by 5 percent, and the result divided by the

14 number of months in the plan; and

15 ‘‘(C) notwithstanding any other provision of

16 this title, any such compensation awarded to a chap17 ter 7 trustee in a converted or dismissed case shall

18 be payable and may be collected in a case under this

19 chapter—

20 ‘‘(i) even if such amount has been dis21 charged in a prior proceeding under this title;

22 and

23 ‘‘(ii) only to the extent permitted by this

24 section.’’.
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1 TITLE VII—BANKRUPTCY DATA

2 SEC. 701. IMPROVED BANKRUPTCY STATISTICS.

3 (a) AMENDMENT.—Chapter 6 of part I of title 28,

4 United States Code, is amended by adding at the end the

5 following:

6 ‘‘§ 159. Bankruptcy statistics

7 ‘‘(a) The clerk of each district shall compile statistics

8 regarding individual debtors with primarily consumer

9 debts seeking relief under chapters 7, 11, and 13 of title

10 11. Those statistics shall be in a form prescribed by the

11 Director of the Administrative Office of the United States

12 Courts (referred to in this section as the ‘Office’).

13 ‘‘(b) The Director shall—

14 ‘‘(1) compile the statistics referred to in sub15 section (a);

16 ‘‘(2) make the statistics available to the public;

17 and

18 ‘‘(3) not later than October 31, 2000, and an19 nually thereafter, prepare, and submit to Congress a

20 report concerning the information collected under

21 subsection (a) that contains an analysis of the infor22 mation.

23 ‘‘(c) The compilation required under subsection (b)

24 shall—
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1 ‘‘(1) be itemized, by chapter, with respect to

2 title 11, United States Code;

3 ‘‘(2) be presented in the aggregate and for each

4 district; and

5 ‘‘(3) include information concerning—

6 ‘‘(A) the total assets and total liabilities of

7 the debtors described in subsection (a), and in

8 each category of assets and liabilities, as re9 ported in the schedules prescribed pursuant to

10 section 2075 of this title and filed by those

11 debtors;

12 ‘‘(B) the current monthly income, and av13 erage income and average expenses of those

14 debtors as reported on the schedules and state15 ments that each such debtor files under sections

16 521 and 1322 of title 11, United States Code;

17 ‘‘(C) the aggregate amount of debt dis18 charged in the reporting period, determined as

19 the difference between the total amount of debt

20 and obligations of a debtor reported on the

21 schedules and the amount of such debt reported

22 in categories which are predominantly non23 dischargeable;
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1 ‘‘(D) the average period of time between

2 the filing of the petition and the closing of the

3 case;

4 ‘‘(E) for the reporting period—

5 ‘‘(i) the number of cases in which a

6 reaffirmation was filed; and

7 ‘‘(ii)(I) the total number of reaffirma8 tions filed;

9 ‘‘(II) of those cases in which a reaffir10 mation was filed, the number in which the

11 debtor was not represented by an attorney;

12 and

13 ‘‘(III) of those cases, the number of

14 cases in which the reaffirmation was ap15 proved by the court;

16 ‘‘(F) with respect to cases filed under

17 chapter 13 of title 11, for the reporting

18 period—

19 ‘‘(i)(I) the number of cases in which a

20 final order was entered determining the

21 value of property securing a claim in an

22 amount less than the amount of the claim;

23 and
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1 ‘‘(II) the number of final orders deter2 mining the value of property securing a

3 claim issued;

4 ‘‘(ii) the number of cases dismissed,

5 the number of cases dismissed for failure

6 to make payments under the plan, the

7 number of cases refiled after dismissal,

8 and the number of cases in which the plan

9 was completed, separately itemized with re10 spect to the number of modifications made

11 before completion of the plan, if any; and

12 ‘‘(iii) the number of cases in which

13 the debtor filed another case within the 6

14 years previous to the filing;

15 ‘‘(G) the number of cases in which credi16 tors were fined for misconduct and any amount

17 of punitive damages awarded by the court for

18 creditor misconduct; and

19 ‘‘(H) the number of cases in which sanc20 tions under rule 9011 of the Federal Rules of

21 Bankruptcy Procedure were imposed against

22 debtor’s counsel and damages awarded under

23 such Rule.’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of chapter 6 of title 28, United States

3 Code, is amended by adding at the end the following:

‘‘159. Bankruptcy statistics.’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall take effect 18 months after the date of

6 the enactment of this Act.

7 SEC. 702. UNIFORM RULES FOR THE COLLECTION OF BANK8 RUPTCY DATA.

9 (a) AMENDMENT.—Title 28, United States Code, is

10 amended by inserting after section 589a the following:

11 ‘‘§ 589b. Bankruptcy data

12 ‘‘(a) RULES.—The Attorney General shall, within a

13 reasonable time after the effective date of this section,

14 issue rules requiring uniform forms for (and from time

15 to time thereafter to appropriately modify and approve)—

16 ‘‘(1) final reports by trustees in cases under

17 chapters 7, 12, and 13 of title 11, United States

18 Code; and

19 ‘‘(2) periodic reports by debtors in possession or

20 trustees, as the case may be, in cases under chapter

21 11 of title 11, United States Code.

22 ‘‘(b) REPORTS.—All reports referred to in subsection

23 (a) shall be designed (and the requirements as to place

24 and manner of filing shall be established) so as to facili25 tate compilation of data and maximum possible access of
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1 the public, both by physical inspection at one or more cen2 tral filing locations, and by electronic access through the

3 Internet or other appropriate media.

4 ‘‘(c) REQUIRED INFORMATION.—The information re5 quired to be filed in the reports referred to in subsection

6 (b) shall be that which is in the best interests of debtors

7 and creditors, and in the public interest in reasonable and

8 adequate information to evaluate the efficiency and practi9 cality of the Federal bankruptcy system. In issuing rules

10 proposing the forms referred to in subsection (a), the At11 torney General shall strike the best achievable practical

12 balance between—

13 ‘‘(1) the reasonable needs of the public for in14 formation about the operational results of the Fed15 eral bankruptcy system; and

16 ‘‘(2) economy, simplicity, and lack of undue

17 burden on persons with a duty to file reports.

18 ‘‘(d) FINAL REPORTS.—Final reports proposed for

19 adoption by trustees under chapters 7, 12, and 13 of title

20 11 shall, in addition to such other matters as are required

21 by law or as the Attorney General in the discretion of the

22 Attorney General, shall propose, include with respect to

23 a case under such title—

24 ‘‘(1) information about the length of time the

25 case was pending;
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1 ‘‘(2) assets abandoned;

2 ‘‘(3) assets exempted;

3 ‘‘(4) receipts and disbursements of the estate;

4 ‘‘(5) expenses of administration;

5 ‘‘(6) claims asserted;

6 ‘‘(7) claims allowed; and

7 ‘‘(8) distributions to claimants and claims dis8 charged without payment,

9 in each case by appropriate category and, in cases under

10 chapters 12 and 13 of title 11, date of confirmation of

11 the plan, each modification thereto, and defaults by the

12 debtor in performance under the plan.

13 ‘‘(e) PERIODIC REPORTS.—Periodic reports proposed

14 for adoption by trustees or debtors in possession under

15 chapter 11 of title 11 shall, in addition to such other mat16 ters as are required by law or as the Attorney General,

17 in the discretion of the Attorney General, shall propose,

18 include—

19 ‘‘(1) information about the standard industry

20 classification, published by the Department of Com21 merce, for the businesses conducted by the debtor;

22 ‘‘(2) length of time the case has been pending;

23 ‘‘(3) number of full-time employees as at the

24 date of the order for relief and at end of each re25 porting period since the case was filed;
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1 ‘‘(4) cash receipts, cash disbursements and

2 profitability of the debtor for the most recent period

3 and cumulatively since the date of the order for re4 lief;

5 ‘‘(5) compliance with title 11, whether or not

6 tax returns and tax payments since the date of the

7 order for relief have been timely filed and made;

8 ‘‘(6) all professional fees approved by the court

9 in the case for the most recent period and cumula10 tively since the date of the order for relief (sepa11 rately reported, in for the professional fees incurred

12 by or on behalf of the debtor, between those that

13 would have been incurred absent a bankruptcy case

14 and those not); and

15 ‘‘(7) plans of reorganization filed and confirmed

16 and, with respect thereto, by class, the recoveries of

17 the holders, expressed in aggregate dollar values

18 and, in the case of claims, as a percentage of total

19 claims of the class allowed.’’.

20 (b) TECHNICAL AMENDMENT.—The table of sections

21 of chapter 39 of title 28, United States Code, is amended

22 by adding at the end the following:

‘‘589b. Bankruptcy data.’’.

23 SEC. 703. SENSE OF THE CONGRESS REGARDING AVAIL24 ABILITY OF BANKRUPTCY DATA.

25 It is the sense of the Congress that—
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1 (1) the national policy of the United States

2 should be that all data held by bankruptcy clerks in

3 electronic form, to the extent such data reflects only

4 public records (as defined in section 107 of title 11,

5 United States Code), should be released in a usable

6 electronic form in bulk to the public subject to such

7 appropriate privacy concerns and safeguards as the

8 Judicial Conference of the United States may deter9 mine; and

10 (2) there should be established a bankruptcy

11 data system in which—

12 (A) a single set of data definitions and

13 forms are used to collect data nationwide; and

14 (B) data for any particular bankruptcy

15 case are aggregated in the same electronic

16 record.

17 TITLE VIII—BANKRUPTCY TAX

18 PROVISIONS

19 SEC. 801. TREATMENT OF CERTAIN LIENS.

20 (a) TREATMENT OF CERTAIN LIENS.—Section 724

21 of title 11, United States Code, is amended—

22 (1) in subsection (b), in the matter preceding

23 paragraph (1), by inserting ‘‘(other than to the ex24 tent that there is a properly perfected unavoidable

25 tax lien arising in connection with an ad valorem tax
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1 on real or personal property of the estate)’’ after

2 ‘‘under this title’’;

3 (2) in subsection (b)(2), after ‘‘507(a)(1)’’, in4 sert ‘‘(except that such expenses, other than claims

5 for wages, salaries, or commissions which arise after

6 the filing of a petition, shall be limited to expenses

7 incurred under chapter 7 of this title and shall not

8 include expenses incurred under chapter 11 of this

9 title)’’; and

10 (3) by adding at the end the following:

11 ‘‘(e) Before subordinating a tax lien on real or per12 sonal property of the estate, the trustee shall—

13 ‘‘(1) exhaust the unencumbered assets of the

14 estate; and

15 ‘‘(2) in a manner consistent with section 506(c)

16 of this title, recover from property securing an al17 lowed secured claim the reasonable, necessary costs

18 and expenses of preserving or disposing of that prop19 erty.

20 ‘‘(f) Notwithstanding the exclusion of ad valorem tax

21 liens set forth in this section and subject to the require22 ments of subsection (e)—

23 ‘‘(1) claims for wages, salaries, and commis24 sions that are entitled to priority under section

25 507(a)(3) of this title; or
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1 ‘‘(2) claims for contributions to an employee

2 benefit plan entitled to priority under section

3 507(a)(4) of this title,

4 may be paid from property of the estate which secures

5 a tax lien, or the proceeds of such property.’’.

6 (b) DETERMINATION OF TAX LIABILITY.—Section

7 505(a)(2) of title 11, United States Code, is amended—

8 (1) in subparagraph (A), by striking ‘‘or’’ at

9 the end;

10 (2) in subparagraph (B), by striking the period

11 at the end and inserting ‘‘; or’’; and

12 (3) by adding at the end the following:

13 ‘‘(C) the amount or legality of any amount aris14 ing in connection with an ad valorem tax on real or

15 personal property of the estate, if the applicable pe16 riod for contesting or redetermining that amount

17 under any law (other than a bankruptcy law) has ex18 pired.’’.

19 SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.

20 (a) EFFECTIVE NOTICE TO GOVERNMENTAL

21 UNITS.—Section 342 of title 11, United States Code, as

22 amended by section 603, is amended by adding at the end

23 the following:

24 ‘‘(g) If a debtor lists a governmental unit as a cred25 itor in a list or schedule, any notice required to be given
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1 by the debtor under this title, any rule, any applicable law,

2 or any order of the court, shall identify the department,

3 agency, or instrumentality through which the debtor is in4 debted. The debtor shall identify (with information such

5 as a taxpayer identification number, loan, account or con6 tract number, or real estate parcel number, where applica7 ble), and describe the underlying basis for the govern8 mental unit’s claim. If the debtor’s liability to a govern9 mental unit arises from a debt or obligation owed or in10 curred by another individual, entity, or organization, or

11 under a different name, the debtor shall identify such indi12 vidual, entity, organization, or name.

13 ‘‘(h) The clerk shall keep and update quarterly, in

14 the form and manner as the Director of the Administra15 tive Office of the United States Courts prescribes, and

16 make available to debtors, a register in which a govern17 mental unit may designate a safe harbor mailing address

18 for service of notice in cases pending in the district. A

19 governmental unit may file a statement with the clerk des20 ignating a safe harbor address to which notices are to be

21 sent, unless such governmental unit files a notice of

22 change of address.’’.

23 (b) ADOPTION OF RULES PROVIDING NOTICE.—The

24 Advisory Committee on Bankruptcy Rules of the Judicial

25 Conference shall, within a reasonable period of time after
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1 the date of the enactment of this Act, propose for adoption

2 enhanced rules for providing notice to State, Federal, and

3 local government units that have regulatory authority over

4 the debtor or which may be creditors in the debtor’s case.

5 Such rules shall be reasonably calculated to ensure that

6 notice will reach the representatives of the governmental

7 unit, or subdivision thereof, who will be the proper persons

8 authorized to act upon the notice. At a minimum, the rules

9 should require that the debtor—

10 (1) identify in the schedules and the notice, the

11 subdivision, agency, or entity in respect of which

12 such notice should be received;

13 (2) provide sufficient information (such as case

14 captions, permit numbers, taxpayer identification

15 numbers, or similar identifying information) to per16 mit the governmental unit or subdivision thereof, en17 titled to receive such notice, to identify the debtor or

18 the person or entity on behalf of which the debtor

19 is providing notice where the debtor may be a suc20 cessor in interest or may not be the same as the per21 son or entity which incurred the debt or obligation;

22 and

23 (3) identify, in appropriate schedules, served to24 gether with the notice, the property in respect of

25 which the claim or regulatory obligation may have
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1 arisen, if any, the nature of such claim or regulatory

2 obligation and the purpose for which notice is being

3 given.

4 (c) EFFECT OF FAILURE OF NOTICE.—Section 342

5 of title 11, United States Code, as amended by section

6 603 and subsection (a), is amended by adding at the end

7 the following:

8 ‘‘(i) A notice that does not comply with subsections

9 (d) and (e) shall not be effective unless the debtor dem10 onstrates, by clear and convincing evidence, that timely

11 notice was given in a manner reasonably calculated to sat12 isfy the requirements of this section was given, and that—

13 ‘‘(1) either the notice was timely sent to the

14 safe harbor address provided in the register main15 tained by the clerk of the district in which the case

16 was pending for such purposes; or

17 ‘‘(2) no safe harbor address was provided in

18 such list for the governmental unit and that an offi19 cer of the governmental unit who is responsible for

20 the matter or claim had actual knowledge of the case

21 in sufficient time to act.’’.

22 SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF

23 TAXES.

24 Section 505(b) of title 11, United States Code, is

25 amended by striking ‘‘Unless’’ at the beginning of the sec-
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1 ond sentence thereof and inserting ‘‘If the request is made

2 substantially in the manner designated by the govern3 mental unit and unless’’.

4 SEC. 804. RATE OF INTEREST ON TAX CLAIMS.

5 (a) AMENDMENT.—Chapter 5 of title 11, United

6 States Code, is amended by adding at the end the fol7 lowing:

8 ‘‘§ 511. Rate of interest on tax claims

9 ‘‘If any provision of this title requires the payment

10 of interest on a tax claim or requires the payment of inter11 est to enable a creditor to receive the present value of the

12 allowed amount of a tax claim, the rate of interest shall

13 be as follows:

14 ‘‘(1) In the case of ad valorem tax claims,

15 whether secured or unsecured, other unsecured tax

16 claims where interest is required to be paid under

17 section 726(a)(5) of this title, secured tax claims,

18 and administrative tax claims paid under section

19 503(b)(1) of this title, the rate shall be determined

20 under applicable nonbankruptcy law.

21 ‘‘(2) In the case of all other tax claims, the

22 minimum rate of interest shall be the Federal short23 term rate rounded to the nearest full percent, deter24 mined under section 1274(d) of the Internal Rev25 enue Code of 1986, plus 3 percentage points.
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1 ‘‘(A) In the case of claims for Federal in2 come taxes, such rate shall be subject to any

3 adjustment that may be required under section

4 6621(d) of the Internal Revenue Code of 1986.

5 ‘‘(B) In the case of taxes paid under a con6 firmed plan or reorganization, such rate shall

7 be determined as of the calendar month in

8 which the plan is confirmed.’’.

9 (b) CONFORMING AMENDMENT.—The table of sec10 tions of chapter 5 of title 11, United States Code, is

11 amended by inserting after the item relating to section

12 510 the following:

‘‘511. Rate of interest on tax claims.’’.

13 SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERI14 ODS.

15 Section 507(a)(8)(A) of title 11, United States Code,

16 as so redesignated, is amended—

17 (1) in clause (i) by inserting after ‘‘petition’’

18 and before the semicolon ‘‘, plus any time, plus 6

19 months, during which the stay of proceedings was in

20 effect in a prior case under this title’’; and

21 (2) amend clause (ii) to read as follows:

22 ‘‘(ii) assessed within 240 days before

23 the date of the filing of the petition, exclu24 sive of—
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1 ‘‘(I) any time plus 30 days dur2 ing which an offer in compromise with

3 respect of such tax, was pending or in

4 effect during such 240-day period;

5 ‘‘(II) any time plus 30 days dur6 ing which an installment agreement

7 with respect of such tax was pending

8 or in effect during such 240-day pe9 riod, up to 1 year; and

10 ‘‘(III) any time plus 6 months

11 during which a stay of proceedings

12 against collections was in effect in a

13 prior case under this title during such

14 240-day period.’’.

15 SEC. 806. PRIORITY PROPERTY TAXES INCURRED.

16 Section 507(a)(8)(B) of title 11, United States Code,

17 is amended by striking ‘‘assessed’’ and inserting ‘‘in18 curred’’.

19 SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND

20 OTHER TAXES.

21 Section 1328(a)(2) of title 11, United States Code,

22 is amended by inserting ‘‘(1),’’ after ‘‘paragraph’’.

23 SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

24 Section 1141(d) of title 11, United States Code, is

25 amended by adding at the end the following:
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1 ‘‘(6) Notwithstanding the provisions of paragraph

2 (1), the confirmation of a plan does not discharge a debtor

3 which is a corporation from any debt for a tax or customs

4 duty with respect to which the debtor made a fraudulent

5 return or willfully attempted in any manner to evade or

6 defeat such tax.’’.

7 SEC. 809. STAY OF TAX PROCEEDINGS.

8 (a) SECTION 362 STAY LIMITED TO PREPETITION

9 TAXES.—Section 362(a)(8) of title 11, United States

10 Code, is amended by striking the period at the end and

11 inserting ‘‘, in respect of a tax liability for a taxable period

12 ending before the order for relief.’’.

