In the Senate of the United States,

February 2, 2000.

Resolved, That the bill from the House of Representatives (H.R. 833) entitled ‘‘An Act to amend title 11 of the

United States Code, and for other purposes.’’, do pass with

the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Bankruptcy Reform Act of 2000’’.

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

5 Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—NEEDS-BASED BANKRUPTCY

Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.

Sec. 103. Findings and study.

Sec. 104. Notice of alternatives.

Sec. 105. Debtor financial management training test program.

Sec. 106. Credit counseling.
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TITLE II—ENHANCED CONSUMER PROTECTION

Subtitle A—Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.

Sec. 202. Effect of discharge.

Sec. 203. Discouraging abuse of reaffirmation practices.

Subtitle B—Priority Child Support

Sec. 211. Definition of domestic support obligation.

Sec. 212. Priorities for claims for domestic support obligations.

Sec. 213. Requirements to obtain confirmation and discharge in cases involving

domestic support obligations.

Sec. 214. Exceptions to automatic stay in domestic support obligation proceedings.

Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and

support.

Sec. 216. Continued liability of property.

Sec. 217. Protection of domestic support claims against preferential transfer motions.

Sec. 218. Disposable income defined.

Sec. 219. Collection of child support.

Sec. 220. Nondischargeability of certain educational benefits and loans.

Subtitle C—Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.

Sec. 222. Sense of Congress.

Sec. 223. Additional amendments to title 11, United States Code.

Sec. 224. Protection of retirement savings in bankruptcy.

Sec. 225. Protection of education savings.

TITLE III—DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Reinforcement of the fresh start.

Sec. 302. Discouraging bad faith repeat filings.

Sec. 303. Curbing abusive filings.

Sec. 304. Debtor retention of personal property security.

Sec. 305. Relief from the automatic stay when the debtor does not complete intended surrender of consumer debt collateral.

Sec. 306. Giving secured creditors fair treatment in chapter 13.

Sec. 307. Exemptions.

Sec. 308. Residency requirement for homestead exemption.

Sec. 309. Protecting secured creditors in chapter 13 cases.

Sec. 310. Limitation on luxury goods.

Sec. 311. Automatic stay.

Sec. 312. Extension of period between bankruptcy discharges.

Sec. 313. Definition of household goods and antiques.

Sec. 314. Debt incurred to pay nondischargeable debts.

Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.

Sec. 316. Dismissal for failure to timely file schedules or provide required information.

Sec. 317. Adequate time to prepare for hearing on confirmation of the plan.

Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.

Sec. 319. Sense of the Congress regarding expansion of rule 9011 of the Federal

Rules of Bankruptcy Procedure.
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Sec. 320. Prompt relief from stay in individual cases.

Sec. 321. Chapter 11 cases filed by individuals.

Sec. 322. Excluding employee benefit plan participant contributions and other

property from the estate.

Sec. 323. Clarification of postpetition wages and benefits.

Sec. 324. Limitation.

Sec. 325. Exclusive jurisdiction in matters involving bankruptcy professionals.

Sec. 326. United States trustee program filing fee increase.

Sec. 327. Compensation of trustees in certain cases under chapter 7 of title 11,

United States Code.

Sec. 328. Nondischargeability of debts incurred through the commission of violence at clinics.

TITLE IV—GENERAL AND SMALL BUSINESS BANKRUPTCY

PROVISIONS

Subtitle A—General Business Bankruptcy Provisions

Sec. 401. Rolling stock equipment.

Sec. 402. Adequate protection for investors.

Sec. 403. Meetings of creditors and equity security holders.

Sec. 404. Protection of refinance of security interest.

Sec. 405. Executory contracts and unexpired leases.

Sec. 406. Creditors and equity security holders committees.

Sec. 407. Amendment to section 546 of title 11, United States Code.

Sec. 408. Limitation.

Sec. 409. Amendment to section 330(a) of title 11, United States Code.

Sec. 410. Postpetition disclosure and solicitation.

Sec. 411. Preferences.

Sec. 412. Venue of certain proceedings.

Sec. 413. Period for filing plan under chapter 11.

Sec. 414. Fees arising from certain ownership interests.

Sec. 415. Creditor representation at first meeting of creditors.

Sec. 416. Definition of disinterested person.

Sec. 417. Factors for compensation of professional persons.

Sec. 418. Appointment of elected trustee.

Sec. 419. Utility service.

Sec. 420. Bankruptcy fees.

Sec. 421. More complete information regarding assets of the estate.

Subtitle B—Small Business Bankruptcy Provisions

Sec. 431. Flexible rules for disclosure statement and plan.

Sec. 432. Definitions; effect of discharge.

Sec. 433. Standard form disclosure statement and plan.

Sec. 434. Uniform national reporting requirements.

Sec. 435. Uniform reporting rules and forms for small business cases.

Sec. 436. Duties in small business cases.

Sec. 437. Plan filing and confirmation deadlines.

Sec. 438. Plan confirmation deadline.

Sec. 439. Duties of the United States trustee.

Sec. 440. Scheduling conferences.

Sec. 441. Serial filer provisions.

Sec. 442. Expanded grounds for dismissal or conversion and appointment of

trustee.
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Sec. 443. Study of operation of title 11, United States Code, with respect to small

businesses.

Sec. 444. Payment of interest.

Sec. 445. Technical correction.

TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.

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

TITLE VI—IMPROVED BANKRUPTCY STATISTICS AND DATA

Sec. 601. Audit procedures.

Sec. 602. Improved bankruptcy statistics.

Sec. 603. Uniform rules for the collection of bankruptcy data.

Sec. 604. Sense of Congress regarding availability of bankruptcy data.

TITLE VII—BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.

Sec. 702. Treatment of fuel tax claims.

Sec. 703. Notice of request for a determination of taxes.

Sec. 704. Rate of interest on tax claims.

Sec. 705. Priority of tax claims.

Sec. 706. Priority property taxes incurred.

Sec. 707. No discharge of fraudulent taxes in chapter 13.

Sec. 708. No discharge of fraudulent taxes in chapter 11.

Sec. 709. Stay of tax proceedings limited to prepetition taxes.

Sec. 710. Periodic payment of taxes in chapter 11 cases.

Sec. 711. Avoidance of statutory tax liens prohibited.

Sec. 712. Payment of taxes in the conduct of business.

Sec. 713. Tardily filed priority tax claims.

Sec. 714. Income tax returns prepared by tax authorities.

Sec. 715. Discharge of the estate’s liability for unpaid taxes.

Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.

Sec. 717. Standards for tax disclosure.

Sec. 718. Setoff of tax refunds.

Sec. 719. Special provisions related to the treatment of State and local taxes.

Sec. 720. Dismissal for failure to timely file tax returns.

TITLE VIII—ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 801. Amendment to add chapter 15 to title 11, United States Code.

Sec. 802. Amendments to other chapters in title 11, United States Code.

Sec. 803. Claims relating to insurance deposits in cases ancillary to foreign proceedings.

TITLE IX—FINANCIAL CONTRACT PROVISIONS

Sec. 901. Bankruptcy Code amendments.

Sec. 902. Damage measure.

Sec. 903. Asset-backed securitizations.

Sec. 904. Effective date; application of amendments.

TITLE X—PROTECTION OF FAMILY FARMERS AND FAMILY

FISHERMEN

Sec. 1001. Reenactment of chapter 12.
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Sec. 1002. Debt limit increase.

Sec. 1003. Elimination of requirement that family farmer and spouse receive over

50 percent of income from farming operation in year prior to

bankruptcy.

Sec. 1004. Certain claims owed to governmental units.

Sec. 1005. Prohibition of retroactive assessment of disposable income.

Sec. 1006. Family fishermen.

TITLE XI—HEALTH CARE AND EMPLOYEE BENEFITS

Sec. 1101. Definitions.

Sec. 1102. Disposal of patient records.

Sec. 1103. Administrative expense claim for costs of closing a health care business.

Sec. 1104. Appointment of ombudsman to act as patient advocate.

Sec. 1105. Debtor in possession; duty of trustee to transfer patients.

Sec. 1106. Establishment of policy and protocols relating to bankruptcies of

health care businesses.

Sec. 1107. Exclusion from program participation not subject to automatic stay.

TITLE XII—AMENDMENTS TO FAIR LABOR STANDARDS ACT OF 1938

Sec. 1201. Minimum wage.

Sec. 1202. Regular rate for overtime purposes.

TITLE XIII—TAX RELIEF

Sec. 1300. Amendment of 1986 code.

Subtitle A—Small Business Tax Relief

Sec. 1301. Increase in expensing limitation to $30,000.

Sec. 1302. Repeal of temporary unemployment tax.

Sec. 1303. Full deduction of health insurance costs for self-employed individuals.

Sec. 1304. Permanent extension of work opportunity tax credit.

Sec. 1305. Small businesses allowed increased deduction for meal and entertainment expenses.

Subtitle B—Deduction for Health and Long-Term Care Insurance

Sec. 1311. Deduction for health and long-term care insurance costs of individuals

not participating in employer-subsidized health plans.

Subtitle C—Pension Tax Relief

PART I—EXPANDING COVERAGE

Sec. 1321. Increase in benefit and contribution limits.

Sec. 1322. Plan loans for subchapter s owners, partners, and sole proprietors.

Sec. 1323. Modification of top-heavy rules.

Sec. 1324. Elective deferrals not taken into account for purposes of deduction limits.

Sec. 1325. Repeal of coordination requirements for deferred compensation plans

of State and local governments and tax-exempt organizations.

Sec. 1326. Elimination of user fee for requests to IRS regarding pension plans.

Sec. 1327. Deduction limits.

Sec. 1328. Option to treat elective deferrals as after-tax contributions.
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PART II—ENHANCING FAIRNESS FOR WOMEN

Sec. 1331. Catchup contributions for individuals age 50 or over.

Sec. 1332. Equitable treatment for contributions of employees to defined contribution plans.

Sec. 1333. Faster vesting of certain employer matching contributions.

Sec. 1334. Simplify and update the minimum distribution rules.

Sec. 1335. Clarification of tax treatment of division of section 457 plan benefits

upon divorce.

Sec. 1336. Modification of safe harbor relief for hardship withdrawals from cash

or deferred arrangements.

PART III—INCREASING PORTABILITY FOR PARTICIPANTS

Sec. 1341. Rollovers allowed among various types of plans.

Sec. 1342. Rollovers of IRAs into workplace retirement plans.

Sec. 1343. Rollovers of after-tax contributions.

Sec. 1344. Hardship exception to 60-day rule.

Sec. 1345. Treatment of forms of distribution.

Sec. 1346. Rationalization of restrictions on distributions.

Sec. 1347. Purchase of service credit in governmental defined benefit plans.

Sec. 1348. Employers may disregard rollovers for purposes of cash-out amounts.

Sec. 1349. Minimum distribution and inclusion requirements for section 457

plans.

PART IV—STRENGTHENING PENSION SECURITY AND ENFORCEMENT

Sec. 1351. Repeal of 150 percent of current liability funding limit.

Sec. 1352. Maximum contribution deduction rules modified and applied to all defined benefit plans.

Sec. 1353. Excise tax relief for sound pension funding.

Sec. 1354. Excise tax on failure to provide notice by defined benefit plans significantly reducing future benefit accruals.

Sec. 1355. Protection of investment of employee contributions to 401(K) plans.

Sec. 1356. Treatment of multiemployer plans under section 415.

PART V—REDUCING REGULATORY BURDENS

Sec. 1361. Modification of timing of plan valuations.

Sec. 1362. ESOP dividends may be reinvested without loss of dividend deduction.

Sec. 1363. Repeal of transition rule relating to certain highly compensated employees.

Sec. 1364. Employees of tax-exempt entities.

Sec. 1365. Clarification of treatment of employer-provided retirement advice.

Sec. 1366. Reporting simplification.

Sec. 1367. Improvement of employee plans compliance resolution system.

Sec. 1368. Modification of exclusion for employer-provided transit passes.

Sec. 1369. Repeal of the multiple use test.

Sec. 1370. Flexibility in nondiscrimination, coverage, and line of business rules.

Sec. 1371. Extension to international organizations of moratorium on application of certain nondiscrimination rules applicable to State and

local plans.

PART VI—PLAN AMENDMENTS

Sec. 1381. Provisions relating to plan amendments.
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Subtitle D—Revenue Provisions

Sec. 1391. Modification of installment method and repeal of installment method

for accrual method taxpayers.

Sec. 1392. Modification of estimated tax rules for closely held real estate investment trusts.

TITLE XIV—TECHNICAL AMENDMENTS

Sec. 1401. Definitions.

Sec. 1402. Adjustment of dollar amounts.

Sec. 1403. Extension of time.

Sec. 1404. Technical amendments.

Sec. 1405. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions.

Sec. 1406. Limitation on compensation of professional persons.

Sec. 1407. Effect of conversion.

Sec. 1408. Allowance of administrative expenses.

Sec. 1409. Exceptions to discharge.

Sec. 1410. Effect of discharge.

Sec. 1411. Protection against discriminatory treatment.

Sec. 1412. Property of the estate.

Sec. 1413. Preferences.

Sec. 1414. Postpetition transactions.

Sec. 1415. Disposition of property of the estate.

Sec. 1416. General provisions.

Sec. 1417. Abandonment of railroad line.

Sec. 1418. Contents of plan.

Sec. 1419. Discharge under chapter 12.

Sec. 1420. Bankruptcy cases and proceedings.

Sec. 1421. Knowing disregard of bankruptcy law or rule.

Sec. 1422. Transfers made by nonprofit charitable corporations.

Sec. 1423. Protection of valid purchase money security interests.

Sec. 1424. Extensions.

Sec. 1425. Bankruptcy judgeships.

Sec. 1426. Family fishermen.

Sec. 1427. Compensating trustees.

Sec. 1428. Amendment to section 362 of title 11, United States Code.

Sec. 1429. Provision of electronic FTC pamphlet with electronic credit card applications and solicitations.

Sec. 1430. No bankruptcy for insolvent political committees.

Sec. 1431. Federal election law fines and penalties as nondischargeable debt.

Sec. 1432. Prohibition on certain retroactive finance charges.

Sec. 1433. Sense of Senate concerning credit worthiness.

Sec. 1434. Judicial education.

Sec. 1435. United States trustee program filing fee increase.

Sec. 1436. Providing requested tax documents to the court.

Sec. 1437. Definition of family farmer.

Sec. 1438. Encouraging creditworthiness.

Sec. 1439. Property no longer subject to redemption.

Sec. 1440. Availability of toll-free access to information.

TITLE XV—GENERAL EFFECTIVE DATE; APPLICATION OF

AMENDMENTS

Sec. 1501. Effective date; application of amendments.
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TITLE XVI—FINANCIAL INSTITUTIONS INSOLVENCY IMPROVEMENT

Sec. 1601. Short title.

Sec. 1602. Treatment of certain agreements by conservators or receivers of insured

depository institutions.

Sec. 1603. Authority of the corporation with respect to failed and failing institutions.

Sec. 1604. Amendments relating to transfers of qualified financial contracts.

Sec. 1605. Amendments relating to disaffirmance or repudiation of qualified financial contracts.

Sec. 1606. Clarifying amendment relating to master agreements.

Sec. 1607. Federal Deposit Insurance Corporation Improvement Act of 1991.

Sec. 1608. Recordkeeping requirements.

Sec. 1609. Exemptions from contemporaneous execution requirement.

Sec. 1610. SIPC stay.

Sec. 1611. Federal Reserve collateral requirements.

Sec. 1612. Effective date; application of amendments.

TITLE XVII—METHAMPHETAMINE AND OTHER CONTROLLED

SUBSTANCES

Sec. 1701. Short title.

Subtitle A—Methamphetamine Production, Trafficking, and Abuse

CHAPTER 1—CRIMINAL PENALTIES

Sec. 1711. Enhanced punishment of amphetamine laboratory operations.

Sec. 1712. Enhanced punishment of amphetamine or methamphetamine laboratory operators.

Sec. 1713. Mandatory restitution for violations of Controlled Substances Act and

Controlled Substances Import and Export Act relating to amphetamine and methamphetamine.

Sec. 1714. Methamphetamine paraphernalia.

CHAPTER 2—ENHANCED LAW ENFORCEMENT

Sec. 1721. Environmental hazards associated with illegal manufacture of amphetamine and methamphetamine.

Sec. 1722. Reduction in retail sales transaction threshold for non-safe harbor

products containing pseudoephedrine or phenlypropanolamine.

Sec. 1723. Training for Drug Enforcement Administration and State and local

law enforcement personnel relating to clandestine laboratories.

Sec. 1724. Combating methamphetamine and amphetamine in high intensity

drug trafficking areas.

Sec. 1725. Combating amphetamine and methamphetamine manufacturing and

trafficking.

CHAPTER 3—ABUSE PREVENTION AND TREATMENT

Sec. 1731. Expansion of methamphetamine research.

Sec. 1732. Methamphetamine and amphetamine treatment initiative by Center

for Substance Abuse Treatment.

Sec. 1733. Expansion of methamphetamine abuse prevention efforts.

Sec. 1734. Study of methamphetamine treatment.
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CHAPTER 4—REPORTS

Sec. 1741. Reports on consumption of methamphetamine and other illicit drugs

in rural areas, metropolitan areas, and consolidated metropolitan areas.

Sec. 1742. Report on diversion of ordinary over-the-counter pseudoephedrine and

phenylpropanolamine products.

Subtitle B—Controlled Substances Generally

CHAPTER 1—CRIMINAL MATTERS

Sec. 1751. Enhanced punishment for trafficking in list I chemicals.

Sec. 1752. Mail order requirements.

Sec. 1753. Increased penalties for distributing drugs to minors.

Sec. 1754. Increased penalty for drug trafficking in or near a school or other protected location.

Sec. 1755. Advertisments for drug paraphernalia and schedule I controlled substances.

Sec. 1756. Theft and transportation of anhydrous ammonia for purposes of illicit

production of controlled substances.

Sec. 1757. Criminal prohibition on distribution of certain information relating

to the manufacture of controlled substances.

CHAPTER 2—OTHER MATTERS

Sec. 1761. Waiver authority for physicians who dispense or prescribe certain narcotic drugs for maintenance treatment or detoxification treatment.

Subtitle C—Cocaine Powder

Sec. 1771. Short title.

Sec. 1772. Sentencing for violations involving cocaine powder.

Subtitle D—Education Matters

Sec. 1781. Safe schools.

Sec. 1782. Student safety and family school choice.

Sec. 1783. Transfer of revenues.

Subtitle E—Miscellaneous

Sec. 1791. Notice; clarification.

Sec. 1792. Domestic terrorism assessment and recovery.

Sec. 1793. Antidrug messages on Federal Government Internet websites.

Sec. 1794. State schools.

Sec. 1795. Student safety and family school choice.

Sec. 1796. Transfer of revenues.

Sec. 1797. Increased penalties for distributing drugs to minors.

Sec. 1798. Increased penalty for drug trafficking in or near a school or other protected location.

Sec. 1799. Severability.

TITLE XVIII—PROTECTION FROM THE IMPACT OF BANKRUPTCY OF

CERTAIN ELECTRIC UTILITIES

Sec. 1801. Short title.
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Sec. 1802. Findings and purposes.

Sec. 1803. Unlawful contract and amended contract.

Sec. 1804. Exclusive enforcement.

TITLE XIX—CONSUMER CREDIT DISCLOSURE

Sec. 1901. Enhanced disclosures under an open end credit plan.

Sec. 1902. Enhanced disclosure for credit extensions secured by a dwelling.

Sec. 1903. Disclosures related to ‘‘introductory rates’’.

Sec. 1904. Internet-based credit card solicitations.

Sec. 1905. Disclosures related to late payment deadlines and penalties.

Sec. 1906. Prohibition on certain actions for failure to incur finance charges.

Sec. 1907. Dual use debit card.

Sec. 1908. Study of bankruptcy impact of credit extended to dependent students.

1 TITLE I—NEEDS-BASED

2 BANKRUPTCY

3 SEC. 101. CONVERSION.

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

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

6 SEC. 102. DISMISSAL OR CONVERSION.

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

8 States Code, is amended—

9 (1) by striking the section heading and inserting

10 the following:

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

12 under chapter 11 or 13’’;

13 and

14 (2) in subsection (b)—

15 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’;

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

17 subparagraph (A) of this paragraph—

18 (i) in the first sentence—
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1 (I) by striking ‘‘but not at the re2 quest or suggestion’’ and inserting ‘‘,

3 panel trustee or’’;

4 (II) by inserting ‘‘, or, with the

5 debtor’s consent, convert such a case to

6 a case under chapter 11 or 13 of this

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

8 (III) by striking ‘‘substantial

9 abuse’’ and inserting ‘‘abuse’’; and

10 (ii) by striking the next to last sen11 tence; and

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

13 ‘‘(2)(A)(i) In considering under paragraph (1) whether

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

15 of this chapter, the court shall presume abuse exists if the

16 debtor’s current monthly income reduced by the amounts

17 determined under clauses (ii), (iii), and (iv), and multi18 plied by 60 is not less than the lesser of—

19 ‘‘(I) 25 percent of the debtor’s nonpriority unse20 cured claims in the case; or

21 ‘‘(II) $15,000.

22 ‘‘(ii)(I) The debtor’s monthly expenses shall be the ap23 plicable monthly (excluding payments for debts) expenses

24 under standards issued by the Internal Revenue Service for

25 the area in which the debtor resides, as in effect on the date
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1 of the entry of the order for relief, for the debtor, the depend2 ents of the debtor, and the spouse of the debtor in a joint

3 case, if the spouse is not otherwise a dependent. In addition,

4 the debtor’s monthly expenses shall include the debtor’s rea5 sonably necessary expenses incurred to maintain the safety

6 of the debtor and the family of the debtor from family vio7 lence as identified under section 309 of the Family Violence

8 Prevention and Services Act (42 U.S.C. 10408), or other

9 applicable Federal law. The expenses included in the debt10 or’s monthly expenses described in the preceding sentence

11 shall be kept confidential by the court.

12 ‘‘(II) In addition, the debtor’s monthly expenses may

13 include, if applicable, the continuation of actual expenses

14 paid by the debtor that are reasonable and necessary for

15 care and support of an elderly, chronically ill, or disabled

16 household member or member of the debtor’s immediate

17 family (including parents, grandparents, and siblings of the

18 debtor, the dependents of the debtor, and the spouse of the

19 debtor in a joint case) who is not a dependent and who

20 is unable to pay for such reasonable and necessary expenses.

21 ‘‘(iii) The debtor’s average monthly payments on ac22 count of secured debts shall be calculated as—

23 ‘‘(I) the sum of—

24 ‘‘(aa) the total of all amounts scheduled as

25 contractually due to secured creditors in each
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1 month of the 60 months following the date of the

2 petition; and

3 ‘‘(bb) any additional payments to secured

4 creditors necessary for the debtor, in filing a

5 plan under chapter 13 of this title, to maintain

6 possession of the debtor’s primary residence,

7 motor vehicle, or other property necessary for the

8 support of the debtor and the debtor’s depend9 ents, that serves as collateral for secured debts;

10 divided by

11 ‘‘(II) 60.

12 ‘‘(iv) The debtor’s expenses for payment of all priority

13 claims (including priority child support and alimony

14 claims) shall be calculated as—

15 ‘‘(I) the total amount of debts entitled to pri16 ority; divided by

17 ‘‘(II) 60.

18 ‘‘(B)(i) In any proceeding brought under this sub19 section, the presumption of abuse may be rebutted by dem20 onstrating special circumstances that justify additional ex21 penses or adjustments of current monthly total income. In

22 order to establish special circumstances, the debtor shall be

23 required to—

24 ‘‘(I) itemize each additional expense or adjust25 ment of income; and
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1 ‘‘(II) provide—

2 ‘‘(aa) documentation for such expenses; and

3 ‘‘(bb) a detailed explanation of the special

4 circumstances that make such expenses necessary

5 and reasonable.

6 ‘‘(ii) The debtor, and the attorney for the debtor if the

7 debtor has an attorney, shall attest under oath to the accu8 racy of any information provided to demonstrate that addi9 tional expenses or adjustments to income are required.

10 ‘‘(iii) The presumption of abuse may be rebutted if the

11 additional expenses or adjustments to income referred to in

12 clause (i) cause the product of the debtor’s current monthly

13 income reduced by the amounts determined under clauses

14 (ii), (iii), and (iv) of subparagraph (A) multiplied by 60

15 to be less than the lesser of—

16 ‘‘(I) 25 percent of the debtor’s nonpriority unse17 cured claims; or

18 ‘‘(II) $15,000.

19 ‘‘(C)(i) As part of the schedule of current income and

20 expenditures required under section 521, the debtor shall in21 clude a statement of the debtor’s current monthly income,

22 and the calculations that determine whether a presumption

23 arises under subparagraph (A)(i), that shows how each such

24 amount is calculated.
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1 ‘‘(ii) The Supreme Court shall promulgate rules under

2 section 2075 of title 28, that prescribe a form for a state3 ment under clause (i) and may provide general rules on

4 the content of the statement.

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

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

7 this chapter in a case in which the presumption in subpara8 graph (A)(i) of such paragraph does not apply or has been

9 rebutted, the court shall consider—

10 ‘‘(A) whether the debtor filed the petition in bad

11 faith; or

12 ‘‘(B) the totality of the circumstances (including

13 whether the debtor seeks to reject a personal services

14 contract and the financial need for such rejection as

15 sought by the debtor) of the debtor’s financial situa16 tion demonstrates abuse.’’.

17 (b) DEFINITION.—Title 11, United States Code, is

18 amended—

19 (1) in section 101, by inserting after paragraph

20 (10) the following:

21 ‘‘(10A) ‘current monthly income’—

22 ‘‘(A) means the average monthly income

23 from all sources which the debtor, or in a joint

24 case, the debtor and the debtor’s spouse, receive

25 without regard to whether the income is taxable
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1 income, derived during the 180-day period pre2 ceding the date of determination; and

3 ‘‘(B) includes any amount paid by any en4 tity other than the debtor (or, in a joint case, the

5 debtor and the debtor’s spouse), on a regular

6 basis to the household expenses of the debtor or

7 the debtor’s dependents (and, in a joint case, the

8 debtor’s spouse if not otherwise a dependent), but

9 excludes benefits received under the Social Secu10 rity Act;’’; and

11 (2) in section 704—

12 (A) by inserting ‘‘(a)’’ before ‘‘The trustee

13 shall—’’; and

14 (B) by adding at the end the following:

15 ‘‘(b)(1) With respect to an individual debtor under this

16 chapter—

17 ‘‘(A) the United States trustee or bankruptcy ad18 ministrator shall review all materials filed by the

19 debtor and, not later than 10 days before the first

20 meeting of creditors, file with the court a statement

21 as to whether the debtor’s case would be presumed to

22 be an abuse under section 707(b); and

23 ‘‘(B) not later than 5 days after receiving a

24 statement under subparagraph (A), the court shall

25 provide a copy of the statement to all creditors.
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1 ‘‘(2) The United States trustee or bankruptcy adminis2 trator shall not later than 30 days after receiving a state3 ment filed under paragraph (1) file a motion to dismiss

4 or convert under section 707(b), or file a statement setting

5 forth the reasons the United States trustee or bankruptcy

6 administrator does not believe that such a motion would

7 be appropriate, if based on the filing of such statement with

8 the court, the United States trustee or bankruptcy adminis9 trator determines that the debtor’s case should be presumed

10 to be an abuse under section 707(b) and the product of the

11 debtor’s current monthly income, multiplied by 12 is not

12 less than—

13 ‘‘(A) the highest national or applicable State me14 dian family income reported for a family of equal or

15 lesser size, whichever is greater; or

16 ‘‘(B) in the case of a household of 1 person, the

17 national or applicable State median household income

18 for 1 earner, whichever is greater.

19 ‘‘(3) In any case in which a motion to dismiss or con20 vert, or a statement is required to be filed by this subsection,

21 the United States trustee or bankruptcy administrator may

22 decline to file a motion to dismiss or convert pursuant to

23 section 704(b)(2) or if the product of the debtor’s current

24 monthly income multiplied by 12—
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1 ‘‘(A)(i) exceeds 100 percent, but does not exceed

2 150 percent of the national or applicable State me3 dian household income reported for a household of

4 equal size, whichever is greater; or

5 ‘‘(ii) in the case of a household of 1 person, ex6 ceeds 100 percent but does not exceed 150 percent of

7 the national or applicable State median household in8 come reported for 1 earner, whichever is greater; and

9 ‘‘(B) the product of the debtor’s current monthly

10 income (reduced by the amounts determined under

11 section 707(b)(2)(A)(ii)) (except for the amount cal12 culated under the other necessary expenses standard

13 issued by the Internal Revenue Service and section

14 707(b)(2)(A) (iii) and (iv)) multiplied by 60 is less

15 than the greater of—

16 ‘‘(i) 25 percent of the debtor’s nonpriority

17 unsecured claims in the case; or

18 ‘‘(ii) $15,000.

19 ‘‘(4)(A) The court shall order the counsel for the debtor

20 to reimburse the panel trustee for all reasonable costs in

21 prosecuting a motion brought under section 707(b), includ22 ing reasonable attorneys’ fees, if—

23 ‘‘(i) a panel trustee appointed under section

24 586(a)(1) of title 28 brings a motion for dismissal or

25 conversion under this subsection; and
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1 ‘‘(ii) the court—

2 ‘‘(I) grants that motion; and

3 ‘‘(II) finds that the action of the counsel for

4 the debtor in filing under this chapter was frivo5 lous.

6 ‘‘(B) If the court finds that the attorney for the debtor

7 violated Rule 9011, at a minimum, the court shall order—

8 ‘‘(i) the assessment of an appropriate civil pen9 alty against the counsel for the debtor; and

10 ‘‘(ii) the payment of the civil penalty to the

11 panel trustee or the United States trustee.

12 ‘‘(C) In the case of a petition referred to in subpara13 graph (B), the signature of an attorney shall constitute a

14 certificate that the attorney has—

15 ‘‘(i) performed a reasonable investigation into

16 the circumstances that gave rise to the petition; and

17 ‘‘(ii) determined that the petition—

18 ‘‘(I) is well grounded in fact; and

19 ‘‘(II) is warranted by existing law or a

20 good faith argument for the extension, modifica21 tion, or reversal of existing law and does not

22 constitute an abuse under paragraph (1).

23 ‘‘(5)(A) Except as provided in subparagraph (B) and

24 subject to paragraph (6), the court may award a debtor all

25 reasonable costs in contesting a motion brought by a party
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1 in interest (other than a panel trustee or United States

2 trustee) under this subsection (including reasonable attor3 neys’ fees) if—

4 ‘‘(i) the court does not grant the motion; and

5 ‘‘(ii) the court finds that—

6 ‘‘(I) the position of the party that brought

7 the motion was not substantially justified; or

8 ‘‘(II) the party brought the motion solely for

9 the purpose of coercing a debtor into waiving a

10 right guaranteed to the debtor under this title.

11 ‘‘(B) A party in interest that has a claim of an aggre12 gate amount less than $1,000 shall not be subject to sub13 paragraph (A).

14 ‘‘(6)(A) Only the judge, United States trustee, bank15 ruptcy administrator, or panel trustee may bring a motion

16 under section 707(b), if the current monthly income of the

17 debtor, or in a joint case, the debtor and the debtor’s spouse,

18 as of the date of the order for relief, when multiplied by

19 12, is equal to or less than—

20 ‘‘(i) the national or applicable State median

21 family income reported for a family of equal or lesser

22 size, whichever is greater; or

23 ‘‘(ii) in the case of a household of 1 person, the

24 national or applicable State median household income
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1 last reported by the Bureau of the Census for 1 earn2 er, whichever is greater.

3 ‘‘(B) Notwithstanding subparagraph (A), the national

4 or applicable State median family income for a family of

5 more than 4 individuals shall be the national or applicable

6 State median family income last reported by the Bureau

7 of the Census for a family of 4 individuals, whichever is

8 greater, plus $583 for each additional member of that fam9 ily.’’.

10 (c) NONLIMITATION OF INFORMATION.—Nothing in

11 this title shall limit the ability of a creditor to provide in12 formation to a judge, United States trustee, bankruptcy ad13 ministrator or panel trustee.

14 (d) DISMISSAL FOR CERTAIN CRIMES.—Section 707 of

15 title 11, United States Code, as amended by subsection (a)

16 of this section, is amended by adding at the end the fol17 lowing:

18 ‘‘(c)(1) In this subsection—

19 ‘‘(A) the term ‘crime of violence’ has the meaning

20 given that term in section 16 of title 18; and

21 ‘‘(B) the term ‘drug trafficking crime’ has the

22 meaning given that term in section 924(c)(2) of title

23 18.

24 ‘‘(2) Except as provided in paragraph (3), after notice

25 and a hearing, the court, on a motion by the victim of a
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1 crime of violence or a drug trafficking crime, or at the re2 quest of a party in interest, shall dismiss a voluntary case

3 filed by an individual debtor under this chapter if that in4 dividual was convicted of that crime.

5 ‘‘(3) The court may not dismiss a case under para6 graph (2) if the debtor establishes by a preponderance of

7 the evidence that the filing of a case under this chapter is

8 necessary to satisfy a claim for a domestic support obliga9 tion.’’.

10 (e) CLERICAL AMENDMENT.—The table of sections for

11 chapter 7 of title 11, United States Code, is amended by

12 striking the item relating to section 707 and inserting the

13 following:

‘‘707. Dismissal of a case or conversion to a case under chapter 11 or 13.’’.

14 SEC. 103. FINDINGS AND STUDY.

15 (a) FINDINGS.—Congress finds that the Secretary of

16 the Treasury has the inherent authority to alter the Internal

17 Revenue Service standards established to set guidelines for

18 repayment plans as needed to accommodate their use under

19 section 707(b) of title 11, United States Code.

20 (b) STUDY.—

21 (1) IN GENERAL.—Not later than 3 years after

22 the date of enactment of this Act, the Secretary of the

23 Treasury, in consultation with the Director of the Ex24 ecutive Office of United States Trustees, shall submit

25 a report to the Committee on the Judiciary of the
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1 Senate and the Committee on the Judiciary of the

2 House of Representatives containing the findings of

3 the Secretary concerning the utilization of Internal

4 Revenue Service standards for determining—

5 (A) the current monthly expenses of a debtor

6 under section 707(b) of title 11, United States

7 Code; and

8 (B) the impact that the application of those

9 standards has had on debtors and on the bank10 ruptcy courts.

11 (2) RECOMMENDATION.—The report under para12 graph (1) may include recommendations for amend13 ments to title 11, United States Code, that are con14 sistent with the findings of the Secretary of the Treas15 ury under paragraph (1).

16 SEC. 104. NOTICE OF ALTERNATIVES.

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

18 amended to read as follows:

19 ‘‘(b)(1) Before the commencement of a case under this

20 title by an individual whose debts are primarily consumer

21 debts, that individual shall be given or obtain (as required

22 in section 521(a)(1), as part of the certification process

23 under subchapter I of chapter 5) a written notice prescribed

24 by the United States trustee for the district in which the

25 petition is filed under section 586 of title 28.
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1 ‘‘(2) The notice shall contain the following:

2 ‘‘(A) A brief description of chapters 7, 11, 12,

3 and 13 and the general purpose, benefits, and costs of

4 proceeding under each of those chapters.

5 ‘‘(B) A brief description of services that may be

6 available to that individual from a nonprofit budget

7 and credit counseling agency that is approved by the

8 United States trustee for that district.’’.

9 SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING

10 TEST PROGRAM.

11 (a) DEVELOPMENT OF FINANCIAL MANAGEMENT AND

12 TRAINING CURRICULUM AND MATERIALS.—The Director of

13 the Executive Office for United States Trustees (in this sec14 tion referred to as the ‘‘Director’’) shall—

15 (1) consult with a wide range of individuals who

16 are experts in the field of debtor education, including

17 trustees who are appointed under chapter 13 of title

18 11, United States Code, and who operate financial

19 management education programs for debtors; and

20 (2) develop a financial management training

21 curriculum and materials that may be used to edu22 cate individual debtors concerning how to better man23 age their finances.

24 (b) TEST.—
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1 (1) IN GENERAL.—The Director shall select 3 ju2 dicial districts of the United States in which to test

3 the effectiveness of the financial management training

4 curriculum and materials developed under subsection

5 (a).

6 (2) AVAILABILITY OF CURRICULUM AND MATE7 RIALS.—For a 1-year period beginning not later than

8 270 days after the date of enactment of this Act, the

9 curriculum and materials referred to in paragraph

10 (1) shall be made available by the Director, directly

11 or indirectly, on request to individual debtors in cases

12 filed during that 1-year period under chapter 7 or 13

13 of title 11, United States Code.

14 (c) EVALUATION.—

15 (1) IN GENERAL.—During the 1-year period re16 ferred to in subsection (b), the Director shall evaluate

17 the effectiveness of—

18 (A) the financial management training cur19 riculum and materials developed under sub20 section (a); and

21 (B) a sample of existing consumer edu22 cation programs such as those described in the

23 report of the National Bankruptcy Review Com24 mission issued on October 20, 1997, that are rep-
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1 resentative of consumer education programs car2 ried out by—

3 (i) the credit industry;

4 (ii) trustees serving under chapter 13

5 of title 11, United States Code; and

6 (iii) consumer counseling groups.

7 (2) REPORT.—Not later than 3 months after con8 cluding the evaluation under paragraph (1), the Di9 rector shall submit a report to the Speaker of the

10 House of Representatives and the President pro tem11 pore of the Senate, for referral to the appropriate

12 committees of Congress, containing the findings of the

13 Director regarding the effectiveness of such cur14 riculum, such materials, and such programs.

15 SEC. 106. CREDIT COUNSELING.

16 (a) WHO MAY BE A DEBTOR.—Section 109 of title 11,

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

18 following:

19 ‘‘(h)(1) Subject to paragraphs (2) and (3), and not20 withstanding any other provision of this section, an indi21 vidual may not be a debtor under this title unless that indi22 vidual has, during the 180-day period preceding the date

23 of filing of the petition of that individual, received from

24 an approved nonprofit budget and credit counseling agency

25 described in section 111(a) an individual or group briefing
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1 (including a briefing conducted by telephone or on the

2 Internet) that outlined the opportunities for available credit

3 counseling and assisted that individual in performing a re4 lated budget analysis.

5 ‘‘(2)(A) Paragraph (1) shall not apply with respect to

6 a debtor who resides in a district for which the United

7 States trustee or bankruptcy administrator of the bank8 ruptcy court of that district determines that the approved

9 nonprofit budget and credit counseling agency for that dis10 trict is not reasonably able to provide adequate services to

11 the additional individuals who would otherwise seek credit

12 counseling from that agency by reason of the requirements

13 of paragraph (1).

14 ‘‘(B) Each United States trustee or bankruptcy admin15 istrator that makes a determination described in subpara16 graph (A) shall review that determination not later than

17 1 year after the date of that determination, and not less

18 frequently than every year thereafter. Notwithstanding the

19 preceding sentence, a nonprofit budget and credit coun20 seling service may be disapproved by the United States

21 trustee or bankruptcy administrator at any time.

22 ‘‘(3)(A) Subject to subparagraph (B), the requirements

23 of paragraph (1) shall not apply with respect to a debtor

24 who submits to the court a certification that—
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1 ‘‘(i) describes exigent circumstances that merit a

2 waiver of the requirements of paragraph (1);

3 ‘‘(ii) states that the debtor requested credit coun4 seling services from an approved nonprofit budget

5 and credit counseling agency, but was unable to ob6 tain the services referred to in paragraph (1) during

7 the 5-day period beginning on the date on which the

8 debtor made that request; and

9 ‘‘(iii) is satisfactory to the court.

10 ‘‘(B) With respect to a debtor, an exemption under sub11 paragraph (A) shall cease to apply to that debtor on the

12 date on which the debtor meets the requirements of para13 graph (1), but in no case may the exemption apply to that

14 debtor after the date that is 30 days after the debtor files

15 a petition, except that the court, for cause, may order an

16 additional 15 days.’’.

17 (b) CHAPTER 7 DISCHARGE.—Section 727(a) of title

18 11, United States Code, is amended—

19 (1) in paragraph (9), by striking ‘‘or’’ at the

20 end;

21 (2) in paragraph (10), by striking the period

22 and inserting ‘‘; or’’; and

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

24 ‘‘(11) after the filing of the petition, the debtor

25 failed to complete an instructional course concerning
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1 personal financial management described in section

2 111.’’.

3 (c) CHAPTER 13 DISCHARGE.—Section 1328 of title

4 11, United States Code, is amended by adding at the end

5 the following:

6 ‘‘(g) The court shall not grant a discharge under this

7 section to a debtor, unless after filing a petition the debtor

8 has completed an instructional course concerning personal

9 financial management described in section 111.

10 ‘‘(h) Subsection (g) shall not apply with respect to a

11 debtor who resides in a district for which the United States

12 trustee or bankruptcy administrator of the bankruptcy

13 court of that district determines that the approved instruc14 tional courses are not adequate to service the additional in15 dividuals who would be required to complete the instruc16 tional course by reason of the requirements of this section.

17 ‘‘(i) Each United States trustee or bankruptcy admin18 istrator that makes a determination described in subsection

19 (h) shall review that determination not later than 1 year

20 after the date of that determination, and not less frequently

21 than every year thereafter.’’.

22 (d) DEBTOR’S DUTIES.—Section 521 of title 11,

23 United States Code, is amended—

24 (1) by inserting ‘‘(a)’’ before ‘‘The debtor shall—

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

2 ‘‘(b) In addition to the requirements under subsection

3 (a), an individual debtor shall file with the court—

4 ‘‘(1) a certificate from the approved nonprofit

5 budget and credit counseling agency that provided the

6 debtor services under section 109(h); and

7 ‘‘(2) a copy of the debt repayment plan, if any,

8 developed under section 109(h) through the approved

9 nonprofit budget and credit counseling agency re10 ferred to in paragraph (1).’’.

11 (e) GENERAL PROVISIONS.—

12 (1) IN GENERAL.—Chapter 1 of title 11, United

13 States Code, is amended by adding at the end the fol14 lowing:

15 ‘‘§ 111. Nonprofit budget and credit counseling agen16 cies; financial management instructional

17 courses

18 ‘‘(a) The clerk of each district shall maintain a list

19 of nonprofit budget and credit counseling ageancies that

20 provide 1 or more programs described in section 109(h) and

21 a list of instructional courses concerning personal financial

22 management that have been approved by—

23 ‘‘(1) the United States trustee; or

24 ‘‘(2) the bankruptcy administrator for the dis25 trict.
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1 ‘‘(b) For inclusion on the approved list under sub2 section (a), the United States trustee or bankruptcy admin3 istrator shall require the credit counseling service, at a

4 minimum—

5 ‘‘(1) to be a nonprofit budget and credit coun6 seling agency, the majority of the board of directors

7 of which—

8 ‘‘(A) are not employed by the agency; and

9 ‘‘(B) will not directly or indirectly benefit

10 financially from the outcome of a credit coun11 seling session;

12 ‘‘(2) if a fee is charged for counseling services, to

13 charge a reasonable fee, and to provide services with14 out regard to ability to pay the fee;

15 ‘‘(3) to provide for safekeeping and payment of

16 client funds, including an annual audit of the trust

17 accounts and appropriate employee bonding;

18 ‘‘(4) to provide full disclosures to clients, includ19 ing funding sources, counselor qualifications, and pos20 sible impact on credit reports;

21 ‘‘(5) to provide adequate counseling with respect

22 to client credit problems that includes an analysis of

23 their current situation, what brought them to that fi24 nancial status, and how they can develop a plan to
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1 handle the problem without incurring negative amor2 tization of their debts; and

3 ‘‘(6) to provide trained counselors who receive no

4 commissions or bonuses based on the counseling ses5 sion outcome.

6 ‘‘(c)(1) No credit counseling service may provide to a

7 credit reporting agency information concerning whether an

8 individual debtor has received or sought instruction con9 cerning personal financial management from the credit

10 counseling service.

11 ‘‘(2) A credit counseling service that willfully or neg12 ligently fails to comply with any requirement under this

13 title with respect to a debtor shall be liable for damages

14 in an amount equal to the sum of—

15 ‘‘(A) any actual damages sustained by the debtor

16 as a result of the violation; and

17 ‘‘(B) any court costs or reasonable attorneys’ fees

18 (as determined by the court) incurred in an action to

19 recover those damages.’’.

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions for chapter 1 of title 11, United States Code, is

22 amended by adding at the end the following:

‘‘111. Nonprofit budget and credit counseling agencies; financial management instructional courses.’’.

23 (f) LIMITATION.—Section 362 of title 11, United States

24 Code, is amended by adding at the end the following:
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1 ‘‘(i) If a case commenced under chapter 7, 11, or 13

2 is dismissed due to the creation of a debt repayment plan,

3 for purposes of subsection (c)(3), any subsequent case com4 menced by the debtor under any such chapter shall not be

5 presumed to be filed not in good faith.’’.

6 TITLE II—ENHANCED

7 CONSUMER PROTECTION

8 Subtitle A—Penalties for Abusive

9 Creditor Practices

10 SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLU11 TION.

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

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

14 following:

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

16 a hearing, may reduce a claim filed under this section based

17 in whole on unsecured consumer debts by not more than

18 20 percent of the claim, if—

19 ‘‘(A) the claim was filed by a creditor who un20 reasonably refused to negotiate a reasonable alter21 native repayment schedule proposed by an approved

22 credit counseling agency acting on behalf of the debt23 or;

24 ‘‘(B) the offer of the debtor under subparagraph

25 (A)—
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1 ‘‘(i) was made at least 60 days before the

2 filing of the petition; and

3 ‘‘(ii) provided for payment of at least 60

4 percent of the amount of the debt over a period

5 not to exceed the repayment period of the loan,

6 or a reasonable extension thereof; and

7 ‘‘(C) no part of the debt under the alternative re8 payment schedule is nondischargeable.

9 ‘‘(2) The debtor shall have the burden of proving, by

10 clear and convincing evidence, that—

11 ‘‘(A) the creditor unreasonably refused to con12 sider the debtor’s proposal; and

13 ‘‘(B) the proposed alternative repayment sched14 ule was made in the 60-day period specified in para15 graph (1)(B)(i).’’.

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

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

18 end the following:

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

20 transfer was made as a part of an alternative repayment

21 plan between the debtor and any creditor of the debtor cre22 ated by an approved credit counseling agency.’’.

23 SEC. 202. EFFECT OF DISCHARGE.

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

25 by adding at the end the following:
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1 ‘‘(i) The willful failure of a creditor to credit payments

2 received under a plan confirmed under this title (including

3 a plan of reorganization confirmed under chapter 11 of this

4 title) in the manner required by the plan (including cred5 iting the amounts required under the plan) shall constitute

6 a violation of an injunction under subsection (a)(2).’’.

7 SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION PRAC8 TICES.

9 (a) IN GENERAL.—Section 524 of title 11, United

10 States Code, as amended by section 202 of this Act, is

11 amended—

12 (1) in subsection (c) by striking paragraph (2)

13 and inserting the following:

14 ‘‘(2) the debtor received the disclosures described

15 in subsection (i) at or before the time the debtor

16 signed the agreement.’’;

17 (2) by inserting at the end of the section the fol18 lowing:

19 ‘‘(i)(1) The disclosures required under subsection (c)

20 paragraph (2) of this section shall consist of the disclosure

21 statement described in paragraph (3), completed as required

22 in that paragraph, together with the agreement, statement,

23 declaration, motion and order described, respectively, in

24 paragraphs (4) through (8) of this subsection, and shall be
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1 the only disclosures required in connection with the reaffir2 mation.

3 ‘‘(2) Disclosures made under this paragraph shall be

4 made clearly and conspicuously and in writing. The terms

5 ‘Amount Reaffirmed’ and ‘Annual Percentage Rate’ shall

6 be disclosed more conspicuously than other terms, data or

7 information provided in connection with this disclosure, ex8 cept that the phrases ‘Before agreeing to reaffirm a debt,

9 review these important disclosures’ and ‘Summary of Reaf10 firmation Agreement’ may be equally conspicuous. Disclo11 sures may be made in a different order and may use termi12 nology different from that set forth in paragraphs (2)

13 through (8), except that the terms ‘Amount Reaffirmed’ and

14 ‘Annual Percentage Rate’ must be used where indicated.

15 ‘‘(3) The disclosure statement required under this

16 paragraph shall consist of the following:

17 ‘‘(A) The statement: ‘Part A: Before agreeing to

18 reaffirm a debt, review these important disclosures:’;

19 ‘‘(B) Under the heading ‘Summary of Reaffir20 mation Agreement’, the statement: ‘This Summary is

21 made pursuant to the requirements of the Bankruptcy

22 Code’;

23 ‘‘(C) The ‘Amount Reaffirmed’, using that term,

24 which shall be—
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1 ‘‘(i) the total amount which the debtor

2 agrees to reaffirm, and

3 ‘‘(ii) the total of any other fees or cost ac4 crued as of the date of the disclosure statement.

5 ‘‘(D) In conjunction with the disclosure of the

6 ‘Amount Reaffirmed’, the statements—

7 ‘‘(i) ‘The amount of debt you have agreed to

8 reaffirm’; and

9 ‘‘(ii) ‘Your credit agreement may obligate

10 you to pay additional amounts which may come

11 due after the date of this disclosure. Consult your

12 credit agreement.’.

13 ‘‘(E) The ‘Annual Percentage Rate’, using that

14 term, which shall be disclosed as—

15 ‘‘(i) if, at the time the petition is filed, the

16 debt is open end credit as defined pursuant to

17 the Truth in Lending Act, title 15, United States

18 Code, section 1601 et. seq., then—

19 ‘‘(I) the annual percentage rate deter20 mined pursuant to title 15, United States

21 Code, section 1637(b) (5) and (6), as appli22 cable, as disclosed to the debtor in the most

23 recent periodic statement prior to the agree24 ment or, if no such periodic statement has

25 been provided the debtor during the prior
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1 six months, the annual percentage rate as it

2 would have been so disclosed at the time the

3 disclosure statement is given the debtor, or

4 to the extent this annual percentage rate is

5 not readily available or not applicable, then

6 ‘‘(II) the simple interest rate applica7 ble to the amount reaffirmed as of the date

8 the disclosure statement is given to the debt9 or, or if different simple interest rates apply

10 to different balances, the simple interest rate

11 applicable to each such balance, identifying

12 the amount of each such balance included in

13 the amount reaffirmed, or

14 ‘‘(III) if the entity making the disclo15 sure elects, to disclose the annual percentage

16 rate under (I) and the simple interest rate

17 under (II);

18 ‘‘(ii) if, at the time the petition is filed, the

19 debt is closed end credit as defined pursuant to

20 the Truth in Lending Act, title 15, United States

21 Code, section 1601 et seq., then—

22 ‘‘(I) the annual percentage rate pursu23 ant to title 15, United States Code, section

24 1638(a)(4) as disclosed to the debtor in the

25 most recent disclosure statement given the
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1 debtor prior to the reaffirmation agreement

2 with respect to the debt, or, if no such dis3 closure statement was provided the debtor,

4 the annual percentage rate as it would have

5 been so disclosed at the time the disclosure

6 statement is given the debtor, or to the ex7 tent this annual percentage rate is not read8 ily available or not applicable, then

9 ‘‘(II) the simple interest rate applica10 ble to the amount reaffirmed as of the date

11 the disclosure statement is given the debtor,

12 or if different simple interest rates apply to

13 different balances, the simple interest rate

14 applicable to each such balance, identifying

15 the amount of such balance included in the

16 amount reaffirmed, or

17 ‘‘(III) if the entity making the disclo18 sure elects, to disclose the annual percentage

19 rate under (I) and the simple interest rate

20 under (II).

21 ‘‘(F) If the underlying debt transaction was dis22 closed as a variable rate transaction on the most re23 cent disclosure given pursuant to the Truth in Lend24 ing Act, title 15, United States Code, section 1601 et

25 seq., by stating ‘The interest rate on your loan may
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1 be a variable interest rate which changes from time

2 to time, so that the annual percentage rate disclosed

3 here may be higher or lower.’.

4 ‘‘(G) If the debt is secured by a security interest

5 which has not been waived in whole or in part or de6 termined to be void by a final order of the court at

7 the time of the disclosure, by disclosing that a secu8 rity interest or lien in goods or property is asserted

9 over some or all of the obligations you are reaffirming

10 and listing the items and their original purchase

11 price that are subject to the asserted security interest,

12 or if not a purchase-money security interest then list13 ing by items or types and the original amount of the

14 loan.

15 ‘‘(H) At the election of the creditor, a statement

16 of the repayment schedule using one or a combination

17 of the following—

18 ‘‘(i) by making the statement: ‘Your first

19 payment in the amount $lll is due on

20 lll but the future payment amount may be

21 different. Consult your reaffirmation or credit

22 agreement, as applicable.’, and stating the

23 amount of the first payment and the due date of

24 that payment in the places provided;
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1 ‘‘(ii) by making the statement: ‘Your pay2 ment schedule will be:’, and describing the repay3 ment schedule with the number, amount and due

4 dates or period of payments scheduled to repay

5 the obligations reaffirmed to the extent then

6 known by the disclosing party; or

7 ‘‘(iii) by describing the debtor’s repayment

8 obligations with reasonable specificity to the ex9 tent then known by the disclosing party.

10 ‘‘(I) The following statement: ‘Note: When this

11 disclosure talks about what a creditor ‘‘may’’ do, it

12 does not use the word ‘‘may’’ to give the creditor spe13 cific permission. The word ‘‘may’’ is used to tell you

14 what might occur if the law permits the creditor to

15 take the action. If you have questions about your reaf16 firmation or what the law requires, talk to the attor17 ney who helped you negotiate this agreement. If you

18 don’t have an attorney helping you, the judge will ex19 plain the effect of your reaffirmation when the reaffir20 mation hearing is held.’.

21 ‘‘(J) The following additional statements:

22 ‘‘ ‘Reaffirming a debt is a serious financial decision.

23 The law requires you to take certain steps to make sure

24 the decision is in your best interest. If these steps are not
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1 completed, the reaffirmation agreement is not effective, even

2 though you have signed it.

3 ‘‘ ‘1. Read the disclosures in this Part A care4 fully. Consider the decision to reaffirm carefully.

5 Then, if you want to reaffirm, sign the reaffirmation

6 agreement in Part B (or you may use a separate

7 agreement you and your creditor agree on).

8 ‘‘ ‘2. Complete and sign Part D and be sure you

9 can afford to make the payments you are agreeing to

10 make and have received a copy of the disclosure state11 ment and a completed and signed reaffirmation

12 agreement.

13 ‘‘ ‘3. If you were represented by an attorney dur14 ing the negotiation of the reaffirmation agreement,

15 the attorney must have signed the certification in

16 Part C.

17 ‘‘ ‘4. If you were not represented by an attorney

18 during the negotiation of the reaffirmation agreement,

19 you must have completed and signed Part E.

20 ‘‘ ‘5. The original of this disclosure must be filed

21 with the court by you or your creditor. If a separate

22 reaffirmation agreement (other than the one in Part

23 B) has been signed, it must be attached.

24 ‘‘ ‘6. If you were represented by an attorney dur25 ing the negotiation of the reaffirmation agreement,
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1 your reaffirmation agreement becomes effective upon

2 filing with the court unless the reaffirmation is pre3 sumed to be an undue hardship as explained in Part

4 D.

5 ‘‘ ‘7. If you were not represented by an attorney

6 during the negotiation of the reaffirmation agreement,

7 it will not be effective unless the court approves it.

8 The court will notify you of the hearing on your reaf9 firmation agreement. You must attend this hearing in

10 bankruptcy court where the judge will review your

11 agreement. The bankruptcy court must approve the

12 agreement as consistent with your best interests, ex13 cept that no court approval is required if the agree14 ment is for a consumer debt secured by a mortgage,

15 deed of trust, security deed or other lien on your real

16 property, like your home.

17 ‘‘ ‘Your right to rescind a reaffirmation. You may re18 scind (cancel) your reaffirmation at any time before the

19 bankruptcy court enters a discharge order or within 60 days

20 after the agreement is filed with the court, whichever is

21 longer. To rescind or cancel, you must notify the creditor

22 that the agreement is canceled.

23 ‘‘ ‘What are your obligations if you reaffirm the debt?

24 A reaffirmed debt remains your personal legal obligation.

25 It is not discharged in your bankruptcy. That means that
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1 if you default on your reaffirmed debt after your bank2 ruptcy is over, your creditor may be able to take your prop3 erty or your wages. Otherwise, your obligations will be de4 termined by the reaffirmation agreement which may have

5 changed the terms of the original agreement. For example,

6 if you are reaffirming an open end credit agreement, the

7 creditor may be permitted by that agreement and/or appli8 cable law to change the terms of the agreement in the future

9 under certain conditions.

10 ‘‘ ‘Are you required to enter into a reaffirmation agree11 ment by any law? No, you are not required to reaffirm a

12 debt by any law. Only agree to reaffirm a debt if it is in

13 your best interest. Be sure you can afford the payments you

14 agree to make.

15 ‘‘ ‘What if your creditor has a security interest or lien?

16 Your bankruptcy discharge does not eliminate any lien on

17 your property. A ‘‘lien’’ is often referred to as a security

18 interest, deed of trust, mortgage or security deed. Even if

19 you do not reaffirm and your personal liability on the debt

20 is discharged, because of the lien your creditor may still

21 have the right to take the security property if you do not

22 pay the debt or default on it. If the lien is on an item of

23 personal property that is exempt under your State’s law

24 or that the trustee has abandoned, you may be able to re25 deem the item rather than reaffirm the debt. To redeem,
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1 you make a single payment to the creditor equal to the cur2 rent value of the security property, as agreed by the parties

3 or determined by the court.’.

4 ‘‘(4) The form of reaffirmation agreement required

5 under this paragraph shall consist of the following:

6 ‘‘ ‘Part B: Reaffirmation Agreement. I/we agree to re7 affirm the obligations arising under the credit agreement

8 described below.

9 ‘‘ ‘Brief description of credit agreement:

10 ‘‘ ‘Description of any changes to the credit agreement

11 made as part of this reaffirmation agreement:

12 ‘‘ ‘Signature: Date:

13 ‘‘ ‘Borrower:

14 ‘‘ ‘Co-borrower, if also reaffirming:

15 ‘‘ ‘Accepted by creditor:

16 ‘‘ ‘Date of creditor acceptance:’.

17 ‘‘(5)(A) The declaration shall consist of the following:

18 ‘‘ ‘Part C: Certification by Debtor’s Attorney (If Any).

19 ‘‘ ‘I hereby certify that (1) this agreement represents

20 a fully informed and voluntary agreement by the debtor(s);

21 (2) this agreement does not impose an undue hardship on

22 the debtor or any dependent of the debtor; and (3) I have

23 fully advised the debtor of the legal effect and consequences

24 of this agreement and any default under this agreement.

25 ‘‘ ‘Signature of Debtor’s Attorney: Date:’.
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1 ‘‘(B) In the case of reaffirmations in which a presump2 tion of undue hardship has been established, the certifi3 cation shall state that in the opinion of the attorney, the

4 debtor is able to make the payment.

5 ‘‘(6) The statement in support of reaffirmation agree6 ment, which the debtor shall sign and date prior to filing

7 with the court, shall consist of the following:

8 ‘‘ ‘Part D: Debtor’s Statement in Support of Reaffir9 mation Agreement.

10 ‘‘ ‘1. I believe this agreement will not impose an undue

11 hardship on my dependents or me. I can afford to make

12 the payments on the reaffirmed debt because my monthly

13 income (take home pay plus any other income received) is

14 $lll, and my actual current monthly expenses includ15 ing monthly payments on post-bankruptcy debt and other

16 reaffirmation agreements total $lll, leaving $lll

17 to make the required payments on this reaffirmed debt. I

18 understand that if my income less my monthly expenses

19 does not leave enough to make the payments, this reaffirma20 tion agreement is presumed to be an undue hardship on

21 me and must be reviewed by the court. However, this pre22 sumption may be overcome if I explain to the satisfaction

23 of the court how I can afford to make the payments here:

24 lll.
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1 ‘‘ ‘2. I received a copy of the Reaffirmation Disclosure

2 Statement in Part A and a completed and signed reaffirma3 tion agreement.’.

4 ‘‘(7) The motion, which may be used if approval of

5 the agreement by the court is required in order for it to

6 be effective and shall be signed and dated by the moving

7 party, shall consist of the following:

8 ‘‘ ‘Part E: Motion for Court Approval (To be completed

9 only where debtor is not represented by an attorney.). I

10 (we), the debtor, affirm the following to be true and correct:

11 ‘‘ ‘I am not represented by an attorney in connection

12 with this reaffirmation agreement.

13 ‘‘ ‘I believe this agreement is in my best interest based

14 on the income and expenses I have disclosed in my State15 ment in Support of this reaffirmation agreement above, and

16 because (provide any additional relevant reasons the court

17 should consider):

18 ‘‘ ‘Therefore, I ask the court for an order approving this

19 reaffirmation agreement.’.

20 ‘‘(8) The court order, which may be used to approve

21 a reaffirmation, shall consist of the following:

22 ‘‘ ‘Court Order: The court grants the debtor’s motion

23 and approves the reaffirmation agreement described above.’.

24 ‘‘(j) Notwithstanding any other provision of this title:
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1 ‘‘(1) A creditor may accept payments from a

2 debtor before and after the filing of a reaffirmation

3 agreement with the court.

4 ‘‘(2) A creditor may accept payments from a

5 debtor under a reaffirmation agreement which the

6 creditor believes in good faith to be effective.

7 ‘‘(3) The requirements of subsections (c)(2) and

8 (i) shall be satisfied if disclosures required under

9 those subsections are given in good faith.

10 ‘‘(k) Until 60 days after a reaffirmation agreement is

11 filed with the court (or such additional period as the court,

12 after notice and hearing and for cause, orders before the

13 expiration of such period), it shall be presumed that the

14 reaffirmation agreement is an undue hardship on the debtor

15 if the debtor’s monthly income less the debtor’s monthly ex16 penses as shown on the debtor’s completed and signed state17 ment in support of the reaffirmation agreement required

18 under subsection (i)(6) of this section is less than the sched19 uled payments on the reaffirmed debt. This presumption

20 must be reviewed by the court. The presumption may be

21 rebutted in writing by the debtor if the statement includes

22 an explanation which identifies additional sources of funds

23 to make the payments as agreed upon under the terms of

24 the reaffirmation agreement. If the presumption is not re25 butted to the satisfaction of the court, the court may dis-
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1 approve the agreement. However, no agreement shall be dis2 approved without notice and hearing to the debtor and cred3 itor and such hearing must be concluded before the entry

4 of the debtor’s discharge.’’.

5 (b) LAW ENFORCEMENT.—

6 (1) IN GENERAL.—Chapter 9 of title 18, United

7 States Code, is amended by adding at the end the fol8 lowing:

9 ‘‘§ 158. Designation of United States attorneys and

10 agents of the Federal Bureau of Investiga11 tion to address abusive reaffirmations of

12 debt and materially fraudulent state13 ments in bankruptcy schedules

14 ‘‘(a) IN GENERAL.—The Attorney General of the

15 United States shall designate the individuals described in

16 subsection (b) to have primary responsibility in carrying

17 out enforcement activities in addressing violations of sec18 tion 152 or 157 relating to abusive reaffirmations of debt.

19 In addition to addressing the violations referred to in the

20 preceding sentence, the individuals described under sub21 section (b) shall address violations of section 152 or 157

22 relating to materially fraudulent statements in bankruptcy

23 schedules that are intentionally false or intentionally mis24 leading.
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1 ‘‘(b) UNITED STATES DISTRICT ATTORNEYS AND

2 AGENTS OF THE FEDERAL BUREAU OF INVESTIGATION—

3 The individuals referred to in subsection (a) are—

4 ‘‘(1) a United States attorney for each judicial

5 district of the United States; and

6 ‘‘(2) an agent of the Federal Bureau of Inves7 tigation (within the meaning of section 3107) for each

8 field office of the Federal Bureau of Investigation.

9 ‘‘(c) BANKRUPTCY INVESTIGATIONS.—Each United

10 States attorney designated under this section shall have pri11 mary responsibility for carrying out the duties of a United

12 States attorney under section 3057.

13 ‘‘(d) BANKRUPTCY PROCEDURES.—The bankruptcy

14 courts shall establish procedures for referring any case

15 which may contain a materially fraudulent statement in

16 a bankruptcy schedule to the individuals designated under

17 this section.’’.

18 (2) CLERICAL AMENDMENT.—The analysis for

19 chapter 9 of title 18, United States Code, is amended

20 by adding at the end the following:

‘‘158. Designation of United States attorneys and agents of the Federal Bureau

of Investigation to address abusive reaffirmations of debt and

materially fraudulent statements in bankruptcy schedules.’’.
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1 Subtitle B—Priority Child Support

2 SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGA3 TION.

4 Section 101 of title 11, United States Code, is

5 amended—

6 (1) by striking paragraph (12A); and

7 (2) by inserting after paragraph (14) the fol8 lowing:

9 ‘‘(14A) ‘domestic support obligation’ means a

10 debt that accrues before or after the entry of an order

11 for relief under this title, including interest that ac12 crues on that debt as provided under applicable non13 bankruptcy law notwithstanding any other provision

14 of this title, that is—

15 ‘‘(A) owed to or recoverable by—

16 ‘‘(i) a spouse, former spouse, or child of

17 the debtor or such child’s parent, legal

18 guardian, or responsible relative; or

19 ‘‘(ii) a governmental unit;

20 ‘‘(B) in the nature of alimony, mainte21 nance, or support (including assistance provided

22 by a governmental unit) of such spouse, former

23 spouse, or child of the debtor or such child’s par24 ent, without regard to whether such debt is ex25 pressly so designated;
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1 ‘‘(C) established or subject to establishment

2 before or after entry of an order for relief under

3 this title, by reason of applicable provisions of—

4 ‘‘(i) a separation agreement, divorce

5 decree, or property settlement agreement;

6 ‘‘(ii) an order of a court of record; or

7 ‘‘(iii) a determination made in accord8 ance with applicable nonbankruptcy law by

9 a governmental unit; and

10 ‘‘(D) not assigned to a nongovernmental en11 tity, unless that obligation is assigned volun12 tarily by the spouse, former spouse, child, or par13 ent, legal guardian, or responsible relative of the

14 child for the purpose of collecting the debt.’’.

15 SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP16 PORT OBLIGATIONS.

17 Section 507(a) of title 11, United States Code, is

18 amended—

19 (1) by striking paragraph (7);

20 (2) by redesignating paragraphs (1) through (6)

21 as paragraphs (2) through (7), respectively;

22 (3) in paragraph (2), as redesignated, by strik23 ing ‘‘First’’ and inserting ‘‘Second’’;

24 (4) in paragraph (3), as redesignated, by strik25 ing ‘‘Second’’ and inserting ‘‘Third’’;
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1 (5) in paragraph (4), as redesignated, by strik2 ing ‘‘Third’’ and inserting ‘‘Fourth’’;

3 (6) in paragraph (5), as redesignated, by strik4 ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;

5 (7) in paragraph (6), as redesignated, by strik6 ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;

7 (8) in paragraph (7), as redesignated, by strik8 ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and

9 (9) by inserting before paragraph (2), as redesig10 nated, the following:

11 ‘‘(1) First:

12 ‘‘(A) Allowed unsecured claims for domestic

13 support obligations that, as of the date of the fil14 ing of the petition, are owed to or recoverable by

15 a spouse, former spouse, or child of the debtor, or

16 the parent, legal guardian, or responsible relative

17 of such child, without regard to whether the

18 claim is filed by such person or is filed by a gov19 ernmental unit on behalf of that person, on the

20 condition that funds received under this para21 graph by a governmental unit under this title

22 after the date of filing of the petition shall be ap23 plied and distributed in accordance with appli24 cable nonbankruptcy law.
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1 ‘‘(B) Subject to claims under subparagraph

2 (A), allowed unsecured claims for domestic sup3 port obligations that, as of the date the petition

4 was filed are assigned by a spouse, former

5 spouse, child of the debtor, or such child’s parent,

6 legal guardian, or responsible relative to a gov7 ernmental unit (unless such obligation is as8 signed voluntarily by the spouse, former spouse,

9 child, parent, legal guardian, or responsible rel10 ative of the child for the purpose of collecting the

11 debt) or are owed directly to or recoverable by a

12 government unit under applicable nonbank13 ruptcy law, on the condition that funds received

14 under this paragraph by a governmental unit

15 under this title after the date of filing of the peti16 tion be applied and distributed in accordance

17 with applicable nonbankruptcy law.’’.

18 SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND

19 DISCHARGE IN CASES INVOLVING DOMESTIC

20 SUPPORT OBLIGATIONS.

21 Title 11, United States Code, is amended—

22 (1) in section 1129(a), by adding at the end the

23 following:

24 ‘‘(14) If the debtor is required by a judicial or

25 administrative order or statute to pay a domestic
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1 support obligation, the debtor has paid all amounts

2 payable under such order or statute for such obliga3 tion that first become payable after the date on which

4 the petition is filed.’’;

5 (2) in section 1208(c)—

6 (A) in paragraph (8), by striking ‘‘or’’ at

7 the end;

8 (B) in paragraph (9), by striking the period

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

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

11 ‘‘(10) failure of the debtor to pay any domestic

12 support obligation that first becomes payable after the

13 date on which the petition is filed.’’;

14 (3) in section 1222(a)—

15 (A) in paragraph (2), by striking ‘‘and’’ at

16 the end;

17 (B) in paragraph (3), by striking the period

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

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

20 ‘‘(4) notwithstanding any other provision of this

21 section, a plan may provide for less than full pay22 ment of all amounts owed for a claim entitled to pri23 ority under section 507(a)(1)(B) only if the plan pro24 vides that all of the debtor’s projected disposable in25 come for a 5-year period, beginning on the date that
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1 the first payment is due under the plan, will be ap2 plied to make payments under the plan.’’;

3 (4) in section 1222(b)—

4 (A) by redesignating paragraph (10) as

5 paragraph (11); and

6 (B) by inserting after paragraph (9) the fol7 lowing:

8 ‘‘(10) provide for the payment of interest accru9 ing after the date of the filing of the petition on unse10 cured claims that are nondischargeable under section

11 1328(a), except that such interest may be paid only

12 to the extent that the debtor has disposable income

13 available to pay such interest after making provision

14 for full payment of all allowed claims;’’;

15 (5) in section 1225(a)—

16 (A) in paragraph (5), by striking ‘‘and’’ at

17 the end;

18 (B) in paragraph (6), by striking the period

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

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

21 ‘‘(7) if the debtor is required by a judicial or ad22 ministrative order or statute to pay a domestic sup23 port obligation, the debtor has paid all amounts pay24 able under such order for such obligation that first be-
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1 come payable after the date on which the petition is

2 filed.’’;

3 (6) in section 1228(a), in the matter preceding

4 paragraph (1), by inserting ‘‘, and in the case of a

5 debtor who is required by a judicial or administrative

6 order to pay a domestic support obligation, after such

7 debtor certifies that all amounts payable under such

8 order or statute that are due on or before the date of

9 the certification (including amounts due before the pe10 tition was filed, but only to the extent provided for

11 in the plan) have been paid’’ after ‘‘completion by the

12 debtor of all payments under the plan’’;

13 (7) in section 1307(c)—

14 (A) in paragraph (9), by striking ‘‘or’’ at

15 the end;

16 (B) in paragraph (10), by striking the pe17 riod at the end and inserting ‘‘; or’’; and

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

19 ‘‘(11) failure of the debtor to pay any domestic

20 support obligation that first becomes payable after the

21 date on which the petition is filed.’’;

22 (8) in section 1322(a)—

23 (A) in paragraph (2), by striking ‘‘and’’ at

24 the end;
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1 (B) in paragraph (3), by striking the period

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

3 (C) by adding in the end the following:

4 ‘‘(4) notwithstanding any other provision of this

5 section, a plan may provide for less than full pay6 ment of all amounts owed for a claim entitled to pri7 ority under section 507(a)(1)(B) only if the plan pro8 vides that all of the debtor’s projected disposable in9 come for a 5-year period beginning on the date that

10 the first payment is due under the plan will be ap11 plied to make payments under the plan.’’;

12 (9) in section 1322(b)—

13 (A) in paragraph (9), by striking ‘‘; and’’

14 and inserting a semicolon;

15 (B) by redesignating paragraph (10) as

16 paragraph (11); and

17 (C) inserting after paragraph (9) the fol18 lowing:

19 ‘‘(10) provide for the payment of interest accru20 ing after the date of the filing of the petition on unse21 cured claims that are nondischargeable under section

22 1328(a), except that such interest may be paid only

23 to the extent that the debtor has disposable income

24 available to pay such interest after making provision

25 for full payment of all allowed claims; and’’;
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1 (10) in section 1325(a)—

2 (A) in paragraph (5), by striking ‘‘and’’ at

3 the end;

4 (B) in paragraph (6), by striking the period

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

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

7 ‘‘(7) if the debtor is required by a judicial or ad8 ministrative order or statute to pay a domestic sup9 port obligation, the debtor has paid amounts payable

10 after the date on which the petition is filed.’’; and

11 (11) in section 1328(a), in the matter preceding

12 paragraph (1), by inserting ‘‘, and in the case of a

13 debtor who is required by a judicial or administrative

14 order to pay a domestic support obligation, after such

15 debtor certifies that all amounts payable under such

16 order or statute that are due on or before the date of

17 the certification (including amounts due before the pe18 tition was filed, but only to the extent provided for

19 in the plan) have been paid’’ after ‘‘completion by the

20 debtor of all payments under the plan’’.

21 SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC

22 SUPPORT OBLIGATION PROCEEDINGS.

23 Section 362(b) of title 11, United States Code, is

24 amended by striking paragraph (2) and inserting the fol25 lowing:
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1 ‘‘(2) under subsection (a)—

2 ‘‘(A) of the commencement or continuation

3 of a civil action or proceeding—

4 ‘‘(i) for the establishment of paternity;

5 ‘‘(ii) for the establishment or modifica6 tion of an order for domestic support obli7 gations;

8 ‘‘(iii) concerning child custody or visi9 tation;

10 ‘‘(iv) for the dissolution of a marriage

11 except to the extent that such a proceeding

12 seeks to determine the division of property

13 which is property of the estate; or

14 ‘‘(v) regarding domestic violence;

15 ‘‘(B) the collection of a domestic support ob16 ligation from property that is not property of the

17 estate;

18 ‘‘(C) with respect to the withholding of in19 come that is property of the estate or property of

20 the debtor for payment of a domestic support ob21 ligation pursuant to a judicial or administrative

22 order;

23 ‘‘(D) the withholding, suspension, or restric24 tion of drivers’ licenses, professional and occupa25 tional licenses, and recreational licenses under
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1 State law, as specified in section 466(a)(16) of

2 the Social Security Act (42 U.S.C. 666(a)(16));

3 ‘‘(E) the reporting of overdue support owed

4 by a parent to any consumer reporting agency

5 as specified in section 466(a)(7) of the Social Se6 curity Act (42 U.S.C. 666(a)(7));

7 ‘‘(F) the interception of tax refunds, as

8 specified in sections 464 and 466(a)(3) of the So9 cial Security Act (42 U.S.C. 664 and 666(a)(3))

10 or under an analogous State law; or

11 ‘‘(G) the enforcement of medical obligations

12 as specified under title IV of the Social Security

13 Act (42 U.S.C. 601 et seq.).’’;

14 SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR

15 ALIMONY, MAINTENANCE, AND SUPPORT.

16 Section 523 of title 11, United States Code, is

17 amended—

18 (1) in subsection (a)—

19 (A) by striking paragraph (5) and inserting

20 the following:

21 ‘‘(5) for a domestic support obligation;’’;

22 (B) in paragraph (15)—

23 (i) by inserting ‘‘to a spouse, former

24 spouse, or child of the debtor and’’ before

25 ‘‘not of the kind’’;
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1 (ii) by inserting ‘‘or’’ after ‘‘court of

2 record’’; and

3 (iii) by striking ‘‘unless—’’ and all

4 that follows through the end of the para5 graph and inserting a semicolon; and

6 (C) by striking paragraph (18); and

7 (2) in subsection (c), by striking ‘‘(6), or (15)’’

8 and inserting ‘‘or (6)’’.

9 SEC. 216. CONTINUED LIABILITY OF PROPERTY.

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

11 amended—

12 (1) in subsection (c), by striking paragraph (1)

13 and inserting the following:

14 ‘‘(1) a debt of a kind specified in paragraph (1)

15 or (4) of section 523(a) (in which case, notwith16 standing any provision of applicable nonbankruptcy

17 law to the contrary, such property shall be liable for

18 a debt of a kind specified in section 523(a)(4));’’; and

19 (2) in subsection (f)(1)(A), by striking the dash

20 and all that follows through the end of the subpara21 graph and inserting ‘‘of a kind that is specified in

22 section 523(a)(4); or’’.
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1 SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS

2 AGAINST PREFERENTIAL TRANSFER MO3 TIONS.

4 Section 547(c)(7) of title 11, United States Code, is

5 amended to read as follows:

6 ‘‘(7) to the extent such transfer was a bona fide

7 payment of a debt for a domestic support obligation;

8 or’’.

9 SEC. 218. DISPOSABLE INCOME DEFINED.

10 (a) CONFIRMATION OF PLAN UNDER CHAPTER 12.—

11 Section 1225(b)(2)(A) of title 11, United States Code, is

12 amended by inserting ‘‘or for a domestic support obligation

13 that first becomes payable after the date on which the peti14 tion is filed’’ after ‘‘dependent of the debtor’’.