13 (b) APPEAL OF TAX COURT DECISIONS PER14 MITTED.—Section 362(b)(9) of title 11, United States

15 Code, is amended—

16 (1) in subparagraph (C) by striking ‘‘or’’ at the

17 end;

18 (2) in subparagraph (D) by striking the period

19 at the end and inserting ‘‘; or’’; and

20 (3) by adding at the end the following:

21 ‘‘(E) the appeal of a decision by a court or

22 administrative tribunal which determines a tax

23 liability of the debtor without regard to whether

24 such determination was made prepetition or

25 postpetition.’’.
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1 SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAPTER 11

2 CASES.

3 Section 1129(a)(9) of title 11, United States Code,

4 is amended—

5 (1) in subparagraph (B) by striking ‘‘and’’ at

6 the end; and

7 (2) in subparagraph (C)—

8 (A) by striking ‘‘deferred cash payments,

9 over a period not exceeding six years after the

10 date of assessment of such claim,’’ and insert11 ing ‘‘regular installment payments in cash, but

12 in no case with a balloon provision, and no

13 more than three months apart, beginning no

14 later than the effective date of the plan and

15 ending on the earlier of five years after the pe16 tition date or the last date payments are to be

17 made under the plan to unsecured creditors,’’;

18 and

19 (B) by striking the period at the end and

20 inserting ‘‘; and’’; and

21 (3) by adding at the end the following:

22 ‘‘(D) with respect to a secured claim which

23 would be described in section 507(a)(8) of this

24 title but for its secured status, the holder of

25 such claim will receive on account of such claim

26 cash payments of not less than is required in
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1 subparagraph (C) and over a period no greater

2 than is required in such subparagraph.’’.

3 SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIB4 ITED.

5 Section 545(2) of title 11, United States Code, is

6 amended by striking the semicolon at the end and insert7 ing ‘‘, except where such purchaser is a purchaser de8 scribed in section 6323 of the Internal Revenue Code of

9 1986 or similar provision of State or local law;’’.

10 SEC. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSI11 NESS.

12 (a) PAYMENT OF TAXES REQUIRED.—Section 960 of

13 title 28, United States Code, is amended—

14 (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and

15 (2) by adding at the end the following:

16 ‘‘(b) Such taxes shall be paid when due in the conduct

17 of such business unless—

18 ‘‘(1) the tax is a property tax secured by a lien

19 against property that is abandoned within a reason20 able time after the lien attaches, by the trustee of

21 a bankruptcy estate, pursuant to section 554 of title

22 11, United States Code; or

23 ‘‘(2) payment of the tax is excused under a spe24 cific provision of title 11, United States Code.
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1 ‘‘(c) In a case pending under chapter 7 of title 11,

2 payment of a tax may be deferred until final distribution

3 is made under section 726 of title 11, United States Code,

4 if—

5 ‘‘(1) the tax was not incurred by a trustee duly

6 appointed under chapter 7 of title 11, United States

7 Code; or

8 ‘‘(2) before the due date of the tax, the court

9 has made a finding of probable insufficiency of

10 funds of the estate to pay in full the administrative

11 expenses allowed under section 503(b) of title 11

12 that have the same priority in distribution under

13 section 726(b) of title 11 as such tax.’’.

14 (b) PAYMENT OF AD VALOREM TAXES REQUIRED.—

15 Section 503(b)(1)(B) of title 11, United States Code, is

16 amended in clause (i) by inserting after ‘‘estate,’’ and be17 fore ‘‘except’’ the following: ‘‘whether secured or unse18 cured, including property taxes for which liability is in rem

19 only, in personam or both,’’.

20 (c) REQUEST FOR PAYMENT OF ADMINISTRATIVE

21 EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of

22 title 11, United States Code, is amended by adding at the

23 end the following:

24 ‘‘(D) notwithstanding the requirements of sub25 section (a) of this section, a governmental unit shall
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1 not be required to file a request for the payment of

2 a claim described in subparagraph (B) or (C);’’.

3 (d) PAYMENT OF TAXES AND FEES AS SECURED

4 CLAIMS.—Section 506 of title 11, United States Code, is

5 amended—

6 (1) in subsection (b) by inserting ‘‘or State

7 statute’’ after ‘‘agreement’’; and

8 (2) in subsection (c) by inserting ‘‘, including

9 the payment of all ad valorem property taxes in re10 spect of the property’’ before the period at the end.

11 SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.

12 Section 726(a)(1) of title 11, United States Code, is

13 amended by striking ‘‘before the date on which the trustee

14 commences distribution under this section’’ and inserting

15 ‘‘on or before the earlier of 10 days after the mailing to

16 creditors of the summary of the trustee’s final report or

17 the date on which the trustee commences final distribution

18 under this section’’.

19 SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AU20 THORITIES.

21 Section 523(a)(1)(B) of title 11, United States Code,

22 is amended—

23 (1) by inserting ‘‘or equivalent report or no24 tice,’’ after ‘‘a return,’’;

25 (2) in clause (i)—
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1 (A) by inserting ‘‘or given’’ after ‘‘filed’’;

2 and

3 (B) by striking ‘‘or’’ at the end;

4 (3) in clause (ii)—

5 (A) by inserting ‘‘or given’’ after ‘‘filed’’;

6 and

7 (B) by inserting ‘‘, report, or notice’’ after

8 ‘‘return’’; and

9 (4) by adding at the end the following:

10 ‘‘(iii) for purposes of this subsection,

11 a return—

12 ‘‘(I) must satisfy the require13 ments of applicable nonbankruptcy

14 law, and includes a return prepared

15 pursuant to section 6020(a) of the In16 ternal Revenue Code of 1986, or simi17 lar State or local law, or a written

18 stipulation to a judgment entered by a

19 nonbankruptcy tribunal, but does not

20 include a return made pursuant to

21 section 6020(b) of the Internal Rev22 enue Code of 1986, or similar State

23 or local law; and
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1 ‘‘(II) must have been filed in a

2 manner permitted by applicable non3 bankruptcy law; or’’.

4 SEC. 815. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN5 PAID TAXES.

6 Section 505(b) of title 11, United States Code, is

7 amended in the second sentence by inserting ‘‘the estate,’’

8 after ‘‘misrepresentation,’’.

9 SEC. 816. REQUIREMENT TO FILE TAX RETURNS TO CON10 FIRM CHAPTER 13 PLANS.

11 (a) FILING OF PREPETITION TAX RETURNS RE12 QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of

13 title 11, United States Code, as amended by section 140,

14 is amended—

15 (1) in paragraph (6) by striking ‘‘and’’ at the

16 end;

17 (2) in paragraph (7) by striking the period at

18 the end and inserting ‘‘; and’’; and

19 (3) by adding at the end the following:

20 ‘‘(8) if the debtor has filed all Federal, State,

21 and local tax returns as required by section 1308 of

22 this title.’’.

23 (b) ADDITIONAL TIME PERMITTED FOR FILING TAX

24 RETURNS.—(1) Chapter 13 of title 11, United States
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1 Code, as amended by section 135, is amended by adding

2 at the end the following:

3 ‘‘§ 1308. Filing of prepetition tax returns

4 ‘‘(a) On or before the day prior to the day on which

5 the first meeting of the creditors is convened under section

6 341(a) of this title, the debtor shall have filed with appro7 priate tax authorities all tax returns for all taxable periods

8 ending in the 3-year period ending on the date of filing

9 of the petition.

10 ‘‘(b) If the tax returns required by subsection (a)

11 have not been filed by the date on which the first meeting

12 of creditors is convened under section 341(a) of this title,

13 the trustee may continue such meeting for a reasonable

14 period of time, to allow the debtor additional time to file

15 any unfiled returns, but such additional time shall be no

16 more than—

17 ‘‘(1) for returns that are past due as of the

18 date of the filing of the petition, 120 days from such

19 date;

20 ‘‘(2) for returns which are not past due as of

21 the date of the filing of the petition, the later of 120

22 days from such date or the due date for such re23 turns under the last automatic extension of time for

24 filing such returns to which the debtor is entitled,
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1 and for which request has been timely made, accord2 ing to applicable nonbankruptcy law; and

3 ‘‘(3) upon notice and hearing, and order en4 tered before the lapse of any deadline fixed accord5 ing to this subsection, where the debtor dem6 onstrates, by clear and convincing evidence, that the

7 failure to file the returns as required is because of

8 circumstances beyond the control of the debtor, the

9 court may extend the deadlines set by the trustee as

10 provided in this subsection for—

11 ‘‘(A) a period of no more than 30 days for

12 returns described in paragraph (1) of this sub13 section; and

14 ‘‘(B) for no more than the period of time

15 ending on the applicable extended due date for

16 the returns described in paragraph (2).

17 ‘‘(c) For purposes of this section only, a return in18 cludes a return prepared pursuant to section 6020 (a) or

19 (b) of the Internal Revenue Code of 1986 or similar State

20 or local law, or a written stipulation to a judgment entered

21 by a nonbankruptcy tribunal.’’.

22 (2) The table of sections of chapter 13 of title 11,

23 United States Code, is amended by inserting after the

24 item relating to section 1307 the following:

‘‘1308. Filing of prepetition tax returns.’’.
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1 (c) DISMISSAL OR CONVERSION ON FAILURE TO

2 COMPLY.—Section 1307 of title 11, United States Code,

3 is amended—

4 (1) by redesignating subsections (e) and (f) as

5 subsections (f) and (g), respectively; and

6 (2) by inserting after subsection (d) the fol7 lowing:

8 ‘‘(e) Upon the failure of the debtor to file tax returns

9 under section 1308 of this title, on request of a party in

10 interest or the United States trustee and after notice and

11 a hearing, the court shall dismiss a case or convert a case

12 under this chapter to a case under chapter 7 of this title,

13 whichever is in the best interests of creditors and the es14 tate.’’.

15 (d) TIMELY FILED CLAIMS.—Section 502(b)(9) of

16 title 11, United States Code, is amended by striking the

17 period at the end and inserting ‘‘, and except that in a

18 case under chapter 13 of this title, a claim of a govern19 mental unit for a tax in respect of a return filed under

20 section 1308 of this title shall be timely if it is filed on

21 or before 60 days after such return or returns were filed

22 as required.’’.

23 (e) RULES FOR OBJECTIONS TO CLAIMS AND TO

24 CONFIRMATION.—It is the sense of the Congress that the

25 Advisory Committee on Bankruptcy Rules of the Judicial
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1 Conference should, within a reasonable period of time

2 after the date of the enactment of this Act, propose for

3 adoption amended Federal Rules of Bankruptcy Proce4 dure which provide that—

5 (1) notwithstanding the provisions of Rule

6 3015(f), in cases under chapter 13 of title 11,

7 United States Code, a governmental unit may object

8 to the confirmation of a plan on or before 60 days

9 after the debtor files all tax returns required under

10 sections 1308 and 1325(a)(7) of title 11, United

11 States Code; and

12 (2) in addition to the provisions of Rule 3007,

13 in a case under chapter 13 of title 11, United States

14 Code, no objection to a tax in respect of a return re15 quired to be filed under such section 1308 shall be

16 filed until such return has been filed as required.

17 SEC. 817. STANDARDS FOR TAX DISCLOSURE.

18 Section 1125(a) of title 11, United States Code, is

19 amended in paragraph (1)—

20 (1) by inserting after ‘‘records,’’ the following:

21 ‘‘including a full discussion of the potential material

22 Federal, State, and local tax consequences of the

23 plan to the debtor, any successor to the debtor, and

24 a hypothetical investor domiciled in the State in

25 which the debtor resides or has its principal place of
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1 business typical of the holders of claims or interests

2 in the case,’’;

3 (2) by inserting ‘‘such’’ after ‘‘enable’’; and

4 (3) by striking ‘‘reasonable’’ where it appears

5 after ‘‘hypothetical’’ and by striking ‘‘typical of hold6 ers of claims or interests’’ after ‘‘investor’’.

7 SEC. 818. SETOFF OF TAX REFUNDS.

8 Section 362(b) of title 11, United States Code, as

9 amended by sections 118, 132, 136, and 203, is

10 amended—

11 (1) in paragraph (29) by striking ‘‘or’’;

12 (2) in paragraph (30) by striking the period at

13 the end and inserting ‘‘; or’’; and

14 (3) by inserting after paragraph (30) the fol15 lowing:

16 ‘‘(31) under subsection (a) of the setoff of an

17 income tax refund, by a governmental unit, in re18 spect of a taxable period which ended before the

19 order for relief against an income tax liability for a

20 taxable period which also ended before the order for

21 relief, unless—

22 ‘‘(A) prior to such setoff, an action to de23 termine the amount or legality of such tax li24 ability under section 505(a) was commenced; or
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1 ‘‘(B) where the setoff of an income tax re2 fund is not permitted because of a pending ac3 tion to determine the amount or legality of a

4 tax liability, the governmental unit may hold

5 the refund pending the resolution of the ac6 tion.’’.

7 TITLE IX—ANCILLARY AND

8 OTHER CROSS-BORDER CASES

9 SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11,

10 UNITED STATES CODE.

11 (a) IN GENERAL.—Title 11, United States Code, is

12 amended by inserting after chapter 13 the following:

13 ‘‘CHAPTER 15—ANCILLARY AND OTHER

14 CROSS-BORDER CASES

‘‘Sec.

‘‘1501. Purpose and scope of application.

‘‘SUBCHAPTER I—GENERAL PROVISIONS

‘‘1502. Definitions.

‘‘1503. International obligations of the United States.

‘‘1504. Commencement of ancillary case.

‘‘1505. Authorization to act in a foreign country.

‘‘1506. Public policy exception.

‘‘1507. Additional assistance.

‘‘1508. Interpretation.

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND

CREDITORS TO THE COURT

‘‘1509. Right of direct access.

‘‘1510. Limited jurisdiction.

‘‘1511. Commencement of case under section 301 or 303.

‘‘1512. Participation of a foreign representative in a case under this title.

‘‘1513. Access of foreign creditors to a case under this title.

‘‘1514. Notification to foreign creditors concerning a case under this title.

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING

AND RELIEF
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‘‘1515. Application for recognition of a foreign proceeding.

‘‘1516. Presumptions concerning recognition.

‘‘1517. Order recognizing a foreign proceeding.

‘‘1518. Subsequent information.

‘‘1519. Relief that may be granted upon petition for recognition of a foreign

proceeding.

‘‘1520. Effects of recognition of a foreign main proceeding.

‘‘1521. Relief that may be granted upon recognition of a foreign proceeding.

‘‘1522. Protection of creditors and other interested persons.

‘‘1523. Actions to avoid acts detrimental to creditors.

‘‘1524. Intervention by a foreign representative.

‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND

FOREIGN REPRESENTATIVES

‘‘1525. Cooperation and direct communication between the court and foreign

courts or foreign representatives.

‘‘1526. Cooperation and direct communication between the trustee and foreign

courts or foreign representatives.

‘‘1527. Forms of cooperation.

‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

‘‘1528. Commencement of a case under this title after recognition of a foreign

main proceeding.

‘‘1529. Coordination of a case under this title and a foreign proceeding.

‘‘1530. Coordination of more than 1 foreign proceeding.

‘‘1531. Presumption of insolvency based on recognition of a foreign main proceeding.

‘‘1532. Rule of payment in concurrent proceedings.

1 ‘‘§ 1501. Purpose and scope of application

2 ‘‘(a) The purpose of this chapter is to incorporate the

3 Model Law on Cross-Border Insolvency so as to provide

4 effective mechanisms for dealing with cases of cross-bor5 der insolvency with the objectives of—

6 ‘‘(1) cooperation between—

7 ‘‘(A) United States courts, United States

8 trustees, trustees, examiners, debtors, and debt9 ors in possession; and

10 ‘‘(B) the courts and other competent au11 thorities of foreign countries involved in cross12 border insolvency cases;
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1 ‘‘(2) greater legal certainty for trade and in2 vestment;

3 ‘‘(3) fair and efficient administration of cross4 border insolvencies that protects the interests of all

5 creditors, and other interested entities, including the

6 debtor;

7 ‘‘(4) protection and maximization of the value

8 of the debtor’s assets; and

9 ‘‘(5) facilitation of the rescue of financially

10 troubled businesses, thereby protecting investment

11 and preserving employment.

12 ‘‘(b) This chapter applies where—

13 ‘‘(1) assistance is sought in the United States

14 by a foreign court or a foreign representative in con15 nection with a foreign proceeding;

16 ‘‘(2) assistance is sought in a foreign country in

17 connection with a case under this title;

18 ‘‘(3) a foreign proceeding and a case under this

19 title with respect to the same debtor are taking place

20 concurrently; or

21 ‘‘(4) creditors or other interested persons in a

22 foreign country have an interest in requesting the

23 commencement of, or participating in, a case or pro24 ceeding under this title.

25 ‘‘(c) This chapter does not apply to—
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1 ‘‘(1) a proceeding concerning an entity, other

2 than a foreign insurance company, identified by ex3 clusion in subsection 109(b);

4 ‘‘(2) an individual, or to an individual and such

5 individual’s spouse, who have debts within the limits

6 specified in section 109(e) and who are citizens of

7 the United States or aliens lawfully admitted for

8 permanent residence in the United States; or

9 ‘‘(3) an entity subject to a proceeding under the

10 Securities Investor Protection Act, a stockbroker

11 subject to subchapter III of chapter 7 of this title,

12 or a commodity broker subject to subchapter IV of

13 chapter 7 of this title.

14 ‘‘(d) The court may not grant relief under this chap15 ter with respect to any deposit, escrow, trust fund, or

16 other security required or permitted under any applicable

17 State insurance law or regulation for the benefit of claim

18 holders in the United States.

19 ‘‘SUBCHAPTER I—GENERAL PROVISIONS

20 ‘‘§ 1502. Definitions

21 ‘‘For the purposes of this chapter, the term—

22 ‘‘(1) ‘debtor’ means an entity that is the subject

23 of a foreign proceeding;
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1 ‘‘(2) ‘establishment’ means any place of oper2 ations where the debtor carries out a nontransitory

3 economic activity;

4 ‘‘(3) ‘foreign court’ means a judicial or other

5 authority competent to control or supervise a foreign

6 proceeding;

7 ‘‘(4) ‘foreign main proceeding’ means a foreign

8 proceeding taking place in the country where the

9 debtor has the center of its main interests;

10 ‘‘(5) ‘foreign nonmain proceeding’ means a for11 eign proceeding, other than a foreign main pro12 ceeding, taking place in a country where the debtor

13 has an establishment;

14 ‘‘(6) ‘trustee’ includes a trustee, a debtor in

15 possession in a case under any chapter of this title,

16 or a debtor under chapter 9 of this title; and

17 ‘‘(7) ‘within the territorial jurisdiction of the

18 United States’ when used with reference to property

19 of a debtor refers to tangible property located within

20 the territory of the United States and intangible

21 property deemed under applicable nonbankruptcy

22 law to be located within that territory, including any

23 property subject to attachment or garnishment that

24 may properly be seized or garnished by an action in

25 a Federal or State court in the United States.
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1 ‘‘§ 1503. International obligations of the United States

2 ‘‘To the extent that this chapter conflicts with an ob3 ligation of the United States arising out of any treaty or

4 other form of agreement to which it is a party with one

5 or more other countries, the requirements of the treaty

6 or agreement prevail.

7 ‘‘§ 1504. Commencement of ancillary case

8 ‘‘A case under this chapter is commenced by the filing

9 of a petition for recognition of a foreign proceeding under

10 section 1515.

11 ‘‘§ 1505. Authorization to act in a foreign country

12 ‘‘A trustee or another entity (including an examiner)

13 may be authorized by the court to act in a foreign country

14 on behalf of an estate created under section 541. An entity

15 authorized to act under this section may act in any way

16 permitted by the applicable foreign law.

17 ‘‘§ 1506. Public policy exception

18 ‘‘Nothing in this chapter prevents the court from re19 fusing to take an action governed by this chapter if the

20 action would be manifestly contrary to the public policy

21 of the United States.

22 ‘‘§ 1507. Additional assistance

23 ‘‘(a) Subject to the specific limitations stated else24 where in this chapter the court, upon recognition of a for25 eign proceeding, the court may provide additional assist-
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1 ance to a foreign representative under this title or under

2 other laws of the United States.

3 ‘‘(b) In determining whether to provide additional as4 sistance under this title or under other laws of the United

5 States, the court shall consider whether such additional

6 assistance, consistent with the principles of comity, will

7 reasonably assure—

8 ‘‘(1) just treatment of all holders of claims

9 against or interests in the debtor’s property;

10 ‘‘(2) protection of claim holders in the United

11 States against prejudice and inconvenience in the

12 processing of claims in such foreign proceeding;

13 ‘‘(3) prevention of preferential or fraudulent

14 dispositions of property of the debtor;

15 ‘‘(4) distribution of proceeds of the debtor’s

16 property substantially in accordance with the order

17 prescribed by this title; and

18 ‘‘(5) if appropriate, the provision of an oppor19 tunity for a fresh start for the individual that such

20 foreign proceeding concerns.

21 ‘‘§ 1508. Interpretation

22 ‘‘In interpreting this chapter, the court shall consider

23 its international origin, and the need to promote an appli24 cation of this chapter that is consistent with the applica25 tion of similar statutes adopted by foreign jurisdictions.
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1 ‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP2 RESENTATIVES AND CREDITORS TO THE

3 COURT

4 ‘‘§ 1509. Right of direct access

5 ‘‘(a) A foreign representative may commence a case

6 under section 1504 of this title by filing with the court

7 a petition for recognition of a foreign proceeding under

8 section 1515 of this title.

9 ‘‘(b) If the court grants recognition under section

10 1515 of this title, and subject to any limitations that the

11 court may impose consistent with the policy of this

12 chapter—

13 ‘‘(1) the foreign representative has the capacity

14 to sue and be sued in a court in the United States;

15 ‘‘(2) the foreign representative may apply di16 rectly to a court in the United States for appropriate

17 relief in that court; and

18 ‘‘(3) a court in the United States shall grant

19 comity or cooperation to the foreign representative.

20 ‘‘(c) A request for comity or cooperation by a foreign

21 representative in a court in the United States shall be ac22 companied by a certified copy of an order granting rec23 ognition under section 1517 of this title.

24 ‘‘(d) If the court denies recognition under this chap25 ter, the court may issue any appropriate order necessary
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1 to prevent the foreign representative from obtaining com2 ity or cooperation from courts in the United States.

3 ‘‘(e) Whether or not the court grants recognition, and

4 subject to sections 306 and 1510 of this title, a foreign

5 representative is subject to applicable nonbankruptcy law.

6 ‘‘(f) Notwithstanding any other provision of this sec7 tion, the failure of a foreign representative to commence

8 a case or to obtain recognition under this chapter does

9 not affect any right the foreign representative may have

10 to sue in a court in the United State to collect or recover

11 a claim which is the property of the debtor.’’.

12 ‘‘§ 1510. Limited jurisdiction

13 ‘‘The sole fact that a foreign representative files a

14 petition under section 1515 does not subject the foreign

15 representative to the jurisdiction of any court in the

16 United States for any other purpose.

17 ‘‘§ 1511. Commencement of case under section 301 or

18 303

19 ‘‘(a) Upon recognition, a foreign representative may

20 commence—

21 ‘‘(1) an involuntary case under section 303; or

22 ‘‘(2) a voluntary case under section 301 or 302,

23 if the foreign proceeding is a foreign main pro24 ceeding.
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1 ‘‘(b) The petition commencing a case under sub2 section (a) must be accompanied by certified copy of an

3 order granting recognition. The court where the petition

4 for recognition has been filed must be advised of the for5 eign representative’s intent to commence a case under sub6 section (a) prior to such commencement.

7 ‘‘§ 1512. Participation of a foreign representative in a

8 case under this title

9 ‘‘Upon recognition of a foreign proceeding, the for10 eign representative in that proceeding is entitled to par11 ticipate as a party in interest in a case regarding the debt12 or under this title.

13 ‘‘§ 1513. Access of foreign creditors to a case under

14 this title

15 ‘‘(a) Foreign creditors have the same rights regarding

16 the commencement of, and participation in, a case under

17 this title as domestic creditors.

18 ‘‘(b)(1) Subsection (a) does not change or codify

19 present law as to the priority of claims under section 507

20 or 726 of this title, except that the claim of a foreign cred21 itor under those sections shall not be given a lower priority

22 than that of general unsecured claims without priority

23 solely because the holder of such claim is a foreign cred24 itor.
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1 ‘‘(2)(A) Subsection (a) and paragraph (1) do not

2 change or codify present law as to the allowability of for3 eign revenue claims or other foreign public law claims in

4 a proceeding under this title.

5 ‘‘(B) Allowance and priority as to a foreign tax claim

6 or other foreign public law claim shall be governed by any

7 applicable tax treaty of the United States, under the con8 ditions and circumstances specified therein.

9 ‘‘§ 1514. Notification to foreign creditors concerning a

10 case under this title

11 ‘‘(a) Whenever in a case under this title notice is to

12 be given to creditors generally or to any class or category

13 of creditors, such notice shall also be given to the known

14 creditors generally, or to creditors in the notified class or

15 category, that do not have addresses in the United States.

16 The court may order that appropriate steps be taken with

17 a view to notifying any creditor whose address is not yet

18 known.

19 ‘‘(b) Such notification to creditors with foreign ad20 dresses described in subsection (a) shall be given individ21 ually, unless the court considers that, under the cir22 cumstances, some other form of notification would be

23 more appropriate. No letters rogatory or other similar for24 mality is required.
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1 ‘‘(c) When a notification of commencement of a case

2 is to be given to foreign creditors, the notification shall—

3 ‘‘(1) indicate the time period for filing proofs of

4 claim and specify the place for their filing;

5 ‘‘(2) indicate whether secured creditors need to

6 file their proofs of claim; and

7 ‘‘(3) contain any other information required to

8 be included in such a notification to creditors under

9 this title and the orders of the court.

10 ‘‘(d) Any rule of procedure or order of the court as

11 to notice or the filing of a claim shall provide such addi12 tional time to creditors with foreign addresses as is rea13 sonable under the circumstances.

14 ‘‘SUBCHAPTER III—RECOGNITION OF A

15 FOREIGN PROCEEDING AND RELIEF

16 ‘‘§ 1515. Application for recognition of a foreign pro17 ceeding

18 ‘‘(a) A foreign representative applies to the court for

19 recognition of the foreign proceeding in which the foreign

20 representative has been appointed by filing a petition for

21 recognition.

22 ‘‘(b) A petition for recognition shall be accompanied

23 by—
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1 ‘‘(1) a certified copy of the decision com2 mencing the foreign proceeding and appointing the

3 foreign representative;

4 ‘‘(2) a certificate from the foreign court affirm5 ing the existence of the foreign proceeding and of

6 the appointment of the foreign representative; or

7 ‘‘(3) in the absence of evidence referred to in

8 paragraphs (1) and (2), any other evidence accept9 able to the court of the existence of the foreign pro10 ceeding and of the appointment of the foreign rep11 resentative.

12 ‘‘(c) A petition for recognition shall also be accom13 panied by a statement identifying all foreign proceedings

14 with respect to the debtor that are known to the foreign

15 representative.

16 ‘‘(d) The documents referred to in paragraphs (1)

17 and (2) of subsection (b) must be translated into English.

18 The court may require a translation into English of addi19 tional documents.

20 ‘‘§ 1516. Presumptions concerning recognition

21 ‘‘(a) If the decision or certificate referred to in section

22 1515(b) indicates that the foreign proceeding is a foreign

23 proceeding as defined in section 101 and that the person

24 or body is a foreign representative as defined in section

25 101, the court is entitled to so presume.
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1 ‘‘(b) The court is entitled to presume that documents

2 submitted in support of the petition for recognition are

3 authentic, whether or not they have been legalized.

4 ‘‘(c) In the absence of evidence to the contrary, the

5 debtor’s registered office, or habitual residence in the case

6 of an individual, is presumed to be the center of the debt7 or’s main interests.

8 ‘‘§ 1517. Order recognizing a foreign proceeding

9 ‘‘(a) Subject to section 1506, after notice and a hear10 ing an order recognizing a foreign proceeding shall be en11 tered if—

12 ‘‘(1) the foreign proceeding is a foreign main

13 proceeding or foreign nonmain proceeding within the

14 meaning of section 1502;

15 ‘‘(2) the foreign representative applying for rec16 ognition is a person or body as defined in section

17 101; and

18 ‘‘(3) the petition meets the requirements of sec19 tion 1515.

20 ‘‘(b) The foreign proceeding shall be recognized—

21 ‘‘(1) as a foreign main proceeding if it is taking

22 place in the country where the debtor has the center

23 of its main interests; or

24 ‘‘(2) as a foreign nonmain proceeding if the

25 debtor has an establishment within the meaning of
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1 section 1502 in the foreign country where the pro2 ceeding is pending.

3 ‘‘(c) A petition for recognition of a foreign proceeding

4 shall be decided upon at the earliest possible time. Entry

5 of an order recognizing a foreign proceeding constitutes

6 recognition under this chapter.

7 ‘‘(d) The provisions of this subchapter do not prevent

8 modification or termination of recognition if it is shown

9 that the grounds for granting it were fully or partially

10 lacking or have ceased to exist, but in considering such

11 action the court shall give due weight to possible prejudice

12 to parties that have relied upon the granting of recogni13 tion. The case under this chapter may be closed in the

14 manner prescribed under section 350.

15 ‘‘§ 1518. Subsequent information

16 ‘‘From the time of filing the petition for recognition

17 of the foreign proceeding, the foreign representative shall

18 file with the court promptly a notice of change of status

19 concerning—

20 ‘‘(1) any substantial change in the status of the

21 foreign proceeding or the status of the foreign rep22 resentative’s appointment; and

23 ‘‘(2) any other foreign proceeding regarding the

24 debtor that becomes known to the foreign represent25 ative.
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1 ‘‘§ 1519. Relief that may be granted upon petition for

2 recognition of a foreign proceeding

3 ‘‘(a) From the time of filing a petition for recognition

4 until the court rules on the petition, the court may, at

5 the request of the foreign representative, where relief is

6 urgently needed to protect the assets of the debtor or the

7 interests of the creditors, grant relief of a provisional na8 ture, including—

9 ‘‘(1) staying execution against the debtor’s as10 sets;

11 ‘‘(2) entrusting the administration or realiza12 tion of all or part of the debtor’s assets located in

13 the United States to the foreign representative or

14 another person authorized by the court, including an

15 examiner, in order to protect and preserve the value

16 of assets that, by their nature or because of other

17 circumstances, are perishable, susceptible to devalu18 ation or otherwise in jeopardy; and

19 ‘‘(3) any relief referred to in paragraph (3),

20 (4), or (7) of section 1521(a).

21 ‘‘(b) Unless extended under section 1521(a)(6), the

22 relief granted under this section terminates when the peti23 tion for recognition is decided upon.

24 ‘‘(c) It is a ground for denial of relief under this sec25 tion that such relief would interfere with the administra26 tion of a foreign main proceeding.
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1 ‘‘(d) The court may not enjoin a police or regulatory

2 act of a governmental unit, including a criminal action or

3 proceeding, under this section.

4 ‘‘(e) The standards, procedures, and limitations ap5 plicable to an injunction shall apply to relief under this

6 section.

7 ‘‘§ 1520. Effects of recognition of a foreign main pro8 ceeding

9 ‘‘(a) Upon recognition of a foreign proceeding that

10 is a foreign main proceeding—

11 ‘‘(1) sections 361 and 362 with respect to the

12 debtor and that property of the debtor that is within

13 the territorial jurisdiction of the United States;

14 ‘‘(2) sections 363, 549, and 552 of this title

15 apply to a transfer of an interest of the debtor in

16 property that is within the territorial jurisdiction of

17 the United States to the same extent that the sec18 tions would apply to property of an estate;

19 ‘‘(3) unless the court orders otherwise, the for20 eign representative may operate the debtor’s busi21 ness and may exercise the rights and powers of a

22 trustee under and to the extent provided by sections

23 363 and 552; and
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1 ‘‘(4) section 552 applies to property of the debt2 or that is within the territorial jurisdiction of the

3 United States.’’.

4 ‘‘(b) Subsection (a) does not affect the right to com5 mence an individual action or proceeding in a foreign

6 country to the extent necessary to preserve a claim against

7 the debtor.

8 ‘‘(c) Subsection (a) does not affect the right of a for9 eign representative or an entity to file a petition com10 mencing a case under this title or the right of any party

11 to file claims or take other proper actions in such a case.

12 ‘‘§ 1521. Relief that may be granted upon recognition

13 of a foreign proceeding

14 ‘‘(a) Upon recognition of a foreign proceeding, wheth15 er main or nonmain, where necessary to effectuate the

16 purpose of this chapter and to protect the assets of the

17 debtor or the interests of the creditors, the court may, at

18 the request of the foreign representative, grant any appro19 priate relief, including—

20 ‘‘(1) staying the commencement or continuation

21 of an individual action or proceeding concerning the

22 debtor’s assets, rights, obligations or liabilities to the

23 extent they have not been stayed under section

24 1520(a);
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1 ‘‘(2) staying execution against the debtor’s as2 sets to the extent it has not been stayed under sec3 tion 1520(a);

4 ‘‘(3) suspending the right to transfer, encumber

5 or otherwise dispose of any assets of the debtor to

6 the extent this right has not been suspended under

7 section 1520(a);

8 ‘‘(4) providing for the examination of witnesses,

9 the taking of evidence or the delivery of information

10 concerning the debtor’s assets, affairs, rights, obliga11 tions or liabilities;

12 ‘‘(5) entrusting the administration or realiza13 tion of all or part of the debtor’s assets within the

14 territorial jurisdiction of the United States to the

15 foreign representative or another person, including

16 an examiner, authorized by the court;

17 ‘‘(6) extending relief granted under section

18 1519(a); and

19 ‘‘(7) granting any additional relief that may be

20 available to a trustee, except for relief available

21 under sections 522, 544, 545, 547, 548, 550, and

22 724(a).

23 ‘‘(b) Upon recognition of a foreign proceeding, wheth24 er main or nonmain, the court may, at the request of the

25 foreign representative, entrust the distribution of all or
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1 part of the debtor’s assets located in the United States

2 to the foreign representative or another person, including

3 an examiner, authorized by the court, provided that the

4 court is satisfied that the interests of creditors in the

5 United States are sufficiently protected.

6 ‘‘(c) In granting relief under this section to a rep7 resentative of a foreign nonmain proceeding, the court

8 must be satisfied that the relief relates to assets that,

9 under the law of the United States, should be adminis10 tered in the foreign nonmain proceeding or concerns infor11 mation required in that proceeding.

12 ‘‘(d) The court may not enjoin a police or regulatory

13 act of a governmental unit, including a criminal action or

14 proceeding, under this section.

15 ‘‘(e) The standards, procedures, and limitations ap16 plicable to an injunction shall apply to relief under para17 graphs (1), (2), (3), and (6) of subsection (a).

18 ‘‘§ 1522. Protection of creditors and other interested

19 persons

20 ‘‘(a) The court may grant relief under section 1519

21 or 1521, or may modify or terminate relief under sub22 section (c), only if the interests of the creditors and other

23 interested entities, including the debtor, are sufficiently

24 protected.
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1 ‘‘(b) The court may subject relief granted under sec2 tion 1519 or 1521, or the operation of the debtor’s busi3 ness under section 1520(a)(3) of this title, to conditions

4 it considers appropriate, including the giving of security

5 or the filing of a bond.

6 ‘‘(c) The court may, at the request of the foreign rep7 resentative or an entity affected by relief granted under

8 section 1519 or 1521, or at its own motion, modify or

9 terminate such relief.

10 ‘‘(d) Section 1104(d) shall apply to the appointment

11 of an examiner under this chapter. Any examiner shall

12 comply with the qualification requirements imposed on a

13 trustee by section 322.

14 ‘‘§ 1523. Actions to avoid acts detrimental to creditors

15 ‘‘(a) Upon recognition of a foreign proceeding, the

16 foreign representative has standing in a case concerning

17 the debtor pending under another chapter of this title to

18 initiate actions under sections 522, 544, 545, 547, 548,

19 550, and 724(a).

20 ‘‘(b) When the foreign proceeding is a foreign

21 nonmain proceeding, the court must be satisfied that an

22 action under subsection (a) relates to assets that, under

23 United States law, should be administered in the foreign

24 nonmain proceeding.
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1 ‘‘§ 1524. Intervention by a foreign representative

2 ‘‘Upon recognition of a foreign proceeding, the for3 eign representative may intervene in any proceedings in

4 a State or Federal court in the United States in which

5 the debtor is a party.

6 ‘‘SUBCHAPTER IV—COOPERATION WITH FOR7 EIGN COURTS AND FOREIGN REPRESENTA8 TIVES

9 ‘‘§ 1525. Cooperation and direct communication be10 tween the court and foreign courts or for11 eign representatives

12 ‘‘(a) Consistent with section 1501, the court shall co13 operate to the maximum extent possible with foreign

14 courts or foreign representatives, either directly or

15 through the trustee.

16 ‘‘(b) The court is entitled to communicate directly

17 with, or to request information or assistance directly from,

18 foreign courts or foreign representatives, subject to the

19 rights of parties in interest to notice and participation.

20 ‘‘§ 1526. Cooperation and direct communication be21 tween the trustee and foreign courts or

22 foreign representatives

23 ‘‘(a) Consistent with section 1501, the trustee or

24 other person, including an examiner, authorized by the

25 court, shall, subject to the supervision of the court, cooper-
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1 ate to the maximum extent possible with foreign courts

2 or foreign representatives.

3 ‘‘(b) The trustee or other person, including an exam4 iner, authorized by the court is entitled, subject to the su5 pervision of the court, to communicate directly with for6 eign courts or foreign representatives.