15 (b) CONFIRMATION OF PLAN UNDER CHAPTER 13.—

16 Section 1325(b)(2)(A) of title 11, United States Code, is

17 amended by inserting ‘‘or for a domestic support obligation

18 that first becomes payable after the date on which the peti19 tion is filed’’ after ‘‘dependent of the debtor’’.

20 SEC. 219. COLLECTION OF CHILD SUPPORT.

21 (a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec22 tion 704 of title 11, United States Code, as amended by

23 section 102(b) of this Act, is amended—

24 (1) in subsection (a)—

25 (A) in paragraph (8), by striking ‘‘and’’ at

26 the end;
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1 (B) in paragraph (9), by striking the period

2 and inserting ‘‘; and’’; and

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

4 ‘‘(10) if, with respect to an individual debtor,

5 there is a claim for a domestic support obligation,

6 provide the applicable notification specified in sub7 section (c).’’; and

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

9 ‘‘(c)(1) In any case described in subsection (a)(10), the

10 trustee shall—

11 ‘‘(A)(i) notify in writing the holder of the claim

12 of the right of that holder to use the services of a State

13 child support enforcement agency established under

14 sections 464 and 466 of the Social Security Act (42

15 U.S.C. 664 and 666, respectively) for the State in

16 which the holder resides for assistance in collecting

17 child support during and after the bankruptcy proce18 dures;

19 ‘‘(ii) include in the notice under this paragraph

20 the address and telephone number of the child support

21 enforcement agency; and

22 ‘‘(iii) include in the notice an explanation of the

23 rights of the holder of the claim to payment of the

24 claim under this chapter; 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 holder

6 of the claim; and

7 ‘‘(iii) at such time as the debtor is granted a dis8 charge under section 727, notify the holder of that

9 claim and the State child support agency of the State

10 in which that holder resides of—

11 ‘‘(I) the granting of the discharge;

12 ‘‘(II) the last recent known address of the

13 debtor;

14 ‘‘(III) the last recent known name and ad15 dress of the debtor’s employer; and

16 ‘‘(IV) with respect to the debtor’s case, the

17 name of each creditor that holds a claim that—

18 ‘‘(aa) is not discharged under para19 graph (2), (4), or (14A) of section 523(a);

20 or

21 ‘‘(bb) was reaffirmed by the debtor

22 under section 524(c).

23 ‘‘(2)(A) A holder of a claim or a State child support

24 agency may request from a creditor described in paragraph

25 (1)(B)(iii)(IV) the last known address of the debtor.
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1 ‘‘(B) Notwithstanding any other provision of law, a

2 creditor that makes a disclosure of a last known address

3 of a debtor in connection with a request made under sub4 paragraph (A) shall not be liable to the debtor or any other

5 person by reason of making that disclosure.’’.

6 (b) DUTIES OF TRUSTEE UNDER CHAPTER 11.—Sec7 tion 1106 of title 11, United States Code, is amended—

8 (1) in subsection (a)—

9 (A) in paragraph (6), by striking ‘‘and’’ at

10 the end;

11 (B) in paragraph (7), by striking the period

12 and inserting ‘‘; and’’; and

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

14 ‘‘(8) if, with respect to an individual debtor,

15 there is a claim for a domestic support obligation,

16 provide the applicable notification specified in sub17 section (c).’’; and

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

19 ‘‘(c)(1) In any case described in subsection (a)(7), the

20 trustee shall—

21 ‘‘(A)(i) notify in writing the holder of the claim

22 of the right of that holder to use the services of a State

23 child support enforcement agency established under

24 sections 464 and 466 of the Social Security Act (42
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1 U.S.C. 664 and 666) for the State in which the holder

2 resides; and

3 ‘‘(ii) include in the notice under this paragraph

4 the address and telephone number of the child support

5 enforcement agency; and

6 ‘‘(B)(i) notify, in writing, the State child sup7 port agency (of the State in which the holder of the

8 claim resides) of the claim;

9 ‘‘(ii) include in the notice under this paragraph

10 the name, address, and telephone number of the holder

11 of the claim; and

12 ‘‘(iii) at such time as the debtor is granted a dis13 charge under section 1141, notify the holder of the

14 claim and the State child support agency of the State

15 in which that holder resides of—

16 ‘‘(I) the granting of the discharge;

17 ‘‘(II) the last recent known address of the

18 debtor;

19 ‘‘(III) the last recent known name and ad20 dress of the debtor’s employer; and

21 ‘‘(IV) with respect to the debtor’s case, the

22 name of each creditor that holds a claim that—

23 ‘‘(aa) is not discharged under para24 graph (2), (3), or (14) of section 523(a); or
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1 ‘‘(bb) was reaffirmed by the debtor

2 under section 524(c).

3 ‘‘(2)(A) A holder of a claim or a State child support

4 agency may request from a creditor described in paragraph

5 (1)(B)(iii)(IV) the last known address of the debtor.

6 ‘‘(B) Notwithstanding any other provision of law, a

7 creditor that makes a disclosure of a last known address

8 of a debtor in connection with a request made under sub9 paragraph (A) shall not be liable to the debtor or any other

10 person by reason of making that disclosure.’’.

11 (c) DUTIES OF TRUSTEE UNDER CHAPTER 12.—Sec12 tion 1202 of title 11, United States Code, is amended—

13 (1) in subsection (b)—

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

15 the end;

16 (B) in paragraph (5), by striking the period

17 and inserting ‘‘; and’’; and

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

19 ‘‘(6) if, with respect to an individual debtor,

20 there is a claim for a domestic support obligation,

21 provide the applicable notification specified in sub22 section (c).’’; and

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

24 ‘‘(c)(1) In any case described in subsection (b)(6), the

25 trustee shall—
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1 ‘‘(A)(i) notify in writing the holder of the claim

2 of the right of that holder to use the services of a State

3 child support enforcement agency established under

4 sections 464 and 466 of the Social Security Act (42

5 U.S.C. 664 and 666) for the State in which the holder

6 resides; and

7 ‘‘(ii) include in the notice under this paragraph

8 the address and telephone number of the child support

9 enforcement agency; and

10 ‘‘(B)(i) notify, in writing, the State child sup11 port agency (of the State in which the holder of the

12 claim resides) of the claim;

13 ‘‘(ii) include in the notice under this paragraph

14 the name, address, and telephone number of the holder

15 of the claim; and

16 ‘‘(iii) at such time as the debtor is granted a dis17 charge under section 1228, notify the holder of the

18 claim and the State child support agency of the State

19 in which that holder resides of—

20 ‘‘(I) the granting of the discharge;

21 ‘‘(II) the last recent known address of the

22 debtor;

23 ‘‘(III) the last recent known name and ad24 dress of the debtor’s employer; and
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1 ‘‘(IV) with respect to the debtor’s case, the

2 name of each creditor that holds a claim that—

3 ‘‘(aa) is not discharged under para4 graph (2), (3), or (14) of section 523(a); or

5 ‘‘(bb) was reaffirmed by the debtor

6 under section 524(c).

7 ‘‘(2)(A) A holder of a claim or a State child support

8 agency may request from a creditor described in paragraph

9 (1)(B)(iii)(IV) the last 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 other

14 person by reason of making that disclosure.’’.

15 (d) DUTIES OF TRUSTEE UNDER CHAPTER 13.—Sec16 tion 1302 of title 11, United States Code, is amended—

17 (1) in subsection (b)—

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

19 the end;

20 (B) in paragraph (5), by striking the period

21 and inserting ‘‘; and’’; and

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

23 ‘‘(6) if, with respect to an individual debtor,

24 there is a claim for a domestic support obligation,
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1 provide the applicable notification specified in sub2 section (d); and

3 ‘‘(7) provide information relating to the admin4 istration of cases that is practical to any not-for-prof5 it entity which shall provide information to parties

6 in interest in a timely and convenient manner, in7 cluding telephonic and Internet access, at no cost or

8 a nominal cost.

9 An entity described in paragraph (7) shall provide

10 parties in interest with reasonable information about

11 each case on behalf of the trustee of that case, includ12 ing the status of the debtor’s payments to the plan,

13 the unpaid balance payable to each creditor treated

14 by the plan, and the amount and date of payments

15 made under the plan. The trustee shall have no duty

16 to provide information under paragraph (7) if no

17 such entity has been established.’’; and

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

19 ‘‘(d)(1) In any case described in subsection (b)(6), the

20 trustee shall—

21 ‘‘(A)(i) notify in writing the holder of the claim

22 of the right of that holder to use the services of a State

23 child support enforcement agency established under

24 sections 464 and 466 of the Social Security Act (42
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1 U.S.C. 664 and 666, respectively) for the State in

2 which the holder resides; and

3 ‘‘(ii) include in the notice under this paragraph

4 the address and telephone number of the child support

5 enforcement agency; and

6 ‘‘(B)(i) notify in writing the State child support

7 agency of the State in which the holder of the claim

8 resides of the claim;

9 ‘‘(ii) include in the notice under this paragraph

10 the name, address, and telephone number of the holder

11 of the claim; and

12 ‘‘(iii) at such time as the debtor is granted a dis13 charge under section 1328, notify the holder of the

14 claim and the State child support agency of the State

15 in which that holder resides of—

16 ‘‘(I) the granting of the discharge;

17 ‘‘(II) the last recent known address of the

18 debtor;

19 ‘‘(III) the last recent known name and ad20 dress of the debtor’s employer; and

21 ‘‘(IV) with respect to the debtor’s case, the

22 name of each creditor that holds a claim that—

23 ‘‘(aa) is not discharged under para24 graph (2), (3), or (14) of section 523(a); or
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1 ‘‘(bb) was reaffirmed by the debtor

2 under section 524(c).

3 ‘‘(2)(A) A holder of a claim or a State child support

4 agency may request from a creditor described in paragraph

5 (1)(B)(iii)(IV) the last known address of the debtor.

6 ‘‘(B) Notwithstanding any other provision of law, a

7 creditor that makes a disclosure of a last known address

8 of a debtor in connection with a request made under sub9 paragraph (A) shall not be liable to the debtor or any other

10 person by reason of making that disclosure.’’.

11 SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDU12 CATIONAL BENEFITS AND LOANS.

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

14 amended by striking paragraph (8) and inserting the fol15 lowing:

16 ‘‘(8) unless excepting such debt from discharge

17 under this paragraph would impose an undue hard18 ship on the debtor and the debtor’s dependents, for—

19 ‘‘(A)(i) an educational benefit overpayment

20 or loan made, insured, or guaranteed by a gov21 ernmental unit, or made under any program

22 funded in whole or in part by a governmental

23 unit or nonprofit institution; or
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1 ‘‘(ii) an obligation to repay funds received

2 as an educational benefit, scholarship, or sti3 pend; or

4 ‘‘(B) any other educational loan that is a

5 qualified education loan, as that term is defined

6 in section 221(e)(1) of the Internal Revenue Code

7 of 1986, incurred by an individual debtor;’’.

8 Subtitle C—Other Consumer

9 Protections

10 SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANK11 RUPTCY FILINGS.

12 Section 110 of title 11, United States Code, is

13 amended—

14 (1) in subsection (a)(1), by inserting ‘‘, under

15 the direct supervision of an attorney,’’ after ‘‘who’’;

16 (2) in subsection (b)—

17 (A) in paragraph (1), by adding at the end

18 the following: ‘‘If a bankruptcy petition preparer

19 is not an individual, then an officer, principal,

20 responsible person, or partner of the preparer

21 shall be required to—

22 ‘‘(A) sign the document for filing; and

23 ‘‘(B) print on the document the name and ad24 dress of that officer, principal, responsible person or

25 partner.’’;
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1 (B) by striking paragraph (2) and inserting

2 the following:

3 ‘‘(2)(A) Before preparing any document for filing or

4 accepting any fees from a debtor, the bankruptcy petition

5 preparer shall provide to the debtor a written notice to debt6 ors concerning bankruptcy petition preparers, which shall

7 be on an official form issued by the Judicial Conference

8 of the United States.

9 ‘‘(B) The notice under subparagraph (A)—

10 ‘‘(i) shall inform the debtor in simple language

11 that a bankruptcy petition preparer is not an attor12 ney and may not practice law or give legal advice;

13 ‘‘(ii) may contain a description of examples of

14 legal advice that a bankruptcy petition preparer is

15 not authorized to give, in addition to any advice that

16 the preparer may not give by reason of subsection

17 (e)(2); and

18 ‘‘(iii) shall—

19 ‘‘(I) be signed by—

20 ‘‘(aa) the debtor; and

21 ‘‘(bb) the bankruptcy petition preparer,

22 under penalty of perjury; and

23 ‘‘(II) be filed with any document for fil24 ing.’’;

25 (3) in subsection (c)—
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1 (A) in paragraph (2)—

2 (i) by striking ‘‘(2) For purposes’’ and

3 inserting ‘‘(2)(A) Subject to subparagraph

4 (B), for purposes’’; and

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

6 ‘‘(B) If a bankruptcy petition preparer is not an indi7 vidual, the identifying number of the bankruptcy petition

8 preparer shall be the Social Security account number of the

9 officer, principal, responsible person, or partner of the pre10 parer.’’; and

11 (B) by striking paragraph (3);

12 (4) in subsection (d)—

13 (A) by striking ‘‘(d)(1)’’ and inserting

14 ‘‘(d)’’; and

15 (B) by striking paragraph (2);

16 (5) in subsection (e)—

17 (A) by striking paragraph (2); and

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

19 ‘‘(2)(A) A bankruptcy petition preparer may not offer

20 a potential bankruptcy debtor any legal advice, including

21 any legal advice described in subparagraph (B).

22 ‘‘(B) The legal advice referred to in subparagraph (A)

23 includes advising the debtor—

24 ‘‘(i) whether—

25 ‘‘(I) to file a petition under this title; or
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1 ‘‘(II) commencing a case under chapter 7,

2 11, 12, or 13 is appropriate;

3 ‘‘(ii) whether the debtor’s debts will be eliminated

4 or discharged in a case under this title;

5 ‘‘(iii) whether the debtor will be able to retain

6 the debtor’s home, car, or other property after com7 mencing a case under this title;

8 ‘‘(iv) concerning—

9 ‘‘(I) the tax consequences of a case brought

10 under this title; or

11 ‘‘(II) the dischargeability of tax claims;

12 ‘‘(v) whether the debtor may or should promise

13 to repay debts to a creditor or enter into a reaffirma14 tion agreement with a creditor to reaffirm a debt;

15 ‘‘(vi) concerning how to characterize the nature

16 of the debtor’s interests in property or the debtor’s

17 debts; or

18 ‘‘(vii) concerning bankruptcy procedures and

19 rights.’’;

20 (6) in subsection (f)—

21 (A) by striking ‘‘(f)(1)’’ and inserting ‘‘(f)’’;

22 and

23 (B) by striking paragraph (2);

24 (7) in subsection (g)—
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1 (A) by striking ‘‘(g)(1)’’ and inserting

2 ‘‘(g)’’; and

3 (B) by striking paragraph (2);

4 (8) in subsection (h)—

5 (A) by redesignating paragraphs (1)

6 through (4) as paragraphs (2) through (5), re7 spectively;

8 (B) by inserting before paragraph (2), as so

9 redesignated, the following:

10 ‘‘(h)(1) The Supreme Court may promulgate rules

11 under section 2075 of title 28, or the Judicial Conference

12 of the United States may prescribe guidelines, for setting

13 a maximum allowable fee chargeable by a bankruptcy peti14 tion preparer. A bankruptcy petition preparer shall notify

15 the debtor of any such maximum amount before preparing

16 any document for filing for a debtor or accepting any fee

17 from the debtor.’’;

18 (C) in paragraph (2), as redesignated by

19 subparagraph (A) of this paragraph—

20 (i) by striking ‘‘Within 10 days after

21 the date of filing a petition, a bankruptcy

22 petition preparer shall file a’’ and inserting

23 ‘‘A’’;
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1 (ii) by inserting ‘‘by the bankruptcy

2 petition preparer shall be filed together with

3 the petition,’’ after ‘‘perjury’’; and

4 (iii) by adding at the end the fol5 lowing: ‘‘If rules or guidelines setting a

6 maximum fee for services have been promul7 gated or prescribed under paragraph (1),

8 the declaration under this paragraph shall

9 include a certification that the bankruptcy

10 petition preparer complied with the notifi11 cation requirement under paragraph (1).’’;

12 (D) by striking paragraph (3), as redesig13 nated by subparagraph (A) of this paragraph,

14 and inserting the following:

15 ‘‘(3)(A) The court shall disallow and order the

16 immediate turnover to the bankruptcy trustee any fee

17 referred to in paragraph (2) found to be in excess of

18 the value of any services—

19 ‘‘(i) rendered by the preparer during the 12-

20 month period immediately preceding the date of

21 filing of the petition; or

22 ‘‘(ii) found to be in violation of any rule or

23 guideline promulgated or prescribed under para24 graph (1).
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1 ‘‘(B) All fees charged by a bankruptcy petition

2 preparer may be forfeited in any case in which the

3 bankruptcy petition preparer fails to comply with

4 this subsection or subsection (b), (c), (d), (e), (f), or

5 (g).

6 ‘‘(C) An individual may exempt any funds re7 covered under this paragraph under section 522(b).’’;

8 and

9 (E) in paragraph (4), as redesignated by

10 subparagraph (A) of this paragraph, by striking

11 ‘‘or the United States trustee’’ and inserting ‘‘the

12 United States trustee, or the court, on the initia13 tive of the court,’’;

14 (9) in subsection (i)(1), by striking the matter

15 preceding subparagraph (A) and inserting the fol16 lowing:

17 ‘‘(i) If a bankruptcy petition preparer violates this sec18 tion or commits any act that the court finds to be fraudu19 lent, unfair, or deceptive, on motion of the debtor, trustee,

20 or United States trustee, and after the court holds a hearing

21 with respect to that violation or act, the court shall order

22 the bankruptcy petition preparer to pay to the debtor—’’;

23 (10) in subsection (j)—

24 (A) in paragraph (2)—
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1 (i) in subparagraph (A)(i)(I), by strik2 ing ‘‘a violation of which subjects a person

3 to criminal penalty’’;

4 (ii) in subparagraph (B)—

5 (I) by striking ‘‘or has not paid a

6 penalty’’ and inserting ‘‘has not paid

7 a penalty’’; and

8 (II) by inserting ‘‘or failed to dis9 gorge all fees ordered by the court’’

10 after ‘‘a penalty imposed under this

11 section,’’;

12 (B) by redesignating paragraph (3) as

13 paragraph (4); and

14 (C) by inserting after paragraph (2) the fol15 lowing:

16 ‘‘(3) The court, as part of its contempt power, may

17 enjoin a bankruptcy petition preparer that has failed to

18 comply with a previous order issued under this section. The

19 injunction under this paragraph may be issued upon mo20 tion of the court, the trustee, or the United States trustee.’’;

21 and

22 (11) by adding at the end the following:

23 ‘‘(l)(1) A bankruptcy petition preparer who fails to

24 comply with any provision of subsection (b), (c), (d), (e),
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1 (f), (g), or (h) may be fined not more than $500 for each

2 such failure.

3 ‘‘(2) The court shall triple the amount of a fine as4 sessed under paragraph (1) in any case in which the court

5 finds that a bankruptcy petition preparer—

6 ‘‘(A) advised the debtor to exclude assets or in7 come that should have been included on applicable

8 schedules;

9 ‘‘(B) advised the debtor to use a false Social Se10 curity account number;

11 ‘‘(C) failed to inform the debtor that the debtor

12 was filing for relief under this title; or

13 ‘‘(D) prepared a document for filing in a man14 ner that failed to disclose the identity of the preparer.

15 ‘‘(3) The debtor, the trustee, a creditor, or the United

16 States trustee may file a motion for an order imposing a

17 fine on the bankruptcy petition preparer for each violation

18 of this section.

19 ‘‘(4) All fines imposed under this section shall be paid

20 to the United States trustee, who shall deposit an amount

21 equal to such fines in a special account of the United States

22 Trustee System Fund referred to in section 586(e)(2) of title

23 28. Amounts deposited under this paragraph shall be avail24 able to fund the enforcement of this section on a national

25 basis.’’.
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1 SEC. 222. SENSE OF CONGRESS.

2 It is the sense of Congress that States should develop

3 curricula relating to the subject of personal finance, de4 signed for use in elementary and secondary schools.

5 SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED

6 STATES CODE.

7 (a) IN GENERAL.—Section 507(a) of title 11, United

8 States Code, as amended by section 212 of this Act, is

9 amended by inserting after paragraph (9) the following:

10 ‘‘(10) Tenth, allowed claims for death or per11 sonal injuries resulting from the operation of a motor

12 vehicle or vessel if such operation was unlawful be13 cause the debtor was intoxicated from using alcohol,

14 a drug, or another substance.’’.

15 (b) VESSELS.—Section 523(a)(8) of title 11, United

16 States Code, is amended by inserting ‘‘or vessel’’ after ‘‘vehi17 cle’’.

18 SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANK19 RUPTCY.

20 (a) IN GENERAL.—Section 522 of title 11, United

21 States Code, as amended by section 215 of this Act, is

22 amended—

23 (1) in subsection (b)—

24 (A) in paragraph (2)—

25 (i) by striking ‘‘(2)(A) any property’’

26 and inserting:
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1 ‘‘(3) Property listed in this paragraph is—

2 ‘‘(A) any property’’;

3 (ii) in subparagraph (A), by striking

4 ‘‘and’’ at the end;

5 (iii) in subparagraph (B), by striking

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

7 and

8 (iv) by adding at the end the following:

9 ‘‘(C) retirement funds to the extent that those

10 funds are in a fund or account that is exempt from

11 taxation under section 401, 403, 408, 408A, 414, 457,

12 or 501(a) of the Internal Revenue Code of 1986.’’;

13 (B) by striking paragraph (1) and insert14 ing:

15 ‘‘(2) Property listed in this paragraph is property that

16 is specified under subsection (d), unless the State law that

17 is applicable to the debtor under paragraph (3)(A) specifi18 cally does not so authorize.’’;

19 (C) in the matter preceding paragraph

20 (2)—

21 (i) by striking ‘‘(b)’’ and inserting

22 ‘‘(b)(1)’’;

23 (ii) by striking ‘‘paragraph (2)’’ both

24 places it appears and inserting ‘‘paragraph

25 (3)’’;
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1 (iii) by striking ‘‘paragraph (1)’’ each

2 place it appears and inserting ‘‘paragraph

3 (2)’’; and

4 (iv) by striking ‘‘Such property is—’’;

5 and

6 (D) by adding at the end of the subsection

7 the following:

8 ‘‘(4) For purposes of paragraph (3)(C) and subsection

9 (d)(12), the following shall apply:

10 ‘‘(A) If the retirement funds are in a retirement

11 fund that has received a favorable determination pur12 suant to section 7805 of the Internal Revenue Code of

13 1986, and that determination is in effect as of the

14 date of the commencement of the case under section

15 301, 302, or 303 of this title, those funds shall be pre16 sumed to be exempt from the estate.

17 ‘‘(B) If the retirement funds are in a retirement

18 fund that has not received a favorable determination

19 pursuant to such section 7805, those funds are exempt

20 from the estate if the debtor demonstrates that—

21 ‘‘(i) no prior determination to the contrary

22 has been made by a court or the Internal Rev23 enue Service; and
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1 ‘‘(ii)(I) the retirement fund is in substan2 tial compliance with the applicable requirements

3 of the Internal Revenue Code of 1986; or

4 ‘‘(II) the retirement fund fails to be in sub5 stantial compliance with the applicable require6 ments of the Internal Revenue Code of 1986 and

7 the debtor is not materially responsible for that

8 failure.

9 ‘‘(C) A direct transfer of retirement funds from

10 1 fund or account that is exempt from taxation under

11 section 401, 403, 408, 408A, 414, 457, or 501(a) of

12 the Internal Revenue Code of 1986, pursuant to sec13 tion 401(a)(31) of the Internal Revenue Code of 1986,

14 or otherwise, shall not cease to qualify for exemption

15 under paragraph (3)(C) or subsection (d)(12) by rea16 son of that direct transfer.

17 ‘‘(D)(i) Any distribution that qualifies as an eli18 gible rollover distribution within the meaning of sec19 tion 402(c) of the Internal Revenue Code of 1986 or

20 that is described in clause (ii) shall not cease to qual21 ify for exemption under paragraph (3)(C) or sub22 section (d)(12) by reason of that distribution.

23 ‘‘(ii) A distribution described in this clause is an

24 amount that—
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1 ‘‘(I) has been distributed from a fund or ac2 count that is exempt from taxation under section

3 401, 403, 408, 408A, 414, 457, or 501(a) of the

4 Internal Revenue Code of 1986; and

5 ‘‘(II) to the extent allowed by law, is depos6 ited in such a fund or account not later than 60

7 days after the distribution of that amount.’’; and

8 (2) in subsection (d)—

9 (A) in the matter preceding paragraph (1),

10 by striking ‘‘subsection (b)(1)’’ and inserting

11 ‘‘subsection (b)(2)’’; and

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

13 ‘‘(12) Retirement funds to the extent that those funds

14 are in a fund or account that is exempt from taxation under

15 section 401, 403, 408, 408A, 414, 457, or 501(a) of the In16 ternal Revenue Code of 1986.’’.

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

18 United States Code, as amended by section 214 of this Act,

19 is amended—

20 (1) in paragraph (18), by striking ‘‘or’’ at the

21 end;

22 (2) in paragraph (19), by striking the period

23 and inserting ‘‘; or’’;

24 (3) by inserting after paragraph (19) the fol25 lowing:
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1 ‘‘(20) under subsection (a), of withholding of in2 come from a debtor’s wages and collection of amounts

3 withheld, pursuant to the debtor’s agreement author4 izing that withholding and collection for the benefit of

5 a pension, profit-sharing, stock bonus, or other plan

6 established under section 401, 403, 408, 408A, 414,

7 457, or 501(a) of the Internal Revenue Code of 1986

8 that is sponsored by the employer of the debtor, or an

9 affiliate, successor, or predecessor of such employer—

10 ‘‘(A) to the extent that the amounts withheld

11 and collected are used solely for payments relat12 ing to a loan from a plan that satisfies the re13 quirements of section 408(b)(1) of the Employee

14 Retirement Income Security Act of 1974 or is

15 subject to section 72(p) of the Internal Revenue

16 Code of 1986; or

17 ‘‘(B) in the case of a loan from a thrift sav18 ings plan described in subchapter III of title 5,

19 that satisfies the requirements of section 8433(g)

20 of such title;’’; and

21 (4) by adding at the end of the flush material at

22 the end of the subsection, the following: ‘‘Nothing in

23 paragraph (20) may be construed to provide that any

24 loan made under a governmental plan under section

25 414(d), or a contract or account under section 403(b),
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1 of the Internal Revenue Code of 1986 constitutes a

2 claim or a debt under this title.’’.

3 (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of

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

5 end the following:

6 ‘‘(18) owed to a pension, profit-sharing, stock

7 bonus, or other plan established under section 401,

8 403, 408, 408A, 414, 457, or 501(c) of the Internal

9 Revenue Code of 1986, pursuant to—

10 ‘‘(A) a loan permitted under section

11 408(b)(1) of the Employee Retirement Income

12 Security Act of 1974, or subject to section 72(p)

13 of the Internal Revenue Code of 1986; or

14 ‘‘(B) a loan from the thrift savings plan de15 scribed in subchapter III of title 5, that satisfies

16 the requirements of section 8433(g) of such title.

17 Nothing in paragraph (19) may be construed to pro18 vide that any loan made under a governmental plan

19 under section 414(d), or a contract or account under

20 section 403(b), of the Internal Revenue Code of 1986

21 constitutes a claim or a debt under this title.’’

22 (d) PLAN CONTENTS.—Section 1322 of title 11, United

23 States Code, is amended by adding at the end the following:

24 ‘‘(f) A plan may not materially alter the terms of a

25 loan described in section 362(b)(20).’’.
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1 SEC. 225. PROTECTION OF EDUCATION SAVINGS.

2 (a) EXCLUSIONS.—Section 541 of title 11, United

3 States Code, as amended by section 903, is amended—

4 (1) in subsection (b)—

5 (A) by redesignating paragraph (6) as

6 paragraph (8); and

7 (B) by inserting after paragraph (5) the fol8 lowing:

9 ‘‘(6) funds placed in an education individual re10 tirement account (as defined in section 530(b)(1) of

11 the Internal Revenue Code of 1986) not later than

12 365 days before the date of filing of the petition,

13 but—

14 ‘‘(A) only if the designated beneficiary of

15 such account was a son, daughter, stepson, step16 daughter, grandchild, or step-grandchild of the

17 debtor for the taxable year for which funds were

18 placed in such account;

19 ‘‘(B) only to the extent that such funds—

20 ‘‘(i) are not pledged or promised to

21 any entity in connection with any extension

22 of credit; and

23 ‘‘(ii) are not excess contributions (as

24 described in section 4973(e) of the Internal

25 Revenue Code of 1986); and
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1 ‘‘(C) in the case of funds placed in all such

2 accounts having the same designated beneficiary

3 not earlier than 720 days nor later than 365

4 days before such date, only so much of such

5 funds as does not exceed $5,000;

6 ‘‘(7) funds used to purchase a tuition credit or

7 certificate or contributed to an account in accordance

8 with section 529(b)(1)(A) of the Internal Revenue

9 Code of 1986 under a qualified State tuition program

10 (as defined in section 529(b)(1) of such Code) not

11 later than 365 days before the date of filing of the pe12 tition, but—

13 ‘‘(A) only if the designated beneficiary of

14 the amounts paid or contributed to such tuition

15 program was a son, daughter, stepson, step16 daughter, grandchild, or step-grandchild of the

17 debtor for the taxable year for which funds were

18 paid or contributed;

19 ‘‘(B) with respect to the aggregate amount

20 paid or contributed to such program having the

21 same designated beneficiary, only so much of

22 such amount as does not exceed the total con23 tributions permitted under section 529(b)(7) of

24 such Code with respect to such beneficiary, as

25 adjusted beginning on the date of the filing of the
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1 petition by the annual increase or decrease

2 (rounded to the nearest tenth of 1 percent) in the

3 education expenditure category of the Consumer

4 Price Index prepared by the Department of

5 Labor; and

6 ‘‘(C) in the case of funds paid or contrib7 uted to such program having the same designated

8 beneficiary not earlier than 720 days nor later

9 than 365 days before such date, only so much of

10 such funds as does not exceed $5,000; or’’; and

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

12 ‘‘(g) In determining whether any of the relationships

13 specified in paragraph (6)(A) or (7)(A) of subsection (b)

14 exists, a legally adopted child of an individual (and a child

15 who is a member of an individual’s household, if placed

16 with such individual by an authorized placement agency

17 for legal adoption by such individual), or a foster child of

18 an individual (if such child has as the child’s principal

19 place of abode the home of the debtor and is a member of

20 the debtor’s household) shall be treated as a child of such

21 individual by blood.’’.

22 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

23 United States Code, as amended by sections 105(d),

24 304(c)(1), 305(2), 315(b), and 316 of this Act, is amended

25 by adding at the end the following:
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1 ‘‘(k) In addition to meeting the requirements under

2 subsection (a), a debtor shall file with the court a record

3 of any interest that a debtor has in an education individual

4 retirement account (as defined in section 530(b)(1) of the

5 Internal Revenue Code of 1986) or under a qualified State

6 tuition program (as defined in section 529(b)(1) of such

7 Code).’’.

8 TITLE III—DISCOURAGING

9 BANKRUPTCY ABUSE

10 SEC. 301. REINFORCEMENT OF THE FRESH START.

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

12 amended—

13 (1) by striking ‘‘by a court’’ and inserting ‘‘on

14 a prisoner by any court’’,

15 (2) by striking ‘‘section 1915(b) or (f)’’ and in16 serting ‘‘subsection (b) or (f)(2) of section 1915’’, and

17 (3) by inserting ‘‘(or a similar non-Federal

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

19 SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

21 amended—

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

23 end;

24 (2) in paragraph (2), by striking the period at

25 the end and inserting a semicolon; and
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1 (3) by adding at the end the following:

2 ‘‘(3) if a single or joint case is filed by or

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

4 13, and if a single or joint case of the debtor was

5 pending within the preceding 1-year period but was

6 dismissed, other than a case refiled under a chapter

7 other than chapter 7 after dismissal under section

8 707(b)—

9 ‘‘(A) the stay under subsection (a) with re10 spect to any action taken with respect to a debt

11 or property securing such debt or with respect to

12 any lease will terminate with respect to the debt13 or on the 30th day after the filing of the later

14 case;

15 ‘‘(B) upon motion by a party in interest for

16 continuation of the automatic stay and upon no17 tice and a hearing, the court may extend the

18 stay in particular cases as to any or all creditors

19 (subject to such conditions or limitations as the

20 court may then impose) after notice and a hear21 ing completed before the expiration of the 30-day

22 period only if the party in interest demonstrates

23 that the filing of the later case is in good faith

24 as to the creditors to be stayed; and
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1 ‘‘(C) for purposes of subparagraph (B), a

2 case is presumptively filed not in good faith (but

3 such presumption may be rebutted by clear and

4 convincing evidence to the contrary)—

5 ‘‘(i) as to all creditors, if—

6 ‘‘(I) more than 1 previous case

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

8 which the individual was a debtor was

9 pending within the preceding 1-year

10 period;

11 ‘‘(II) a previous case under any of

12 chapter 7, 11, or 13 in which the indi13 vidual was a debtor was dismissed

14 within such 1-year period, after the

15 debtor failed to—

16 ‘‘(aa) file or amend the peti17 tion or other documents as re18 quired by this title or the court

19 without substantial excuse (but

20 mere inadvertence or negligence

21 shall not be a substantial excuse

22 unless the dismissal was caused

23 by the negligence of the debtor’s

24 attorney);
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1 ‘‘(bb) provide adequate pro2 tection as ordered by the court; or

3 ‘‘(cc) perform the terms of a

4 plan confirmed by the court; or

5 ‘‘(III) there has not been a sub6 stantial change in the financial or per7 sonal affairs of the debtor since the dis8 missal of the next most previous case

9 under chapter 7, 11, or 13 or any other

10 reason to conclude that the later case

11 will be concluded—

12 ‘‘(aa) if a case under chapter

13 7, with a discharge; or

14 ‘‘(bb) if a case under chapter

15 11 or 13, with a confirmed plan

16 which will be fully performed; and

17 ‘‘(ii) as to any creditor that com18 menced an action under subsection (d) in a

19 previous case in which the individual was

20 a debtor if, as of the date of dismissal of

21 such case, that action was still pending or

22 had been resolved by terminating, condi23 tioning, or limiting the stay as to actions of

24 such creditor; and
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1 ‘‘(4)(A)(i) if a single or joint case is filed by or

2 against an individual debtor under this title, and if

3 2 or more single or joint cases of the debtor were

4 pending within the previous year but were dismissed,

5 other than a case refiled under section 707(b), the

6 stay under subsection (a) shall not go into effect upon

7 the filing of the later case; and

8 ‘‘(ii) on request of a party in interest, the court

9 shall promptly enter an order confirming that no stay

10 is in effect;

11 ‘‘(B) if, within 30 days after the filing of the

12 later case, a party in interest requests the court may

13 order the stay to take effect in the case as to any or

14 all creditors (subject to such conditions or limitations

15 as the court may impose), after notice and hearing,

16 only if the party in interest demonstrates that the fil17 ing of the later case is in good faith as to the creditors

18 to be stayed;

19 ‘‘(C) a stay imposed under subparagraph (B)

20 shall be effective on the date of entry of the order al21 lowing the stay to go into effect; and

22 ‘‘(D) for purposes of subparagraph (B), a case is

23 presumptively not filed in good faith (but such pre24 sumption may be rebutted by clear and convincing

25 evidence to the contrary)—
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1 ‘‘(i) as to all creditors if—

2 ‘‘(I) 2 or more previous cases under

3 this title in which the individual was a

4 debtor were pending within the 1-year pe5 riod;

6 ‘‘(II) a previous case under this title in

7 which the individual was a debtor was dis8 missed within the time period stated in this

9 paragraph after the debtor failed to file or

10 amend the petition or other documents as

11 required by this title or the court without

12 substantial excuse (but mere inadvertence or

13 negligence shall not be substantial excuse

14 unless the dismissal was caused by the neg15 ligence of the debtor’s attorney), failed to

16 pay adequate protection as ordered by the

17 court, or failed to perform the terms of a

18 plan confirmed by the court; or

19 ‘‘(III) there has not been a substantial

20 change in the financial or personal affairs

21 of the debtor since the dismissal of the next

22 most previous case under this title, or any

23 other reason to conclude that the later case

24 will not be concluded, if a case under chap25 ter 7, with a discharge, and if a case under
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1 chapter 11 or 13, with a confirmed plan

2 that will be fully performed; or

3 ‘‘(ii) as to any creditor that commenced an

4 action under subsection (d) in a previous case in

5 which the individual was a debtor if, as of the

6 date of dismissal of such case, such action was

7 still pending or had been resolved by termi8 nating, conditioning, or limiting the stay as to

9 action of such creditor.’’.

10 SEC. 303. CURBING ABUSIVE FILINGS.

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

12 States Code, is amended—

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

14 end;

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

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

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

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

19 property under subsection (a), by a creditor whose

20 claim is secured by an interest in such real estate, if

21 the court finds that the filing of the bankruptcy peti22 tion was part of a scheme to delay, hinder, and de23 fraud creditors that involved either—

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

25 other interest in, the real property without the
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1 consent of the secured creditor or court approval;

2 or

3 ‘‘(B) multiple bankruptcy filings affecting

4 the real property.

5 If recorded in compliance with applicable State laws gov6 erning notices of interests or liens in real property, an order

7 entered under this subsection shall be binding in any other

8 case under this title purporting to affect the real property

9 filed not later than 2 years after that recording, except that

10 a debtor in a subsequent case may move for relief from such

11 order based upon changed circumstances or for good cause

12 shown, after notice and a hearing.’’.

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

14 United States Code, as amended by section 224 of this Act,

15 is amended—

16 (1) in paragraph (19), by striking ‘‘or’’ at the

17 end;

18 (2) in paragraph (20), by striking the period at

19 the end; and

20 (3) by inserting after paragraph (20) the fol21 lowing:

22 ‘‘(21) under subsection (a), of any act to enforce

23 any lien against or security interest in real property

24 following the entry of an order under section

25 362(d)(4) as to that property in any prior bank-
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1 ruptcy case for a period of 2 years after entry of such

2 an order, except that the debtor, in a subsequent case,

3 may move the court for relief from such order based

4 upon changed circumstances or for other good cause

5 shown, after notice and a hearing; or

6 ‘‘(22) under subsection (a), of any act to enforce

7 any lien against or security interest in real

8 property—

9 ‘‘(A) if the debtor is ineligible under section

10 109(g) to be a debtor in a bankruptcy case; or

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

12 violation of a bankruptcy court order in a prior

13 bankruptcy case prohibiting the debtor from

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

15 (c) MODIFICATION OF A RESTRICTION RELATING TO

16 WAIVERS.—Section 522(e) of title 11, United States Code,

17 is amended—

18 (1) in the first sentence, by striking ‘‘subsection

19 (b) of this section’’ and inserting ‘‘subsection (b),

20 other than under paragraph (3)(C) of that sub21 section’’; and

22 (2) in the second sentence—

23 (A) by inserting ‘‘(other than property de24 scribed in subsection (b)(3)(C))’’ after ‘‘property’’

25 each place it appears; and
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1 (B) by inserting ‘‘(other than a transfer of

2 property described in subsection (b)(3)(C))’’ after

3 ‘‘transfer’’ each place it appears.

4 SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY

5 SECURITY.

6 Title 11, United States Code, is amended—

7 (1) in section 521(a), as so redesignated by sec8 tion 106(d) of this Act—

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

10 the end;

11 (B) in paragraph (5), by striking the period

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

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

14 ‘‘(6) in an individual case under chapter 7, not

15 retain possession of personal property as to which a

16 creditor has an allowed claim for the purchase price

17 secured in whole or in part by an interest in that

18 personal property unless, in the case of an individual

19 debtor, the debtor within 45 days after the first meet20 ing of creditors under section 341(a)—

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

22 creditor under section 524(c) with respect to the

23 claim secured by such property; or

24 ‘‘(B) redeems such property from the secu25 rity interest under section 722.’’; and
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1 (D) by adding at the end the following:

2 ‘‘(c) For purposes of subsection (a)(6), if the debtor

3 fails to so act within the 45-day period specified in sub4 section (a)(6), the personal property affected shall no longer

5 be property of the estate, and the creditor may take what6 ever action as to such property as is permitted by applica7 ble nonbankruptcy law, unless the court determines on the

8 motion of the trustee, and after notice and a hearing, that

9 such property is of consequential value or benefit to the es10 tate.’’; and

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

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

13 SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE

14 DEBTOR DOES NOT COMPLETE INTENDED

15 SURRENDER OF CONSUMER DEBT COLLAT16 ERAL.

17 Title 11, United States Code, is amended—

18 (1) in section 362—

19 (A) in subsection (c), by striking ‘‘(e), and

20 (f)’’ and inserting ‘‘(e), (f), and (h)’’; and

21 (B) by redesignating subsection (h), as

22 amended by section 227 of this Act, as subsection

23 (j) and by inserting after subsection (g) the fol24 lowing:
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1 ‘‘(h)(1) Subject to paragraph (2), in an individual

2 case under chapter 7, 11, or 13 the stay provided by sub3 section (a) is terminated with respect to property of the es4 tate securing in whole or in part a claim, or subject to an

5 unexpired lease, if the debtor fails within the applicable pe6 riod of time set by section 521(a)(2) to—

7 ‘‘(A) file timely any statement of intention re8 quired under section 521(a)(2) with respect to that

9 property or to indicate therein that the debtor—

10 ‘‘(i) will either surrender the property or re11 tain the property; and

12 ‘‘(ii) if retaining the property, will, as

13 applicable—

14 ‘‘(I) redeem the property under section

15 722;

16 ‘‘(II) reaffirm the debt the property se17 cures under section 524(c); or

18 ‘‘(III) assume the unexpired lease

19 under section 365(p) if the trustee does not

20 do so; or

21 ‘‘(B) take timely the action specified in that

22 statement of intention, as the statement may be

23 amended before expiration of the period for taking ac24 tion, unless the statement of intention specifies reaf-
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1 firmation and the creditor refuses to reaffirm on the

2 original contract terms.

3 ‘‘(2) Paragraph (1) shall not apply if the court deter4 mines on the motion of the trustee, and after notice and

5 a hearing, that such property is of consequential value or

6 benefit to the estate.’’; and

7 (2) in section 521, as amended by section 304 of

8 this Act—

9 (A) in subsection (a)(2), as redesignated by

10 section 106(d) of this Act—

11 (i) by striking ‘‘consumer’’;

12 (ii) in subparagraph (B)—

13 (I) by striking ‘‘forty-five days

14 after the filing of a notice of intent

15 under this section’’ and inserting ‘‘30

16 days after the first date set for the

17 meeting of creditors under section

18 341(a)’’; and

19 (II) by striking ‘‘forty-five day

20 period’’ and inserting ‘‘30-day period’’;

21 and

22 (iii) in subparagraph (C), by inserting

23 ‘‘except as provided in section 362(h)’’ be24 fore the semicolon; and

25 (B) by adding at the end the following:
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1 ‘‘(d) If the debtor fails timely to take the action speci2 fied in subsection (a)(6), or in paragraph (1) or (2) of sec3 tion 362(h), with respect to property which a lessor or bail4 or owns and has leased, rented, or bailed to the debtor or

5 as to which a creditor holds a security interest not otherwise

6 voidable under section 522(f), 544, 545, 547, 548, or 549,

7 nothing in this title shall prevent or limit the operation

8 of a provision in the underlying lease or agreement that

9 has the effect of placing the debtor in default under that

10 lease or agreement by reason of the occurrence, pendency,

11 or existence of a proceeding under this title or the insol12 vency of the debtor. Nothing in this subsection shall be

13 deemed to justify limiting such a provision in any other

14 circumstance.’’.

15 SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT

16 IN CHAPTER 13.

17 (a) IN GENERAL.—Section 1325(a)(5)(B)(i) of title 11,

18 United States Code, is amended to read as follows:

19 ‘‘(i) the plan provides that—

20 ‘‘(I) the holder of such claim retain the

21 lien securing such claim until the earlier

22 of—

23 ‘‘(aa) the payment of the under24 lying debt determined under nonbank25 ruptcy law; or
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1 ‘‘(bb) discharge under section

2 1328; and

3 ‘‘(II) if the case under this chapter is

4 dismissed or converted without completion

5 of the plan, such lien shall also be retained

6 by such holder to the extent recognized by

7 applicable nonbankruptcy law; and’’.

8 (b) RESTORING THE FOUNDATION FOR SECURED

9 CREDIT.—Section 1325(a) of title 11, United States Code,

10 is amended by adding at the end the following flush sen11 tence:

12 ‘‘For purposes of paragraph (5), section 506 shall not apply

13 to a claim described in that paragraph if the debt that is

14 the subject of the claim was incurred within the 5-year pe15 riod preceding the filing of the petition and the collateral

16 for that debt consists of a motor vehicle (as defined in sec17 tion 30102 of title 49) acquired for the personal use of the

18 debtor, or if collateral for that debt consists of any other

19 thing of value, if the debt was incurred during the 6-month

20 period preceding that filing.’’.

21 (c) DEFINITIONS.—Section 101 of title 11, United

22 States Code, as amended by section 211 of this Act, is

23 amended—

24 (1) by inserting after paragraph (13) the fol25 lowing:
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1 ‘‘(13A) ‘debtor’s principal residence’—

2 ‘‘(A) means a residential structure, includ3 ing incidental property, without regard to

4 whether that structure is attached to real prop5 erty; and

6 ‘‘(B) includes an individual condominium

7 or cooperative unit;’’; and

8 (2) by inserting after paragraph (27), the fol9 lowing:

10 ‘‘(27A) ‘incidental property’ means, with respect

11 to a debtor’s principal residence—

12 ‘‘(A) property commonly conveyed with a

13 principal residence in the area where the real es14 tate is located;

15 ‘‘(B) all easements, rights, appurtenances,

16 fixtures, rents, royalties, mineral rights, oil or

17 gas rights or profits, water rights, escrow funds,

18 or insurance proceeds; and

19 ‘‘(C) all replacements or additions;’’.

20 SEC. 307. EXEMPTIONS.

21 Section 522(b)(3)(A) of title 11, United States Code,

22 as so designated by section 224 of this Act, is amended—

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

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

25 180-day period than in any other place’’.
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1 SEC. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EX2 EMPTION.

3 Section 522 of title 11, United States Code, as amend4 ed by section 307 of this Act, is amended—

5 (1) in subsection (b)(3)(A), by inserting ‘‘subject

6 to subsection (n),’’ before ‘‘any property’’; and

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

8 ‘‘(n) For purposes of subsection (b)(3)(A), and not9 withstanding subsection (a), the value of an interest in—

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

11 a dependent of the debtor uses as a residence;

12 ‘‘(2) a cooperative that owns property that the

13 debtor or a dependent of the debtor uses as a resi14 dence; or

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

16 of the debtor;

17 shall be reduced to the extent such value is attributable to

18 any portion of any property that the debtor disposed of in

19 the 730-day period ending on the date of the filing of the

20 petition, with the intent to hinder, delay, or defraud a cred21 itor and that the debtor could not exempt, or that portion

22 that the debtor could not exempt, under subsection (b) if

23 on such date the debtor had held the property so disposed

24 of.’’.
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1 SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER

2 13 CASES.

3 (a) STOPPING ABUSIVE CONVERSIONS FROM CHAPTER

4 13.—Section 348(f)(1) of title 11, United States Code, is

5 amended—

6 (1) in subparagraph (A), by striking ‘‘and’’ at

7 the end;

8 (2) in subparagraph (B)—

9 (A) by striking ‘‘in the converted case, with

10 allowed secured claims’’ and inserting ‘‘only in

11 a case converted to chapter 11 or 12 but not in

12 a case converted to chapter 7, with allowed se13 cured claims in cases under chapters 11 and

14 12’’; and

15 (B) by striking the period and inserting ‘‘;

16 and’’; and

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

18 ‘‘(C) with respect to cases converted from chapter

19 13—

20 ‘‘(i) the claim of any creditor holding secu21 rity as of the date of the petition shall continue

22 to be secured by that security unless the full

23 amount of such claim determined under applica24 ble nonbankruptcy law has been paid in full as

25 of the date of conversion, notwithstanding any

26 valuation or determination of the amount of an
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1 allowed secured claim made for the purposes of

2 the chapter 13 proceeding; and

3 ‘‘(ii) unless a prebankruptcy default has

4 been fully cured under the plan at the time of

5 conversion, in any proceeding under this title or

6 otherwise, the default shall have the effect given

7 under applicable nonbankruptcy law.’’.

8 (b) GIVING DEBTORS THE ABILITY TO KEEP LEASED

9 PERSONAL PROPERTY BY ASSUMPTION.—Section 365 of

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

11 end the following:

12 ‘‘(p)(1) If a lease of personal property is rejected or

13 not timely assumed by the trustee under subsection (d), the

14 leased property is no longer property of the estate and the

15 stay under section 362(a) is automatically terminated.

16 ‘‘(2)(A) In the case of an individual under chapter 7,

17 the debtor may notify the creditor in writing that the debtor

18 desires to assume the lease. Upon being so notified, the cred19 itor may, at its option, notify the debtor that it is willing

20 to have the lease assumed by the debtor and may condition

21 such assumption on cure of any outstanding default on

22 terms set by the contract.

23 ‘‘(B) If within 30 days after notice is provided under

24 subparagraph (A), the debtor notifies the lessor in writing
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1 that the lease is assumed, the liability under the lease will

2 be assumed by the debtor and not by the estate.

3 ‘‘(C) The stay under section 362 and the injunction

4 under section 524(a)(2) shall not be violated by notification

5 of the debtor and negotiation of cure under this subsection.

6 ‘‘(3) In a case under chapter 11 in which the debtor

7 is an individual and in a case under chapter 13, if the

8 debtor is the lessee with respect to personal property and

9 the lease is not assumed in the plan confirmed by the court,

10 the lease is deemed rejected as of the conclusion of the hear11 ing on confirmation. If the lease is rejected, the stay under

12 section 362 and any stay under section 1301 is automati13 cally terminated with respect to the property subject to the

14 lease.’’.

15 (c) ADEQUATE PROTECTION OF LESSORS AND PUR16 CHASE MONEY SECURED CREDITORS.—

17 (1) CONFIRMATION OF PLAN.—Section

18 1325(a)(5)(B) of title 11, United States Code, is

19 amended—

20 (A) in clause (i), by striking ‘‘and’’ at the

21 end;

22 (B) in clause (ii), by striking ‘‘or’’ at the

23 end and inserting ‘‘and’’; and

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

25 ‘‘(iii) if—
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1 ‘‘(I) property to be distributed

2 pursuant to this subsection is in the

3 form of periodic payments, such pay4 ments shall be in equal monthly

5 amounts; and

6 ‘‘(II) the holder of the claim is se7 cured by personal property the amount

8 of such payments shall not be less than

9 an amount sufficient to provide to the

10 holder of such claim adequate protec11 tion during the period of the plan; or’’.

12 (2) PAYMENTS.—Section 1326(a) of title 11,

13 United States Code, is amended to read as follows:

14 ‘‘(a)(1) Unless the court orders otherwise, the debtor

15 shall—

16 ‘‘(A) commence making the payments proposed

17 by a plan within 30 days after the plan is filed; or

18 ‘‘(B) if no plan is filed then as specified in the

19 proof of claim, within 30 days after the order for re20 lief or within 15 days after the plan is filed, which21 ever is earlier.

22 ‘‘(2) A payment made under this section shall be re23 tained by the trustee until confirmation, denial of con24 firmation, or paid by the trustee as adequate protection

25 payments in accordance with paragraph (3). If a plan is
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1 confirmed, the trustee shall distribute any such payment in

2 accordance with the plan as soon as is practicable. If a plan

3 is not confirmed, the trustee shall return any such payments

4 not previously paid and not yet due and owing to creditors

5 pursuant to paragraph (3) to the debtor, after deducting

6 any unpaid claim allowed under section 503(b).

7 ‘‘(3)(A) As soon as is practicable, and not later than

8 40 days after the filing of the case, the trustee shall—

9 ‘‘(i) pay from payments made under this section

10 the adequate protection payments proposed in the

11 plan; or

12 ‘‘(ii) if no plan is filed then, according to the

13 terms of the proof of claim.

14 ‘‘(B) The court may, upon notice and a hearing, mod15 ify, increase, or reduce the payments required under this

16 paragraph pending confirmation of a plan.’’.

17 SEC. 310. LIMITATION ON LUXURY GOODS.

18 Section 523(a)(2)(C) of title 11, United States Code,

19 is amended to read as follows:

20 ‘‘(C)(i) for purposes of subparagraph (A)—

21 ‘‘(I) consumer debts owed to a single cred22 itor and aggregating more than $250 for luxury

23 goods or services incurred by an individual debt24 or on or within 90 days before the order for relief
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1 under this title are presumed to be nondischarge2 able; and

3 ‘‘(II) cash advances aggregating more than

4 $750 that are extensions of consumer credit

5 under an open end credit plan obtained by an

6 individual debtor on or within 70 days before the

7 order for relief under this title, are presumed to

8 be nondischargeable; and

9 ‘‘(ii) for purposes of this subparagraph—

10 ‘‘(I) the term ‘extension of credit under an

11 open end credit plan’ means an extension of

12 credit under an open end credit plan, within the

13 meaning of the Consumer Credit Protection Act

14 (15 U.S.C. 1601 et seq.);

15 ‘‘(II) the term ‘open end credit plan’ has the

16 meaning given that term under section 103 of

17 Consumer Credit Protection Act (15 U.S.C.

18 1602); and

19 ‘‘(III) the term ‘luxury goods or services’

20 does not include goods or services reasonably nec21 essary for the support or maintenance of the

22 debtor or a dependent of the debtor.’’.

23 SEC. 311. AUTOMATIC STAY.

24 Section 362(b) of title 11, United States Code, as

25 amended by section 303(b) of this Act, is amended—
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1 (1) in paragraph (21), by striking ‘‘or’’ at the

2 end;

3 (2) in paragraph (22), by striking the period at

4 the end and inserting a semicolon; and

5 (3) by inserting after paragraph (22) the fol6 lowing:

7 ‘‘(23) under subsection (a)(3), of the continu8 ation of any eviction, unlawful detainer action, or

9 similar proceeding by a lessor against a debtor in10 volving residential real property in which the debtor

11 resides as a tenant under a rental agreement;

12 ‘‘(24) under subsection (a)(3), of the commence13 ment of any eviction, unlawful detainer action, or

14 similar proceeding by a lessor against a debtor in15 volving residential real property in which the debtor

16 resides as a tenant under a rental agreement that has

17 terminated under the lease agreement or applicable

18 State law; or

19 ‘‘(25) under subsection (a)(3), of eviction actions

20 based on endangerment to property or person or the

21 use of illegal drugs.’’.

22 SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY

23 DISCHARGES.

24 Title 11, United States Code, is amended—
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1 (1) in section 727(a)(8), by striking ‘‘six’’ and

2 inserting ‘‘8’’; and

3 (2) in section 1328, by inserting after subsection

4 (e) the following:

5 ‘‘(f) Notwithstanding subsections (a) and (b), the court

6 shall not grant a discharge of all debts provided for by the

7 plan or disallowed under section 502 if the debtor has re8 ceived a discharge in any case filed under this title within

9 5 years before the order for relief under this chapter.’’.

10 SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND AN11 TIQUES.

12 Section 522(f) of title 11, United States Code, is

13 amended by adding at the end the following:

14 ‘‘(4)(A) Subject to subparagraph (B), for pur15 poses of paragraph (1)(B), the term ‘household goods’

16 means—

17 ‘‘(i) clothing;

18 ‘‘(ii) furniture;

19 ‘‘(iii) appliances;

20 ‘‘(iv) 1 radio;

21 ‘‘(v) 1 television;

22 ‘‘(vi) 1 VCR;

23 ‘‘(vii) linens;

24 ‘‘(viii) china;

25 ‘‘(ix) crockery;
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1 ‘‘(x) kitchenware;

2 ‘‘(xi) educational materials and educational

3 equipment primarily for the use of minor de4 pendent children of the debtor, but only 1 per5 sonal computer only if used primarily for the

6 education or entertainment of such minor chil7 dren;

8 ‘‘(xii) medical equipment and supplies;

9 ‘‘(xiii) furniture exclusively for the use of

10 minor children, or elderly or disabled dependents

11 of the debtor; and

12 ‘‘(xiv) personal effects (including wedding

13 rings and the toys and hobby equipment of

14 minor dependent children) of the debtor and the

15 dependents of the debtor.

16 ‘‘(B) The term ‘household goods’ does not

17 include—

18 ‘‘(i) works of art (unless by or of the debtor

19 or the dependents of the debtor);

20 ‘‘(ii) electronic entertainment equipment

21 (except 1 television, 1 radio, and 1 VCR);

22 ‘‘(iii) items acquired as antiques;

23 ‘‘(iv) jewelry (except wedding rings); and

24 ‘‘(v) a computer (except as otherwise pro25 vided for in this section), motor vehicle (includ-
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1 ing a tractor or lawn tractor), boat, or a motor2 ized recreational device, conveyance, vehicle,

3 watercraft, or aircraft.’’.

4 SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE

5 DEBTS.

6 (a) IN GENERAL.—Section 523(a) of title 11, United

7 States Code, is amended by inserting after paragraph (14)

8 the following:

9 ‘‘(14A)(A) incurred to pay a debt that is non10 dischargeable by reason of section 727, 1141, 1228(a),

11 1228(b), or 1328(b), or any other provision of this

12 subsection, if the debtor incurred the debt to pay such

13 a nondischargeable debt with the intent to discharge

14 in bankruptcy the newly created debt; except that

15 ‘‘(B) all debts incurred to pay nondischargeable

16 debts shall be presumed to be nondischargeable debts

17 if incurred within 70 days before the filing of the pe18 tition (except that, in any case in which there is an

19 allowed claim under section 502 for child support or

20 spousal support entitled to priority under section

21 507(a)(1) and that was filed in a timely manner,

22 debts that would otherwise be presumed to be non23 dischargeable debts by reason of this subparagraph

24 shall be treated as dischargeable debts);’’.
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1 (b) DISCHARGE UNDER CHAPTER 13.—Section

2 1328(a) of title 11, United States Code, is amended by strik3 ing paragraphs (1) through (3) and inserting the following:

4 ‘‘(1) provided for under section 1322(b)(5);

5 ‘‘(2) of the kind specified in paragraph (2), (3),

6 (4), (7), or (8), of section 523(a);

7 ‘‘(3) for restitution, or a criminal fine, included

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

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

10 civil action against the debtor as a result of willful

11 or malicious injury by the debtor that caused per12 sonal injury to an individual or the death of an indi13 vidual.’’.

14 SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7

15 AND 13 CASES.

16 (a) NOTICE.—Section 342 of title 11, United States

17 Code, is amended—

18 (1) in subsection (c)—

19 (A) by inserting ‘‘(1)’’ after ‘‘(c)’’; and

20 (B) by striking ‘‘, but the failure of such no21 tice to contain such information shall not invali22 date the legal effect of such notice’’; and

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

24 ‘‘(d) At any time, a creditor, in a case of an individual

25 debtor under chapter 7 or 13, may file with the court and
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1 serve on the debtor a notice of the address to be used to

2 notify the creditor in that case. Five days after receipt of

3 such notice, if the court or the debtor is required to give

4 the creditor notice, such notice shall be given at that ad5 dress.

6 ‘‘(e) An entity may file with the court a notice stating

7 its address for notice in cases under chapters 7 and 13.

8 After 30 days following the filing of such notice, any notice

9 in any case filed under chapter 7 or 13 given by the court

10 shall be to that address unless specific notice is given under

11 subsection (d) with respect to a particular case.

12 ‘‘(f)(1) Notice given to a creditor other than as pro13 vided in this section shall not be effective notice until that

14 notice has been brought to the attention of the creditor. If

15 the creditor designates a person or department to be respon16 sible for receiving notices concerning bankruptcy cases and

17 establishes reasonable procedures so that bankruptcy notices

18 received by the creditor are to be delivered to such depart19 ment or person, notice shall not be considered to have been

20 brought to the attention of the creditor until received by

21 such person or department.

22 ‘‘(2) No sanction under section 362(h) or any other

23 sanction that a court may impose on account of violations

24 of the stay under section 362(a) or failure to comply with

25 section 542 or 543 may be imposed on any action of the
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1 creditor unless the action takes place after the creditor has

2 received notice of the commencement of the case effective

3 under this section.’’.

4 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

5 United States Code, as amended by section 305 of this Act,

6 is amended—

7 (1) in subsection (a), by striking paragraph (1)

8 and inserting the following:

9 ‘‘(1) file—

10 ‘‘(A) a list of creditors; and

11 ‘‘(B) unless the court orders otherwise—

12 ‘‘(i) a schedule of assets and liabilities;

13 ‘‘(ii) a schedule of current income and

14 current expenditures;

15 ‘‘(iii) a statement of the debtor’s finan16 cial affairs and, if applicable, a

17 certificate—

18 ‘‘(I) of an attorney whose name is

19 on the petition as the attorney for the

20 debtor or any bankruptcy petition pre21 parer signing the petition under sec22 tion 110(b)(1) indicating that such at23 torney or bankruptcy petition preparer

24 delivered to the debtor any notice re25 quired by section 342(b); or
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1 ‘‘(II) if no attorney for the debtor

2 is indicated and no bankruptcy peti3 tion preparer signed the petition, of the

4 debtor that such notice was obtained

5 and read by the debtor;

6 ‘‘(iv) copies of all payment advices or

7 other evidence of payment, if any, received

8 by the debtor from any employer of the

9 debtor in the period 60 days before the fil10 ing of the petition;

11 ‘‘(v) a statement of the amount of pro12 jected monthly net income, itemized to show

13 how the amount is calculated; and

14 ‘‘(vi) a statement disclosing any rea15 sonably anticipated increase in income or

16 expenditures over the 12-month period fol17 lowing the date of filing’’; and

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

19 ‘‘(e)(1) At any time, a creditor, in the case of an indi20 vidual under chapter 7 or 13, may file with the court notice

21 that the creditor requests the petition, schedules, and a

22 statement of affairs filed by the debtor in the case and the

23 court shall make those documents available to the creditor

24 who request those documents.
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1 ‘‘(2)(A) At any time, a creditor in a case under chap2 ter 13 may file with the court notice that the creditor re3 quests the plan filed by the debtor in the case.

4 ‘‘(B) The court shall make such plan available to the

5 creditor who request such plan—

6 ‘‘(i) at a reasonable cost; and

7 ‘‘(ii) not later than 5 days after such request.

8 ‘‘(f) An individual debtor in a case under chapter 7,

9 11, or 13 shall file with the court at the request of any

10 party in interest—

11 ‘‘(1) at the time filed with the taxing authority,

12 all tax returns required under applicable law, includ13 ing any schedules or attachments, with respect to the

14 period from the commencement of the case until such

15 time as the case is closed;

16 ‘‘(2) at the time filed with the taxing authority,

17 all tax returns required under applicable law, includ18 ing any schedules or attachments, that were not filed

19 with the taxing authority when the schedules under

20 subsection (a)(1) were filed with respect to the period

21 that is 3 years before the order of relief;

22 ‘‘(3) any amendments to any of the tax returns,

23 including schedules or attachments, described in para24 graph (1) or (2); and
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1 ‘‘(4) in a case under chapter 13, a statement

2 subject to the penalties of perjury by the debtor of the

3 debtor’s income and expenditures in the preceding tax

4 year and monthly income, that shows how the

5 amounts are calculated—

6 ‘‘(A) beginning on the date that is the later

7 of 90 days after the close of the debtor’s tax year

8 or 1 year after the order for relief, unless a plan

9 has been confirmed; and

10 ‘‘(B) thereafter, on or before the date that is

11 45 days before each anniversary of the confirma12 tion of the plan until the case is closed.

13 ‘‘(g)(1) A statement referred to in subsection (f)(4)

14 shall disclose—

15 ‘‘(A) the amount and sources of income of the

16 debtor;

17 ‘‘(B) the identity of any person responsible with

18 the debtor for the support of any dependent of the

19 debtor; and

20 ‘‘(C) the identity of any person who contributed,

21 and the amount contributed, to the household in

22 which the debtor resides.

23 ‘‘(2) The tax returns, amendments, and statement of

24 income and expenditures described in paragraph (1) shall

25 be available to the United States trustee, any bankruptcy
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1 administrator, any trustee, and any party in interest for

2 inspection and copying, subject to the requirements of sub3 section (h).

4 ‘‘(h)(1) Not later than 30 days after the date of enact5 ment of the Bankruptcy Reform Act of 2000, the Director

6 of the Administrative Office of the United States Courts

7 shall establish procedures for safeguarding the confiden8 tiality of any tax information required to be provided

9 under this section.

10 ‘‘(2) The procedures under paragraph (1) shall include

11 restrictions on creditor access to tax information that is re12 quired to be provided under this section.

13 ‘‘(3) Not later than 1 year after the date of enactment

14 of the Bankruptcy Reform Act of 2000, the Director of the

15 Administrative Office of the United States Courts shall pre16 pare and submit to Congress a report that—

17 ‘‘(A) assesses the effectiveness of the procedures

18 under paragraph (1); and

19 ‘‘(B) if appropriate, includes proposed legisla20 tion to—

21 ‘‘(i) further protect the confidentiality of tax

22 information; and

23 ‘‘(ii) provide penalties for the improper use

24 by any person of the tax information required to

25 be provided under this section.
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1 ‘‘(i) If requested by the United States trustee or a

2 trustee serving in the case, the debtor shall provide—

3 ‘‘(1) a document that establishes the identity of

4 the debtor, including a driver’s license, passport, or

5 other document that contains a photograph of the

6 debtor; and

7 ‘‘(2) such other personal identifying information

8 relating to the debtor that establishes the identity of

9 the debtor.’’.

10 SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED11 ULES OR PROVIDE REQUIRED INFORMATION.

12 Section 521 of title 11, United States Code, as amend13 ed by section 315 of this Act, is amended by adding at the

14 end the following:

15 ‘‘(j)(1) Notwithstanding section 707(a), and subject to

16 paragraph (2), if an individual debtor in a voluntary case

17 under chapter 7 or 13 fails to file all of the information

18 required under subsection (a)(1) within 45 days after the

19 filing of the petition commencing the case, the case shall

20 be automatically dismissed effective on the 46th day after

21 the filing of the petition.

22 ‘‘(2) With respect to a case described in paragraph (1),

23 any party in interest may request the court to enter an

24 order dismissing the case. If requested, the court shall enter
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1 an order of dismissal not later than 5 days after such re2 quest.

3 ‘‘(3) Upon request of the debtor made within 45 days

4 after the filing of the petition commencing a case described

5 in paragraph (1), the court may allow the debtor an addi6 tional period of not to exceed 45 days to file the information

7 required under subsection (a)(1) if the court finds justifica8 tion for extending the period for the filing.’’.

9 SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON

10 CONFIRMATION OF THE PLAN.

11 (a) HEARING.—Section 1324 of title 11, United States

12 Code, is amended—

13 (1) by striking ‘‘After’’ and inserting the fol14 lowing:

15 ‘‘(a) Except as provided in subsection (b) and after’’;

16 and

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

18 ‘‘(b) The hearing on confirmation of the plan may be

19 held not later than 45 days after the meeting of creditors

20 under section 341(a).’’.

21 (b) FILING OF PLAN.—Section 1321 of title 11, United

22 States Code, is amended to read as follows:

23 ‘‘§ 1321. Filing of plan

24 ‘‘Not later than 90 days after the order for relief under

25 this chapter, the debtor shall file a plan, except that the
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1 court may extend such period if the need for an extension

2 is attributable to circumstances for which the debtor should

3 not justly be held accountable.’’.

4 SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION

5 IN CERTAIN CASES.

6 Section 1322(d) of title 11, United States Code, is

7 amended to read as follows:

8 ‘‘(d)(1) Except as provided in paragraph (2), the plan

9 may not provide for payments over a period that is longer

10 than 3 years.

11 ‘‘(2) The plan may provide for payments over a period

12 that is longer than 3 years if—

13 ‘‘(A) the plan is for a case that was converted to

14 a case under this chapter from a case under chapter

15 7, or the plan is for a debtor who has been dismissed

16 from chapter 7 by reason of section 707(b), in which

17 case the plan shall provide for payments over a pe18 riod of 5 years; or

19 ‘‘(B) the plan is for a case that is not described

20 in subparagraph (A), and the court, for cause, ap21 proves a period longer than 3 years, but not to exceed

22 5 years.’’.
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1 SEC. 319. SENSE OF THE CONGRESS REGARDING EXPAN2 SION OF RULE 9011 OF THE FEDERAL RULES

3 OF BANKRUPTCY PROCEDURE.

4 It is the sense of Congress that Rule 9011 of the Federal

5 Rules of Bankruptcy Procedure (11 U.S.C. App.) should be

6 modified to include a requirement that all documents (in7 cluding schedules), signed and unsigned, submitted to the

8 court or to a trustee by debtors who represent themselves

9 and debtors who are represented by an attorney be sub10 mitted only after the debtor or the debtor’s attorney has

11 made reasonable inquiry to verify that the information con12 tained in such documents is—

13 (1) well grounded in fact; and

14 (2) warranted by existing law or a good-faith ar15 gument for the extension, modification, or reversal of

16 existing law.

17 SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL

18 CASES.

19 Section 362(e) of title 11, United States Code, is

20 amended—

21 (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and

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

23 ‘‘(2) Notwithstanding paragraph (1), in the case of an

24 individual filing under chapter 7, 11, or 13, the stay under

25 subsection (a) shall terminate on the date that is 60 days
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1 after a request is made by a party in interest under sub2 section (d), unless—

3 ‘‘(A) a final decision is rendered by the court

4 during the 60-day period beginning on the date of the

5 request; or

6 ‘‘(B) that 60-day period is extended—

7 ‘‘(i) by agreement of all parties in interest;

8 or

9 ‘‘(ii) by the court for such specific period of

10 time as the court finds is required for good

11 cause, as described in findings made by the

12 court.’’.

13 SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

14 (a) PROPERTY OF THE ESTATE.—

15 (1) IN GENERAL.—Subchapter I of chapter 11 of

16 title 11, United States Code, is amended by adding

17 at the end the following:

18 ‘‘§ 1115. Property of the estate

19 ‘‘In a case concerning an individual, property of the

20 estate includes, in addition to the property specified in sec21 tion 541—

22 ‘‘(1) all property of the kind specified in section

23 541 that the debtor acquires after the commencement

24 of the case but before the case is closed, dismissed, or
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1 converted to a case under chapter 7, 12, or 13, which2 ever occurs first; and

3 ‘‘(2) earnings from services performed by the

4 debtor after the commencement of the case but before

5 the case is closed, dismissed, or converted to a case

6 under chapter 7, 12, or 13, whichever occurs first.’’.

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for chapter 11 of title 11, United States Code,

9 is amended by adding at the end of the matter relat10 ing to subchapter I the following:

‘‘1115. Property of the estate.’’.

11 (b) CONTENTS OF PLAN.—Section 1123(a) of title 11,

12 United States Code, is amended—

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

14 end;

15 (2) in paragraph (7), by striking the period and

16 inserting ‘‘; and’’; and

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

18 ‘‘(8) in a case concerning an individual, provide

19 for the payment to creditors through the plan of all

20 or such portion of earnings from personal services

21 performed by the debtor after the commencement of

22 the case or other future income of the debtor as is nec23 essary for the execution of the plan.’’.

24 (c) CONFIRMATION OF PLAN.—
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1 (1) REQUIREMENTS RELATING TO VALUE OF

2 PROPERTY.—Section 1129(a) of title 11, United

3 States Code, is amended by adding at the end the fol4 lowing:

5 ‘‘(14) In a case concerning an individual in

6 which the holder of an allowed unsecured claim ob7 jects to the confirmation of the plan—

8 ‘‘(A) the value of the property to be distrib9 uted under the plan on account of such claim is,

10 as of the effective date of the plan, not less than

11 the amount of such claim; or

12 ‘‘(B) the value of the property to be distrib13 uted under the plan is not less than the debtor’s

14 projected disposable income (as that term is de15 fined in section 1325(b)(2)) to be received during

16 the 3-year period beginning on the date that the

17 first payment is due under the plan, or during

18 the term of the plan, whichever is longer.’’.

19 (2) REQUIREMENT RELATING TO INTERESTS IN

20 PROPERTY.—Section 1129(b)(2)(B)(ii) of title 11,

21 United States Code, is amended by inserting before

22 the period at the end the following: ‘‘, except that in

23 a case concerning an individual, the debtor may re24 tain property included in the estate under section
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1 1115, subject to the requirements of subsection

2 (a)(14)’’.

3 (d) EFFECT OF CONFIRMATION—Section 1141(d) of

4 title 11, United States Code, is amended—

5 (1) in paragraph (2), by striking ‘‘The confirma6 tion of a plan does not discharge an individual debt7 or’’ and inserting ‘‘A discharge under this chapter

8 does not discharge a debtor’’; and

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

10 ‘‘(5) In a case concerning an individual—

11 ‘‘(A) except as otherwise ordered for cause shown,

12 the discharge is not effective until completion of all

13 payment under the plan; and

14 ‘‘(B) at any time after the confirmation of the

15 plan and after notice and a hearing, the court may

16 grant a discharge to a debtor that has not completed

17 payments under the plan only if—

18 ‘‘(i) for each allowed unsecured claim, the

19 value as of the effective date of the plan, of prop20 erty actually distributed under the plan on ac21 count of that claim is not less than the amount

22 that would have been paid on such claim if the

23 estate of the debtor had been liquidated under

24 chapter 7 of this title on such date; and
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1 ‘‘(ii) modification of the plan under 1127 of

2 this title is not practicable.’’.

3 (e) MODIFICATION OF PLAN.—Section 1127 of title 11,

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

5 following:

6 ‘‘(e) In a case concerning an individual, the plan may

7 be modified at any time after confirmation of the plan but

8 before the completion of payments under the plan, whether

9 or not the plan has been substantially consummated, upon

10 request of the debtor, the trustee, the United States trustee,

11 or the holder of an allowed unsecured claim, to—

12 ‘‘(1) increase or reduce the amount of payments

13 on claims of a particular class provided for by the

14 plan;

15 ‘‘(2) extend or reduce the time period for such

16 payments; or

17 ‘‘(3) alter the amount of the distribution to a

18 creditor whose claim is provided for by the plan to

19 the extent necessary to take account of any payment

20 of such claim made other than under the plan.

21 ‘‘(f)(1) Sections 1121 through 1128 of this title and

22 the requirements of section 1129 of this title apply to any

23 modification under subsection (a).

24 ‘‘(2) The plan, as modified, shall become the plan only

25 after there has been disclosure under section 1125, as the
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1 court may direct, notice and a hearing, and such modifica2 tion is approved.’’.

3 SEC. 322. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI4 PANT CONTRIBUTIONS AND OTHER PROP5 ERTY FROM THE ESTATE.

6 (a) IN GENERAL.—Section 541(b) of title 11, United

7 States Code, as amended by section 903 of this Act, is

8 amended—

9 (1) by striking ‘‘or’’ at the end of paragraph (5);

10 (2) by redesignating paragraph (6) as para11 graph (7); and

12 (3) by inserting after paragraph (5) the fol13 lowing:

14 ‘‘(6) any amount—

15 ‘‘(A) withheld by an employer from the

16 wages of employees for payment as contributions

17 to—

18 ‘‘(i) an employee benefit plan subject to

19 title I of the Employee Retirement Income

20 Security Act of 1974 (29 U.S.C. 1001 et

21 seq.); or

22 ‘‘(ii) a health insurance plan regulated

23 by State law whether or not subject to such

24 title; or
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1 ‘‘(B) received by the employer from employ2 ees for payment as contributions to—

3 ‘‘(i) an employee benefit plan subject to

4 title I of the Employee Retirement Income

5 Security Act of 1974 (29 U.S.C. 1001 et

6 seq.); or

7 ‘‘(ii) a health insurance plan regulated

8 by State law whether or not subject to such

9 title;’’.

10 (b) APPLICATION OF AMENDMENT.—The amendment

11 made by this section shall not apply to cases commenced

12 under title 11, United States Code, before the expiration

13 of the 180-day period beginning on the date of the enact14 ment of this Act.

15 SEC. 323. CLARIFICATION OF POSTPETITION WAGES AND

16 BENEFITS.

17 Section 503(b)(1)(A) of title 11, United States Code,

18 is amended to read as follows:

19 ‘‘(A) the actual, necessary costs and expenses of

20 preserving the estate, including wages, salaries, or

21 commissions for services rendered after the commence22 ment of the case, and wages and benefits awarded as

23 back pay attributable to any period of time after com24 mencement of the case as a result of the debtor’s viola25 tion of Federal or State law, without regard to when
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1 the original unlawful act occurred or to whether any

2 services were rendered;’’.