7 ‘‘§ 1527. Forms of cooperation

8 ‘‘Cooperation referred to in sections 1525 and 1526

9 may be implemented by any appropriate means,

10 including—

11 ‘‘(1) appointment of a person or body, including

12 an examiner, to act at the direction of the court;

13 ‘‘(2) communication of information by any

14 means considered appropriate by the court;

15 ‘‘(3) coordination of the administration and su16 pervision of the debtor’s assets and affairs;

17 ‘‘(4) approval or implementation of agreements

18 concerning the coordination of proceedings; and

19 ‘‘(5) coordination of concurrent proceedings re20 garding the same debtor.
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1 ‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

2 ‘‘§ 1528. Commencement of a case under this title

3 after recognition of a foreign main pro4 ceeding

5 ‘‘After recognition of a foreign main proceeding, a

6 case under another chapter of this title may be commenced

7 only if the debtor has assets in the United States. The

8 effects of such case shall be restricted to the assets of the

9 debtor that are within the territorial jurisdiction of the

10 United States and, to the extent necessary to implement

11 cooperation and coordination under sections 1525, 1526,

12 and 1527, to other assets of the debtor that are within

13 the jurisdiction of the court under sections 541(a) of this

14 title, and 1334(e) of title 28, to the extent that such other

15 assets are not subject to the jurisdiction and control of

16 a foreign proceeding that has been recognized under this

17 chapter.

18 ‘‘§ 1529. Coordination of a case under this title and a

19 foreign proceeding

20 ‘‘Where a foreign proceeding and a case under an21 other chapter of this title are taking place concurrently

22 regarding the same debtor, the court shall seek coopera23 tion and coordination under sections 1525, 1526, and

24 1527, and the following shall apply:
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1 ‘‘(1) When the case in the United States is tak2 ing place at the time the petition for recognition of

3 the foreign proceeding is filed—

4 ‘‘(A) any relief granted under sections

5 1519 or 1521 must be consistent with the relief

6 granted in the case in the United States; and

7 ‘‘(B) even if the foreign proceeding is rec8 ognized as a foreign main proceeding, section

9 1520 does not apply.

10 ‘‘(2) When a case in the United States under

11 this title commences after recognition, or after the

12 filing of the petition for recognition, of the foreign

13 proceeding—

14 ‘‘(A) any relief in effect under sections

15 1519 or 1521 shall be reviewed by the court

16 and shall be modified or terminated if incon17 sistent with the case in the United States; and

18 ‘‘(B) if the foreign proceeding is a foreign

19 main proceeding, the stay and suspension re20 ferred to in section 1520(a) shall be modified or

21 terminated if inconsistent with the relief grant22 ed in the case in the United States.

23 ‘‘(3) In granting, extending, or modifying relief

24 granted to a representative of a foreign nonmain

25 proceeding, the court must be satisfied that the re-
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1 lief relates to assets that, under the law of the

2 United States, should be administered in the foreign

3 nonmain proceeding or concerns information re4 quired in that proceeding.

5 ‘‘(4) In achieving cooperation and coordination

6 under sections 1528 and 1529, the court may grant

7 any of the relief authorized under section 305.

8 ‘‘§ 1530. Coordination of more than 1 foreign pro9 ceeding

10 ‘‘In matters referred to in section 1501, with respect

11 to more than 1 foreign proceeding regarding the debtor,

12 the court shall seek cooperation and coordination under

13 sections 1525, 1526, and 1527, and the following shall

14 apply:

15 ‘‘(1) Any relief granted under section 1519 or

16 1521 to a representative of a foreign nonmain pro17 ceeding after recognition of a foreign main pro18 ceeding must be consistent with the foreign main

19 proceeding.

20 ‘‘(2) If a foreign main proceeding is recognized

21 after recognition, or after the filing of a petition for

22 recognition, of a foreign nonmain proceeding, any

23 relief in effect under section 1519 or 1521 shall be

24 reviewed by the court and shall be modified or termi-
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1 nated if inconsistent with the foreign main pro2 ceeding.

3 ‘‘(3) If, after recognition of a foreign nonmain

4 proceeding, another foreign nonmain proceeding is

5 recognized, the court shall grant, modify, or termi6 nate relief for the purpose of facilitating coordina7 tion of the proceedings.

8 ‘‘§ 1531. Presumption of insolvency based on recogni9 tion of a foreign main proceeding

10 ‘‘In the absence of evidence to the contrary, recogni11 tion of a foreign main proceeding is for the purpose of

12 commencing a proceeding under section 303, proof that

13 the debtor is generally not paying its debts as such debts

14 become due.

15 ‘‘§ 1532. Rule of payment in concurrent proceedings

16 ‘‘Without prejudice to secured claims or rights in

17 rem, a creditor who has received payment with respect to

18 its claim in a foreign proceeding pursuant to a law relating

19 to insolvency may not receive a payment for the same

20 claim in a case under any other chapter of this title re21 garding the debtor, so long as the payment to other credi22 tors of the same class is proportionately less than the pay23 ment the creditor has already received.’’.
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1 (b) CLERICAL AMENDMENT.—The table of chapters

2 for title 11, United States Code, is amended by inserting

3 after the item relating to chapter 13 the following:

‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’.

4 SEC. 902. OTHER AMENDMENTS TO TITLES 11 AND 28,

5 UNITED STATES CODE.

6 (a) APPLICABILITY OF CHAPTERS.—Section 103 of

7 title 11, United States Code, is amended—

8 (1) in subsection (a), by inserting before the pe9 riod the following: ‘‘, and this chapter, sections 307,

10 304, 555 through 557, 559, and 560 apply in a case

11 under chapter 15’’; and

12 (2) by adding at the end the following:

13 ‘‘(j) Chapter 15 applies only in a case under such

14 chapter, except that—

15 ‘‘(1) sections 1505, 1513, and 1514 apply in all

16 cases under this title; and

17 ‘‘(2) section 1509 applies whether or not a case

18 under this title is pending.’’.

19 (b) DEFINITIONS.—Paragraphs (23) and (24) of title

20 11, United States Code, are amended to read as follows:

21 ‘‘(23) ‘foreign proceeding’ means a collective ju22 dicial or administrative proceeding in a foreign coun23 try, including an interim proceeding, under a law re24 lating to insolvency or adjustment of debt in which

25 proceeding the assets and affairs of the debtor are
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1 subject to control or supervision by a foreign court,

2 for the purpose of reorganization or liquidation;

3 ‘‘(24) ‘foreign representative’ means a person

4 or body, including a person or body appointed on an

5 interim basis, authorized in a foreign proceeding to

6 administer the reorganization or the liquidation of

7 the debtor’s assets or affairs or to act as a rep8 resentative of the foreign proceeding;’’.

9 (c) AMENDMENTS TO TITLE 28, UNITED STATES

10 CODE.—

11 (1) PROCEDURES.—Section 157(b)(2) of title

12 28, United States Code, is amended—

13 (A) in subparagraph (N), by striking

14 ‘‘and’’ at the end;

15 (B) in subparagraph (O), by striking the

16 period at the end and inserting ‘‘; and’’; and

17 (C) by adding at the end the following:

18 ‘‘(P) recognition of foreign proceedings and

19 other matters under chapter 15 of title 11, United

20 States Code.’’.

21 (2) BANKRUPTCY CASES AND PROCEEDINGS.—

22 Section 1334(c) of title 28, United States Code, is

23 amended by striking ‘‘Nothing in’’ and inserting

24 ‘‘Except with respect to a case under chapter 15 of

25 title 11, nothing in’’.
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1 (3) DUTIES OF TRUSTEES.—Section 586(a)(3)

2 of title 28, United States Code, is amended by strik3 ing ‘‘or 13’’ and inserting ‘‘13, or 15,’’ after ‘‘chap4 ter’’.

5 (d) OTHER SECTIONS OF TITLE 11.—(1) Section

6 109(b)(3) of title 11, United States Code, is amended to

7 read as follows:

8 ‘‘(3)(A) a foreign insurance company, engaged

9 in such business in the United States; or

10 ‘‘(B) a foreign bank, savings bank, cooperative

11 bank, savings and loan association, building and

12 loan association, or credit union, which has a branch

13 or agency (as defined in section 3101 of title 12,

14 United States Code) in the United States.’’.

15 (2) Section 303(k) of title 11, United States Code,

16 is repealed.

17 (3)(A) Section 304 of title 11, United States Code,

18 is repealed.

19 (B) The table of sections of chapter 3 of title 11,

20 United States Code, is amended by striking the item relat21 ing to section 304.

22 (C) Section 306 of title 11, United States Code, is

23 amended by striking ‘‘, 304,’’ each place it appears.

24 (4) Section 305(a)(2) of title 11, United States

25 Code, is amended to read:
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1 ‘‘(2)(A) a petition under section 1515 of this

2 title for recognition of a foreign proceeding has been

3 granted; and

4 ‘‘(B) the purposes of chapter 15 of this title

5 would be best served by such dismissal or suspen6 sion.’’.

7 (5) Section 508 of title 11, United States Code,

8 is amended by striking subsection (a) and by strik9 ing out the letter ‘‘(b)’’ at the beginning of the sec10 ond paragraph.

11 TITLE X—FINANCIAL CONTRACT

12 PROVISIONS

13 SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CON14 SERVATORS OR RECEIVERS OF INSURED DE15 POSITORY INSTITUTIONS.

16 (a) DEFINITION OF QUALIFIED FINANCIAL CON17 TRACT.—Section 11(e)(8)(D)(i) of the Federal Deposit In18 surance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by

19 inserting ‘‘, resolution or order’’ after ‘‘any similar agree20 ment that the Corporation determines by regulation’’.

21 (b) DEFINITION OF SECURITIES CONTRACT.—Sec22 tion 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act

23 (12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as fol24 lows:
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1 ‘‘(ii) SECURITIES CONTRACT.—The

2 term ‘securities contract’—

3 ‘‘(I) means a contract for the

4 purchase, sale, or loan of a security, a

5 certificate of deposit, a mortgage loan,

6 or any interest in a mortgage loan, a

7 group or index of securities, certifi8 cates of deposit, or mortgage loans or

9 interests therein (including any inter10 est therein or based on the value

11 thereof) or any option on any of the

12 foregoing, including any option to

13 purchase or sell any such security,

14 certificate of deposit, loan, interest,

15 group or index, or option;

16 ‘‘(II) does not include any pur17 chase, sale, or repurchase obligation

18 under a participation in a commercial

19 mortgage loan unless the Corporation

20 determines by regulation, resolution,

21 or order to include any such agree22 ment within the meaning of such

23 term;
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1 ‘‘(III) means any option entered

2 into on a national securities exchange

3 relating to foreign currencies;

4 ‘‘(IV) means the guarantee by or

5 to any securities clearing agency of

6 any settlement of cash, securities, cer7 tificates of deposit, mortgage loans or

8 interests therein, group or index of se9 curities, certificates of deposit, or

10 mortgage loans or interests therein

11 (including any interest therein or

12 based on the value thereof) or option

13 on any of the foregoing, including any

14 option to purchase or sell any such se15 curity, certificate of deposit, loan, in16 terest, group or index or option;

17 ‘‘(V) means any margin loan;

18 ‘‘(VI) means any other agree19 ment or transaction that is similar to

20 any agreement or transaction referred

21 to in this clause;

22 ‘‘(VII) means any combination of

23 the agreements or transactions re24 ferred to in this clause;
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1 ‘‘(VIII) means any option to

2 enter into any agreement or trans3 action referred to in this clause;

4 ‘‘(IX) means a master agreement

5 that provides for an agreement or

6 transaction referred to in subclause

7 (I), (III), (IV), (V), (VI), (VII), or

8 (VIII), together with all supplements

9 to any such master agreement, with10 out regard to whether the master

11 agreement provides for an agreement

12 or transaction that is not a securities

13 contract under this clause, except that

14 the master agreement shall be consid15 ered to be a securities contract under

16 this clause only with respect to each

17 agreement or transaction under the

18 master agreement that is referred to

19 in subclause (I), (III), (IV), (V), (VI),

20 (VII), or (VIII); and

21 ‘‘(X) means any security agree22 ment or arrangement or other credit

23 enhancement related to any agree24 ment or transaction referred to in this

25 clause.’’.
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1 (c) DEFINITION OF COMMODITY CONTRACT.—Sec2 tion 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act

3 (12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as fol4 lows:

5 ‘‘(iii) COMMODITY CONTRACT.—The

6 term ‘commodity contract’ means—

7 ‘‘(I) with respect to a futures

8 commission merchant, a contract for

9 the purchase or sale of a commodity

10 for future delivery on, or subject to

11 the rules of, a contract market or

12 board of trade;

13 ‘‘(II) with respect to a foreign fu14 tures commission merchant, a foreign

15 future;

16 ‘‘(III) with respect to a leverage

17 transaction merchant, a leverage

18 transaction;

19 ‘‘(IV) with respect to a clearing

20 organization, a contract for the pur21 chase or sale of a commodity for fu22 ture delivery on, or subject to the

23 rules of, a contract market or board

24 of trade that is cleared by such clear25 ing organization, or commodity option
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1 traded on, or subject to the rules of,

2 a contract market or board of trade

3 that is cleared by such clearing orga4 nization;

5 ‘‘(V) with respect to a commodity

6 options dealer, a commodity option;

7 ‘‘(VI) any other agreement or

8 transaction that is similar to any

9 agreement or transaction referred to

10 in this clause;

11 ‘‘(VII) any combination of the

12 agreements or transactions referred to

13 in this clause;

14 ‘‘(VIII) any option to enter into

15 any agreement or transaction referred

16 to in this clause;

17 ‘‘(IX) a master agreement that

18 provides for an agreement or trans19 action referred to in subclause (I),

20 (II), (III), (IV), (V), (VI), (VII), or

21 (VIII), together with all supplements

22 to any such master agreement, with23 out regard to whether the master

24 agreement provides for an agreement

25 or transaction that is not a com-
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1 modity contract under this clause, ex2 cept that the master agreement shall

3 be considered to be a commodity con4 tract under this clause only with re5 spect to each agreement or trans6 action under the master agreement

7 that is referred to in subclause (I),

8 (II), (III), (IV), (V), (VI), (VII), or

9 (VIII); or

10 ‘‘(X) a security agreement or ar11 rangement or other credit enhance12 ment related to any agreement or

13 transaction referred to in this

14 clause.’’.

15 (d) DEFINITION OF FORWARD CONTRACT.—Section

16 11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12

17 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:

18 ‘‘(iv) FORWARD CONTRACT.—The

19 term ‘forward contract’ means—

20 ‘‘(I) a contract (other than a

21 commodity contract) for the purchase,

22 sale, or transfer of a commodity or

23 any similar good, article, service,

24 right, or interest which is presently or

25 in the future becomes the subject of
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1 dealing in the forward contract trade,

2 or product or byproduct thereof, with

3 a maturity date more than 2 days

4 after the date the contract is entered

5 into, including, but not limited to, a

6 repurchase agreement, reverse repur7 chase agreement, consignment, lease,

8 swap, hedge transaction, deposit, loan,

9 option, allocated transaction,

10 unallocated transaction, or any other

11 similar agreement;

12 ‘‘(II) any combination of agree13 ments or transactions referred to in

14 subclauses (I) and (III);

15 ‘‘(III) any option to enter into

16 any agreement or transaction referred

17 to in subclause (I) or (II);

18 ‘‘(IV) a master agreement that

19 provides for an agreement or trans20 action referred to in subclauses (I),

21 (II), or (III), together with all supple22 ments to any such master agreement,

23 without regard to whether the master

24 agreement provides for an agreement

25 or transaction that is not a forward
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1 contract under this clause, except that

2 the master agreement shall be consid3 ered to be a forward contract under

4 this clause only with respect to each

5 agreement or transaction under the

6 master agreement that is referred to

7 in subclause (I), (II), or (III); or

8 ‘‘(V) a security agreement or ar9 rangement or other credit enhance10 ment related to any agreement or

11 transaction referred to in subclause

12 (I), (II), (III), or (IV).’’.

13 (e) DEFINITION OF REPURCHASE AGREEMENT.—

14 Section 11(e)(8)(D)(v) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read as

16 follows:

17 ‘‘(v) REPURCHASE AGREEMENT.—The

18 term ‘repurchase agreement’ (which defini19 tion also applies to a reverse repurchase

20 agreement)—

21 ‘‘(I) mean an agreement, includ22 ing related terms, which provides for

23 the transfer of one or more certifi24 cates of deposit, mortgage-related se25 curities (as such term is defined in
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1 the Securities Exchange Act of 1934),

2 mortgage loans, interests in mortgage3 related securities or mortgage loans,

4 eligible bankers’ acceptances, qualified

5 foreign government securities or secu6 rities that are direct obligations of, or

7 that are fully guaranteed by, the

8 United States or any agency of the

9 United States against the transfer of

10 funds by the transferee of such certifi11 cates of deposit, eligible bankers’ ac12 ceptances, securities, loans, or inter13 ests with a simultaneous agreement

14 by such transferee to transfer to the

15 transferor thereof certificates of de16 posit, eligible bankers’ acceptances,

17 securities, loans, or interests as de18 scribed above, at a date certain not

19 later than 1 year after such transfers

20 or on demand, against the transfer of

21 funds, or any other similar agreement;

22 ‘‘(II) does not include any repur23 chase obligation under a participation

24 in a commercial mortgage loan unless

25 the Corporation determines by regula-
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1 tion, resolution, or order to include

2 any such participation within the

3 meaning of such term;

4 ‘‘(III) means any combination of

5 agreements or transactions referred to

6 in subclauses (I) and (IV);

7 ‘‘(IV) means any option to enter

8 into any agreement or transaction re9 ferred to in subclause (I) or (III);

10 ‘‘(V) means a master agreement

11 that provides for an agreement or

12 transaction referred to in subclause

13 (I), (III), or (IV), together with all

14 supplements to any such master

15 agreement, without regard to whether

16 the master agreement provides for an

17 agreement or transaction that is not a

18 repurchase agreement under this

19 clause, except that the master agree20 ment shall be considered to be a re21 purchase agreement under this sub22 clause only with respect to each agree23 ment or transaction under the master

24 agreement that is referred to in sub25 clause (I), (III), or (IV); and
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1 ‘‘(VI) means a security agree2 ment or arrangement or other credit

3 enhancement related to any agree4 ment or transaction referred to in

5 subclause (I), (III), (IV), or (V).

6 For purposes of this clause, the term

7 ‘qualified foreign government security’

8 means a security that is a direct obligation

9 of, or that is fully guaranteed by, the cen10 tral government of a member of the Orga11 nization for Economic Cooperation and

12 Development (as determined by regulation

13 or order adopted by the appropriate Fed14 eral banking authority).’’.

15 (f) DEFINITION OF SWAP AGREEMENT.—Section

16 11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12

17 U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows:

18 ‘‘(vi) SWAP AGREEMENT.—The term

19 ‘swap agreement’ means—

20 ‘‘(I) any agreement, including the

21 terms and conditions incorporated by

22 reference in any such agreement,

23 which is an interest rate swap, option,

24 future, or forward agreement, includ25 ing a rate floor, rate cap, rate collar,
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1 cross-currency rate swap, and basis

2 swap; a spot, same day-tomorrow, to3 morrow-next, forward, or other for4 eign exchange or precious metals

5 agreement; a currency swap, option,

6 future, or forward agreement; an eq7 uity index or equity swap, option, fu8 ture, or forward agreement; a debt

9 index or debt swap, option, future, or

10 forward agreement; a credit spread or

11 credit swap, option, future, or forward

12 agreement; a commodity index or

13 commodity swap, option, future, or

14 forward agreement;

15 ‘‘(II) any agreement or trans16 action similar to any other agreement

17 or transaction referred to in this

18 clause that is presently, or in the fu19 ture becomes, regularly entered into

20 in the swap market (including terms

21 and conditions incorporated by ref22 erence in such agreement) and that is

23 a forward, swap, future, or option on

24 one or more rates, currencies, com25 modities, equity securities or other eq-
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1 uity instruments, debt securities or

2 other debt instruments, or economic

3 indices or measures of economic risk

4 or value;

5 ‘‘(III) any combination of agree6 ments or transactions referred to in

7 this clause;

8 ‘‘(IV) any option to enter into

9 any agreement or transaction referred

10 to in this clause;

11 ‘‘(V) a master agreement that

12 provides for an agreement or trans13 action referred to in subclause (I),

14 (II), (III), or (IV), together with all

15 supplements to any such master

16 agreement, without regard to whether

17 the master agreement contains an

18 agreement or transaction that is not a

19 swap agreement under this clause, ex20 cept that the master agreement shall

21 be considered to be a swap agreement

22 under this clause only with respect to

23 each agreement or transaction under

24 the master agreement that is referred
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1 to in subclause (I), (II), (III), or (IV);

2 and

3 ‘‘(VI) any security agreement or

4 arrangement or other credit enhance5 ment related to any agreements or

6 transactions referred to in subpara7 graph (I), (II), (III), or (IV).

8 Such term is applicable for purposes of

9 this title only and shall not be construed or

10 applied so as to challenge or affect the

11 characterization, definition, or treatment of

12 any swap agreement under any other stat13 ute, regulation, or rule, including the Secu14 rities Act of 1933, the Securities Exchange

15 Act of 1934, the Public Utility Holding

16 Company Act of 1935, the Trust Indenture

17 Act of 1939, the Investment Company Act

18 of 1940, the Investment Advisers Act of

19 1940, the Securities Investor Protection

20 Act of 1970, the Commodity Exchange

21 Act, and the regulations promulgated by

22 the Securities and Exchange Commission

23 or the Commodity Futures Trading Com24 mission.’’.
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1 (g) DEFINITION OF TRANSFER.—Section

2 11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12

3 U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:

4 ‘‘(viii) TRANSFER.—The term ‘trans5 fer’ means every mode, direct or indirect,

6 absolute or conditional, voluntary or invol7 untary, of disposing of or parting with

8 property or with an interest in property,

9 including retention of title as a security in10 terest and foreclosure of the depository

11 institutions’s equity of redemption.’’.

12 (h) TREATMENT OF QUALIFIED FINANCIAL CON13 TRACTS.—Section 11(e)(8) of the Federal Deposit Insur14 ance Act (12 U.S.C. 1821(e)(8)) is amended—

15 (1) in subparagraph (A), by striking ‘‘para16 graph (10)’’ and inserting ‘‘paragraphs (9) and

17 (10)’’;

18 (2) in subparagraph (A)(i), by striking ‘‘to

19 cause the termination or liquidation’’ and inserting

20 ‘‘such person has to cause the termination, liquida21 tion, or acceleration’’;

22 (3) by amending subparagraph (A)(ii) to read

23 as follows:

24 ‘‘(ii) any right under any security

25 agreement or arrangement or other credit
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1 enhancement related to one or more quali2 fied financial contracts described in clause

3 (i);’’; and

4 (4) by amending subparagraph (E)(ii) to read

5 as follows:

6 ‘‘(ii) any right under any security

7 agreement or arrangement or other credit

8 enhancement related to one or more quali9 fied financial contracts described in clause

10 (i);’’.

11 (i) AVOIDANCE OF TRANSFERS.—Section

12 11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12

13 U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section

14 5242 of the Revised Statutes of the United States (12

15 U.S.C. 91) or any other Federal or State law relating to

16 the avoidance of preferential or fraudulent transfers,’’ be17 fore ‘‘the Corporation’’.

18 SEC. 1002. AUTHORITY OF THE CORPORATION WITH RE19 SPECT TO FAILED AND FAILING INSTITU20 TIONS.

21 (a) IN GENERAL.—Section 11(e)(8) of the Federal

22 Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is

23 amended—

24 (1) in subparagraph (E), by striking ‘‘other

25 than paragraph (12) of this subsection, subsection
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1 (d)(9)’’ and inserting ‘‘other than subsections (d)(9)

2 and (e)(10)’’; and

3 (2) by adding at the end the following new sub4 paragraphs:

5 ‘‘(F) CLARIFICATION.—No provision of law

6 shall be construed as limiting the right or

7 power of the Corporation, or authorizing any

8 court or agency to limit or delay, in any man9 ner, the right or power of the Corporation to

10 transfer any qualified financial contract in ac11 cordance with paragraphs (9) and (10) of this

12 subsection or to disaffirm or repudiate any such

13 contract in accordance with subsection (e)(1) of

14 this section.

15 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC16 TIVE.—

17 ‘‘(i) IN GENERAL.—Notwithstanding

18 the provisions of subparagraphs (A) and

19 (E), and sections 403 and 404 of the Fed20 eral Deposit Insurance Corporation Im21 provement Act of 1991, no walkaway

22 clause shall be enforceable in a qualified fi23 nancial contract of an insured depository

24 institution in default.
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1 ‘‘(ii) WALKAWAY CLAUSE DEFINED.—

2 For purposes of this subparagraph, the

3 term ‘walkaway clause’ means a provision

4 in a qualified financial contract that, after

5 calculation of a value of a party’s position

6 or an amount due to or from 1 of the par7 ties in accordance with its terms upon ter8 mination, liquidation, or acceleration of the

9 qualified financial contract, either does not

10 create a payment obligation of a party or

11 extinguishes a payment obligation of a

12 party in whole or in part solely because of

13 such party’s status as a nondefaulting

14 party.’’.

15 (b) TECHNICAL AND CONFORMING AMENDMENT.—

16 Section 11(e)(12)(A) of the Federal Deposit Insurance

17 Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting

18 ‘‘or the exercise of rights or powers’’ after ‘‘the appoint19 ment’’.

20 SEC. 1003. AMENDMENTS RELATING TO TRANSFERS OF

21 QUALIFIED FINANCIAL CONTRACTS.

22 (a) TRANSFERS OF QUALIFIED FINANCIAL CON23 TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9)

24 of the Federal Deposit Insurance Act (12 U.S.C.

25 1821(e)(9)) is amended to read as follows:
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1 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON2 TRACTS.—

3 ‘‘(A) IN GENERAL.—In making any trans4 fer of assets or liabilities of a depository institu5 tion in default which includes any qualified fi6 nancial contract, the conservator or receiver for

7 such depository institution shall either—

8 ‘‘(i) transfer to one financial institu9 tion, other than a financial institution for

10 which a conservator, receiver, trustee in

11 bankruptcy, or other legal custodian has

12 been appointed or which is otherwise the

13 subject of a bankruptcy or insolvency

14 proceeding—

15 ‘‘(I) all qualified financial con16 tracts between any person or any af17 filiate of such person and the deposi18 tory institution in default;

19 ‘‘(II) all claims of such person or

20 any affiliate of such person against

21 such depository institution under any

22 such contract (other than any claim

23 which, under the terms of any such

24 contract, is subordinated to the claims
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1 of general unsecured creditors of such

2 institution);

3 ‘‘(III) all claims of such deposi4 tory institution against such person or

5 any affiliate of such person under any

6 such contract; and

7 ‘‘(IV) all property securing or

8 any other credit enhancement for any

9 contract described in subclause (I) or

10 any claim described in subclause (II)

11 or (III) under any such contract; or

12 ‘‘(ii) transfer none of the qualified fi13 nancial contracts, claims, property or other

14 credit enhancement referred to in clause (i)

15 (with respect to such person and any affil16 iate of such person).

17 ‘‘(B) TRANSFER TO FOREIGN BANK, FOR18 EIGN FINANCIAL INSTITUTION, OR BRANCH OR

19 AGENCY OF A FOREIGN BANK OR FINANCIAL IN20 STITUTION.—In transferring any qualified fi21 nancial contracts and related claims and prop22 erty pursuant to subparagraph (A)(i), the con23 servator or receiver for such depository institu24 tion shall not make such transfer to a foreign

25 bank, financial institution organized under the
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1 laws of a foreign country, or a branch or agency

2 of a foreign bank or financial institution unless,

3 under the law applicable to such bank, financial

4 institution, branch or agency, to the qualified

5 financial contracts, and to any netting contract,

6 any security agreement or arrangement or other

7 credit enhancement related to one or more

8 qualified financial contracts, the contractual

9 rights of the parties to such qualified financial

10 contracts, netting contracts, security agree11 ments or arrangements, or other credit en12 hancements are enforceable substantially to the

13 same extent as permitted under this section.

14 ‘‘(C) TRANSFER OF CONTRACTS SUBJECT

15 TO THE RULES OF A CLEARING ORGANIZA16 TION.—In the event that a conservator or re17 ceiver transfers any qualified financial contract

18 and related claims, property and credit en19 hancements pursuant to subparagraph (A)(i)

20 and such contract is subject to the rules of a

21 clearing organization, the clearing organization

22 shall not be required to accept the transferee as

23 a member by virtue of the transfer.

24 ‘‘(D) DEFINITION.—For purposes of this

25 section, the term ‘financial institution’ means a
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1 broker or dealer, a depository institution, a fu2 tures commission merchant, or any other insti3 tution as determined by the Corporation by reg4 ulation to be a financial institution.’’.

5 (b) NOTICE TO QUALIFIED FINANCIAL CONTRACT

6 COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal

7 Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is

8 amended by amending the flush material following clause

9 (ii) to read as follows: ‘‘the conservator or receiver shall

10 notify any person who is a party to any such contract of

11 such transfer by 5:00 p.m. (eastern time) on the business

12 day following the date of the appointment of the receiver,

13 in the case of a receivership, or the business day following

14 such transfer, in the case of a conservatorship.’’.

15 (c) RIGHTS AGAINST RECEIVER AND TREATMENT OF

16 BRIDGE BANKS.—Section 11(e)(10) of the Federal De17 posit Insurance Act (12 U.S.C. 1821(e)(10)) is further

18 amended—

19 (1) by redesignating subparagraph (B) as sub20 paragraph (D); and

21 (2) by inserting after subparagraph (A) the fol22 lowing new subparagraphs:

23 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE24 ABLE.—
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1 ‘‘(i) RECEIVERSHIP.—A person who is

2 a party to a qualified financial contract

3 with an insured depository institution may

4 not exercise any right such person has to

5 terminate, liquidate, or net such contract

6 under paragraph (8)(A) or section 403 or

7 404 of the Federal Deposit Insurance Cor8 poration Improvement Act of 1991 solely

9 by reason of or incidental to the appoint10 ment of a receiver for the depository insti11 tution (or the insolvency or financial condi12 tion of the depository institution for which

13 the receiver has been appointed)—

14 ‘‘(I) until 5:00 p.m. (eastern

15 time) on the business day following

16 the date of the appointment of the re17 ceiver; or

18 ‘‘(II) after the person has re19 ceived notice that the contract has

20 been transferred pursuant to para21 graph (9)(A).

22 ‘‘(ii) CONSERVATORSHIP.—A person

23 who is a party to a qualified financial con24 tract with an insured depository institution

25 may not exercise any right such person has
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1 to terminate, liquidate, or net such con2 tract under paragraph (8)(E) or sections

3 403 or 404 of the Federal Deposit Insur4 ance Corporation Improvement Act of

5 1991, solely by reason of or incidental to

6 the appointment of a conservator for the

7 depository institution (or the insolvency or

8 financial condition of the depository insti9 tution for which the conservator has been

10 appointed).

11 ‘‘(iii) NOTICE.—For purposes of this

12 subsection, the Corporation as receiver or

13 conservator of an insured depository insti14 tution shall be deemed to have notified a

15 person who is a party to a qualified finan16 cial contract with such depository institu17 tion if the Corporation has taken steps

18 reasonably calculated to provide notice to

19 such person by the time specified in sub20 paragraph (A) of this subsection.

21 ‘‘(C) TREATMENT OF BRIDGE BANKS.—

22 The following institutions shall not be consid23 ered a financial institution for which a conser24 vator, receiver, trustee in bankruptcy, or other

25 legal custodian has been appointed or which is
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1 otherwise the subject of a bankruptcy or insol2 vency proceeding for purposes of subsection

3 (e)(9)—

4 ‘‘(i) a bridge bank; or

5 ‘‘(ii) a depository institution organized

6 by the Corporation, for which a conser7 vator is appointed either—

8 ‘‘(I) immediately upon the orga9 nization of the institution; or

10 ‘‘(II) at the time of a purchase

11 and assumption transaction between

12 such institution and the Corporation

13 as receiver for a depository institution

14 in default.’’.

15 SEC. 1004. AMENDMENTS RELATING TO DISAFFIRMANCE

16 OR REPUDIATION OF QUALIFIED FINANCIAL

17 CONTRACTS.

18 Section 11(e) of the Federal Deposit Insurance Act

19 (12 U.S.C. 1821(e)) is further amended—

20 (1) by redesignating paragraphs (11) through

21 (15) as paragraphs (12) through (16), respectively;

22 and

23 (2) by inserting after paragraph (10) the fol24 lowing new paragraph:
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1 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

2 QUALIFIED FINANCIAL CONTRACTS.—In exercising

3 the rights of disaffirmance or repudiation of a con4 servator or receiver with respect to any qualified fi5 nancial contract to which an insured depository in6 stitution is a party, the conservator or receiver for

7 such institution shall either—

8 ‘‘(A) disaffirm or repudiate all qualified fi9 nancial contracts between—

10 ‘‘(i) any person or any affiliate of

11 such person; and

12 ‘‘(ii) the depository institution in de13 fault; or

14 ‘‘(B) disaffirm or repudiate none of the

15 qualified financial contracts referred to in sub16 paragraph (A) (with respect to such person or

17 any affiliate of such person).’’.

18 SEC. 1005. CLARIFYING AMENDMENT RELATING TO MAS19 TER AGREEMENTS.

20 Section 11(e)(8)(D)(vii) of the Federal Deposit In21 surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to

22 read as follows:

23 ‘‘(vii) TREATMENT OF MASTER

24 AGREEMENT AS ONE AGREEMENT.—Any

25 master agreement for any contract or
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1 agreement described in any preceding

2 clause of this subparagraph (or any master

3 agreement for such master agreement or

4 agreements), together with all supplements

5 to such master agreement, shall be treated

6 as a single agreement and a single quali7 fied financial contract. If a master agree8 ment contains provisions relating to agree9 ments or transactions that are not them10 selves qualified financial contracts, the

11 master agreement shall be deemed to be a

12 qualified financial contract only with re13 spect to those transactions that are them14 selves qualified financial contracts.’’.

15 SEC. 1006. FEDERAL DEPOSIT INSURANCE CORPORATION

16 IMPROVEMENT ACT OF 1991.

17 (a) DEFINITIONS.—Section 402 of the Federal De18 posit Insurance Corporation Improvement Act of 1991 (12

19 U.S.C. 4402) is amended—

20 (1) in paragraph (6)—

21 (A) by redesignating subparagraphs (B)

22 through (D) as subparagraphs (C) through (E),

23 respectively;

24 (B) by inserting after subparagraph (A)

25 the following new subparagraph:
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1 ‘‘(B) an uninsured national bank or an un2 insured State bank that is a member of the

3 Federal Reserve System if the national bank or

4 State member bank is not eligible to make ap5 plication to become an insured bank under sec6 tion 5 of the Federal Deposit Insurance Act;’’;

7 and

8 (C) by amending subparagraph (C) (as re9 designated) to read as follows:

10 ‘‘(C) a branch or agency of a foreign bank,

11 a foreign bank and any branch or agency of the

12 foreign bank, or the foreign bank that estab13 lished the branch or agency, as those terms are

14 defined in section 1(b) of the International

15 Banking Act of 1978;’’;

16 (2) in paragraph (11), by adding before the pe17 riod ‘‘and any other clearing organization with which

18 such clearing organization has a netting contract’’;

19 (3) by amending paragraph (14)(A)(i) to read

20 as follows:

21 ‘‘(i) means a contract or agreement

22 between two or more financial institutions,

23 clearing organizations, or members that

24 provides for netting present or future pay25 ment obligations or payment entitlements
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1 (including liquidation or closeout values re2 lating to such obligations or entitlements)

3 among the parties to the agreement; and’’;

4 and

5 (4) by adding at the end the following new

6 paragraph:

7 ‘‘(15) PAYMENT.—The term ‘payment’ means a

8 payment of United States dollars, another currency,

9 or a composite currency, and a noncash delivery, in10 cluding a payment or delivery to liquidate an

11 unmatured obligation.’’.

12 (b) ENFORCEABILITY OF BILATERAL NETTING CON13 TRACTS.—Section 403 of the Federal Deposit Insurance

14 Corporation Improvement Act of 1991 (12 U.S.C. 4403)

15 is amended—

16 (1) by amending subsection (a) to read as fol17 lows:

18 ‘‘(a) GENERAL RULE.—Notwithstanding any other

19 provision of State or Federal law (other than paragraphs

20 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

21 Deposit Insurance Act or any order authorized under sec22 tion 5(b)(2) of the Securities Investor Protection Act of

23 1970, the covered contractual payment obligations and the

24 covered contractual payment entitlements between any two

25 financial institutions shall be netted in accordance with,
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1 and subject to the conditions of, the terms of any applica2 ble netting contract (except as provided in section

3 561(b)(2) of title 11, United States Code).’’; and

4 (2) by adding at the end the following new sub5 section:

6 ‘‘(f) ENFORCEABILITY OF SECURITY AGREE7 MENTS.—The provisions of any security agreement or ar8 rangement or other credit enhancement related to one or

9 more netting contracts between any two financial institu10 tions shall be enforceable in accordance with their terms

11 (except as provided in section 561(b)(2) of title 11, United

12 States Code) and shall not be stayed, avoided, or otherwise

13 limited by any State or Federal law (other than para14 graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the

15 Federal Deposit Insurance Act and section 5(b)(2) of the

16 Securities Investor Protection Act of 1970).’’.

17 (c) ENFORCEABILITY OF CLEARING ORGANIZATION

18 NETTING CONTRACTS.—Section 404 of the Federal De19 posit Insurance Corporation Improvement Act of 1991 (12

20 U.S.C. 4404) is amended—

21 (1) by amending subsection (a) to read as fol22 lows:

23 ‘‘(a) GENERAL RULE.—Notwithstanding any other

24 provision of State or Federal law (other than paragraphs

25 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal
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1 Deposit Insurance Act and any order authorized under

2 section 5(b)(2) of the Securities Investor Protection Act

3 of 1970, the covered contractual payment obligations and

4 the covered contractual payment entitlements of a member

5 of a clearing organization to and from all other members

6 of a clearing organization shall be netted in accordance

7 with and subject to the conditions of any applicable net8 ting contract (except as provided in section 561(b)(2) of

9 title 11, United States Code).’’; and

10 (2) by adding at the end the following new sub11 section:

12 ‘‘(h) ENFORCEABILITY OF SECURITY AGREE13 MENTS.—The provisions of any security agreement or ar14 rangement or other credit enhancement related to one or

15 more netting contracts between any two members of a

16 clearing organization shall be enforceable in accordance

17 with their terms (except as provided in section 561(b)(2)

18 of title 11, United States Code) and shall not be stayed,

19 avoided, or otherwise limited by any State or Federal law

20 other than paragraphs (8)(E), (8)(F), and (10)(B) of sec21 tion 11(e) of the Federal Deposit Insurance Act and sec22 tion 5(b)(2) of the Securities Investor Protection Act of

23 1970.’’.