3 SEC. 324. LIMITATION.

4 (a) EXEMPTIONS.—Section 522 of title 11, United

5 States Code, as amended by sections 224 and 307 of this

6 Act, is amended—

7 (1) in subsection (b)(3)(A), by inserting ‘‘subject

8 to subsection (n),’’ before ‘‘any property’’; and

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

10 ‘‘(n)(1) Except as provided in paragraph (2), as a re11 sult of electing under subsection (b)(3)(A) to exempt prop12 erty under State or local law, a debtor may not exempt

13 any amount of interest that exceeds in the aggregate

14 $100,000 in value in—

15 ‘‘(A) real or personal property that the debtor or

16 a dependent of the debtor uses as a residence;

17 ‘‘(B) a cooperative that owns property that the

18 debtor or a dependent of the debtor uses as a resi19 dence; or

20 ‘‘(C) a burial plot for the debtor or a dependent

21 of the debtor.

22 ‘‘(2) The limitation under paragraph (1) shall not

23 apply to an exemption claimed under subsection (b)(3)(A)

24 by a family farmer for the principal residence of that farm25 er.’’.
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1 (b) ADJUSTMENT OF DOLLAR AMOUNTS.—Section

2 104(b) of title 11, United States Code, is amended—

3 (1) in paragraph (1), by striking ‘‘522(d),’’ and

4 inserting ‘‘522 (d) or (n),’’; and

5 (2) in paragraph (3), by striking ‘‘522(d),’’ and

6 inserting ‘‘522 (d) or (n),’’.

7 SEC. 325. EXCLUSIVE JURISDICTION IN MATTERS INVOLV8 ING BANKRUPTCY PROFESSIONALS.

9 Section 1334 of title 28, United States Code, is

10 amended—

11 (1) in subsection (b) by striking ‘‘Notwith12 standing’’ and inserting ‘‘Except as provided in sub13 section (e)(2), and notwithstanding’’; and

14 (2) amending subsection (e) to read as follows:

15 ‘‘(e) The district court in which a case under title 11

16 is commenced or is pending shall have exclusive

17 jurisdiction—

18 ‘‘(1) of all the property, wherever located, of the

19 debtor as of the commencement of such case, and of

20 property of the estate; and

21 ‘‘(2) over all claims or causes of action that in22 volve construction of section 327 of title 11, United

23 States Code, or rules relating to disclosure require24 ments under section 327.’’.
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1 SEC. 326. UNITED STATES TRUSTEE PROGRAM FILING FEE

2 INCREASE.

3 (a) ACTIONS UNDER CHAPTER 7 OR 13 OF TITLE 11,

4 UNITED STATES CODE.—Section 1930(a) of title 28,

5 United States Code, is amended by striking paragraph (1)

6 and inserting the following:

7 ‘‘(1) For a case commenced—

8 ‘‘(A) under chapter 7 of title 11, $160; or

9 ‘‘(B) under chapter 13 of title 11, $150.’’.

10 (b) UNITED STATES TRUSTEE SYSTEM FUND.—Sec11 tion 589a(b) of title 28, United States Code, is amended—

12 (1) by striking paragraph (1) and inserting the

13 following:

14 ‘‘(1)(A) 40.63 percent of the fees collected under

15 section 1930(a)(1)(A) of this title in cases commenced

16 under chapter 7 of title 11; and

17 ‘‘(B) 70.00 percent of the fees collected under sec18 tion 1930(a)(1)(B) of this title in cases commenced

19 under chapter 13 of title 11;’’;

20 (2) in paragraph (2) by striking ‘‘one-half’’ and

21 inserting ‘‘three-fourths’’; and

22 (3) in paragraph (4) by striking ‘‘one-half’’ and

23 inserting ‘‘100 percent’’.

24 (c) COLLECTION AND DEPOSIT OF MISCELLANEOUS

25 BANKRUPTCY FEES.—Section 406(b) of the Judiciary Ap26 propriations Act, 1990 (28 U.S.C. 1931 note) is amended
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1 by striking ‘‘pursuant to 28 U.S.C. section 1930(b) and

2 30.76 per centum of the fees hereafter collected under 28

3 U.S.C. section 1930(a)(1) and 25 percent of the fees here4 after collected under 28 U.S.C. section 1930(a)(3) shall be

5 deposited as offsetting receipts to the fund established under

6 28 U.S.C. section 1931’’ and inserting ‘‘under section

7 1930(b) of title 28, United States Code, and 31.25 percent

8 of the fees collected under section 1930(a)(1)(A) of that title,

9 30.00 percent of the fees collected under section

10 1930(a)(1)(B) of that title, and 25 percent of the fees col11 lected under section 1930(a)(3) of that title shall be depos12 ited as offsetting receipts to the fund established under sec13 tion 1931 of that title’’.

14 SEC. 327. COMPENSATION OF TRUSTEES IN CERTAIN CASES

15 UNDER CHAPTER 7 OF TITLE 11, UNITED

16 STATES CODE.

17 Section 326 of title 11, United States Code, is amended

18 by adding at the end the following:

19 ‘‘(e) In a case that has been converted under section

20 706, or after a case has been converted or dismissed under

21 section 707 or the debtor has been denied a discharge under

22 section 727—

23 ‘‘(1) the court may allow reasonable compensa24 tion under section 330 for the trustee’s services ren25 dered, payable after the trustee renders services; and
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1 ‘‘(2) any allowance made by a court under para2 graph (1) shall not be subject to the limitations under

3 subsection (a).’’.

4 SEC. 328. NONDISCHARGEABILITY OF DEBTS INCURRED

5 THROUGH THE COMMISSION OF VIOLENCE AT

6 CLINICS.

7 Section 523(a) of title 11, United States Code, as

8 amended by section 224 of this Act, is amended—

9 (1) in paragraph (18), by striking ‘‘or’’ at the

10 end;

11 (2) in paragraph (19)(B), by striking the period

12 and inserting ‘‘; or’’; and

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

14 ‘‘(20) that results from any judgment, order, con15 sent order, or decree entered in any Federal or State

16 court, or contained in any settlement agreement en17 tered into by the debtor, including any damages, fine,

18 penalty, citation, or attorney fee or cost owed by the

19 debtor, arising from—

20 ‘‘(A) an actual or potential action under

21 section 248 of title 18;

22 ‘‘(B) an actual or potential action under

23 any Federal, State, or local law, the purpose of

24 which is to protect—
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1 ‘‘(i) access to a health care facility, in2 cluding a facility providing reproductive

3 health services, as defined in section 248(e)

4 of title 18 (referred to in this paragraph as

5 a ‘health care facility’); or

6 ‘‘(ii) the provision of health services,

7 including reproductive health services (re8 ferred to in this paragraph as ‘health serv9 ices’);

10 ‘‘(C) an actual or potential action alleging

11 the violation of any Federal, State, or local stat12 utory or common law, including chapter 96 of

13 title 18 and the Federal civil rights laws (includ14 ing sections 1977 through 1980 of the Revised

15 Statutes) that results from the debtor’s actual,

16 attempted, or alleged—

17 ‘‘(i) harassment of, intimidation of, in18 terference with, obstruction of, injury to,

19 threat to, or violence against any person—

20 ‘‘(I) because that person provides

21 or has provided health services;

22 ‘‘(II) because that person is or has

23 been obtaining health services; or

24 ‘‘(III) to deter that person, any

25 other person, or a class of persons from
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1 obtaining or providing health services;

2 or

3 ‘‘(ii) damage or destruction of property

4 of a health care facility; or

5 ‘‘(D) an actual or alleged violation of a

6 court order or injunction that protects access to

7 a health care facility or the provision of health

8 services.’’.

9 TITLE IV—GENERAL AND SMALL

10 BUSINESS BANKRUPTCY PRO11 VISIONS

12 Subtitle A—General Business

13 Bankruptcy Provisions

14 SEC. 401. 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 equipment

20 described in paragraph (2) to take possession of such equip21 ment in compliance with an equipment security agreement,

22 lease, or conditional sale contract, and to enforce any of

23 its other rights or remedies under such security agreement,

24 lease, or conditional sale contract, to sell, lease, or otherwise

25 retain or dispose of such equipment, is not limited or other-
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1 wise affected by any other provision of this title or by any

2 power of the court, except that the right to take possession

3 and enforce those other rights and remedies shall be subject

4 to section 362, 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 secu9 rity 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), under such security

13 agreement, lease, or conditional sale contract that—

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

15 of the case and is an event of default therewith

16 is cured before the expiration of such 60-day pe17 riod;

18 ‘‘(ii) occurs or becomes an event of default

19 after the date of commencement of the case and

20 before the expiration of such 60-day period is

21 cured before the later of—

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

23 date of the default or event of the default; or

24 ‘‘(II) the expiration of such 60-day pe25 riod; and
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1 ‘‘(iii) occurs on or after the expiration of

2 such 60-day period is cured in accordance with

3 the terms of such security agreement, lease, or

4 conditional sale contract, if cure is permitted

5 under that agreement, lease, or conditional sale

6 contract.

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

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

9 used on rolling stock equipment, including super10 structures or racks, that is subject to a security inter11 est granted by, leased to, or conditionally sold to a

12 debtor; and

13 ‘‘(B) includes all records and documents relating

14 to such equipment that are required, under the terms

15 of the security agreement, lease, or conditional sale

16 contract, to be surrendered or returned by the debtor

17 in connection with the surrender or return of such

18 equipment.

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

20 or conditional vendor acting in its own behalf or acting

21 as trustee or otherwise in behalf of another party.

22 ‘‘(b) The trustee and the secured party, lessor, or condi23 tional vendor whose right to take possession is protected

24 under subsection (a) may agree, subject to the court’s ap-
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1 proval, to extend the 60-day period specified in subsection

2 (a)(1).

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

4 immediately surrender and return to a secured party, les5 sor, or conditional vendor, described in subsection (a)(1),

6 equipment described in subsection (a)(2), if at any time

7 after the date of commencement of the case under this chap8 ter such secured party, lessor, or conditional vendor is enti9 tled under subsection (a)(1) to take possession of such equip10 ment and makes a written demand for such possession of

11 the trustee.

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

13 paragraph (1) to surrender and return equipment described

14 in subsection (a)(2), any lease of such equipment, and any

15 security agreement or conditional sale contract relating to

16 such equipment, if such security agreement or conditional

17 sale contract is an executory contract, shall be deemed re18 jected.

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

20 on or before October 22, 1994, for purposes of this section—

21 ‘‘(1) the term ‘lease’ includes any written agree22 ment with respect to which the lessor and the debtor,

23 as lessee, have expressed in the agreement or in a sub24 stantially contemporaneous writing that the agree-
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1 ment is to be treated as a lease for Federal income

2 tax purposes; and

3 ‘‘(2) the term ‘security interest’ means a pur4 chase-money equipment security interest.

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

6 after October 22, 1994, for purposes of this section, the term

7 ‘rolling stock equipment’ includes rolling stock equipment

8 that is substantially rebuilt and accessories used on such

9 equipment.’’.

10 (b) AIRCRAFT EQUIPMENT AND VESSELS.—Section

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

12 as follows:

13 ‘‘§ 1110. Aircraft equipment and vessels

14 ‘‘(a)(1) Except as provided in paragraph (2) and sub15 ject to subsection (b), the right of a secured party with a

16 security interest in equipment described in paragraph (3),

17 or of a lessor or conditional vendor of such equipment, to

18 take possession of such equipment in compliance with a se19 curity agreement, lease, or conditional sale contract, and

20 to enforce any of its other rights or remedies, under such

21 security agreement, lease, or conditional sale contract, to

22 sell, lease, or otherwise retain or dispose of such equipment,

23 is not limited or otherwise affected by any other provision

24 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 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 to

7 perform all obligations of the debtor under such secu8 rity agreement, lease, or conditional sale contract;

9 and

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

11 specified in section 365(b)(2), under such security

12 agreement, lease, or conditional sale contract that

13 occurs—

14 ‘‘(i) before the date of the order is cured be15 fore the expiration of such 60-day period;

16 ‘‘(ii) after the date of the order and before

17 the expiration of such 60-day period is cured be18 fore the later of—

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

20 date of the default; or

21 ‘‘(II) the expiration of such 60-day pe22 riod; and

23 ‘‘(iii) on or after the expiration of such 60-

24 day period is cured in compliance with the terms

25 of such security agreement, lease, or conditional
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1 sale contract, if a cure is permitted under that

2 agreement, lease, or contract.

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

4 ‘‘(A) is—

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

6 appliance, or spare part (as defined in section

7 40102 of title 49) that is subject to a security in8 terest granted by, leased to, or conditionally sold

9 to a debtor that, at the time such transaction is

10 entered into, holds an air carrier operating cer11 tificate issued under chapter 447 of title 49 for

12 aircraft capable of carrying 10 or more individ13 uals or 6,000 pounds or more of cargo; or

14 ‘‘(ii) a documented vessel (as defined in sec15 tion 30101(1) of title 46) that is subject to a se16 curity interest granted by, leased to, or condi17 tionally sold to a debtor that is a water carrier

18 that, at the time such transaction is entered into,

19 holds a certificate of public convenience and ne20 cessity or permit issued by the Department of

21 Transportation; and

22 ‘‘(B) includes all records and documents relating

23 to such equipment that are required, under the terms

24 of the security agreement, lease, or conditional sale

25 contract, to be surrendered or returned by the debtor
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1 in connection with the surrender or return of such

2 equipment.

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

4 or conditional vendor acting in its own behalf or acting

5 as trustee or otherwise in behalf of another party.

6 ‘‘(b) The trustee and the secured party, lessor, or condi7 tional vendor whose right to take possession is protected

8 under subsection (a) may agree, subject to the approval of

9 the court, to extend the 60-day period specified in subsection

10 (a)(1).

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

12 immediately surrender and return to a secured party, les13 sor, or conditional vendor, described in subsection (a)(1),

14 equipment described in subsection (a)(3), if at any time

15 after the date of the order for relief under this chapter such

16 secured party, lessor, or conditional vendor is entitled under

17 subsection (a)(1) to take possession of such equipment and

18 makes a written demand for such possession to the trustee.

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

20 paragraph (1) to surrender and return equipment described

21 in subsection (a)(3), any lease of such equipment, and any

22 security agreement or conditional sale contract relating to

23 such equipment, if such security agreement or conditional

24 sale contract is an executory contract, shall be deemed re25 jected.
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1 ‘‘(d) With respect to equipment first placed in service

2 on or before October 22, 1994, for purposes of this section—

3 ‘‘(1) the term ‘lease’ includes any written agree4 ment with respect to which the lessor and the debtor,

5 as lessee, have expressed in the agreement or in a sub6 stantially contemporaneous writing that the agree7 ment is to be treated as a lease for Federal income

8 tax purposes; and

9 ‘‘(2) the term ‘security interest’ means a pur10 chase-money equipment security interest.’’.

11 SEC. 402. ADEQUATE PROTECTION FOR INVESTORS.

12 (a) DEFINITION.—Section 101 of title 11, United

13 States Code, as amended by section 306(c) of this Act, is

14 amended by inserting after paragraph (48) the following:

15 ‘‘(48A) ‘securities self regulatory organization’

16 means either a securities association registered with

17 the Securities and Exchange Commission under sec18 tion 15A of the Securities Exchange Act of 1934 (15

19 U.S.C. 78o–3) or a national securities exchange reg20 istered with the Securities and Exchange Commission

21 under section 6 of the Securities Exchange Act of

22 1934 (15 U.S.C. 78f);’’.

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

24 United States Code, as amended by section 311 of this Act,

25 is amended—
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1 (1) in paragraph (24), by striking ‘‘or’’ at the

2 end;

3 (2) in paragraph (25), by striking the period at

4 the end and inserting ‘‘; or’’; and

5 (3) by inserting after paragraph (25) the fol6 lowing:

7 ‘‘(26) under subsection (a), of—

8 ‘‘(A) the commencement or continuation of

9 an investigation or action by a securities self

10 regulatory organization to enforce such organiza11 tion’s regulatory power;

12 ‘‘(B) the enforcement of an order or deci13 sion, other than for monetary sanctions, obtained

14 in an action by the securities self regulatory or15 ganization to enforce such organization’s regu16 latory power; or

17 ‘‘(C) any act taken by the securities self reg18 ulatory organization to delist, delete, or refuse to

19 permit quotation of any stock that does not meet

20 applicable regulatory requirements.’’.

21 SEC. 403. MEETINGS OF CREDITORS AND EQUITY SECURITY

22 HOLDERS.

23 Section 341 of title 11, United States Code, is amended

24 by adding at the end the following:
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1 ‘‘(e) Notwithstanding subsections (a) and (b), the

2 court, on the request of a party in interest and after notice

3 and a hearing, for cause may order that the United States

4 trustee not convene a meeting of creditors or equity security

5 holders if the debtor has filed a plan as to which the debtor

6 solicited acceptances prior to the commencement of the

7 case.’’.

8 SEC. 404. PROTECTION OF REFINANCE OF SECURITY INTER9 EST.

10 Subparagraphs (A), (B), and (C) of section 547(e)(2)

11 of title 11, United States Code, are each amended by strik12 ing ‘‘10’’ each place it appears and inserting ‘‘30’’.

13 SEC. 405. EXECUTORY CONTRACTS AND UNEXPIRED

14 LEASES.

15 Section 365(d)(4) of title 11, United States Code, is

16 amended to read as follows:

17 ‘‘(4)(A) Subject to subparagraph (B), in any case

18 under any chapter of this title, an unexpired lease of non19 residential real property under which the debtor is the lessee

20 shall be deemed rejected and the trustee shall immediately

21 surrender that nonresidential real property to the lessor if

22 the trustee does not assume or reject the unexpired lease by

23 the earlier of—

24 ‘‘(i) the date that is 120 days after the date of

25 the order for relief; or
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1 ‘‘(ii) the date of the entry of an order confirming

2 a plan.

3 ‘‘(B) The court may extend the period determined

4 under subparagraph (A) only upon a motion of the lessor.’’.

5 SEC. 406. CREDITORS AND EQUITY SECURITY HOLDERS

6 COMMITTEES.

7 (a) APPOINTMENT.—Section 1102(a)(2) of title 11,

8 United States Code, is amended by inserting before the first

9 sentence the following: ‘‘On its own motion or on request

10 of a party in interest, and after notice and hearing, the

11 court may order a change in the membership of a committee

12 appointed under this subsection, if the court determines that

13 the change is necessary to ensure adequate representation

14 of creditors or equity security holders. The court may in15 crease the number of members of a committee to include

16 a creditor that is a small business concern (as described

17 in section 3(a)(1) of the Small Business Act (15 U.S.C.

18 632(a)(1))), if the court determines that the creditor holds

19 claims (of the kind represented by the committee) the aggre20 gate amount of which, in comparison to the annual gross

21 revenue of that creditor, is disproportionately large.’’.

22 (b) INFORMATION.—Section 1102(b) of title 11, United

23 States Code, is amended by adding at the end the following:

24 ‘‘(3) A committee appointed under subsection (a)

25 shall—
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1 ‘‘(A) provide access to information for creditors

2 who—

3 ‘‘(i) hold claims of the kind represented by

4 that committee; and

5 ‘‘(ii) are not appointed to the committee;

6 ‘‘(B) solicit and receive comments from the credi7 tors described in subparagraph (A); and

8 ‘‘(C) be subject to a court order that compels any

9 additional report or disclosure to be made to the

10 creditors described in subparagraph (A).’’.

11 SEC. 407. AMENDMENT TO SECTION 546 OF TITLE 11,

12 UNITED STATES CODE.

13 Section 546 of title 11, United States Code, is

14 amended—

15 (1) by redesignating the second subsection des16 ignated as subsection (g) (as added by section 222(a)

17 of Public Law 103–394) as subsection (i); and

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

19 ‘‘(j)(1) Notwithstanding section 545 (2) and (3), the

20 trustee may not avoid a warehouseman’s lien for storage,

21 transportation or other costs incidental to the storage and

22 handling of goods.

23 ‘‘(2) The prohibition under paragraph (1) shall be ap24 plied in a manner consistent with any applicable State
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1 statute that is similar to section 7–209 of the Uniform Com2 mercial Code.’’.

3 SEC. 408. LIMITATION.

4 Section 546(c)(1)(B) of title 11, United States Code,

5 is amended by striking ‘‘20’’ and inserting ‘‘45’’.

6 SEC. 409. AMENDMENT TO SECTION 330(a) OF TITLE 11,

7 UNITED STATES CODE.

8 Section 330(a)(3) of title 11, United States Code, is

9 amended—

10 (1) by striking ‘‘(A) the; and inserting ‘‘(i) the’’;

11 (2) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’;

12 (3) by striking ‘‘(C)’’ and inserting ‘‘(iii)’’;

13 (4) by striking ‘‘(D)’’ and inserting ‘‘(iv)’’;

14 (5) by striking ‘‘(E)’’ and inserting ‘‘(v)’’;

15 (6) in subparagraph (A), by inserting ‘‘to an ex16 aminer, trustee under chapter 11, or professional per17 son’’ after ‘‘awarded’’; and

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

19 ‘‘(B) In determining the amount of reasonable com20 pensation to be awarded a trustee, the court shall treat such

21 compensation as a commission based on the results

22 achieved.’’.

23 SEC. 410. POSTPETITION DISCLOSURE AND SOLICITATION.

24 Section 1125 of title 11, United States Code, is amend25 ed by adding at the end the following:
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1 ‘‘(g) Notwithstanding subsection (b), an acceptance or

2 rejection of the plan may be solicited from a holder of a

3 claim or interest if such solicitation complies with applica4 ble nonbankruptcy law and if such holder was solicited be5 fore the commencement of the case in a manner complying

6 with applicable nonbankruptcy law.’’.

7 SEC. 411. PREFERENCES.

8 Section 547(c) of title 11, United States Code, is

9 amended—

10 (1) by striking paragraph (2) and inserting the

11 following:

12 ‘‘(2) to the extent that such transfer was in pay13 ment of a debt incurred by the debtor in the ordinary

14 course of business or financial affairs of the debtor

15 and the transferee, and such transfer was—

16 ‘‘(A) made in the ordinary course of busi17 ness or financial affairs of the debtor and the

18 transferee; or

19 ‘‘(B) made according to ordinary business

20 terms;’’;

21 (2) in paragraph (7) by striking ‘‘or’’ at the end;

22 (3) in paragraph (8) by striking the period at

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

24 (4) by adding at the end the following:
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1 ‘‘(9) if, in a case filed by a debtor whose debts

2 are not primarily consumer debts, the aggregate value

3 of all property that constitutes or is affected by such

4 transfer is less than $5,000.’’.

5 SEC. 412. VENUE OF CERTAIN PROCEEDINGS.

6 Section 1409(b) of title 28, United States Code, is

7 amended by inserting ‘‘, or a nonconsumer debt against a

8 noninsider of less than $10,000,’’ after ‘‘$5,000’’.

9 SEC. 413. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

10 Section 1121(d) of title 11, United States Code, is

11 amended—

12 (1) by striking ‘‘On’’ and inserting ‘‘(1) Subject

13 to paragraph (1), on’’; and

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

15 ‘‘(2)(A) The 120-day period specified in paragraph (1)

16 may not be extended beyond a date that is 18 months after

17 the date of the order for relief under this chapter.

18 ‘‘(B) The 180-day period specified in paragraph (1)

19 may not be extended beyond a date that is 20 months after

20 the date of the order for relief under this chapter.’’.

21 SEC. 414. FEES ARISING FROM CERTAIN OWNERSHIP INTER22 ESTS.

23 Section 523(a)(16) of title 11, United States Code, is

24 amended—
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1 (1) by striking ‘‘dwelling’’ the first place it ap2 pears;

3 (2) by striking ‘‘ownership or’’ and inserting

4 ‘‘ownership,’’;

5 (3) by striking ‘‘housing’’ the first place it ap6 pears; and

7 (4) by striking ‘‘but only’’ and all that follows

8 through ‘‘but nothing in this paragraph’’ and insert9 ing ‘‘or a lot in a homeowners association, for as long

10 as the debtor or the trustee has a legal, equitable, or

11 possessory ownership interest in such unit, such cor12 poration, or such lot, and until such time as the debt13 or or trustee has surrendered any legal, equitable or

14 possessory interest in such unit, such corporation, or

15 such lot, but nothing in this paragraph’’.

16 SEC. 415. CREDITOR REPRESENTATION AT FIRST MEETING

17 OF CREDITORS.

18 Section 341(c) of title 11, United States Code, is

19 amended by inserting after the first sentence the following:

20 ‘‘Notwithstanding any local court rule, provision of a State

21 constitution, any other Federal or State law that is not a

22 bankruptcy law, or other requirement that representation

23 at the meeting of creditors under subsection (a) be by an

24 attorney, a creditor holding a consumer debt or any rep25 resentative of the creditor (which may include an entity or
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1 an employee of an entity and may be a representative for

2 more than 1 creditor) shall be permitted to appear at and

3 participate in the meeting of creditors in a case under chap4 ter 7 or 13, either alone or in conjunction with an attorney

5 for the creditor. Nothing in this subsection shall be con6 strued to require any creditor to be represented by an attor7 ney at any meeting of creditors.’’.

8 SEC. 416. DEFINITION OF DISINTERESTED PERSON.

9 Section 101(14) of title 11, United States Code, is

10 amended to read as follows:

11 ‘‘(14) ‘disinterested person’ means a person

12 that—

13 ‘‘(A) is not a creditor, an equity security

14 holder, or an insider;

15 ‘‘(B) is not and was not, within 2 years be16 fore the date of the filing of the petition, a direc17 tor, officer, or employee of the debtor; and

18 ‘‘(C) does not have an interest materially

19 adverse to the interest of the estate or of any

20 class of creditors or equity security holders, by

21 reason of any direct or indirect relationship to,

22 connection with, or interest in, the debtor, or for

23 any other reason;’’.
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1 SEC. 417. FACTORS FOR COMPENSATION OF PROFESSIONAL

2 PERSONS.

3 Section 330(a)(3)(A) of title 11, United States Code,

4 as amended by section 409 of this Act, is amended—

5 (1) in clause (i), by striking ‘‘and’’ at the end;

6 (2) by redesignating clause (v) as clause (vi);

7 and

8 (3) by inserting after clause (iv) the following:

9 ‘‘(v) with respect to a professional person, wheth10 er the person is board certified or otherwise has dem11 onstrated skill and experience in the bankruptcy

12 field;’’.

13 SEC. 418. APPOINTMENT OF ELECTED TRUSTEE.

14 Section 1104(b) of title 11, United States Code, is

15 amended—

16 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

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

18 ‘‘(2)(A) If an eligible, disinterested trustee is elected

19 at a meeting of creditors under paragraph (1), the United

20 States trustee shall file a report certifying that election.

21 ‘‘(B) Upon the filing of a report under subparagraph

22 (A)—

23 ‘‘(i) the trustee elected under paragraph (1) shall

24 be considered to have been selected and appointed for

25 purposes of this section; and
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1 ‘‘(ii) the service of any trustee appointed under

2 subsection (d) shall terminate.

3 ‘‘(C) In the case of any dispute arising out of an elec4 tion described in subparagraph (A), the court shall resolve

5 the dispute.’’.

6 SEC. 419. UTILITY SERVICE.

7 Section 366 of title 11, United States Code, is

8 amended—

9 (1) in subsection (a), by striking ‘‘subsection (b)’’

10 and inserting ‘‘subsections (b) and (c)’’; and

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

12 ‘‘(c)(1)(A) For purposes of this subsection, the term

13 ‘assurance of payment’ means—

14 ‘‘(i) a cash deposit;

15 ‘‘(ii) a letter of credit;

16 ‘‘(iii) a certificate of deposit;

17 ‘‘(iv) a surety bond;

18 ‘‘(v) a prepayment of utility consumption; or

19 ‘‘(vi) another form of security that is mutually

20 agreed on between the utility and the debtor or the

21 trustee.

22 ‘‘(B) For purposes of this subsection an administrative

23 expense priority shall not constitute an assurance of pay24 ment.
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1 ‘‘(2) Subject to paragraphs (3) through (5), with re2 spect to a case filed under chapter 11, a utility referred

3 to in subsection (a) may alter, refuse, or discontinue utility

4 service, if during the 20-day period beginning on the date

5 of filing of the petition, the utility does not receive from

6 the debtor or the trustee adequate assurance of payment for

7 utility service that is satisfactory to the utility.

8 ‘‘(3)(A) On request of a party in interest and after

9 notice and a hearing, the court may order modification of

10 the amount of an assurance of payment under paragraph

11 (2).

12 ‘‘(B) In making a determination under this paragraph

13 whether an assurance of payment is adequate, the court

14 may not consider—

15 ‘‘(i) the absence of security before the date of fil16 ing of the petition;

17 ‘‘(ii) the payment by the debtor of charges for

18 utility service in a timely manner before the date of

19 filing of the petition; or

20 ‘‘(iii) the availability of an administrative ex21 pense priority.

22 ‘‘(4) Notwithstanding any other provision of law, with

23 respect to a case subject to this subsection, a utility may

24 recover or set off against a security deposit provided to the
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1 utility by the debtor before the date of filing of the petition

2 without notice or order of the court.’’.

3 SEC. 420. BANKRUPTCY FEES.

4 Section 1930 of title 28, United States Code, is

5 amended—

6 (1) in subsection (a), by striking ‘‘Notwith7 standing section 1915 of this title, the parties’’ and

8 inserting ‘‘Subject to subsection (f), the parties’’; and

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

10 ‘‘(f)(1) The Judicial Conference of the United States

11 shall prescribe procedures for waiving fees under this sub12 section.

13 ‘‘(2) Under the procedures described in paragraph (1),

14 the district court or the bankruptcy court may waive a fil15 ing fee described in paragraph (3) for a case commenced

16 under chapter 7 of title 11 if the court determines that an

17 individual debtor whose income is less than 125 percent of

18 the income official poverty line (as defined by the Office

19 of Management and Budget, and revised annually in ac20 cordance with section 673(2) of the Omnibus Budget Rec21 onciliation Act of 1981) applicable to a family of the size

22 involved is unable to pay that fee in installments.

23 ‘‘(3) A filing fee referred to in paragraph (2) is—

24 ‘‘(A) a filing fee under subsection (a)(1); or
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1 ‘‘(B) any other fee prescribed by the Judicial

2 Conference of the United States under subsection (b)

3 that is payable to the clerk of the district court or the

4 clerk of the bankruptcy court upon the commencement

5 of a case under chapter 7 of title 11.

6 ‘‘(4) In addition to waiving a fee under paragraph

7 (2), the district court or the bankruptcy court may waive

8 any other fee prescribed under subsection (b) or (c) if the

9 court determines that the individual with an income at a

10 level described in paragraph (2) is unable to pay that fee

11 in installments.’’.

12 SEC. 421. MORE COMPLETE INFORMATION REGARDING AS13 SETS OF THE ESTATE.

14 (a) IN GENERAL.—

15 (1) DISCLOSURE.—The Advisory Committee on

16 Bankruptcy Rules of the Judicial Conference of the

17 United States, after consideration of the views of the

18 Director of the Executive Office for the United States

19 Trustees, shall propose for adoption amended Federal

20 Rules of Bankruptcy Procedure and Official Bank21 ruptcy Forms directing debtors under chapter 11 of

22 title 11, United States Code, to disclose the informa23 tion described in paragraph (2) by filing and serving

24 periodic financial and other reports designed to pro25 vide such information.
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1 (2) INFORMATION.—The information referred to

2 in paragraph (1) is the value, operations, and profit3 ability of any closely held corporation, partnership,

4 or of any other entity in which the debtor holds a sub5 stantial or controlling interest.

6 (b) PURPOSE.—The purpose of the rules and reports

7 under subsection (a) shall be to assist parties in interest

8 taking steps to ensure that the debtor’s interest in any enti9 ty referred to in subsection (a)(2) is used for the payment

10 of allowed claims against debtor.

11 Subtitle B—Small Business

12 Bankruptcy Provisions

13 SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT

14 AND PLAN.

15 Section 1125 of title 11, United States Code, is amend16 ed by striking subsection (f) and inserting the following:

17 ‘‘(f) Notwithstanding subsection (b), in a small busi18 ness case—

19 ‘‘(1) in determining whether a disclosure state20 ment provides adequate information, the court shall

21 consider the complexity of the case, the benefit of ad22 ditional information to creditors and other parties in

23 interest, and the cost of providing additional infor24 mation;
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1 ‘‘(2) the court may determine that the plan itself

2 provides adequate information and that a separate

3 disclosure statement is not necessary;

4 ‘‘(3) the court may approve a disclosure state5 ment submitted on standard forms approved by the

6 court or adopted under section 2075 of title 28; and

7 ‘‘(4)(A) the court may conditionally approve a

8 disclosure statement subject to final approval after

9 notice and a hearing;

10 ‘‘(B) acceptances and rejections of a plan may be

11 solicited based on a conditionally approved disclosure

12 statement if the debtor provides adequate information

13 to each holder of a claim or interest that is solicited,

14 but a conditionally approved disclosure statement

15 shall be mailed not later than 20 days before the date

16 of the hearing on confirmation of the plan; and

17 ‘‘(C) the hearing on the disclosure statement may

18 be combined with the hearing on confirmation of a

19 plan.’’.

20 SEC. 432. DEFINITIONS; EFFECT OF DISCHARGE.

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

22 States Code, as amended by section 402 of this Act, is

23 amended by striking paragraph (51C) and inserting the fol24 lowing:
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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;

4 ‘‘(51D) ‘small business debtor’—

5 ‘‘(A) subject to subparagraph (B), means a

6 person (including any affiliate of such person

7 that is also a debtor under this title and exclud8 ing a person whose primary activity is the busi9 ness of owning and operating real property and

10 activities incidental thereto) that has aggregate

11 noncontingent, liquidated secured and unsecured

12 debts as of the date of the petition or the order

13 for relief in an amount not more than

14 $3,000,000 (excluding debts owed to 1 or more

15 affiliates or insiders) for a case in which the

16 United States trustee has appointed under sec17 tion 1102(a)(1) a committee of unsecured credi18 tors that the court has determined is sufficiently

19 active and representative to provide effective

20 oversight of the debtor; and

21 ‘‘(B) does not include any member of a

22 group of affiliated debtors that has aggregate

23 noncontingent liquidated secured and unsecured

24 debts in an amount greater than $4,000,000 (ex-
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1 cluding debt owed to 1 or more affiliates or in2 siders);’’.

3 (b) CONFORMING AMENDMENT.—Section 1102(a)(3) of

4 title 11, United States Code, is amended by inserting ‘‘debt5 or’’ after ‘‘small business’’.

6 SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND

7 PLAN.

8 Within a reasonable period of time after the date of

9 the enactment of this Act, the Advisory Committee on Bank10 ruptcy Rules of the Judicial Conference of the United States

11 shall propose for adoption standard form disclosure state12 ments and plans of reorganization for small business debt13 ors (as defined in section 101 of title 11, United States

14 Code, as amended by this Act), designed to achieve a prac15 tical balance between—

16 (1) the reasonable needs of the courts, the United

17 States trustee, creditors, and other parties in interest

18 for reasonably complete information; and

19 (2) economy and simplicity for debtors.

20 SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.

21 (a) REPORTING REQUIRED.—

22 (1) IN GENERAL.—Chapter 3 of title 11, United

23 States Code, is amended by inserting after section 307

24 the following:
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1 ‘‘§ 308. Debtor reporting requirements

2 ‘‘(1) For purposes of this section, the term ‘profit3 ability’ means, with respect to a debtor, the amount of

4 money that the debtor has earned or lost during current

5 and recent fiscal periods.

6 ‘‘(2) A small business debtor shall file periodic finan7 cial and other reports containing information including—

8 ‘‘(A) the debtor’s profitability;

9 ‘‘(B) reasonable approximations of the debtor’s

10 projected cash receipts and cash disbursements over a

11 reasonable period;

12 ‘‘(C) comparisons of actual cash receipts and

13 disbursements with projections in prior reports;

14 ‘‘(D)(i) whether the debtor is—

15 ‘‘(I) in compliance in all material respects

16 with postpetition requirements imposed by this

17 title and the Federal Rules of Bankruptcy Proce18 dure; and

19 ‘‘(II) timely filing tax returns and other re20 quired government filings and paying taxes and

21 other administrative claims when due; and

22 ‘‘(ii) if the debtor is not in compliance with the

23 requirements referred to in clause (i)(I) or filing tax

24 returns and other required government filings and

25 making the payments referred to in clause (i)(II),
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1 what the failures are and how, at what cost, and

2 when the debtor intends to remedy such failures; and

3 ‘‘(iii) such other matters as are in the best inter4 ests of the debtor and creditors, and in the public in5 terest in fair and efficient procedures under chapter

6 11 of this title.’’.

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for chapter 3 of title 11, United States Code, is

9 amended by inserting after the item relating to sec10 tion 307 the following:

‘‘308. Debtor reporting requirements.’’.

11 (b) EFFECTIVE DATE.—The amendments made by sub12 section (a) shall take effect 60 days after the date on which

13 rules are prescribed under section 2075 of title 28, United

14 States Code, to establish forms to be used to comply with

15 section 308 of title 11, United States Code, as added by

16 subsection (a).

17 SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR

18 SMALL BUSINESS CASES.

19 (a) PROPOSAL OF RULES AND FORMS.—The Advisory

20 Committee on Bankruptcy Rules of the Judicial Conference

21 of the United States shall propose for adoption amended

22 Federal Rules of Bankruptcy Procedure and Official Bank23 ruptcy Forms to be used by small business debtors to file

24 periodic financial and other reports containing informa25 tion, including information relating to—
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1 (1) the debtor’s profitability;

2 (2) the debtor’s cash receipts and disbursements;

3 and

4 (3) whether the debtor is timely filing tax re5 turns and paying taxes and other administrative

6 claims when due.

7 (b) PURPOSE.—The rules and forms proposed under

8 subsection (a) shall be designed to achieve a practical bal9 ance among—

10 (1) the reasonable needs of the bankruptcy court,

11 the United States trustee, creditors, and other parties

12 in interest for reasonably complete information;

13 (2) the small business debtor’s interest that re14 quired reports be easy and inexpensive to complete;

15 and

16 (3) the interest of all parties that the required re17 ports help the small business debtor to understand the

18 small business debtor’s financial condition and plan

19 the small business debtor’s future.

20 SEC. 436. DUTIES IN SMALL BUSINESS CASES.

21 (a) DUTIES IN CHAPTER 11 CASES.—Subchapter I of

22 title 11, United States Code, as amended by section 321

23 of this Act, is amended by adding at the end the following:
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1 ‘‘§ 1116. Duties of trustee or debtor in possession in

2 small business cases

3 ‘‘In a small business case, a trustee or the debtor in

4 possession, in addition to the duties provided in this title

5 and as otherwise required by law, shall—

6 ‘‘(1) append to the voluntary petition or, in an

7 involuntary case, file within 7 days after the date of

8 the order for relief—

9 ‘‘(A) its most recent balance sheet, statement

10 of operations, cash-flow statement, Federal in11 come tax return; or

12 ‘‘(B) a statement made under penalty of

13 perjury that no balance sheet, statement of oper14 ations, or cash-flow statement has been prepared

15 and no Federal tax return has been filed;

16 ‘‘(2) attend, through its senior management per17 sonnel and counsel, meetings scheduled by the court or

18 the United States trustee, including initial debtor

19 interviews, scheduling conferences, and meetings of

20 creditors convened under section 341 unless the court

21 waives that requirement after notice and hearing,

22 upon a finding of extraordinary and compelling cir23 cumstances;

24 ‘‘(3) timely file all schedules and statements of

25 financial affairs, unless the court, after notice and a

26 hearing, grants an extension, which shall not extend
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1 such time period to a date later than 30 days after

2 the date of the order for relief, absent extraordinary

3 and compelling circumstances;

4 ‘‘(4) file all postpetition financial and other re5 ports required by the Federal Rules of Bankruptcy

6 Procedure or by local rule of the district court;

7 ‘‘(5) subject to section 363(c)(2), maintain insur8 ance customary and appropriate to the industry;

9 ‘‘(6)(A) timely file tax returns and other re10 quired government filings; and

11 ‘‘(B) subject to section 363(c)(2), timely pay all

12 administrative expense tax claims, except those being

13 contested by appropriate proceedings being diligently

14 prosecuted; and

15 ‘‘(7) allow the United States trustee, or a des16 ignated representative of the United States trustee, to

17 inspect the debtor’s business premises, books, and

18 records at reasonable times, after reasonable prior

19 written notice, unless notice is waived by the debtor.’’.

20 (b) CLERICAL AMENDMENT.—The table of sections for

21 chapter 11 of title 11, United States Code, is amended by

22 adding at the end of the matter relating to subchapter I

23 the following:

‘‘1116. Duties of trustee or debtor in possession in small business cases.’’.
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1 SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

2 Section 1121 of title 11, United States Code, is amend3 ed by striking subsection (e) and inserting the following:

4 ‘‘(e) In a small business case—

5 ‘‘(1) only the debtor may file a plan until after

6 180 days after the date of the order for relief, unless

7 that period is—

8 ‘‘(A) extended as provided by this sub9 section, after notice and hearing; or

10 ‘‘(B) the court, for cause, orders otherwise;

11 ‘‘(2) the plan, and any necessary disclosure

12 statement, shall be filed not later than 300 days after

13 the date of the order for relief; and

14 ‘‘(3) the time periods specified in paragraphs (1)

15 and (2), and the time fixed in section 1129(e), within

16 which the plan shall be confirmed, may be extended

17 only if—

18 ‘‘(A) the debtor, after providing notice to

19 parties in interest (including the United States

20 trustee), demonstrates by a preponderance of the

21 evidence that it is more likely than not that the

22 court will confirm a plan within a reasonable

23 period of time;

24 ‘‘(B) a new deadline is imposed at the time

25 the extension is granted; and
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1 ‘‘(C) the order extending time is signed be2 fore the existing deadline has expired.’’.

3 SEC. 438. PLAN CONFIRMATION DEADLINE.

4 Section 1129 of title 11, United States Code, is amend5 ed by adding at the end the following:

6 ‘‘(e) In a small business case, the plan shall be con7 firmed not later than 175 days after the date of the order

8 for relief, unless such 175-day period is extended as pro9 vided in section 1121(e)(3).’’.

10 SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.

11 Section 586(a) of title 28, United States Code, is

12 amended—

13 (1) in paragraph (3)—

14 (A) in subparagraph (G), by striking ‘‘and’’

15 at the end;

16 (B) by redesignating subparagraph (H) as

17 subparagraph (I); and

18 (C) by inserting after subparagraph (G) the

19 following:

20 ‘‘(H) in small business cases (as defined in

21 section 101 of title 11), performing the addi22 tional duties specified in title 11 pertaining to

23 such cases;’’;

24 (2) in paragraph (5), by striking ‘‘and’’ at the

25 end;
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1 (3) in paragraph (6), by striking the period at

2 the end and inserting ‘‘; and’’; and

3 (4) by inserting after paragraph (6) the fol4 lowing:

5 ‘‘(7) in each of such small business cases—

6 ‘‘(A) conduct an initial debtor interview as

7 soon as practicable after the entry of order for

8 relief but before the first meeting scheduled under

9 section 341(a) of title 11, at which time the

10 United States trustee shall—

11 ‘‘(i) begin to investigate the debtor’s vi12 ability;

13 ‘‘(ii) inquire about the debtor’s busi14 ness plan;

15 ‘‘(iii) explain the debtor’s obligations

16 to file monthly operating reports and other

17 required reports;

18 ‘‘(iv) attempt to develop an agreed

19 scheduling order; and

20 ‘‘(v) inform the debtor of other obliga21 tions;

22 ‘‘(B) if determined to be appropriate and

23 advisable, visit the appropriate business premises

24 of the debtor and ascertain the state of the debt-
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1 or’s books and records and verify that the debtor

2 has filed its tax returns; and

3 ‘‘(C) review and monitor diligently the

4 debtor’s activities, to identify as promptly as

5 possible whether the debtor will be unable to con6 firm a plan; and

7 ‘‘(8) in any case in which the United States

8 trustee finds material grounds for any relief under

9 section 1112 of title 11, the United States trustee shall

10 apply promptly after making that finding to the

11 court for relief.’’.

12 SEC. 440. SCHEDULING CONFERENCES.

13 Section 105(d) of title 11, United States Code, is

14 amended—

15 (1) in the matter preceding paragraph (1), by

16 striking ‘‘, may’’;

17 (2) by striking paragraph (1) and inserting the

18 following:

19 ‘‘(1) shall hold such status conferences as are

20 necessary to further the expeditious and economical

21 resolution of the case; and’’; and

22 (3) in paragraph (2), by striking ‘‘unless incon23 sistent with another provision of this title or with ap24 plicable Federal Rules of Bankruptcy Procedure,’’.
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1 SEC. 441. SERIAL FILER PROVISIONS.

2 Section 362 of title 11, United States Code, is

3 amended—

4 (1) in subsection (j), as redesignated by section

5 305(1) of this Act—

6 (A) by striking ‘‘An’’ and inserting ‘‘(1)

7 Except as provided in paragraph (2), an’’; and

8 (B) by adding at the end the following:

9 ‘‘(2) If such violation is based on an action taken by

10 an entity in the good faith belief that subsection (h) applies

11 to the debtor, the recovery under paragraph (1) against such

12 entity shall be limited to actual damages.’’; and

13 (2) by inserting after subsection (j) the following:

14 ‘‘(k)(1) Except as provided in paragraph (2), the filing

15 of a petition under chapter 11 operates as a stay of the

16 acts described in subsection (a) only in an involuntary case

17 involving no collusion by the debtor with creditors and in

18 which the debtor—

19 ‘‘(A) is a debtor in a small business case pending

20 at the time the petition is filed;

21 ‘‘(B) was a debtor in a small business case that

22 was dismissed for any reason by an order that became

23 final in the 2-year period ending on the date of the

24 order for relief entered with respect to the petition;

25 ‘‘(C) was a debtor in a small business case in

26 which a plan was confirmed in the 2-year period end-
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1 ing on the date of the order for relief entered with re2 spect to the petition; or

3 ‘‘(D) is an entity that has succeeded to substan4 tially all of the assets or business of a small business

5 debtor described in subparagraph (A), (B), or (C).

6 ‘‘(2) Paragraph (1) does not apply to the filing of a

7 petition if the debtor proves by a preponderance of the evi8 dence that—

9 ‘‘(A) the filing of that petition resulted from cir10 cumstances beyond the control of the debtor not fore11 seeable at the time the case then pending was filed;

12 and

13 ‘‘(B) it is more likely than not that the court

14 will confirm a feasible plan, but not a liquidating

15 plan, within a reasonable period of time.’’.

16 SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON17 VERSION AND APPOINTMENT OF TRUSTEE.

18 (a) EXPANDED GROUNDS FOR DISMISSAL OR CONVER19 SION.—Section 1112 of title 11, United States Code, is

20 amended by striking subsection (b) and inserting the fol21 lowing:

22 ‘‘(b)(1) Except as provided in paragraph (2), in sub23 section (c), and section 1104(a)(3), on request of a party

24 in interest, and after notice and a hearing, the court shall

25 convert a case under this chapter to a case under chapter
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1 7 or dismiss a case under this chapter, whichever is in the

2 best interest of creditors and the estate, if the movant estab3 lishes cause.

4 ‘‘(2) The relief provided in paragraph (1) shall not be

5 granted if the debtor or another party in interest objects

6 and establishes by a preponderance of the evidence that—

7 ‘‘(A) a plan with a reasonable possibility of

8 being confirmed will be filed within a reasonable pe9 riod of time; and

10 ‘‘(B) if the grounds include an act or omission

11 of the debtor—

12 ‘‘(i) for which there exists a reasonable jus13 tification for the act or omission; and

14 ‘‘(ii) which will be cured within a reason15 able period of time fixed by the court.

16 ‘‘(3) The court shall commence the hearing on any mo17 tion under this subsection not later than 30 days after filing

18 of the motion, and shall decide the motion within 15 days

19 after commencement of the hearing, unless the movant ex20 pressly consents to a continuance for a specific period of

21 time or compelling circumstances prevent the court from

22 meeting the time limits established by this paragraph.

23 ‘‘(4) For purposes of this subsection, cause includes—

24 ‘‘(A) substantial or continuing loss to or diminu25 tion of the estate;
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1 ‘‘(B) gross mismanagement of the estate;

2 ‘‘(C) failure to maintain appropriate insurance

3 that poses a risk to the estate or to the public;

4 ‘‘(D) unauthorized use of cash collateral harmful

5 to 1 or more creditors;

6 ‘‘(E) failure to comply with an order of the

7 court;

8 ‘‘(F) repeated failure timely to satisfy any filing

9 or reporting requirement established by this title or

10 by any rule applicable to a case under this chapter;

11 ‘‘(G) failure to attend the meeting of creditors

12 convened under section 341(a) or an examination or13 dered under Rule 2004 of the Federal Rules of Bank14 ruptcy Procedure;

15 ‘‘(H) failure timely to provide information or at16 tend meetings reasonably requested by the United

17 States trustee;

18 ‘‘(I) failure timely to pay taxes due after the

19 date of the order for relief or to file tax returns due

20 after the order for relief;

21 ‘‘(J) failure to file a disclosure statement, or to

22 file or confirm a plan, within the time fixed by this

23 title or by order of the court;

24 ‘‘(K) failure to pay any fees or charges required

25 under chapter 123 of title 28;
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1 ‘‘(L) revocation of an order of confirmation

2 under section 1144;

3 ‘‘(M) inability to effectuate substantial con4 summation of a confirmed plan;

5 ‘‘(N) material default by the debtor with respect

6 to a confirmed plan;

7 ‘‘(O) termination of a confirmed plan by reason

8 of the occurrence of a condition specified in the plan;

9 and

10 ‘‘(P) failure of the debtor to pay any domestic

11 support obligation that first becomes payable after the

12 date on which the petition is filed.

13 ‘‘(5) The court shall commence the hearing on any mo14 tion under this subsection not later than 30 days after filing

15 of the motion, and shall decide the motion within 15 days

16 after commencement of the hearing, unless the movant ex17 pressly consents to a continuance for a specific period of

18 time or compelling circumstances prevent the court from

19 meeting the time limits established by this paragraph.’’.

20 (b) ADDITIONAL GROUNDS FOR APPOINTMENT OF

21 TRUSTEE.—Section 1104(a) of title 11, United States Code,

22 is amended—

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

24 end;
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1 (2) in paragraph (2), by striking the period at

2 the end and inserting ‘‘; or’’; and

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

4 ‘‘(3) if grounds exist to convert or dismiss the

5 case under section 1112, but the court determines that

6 the appointment of a trustee or an examiner is in the

7 best interests of creditors and the estate.’’.

8 SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED

9 STATES CODE, WITH RESPECT TO SMALL

10 BUSINESSES.

11 Not later than 2 years after the date of the enactment

12 of this Act, the Administrator of the Small Business Admin13 istration, in consultation with the Attorney General of the

14 United States, the Director of the Administrative Office of

15 United States Trustees, and the Director of the Administra16 tive Office of the United States Courts, shall—

17 (1) conduct a study to determine—

18 (A) the internal and external factors that

19 cause small businesses, especially sole proprietor20 ships, to become debtors in cases under title 11,

21 United States Code, and that cause certain small

22 businesses to successfully complete cases under

23 chapter 11 of such title; and

24 (B) how Federal laws relating to bank25 ruptcy may be made more effective and efficient
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1 in assisting small businesses to remain viable;

2 and

3 (2) submit to the President pro tempore of the

4 Senate and the Speaker of the House of Representa5 tives a report summarizing that study.

6 SEC. 444. PAYMENT OF INTEREST.

7 Section 362(d)(3) of title 11, United States Code, is

8 amended—

9 (1) by inserting ‘‘or 30 days after the court de10 termines that the debtor is subject to this paragraph,

11 whichever is later’’ after ‘‘90-day period)’’; and

12 (2) by striking subparagraph (B) and inserting

13 the following:

14 ‘‘(B) the debtor has commenced monthly

15 payments that—

16 ‘‘(i) may, in the debtor’s sole discre17 tion, notwithstanding section 363(c)(2), be

18 made from rents or other income generated

19 before or after the commencement of the case

20 by or from the property to each creditor

21 whose claim is secured by such real estate

22 (other than a claim secured by a judgment

23 lien or by an unmatured statutory lien);

24 and
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1 ‘‘(ii) are in an amount equal to inter2 est at the then applicable nondefault con3 tract rate of interest on the value of the

4 creditor’s interest in the real estate; or’’.

5 SEC. 445. TECHNICAL CORRECTION.

6 Section 365(b)(2)(D) of title 11, United States Code,

7 is amended by striking ‘‘penalty rate or provision’’ and in8 serting ‘‘penalty rate or penalty provision’’.

9 TITLE V—MUNICIPAL

10 BANKRUPTCY PROVISIONS

11 SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI12 TION.

13 (a) TECHNICAL AMENDMENT RELATING TO MUNICI14 PALITIES.—Section 921(d) of title 11, United States Code,

15 is amended by inserting ‘‘, notwithstanding section 301(b)’’

16 before the period at the end.

17 (b) CONFORMING AMENDMENT.—Section 301 of title

18 11, United States Code, is amended—

19 (1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;

20 (2) by striking the last sentence; and

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

22 ‘‘(b) The commencement of a voluntary case under a

23 chapter of this title constitutes an order for relief under such

24 chapter.’’.
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1 SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER

2 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,’’ after ‘‘557,’’.

7 TITLE VI—IMPROVED BANK8 RUPTCY STATISTICS AND

9 DATA

10 SEC. 601. AUDIT PROCEDURES.

11 (a) AMENDMENTS.—Section 586 of title 28, United

12 States Code, is amended—

13 (1) in subsection (a), by striking paragraph (6)

14 and inserting the following:

15 ‘‘(6) make such reports as the Attorney General

16 directs, including the results of audits performed

17 under subsection (f); and’’; and

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

19 ‘‘(f)(1)(A) The Attorney General shall establish proce20 dures to determine the accuracy, veracity, and completeness

21 of petitions, schedules, and other information which the

22 debtor is required to provide under sections 521 and 1322

23 of title 11, and, if applicable, section 111 of title 11, in

24 individual cases filed under chapter 7 or 13 of such title.

25 ‘‘(B) Those procedures shall—
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1 ‘‘(i) establish a method of selecting appropriate

2 qualified persons to contract to perform those audits;

3 ‘‘(ii) establish a method of randomly selecting

4 cases to be audited, except that not less than 1 out of

5 every 250 cases in each Federal judicial district shall

6 be selected for audit;

7 ‘‘(iii) require audits for schedules of income and

8 expenses which reflect greater than average variances

9 from the statistical norm of the district in which the

10 schedules were filed if those variances occur by reason

11 of higher income or higher expenses than the statis12 tical norm of the district in which the schedules were

13 filed; and

14 ‘‘(iv) include procedures for providing, not less

15 frequently than annually, public information con16 cerning the aggregate results of the audits referred to

17 in this subparagraph, including the percentage of

18 cases, by district, in which a material misstatement

19 of income or expenditures is reported.

20 ‘‘(2) The United States trustee for each district may

21 contract with auditors to perform audits in cases designated

22 by the United States trustee according to the procedures es23 tablished under paragraph (1).

24 ‘‘(3)(A) The report of each audit conducted under this

25 subsection shall be filed with the court and transmitted to
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1 the United States trustee. Each report shall clearly and con2 spicuously specify any material misstatement of income or

3 expenditures or of assets identified by the person performing

4 the audit. In any case where a material misstatement of

5 income or expenditures or of assets has been reported, the

6 clerk of the bankruptcy court shall give notice of the

7 misstatement to the creditors in the case.

8 ‘‘(B) If a material misstatement of income or expendi9 tures or of assets is reported, the United States trustee

10 shall—

11 ‘‘(i) report the material misstatement, if appro12 priate, to the United States Attorney under section

13 3057 of title 18; and

14 ‘‘(ii) if advisable, take appropriate action, in15 cluding commencing an adversary proceeding to re16 voke the debtor’s discharge under section 727(d) of

17 title 11.’’.

18 (b) AMENDMENTS TO SECTION 521 OF TITLE 11,

19 UNITED STATES CODE.—Paragraphs (3) and (4) of section

20 521(a) of title 11, United States Code, as amended by sec21 tion 315 of this Act, are each amended by inserting ‘‘or

22 an auditor appointed under section 586 of title 28’’ after

23 ‘‘serving in the case’’ each place that term appears.
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1 (c) AMENDMENTS TO SECTION 727 OF TITLE 11,

2 UNITED STATES CODE.—Section 727(d) of title 11, United

3 States Code, is amended—

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

5 end;

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

7 the end and inserting ‘‘; or’’; and

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

9 ‘‘(4) the debtor has failed to explain

10 satisfactorily—

11 ‘‘(A) a material misstatement in an audit

12 performed under section 586(f) of title 28; or

13 ‘‘(B) a failure to make available for inspec14 tion all necessary accounts, papers, documents,

15 financial records, files, and any other papers,

16 things, or property belonging to the debtor that

17 are requested for an audit conducted under sec18 tion 586(f).’’.

19 (d) EFFECTIVE DATE.—The amendments made by this

20 section shall take effect 18 months after the date of enact21 ment of this Act.

22 SEC. 602. IMPROVED BANKRUPTCY STATISTICS.

23 (a) AMENDMENT.—Chapter 6 of title 28, United States

24 Code, is amended by adding at the end the following:
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1 ‘‘§ 159. Bankruptcy statistics

2 ‘‘(a) The clerk of each district court shall compile sta3 tistics regarding individual debtors with primarily con4 sumer debts seeking relief under chapters 7, 11, and 13 of

5 title 11. Those statistics shall be in a form prescribed by

6 the Director of the Administrative Office of the United

7 States Courts (referred to in this section as the ‘Office’).

8 ‘‘(b) The Director shall—

9 ‘‘(1) compile the statistics referred to in sub10 section (a);

11 ‘‘(2) make the statistics available to the public;

12 and

13 ‘‘(3) not later than October 31, 1999, and annu14 ally thereafter, prepare, and submit to Congress a re15 port concerning the information collected under sub16 section (a) that contains an analysis of the informa17 tion.

18 ‘‘(c) The compilation required under subsection (b)

19 shall—

20 ‘‘(1) be itemized, by chapter, with respect to title

21 11;

22 ‘‘(2) be presented in the aggregate and for each

23 district; and

24 ‘‘(3) include information concerning—

25 ‘‘(A) the total assets and total liabilities of

26 the debtors described in subsection (a), and in
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1 each category of assets and liabilities, as re2 ported in the schedules prescribed under section

3 2075 and filed by those debtors;

4 ‘‘(B) the total current monthly income, pro5 jected monthly net income, and average income,

6 and average expenses of those debtors as reported

7 on the schedules and statements that each such

8 debtor files under sections 111, 521, and 1322 of

9 title 11;

10 ‘‘(C) the aggregate amount of debt dis11 charged in the reporting period, determined as

12 the difference between the total amount of debt

13 and obligations of a debtor reported on the sched14 ules and the amount of such debt reported in cat15 egories which are predominantly nondischarge16 able;

17 ‘‘(D) the average period of time between the

18 filing of the petition and the closing of the case;

19 ‘‘(E) for the reporting period—

20 ‘‘(i) the number of cases in which a re21 affirmation was filed; and

22 ‘‘(ii)(I) the total number of reaffirma23 tions filed;

24 ‘‘(II) of those cases in which a reaffir25 mation was filed, the number in which the
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1 debtor was not represented by an attorney;

2 and

3 ‘‘(III) of the cases under each of sub4 clauses (I) and (II), the number of cases in

5 which the reaffirmation was approved by

6 the court;

7 ‘‘(F) with respect to cases filed under chap8 ter 13 of title 11, for the reporting period—

9 ‘‘(i)(I) the number of cases in which a

10 final order was entered determining the

11 value of property securing a claim in an

12 amount less than the amount of the claim;

13 and

14 ‘‘(II) the number of final orders deter15 mining the value of property securing a

16 claim issued;

17 ‘‘(ii) the number of cases dismissed for

18 failure to make payments under the plan;

19 and

20 ‘‘(iii) the number of cases in which the

21 debtor filed another case during the 6-year

22 period preceding the date of filing;

23 ‘‘(G) the number of cases in which creditors

24 were fined for misconduct and any amount of
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1 punitive damages awarded by the court for cred2 itor misconduct; and

3 ‘‘(H) the number of cases in which sanc4 tions under Rule 9011 of the Federal Rules of

5 Bankruptcy Procedure were imposed against

6 debtor’s counsel and damages awarded under

7 such rule.’’.

8 (b) CLERICAL AMENDMENT.—The table of sections for

9 chapter 6 of title 28, United States Code, is amended by

10 adding at the end the following:

‘‘159. Bankruptcy statistics.’’.

11 (c) EFFECTIVE DATE.—The amendments made by this

12 section shall take effect 18 months after the date of enact13 ment of this Act.

14 SEC. 603. UNIFORM RULES FOR THE COLLECTION OF BANK15 RUPTCY DATA.

16 (a) AMENDMENT.—Chapter 39 of title 28, United

17 States Code, is amended by inserting after section 589a the

18 following:

19 ‘‘§ 589b. Bankruptcy data

20 ‘‘(a) Within a reasonable period of time after the effec21 tive date of this section, the Attorney General of the United

22 States shall issue rules requiring uniform forms for (and

23 from time to time thereafter to appropriately modify and

24 approve)—
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1 ‘‘(1) final reports by trustees in cases under

2 chapters 7, 12, and 13 of title 11; and

3 ‘‘(2) periodic reports by debtors in possession or

4 trustees, as the case may be, in cases under chapter

5 11 of title 11.

6 ‘‘(b) Each report referred to in subsection (a) shall be

7 designed (and the requirements as to place and manner of

8 filing shall be established) so as to facilitate compilation

9 of data and maximum practicable access of the public, by—

10 ‘‘(1) physical inspection at 1 or more central fil11 ing locations; and

12 ‘‘(2) electronic access through the Internet or

13 other appropriate media.

14 ‘‘(c)(1) The information required to be filed in the re15 ports referred to in subsection (b) shall be information that

16 is—

17 ‘‘(A) in the best interests of debtors and creditors,

18 and in the public interest; and

19 ‘‘(B) reasonable and adequate information to

20 evaluate the efficiency and practicality of the Federal

21 bankruptcy system.

22 ‘‘(2) In issuing rules proposing the forms referred to

23 in subsection (a), the Attorney General shall strike the best

24 achievable practical balance between—
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1 ‘‘(A) the reasonable needs of the public for infor2 mation about the operational results of the Federal

3 bankruptcy system; and

4 ‘‘(B) economy, simplicity, and lack of undue

5 burden on persons with a duty to file reports.

6 ‘‘(d)(1) Final reports proposed for adoption by trustees

7 under chapters 7, 12, and 13 of title 11 shall include with

8 respect to a case under such title, by appropriate category—

9 ‘‘(A) information about the length of time the

10 case was pending;

11 ‘‘(B) assets abandoned;

12 ‘‘(C) assets exempted;

13 ‘‘(D) receipts and disbursements of the estate;

14 ‘‘(E) expenses of administration;

15 ‘‘(F) claims asserted;

16 ‘‘(G) claims allowed; and

17 ‘‘(H) distributions to claimants and claims dis18 charged without payment.

19 ‘‘(2) In cases under chapters 12 and 13 of title 11,

20 final reports proposed for adoption by trustees shall

21 include—

22 ‘‘(A) the date of confirmation of the plan;

23 ‘‘(B) each modification to the plan; and

24 ‘‘(C) defaults by the debtor in performance under

25 the plan.
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1 ‘‘(3) The information described in paragraphs (1) and

2 (2) shall be in addition to such other matters as are re3 quired by law for a final report or as the Attorney General,

4 in the discretion of the Attorney General, may propose for

5 a final report.

6 ‘‘(e)(1) Periodic reports proposed for adoption by

7 trustees or debtors in possession under chapter 11 of title

8 11 shall include—

9 ‘‘(A) information about the standard industry

10 classification, published by the Department of Com11 merce, for the businesses conducted by the debtor;

12 ‘‘(B) the length of time the case has been pend13 ing;

14 ‘‘(C) the number of full-time employees—

15 ‘‘(i) as of the date of the order for relief; and

16 ‘‘(ii) at the end of each reporting period

17 since the case was filed;

18 ‘‘(D) cash receipts, cash disbursements, and prof19 itability of the debtor for the most recent period and

20 cumulatively since the date of the order for relief;

21 ‘‘(E) compliance with title 11, whether or not

22 tax returns and tax payments since the date of the

23 order for relief have been timely filed and made;

24 ‘‘(F) all professional fees approved by the court

25 in the case for the most recent period and cumula-
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1 tively since the date of the order for relief (separately

2 reported, for the professional fees incurred by or on

3 behalf of the debtor, between those that would have

4 been incurred absent a bankruptcy case and those

5 that would not have been so incurred); and

6 ‘‘(G) plans of reorganization filed and confirmed

7 and, with respect thereto, by class, the recoveries of

8 the holders, expressed in aggregate dollar values and,

9 in the case of claims, as a percentage of total claims

10 of the class allowed.

11 ‘‘(2) The information described in paragraph (1) shall

12 be in addition to such other matters as are required by law

13 for a periodic report or as the Attorney General, in the dis14 cretion of the Attorney General, may propose for a periodic

15 report.’’.

16 (b) TECHNICAL AMENDMENT.—The table of sections for

17 chapter 39 of title 28, United States Code, is amended by

18 adding at the end the following:

‘‘589b. Bankruptcy data.’’.

19 SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY

20 OF BANKRUPTCY DATA.

21 It is the sense of Congress that—

22 (1) it should be the national policy of the United

23 States that all data held by bankruptcy clerks in elec24 tronic form, to the extent such data reflects only pub25 lic records (as defined in section 107 of title 11,
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1 United States Code), should be released in a usable

2 electronic form in bulk to the public subject to such

3 appropriate privacy concerns and safeguards as the

4 Judicial Conference of the United States may deter5 mine; and

6 (2) there should be established a bankruptcy data

7 system in which—

8 (A) a single set of data definitions and

9 forms are used to collect data nationwide; and

10 (B) data for any particular bankruptcy

11 case are aggregated in the same electronic record.

12 TITLE VII—BANKRUPTCY TAX

13 PROVISIONS

14 SEC. 701. TREATMENT OF CERTAIN LIENS.

15 (a) TREATMENT OF CERTAIN LIENS.—Section 724 of

16 title 11, United States Code, is amended—

17 (1) in subsection (b), in the matter preceding

18 paragraph (1), by inserting ‘‘(other than to the extent

19 that there is a properly perfected unavoidable tax lien

20 arising in connection with an ad valorem tax on real

21 or personal property of the estate)’’ after ‘‘under this

22 title’’;

23 (2) in subsection (b)(2), by inserting ‘‘(except

24 that such expenses, other than claims for wages, sala25 ries, or commissions which arise after the filing of a
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1 petition, shall be limited to expenses incurred under

2 chapter 7 of this title and shall not include expenses

3 incurred under chapter 11 of this title)’’ after

4 ‘‘507(a)(1)’’; and

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

6 ‘‘(e) Before subordinating a tax lien on real or per7 sonal property of the estate, the trustee shall—

8 ‘‘(1) exhaust the unencumbered assets of the es9 tate; and

10 ‘‘(2) in a manner consistent with section 506(c),

11 recover from property securing an allowed secured

12 claim the reasonable, necessary costs and expenses of

13 preserving or disposing of that property.

14 ‘‘(f) Notwithstanding the exclusion of ad valorem tax

15 liens under this section and subject to the requirements of

16 subsection (e), the following may be paid from property of

17 the estate which secures a tax lien, or the proceeds of such

18 property:

19 ‘‘(1) Claims for wages, salaries, and commissions

20 that are entitled to priority under section 507(a)(4).

21 ‘‘(2) Claims for contributions to an employee

22 benefit plan entitled to priority under section

23 507(a)(5).’’.

24 (b) DETERMINATION OF TAX LIABILITY.—Section

25 505(a)(2) of title 11, United States Code, is amended—
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1 (1) in subparagraph (A), by striking ‘‘or’’ at the

2 end;

3 (2) in subparagraph (B), by striking the period

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

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

6 ‘‘(C) the amount or legality of any amount aris7 ing in connection with an ad valorem tax on real or

8 personal property of the estate, if the applicable pe9 riod for contesting or redetermining that amount

10 under any law (other than a bankruptcy law) has ex11 pired.’’.

12 SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

13 Section 501 of title 11, United States Code, is amended

14 by adding at the end the following:

15 ‘‘(e) A claim arising from the liability of a debtor for

16 fuel use tax assessed consistent with the requirements of sec17 tion 31705 of title 49 may be filed by the base jurisdiction

18 designated pursuant to the International Fuel Tax Agree19 ment and, if so filed, shall be allowed as a single claim.’’.

20 SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF

21 TAXES.

22 Section 505(b) of title 11, United States Code, is

23 amended—
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1 (1) in the first sentence, by inserting ‘‘at the ad2 dress and in the manner designated in paragraph

3 (1)’’ after ‘‘determination of such tax’’;

4 (2) by striking ‘‘(1) upon payment’’ and insert5 ing ‘‘(2)(A) upon payment’’;

6 (3) by striking ‘‘(A) such governmental unit’’

7 and inserting ‘‘(i) such governmental unit’’;

8 (4) by striking ‘‘(B) such governmental unit’’

9 and inserting ‘‘(ii) such governmental unit’’;

10 (5) by striking ‘‘(2) upon payment’’ and insert11 ing ‘‘(B) upon payment’’;

12 (6) by striking ‘‘(3) upon payment’’ and insert13 ing ‘‘(C) upon payment’’;

14 (7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and

15 (8) by inserting before paragraph (2), as so des16 ignated, the following:

17 ‘‘(b)(1)(A) The clerk of each district shall maintain a

18 listing under which a Federal, State, or local governmental

19 unit responsible for the collection of taxes within the district

20 may—

21 ‘‘(i) designate an address for service of requests

22 under this subsection; and

23 ‘‘(ii) describe where further information con24 cerning additional requirements for filing such re25 quests may be found.
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1 ‘‘(B) If a governmental unit referred to in subpara2 graph (A) does not designate an address and provide that

3 address to the clerk under that subparagraph, any request

4 made under this subsection may be served at the address

5 for the filing of a tax return or protest with the appropriate

6 taxing authority of that governmental unit.’’.

7 SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

8 (a) IN GENERAL.—Subchapter I of chapter 5 of title

9 11, United States Code, is amended by adding at the end

10 the following:

11 ‘‘§ 511. Rate of interest on tax claims

12 ‘‘(a) If any provision of this title requires the payment

13 of interest on a tax claim or the payment of interest to

14 enable a creditor to receive the present value of the allowed

15 amount of a tax claim, the rate of interest shall be the rate

16 shall be determined under applicable nonbankruptcy law.

17 ‘‘(b) In the case of taxes paid under a confirmed plan

18 under this title, the rate of interest shall be determined as

19 of the calendar month in which the plan is confirmed.’’.

20 (b) CLERICAL AMENDMENT.—The table of sections for

21 chapter 5 of title 11, United States Code, is amended by

22 inserting after the item relating to section 510 the following:

‘‘511. Rate of interest on tax claims.’’.

23 SEC. 705. PRIORITY OF TAX CLAIMS.

24 Section 507(a)(8) of title 11, United States Code, is

25 amended—
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1 (1) in subparagraph (A)—

2 (A) in the matter preceding clause (i), by

3 inserting ‘‘for a taxable year ending on or before

4 the date of filing of the petition’’ after ‘‘gross re5 ceipts’’;

6 (B) in clause (i)—

7 (i) by striking ‘‘for a taxable year end8 ing on or before the date of filing of the pe9 tition’’; and

10 (ii) by inserting before the semicolon at

11 the end, the following: ‘‘, plus any time dur12 ing which the stay of proceedings was in ef13 fect in a prior case under this title or dur14 ing which collection was precluded by the

15 existence of 1 or more confirmed plans

16 under this title, plus 90 days’’; and

17 (C) by striking clause (ii) and inserting the

18 following:

19 ‘‘(ii) assessed within 240 days before

20 the date of the filing of the petition, exclu21 sive of—

22 ‘‘(I) any time during which an

23 offer in compromise with respect to

24 that tax was pending or in effect dur-
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1 ing that 240-day period, plus 30 days;

2 and

3 ‘‘(II) any time during which a

4 stay of proceedings against collections

5 was in effect in a prior case under this

6 title during that 240-day period; plus

7 90 days.’’; and

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

9 ‘‘(H) An otherwise applicable time period

10 specified in this paragraph shall be suspended

11 for—

12 ‘‘(i) any period during which a gov13 ernmental unit is prohibited under applica14 ble nonbankruptcy law from collecting a tax

15 as a result of a request by the debtor for a

16 hearing and an appeal of any collection ac17 tion taken or proposed against the debtor;

18 plus

19 ‘‘(ii) 90 days.’’.

20 SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

21 Section 507(a)(9)(B) of title 11, United States Code,

22 is amended by striking ‘‘assessed’’ and inserting ‘‘in23 curred’’.
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1 SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP2 TER 13.

3 Section 1328(a)(2) of title 11, United States Code, as

4 amended by sections 105, 213, and 314 of this Act, is

5 amended—

6 (1) by inserting ‘‘(1)(B), (1)(C),’’ after ‘‘para7 graph’’; and

8 (2) by inserting ‘‘and in section 507(a)(8)(C)’’

9 after ‘‘section 523(a)’’.

10 SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP11 TER 11.

12 Section 1141(d) of title 11, United States Code, is

13 amended by adding at the end the following:

14 ‘‘(5) Notwithstanding paragraph (1), the confirmation

15 of a plan does not discharge a debtor that is a corporation

16 from any debt for a tax or customs duty with respect to

17 which the debtor—

18 ‘‘(A) made a fraudulent return; or

19 ‘‘(B) willfully attempted in any manner to evade

20 or defeat that tax or duty.’’.

21 SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO

22 PREPETITION TAXES.

23 Section 362(a)(8) of title 11, United States Code, is

24 amended by inserting ‘‘, with respect to a tax liability for

25 a taxable period ending before the order for relief under this

26 title’’ before the semicolon at the end.
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1 SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11

2 CASES.

3 Section 1129(a)(9) of title 11, United States Code, is

4 amended—

5 (1) in subparagraph (B), by striking ‘‘and’’ at

6 the end;

7 (2) in subparagraph (C), by striking ‘‘deferred

8 cash payments, over a period not exceeding six years

9 after the date of assessment of such claim,’’ and all

10 that follows through the end of the subparagraph, and

11 inserting ‘‘regular installment payments in cash—

12 ‘‘(i) of a total value, as of the effective

13 date of the plan, equal to the allowed

14 amount of such claim;

15 ‘‘(ii) with interest thereon calculated at

16 the rate provided in section 6621(a)(2) of

17 the Internal Revenue Code of 1986;

18 ‘‘(iii) over a period ending not later

19 than 5 years after the date of the entry of

20 the order for relief under section 301, 302,

21 or 303; and

22 ‘‘(iv) in a manner not less favorable

23 than the most favored nonpriority unse24 cured claim provided for in the plan (other

25 than cash payments made to a class of

26 creditors under section 1122(b)); and’’; and
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1 (3) by adding at the end the following:

2 ‘‘(D) with respect to a secured claim which

3 would otherwise meet the description of an unse4 cured claim of a governmental unit under sec5 tion 507(a)(8), but for the secured status of that

6 claim, the holder of that claim will receive on ac7 count of that claim, cash payments, in the same

8 manner and over the same period, as prescribed

9 in subparagraph (C).’’.

10 SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB11 ITED.

12 Section 545(2) of title 11, United States Code, is

13 amended by striking the semicolon at the end and inserting

14 ‘‘, except in any case in which a purchaser is a purchaser

15 described in section 6323 of the Internal Revenue Code of

16 1986, or in any other similar provision of State or local

17 law;’’.

18 SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSI19 NESS.

20 (a) PAYMENT OF TAXES REQUIRED.—Section 960 of

21 title 28, United States Code, is amended—

22 (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and

23 (2) by adding at the end the following:
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1 ‘‘(b) A tax under subsection (a) shall be paid on or

2 before the due date of the tax under applicable nonbank3 ruptcy law, unless—

4 ‘‘(1) the tax is a property tax secured by a lien

5 against property that is abandoned within a reason6 able period of time after the lien attaches by the trust7 ee of a bankruptcy estate under section 554 of title 11;

8 or

9 ‘‘(2) payment of the tax is excused under a spe10 cific provision of title 11.

11 ‘‘(c) In a case pending under chapter 7 of title 11,

12 payment of a tax may be deferred until final distribution

13 is made under section 726 of title 11, if—

14 ‘‘(1) the tax was not incurred by a trustee duly

15 appointed under chapter 7 of title 11; or

16 ‘‘(2) before the due date of the tax, an order of

17 the court makes a finding of probable insufficiency of

18 funds of the estate to pay in full the administrative

19 expenses allowed under section 503(b) of title 11 that

20 have the same priority in distribution under section

21 726(b) of title 11 as the priority of that tax.’’.

22 (b) PAYMENT OF AD VALOREM TAXES REQUIRED.—

23 Section 503(b)(1)(B)(i) of title 11, United States Code, is

24 amended by inserting ‘‘whether secured or unsecured, in-
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1 cluding property taxes for which liability is in rem, in per2 sonam, or both,’’ before ‘‘except’’.

3 (c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EX4 PENSE TAXES ELIMINATED.—Section 503(b)(1) of title 11,

5 United States Code, is amended—

6 (1) in subparagraph (B), by striking ‘‘and’’ at

7 the end;

8 (2) in subparagraph (C), by adding ‘‘and’’ at the

9 end; and

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

11 ‘‘(D) notwithstanding the requirements of sub12 section (a), a governmental unit shall not be required

13 to file a request for the payment of an expense de14 scribed in subparagraph (B) or (C), as a condition of

15 its being an allowed administrative expense;’’.