24 (d) ENFORCEABILITY OF CONTRACTS WITH UNIN25 SURED NATIONAL BANKS AND UNINSURED FEDERAL
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1 BRANCHES AND AGENCIES.—The Federal Deposit Insur2 ance Corporation Improvement Act of 1991 (12 U.S.C.

3 4401 et seq.) is amended—

4 (1) by redesignating section 407 as section 408;

5 and

6 (2) by adding after section 406 the following

7 new section:

8 ‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED

9 NATIONAL BANKS AND UNINSURED FEDERAL

10 BRANCHES AND AGENCIES.

11 ‘‘(a) IN GENERAL.—Notwithstanding any other pro12 vision of law, paragraphs (8), (9), (10), and (11) of section

13 11(e) of the Federal Deposit Insurance Act shall apply

14 to an uninsured national bank or uninsured Federal

15 branch or Federal agency except—

16 ‘‘(1) any reference to the ‘Corporation as re17 ceiver’ or ‘the receiver or the Corporation’ shall refer

18 to the receiver of an uninsured national bank or un19 insured Federal branch or Federal agency appointed

20 by the Comptroller of the Currency;

21 ‘‘(2) any reference to the ‘Corporation’ (other

22 than in section 11(e)(8)(D) of such Act), the ‘Cor23 poration, whether acting as such or as conservator

24 or receiver’, a ‘receiver’, or a ‘conservator’ shall refer

25 to the receiver or conservator of an uninsured na-
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1 tional bank or uninsured Federal branch or Federal

2 agency appointed by the Comptroller of the Cur3 rency; and

4 ‘‘(3) any reference to an ‘insured depository in5 stitution’ or ‘depository institution’ shall refer to an

6 uninsured national bank or an uninsured Federal

7 branch or Federal agency.

8 ‘‘(b) LIABILITY.—The liability of a receiver or conser9 vator of an uninsured national bank or uninsured Federal

10 branch or agency shall be determined in the same manner

11 and subject to the same limitations that apply to receivers

12 and conservators of insured depository institutions under

13 section 11(e) of the Federal Deposit Insurance Act.

14 ‘‘(c) REGULATORY AUTHORITY.—

15 ‘‘(1) IN GENERAL.—The Comptroller of the

16 Currency, in consultation with the Federal Deposit

17 Insurance Corporation, may promulgate regulations

18 to implement this section.

19 ‘‘(2) SPECIFIC REQUIREMENT.—In promul20 gating regulations to implement this section, the

21 Comptroller of the Currency shall ensure that the

22 regulations generally are consistent with the regula23 tions and policies of the Federal Deposit Insurance

24 Corporation adopted pursuant to the Federal De25 posit Insurance Act.
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1 ‘‘(d) DEFINITIONS.—For purposes of this section, the

2 terms ‘Federal branch’, ‘Federal agency’, and ‘foreign

3 bank’ have the same meaning as in section 1(b) of the

4 International Banking Act.’’.

5 SEC. 1007. BANKRUPTCY CODE AMENDMENTS.

6 (a) DEFINITIONS OF FORWARD CONTRACT, REPUR7 CHASE AGREEMENT, SECURITIES CLEARING AGENCY,

8 SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU9 RITIES CONTRACT.—Title 11, United States Code, is

10 amended—

11 (1) in section 101—

12 (A) in paragraph (25)—

13 (i) by striking ‘‘means a contract’’

14 and inserting ‘‘means—

15 ‘‘(A) a contract’’;

16 (ii) by striking ‘‘, or any combination

17 thereof or option thereon;’’ and inserting

18 ‘‘, or any other similar agreement;’’; and

19 (iii) by adding at the end the fol20 lowing:

21 ‘‘(B) any combination of agreements or

22 transactions referred to in subparagraphs (A)

23 and (C);
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1 ‘‘(C) any option to enter into an agreement

2 or transaction referred to in subparagraph (A)

3 or (B);

4 ‘‘(D) a master agreement that provides for

5 an agreement or transaction referred to in sub6 paragraph (A), (B), or (C), together with all

7 supplements to any such master agreement,

8 without regard to whether such master agree9 ment provides for an agreement or transaction

10 that is not a forward contract under this para11 graph, except that such master agreement shall

12 be considered to be a forward contract under

13 this paragraph only with respect to each agree14 ment or transaction under such master agree15 ment that is referred to in subparagraph (A),

16 (B) or (C); or

17 ‘‘(E) a security agreement or arrangement,

18 or other credit enhancement related to any

19 agreement or transaction referred to in sub20 paragraph (A), (B), (C), or (D), but not to ex21 ceed the actual value of such contract, option,

22 agreement, or transaction on the date of the fil23 ing of the petition;’’;

24 (B) in paragraph (46), by striking ‘‘on any

25 day during the period beginning 90 days before
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1 the date of’’ and replacing it with ‘‘at any time

2 before’’;

3 (C) by amending paragraph (47) to read

4 as follows:

5 ‘‘(47) ‘repurchase agreement’ (which definition

6 also applies to a reverse repurchase agreement)

7 means—

8 ‘‘(i) an agreement, including related

9 terms, which provides for the transfer of

10 one or more certificates of deposit, mort11 gage-related securities (as defined in the

12 Securities Exchange Act of 1934), mort13 gage loans, interests in mortgage-related

14 securities or mortgage loans, eligible bank15 ers’ acceptances, qualified foreign govern16 ment securities; or securities that are di17 rect obligations of, or that are fully guar18 anteed by, the United States or any agency

19 of the United States against the transfer

20 of funds by the transferee of such certifi21 cates of deposit, eligible bankers’ accept22 ances, securities, loans, or interests; with a

23 simultaneous agreement by such transferee

24 to transfer to the transferor thereof certifi25 cates of deposit, eligible bankers’ accept-
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1 ance, securities, loans, or interests of the

2 kind described above, at a date certain not

3 later than 1 year after such transfer or on

4 demand, against the transfer of funds;

5 ‘‘(ii) any combination of agreements

6 or transactions referred to in clauses (i)

7 and (iii);

8 ‘‘(iii) an option to enter into an agree9 ment or transaction referred to in clause

10 (i) or (ii);

11 ‘‘(iv) a master agreement that pro12 vides for an agreement or transaction re13 ferred to in clause (i), (ii), or (iii), together

14 with all supplements to any such master

15 agreement, without regard to whether such

16 master agreement provides for an agree17 ment or transaction that is not a repur18 chase agreement under this paragraph, ex19 cept that such master agreement shall be

20 considered to be a repurchase agreement

21 under this paragraph only with respect to

22 each agreement or transaction under the

23 master agreement that is referred to in

24 clause (i), (ii), or (iii); or
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1 ‘‘(v) a security agreement or arrange2 ment or other credit enhancement related

3 to any agreement or transaction referred

4 to in clause (i), (ii), (iii), or (iv), but not

5 to exceed the actual value of such contract

6 on the date of the filing of the petition;

7 and

8 ‘‘(B) does not include a repurchase obliga9 tion under a participation in a commercial

10 mortgage loan,

11 and, for purposes of this paragraph, the term ‘quali12 fied foreign government security’ means a security

13 that is a direct obligation of, or that is fully guaran14 teed by, the central government of a member of the

15 Organization for Economic Cooperation and Devel16 opment;’’;

17 (D) in paragraph (48) by inserting ‘‘or ex18 empt from such registration under such section

19 pursuant to an order of the Securities and Ex20 change Commission’’ after ‘‘1934’’; and

21 (E) by amending paragraph (53B) to read

22 as follows:

23 ‘‘(53B) ‘swap agreement’—

24 ‘‘(A) means—
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1 ‘‘(i) any agreement, including the

2 terms and conditions incorporated by ref3 erence in such agreement, which is an in4 terest rate swap, option, future, or forward

5 agreement, including a rate floor, rate cap,

6 rate collar, cross-currency rate swap, and

7 basis swap; a spot, same day-tomorrow, to8 morrow-next, forward, or other foreign ex9 change or precious metals agreement; a

10 currency swap, option, future, or forward

11 agreement; an equity index or an equity

12 swap, option, future, or forward agree13 ment; a debt index or a debt swap, option,

14 future, or forward agreement; a credit

15 spread or a credit swap, option, future, or

16 forward agreement; or a commodity index

17 or a commodity swap, option, future, or

18 forward agreement;

19 ‘‘(ii) any agreement or transaction

20 similar to any other agreement or trans21 action referred to in this paragraph that—

22 ‘‘(I) is presently, or in the future

23 becomes, regularly entered into in the

24 swap market (including terms and
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1 conditions incorporated by reference

2 therein); and

3 ‘‘(II) is a forward, swap, future,

4 or option on one or more rates, cur5 rencies commodities, equity securities,

6 or other equity instruments, debt se7 curities or other debt instruments, or

8 on an economic index or measure of

9 economic risk or value;

10 ‘‘(iii) any combination of agreements

11 or transactions referred to in this para12 graph;

13 ‘‘(iv) any option to enter into an

14 agreement or transaction referred to in

15 this paragraph;

16 ‘‘(v) a master agreement that provides

17 for an agreement or transaction referred to

18 in clause (i), (ii), (iii), or (iv), together

19 with all supplements to any such master

20 agreement, and without regard to whether

21 the master agreement contains an agree22 ment or transaction that is not a swap

23 agreement under this paragraph, except

24 that the master agreement shall be consid25 ered to be a swap agreement under this
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1 paragraph only with respect to each agree2 ment or transaction under the master

3 agreement that is referred to in clause (i),

4 (ii), (iii), or (iv); or

5 ‘‘(B) any security agreement or arrange6 ment or other credit enhancement related to

7 any agreements or transactions referred to in

8 subparagraph (A); and

9 ‘‘(C) is applicable for purposes of this title

10 only and shall not be construed or applied so as

11 to challenge or affect the characterization, defi12 nition, or treatment of any swap agreement

13 under any other statute, regulation, or rule, in14 cluding the Securities Act of 1933, the Securi15 ties Exchange Act of 1934, the Public Utility

16 Holding Company Act of 1935, the Trust In17 denture Act of 1939, the Investment Company

18 Act of 1940, the Investment Advisers Act of

19 1940, the Securities Investor Protection Act of

20 1970, the Commodity Exchange Act, and the

21 regulations prescribed by the Securities and Ex22 change Commission or the Commodity Futures

23 Trading Commission.’’;

24 (2) by amending section 741(7) to read as fol25 lows:
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1 ‘‘(7) ‘securities contract’—

2 ‘‘(A) means—

3 ‘‘(i) a contract for the purchase, sale,

4 or loan of a security, a certificate of de5 posit, a mortgage loan or any interest in a

6 mortgage loan, a group or index of securi7 ties, certificates of deposit or mortgage

8 loans or interests therein (including an in9 terest therein or based on the value there10 of), or option on any of the foregoing, in11 cluding an option to purchase or sell any

12 such security certificate of deposit, loan,

13 interest, group or index or option;

14 ‘‘(ii) any option entered into on a na15 tional securities exchange relating to for16 eign currencies;

17 ‘‘(iii) the guarantee by or to any secu18 rities clearing agency of a settlement of

19 cash, securities, certificates of deposit

20 mortgage loans or interests therein, group

21 or index of securities, or mortgage loans or

22 interests therein (including any interest

23 therein or based on the value thereof), or

24 option on any of the foregoing, including

25 an option to purchase or sell any such se-
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1 curity certificate of deposit, loan, interest,

2 group or index or option;

3 ‘‘(iv) any margin loan;

4 ‘‘(v) any other agreement or trans5 action that is similar to an agreement or

6 transaction referred to in this paragraph;

7 ‘‘(vi) any combination of the agree8 ments or transactions referred to in this

9 paragraph;

10 ‘‘(vii) any option to enter into any

11 agreement or transaction referred to in

12 this paragraph;

13 ‘‘(viii) a master agreement that pro14 vides for an agreement or transaction re15 ferred to in clause (i), (ii), (iii), (iv), (v),

16 (vi), or (vii), together with all supplements

17 to any such master agreement, without re18 gard to whether the master agreement pro19 vides for an agreement or transaction that

20 is not a securities contract under this

21 paragraph, except that such master agree22 ment shall be considered to be a securities

23 contract under this paragraph only with

24 respect to each agreement or transaction

25 under such master agreement that is re-
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1 ferred to in clause (i), (ii), (iii), (iv), (v),

2 (vi), or (vii); or

3 ‘‘(ix) any security agreement or ar4 rangement, or other credit enhancement,

5 related to any agreement or transaction re6 ferred to in this paragraph, but not to ex7 ceed the actual value of such contract on

8 the date of the filing of the petition; and

9 ‘‘(B) does not include any purchase, sale,

10 or repurchase obligation under a participation

11 in a commercial mortgage loan.’’; and

12 (3) in section 761(4)—

13 (A) by striking ‘‘or’’ at the end of subpara14 graph (D); and

15 (B) by adding at the end the following:

16 ‘‘(F) any other agreement or transaction

17 that is similar to an agreement or transaction

18 referred to in this paragraph;

19 ‘‘(G) any combination of the agreements or

20 transactions referred to in this paragraph;

21 ‘‘(H) any option to enter into an agree22 ment or transaction referred to in this para23 graph;

24 ‘‘(I) a master agreement that provides for

25 an agreement or transaction referred to in sub-
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1 paragraph (A), (B), (C), (D), (E), (F), (G), or

2 (H), together with all supplements to such mas3 ter netting agreement, without regard to wheth4 er the master netting agreement provides for an

5 agreement or transaction that is not a com6 modity contract under this paragraph, except

7 that the master agreement shall be considered

8 to be a commodity contract under this para9 graph only with respect to each agreement or

10 transaction under the master agreement that is

11 referred to in subparagraph (A), (B), (C), (D),

12 (E), (F), (G), or (H); or

13 ‘‘(J) a security agreement or arrangement,

14 or other credit enhancement related to any

15 agreement or transaction referred to in this

16 paragraph, but not to exceed the actual value of

17 such contract on the date of the filing of the pe18 tition;’’.

19 (b) DEFINITIONS OF FINANCIAL INSTITUTION, FI20 NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER21 CHANT.—Section 101 of title 11, United States Code, is

22 amended—

23 (1) by amending paragraph (22) to read as fol24 lows:

25 ‘‘(22) ‘financial institution’ means—
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1 ‘‘(A) a Federal reserve bank, or an entity

2 (domestic or foreign) that is a commercial or

3 savings bank, industrial savings bank, savings

4 and loan association, trust company, or receiver

5 or conservator for such entity and, when any

6 such Federal reserve bank, receiver, conservator

7 or entity is acting as agent or custodian for a

8 customer in connection with a securities con9 tract, as defined in section 741 of this title,

10 such customer; or

11 ‘‘(B) in connection with a securities con12 tract, as defined in section 741 of this title, an

13 investment company registered under the In14 vestment Company Act of 1940;’’;

15 (2) by inserting after paragraph (22) the fol16 lowing:

17 ‘‘(22A) ‘financial participant’ means an entity

18 that, at the time it enters into a securities contract,

19 commodity contract or forward contract, or at the

20 time of the filing of the petition, has one or more

21 agreements or transactions described in paragraph

22 (1), (2), (3), (4), or (5) of section 561(a) with the

23 debtor or any other entity (other than an affiliate)

24 of a total gross dollar value of at least

25 $1,000,000,000 in notional or actual principal
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1 amount outstanding on any day during the previous

2 15-month period, or has gross mark-to-market posi3 tions of at least $100,000,000 (aggregated across

4 counterparties) in one or more such agreement or

5 transaction with the debtor or any other entity

6 (other than an affiliate) on any day during the pre7 vious 15-month period;’’; and

8 (3) by amending paragraph (26) to read as fol9 lows:

10 ‘‘(26) ‘forward contract merchant’ means a

11 Federal reserve bank, or an entity whose business

12 consists in whole or in part of entering into forward

13 contracts as or with merchants or in a commodity,

14 as defined or in section 761 of this title, or any simi15 lar good, article, service, right, or interest which is

16 presently or in the future becomes the subject of

17 dealing or in the forward contract trade;’’.

18 (c) DEFINITION OF MASTER NETTING AGREEMENT

19 AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec20 tion 101 of title 11, United States Code, is amended by

21 inserting after paragraph (38) the following new para22 graphs:

23 ‘‘(38A) ‘master netting agreement’ means an

24 agreement providing for the exercise of rights, in25 cluding rights of netting, setoff, liquidation, termi-
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1 nation, acceleration, or closeout, under or in connec2 tion with one or more contracts that are described

3 in any one or more of paragraphs (1) through (5)

4 of section 561(a), or any security agreement or ar5 rangement or other credit enhancement related to

6 one or more of the foregoing. If a master netting

7 agreement contains provisions relating to agree8 ments or transactions that are not contracts de9 scribed in paragraphs (1) through (5) of section

10 561(a), the master netting agreement shall be

11 deemed to be a master netting agreement only with

12 respect to those agreements or transactions that are

13 described in any one or more of the paragraphs (1)

14 through (5) of section 561(a);

15 ‘‘(38B) ‘master netting agreement participant’

16 means an entity that, at any time before the filing

17 of the petition, is a party to an outstanding master

18 netting agreement with the debtor;’’.

19 (d) SWAP AGREEMENTS, SECURITIES CONTRACTS,

20 COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR21 CHASE AGREEMENTS, AND MASTER NETTING AGREE22 MENTS UNDER THE AUTOMATIC-STAY.—

23 (1) IN GENERAL.—Section 362(b) of title 11,

24 United States Code, as amended by sections 118,

25 132, 136, 142, 203, and 818, is amended—
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1 (A) in paragraph (6), by inserting ‘‘,

2 pledged to, and under the control of,’’ after

3 ‘‘held by’’;

4 (B) in paragraph (7), by inserting ‘‘,

5 pledged to, and under the control of,’’ after

6 ‘‘held by’’;

7 (C) by amending paragraph (17) to read

8 as follows:

9 ‘‘(17) under subsection (a), of the setoff by a

10 swap participant of a mutual debt and claim under

11 or in connection with one or more swap agreements

12 that constitutes the setoff of a claim against the

13 debtor for any payment or other transfer of property

14 due from the debtor under or in connection with any

15 swap agreement against any payment due to the

16 debtor from the swap participant under or in con17 nection with any swap agreement or against cash,

18 securities, or other property held by, pledged to, and

19 under the control of, or due from such swap partici20 pant to margin guarantee, secure, or settle a swap

21 agreement;’’;

22 (D) in paragraph (30) by striking ‘‘or’’ at

23 the end;

24 (E) in paragraph (31) by striking the pe25 riod at the end and inserting ‘‘; or’’; and
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1 (F) by inserting after paragraph (31) the

2 following new paragraph:

3 ‘‘(32) under subsection (a), of the setoff by a

4 master netting agreement participant of a mutual

5 debt and claim under or in connection with one or

6 more master netting agreements or any contract or

7 agreement subject to such agreements that con8 stitutes the setoff of a claim against the debtor for

9 any payment or other transfer of property due from

10 the debtor under or in connection with such agree11 ments or any contract or agreement subject to such

12 agreements against any payment due to the debtor

13 from such master netting agreement participant

14 under or in connection with such agreements or any

15 contract or agreement subject to such agreements or

16 against cash, securities, or other property held by,

17 pledged or and under the control of, or due from

18 such master netting agreement participant to mar19 gin, guarantee, secure, or settle such agreements or

20 any contract or agreement subject to such agree21 ments, to the extent such participant is eligible to

22 exercise such offset rights under paragraph (6), (7),

23 or (17) for each individual contract covered by the

24 master netting agreement in issue.’’.
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1 (2) LIMITATION.—Section 362 of title 11,

2 United States Code, as amended by sections 120,

3 302, and 412, is amended by adding at the end the

4 following:

5 ‘‘(l) LIMITATION.—The exercise of rights not subject

6 to the stay arising under subsection (a) pursuant to para7 graph (6), (7), or (17), or (31) of subsection (b) shall not

8 be stayed by any order of a court or administrative agency

9 in any proceeding under this title.’’.

10 (e) LIMITATION OF AVOIDANCE POWERS UNDER

11 MASTER NETTING AGREEMENT.—Section 546 of title 11,

12 United States Code, as amended by sections 207 and 302,

13 is amended—

14 (1) in subsection (g) (as added by section 103

15 of Public Law 101–311)—

16 (A) by striking ‘‘under a swap agreement’’;

17 and

18 (B) by striking ‘‘in connection with a swap

19 agreement’’ and inserting ‘‘under or in connec20 tion with any swap agreement’’; and

21 (2) by adding at the end the following:

22 ‘‘(j) Notwithstanding sections 544, 545, 547,

23 548(a)(2)(B), and 548(b) of this title, the trustee may not

24 avoid a transfer made by or to a master netting agreement

25 participant under or in connection with any master netting
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1 agreement or any individual contract covered thereby that

2 is made before the commencement of the case, except

3 under section 548(a)(1)(A) of this title, and except to the

4 extent the trustee could otherwise avoid such a transfer

5 made under an individual contract covered by such master

6 netting agreement.’’.

7 (f) FRAUDULENT TRANSFERS OF MASTER NETTING

8 AGREEMENTS.—Section 548(d)(2) of title 11, United

9 States Code, is amended—

10 (1) in subparagraph (C), by striking ‘‘and’’;

11 (2) in subparagraph (D), by striking the period

12 and inserting ‘‘; and’’; and

13 (3) by adding at the end the following new sub14 paragraph:

15 ‘‘(E) a master netting agreement participant

16 that receives a transfer in connection with a master

17 netting agreement or any individual contract covered

18 thereby takes for value to the extent of such trans19 fer, except, with respect to a transfer under any in20 dividual contract covered thereby, to the extent such

21 master netting agreement participant otherwise did

22 not take (or is otherwise not deemed to have taken)

23 such transfer for value.’’.
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1 (g) TERMINATION OR ACCELERATION OF SECURITIES

2 CONTRACTS.—Section 555 of title 11, United States Code,

3 is amended—

4 (1) by amending the section heading to read as

5 follows:

6 ‘‘§ 555. Contractual right to liquidate, terminate, or

7 accelerate a securities contract’’;

8 and

9 (2) in the first sentence, by striking ‘‘liquida10 tion’’ and inserting ‘‘liquidation, termination, or ac11 celeration’’.

12 (h) TERMINATION OR ACCELERATION OF COMMOD13 ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,

14 United States Code, is amended—

15 (1) by amending the section heading to read as

16 follows:

17 ‘‘§ 556. Contractual right to liquidate, terminate, or

18 accelerate a commodities contract or for19 ward contract’’;

20 and

21 (2) in the first sentence, by striking ‘‘liquida22 tion’’ and inserting ‘‘liquidation, termination, or ac23 celeration’’.
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1 (i) TERMINATION OR ACCELERATION OF REPUR2 CHASE AGREEMENTS.—Section 559 of title 11, United

3 States Code, is amended—

4 (1) by amending the section heading to read as

5 follows:

6 ‘‘§ 559. Contractual right to liquidate, terminate, or

7 accelerate a repurchase agreement’’;

8 and

9 (2) in the first sentence, by striking ‘‘liquida10 tion’’ and inserting ‘‘liquidation, termination, or ac11 celeration’’.

12 (j) LIQUIDATION, TERMINATION, OR ACCELERATION

13 OF SWAP AGREEMENTS.—Section 560 of title 11, United

14 States Code, is amended—

15 (1) by amending the section heading to read as

16 follows:

17 ‘‘§ 560. Contractual right to liquidate, terminate, or

18 accelerate a swap agreement’’;

19 and

20 (2) in the first sentence, by striking ‘‘termi21 nation of a swap agreement’’ and inserting ‘‘liquida22 tion, termination, or acceleration of one or more

23 swap agreements’’; and

24 (3) by striking ‘‘in connection with any swap

25 agreement’’ and inserting ‘‘in connection with the
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1 termination, liquidation, or acceleration of one or

2 more swap agreements’’.

3 (k) LIQUIDATION, TERMINATION, ACCELERATION, OR

4 OFFSET UNDER A MASTER NETTING AGREEMENT AND

5 ACROSS CONTRACTS.—(1) Title 11, United States Code,

6 is amended by inserting after section 560 the following:

7 ‘‘§ 561. Contractual right to terminate, liquidate, ac8 celerate, or offset under a master netting

9 agreement and across contracts

10 ‘‘(a) IN GENERAL.—Subject to subsection (b), the ex11 ercise of any contractual right, because of a condition of

12 the kind specified in section 365(e)(1), to cause the termi13 nation, liquidation, or acceleration of or to offset or net

14 termination values, payment amounts or other transfer ob15 ligations arising under or in connection with one or more

16 (or the termination, liquidation, or acceleration of one or

17 more)—

18 ‘‘(1) securities contracts, as defined in section

19 741(7);

20 ‘‘(2) commodity contracts, as defined in section

21 761(4);

22 ‘‘(3) forward contracts;

23 ‘‘(4) repurchase agreements;

24 ‘‘(5) swap agreements; or

25 ‘‘(6) master netting agreements,
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1 shall not be stayed, avoided, or otherwise limited by oper2 ation of any provision of this title or by any order of a

3 court or administrative agency in any proceeding under

4 this title.

5 ‘‘(b) EXCEPTION.—

6 ‘‘(1) A party may exercise a contractual right

7 described in subsection (a) to terminate, liquidate, or

8 accelerate only to the extent that such party could

9 exercise such a right under section 555, 556, 559,

10 or 560 for each individual contract covered by the

11 master netting agreement in issue.

12 ‘‘(2) If a debtor is a commodity broker subject

13 to subchapter IV of chapter 7 of this title—

14 ‘‘(A) a party may not net or offset an obli15 gation to the debtor arising under, or in con16 nection with, a commodity contract against any

17 claim arising under, or in connection with,

18 other instruments, contracts, or agreements

19 listed in subsection (a) except to the extent the

20 party has positive net equity in the commodity

21 accounts at the debtor, as calculated under sub22 chapter IV; and

23 ‘‘(B) another commodity broker may not

24 net or offset an obligation to the debtor arising

25 under, or in connection with, a commodity con-
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1 tract entered into or held on behalf of a cus2 tomer of the debtor against any claim arising

3 under, or in connection with, other instruments,

4 contracts, or agreements listed in subsection

5 (a).

6 ‘‘(c) DEFINITION.—As used in this section, the term

7 ‘contractual right’ includes a right set forth in a rule or

8 bylaw of a national securities exchange, a national securi9 ties association, or a securities clearing agency, a right

10 set forth in a bylaw of a clearing organization or contract

11 market or in a resolution of the governing board thereof,

12 and a right, whether or not evidenced in writing, arising

13 under common law, under law merchant, or by reason of

14 normal business practice.’’.

15 (2) CONFORMING AMENDMENT.—The table of sec16 tions of chapter 9 of title 11, United States Code, is

17 amended by inserting after the item relating to section

18 560 the following:

‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a

master netting agreement and across contracts.

19 (l) ANCILLARY PROCEEDINGS.—Section 304 of title

20 11, United States Code, is amended by adding at the end

21 the following:

22 ‘‘(d) Any provisions of this title relating to securities

23 contracts, commodity contracts, forward contracts, repur24 chase agreements, swap agreements, or master netting
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1 agreements shall apply in a case ancillary to a foreign pro2 ceeding under this section or any other section of this title,

3 so that enforcement of contractual provisions of such con4 tracts and agreements in accordance with their terms will

5 not be stayed or otherwise limited by operation of any pro6 vision of this title or by order of a court in any case under

7 this title, and to limit avoidance powers to the same extent

8 as in a proceeding under chapter 7 or 11 of this title (such

9 enforcement not to be limited based on the presence or

10 absence of assets of the debtor in the United States).’’.

11 (m) COMMODITY BROKER LIQUIDATIONS.—Title 11,

12 United States Code, is amended by inserting after section

13 766 the following:

14 ‘‘§ 767. Commodity broker liquidation and forward

15 contract merchants, commodity brokers,

16 stockbrokers, financial institutions, secu17 rities clearing agencies, swap partici18 pants, repo participants, and master net19 ting agreement participants

20 ‘‘Notwithstanding any other provision of this title,

21 the exercise of rights by a forward contract merchant,

22 commodity broker, stockbroker, financial institution, secu23 rities clearing agency, swap participant, repo participant,

24 or master netting agreement participant under this title
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1 shall not affect the priority of any unsecured claim it may

2 have after the exercise of such rights.’’.

3 (n) STOCKBROKER LIQUIDATIONS.—Title 11, United

4 States Code, is amended by inserting after section 752 the

5 following:

6 ‘‘§ 753. Stockbroker liquidation and forward contract

7 merchants, commodity brokers, stock8 brokers, financial institutions, securities

9 clearing agencies, swap participants,

10 repo participants, and master netting

11 agreement participants

12 ‘‘Notwithstanding any other provision of this title,

13 the exercise of rights by a forward contract merchant,

14 commodity broker, stockbroker, financial institution, secu15 rities clearing agency, swap participant, repo participant,

16 financial participant, or master netting agreement partici17 pant under this title shall not affect the priority of any

18 unsecured claim it may have after the exercise of such

19 rights.’’.

20 (o) SETOFF.—Section 553 of title 11, United States

21 Code, is amended—

22 (1) in subsection (a)(3)(C), by inserting ‘‘(ex23 cept for a setoff of a kind described in section

24 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(19), 555,
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1 556, 559, 560 or 561 of this title)’’ before the pe2 riod; and

3 (2) in subsection (b)(1), by striking

4 ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17),

5 362(b)(19), 555, 556, 559, 560, 561’’.

6 (p) SECURITIES CONTRACTS, COMMODITY CON7 TRACTS, AND FORWARD CONTRACTS.—Title 11, United

8 States Code, is amended—

9 (1) in section 362(b)(6), by striking ‘‘financial

10 institutions,’’ each place such term appears and in11 serting ‘‘financial institution, financial participant’’;

12 (2) in section 546(e), by inserting ‘‘financial

13 participant,’’ after ‘‘financial institution,’’;

14 (3) in section 548(d)(2)(B), by inserting ‘‘fi15 nancial participant,’’ after ‘‘financial institution,’’;

16 (4) in section 555—

17 (A) by inserting ‘‘financial participant,’’

18 after ‘‘financial institution,’’; and

19 (B) by inserting before the period at the

20 end ‘‘, a right set forth in a bylaw of a clearing

21 organization or contract market or in a resolu22 tion of the governing board thereof, and a right,

23 whether or not in writing, arising under com24 mon law, under law merchant, or by reason of

25 normal business practice’’; and
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1 (5) in section 556, by inserting ‘‘, financial par2 ticipant’’ after ‘‘commodity broker’’.

3 (q) CONFORMING AMENDMENTS.—Title 11, United

4 States Code, is amended—

5 (1) in the table of sections of chapter 5—

6 (A) by amending the items relating to sec7 tions 555 and 556 to read as follows:

‘‘555. Contractual right to liquidate, terminate, or accelerate a securities contract.

‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract.’’;

8 and

9 (B) by amending the items relating to sec10 tions 559 and 560 to read as follows:

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase

agreement.

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;

11 and

12 (2) in the table of sections of chapter 7—

13 (A) by inserting after the item relating to

14 section 766 the following:

‘‘767. Commodity broker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities

clearing agencies, swap participants, repo participants, and

master netting agreement participants.’’;

15 and

16 (B) by inserting after the item relating to

17 section 752 the following:

‘‘753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing

agencies, swap participants, repo participants, and master netting agreement participants.’’.
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1 SEC. 1008. RECORDKEEPING REQUIREMENTS.

2 Section 11(e)(8) of the Federal Deposit Insurance

3 Act (12 U.S.C. 1821(e)(8)) is amended by adding at the

4 end the following new subparagraph:

5 ‘‘(H) RECORDKEEPING REQUIREMENTS.—

6 The Corporation, in consultation with the ap7 propriate Federal banking agencies, may pre8 scribe regulations requiring more detailed rec9 ordkeeping with respect to qualified financial

10 contracts (including market valuations) by in11 sured depository institutions.’’.

12 SEC. 1009. EXEMPTIONS FROM CONTEMPORANEOUS EXE13 CUTION REQUIREMENT.

14 Section 13(e)(2) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1823(e)(2)) is amended to read as follows:

16 ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS

17 EXECUTION REQUIREMENT.—An agreement to pro18 vide for the lawful collateralization of—

19 ‘‘(A) deposits of, or other credit extension

20 by, a Federal, State, or local governmental enti21 ty, or of any depositor referred to in section

22 11(a)(2), including an agreement to provide col23 lateral in lieu of a surety bond;

24 ‘‘(B) bankruptcy estate funds pursuant to

25 section 345(b)(2) of title 11, United States

26 Code;
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1 ‘‘(C) extensions of credit, including any

2 overdraft, from a Federal reserve bank or Fed3 eral home loan bank; or

4 ‘‘(D) one or more qualified financial con5 tracts, as defined in section 11(e)(8)(D),

6 shall not be deemed invalid pursuant to paragraph

7 (1)(B) solely because such agreement was not exe8 cuted contemporaneously with the acquisition of the

9 collateral or because of pledges, delivery, or substi10 tution of the collateral made in accordance with such

11 agreement.’’.

12 SEC. 1010. DAMAGE MEASURE.

13 (a) Title 11, United States Code, as amended by sec14 tion 1007, is amended—

15 (1) by inserting after section 561 the following:

16 ‘‘§ 562. Damage measure in connection with swap

17 agreements, securities contracts, forward

18 contracts, commodity contracts, repur19 chase agreements, or master netting

20 agreements

21 ‘‘If the trustee rejects a swap agreement, securities

22 contract as defined in section 741 of this title, forward

23 contract, commodity contract (as defined in section 761

24 of this title) repurchase agreement, or master netting

25 agreement pursuant to section 365(a) of this title, or if
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1 a forward contract merchant, stockbroker, financial insti2 tution, securities clearing agency, repo participant, finan3 cial participant, master netting agreement participant, or

4 swap participant liquidates, terminates, or accelerates

5 such contract or agreement, damages shall be measured

6 as of the earlier of—

7 ‘‘(1) the date of such rejection; or

8 ‘‘(2) the date of such liquidation, termination,

9 or acceleration.’’; and

10 (2) in the table of sections of chapter 5 by in11 serting after the item relating to section 561 the fol12 lowing:

‘‘562. Damage measure in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase

agreements, or master netting agreements.’’.

13 (b) CLAIMS ARISING FROM REJECTION.—Section

14 502(g) of title 11, United States Code, is amended—

15 (1) by designating the existing text as para16 graph (1); and

17 (2) by adding at the end the following:

18 ‘‘(2) A claim for damages calculated in accordance

19 with section 561 of this title shall be allowed under sub20 section (a), (b), or (c), or disallowed under subsection (d)

21 or (e), as if such claim had arisen before the date of the

22 filing of the petition.’’.
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1 SEC. 1011. SIPC STAY.

2 Section 5(b)(2) of the Securities Investor Protection

3 Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding

4 after subparagraph (B) the following new subparagraph:

5 ‘‘(C) EXCEPTION FROM STAY.—

6 ‘‘(i) Notwithstanding section 362 of

7 title 11, United States Code, neither the

8 filing of an application under subsection

9 (a)(3) nor any order or decree obtained by

10 Securities Investor Protection Corporation

11 from the court shall operate as a stay of

12 any contractual rights of a creditor to liq13 uidate, terminate, or accelerate a securities

14 contract, commodity contract, forward con15 tract, repurchase agreement, swap agree16 ment, or master netting agreement, each

17 as defined in title 11, to offset or net ter18 mination values, payment amounts, or

19 other transfer obligations arising under or

20 in connection with one or more of such

21 contracts or agreements, or to foreclose on

22 any cash collateral pledged by the debtor

23 whether or not with respect to one or more

24 of such contracts or agreements.

25 ‘‘(ii) Notwithstanding clause (i), such

26 application, order, or decree may operate
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1 as a stay of the foreclosure on securities

2 collateral pledged by the debtor, whether

3 or not with respect to one or more of such

4 contracts or agreements, securities sold by

5 the debtor under a repurchase agreement

6 or securities lent under a securities lending

7 agreement.

8 ‘‘(iii) As used in this section, the term

9 ‘contractual right’ includes a right set

10 forth in a rule or bylaw of a national secu11 rities exchange, a national securities asso12 ciation, or a securities clearing agency, a

13 right set forth in a bylaw of a clearing or14 ganization or contract market or in a reso15 lution of the governing board thereof, and

16 a right, whether or not in writing, arising

17 under common law, under law merchant,

18 or by reason of normal business practice.’’.