16 (d) PAYMENT OF TAXES AND FEES AS SECURED

17 CLAIMS.—Section 506 of title 11, United States Code, is

18 amended—

19 (1) in subsection (b), by inserting ‘‘or State stat20 ute’’ after ‘‘agreement’’; and

21 (2) in subsection (c), by inserting ‘‘, including

22 the payment of all ad valorem property taxes with re23 spect to the property’’ before the period at the end.
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1 SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

2 Section 726(a)(1) of title 11, United States Code, is

3 amended by striking ‘‘before the date on which the trustee

4 commences distribution under this section;’’ and inserting

5 the following: ‘‘on or before the earlier of—

6 ‘‘(A) the date that is 10 days after the mail7 ing to creditors of the summary of the trustee’s

8 final report; or

9 ‘‘(B) the date on which the trustee com10 mences final distribution under this section;’’.

11 SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU12 THORITIES.

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

14 amended—

15 (1) in paragraph (1)(B)—

16 (A) in the matter preceding clause (i), by

17 inserting ‘‘or equivalent report or notice,’’ after

18 ‘‘a return,’’;

19 (B) in clause (i)—

20 (i) by inserting ‘‘or given’’ after

21 ‘‘filed’’; and

22 (ii) by striking ‘‘or’’ at the end; and

23 (C) in clause (ii)—

24 (i) by inserting ‘‘or given’’ after

25 ‘‘filed’’; and
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1 (ii) by inserting ‘‘, report, or notice’’

2 after ‘‘return’’; and

3 (2) by adding at the end the following flush sen4 tences:

5 ‘‘For purposes of this subsection, the term ‘return’ means

6 a return that satisfies the requirements of applicable non7 bankruptcy law (including applicable filing requirements).

8 Such term includes a return prepared pursuant to section

9 6020(a) of the Internal Revenue Code of 1986, or similar

10 State or local law, or a written stipulation to a judgment

11 or a final order entered by a nonbankruptcy tribunal, but

12 does not include a return made pursuant to section 6020(b)

13 of the Internal Revenue Code of 1986, or a similar State

14 or local law.’’.

15 SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN16 PAID TAXES.

17 The second sentence of section 505(b) of title 11, United

18 States Code, as amended by section 703 of this Act, is

19 amended by inserting ‘‘the estate,’’ after ‘‘misrepresenta20 tion,’’.

21 SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CON22 FIRM CHAPTER 13 PLANS.

23 (a) FILING OF PREPETITION TAX RETURNS REQUIRED

24 FOR PLAN CONFIRMATION.—Section 1325(a) of title 11,
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1 United States Code, as amended by section 213 of this Act,

2 is amended—

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

4 end;

5 (2) in paragraph (7), by striking the period at

6 the end and inserting ‘‘; and’’; and

7 (3) by inserting after paragraph (7) the fol8 lowing:

9 ‘‘(8) if the debtor has filed all applicable Federal,

10 State, and local tax returns as required by section

11 1308.’’.

12 (b) ADDITIONAL TIME PERMITTED FOR FILING TAX

13 RETURNS.—

14 (1) IN GENERAL.—Chapter 13 of title 11, United

15 States Code, is amended by adding at the end the fol16 lowing:

17 ‘‘§ 1308. Filing of prepetition tax returns

18 ‘‘(a) Not later than the day before the date on which

19 the meeting of the creditors is first scheduled to be held

20 under section 341(a), the debtor shall file with appropriate

21 tax authorities all tax returns for all taxable periods ending

22 during the 4-year period ending on the date of the filing

23 of the petition.

24 ‘‘(b)(1) Subject to paragraph (2), if the tax returns re25 quired by subsection (a) have not been filed by the date on
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1 which the meeting of creditors is first scheduled to be held

2 under section 341(a), the trustee may hold open that meet3 ing for a reasonable period of time to allow the debtor an

4 additional period of time to file any unfiled returns, but

5 such additional period of time shall not extend beyond—

6 ‘‘(A) for any return that is past due as of the

7 date of the filing of the petition, the date that is 120

8 days after the date of that meeting; or

9 ‘‘(B) for any return that is not past due as of

10 the date of the filing of the petition, the later of—

11 ‘‘(i) the date that is 120 days after the date

12 of that meeting; or

13 ‘‘(ii) the date on which the return is due

14 under the last automatic extension of time for

15 filing that return to which the debtor is entitled,

16 and for which request is timely made, in accord17 ance with applicable nonbankruptcy law.

18 ‘‘(2) Upon notice and hearing, and order entered before

19 the tolling of any applicable filing period determined under

20 this subsection, if the debtor demonstrates by clear and con21 vincing evidence that the failure to file a return as required

22 under this subsection is attributable to circumstances be23 yond the control of the debtor, the court may extend the

24 filing period established by the trustee under this subsection

25 for—
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1 ‘‘(A) a period of not more than 30 days for re2 turns described in paragraph (1); and

3 ‘‘(B) a period not to extend after the applicable

4 extended due date for a return described in paragraph

5 (2).

6 ‘‘(c) For purposes of this section, the term ‘return’ in7 cludes a return prepared pursuant to section 6020 (a) or

8 (b) of the Internal Revenue Code of 1986, or a similar State

9 or local law, or a written stipulation to a judgment or a

10 final order entered by a nonbankruptcy tribunal.’’.

11 (2) CONFORMING AMENDMENT.—The table of sec12 tions for chapter 13 of title 11, United States Code,

13 is amended by inserting after the item relating to sec14 tion 1307 the following:

‘‘1308. Filing of prepetition tax returns.’’.

15 (c) DISMISSAL OR CONVERSION ON FAILURE TO COM16 PLY.—Section 1307 of title 11, United States Code, is

17 amended—

18 (1) by redesignating subsections (e) and (f) as

19 subsections (f) and (g), respectively; and

20 (2) by inserting after subsection (d), the fol21 lowing:

22 ‘‘(e) Upon the failure of the debtor to file a tax return

23 under section 1308, on request of a party in interest or the

24 United States trustee and after notice and a hearing, the

25 court shall dismiss a case or convert a case under this chap-
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1 ter to a case under chapter 7 of this title, whichever is in

2 the best interest of the creditors and the estate.’’.

3 (d) TIMELY FILED CLAIMS.—Section 502(b)(9) of title

4 11, United States Code, is amended by inserting before the

5 period at the end the following ‘‘, and except that in a case

6 under chapter 13, a claim of a governmental unit for a

7 tax with respect to a return filed under section 1308 shall

8 be timely if the claim is filed on or before the date that

9 is 60 days after the date on which such return was filed

10 as required’’.

11 (e) RULES FOR OBJECTIONS TO CLAIMS AND TO CON12 FIRMATION.—It is the sense of Congress that the Advisory

13 Committee on Bankruptcy Rules of the Judicial Conference

14 should, as soon as practicable after the date of enactment

15 of this Act, propose for adoption amended Federal Rules

16 of Bankruptcy Procedure which provide that—

17 (1) notwithstanding the provisions of Rule

18 3015(f), in cases under chapter 13 of title 11, United

19 States Code, an objection to the confirmation of a

20 plan filed by a governmental unit on or before the

21 date that is 60 days after the date on which the debtor

22 files all tax returns required under sections 1308 and

23 1325(a)(7) of title 11, United States Code, shall be

24 treated for all purposes as if such objection had been

25 timely filed before such confirmation; and
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1 (2) in addition to the provisions of Rule 3007,

2 in a case under chapter 13 of title 11, United States

3 Code, no objection to a tax with respect to which a

4 return is required to be filed under section 1308 of

5 title 11, United States Code, shall be filed until such

6 return has been filed as required.

7 SEC. 717. STANDARDS FOR TAX DISCLOSURE.

8 Section 1125(a)(1) of title 11, United States Code, is

9 amended—

10 (1) by inserting ‘‘including a discussion of the

11 potential material Federal tax consequences of the

12 plan to the debtor, any successor to the debtor, and

13 a hypothetical investor typical of the holders of claims

14 or interests in the case,’’ after ‘‘records’’; and

15 (2) by striking ‘‘a hypothetical reasonable inves16 tor typical of holders of claims or interests’’ and in17 serting ‘‘such a hypothetical investor’’.

18 SEC. 718. SETOFF OF TAX REFUNDS.

19 Section 362(b) of title 11, United States Code, as

20 amended by section 402 of this Act, is amended—

21 (1) in paragraph (25), by striking ‘‘or’’ at the

22 end;

23 (2) in paragraph (26), by striking the period at

24 the end and inserting ‘‘; or’’; and
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1 (3) by inserting after paragraph (26) the fol2 lowing:

3 ‘‘(27) under subsection (a), of the setoff under

4 applicable nonbankruptcy law of an income tax re5 fund, by a governmental unit, with respect to a tax6 able period that ended before the order for relief

7 against an income tax liability for a taxable period

8 that also ended before the order for relief, except that

9 in any case in which the setoff of an income tax re10 fund is not permitted under applicable nonbank11 ruptcy law because of a pending action to determine

12 the amount or legality of a tax liability, the govern13 mental unit may hold the refund pending the resolu14 tion of the action, unless the court, upon motion of

15 the trustee and after notice and hearing, grants the

16 taxing authority adequate protection (within the

17 meaning of section 361) for the secured claim of that

18 authority in the setoff under section 506(a).’’.

19 SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREAT20 MENT OF STATE AND LOCAL TAXES.

21 (a) IN GENERAL.—Section 346 of title 11, United

22 States Code, is amended to read as follows:
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1 ‘‘SEC. 346. SPECIAL PROVISIONS RELATED TO THE TREAT2 MENT OF STATE AND LOCAL TAXES.

3 ‘‘(a) Whenever the Internal Revenue Code of 1986 pro4 vides that a separate taxable estate or entity is created in

5 a case concerning a debtor under this title, and the income,

6 gain, loss, deductions, and credits of such estate shall be

7 taxed to or claimed by the estate, a separate taxable estate

8 is also created for purposes of any State and local law im9 posing a tax on or measured by income and such income,

10 gain, loss, deductions, and credits shall be taxed to or

11 claimed by the estate and may not be taxed to or claimed

12 by the debtor. The preceding sentence shall not apply if the

13 case is dismissed. The trustee shall make tax returns of in14 come required under any such State or local law.

15 ‘‘(b) Whenever the Internal Revenue Code of 1986 pro16 vides that no separate taxable estate shall be created in a

17 case concerning a debtor under this title, and the income,

18 gain, loss, deductions, and credits of an estate shall be taxed

19 to or claimed by the debtor, such income, gain, loss, deduc20 tions, and credits shall be taxed to or claimed by the debtor

21 under a State or local law imposing a tax on or measured

22 by income and may not be taxed to or claimed by the estate.

23 The trustee shall make such tax returns of income of cor24 porations and of partnerships as are required under any

25 State or local law, but with respect to partnerships, shall

26 make said returns only to the extent such returns are also
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1 required to be made under such Code. The estate shall be

2 liable for any tax imposed on such corporation or partner3 ship, but not for any tax imposed on partners or members.

4 ‘‘(c) With respect to a partnership or any entity treat5 ed as a partnership under a State or local law imposing

6 a tax on or measured by income that is a debtor in a case

7 under this title, any gain or loss resulting from a distribu8 tion of property from such partnership, or any distributive

9 share of any income, gain, loss, deduction, or credit of a

10 partner or member that is distributed, or considered distrib11 uted, from such partnership, after the commencement of the

12 case, is gain, loss, income, deduction, or credit, as the case

13 may be, of the partner or member, and if such partner or

14 member is a debtor in a case under this title, shall be subject

15 to tax in accordance with subsection (a) or (b).

16 ‘‘(d) For purposes of any State or local law imposing

17 a tax on or measured by income, the taxable period of a

18 debtor in a case under this title shall terminate only if and

19 to the extent that the taxable period of such debtor termi20 nates under the Internal Revenue Code of 1986.

21 ‘‘(e) The estate in any case described in subsection (a)

22 shall use the same accounting method as the debtor used

23 immediately before the commencement of the case, if such

24 method of accounting complies with applicable nonbank25 ruptcy tax law.
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1 ‘‘(f) For purposes of any State or local law imposing

2 a tax on or measured by income, a transfer of property

3 from the debtor to the estate or from the estate to the debtor

4 shall not be treated as a disposition for purposes of any

5 provision assigning tax consequences to a disposition, ex6 cept to the extent that such transfer is treated as a disposi7 tion under the Internal Revenue Code of 1986.

8 ‘‘(g) Whenever a tax is imposed pursuant to a State

9 or local law imposing a tax on or measured by income pur10 suant to subsection (a) or (b), such tax shall be imposed

11 at rates generally applicable to the same types of entities

12 under such State or local law.

13 ‘‘(h) The trustee shall withhold from any payment of

14 claims for wages, salaries, commissions, dividends, interest,

15 or other payments, or collect, any amount required to be

16 withheld or collected under applicable State or local tax

17 law, and shall pay such withheld or collected amount to

18 the appropriate governmental unit at the time and in the

19 manner required by such tax law, and with the same pri20 ority as the claim from which such amount was withheld

21 or collected was paid.

22 ‘‘(i)(1) To the extent that any State or local law im23 posing a tax on or measured by income provides for the

24 carryover of any tax attribute from one taxable period to

25 a subsequent taxable period, the estate shall succeed to such
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1 tax attribute in any case in which such estate is subject

2 to tax under subsection (a).

3 ‘‘(2) After such a case is closed or dismissed, the debtor

4 shall succeed to any tax attribute to which the estate suc5 ceeded under paragraph (1) to the extent consistent with

6 the Internal Revenue Code of 1986.

7 ‘‘(3) The estate may carry back any loss or tax at8 tribute to a taxable period of the debtor that ended before

9 the order for relief under this title to the extent that—

10 ‘‘(A) applicable State or local tax law provides

11 for a carryback in the case of the debtor; and

12 ‘‘(B) the same or a similar tax attribute may be

13 carried back by the estate to such a taxable period of

14 the debtor under the Internal Revenue Code of 1986.

15 ‘‘(j)(1) For purposes of any State or local law impos16 ing a tax on or measured by income, income is not realized

17 by the estate, the debtor, or a successor to the debtor by rea18 son of discharge of indebtedness in a case under this title,

19 except to the extent, if any, that such income is subject to

20 tax under the Internal Revenue Code of 1986.

21 ‘‘(2) Whenever the Internal Revenue Code of 1986 pro22 vides that the amount excluded from gross income in respect

23 of the discharge of indebtedness in a case under this title

24 shall be applied to reduce the tax attributes of the debtor

25 or the estate, a similar reduction shall be made under any
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1 State or local law imposing a tax on or measured by income

2 to the extent such State or local law recognizes such at3 tributes. Such State or local law may also provide for the

4 reduction of other attributes to the extent that the full

5 amount of income from the discharge of indebtedness has

6 not been applied.

7 ‘‘(k)(1) Except as provided in this section and section

8 505, the time and manner of filing tax returns and the

9 items of income, gain, loss, deduction, and credit of any

10 taxpayer shall be determined under applicable nonbank11 ruptcy law.

12 ‘‘(2) For Federal tax purposes, the provisions of this

13 section are subject to the Internal Revenue Code of 1986

14 and other applicable Federal nonbankruptcy law.’’.

15 (b) CONFORMING AMENDMENTS.—

16 (1) Section 728 of title 11, United States Code,

17 is repealed.

18 (2) Section 1146 of title 11, United States Code,

19 is amended by striking subsections (a) and (b) and by

20 redesignating subsections (c) and (d) as subsections

21 (a) and (b), respectively.

22 (3) Section 1231 of title 11, United States Code,

23 is amended by striking subsections (a) and (b) and by

24 redesignating subsections (c) and (d) as subsections

25 (a) and (b), respectively.
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1 SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RE2 TURNS.

3 Section 521 of title 11, United States Code, as amend4 ed by this Act, is amended by adding at the end the fol5 lowing:

6 ‘‘(k)(1) Notwithstanding any other provision of this

7 title, if the debtor fails to file a tax return that becomes

8 due after the commencement of the case or to properly ob9 tain an extension of the due date for filing such return,

10 the taxing authority may request that the court enter an

11 order converting or dismissing the case.

12 ‘‘(2) If the debtor does not file the required return or

13 obtain the extension referred to in paragraph (1) within

14 90 days after a request is filed by the taxing authority

15 under that paragraph, the court shall convert or dismiss

16 the case, whichever is in the best interests of creditors and

17 the estate.’’.

18 TITLE VIII—ANCILLARY AND

19 OTHER CROSS-BORDER CASES

20 SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11,

21 UNITED STATES CODE.

22 (a) IN GENERAL.—Title 11, United States Code, is

23 amended by inserting after chapter 13 the following:
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1 ‘‘CHAPTER 15—ANCILLARY AND OTHER

2 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

‘‘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.
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‘‘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 ef4 fective mechanisms for dealing with cases of cross-border in5 solvency 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;

13 ‘‘(2) greater legal certainty for trade and invest14 ment;

15 ‘‘(3) fair and efficient administration of cross16 border insolvencies that protects the interests of all

17 creditors, and other interested entities, including the

18 debtor;

19 ‘‘(4) protection and maximization of the value of

20 the debtor’s assets; and

21 ‘‘(5) facilitation of the rescue of financially trou22 bled businesses, thereby protecting investment and

23 preserving employment.

24 ‘‘(b) This chapter applies if—
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1 ‘‘(1) assistance is sought in the United States by

2 a foreign court or a foreign representative in connec3 tion with a foreign proceeding;

4 ‘‘(2) assistance is sought in a foreign country in

5 connection with a case under this title;

6 ‘‘(3) a foreign proceeding and a case under this

7 title with respect to the same debtor are taking place

8 concurrently; or

9 ‘‘(4) creditors or other interested persons in a

10 foreign country have an interest in requesting the

11 commencement of, or participating in, a case or pro12 ceeding under this title.

13 ‘‘(c) This chapter does not apply to—

14 ‘‘(1) a proceeding concerning an entity identified

15 by exclusion in subsection 109(b);

16 ‘‘(2) an individual, or to an individual and such

17 individual’s spouse, who have debts within the limits

18 specified in section 109(e) and who are citizens of the

19 United States or aliens lawfully admitted for perma20 nent residence in the United States; or

21 ‘‘(3) an entity subject to a proceeding under the

22 Securities Investor Protection Act of 1970 (84 Stat.

23 1636 et seq.), a stockbroker subject to subchapter III

24 of chapter 7 of this title, or a commodity broker sub25 ject to subchapter IV of chapter 7 of this title.
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1 ‘‘SUBCHAPTER I—GENERAL PROVISIONS

2 ‘‘§ 1502. Definitions

3 ‘‘For the purposes of this chapter, the term—

4 ‘‘(1) ‘debtor’ means an entity that is the subject

5 of a foreign proceeding;

6 ‘‘(2) ‘establishment’ means any place of oper7 ations where the debtor carries out a nontransitory

8 economic activity;

9 ‘‘(3) ‘foreign court’ means a judicial or other au10 thority competent to control or supervise a foreign

11 proceeding;

12 ‘‘(4) ‘foreign main proceeding’ means a foreign

13 proceeding taking place in the country where the debt14 or has the center of its main interests;

15 ‘‘(5) ‘foreign nonmain proceeding’ means a for16 eign proceeding, other than a foreign main pro17 ceeding, taking place in a country where the debtor

18 has an establishment;

19 ‘‘(6) ‘trustee’ includes a trustee, a debtor in pos20 session in a case under any chapter of this title, or

21 a debtor under chapter 9 of this title; and

22 ‘‘(7) ‘within the territorial jurisdiction of the

23 United States’ when used with reference to property

24 of a debtor refers to tangible property located within

25 the territory of the United States and intangible
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1 property deemed under applicable nonbankruptcy law

2 to be located within that territory, including any

3 property subject to attachment or garnishment that

4 may properly be seized or garnished by an action in

5 a Federal or State court in the United States.

6 ‘‘§ 1503. International obligations of the United States

7 ‘‘To the extent that this chapter conflicts with an obli8 gation of the United States arising out of any treaty or

9 other form of agreement to which it is a party with 1 or

10 more other countries, the requirements of the treaty or

11 agreement prevail.

12 ‘‘§ 1504. Commencement of ancillary case

13 ‘‘A case under this chapter is commenced by the filing

14 of a petition for recognition of a foreign proceeding under

15 section 1515.

16 ‘‘§ 1505. Authorization to act in a foreign country

17 ‘‘A trustee or another entity, including an examiner,

18 may be authorized by the court to act in a foreign country

19 on behalf of an estate created under section 541. An entity

20 authorized to act under this section may act in any way

21 permitted by the applicable foreign law.

22 ‘‘§ 1506. Public policy exception

23 ‘‘Nothing in this chapter prevents the court from refus24 ing to take an action governed by this chapter if the action
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1 would be manifestly contrary to the public policy of the

2 United States.

3 ‘‘§ 1507. Additional assistance

4 ‘‘(a) Subject to the specific limitations under other

5 provisions of this chapter, the court, upon recognition of

6 a foreign proceeding, may provide additional assistance to

7 a foreign representative under this title or under other laws

8 of the United States.

9 ‘‘(b) In determining whether to provide additional as10 sistance under this title or under other laws of the United

11 States, the court shall consider whether such additional as12 sistance, consistent with the principles of comity, will rea13 sonably assure—

14 ‘‘(1) just treatment of all holders of claims

15 against or interests in the debtor’s property;

16 ‘‘(2) protection of claim holders in the United

17 States against prejudice and inconvenience in the

18 processing of claims in such foreign proceeding;

19 ‘‘(3) prevention of preferential or fraudulent dis20 positions of property of the debtor;

21 ‘‘(4) distribution of proceeds of the debtor’s prop22 erty substantially in accordance with the order pre23 scribed by this title; and
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1 ‘‘(5) if appropriate, the provision of an oppor2 tunity for a fresh start for the individual that such

3 foreign proceeding concerns.

4 ‘‘§ 1508. Interpretation

5 ‘‘In interpreting this chapter, the court shall consider

6 its international origin, and the need to promote an appli7 cation of this chapter that is consistent with the application

8 of similar statutes adopted by foreign jurisdictions.

9 ‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP10 RESENTATIVES AND CREDITORS TO THE

11 COURT

12 ‘‘§ 1509. Right of direct access

13 ‘‘(a) A foreign representative is entitled to commence

14 a case under section 1504 by filing a petition for recogni15 tion under section 1515, and upon recognition, to apply

16 directly to other Federal and State courts for appropriate

17 relief in those courts.

18 ‘‘(b) Upon recognition, and subject to section 1510, a

19 foreign representative shall have the capacity to sue and

20 be sued, and shall be subject to the laws of the United States

21 of general applicability.

22 ‘‘(c) Subject to section 1510, a foreign representative

23 is subject to laws of general application.

24 ‘‘(d) Recognition under this chapter is prerequisite to

25 the granting of comity or cooperation to a foreign represent-
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1 ative in any Federal or State court in the United States.

2 Any request for comity or cooperation by a foreign rep3 resentative in any court shall be accompanied by a sworn

4 statement setting forth whether recognition under section

5 1515 has been sought and the status of any such petition.

6 ‘‘(e) Upon denial of recognition under this chapter, the

7 court may issue appropriate orders necessary to prevent an

8 attempt to obtain comity or cooperation from courts in the

9 United States without such recognition.

10 ‘‘§ 1510. Limited jurisdiction

11 ‘‘The sole fact that a foreign representative files a peti12 tion under section 1515 does not subject the foreign rep13 resentative to the jurisdiction of any court in the United

14 States for any other purpose.

15 ‘‘§ 1511. Commencement of case under section 301 or

16 303

17 ‘‘(a) Upon recognition, a foreign representative may

18 commence—

19 ‘‘(1) an involuntary case under section 303; or

20 ‘‘(2) a voluntary case under section 301 or 302,

21 if the foreign proceeding is a foreign main proceeding.

22 ‘‘(b) The petition commencing a case under subsection

23 (a) must be accompanied by a statement describing the peti24 tion for recognition and its current status. The court where

25 the petition for recognition has been filed must be advised
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1 of the foreign representative’s intent to commence a case

2 under subsection (a) prior to such commencement.

3 ‘‘§ 1512. Participation of a foreign representative in a

4 case under this title

5 ‘‘Upon recognition of a foreign proceeding, the foreign

6 representative in that proceeding is entitled to participate

7 as a party in interest in a case regarding the debtor under

8 this title.

9 ‘‘§ 1513. Access of foreign creditors to a case under

10 this title

11 ‘‘(a) Foreign creditors have the same rights regarding

12 the commencement of, and participation in, a case under

13 this title as domestic creditors.

14 ‘‘(b)(1) Subsection (a) does not change or codify law

15 in effect on the date of enactment of this chapter as to the

16 priority of claims under section 507 or 726, except that the

17 claim of a foreign creditor under section 507 or 726 shall

18 not be given a lower priority than that of general unsecured

19 claims without priority solely because the holder of such

20 claim is a foreign creditor.

21 ‘‘(2)(A) Subsection (a) and paragraph (1) do not

22 change or codify law in effect on the date of enactment of

23 this chapter as to the allowability of foreign revenue claims

24 or other foreign public law claims in a proceeding under

25 this title.
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1 ‘‘(B) Allowance and priority as to a foreign tax claim

2 or other foreign public law claim shall be governed by any

3 applicable tax treaty of the United States, under the condi4 tions and circumstances specified therein.

5 ‘‘§ 1514. Notification to foreign creditors concerning a

6 case under this title

7 ‘‘(a) Whenever in a case under this title notice is to

8 be given to creditors generally or to any class or category

9 of creditors, such notice shall also be given to the known

10 creditors generally, or to creditors in the notified class or

11 category, that do not have addresses in the United States.

12 The court may order that appropriate steps be taken with

13 a view to notifying any creditor whose address is not yet

14 known.

15 ‘‘(b) Such notification to creditors with foreign ad16 dresses described in subsection (a) shall be given individ17 ually, unless the court considers that, under the cir18 cumstances, some other form of notification would be more

19 appropriate. No letters rogatory or other similar formality

20 is required.

21 ‘‘(c) When a notification of commencement of a case

22 is to be given to foreign creditors, the notification shall—

23 ‘‘(1) indicate the time period for filing proofs of

24 claim and specify the place for their filing;
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1 ‘‘(2) indicate whether secured creditors need to

2 file their proofs of claim; and

3 ‘‘(3) contain any other information required to

4 be included in such a notification to creditors pursu5 ant to this title and the orders of the court.

6 ‘‘(d) Any rule of procedure or order of the court as

7 to notice or the filing of a claim shall provide such addi8 tional time to creditors with foreign addresses as is reason9 able under the circumstances.

10 ‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN

11 PROCEEDING AND RELIEF

12 ‘‘§ 1515. Application for recognition of a foreign pro13 ceeding

14 ‘‘(a) A foreign representative applies to the court for

15 recognition of the foreign proceeding in which the foreign

16 representative has been appointed by filing a petition for

17 recognition.

18 ‘‘(b) A petition for recognition shall be accompanied

19 by—

20 ‘‘(1) a certified copy of the decision commencing

21 the foreign proceeding and appointing the foreign

22 representative;

23 ‘‘(2) a certificate from the foreign court affirm24 ing the existence of the foreign proceeding and of the

25 appointment of the foreign representative; or
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1 ‘‘(3) in the absence of evidence referred to in

2 paragraphs (1) and (2), any other evidence acceptable

3 to the court of the existence of the foreign proceeding

4 and of the appointment of the foreign representative.

5 ‘‘(c) A petition for recognition shall also be accom6 panied by a statement identifying all foreign proceedings

7 with respect to the debtor that are known to the foreign rep8 resentative.

9 ‘‘(d) The documents referred to in paragraphs (1) and

10 (2) of subsection (b) must be translated into English. The

11 court may require a translation into English of additional

12 documents.

13 ‘‘§ 1516. Presumptions concerning recognition

14 ‘‘(a) If the decision or certificate referred to in section

15 1515(b) indicates that the foreign proceeding is a foreign

16 proceeding as defined in section 101 and that the person

17 or body is a foreign representative as defined in section 101,

18 the court is entitled to so presume.

19 ‘‘(b) The court is entitled to presume that documents

20 submitted in support of the petition for recognition are au21 thentic, whether or not they have been legalized.

22 ‘‘(c) In the absence of evidence to the contrary, the

23 debtor’s registered office, or habitual residence in the case

24 of an individual, is presumed to be the center of the debtor’s

25 main interests.
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1 ‘‘§ 1517. Order recognizing a foreign proceeding

2 ‘‘(a) Subject to section 1506, after notice and a hearing

3 an order recognizing a foreign proceeding shall be entered

4 if—

5 ‘‘(1) the foreign proceeding is a foreign main

6 proceeding or foreign nonmain proceeding within the

7 meaning of section 1502;

8 ‘‘(2) the foreign representative applying for rec9 ognition is a person or body as defined in section

10 101; and

11 ‘‘(3) the petition meets the requirements of sec12 tion 1515.

13 ‘‘(b) The foreign proceeding shall be recognized—

14 ‘‘(1) as a foreign main proceeding if it is taking

15 place in the country where the debtor has the center

16 of its main interests; or

17 ‘‘(2) as a foreign nonmain proceeding if the debt18 or has an establishment within the meaning of section

19 1502 in the foreign country where the proceeding is

20 pending.

21 ‘‘(c) A petition for recognition of a foreign proceeding

22 shall be decided upon at the earliest possible time. Entry

23 of an order recognizing a foreign proceeding shall constitute

24 recognition under this chapter.

25 ‘‘(d) The provisions of this subchapter do not prevent

26 modification or termination of recognition if it is shown
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1 that the grounds for granting it were fully or partially lack2 ing or have ceased to exist, but in considering such action

3 the court shall give due weight to possible prejudice to par4 ties that have relied upon the granting of recognition. The

5 case under this chapter may be closed in the manner pre6 scribed for a case under section 350.

7 ‘‘§ 1518. Subsequent information

8 ‘‘After the petition for recognition of the foreign pro9 ceeding is filed, the foreign representative shall file with the

10 court promptly a notice of change of status concerning—

11 ‘‘(1) any substantial change in the status of the

12 foreign proceeding or the status of the foreign rep13 resentative’s appointment; and

14 ‘‘(2) any other foreign proceeding regarding the

15 debtor that becomes known to the foreign representa16 tive.

17 ‘‘§ 1519. Relief that may be granted upon petition for

18 recognition of a foreign proceeding

19 ‘‘(a) Beginning on the date on which a petition for

20 recognition is filed and ending on the date on which the

21 petition is decided upon, the court may, at the request of

22 the foreign representative, where relief is urgently needed

23 to protect the assets of the debtor or the interests of the credi24 tors, grant relief of a provisional nature, including—

25 ‘‘(1) staying execution against the debtor’s assets;
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1 ‘‘(2) entrusting the administration or realization

2 of all or part of the debtor’s assets located in the

3 United States to the foreign representative or another

4 person authorized by the court, including an exam5 iner, in order to protect and preserve the value of as6 sets that, by their nature or because of other cir7 cumstances, are perishable, susceptible to devaluation,

8 or otherwise in jeopardy; and

9 ‘‘(3) any relief referred to in paragraph (3), (4),

10 or (7) of section 1521(a).

11 ‘‘(b) Unless extended under section 1521(a)(6), the re12 lief granted under this section terminates when the petition

13 for recognition is decided upon.

14 ‘‘(c) It is a ground for denial of relief under this sec15 tion that such relief would interfere with the administration

16 of a foreign main proceeding.

17 ‘‘(d) The court may not enjoin a police or regulatory

18 act of a governmental unit, including a criminal action or

19 proceeding, under this section.

20 ‘‘(e) The standards, procedures, and limitations appli21 cable to an injunction shall apply to relief under this sec22 tion.
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1 ‘‘§ 1520. Effects of recognition of a foreign main pro2 ceeding

3 ‘‘(a) Upon recognition of a foreign proceeding that is

4 a foreign main proceeding—

5 ‘‘(1) section 362 applies with respect to the debt6 or and that property of the debtor that is within the

7 territorial jurisdiction of the United States;

8 ‘‘(2) a transfer, an encumbrance, or any other

9 disposition of an interest of the debtor in property

10 within the territorial jurisdiction of the United States

11 is restrained as and to the extent that is provided for

12 property of an estate under sections 363, 549, and

13 552; and

14 ‘‘(3) unless the court orders otherwise, the foreign

15 representative may operate the debtor’s business and

16 may exercise the powers of a trustee under section

17 549, subject to sections 363 and 552.

18 ‘‘(b) The scope, and the modification or termination,

19 of the stay and restraints referred to in subsection (a) are

20 subject to the exceptions and limitations provided in sub21 sections (b), (c), and (d) of section 362, subsections (b) and

22 (c) of section 363, and sections 552, 555 through 557, 559,

23 and 560.

24 ‘‘(c) Subsection (a) does not affect the right to com25 mence individual actions or proceedings in a foreign coun-
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1 try to the extent necessary to preserve a claim against the

2 debtor.

3 ‘‘(d) Subsection (a) does not affect the right of a foreign

4 representative or an entity to file a petition commencing

5 a case under this title or the right of any party to file

6 claims or take other proper actions in such a case.

7 ‘‘§ 1521. Relief that may be granted upon recognition

8 of a foreign proceeding

9 ‘‘(a) Upon recognition of a foreign proceeding, whether

10 main or nonmain, where necessary to effectuate the purpose

11 of this chapter and to protect the assets of the debtor or

12 the interests of the creditors, the court may, at the request

13 of the foreign representative, grant any appropriate relief,

14 including—

15 ‘‘(1) staying the commencement or continuation

16 of individual actions or individual proceedings con17 cerning the debtor’s assets, rights, obligations or li18 abilities to the extent the actions or proceedings have

19 not been stayed under section 1520(a);

20 ‘‘(2) staying execution against the debtor’s assets

21 to the extent the execution has not been stayed under

22 section 1520(a);

23 ‘‘(3) suspending the right to transfer, encumber

24 or otherwise dispose of any assets of the debtor to the
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1 extent that right has not been suspended under section

2 1520(a);

3 ‘‘(4) providing for the examination of witnesses,

4 the taking of evidence or the delivery of information

5 concerning the debtor’s assets, affairs, rights, obliga6 tions or liabilities;

7 ‘‘(5) entrusting the administration or realization

8 of all or part of the debtor’s assets within the terri9 torial jurisdiction of the United States to the foreign

10 representative or another person, including an exam11 iner, authorized by the court;

12 ‘‘(6) extending relief granted under section

13 1519(a); and

14 ‘‘(7) granting any additional relief that may be

15 available to a trustee, except for relief available under

16 sections 522, 544, 545, 547, 548, 550, and 724(a).

17 ‘‘(b) Upon recognition of a foreign proceeding, whether

18 main or nonmain, the court may, at the request of the for19 eign representative, entrust the distribution of all or part

20 of the debtor’s assets located in the United States to the for21 eign representative or another person, including an exam22 iner, authorized by the court, if the court is satisfied that

23 the interests of creditors in the United States are suffi24 ciently protected.
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1 ‘‘(c) In granting relief under this section to a rep2 resentative of a foreign nonmain proceeding, the court must

3 be satisfied that the relief relates to assets that, under the

4 law of the United States, should be administered in the for5 eign nonmain proceeding or concerns information required

6 in that proceeding.

7 ‘‘(d) The court may not enjoin a police or regulatory

8 act of a governmental unit, including a criminal action or

9 proceeding, under this section.

10 ‘‘(e) The standards, procedures, and limitations appli11 cable to an injunction shall apply to relief under para12 graphs (1), (2), (3), and (6) of subsection (a).

13 ‘‘§ 1522. Protection of creditors and other interested

14 persons

15 ‘‘(a) The court may grant relief under section 1519

16 or 1521, or may modify or terminate relief under subsection

17 (c), only if the interests of the creditors and other interested

18 entities, including the debtor, are sufficiently protected.

19 ‘‘(b) The court may subject relief granted under section

20 1519 or 1521, or the operation of the debtor’s business under

21 section 1520(a)(2), to conditions that the court considers

22 to be appropriate, including the giving of security or the

23 filing of a bond.

24 ‘‘(c) The court may, at the request of the foreign rep25 resentative or an entity affected by relief granted under sec-
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1 tion 1519 or 1521, or at its own motion, modify or termi2 nate the relief referred to in subsection (b).

3 ‘‘(d) Section 1104(d) shall apply to the appointment

4 of an examiner under this chapter. Any examiner shall

5 comply with the qualification requirements imposed on a

6 trustee by section 322.

7 ‘‘§ 1523. Actions to avoid acts detrimental to creditors

8 ‘‘(a) Upon recognition of a foreign proceeding, the for9 eign representative has standing in a case concerning the

10 debtor pending under another chapter of this title to initiate

11 actions under sections 522, 544, 545, 547, 548, 550, and

12 724(a).

13 ‘‘(b) In any case in which the foreign proceeding is

14 a foreign nonmain proceeding, the court must be satisfied

15 that an action under subsection (a) relates to assets that,

16 under United States law, should be administered in the for17 eign nonmain proceeding.

18 ‘‘§ 1524. Intervention by a foreign representative

19 ‘‘Upon recognition of a foreign proceeding, the foreign

20 representative may intervene in any proceedings in a State

21 or Federal court in the United States in which the debtor

22 is a party.
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1 ‘‘SUBCHAPTER IV—COOPERATION WITH FOR2 EIGN COURTS AND FOREIGN REPRESENTA3 TIVES

4 ‘‘§ 1525. Cooperation and direct communication be5 tween the court and foreign courts or for6 eign representatives

7 ‘‘(a) Consistent with section 1501, the court shall co8 operate to the maximum extent possible with foreign courts

9 or foreign representatives, either directly or through the

10 trustee.

11 ‘‘(b) The court is entitled to communicate directly

12 with, or to request information or assistance directly from,

13 foreign courts or foreign representatives, subject to the rights

14 of parties in interest to notice and participation.

15 ‘‘§ 1526. Cooperation and direct communication be16 tween the trustee and foreign courts or

17 foreign representatives

18 ‘‘(a) Consistent with section 1501, the trustee or other

19 person, including an examiner, authorized by the court,

20 shall, subject to the supervision of the court, cooperate to

21 the maximum extent possible with foreign courts or foreign

22 representatives.

23 ‘‘(b) The trustee or other person, including an exam24 iner, authorized by the court is entitled, subject to the super-
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1 vision of the court, to communicate directly with foreign

2 courts or foreign representatives.

3 ‘‘§ 1527. Forms of cooperation

4 ‘‘Cooperation referred to in sections 1525 and 1526

5 may be implemented by any appropriate means,

6 including—

7 ‘‘(1) appointment of a person or body, including

8 an examiner, to act at the direction of the court;

9 ‘‘(2) communication of information by any

10 means considered appropriate by the court;

11 ‘‘(3) coordination of the administration and su12 pervision of the debtor’s assets and affairs;

13 ‘‘(4) approval or implementation of agreements

14 concerning the coordination of proceedings; and

15 ‘‘(5) coordination of concurrent proceedings re16 garding the same debtor.

17 ‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

18 ‘‘§ 1528. Commencement of a case under this title after

19 recognition of a foreign main proceeding

20 ‘‘After recognition of a foreign main proceeding, a case

21 under another chapter of this title may be commenced only

22 if the debtor has assets in the United States. The effects of

23 such case shall be restricted to the assets of the debtor that

24 are within the territorial jurisdiction of the United States

25 and, to the extent necessary to implement cooperation and
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1 coordination under sections 1525, 1526, and 1527, to other

2 assets of the debtor that are within the jurisdiction of the

3 court under sections 541(a), and 1334(e) of title 28, to the

4 extent that such other assets are not subject to the jurisdic5 tion and control of a foreign proceeding that has been recog6 nized under this chapter.

7 ‘‘§ 1529. Coordination of a case under this title and a

8 foreign proceeding

9 ‘‘In any case in which a foreign proceeding and a case

10 under another chapter of this title are taking place concur11 rently regarding the same debtor, the court shall seek co12 operation and coordination under sections 1525, 1526, and

13 1527, and the following shall apply:

14 ‘‘(1) If the case in the United States is taking

15 place at the time the petition for recognition of the

16 foreign proceeding is filed—

17 ‘‘(A) any relief granted under sections 1519

18 or 1521 must be consistent with the relief grant19 ed in the case in the United States; and

20 ‘‘(B) even if the foreign proceeding is recog21 nized as a foreign main proceeding, section 1520

22 does not apply.

23 ‘‘(2) If a case in the United States under this

24 title commences after recognition, or after the filing of
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1 the petition for recognition, of the foreign

2 proceeding—

3 ‘‘(A) any relief in effect under sections 1519

4 or 1521 shall be reviewed by the court and shall

5 be modified or terminated if inconsistent with

6 the case in the United States; and

7 ‘‘(B) if the foreign proceeding is a foreign

8 main proceeding, the stay and suspension re9 ferred to in section 1520(a) shall be modified or

10 terminated if inconsistent with the relief granted

11 in the case in the United States.

12 ‘‘(3) In granting, extending, or modifying relief

13 granted to a representative of a foreign nonmain pro14 ceeding, the court must be satisfied that the relief re15 lates to assets that, under the law of the United

16 States, should be administered in the foreign nonmain

17 proceeding or concerns information required in that

18 proceeding.

19 ‘‘(4) In achieving cooperation and coordination

20 under sections 1528 and 1529, the court may grant

21 any of the relief authorized under section 305.

22 ‘‘§ 1530. Coordination of more than 1 foreign pro23 ceeding

24 ‘‘In matters referred to in section 1501, with respect

25 to more than 1 foreign proceeding regarding the debtor, the
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1 court shall seek cooperation and coordination under sections

2 1525, 1526, and 1527, and the following shall apply:

3 ‘‘(1) Any relief granted under section 1519 or

4 1521 to a representative of a foreign nonmain pro5 ceeding after recognition of a foreign main proceeding

6 must be consistent with the foreign main proceeding.

7 ‘‘(2) If a foreign main proceeding is recognized

8 after recognition, or after the filing of a petition for

9 recognition, of a foreign nonmain proceeding, any re10 lief in effect under section 1519 or 1521 shall be re11 viewed by the court and shall be modified or termi12 nated if inconsistent with the foreign main pro13 ceeding.

14 ‘‘(3) If, after recognition of a foreign nonmain

15 proceeding, another foreign nonmain proceeding is

16 recognized, the court shall grant, modify, or terminate

17 relief for the purpose of facilitating coordination of

18 the proceedings.

19 ‘‘§ 1531. Presumption of insolvency based on recogni20 tion of a foreign main proceeding

21 ‘‘In the absence of evidence to the contrary, recognition

22 of a foreign main proceeding is for the purpose of com23 mencing a proceeding under section 303, proof that the

24 debtor is generally not paying its debts as such debts become

25 due.
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1 ‘‘§ 1532. Rule of payment in concurrent proceedings

2 ‘‘Without prejudice to secured claims or rights in rem,

3 a creditor who has received payment with respect to its

4 claim in a foreign proceeding pursuant to a law relating

5 to insolvency may not receive a payment for the same claim

6 in a case under any other chapter of this title regarding

7 the debtor, so long as the payment to other creditors of the

8 same class is proportionately less than the payment the

9 creditor has already received.’’.

10 (b) CLERICAL AMENDMENT.—The table of chapters for

11 title 11, United States Code, is amended by inserting after

12 the item relating to chapter 13 the following:

‘‘15. Ancillary and Other Cross-Border Cases ........................... 1501’’.

13 SEC. 802. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11,

14 UNITED STATES CODE.

15 (a) APPLICABILITY OF CHAPTERS.—Section 103 of

16 title 11, United States Code, is amended—

17 (1) in subsection (a), by inserting before the pe18 riod the following: ‘‘, and this chapter, sections 307,

19 304, 555 through 557, 559, and 560 apply in a case

20 under chapter 15’’; and

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

22 ‘‘(j) Chapter 15 applies only in a case under such

23 chapter, except that—

24 ‘‘(1) sections 1513 and 1514 apply in all cases

25 under this title; and
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1 ‘‘(2) section 1505 applies to trustees and to any

2 other entity (including an examiner) authorized by

3 the court under chapter 7, 11, or 12, to debtors in

4 possession under chapter 11 or 12, and to debtors

5 under chapter 9 who are authorized to act under sec6 tion 1505.’’.

7 (b) DEFINITIONS.—Paragraphs (23) and (24) of sec8 tion 101 of title 11, United States Code, are amended to

9 read as follows:

10 ‘‘(23) ‘foreign proceeding’ means a collective ju11 dicial or administrative proceeding in a foreign coun12 try, including an interim proceeding, pursuant to a

13 law relating to insolvency in which proceeding the as14 sets and affairs of the debtor are subject to control or

15 supervision by a foreign court, for the purpose of reor16 ganization or liquidation;

17 ‘‘(24) ‘foreign representative’ means a person or

18 body, including a person or body appointed on an in19 terim basis, authorized in a foreign proceeding to ad20 minister the reorganization or the liquidation of the

21 debtor’s assets or affairs or to act as a representative

22 of the foreign proceeding;’’.

23 (c) AMENDMENTS TO TITLE 28, UNITED STATES

24 CODE.—
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1 (1) PROCEDURES.—Section 157(b)(2) of title 28,

2 United States Code, is amended—

3 (A) in subparagraph (N), by striking ‘‘and’’

4 at the end;

5 (B) in subparagraph (O), by striking the

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

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

8 ‘‘(P) recognition of foreign proceedings and other

9 matters under chapter 15 of title 11.’’.

10 (2) BANKRUPTCY CASES AND PROCEEDINGS.—

11 Section 1334(c)(1) of title 28, United States Code, is

12 amended by striking ‘‘Nothing in’’ and inserting ‘‘Ex13 cept with respect to a case under chapter 15 of title

14 11, nothing in’’.

15 (3) DUTIES OF TRUSTEES.—Section 586(a)(3) of

16 title 28, United States Code, is amended by inserting

17 ‘‘15,’’ after ‘‘chapter’’.

18 SEC. 803. CLAIMS RELATING TO INSURANCE DEPOSITS IN

19 CASES ANCILLARY TO FOREIGN PRO20 CEEDINGS.

21 Section 304 of title 11, United States Code, is amended

22 to read as follows:

23 ‘‘§ 304. Cases ancillary to foreign proceedings

24 ‘‘(a) For purposes of this section—
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1 ‘‘(1) the term ‘domestic insurance company’

2 means a domestic insurance company, as such term

3 is used in section 109(b)(2);

4 ‘‘(2) the term ‘foreign insurance company’ means

5 a foreign insurance company, as such term is used in

6 section 109(b)(3);

7 ‘‘(3) the term ‘United States claimant’ means a

8 beneficiary of any deposit referred to in subsection (b)

9 or any multibeneficiary trust referred to in subsection

10 (b);

11 ‘‘(4) the term ‘United States creditor’ means,

12 with respect to a foreign insurance company—

13 ‘‘(i) a United States claimant; or

14 ‘‘(ii) any business entity that operates in

15 the United States and that is a creditor; and

16 ‘‘(5) the term ‘United States policyholder’ means

17 a holder of an insurance policy issued in the United

18 States.

19 ‘‘(b) The court may not grant relief under chapter 15

20 of this title with respect to any deposit, escrow, trust fund,

21 or other security required or permitted under any applica22 ble State insurance law or regulation for the benefit of

23 claim holders in the United States.’’.
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1 TITLE IX—FINANCIAL CONTRACT

2 PROVISIONS

3 SEC. 901. BANKRUPTCY CODE AMENDMENTS.

4 (a) DEFINITIONS OF FORWARD CONTRACT, REPUR5 CHASE AGREEMENT, SECURITIES CLEARING AGENCY, SWAP

6 AGREEMENT, COMMODITY CONTRACT, AND SECURITIES

7 CONTRACT.—Title 11, United States Code, is amended—

8 (1) in section 101—

9 (A) in paragraph (25)—

10 (i) by striking ‘‘means a contract’’ and

11 inserting ‘‘means—

12 ‘‘(A) a contract’’;

13 (ii) by striking ‘‘, or any combination

14 thereof or option thereon;’’ and inserting ‘‘,

15 or any other similar agreement;’’; and

16 (iii) by adding at the end the fol17 lowing:

18 ‘‘(B) a combination of agreements or trans19 actions referred to in subparagraphs (A) and

20 (C);

21 ‘‘(C) an option to enter into an agreement

22 or transaction referred to in subparagraph (A)

23 or (B);

24 ‘‘(D) a master netting agreement that pro25 vides for an agreement or transaction referred to
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1 in subparagraph (A), (B), or (C), together with

2 all supplements to such master netting agree3 ment, without regard to whether such master net4 ting agreement provides for an agreement or

5 transaction that is not a forward contract under

6 this paragraph, except that such master netting

7 agreement shall be considered to be a forward

8 contract under this paragraph only with respect

9 to each agreement or transaction under such

10 master netting agreement that is referred to in

11 subparagraph (A), (B) or (C); or

12 ‘‘(E) a security agreement or arrangement,

13 or other credit enhancement, directly pertaining

14 to a contract, option, agreement, or transaction

15 referred to in subparagraph (A), (B), (C), or

16 (D), but not to exceed the actual value of such

17 contract, option, agreement, or transaction on

18 the date of the filing of the petition;’’;

19 (B) by striking paragraph (47) and insert20 ing the following:

21 ‘‘(47) ‘repurchase agreement’ and ‘reverse repur22 chase agreement’—

23 ‘‘(A) mean—

24 ‘‘(i) an agreement, including related

25 terms, which provides for the transfer of—
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1 ‘‘(I) a certificate of deposit, mort2 gage related security (as defined in sec3 tion 3 of the Securities Exchange Act

4 of 1934), mortgage loan, interest in a

5 mortgage related security or mortgage

6 loan, eligible bankers’ acceptance, or

7 qualified foreign government security

8 (defined for purposes of this paragraph

9 to mean a security that is a direct ob10 ligation of, or that is fully guaranteed

11 by, the central government of a mem12 ber of the Organization for Economic

13 Cooperation and Development); or

14 ‘‘(II) a security that is a direct

15 obligation of, or that is fully guaran16 teed by, the United States or an agency

17 of the United States against the trans18 fer of funds by the transferee of such

19 certificate of deposit, eligible bankers’

20 acceptance, security, loan, or interest;

21 with a simultaneous agreement by such

22 transferee to transfer to the transferor there23 of a certificate of deposit, eligible bankers’

24 acceptance, security, loan, or interest of the

25 kind described in subclause (I) or (II), at a
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1 date certain that is not later than 1 year

2 after the date of the transferor’s transfer or

3 on demand, against the transfer of funds;

4 ‘‘(ii) a combination of agreements or

5 transactions referred to in clauses (i) and

6 (iii);

7 ‘‘(iii) an option to enter into an agree8 ment or transaction referred to in clause (i)

9 or (ii); or

10 ‘‘(iv) a master netting agreement that

11 provides for an agreement or transaction re12 ferred to in clause (i), (ii), or (iii), together

13 with all supplements to such master netting

14 agreement, without regard to whether such

15 master netting agreement provides for an

16 agreement or transaction that is not a re17 purchase agreement under this subpara18 graph, except that such master netting

19 agreement shall be considered to be a repur20 chase agreement under this subparagraph

21 only with respect to each agreement or

22 transaction under such master netting

23 agreement that is referred to in clause (i),

24 (ii), or (iii); or
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1 ‘‘(v) a security agreement or arrange2 ment, or other credit enhancement, directly

3 pertaining to a contract referred to in

4 clause (i), (ii), (iii), or (iv), but not to ex5 ceed the actual value of such contract on the

6 date of the filing of the petition; and

7 ‘‘(B) do not include a repurchase obligation

8 under a participation in a commercial mortgage

9 loan;’’;

10 (C) in paragraph (48) by inserting ‘‘, or ex11 empt from such registration under such section

12 pursuant to an order of the Securities and Ex13 change Commission’’ after ‘‘1934’’; and

14 (D) by striking paragraph (53B) and in15 serting the following:

16 ‘‘(53B) ‘swap agreement’—

17 ‘‘(A) means—

18 ‘‘(i) an agreement, including the terms

19 and conditions incorporated by reference in

20 such agreement, that is—

21 ‘‘(I) an interest rate swap, option,

22 future, or forward agreement, includ23 ing a rate floor, rate cap, rate collar,

24 cross-currency rate swap, and basis

25 swap;
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1 ‘‘(II) a spot, same day-tomorrow,

2 tomorrow-next, forward, or other for3 eign exchange or precious metals agree4 ment;

5 ‘‘(III) a currency swap, option,

6 future, or forward agreement;

7 ‘‘(IV) an equity index or an eq8 uity swap, option, future, or forward

9 agreement;

10 ‘‘(V) a debt index or a debt swap,

11 option, future, or forward agreement;

12 ‘‘(VI) a credit spread or a credit

13 swap, option, future, or forward agree14 ment; or

15 ‘‘(VII) a commodity index or a

16 commodity swap, option, future, or

17 forward agreement;

18 ‘‘(ii) an agreement or transaction that

19 is similar to an agreement or transaction

20 referred to in clause (i) that—

21 ‘‘(I) is currently, or in the future

22 becomes, regularly entered into in the

23 swap market (including terms and

24 conditions incorporated by reference

25 therein); and
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1 ‘‘(II) is a forward, swap, future,

2 or option on a rate, currency, com3 modity, equity security, or other equity

4 instrument, on a debt security or other

5 debt instrument, or on an economic

6 index or measure of economic risk or

7 value;

8 ‘‘(iii) a combination of agreements or

9 transactions referred to in clauses (i) and

10 (ii);

11 ‘‘(iv) an option to enter into an agree12 ment or transaction referred to in this sub13 paragraph;

14 ‘‘(v) a master netting agreement that

15 provides for an agreement or transaction re16 ferred to in clause (i), (ii), (iii), or (iv), to17 gether with all supplements to such master

18 netting agreement and without regard to

19 whether such master netting agreement con20 tains an agreement or transaction described

21 in any such clause, but only with respect to

22 each agreement or transaction referred to in

23 any such clause that is under such master

24 netting agreement; except that
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1 ‘‘(B) the definition under subparagraph (A)

2 is applicable for purposes of this title only, and

3 shall not be construed or applied so as to chal4 lenge or affect the characterization, definition, or

5 treatment of any swap agreement under any

6 other statute, regulation, or rule, including the

7 Securities Act of 1933, the Securities Exchange

8 Act of 1934, the Public Utility Holding Com9 pany Act of 1935, the Trust Indenture Act of

10 1939, the Investment Company Act of 1940, the

11 Investment Advisers Act of 1940, the Securities

12 Investor Protection Act of 1970, the Commodity

13 Exchange Act, and the regulations prescribed by

14 the Securities and Exchange Commission or the

15 Commodity Futures Trading Commission.’’;

16 (2) in section 741, by striking paragraph (7)

17 and inserting the following:

18 ‘‘(7) ‘securities contract’—

19 ‘‘(A) means—

20 ‘‘(i) a contract for the purchase, sale,

21 or loan of a security, a mortgage loan or an

22 interest in a mortgage loan, a group or

23 index of securities, or mortgage loans or in24 terests therein (including an interest therein

25 or based on the value thereof), or option on
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1 any of the foregoing, including an option to

2 purchase or sell any of the foregoing;

3 ‘‘(ii) an option entered into on a na4 tional securities exchange relating to foreign

5 currencies;

6 ‘‘(iii) the guarantee by or to a securi7 ties clearing agency of a settlement of cash,

8 securities, mortgage loans or interests there9 in, group or index of securities, or mortgage

10 loans or interests therein (including any in11 terest therein or based on the value thereof),

12 or option on any of the foregoing, including

13 an option to purchase or sell any of the

14 foregoing;

15 ‘‘(iv) a margin loan;

16 ‘‘(v) any other agreement or trans17 action that is similar to an agreement or

18 transaction referred to in this subpara19 graph;

20 ‘‘(vi) a combination of the agreements

21 or transactions referred to in this subpara22 graph;

23 ‘‘(vii) an option to enter into an agree24 ment or transaction referred to in this sub25 paragraph;
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1 ‘‘(viii) a master netting agreement that

2 provides for an agreement or transaction re3 ferred to in clause (i), (ii), (iii), (iv), (v),

4 (vi), or (vii), together with all supplements

5 to such master netting agreement, without

6 regard to whether such master netting

7 agreement provides for an agreement or

8 transaction that is not a securities contract

9 under this subparagraph, except that such

10 master netting agreement shall be consid11 ered to be a securities contract under this

12 subparagraph only with respect to each

13 agreement or transaction under such master

14 netting agreement that is referred to in

15 clause (i), (ii), (iii), (iv), (v), (vi), or (vii);

16 or

17 ‘‘(ix) a security agreement or arrange18 ment, or other credit enhancement, directly

19 pertaining to a contract referred to in this

20 subparagraph, but not to exceed the actual

21 value of such contract on the date of the fil22 ing of the petition; and

23 ‘‘(B) does not include a purchase, sale, or

24 repurchase obligation under a participation in a

25 commercial mortgage loan;’’; and
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1 (3) in section 761(4)—

2 (A) by striking ‘‘or’’ at the end of subpara3 graph (D); and

4 (B) by adding at the end the following:

5 ‘‘(F) any other agreement or transaction

6 that is similar to an agreement or transaction

7 referred to in this paragraph;

8 ‘‘(G) a combination of the agreements or

9 transactions referred to in this paragraph;

10 ‘‘(H) an option to enter into an agreement

11 or transaction referred to in this paragraph;

12 ‘‘(I) a master netting agreement that pro13 vides for an agreement or transaction referred to

14 in subparagraph (A), (B), (C), (D), (E), (F),

15 (G), or (H), together with all supplements to

16 such master netting agreement, without regard to

17 whether such master netting agreement provides

18 for an agreement or transaction that is not a

19 commodity contract under this paragraph, ex20 cept that such master netting agreement shall be

21 considered to be a commodity contract under this

22 paragraph only with respect to each agreement

23 or transaction under such master netting agree24 ment that is referred to in subparagraph (A),

25 (B), (C), (D), (E), (F), (G), or (H); or
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1 ‘‘(J) a security agreement or arrangement,

2 or other credit enhancement, directly pertaining

3 to a contract referred to in this paragraph, but

4 not to exceed the actual value of such contract on

5 the date of the filing of the petition.’’.

6 (b) DEFINITIONS OF FINANCIAL INSTITUTION, FINAN7 CIAL PARTICIPANT, AND FORWARD CONTRACT MER8 CHANT.—Section 101 of title 11, United States Code, as

9 amended by section 802(b) of this Act, is amended—

10 (1) by striking paragraph (22) and inserting the

11 following:

12 ‘‘(22) ‘financial institution’ means—

13 ‘‘(A)(i) a Federal reserve bank, or an entity

14 that is a commercial or savings bank, industrial

15 savings bank, savings and loan association, trust

16 company, or receiver or conservator for such en17 tity; and

18 ‘‘(ii) if such Federal reserve bank, receiver,

19 or conservator or entity is acting as agent or

20 custodian for a customer in connection with a

21 securities contract, as defined in section 741,

22 such customer; or

23 ‘‘(B) in connection with a securities con24 tract, as defined in section 741 of this title, an
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1 investment company registered under the Invest2 ment Company Act of 1940;’’;

3 (2) by inserting after paragraph (22) the fol4 lowing:

5 ‘‘(22A) ‘financial participant’ means an entity

6 that is a party to a securities contract, commodity

7 contract or forward contract, or on the date of the fil8 ing of the petition, has a commodity contract (as de9 fined in section 761) with the debtor or any other en10 tity (other than an affiliate) of a total gross dollar

11 value of not less than $1,000,000,000 in notional or

12 actual principal amount outstanding on any day

13 during the previous 15-month period, or has gross

14 mark-to-market positions of not less than

15 $100,000,000 (aggregated across counterparties) in

16 any such agreement or transaction with the debtor or

17 any other entity (other than an affiliate) on any day

18 during the previous 15-month period;’’; and

19 (3) by striking paragraph (26) and inserting the

20 following:

21 ‘‘(26) ‘forward contract merchant’ means a Fed22 eral reserve bank, or an entity, the business of which

23 consists in whole or in part of entering into forward

24 contracts as or with merchants or in a commodity, as

25 defined or in section 761, or any similar good, article,
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1 service, right, or interest that is presently or in the

2 future becomes the subject of dealing or in the forward

3 contract trade;’’.

4 (c) DEFINITION OF MASTER NETTING AGREEMENT

5 AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec6 tion 101 of title 11, United States Code, as amended by

7 subsection (b) of this section, is amended by inserting after

8 paragraph (38) the following new paragraphs:

9 ‘‘(38A) the term ‘master netting agreement’—

10 ‘‘(A) means an agreement providing for the

11 exercise of rights, including rights of netting,

12 setoff, liquidation, termination, acceleration, or

13 closeout, under or in connection with 1 or more

14 contracts that are described in any 1 or more of

15 paragraphs (1) through (5) of section 561(a), or

16 any security agreement or arrangement or other

17 credit enhancement related to 1 or more of the

18 foregoing; except that

19 ‘‘(B) if a master netting agreement contains

20 provisions relating to agreements or transactions

21 that are not contracts described in paragraphs

22 (1) through (5) of section 561(a), the master net23 ting agreement shall be deemed to be a master

24 netting agreement only with respect to those

25 agreements or transactions that are described in
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1 any 1 or more of the paragraphs (1) through (5)

2 of section 561(a);

3 ‘‘(38B) the term ‘master netting agreement par4 ticipant’ means an entity that, at any time before the

5 filing of the petition, is a party to an outstanding

6 master netting agreement with the debtor;’’.

7 (d) SWAP AGREEMENTS, SECURITIES CONTRACTS,

8 COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR9 CHASE AGREEMENTS, AND MASTER NETTING AGREEMENTS

10 UNDER THE AUTOMATIC STAY.—

11 (1) IN GENERAL.—Section 362(b) of title 11,

12 United States Code, as amended by section 718 of this

13 Act, is amended—

14 (A) in paragraph (6), by inserting ‘‘,

15 pledged to, and under the control of,’’ after ‘‘held

16 by’’;

17 (B) in paragraph (7), by inserting ‘‘,

18 pledged to, and under the control of,’’ after ‘‘held

19 by’’;

20 (C) by striking paragraph (17) and insert21 ing the following:

22 ‘‘(17) under subsection (a), of the setoff by a

23 swap participant of a mutual debt and claim under

24 or in connection with a swap agreement that con25 stitutes the setoff of a claim against the debtor for a
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1 payment or transfer due from the debtor under or in

2 connection with a swap agreement against a payment

3 due to the debtor from the swap participant under or

4 in connection with a swap agreement or against cash,

5 securities, or other property held by, pledged to, and

6 under the control of, or due from such swap partici7 pant to guarantee, secure, or settle a swap agree8 ment;’’;

9 (D) in paragraph (26), by striking ‘‘or’’ at

10 the end;

11 (E) in paragraph (27), by striking the pe12 riod at the end and inserting ‘‘; or’’; and

13 (F) by inserting after paragraph (27) the

14 following:

15 ‘‘(28) under subsection (a), of the setoff by a

16 master netting agreement participant of a mutual

17 debt and claim under or in connection with 1 or more

18 master netting agreements or any contract or agree19 ment subject to such agreements that constitutes the

20 setoff of a claim against the debtor for any payment

21 or other transfer of property due from the debtor

22 under or in connection with such agreements or any

23 contract or agreement subject to such agreements

24 against any payment due to the debtor from such

25 master netting agreement participant under or in
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1 connection with such agreements or any contract or

2 agreement subject to such agreements or against cash,

3 securities, or other property held by, pledged or and

4 under the control of, or due from such master netting

5 agreement participant to margin, guarantee, secure,

6 or settle such agreements or any contract or agree7 ment subject to such agreements, to the extent such

8 participant is eligible to exercise such offset rights

9 under paragraph (6), (7), or (17) for each individual

10 contract covered by the master netting agreement in

11 issue.’’.

12 (2) LIMITATION.—Section 362 of title 11, United

13 States Code, as amended by section 441(2) of this Act,

14 is amended by adding at the end the following:

15 ‘‘(l) LIMITATION.—The exercise of rights not subject to

16 the stay arising under subsection (a) pursuant to para17 graph (6), (7), or (17) of subsection (b) shall not be stayed

18 by an order of a court or administrative agency in any

19 proceeding under this title.’’.

20 (e) LIMITATION OF AVOIDANCE POWERS UNDER MAS21 TER NETTING AGREEMENT.—Section 546 of title 11, United

22 States Code, is amended—

23 (1) in subsection (g) (as added by section 103 of

24 Public Law 101–311 (104 Stat. 267 et seq.))—
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1 (A) by striking ‘‘under a swap agreement’’;

2 and

3 (B) by striking ‘‘in connection with a swap

4 agreement’’ and inserting ‘‘under or in connec5 tion with any swap agreement’’; and

6 (2) by inserting before subsection (i) (as redesig7 nated by section 407 of this Act) the following new

8 subsection:

9 ‘‘(h) Notwithstanding sections 544, 545, 547,

10 548(a)(2)(B), and 548(b), the trustee may not avoid a

11 transfer made by or to a master netting agreement partici12 pant under or in connection with any master netting agree13 ment or any individual contract covered thereby that is

14 made before the commencement of the case, and except to

15 the extent that the trustee could otherwise avoid such a

16 transfer made under an individual contract covered by such

17 master netting agreement (except under section

18 548(a)(1)(A)).’’.

19 (f) FRAUDULENT TRANSFERS OF MASTER NETTING

20 AGREEMENTS.—Section 548(d)(2) of title 11, United States

21 Code, is amended—

22 (1) in subparagraph (C), by striking ‘‘and’’;

23 (2) in subparagraph (D), by striking the period

24 at the end and inserting ‘‘; and’’; and
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1 (3) by adding at the end the following new sub2 paragraph:

3 ‘‘(E) a master netting agreement partici4 pant that receives a transfer in connection with

5 a master netting agreement or any individual

6 contract covered thereby takes for value to the ex7 tent of such transfer, except, with respect to a

8 transfer under any individual contract covered

9 thereby, to the extent that such master netting

10 agreement participant otherwise did not take (or

11 is otherwise not deemed to have taken) such

12 transfer for value.’’.

13 (g) TERMINATION OR ACCELERATION OF SECURITIES

14 CONTRACTS.—Section 555 of title 11, United States Code,

15 is amended—

16 (1) by striking the section heading and inserting

17 the following:

18 ‘‘§ 555. Contractual right to liquidate, terminate, or

19 accelerate a securities 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 (h) TERMINATION OR ACCELERATION OF COMMOD2 ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,

3 United States Code, is amended—

4 (1) by striking the section heading and inserting

5 the following:

6 ‘‘§ 556. Contractual right to liquidate, terminate, or

7 accelerate a commodities contract or for8 ward contract’’;

9 and

10 (2) in the first sentence, by striking ‘‘liquida11 tion’’ and inserting ‘‘liquidation, termination, or ac12 celeration’’.

13 (i) TERMINATION OR ACCELERATION OF REPURCHASE

14 AGREEMENTS.—Section 559 of title 11, United States Code,

15 is amended—

16 (1) by striking the section heading and inserting

17 the following:

18 ‘‘§ 559. Contractual right to liquidate, terminate, or

19 accelerate a repurchase agreement’’;

20 and

21 (2) in the first sentence, by striking ‘‘liquida22 tion’’ and inserting ‘‘liquidation, termination, or ac23 celeration’’.
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1 (j) LIQUIDATION, TERMINATION, OR ACCELERATION OF

2 SWAP AGREEMENTS.—Section 560 of title 11, United States

3 Code, is amended—

4 (1) by striking the section heading and inserting

5 following:

6 ‘‘§ 560. Contractual right to liquidate, terminate, or

7 accelerate a swap agreement’’;

8 (2) in the first sentence, by striking ‘‘termi9 nation of a swap agreement’’ and inserting ‘‘liquida10 tion, termination, or acceleration of a swap agree11 ment’’; and

12 (3) by striking ‘‘in connection with any swap

13 agreement’’ and inserting ‘‘in connection with the ter14 mination, liquidation, or acceleration of a swap

15 agreement’’.

16 (k) LIQUIDATION, TERMINATION, ACCELERATION, OR

17 OFFSET UNDER A MASTER NETTING AGREEMENT AND

18 ACROSS CONTRACTS.—Title 11, United States Code, is

19 amended by inserting after section 560 the following:

20 ‘‘§ 561. Contractual right to terminate, liquidate, ac21 celerate, or offset under a master netting

22 agreement and across contracts

23 ‘‘(a) Subject to subsection (b), the exercise of any con24 tractual right, because of a condition of the kind specified

25 in section 365(e)(1), to cause the termination, liquidation,
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1 or acceleration of or to offset or net termination values, pay2 ment amounts or other transfer obligations arising under

3 or in connection with 1 or more (or the termination, liq4 uidation, or acceleration of 1 or more)—

5 ‘‘(1) securities contracts, as defined in section

6 741(7);

7 ‘‘(2) commodity contracts, as defined in section

8 761(4);

9 ‘‘(3) forward contracts;

10 ‘‘(4) repurchase agreements;

11 ‘‘(5) swap agreements; or

12 ‘‘(6) master netting agreements,

13 shall not be stayed, avoided, or otherwise limited by oper14 ation of any provision of this title or by any order of a

15 court or administrative agency in any proceeding under

16 this title.

17 ‘‘(b)(1) A party may exercise a contractual right de18 scribed in subsection (a) to terminate, liquidate, or accel19 erate only to the extent that such party could exercise such

20 a right under section 555, 556, 559, or 560 for each indi21 vidual contract covered by the master netting agreement in

22 issue.

23 ‘‘(2) If a debtor is a commodity broker subject to sub24 chapter IV of chapter 7—
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1 ‘‘(A) a party may not net or offset an obligation

2 to the debtor arising under, or in connection with, a

3 commodity contract against any claim arising under,

4 or in connection with, other instruments, contracts, or

5 agreements listed in subsection (a), except to the ex6 tent that the party has positive net equity in the com7 modity accounts at the debtor, as calculated under

8 such subchapter IV; and

9 ‘‘(B) another commodity broker may not net or

10 offset an obligation to the debtor arising under, or in

11 connection with, a commodity contract entered into

12 or held on behalf of a customer of the debtor against

13 any claim arising under, or in connection with, other

14 instruments, contracts, or agreements referred to in

15 subsection (a).

16 ‘‘(c) As used in this section, the term ‘contractual

17 right’ includes a right set forth in a rule or bylaw of a

18 national securities exchange, a national securities associa19 tion, or a securities clearing agency, a right set forth in

20 a bylaw of a clearing organization or contract market or

21 in a resolution of the governing board thereof, and a right,

22 whether or not evidenced in writing, arising under common

23 law, under law merchant, or by reason of normal business

24 practice.’’.
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1 (l) ANCILLARY PROCEEDINGS.—Section 304 of title 11,

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

3 following:

4 ‘‘(d) Any provisions of this title relating to securities

5 contracts, commodity contracts, forward contracts, repur6 chase agreements, swap agreements, or master netting

7 agreements shall apply in a case ancillary to a foreign pro8 ceeding under this section or any other section of this title,

9 so that enforcement of contractual provisions of such con10 tracts and agreements in accordance with their terms—

11 ‘‘(1) shall not be stayed or otherwise limited

12 by—

13 ‘‘(A) operation of any provision of this title;

14 or

15 ‘‘(B) order of a court in any case under this

16 title;

17 ‘‘(2) shall limit avoidance powers to the same ex18 tent as in a proceeding under chapter 7 or 11; and

19 ‘‘(3) shall not be limited based on the presence

20 or absence of assets of the debtor in the United

21 States.’’.

22 (m) COMMODITY BROKER LIQUIDATIONS.—Title 11,

23 United States Code, is amended by inserting after section

24 766 the following:
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1 ‘‘§ 767. Commodity broker liquidation and forward

2 contract merchants, commodity brokers,

3 stockbrokers, financial institutions, secu4 rities clearing agencies, swap partici5 pants, repo participants, and master net6 ting agreement participants

7 ‘‘Notwithstanding any other provision of this title, the

8 exercise of rights by a forward contract merchant, com9 modity broker, stockbroker, financial institution, securities

10 clearing agency, swap participant, repo participant, or

11 master netting agreement participant under this title shall

12 not affect the priority of any unsecured claim it may have

13 after the exercise of such rights.’’.

14 (n) STOCKBROKER LIQUIDATIONS.—Title 11, United

15 States Code, is amended by inserting after section 752 the

16 following:

17 ‘‘§ 753. Stockbroker liquidation and forward contract

18 merchants, commodity brokers, stock19 brokers, financial institutions, securities

20 clearing agencies, swap participants, repo

21 participants, and master netting agree22 ment participants

23 ‘‘Notwithstanding any other provision of this title, the

24 exercise of rights by a forward contract merchant, com25 modity broker, stockbroker, financial institution, securities

26 clearing agency, swap participant, repo participant, finan-
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1 cial participant, or master netting agreement participant

2 under this title shall not affect the priority of any unsecured

3 claim it may have after the exercise of such rights.’’.

4 (o) SETOFF.—Section 553 of title 11, United States

5 Code, is amended—

6 (1) in subsection (a)(3)(C), by inserting ‘‘(except

7 for a setoff of a kind described in section 362(b)(6),

8 362(b)(7), 362(b)(17), 362(b)(28), 555, 556, 559, or

9 560)’’ before the period; and

10 (2) in subsection (b)(1), by striking

11 ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 362(b)(28),

12 555, 556, 559, 560,’’.

13 (p) SECURITIES CONTRACTS, COMMODITY CONTRACTS,

14 AND FORWARD CONTRACTS.—Title 11, United States Code,

15 is amended—

16 (1) in section 362(b)(6), by striking ‘‘financial

17 institutions,’’ each place such term appears and in18 serting ‘‘financial institution, financial participant’’;

19 (2) in section 546(e), by inserting ‘‘financial

20 participant’’ after ‘‘financial institution,’’;

21 (3) in section 548(d)(2)(B), by inserting ‘‘finan22 cial participant’’ after ‘‘financial institution,’’;

23 (4) in section 555—

24 (A) by inserting ‘‘financial participant’’

25 after ‘‘financial institution,’’; and
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1 (B) by inserting before the period ‘‘, a right

2 set forth in a bylaw of a clearing organization

3 or contract market or in a resolution of the gov4 erning board thereof, and a right, whether or not

5 in writing, arising under common law, under

6 law merchant, or by reason of normal business

7 practice’’; and

8 (5) in section 556, by inserting ‘‘, financial par9 ticipant’’ after ‘‘commodity broker’’.

10 (q) CONFORMING AMENDMENTS.—Title 11, United

11 States Code, is amended—

12 (1) in the table of sections for chapter 5—

13 (A) by striking the items relating to sections

14 555 and 556 and inserting the following:

‘‘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.’’;

15 (B) by striking the items relating to sections

16 559 and 560 and inserting the following:

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement.

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;

17 and

18 (C) by adding after the item relating to sec19 tion 560 the following:

‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement and across contracts.’’;

20 and

21 (2) in the table of sections for chapter 7—
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1 (A) by inserting after the item relating to

2 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.’’;

3 and

4 (B) by inserting after the item relating to

5 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.’’.

6 SEC. 902. DAMAGE MEASURE.

7 (a) IN GENERAL.—Title 11, United States Code, is

8 amended—

9 (1) by inserting after section 561 the following:

10 ‘‘§ 562. Damage measure in connection with swap

11 agreements, securities contracts, forward

12 contracts, commodity contracts, repur13 chase agreements, or master netting

14 agreements

15 ‘‘If the trustee rejects a swap agreement, securities con16 tract (as defined in section 741), forward contract, com17 modity contract (as defined in section 761) repurchase

18 agreement, or master netting agreement under section

19 365(a), or if a forward contract merchant, stockbroker, fi20 nancial institution, securities clearing agency, repo partici21 pant, financial participant, master netting agreement par-
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1 ticipant, or swap participant liquidates, terminates, or ac2 celerates such contract or agreement, damages shall be

3 measured as of the earlier of—

4 ‘‘(1) the date of such rejection; or

5 ‘‘(2) the date of such liquidation, termination, or

6 acceleration.’’; and

7 (2) in the table of sections for chapter 5 by in8 serting after the item relating to section 561 the fol9 lowing:

‘‘562. Damage measure in connection with swap agreements, securities contracts,

forward contracts, commodity contracts, repurchase agreements,

or master netting agreements.’’.

10 (b) CLAIMS ARISING FROM REJECTION.—Section

11 502(g) of title 11, United States Code, is amended—

12 (1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and

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

14 ‘‘(2) A claim for damages calculated in accordance

15 with section 561 shall be allowed under subsection (a), (b),

16 or (c) of this section, or disallowed under subsection (d) or

17 (e) of this section, as if such claim had arisen before the

18 date of the filing of the petition.’’.