19 SEC. 1012. ASSET-BACKED SECURITIZATIONS.

20 Section 541 of title 11, United States Code, as

21 amended by section 150, is amended—

22 (1) by redesignating paragraph (5) of sub23 section (b) as paragraph (6);

24 (2) by inserting after paragraph (4) of sub25 section (b) the following new paragraph:
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1 ‘‘(5) any eligible asset (or proceeds thereof), to

2 the extent that such eligible asset was transferred by

3 the debtor, before the date of commencement of the

4 case, to an eligible entity in connection with an

5 asset-backed securitization, except to the extent such

6 asset (or proceeds or value thereof) may be recov7 ered by the trustee under section 550 by virtue of

8 avoidance under section 548(a);’’; and

9 (3) by adding at the end the following new sub10 section:

11 ‘‘(e) For purposes of this section, the following defini12 tions shall apply:

13 ‘‘(1) the term ‘asset-backed securitization’

14 means a transaction in which eligible assets trans15 ferred to an eligible entity are used as the source of

16 payment on securities, the most senior of which are

17 rated investment grade by one or more nationally

18 recognized securities rating organizations, issued by

19 an issuer;

20 ‘‘(2) the term ‘eligible asset’ means—

21 ‘‘(A) financial assets (including interests

22 therein and proceeds thereof), either fixed or re23 volving, including residential and commercial

24 mortgage loans, consumer receivables, trade re25 ceivables, and lease receivables, that, by their
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1 terms, convert into cash within a finite time pe2 riod, plus any residual interest in property sub3 ject to receivables included in such financial as4 sets plus any rights or other assets designed to

5 assure the servicing or timely distribution of

6 proceeds to security holders;

7 ‘‘(B) cash; and

8 ‘‘(C) securities.

9 ‘‘(3) the term ‘eligible entity’ means—

10 ‘‘(A) an issuer; or

11 ‘‘(B) a trust, corporation, partnership, or

12 other entity engaged exclusively in the business

13 of acquiring and transferring eligible assets di14 rectly or indirectly to an issuer and taking ac15 tions ancillary thereto;

16 ‘‘(4) the term ‘issuer’ means a trust, corpora17 tion, partnership, or other entity engaged exclusively

18 in the business of acquiring and holding eligible as19 sets, issuing securities backed by eligible assets, and

20 taking actions ancillary thereto; and

21 ‘‘(5) the term ‘transferred’ means the debtor,

22 pursuant to a written agreement, represented and

23 warranted that eligible assets were sold, contributed,

24 or otherwise conveyed with the intention of removing
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1 them from the estate of the debtor pursuant to sub2 section (b)(5), irrespective, without limitation of—

3 ‘‘(A) whether the debtor directly or indi4 rectly obtained or held an interest in the issuer

5 or in any securities issued by the issuer;

6 ‘‘(B) whether the debtor had an obligation

7 to repurchase or to service or supervise the

8 servicing of all or any portion of such eligible

9 assets; or

10 ‘‘(C) the characterization of such sale, con11 tribution, or other conveyance for tax, account12 ing, regulatory reporting, or other purposes.’’.

13 SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIRE14 MENTS.

15 The third sentence of the third undesignated para16 graph of section 16 of the Federal Reserve Act (12 U.S.C.

17 412) is amended by striking ‘‘acceptances acquired under

18 the provisions of section 13 of this Act’’ and inserting ‘‘ac19 ceptances acquired under section 10A, 10B, 13, or 13A

20 of this Act’’.

21 SEC. 1014. EFFECTIVE DATE; APPLICATION OF AMEND22 MENTS.

23 (a) EFFECTIVE DATE.—This title shall take effect on

24 the date of the enactment of this Act.
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1 (b) APPLICATION OF AMENDMENTS.—The amend2 ments made by this title shall apply with respect to cases

3 commenced or appointments made under any Federal or

4 State law after the date of the enactment of this Act, but

5 shall not apply with respect to cases commenced or ap6 pointments made under any Federal or State law before

7 the date of the enactment of this Act.

8 TITLE XI—TECHNICAL

9 CORRECTIONS

10 SEC. 1101. DEFINITIONS.

11 Section 101 of title 11, United States Code, as

12 amended by sections 102, 105, 132, 138, 301, 302, 402,

13 902, and 1007, is amended—

14 (1) by striking ‘‘In this title—’’ and inserting

15 ‘‘In this title:’’;

16 (2) in each paragraph, by inserting ‘‘The term’’

17 after the paragraph designation;

18 (3) in paragraph (35)(B), by striking ‘‘para19 graphs (21B) and (33)(A)’’ and inserting ‘‘para20 graphs (23) and (35)’’;

21 (4) in each of paragraphs (35A) and (38), by

22 striking ‘‘; and’’ at the end and inserting a period;

23 (5) in paragraph (51B)—
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1 (A) by inserting ‘‘who is not a family farm2 er’’ after ‘‘debtor’’ the first place it appears;

3 and

4 (B) by striking ‘‘thereto having aggregate’’

5 and all that follows through the end of the

6 paragraph;

7 (6) by amending paragraph (54) to read as fol8 lows:

9 ‘‘(54) The term ‘transfer’ means—

10 ‘‘(A) the creation of a lien;

11 ‘‘(B) the retention of title as a security in12 terest;

13 ‘‘(C) the foreclosure of a debtor’s equity of

14 redemption; or

15 ‘‘(D) each mode, direct or indirect, abso16 lute or conditional, voluntary or involuntary, of

17 disposing of or parting with—

18 ‘‘(i) property; or

19 ‘‘(ii) an interest in property;’’;

20 (7) in each of paragraphs (1) through (35), in

21 each of paragraphs (36) and (37), and in each of

22 paragraphs (40) through (55) (including paragraph

23 (54), as amended by paragraph (6) of this section),

24 by striking the semicolon at the end and inserting a

25 period; and
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1 (8) by redesignating paragraphs (4) through

2 (55), including paragraph (54), as amended by para3 graph (6) of this section, in entirely numerical se4 quence.

5 SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

6 Section 104 of title 11, United States Code, is

7 amended by inserting ‘‘522(f)(3), 707(b)(5),’’ after

8 ‘‘522(d),’’ each place it appears.

9 SEC. 1103. EXTENSION OF TIME.

10 Section 108(c)(2) of title 11, United States Code, is

11 amended by striking ‘‘922’’ and all that follows through

12 ‘‘or’’, and inserting ‘‘922, 1201, or’’.

13 SEC. 1104. TECHNICAL AMENDMENTS.

14 Title 11, United States Code, is amended—

15 (1) in section 109(b)(2) by striking ‘‘subsection

16 (c) or (d) of’’; and

17 (2) in section 552(b)(1) by striking ‘‘product’’

18 each place it appears and inserting ‘‘products’’.

19 SEC. 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

20 FRAUDULENTLY PREPARE BANKRUPTCY PE21 TITIONS.

22 Section 110(j)(3) of title 11, United States Code, is

23 amended by striking ‘‘attorney’s’’ and inserting ‘‘attor24 neys’ ’’.
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1 SEC. 1106. LIMITATION ON COMPENSATION OF PROFES2 SIONAL PERSONS.

3 Section 328(a) of title 11, United States Code, is

4 amended by inserting ‘‘on a fixed or percentage fee basis,’’

5 after ‘‘hourly basis,’’.

6 SEC. 1107. SPECIAL TAX PROVISIONS.

7 Section 346(g)(1)(C) of title 11, United States Code,

8 is amended by striking ‘‘, except’’ and all that follows

9 through ‘‘1986’’.

10 SEC. 1108. EFFECT OF CONVERSION.

11 Section 348(f)(2) of title 11, United States Code, is

12 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

13 first place it appears.

14 SEC. 1109. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

15 Section 503(b)(4) of title 11, United States Code, is

16 amended by inserting ‘‘subparagraph (A), (B), (C), (D),

17 or (E) of’’ before ‘‘paragraph (3)’’.

18 SEC. 1110. PRIORITIES.

19 Section 507(a) of title 11, United States Code, as

20 amended by section 323, is amended in paragraph (4), as

21 so redesignated by section 142, by striking the semicolon

22 at the end and inserting a period.

23 SEC. 1111. EXEMPTIONS.

24 Section 522(g)(2) of title 11, United States Code, is

25 amended by striking ‘‘subsection (f)(2)’’ and inserting

26 ‘‘subsection (f)(1)(B)’’.
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1 SEC. 1112. EXCEPTIONS TO DISCHARGE.

2 Section 523 of title 11, United States Code, as

3 amended by section 146, is amended—

4 (1) in subsection (a)(3), by striking ‘‘or (6)’’

5 each place it appears and inserting ‘‘(6), or (15)’’;

6 (2) as amended by section 304(e) of Public Law

7 103–394 (108 Stat. 4133), in paragraph (15), by

8 transferring such paragraph so as to insert it after

9 paragraph (14A) of subsection (a);

10 (3) in subsection (a)(9), by inserting ‘‘,

11 watercraft, or aircraft’’ after ‘‘motor vehicle’’;

12 (4) in subsection (a)(15), as so redesignated by

13 paragraph (2) of this subsection, by inserting ‘‘to a

14 spouse, former spouse, or child of the debtor and’’

15 after ‘‘(15)’’; and

16 (5) in subsection (e), by striking ‘‘a insured’’

17 and inserting ‘‘an insured’’.

18 SEC. 1113. EFFECT OF DISCHARGE.

19 Section 524(a)(3) of title 11, United States Code, is

20 amended by striking ‘‘section 523’’ and all that follows

21 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

22 or 1328(a)(1) of this title, or that’’.

23 SEC. 1114. PROTECTION AGAINST DISCRIMINATORY TREAT24 MENT.

25 Section 525(c) of title 11, United States Code, is

26 amended—
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1 (1) in paragraph (1), by inserting ‘‘student’’ be2 fore ‘‘grant’’ the second place it appears; and

3 (2) in paragraph (2), by striking ‘‘the program

4 operated under part B, D, or E of’’ and inserting

5 ‘‘any program operated under’’.

6 SEC. 1115. PROPERTY OF THE ESTATE.

7 Section 541(b)(4)(B)(ii) of title 11, United States

8 Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.

9 SEC. 1116. PREFERENCES.

10 (a) IN GENERAL.—Section 547 of title 11, United

11 States Code, is amended—

12 (1) in subsection (b), by striking ‘‘subsection

13 (c)’’ and inserting ‘‘subsections (c) and (i)’’; and

14 (2) by adding at the end the following:

15 ‘‘(i) If the trustee avoids under subsection (b) a

16 transfer made between 90 days and 1 year before the date

17 of the filing of the petition, by the debtor to an entity

18 that is not an insider for the benefit of a creditor that

19 is an insider, such transfer may be avoided under this sec20 tion only with respect to the creditor that is an insider.’’.

21 (b) APPLICABILITY.—The amendments made by this

22 section shall apply to any case that is pending or com23 menced on or after the date of the enactment of this Act.
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1 SEC. 1117. POSTPETITION TRANSACTIONS.

2 Section 549(c) of title 11, United States Code, is

3 amended—

4 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

5 of’’;

6 (2) by striking ‘‘such property’’ and inserting

7 ‘‘such real property’’; and

8 (3) by striking ‘‘the interest’’ and inserting

9 ‘‘such interest’’.

10 SEC. 1118. DISPOSITION OF PROPERTY OF THE ESTATE.

11 Section 726(b) of title 11, United States Code, is

12 amended by striking ‘‘1009,’’.

13 SEC. 1119. GENERAL PROVISIONS.

14 Section 901(a) of title 11, United States Code, is

15 amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.

16 SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE.

17 Section 1104(b) of title 11, United States Code, is

18 amended—

19 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

20 (2) by adding at the end the following:

21 ‘‘(2)(A) If an eligible, disinterested trustee is elected

22 at a meeting of creditors under paragraph (1), the United

23 States trustee shall file a report certifying that election.

24 Upon the filing of a report under the preceding sentence—
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1 ‘‘(i) the trustee elected under paragraph (1)

2 shall be considered to have been selected and ap3 pointed for purposes of this section; and

4 ‘‘(ii) the service of any trustee appointed under

5 subsection (d) shall terminate.

6 ‘‘(B) In the case of any dispute arising out of an elec7 tion under subparagraph (A), the court shall resolve the

8 dispute.’’.

9 SEC. 1121. ABANDONMENT OF RAILROAD LINE.

10 Section 1170(e)(1) of title 11, United States Code,

11 is amended by striking ‘‘section 11347’’ and inserting

12 ‘‘section 11326(a)’’.

13 SEC. 1122. CONTENTS OF PLAN.

14 Section 1172(c)(1) of title 11, United States Code,

15 is amended by striking ‘‘section 11347’’ and inserting

16 ‘‘section 11326(a)’’.

17 SEC. 1123. DISCHARGE UNDER CHAPTER 12.

18 Subsections (a) and (c) of section 1228 of title 11,

19 United States Code, are amended by striking

20 ‘‘1222(b)(10)’’ each place it appears and inserting

21 ‘‘1222(b)(9)’’.

22 SEC. 1124. BANKRUPTCY CASES AND PROCEEDINGS.

23 Section 1334(d) of title 28, United States Code, is

24 amended—
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1 (1) by striking ‘‘made under this subsection’’

2 and inserting ‘‘made under subsection (c)’’; and

3 (2) by striking ‘‘This subsection’’ and inserting

4 ‘‘Subsection (c) and this subsection’’.

5 SEC. 1125. KNOWING DISREGARD OF BANKRUPTCY LAW OR

6 RULE.

7 Section 156(a) of title 18, United States Code, is

8 amended—

9 (1) in the first undesignated paragraph—

10 (A) by inserting ‘‘(1) the term’’ before

11 ‘‘ ‘bankruptcy’’; and

12 (B) by striking the period at the end and

13 inserting ‘‘; and’’; and

14 (2) in the second undesignated paragraph—

15 (A) by inserting ‘‘(2) the term’’ before

16 ‘‘ ‘document’’; and

17 (B) by striking ‘‘this title’’ and inserting

18 ‘‘title 11’’.

19 SEC. 1126. TRANSFERS MADE BY NONPROFIT CHARITABLE

20 CORPORATIONS.

21 (a) SALE OF PROPERTY OF ESTATE.—Section 363(d)

22 of title 11, United States Code, is amended—

23 (1) by striking ‘‘only’’ and all that follows

24 through the end of the subsection and inserting

25 ‘‘only—
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1 ‘‘(1) in accordance with applicable nonbank2 ruptcy law that governs the transfer of property by

3 a corporation or trust that is not a moneyed, busi4 ness, or commercial corporation or trust; and

5 ‘‘(2) to the extent not inconsistent with any re6 lief granted under subsection (c), (d), (e), or (f) of

7 section 362 of this title.’’.

8 (b) CONFIRMATION OF PLAN FOR REORGANIZA9 TION.—Section 1129(a) of title 11, United States Code,

10 as amended by section 140, is amended by adding at the

11 end the following:

12 ‘‘(15) All transfers of property of the plan shall

13 be made in accordance with any applicable provi14 sions of nonbankruptcy law that govern the transfer

15 of property by a corporation or trust that is not a

16 moneyed, business, or commercial corporation or

17 trust.’’.

18 (c) TRANSFER OF PROPERTY.—Section 541 of title

19 11, United States Code, as amended by section 1102, is

20 amended by adding at the end the following:

21 ‘‘(f) Notwithstanding any other provision of this title,

22 property that is held by a debtor that is a corporation de23 scribed in section 501(c)(3) of the Internal Revenue Code

24 of 1986 and exempt from tax under section 501(a) of such

25 Code may be transferred to an entity that is not such a
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1 corporation, but only under the same conditions as would

2 apply if the debtor had not filed a case under this title.’’.

3 (d) APPLICABILITY.—The amendments made by this

4 section shall apply to a case pending under title 11, United

5 States Code, on the date of the enactment of this Act,

6 except that the court shall not confirm a plan under chap7 ter 11 of this title without considering whether this section

8 would substantially affect the rights of a party in interest

9 who first acquired rights with respect to the debtor after

10 the date of the petition. The parties who may appear and

11 be heard in a proceeding under this section include the

12 attorney general of the State in which the debtor is incor13 porated, was formed, or does business.

14 (e) RULE OF CONSTRUCTION.—Nothing in this sec15 tion shall be deemed to require the court in which a case

16 under chapter 11 is pending to remand or refer any pro17 ceeding, issue, or controversy to any other court or to re18 quire the approval of any other court for the transfer of

19 property.

20 SEC. 1127. PROHIBITION ON CERTAIN ACTIONS FOR FAIL21 URE TO INCUR FINANCE CHARGES.

22 Section 127 of the Truth in Lending Act (15 U.S.C.

23 1637) is amended by adding at the end the following:

24 ‘‘(i) PROHIBITION ON CERTAIN ACTIONS FOR FAIL25 URE TO INCUR FINANCE CHARGES.—A creditor of an ac-
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1 count under an open end consumer credit plan may not

2 terminate an account prior to its expiration date solely be3 cause the consumer has not incurred finance charges on

4 the account. Nothing in this subsection shall prohibit a

5 creditor from terminating an account for inactivity in 3

6 or more consecutive months.’’.

7 SEC. 1128. PROTECTION OF VALID PURCHASE MONEY SE8 CURITY INTERESTS.

9 Section 547(c)(3)(B) of title 11, United States Code,

10 is amended by striking ‘‘20’’ and inserting ‘‘30’’.

11 SEC. 1129. TRUSTEES.

12 (a) SUSPENSION AND TERMINATION OF PANEL

13 TRUSTEES AND STANDING TRUSTEES.—Section 586(d) of

14 title 28, United States Code, is amended—

15 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and

16 (2) by adding at the end the following:

17 ‘‘(2) A trustee whose appointment under subsection

18 (a)(1) or under subsection (b) is terminated or who ceases

19 to be assigned to cases filed under title 11, United States

20 Code, may obtain judicial review of the final agency deci21 sion by commencing an action in the United States district

22 court for the district for which the panel to which the

23 trustee is appointed under subsection (a)(1), or in the

24 United States district court for the district in which the

25 trustee is appointed under subsection (b) resides, after
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1 first exhausting all available administrative remedies,

2 which if the trustee so elects, shall also include an admin3 istrative hearing on the record. Unless the trustee elects

4 to have an administrative hearing on the record, the trust5 ee shall be deemed to have exhausted all administrative

6 remedies for purposes of this paragraph if the agency fails

7 to make a final agency decision within 90 days after the

8 trustee requests administrative remedies. The Attorney

9 General shall prescribe procedures to implement this para10 graph. The decision of the agency shall be affirmed by

11 the district court unless it is unreasonable and without

12 cause based on the administrative record before the agen13 cy.’’.

14 (b) EXPENSES OF STANDING TRUSTEES.—Section

15 586(e) of title 28, United States Code, is amended by add16 ing at the end the following:

17 ‘‘(3) After first exhausting all available administra18 tive remedies, an individual appointed under subsection

19 (b) may obtain judicial review of final agency action to

20 deny a claim of actual, necessary expenses under this sub21 section by commencing an action in the United States dis22 trict court in the district where the individual resides. The

23 decision of the agency shall be affirmed by the district

24 court unless it is unreasonable and without cause based

25 upon the administrative record before the agency.
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1 ‘‘(4) The Attorney General shall prescribe procedures

2 to implement this subsection.’’.

3 TITLE XII—GENERAL EFFECTIVE

4 DATE; APPLICATION OF

5 AMENDMENTS

6 SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMEND7 MENTS.

8 (a) EFFECTIVE DATE.—Except as provided otherwise

9 in this Act, this Act and the amendments made by this

10 Act shall take effect 180 days after the date of the enact11 ment of this Act.

12 (b) APPLICATION OF AMENDMENTS.—Except as oth13 erwise provided in this Act, the amendments made by this

14 Act shall not apply with respect to cases commenced under

15 title 11, United States Code, before the effective date of

16 this Act.

Passed the House of Representatives May 5, 1999.

Attest: JEFF TRANDAHL,

Clerk.