19 SEC. 903. ASSET-BACKED SECURITIZATIONS.

20 Section 541 of title 11, United States Code, is

21 amended—

22 (1) in subsection (b), by striking ‘‘or’’ at the end

23 of paragraph (4);
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1 (2) by redesignating paragraph (5) of subsection

2 (b) as paragraph (6);

3 (3) by inserting after paragraph (4) of sub4 section (b) the following new paragraph:

5 ‘‘(5) any eligible asset (or proceeds thereof), to

6 the extent that such eligible asset was transferred by

7 the debtor, before the date of commencement of the

8 case, to an eligible entity in connection with an asset9 backed securitization, except to the extent that such

10 asset (or proceeds or value thereof) may be recovered

11 by the trustee under section 550 by virtue of avoid12 ance under section 548(a); or’’; and

13 (4) by adding at the end the following:

14 ‘‘(e) For purposes of this section, the following defini15 tions shall apply:

16 ‘‘(1) The term ‘asset-backed securitization’ means

17 a transaction in which eligible assets transferred to

18 an eligible entity are used as the source of payment

19 on securities, the most senior of which are rated in20 vestment grade by 1 or more nationally recognized se21 curities rating organizations, issued by an issuer.

22 ‘‘(2) The term ‘eligible asset’ means—

23 ‘‘(A) financial assets (including interests

24 therein and proceeds thereof), either fixed or re25 volving, including residential and commercial
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1 mortgage loans, consumer receivables, trade re2 ceivables, and lease receivables, that, by their

3 terms, convert into cash within a finite time pe4 riod, 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.

21 ‘‘(5) The term ‘transferred’ means the debtor,

22 under a written agreement, represented and war23 ranted that eligible assets were sold, contributed, or

24 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 serv8 icing of all or any portion of such eligible assets;

9 or

10 ‘‘(C) the characterization of such sale, con11 tribution, or other conveyance for tax, account12 ing, regulatory reporting, or other purposes.’’.

13 SEC. 904. EFFECTIVE DATE; APPLICATION OF AMEND14 MENTS.

15 (a) EFFECTIVE DATE.—This title shall take effect on

16 the date of enactment of this Act.

17 (b) APPLICATION OF AMENDMENTS.—The amendments

18 made by this title shall apply with respect to cases com19 menced or appointments made under any Federal or State

20 law after the date of enactment of this Act, but shall not

21 apply with respect to cases commenced or appointments

22 made under any Federal or State law before the date of

23 enactment of this Act.
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1 TITLE X—PROTECTION OF FAM2 ILY FARMERS AND FAMILY

3 FISHERMEN

4 SEC. 1001. REENACTMENT OF CHAPTER 12.

5 (a) REENACTMENT.—

6 (1) IN GENERAL.—Chapter 12 of title 11, United

7 States Code, as reenacted by section 149 of division

8 C of the Omnibus Consolidated and Emergency Sup9 plemental Appropriations Act, 1999 (Public Law

10 105–277), and amended by this Act, is reenacted.

11 (2) EFFECTIVE DATE.—Subsection (a) shall take

12 effect on October 1, 1999.

13 (b) CONFORMING AMENDMENT.—Section 302 of the

14 Bankruptcy, Judges, United States Trustees, and Family

15 Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is

16 amended by striking subsection (f).

17 SEC. 1002. DEBT LIMIT INCREASE.

18 Section 104(b) of title 11, United States Code, is

19 amended by adding at the end the following:

20 ‘‘(4) The dollar amount in section 101(18) shall be ad21 justed at the same times and in the same manner as the

22 dollar amounts in paragraph (1) of this subsection, begin23 ning with the adjustment to be made on April 1, 2001.’’.
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1 SEC. 1003. ELIMINATION OF REQUIREMENT THAT FAMILY

2 FARMER AND SPOUSE RECEIVE OVER 50 PER3 CENT OF INCOME FROM FARMING OPER4 ATION IN YEAR PRIOR TO BANKRUPTCY.

5 Section 101(18)(A) of title 11, United States Code, is

6 amended by striking ‘‘the taxable year preceding the taxable

7 year’’ and inserting ‘‘at least 1 of the 3 calendar years pre8 ceding the year’’.

9 SEC. 1004. CERTAIN CLAIMS OWED TO GOVERNMENTAL

10 UNITS.

11 (a) CONTENTS OF PLAN.—Section 1222(a)(2) of title

12 11, United States Code, is amended to read as follows:

13 ‘‘(2) provide for the full payment, in deferred

14 cash payments, of all claims entitled to priority

15 under section 507, unless—

16 ‘‘(A) the claim is a claim owed to a govern17 mental unit that arises as a result of the sale,

18 transfer, exchange, or other disposition of any

19 farm asset used in the debtor’s farming oper20 ation, in which case the claim shall be treated as

21 an unsecured claim that is not entitled to pri22 ority under section 507, but the debt shall be

23 treated in such manner only if the debtor re24 ceives a discharge; or

25 ‘‘(B) the holder of a particular claim agrees

26 to a different treatment of that claim; and’’.
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1 (b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) of

2 title 11, United States Code, is amended by striking ‘‘a

3 State or local governmental unit’’ and inserting ‘‘any gov4 ernmental unit’’.

5 SEC. 1005. PROHIBITION OF RETROACTIVE ASSESSMENT OF

6 DISPOSABLE INCOME.

7 (a) IN GENERAL.—Section 1225(b) of title 11, United

8 States Code, is amended by adding at the end the following:

9 ‘‘(3) If the plan provides for specific amounts of

10 property to be distributed on account of allowed unse11 cured claims as required by paragraph (1)(B), those

12 amounts equal or exceed the debtor’s projected dispos13 able income for that period, and the plan meets the

14 requirements for confirmation other than those of this

15 subsection, the plan shall be confirmed.’’.

16 (b) MODIFICATION.—Section 1229 of title 11, United

17 States Code, is amended by adding at the end the following:

18 ‘‘(d)(1) A modification of the plan under this section

19 may not increase the amount of payments that were due

20 prior to the date of the order modifying the plan.

21 ‘‘(2) A modification of the plan under this section to

22 increase payments based on an increase in the debtor’s dis23 posable income may not require payments to unsecured

24 creditors in any particular month greater than the debtor’s
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1 disposable income for that month unless the debtor proposes

2 such a modification.

3 ‘‘(3) A modification of the plan in the last year of the

4 plan shall not require payments that would leave the debtor

5 with insufficient funds to carry on the farming operation

6 after the plan is completed unless the debtor proposes such

7 a modification.’’.

8 SEC. 1006. FAMILY FISHERMEN.

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

10 States Code, is amended—

11 (1) by inserting after paragraph (7) the fol12 lowing:

13 ‘‘(7A) ‘commercial fishing operation’ includes—

14 ‘‘(A) the catching or harvesting of fish,

15 shrimp, lobsters, urchins, seaweed, shellfish, or

16 other aquatic species or products; and

17 ‘‘(B) for purposes of section 109 and chap18 ter 12, aquaculture activities consisting of rais19 ing for market any species or product described

20 in subparagraph (A);’’;

21 ‘‘(7B) ‘commercial fishing vessel’ means a vessel

22 used by a fisherman to carry out a commercial fish23 ing operation;’’;

24 (2) by inserting after paragraph (19) the fol25 lowing:
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1 ‘‘(19A) ‘family fisherman’ means—

2 ‘‘(A) an individual or individual and

3 spouse engaged in a commercial fishing oper4 ation (including aquiculture for purposes of

5 chapter 12)—

6 ‘‘(i) whose aggregate debts do not ex7 ceed $1,500,000 and not less than 80 per8 cent of whose aggregate noncontingent, liq9 uidated debts (excluding a debt for the prin10 cipal residence of such individual or such

11 individual and spouse, unless such debt

12 arises out of a commercial fishing oper13 ation), on the date the case is filed, arise

14 out of a commercial fishing operation

15 owned or operated by such individual or

16 such individual and spouse; and

17 ‘‘(ii) who receive from such commercial

18 fishing operation more than 50 percent of

19 such individual’s or such individual’s and

20 spouse’s gross income for the taxable year

21 preceding the taxable year in which the case

22 concerning such individual or such indi23 vidual and spouse was filed; or

24 ‘‘(B) a corporation or partnership—
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1 ‘‘(i) in which more than 50 percent of

2 the outstanding stock or equity is held by—

3 ‘‘(I) 1 family that conducts the

4 commercial fishing operation; or

5 ‘‘(II) 1 family and the relatives of

6 the members of such family, and such

7 family or such relatives conduct the

8 commercial fishing operation; and

9 ‘‘(ii)(I) more than 80 percent of the

10 value of its assets consists of assets related

11 to the commercial fishing operation;

12 ‘‘(II) its aggregate debts do not exceed

13 $1,500,000 and not less than 80 percent of

14 its aggregate noncontingent, liquidated

15 debts (excluding a debt for 1 dwelling which

16 is owned by such corporation or partner17 ship and which a shareholder or partner

18 maintains as a principal residence, unless

19 such debt arises out of a commercial fishing

20 operation), on the date the case is filed,

21 arise out of a commercial fishing operation

22 owned or operated by such corporation or

23 such partnership; and

24 ‘‘(III) if such corporation issues stock,

25 such stock is not publicly traded;’’; and
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1 (3) by inserting after paragraph (19A) the fol2 lowing:

3 ‘‘(19B) ‘family fisherman with regular annual

4 income’ means a family fisherman whose annual in5 come is sufficiently stable and regular to enable such

6 family fisherman to make payments under a plan

7 under chapter 12 of this title;’’.

8 (b) WHO MAY BE A DEBTOR.—Section 109(f) of title

9 11, United States Code, is amended by inserting ‘‘or family

10 fisherman’’ after ‘‘family farmer’’.

11 (c) CHAPTER 12.—Chapter 12 of title 11, United

12 States Code, is amended—

13 (1) in the chapter heading, by inserting ‘‘OR

14 FISHERMAN’’ after ‘‘FAMILY FARMER’’;

15 (2) in section 1201, by adding at the end the fol16 lowing:

17 ‘‘(e)(1) Notwithstanding any other provision of law,

18 for purposes of this subsection, a guarantor of a claim of

19 a creditor under this section shall be treated in the same

20 manner as a creditor with respect to the operation of a stay

21 under this section.

22 ‘‘(2) For purposes of a claim that arises from the own23 ership or operation of a commercial fishing operation, a

24 co-maker of a loan made by a creditor under this section
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1 shall be treated in the same manner as a creditor with re2 spect to the operation of a stay under this section.’’;

3 (3) in section 1203, by inserting ‘‘or commercial

4 fishing operation’’ after ‘‘farm’’;

5 (4) in section 1206, by striking ‘‘if the property

6 is farmland or farm equipment’’ and inserting ‘‘if the

7 property is farmland, farm equipment, or property of

8 a commercial fishing operation (including a commer9 cial fishing vessel)’’; and

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

11 ‘‘§ 1232. Additional provisions relating to family fish12 ermen

13 ‘‘(a)(1) Notwithstanding any other provision of law,

14 except as provided in subsection (c), with respect to any

15 commercial fishing vessel of a family fisherman, the debts

16 of that family fisherman shall be treated in the manner pre17 scribed in paragraph (2).

18 ‘‘(2)(A) For purposes of this chapter, a claim for a

19 lien described in subsection (b) for a commercial fishing ves20 sel of a family fisherman that could, but for this subsection,

21 be subject to a lien under otherwise applicable maritime

22 law, shall be treated as an unsecured claim.

23 ‘‘(B) Subparagraph (A) applies to a claim for a lien

24 resulting from a debt of a family fisherman incurred on

25 or after the date of enactment of this chapter.
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1 ‘‘(b) A lien described in this subsection is—

2 ‘‘(1) a maritime lien under subchapter III of

3 chapter 313 of title 46, United States Code, without

4 regard to whether that lien is recorded under section

5 31343 of title 46, United States Code; or

6 ‘‘(2) a lien under applicable State law (or the

7 law of a political subdivision thereof).

8 ‘‘(c) Subsection (a) shall not apply to—

9 ‘‘(1) a claim made by a member of a crew or a

10 seaman including a claim made for—

11 ‘‘(A) wages, maintenance, or cure; or

12 ‘‘(B) personal injury; or

13 ‘‘(2) a preferred ship mortgage that has been per14 fected under subchapter II of chapter 313 of title 46,

15 United States Code.

16 ‘‘(d) For purposes of this chapter, a mortgage described

17 in subsection (c)(2) shall be treated as a secured claim.’’.

18 (d) CLERICAL AMENDMENTS.—

19 (1) TABLE OF CHAPTERS.—In the table of chap20 ters for title 11, United States Code, the item relating

21 to chapter 12, is amended to read as follows:

‘‘12. Adjustments of Debts of a Family Farmer or Family

Fisherman with Regular Annual Income ...... 1201’’.

22 (2) TABLE OF SECTIONS.—The table of sections

23 for chapter 12 of title 11, United States Code, is

24 amended by adding at the end the following new item:

‘‘1232. Additional provisions relating to family fishermen.’’.
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1 TITLE XI—HEALTH CARE AND

2 EMPLOYEE BENEFITS

3 SEC. 1101. DEFINITIONS.

4 (a) HEALTH CARE BUSINESS DEFINED.—Section 101

5 of title 11, United States Code, as amended by section

6 1003(a) of this Act, is amended—

7 (1) by redesignating paragraph (27A) as para8 graph (27B); and

9 (2) inserting after paragraph (27) the following:

10 ‘‘(27A) ‘health care business’—

11 ‘‘(A) means any public or private entity

12 (without regard to whether that entity is orga13 nized for profit or not for profit) that is pri14 marily engaged in offering to the general public

15 facilities and services for—

16 ‘‘(i) the diagnosis or treatment of in17 jury, deformity, or disease; and

18 ‘‘(ii) surgical, drug treatment, psy19 chiatric or obstetric care; and

20 ‘‘(B) includes—

21 ‘‘(i) any—

22 ‘‘(I) general or specialized hos23 pital;

24 ‘‘(II) ancillary ambulatory, emer25 gency, or surgical treatment facility;
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1 ‘‘(III) hospice;

2 ‘‘(IV) home health agency; and

3 ‘‘(V) other health care institution

4 that is similar to an entity referred to

5 in subclause (I), (II), (III), or (IV);

6 and

7 ‘‘(ii) any long-term care facility, in8 cluding any—

9 ‘‘(I) skilled nursing facility;

10 ‘‘(II) intermediate care facility;

11 ‘‘(III) assisted living facility;

12 ‘‘(IV) home for the aged;

13 ‘‘(V) domiciliary care facility;

14 and

15 ‘‘(VI) health care institution that

16 is related to a facility referred to in

17 subclause (I), (II), (III), (IV), or (V),

18 if that institution is primarily engaged

19 in offering room, board, laundry, or

20 personal assistance with activities of

21 daily living and incidentals to activi22 ties of daily living;’’.

23 (b) PATIENT DEFINED.—Section 101 of title 11,

24 United States Code, as amended by subsection (a) of this
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1 section, is amended by inserting after paragraph (40) the

2 following:

3 ‘‘(40A) ‘patient’ means any person who obtains

4 or receives services from a health care business;’’.

5 (c) PATIENT RECORDS DEFINED.—Section 101 of title

6 11, United States Code, as amended by subsection (b) of

7 this section, is amended by inserting after paragraph (40A)

8 the following:

9 ‘‘(40B) ‘patient records’ means any written doc10 ument relating to a patient or a record recorded in

11 a magnetic, optical, or other form of electronic me12 dium;’’.

13 (d) RULE OF CONSTRUCTION.—The amendments made

14 by subsection (a) of this section shall not affect the interpre15 tation of section 109(b) of title 11, United States Code.

16 SEC. 1102. DISPOSAL OF PATIENT RECORDS.

17 (a) IN GENERAL.—Subchapter III of chapter 3 of title

18 11, United States Code, is amended by adding at the end

19 the following:

20 ‘‘§ 351. Disposal of patient records

21 ‘‘If a health care business commences a case under

22 chapter 7, 9, or 11, and the trustee does not have a sufficient

23 amount of funds to pay for the storage of patient records

24 in the manner required under applicable Federal or State

25 law, the following requirements shall apply:
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1 ‘‘(1) The trustee shall—

2 ‘‘(A) publish notice, in 1 or more appro3 priate newspapers, that if patient records are

4 not claimed by the patient or an insurance pro5 vider (if applicable law permits the insurance

6 provider to make that claim) by the date that is

7 90 days after the date of that notification, the

8 trustee will destroy the patient records; and

9 ‘‘(B) during the 90-day period described in

10 subparagraph (A), attempt to notify directly

11 each patient that is the subject of the patient

12 records and appropriate insurance carrier con13 cerning the patient records by mailing to the last

14 known address of that patient and appropriate

15 insurance carrier an appropriate notice regard16 ing the claiming or disposing of patient records.

17 ‘‘(2) If after providing the notification under

18 paragraph (1), patient records are not claimed dur19 ing the 90-day period described under that para20 graph, the trustee shall mail, by certified mail, at the

21 end of such 90-day period a written request to each

22 appropriate Federal agency to request permission

23 from that agency to deposit the patient records with

24 that agency.
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1 ‘‘(3) If, following the period in paragraph (2)

2 and after providing the notification under paragraph

3 (1), patient records are not claimed during the 90-

4 day period described in paragraph (1)(A) or in any

5 case in which a notice is mailed under paragraph

6 (1)(B), during the 90-day period beginning on the

7 date on which the notice is mailed, by a patient or

8 insurance provider in accordance with that para9 graph, the trustee shall destroy those records by—

10 ‘‘(A) if the records are written, shredding or

11 burning the records; or

12 ‘‘(B) if the records are magnetic, optical, or

13 other electronic records, by otherwise destroying

14 those records so that those records cannot be re15 trieved.’’.

16 (b) CLERICAL AMENDMENT.—The chapter analysis for

17 chapter 3 of title 11, United States Code, is amended by

18 inserting after the item relating to section 350 the following:

‘‘351. Disposal of patient records.’’.

19 SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF

20 CLOSING A HEALTH CARE BUSINESS.

21 Section 503(b) of title 11, United States Code, is

22 amended—

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

24 end;
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1 (2) in paragraph (6), by striking the period at

2 the end and inserting ‘‘; and’’; and

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

4 ‘‘(7) the actual, necessary costs and expenses of

5 closing a health care business incurred by a trustee or

6 by a Federal agency (as that term is defined in sec7 tion 551(1) of title 5) or a department or agency of

8 a State or political subdivision thereof, including any

9 cost or expense incurred—

10 ‘‘(A) in disposing of patient records in ac11 cordance with section 351; or

12 ‘‘(B) in connection with transferring pa13 tients from the health care business that is in the

14 process of being closed to another health care

15 business.’’.

16 SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA17 TIENT ADVOCATE.

18 (a) IN GENERAL.—

19 (1) APPOINTMENT OF OMBUDSMAN.—Subchapter

20 II of chapter 3 of title 11, United States Code, is

21 amended by inserting after section 331 the following:

22 ‘‘§ 332. Appointment of ombudsman

23 ‘‘(a) Not later than 30 days after a case is commenced

24 by a health care business under chapter 7, 9, or 11, the

25 court shall appoint an ombudsman with appropriate exper-
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1 tise in monitoring the quality of patient care to represent

2 the interests of the patients of the health care business. The

3 court may appoint as an ombudsman a person who is serv4 ing as a State Long-Term Care Ombudsman appointed

5 under title III or VII of the Older Americans Act of 1965

6 (42 U.S.C. 3021 et seq. and 3058 et seq.).

7 ‘‘(b) An ombudsman appointed under subsection (a)

8 shall—

9 ‘‘(1) monitor the quality of patient care, to the

10 extent necessary under the circumstances, including

11 interviewing patients and physicians;

12 ‘‘(2) not later than 60 days after the date of ap13 pointment, and not less frequently than every 60 days

14 thereafter, report to the court, at a hearing or in

15 writing, regarding the quality of patient care at the

16 health care business involved; and

17 ‘‘(3) if the ombudsman determines that the qual18 ity of patient care is declining significantly or is oth19 erwise being materially compromised, notify the court

20 by motion or written report, with notice to appro21 priate parties in interest, immediately upon making

22 that determination.

23 ‘‘(c) An ombudsman shall maintain any information

24 obtained by the ombudsman under this section that relates
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1 to patients (including information relating to patient

2 records) as confidential information.’’.

3 (2) CLERICAL AMENDMENT.—The chapter anal4 ysis for chapter 3 of title 11, United States Code, is

5 amended by inserting after the item relating to sec6 tion 331 the following:

‘‘332. Appointment of ombudsman.’’.

7 (b) COMPENSATION OF OMBUDSMAN.—Section

8 330(a)(1) of title 11, United States Code, is amended—

9 (1) in the matter proceeding subparagraph (A),

10 by inserting ‘‘an ombudsman appointed under section

11 331, or’’ before ‘‘a professional person’’; and

12 (2) in subparagraph (A), by inserting ‘‘ombuds13 man,’’ before ‘‘professional person’’.

14 SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO

15 TRANSFER PATIENTS.

16 (a) IN GENERAL.—Section 704(a) of title 11, United

17 States Code, as amended by section 219 of this Act, is

18 amended—

19 (1) in paragraph (9), by striking ‘‘and’’ at the

20 end;

21 (2) in paragraph (10), by striking the period

22 and inserting ‘‘; and’’; and

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

24 ‘‘(11) use all reasonable and best efforts to trans25 fer patients from a health care business that is in the
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1 process of being closed to an appropriate health care

2 business that—

3 ‘‘(A) is in the vicinity of the health care

4 business that is closing;

5 ‘‘(B) provides the patient with services that

6 are substantially similar to those provided by the

7 health care business that is in the process of

8 being closed; and

9 ‘‘(C) maintains a reasonable quality of

10 care.’’.

11 (b) CONFORMING AMENDMENT.—Section 1106(a)(1) of

12 title 11, United States Code, is amended by striking

13 ‘‘704(2), 704(5), 704(7), 704(8), and 704(9)’’ and inserting

14 ‘‘704(a) (2), (5), (7), (8), (9), and (11)’’.

15 SEC. 1106. ESTABLISHMENT OF POLICY AND PROTOCOLS

16 RELATING TO BANKRUPTCIES OF HEALTH

17 CARE BUSINESSES.

18 Not later than 30 days after the date of enactment of

19 this Act, the Attorney General of the United States, in con20 sultation with the Secretary of Health and Human Services

21 and the National Association of Attorneys General, shall

22 establish a policy and protocols for coordinating a response

23 to bankruptcies of health care businesses (as that term is

24 defined in section 101 of title 11, United States Code), in-
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1 cluding assessing the appropriate time frame for disposal

2 of patient records under section 1102 of this Act.

3 SEC. 1107. EXCLUSION FROM PROGRAM PARTICIPATION

4 NOT SUBJECT TO AUTOMATIC STAY.

5 Section 362(b) of title 11, United States Code, as

6 amended by section 901(d) of this Act, is amended—

7 (1) in paragraph (27), by striking ‘‘or’’ at the

8 end;

9 (2) in paragraph (28), by striking the period at

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

11 (3) by inserting after paragraph (28) the fol12 lowing:

13 ‘‘(29) under subsection (a), of the exclusion by

14 the Secretary of Health and Human Services of the

15 debtor from participation in the medicare program or

16 any other Federal health care program (as defined in

17 section 1128B(f) of the Social Security Act (42 U.S.C.

18 1320a–7b(f)) pursuant to title XI of such Act (42

19 U.S.C. 1301 et seq.) or title XVIII of such Act (42

20 U.S.C. 1395 et seq.).’’.
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1 TITLE XII—AMENDMENTS TO

2 FAIR LABOR STANDARDS ACT

3 OF 1938

4 SEC. 1201. MINIMUM WAGE.

5 Section 6(a)(1) of the Fair Labor Standards Act of

6 1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:

7 ‘‘(1) except as otherwise provided in this section,

8 not less than—

9 ‘‘(A) $5.15 an hour beginning September 1,

10 1997,

11 ‘‘(B) $5.50 an hour during the year begin12 ning March 1, 2000,

13 ‘‘(C) $5.85 an hour during the year begin14 ning March 1, 2001, and

15 ‘‘(D) $6.15 an hour during the year begin16 ning March 1, 2002.’’.

17 SEC. 1202. REGULAR RATE FOR OVERTIME PURPOSES.

18 Section 7(e) of the Fair Labor Standards Act of 1938

19 (29 U.S.C. 207(e)) is amended—

20 (1) by inserting before the semicolon at the end

21 of paragraph (3) the following: ‘‘; or (d) the payments

22 are made to reward an employee or group of employ23 ees for meeting or exceeding the productivity, quality,

24 efficiency, or sales goals as specified in a gainsharing,
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1 incentive bonus, commission, or performance contin2 gent bonus plan’’; and

3 (2) by inserting after and below paragraph (7)

4 the following:

5 ‘‘A plan described in paragraph (3)(d) shall be in writing

6 and made available to employees, provide that the amount

7 of the payments to be made under the plan be based upon

8 a formula that is stated in the plan, and be established and

9 maintained in good faith for the purpose of distributing

10 to employees additional remuneration over and above the

11 wages and salaries that are not dependent upon the exist12 ence of such plan or payments made pursuant to such

13 plan.’’.

14 TITLE XIII—TAX RELIEF

15 SEC. 1300. AMENDMENT OF 1986 CODE.

16 Except as otherwise expressly provided, whenever in

17 this title an amendment or repeal is expressed in terms of

18 an amendment to, or repeal of, a section or other provision,

19 the reference shall be considered to be made to a section or

20 other provision of the Internal Revenue Code of 1986.

21 Subtitle A—Small Business Tax

22 Relief

23 SEC. 1301. INCREASE IN EXPENSING LIMITATION TO $30,000.

24 (a) IN GENERAL.—Paragraph (1) of section 179(b)

25 (relating to limitations) is amended to read as follows:
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1 ‘‘(1) DOLLAR LIMITATION.—The aggregate cost

2 which may be taken into account under subsection (a)

3 for any taxable year shall not exceed $30,000.’’

4 (b) EFFECTIVE DATE.—The amendment made by this

5 section shall apply to taxable years beginning after Decem6 ber 31, 2000.

7 SEC. 1302. REPEAL OF TEMPORARY UNEMPLOYMENT TAX.

8 Section 3301 (relating to rate of unemployment tax)

9 is amended—

10 (1) by striking ‘‘2007’’ in paragraph (1) and in11 serting ‘‘2000’’; and

12 (2) by striking ‘‘2008’’ in paragraph (2) and in13 serting ‘‘2001’’.

14 SEC. 1303. FULL DEDUCTION OF HEALTH INSURANCE

15 COSTS FOR SELF-EMPLOYED INDIVIDUALS.

16 (a) IN GENERAL.—Section 162(l)(1) (relating to al17 lowance of deduction) is amended to read as follows:

18 ‘‘(1) ALLOWANCE OF DEDUCTION.—In the case of

19 an individual who is an employee within the mean20 ing of section 401(c)(1), there shall be allowed as a

21 deduction under this section an amount equal to the

22 amount paid during the taxable year for insurance

23 which constitutes medical care for the taxpayer and

24 the taxpayer’s spouse and dependents.’’
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1 (b) EFFECTIVE DATE.—The amendment made by this

2 section shall apply to taxable years beginning after Decem3 ber 31, 1999.

4 SEC. 1304. PERMANENT EXTENSION OF WORK OPPOR5 TUNITY TAX CREDIT.

6 (a) IN GENERAL.—Section 51(c) (defining wages) is

7 amended by striking paragraph (4).

8 (b) EFFECTIVE DATE.—The amendment made by this

9 section shall apply to individuals who begin work for the

10 employer after June 30, 1999.

11 SEC. 1305. SMALL BUSINESSES ALLOWED INCREASED DE12 DUCTION FOR MEAL AND ENTERTAINMENT

13 EXPENSES.

14 (a) IN GENERAL.—Subsection (n) of section 274 (relat15 ing to only 50 percent of meal and entertainment expenses

16 allowed as deduction) is amended by adding at the end the

17 following:

18 ‘‘(4) SPECIAL RULE FOR SMALL BUSINESSES.—

19 ‘‘(A) IN GENERAL.—In the case of any tax20 payer which is a small business, paragraph (1)

21 shall be applied by substituting ‘the applicable

22 percentage’ for ‘50 percent’. For purposes of the

23 preceding sentence, the term ‘applicable percent24 age’ means 55 percent in the case of taxable

25 years beginning in 2001, increased (but not
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1 above 80 percent) by 5 percentage points for each

2 succeeding calendar year after 2001 with respect

3 to taxable years beginning in each such calendar

4 year.

5 ‘‘(B) SMALL BUSINESS.—For purposes of

6 this paragraph, the term ‘small business’ means,

7 with respect to expenses paid or incurred during

8 any taxable year—

9 ‘‘(i) any C corporation which meets the

10 requirements of section 55(e)(1) for such

11 year, and

12 ‘‘(ii) any S corporation, partnership,

13 or sole proprietorship which would meet

14 such requirements if it were a C corpora15 tion.’’

16 (b) EFFECTIVE DATE.—The amendment made by sub17 section (a) shall apply to taxable years beginning after De18 cember 31, 2000.
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1 Subtitle B—Deduction for Health

2 and Long-Term Care Insurance

3 SEC. 1311. DEDUCTION FOR HEALTH AND LONG-TERM CARE

4 INSURANCE COSTS OF INDIVIDUALS NOT

5 PARTICIPATING IN EMPLOYER-SUBSIDIZED

6 HEALTH PLANS.

7 (a) IN GENERAL.—Part VII of subchapter B of chapter

8 1 is amended by redesignating section 222 as section 223

9 and by inserting after section 221 the following new section:

10 ‘‘SEC. 222. HEALTH AND LONG-TERM CARE INSURANCE

11 COSTS.

12 ‘‘(a) IN GENERAL.—In the case of an individual, there

13 shall be allowed as a deduction an amount equal to the ap14 plicable percentage of the amount paid during the taxable

15 year for insurance which constitutes medical care for the

16 taxpayer and the taxpayer’s spouse and dependents.

17 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of sub18 section (a), the applicable percentage shall be determined

19 in accordance with the following table:

‘‘For taxable years beginning The applicable

in calendar year— percentage is—

2002, 2003, and 2004 .................................................................... 25

2005 ................................................................................................ 35

2006 ................................................................................................ 65

2007 and thereafter ........................................................................ 100.

20 ‘‘(c) LIMITATION BASED ON OTHER COVERAGE.—

21 ‘‘(1) COVERAGE UNDER CERTAIN SUBSIDIZED

22 EMPLOYER PLANS.—
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1 ‘‘(A) IN GENERAL.—Subsection (a) shall not

2 apply to any taxpayer for any calendar month

3 for which the taxpayer participates in any

4 health plan maintained by any employer of the

5 taxpayer or of the spouse of the taxpayer if 50

6 percent or more of the cost of coverage under

7 such plan (determined under section 4980B and

8 without regard to payments made with respect to

9 any coverage described in subsection (e)) is paid

10 or incurred by the employer.

11 ‘‘(B) EMPLOYER CONTRIBUTIONS TO CAFE12 TERIA PLANS, FLEXIBLE SPENDING ARRANGE13 MENTS, AND MEDICAL SAVINGS ACCOUNTS.—Em14 ployer contributions to a cafeteria plan, a flexi15 ble spending or similar arrangement, or a med16 ical savings account which are excluded from

17 gross income under section 106 shall be treated

18 for purposes of subparagraph (A) as paid by the

19 employer.

20 ‘‘(C) AGGREGATION OF PLANS OF EM21 PLOYER.—A health plan which is not otherwise

22 described in subparagraph (A) shall be treated as

23 described in such subparagraph if such plan

24 would be so described if all health plans of per25 sons treated as a single employer under sub-
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1 section (b), (c), (m), or (o) of section 414 were

2 treated as one health plan.

3 ‘‘(D) SEPARATE APPLICATION TO HEALTH

4 INSURANCE AND LONG-TERM CARE INSURANCE.—

5 Subparagraphs (A) and (C) shall be applied sep6 arately with respect to—

7 ‘‘(i) plans which include primarily

8 coverage for qualified long-term care serv9 ices or are qualified long-term care insur10 ance contracts, and

11 ‘‘(ii) plans which do not include such

12 coverage and are not such contracts.

13 ‘‘(2) COVERAGE UNDER CERTAIN FEDERAL PRO14 GRAMS.—

15 ‘‘(A) IN GENERAL.—Subsection (a) shall not

16 apply to any amount paid for any coverage for

17 an individual for any calendar month if, as of

18 the first day of such month, the individual is

19 covered under any medical care program de20 scribed in—

21 ‘‘(i) title XVIII, XIX, or XXI of the So22 cial Security Act,

23 ‘‘(ii) chapter 55 of title 10, United

24 States Code,
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1 ‘‘(iii) chapter 17 of title 38, United

2 States Code,

3 ‘‘(iv) chapter 89 of title 5, United

4 States Code, or

5 ‘‘(v) the Indian Health Care Improve6 ment Act.

7 ‘‘(B) EXCEPTIONS.—

8 ‘‘(i) QUALIFIED LONG-TERM CARE.—

9 Subparagraph (A) shall not apply to

10 amounts paid for coverage under a qualified

11 long-term care insurance contract.

12 ‘‘(ii) CONTINUATION COVERAGE OF

13 FEHBP.—Subparagraph (A)(iv) shall not

14 apply to coverage which is comparable to

15 continuation coverage under section 4980B.

16 ‘‘(d) LONG-TERM CARE DEDUCTION LIMITED TO

17 QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.—

18 In the case of a qualified long-term care insurance contract,

19 only eligible long-term care premiums (as defined in section

20 213(d)(10)) may be taken into account under subsection (a).

21 ‘‘(e) DEDUCTION NOT AVAILABLE FOR PAYMENT OF

22 ANCILLARY COVERAGE PREMIUMS.—Any amount paid as

23 a premium for insurance which provides for—

24 ‘‘(1) coverage for accidents, disability, dental

25 care, vision care, or a specified illness, or
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1 ‘‘(2) making payments of a fixed amount per

2 day (or other period) by reason of being hospitalized,

3 shall not be taken into account under subsection (a).

4 ‘‘(f ) SPECIAL RULES.—

5 ‘‘(1) COORDINATION WITH DEDUCTION FOR

6 HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDI7 VIDUALS.—The amount taken into account by the tax8 payer in computing the deduction under section

9 162(l) shall not be taken into account under this sec10 tion.

11 ‘‘(2) COORDINATION WITH MEDICAL EXPENSE

12 DEDUCTION.—The amount taken into account by the

13 taxpayer in computing the deduction under this sec14 tion shall not be taken into account under section

15 213.

16 ‘‘(g) REGULATIONS.—The Secretary shall prescribe

17 such regulations as may be appropriate to carry out this

18 section, including regulations requiring employers to report

19 to their employees and the Secretary such information as

20 the Secretary determines to be appropriate.’’.

21 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX22 PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a) of

23 section 62 is amended by inserting after paragraph (17)

24 the following new item:
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1 ‘‘(18) HEALTH AND LONG-TERM CARE INSUR2 ANCE COSTS.—The deduction allowed by section

3 222.’’.

4 (c) CLERICAL AMENDMENT.—The table of sections for

5 part VII of subchapter B of chapter 1 is amended by strik6 ing the last item and inserting the following new items:

‘‘Sec. 222. Health and long-term care insurance costs.

‘‘Sec. 223. Cross reference.’’.

7 (d) EFFECTIVE DATE.—The amendments made by this

8 section shall apply to taxable years beginning after Decem9 ber 31, 2000.

10 Subtitle C—Pension Tax Relief

11 PART I—EXPANDING COVERAGE

12 SEC. 1321. INCREASE IN BENEFIT AND CONTRIBUTION LIM13 ITS.

14 (a) DEFINED BENEFIT PLANS.—

15 (1) DOLLAR LIMIT.—

16 (A) Subparagraph (A) of section 415(b)(1)

17 (relating to limitation for defined benefit plans)

18 is amended by striking ‘‘$90,000’’ and inserting

19 ‘‘$160,000’’.

20 (B) Subparagraphs (C) and (D) of section

21 415(b)(2) are each amended by striking

22 ‘‘$90,000’’ each place it appears in the headings

23 and the text and inserting ‘‘$160,000’’.
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1 (C) Paragraph (7) of section 415(b) (relat2 ing to benefits under certain collectively bar3 gained plans) is amended by striking ‘‘the great4 er of $68,212 or one-half the amount otherwise

5 applicable for such year under paragraph (1)(A)

6 for ‘$90,000’ ’’ and inserting ‘‘one-half the

7 amount otherwise applicable for such year under

8 paragraph (1)(A) for ‘$160,000’ ’’.

9 (2) LIMIT REDUCED WHEN BENEFIT BEGINS BE10 FORE AGE 62.—Subparagraph (C) of section 415(b)(2)

11 is amended by striking ‘‘the social security retirement

12 age’’ each place it appears in the heading and text

13 and inserting ‘‘age 62’’.

14 (3) LIMIT INCREASED WHEN BENEFIT BEGINS

15 AFTER AGE 65.—Subparagraph (D) of section

16 415(b)(2) is amended by striking ‘‘the social security

17 retirement age’’ each place it appears in the heading

18 and text and inserting ‘‘age 65’’.

19 (4) COST-OF-LIVING ADJUSTMENTS.—Subsection

20 (d) of section 415 (related to cost-of-living adjust21 ments) is amended—

22 (A) by striking ‘‘$90,000’’ in paragraph

23 (1)(A) and inserting ‘‘$160,000’’, and

24 (B) in paragraph (3)(A)—
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1 (i) by striking ‘‘$90,000’’ in the head2 ing and inserting ‘‘$160,000’’, and

3 (ii) by striking ‘‘October 1, 1986’’ and

4 inserting ‘‘July 1, 2000’’.

5 (5) CONFORMING AMENDMENT.—Section

6 415(b)(2) is amended by striking subparagraph (F).

7 (b) DEFINED CONTRIBUTION PLANS.—

8 (1) DOLLAR LIMIT.—Subparagraph (A) of sec9 tion 415(c)(1) (relating to limitation for defined con10 tribution plans) is amended by striking ‘‘$30,000’’

11 and inserting ‘‘$40,000’’.

12 (2) COST-OF-LIVING ADJUSTMENTS.—Subsection

13 (d) of section 415 (related to cost-of-living adjust14 ments) is amended—

15 (A) by striking ‘‘$30,000’’ in paragraph

16 (1)(C) and inserting ‘‘$40,000’’, and

17 (B) in paragraph (3)(D)—

18 (i) by striking ‘‘$30,000’’ in the head19 ing and inserting ‘‘$40,000’’, and

20 (ii) by striking ‘‘October 1, 1993’’ and

21 inserting ‘‘July 1, 2000’’.

22 (c) QUALIFIED TRUSTS.—

23 (1) COMPENSATION LIMIT.—Sections 401(a)(17),

24 404(l), 408(k), and 505(b)(7) are each amended by
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1 striking ‘‘$150,000’’ each place it appears and insert2 ing ‘‘$200,000’’.

3 (2) BASE PERIOD AND ROUNDING OF COST-OF4 LIVING ADJUSTMENT.—Subparagraph (B) of section

5 401(a)(17) is amended—

6 (A) by striking ‘‘October 1, 1993’’ and in7 serting ‘‘July 1, 2000’’, and

8 (B) by striking ‘‘$10,000’’ both places it ap9 pears and inserting ‘‘$5,000’’.

10 (d) ELECTIVE DEFERRALS.—

11 (1) IN GENERAL.—Paragraph (1) of section

12 402(g) (relating to limitation on exclusion for elective

13 deferrals) is amended to read as follows:

14 ‘‘(1) IN GENERAL.—

15 ‘‘(A) LIMITATION.—Notwithstanding sub16 sections (e)(3) and (h)(1)(B), the elective defer17 rals of any individual for any taxable year shall

18 be included in such individual’s gross income to

19 the extent the amount of such deferrals for the

20 taxable year exceeds the applicable dollar

21 amount.

22 ‘‘(B) APPLICABLE DOLLAR AMOUNT.—For

23 purposes of subparagraph (A), the applicable

24 dollar amount shall be the amount determined in

25 accordance with the following table:
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‘‘For taxable years beginning The applicable

in calendar year: dollar amount:

2001 ................................................................................................ $11,000

2002 ................................................................................................ $12,000

2003 ................................................................................................ $13,000

2004 ................................................................................................ $14,000

2005 or thereafter .......................................................................... $15,000.’’.

1 (2) COST-OF-LIVING ADJUSTMENT.—Paragraph

2 (5) of section 402(g) is amended to read as follows:

3 ‘‘(5) COST-OF-LIVING ADJUSTMENT.—In the case

4 of taxable years beginning after December 31, 2005,

5 the Secretary shall adjust the $15,000 amount under

6 paragraph (1)(B) at the same time and in the same

7 manner as under section 415(d), except that the base

8 period shall be the calendar quarter beginning July 1,

9 2004, and any increase under this paragraph which

10 is not a multiple of $500 shall be rounded to the next

11 lowest multiple of $500.’’.

12 (3) CONFORMING AMENDMENTS.—

13 (A) Section 402(g) (relating to limitation

14 on exclusion for elective deferrals), as amended

15 by paragraphs (1) and (2), is further amended

16 by striking paragraph (4) and redesignating

17 paragraphs (5), (6), (7), (8), and (9) as para18 graphs (4), (5), (6), (7), and (8), respectively.

19 (B) Paragraph (2) of section 457(c) is

20 amended by striking ‘‘402(g)(8)(A)(iii)’’ and in21 serting ‘‘402(g)(7)(A)(iii)’’.
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1 (C) Clause (iii) of section 501(c)(18)(D) is

2 amended by striking ‘‘(other than paragraph (4)

3 thereof)’’.

4 (e) DEFERRED COMPENSATION PLANS OF STATE AND

5 LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZA6 TIONS.—

7 (1) IN GENERAL.—Section 457 (relating to de8 ferred compensation plans of State and local govern9 ments and tax-exempt organizations) is amended—

10 (A) in subsections (b)(2)(A) and (c)(1) by

11 striking ‘‘$7,500’’ each place it appears and in12 serting ‘‘the applicable dollar amount’’, and

13 (B) in subsection (b)(3)(A) by striking

14 ‘‘$15,000’’ and inserting ‘‘twice the dollar

15 amount in effect under subsection (b)(2)(A)’’.

16 (2) APPLICABLE DOLLAR AMOUNT; COST-OF-LIV17 ING ADJUSTMENT.—Paragraph (15) of section 457(e)

18 is amended to read as follows:

19 ‘‘(15) APPLICABLE DOLLAR AMOUNT.—

20 ‘‘(A) IN GENERAL.—The applicable dollar

21 amount shall be the amount determined in ac22 cordance with the following table:

‘‘For taxable years beginning The applicable

in calendar year: dollar amount:

2001 ................................................................................................ $11,000

2002 ................................................................................................ $12,000

2003 ................................................................................................ $13,000

2004 ................................................................................................ $14,000

2005 or thereafter .......................................................................... $15,000.
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1 ‘‘(B) COST-OF-LIVING ADJUSTMENTS.—In

2 the case of taxable years beginning after Decem3 ber 31, 2005, the Secretary shall adjust the

4 $15,000 amount specified in the table in sub5 paragraph (A) at the same time and in the same

6 manner as under section 415(d), except that the

7 base period shall be the calendar quarter begin8 ning July 1, 2004, and any increase under this

9 paragraph which is not a multiple of $500 shall

10 be rounded to the next lowest multiple of $500.’’.

11 (f ) SIMPLE RETIREMENT ACCOUNTS.—

12 (1) LIMITATION.—Clause (ii) of section

13 408(p)(2)(A) (relating to general rule for qualified

14 salary reduction arrangement) is amended by striking

15 ‘‘$6,000’’ and inserting ‘‘the applicable dollar

16 amount’’.

17 (2) APPLICABLE DOLLAR AMOUNT.—Subpara18 graph (E) of 408(p)(2) is amended to read as follows:

19 ‘‘(E) APPLICABLE DOLLAR AMOUNT; COST20 OF-LIVING ADJUSTMENT.—

21 ‘‘(i) IN GENERAL.—For purposes of

22 subparagraph (A)(ii), the applicable dollar

23 amount shall be the amount determined in

24 accordance with the following table:

‘‘For taxable years beginning The applicable

in calendar year: dollar amount:

2001 ................................................................................................ $7,000
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‘‘For taxable years beginning The applicable

in calendar year: dollar amount:

2002 ................................................................................................ $8,000

2003 ................................................................................................ $9,000

2004 or thereafter .......................................................................... $10,000.

1 ‘‘(ii) COST-OF-LIVING ADJUSTMENT.—

2 In the case of a year beginning after Decem3 ber 31, 2004, the Secretary shall adjust the

4 $10,000 amount under clause (i) at the

5 same time and in the same manner as

6 under section 415(d), except that the base

7 period taken into account shall be the cal8 endar quarter beginning July 1, 2003, and

9 any increase under this subparagraph

10 which is not a multiple of $500 shall be

11 rounded to the next lower multiple of

12 $500.’’.

13 (3) CONFORMING AMENDMENTS.—

14 (A) Clause (I) of section 401(k)(11)(B)(i) is

15 amended by striking ‘‘$6,000’’ and inserting ‘‘the

16 amount in effect under section 408(p)(2)(A)(ii)’’.

17 (B) Section 401(k)(11) is amended by strik18 ing subparagraph (E).

19 (g) ROUNDING RULE RELATING TO DEFINED BENEFIT

20 PLANS AND DEFINED CONTRIBUTION PLANS.—Paragraph

21 (4) of section 415(d) is amended to read as follows:

22 ‘‘(4) ROUNDING.—
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1 ‘‘(A) $160,000 AMOUNT.—Any increase

2 under subparagraph (A) of paragraph (1) which

3 is not a multiple of $5,000 shall be rounded to

4 the next lowest multiple of $5,000.

5 ‘‘(B) $40,000 AMOUNT.—Any increase

6 under subparagraph (C) of paragraph (1) which

7 is not a multiple of $1,000 shall be rounded to

8 the next lowest multiple of $1,000.’’.

9 (h) EFFECTIVE DATE.—The amendments made by this

10 section shall apply to years beginning after December 31,

11 2000.

12 SEC. 1322. PLAN LOANS FOR SUBCHAPTER S OWNERS,

13 PARTNERS, AND SOLE PROPRIETORS.

14 (a) AMENDMENT TO 1986 CODE.—Subparagraph (B)

15 of section 4975(f )(6) (relating to exemptions not to apply

16 to certain transactions) is amended by adding at the end

17 the following new clause:

18 ‘‘(iii) LOAN EXCEPTION.—For purposes

19 of subparagraph (A)(i), the term ‘owner-em20 ployee’ shall only include a person described

21 in subclause (II) or (III) of clause (i).’’.

22 (b) AMENDMENT TO ERISA.—Section 408(d)(2) of the

23 Employee Retirement Income Security Act of 1974 (29

24 U.S.C. 1108(d)(2)) is amended by adding at the end the

25 following new subparagraph:
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1 ‘‘(C) For purposes of paragraph (1)(A), the term

2 ‘owner-employee’ shall only include a person described in

3 clause (ii) or (iii) of subparagraph (A).’’.

4 (c) EFFECTIVE DATE.—The amendments made by this

5 section shall apply to loans made after December 31, 2000.

6 SEC. 1323. MODIFICATION OF TOP-HEAVY RULES.

7 (a) SIMPLIFICATION OF DEFINITION OF KEY EM8 PLOYEE.—

9 (1) IN GENERAL.—Section 416(i)(1)(A) (defining

10 key employee) is amended—

11 (A) by striking ‘‘or any of the 4 preceding

12 plan years’’ in the matter preceding clause (i),

13 (B) by striking clause (i) and inserting the

14 following:

15 ‘‘(i) an officer of the employer having

16 an annual compensation greater than

17 $150,000,’’,

18 (C) by striking clause (ii) and redesig19 nating clauses (iii) and (iv) as clauses (ii) and

20 (iii), respectively, and

21 (D) by striking the second sentence in the

22 matter following clause (iii), as redesignated by

23 subparagraph (C).
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1 (2) CONFORMING AMENDMENT.—Section

2 416(i)(1)(B)(iii) is amended by striking ‘‘and sub3 paragraph (A)(ii)’’.

4 (b) MATCHING CONTRIBUTIONS TAKEN INTO ACCOUNT

5 FOR MINIMUM CONTRIBUTION REQUIREMENTS.—Section

6 416(c)(2)(A) (relating to defined contribution plans) is

7 amended by adding at the end the following: ‘‘Employer

8 matching contributions (as defined in section

9 401(m)(4)(A)) shall be taken into account for purposes of

10 this subparagraph.’’.

11 (c) DISTRIBUTIONS DURING LAST YEAR BEFORE DE12 TERMINATION DATE TAKEN INTO ACCOUNT.—

13 (1) IN GENERAL.—Paragraph (3) of section

14 416(g) is amended to read as follows:

15 ‘‘(3) DISTRIBUTIONS DURING LAST YEAR BEFORE

16 DETERMINATION DATE TAKEN INTO ACCOUNT.—

17 ‘‘(A) IN GENERAL.—For purposes of

18 determining—

19 ‘‘(i) the present value of the cumulative

20 accrued benefit for any employee, or

21 ‘‘(ii) the amount of the account of any

22 employee,

23 such present value or amount shall be increased

24 by the aggregate distributions made with respect

25 to such employee under the plan during the 1-
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1 year period ending on the determination date.

2 The preceding sentence shall also apply to dis3 tributions under a terminated plan which if it

4 had not been terminated would have been re5 quired to be included in an aggregation group.

6 ‘‘(B) 5-YEAR PERIOD IN CASE OF IN-SERV7 ICE DISTRIBUTION.—In the case of any distribu8 tion made for a reason other than separation

9 from service, death, or disability, subparagraph

10 (A) shall be applied by substituting ‘5-year pe11 riod’ for ‘1-year period’.’’.

12 (2) BENEFITS NOT TAKEN INTO ACCOUNT.—Sub13 paragraph (E) of section 416(g)(4) is amended—

14 (A) by striking ‘‘LAST 5 YEARS’’ in the

15 heading and inserting ‘‘LAST YEAR BEFORE DE16 TERMINATION DATE’’, and

17 (B) by striking ‘‘5-year period’’ and insert18 ing ‘‘1-year period’’.

19 (d) DEFINITION OF TOP-HEAVY PLANS.—Paragraph

20 (4) of section 416(g) (relating to other special rules for top21 heavy plans) is amended by adding at the end the following

22 new subparagraph:

23 ‘‘(H) CASH OR DEFERRED ARRANGEMENTS

24 USING ALTERNATIVE METHODS OF MEETING NON25 DISCRIMINATION REQUIREMENTS.—The term
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1 ‘top-heavy plan’ shall not include a plan which

2 consists solely of—

3 ‘‘(i) a cash or deferred arrangement

4 which meets the requirements of section

5 401(k)(12), and

6 ‘‘(ii) matching contributions with re7 spect to which the requirements of section

8 401(m)(11) are met.

9 If, but for this subparagraph, a plan would be

10 treated as a top-heavy plan because it is a mem11 ber of an aggregation group which is a top-heavy

12 group, contributions under the plan may be

13 taken into account in determining whether any

14 other plan in the group meets the requirements

15 of subsection (c)(2).’’.

16 (e) FROZEN PLAN EXEMPT FROM MINIMUM BENEFIT

17 REQUIREMENT.—Subparagraph (C) of section 416(c)(1)

18 (relating to defined benefit plans) is amended—

19 (A) by striking ‘‘clause (ii)’’ in clause (i)

20 and inserting ‘‘clause (ii) or (iii)’’, and

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

22 ‘‘(iii) EXCEPTION FOR FROZEN

23 PLAN.—For purposes of determining an em24 ployee’s years of service with the employer,

25 any service with the employer shall be dis-
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1 regarded to the extent that such service oc2 curs during a plan year when the plan ben3 efits (within the meaning of section 410(b))

4 no employee or former employee.’’.

5 (f ) ELIMINATION OF FAMILY ATTRIBUTION.—Section

6 416(i)(1)(B) (defining 5-percent owner) is amended by add7 ing at the end the following new clause:

8 ‘‘(iv) FAMILY ATTRIBUTION DIS9 REGARDED.—Solely for purposes of apply10 ing this paragraph (and not for purposes of

11 any provision of this title which incor12 porates by reference the definition of a key

13 employee or 5-percent owner under this

14 paragraph), section 318 shall be applied

15 without regard to subsection (a)(1) thereof

16 in determining whether any person is a 5-

17 percent owner.’’.

18 (g) EFFECTIVE DATE.—The amendments made by this

19 section shall apply to years beginning after December 31,

20 2000.

21 SEC. 1324. ELECTIVE DEFERRALS NOT TAKEN INTO AC22 COUNT FOR PURPOSES OF DEDUCTION LIM23 ITS.

24 (a) IN GENERAL.—Section 404 (relating to deduction

25 for contributions of an employer to an employees’ trust or
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1 annuity plan and compensation under a deferred payment

2 plan) is amended by adding at the end the following new

3 subsection:

4 ‘‘(n) ELECTIVE DEFERRALS NOT TAKEN INTO AC5 COUNT FOR PURPOSES OF DEDUCTION LIMITS.—Elective

6 deferrals (as defined in section 402(g)(3)) shall not be sub7 ject to any limitation contained in paragraph (3), (7), or

8 (9) of subsection (a), and such elective deferrals shall not

9 be taken into account in applying any such limitation to

10 any other contributions.’’.

11 (b) EFFECTIVE DATE.—The amendment made by this

12 section shall apply to years beginning after December 31,

13 2000.

14 SEC. 1325. REPEAL OF COORDINATION REQUIREMENTS FOR

15 DEFERRED COMPENSATION PLANS OF STATE

16 AND LOCAL GOVERNMENTS AND TAX-EXEMPT

17 ORGANIZATIONS.

18 (a) IN GENERAL.—Subsection (c) of section 457 (relat19 ing to deferred compensation plans of State and local gov20 ernments and tax-exempt organizations), as amended by

21 section 1321, is amended to read as follows:

22 ‘‘(c) LIMITATION.—The maximum amount of the com23 pensation of any one individual which may be deferred

24 under subsection (a) during any taxable year shall not ex25 ceed the amount in effect under subsection (b)(2)(A) (as
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1 modified by any adjustment provided under subsection

2 (b)(3)).’’.

3 (b) EFFECTIVE DATE.—The amendment made by sub4 section (a) shall apply to years beginning after December

5 31, 2000.

6 SEC. 1326. ELIMINATION OF USER FEE FOR REQUESTS TO

7 IRS REGARDING PENSION PLANS.

8 (a) ELIMINATION OF CERTAIN USER FEES.—The Sec9 retary of the Treasury or the Secretary’s delegate shall not

10 require payment of user fees under the program established

11 under section 7527 of the Internal Revenue Code of 1986

12 for requests to the Internal Revenue Service for determina13 tion letters with respect to the qualified status of a pension

14 benefit plan maintained solely by one or more eligible em15 ployers or any trust which is part of the plan. The pre16 ceding sentence shall not apply to any request—

17 (1) made after the 5th plan year the pension

18 benefit plan is in existence, or

19 (2) made by the sponsor of any prototype or

20 similar plan which the sponsor intends to market to

21 participating employers.

22 (b) PENSION BENEFIT PLAN.—For purposes of this

23 section, the term ‘‘pension benefit plan’’ means a pension,

24 profit-sharing, stock bonus, annuity, or employee stock own25 ership plan.
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1 (c) ELIGIBLE EMPLOYER.—For purposes of this sec2 tion, the term ‘‘eligible employer’’ has the same meaning

3 given such term in section 408(p)(2)(C)(i)(I) of the Internal

4 Revenue Code of 1986. The determination of whether an em5 ployer is an eligible employer under this section shall be

6 made as of the date of the request described in subsection

7 (a).

8 (d) EFFECTIVE DATE.—The provisions of this section

9 shall apply with respect to requests made after December

10 31, 2000.

11 SEC. 1327. DEDUCTION LIMITS.

12 (a) IN GENERAL.—Section 404(a) (relating to general

13 rule) is amended by adding at the end the following:

14 ‘‘(12) DEFINITION OF COMPENSATION.—For pur15 poses of paragraphs (3), (7), (8), and (9), the term

16 ‘compensation’ shall include amounts treated as par17 ticipant’s compensation under subparagraph (C) or

18 (D) of section 415(c)(3).’’.

19 (b) CONFORMING AMENDMENT.—Subparagraph (B) of

20 section 404(a)(3) is amended by striking the last sentence

21 thereof.

22 (c) EFFECTIVE DATE.—The amendments made by this

23 section shall apply to years beginning after December 31,

24 2000.
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1 SEC. 1328. OPTION TO TREAT ELECTIVE DEFERRALS AS

2 AFTER-TAX CONTRIBUTIONS.

3 (a) IN GENERAL.—Subpart A of part I of subchapter

4 D of chapter 1 (relating to deferred compensation, etc.) is

5 amended by inserting after section 402 the following new

6 section:

7 ‘‘SEC. 402A. OPTIONAL TREATMENT OF ELECTIVE DEFER8 RALS AS PLUS CONTRIBUTIONS.

9 ‘‘(a) GENERAL RULE.—If an applicable retirement

10 plan includes a qualified plus contribution program—

11 ‘‘(1) any designated plus contribution made by

12 an employee pursuant to the program shall be treated

13 as an elective deferral for purposes of this chapter, ex14 cept that such contribution shall not be excludable

15 from gross income, and

16 ‘‘(2) such plan (and any arrangement which is

17 part of such plan) shall not be treated as failing to

18 meet any requirement of this chapter solely by reason

19 of including such program.

20 ‘‘(b) QUALIFIED PLUS CONTRIBUTION PROGRAM.—

21 For purposes of this section—

22 ‘‘(1) IN GENERAL.—The term ‘qualified plus con23 tribution program’ means a program under which an

24 employee may elect to make designated plus contribu25 tions in lieu of all or a portion of elective deferrals
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1 the employee is otherwise eligible to make under the

2 applicable retirement plan.

3 ‘‘(2) SEPARATE ACCOUNTING REQUIRED.—A pro4 gram shall not be treated as a qualified plus contribu5 tion program unless the applicable retirement plan—

6 ‘‘(A) establishes separate accounts (‘des7 ignated plus accounts’) for the designated plus

8 contributions of each employee and any earnings

9 properly allocable to the contributions, and

10 ‘‘(B) maintains separate recordkeeping with

11 respect to each account.

12 ‘‘(c) DEFINITIONS AND RULES RELATING TO DES13 IGNATED PLUS CONTRIBUTIONS.—For purposes of this

14 section—

15 ‘‘(1) DESIGNATED PLUS CONTRIBUTION.—The

16 term ‘designated plus contribution’ means any elec17 tive deferral which—

18 ‘‘(A) is excludable from gross income of an

19 employee without regard to this section, and

20 ‘‘(B) the employee designates (at such time

21 and in such manner as the Secretary may pre22 scribe) as not being so excludable.

23 ‘‘(2) DESIGNATION LIMITS.—The amount of elec24 tive deferrals which an employee may designate under

25 paragraph (1) shall not exceed the excess (if any) of—
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1 ‘‘(A) the maximum amount of elective defer2 rals excludable from gross income of the employee

3 for the taxable year (without regard to this sec4 tion), over

5 ‘‘(B) the aggregate amount of elective defer6 rals of the employee for the taxable year which

7 the employee does not designate under paragraph

8 (1).

9 ‘‘(3) ROLLOVER CONTRIBUTIONS.—

10 ‘‘(A) IN GENERAL.—A rollover contribution

11 of any payment or distribution from a des12 ignated plus account which is otherwise allow13 able under this chapter may be made only if the

14 contribution is to—

15 ‘‘(i) another designated plus account of

16 the individual from whose account the pay17 ment or distribution was made, or

18 ‘‘(ii) a Roth IRA of such individual.

19 ‘‘(B) COORDINATION WITH LIMIT.—Any

20 rollover contribution to a designated plus ac21 count under subparagraph (A) shall not be taken

22 into account for purposes of paragraph (1).

23 ‘‘(d) DISTRIBUTION RULES.—For purposes of this

24 title—
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1 ‘‘(1) EXCLUSION.—Any qualified distribution

2 from a designated plus account shall not be includible

3 in gross income.

4 ‘‘(2) QUALIFIED DISTRIBUTION.—For purposes

5 of this subsection—

6 ‘‘(A) IN GENERAL.—The term ‘qualified dis7 tribution’ has the meaning given such term by

8 section 408A(d)(2)(A) (without regard to clause

9 (iv) thereof).

10 ‘‘(B) DISTRIBUTIONS WITHIN NONEXCLU11 SION PERIOD.—A payment or distribution from

12 a designated plus account shall not be treated as

13 a qualified distribution if such payment or dis14 tribution is made within the 5-taxable-year pe15 riod beginning with the earlier of—

16 ‘‘(i) the first taxable year for which the

17 individual made a designated plus con18 tribution to any designated plus account es19 tablished for such individual under the

20 same applicable retirement plan, or

21 ‘‘(ii) if a rollover contribution was

22 made to such designated plus account from

23 a designated plus account previously estab24 lished for such individual under another

25 applicable retirement plan, the first taxable
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1 year for which the individual made a des2 ignated plus contribution to such previously

3 established account.

4 ‘‘(C) DISTRIBUTIONS OF EXCESS DEFER5 RALS AND EARNINGS.—The term ‘qualified dis6 tribution’ shall not include any distribution of

7 any excess deferral under section 402(g)(2) and

8 any income on the excess deferral.

9 ‘‘(3) AGGREGATION RULES.—Section 72 shall be

10 applied separately with respect to distributions and

11 payments from a designated plus account and other

12 distributions and payments from the plan.

13 ‘‘(e) OTHER DEFINITIONS.—For purposes of this

14 section—

15 ‘‘(1) APPLICABLE RETIREMENT PLAN.—The term

16 ‘applicable retirement plan’ means—

17 ‘‘(A) an employees’ trust described in sec18 tion 401(a) which is exempt from tax under sec19 tion 501(a), and

20 ‘‘(B) a plan under which amounts are con21 tributed by an individual’s employer for an an22 nuity contract described in section 403(b).

23 ‘‘(2) ELECTIVE DEFERRAL.—The term ‘elective

24 deferral’ means any elective deferral described in sub25 paragraph (A) or (C) of section 402(g)(3).’’.
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1 (b) EXCESS DEFERRALS.—Section 402(g) (relating to

2 limitation on exclusion for elective deferrals) is amended—

3 (1) by adding at the end of paragraph (1) the

4 following new sentence: ‘‘The preceding sentence shall

5 not apply to so much of such excess as does not exceed

6 the designated plus contributions of the individual for

7 the taxable year.’’, and

8 (2) by inserting ‘‘(or would be included but for

9 the last sentence thereof)’’ after ‘‘paragraph (1)’’ in

10 paragraph (2)(A).

11 (c) ROLLOVERS.—Subparagraph (B) of section

12 402(c)(8) is amended by adding at the end the following:

13 ‘‘If any portion of an eligible rollover distribu14 tion is attributable to payments or distributions

15 from a designated plus account (as defined in

16 section 402A), an eligible retirement plan with

17 respect to such portion shall include only another

18 designated plus account and a Roth IRA.’’.

19 (d) REPORTING REQUIREMENTS.—

20 (1) W–2 INFORMATION.—Section 6051(a)(8) is

21 amended by inserting ‘‘, including the amount of des22 ignated plus contributions (as defined in section

23 402A)’’ before the comma at the end.

24 (2) INFORMATION.—Section 6047 is amended by

25 redesignating subsection (f ) as subsection (g) and by
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1 inserting after subsection (e) the following new sub2 section:

3 ‘‘(f ) DESIGNATED PLUS CONTRIBUTIONS.—The Sec4 retary shall require the plan administrator of each applica5 ble retirement plan (as defined in section 402A) to make

6 such returns and reports regarding designated plus con7 tributions (as so defined) to the Secretary, participants and

8 beneficiaries of the plan, and such other persons as the Sec9 retary may prescribe.’’.

10 (e) CONFORMING AMENDMENTS.—

11 (1) Section 408A(e) is amended by adding after

12 the first sentence the following new sentence: ‘‘Such

13 term includes a rollover contribution described in sec14 tion 402A(c)(3)(A).’’.

15 (2) The table of sections for subpart A of part I

16 of subchapter D of chapter 1 is amended by inserting

17 after the item relating to section 402 the following

18 new item:

‘‘Sec. 402A. Optional treatment of elective deferrals as plus contributions.’’.

19 (f ) EFFECTIVE DATE.—The amendments made by this

20 section shall apply to taxable years beginning after Decem21 ber 31, 2000.
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1 PART II—ENHANCING FAIRNESS FOR WOMEN

2 SEC. 1331. CATCHUP CONTRIBUTIONS FOR INDIVIDUALS

3 AGE 50 OR OVER.

4 (a) IN GENERAL.—Section 414 (relating to definitions

5 and special rules) is amended by adding at the end the fol6 lowing new subsection:

7 ‘‘(v) CATCHUP CONTRIBUTIONS FOR INDIVIDUALS AGE

8 50 OR OVER.—

9 ‘‘(1) IN GENERAL.—An applicable employer plan

10 shall not be treated as failing to meet any require11 ment of this title solely because the plan permits an

12 eligible participant to make additional elective defer13 rals in any plan year.

14 ‘‘(2) LIMITATION ON AMOUNT OF ADDITIONAL

15 DEFERRALS.—

16 ‘‘(A) IN GENERAL.—A plan shall not permit

17 additional elective deferrals under paragraph (1)

18 for any year in an amount greater than the less19 er of—

20 ‘‘(i) the applicable percentage of the

21 applicable dollar amount for such elective

22 deferrals for such year, or

23 ‘‘(ii) the excess (if any) of—

24 ‘‘(I) the participant’s compensa25 tion for the year, over
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1 ‘‘(II) any other elective deferrals

2 of the participant for such year which

3 are made without regard to this sub4 section.

5 ‘‘(B) APPLICABLE PERCENTAGE.—For pur6 poses of this paragraph, the applicable percent7 age shall be determined in accordance with the

8 following table:

‘‘For taxable years The applicable

beginning in: percentage is:

2001 ................................................................................................ 10 percent

2002 ................................................................................................ 20 percent

2003 ................................................................................................ 30 percent

2004 ................................................................................................ 40 percent

2005 and thereafter ........................................................................ 50 percent.

9 ‘‘(3) TREATMENT OF CONTRIBUTIONS.—In the

10 case of any contribution to a plan under paragraph

11 (1)—

12 ‘‘(A) such contribution shall not, with re13 spect to the year in which the contribution is

14 made—

15 ‘‘(i) be subject to any otherwise appli16 cable limitation contained in section 402(g),

17 402(h), 403(b), 404(a), 404(h), 408, 415, or

18 457, or

19 ‘‘(ii) be taken into account in applying

20 such limitations to other contributions or

21 benefits under such plan or any other such

22 plan, and
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1 ‘‘(B) such plan shall not be treated as fail2 ing to meet the requirements of section 401(a)(4),

3 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),

4 401(m), 403(b)(12), 408(k), 408(p), 408B,

5 410(b), or 416 by reason of the making of (or the

6 right to make) such contribution.

7 ‘‘(4) ELIGIBLE PARTICIPANT.—For purposes of

8 this subsection, the term ‘eligible participant’ means,

9 with respect to any plan year, a participant in a

10 plan—

11 ‘‘(A) who has attained the age of 50 before

12 the close of the plan year, and

13 ‘‘(B) with respect to whom no other elective

14 deferrals may (without regard to this subsection)

15 be made to the plan for the plan year by reason

16 of the application of any limitation or other re17 striction described in paragraph (3) or contained

18 in the terms of the plan.

19 ‘‘(5) OTHER DEFINITIONS AND RULES.—For

20 purposes of this subsection—

21 ‘‘(A) APPLICABLE DOLLAR AMOUNT.—The

22 term ‘applicable dollar amount’ means, with re23 spect to any year, the amount in effect under

24 section 402(g)(1)(B), 408(p)(2)(E)(i), or
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1 457(e)(15)(A), whichever is applicable to an ap2 plicable employer plan, for such year.

3 ‘‘(B) APPLICABLE EMPLOYER PLAN.—The

4 term ‘applicable employer plan’ means—

5 ‘‘(i) an employees’ trust described in

6 section 401(a) which is exempt from tax

7 under section 501(a),

8 ‘‘(ii) a plan under which amounts are

9 contributed by an individual’s employer for

10 an annuity contract described in section

11 403(b),

12 ‘‘(iii) an eligible deferred compensation

13 plan under section 457 of an eligible em14 ployer as defined in section 457(e)(1)(A),

15 and

16 ‘‘(iv) an arrangement meeting the re17 quirements of section 408 (k) or (p).

18 ‘‘(C) ELECTIVE DEFERRAL.—The term ‘elec19 tive deferral’ has the meaning given such term

20 by subsection (u)(2)(C).

21 ‘‘(D) EXCEPTION FOR SECTION 457 PLANS.—

22 This subsection shall not apply to an applicable

23 employer plan described in subparagraph

24 (B)(iii) for any year to which section 457(b)(3)

25 applies.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by this

2 section shall apply to contributions in taxable years begin3 ning after December 31, 2000.

4 SEC. 1332. EQUITABLE TREATMENT FOR CONTRIBUTIONS

5 OF EMPLOYEES TO DEFINED CONTRIBUTION

6 PLANS.

7 (a) EQUITABLE TREATMENT.—

8 (1) IN GENERAL.—Subparagraph (B) of section

9 415(c)(1) (relating to limitation for defined contribu10 tion plans) is amended by striking ‘‘25 percent’’ and

11 inserting ‘‘100 percent’’.

12 (2) APPLICATION TO SECTION 403(b).—Section

13 403(b) is amended—

14 (A) by striking ‘‘the exclusion allowance for

15 such taxable year’’ in paragraph (1) and insert16 ing ‘‘the applicable limit under section 415’’,

17 (B) by striking paragraph (2), and

18 (C) by inserting ‘‘or any amount received

19 by a former employee after the 5th taxable year

20 following the taxable year in which such em21 ployee was terminated’’ before the period at the

22 end of the second sentence of paragraph (3).

23 (3) CONFORMING AMENDMENTS.—

24 (A) Subsection (f ) of section 72 is amended

25 by striking ‘‘section 403(b)(2)(D)(iii))’’ and in-
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1 serting ‘‘section 403(b)(2)(D)(iii), as in effect be2 fore the enactment of the Taxpayer Refund and

3 Relief Act of 1999)’’.

4 (B) Section 404(a)(10)(B) is amended by

5 striking ‘‘, the exclusion allowance under section

6 403(b)(2),’’.

7 (C) Section 415(a)(2) is amended by strik8 ing ‘‘, and the amount of the contribution for

9 such portion shall reduce the exclusion allowance

10 as provided in section 403(b)(2)’’.

11 (D) Section 415(c)(3) is amended by adding

12 at the end the following new subparagraph:

13 ‘‘(E) ANNUITY CONTRACTS.—In the case of

14 an annuity contract described in section 403(b),

15 the term ‘participant’s compensation’ means the

16 participant’s includible compensation deter17 mined under section 403(b)(3).’’.

18 (E) Section 415(c) is amended by striking

19 paragraph (4).

20 (F) Section 415(c)(7) is amended to read as

21 follows:

22 ‘‘(7) CERTAIN CONTRIBUTIONS BY CHURCH

23 PLANS NOT TREATED AS EXCEEDING LIMIT.—

24 ‘‘(A) IN GENERAL.—Notwithstanding any

25 other provision of this subsection, at the election
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1 of a participant who is an employee of a church

2 or a convention or association of churches, in3 cluding an organization described in section

4 414(e)(3)(B)(ii), contributions and other addi5 tions for an annuity contract or retirement in6 come account described in section 403(b) with re7 spect to such participant, when expressed as an

8 annual addition to such participant’s account,

9 shall be treated as not exceeding the limitation

10 of paragraph (1) if such annual addition is not

11 in excess of $10,000.

12 ‘‘(B) $40,000 AGGREGATE LIMITATION.—

13 The total amount of additions with respect to

14 any participant which may be taken into ac15 count for purposes of this subparagraph for all

16 years may not exceed $40,000.

17 ‘‘(C) ANNUAL ADDITION.—For purposes of

18 this paragraph, the term ‘annual addition’ has

19 the meaning given such term by paragraph (2).’’.

20 (G) Subparagraph (B) of section 402(g)(7)

21 (as redesignated by section 1201) is amended by

22 inserting before the period at the end the fol23 lowing: ‘‘(as in effect before the enactment of the

24 Taxpayer Refund and Relief Act of 1999)’’.
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1 (3) EFFECTIVE DATE.—The amendments made

2 by this subsection shall apply to years beginning after

3 December 31, 2000.

4 (b) SPECIAL RULES FOR SECTIONS 403(b) AND 408.—

5 (1) IN GENERAL.—Subsection (k) of section 415

6 is amended by adding at the end the following new

7 paragraph:

8 ‘‘(4) SPECIAL RULES FOR SECTIONS 403(b) AND

9 408.—For purposes of this section, any annuity con10 tract described in section 403(b) for the benefit of a

11 participant shall be treated as a defined contribution

12 plan maintained by each employer with respect to

13 which the participant has the control required under

14 subsection (b) or (c) of section 414 (as modified by

15 subsection (h)). For purposes of this section, any con16 tribution by an employer to a simplified employee

17 pension plan for an individual for a taxable year

18 shall be treated as an employer contribution to a de19 fined contribution plan for such individual for such

20 year.’’.

21 (2) EFFECTIVE DATE.—

22 (A) IN GENERAL.—The amendment made

23 by paragraph (1) shall apply to limitation years

24 beginning after December 31, 1999.
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1 (B) EXCLUSION ALLOWANCE.—Effective for

2 limitation years beginning in 2000, in the case

3 of any annuity contract described in section

4 403(b) of the Internal Revenue Code of 1986, the

5 amount of the contribution disqualified by rea6 son of section 415(g) of such Code shall reduce

7 the exclusion allowance as provided in section

8 403(b)(2) of such Code.

9 (3) MODIFICATION OF 403(b) EXCLUSION ALLOW10 ANCE TO CONFORM TO 415 MODIFICATION.—The Sec11 retary of the Treasury shall modify the regulations re12 garding the exclusion allowance under section

13 403(b)(2) of the Internal Revenue Code of 1986 to

14 render void the requirement that contributions to a

15 defined benefit pension plan be treated as previously

16 excluded amounts for purposes of the exclusion allow17 ance. For taxable years beginning after December 31,

18 1999, such regulations shall be applied as if such re19 quirement were void.

20 (c) DEFERRED COMPENSATION PLANS OF STATE AND

21 LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZA22 TIONS.—

23 (1) IN GENERAL.—Subparagraph (B) of section

24 457(b)(2) (relating to salary limitation on eligible de-
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1 ferred compensation plans) is amended by striking

‘‘331 2 ⁄3 percent’’ and inserting ‘‘100 percent’’.

3 (2) EFFECTIVE DATE.—The amendment made by

4 this subsection shall apply to years beginning after

5 December 31, 2000.

6 SEC. 1333. FASTER VESTING OF CERTAIN EMPLOYER

7 MATCHING CONTRIBUTIONS.

8 (a) AMENDMENTS TO 1986 CODE.—Section 411(a) (re9 lating to minimum vesting standards) is amended—

10 (1) in paragraph (2), by striking ‘‘A plan’’ and

11 inserting ‘‘Except as provided in paragraph (12), a

12 plan’’, and

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

14 ‘‘(12) FASTER VESTING FOR MATCHING CON15 TRIBUTIONS.—In the case of matching contributions

16 (as defined in section 401(m)(4)(A)), paragraph (2)

17 shall be applied—

18 ‘‘(A) by substituting ‘3 years’ for ‘5 years’

19 in subparagraph (A), and

20 ‘‘(B) by substituting the following table for

21 the table contained in subparagraph (B):

The nonforfeitable

‘‘Years of service: percentage is:

2 ...................................................................................................... 20

3 ...................................................................................................... 40

4 ...................................................................................................... 60

5 ...................................................................................................... 80

6 ...................................................................................................... 100.’’.
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1 (b) AMENDMENTS TO ERISA.—Section 203(a) of the

2 Employee Retirement Income Security Act of 1974 (29

3 U.S.C. 1053(a)) is amended—

4 (1) in paragraph (2), by striking ‘‘A plan’’ and

5 inserting ‘‘Except as provided in paragraph (4), a

6 plan’’, and

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

8 ‘‘(4) FASTER VESTING FOR MATCHING CONTRIBU9 TIONS.—In the case of matching contributions (as de10 fined in section 401(m)(4)(A) of the Internal Revenue

11 Code of 1986), paragraph (2) shall be applied—

12 ‘‘(A) by substituting ‘3 years’ for ‘5 years’

13 in subparagraph (A), and

14 ‘‘(B) by substituting the following table for

15 the table contained in subparagraph (B):

The nonforfeitable

‘‘Years of service: percentage is:

2 ...................................................................................................... 20

3 ...................................................................................................... 40

4 ...................................................................................................... 60

5 ...................................................................................................... 80

6 ...................................................................................................... 100.’’.

16 (c) EFFECTIVE DATES.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the amendments made by this section shall

19 apply to contributions for plan years beginning after

20 December 31, 2000.

21 (2) COLLECTIVE BARGAINING AGREEMENTS.—In

22 the case of a plan maintained pursuant to one or
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1 more collective bargaining agreements between em2 ployee representatives and one or more employers

3 ratified by the date of the enactment of this Act, the

4 amendments made by this section shall not apply to

5 contributions on behalf of employees covered by any

6 such agreement for plan years beginning before the

7 earlier of—

8 (A) the later of—

9 (i) the date on which the last of such

10 collective bargaining agreements terminates

11 (determined without regard to any exten12 sion thereof on or after such date of the en13 actment), or

14 (ii) January 1, 2001, or

15 (B) January 1, 2005.

16 (3) SERVICE REQUIRED.—With respect to any

17 plan, the amendments made by this section shall not

18 apply to any employee before the date that such em19 ployee has 1 hour of service under such plan in any

20 plan year to which the amendments made by this sec21 tion apply.

22 SEC. 1334. SIMPLIFY AND UPDATE THE MINIMUM DISTRIBU23 TION RULES.

24 (a) SIMPLIFICATION AND FINALIZATION OF MINIMUM

25 DISTRIBUTION REQUIREMENTS.—
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1 (1) IN GENERAL.—The Secretary of the Treasury

2 shall—

3 (A) simplify and finalize the regulations re4 lating to minimum distribution requirements

5 under sections 401(a)(9), 408(a)(6) and (b)(3),

6 403(b)(10), and 457(d)(2) of the Internal Rev7 enue Code of 1986, and

8 (B) modify such regulations to—

9 (i) reflect current life expectancy, and

10 (ii) revise the required distribution

11 methods so that, under reasonable assump12 tions, the amount of the required minimum

13 distribution does not decrease over a par14 ticipant’s life expectancy.

15 (2) FRESH START.—Notwithstanding subpara16 graph (D) of section 401(a)(9) of such Code, during

17 the first year that regulations are in effect under this

18 subsection, required distributions for future years

19 may be redetermined to reflect changes under such

20 regulations. Such redetermination shall include the

21 opportunity to choose a new designated beneficiary

22 and to elect a new method of calculating life expect23 ancy.

24 (3) EFFECTIVE DATE FOR REGULATIONS.—Regu25 lations referred to in paragraph (1) shall be effective
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1 for years beginning after December 31, 2000, and

2 shall apply in such years without regard to whether

3 an individual had previously begun receiving min4 imum distributions.

5 (b) REPEAL OF RULE WHERE DISTRIBUTIONS HAD

6 BEGUN BEFORE DEATH OCCURS.—

7 (1) IN GENERAL.—Subparagraph (B) of section

8 401(a)(9) is amended by striking clause (i) and redes9 ignating clauses (ii), (iii), and (iv) as clauses (i),

10 (ii), and (iii), respectively.

11 (2) CONFORMING CHANGES.—

12 (A) Clause (i) of section 401(a)(9)(B) (as so

13 redesignated) is amended—

14 (i) by striking ‘‘FOR OTHER CASES’’ in

15 the heading, and

16 (ii) by striking ‘‘the distribution of the

17 employee’s interest has begun in accordance

18 with subparagraph (A)(ii)’’ and inserting

19 ‘‘his entire interest has been distributed to

20 him,’’.

21 (B) Clause (ii) of section 401(a)(9)(B) (as

22 so redesignated) is amended by striking ‘‘clause

23 (ii)’’ and inserting ‘‘clause (i)’’.

24 (C) Clause (iii) of section 401(a)(9)(B) (as

25 so redesignated) is amended—
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1 (i) by striking ‘‘clause (iii)(I)’’ and in2 serting ‘‘clause (ii)(I)’’,

3 (ii) by striking ‘‘clause (iii)(III)’’ in

4 subclause (I) and inserting ‘‘clause

5 (ii)(III)’’,

6 (iii) by striking ‘‘the date on which the

7 employee would have attained the age

701 8 ⁄2,’’ in subclause (I) and inserting ‘‘April

9 1 of the calendar year following the cal10 endar year in which the spouse attains

701 11 ⁄2,’’, and

12 (iv) by striking ‘‘the distributions to

13 such spouse begin,’’ in subclause (II) and

14 inserting ‘‘his entire interest has been dis15 tributed to him,’’.

16 (3) EFFECTIVE DATE.—The amendments made

17 by this subsection shall apply to years beginning after

18 December 31, 2000.

19 (c) REDUCTION IN EXCISE TAX.—

20 (1) IN GENERAL.—Subsection (a) of section 4974

21 is amended by striking ‘‘50 percent’’ and inserting

22 ‘‘10 percent’’.

23 (2) EFFECTIVE DATE.—The amendment made by

24 this subsection shall apply to years beginning after

25 December 31, 2000.
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1 SEC. 1335. CLARIFICATION OF TAX TREATMENT OF DIVI2 SION OF SECTION 457 PLAN BENEFITS UPON

3 DIVORCE.

4 (a) IN GENERAL.—Section 414(p)(11) (relating to ap5 plication of rules to governmental and church plans) is

6 amended—

7 (1) by inserting ‘‘or an eligible deferred com8 pensation plan (within the meaning of section

9 457(b))’’ after ‘‘subsection (e))’’, and

10 (2) in the heading, by striking ‘‘GOVERNMENTAL

11 AND CHURCH PLANS’’ and inserting ‘‘CERTAIN OTHER

12 PLANS’’.

13 (b) WAIVER OF CERTAIN DISTRIBUTION REQUIRE14 MENTS.—Paragraph (10) of section 414(p) is amended by

15 striking ‘‘and section 409(d)’’ and inserting ‘‘section

16 409(d), and section 457(d)’’.

17 (c) TAX TREATMENT OF PAYMENTS FROM A SECTION

18 457 PLAN.—Subsection (p) of section 414 is amended by

19 redesignating paragraph (12) as paragraph (13) and in20 serting after paragraph (11) the following new paragraph:

21 ‘‘(12) TAX TREATMENT OF PAYMENTS FROM A

22 SECTION 457 PLAN.—If a distribution or payment

23 from an eligible deferred compensation plan described

24 in section 457(b) is made pursuant to a qualified do25 mestic relations order, rules similar to the rules of
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1 section 402(e)(1)(A) shall apply to such distribution

2 or payment.’’.

3 (d) EFFECTIVE DATE.—The amendments made by this

4 section shall apply to transfers, distributions, and pay5 ments made after December 31, 2000.

6 SEC. 1336. MODIFICATION OF SAFE HARBOR RELIEF FOR

7 HARDSHIP WITHDRAWALS FROM CASH OR DE8 FERRED ARRANGEMENTS.

9 (a) IN GENERAL.—The Secretary of the Treasury shall

10 revise the regulations relating to hardship distributions

11 under section 401(k)(2)(B)(i)(IV) of the Internal Revenue

12 Code of 1986 to provide that the period an employee is pro13 hibited from making elective and employee contributions in

14 order for a distribution to be deemed necessary to satisfy

15 financial need shall be equal to 6 months.

16 (b) EFFECTIVE DATE.—The revised regulations under

17 subsection (a) shall apply to years beginning after Decem18 ber 31, 2000.

19 PART III—INCREASING PORTABILITY FOR

20 PARTICIPANTS

21 SEC. 1341. ROLLOVERS ALLOWED AMONG VARIOUS TYPES

22 OF PLANS.

23 (a) ROLLOVERS FROM AND TO SECTION 457 PLANS.—

24 (1) ROLLOVERS FROM SECTION 457 PLANS.—
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1 (A) IN GENERAL.—Section 457(e) (relating

2 to other definitions and special rules) is amend3 ed by adding at the end the following:

4 ‘‘(16) ROLLOVER AMOUNTS.—

5 ‘‘(A) GENERAL RULE.—In the case of an el6 igible deferred compensation plan established

7 and maintained by an employer described in

8 subsection (e)(1)(A), if—

9 ‘‘(i) any portion of the balance to the

10 credit of an employee in such plan is paid

11 to such employee in an eligible rollover dis12 tribution (within the meaning of section

13 402(c)(4) without regard to subparagraph

14 (C) thereof),

15 ‘‘(ii) the employee transfers any por16 tion of the property such employee receives

17 in such distribution to an eligible retire18 ment plan described in section 402(c)(8)(B),

19 and

20 ‘‘(iii) in the case of a distribution of

21 property other than money, the amount so

22 transferred consists of the property distrib23 uted,
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1 then such distribution (to the extent so trans2 ferred) shall not be includible in gross income for

3 the taxable year in which paid.

4 ‘‘(B) CERTAIN RULES MADE APPLICABLE.—

5 The rules of paragraphs (2) through (7) (other

6 than paragraph (4)(C)) and (9) of section 402(c)

7 and section 402(f ) shall apply for purposes of

8 subparagraph (A).

9 ‘‘(C) REPORTING.—Rollovers under this

10 paragraph shall be reported to the Secretary in

11 the same manner as rollovers from qualified re12 tirement plans (as defined in section 4974(c)).’’.

13 (B) DEFERRAL LIMIT DETERMINED WITH14 OUT REGARD TO ROLLOVER AMOUNTS.—Section

15 457(b)(2) (defining eligible deferred compensa16 tion plan) is amended by inserting ‘‘(other than

17 rollover amounts)’’ after ‘‘taxable year’’.

18 (C) DIRECT ROLLOVER.—Paragraph (1) of

19 section 457(d) is amended by striking ‘‘and’’ at

20 the end of subparagraph (A), by striking the pe21 riod at the end of subparagraph (B) and insert22 ing ‘‘, and’’, and by inserting after subpara23 graph (B) the following:

24 ‘‘(C) in the case of a plan maintained by

25 an employer described in subsection (e)(1)(A),
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1 the plan meets requirements similar to the re2 quirements of section 401(a)(31).

3 Any amount transferred in a direct trustee-to-trustee

4 transfer in accordance with section 401(a)(31) shall

5 not be includible in gross income for the taxable year

6 of transfer.’’.

7 (D) WITHHOLDING.—

8 (i) Paragraph (12) of section 3401(a)

9 is amended by adding at the end the fol10 lowing:

11 ‘‘(E) under or to an eligible deferred com12 pensation plan which, at the time of such pay13 ment, is a plan described in section 457(b)

14 maintained by an employer described in section

15 457(e)(1)(A); or’’.

16 (ii) Paragraph (3) of section 3405(c) is

17 amended to read as follows:

18 ‘‘(3) ELIGIBLE ROLLOVER DISTRIBUTION.—For

19 purposes of this subsection, the term ‘eligible rollover

20 distribution’ has the meaning given such term by sec21 tion 402(f )(2)(A).’’.

22 (iii) LIABILITY FOR WITHHOLDING.—

23 Subparagraph (B) of section 3405(d)(2) is

24 amended by striking ‘‘or’’ at the end of

25 clause (ii), by striking the period at the end
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1 of clause (iii) and inserting ‘‘, or’’, and by

2 adding at the end the following:

3 ‘‘(iv) section 457(b).’’.

4 (2) ROLLOVERS TO SECTION 457 PLANS.—

5 (A) IN GENERAL.—Section 402(c)(8)(B)

6 (defining eligible retirement plan) is amended by

7 striking ‘‘and’’ at the end of clause (iii), by

8 striking the period at the end of clause (iv) and

9 inserting ‘‘, and’’, and by inserting after clause

10 (iv) the following new clause:

11 ‘‘(v) an eligible deferred compensation

12 plan described in section 457(b) of an em13 ployer described in section 457(e)(1)(A).’’.

14 (B) SEPARATE ACCOUNTING.—Section

15 402(c) is amended by adding at the end the fol16 lowing new paragraph:

17 ‘‘(11) SEPARATE ACCOUNTING.—Unless a plan

18 described in clause (v) of paragraph (8)(B) agrees to

19 separately account for amounts rolled into such plan

20 from eligible retirement plans not described in such

21 clause, the plan described in such clause may not ac22 cept transfers or rollovers from such retirement

23 plans.’’.

24 (C) 10 PERCENT ADDITIONAL TAX.—Sub25 section (t) of section 72 (relating to 10-percent
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1 additional tax on early distributions from quali2 fied retirement plans) is amended by adding at

3 the end the following new paragraph:

4 ‘‘(9) SPECIAL RULE FOR ROLLOVERS TO SECTION

5 457 PLANS.—For purposes of this subsection, a dis6 tribution from an eligible deferred compensation plan

7 (as defined in section 457(b)) of an employer de8 scribed in section 457(e)(1)(A) shall be treated as a

9 distribution from a qualified retirement plan de10 scribed in 4974(c)(1) to the extent that such distribu11 tion is attributable to an amount transferred to an el12 igible deferred compensation plan from a qualified re13 tirement plan (as defined in section 4974(c)).’’.

14 (b) ALLOWANCE OF ROLLOVERS FROM AND TO 403 (b)

15 PLANS.—

16 (1) ROLLOVERS FROM SECTION 403 (b) PLANS.—

17 Section 403(b)(8)(A)(ii) (relating to rollover

18 amounts) is amended by striking ‘‘such distribution’’

19 and all that follows and inserting ‘‘such distribution

20 to an eligible retirement plan described in section

21 402(c)(8)(B), and’’.

22 (2) ROLLOVERS TO SECTION 403 (b) PLANS.—Sec23 tion 402(c)(8)(B) (defining eligible retirement plan),

24 as amended by subsection (a), is amended by striking

25 ‘‘and’’ at the end of clause (iv), by striking the period
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1 at the end of clause (v) and inserting ‘‘, and’’, and

2 by inserting after clause (v) the following new clause:

3 ‘‘(vi) an annuity contract described in

4 section 403(b).’’.

5 (c) EXPANDED EXPLANATION TO RECIPIENTS OF

6 ROLLOVER DISTRIBUTIONS.—Paragraph (1) of section

7 402(f ) (relating to written explanation to recipients of dis8 tributions eligible for rollover treatment) is amended by

9 striking ‘‘and’’ at the end of subparagraph (C), by striking

10 the period at the end of subparagraph (D) and inserting

11 ‘‘, and’’, and by adding at the end the following new sub12 paragraph:

13 ‘‘(E) of the provisions under which distribu14 tions from the eligible retirement plan receiving

15 the distribution may be subject to restrictions

16 and tax consequences which are different from

17 those applicable to distributions from the plan

18 making such distribution.’’.

19 (d) SPOUSAL ROLLOVERS.—Section 402(c)(9) (relat20 ing to rollover where spouse receives distribution after death

21 of employee) is amended by striking ‘‘; except that’’ and

22 all that follows up to the end period.

23 (e) CONFORMING AMENDMENTS.—
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1 (1) Section 72(o)(4) is amended by striking ‘‘and

2 408(d)(3)’’ and inserting ‘‘403(b)(8), 408(d)(3), and

3 457(e)(16)’’.

4 (2) Section 219(d)(2) is amended by striking ‘‘or

5 408(d)(3)’’ and inserting ‘‘408(d)(3), or 457(e)(16)’’.

6 (3) Section 401(a)(31)(B) is amended by strik7 ing ‘‘and 403(a)(4)’’ and inserting ‘‘, 403(a)(4),

8 403(b)(8), and 457(e)(16)’’.

9 (4) Subparagraph (A) of section 402(f )(2) is

10 amended by striking ‘‘or paragraph (4) of section

11 403(a)’’ and inserting ‘‘, paragraph (4) of section

12 403(a), subparagraph (A) of section 403(b)(8), or sub13 paragraph (A) of section 457(e)(16)’’.

14 (5) Paragraph (1) of section 402(f ) is amended

15 by striking ‘‘from an eligible retirement plan’’.

16 (6) Subparagraphs (A) and (B) of section

17 402(f )(1) are amended by striking ‘‘another eligible

18 retirement plan’’ and inserting ‘‘an eligible retire19 ment plan’’.

20 (7) Subparagraph (B) of section 403(b)(8) is

21 amended to read as follows:

22 ‘‘(B) CERTAIN RULES MADE APPLICABLE.—

23 The rules of paragraphs (2) through (7) and (9)

24 of section 402(c) and section 402(f ) shall apply

25 for purposes of subparagraph (A), except that
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1 section 402(f ) shall be applied to the payor in

2 lieu of the plan administrator.’’.

3 (8) Section 408(a)(1) is amended by striking ‘‘or

4 403(b)(8)’’ and inserting ‘‘, 403(b)(8), or 457(e)(16)’’.

5 (9) Subparagraphs (A) and (B) of section

6 415(b)(2) are each amended by striking ‘‘and

7 408(d)(3)’’ and inserting ‘‘403(b)(8), 408(d)(3), and

8 457(e)(16)’’.

9 (10) Section 415(c)(2) is amended by striking

10 ‘‘and 408(d)(3)’’ and inserting ‘‘408(d)(3), and

11 457(e)(16)’’.

12 (11) Section 4973(b)(1)(A) is amended by strik13 ing ‘‘or 408(d)(3)’’ and inserting ‘‘408(d)(3), or

14 457(e)(16)’’.

15 (f ) EFFECTIVE DATE; SPECIAL RULE.—

16 (1) EFFECTIVE DATE.—The amendments made

17 by this section shall apply to distributions after De18 cember 31, 2000.

19 (2) SPECIAL RULE.—Notwithstanding any other

20 provision of law, subsections (h)(3) and (h)(5) of sec21 tion 1122 of the Tax Reform Act of 1986 shall not

22 apply to any distribution from an eligible retirement

23 plan (as defined in clause (iii) or (iv) of section

24 402(c)(8)(B) of the Internal Revenue Code of 1986) on

25 behalf of an individual if there was a rollover to such
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1 plan on behalf of such individual which is permitted

2 solely by reason of any amendment made by this sec3 tion.

4 SEC. 1342. ROLLOVERS OF IRAS INTO WORKPLACE RETIRE5 MENT PLANS.

6 (a) IN GENERAL.—Subparagraph (A) of section

7 408(d)(3) (relating to rollover amounts) is amended by add8 ing ‘‘or’’ at the end of clause (i), by striking clauses (ii)

9 and (iii), and by adding at the end the following:

10 ‘‘(ii) the entire amount received (in11 cluding money and any other property) is

12 paid into an eligible retirement plan for the

13 benefit of such individual not later than the

14 60th day after the date on which the pay15 ment or distribution is received, except that

16 the maximum amount which may be paid

17 into such plan may not exceed the portion

18 of the amount received which is includible

19 in gross income (determined without regard

20 to this paragraph).

21 For purposes of clause (ii), the term ‘eligible re22 tirement plan’ means an eligible retirement plan

23 described in clause (iii), (iv), (v), or (vi) of sec24 tion 402(c)(8)(B).’’.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Paragraph (1) of section 403(b) is amended

2 by striking ‘‘section 408(d)(3)(A)(iii)’’ and inserting

3 ‘‘section 408(d)(3)(A)(ii)’’.

4 (2) Clause (i) of section 408(d)(3)(D) is amended

5 by striking ‘‘(i), (ii), or (iii)’’ and inserting ‘‘(i) or

6 (ii)’’.

7 (3) Subparagraph (G) of section 408(d)(3) is

8 amended to read as follows:

9 ‘‘(G) SIMPLE RETIREMENT ACCOUNTS.—In

10 the case of any payment or distribution out of

11 a simple retirement account (as defined in sub12 section (p)) to which section 72(t)(6) applies,

13 this paragraph shall not apply unless such pay14 ment or distribution is paid into another simple

15 retirement account.’’.

16 (c) EFFECTIVE DATE; SPECIAL RULE.—

17 (1) EFFECTIVE DATE.—The amendments made

18 by this section shall apply to distributions after De19 cember 31, 2000.

20 (2) SPECIAL RULE.—Notwithstanding any other

21 provision of law, subsections (h)(3) and (h)(5) of sec22 tion 1122 of the Tax Reform Act of 1986 shall not

23 apply to any distribution from an eligible retirement

24 plan (as defined in clause (iii) or (iv) of section

25 402(c)(8)(B) of the Internal Revenue Code of 1986) on
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1 behalf of an individual if there was a rollover to such

2 plan on behalf of such individual which is permitted

3 solely by reason of the amendments made by this sec4 tion.

5 SEC. 1343. ROLLOVERS OF AFTER-TAX CONTRIBUTIONS.

6 (a) ROLLOVERS FROM EXEMPT TRUSTS.—Paragraph

7 (2) of section 402(c) (relating to maximum amount which

8 may be rolled over) is amended by adding at the end the

9 following: ‘‘The preceding sentence shall not apply to such

10 distribution to the extent—

11 ‘‘(A) such portion is transferred in a direct

12 trustee-to-trustee transfer to a qualified trust

13 which is part of a plan which is a defined con14 tribution plan and which agrees to separately

15 account for amounts so transferred, including

16 separately accounting for the portion of such dis17 tribution which is includible in gross income

18 and the portion of such distribution which is not

19 so includible, or

20 ‘‘(B) such portion is transferred to an eligi21 ble retirement plan described in clause (i) or (ii)

22 of paragraph (8)(B).’’.

23 (b) OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLL24 OVER DISTRIBUTIONS.—Subparagraph (B) of section

25 401(a)(31) (relating to limitation) is amended by adding
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1 at the end the following: ‘‘The preceding sentence shall not

2 apply to such distribution if the plan to which such dis3 tribution is transferred—

4 ‘‘(i) agrees to separately account for

5 amounts so transferred, including sepa6 rately accounting for the portion of such

7 distribution which is includible in gross in8 come and the portion of such distribution

9 which is not so includible, or

10 ‘‘(ii) is an eligible retirement plan de11 scribed in clause (i) or (ii) of section

12 402(c)(8)(B).’’.

13 (c) RULES FOR APPLYING SECTION 72 TO IRAS.—

14 Paragraph (3) of section 408(d) (relating to special rules

15 for applying section 72) is amended by inserting at the end

16 the following:

17 ‘‘(H) APPLICATION OF SECTION 72.—

18 ‘‘(i) IN GENERAL.—If—

19 ‘‘(I) a distribution is made from

20 an individual retirement plan, and

21 ‘‘(II) a rollover contribution is

22 made to an eligible retirement plan de23 scribed in section 402(c)(8)(B)(iii),

24 (iv), (v), or (vi) with respect to all or

25 part of such distribution,
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1 then, notwithstanding paragraph (2), the

2 rules of clause (ii) shall apply for purposes

3 of applying section 72.

4 ‘‘(ii) APPLICABLE RULES.—In the case

5 of a distribution described in clause (i)—

6 ‘‘(I) section 72 shall be applied

7 separately to such distribution,

8 ‘‘(II) notwithstanding the pro

9 rata allocation of income on, and in10 vestment in, the contract to distribu11 tions under section 72, the portion of

12 such distribution rolled over to an eli13 gible retirement plan described in

14 clause (i) shall be treated as from in15 come on the contract (to the extent of

16 the aggregate income on the contract

17 from all individual retirement plans of

18 the distributee), and

19 ‘‘(III) appropriate adjustments

20 shall be made in applying section 72 to

21 other distributions in such taxable year

22 and subsequent taxable years.’’.

23 (d) EFFECTIVE DATE.—The amendments made by this

24 section shall apply to distributions made after December 31,

25 2000.
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1 SEC. 1344. HARDSHIP EXCEPTION TO 60-DAY RULE.

2 (a) EXEMPT TRUSTS.—Paragraph (3) of section

3 402(c) (relating to transfer must be made within 60 days

4 of receipt) is amended to read as follows:

5 ‘‘(3) TRANSFER MUST BE MADE WITHIN 60 DAYS

6 OF RECEIPT.—

7 ‘‘(A) IN GENERAL.—Except as provided in

8 subparagraph (B), paragraph (1) shall not

9 apply to any transfer of a distribution made

10 after the 60th day following the day on which the

11 distributee received the property distributed.

12 ‘‘(B) HARDSHIP EXCEPTION.—The Sec13 retary may waive the 60-day requirement under

14 subparagraph (A) where the failure to waive

15 such requirement would be against equity or

16 good conscience, including casualty, disaster, or

17 other events beyond the reasonable control of the

18 individual subject to such requirement.’’.

19 (b) IRAS.—Paragraph (3) of section 408(d) (relating

20 to rollover contributions), as amended by section 1343, is

21 amended by adding after subparagraph (H) the following

22 new subparagraph:

23 ‘‘(I) WAIVER OF 60-DAY REQUIREMENT.—

24 The Secretary may waive the 60-day require25 ment under subparagraphs (A) and (D) where

26 the failure to waive such requirement would be
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1 against equity or good conscience, including cas2 ualty, disaster, or other events beyond the rea3 sonable control of the individual subject to such

4 requirement.’’.

5 (c) EFFECTIVE DATE.—The amendments made by this

6 section shall apply to distributions after December 31, 2000.

7 SEC. 1345. TREATMENT OF FORMS OF DISTRIBUTION.

8 (a) PLAN TRANSFERS.—

9 (1) AMENDMENT TO INTERNAL REVENUE CODE

10 OF 1986.—Paragraph (6) of section 411(d) (relating to

11 accrued benefit not to be decreased by amendment) is

12 amended by adding at the end the following:

13 ‘‘(D) PLAN TRANSFERS.—

14 ‘‘(i) A defined contribution plan (in

15 this subparagraph referred to as the ‘trans16 feree plan’) shall not be treated as failing to

17 meet the requirements of this subsection

18 merely because the transferee plan does not

19 provide some or all of the forms of distribu20 tion previously available under another de21 fined contribution plan (in this subpara22 graph referred to as the ‘transferor plan’) to

23 the extent that—

24 ‘‘(I) the forms of distribution pre25 viously available under the transferor
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1 plan applied to the account of a par2 ticipant or beneficiary under the

3 transferor plan that was transferred

4 from the transferor plan to the trans5 feree plan pursuant to a direct transfer

6 rather than pursuant to a distribution

7 from the transferor plan,

8 ‘‘(II) the terms of both the trans9 feror plan and the transferee plan au10 thorize the transfer described in sub11 clause (I),

12 ‘‘(III) the transfer described in

13 subclause (I) was made pursuant to a

14 voluntary election by the participant

15 or beneficiary whose account was

16 transferred to the transferee plan,

17 ‘‘(IV) the election described in

18 subclause (III) was made after the par19 ticipant or beneficiary received a no20 tice describing the consequences of

21 making the election,

22 ‘‘(V) if the transferor plan pro23 vides for an annuity as the normal

24 form of distribution under the plan in

25 accordance with section 417, the trans-
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1 fer is made with the consent of the par2 ticipant’s spouse (if any), and such

3 consent meets requirements similar to

4 the requirements imposed by section

5 417(a)(2), and

6 ‘‘(VI) the transferee plan allows

7 the participant or beneficiary described

8 in clause (iii) to receive any distribu9 tion to which the participant or bene10 ficiary is entitled under the transferee

11 plan in the form of a single sum dis12 tribution.

13 ‘‘(ii) Clause (i) shall apply to plan

14 mergers and other transactions having the

15 effect of a direct transfer, including consoli16 dations of benefits attributable to different

17 employers within a multiple employer plan.

18 ‘‘(E) ELIMINATION OF FORM OF DISTRIBU19 TION.—Except to the extent provided in regula20 tions, a defined contribution plan shall not be

21 treated as failing to meet the requirements of this

22 section merely because of the elimination of a

23 form of distribution previously available there24 under. This subparagraph shall not apply to the
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1 elimination of a form of distribution with re2 spect to any participant unless—

3 ‘‘(i) a single sum payment is available

4 to such participant at the same time or

5 times as the form of distribution being

6 eliminated, and

7 ‘‘(ii) such single sum payment is based

8 on the same or greater portion of the par9 ticipant’s account as the form of distribu10 tion being eliminated.’’.

11 (2) AMENDMENT TO ERISA.—Section 204(g) of

12 the Employee Retirement Income Security Act of

13 1974 (29 U.S.C. 1054(g)) is amended by adding at

14 the end the following:

15 ‘‘(4)(A) A defined contribution plan (in this subpara16 graph referred to as the ‘transferee plan’) shall not be treat17 ed as failing to meet the requirements of this subsection

18 merely because the transferee plan does not provide some

19 or all of the forms of distribution previously available under

20 another defined contribution plan (in this subparagraph re21 ferred to as the ‘transferor plan’) to the extent that—

22 ‘‘(i) the forms of distribution previously avail23 able under the transferor plan applied to the account

24 of a participant or beneficiary under the transferor

25 plan that was transferred from the transferor plan to
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1 the transferee plan pursuant to a direct transfer rath2 er than pursuant to a distribution from the transferor

3 plan;

4 ‘‘(ii) the terms of both the transferor plan and

5 the transferee plan authorize the transfer described in

6 clause (i);

7 ‘‘(iii) the transfer described in clause (i) was

8 made pursuant to a voluntary election by the partici9 pant or beneficiary whose account was transferred to

10 the transferee plan;

11 ‘‘(iv) the election described in clause (iii) was

12 made after the participant or beneficiary received a

13 notice describing the consequences of making the elec14 tion;

15 ‘‘(v) if the transferor plan provides for an annu16 ity as the normal form of distribution under the plan

17 in accordance with section 205, the transfer is made

18 with the consent of the participant’s spouse (if any),

19 and such consent meets requirements similar to the

20 requirements imposed by section 205(c)(2); and

21 ‘‘(vi) the transferee plan allows the participant

22 or beneficiary described in clause (iii) to receive any

23 distribution to which the participant or beneficiary is

24 entitled under the transferee plan in the form of a

25 single sum distribution.
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1 ‘‘(B) Subparagraph (A) shall apply to plan mergers

2 and other transactions having the effect of a direct transfer,

3 including consolidations of benefits attributable to different

4 employers within a multiple employer plan.

5 ‘‘(5) ELIMINATION OF FORM OF DISTRIBUTION.—Ex6 cept to the extent provided in regulations, a defined con7 tribution plan shall not be treated as failing to meet the

8 requirements of this section merely because of the elimi9 nation of a form of distribution previously available there10 under. This paragraph shall not apply to the elimination

11 of a form of distribution with respect to any participant

12 unless—

13 ‘‘(A) a single sum payment is available to such

14 participant at the same time or times as the form of

15 distribution being eliminated; and

16 ‘‘(B) such single sum payment is based on the

17 same or greater portion of the participant’s account

18 as the form of distribution being eliminated.’’.

19 (3) EFFECTIVE DATE.—The amendments made

20 by this subsection shall apply to years beginning after

21 December 31, 2000.

22 (b) REGULATIONS.—

23 (1) AMENDMENT TO INTERNAL REVENUE CODE

24 OF 1986.—The last sentence of paragraph (6)(B) of

25 section 411(d) (relating to accrued benefit not to be
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1 decreased by amendment) is amended to read as fol2 lows: ‘‘The Secretary shall by regulations provide that

3 this subparagraph shall not apply to any plan

4 amendment that does not adversely affect the rights of

5 participants in a material manner.’’.

6 (2) AMENDMENT TO ERISA.—The last sentence of

7 section 204(g)(2) of the Employee Retirement Income

8 Security Act of 1974 (29 U.S.C. 1054(g)(2)) is

9 amended to read as follows: ‘‘The Secretary of the

10 Treasury shall by regulations provide that this para11 graph shall not apply to any plan amendment that

12 does not adversely affect the rights of participants in

13 a material manner.’’.

14 (3) SECRETARY DIRECTED.—Not later than De15 cember 31, 2001, the Secretary of the Treasury is di16 rected to issue final regulations under section

17 411(d)(6) of the Internal Revenue Code of 1986 and

18 section 204(g) of the Employee Retirement Income Se19 curity Act of 1974, including the regulations required

20 by the amendments made by this subsection. Such

21 regulations shall apply to plan years beginning after

22 December 31, 2001, or such earlier date as is specified

23 by the Secretary of the Treasury.
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1 SEC. 1346. RATIONALIZATION OF RESTRICTIONS ON DIS2 TRIBUTIONS.

3 (a) MODIFICATION OF SAME DESK EXCEPTION.—

4 (1) SECTION 401(k).—

5 (A) Section 401(k)(2)(B)(i)(I) (relating to

6 qualified cash or deferred arrangements) is

7 amended by striking ‘‘separation from service’’

8 and inserting ‘‘severance from employment’’.

9 (B) Subparagraph (A) of section 401(k)(10)

10 (relating to distributions upon termination of

11 plan or disposition of assets or subsidiary) is

12 amended to read as follows:

13 ‘‘(A) IN GENERAL.—An event described in

14 this subparagraph is the termination of the plan

15 without establishment or maintenance of another

16 defined contribution plan (other than an em17 ployee stock ownership plan as defined in section

18 4975(e)(7)).’’.

19 (C) Section 401(k)(10) is amended—

20 (i) in subparagraph (B)—

21 (I) by striking ‘‘An event’’ in

22 clause (i) and inserting ‘‘A termi23 nation’’, and

24 (II) by striking ‘‘the event’’ in

25 clause (i) and inserting ‘‘the termi26 nation’’,
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1 (ii) by striking subparagraph (C), and

2 (iii) by striking ‘‘OR DISPOSITION OF

3 ASSETS OR SUBSIDIARY’’ in the heading.

4 (2) SECTION 403(b).—

5 (A) Paragraphs (7)(A)(ii) and (11)(A) of

6 section 403(b) are each amended by striking

7 ‘‘separates from service’’ and inserting ‘‘has a

8 severance from employment’’.

9 (B) The heading for paragraph (11) of sec10 tion 403(b) is amended by striking ‘‘SEPARATION

11 FROM SERVICE’’ and inserting ‘‘SEVERANCE

12 FROM EMPLOYMENT’’.

13 (3) SECTION 457.—Clause (ii) of section

14 457(d)(1)(A) is amended by striking ‘‘is separated

15 from service’’ and inserting ‘‘has a severance from

16 employment’’.

17 (b) EFFECTIVE DATE.—The amendments made by this

18 section shall apply to distributions after December 31, 2000.

19 SEC. 1347. PURCHASE OF SERVICE CREDIT IN GOVERN20 MENTAL DEFINED BENEFIT PLANS.

21 (a) 403(b) PLANS.—Subsection (b) of section 403 is

22 amended by adding at the end the following new paragraph:

23 ‘‘(13) TRUSTEE-TO-TRUSTEE TRANSFERS TO

24 PURCHASE PERMISSIVE SERVICE CREDIT.—No

25 amount shall be includible in gross income by reason
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1 of a direct trustee-to-trustee transfer to a defined ben2 efit governmental plan (as defined in section 414(d))

3 if such transfer is—

4 ‘‘(A) for the purchase of permissive service

5 credit (as defined in section 415(n)(3)(A)) under

6 such plan, or

7 ‘‘(B) a repayment to which section 415 does

8 not apply by reason of subsection (k)(3) there9 of.’’.

10 (b) 457 PLANS.—

11 (1) Subsection (e) of section 457 is amended by

12 adding after paragraph (16) the following new para13 graph:

14 ‘‘(17) TRUSTEE-TO-TRUSTEE TRANSFERS TO

15 PURCHASE PERMISSIVE SERVICE CREDIT.—No

16 amount shall be includible in gross income by reason

17 of a direct trustee-to-trustee transfer to a defined ben18 efit governmental plan (as defined in section 414(d))

19 if such transfer is—

20 ‘‘(A) for the purchase of permissive service

21 credit (as defined in section 415(n)(3)(A)) under

22 such plan, or

23 ‘‘(B) a repayment to which section 415 does

24 not apply by reason of subsection (k)(3) there25 of.’’.
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1 (2) Section 457(b)(2) is amended by striking

2 ‘‘(other than rollover amounts)’’ and inserting ‘‘(other

3 than rollover amounts and amounts received in a

4 transfer referred to in subsection (e)(17))’’.

5 (c) EFFECTIVE DATE.—The amendments made by this

6 section shall apply to trustee-to-trustee transfers after De7 cember 31, 2000.

8 SEC. 1348. EMPLOYERS MAY DISREGARD ROLLOVERS FOR

9 PURPOSES OF CASH-OUT AMOUNTS.

10 (a) QUALIFIED PLANS.—

11 (1) AMENDMENT TO INTERNAL REVENUE CODE

12 OF 1986.—Section 411(a)(11) (relating to restrictions

13 on certain mandatory distributions) is amended by

14 adding at the end the following:

15 ‘‘(D) SPECIAL RULE FOR ROLLOVER CON16 TRIBUTIONS.—A plan shall not fail to meet the

17 requirements of this paragraph if, under the

18 terms of the plan, the present value of the non19 forfeitable accrued benefit is determined without

20 regard to that portion of such benefit which is

21 attributable to rollover contributions (and earn22 ings allocable thereto). For purposes of this sub23 paragraph, the term ‘rollover contributions’

24 means any rollover contribution under sections
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1 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii),

2 and 457(e)(16).’’.

3 (2) AMENDMENT TO ERISA.—Section 203(e) of

4 the Employee Retirement Income Security Act of

5 1974 (29 U.S.C. 1053(c)) is amended by adding at

6 the end the following:

7 ‘‘(4) A plan shall not fail to meet the requirements of

8 this subsection if, under the terms of the plan, the present

9 value of the nonforfeitable accrued benefit is determined

10 without regard to that portion of such benefit which is at11 tributable to rollover contributions (and earnings allocable

12 thereto). For purposes of this subparagraph, the term ‘roll13 over contributions’ means any rollover contribution under

14 sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and

15 457(e)(16) of the Internal Revenue Code of 1986.’’.

16 (b) ELIGIBLE DEFERRED COMPENSATION PLANS.—

17 Clause (i) of section 457(e)(9)(A) is amended by striking

18 ‘‘such amount’’ and inserting ‘‘the portion of such amount

19 which is not attributable to rollover contributions (as de20 fined in section 411(a)(11)(D))’’.

21 (c) EFFECTIVE DATE.—The amendments made by this

22 section shall apply to distributions after December 31, 2000.
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1 SEC. 1349. MINIMUM DISTRIBUTION AND INCLUSION RE2 QUIREMENTS FOR SECTION 457 PLANS.

3 (a) MINIMUM DISTRIBUTION REQUIREMENTS.—Para4 graph (2) of section 457(d) (relating to distribution require5 ments) is amended to read as follows:

6 ‘‘(2) MINIMUM DISTRIBUTION REQUIREMENTS.—

7 A plan meets the minimum distribution requirements

8 of this paragraph if such plan meets the requirements

9 of section 401(a)(9).’’.

10 (b) INCLUSION IN GROSS INCOME.—

11 (1) YEAR OF INCLUSION.—Subsection (a) of sec12 tion 457 (relating to year of inclusion in gross in13 come) is amended to read as follows:

14 ‘‘(a) YEAR OF INCLUSION IN GROSS INCOME.—

15 ‘‘(1) IN GENERAL.—Any amount of compensa16 tion deferred under an eligible deferred compensation

17 plan, and any income attributable to the amounts so

18 deferred, shall be includible in gross income only for

19 the taxable year in which such compensation or other

20 income—

21 ‘‘(A) is paid to the participant or other ben22 eficiary, in the case of a plan of an eligible em23 ployer described in subsection (e)(1)(A), and

24 ‘‘(B) is paid or otherwise made available to

25 the participant or other beneficiary, in the case
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1 of a plan of an eligible employer described in

2 subsection (e)(1)(B).

3 ‘‘(2) SPECIAL RULE FOR ROLLOVER AMOUNTS.—

4 To the extent provided in section 72(t)(9), section

5 72(t) shall apply to any amount includible in gross

6 income under this subsection.’’.

7 (2) CONFORMING AMENDMENTS.—

8 (A) So much of paragraph (9) of section

9 457(e) as precedes subparagraph (A) is amended

10 to read as follows:

11 ‘‘(9) BENEFITS OF TAX EXEMPT ORGANIZATION

12 PLANS NOT TREATED AS MADE AVAILABLE BY REASON

13 OF CERTAIN ELECTIONS, ETC.—In the case of an eligi14 ble deferred compensation plan of an employer de15 scribed in subsection (e)(1)(B)—’’.

16 (B) Section 457(d) is amended by adding at

17 the end the following new paragraph:

18 ‘‘(3) SPECIAL RULE FOR GOVERNMENT PLAN.—

19 An eligible deferred compensation plan of an em20 ployer described in subsection (e)(1)(A) shall not be

21 treated as failing to meet the requirements of this sub22 section solely by reason of making a distribution de23 scribed in subsection (e)(9)(A).’’.

24 (c) EFFECTIVE DATE.—The amendments made by this

25 section shall apply to distributions after December 31, 2000.
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1 PART IV—STRENGTHENING PENSION SECURITY

2 AND ENFORCEMENT

3 SEC. 1351. REPEAL OF 150 PERCENT OF CURRENT LIABILITY

4 FUNDING LIMIT.

5 (a) AMENDMENT TO INTERNAL REVENUE CODE OF

6 1986.—Section 412(c)(7) (relating to full-funding limita7 tion) is amended—

8 (1) by striking ‘‘the applicable percentage’’ in

9 subparagraph (A)(i)(I) and inserting ‘‘in the case of

10 plan years beginning before January 1, 2004, the ap11 plicable percentage’’, and

12 (2) by amending subparagraph (F) to read as

13 follows:

14 ‘‘(F) APPLICABLE PERCENTAGE.—For pur15 poses of subparagraph (A)(i)(I), the applicable

16 percentage shall be determined in accordance

17 with the following table:

‘‘In the case of any plan year The applicable

beginning in— percentage is—

2001 ................................................................................................ 160

2002 ................................................................................................ 165

2003 ................................................................................................ 170.’’.

18 (b) AMENDMENT TO ERISA.—Section 302(c)(7) of the

19 Employee Retirement Income Security Act of 1974 (29

20 U.S.C. 1082(c)(7)) is amended—

21 (1) by striking ‘‘the applicable percentage’’ in

22 subparagraph (A)(i)(I) and inserting ‘‘in the case of
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1 plan years beginning before January 1, 2004, the ap2 plicable percentage’’, and

3 (2) by amending subparagraph (F) to read as

4 follows:

5 ‘‘(F) APPLICABLE PERCENTAGE.—For pur6 poses of subparagraph (A)(i)(I), the applicable

7 percentage shall be determined in accordance

8 with the following table:

‘‘In the case of any plan year The applicable

beginning in— percentage is—

2001 ................................................................................................ 160

2002 ................................................................................................ 165

2003 ................................................................................................ 170.’’.

9 (c) EFFECTIVE DATE.—The amendments made by this

10 section shall apply to plan years beginning after December

11 31, 2000.

12 SEC. 1352. MAXIMUM CONTRIBUTION DEDUCTION RULES

13 MODIFIED AND APPLIED TO ALL DEFINED

14 BENEFIT PLANS.

15 (a) IN GENERAL.—Subparagraph (D) of section

16 404(a)(1) (relating to special rule in case of certain plans)

17 is amended to read as follows:

18 ‘‘(D) SPECIAL RULE IN CASE OF CERTAIN

19 PLANS.—

20 ‘‘(i) IN GENERAL.—In the case of any

21 defined benefit plan, except as provided in

22 regulations, the maximum amount deduct23 ible under the limitations of this paragraph
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1 shall not be less than the unfunded termi2 nation liability (determined as if the pro3 posed termination date referred to in section

4 4041(b)(2)(A)(i)(II) of the Employee Retire5 ment Income Security Act of 1974 were the

6 last day of the plan year).

7 ‘‘(ii) PLANS WITH LESS THAN 100 PAR8 TICIPANTS.—For purposes of this subpara9 graph, in the case of a plan which has less

10 than 100 participants for the plan year,

11 termination liability shall not include the

12 liability attributable to benefit increases for

13 highly compensated employees (as defined

14 in section 414(q)) resulting from a plan

15 amendment which is made or becomes effec16 tive, whichever is later, within the last 2

17 years before the termination date.

18 ‘‘(iii) RULE FOR DETERMINING NUM19 BER OF PARTICIPANTS.—For purposes of de20 termining whether a plan has more than

21 100 participants, all defined benefit plans

22 maintained by the same employer (or any

23 member of such employer’s controlled group

24 (within the meaning of section

25 412(l)(8)(C))) shall be treated as one plan,
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1 but only employees of such member or em2 ployer shall be taken into account.

3 ‘‘(iv) PLANS ESTABLISHED AND MAIN4 TAIN BY PROFESSIONAL SERVICE EMPLOY5 ERS.—Clause (i) shall not apply to a plan

6 described in section 4021(b)(13) of the Em7 ployee Retirement Income Security Act of

8 1974.’’.

9 (b) CONFORMING AMENDMENT.—Paragraph (6) of sec10 tion 4972(c) is amended to read as follows:

11 ‘‘(6) EXCEPTIONS.—In determining the amount

12 of nondeductible contributions for any taxable year,

13 there shall not be taken into account so much of the

14 contributions to one or more defined contribution

15 plans which are not deductible when contributed sole16 ly because of section 404(a)(7) as does not exceed the

17 greater of—

18 ‘‘(A) the amount of contributions not in ex19 cess of 6 percent of compensation (within the

20 meaning of section 404(a)) paid or accrued (dur21 ing the taxable year for which the contributions

22 were made) to beneficiaries under the plans, or

23 ‘‘(B) the sum of—

24 ‘‘(i) the amount of contributions de25 scribed in section 401(m)(4)(A), plus
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1 ‘‘(ii) the amount of contributions de2 scribed in section 402(g)(3)(A).

3 For purposes of this paragraph, the deductible limits

4 under section 404(a)(7) shall first be applied to

5 amounts contributed to a defined benefit plan and

6 then to amounts described in subparagraph (B).’’.

7 (c) EFFECTIVE DATE.—The amendments made by this

8 section shall apply to plan years beginning after December

9 31, 2000.

10 SEC. 1353. EXCISE TAX RELIEF FOR SOUND PENSION FUND11 ING.

12 (a) IN GENERAL.—Subsection (c) of section 4972 (re13 lating to nondeductible contributions) is amended by add14 ing at the end the following new paragraph:

15 ‘‘(7) DEFINED BENEFIT PLAN EXCEPTION.—In

16 determining the amount of nondeductible contribu17 tions for any taxable year, an employer may elect for

18 such year not to take into account any contributions

19 to a defined benefit plan except to the extent that such

20 contributions exceed the full-funding limitation (as

21 defined in section 412(c)(7), determined without re22 gard to subparagraph (A)(i)(I) thereof). For purposes

23 of this paragraph, the deductible limits under section

24 404(a)(7) shall first be applied to amounts contrib25 uted to defined contribution plans and then to
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1 amounts described in this paragraph. If an employer

2 makes an election under this paragraph for a taxable

3 year, paragraph (6) shall not apply to such employer

4 for such taxable year.’’.

5 (b) EFFECTIVE DATE.—The amendments made by this

6 section shall apply to years beginning after December 31,

7 2000.

8 SEC. 1354. EXCISE TAX ON FAILURE TO PROVIDE NOTICE BY

9 DEFINED BENEFIT PLANS SIGNIFICANTLY RE10 DUCING FUTURE BENEFIT ACCRUALS.

11 (a) AMENDMENT TO 1986 CODE.—Chapter 43 of sub12 title D (relating to qualified pension, etc., plans) is amend13 ed by adding at the end the following new section:

14 ‘‘SEC. 4980F. FAILURE OF APPLICABLE PLANS REDUCING

15 BENEFIT ACCRUALS TO SATISFY NOTICE RE16 QUIREMENTS.

17 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed a

18 tax on the failure of any applicable pension plan to meet

19 the requirements of subsection (e) with respect to any appli20 cable individual.

21 ‘‘(b) AMOUNT OF TAX.—

22 ‘‘(1) IN GENERAL.—The amount of the tax im23 posed by subsection (a) on any failure with respect to

24 any applicable individual shall be $100 for each day
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1 in the noncompliance period with respect to such fail2 ure.

3 ‘‘(2) NONCOMPLIANCE PERIOD.—For purposes of

4 this section, the term ‘noncompliance period’ means,

5 with respect to any failure, the period beginning on

6 the date the failure first occurs and ending on the

7 date the failure is corrected.

8 ‘‘(c) LIMITATIONS ON AMOUNT OF TAX.—

9 ‘‘(1) OVERALL LIMITATION FOR UNINTENTIONAL

10 FAILURES.—In the case of failures that are due to

11 reasonable cause and not to willful neglect, the tax

12 imposed by subsection (a) for failures during the tax13 able year of the employer (or, in the case of a multi14 employer plan, the taxable year of the trust forming

15 part of the plan) shall not exceed $500,000. For pur16 poses of the preceding sentence, all multiemployer

17 plans of which the same trust forms a part shall be

18 treated as one plan. For purposes of this paragraph,

19 if not all persons who are treated as a single em20 ployer for purposes of this section have the same tax21 able year, the taxable years taken into account shall

22 be determined under principles similar to the prin23 ciples of section 1561.

24 ‘‘(2) WAIVER BY SECRETARY.—In the case of a

25 failure which is due to reasonable cause and not to
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1 willful neglect, the Secretary may waive part or all

2 of the tax imposed by subsection (a) to the extent that

3 the payment of such tax would be excessive relative to

4 the failure involved.

5 ‘‘(d) LIABILITY FOR TAX.—The following shall be lia6 ble for the tax imposed by subsection (a):

7 ‘‘(1) In the case of a plan other than a multiem8 ployer plan, the employer.

9 ‘‘(2) In the case of a multiemployer plan, the

10 plan.

11 ‘‘(e) NOTICE REQUIREMENTS FOR PLANS SIGNIFI12 CANTLY REDUCING BENEFIT ACCRUALS.—

13 ‘‘(1) IN GENERAL.—If an applicable pension

14 plan is amended to provide for a significant reduc15 tion in the rate of future benefit accrual, the plan ad16 ministrator shall provide written notice to each ap17 plicable individual (and to each employee organiza18 tion representing applicable individuals).

19 ‘‘(2) NOTICE.—The notice required by paragraph

20 (1) shall be written in a manner calculated to be un21 derstood by the average plan participant and shall

22 provide sufficient information (as determined in ac23 cordance with regulations prescribed by the Sec24 retary) to allow applicable individuals to understand

25 the effect of the plan amendment.
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1 ‘‘(3) TIMING OF NOTICE.—Except as provided in

2 regulations, the notice required by paragraph (1)

3 shall be provided within a reasonable time before the

4 effective date of the plan amendment.

5 ‘‘(4) DESIGNEES.—Any notice under paragraph

6 (1) may be provided to a person designated, in writ7 ing, by the person to which it would otherwise be pro8 vided.

9 ‘‘(5) NOTICE BEFORE ADOPTION OF AMEND10 MENT.—A plan shall not be treated as failing to meet

11 the requirements of paragraph (1) merely because no12 tice is provided before the adoption of the plan

13 amendment if no material modification of the amend14 ment occurs before the amendment is adopted.

15 ‘‘(f ) APPLICABLE INDIVIDUAL; APPLICABLE PENSION

16 PLAN.—For purposes of this section—

17 ‘‘(1) APPLICABLE INDIVIDUAL.—The term ‘appli18 cable individual’ means, with respect to any plan

19 amendment—

20 ‘‘(A) any participant in the plan, and

21 ‘‘(B) any beneficiary who is an alternate

22 payee (within the meaning of section 414(p)(8))

23 under an applicable qualified domestic relations

24 order (within the meaning of section

25 414(p)(1)(A)),
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1 who may reasonably be expected to be affected by such

2 plan amendment.

3 ‘‘(2) APPLICABLE PENSION PLAN.—The term ‘ap4 plicable pension plan’ means—

5 ‘‘(A) any defined benefit plan, or

6 ‘‘(B) an individual account plan which is

7 subject to the funding standards of section 412,

8 which had 100 or more participants who had accrued

9 a benefit, or with respect to whom contributions were

10 made, under the plan (whether or not vested) as of the

11 last day of the plan year preceding the plan year in

12 which the plan amendment becomes effective. Such

13 term shall not include a governmental plan (within

14 the meaning of section 414(d)) or a church plan

15 (within the meaning of section 414(e)) with respect to

16 which the election provided by section 410(d) has not

17 been made.’’.

18 (b) AMENDMENT TO ERISA.—Section 204(h) of the

19 Employee Retirement Income Security Act or 1974 (29

20 U.S.C. 1054(h)) is amended by adding at the end the fol21 lowing new paragraph:

22 ‘‘(3)(A) A plan to which paragraph (1) applies shall

23 not be treated as meeting the requirements of such para24 graph unless, in addition to any notice required to be pro25 vided to an individual or organization under such para-
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1 graph, the plan administrator provides the notice described

2 in subparagraph (B).

3 ‘‘(B) The notice required by subparagraph (A) shall

4 be written in a manner calculated to be understood by the

5 average plan participant and shall provide sufficient infor6 mation (as determined in accordance with regulations pre7 scribed by the Secretary of the Treasury) to allow individ8 uals to understand the effect of the plan amendment.

9 ‘‘(C) Except as provided in regulations prescribed by

10 the Secretary of the Treasury, the notice required by sub11 paragraph (A) shall be provided within a reasonable time

12 before the effective date of the plan amendment.

13 ‘‘(D) A plan shall not be treated as failing to meet

14 the requirements of subparagraph (A) merely because notice

15 is provided before the adoption of the plan amendment if

16 no material modification of the amendment occurs before

17 the amendment is adopted.’’.

18 (c) CLERICAL AMENDMENT.—The table of sections for

19 chapter 43 of subtitle D is amended by adding at the end

20 the following new item:

‘‘Sec. 4980F. Failure of applicable plans reducing benefit accruals to satisfy notice requirements.’’.

21 (d) EFFECTIVE DATES.—

22 (1) IN GENERAL.—The amendments made by

23 this section shall apply to plan amendments taking

24 effect on or after the date of the enactment of this Act.
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1 (2) TRANSITION.—Until such time as the Sec2 retary of the Treasury issues regulations under sec3 tions 4980F(e)(2) and (3) of the Internal Revenue

4 Code of 1986 and section 204(h)(3) of the Employee

5 Retirement Income Security Act of 1974 (as added by

6 the amendments made by this section), a plan shall

7 be treated as meeting the requirements of such sections

8 if it makes a good faith effort to comply with such re9 quirements.

10 (3) SPECIAL RULE.—The period for providing

11 any notice required by the amendments made by this

12 section shall not end before the date which is 3

13 months after the date of the enactment of this Act.

14 SEC. 1355. PROTECTION OF INVESTMENT OF EMPLOYEE

15 CONTRIBUTIONS TO 401(K) PLANS.

16 (a) IN GENERAL.—Section 1524(b) of the Taxpayer

17 Relief Act of 1997 is amended to read as follows:

18 ‘‘(b) EFFECTIVE DATE.—

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), the amendments made by this section shall

21 apply to elective deferrals for plan years beginning

22 after December 31, 1998.

23 ‘‘(2) NONAPPLICATION TO PREVIOUSLY ACQUIRED

24 PROPERTY.—The amendments made by this section

25 shall not apply to any elective deferral which is in-
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1 vested in assets consisting of qualifying employer se2 curities, qualifying employer real property, or both, if

3 such assets were acquired before January 1, 1999.’’.

4 (b) EFFECTIVE DATE.—The amendment made by this

5 section shall apply as if included in the provision of the

6 Taxpayer Relief Act of 1997 to which it relates.

7 SEC. 1356. TREATMENT OF MULTIEMPLOYER PLANS UNDER

8 SECTION 415.

9 (a) COMPENSATION LIMIT.—Paragraph (11) of section

10 415(b) (relating to limitation for defined benefit plans) is

11 amended to read as follows:

12 ‘‘(11) SPECIAL LIMITATION RULE FOR GOVERN13 MENTAL AND MULTIEMPLOYER PLANS.—In the case of

14 a governmental plan (as defined in section 414(d)) or

15 a multiemployer plan (as defined in section 414(f )),

16 subparagraph (B) of paragraph (1) shall not apply.’’.

17 (b) EFFECTIVE DATE.—The amendment made by this

18 section shall apply to years beginning after December 31,

19 2000.

20 PART V—REDUCING REGULATORY BURDENS

21 SEC. 1361. MODIFICATION OF TIMING OF PLAN VALU22 ATIONS.

23 (a) IN GENERAL.—Section 412(c)(9) (relating to an24 nual valuation) is amended—
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1 (1) by striking ‘‘For purposes’’ and inserting the

2 following:

3 ‘‘(A) IN GENERAL.—For purposes’’, and

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

5 ‘‘(B) ELECTION TO USE PRIOR YEAR VALU6 ATION.—

7 ‘‘(i) IN GENERAL.—Except as provided

8 in clause (ii), if, for any plan year—

9 ‘‘(I) an election is in effect under

10 this subparagraph with respect to a

11 plan, and

12 ‘‘(II) the assets of the plan are not

13 less than 125 percent of the plan’s cur14 rent liability (as defined in paragraph

15 (7)(B)), determined as of the valuation

16 date for the preceding plan year,

17 then this section shall be applied using the

18 information available as of such valuation

19 date.

20 ‘‘(ii) EXCEPTIONS.—

21 ‘‘(I) ACTUAL VALUATION EVERY 3

22 YEARS.—Clause (i) shall not apply for

23 more than 2 consecutive plan years

24 and valuation shall be under subpara25 graph (A) with respect to any plan
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1 year to which clause (i) does not apply

2 by reason of this subclause.

3 ‘‘(II) REGULATIONS.—Clause (i)

4 shall not apply to the extent that more

5 frequent valuations are required under

6 the regulations under subparagraph

7 (A).

8 ‘‘(iii) ADJUSTMENTS.—Information

9 under clause (i) shall, in accordance with

10 regulations, be actuarially adjusted to re11 flect significant differences in participants.

12 ‘‘(iv) ELECTION.—An election under

13 this subparagraph, once made, shall be ir14 revocable without the consent of the Sec15 retary.’’.

16 (b) AMENDMENTS TO ERISA.—Paragraph (9) of sec17 tion 302(c) of the Employee Retirement Income Security

18 Act of 1974 (29 U.S.C. 1053(c)) is amended—

19 (1) by inserting ‘‘(A)’’ after ‘‘(9)’’, and

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

21 ‘‘(B)(i) Except as provided in clause (ii), if, for any

22 plan year—

23 ‘‘(I) an election is in effect under this subpara24 graph with respect to a plan, and
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1 ‘‘(II) the assets of the plan are not less than 125

2 percent of the plan’s current liability (as defined in

3 paragraph (7)(B)), determined as of the valuation

4 date for the preceding plan year,

5 then this section shall be applied using the information

6 available as of such valuation date.

7 ‘‘(ii)(I) Clause (i) shall not apply for more than 2 con8 secutive plan years and valuation shall be under subpara9 graph (A) with respect to any plan year to which clause

10 (i) does not apply by reason of this subclause.

11 ‘‘(II) Clause (i) shall not apply to the extent that more

12 frequent valuations are required under the regulations

13 under subparagraph (A).

14 ‘‘(iii) Information under clause (i) shall, in accord15 ance with regulations, be actuarially adjusted to reflect sig16 nificant differences in participants.

17 ‘‘(iv) An election under this subparagraph, once made,

18 shall be irrevocable without the consent of the Secretary of

19 the Treasury.’’.

20 (c) EFFECTIVE DATE.—The amendments made by this

21 section shall apply to plan years beginning after December

22 31, 2000.
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1 SEC. 1362. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT

2 LOSS OF DIVIDEND DEDUCTION.

3 (a) IN GENERAL.—Section 404(k)(2)(A) (defining ap4 plicable dividends) is amended by striking ‘‘or’’ at the end

5 of clause (ii), by redesignating clause (iii) as clause (iv),

6 and by inserting after clause (ii) the following new clause:

7 ‘‘(iii) is, at the election of such partici8 pants or their beneficiaries—

9 ‘‘(I) payable as provided in clause

10 (i) or (ii), or

11 ‘‘(II) paid to the plan and rein12 vested in qualifying employer securi13 ties, or’’.

14 (b) EFFECTIVE DATE.—The amendments made by this

15 section shall apply to taxable years beginning after Decem16 ber 31, 2000.

17 SEC. 1363. REPEAL OF TRANSITION RULE RELATING TO

18 CERTAIN HIGHLY COMPENSATED EMPLOY19 EES.

20 (a) IN GENERAL.—Paragraph (4) of section 1114(c)

21 of the Tax Reform Act of 1986 is hereby repealed.

22 (b) EFFECTIVE DATE.—The repeal made by subsection

23 (a) shall apply to plan years beginning after December 31,

24 1999.
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1 SEC. 1364. EMPLOYEES OF TAX-EXEMPT ENTITIES.

2 (a) IN GENERAL.—The Secretary of the Treasury shall

3 modify Treasury Regulations section 1.410(b)–6(g) to pro4 vide that employees of an organization described in section

5 403(b)(1)(A)(i) of the Internal Revenue Code of 1986 who

6 are eligible to make contributions under section 403(b) of

7 such Code pursuant to a salary reduction agreement may

8 be treated as excludable with respect to a plan under section

9 401 (k) or (m) of such Code that is provided under the same

10 general arrangement as a plan under such section 401(k),

11 if—

12 (1) no employee of an organization described in

13 section 403(b)(1)(A)(i) of such Code is eligible to par14 ticipate in such section 401(k) plan or section 401(m)

15 plan, and

16 (2) 95 percent of the employees who are not em17 ployees of an organization described in section

18 403(b)(1)(A)(i) of such Code are eligible to partici19 pate in such plan under such section 401 (k) or (m).

20 (b) EFFECTIVE DATE.—The modification required by

21 subsection (a) shall apply as of the same date set forth in

22 section 1426(b) of the Small Business Job Protection Act

23 of 1996.
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1 SEC. 1365. CLARIFICATION OF TREATMENT OF EMPLOYER2 PROVIDED RETIREMENT ADVICE.

3 (a) IN GENERAL.—Subsection (a) of section 132 (relat4 ing to exclusion from gross income) is amended by striking

5 ‘‘or’’ at the end of paragraph (5), by striking the period

6 at the end of paragraph (6) and inserting ‘‘, or’’, and by

7 adding at the end the following new paragraph:

8 ‘‘(7) qualified retirement planning services.’’.

9 (b) QUALIFIED RETIREMENT PLANNING SERVICES DE10 FINED.—Section 132 is amended by redesignating sub11 section (m) as subsection (n) and by inserting after sub12 section (l) the following:

13 ‘‘(m) QUALIFIED RETIREMENT PLANNING SERV14 ICES.—

15 ‘‘(1) IN GENERAL.—For purposes of this section,

16 the term ‘qualified retirement planning services’

17 means any retirement planning service provided to

18 an employee and his spouse by an employer main19 taining a qualified employer plan.

20 ‘‘(2) NONDISCRIMINATION RULE.—Subsection

21 (a)(7) shall apply in the case of highly compensated

22 employees only if such services are available on sub23 stantially the same terms to each member of the group

24 of employees normally provided education and infor25 mation regarding the employer’s qualified employer

26 plan.
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1 ‘‘(3) QUALIFIED EMPLOYER PLAN.—For purposes

2 of this subsection, the term ‘qualified employer plan’

3 means a plan, contract, pension, or account described

4 in section 219(g)(5).’’.

5 (c) EFFECTIVE DATE.—The amendments made by this

6 section shall apply to years beginning after December 31,

7 2000.

8 SEC. 1366. REPORTING SIMPLIFICATION.

9 (a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR

10 OWNERS AND THEIR SPOUSES.—

11 (1) IN GENERAL.—The Secretary of the Treasury

12 shall modify the requirements for filing annual re13 turns with respect to one-participant retirement plans

14 to ensure that such plans with assets of $250,000 or

15 less as of the close of the plan year need not file a

16 return for that year.

17 (2) ONE-PARTICIPANT RETIREMENT PLAN DE18 FINED.—For purposes of this subsection, the term

19 ‘‘one-participant retirement plan’’ means a retire20 ment plan that—

21 (A) on the first day of the plan year—

22 (i) covered only the employer (and the

23 employer’s spouse) and the employer owned

24 the entire business (whether or not incor25 porated), or
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1 (ii) covered only one or more partners

2 (and their spouses) in a business partner3 ship (including partners in an S or C cor4 poration),

5 (B) meets the minimum coverage require6 ments of section 410(b) of the Internal Revenue

7 Code of 1986 without being combined with any

8 other plan of the business that covers the employ9 ees of the business,

10 (C) does not provide benefits to anyone ex11 cept the employer (and the employer’s spouse) or

12 the partners (and their spouses),

13 (D) does not cover a business that is a

14 member of an affiliated service group, a con15 trolled group of corporations, or a group of busi16 nesses under common control, and

17 (E) does not cover a business that leases em18 ployees.

19 (3) OTHER DEFINITIONS.—Terms used in para20 graph (2) which are also used in section 414 of the

21 Internal Revenue Code of 1986 shall have the respec22 tive meanings given such terms by such section.

23 (b) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR

24 PLANS WITH FEWER THAN 25 EMPLOYEES.—In the case

25 of a retirement plan which covers less than 25 employees
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1 on the first day of the plan year and meets the requirements

2 described in subparagraphs (B), (D), and (E) of subsection

3 (a)(2), the Secretary of the Treasury shall provide for the

4 filing of a simplified annual return that is substantially

5 similar to the annual return required to be filed by a one6 participant retirement plan.

7 (c) EFFECTIVE DATE.—The provisions of this section

8 shall take effect on January 1, 2001.

9 SEC. 1367. IMPROVEMENT OF EMPLOYEE PLANS COMPLI10 ANCE RESOLUTION SYSTEM.

11 The Secretary of the Treasury shall continue to update

12 and improve the Employee Plans Compliance Resolution

13 System (or any successor program) giving special attention

14 to—

15 (1) increasing the awareness and knowledge of

16 small employers concerning the availability and use

17 of the program,

18 (2) taking into account special concerns and cir19 cumstances that small employers face with respect to

20 compliance and correction of compliance failures,

21 (3) extending the duration of the self-correction

22 period under the Administrative Policy Regarding

23 Self-Correction for significant compliance failures,
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1 (4) expanding the availability to correct insig2 nificant compliance failures under the Administrative

3 Policy Regarding Self-Correction during audit, and

4 (5) assuring that any tax, penalty, or sanction

5 that is imposed by reason of a compliance failure is

6 not excessive and bears a reasonable relationship to

7 the nature, extent, and severity of the failure.

8 SEC. 1368. MODIFICATION OF EXCLUSION FOR EMPLOYER9 PROVIDED TRANSIT PASSES.

10 (a) IN GENERAL.—Section 132(f )(3) (relating to cash

11 reimbursements) is amended by striking the last sentence.

12 (b) EFFECTIVE DATE.—The amendment made by this

13 section shall apply to taxable years beginning after Decem14 ber 31, 1999.

15 SEC. 1369. REPEAL OF THE MULTIPLE USE TEST.

16 (a) IN GENERAL.—Paragraph (9) of section 401(m) is

17 amended to read as follows:

18 ‘‘(9) REGULATIONS.—The Secretary shall pre19 scribe such regulations as may be necessary to carry

20 out the purposes of this subsection and subsection (k),

21 including regulations permitting appropriate aggre22 gation of plans and contributions.’’.

23 (b) EFFECTIVE DATE.—The amendment made by this

24 section shall apply to years beginning after December 31,

25 2000.
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1 SEC. 1370. FLEXIBILITY IN NONDISCRIMINATION, COV2 ERAGE, AND LINE OF BUSINESS RULES.

3 (a) NONDISCRIMINATION.—

4 (1) IN GENERAL.—The Secretary of the Treasury

5 shall, by regulation, provide that a plan shall be

6 deemed to satisfy the requirements of section

7 401(a)(4) of the Internal Revenue Code of 1986 if

8 such plan satisfies the facts and circumstances test

9 under section 401(a)(4) of such Code, as in effect be10 fore January 1, 1994, but only if—

11 (A) the plan satisfies conditions prescribed

12 by the Secretary to appropriately limit the

13 availability of such test, and

14 (B) the plan is submitted to the Secretary

15 for a determination of whether it satisfies such

16 test.

17 Subparagraph (B) shall only apply to the extent pro18 vided by the Secretary.

19 (2) EFFECTIVE DATES.—

20 (A) REGULATIONS.—The regulation re21 quired by paragraph (1) shall apply to years be22 ginning after December 31, 2000.

23 (B) CONDITIONS OF AVAILABILITY.—Any

24 condition of availability prescribed by the Sec25 retary under paragraph (1)(A) shall not apply

26 before the first year beginning not less than 120
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1 days after the date on which such condition is

2 prescribed.

3 (b) COVERAGE TEST.—

4 (1) IN GENERAL.—Section 410(b)(1) (relating to

5 minimum coverage requirements) is amended by add6 ing at the end the following:

7 ‘‘(D) In the case that the plan fails to meet

8 the requirements of subparagraphs (A), (B) and

9 (C), the plan—

10 ‘‘(i) satisfies subparagraph (B), as in

11 effect immediately before the enactment of

12 the Tax Reform Act of 1986,

13 ‘‘(ii) is submitted to the Secretary for

14 a determination of whether it satisfies the

15 requirement described in clause (i), and

16 ‘‘(iii) satisfies conditions prescribed by

17 the Secretary by regulation that appro18 priately limit the availability of this sub19 paragraph.

20 Clause (ii) shall apply only to the extent pro21 vided by the Secretary.’’.

22 (2) EFFECTIVE DATES.—

23 (A) IN GENERAL.—The amendment made

24 by paragraph (1) shall apply to years beginning

25 after December 31, 2000.
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1 (B) CONDITIONS OF AVAILABILITY.—Any

2 condition of availability prescribed by the Sec3 retary under regulations prescribed by the Sec4 retary under section 410(b)(1)(D) of the Internal

5 Revenue Code of 1986 shall not apply before the

6 first year beginning not less than 120 days after

7 the date on which such condition is prescribed.

8 (c) LINE OF BUSINESS RULES.—The Secretary of the

9 Treasury shall, on or before December 31, 2000, modify the

10 existing regulations issued under section 414(r) of the Inter11 nal Revenue Code of 1986 in order to expand (to the extent

12 that the Secretary determines appropriate) the ability of

13 a pension plan to demonstrate compliance with the line of

14 business requirements based upon the facts and cir15 cumstances surrounding the design and operation of the

16 plan, even though the plan is unable to satisfy the mechan17 ical tests currently used to determine compliance.

18 SEC. 1371. EXTENSION TO INTERNATIONAL ORGANIZA19 TIONS OF MORATORIUM ON APPLICATION OF

20 CERTAIN NONDISCRIMINATION RULES APPLI21 CABLE TO STATE AND LOCAL PLANS.

22 (a) IN GENERAL.—Subparagraph (G) of section

23 401(a)(5), subparagraph (H) of section 401(a)(26), sub24 paragraph (G) of section 401(k)(3), and paragraph (2) of

25 section 1505(d) of the Taxpayer Relief Act of 1997 are each
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1 amended by inserting ‘‘or by an international organization

2 which is described in section 414(d)’’ after ‘‘or instrumen3 tality thereof)’’.

4 (b) CONFORMING AMENDMENTS.—

5 (1) The headings for subparagraph (G) of section

6 401(a)(5) and subparagraph (H) of section

7 401(a)(26) are each amended by inserting ‘‘AND

8 INTERNATIONAL ORGANIZATION’’ after ‘‘GOVERN9 MENTAL’’.

10 (2) Subparagraph (G) of section 401(k)(3) is

11 amended by inserting ‘‘STATE AND LOCAL GOVERN12 MENTAL AND INTERNATIONAL ORGANIZATION

13 PLANS.—’’ after ‘‘(G)’’.

14 (c) EFFECTIVE DATE.—The amendments made by this

15 section shall apply to years beginning after December 31,

16 2000.

17 PART VI—PLAN AMENDMENTS

18 SEC. 1381. PROVISIONS RELATING TO PLAN AMENDMENTS.

19 (a) IN GENERAL.—If this section applies to any plan

20 or contract amendment—

21 (1) such plan or contract shall be treated as

22 being operated in accordance with the terms of the

23 plan during the period described in subsection

24 (b)(2)(A), and
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1 (2) such plan shall not fail to meet the require2 ments of section 411(d)(6) of the Internal Revenue

3 Code of 1986 by reason of such amendment.

4 (b) AMENDMENTS TO WHICH SECTION APPLIES.—

5 (1) IN GENERAL.—This section shall apply to

6 any amendment to any plan or annuity contract

7 which is made—

8 (A) pursuant to any amendment made by

9 this title, or pursuant to any regulation issued

10 under this title, and

11 (B) on or before the last day of the first

12 plan year beginning on or after January 1,

13 2003.

14 In the case of a government plan (as defined in sec15 tion 414(d) of the Internal Revenue Code of 1986),

16 this paragraph shall be applied by substituting

17 ‘‘2005’’ for ‘‘2003’’.

18 (2) CONDITIONS.—This section shall not apply to

19 any amendment unless—

20 (A) during the period—

21 (i) beginning on the date the legislative

22 or regulatory amendment described in para23 graph (1)(A) takes effect (or in the case of

24 a plan or contract amendment not required

25 by such legislative or regulatory amend-
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1 ment, the effective date specified by the

2 plan), and

3 (ii) ending on the date described in

4 paragraph (1)(B) (or, if earlier, the date the

5 plan or contract amendment is adopted),

6 the plan or contract is operated as if such plan

7 or contract amendment were in effect, and

8 (B) such plan or contract amendment ap9 plies retroactively for such period.

10 Subtitle D—Revenue Provisions

11 SEC. 1391. MODIFICATION OF INSTALLMENT METHOD AND

12 REPEAL OF INSTALLMENT METHOD FOR AC13 CRUAL METHOD TAXPAYERS.

14 (a) REPEAL OF INSTALLMENT METHOD FOR ACCRUAL

15 BASIS TAXPAYERS.—

16 (1) IN GENERAL.—Subsection (a) of section 453

17 (relating to installment method) is amended to read

18 as follows:

19 ‘‘(a) USE OF INSTALLMENT METHOD.—

20 ‘‘(1) IN GENERAL.—Except as otherwise provided

21 in this section, income from an installment sale shall

22 be taken into account for purposes of this title under

23 the installment method.

24 ‘‘(2) ACCRUAL METHOD TAXPAYER.—The install25 ment method shall not apply to income from an in-
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1 stallment sale if such income would be reported under

2 an accrual method of accounting without regard to

3 this section. The preceding sentence shall not apply to

4 a disposition described in subparagraph (A) or (B) of

5 subsection (l)(2).’’.

6 (2) CONFORMING AMENDMENTS.—Sections

7 453(d)(1), 453(i)(1), and 453(k) of such Code are each

8 amended by striking ‘‘(a)’’ each place it appears and

9 inserting ‘‘(a)(1)’’.

10 (b) MODIFICATION OF PLEDGE RULES.—Paragraph

11 (4) of section 453A(d) (relating to pledges, etc., of install12 ment obligations) is amended by adding at the end the fol13 lowing: ‘‘A payment shall be treated as directly secured by

14 an interest in an installment obligation to the extent an

15 arrangement allows the taxpayer to satisfy all or a portion

16 of the indebtedness with the installment obligation.’’.

17 (c) EFFECTIVE DATE.—The amendments made by this

18 section shall apply to sales or other dispositions occurring

19 on or after the date of the enactment of this Act.

20 SEC. 1392. MODIFICATION OF ESTIMATED TAX RULES FOR

21 CLOSELY HELD REAL ESTATE INVESTMENT

22 TRUSTS.

23 (a) IN GENERAL.—Subsection (e) of section 6655 (re24 lating to estimated tax by corporations) is amended by add25 ing at the end the following new paragraph:
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1 ‘‘(5) TREATMENT OF CERTAIN REIT DIVI2 DENDS.—

3 ‘‘(A) IN GENERAL.—Any dividend received

4 from a closely held real estate investment trust

5 by any person which owns (after application of

6 subsections (d)(5) and (l)(3)(B) of section 856)

7 10 percent or more (by vote or value) of the stock

8 or beneficial interests in the trust shall be taken

9 into account in computing annualized income

10 installments under paragraph (2) in a manner

11 similar to the manner under which partnership

12 income inclusions are taken into account.

13 ‘‘(B) CLOSELY HELD REIT.—For purposes

14 of subparagraph (A), the term ‘closely held real

15 estate investment trust’ means a real estate in16 vestment trust with respect to which 5 or fewer

17 persons own (after application of subsections

18 (d)(5) and (l)(3)(B) of section 856) 50 percent or

19 more (by vote or value) of the stock or beneficial

20 interests in the trust.’’

21 (b) EFFECTIVE DATE.—The amendment made by sub22 section (a) shall apply to estimated tax payments due on

23 or after November 15, 1999.
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1 TITLE XIV—TECHNICAL

2 AMENDMENTS

3 SEC. 1401. DEFINITIONS.

4 Section 101 of title 11, United States Code, as amend5 ed by section 1003 of this Act, is amended—

6 (1) by striking ‘‘In this title—’’ and inserting

7 ‘‘In this title:’’;

8 (2) in each paragraph, by inserting ‘‘The term’’

9 after the paragraph designation;

10 (3) in paragraph (35)(B), by striking ‘‘para11 graphs (21B) and (33)(A)’’ and inserting ‘‘para12 graphs (23) and (35)’’;

13 (4) in each of paragraphs (35A) and (38), by

14 striking ‘‘; and’’ at the end and inserting a period;

15 (5) in paragraph (51B)—

16 (A) by inserting ‘‘who is not a family farm17 er’’ after ‘‘debtor’’ the first place it appears; and

18 (B) by striking ‘‘thereto having aggregate’’

19 and all that follows through the end of the para20 graph;

21 (6) by striking paragraph (54) and inserting the

22 following:

23 ‘‘(54) The term ‘transfer’ means—

24 ‘‘(A) the creation of a lien;
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1 ‘‘(B) the retention of title as a security in2 terest;

3 ‘‘(C) the foreclosure of a debtor’s equity of

4 redemption; or

5 ‘‘(D) each mode, direct or indirect, absolute

6 or conditional, voluntary or involuntary, of dis7 posing of or parting with—

8 ‘‘(i) property; or

9 ‘‘(ii) an interest in property;’’;

10 (7) in each of paragraphs (1) through (35), in

11 each of paragraphs (36) and (37), and in each of

12 paragraphs (40) through (55) (including paragraph

13 (54), as amended by paragraph (6) of this section),

14 by striking the semicolon at the end and inserting a

15 period; and

16 (8) by redesignating paragraphs (4) through

17 (55), including paragraph (54), as amended by para18 graph (6) of this section, in entirely numerical se19 quence.

20 SEC. 1402. ADJUSTMENT OF DOLLAR AMOUNTS.

21 Section 104 of title 11, United States Code, is amended

22 by inserting ‘‘522(f)(3),’’ after ‘‘522(d),’’ each place it ap23 pears.
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1 SEC. 1403. EXTENSION OF TIME.

2 Section 108(c)(2) of title 11, United States Code, is

3 amended by striking ‘‘922’’ and all that follows through

4 ‘‘or’’, and inserting ‘‘922, 1201, or’’.

5 SEC. 1404. TECHNICAL AMENDMENTS.

6 Title 11, United States Code, is amended—

7 (1) in section 109(b)(2), by striking ‘‘subsection

8 (c) or (d) of’’; and

9 (2) in section 552(b)(1), by striking ‘‘product’’

10 each place it appears and inserting ‘‘products’’.

11 SEC. 1405. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

12 FRAUDULENTLY PREPARE BANKRUPTCY PE13 TITIONS.

14 Section 110(j)(3) of title 11, United States Code, is

15 amended by striking ‘‘attorney’s’’ and inserting ‘‘attor16 neys’ ’’.

17 SEC. 1406. LIMITATION ON COMPENSATION OF PROFES18 SIONAL PERSONS.

19 Section 328(a) of title 11, United States Code, is

20 amended by inserting ‘‘on a fixed or percentage fee basis,’’

21 after ‘‘hourly basis,’’.

22 SEC. 1407. EFFECT OF CONVERSION.

23 Section 348(f)(2) of title 11, United States Code, is

24 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

25 first place it appears.
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1 SEC. 1408. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

2 Section 503(b)(4) of title 11, United States Code, is

3 amended by inserting ‘‘subparagraph (A), (B), (C), (D), or

4 (E) of’’ before ‘‘paragraph (3)’’.

5 SEC. 1409. EXCEPTIONS TO DISCHARGE.

6 Section 523 of title 11, United States Code, as amend7 ed by section 714 of this Act, is amended—

8 (1) as amended by section 304(e) of Public Law

9 103–394 (108 Stat. 4133), in paragraph (15), by

10 transferring such paragraph so as to insert such

11 paragraph after paragraph (14) of subsection (a);

12 (2) in subsection (a)(9), by striking ‘‘motor vehi13 cle or vessel’’ and inserting ‘‘motor vehicle, vessel, or

14 aircraft’’; and

15 (3) in subsection (e), by striking ‘‘a insured’’

16 and inserting ‘‘an insured’’.

17 SEC. 1410. EFFECT OF DISCHARGE.

18 Section 524(a)(3) of title 11, United States Code, is

19 amended by striking ‘‘section 523’’ and all that follows

20 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

21 or 1328(a)(1), or that’’.

22 SEC. 1411. PROTECTION AGAINST DISCRIMINATORY TREAT23 MENT.

24 Section 525(c) of title 11, United States Code, is

25 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. 1412. 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. 1413. PREFERENCES.

10 (a) IN GENERAL.—Section 547 of title 11, United

11 States Code, as amended by section 201(b) of this Act, is

12 amended—

13 (1) in subsection (b), by striking ‘‘subsection (c)’’

14 and inserting ‘‘subsections (c) and (i)’’; and

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

16 ‘‘(i) If the trustee avoids under subsection (b) a secu17 rity interest given between 90 days and 1 year before the

18 date of the filing of the petition, by the debtor to an entity

19 that is not an insider for the benefit of a creditor that is

20 an insider, such security interest shall be considered to be

21 avoided under this section only with respect to the creditor

22 that is an insider.’’.

23 (b) APPLICABILITY.—The amendments made by this

24 section shall apply to any case that pending or commenced

25 on or after the date of enactment of this Act.
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1 SEC. 1414. 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. 1415. DISPOSITION OF PROPERTY OF THE ESTATE.

11 Section 726(b) of title 11, United States Code, is

12 amended by striking ‘‘1009,’’.

13 SEC. 1416. GENERAL PROVISIONS.

14 Section 901(a) of title 11, United States Code, as

15 amended by section 502 of this Act, is amended by inserting

16 ‘‘1123(d),’’ after ‘‘1123(b),’’.

17 SEC. 1417. ABANDONMENT OF RAILROAD LINE.

18 Section 1170(e)(1) of title 11, United States Code, is

19 amended by striking ‘‘section 11347’’ and inserting ‘‘section

20 11326(a)’’.

21 SEC. 1418. CONTENTS OF PLAN.

22 Section 1172(c)(1) of title 11, United States Code, is

23 amended by striking ‘‘section 11347’’ and inserting ‘‘section

24 11326(a)’’.
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1 SEC. 1419. DISCHARGE UNDER CHAPTER 12.

2 Subsections (a) and (c) of section 1228 of title 11,

3 United States Code, are amended by striking ‘‘1222(b)(10)’’

4 each place it appears and inserting ‘‘1222(b)(9)’’.

5 SEC. 1420. BANKRUPTCY CASES AND PROCEEDINGS.

6 Section 1334(d) of title 28, United States Code, is

7 amended—

8 (1) by striking ‘‘made under this subsection’’ and

9 inserting ‘‘made under subsection (c)’’; and

10 (2) by striking ‘‘This subsection’’ and inserting

11 ‘‘Subsection (c) and this subsection’’.

12 SEC. 1421. KNOWING DISREGARD OF BANKRUPTCY LAW OR

13 RULE.

14 Section 156(a) of title 18, United States Code, is

15 amended—

16 (1) in the first undesignated paragraph—

17 (A) by inserting ‘‘(1) the term’’ before

18 ‘‘ ‘bankruptcy’’; and

19 (B) by striking the period at the end and

20 inserting ‘‘; and’’; and

21 (2) in the second undesignated paragraph—

22 (A) by inserting ‘‘(2) the term’’ before ‘‘ ‘doc23 ument’’; and

24 (B) by striking ‘‘this title’’ and inserting

25 ‘‘title 11’’.
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1 SEC. 1422. TRANSFERS MADE BY NONPROFIT CHARITABLE

2 CORPORATIONS.

3 (a) SALE OF PROPERTY OF ESTATE.—Section 363(d)

4 of title 11, United States Code, is amended by striking

5 ‘‘only’’ and all that follows through the end of the subsection

6 and inserting ‘‘only—

7 ‘‘(1) in accordance with applicable nonbank8 ruptcy law that governs the transfer of property by

9 a corporation or trust that is not a moneyed, busi10 ness, or commercial corporation or trust; and

11 ‘‘(2) to the extent not inconsistent with any relief

12 granted under subsection (c), (d), (e), or (f) of section

13 362.’’.

14 (b) CONFIRMATION OF PLAN FOR REORGANIZATION.—

15 Section 1129(a) of title 11, United States Code, as amended

16 by section 212 of this Act, is amended by adding at the

17 end the following:

18 ‘‘(15) All transfers of property of the plan shall

19 be made in accordance with any applicable provisions

20 of nonbankruptcy law that govern the transfer of

21 property by a corporation or trust that is not a

22 moneyed, business, or commercial corporation or

23 trust.’’.

24 (c) TRANSFER OF PROPERTY.—Section 541 of title 11,

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

26 following:
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1 ‘‘(f) Notwithstanding any other provision of this title,

2 property that is held by a debtor that is a corporation de3 scribed in section 501(c)(3) of the Internal Revenue Code

4 of 1986 and exempt from tax under section 501(a) of such

5 Code may be transferred to an entity that is not such a

6 corporation, but only under the same conditions as would

7 apply if the debtor had not filed a case under this title.’’.

8 (d) APPLICABILITY.—The amendments made by this

9 section shall apply to a case pending under title 11, United

10 States Code, on the date of enactment of this Act, except

11 that the court shall not confirm a plan under chapter 11

12 of this title without considering whether this section would

13 substantially affect the rights of a party in interest who

14 first acquired rights with respect to the debtor after the date

15 of the petition. The parties who may appear and be heard

16 in a proceeding under this section include the attorney gen17 eral of the State in which the debtor is incorporated, was

18 formed, or does business.

19 (e) RULE OF CONSTRUCTION.—Nothing in this section

20 shall be construed to require the court in which a case under

21 chapter 11 is pending to remand or refer any proceeding,

22 issue, or controversy to any other court or to require the

23 approval of any other court for the transfer of property.
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1 SEC. 1423. PROTECTION OF VALID PURCHASE MONEY SECU2 RITY INTERESTS.

3 Section 547(c)(3)(B) of title 11, United States Code,

4 is amended by striking ‘‘20’’ and inserting ‘‘30’’.

5 SEC. 1424. EXTENSIONS.

6 Section 302(d)(3) of the Bankruptcy, Judges, United

7 States Trustees, and Family Farmer Bankruptcy Act of

8 1986 (28 U.S.C. 581 note) is amended—

9 (1) in subparagraph (A), in the matter following

10 clause (ii), by striking ‘‘or October 1, 2002, whichever

11 occurs first’’; and

12 (2) in subparagraph (F)—

13 (A) in clause (i)—

14 (i) in subclause (II), by striking ‘‘or

15 October 1, 2002, whichever occurs first’’;

16 and

17 (ii) in the matter following subclause

18 (II), by striking ‘‘October 1, 2003, or’’; and

19 (B) in clause (ii), in the matter following

20 subclause (II)—

21 (i) by striking ‘‘before October 1, 2003,

22 or’’; and

23 (ii) by striking ‘‘, whichever occurs

24 first’’.
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1 SEC. 1425. BANKRUPTCY JUDGESHIPS.

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

3 ‘‘Bankruptcy Judgeship Act of 2000’’.

4 (b) TEMPORARY JUDGESHIPS.—

5 (1) APPOINTMENTS.—The following judgeship

6 positions shall be filled in the manner prescribed in

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

8 the appointment of bankruptcy judges provided for in

9 section 152(a)(2) of such title:

10 (A) One additional bankruptcy judgeship

11 for the eastern district of California.

12 (B) Four additional bankruptcy judgeships

13 for the central district of California.

14 (C) One additional bankruptcy judgeship

15 for the southern district of Florida.

16 (D) Two additional bankruptcy judgeships

17 for the district of Maryland.

18 (E) One additional bankruptcy judgeship

19 for the eastern district of Michigan.

20 (F) One additional bankruptcy judgeship

21 for the southern district of Mississippi.

22 (G) One additional bankruptcy judgeship

23 for the district of New Jersey.

24 (H) One additional bankruptcy judgeship

25 for the eastern district of New York.
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1 (I) One additional bankruptcy judgeship for

2 the northern district of New York.

3 (J) One additional bankruptcy judgeship

4 for the southern district of New York.

5 (K) One additional bankruptcy judgeship

6 for the eastern district of Pennsylvania.

7 (L) One additional bankruptcy judgeship

8 for the middle district of Pennsylvania.

9 (M) One additional bankruptcy judgeship

10 for the western district of Tennessee.

11 (N) One additional bankruptcy judgeship

12 for the eastern district of Virginia.

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

14 the office of a bankruptcy judge in each of the judicial

15 districts set forth in paragraph (1) that—

16 (A) results from the death, retirement, res17 ignation, or removal of a bankruptcy judge; and

18 (B) occurs 5 years or more after the ap19 pointment date of a bankruptcy judge appointed

20 under paragraph (1);

21 shall not be filled.

22 (c) EXTENSIONS.—

23 (1) IN GENERAL.—The temporary bankruptcy

24 judgeship positions authorized for the northern dis25 trict of Alabama, the district of Delaware, the district
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1 of Puerto Rico, the district of South Carolina, and the

2 eastern district of Tennessee under section 3(a) (1),

3 (3), (7), (8), and (9) of the Bankruptcy Judgeship Act

4 of 1992 (28 U.S.C. 152 note) are extended until the

5 first vacancy occurring in the office of a bankruptcy

6 judge in the applicable district resulting from the

7 death, retirement, resignation, or removal of a bank8 ruptcy judge and occurring—

9 (A) 8 years or more after November 8, 1993,

10 with respect to the northern district of Alabama;

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

12 1993, with respect to the district of Delaware;

13 (C) 8 years or more after August 29, 1994,

14 with respect to the district of Puerto Rico;

15 (D) 8 years or more after June 27, 1994,

16 with respect to the district of South Carolina;

17 and

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

19 1993, with respect to the eastern district of Ten20 nessee.

21 (2) APPLICABILITY OF OTHER PROVISIONS.—All

22 other provisions of section 3 of the Bankruptcy Judge23 ship Act of 1992 remain applicable to such temporary

24 judgeship positions.
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1 (d) TECHNICAL AMENDMENT.—The first sentence of

2 section 152(a)(1) of title 28, United States Code, is amend3 ed to read as follows: ‘‘Each bankruptcy judge to be ap4 pointed for a judicial district as provided in paragraph (2)

5 shall be appointed by the United States court of appeals

6 for the circuit in which such district is located.’’.

7 SEC. 1426. FAMILY FISHERMEN.

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

9 States Code, is amended—

10 (1) by inserting after paragraph (7) the fol11 lowing:

12 ‘‘(7A) ‘commercial fishing operation’ includes—

13 ‘‘(A) the catching or harvesting of fish,

14 shrimp, lobsters, urchins, seaweed, shellfish, or

15 other aquatic species or products;

16 ‘‘(B) for purposes of section 109 and chap17 ter 12, aquaculture activities consisting of rais18 ing for market any species or product described

19 in subparagraph (A); and

20 ‘‘(C) the transporting by vessel of a pas21 senger for hire (as defined in section 2101 of title

22 46) who is engaged in recreational fishing;

23 ‘‘(7B) ‘commercial fishing vessel’ means a vessel

24 used by a fisherman to carry out a commercial fish25 ing operation;’’;
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1 (2) by inserting after paragraph (19) the fol2 lowing:

3 ‘‘(19A) ‘family fisherman’ means—

4 ‘‘(A) an individual or individual and

5 spouse engaged in a commercial fishing oper6 ation (including aquaculture for purposes of

7 chapter 12)—

8 ‘‘(i) whose aggregate debts do not ex9 ceed $1,500,000 and not less than 80 per10 cent of whose aggregate noncontingent, liq11 uidated debts (excluding a debt for the prin12 cipal residence of such individual or such

13 individual and spouse, unless such debt

14 arises out of a commercial fishing oper15 ation), on the date the case is filed, arise

16 out of a commercial fishing operation

17 owned or operated by such individual or

18 such individual and spouse; and

19 ‘‘(ii) who receive from such commercial

20 fishing operation more than 50 percent of

21 such individual’s or such individual’s and

22 spouse’s gross income for the taxable year

23 preceding the taxable year in which the case

24 concerning such individual or such indi25 vidual and spouse was filed; or
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1 ‘‘(B) a corporation or partnership—

2 ‘‘(i) in which more than 50 percent of

3 the outstanding stock or equity is held by—

4 ‘‘(I) 1 family that conducts the

5 commercial fishing operation; or

6 ‘‘(II) 1 family and the relatives of

7 the members of such family, and such

8 family or such relatives conduct the

9 commercial fishing operation; and

10 ‘‘(ii)(I) more than 80 percent of the

11 value of its assets consists of assets related

12 to the commercial fishing operation;

13 ‘‘(II) its aggregate debts do not exceed

14 $1,500,000 and not less than 80 percent of

15 its aggregate noncontingent, liquidated

16 debts (excluding a debt for 1 dwelling which

17 is owned by such corporation or partner18 ship and which a shareholder or partner

19 maintains as a principal residence, unless

20 such debt arises out of a commercial fishing

21 operation), on the date the case is filed,

22 arise out of a commercial fishing operation

23 owned or operated by such corporation or

24 such partnership; and
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1 ‘‘(III) if such corporation issues stock,

2 such stock is not publicly traded;’’; and

3 (3) by inserting after paragraph (19A) the fol4 lowing:

5 ‘‘(19B) ‘family fisherman with regular annual

6 income’ means a family fisherman whose annual in7 come is sufficiently stable and regular to enable such

8 family fisherman to make payments under a plan

9 under chapter 12 of this title;’’.

10 (b) WHO MAY BE A DEBTOR.—Section 109(f) of title

11 11, United States Code, is amended by inserting ‘‘or family

12 fisherman’’ after ‘‘family farmer’’.

13 (c) CHAPTER 12.—Chapter 12 of title 11, United

14 States Code, is amended—

15 (1) in the chapter heading, by inserting ‘‘OR

16 FISHERMAN’’ after ‘‘FAMILY FARMER’’;

17 (2) in section 1201, by adding at the end the fol18 lowing:

19 ‘‘(e)(1) Notwithstanding any other provision of law,

20 for purposes of this subsection, a guarantor of a claim of

21 a creditor under this section shall be treated in the same

22 manner as a creditor with respect to the operation of a stay

23 under this section.

24 ‘‘(2) For purposes of a claim that arises from the own25 ership or operation of a commercial fishing operation, a
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1 co-maker of a loan made by a creditor under this section

2 shall be treated in the same manner as a creditor with re3 spect to the operation of a stay under this section.’’;

4 (3) in section 1203, by inserting ‘‘or commercial

5 fishing operation’’ after ‘‘farm’’;

6 (4) in section 1206, by striking ‘‘if the property

7 is farmland or farm equipment’’ and inserting ‘‘if the

8 property is farmland, farm equipment, or property of

9 a commercial fishing operation (including a commer10 cial fishing vessel)’’; and

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

12 ‘‘§ 1232. Additional provisions relating to family fish13 ermen

14 ‘‘(a)(1) Notwithstanding any other provision of law,

15 except as provided in subsection (c), with respect to any

16 commercial fishing vessel of a family fisherman, the debts

17 of that family fisherman shall be treated in the manner pre18 scribed in paragraph (2).

19 ‘‘(2)(A) For purposes of this chapter, a claim for a

20 lien described in subsection (b) for a commercial fishing ves21 sel of a family fisherman that could, but for this subsection,

22 be subject to a lien under otherwise applicable maritime

23 law, shall be treated as an unsecured claim.
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1 ‘‘(B) Subparagraph (A) applies to a claim for a lien

2 resulting from a debt of a family fisherman incurred on

3 or after the date of enactment of this chapter.

4 ‘‘(b) A lien described in this subsection is—

5 ‘‘(1) a maritime lien under subchapter III of

6 chapter 313 of title 46 without regard to whether that

7 lien is recorded under section 31343 of title 46; or

8 ‘‘(2) a lien under applicable State law (or the

9 law of a political subdivision thereof).

10 ‘‘(c) Subsection (a) shall not apply to—

11 ‘‘(1) a claim made by a member of a crew or a

12 seaman including a claim made for—

13 ‘‘(A) wages, maintenance, or cure; or

14 ‘‘(B) personal injury; or

15 ‘‘(2) a preferred ship mortgage that has been per16 fected under subchapter II of chapter 313 of title 46.

17 ‘‘(d) For purposes of this chapter, a mortgage described

18 in subsection (c)(2) shall be treated as a secured claim.’’.

19 (d) CLERICAL AMENDMENTS.—

20 (1) TABLE OF CHAPTERS.—In the table of chap21 ters for title 11, United States Code, the item relating

22 to chapter 12, is amended to read as follows:

‘‘12. Adjustments of Debts of a Family Farmer or Family

Fisherman with Regular Annual Income ...... 1201’’.
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1 (2) TABLE OF SECTIONS.—The table of sections

2 for chapter 12 of title 11, United States Code, is

3 amended by adding at the end the following new item:

‘‘1232. Additional provisions relating to family fishermen.’’.

4 (e) MAGNUSON-STEVENS FISHERY CONSERVATION AND

5 MANAGEMENT ACT.—Nothing in this title is intended to

6 change, affect, or amend the Magnuson-Stevens Fishery

7 Conservation and Management Act (16 U.S.C. 1801 et seq.).

8 SEC. 1427. COMPENSATING TRUSTEES.

9 Title 11, United States Code, is amended—

10 (1) in section 104(b)(1) in the matter preceding

11 subparagraph (A) by—

12 (A) striking ‘‘and 523(a)(2)(C)’’; and

13 (B) inserting ‘‘523(a)(2)(C), and

14 1326(b)(3)’’ before ‘‘immediately’’;

15 (2) in section 326, by inserting at the end the

16 following:

17 ‘‘(e) Notwithstanding any other provision of this sec18 tion, if a trustee in a chapter 7 case commences a motion

19 to dismiss or convert under section 707(b) and such motion

20 is granted, the court shall allow reasonable compensation

21 under section 330(a) of this title for the services and ex22 penses of the trustee and the trustee’s counsel in preparing

23 and presenting such motion and any related appeals.’’; and

24 (3) in section 1326(b)—

25 (A) in paragraph (1), by striking ‘‘and’’;
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1 (B) in paragraph (2), by striking the period

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

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

4 ‘‘(3) if a chapter 7 trustee has been allowed com5 pensation under section 326(e) in a case converted to

6 this chapter or in a case dismissed under section

7 707(b) in which the debtor in this case was a

8 debtor—

9 ‘‘(A) the amount of such unpaid compensa10 tion which shall be paid monthly by prorating

11 such amount over the remaining duration of the

12 plan, but a monthly payment shall not exceed

13 the greater of—

14 ‘‘(i) $25; or

15 ‘‘(ii) the amount payable to unsecured

16 nonpriority creditors as provided by the

17 plan multiplied by 5 percent, and the result

18 divided by the number of months in the

19 plan; and

20 ‘‘(B) notwithstanding any other provision

21 of this title—

22 ‘‘(i) such compensation is payable and

23 may be collected by the trustee under this

24 paragraph even if such amount has been
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1 discharged in a prior proceeding under this

2 title; and

3 ‘‘(ii) such compensation is payable in

4 a case under this chapter only to the extent

5 permitted by this paragraph.’’.

6 SEC. 1428. AMENDMENT TO SECTION 362 OF TITLE 11,

7 UNITED STATES CODE.

8 Section 362(b)(18) of title 11, United States Code, is

9 amended to read as follows:

10 ‘‘(18) under subsection (a) of the creation or per11 fection of a statutory lien for an ad valorem property

12 tax, or a special tax or special assessment on real

13 property whether or not ad valorem, imposed by a

14 governmental unit, if such tax or assessment comes

15 due after the filing of the petition.’’.

16 SEC. 1429. PROVISION OF ELECTRONIC FTC PAMPHLET

17 WITH ELECTRONIC CREDIT CARD APPLICA18 TIONS AND SOLICITATIONS.

19 Section 127(c) of the Truth in Lending Act (15 U.S.C.

20 1637(c)) is amended—

21 (1) by redesignating paragraph (5) as para22 graph (6); and

23 (2) by inserting after paragraph (4) the fol24 lowing:
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1 ‘‘(5) INCLUSION OF FEDERAL TRADE COMMISSION

2 PAMPHLET.—

3 ‘‘(A) IN GENERAL.—Any application to

4 open a credit card account for any person under

5 an open end consumer credit plan, or a solicita6 tion or an advertisement to open such an ac7 count without requiring an application, that is

8 electronically transmitted to or accessed by a

9 consumer shall be accompanied by an electronic

10 version (or an electronic link thereto) of the

11 pamphlet published by the Federal Trade Com12 mission relating to choosing and using credit

13 cards.

14 ‘‘(B) COSTS.—The card issuer with respect

15 to an account described in subparagraph (A)

16 shall be responsible for all costs associated with

17 compliance with that subparagraph.’’.

18 SEC. 1430. NO BANKRUPTCY FOR INSOLVENT POLITICAL

19 COMMITTEES.

20 Section 105 of title 11, United States Code, is amended

21 by inserting at the end the following:

22 ‘‘(e) A political committee subject to the jurisdiction

23 of the Federal Election Commission under Federal election

24 laws may not file for bankruptcy under this title.’’.
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1 SEC. 1431. FEDERAL ELECTION LAW FINES AND PENALTIES

2 AS NONDISCHARGEABLE DEBT.

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

4 amended by inserting after paragraph (14A) the following:

5 ‘‘(14B) fines or penalties imposed under Federal

6 election law;’’.

7 SEC. 1432. PROHIBITION ON CERTAIN RETROACTIVE FI8 NANCE CHARGES.

9 Section 127 of the Truth in Lending Act (15 U.S.C.

10 1637) is amended by adding at the end the following:

11 ‘‘(h) PROHIBITION ON RETROACTIVE FINANCE

12 CHARGES.—

13 ‘‘(1) IN GENERAL.—In the case of any credit

14 card account under an open end credit plan, if the

15 creditor provides a grace period applicable to any

16 new extension of credit under the account, no finance

17 charge may be imposed subsequent to the grace period

18 with regard to any amount that was paid on or be19 fore the end of that grace period.

20 ‘‘(2) DEFINITION.—For purposes of this sub21 section, the term ‘grace period’ means a period during

22 which the extension of credit may be repaid, in whole

23 or in part, without incurring a finance charge for the

24 extension of credit.’’.
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1 SEC. 1433. SENSE OF SENATE CONCERNING CREDIT WOR2 THINESS.

3 The Board of Governors of the Federal Reserve System

4 shall report to the Senate Committee on Banking, Housing,

5 and Urban Affairs and the House of Representatives Com6 mittee on Banking and Financial Services within 6 months

7 of enactment of this Act as to whether and how the location

8 of the residence of an applicant for a credit card is consid9 ered by financial institutions in deciding whether an appli10 cant should be granted such credit card.

11 SEC. 1434. JUDICIAL EDUCATION.

12 The Director of the Administrative Office of the United

13 States Courts, in consultation with the Director of the Exec14 utive Office for United States Trustees, shall develop mate15 rials and conduct such training as may be useful to courts

16 in implementing this Act, including the requirements relat17 ing to the 707(b) means test and reaffirmations.

18 SEC. 1435. UNITED STATES TRUSTEE PROGRAM FILING FEE

19 INCREASE.

20 (a) RIGHTS AND POWERS OF THE TRUSTEE.—Section

21 546(c) of title 11, United States Code, is amended to read

22 as follows:

23 ‘‘(c)(1) Except as provided in subsection (d) of

24 this section, and except as provided in subsection (c)

25 of section 507, the rights and powers of the trustee

26 under sections 544(a), 545, 547, and 549 are subject
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1 to the right of a seller of goods that has sold goods to

2 the debtor, in the ordinary course of the business of

3 the seller, to reclaim such goods if the debtor has re4 ceived such goods within 45 days prior to the com5 mencement of a case under this title, but such seller

6 may not reclaim any such goods unless the seller de7 mands in writing the reclamation of such goods—

8 ‘‘(A) before 45 days after the date of receipt

9 of such goods by the debtor; or

10 ‘‘(B) if such 45-day period expires after the

11 commencement of the case, before 20 days after

12 the date of commencement of the case.

13 ‘‘(2) Notwithstanding the failure of the seller to

14 provide notice in a manner consistent with this sub15 section, the seller shall be entitled to assert the rights

16 established in section 503(b)(7) of this title.’’.

17 (b) ADMINISTRATIVE EXPENSES.—Section 503(b) of

18 title 11, United States Code, is amended—

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

20 end;

21 (2) in paragraph (6), by striking the period at

22 the end and inserting ‘‘; and’’; and

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

24 ‘‘(7) the invoice price of any goods received by

25 the debtor within 20 days of the date of filing of a
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1 case under this title where the goods have been sold

2 to the debtor in the ordinary course of such seller’s

3 business.’’.

4 SEC. 1436. PROVIDING REQUESTED TAX DOCUMENTS TO

5 THE COURT.

6 In the case of an individual under chapter 7, the court

7 shall not grant a discharge unless requested tax documents

8 have been provided to the court. In the case of an individual

9 under chapter 11 or 13, the court shall not confirm a plan

10 of reorganization unless requested tax documents have been

11 filed with the court.

12 SEC. 1437. DEFINITION OF FAMILY FARMER.

13 Section 101(18) of title 11, United States Code, is

14 amended—

15 (1) in subparagraph (A) by—

16 (A) striking ‘‘$1,500,000’’ and inserting

17 ‘‘$3,000,000’’; and

18 (B) striking ‘‘80’’ and inserting ‘‘50’’; and

19 (2) in subparagraph (B)(ii) by striking

20 ‘‘$1,500,000’’ and inserting ‘‘$3,000,000’’.

21 SEC. 1438. ENCOURAGING CREDITWORTHINESS.

22 (a) SENSE OF THE CONGRESS.—It is the sense of the

23 Congress that—

24 (1) certain lenders may sometimes offer credit to

25 consumers indiscriminately, without taking steps to
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1 ensure that consumers are capable of repaying the re2 sulting debt, and in a manner which may encourage

3 certain consumers to accumulate additional debt; and

4 (2) resulting consumer debt may increasingly be

5 a major contributing factor to consumer insolvency.

6 (b) STUDY REQUIRED.—The Board of Governors of the

7 Federal Reserve System (hereafter in this section referred

8 to as the ‘‘Board’’) shall conduct a study of—

9 (1) consumer credit industry practices of solic10 iting and extending credit—

11 (A) indiscriminately;

12 (B) without taking steps to ensure that con13 sumers are capable of repaying the resulting

14 debt; and

15 (C) in a manner that encourages consumers

16 to accumulate additional debt; and

17 (2) the effects of such practices on consumer debt

18 and insolvency.

19 (c) REPORT AND REGULATIONS.—Not later than 12

20 months after the date of enactment of this Act, the Board—

21 (1) shall make public a report on its findings

22 with respect to the indiscriminate solicitation and ex23 tension of credit by the credit industry;

24 (2) may issue regulations that would require ad25 ditional disclosures to consumers; and
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1 (3) may take any other actions, consistent with

2 its existing statutory authority, that the Board finds

3 necessary to ensure responsible industrywide practices

4 and to prevent resulting consumer debt and insol5 vency.

6 SEC. 1439. PROPERTY NO LONGER SUBJECT TO REDEMP7 TION.

8 Section 541(b) of title 11 of the United States Code

9 is amended by adding at the end the following:

10 ‘‘(6) any interest of the debtor in property where

11 the debtor pledged or sold tangible personal property

12 (other than securities or written or printed evidences

13 of indebtedness or title) as collateral for a loan or ad14 vance of money, where—

15 ‘‘(A) the tangible personal property is in the

16 possession of the pledgee or transferee;

17 ‘‘(B) the debtor has no obligation to repay

18 the money, redeem the collateral, or buy back the

19 property at a stipulated price; and

20 ‘‘(C) neither the debtor nor the trustee have

21 exercised any right to redeem provided under the

22 contract or State law, in a timely manner as

23 provided under State law and section 108(b) of

24 this title.’’.
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1 SEC. 1440. AVAILABILITY OF TOLL-FREE ACCESS TO INFOR2 MATION.

3 Section 127(b)(11) of the Truth in Lending Act (15

4 U.S.C. 1637(b)), as added by this Act, is amended by add5 ing at the end the following:

6 ‘‘(K) A creditor that maintains a toll-free tele7 phone number for the purpose of providing customers

8 with the actual number of months that it will take to

9 repay an outstanding balance shall include the fol10 lowing statement on each billing statement: ‘Making

11 only the minimum payment will increase the interest

12 you pay and the time it takes to repay your balance.

13 For more information, call this toll-free number:

14 llll.’. ’’.

15 TITLE XV—GENERAL EFFECTIVE

16 DATE; APPLICATION OF

17 AMENDMENTS

18 SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMEND19 MENTS.

20 (a) EFFECTIVE DATE.—Except as provided otherwise

21 in this Act, this Act and the amendments made by this Act

22 shall take effect 180 days after the date of enactment of this

23 Act.

24 (b) APPLICATION OF AMENDMENTS.—The amendments

25 made by this Act shall not apply with respect to cases com-
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1 menced under title 11, United States Code, before the effec2 tive date of this Act.

3 TITLE XVI—FINANCIAL INSTITU4 TIONS INSOLVENCY IMPROVE5 MENT

6 SEC. 1601. SHORT TITLE.

7 This title may be cited as the ‘‘Financial Institutions

8 Insolvency Improvement Act of 2000’’.

9 SEC. 1602. TREATMENT OF CERTAIN AGREEMENTS BY CON10 SERVATORS OR RECEIVERS OF INSURED DE11 POSITORY INSTITUTIONS.

12 (a) DEFINITION OF QUALIFIED FINANCIAL CON13 TRACT.—Section 11(e)(8)(D)(i) of the Federal Deposit In14 surance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by in15 serting ‘‘, resolution, or order’’ after ‘‘any similar agree16 ment that the Corporation determines by regulation’’.

17 (b) DEFINITION OF SECURITIES CONTRACT.—Section

18 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12

19 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as follows:

20 ‘‘(ii) SECURITIES CONTRACT.—The

21 term ‘securities contract’—

22 ‘‘(I) means a contract for the pur23 chase, sale, or loan of a security, a cer24 tificate of deposit, a mortgage loan, or

25 any interest in a mortgage loan, a
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1 group or index of securities, certificates

2 of deposit, or mortgage loans or inter3 ests therein (including any interest

4 therein or based on the value thereof)

5 or any option on any of the foregoing,

6 including any option to purchase or

7 sell any such security, certificate of de8 posit, loan, interest, group or index, or

9 option;

10 ‘‘(II) does not include any pur11 chase, sale, or repurchase obligation

12 under a participation in a commercial

13 mortgage loan unless the Corporation

14 determines by regulation, resolution, or

15 order to include any such agreement

16 within the meaning of such term;

17 ‘‘(III) means any option entered

18 into on a national securities exchange

19 relating to foreign currencies;

20 ‘‘(IV) means the guarantee by or

21 to any securities clearing agency of

22 any settlement of cash, securities, cer23 tificates of deposit, mortgage loans or

24 interests therein, group or index of se25 curities, certificates of deposit, or mort-
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1 gage loans or interests therein (includ2 ing any interest therein or based on

3 the value thereof) or option on any of

4 the foregoing, including any option to

5 purchase or sell any such security, cer6 tificate of deposit, loan, interest, group

7 or index or option;

8 ‘‘(V) means any margin loan;

9 ‘‘(VI) means any other agreement

10 or transaction that is similar to any

11 agreement or transaction referred to in

12 this clause (other than subclause (II));

13 ‘‘(VII) means any combination of

14 the agreements or transactions referred

15 to in this clause (other than subclause

16 (II));

17 ‘‘(VIII) means any option to enter

18 into any agreement or transaction re19 ferred to in this clause (other than sub20 clause (II));

21 ‘‘(IX) means a master agreement

22 that provides for an agreement or

23 transaction referred to in subclause (I),

24 (III), (IV), (V), (VI), (VII), or (VIII),

25 together with all supplements to any
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1 such master agreement, without regard

2 to whether the master agreement pro3 vides for an agreement or transaction

4 that is not a securities contract under

5 this clause, except that the master

6 agreement shall be considered to be a

7 securities contract under this clause

8 only with respect to each agreement or

9 transaction under the master agree10 ment that is referred to in subclause

11 (I), (III), (IV), (V), (VI), (VII), or

12 (VIII); and

13 ‘‘(X) means any security agree14 ment or arrangement or other credit

15 enhancement related to any agreement

16 or transaction referred to in this clause

17 (other than subclause (II)).’’.

18 (c) DEFINITION OF COMMODITY CONTRACT.—Section

19 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act (12

20 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as follows:

21 ‘‘(iii) COMMODITY CONTRACT.—The

22 term ‘commodity contract’ means—

23 ‘‘(I) with respect to a futures com24 mission merchant, a contract for the

25 purchase or sale of a commodity for fu-
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1 ture delivery on, or subject to the rules

2 of, a contract market or board of trade;

3 ‘‘(II) with respect to a foreign fu4 tures commission merchant, a foreign

5 future;

6 ‘‘(III) with respect to a leverage

7 transaction merchant, a leverage trans8 action;

9 ‘‘(IV) with respect to a clearing

10 organization, a contract for the pur11 chase or sale of a commodity for future

12 delivery on, or subject to the rules of,

13 a contract market or board of trade

14 that is cleared by such clearing organi15 zation, or commodity option traded on,

16 or subject to the rules of, a contract

17 market or board of trade that is

18 cleared by such clearing organization;

19 ‘‘(V) with respect to a commodity

20 options dealer, a commodity option;

21 ‘‘(VI) any other agreement or

22 transaction that is similar to any

23 agreement or transaction referred to in

24 this clause;
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1 ‘‘(VII) any combination of the

2 agreements or transactions referred to

3 in this clause;

4 ‘‘(VIII) any option to enter into

5 any agreement or transaction referred

6 to in this clause;

7 ‘‘(IX) a master agreement that

8 provides for an agreement or trans9 action referred to in subclause (I), (II),

10 (III), (IV), (V), (VI), (VII), or (VIII),

11 together with all supplements to any

12 such master agreement, without regard

13 to whether the master agreement pro14 vides for an agreement or transaction

15 that is not a commodity contract

16 under this clause, except that the mas17 ter agreement shall be considered to be

18 a commodity contract under this clause

19 only with respect to each agreement or

20 transaction under the master agree21 ment that is referred to in subclause

22 (I), (II), (III), (IV), (V), (VI), (VII), or

23 (VIII); or

24 ‘‘(X) a security agreement or ar25 rangement or other credit enhancement
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1 related to any agreement or trans2 action referred to in this clause.’’.

3 (d) DEFINITION OF FORWARD CONTRACT.—Section

4 11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12

5 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:

6 ‘‘(iv) FORWARD CONTRACT.—The term

7 ‘forward contract’ means—

8 ‘‘(I) a contract (other than a com9 modity contract) for the purchase, sale,

10 or transfer of a commodity or any

11 similar good, article, service, right, or

12 interest which is presently or in the fu13 ture becomes the subject of dealing in

14 the forward contract trade, or product

15 or byproduct thereof, with a maturity

16 date that is more than 2 days after the

17 date on which the contract is entered

18 into, including a repurchase agree19 ment, reverse repurchase agreement,

20 consignment, lease, swap, hedge trans21 action, deposit, loan, option, allocated

22 transaction, unallocated transaction,

23 or any other similar agreement;
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1 ‘‘(II) any combination of agree2 ments or transactions referred to in

3 subclauses (I) and (III);

4 ‘‘(III) any option to enter into

5 any agreement or transaction referred

6 to in subclause (I) or (II);

7 ‘‘(IV) a master agreement that

8 provides for an agreement or trans9 action referred to in subclauses (I),

10 (II), or (III), together with all supple11 ments to any such master agreement,

12 without regard to whether the master

13 agreement provides for an agreement

14 or transaction that is not a forward

15 contract under this clause, except that

16 the master agreement shall be consid17 ered to be a forward contract under

18 this clause only with respect to each

19 agreement or transaction under the

20 master agreement that is referred to in

21 subclause (I), (II), or (III); or

22 ‘‘(V) a security agreement or ar23 rangement or other credit enhancement

24 related to any agreement or trans-
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1 action referred to in subclause (I), (II),

2 (III), or (IV).’’.

3 (e) DEFINITION OF REPURCHASE AGREEMENT AND

4 REVERSE REPURCHASE AGREEMENT.—Section

5 11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12

6 U.S.C. 1821(e)(8)(D)(v)) is amended to read as follows:

7 ‘‘(v) REPURCHASE AGREEMENT; RE8 VERSE REPURCHASE AGREEMENT.—The

9 terms ‘repurchase agreement’ and ‘reverse

10 repurchase agreement’—

11 ‘‘(I) mean an agreement, includ12 ing related terms, which provides for

13 the transfer of 1 or more certificates of

14 deposit, mortgage-related securities (as

15 such term is defined in the Securities

16 Exchange Act of 1934), mortgage loans,

17 interests in mortgage-related securities

18 or mortgage loans, eligible bankers’ ac19 ceptances, qualified foreign government

20 securities or securities that are direct

21 obligations of, or that are fully guaran22 teed by, the United States or any agen23 cy of the United States against the

24 transfer of funds by the transferee of

25 such certificates of deposit, eligible
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1 bankers’ acceptances, securities, loans,

2 or interests with a simultaneous agree3 ment by such transferee to transfer to

4 the transferor thereof certificates of de5 posit, eligible bankers’ acceptances, se6 curities, loans, or interests as described

7 in this subclause, at a date certain

8 that is not later than 1 year after the

9 date of such transfers or on demand,

10 against the transfer of funds, or any

11 other similar agreement;

12 ‘‘(II) does not include any repur13 chase obligation under a participation

14 in a commercial mortgage loan unless

15 the Corporation determines by regula16 tion, resolution, or order to include

17 any such participation within the

18 meaning of such term;

19 ‘‘(III) means any combination of

20 agreements or transactions referred to

21 in subclauses (I) and (IV);

22 ‘‘(IV) means any option to enter

23 into any agreement or transaction re24 ferred to in subclause (I) or (III);
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1 ‘‘(V) means a master agreement

2 that provides for an agreement or

3 transaction referred to in subclause (I),

4 (III), or (IV), together with all supple5 ments to any such master agreement,

6 without regard to whether the master

7 agreement provides for an agreement

8 or transaction that is not a repurchase

9 agreement under this clause, except

10 that the master agreement shall be con11 sidered to be a repurchase agreement

12 under this subclause only with respect

13 to each agreement or transaction under

14 the master agreement that is referred to

15 in subclause (I), (III), or (IV); and

16 ‘‘(VI) means a security agreement

17 or arrangement or other credit en18 hancement related to any agreement or

19 transaction referred to in subclause (I),

20 (III), (IV), or (V).

21 For purposes of this clause, the term ‘quali22 fied foreign government security’ means a

23 security that is a direct obligation of, or

24 that is fully guaranteed by, the central gov25 ernment of a member of the Organization
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1 for Economic Cooperation and Development

2 (as determined by regulation or order

3 adopted by the appropriate Federal banking

4 authority).’’.

5 (f) DEFINITION OF SWAP AGREEMENT.—The Federal

6 Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is

7 amended to read as follows:

8 ‘‘(vi) SWAP AGREEMENT.—The term

9 ‘swap agreement’—

10 ‘‘(I) means any agreement, in11 cluding the terms and conditions in12 corporated by reference in any such

13 agreement, that is—

14 ‘‘(aa) an interest rate swap,

15 option, future, or forward agree16 ment, including a rate floor, rate

17 cap, rate collar, cross-currency

18 rate swap, and basis swap;

19 ‘‘(bb) a spot, same day-to20 morrow, tomorrow-next, forward,

21 or other foreign exchange or pre22 cious metals agreement;

23 ‘‘(cc) a currency swap, op24 tion, future, or forward agree25 ment;
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1 ‘‘(dd) an equity index or eq2 uity swap, option, future, or for3 ward agreement;

4 ‘‘(ee) a debt index or debt

5 swap, option, future, or forward

6 agreement;

7 ‘‘(ff) a credit spread or credit

8 swap, option, future, or forward

9 agreement; or

10 ‘‘(gg) a commodity index or

11 commodity swap, option, future,

12 or forward agreement;

13 ‘‘(II) means any agreement or

14 transaction that is similar to any

15 other agreement or transaction referred

16 to in this clause, that is presently, or

17 in the future becomes, regularly entered

18 into in the swap market (including

19 terms and conditions incorporated by

20 reference in such agreement), and that

21 is a forward, swap, future, or option

22 on 1 or more rates, currencies, com23 modities, equity securities or other eq24 uity instruments, debt securities or

25 other debt instruments, or economic in-
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1 dices or measures of economic risk or

2 value;

3 ‘‘(III) means any combination of

4 agreements or transactions referred to

5 in this clause;

6 ‘‘(IV) means any option to enter

7 into any agreement or transaction re8 ferred to in this clause;

9 ‘‘(V) means a master agreement

10 that provides for an agreement or

11 transaction referred to in subclause (I),

12 (II), (III), or (IV), together with all

13 supplements to any such master agree14 ment, without regard to whether the

15 master agreement contains an agree16 ment or transaction that is not a swap

17 agreement under this clause, except

18 that the master agreement shall be con19 sidered to be a swap agreement under

20 this clause only with respect to each

21 agreement or transaction under the

22 master agreement that is referred to in

23 subclause (I), (II), (III), or (IV);

24 ‘‘(VI) means any security agree25 ment or arrangement or other credit
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1 enhancement related to any agreements

2 or transactions referred to in subpara3 graph (I), (II), (III), or (IV); and

4 ‘‘(VII) is applicable for purposes

5 of this Act only, and shall not be con6 strued or applied so as to challenge or

7 affect the characterization, definition,

8 or treatment of any swap agreement

9 under any other statute, regulation, or

10 rule, including the Securities Act of

11 1933, the Securities Exchange Act of

12 1934, the Public Utility Holding Com13 pany Act of 1935, the Trust Indenture

14 Act of 1939, the Investment Company

15 Act of 1940, the Investment Advisers

16 Act of 1940, the Securities Investor

17 Protection Act of 1970, the Commodity

18 Exchange Act, and the regulations pro19 mulgated by the Securities and Ex20 change Commission or the Commodity

21 Futures Trading Commission.’’.

22 (g) DEFINITION OF TRANSFER.—Section

23 11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12

24 U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:
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1 ‘‘(viii) TRANSFER.—The term ‘trans2 fer’ means every mode, direct or indirect,

3 absolute or conditional, voluntary or invol4 untary, of disposing of or parting with

5 property or with an interest in property,

6 including retention of title as a security in7 terest and foreclosure of the depository

8 institutions’s equity of redemption.’’.

9 (h) TREATMENT OF QUALIFIED FINANCIAL CON10 TRACTS.—Section 11(e)(8) of the Federal Deposit Insurance

11 Act (12 U.S.C. 1821(e)(8)) is amended—

12 (1) in subparagraph (A), by striking ‘‘paragraph

13 (10)’’ and inserting ‘‘paragraphs (9) and (10)’’;

14 (2) in subparagraph (A)(i), by striking ‘‘to cause

15 the termination or liquidation’’ and inserting ‘‘such

16 person has to cause the termination, liquidation, or

17 acceleration’’;

18 (3) by striking clause (ii) of subparagraph (A)

19 and inserting the following:

20 ‘‘(ii) any right under any security

21 agreement or arrangement or other credit

22 enhancement related to 1 or more qualified

23 financial contracts described in clause (i);

24 or’’; and
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1 (4) by striking clause (ii) of subparagraph (E)

2 and inserting the following:

3 ‘‘(ii) any right under any security

4 agreement or arrangement or other credit

5 enhancement related to 1 or more qualified

6 financial contracts described in clause (i);

7 or’’.

8 (i) AVOIDANCE OF TRANSFERS.—Section

9 11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12

10 U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section

11 5242 of the Revised Statutes (12 U.S.C. 91), or any other

12 Federal or State law relating to the avoidance of pref13 erential or fraudulent transfers,’’ before ‘‘the Corporation’’.

14 SEC. 1603. AUTHORITY OF THE CORPORATION WITH RE15 SPECT TO FAILED AND FAILING INSTITU16 TIONS.

17 (a) IN GENERAL.—Section 11(e)(8) of the Federal De18 posit Insurance Act (12 U.S.C. 1821(e)(8)) is amended—

19 (1) in subparagraph (E), by striking ‘‘other than

20 paragraph (12) of this subsection, subsection (d)(9)’’

21 and inserting ‘‘other than subsections (d)(9) and

22 (e)(10)’’; and

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

24 ‘‘(F) CLARIFICATION.—No provision of law

25 shall be construed as limiting the right or power
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1 of the Corporation, or authorizing any court or

2 agency to limit or delay, in any manner, the

3 right or power of the Corporation to transfer any

4 qualified financial contract in accordance with

5 paragraphs (9) and (10) or to disaffirm or repu6 diate any such contract in accordance with sub7 section (e)(1).

8 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC9 TIVE.—

10 ‘‘(i) IN GENERAL.—Notwithstanding

11 the provisions of subparagraphs (A) and

12 (E), and sections 403 and 404 of the Fed13 eral Deposit Insurance Corporation Im14 provement Act of 1991, no walkaway clause

15 shall be enforceable in a qualified financial

16 contract of an insured depository institu17 tion in default.

18 ‘‘(ii) WALKAWAY CLAUSE DEFINED.—

19 For purposes of this subparagraph, the term

20 ‘walkaway clause’ means a provision in a

21 qualified financial contract that, after cal22 culation of a value of a party’s position or

23 an amount due to or from 1 of the parties

24 in accordance with its terms upon termi25 nation, liquidation, or acceleration of the
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1 qualified financial contract, either does not

2 create a payment obligation of a party or

3 extinguishes a payment obligation of a

4 party in whole or in part solely because of

5 such party’s status as a nondefaulting

6 party.’’.

7 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec8 tion 11(e)(12)(A) of the Federal Deposit Insurance Act (12

9 U.S.C. 1821(e)(12)(A)) is amended by inserting ‘‘or the ex10 ercise of rights or powers by’’ after ‘‘the appointment of’’.

11 SEC. 1604. AMENDMENTS RELATING TO TRANSFERS OF

12 QUALIFIED FINANCIAL CONTRACTS.

13 (a) TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS

14 TO FINANCIAL INSTITUTIONS.—Section 11(e)(9) of the Fed15 eral Deposit Insurance Act (12 U.S.C. 1821(e)(9)) is

16 amended to read as follows:

17 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON18 TRACTS.—

19 ‘‘(A) IN GENERAL.—In making any transfer

20 of assets or liabilities of a depository institution

21 in default which includes any qualified financial

22 contract, the conservator or receiver for such de23 pository institution shall either—

24 ‘‘(i) transfer to 1 financial institution,

25 other than a financial institution for which
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1 a conservator, receiver, trustee in bank2 ruptcy, or other legal custodian has been

3 appointed or which is otherwise the subject

4 of a bankruptcy or insolvency proceeding—

5 ‘‘(I) all qualified financial con6 tracts between any person or any affil7 iate of such person and the depository

8 institution in default;

9 ‘‘(II) all claims of such person or

10 any affiliate of such person against

11 such depository institution under any

12 such contract (other than any claim

13 which, under the terms of any such

14 contract, is subordinated to the claims

15 of general unsecured creditors of such

16 institution);

17 ‘‘(III) all claims of such deposi18 tory institution against such person or

19 any affiliate of such person under any

20 such contract; and

21 ‘‘(IV) all property securing or any

22 other credit enhancement for any con23 tract described in subclause (I) or any

24 claim described in subclause (II) or

25 (III) under any such contract; or
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1 ‘‘(ii) transfer none of the qualified fi2 nancial contracts, claims, property, or other

3 credit enhancement referred to in clause (i)

4 (with respect to such person and any affil5 iate of such person).

6 ‘‘(B) TRANSFER TO FOREIGN BANK, FOR7 EIGN FINANCIAL INSTITUTION, OR BRANCH OR

8 AGENCY OF A FOREIGN BANK OR FINANCIAL IN9 STITUTION.—In transferring any qualified fi10 nancial contract and related claims and prop11 erty pursuant to subparagraph (A)(i), the con12 servator or receiver for the depository institution

13 shall not make such transfer to a foreign bank,

14 financial institution organized under the laws of

15 a foreign country, or a branch or agency of a

16 foreign bank or financial institution unless,

17 under the law applicable to such bank, financial

18 institution, branch, or agency, to the qualified fi19 nancial contract, and to any netting contract,

20 any security agreement or arrangement or other

21 credit enhancement related to 1 or more qualified

22 financial contracts the contractual rights of the

23 parties to such qualified financial contracts, net24 ting contracts, security agreements, or arrange25 ments, or other credit enhancements are enforce-
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1 able substantially to the same extent as per2 mitted under this section.

3 ‘‘(C) TRANSFER OF CONTRACT SUBJECT TO

4 THE RULES OF A CLEARING ORGANIZATION.—If

5 a conservator or receiver transfers any qualified

6 financial contract and related claims, property,

7 and credit enhancements pursuant to subpara8 graph (A)(i) and such contract is subject to the

9 rules of a clearing organization, the clearing or10 ganization shall not be required to accept the

11 transferee as a member by virtue of the transfer.

12 ‘‘(D) DEFINITION.—For purposes of this

13 paragraph, the term ‘financial institution’

14 means a broker or dealer, a depository institu15 tion, a futures commission merchant, or any

16 other institution that the Corporation deter17 mines, by regulation, to be a financial institu18 tion.’’.

19 (b) NOTICE TO QUALIFIED FINANCIAL CONTRACT

20 COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal

21 Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is

22 amended by striking the flush material immediately fol23 lowing clause (ii) and inserting the following:

24 ‘‘the conservator or receiver shall notify any per25 son who is a party to any such contract of such
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1 transfer by 5:00 p.m. (eastern time) on the busi2 ness day following the date of the appointment

3 of the receiver in the case of a receivership, or the

4 business day following such transfer in the case

5 of a conservatorship.’’.

6 (c) RIGHTS AGAINST RECEIVER AND TREATMENT OF

7 BRIDGE BANKS.—Section 11(e)(10) of the Federal Deposit

8 Insurance Act (12 U.S.C. 1821(e)(10)) is amended—

9 (1) by redesignating subparagraph (B) as sub10 paragraph (D); and

11 (2) by inserting after subparagraph (A) the fol12 lowing:

13 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE14 ABLE.—

15 ‘‘(i) RECEIVERSHIP.—A person who is

16 a party to a qualified financial contract

17 with an insured depository institution may

18 not exercise any right such person has to

19 terminate, liquidate, or net such contract

20 under paragraph (8)(A) or section 403 or

21 404 of the Federal Deposit Insurance Cor22 poration Improvement Act of 1991, solely

23 by reason of or incidental to the appoint24 ment of a receiver for the depository institu25 tion (or the insolvency or financial condi-
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1 tion of the depository institution for which

2 the receiver has been appointed)—

3 ‘‘(I) until 5:00 p.m. (eastern time)

4 on the business day following the date

5 of the appointment of the receiver; or

6 ‘‘(II) after the person has received

7 notice that the contract has been trans8 ferred pursuant to paragraph (9)(A).

9 ‘‘(ii) CONSERVATORSHIP.—A person

10 who is a party to a qualified financial con11 tract with an insured depository institution

12 may not exercise any right such person has

13 to terminate, liquidate, or net such contract

14 under paragraph (8)(E) or section 403 or

15 404 of the Federal Deposit Insurance Cor16 poration Improvement Act of 1991, solely

17 by reason of or incidental to the appoint18 ment of a conservator for the depository in19 stitution (or the insolvency or financial

20 condition of the depository institution for

21 which the conservator has been appointed).

22 ‘‘(iii) NOTICE.—For purposes of this

23 paragraph, the Corporation as receiver or

24 conservator of an insured depository insti25 tution shall be deemed to have notified a
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1 person who is a party to a qualified finan2 cial contract with such depository institu3 tion if the Corporation has taken steps rea4 sonably calculated to provide notice to such

5 person by the time specified in subpara6 graph (A).

7 ‘‘(C) TREATMENT OF BRIDGE BANKS.—A fi8 nancial institution for which a conservator, re9 ceiver, trustee in bankruptcy, or other legal cus10 todian has been appointed or that is otherwise

11 the subject of a bankruptcy or insolvency pro12 ceeding for purposes of subsection (e)(9) does not

13 include—

14 ‘‘(i) a bridge bank; or

15 ‘‘(ii) a depository institution organized

16 by the Corporation, for which a conservator

17 is appointed either—

18 ‘‘(I) immediately upon the organi19 zation of the institution; or

20 ‘‘(II) at the time of a purchase

21 and assumption transaction between

22 such institution and the Corporation

23 as receiver for a depository institution

24 in default.’’.
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1 SEC. 1605. AMENDMENTS RELATING TO DISAFFIRMANCE OR

2 REPUDIATION OF QUALIFIED FINANCIAL

3 CONTRACTS.

4 Section 11(e) of the Federal Deposit Insurance Act (12

5 U.S.C. 1821(e)) is amended—

6 (1) by redesignating paragraphs (11) through

7 (15) as paragraphs (12) through (16), respectively;

8 (2) in paragraph (8)(C)(i), by striking ‘‘(11)’’

9 and inserting ‘‘(12)’’;

10 (3) in paragraph (8)(E), by striking ‘‘(12)’’ and

11 inserting ‘‘(13)’’; and

12 (4) by inserting after paragraph (10) the fol13 lowing:

14 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

15 QUALIFIED FINANCIAL CONTRACTS.—In exercising the

16 right to disaffirm or repudiate with respect to any

17 qualified financial contract to which an insured de18 pository institution is a party, the conservator or re19 ceiver for such institution shall either—

20 ‘‘(A) disaffirm or repudiate all qualified fi21 nancial contracts between—

22 ‘‘(i) any person or any affiliate of such

23 person; and

24 ‘‘(ii) the depository institution in de25 fault; or
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1 ‘‘(B) disaffirm or repudiate none of the

2 qualified financial contracts referred to in sub3 paragraph (A) (with respect to such person or

4 any affiliate of such person).’’.

5 SEC. 1606. CLARIFYING AMENDMENT RELATING TO MASTER

6 AGREEMENTS.

7 Section 11(e)(8)(D)(vii) of the Federal Deposit Insur8 ance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read

9 as follows:

10 ‘‘(vii) TREATMENT OF MASTER AGREE11 MENT AS 1 AGREEMENT.—Any master

12 agreement for any contract or agreement de13 scribed in any preceding clause of this sub14 paragraph (or any master agreement for

15 such master agreement or agreements), to16 gether with all supplements to such master

17 agreement, shall be treated as a single

18 agreement and a single qualified financial

19 contract. If a master agreement contains

20 provisions relating to agreements or trans21 actions that are not themselves qualified fi22 nancial contracts, the master agreement

23 shall be deemed to be a qualified financial

24 contract only with respect to those trans-
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1 actions that are themselves qualified finan2 cial contracts.’’.

3 SEC. 1607. FEDERAL DEPOSIT INSURANCE CORPORATION

4 IMPROVEMENT ACT OF 1991.

5 (a) DEFINITIONS.—Section 402 of the Federal Deposit

6 Insurance Corporation Improvement Act of 1991 (12 U.S.C.

7 4402) is amended—

8 (1) in paragraph (6)—

9 (A) by redesignating subparagraphs (B)

10 through (D) as subparagraphs (C) through (E),

11 respectively;

12 (B) by inserting after subparagraph (A) the

13 following:

14 ‘‘(B) an uninsured national bank or an un15 insured State bank that is a member of the Fed16 eral Reserve System, if the national bank or

17 State member bank is not eligible to make appli18 cation to become an insured bank under section

19 5 of the Federal Deposit Insurance Act;’’; and

20 (C) by striking subparagraph (C) (as redes21 ignated) and inserting the following:

22 ‘‘(C) a branch or agency of a foreign bank,

23 a foreign bank and any branch or agency of the

24 foreign bank, or the foreign bank that established

25 the branch or agency, as those terms are defined
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1 in section 1(b) of the International Banking Act

2 of 1978;’’;

3 (2) in paragraph (11), by inserting before the pe4 riod ‘‘and any other clearing organization with which

5 such clearing organization has a netting contract’’;

6 (3) in paragraph (14)(A), by striking clause (i)

7 and inserting the following:

8 ‘‘(i) means a contract or agreement be9 tween 2 or more financial institutions,

10 clearing organizations, or members that

11 provides for netting present or future pay12 ment obligations or payment entitlements

13 (including liquidation or closeout values re14 lating to such obligations or entitlements)

15 among the parties to the agreement; and’’;

16 and

17 (4) by adding at the end the following:

18 ‘‘(15) PAYMENT.—The term ‘payment’ means a

19 payment of United States dollars, another currency,

20 or a composite currency, and a noncash delivery, in21 cluding a payment or delivery to liquidate an

22 unmatured obligation.’’.

23 (b) ENFORCEABILITY OF BILATERAL NETTING CON24 TRACTS.—Section 403 of the Federal Deposit Insurance
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1 Corporation Improvement Act of 1991 (12 U.S.C. 4403) is

2 amended—

3 (1) by striking subsection (a) and inserting the

4 following:

5 ‘‘(a) GENERAL RULE.—Notwithstanding any other

6 provision of Federal or State law (other than paragraphs

7 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

8 Deposit Insurance Act or any order authorized under sec9 tion 5(b)(2) of the Securities Investor Protection Act of

10 1970, the covered contractual payment obligations and the

11 covered contractual payment entitlements between any 2 fi12 nancial institutions shall be netted in accordance with, and

13 subject to the conditions of, the terms of any applicable net14 ting contract (except as provided in section 561(b)(2) of

15 title 11, United States Code).’’; and

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

17 ‘‘(f) ENFORCEABILITY OF SECURITY AGREEMENTS.—

18 The provisions of any security agreement or arrangement

19 or other credit enhancement related to 1 or more netting

20 contracts between any 2 financial institutions shall be en21 forceable in accordance with their terms (except as provided

22 in section 561(b)(2) of title 11, United States Code) and

23 shall not be stayed, avoided, or otherwise limited by any

24 State or Federal law (other than paragraphs (8)(E), (8)(F),

25 and (10)(B) of section 11(e) of the Federal Deposit Insur-
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1 ance Act and section 5(b)(2) of the Securities Investor Pro2 tection Act of 1970).’’.

3 (c) ENFORCEABILITY OF CLEARING ORGANIZATION

4 NETTING CONTRACTS.—Section 404 of the Federal Deposit

5 Insurance Corporation Improvement Act of 1991 (12 U.S.C.

6 4404) is amended—

7 (1) by striking subsection (a) and inserting the

8 following:

9 ‘‘(a) GENERAL RULE.—Notwithstanding any other

10 provision of Federal or State law (other than paragraphs

11 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

12 Deposit Insurance Act or any order authorized under sec13 tion 5(b)(2) of the Securities Investor Protection Act of

14 1970) the covered contractual payment obligations and the

15 covered contractual payment entitlements of a member of

16 a clearing organization to and from all other members of

17 the clearing organization shall be netted in accordance with,

18 and subject to the conditions of, the terms of any applicable

19 netting contract (except as provided in section 561(b)(2) of

20 title 11, United States Code).’’; and

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

22 ‘‘(h) ENFORCEABILITY OF SECURITY AGREEMENTS.—

23 The provisions of any security agreement or arrangement

24 or other credit enhancement related to 1 or more netting

25 contracts between any 2 members of a clearing organization
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1 shall be enforceable in accordance with their terms (except

2 as provided in section 561(b)(2) of title 11, United States

3 Code) and shall not be stayed, avoided, or otherwise limited

4 by any State or Federal law (other than paragraphs (8)(E),

5 (8)(F), and (10)(B) of section 11(e) of the Federal Deposit

6 Insurance Act and section 5(b)(2) of the Securities Investor

7 Protection Act of 1970).’’.

8 (d) ENFORCEABILITY OF CONTRACTS WITH UNIN9 SURED NATIONAL BANKS AND UNINSURED FEDERAL

10 BRANCHES AND AGENCIES.—The Federal Deposit Insur11 ance Corporation Improvement Act of 1991 (12 U.S.C. 4401

12 et seq.) is amended by adding at the end the following:

13 ‘‘SEC. 408. TREATMENT OF CONTRACTS WITH UNINSURED

14 NATIONAL BANKS AND UNINSURED FEDERAL

15 BRANCHES AND AGENCIES.

16 ‘‘(a) IN GENERAL.—Notwithstanding any other provi17 sion of law, paragraphs (8), (9), (10), and (11) of section

18 11(e) of the Federal Deposit Insurance Act shall apply to

19 an uninsured national bank or uninsured Federal branch

20 or Federal agency, except that for such purpose—

21 ‘‘(1) any reference to the ‘Corporation as re22 ceiver’ or ‘the receiver or the Corporation’ shall refer

23 to the receiver of an uninsured national bank or un24 insured Federal branch or Federal agency appointed

25 by the Comptroller of the Currency;
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1 ‘‘(2) any reference to the ‘Corporation’ (other

2 than in section 11(e)(8)(D) of that Act), the ‘Corpora3 tion, whether acting as such or as conservator or re4 ceiver’, a ‘receiver’, or a ‘conservator’ shall refer to the

5 receiver or conservator of an uninsured national bank

6 or uninsured Federal branch or Federal agency ap7 pointed by the Comptroller of the Currency; and

8 ‘‘(3) any reference to an ‘insured depository in9 stitution’ or ‘depository institution’ shall refer to an

10 uninsured national bank or an uninsured Federal

11 branch or Federal agency.

12 ‘‘(b) LIABILITY.—The liability of a receiver or conser13 vator of an uninsured national bank or uninsured Federal

14 branch or agency shall be determined in the same manner

15 and subject to the same limitations that apply to receivers

16 and conservators of insured depository institutions under

17 section 11(e) of the Federal Deposit Insurance Act.

18 ‘‘(c) REGULATORY AUTHORITY.—

19 ‘‘(1) IN GENERAL.—The Comptroller of the Cur20 rency, in consultation with the Federal Deposit In21 surance Corporation, may promulgate regulations to

22 implement this section.

23 ‘‘(2) SPECIFIC REQUIREMENT.—In promulgating

24 regulations to implement this section, the Comptroller

25 of the Currency shall ensure that the regulations gen-
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1 erally are consistent with the regulations and policies

2 of the Federal Deposit Insurance Corporation adopted

3 pursuant to the Federal Deposit Insurance Act.

4 ‘‘(d) DEFINITIONS.—For purposes of this section, the

5 terms ‘Federal branch’, ‘Federal agency’, and ‘foreign bank’

6 have the same meanings as in section 1(b) of the Inter7 national Banking Act of 1978.’’.

8 SEC. 1608. RECORDKEEPING REQUIREMENTS.

9 Section 11(e)(8) of the Federal Deposit Insurance Act

10 (12 U.S.C. 1821(e)(8)) is amended by adding at the end

11 the following:

12 ‘‘(H) RECORDKEEPING REQUIREMENTS.—

13 The Corporation, in consultation with the appro14 priate Federal banking agencies, may prescribe

15 regulations requiring more detailed record16 keeping with respect to qualified financial con17 tracts (including market valuations) by insured

18 depository institutions.’’.

19 SEC. 1609. EXEMPTIONS FROM CONTEMPORANEOUS EXECU20 TION REQUIREMENT.

21 Section 13(e)(2) of the Federal Deposit Insurance Act

22 (12 U.S.C. 1823(e)(2)) is amended to read as follows:

23 ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS

24 EXECUTION REQUIREMENT.—
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1 ‘‘(A) IN GENERAL.—An agreement described

2 in subparagraph (B) shall not be deemed to be

3 invalid pursuant to paragraph (1)(B) solely on

4 the basis—

5 ‘‘(i) that the agreement was not exe6 cuted contemporaneously with the acquisi7 tion of the collateral; or

8 ‘‘(ii) of any pledge, delivery, or substi9 tution of the collateral made in accordance

10 with the agreement.

11 ‘‘(B) AGREEMENT DESCRIBED.—An agree12 ment is described in this subparagraph if it is

13 an agreement to provide for the lawful

14 collateralization of—

15 ‘‘(i) deposits of, or other credit exten16 sion by, a Federal, State, or local govern17 mental entity, or of any depositor referred

18 to in section 11(a)(2), including an agree19 ment to provide collateral in lieu of a sur20 ety bond;

21 ‘‘(ii) securities deposited under section

22 345(b)(2) of title 11, United States Code;

23 ‘‘(iii) extensions of credit, including an

24 overdraft, from a Federal reserve bank or

25 Federal home loan bank; or
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1 ‘‘(iv) 1 or more qualified financial con2 tracts (as defined in section 11(e)(8)(D)).’’.

3 SEC. 1610. SIPC STAY.

4 Section 5(b)(2) of the Securities Investor Protection

5 Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding

6 at the end the following:

7 ‘‘(C) EXCEPTION FROM STAY.—

8 ‘‘(i) IN GENERAL.—Notwithstanding

9 section 362 of title 11, United States Code,

10 neither the filing of an application under

11 subsection (a)(3) of this section nor any

12 order or decree obtained by SIPC from the

13 court shall operate as a stay of any contrac14 tual right of a creditor to liquidate, termi15 nate, or accelerate a securities contract,

16 commodity contract, forward contract, re17 purchase agreement, swap agreement, or

18 master netting agreement, each as defined

19 in title 11, United States Code, to offset or

20 net termination values, payment amounts,

21 or other transfer obligations arising under

22 or in connection with 1 or more of such

23 contracts or agreements, or to foreclose on

24 any cash collateral pledged by the debtor,
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1 whether or not with respect to 1 or more of

2 such contracts or agreements.

3 ‘‘(ii) STAYS ON FORECLOSURE.—Not4 withstanding clause (i), an application,

5 order, or decree described therein may oper6 ate as a stay of the foreclosure on securities

7 collateral pledged by the debtor, whether or

8 not with respect to 1 or more of such con9 tracts or agreements, securities sold by the

10 debtor under a repurchase agreement or se11 curities lent under a securities lending

12 agreement.

13 ‘‘(iii) DEFINITION.—As used in this

14 section, the term ‘contractual right’

15 includes—

16 ‘‘(I) a right set forth in a rule or

17 bylaw of a national securities ex18 change, a national securities associa19 tion, or a securities clearing agency;

20 ‘‘(II) a right set forth in a bylaw

21 of a clearing organization or contract

22 market or in a resolution of the gov23 erning board thereof; and

24 ‘‘(III) a right, whether or not in

25 writing, arising under common law,
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1 under law merchant, or by reason of

2 normal business practice.’’.

3 SEC. 1611. FEDERAL RESERVE COLLATERAL REQUIRE4 MENTS.

5 Section 16 of the Federal Reserve Act (12 U.S.C. 412)

6 is amended in the third sentence of the second undesignated

7 paragraph, by striking ‘‘acceptances acquired under section

8 13 of this Act’’ and inserting ‘‘acceptances acquired under

9 section 10A, 10B, 13, or 13A’’.

10 SEC. 1612. EFFECTIVE DATE; APPLICATION OF AMEND11 MENTS.

12 (a) SEVERABILITY.—If any provision of this title or

13 any amendment made by this title, or the application of

14 any such provision or amendment to any person or cir15 cumstance, is held to be unconstitutional, the remaining

16 provisions of and amendments made by this title and the

17 application of such other provisions and amendments to

18 any person or circumstance shall not be affected thereby.

19 (b) EFFECTIVE DATE.—This title and the amendments

20 made by this title shall take effect on the date of enactment

21 of this Act.

22 (c) APPLICATION OF AMENDMENTS.—The amendments

23 made by this title shall apply with respect to cases com24 menced or appointments made under any Federal or State

25 law after the date of enactment of this Act, but shall not
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1 apply with respect to cases commenced or appointments

2 made under any Federal or State law before the date of

3 enactment of this Act.

4 TITLE XVII—METHAMPHET5 AMINE AND OTHER CON6 TROLLED SUBSTANCES

7 SEC. 1701. SHORT TITLE.

8 This title may be cited as the ‘‘Methamphetamine

9 Anti-Proliferation Act of 2000’’.

10 Subtitle A—Methamphetamine

11 Production, Trafficking, and Abuse

12 CHAPTER 1—CRIMINAL PENALTIES

13 SEC. 1711. ENHANCED PUNISHMENT OF AMPHETAMINE

14 LABORATORY OPERATORS.

15 (a) AMENDMENT TO FEDERAL SENTENCING GUIDE16 LINES.—Pursuant to its authority under section 994(p) of

17 title 28, United States Code, the United States Sentencing

18 Commission shall amend the Federal sentencing guidelines

19 in accordance with this section with respect to any offense

20 relating to the manufacture, importation, exportation, or

21 trafficking in amphetamine (including an attempt or con22 spiracy to do any of the foregoing) in violation of—

23 (1) the Controlled Substances Act (21 U.S.C. 801

24 et seq.);
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1 (2) the Controlled Substances Import and Export

2 Act (21 U.S.C. 951 et seq.); or

3 (3) the Maritime Drug Law Enforcement Act (46

4 U.S.C. App. 1901 et seq.).

5 (b) GENERAL REQUIREMENT.—In carrying out this

6 section, the United States Sentencing Commission shall,

7 with respect to each offense described in subsection (a) relat8 ing to amphetamine—

9 (1) review and amend its guidelines to provide

10 for increased penalties such that those penalties are

11 comparable to the base offense level for methamphet12 amine; and

13 (2) take any other action the Commission con14 siders necessary to carry out this subsection.

15 (c) ADDITIONAL REQUIREMENTS.—In carrying out

16 this section, the United States Sentencing Commission shall

17 ensure that the sentencing guidelines for offenders convicted

18 of offenses described in subsection (a) reflect the heinous na19 ture of such offenses, the need for aggressive law enforcement

20 action to fight such offenses, and the extreme dangers associ21 ated with unlawful activity involving amphetamines,

22 including—

23 (1) the rapidly growing incidence of amphet24 amine abuse and the threat to public safety that such

25 abuse poses;
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1 (2) the high risk of amphetamine addiction;

2 (3) the increased risk of violence associated with

3 amphetamine trafficking and abuse; and

4 (4) the recent increase in the illegal importation

5 of amphetamine and precursor chemicals.

6 (d) EMERGENCY AUTHORITY TO SENTENCING COMMIS7 SION.—The United States Sentencing Commission shall

8 promulgate amendments pursuant to this section as soon

9 as practicable after the date of the enactment of this Act

10 in accordance with the procedure set forth in section 21(a)

11 of the Sentencing Act of 1987 (Public Law 100–182), as

12 though the authority under that Act had not expired.

13 SEC. 1712. ENHANCED PUNISHMENT OF AMPHETAMINE OR

14 METHAMPHETAMINE LABORATORY OPERA15 TORS.

16 (a) FEDERAL SENTENCING GUIDELINES.—

17 (1) IN GENERAL.—Pursuant to its authority

18 under section 994(p) of title 28, United States Code,

19 the United States Sentencing Commission shall

20 amend the Federal sentencing guidelines in accord21 ance with paragraph (2) with respect to any offense

22 relating to the manufacture, attempt to manufacture,

23 or conspiracy to manufacture amphetamine or meth24 amphetamine in violation of—
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1 (A) the Controlled Substances Act (21

2 U.S.C. 801 et seq.);

3 (B) the Controlled Substances Import and

4 Export Act (21 U.S.C. 951 et seq.); or

5 (C) the Maritime Drug Law Enforcement

6 Act (46 U.S.C. App. 1901 et seq.).

7 (2) REQUIREMENTS.—In carrying out this para8 graph, the United States Sentencing Commission

9 shall—

10 (A) if the offense created a substantial risk

11 of harm to human life (other than a life de12 scribed in subparagraph (B)) or the environ13 ment, increase the base offense level for the

14 offense—

15 (i) by not less than 3 offense levels

16 above the applicable level in effect on the

17 date of the enactment of this Act; or

18 (ii) if the resulting base offense level

19 after an increase under clause (i) would be

20 less than level 27, to not less than level 27;

21 or

22 (B) if the offense created a substantial risk

23 of harm to the life of a minor or incompetent,

24 increase the base offense level for the offense—
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1 (i) by not less than 6 offense levels

2 above the applicable level in effect on the

3 date of the enactment of this Act; or

4 (ii) if the resulting base offense level

5 after an increase under clause (i) would be

6 less than level 30, to not less than level 30.

7 (3) EMERGENCY AUTHORITY TO SENTENCING

8 COMMISSION.—The United States Sentencing Com9 mission shall promulgate amendments pursuant to

10 this subsection as soon as practicable after the date of

11 enactment of this Act in accordance with the proce12 dure set forth in section 21(a) of the Sentencing Act

13 of 1987 (Public Law 100–182), as though the author14 ity under that Act had not expired.

15 (b) EFFECTIVE DATE.—The amendments made pursu16 ant to this section shall apply with respect to any offense

17 occurring on or after the date that is 60 days after the date

18 of enactment of this Act.

19 SEC. 1713. MANDATORY RESTITUTION FOR VIOLATIONS OF

20 CONTROLLED SUBSTANCES ACT AND CON21 TROLLED SUBSTANCES IMPORT AND EXPORT

22 ACT RELATING TO AMPHETAMINE AND METH23 AMPHETAMINE.

24 (a) MANDATORY RESTITUTION.—Section 413(q) of the

25 Controlled Substances Act (21 U.S.C. 853(q)) is amended—
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1 (1) in the matter preceding paragraph (1), by

2 striking ‘‘may’’ and inserting ‘‘shall’’;

3 (2) by inserting ‘‘amphetamine or’’ before ‘‘meth4 amphetamine’’ each place it appears;

5 (3) in paragraph (2)—

6 (A) by inserting ‘‘, the State or local gov7 ernment concerned, or both the United States

8 and the State or local government concerned’’

9 after ‘‘United States’’ the first place it appears;

10 and

11 (B) by inserting ‘‘or the State or local gov12 ernment concerned, as the case may be,’’ after

13 ‘‘United States’’ the second place it appears; and

14 (4) in paragraph (3), by striking ‘‘section 3663

15 of title 18, United States Code’’ and inserting ‘‘sec16 tion 3663A of title 18, United States Code’’.

17 (b) DEPOSIT OF AMOUNTS IN DEPARTMENT OF JUS18 TICE ASSETS FORFEITURE FUND.—Section 524(c)(4) of

19 title 28, United States Code, is amended—

20 (1) by striking ‘‘and’’ at the end of subpara21 graph (B);

22 (2) by striking the period at the end of subpara23 graph (C) and inserting ‘‘; and’’; and

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

25 ‘‘(D) all amounts collected—
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1 ‘‘(i) by the United States pursuant to a re2 imbursement order under paragraph (2) of sec3 tion 413(q) of the Controlled Substances Act (21

4 U.S.C. 853(q)); and

5 ‘‘(ii) pursuant to a restitution order under

6 paragraph (1) or (3) of section 413(q) of the

7 Controlled Substances Act for injuries to the

8 United States.’’.

9 (c) CLARIFICATION OF CERTAIN ORDERS OF RESTITU10 TION.—Section 3663(c)(2)(B) of title 18, United States

11 Code, is amended by inserting ‘‘which may be’’ after ‘‘the

12 fine’’.

13 (d) EXPANSION OF APPLICABILITY OF MANDATORY

14 RESTITUTION.—Section 3663A(c)(1)(A)(ii) of title 18,

15 United States Code, is amended by inserting ‘‘or under sec16 tion 416(a) of the Controlled Substances Act (21 U.S.C.

17 856(a)),’’ after ‘‘under this title,’’.

18 (e) TREATMENT OF ILLICIT SUBSTANCE MANUFAC19 TURING OPERATIONS AS CRIMES AGAINST PROPERTY.—

20 Section 416 of the Controlled Substances Act (21 U.S.C.

21 856) is amended by adding at the end the following new

22 subsection:

23 ‘‘(c) A violation of subsection (a) shall be considered

24 an offense against property for purposes of section

25 3663A(c)(1)(A)(ii) of title 18, United States Code.’’.
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1 SEC. 1714. METHAMPHETAMINE PARAPHERNALIA.

2 Section 422(d) of the Controlled Substances Act (21

3 U.S.C. 863(d)) is amended in the matter preceding para4 graph (1) by inserting ‘‘methamphetamine,’’ after ‘‘PCP,’’.

5 CHAPTER 2—ENHANCED LAW

6 ENFORCEMENT

7 SEC. 1721. ENVIRONMENTAL HAZARDS ASSOCIATED WITH

8 ILLEGAL MANUFACTURE OF AMPHETAMINE

9 AND METHAMPHETAMINE.

10 (a) USE OF AMOUNTS OR DEPARTMENT OF JUSTICE

11 ASSETS FORFEITURE FUND.—Section 524(c)(1)(E) of title

12 28, United States Code, is amended—

13 (1) by inserting ‘‘(i) for’’ before ‘‘disbursements’’;

14 (2) by inserting ‘‘and’’ after the semicolon; and

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

16 ‘‘(ii) for payment for—

17 ‘‘(I) costs incurred by or on behalf of the

18 Department of Justice in connection with the re19 moval, for purposes of Federal forfeiture and dis20 position, of any hazardous substance or pollutant

21 or contaminant associated with the illegal manu22 facture of amphetamine or methamphetamine;

23 and

24 ‘‘(II) costs incurred by or on behalf of a

25 State or local government in connection with

26 such removal in any case in which such State or
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1 local government has assisted in a Federal pros2 ecution relating to amphetamine or methamphet3 amine, to the extent such costs exceed equitable

4 sharing payments made to such State or local

5 government in such case;’’.

6 (b) GRANTS UNDER DRUG CONTROL AND SYSTEM IM7 PROVEMENT GRANT PROGRAM.—Section 501(b)(3) of the

8 Omnibus Crime Control and Safe Streets Act of 1968 is

9 amended by inserting before the semicolon the following:

10 ‘‘and to remove any hazardous substance or pollutant or

11 contaminant associated with the illegal manufacture of am12 phetamine or methamphetamine’’.

13 (c) AMOUNTS SUPPLEMENT AND NOT SUPPLANT.—

14 (1) ASSETS FORFEITURE FUND.—Any amounts

15 made available from the Department of Justice Assets

16 Forfeiture Fund in a fiscal year by reason of the

17 amendment made by subsection (a) shall supplement,

18 and not supplant, any other amounts made available

19 to the Department of Justice in such fiscal year from

20 other sources for payment of costs described in section

21 524(c)(1)(E)(ii) of title 28, United States Code, as so

22 amended.

23 (2) GRANT PROGRAM.—Any amounts made

24 available in a fiscal year under the grant program

25 under section 501(b)(3) of the Omnibus Crime Con-
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1 trol and Safe Streets Act of 1968 for the removal of

2 hazardous substances or pollutants or contaminants

3 associated with the illegal manufacture of amphet4 amine or methamphetamine by reason of the amend5 ment made by subsection (b) shall supplement, and

6 not supplant, any other amounts made available in

7 such fiscal year from other sources for such removal.

8 SEC. 1722. REDUCTION IN RETAIL SALES TRANSACTION

9 THRESHOLD FOR NON-SAFE HARBOR PROD10 UCTS CONTAINING PSEUDOEPHEDRINE OR

11 PHENLYPROPANOLAMINE.

12 (a) REDUCTION IN TRANSACTION THRESHOLD.—Sec13 tion 102(39)(A)(iv)(II) of the Controlled Substances Act (21

14 U.S.C. 802(39)(A)(iv)(II) is amended—

15 (1) by striking ‘‘24 grams’’ both places it ap16 pears and inserting ‘‘9 grams’’; and

17 (2) by inserting before the semicolon at the end

18 the following: ‘‘and sold in package sizes of not more

19 than 3 grams of pseudoephedrine base or 3 grams of

20 phenylpropanolamine base’’.

21 (b) EFFECTIVE DATE.—The amendments made by sub22 section (a) shall take effect one year after the date of the

23 enactment of this Act.
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1 SEC. 1723. TRAINING FOR DRUG ENFORCEMENT ADMINIS2 TRATION AND STATE AND LOCAL LAW EN3 FORCEMENT PERSONNEL RELATING TO

4 CLANDESTINE LABORATORIES.

5 (a) IN GENERAL.—

6 (1) REQUIREMENT.—The Administrator of the

7 Drug Enforcement Administration shall carry out the

8 programs described in subsection (b) with respect to

9 the law enforcement personnel of States and localities

10 determined by the Administrator to have significant

11 levels of methamphetamine-related or amphetamine12 related crime or projected by the Administrator to

13 have the potential for such levels of crime in the fu14 ture.

15 (2) DURATION.—The duration of any program

16 under that subsection may not exceed 3 years.

17 (b) COVERED PROGRAMS.—The programs described in

18 this subsection are as follows:

19 (1) ADVANCED MOBILE CLANDESTINE LABORA20 TORY TRAINING TEAMS.—A program of advanced mo21 bile clandestine laboratory training teams, which

22 shall provide information and training to State and

23 local law enforcement personnel in techniques utilized

24 in conducting undercover investigations and con25 spiracy cases, and other information designed to as26 sist in the investigation of the illegal manufacturing
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1 and trafficking of amphetamine and methamphet2 amine.

3 (2) BASIC CLANDESTINE LABORATORY CERTIFI4 CATION TRAINING.—A program of basic clandestine

5 laboratory certification training, which shall provide

6 information and training—

7 (A) to Drug Enforcement Administration

8 personnel and State and local law enforcement

9 personnel for purposes of enabling such personnel

10 to meet any certification requirements under law

11 with respect to the handling of wastes created by

12 illegal amphetamine and methamphetamine lab13 oratories; and

14 (B) to State and local law enforcement per15 sonnel for purposes of enabling such personnel to

16 provide the information and training covered by

17 subparagraph (A) to other State and local law

18 enforcement personnel.

19 (3) CLANDESTINE LABORATORY RECERTIFI20 CATION AND AWARENESS TRAINING.—A program of

21 clandestine laboratory recertification and awareness

22 training, which shall provide information and train23 ing to State and local law enforcement personnel for

24 purposes of enabling such personnel to provide recer25 tification and awareness training relating to clandes-
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1 tine laboratories to additional State and local law en2 forcement personnel.

3 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

4 authorized to be appropriated for each of fiscal years 2000,

5 2001, and 2002 amounts as follows:

6 (1) $1,500,000 to carry out the program de7 scribed in subsection (b)(1).

8 (2) $3,000,000 to carry out the program de9 scribed in subsection (b)(2).

10 (3) $1,000,000 to carry out the program de11 scribed in subsection (b)(3).

12 SEC. 1724. COMBATING METHAMPHETAMINE AND AMPHET13 AMINE IN HIGH INTENSITY DRUG TRAF14 FICKING AREAS.

15 (a) IN GENERAL.—

16 (1) IN GENERAL.—The Director of National

17 Drug Control Policy shall use amounts available

18 under this section to combat the trafficking of meth19 amphetamine and amphetamine in areas designated

20 by the Director as high intensity drug trafficking

21 areas.

22 (2) ACTIVITIES.—In meeting the requirement in

23 paragraph (1), the Director shall provide funds for—

24 (A) employing additional Federal law en25 forcement personnel, or facilitating the employ-
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1 ment of additional State and local law enforce2 ment personnel, including agents, investigators,

3 prosecutors, laboratory technicians, chemists, in4 vestigative assistants, and drug-prevention spe5 cialists; and

6 (B) such other activities as the Director

7 considers appropriate.

8 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

9 authorized to be appropriated to carry out this section—

10 (1) $15,000,000 for fiscal year 2000; and

11 (2) such sums as may be necessary for each of

12 fiscal years 2001 through 2004.

13 (c) APPORTIONMENT OF FUNDS.—

14 (1) FACTORS IN APPORTIONMENT.—The Director

15 shall apportion amounts appropriated for a fiscal

16 year pursuant to the authorization of appropriations

17 in subsection (b) for activities under subsection (a)

18 among and within areas designated by the Director

19 as high intensity drug trafficking areas based on the

20 following factors:

21 (A) The number of methamphetamine man22 ufacturing facilities and amphetamine manufac23 turing facilities discovered by Federal, State, or

24 local law enforcement officials in the previous

25 fiscal year.
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1 (B) The number of methamphetamine pros2 ecutions and amphetamine prosecutions in Fed3 eral, State, or local courts in the previous fiscal

4 year.

5 (C) The number of methamphetamine ar6 rests and amphetamine arrests by Federal, State,

7 or local law enforcement officials in the previous

8 fiscal year.

9 (D) The amounts of methamphetamine, am10 phetamine, or listed chemicals (as that term is

11 defined in section 102(33) of the Controlled Sub12 stances Act (21 U.S.C. 802(33)) seized by Fed13 eral, State, or local law enforcement officials in

14 the previous fiscal year.

15 (E) Intelligence and predictive data from

16 the Drug Enforcement Administration and the

17 Department of Health and Human Services

18 showing patterns and trends in abuse, traf19 ficking, and transportation in methamphet20 amine, amphetamine, and listed chemicals (as

21 that term is so defined).

22 (2) CERTIFICATION.—Before the Director appor23 tions any funds under this subsection to a high inten24 sity drug trafficking area, the Director shall certify

25 that the law enforcement entities responsible for clan-
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1 destine methamphetamine and amphetamine labora2 tory seizures in that area are providing laboratory

3 seizure data to the national clandestine laboratory

4 database at the El Paso Intelligence Center.

5 (d) LIMITATION ON ADMINISTRATIVE COSTS.—Not

6 more than 5 percent of the amount appropriated in a fiscal

7 year pursuant to the authorization of appropriations for

8 that fiscal year in subsection (b) may be available in that

9 fiscal year for administrative costs associated with activi10 ties under subsection (a).

11 SEC. 1725. COMBATING AMPHETAMINE AND METHAMPHET12 AMINE MANUFACTURING AND TRAFFICKING.

13 (a) ACTIVITIES.—In order to combat the illegal manu14 facturing and trafficking in amphetamine and meth15 amphetamine, the Administrator of the Drug Enforcement

16 Administration may—

17 (1) assist State and local law enforcement in

18 small and mid-sized communities in all phases of in19 vestigations related to such manufacturing and traf20 ficking, including assistance with foreign-language

21 interpretation;

22 (2) staff additional regional enforcement and

23 mobile enforcement teams related to such manufac24 turing and trafficking;
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1 (3) establish additional resident offices and posts

2 of duty to assist State and local law enforcement in

3 rural areas in combating such manufacturing and

4 trafficking;

5 (4) provide the Special Operations Division of

6 the Administration with additional agents and staff

7 to collect, evaluate, interpret, and disseminate critical

8 intelligence targeting the command and control oper9 ations of major amphetamine and methamphetamine

10 manufacturing and trafficking organizations;

11 (5) enhance the investigative and related func12 tions of the Chemical Control Program of the Admin13 istration to implement more fully the provisions of

14 the Comprehensive Methamphetamine Control Act of

15 1996 (Public Law 104–237);

16 (6) design an effective means of requiring an ac17 curate accounting of the import and export of list I

18 chemicals, and coordinate investigations relating to

19 the diversion of such chemicals;

20 (7) develop a computer infrastructure sufficient

21 to receive, process, analyze, and redistribute time-sen22 sitive enforcement information from suspicious order

23 reporting to field offices of the Administration and

24 other law enforcement and regulatory agencies, in25 cluding the continuing development of the Suspicious
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1 Order Reporting and Tracking System (SORTS) and

2 the Chemical Transaction Database (CTRANS) of the

3 Administration;

4 (8) establish an education, training, and com5 munication process in order to alert the industry to

6 current trends and emerging patterns in the illegal

7 manufacturing of amphetamine and methamphet8 amine; and

9 (9) carry out such other activities as the Admin10 istrator considers appropriate.

11 (b) ADDITIONAL POSITIONS AND PERSONNEL.—

12 (1) IN GENERAL.—In carrying out activities

13 under subsection (a), the Administrator may establish

14 in the Administration not more than 50 full-time po15 sitions, including not more than 31 special-agent po16 sitions, and may appoint personnel to such positions.

17 (2) PARTICULAR POSITIONS.—In carrying out

18 activities under paragraphs (5) through (8) of sub19 section (a), the Administrator may establish in the

20 Administration not more than 15 full-time positions,

21 including not more than 10 diversion investigator po22 sitions, and may appoint personnel to such positions.

23 Any positions established under this paragraph are in

24 addition to any positions established under para25 graph (1).
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1 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

2 authorized to be appropriated for the Drug Enforcement

3 Administration for each fiscal year after fiscal year 1999,

4 $9,500,000 for purposes of carrying out the activities au5 thorized by subsection (a) and employing personnel in posi6 tions established under subsection (b), of which $3,000,000

7 shall be available for activities under paragraphs (5)

8 through (8) of subsection (a) and employing personnel in

9 positions established under subsection (b)(2).

10 CHAPTER 3—ABUSE PREVENTION AND

11 TREATMENT

12 SEC. 1731. EXPANSION OF METHAMPHETAMINE RESEARCH.

13 Section 464N of the Public Health Service Act (42

14 U.S.C. 285o–2) is amended by adding at the end the fol15 lowing:

16 ‘‘(c) METHAMPHETAMINE RESEARCH.—

17 ‘‘(1) GRANTS OR COOPERATIVE AGREEMENTS.—

18 The Director of the Institute may make grants or

19 enter into cooperative agreements to expand the cur20 rent and on-going interdisciplinary research and

21 clinical trials with treatment centers of the National

22 Drug Abuse Treatment Clinical Trials Network relat23 ing to methamphetamine abuse and addiction and

24 other biomedical, behavioral, and social issues related

25 to methamphetamine abuse and addiction.
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1 ‘‘(2) USE OF FUNDS.—Amounts made available

2 under a grant or cooperative agreement under para3 graph (1) for methamphetamine abuse and addiction

4 may be used for research and clinical trials relating

5 to—

6 ‘‘(A) the effects of methamphetamine abuse

7 on the human body, including the brain;

8 ‘‘(B) the addictive nature of methamphet9 amine and how such effects differ with respect to

10 different individuals;

11 ‘‘(C) the connection between methamphet12 amine abuse and mental health;

13 ‘‘(D) the identification and evaluation of

14 the most effective methods of prevention of meth15 amphetamine abuse and addiction;

16 ‘‘(E) the identification and development of

17 the most effective methods of treatment of meth18 amphetamine addiction, including pharma19 cological treatments;

20 ‘‘(F) risk factors for methamphetamine

21 abuse;

22 ‘‘(G) effects of methamphetamine abuse and

23 addiction on pregnant women and their fetuses;

24 and
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1 ‘‘(H) cultural, social, behavioral, neuro2 logical and psychological reasons that individ3 uals abuse methamphetamine, or refrain from

4 abusing methamphetamine.

5 ‘‘(3) RESEARCH RESULTS.—The Director shall

6 promptly disseminate research results under this sub7 section to Federal, State and local entities involved in

8 combating methamphetamine abuse and addiction.

9 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

10 ‘‘(A) AUTHORIZATION OF APPROPRIA11 TIONS.—There is authorized to be appropriated

12 to carry out paragraph (1), such sums as may

13 be necessary for each fiscal year.

14 ‘‘(B) SUPPLEMENT NOT SUPPLANT.—

15 Amounts appropriated pursuant to the author16 ization of appropriations in subparagraph (A)

17 for a fiscal year shall supplement and not sup18 plant any other amounts appropriated in such

19 fiscal year for research on methamphetamine

20 abuse and addiction.’’.
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1 SEC. 1732. METHAMPHETAMINE AND AMPHETAMINE TREAT2 MENT INITIATIVE BY CENTER FOR SUB3 STANCE ABUSE TREATMENT.

4 Subpart 1 of part B of title V of the Public Health

5 Service Act (42 U.S.C. 290bb et seq.) is amended by adding

6 at the end the following new section:

7 ‘‘METHAMPHETAMINE AND AMPHETAMINE TREATMENT

8 INITIATIVE

9 ‘‘SEC. 514. (a) GRANTS.—

10 ‘‘(1) AUTHORITY TO MAKE GRANTS.—The Direc11 tor of the Center for Substance Abuse Treatment may

12 make grants to States and Indian tribes recognized by

13 the United States that have a high rate, or have had

14 a rapid increase, in methamphetamine or amphet15 amine abuse or addiction in order to permit such

16 States and Indian tribes to expand activities in con17 nection with the treatment of methamphetamine or

18 amphetamine abuser or addiction in the specific geo19 graphical areas of such States or Indian tribes, as the

20 case may be, where there is such a rate or has been

21 such an increase.

22 ‘‘(2) RECIPIENTS.—Any grants under paragraph

23 (1) shall be directed to the substance abuse directors

24 of the States, and of the appropriate tribal govern25 ment authorities of the Indian tribes, selected by the

26 Director to receive such grants.
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1 ‘‘(3) NATURE OF ACTIVITIES.—Any activities

2 under a grant under paragraph (1) shall be based on

3 reliable scientific evidence of their efficacy in the

4 treatment of methamphetamine or amphetamine

5 abuse or addiction.

6 ‘‘(b) GEOGRAPHIC DISTRIBUTION.—The Director shall

7 ensure that grants under subsection (a) are distributed eq8 uitably among the various regions of the country and

9 among rural, urban, and suburban areas that are affected

10 by methamphetamine or amphetamine abuse or addiction.

11 ‘‘(c) ADDITIONAL ACTIVITIES.—The Director shall—

12 ‘‘(1) evaluate the activities supported by grants

13 under subsection (a);

14 ‘‘(2) disseminate widely such significant infor15 mation derived from the evaluation as the Director

16 considers appropriate to assist States, Indian tribes,

17 and private providers of treatment services for meth18 amphetamine or amphetamine abuser or addiction in

19 the treatment of methamphetamine or amphetamine

20 abuse or addiction; and

21 ‘‘(3) provide States, Indian tribes, and such pro22 viders with technical assistance in connection with

23 the provision of such treatment.

24 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—
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1 ‘‘(1) IN GENERAL.—There are authorized to be

2 appropriated to carry out this section $10,000,000 for

3 fiscal year 2000 and such sums as may be necessary

4 for each of fiscal years 2001 and 2002.

5 ‘‘(2) USE OF CERTAIN FUNDS.—Of the funds ap6 propriated to carry out this section in any fiscal

7 year, the lesser of 5 percent of such funds or

8 $1,000,000 shall be available to the Director for pur9 poses of carrying out subsection (c).’’.

10 SEC. 1733. EXPANSION OF METHAMPHETAMINE ABUSE PRE11 VENTION EFFORTS.

12 (a) EXPANSION OF EFFORTS.—Section 515 of the Pub13 lic Health Service Act (42 U.S.C. 290bb–21) is amended

14 by adding at the end the following:

15 ‘‘(e)(1) The Administrator may make grants to and

16 enter into contracts and cooperative agreements with public

17 and nonprofit private entities to enable such entities—

18 ‘‘(A) to carry out school-based programs con19 cerning the dangers of abuse of and addiction to

20 methamphetamine and other illicit drugs, using meth21 ods that are effective and science-based, including ini22 tiatives that give students the responsibility to create

23 their own anti-drug abuse education programs for

24 their schools; and
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1 ‘‘(B) to carry out community-based abuse and

2 addiction prevention programs relating to meth3 amphetamine and other illicit drugs that are effective

4 and science-based.

5 ‘‘(2) Amounts made available under a grant, contract

6 or cooperative agreement under paragraph (1) shall be used

7 for planning, establishing, or administering prevention pro8 grams relating to methamphetamine and other illicit drugs

9 in accordance with paragraph (3).

10 ‘‘(3)(A) Amounts provided under this subsection may

11 be used—

12 ‘‘(i) to carry out school-based programs that are

13 focused on those districts with high or increasing

14 rates of methamphetamine abuse and addiction and

15 targeted at populations which are most at risk to

16 start abuse of methamphetamine and other illicit

17 drugs;

18 ‘‘(ii) to carry out community-based prevention

19 programs that are focused on those populations with20 in the community that are most at-risk for abuse of

21 and addiction to methamphetamine and other illicit

22 drugs;

23 ‘‘(iii) to assist local government entities to con24 duct appropriate prevention activities relating to

25 methamphetamine and other illicit drugs;
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1 ‘‘(iv) to train and educate State and local law

2 enforcement officials, prevention and education offi3 cials, members of community anti-drug coalitions and

4 parents on the signs of abuse of and addiction to

5 methamphetamine and other illicit drugs, and the op6 tions for treatment and prevention;

7 ‘‘(v) for planning, administration, and edu8 cational activities related to the prevention of abuse

9 of and addiction to methamphetamine and other il10 licit drugs;

11 ‘‘(vi) for the monitoring and evaluation of pre12 vention activities relating to methamphetamine and

13 other illicit drugs, and reporting and disseminating

14 resulting information to the public; and

15 ‘‘(vii) for targeted pilot programs with evalua16 tion components to encourage innovation and experi17 mentation with new methodologies.

18 ‘‘(B) The Administrator shall give priority in making

19 grants under this subsection to rural and urban areas that

20 are experiencing a high rate or rapid increases in meth21 amphetamine abuse and addiction.

22 ‘‘(4)(A) Not less than $500,000 of the amount available

23 in each fiscal year to carry out this subsection shall be made

24 available to the Administrator, acting in consultation with

25 other Federal agencies, to support and conduct periodic
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1 analyses and evaluations of effective prevention programs

2 for abuse of and addiction to methamphetamine and other

3 illicit drugs and the development of appropriate strategies

4 for disseminating information about and implementing

5 these programs.

6 ‘‘(B) The Administrator shall submit to the committees

7 of Congress referred to in subparagraph (C) an annual re8 port with the results of the analyses and evaluation under

9 subparagraph (A).

10 ‘‘(C) The committees of Congress referred to in this

11 subparagraph are the following:

12 ‘‘(i) The Committees on Health, Education,

13 Labor, and Pensions, the Judiciary, and Appropria14 tions of the Senate.

15 ‘‘(ii) The Committees on Commerce, the Judici16 ary, and Appropriations of the House of Representa17 tives.’’.

18 (b) AUTHORIZATION OF APPROPRIATIONS FOR EXPAN19 SION OF ABUSE PREVENTION EFFORTS AND PRACTITIONER

20 REGISTRATION REQUIREMENTS.—There is authorized to be

21 appropriated to carry out section 515(e) of the Public

22 Health Service Act (as added by subsection (a)) and section

23 303(g)(2) of the Controlled Substances Act (as added by sec24 tion 18(a) of this Act), $15,000,000 for fiscal year 2000,
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1 and such sums as may be necessary for each succeeding fis2 cal year.

3 SEC. 1734. STUDY OF METHAMPHETAMINE TREATMENT.

4 (a) STUDY.—

5 (1) REQUIREMENT.—The Secretary of Health

6 and Human Services shall, in consultation with the

7 Institute of Medicine of the National Academy of

8 Sciences, conduct a study on the development of medi9 cations for the treatment of addiction to amphetamine

10 and methamphetamine.

11 (2) REPORT.—Not later than nine months after

12 the date of the enactment of this Act, the Secretary

13 shall submit to the Committees on the Judiciary of

14 the Senate and House of Representatives a report on

15 the results of the study conducted under paragraph

16 (1).

17 (b) AUTHORIZATION OF APPROPRIATIONS.—There are

18 hereby authorized to be appropriated for the Department

19 of Health and Human Services for fiscal year 2000 such

20 sums as may be necessary to meet the requirements of sub21 section (a).
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1 CHAPTER 4—REPORTS

2 SEC. 1741. REPORTS ON CONSUMPTION OF METHAMPHET3 AMINE AND OTHER ILLICIT DRUGS IN RURAL

4 AREAS, METROPOLITAN AREAS, AND CON5 SOLIDATED METROPOLITAN AREAS.

6 The Secretary of Health and Human Services shall in7 clude in each National Household Survey on Drug Abuse

8 appropriate prevalence data and information on the con9 sumption of methamphetamine and other illicit drugs in

10 rural areas, metropolitan areas, and consolidated metro11 politan areas.

12 SEC. 1742. REPORT ON DIVERSION OF ORDINARY OVER13 THE-COUNTER PSEUDOEPHEDRINE AND

14 PHENYLPROPANOLAMINE PRODUCTS.

15 (a) STUDY.—The Attorney General shall conduct a

16 study of the use of ordinary over-the-counter

17 pseudoephedrine and phenylpropanolamine products in the

18 clandestine production of illicit drugs. Sources of data for

19 the study shall include the following:

20 (1) Information from Federal, State, and local

21 clandestine laboratory seizures and related investiga22 tions identifying the source, type, or brand of drug

23 products being utilized and how they were obtained

24 for the illicit production of methamphetamine and

25 amphetamine.
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1 (2) Information submitted voluntarily from the

2 pharmaceutical and retail industries involved in the

3 manufacture, distribution, and sale of drug products

4 containing ephedrine, pseudoephedrine, and phenyl5 propanolamine, including information on changes in

6 the pattern, volume, or both, of sales of ordinary over7 the-counter pseudoephedrine and phenylpropanola8 mine products.

9 (b) REPORT.—

10 (1) REQUIREMENT.—Not later than April 1,

11 2001, the Attorney General shall submit to Congress

12 a report on the study conducted under subsection (a).

13 (2) ELEMENTS.—The report shall include—

14 (A) the findings of the Attorney General as

15 a result of the study; and

16 (B) such recommendations on the need to

17 establish additional measures to prevent diver18 sion of ordinary over-the-counter

19 pseudoephedrine and phenylpropanolamine (such

20 as a threshold on ordinary over-the-counter

21 pseudoephedrine and phenylpropanolamine prod22 ucts) as the Attorney General considers appro23 priate.

24 (3) MATTERS CONSIDERED.—In preparing the

25 report, the Attorney General shall consider the com-
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1 ments and recommendations of State and local law

2 enforcement and regulatory officials and of represent3 atives of the industry described in subsection (a)(2).

4 Subtitle B—Controlled Substances

5 Generally

6 CHAPTER 1—CRIMINAL MATTERS

7 SEC. 1751. ENHANCED PUNISHMENT FOR TRAFFICKING IN

8 LIST I CHEMICALS.

9 (a) AMENDMENTS TO FEDERAL SENTENCING GUIDE10 LINES.—Pursuant to its authority under section 994(p) of

11 title 28, United States, the United States Sentencing Com12 mission shall amend the Federal sentencing guidelines in

13 accordance with this section with respect to any violation

14 of paragraph (1) or (2) of section 401(d) of the Controlled

15 Substances Act (21 U.S.C. 841(d)) involving a list I chem16 ical and any violation of paragraph (1) or (3) of section

17 1010(d) of the Controlled Substance Import and Export Act

18 (21 U.S.C. 960(d)) involving a list I chemical.

19 (b) EPHEDRINE, PHENYLPROPANOLAMINE, AND

20 PSEUDOEPHEDRINE.—

21 (1) IN GENERAL.—In carrying this section, the

22 United States Sentencing Commission shall, with re23 spect to each offense described in subsection (a) in24 volving ephedrine, phenylpropanolamine, or

25 pseudoephedrine (including their salts, optical iso-
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1 mers, and salts of optical isomers), review and amend

2 its guidelines to provide for increased penalties such

3 that those penalties corresponded to the quantity of

4 controlled substance that could reasonably have been

5 manufactured using the quantity of ephedrine, phen6 ylpropanolamine, or pseudoephedrine possessed or

7 distributed.

8 (2) CONVERSION RATIOS.—For the purposes of

9 the amendments made by this subsection, the quantity

10 of controlled substance that could reasonably have

11 been manufactured shall be determined by using a

12 table of manufacturing conversion ratios for ephed13 rine, phenylpropanolamine, and pseudoephedrine,

14 which table shall be established by the Sentencing

15 Commission based on scientific, law enforcement, and

16 other data the Sentencing Commission considers ap17 propriate.

18 (c) OTHER LIST I CHEMICALS.—In carrying this sec19 tion, the United States Sentencing Commission shall, with

20 respect to each offense described in subsection (a) involving

21 any list I chemical other than ephedrine, phenylpropanola22 mine, or pseudoephedrine, review and amend its guidelines

23 to provide for increased penalties such that those penalties

24 reflect the dangerous nature of such offenses, the need for

25 aggressive law enforcement action to fight such offenses, and
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1 the extreme dangers associated with unlawful activity in2 volving methamphetamine and amphetamine, including—

3 (1) the rapidly growing incidence of controlled

4 substance manufacturing;

5 (2) the extreme danger inherent in manufac6 turing controlled substances;

7 (3) the threat to public safety posed by manufac8 turing controlled substances; and

9 (4) the recent increase in the importation, pos10 session, and distribution of list I chemicals for the

11 purpose of manufacturing controlled substances.

12 (d) EMERGENCY AUTHORITY TO SENTENCING COMMIS13 SION.—The United States Sentencing Commission shall

14 promulgate amendments pursuant to this section as soon

15 as practicable after the date of the enactment of this Act

16 in accordance with the procedure set forth in section 21(a)

17 of the Sentencing Act of 1987 (Public Law 100–182), as

18 though the authority under that Act had not expired.

19 SEC. 1752. MAIL ORDER REQUIREMENTS.

20 Section 310(b)(3) of the Controlled Substances Act (21

21 U.S.C. 830(b)(3)) is amended—

22 (1) by redesignating subparagraphs (A) and (B)

23 as subparagraphs (B) and (C), respectively;

24 (2) by inserting before subparagraph (B), as so

25 redesignated, the following new subparagraph (A):
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1 ‘‘(A) As used in this paragraph:

2 ‘‘(i) The term ‘drug product’ means an

3 active ingredient in dosage form that has

4 been approved or otherwise may be lawfully

5 marketed under the Food, Drug, and Cos6 metic Act for distribution in the United

7 States.

8 ‘‘(ii) The term ‘valid prescription’

9 means a prescription which is issued for a

10 legitimate medical purpose by an indi11 vidual practitioner licensed by law to ad12 minister and prescribe the drugs concerned

13 and acting in the usual course of the practi14 tioner’s professional practice.’’;

15 (3) in subparagraph (B), as so redesignated, by

16 inserting ‘‘or who engages in an export transaction’’

17 after ‘‘nonregulated person’’; and

18 (4) adding at the end the following:

19 ‘‘(D) Except as provided in subparagraph

20 (E), the following distributions to a nonregulated

21 person, and the following export transactions,

22 shall not be subject to the reporting requirement

23 in subparagraph (B):

24 ‘‘(i) Distributions of sample packages

25 of drug products when such packages con-
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1 tain not more than 2 solid dosage units or

2 the equivalent of 2 dosage units in liquid

3 form, not to exceed 10 milliliters of liquid

4 per package, and not more than one pack5 age is distributed to an individual or resi6 dential address in any 30-day period.

7 ‘‘(ii) Distributions of drug products by

8 retail distributors that may not include

9 face-to-face transactions to the extent that

10 such distributions are consistent with the

11 activities authorized for a retail distributor

12 as specified in section 102(46).

13 ‘‘(iii) Distributions of drug products to

14 a resident of a long term care facility (as

15 that term is defined in regulations pre16 scribed by the Attorney General) or dis17 tributions of drug products to a long term

18 care facility for dispensing to or for use by

19 a resident of that facility.

20 ‘‘(iv) Distributions of drug products

21 pursuant to a valid prescription.

22 ‘‘(v) Exports which have been reported

23 to the Attorney General pursuant to section

24 1004 or 1018 or which are subject to a

25 waiver granted under section 1018(e)(2).
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1 ‘‘(vi) Any quantity, method, or type of

2 distribution or any quantity, method, or

3 type of distribution of a specific listed

4 chemical (including specific formulations or

5 drug products) or of a group of listed

6 chemicals (including specific formulations

7 or drug products) which the Attorney Gen8 eral has excluded by regulation from such

9 reporting requirement on the basis that such

10 reporting is not necessary for the enforce11 ment of this title or title III.

12 ‘‘(E) The Attorney General may revoke any

13 or all of the exemptions listed in subparagraph

14 (D) for an individual regulated person if he

15 finds that drug products distributed by the regu16 lated person are being used in violation of this

17 title or title III. The regulated person shall be

18 notified of the revocation, which will be effective

19 upon receipt by the person of such notice, as pro20 vided in section 1018(c)(1), and shall have the

21 right to an expedited hearing as provided in sec22 tion 1018(c)(2).’’.
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1 SEC. 1753. INCREASED PENALTIES FOR DISTRIBUTING

2 DRUGS TO MINORS.

3 Section 418 of the Controlled Substances Act (21

4 U.S.C. 859) is amended—

5 (1) in subsection (a), by striking ‘‘one year’’ and

6 inserting ‘‘3 years’’; and

7 (2) in subsection (b), by striking ‘‘one year’’ and

8 inserting ‘‘5 years’’.

9 SEC. 1754. INCREASED PENALTY FOR DRUG TRAFFICKING

10 IN OR NEAR A SCHOOL OR OTHER PRO11 TECTED LOCATION.

12 Section 419 of the Controlled Substances Act (21

13 U.S.C. 860) is amended—

14 (1) in subsection (a), by striking ‘‘one year’’ and

15 inserting ‘‘3 years’’; and

16 (2) in subsection (b), by striking ‘‘three years’’

17 each place that term appears and inserting ‘‘5 years’’.

18 SEC. 1755. ADVERTISEMENTS FOR DRUG PARAPHERNALIA

19 AND SCHEDULE I CONTROLLED SUBSTANCES.

20 (a) DRUG PARAPHERNALIA.—Subsection (a)(1) of sec21 tion 422 of the Controlled Substances Act (21 U.S.C. 863)

22 is amended by inserting ‘‘, directly or indirectly advertise

23 for sale,’’ after ‘‘sell’’.

24 (b) DIRECTLY OR INDIRECTLY ADVERTISE FOR SALE

25 DEFINED.—Such section 422 is further amended by adding

26 at the end the following new subsection:
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1 ‘‘(g) In this section, the term ‘directly or indirectly ad2 vertise for sale’ means the use of any communication facil3 ity (as that term is defined in section 403(b)) to post, pub4 licize, transmit, publish, link to, broadcast, or otherwise ad5 vertise any matter (including a telephone number or elec6 tronic or mail address) with the intent to facilitate or pro7 mote a transaction in.’’.

8 (c) SCHEDULE I CONTROLLED SUBSTANCES.—Section

9 403(c) of such Act (21 U.S.C. 843(c)) is amended—

10 (1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and

11 (2) in paragraph (1), as so designated—

12 (A) in the first sentence, by inserting before

13 the period the following: ‘‘, or to directly or indi14 rectly advertise for sale (as that term is defined

15 in section 422(g)) any Schedule I controlled sub16 stance’’; and

17 (B) in the second sentence, by striking

18 ‘‘term ‘advertisement’ ’’ and inserting ‘‘term

19 ‘written advertisement’ ’’.

20 SEC. 1756. THEFT AND TRANSPORTATION OF ANHYDROUS

21 AMMONIA FOR PURPOSES OF ILLICIT PRO22 DUCTION OF CONTROLLED SUBSTANCES.

23 (a) IN GENERAL.—Part D of the Controlled Substances

24 Act (21 U.S.C. 841 et seq.) is amended by adding at the

25 end the following:
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1 ‘‘ANHYDROUS AMMONIA

2 ‘‘SEC. 423. (a) It is unlawful for any person—

3 ‘‘(1) to steal anhydrous ammonia, or

4 ‘‘(2) to transport stolen anhydrous ammonia

5 across State lines,

6 knowing, intending, or having reasonable cause to believe

7 that such anhydrous ammonia will be used to manufacture

8 a controlled substance in violation of this part.

9 ‘‘(b) Any person who violates subsection (a) shall be

10 imprisoned or fined, or both, in accordance with section

11 403(d) as if such violation were a violation of a provision

12 of section 403.’’.

13 (b) CLERICAL AMENDMENT.—The table of contents for

14 that Act is amended by inserting after the item relating

15 to section 421 the following new items:

‘‘Sec. 422. Drug paraphernalia.

‘‘Sec. 423. Anhydrous ammonia.’’.

16 (c) ASSISTANCE FOR CERTAIN RESEARCH.—

17 (1) AGREEMENT.—The Administrator of the

18 Drug Enforcement Administration shall seek to enter

19 into an agreement with Iowa State University in

20 order to permit the University to continue and ex21 pand its current research into the development of

22 inert agents that, when added to anhydrous ammo23 nia, eliminate the usefulness of anhydrous ammonia
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1 as an ingredient in the production of methamphet2 amine.

3 (2) REIMBURSABLE PROVISION OF FUNDS.—The

4 agreement under paragraph (1) may provide for the

5 provision to Iowa State University, on a reimbursable

6 basis, of $500,000 for purposes the activities specified

7 in that paragraph.

8 (3) AUTHORIZATION OF APPROPRIATIONS.—

9 There is hereby authorized to be appropriated for the

10 Drug Enforcement Administration for fiscal year

11 2000, $500,000 for purposes of carrying out the agree12 ment under this subsection.

13 SEC. 1757. CRIMINAL PROHIBITION ON DISTRIBUTION OF

14 CERTAIN INFORMATION RELATING TO THE

15 MANUFACTURE OF CONTROLLED SUB16 STANCES.

17 (a) IN GENERAL.—Part I of title 18, United States

18 Code, is amended by inserting after chapter 21 the following

19 new chapter:

20 ‘‘CHAPTER 22—CONTROLLED SUBSTANCES

‘‘Sec.

‘‘421. Distribution of information relating to manufacture of controlled substances.
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1 ‘‘§ 421. Distribution of information relating to manu2 facture of controlled substances

3 ‘‘(a) PROHIBITION ON DISTRIBUTION OF INFORMATION

4 RELATING TO MANUFACTURE OF CONTROLLED SUB5 STANCES.—

6 ‘‘(1) CONTROLLED SUBSTANCE DEFINED.—In

7 this subsection, the term ‘controlled substance’ has the

8 meaning given that term in section 102(6) of the Con9 trolled Substances Act (21 U.S.C. 802(6)).

10 ‘‘(2) PROHIBITION.—It shall be unlawful for any

11 person—

12 ‘‘(A) to teach or demonstrate the manufac13 ture of a controlled substance, or to distribute by

14 any means information pertaining to, in whole

15 or in part, the manufacture of a controlled sub16 stance, with the intent that the teaching, dem17 onstration, or information be used for, or in fur18 therance of, an activity that constitutes a Fed19 eral crime; or

20 ‘‘(B) to teach or demonstrate to any person

21 the manufacture of a controlled substance, or to

22 distribute to any person, by any means, infor23 mation pertaining to, in whole or in part, the

24 manufacture of a controlled substance, knowing

25 that such person intends to use the teaching,

26 demonstration, or information for, or in further-
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1 ance of, an activity that constitutes a Federal

2 crime.

3 ‘‘(b) PENALTY.—Any person who violates subsection

4 (a) shall be fined under this title, imprisoned not more than

5 10 years, or both.’’.

6 (b) CLERICAL AMENDMENT.—The table of chapters at

7 the beginning of part I of title 18, United States Code, is

8 amended by inserting after the item relating to chapter 21

9 the following new item:

‘‘22. Controlled Substances ................................................................. 421’’.

10 CHAPTER 2—OTHER MATTERS

11 SEC. 1761. WAIVER AUTHORITY FOR PHYSICIANS WHO DIS12 PENSE OR PRESCRIBE CERTAIN NARCOTIC

13 DRUGS FOR MAINTENANCE TREATMENT OR

14 DETOXIFICATION TREATMENT.

15 (a) REQUIREMENTS.—Section 303(g) of the Controlled

16 Substances Act (21 U.S.C. 823(g)) is amended—

17 (1) in paragraph (2), by striking ‘‘(A) security’’

18 and inserting ‘‘(i) security’’, and by striking ‘‘(B) the

19 maintenance’’ and inserting ‘‘(ii) the maintenance’’;

20 (2) by redesignating paragraphs (1) through (3)

21 as subparagraphs (A) through (C), respectively;

22 (3) by inserting ‘‘(1)’’ after ‘‘(g)’’;

23 (4) by striking ‘‘Practitioners who dispense’’ and

24 inserting ‘‘Except as provided in paragraph (2),

25 practitioners who dispense and prescribe’’; and
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1 (5) by adding at the end the following:

2 ‘‘(2)(A) Subject to subparagraphs (D), the require3 ments of paragraph (1) are waived in the case of the dis4 pensing or prescribing, by a physician, of narcotic drugs

5 in schedule III, IV, or V, or combinations of such drugs,

6 if the physician meets the conditions specified in subpara7 graph (B) and the narcotic drugs or combinations of such

8 drugs meet the conditions specified in subparagraph (C).

9 ‘‘(B)(i) For purposes of subparagraph (A), the condi10 tions specified in this subparagraph with respect to a physi11 cian are that, before dispensing or prescribing narcotic

12 drugs in schedule III, IV, or V, or combinations of such

13 drugs, to patients for maintenance or detoxification treat14 ment, the physician submit to the Secretary and the Attor15 ney General a notification of the intent of the physician

16 to begin dispensing or prescribing the drugs or combina17 tions for such purpose, and that the notification to the Sec18 retary also contain the following certifications by the physi19 cian:

20 ‘‘(I) The physician—

21 ‘‘(aa) is a physician licensed under State

22 law; and

23 ‘‘(bb) has training or experience and the

24 ability to treat and manage opiate-dependent

25 patients.
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1 ‘‘(II) With respect to patients to whom the physi2 cian will provide such drugs or combinations of

3 drugs, the physician has the capacity to refer the pa4 tients for appropriate counseling and other appro5 priate ancillary services.

6 ‘‘(III) In any case in which the physician is not

7 in a group practice, the total number of such patients

8 of the physician at any one time will not exceed the

9 applicable number. For purposes of this subclause, the

10 applicable number is 20, except that the Secretary

11 may by regulation change such total number.

12 ‘‘(IV) In any case in which the physician is in

13 a group practice, the total number of such patients of

14 the group practice at any one time will not exceed the

15 applicable number. For purposes of this subclause, the

16 applicable number is 20, except that the Secretary

17 may by regulation change such total number, and the

18 Secretary for such purposes may by regulation estab19 lish different categories on the basis of the number of

20 physicians in a group practice and establish for the

21 various categories different numerical limitations on

22 the number of such patients that the group practice

23 may have.

24 ‘‘(ii)(I) The Secretary may, in consultation with the

25 Administrator of the Drug Enforcement Administration,
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1 the Administrator of the Substance Abuse and Mental

2 Health Services Administration, the Director of the Center

3 for Substance Abuse Treatment, the Director of the National

4 Institute on Drug Abuse, and the Commissioner of Food

5 and Drugs, issue regulations through notice and comment

6 rulemaking or practice guidelines to implement this para7 graph. The regulations or practice guidelines shall address

8 the following:

9 ‘‘(aa) Approval of additional credentialing bod10 ies and the responsibilities of credentialing bodies.

11 ‘‘(bb) Additional exemptions from the require12 ments of this paragraph and any regulations under

13 this paragraph.

14 ‘‘(II) Nothing in the regulations or practice guidelines

15 under this clause may authorize any Federal official or em16 ployee to exercise supervision or control over the practice

17 of medicine or the manner in which medical services are

18 provided.

19 ‘‘(III)(aa) The Secretary shall issue a Treatment Im20 provement Protocol containing best practice guidelines for

21 the treatment and maintenance of opiate-dependent pa22 tients. The Secretary shall develop the protocol in consulta23 tion with the Director of the National Institute on Drug

24 Abuse, the Director of the Center for Substance Abuse Treat25 ment, the Administrator of the Drug Enforcement Adminis-
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1 tration, the Commissioner of Food and Drugs, the Adminis2 trator of the Substance Abuse and Mental Health Services

3 Administration, and other substance abuse disorder profes4 sionals. The protocol shall be guided by science.

5 ‘‘(bb) The protocol shall be issued not later than 120

6 days after the date of the enactment of the Methamphet7 amine Anti-Proliferation Act of 2000.

8 ‘‘(IV) For purposes of the regulations or practice

9 guidelines under subclause (I), a physician shall have train10 ing or experience under clause (i)(I)(bb) if the physician

11 meets one or more of the following conditions:

12 ‘‘(aa) The physician is certified in addiction

13 treatment by the American Society of Addiction Med14 icine, the American Board of Medical Specialties, the

15 American Osteopathic Academy of Addiction Medi16 cine, or any other certified body accredited by the

17 Secretary.

18 ‘‘(bb) The physician has been a clinical investi19 gator in a clinical trial conducted for purposes of se20 curing approval under section 505 of the Federal

21 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or sec22 tion 351 of the Public Health Service Act (42 U.S.C.

23 262) of a narcotic drug in schedule III, IV, or V for

24 the treatment of addiction, if such approval was

25 granted.
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1 ‘‘(cc) The physician has completed training

2 (through classroom situations, seminars, professional

3 society meetings, electronic communications, or other4 wise) provided by the American Society of Addiction

5 Medicine, the American Academy of Addiction Psy6 chiatry, the American Osteopathic Academy of Addic7 tion Medicine, the American Medical Association, the

8 American Osteopathic Association, the American Psy9 chiatric Association, or any other organization that

10 the Secretary determines appropriate for purposes of

11 this item. The curricula may include training in pa12 tient need for counseling regarding HIV, Hepatitis C,

13 and other infectious diseases, substance abuse coun14 seling, random drug testing, medical evaluation, an15 nual assessment, prenatal care, diagnosis of addic16 tion, rehabilitation services, confidentiality, and other

17 appropriate topics.

18 ‘‘(dd) The physician has training or experience

19 in the treatment and management of opiate-depend20 ent, which training or experience shall meet such cri21 teria as the Secretary may prescribe. Any such cri22 teria shall be effective for a period of three years after

23 the effective date of such criteria, but the Secretary

24 may extend the effective period of such criteria by ad25 ditional periods of three years for each extension if
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1 the Secretary determines that such extension is appro2 priate for purposes of this item. Any such extension

3 shall go into effect only if the Secretary publishes a

4 notice of such extension in the Federal Register dur5 ing the 30-day period ending on the date of the end

6 of the three-year effective period of such criteria to

7 which such extension will apply.

8 ‘‘(ee) The physician is certified in addiction

9 treatment by a State medical licensing board, or an

10 entity accredited by such board, unless the Secretary

11 determines (after an opportunity for a hearing) that

12 the training provided by such board or entity was in13 adequate for the treatment and management of opi14 ate-dependent patients.

15 ‘‘(C) For purposes of subparagraph (A), the conditions

16 specified in this subparagraph with respect to narcotic

17 drugs in schedule III, IV, or V, or combinations of such

18 drugs, are as follows:

19 ‘‘(i) The drugs or combinations of drugs have,

20 under the Federal Food, Drug and Cosmetic Act or

21 section 351 of the Public Health Service Act, been ap22 proved for use in maintenance or detoxification treat23 ment.

24 ‘‘(ii) The drugs or combinations of drugs have

25 not been the subject of an adverse determination. For
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1 purposes of this clause, an adverse determination is

2 a determination published in the Federal Register

3 and made by the Secretary, after consultation with

4 the Attorney General, that experience since the ap5 proval of the drug or combinations of drugs has

6 shown that the use of the drugs or combinations of

7 drugs for maintenance or detoxification treatment re8 quires additional standards respecting the qualifica9 tions of physicians to provide such treatment, or re10 quires standards respecting the quantities of the drugs

11 that may be provided for unsupervised use.

12 ‘‘(D)(i) A waiver under subparagraph (A) with respect

13 to a physician is not in effect unless (in addition to condi14 tions under subparagraphs (B) and (C)) the following con15 ditions are met:

16 ‘‘(I) The notification under subparagraph (B) is

17 in writing and states the name of the physician.

18 ‘‘(II) The notification identifies the registration

19 issued for the physician pursuant to subsection (f).

20 ‘‘(III) If the physician is a member of a group

21 practice, the notification states the names of the other

22 physicians in the practice and identifies the registra23 tions issued for the other physicians pursuant to sub24 section (f).
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1 ‘‘(IV) A period of 45 days has elapsed after the

2 date on which the notification was submitted, and

3 during such period the physician does not receive

4 from the Secretary a written notice that one or more

5 of the conditions specified in subparagraph (B), sub6 paragraph (C), or this subparagraph, have not been

7 met.

8 ‘‘(ii) The Secretary shall provide to the Attorney Gen9 eral such information contained in notifications under sub10 paragraph (B) as the Attorney General may request.

11 ‘‘(E) If in violation of subparagraph (A) a physician

12 dispenses or prescribes narcotic drugs in schedule III, IV,

13 or V, or combinations of such drugs, for maintenance treat14 ment or detoxification treatment, the Attorney General

15 may, for purposes of section 304(a)(4), consider the physi16 cian to have committed an act that renders the registration

17 of the physician pursuant to subsection (f) to be inconsistent

18 with the public interest.

19 ‘‘(F)(i) Upon determining that a physician meets the

20 conditions specified in subparagraph (B), the Secretary

21 shall notify the physician and the Attorney General.

22 ‘‘(ii) Upon receiving notice with respect to a physician

23 under clause (i), the Attorney General shall assign the phy24 sician an identification number under this paragraph for

25 inclusion with the physician’s current registration to pre-
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1 scribe narcotics. An identification number assigned a phy2 sician under this clause shall be appropriate to preserve the

3 confidentiality of a patient prescribed narcotic drugs cov4 ered by this paragraph by the physician.

5 ‘‘(iii) If the Secretary fails to make a determination

6 described in clause (i) by the end of the 45-day period begin7 ning on the date of the receipt by the Secretary of a notifica8 tion from a physician under subparagraph (B), the Attor9 ney General shall assign the physician an identification

10 number described in clause (ii) at the end of such period.

11 ‘‘(G) In this paragraph:

12 ‘‘(i) The term ‘group practice’ has the meaning

13 given such term in section 1877(h)(4) of the Social

14 Security Act.

15 ‘‘(ii) The term ‘physician’ has the meaning given

16 such term in section 1861(r) of the Social Security

17 Act.

18 ‘‘(H)(i) This paragraph takes effect on the date of the

19 enactment of the Methamphetamine Anti-Proliferation Act

20 of 2000, and remains in effect thereafter except as provided

21 in clause (iii) (relating to a decision by the Secretary or

22 the Attorney General that this paragraph should not re23 main in effect).

24 ‘‘(ii) For the purposes relating to clause (iii), the Sec25 retary and the Attorney General shall, during the 3-year
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1 period beginning on the date of the enactment of the Meth2 amphetamine Anti-Proliferation Act of 2000, make deter3 minations in accordance with the following:

4 ‘‘(I)(aa) The Secretary shall—

5 ‘‘(aaa) make a determination of whether

6 treatments provided under waivers under sub7 paragraph (A) have been effective forms of main8 tenance treatment and detoxification treatment

9 in clinical settings;

10 ‘‘(bbb) make a determination regarding

11 whether such waivers have significantly in12 creased (relative to the beginning of such period)

13 the availability of maintenance treatment and

14 detoxification treatment; and

15 ‘‘(ccc) make a determination regarding

16 whether such waivers have adverse consequences

17 for the public health.

18 ‘‘(bb) In making determinations under this sub19 clause, the Secretary—

20 ‘‘(aaa) may collect data from the practi21 tioners for whom waivers under subparagraph

22 (A) are in effect;

23 ‘‘(bbb) shall issue appropriate guidelines or

24 regulations (in accordance with procedures for

25 substantive rules under section 553 of title 5,
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1 United States Code) specifying the scope of the

2 data that will be required to be provided under

3 this subclause and the means through which the

4 data will be collected; and

5 ‘‘(ccc) shall, with respect to collecting such

6 data, comply with applicable provisions of chap7 ter 6 of title 5, United States Code (relating to

8 a regulatory flexibility analysis), and of chapter

9 8 of such title (relating to congressional review

10 of agency rulemaking).

11 ‘‘(II) The Attorney General shall—

12 ‘‘(aa) make a determination of the extent to

13 which there have been violations of the numerical

14 limitations established under subparagraph (B)

15 for the number of individuals to whom a practi16 tioner may provide treatment; and

17 ‘‘(bb) make a determination regarding

18 whether waivers under subparagraph (A) have

19 increased (relative to the beginning of such pe20 riod) the extent to which narcotic drugs in sched21 ule III, IV, or V, or combinations of such drugs,

22 are being dispensed or prescribed, or possessed,

23 in violation of this Act.

24 ‘‘(iii) If, before the expiration of the period specified

25 in clause (ii), the Secretary or the Attorney General pub-
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1 lishes in the Federal Register a decision, made on the basis

2 of determinations under such clause, that this paragraph

3 should not remain in effect, this paragraph ceases to be in

4 effect 60 days after the date on which the decision is so

5 published. The Secretary shall, in making any such deci6 sion, consult with the Attorney General, and shall, in pub7 lishing the decision in the Federal Register, include any

8 comments received from the Attorney General for inclusion

9 in the publication. The Attorney General shall, in making

10 any such decision, consult with the Secretary, and shall,

11 in publishing the decision in the Federal Register, include

12 any comments received from the Secretary for inclusion in

13 the publication.

14 ‘‘(I) During the 3-year period beginning on the date

15 of the enactment of the Methamphetamine Anti-Prolifera16 tion Act of 2000, a State may not preclude a practitioner

17 from dispensing or prescribing narcotic drugs in schedule

18 III, IV, or V, or combinations of such drugs, to patients

19 for maintenance or detoxification treatment in accordance

20 with this paragraph, or the other amendments made by sec21 tion 22 of that Act, unless, before the expiration of that 3-

22 year period, the State enacts a law prohibiting a practi23 tioner from dispensing or prescribing such drugs or com24 bination of drugs.’’.
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1 (b) CONFORMING AMENDMENTS.—Section 304 of the

2 Controlled Substances Act (21 U.S.C. 824) is amended—

3 (1) in subsection (a), in the matter following

4 paragraph (5), by striking ‘‘section 303(g)’’ each

5 place the term appears and inserting ‘‘section

6 303(g)(1)’’; and

7 (2) in subsection (d), by striking ‘‘section

8 303(g)’’ and inserting ‘‘section 303(g)(1)’’.

9 (c) AUTHORIZATION OF APPROPRIATIONS.—There is

10 hereby authorized to be appropriated for purposes of activi11 ties under section 303(g)(2) of the Controlled Substances

12 Act, as added by subsection (a), amounts as follows:

13 (1) For fiscal year 2000, $3,000,000.

14 (2) For each fiscal year after fiscal year 2000,

15 such sums as may be necessary for such fiscal year.

16 Subtitle C—Cocaine Powder

17 SEC. 1771. SHORT TITLE.

18 This subtitle may be cited as the ‘‘Powder Cocaine

19 Sentencing Act of 2000’’.

20 SEC. 1772. SENTENCING FOR VIOLATIONS INVOLVING CO21 CAINE POWDER.

22 (a) AMENDMENT OF CONTROLLED SUBSTANCES

23 ACT.—

24 (1) LARGE QUANTITIES.—Section

25 401(b)(1)(A)(ii) of the Controlled Substances Act (21
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1 U.S.C. 841(b)(1)(A)(ii)) is amended by striking ‘‘5

2 kilograms’’ and inserting ‘‘500 grams’’.

3 (2) SMALL QUANTITIES.—Section

4 401(b)(1)(B)(ii) of the Controlled Substances Act (21

5 U.S.C. 841(b)(1)(B)(ii)) is amended by striking ‘‘500

6 grams’’ and inserting ‘‘50 grams’’.

7 (b) AMENDMENT OF CONTROLLED SUBSTANCES IM8 PORT AND EXPORT ACT.—

9 (1) LARGE QUANTITIES.—Section 1010(b)(1)(B)

10 of the Controlled Substances Import and Export Act

11 (21 U.S.C. 960(b)(1)(B)) is amended by striking ‘‘5

12 kilograms’’ and inserting ‘‘500 grams’’.

13 (2) SMALL QUANTITIES.—Section 1010(b)(2)(B)

14 of the Controlled Substances Import and Export Act

15 (21 U.S.C. 960(b)(2)(B)) is amended by striking ‘‘500

16 grams’’ and inserting ‘‘50 grams’’.

17 (c) AMENDMENT OF SENTENCING GUIDELINES.—Pur18 suant to section 994 of title 28, United States Code, the

19 United States Sentencing Commission shall amend the Fed20 eral sentencing guidelines to reflect the amendments made

21 by this section.
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1 Subtitle D—Education Matters

2 SEC. 1781. SAFE SCHOOLS.

3 (a) AMENDMENTS.—Part F of title XIV of the Elemen4 tary and Secondary Education Act of 1965 (20 U.S.C. 8921

5 et seq.) is amended as follows:

6 (1) SHORT TITLE.—Section 14601(a) is amended

7 by replacing ‘‘Gun-Free’’ with ‘‘Safe’’, and ‘‘1994’’

8 with ‘‘1999’’.

9 (2) REQUIREMENTS.—Section 14601(b)(1) is

10 amended by inserting after ‘‘determined’’ the fol11 lowing: ‘‘to be in possession of felonious quantities of

12 an illegal drug, on school property under the jurisdic13 tion of, or in a vehicle operated by an employee or

14 agent of, a local educational agency in that State,

15 or’’.

16 (3) DEFINITIONS.—Section 14601(b)(4) is

17 amended by replacing ‘‘Definition’’ with ‘‘Defini18 tions’’ in the catchline, by replacing ‘‘section’’ in the

19 matter under the catchline with ‘‘part’’, by redesig20 nating the matter under the catchline after the

21 comma as subparagraph (A), by replacing the period

22 with a semicolon, and by adding new subparagraphs

23 (B), (C), and (D) as follows:

24 ‘‘(B) the term ‘illegal drug’ means a con25 trolled substance, as defined in section 102(6) of
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1 the Controlled Substances Act (21 U.S.C.

2 802(6)), the possession of which is unlawful

3 under the Act (21 U.S.C. 801 et seq.) or under

4 the Controlled Substances Import and Export

5 Act (21 U.S.C. 951 et seq.), but does not mean

6 a controlled substance used pursuant to a valid

7 prescription or as authorized by law; and

8 ‘‘(C) the term ‘illegal drug paraphernalia’

9 means drug paraphernalia, as defined in section

10 422(d) of the Controlled Substances Act (21

11 U.S.C. 863(d)), except that the first sentence of

12 that section shall be applied by inserting ‘or

13 under the Controlled Substances Import and Ex14 port Act (21 U.S.C. 951 et seq.)’, before the pe15 riod.

16 ‘‘(D) the term ‘felonious quantities of an il17 legal drug’ means any quantity of an illegal

18 drug—

19 ‘‘(i) possession of which quantity

20 would, under Federal, State, or local law,

21 either constitute a felony or indicate an in22 tent to distribute; or

23 ‘‘(ii) that is possessed with an intent to

24 distribute.’’.
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1 (4) REPORT TO STATE.—Section

2 14601(d)(2)(C) is amended by inserting ‘‘illegal

3 drugs or’’ before ‘‘weapons’’.

4 (5) REPEALER.—Section 14601 is amended

5 by striking subsection (f).

6 (6) POLICY REGARDING CRIMINAL JUSTICE

7 SYSTEM REFERRAL.—Section 14602(a) is

8 amended by replacing ‘‘served by’’ with ‘‘under

9 the jurisdiction of’’, and by inserting after

10 ‘‘who’’ the following: ‘‘is in possession of an ille11 gal drug, or illegal drug paraphernalia, on

12 school property under the jurisdiction of, or in

13 a vehicle operated by an employee or agent of,

14 such agency, or who’’.

15 (7) DATA AND POLICY DISSEMINATION

16 UNDER IDEA.—Section 14603 is amended by in17 serting ‘‘current’’ before ‘‘policy’’, by striking ‘‘in

18 effect on October 20, 1994’’, by striking all the

19 matter after ‘‘schools’’ and inserting a period

20 thereafter, and by inserting before ‘‘engaging’’

21 the following: ‘‘possessing illegal drugs, or illegal

22 drug paraphernalia, on school property, or in

23 vehicles operated by employees or agents of,

24 schools or local educational agencies, or’’.
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1 (b) COMPLIANCE DATE; REPORTING.—(1) States shall

2 have 2 years from the date of the enactment of this Act to

3 comply with the requirements established in the amend4 ments made by subsection (a).

5 (2) Not later than 3 years after the date of the enact6 ment of this Act, the Secretary of Education shall submit

7 to Congress a report on any State that is not in compliance

8 with the requirements of this section.

9 (3) Not later than 2 years after the date of the enact10 ment of this Act, the Secretary of Education shall submit

11 to Congress a report analyzing the strengths and weaknesses

12 of approaches regarding the disciplining of children with

13 disabilities.

14 SEC. 1782. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.

15 Subpart 1 of part A of title I of the Elementary and

16 Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.)

17 is amended by inserting after section 1115A of such Act

18 (20 U.S.C. 6316) the following:

19 ‘‘SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL

20 CHOICE.

21 ‘‘(a) IN GENERAL.—Notwithstanding any other provi22 sion of law, if a student is eligible to be served under section

23 1115(b), or attends a school eligible for a schoolwide pro24 gram under section 1114, and becomes a victim of a violent

25 criminal offense, including drug-related violence, while in
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1 or on the grounds of a public elementary school or sec2 ondary school that the student attends and that receives as3 sistance under this part, then the local educational agency

4 may use funds provided under this part or under any other

5 Federal education program to pay the supplementary costs

6 for such student to attend another school. The agency may

7 use the funds to pay for the supplementary costs of such

8 student to attend any other public or private elementary

9 school or secondary school, including a religious school, in

10 the same State as the school where the criminal offense oc11 curred, that is selected by the student’s parent. The State

12 educational agency shall determine what actions constitute

13 a violent criminal offense for purposes of this section.

14 ‘‘(b) SUPPLEMENTARY COSTS.—The supplementary

15 costs referred to in subsection (a) shall not exceed—

16 ‘‘(1) in the case of a student for whom funds

17 under this section are used to enable the student to at18 tend a public elementary school or secondary school

19 served by a local educational agency that also serves

20 the school where the violent criminal offense occurred,

21 the costs of supplementary educational services and

22 activities described in section 1114(b) or 1115(c) that

23 are provided to the student;

24 ‘‘(2) in the case of a student for whom funds

25 under this section are used to enable the student to at-
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1 tend a public elementary school or secondary school

2 served by a local educational agency that does not

3 serve the school where the violent criminal offense oc4 curred but is located in the same State—

5 ‘‘(A) the costs of supplementary educational

6 services and activities described in section

7 1114(b) or 1115(c) that are provided to the stu8 dent; and

9 ‘‘(B) the reasonable costs of transportation

10 for the student to attend the school selected by the

11 student’s parent; and

12 ‘‘(3) in the case of a student for whom funds

13 under this section are used to enable the student to at14 tend a private elementary school or secondary school,

15 including a religious school, the costs of tuition, re16 quired fees, and the reasonable costs of such transpor17 tation.

18 ‘‘(c) CONSTRUCTION.—Nothing in this Act or any

19 other Federal law shall be construed to prevent a parent

20 assisted under this section from selecting the public or pri21 vate, including religious, elementary school or secondary

22 school that a child of the parent will attend within the

23 State.

24 ‘‘(d) CONSIDERATION OF ASSISTANCE.—Subject to sub25 section (h), assistance made available under this section
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1 that is used to pay the costs for a student to attend a private

2 or religious school shall not be considered to be Federal aid

3 to the school, and the Federal Government shall have no

4 authority to influence or regulate the operations of a private

5 or religious school as a result of assistance received under

6 this section.

7 ‘‘(e) CONTINUING ELIGIBILITY.—A student assisted

8 under this section shall remain eligible to continue receiving

9 assistance under this section for at least 3 academic years

10 without regard to whether the student is eligible for assist11 ance under section 1114 or 1115(b).

12 ‘‘(f) TUITION CHARGES.—Assistance under this section

13 may not be used to pay tuition or required fees at a private

14 elementary school or secondary school in an amount that

15 is greater than the tuition and required fees paid by stu16 dents not assisted under this section at such school.

17 ‘‘(g) SPECIAL RULE.—Any school receiving assistance

18 provided under this section shall comply with title VI of

19 the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) and

20 not discriminate on the basis race, color, or national origin.

21 ‘‘(h) ASSISTANCE; TAXES AND OTHER FEDERAL PRO22 GRAMS.—

23 ‘‘(1) ASSISTANCE TO FAMILIES, NOT SCHOOLS.—

24 Assistance provided under this section shall be consid25 ered to be aid to families, not schools. Use of such as-
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1 sistance at a school shall not be construed to be Fed2 eral financial aid or assistance to that school.

3 ‘‘(2) TAXES AND DETERMINATIONS OF ELIGI4 BILITY FOR OTHER FEDERAL PROGRAMS.—Assistance

5 provided under this section to a student shall not be

6 considered to be income of the student or the parent

7 of such student for Federal, State, or local tax pur8 poses or for determining eligibility for any other Fed9 eral program.

10 ‘‘(i) PART B OF THE INDIVIDUALS WITH DISABILITIES

11 EDUCATION ACT.—Nothing in this section shall be con12 strued to affect the requirements of part B of the Individ13 uals with Disabilities Education Act (20 U.S.C. 1411 et

14 seq.).

15 ‘‘(j) MAXIMUM AMOUNT.—Notwithstanding any other

16 provision of this section, the amount of assistance provided

17 under this part for a student shall not exceed the per pupil

18 expenditure for elementary or secondary education, as ap19 propriate, by the local educational agency that serves the

20 school where the criminal offense occurred for the fiscal year

21 preceding the fiscal year for which the determination is

22 made.’’.

23 SEC. 1783. TRANSFER OF REVENUES.

24 (a) IN GENERAL.—Notwithstanding any other provi25 sion of Federal law, a State, a State educational agency,
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1 or a local educational agency may transfer any non-Federal

2 public funds associated with the education of a student who

3 is a victim of a violent criminal offense while in or on the

4 grounds of a public elementary school or secondary school

5 served by a local educational agency to another local edu6 cational agency or to a private elementary school or sec7 ondary school, including a religious school.

8 (b) DEFINITIONS.—For the purpose of subsection (a),

9 the terms ‘‘elementary school’’, ‘‘secondary school’’, ‘‘local

10 educational agency’’, and ‘‘State educational agency’’ have

11 the meanings given such terms in section 14101 of the Ele12 mentary and Secondary Education Act of 1965 (20 U.S.C.

13 8801).

14 Subtitle E—Miscellaneous

15 SEC. 1791. NOTICE; CLARIFICATION.

16 (a) NOTICE OF ISSUANCE.—Section 3103a of title 18,

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

18 following new sentence: ‘‘With respect to any issuance under

19 this section or any other provision of law (including section

20 3117 and any rule), any notice required, or that may be

21 required, to be given may be delayed pursuant to the stand22 ards, terms, and conditions set forth in section 2705, unless

23 otherwise expressly provided by statute.’’.
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1 (b) CLARIFICATION.—(1) Section 2(e) of Public Law

2 95–78 (91 Stat. 320) is amended by adding at the end the

3 following:

4 ‘‘Subdivision (d) of such rule, as in effect on this date, is

5 amended by inserting ‘tangible’ before ‘property’ each place

6 it occurs.’’.

7 (2) The amendment made by paragraph (1) shall take

8 effect on the date of the enactment of this Act.

9 SEC. 1792. DOMESTIC TERRORISM ASSESSMENT AND RE10 COVERY.

11 (a) IN GENERAL.—The Federal Bureau of Investiga12 tion shall prepare a study assessing—

13 (1) the threat posed by the Fuerzas Armadas de

14 Liberacion Nacional Puertorriquena (FALN) and Los

15 Macheteros terrorist organizations to the United

16 States and its territories as of July 31, 1999; and

17 (2) what effect the President’s offer of clemency

18 to 16 FALN and Los Macheteros members on August

19 11, 1999, and the subsequent release of 11 of those

20 members, will have on the threat posed by those ter21 rorist organizations to the United States and its ter22 ritories.

23 (b) ISSUES EXAMINED.—In conducting and preparing

24 the study under subsection (a), the Federal Bureau of Inves25 tigation shall address—
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1 (1) the threat posed by the FALN and Los

2 Macheteros organizations to law enforcement officers,

3 prosecutors, defense attorneys, witnesses, and judges

4 involved in the prosecution of members of the FALN

5 and Los Macheteros, both in the United States and its

6 territories;

7 (2) the roles played by each the 16 members of8 fered clemency by the President on August 11, 1999,

9 in the FALN and Los Macheteros organizations;

10 (3) the extent to which the FALN and Los

11 Macheteros organizations are associated with other

12 known terrorist organizations or countries suspected

13 of sponsoring terrorism;

14 (4) the threat posed to the national security in15 terests of the United States by the FALN and Los

16 Macheteros organizations;

17 (5) whether the offer of clemency to, or release of,

18 any of the 16 FALN or Los Macheteros members

19 would violate, or be inconsistent with, the United

20 States’ obligations under international treaties and

21 agreements governing terrorist activity; and

22 (6) the effect on law enforcement’s ability to solve

23 open cases and apprehend fugitives resulting from the

24 offer of clemency to the 16 FALN and Los Macheteros

25 members, without first requiring each of them to pro-
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1 vide the government all truthful information and evi2 dence he or she has concerning open investigations

3 and fugitives associated with the FALN and Los

4 Macheteros organizations.

5 (c) REPORT.—Not later than 30 days after the date

6 of the enactment of this Act, the Federal Bureau of Inves7 tigation shall submit to Congress a report on the study con8 ducted under subsection (a).

9 SEC. 1793. ANTIDRUG MESSAGES ON FEDERAL GOVERN10 MENT INTERNET WEBSITES.

11 Not later than 90 days after the date of the enactment

12 of this Act, the head of each department, agency, and estab13 lishment of the Federal Government shall, in consultation

14 with the Director of the Office of National Drug Control

15 Policy, place antidrug messages on appropriate Internet

16 websites controlled by such department, agency, or establish17 ment which messages shall, where appropriate, contain an

18 electronic hyperlink to the Internet website, if any, of the

19 Office.

20 SEC. 1794. STATE SCHOOLS.

21 (a) AMENDMENTS.—Part F of title XIV of the Elemen22 tary and Secondary Education Act of 1965 (20 U.S.C. 8921

23 et seq.) is amended as follows:
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1 (1) SHORT TITLE.—Section 14601(a) is amended

2 by replacing ‘‘Gun-Free’’ with ‘‘Safe’’, and ‘‘1994’’

3 with ‘‘1999’’.

4 (2) REQUIREMENTS.—Section 14601(b)(1) is

5 amended by inserting after ‘‘determined’’ the fol6 lowing: ‘‘to be in possession of felonious quantities of

7 an illegal drug, on school property under the jurisdic8 tion of, or in a vehicle operated by an employee or

9 agent of, a local educational agency in that State,

10 or’’.

11 (3) DEFINITIONS.—Section 14601(b)(4) is

12 amended by replacing ‘‘Definition’’ with ‘‘Defini13 tions’’ in the catchline, by replacing ‘‘section’’ in the

14 matter under the catchline with ‘‘part’’, by redesig15 nating the matter under the catchline after the

16 comma as subparagraph (A), by replacing the period

17 with a semicolon, and by adding new subparagraphs

18 (B), (C), and (D) as follows:

19 ‘‘(B) The term ‘illegal drug’ means a con20 trolled substance, as defined in section 102(6) of

21 the Controlled Substances Act (21 U.S.C.

22 802(6)), the possession of which is unlawful

23 under the Act (21 U.S.C. 801 et seq.) or under

24 the Controlled Substances Import and Export

25 Act (21 U.S.C. 951 et seq.), but does not mean
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1 a controlled substance used pursuant to a valid

2 prescription or as authorized by law.

3 ‘‘(C) The term ‘illegal drug paraphernalia’

4 means drug paraphernalia, as defined in section

5 422(d) of the Controlled Substances Act (21

6 U.S.C. 863(d)), except that the first sentence of

7 that section shall be applied by inserting ‘or

8 under the Controlled Substances Import and Ex9 port Act (21 U.S.C. 951 et seq.)’, before the pe10 riod.

11 ‘‘(D) The term ‘felonious quantities of an il12 legal drug’ means any quantity of an illegal

13 drug—

14 ‘‘(i) possession of which quantity

15 would, under Federal, State, or local law,

16 either constitute a felony or indicate an in17 tent to distribute; or

18 ‘‘(ii) that is possessed with an intent to

19 distribute.’’.

20 (4) REPORT TO STATE.—Section 14601(d)(2)(C)

21 is amended by inserting ‘‘illegal drugs or’’ before

22 ‘‘weapons’’.

23 (5) REPEALER.—Section 14601 is amended by

24 striking subsection (f).
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1 (6) POLICY REGARDING CRIMINAL JUSTICE SYS2 TEM REFERRAL.—Section 14602(a) is amended by re3 placing ‘‘served by’’ with ‘‘under the jurisdiction of’’,

4 and by inserting after ‘‘who’’ the following: ‘‘is in

5 possession of an illegal drug, or illegal drug para6 phernalia, on school property under the jurisdiction

7 of, or in a vehicle operated by an employee or agent

8 of, such agency, or who’’.

9 (7) DATA AND POLICY DISSEMINATION UNDER

10 IDEA.—Section 14603 is amended by inserting ‘‘cur11 rent’’ before ‘‘policy’’, by striking ‘‘in effect on Octo12 ber 20, 1994’’, by striking all the matter after

13 ‘‘schools’’ and inserting a period thereafter, and by

14 inserting before ‘‘engaging’’ the following: ‘‘possessing

15 illegal drugs, or illegal drug paraphernalia, on school

16 property, or in vehicles operated by employees or

17 agents of, schools or local educational agencies, or’’.

18 (b) COMPLIANCE DATE; REPORTING.—(1) States shall

19 have 2 years from the date of enactment of this Act to com20 ply with the requirements established in the amendments

21 made by subsection (a).

22 (2) Not later than 3 years after the date of enactment

23 of this Act, the Secretary of Education shall submit to Con24 gress a report on any State that is not in compliance with

25 the requirements of this part.
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1 (3) Not later than 2 years after the date of enactment

2 of this Act, the Secretary of Education shall submit to Con3 gress a report analyzing the strengths and weaknesses of

4 approaches regarding the disciplining of children with dis5 abilities.

6 SEC. 1795. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.

7 Subpart 1 of part A of title I of the Elementary and

8 Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.)

9 is amended by inserting after section 1115A of such Act

10 (20 U.S.C. 6316) the following:

11 ‘‘SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL

12 CHOICE.

13 ‘‘(a) IN GENERAL.—Notwithstanding any other provi14 sion of law, if a student is eligible to be served under section

15 1115(b), or attends a school eligible for a schoolwide pro16 gram under section 1114, and becomes a victim of a violent

17 criminal offense, including drug-related violence, while in

18 or on the grounds of a public elementary school or sec19 ondary school that the student attends and that receives as20 sistance under this part, then the local educational agency

21 may use funds provided under this part or under any other

22 Federal education program to pay the supplementary costs

23 for such student to attend another school. The agency may

24 use the funds to pay for the supplementary costs of such

25 student to attend any other public or private elementary
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1 school or secondary school, including a religious school, in

2 the same State as the school where the criminal offense oc3 curred, that is selected by the student’s parent. The State

4 educational agency shall determine what actions constitute

5 a violent criminal offense for purposes of this section.

6 ‘‘(b) SUPPLEMENTARY COSTS.—The supplementary

7 costs referred to in subsection (a) shall not exceed—

8 ‘‘(1) in the case of a student for whom funds

9 under this section are used to enable the student to at10 tend a public elementary school or secondary school

11 served by a local educational agency that also serves

12 the school where the violent criminal offense occurred,

13 the costs of supplementary educational services and

14 activities described in section 1114(b) or 1115(c) that

15 are provided to the student;

16 ‘‘(2) in the case of a student for whom funds

17 under this section are used to enable the student to at18 tend a public elementary school or secondary school

19 served by a local educational agency that does not

20 serve the school where the violent criminal offense oc21 curred but is located in the same State—

22 ‘‘(A) the costs of supplementary educational

23 services and activities described in section

24 1114(b) or 1115(c) that are provided to the stu25 dent; and
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1 ‘‘(B) the reasonable costs of transportation

2 for the student to attend the school selected by the

3 student’s parent; and

4 ‘‘(3) in the case of a student for whom funds

5 under this section are used to enable the student to at6 tend a private elementary school or secondary school,

7 including a religious school, the costs of tuition, re8 quired fees, and the reasonable costs of such transpor9 tation.

10 ‘‘(c) CONSTRUCTION.—Nothing in this Act or any

11 other Federal law shall be construed to prevent a parent

12 assisted under this section from selecting the public or pri13 vate, including religious, elementary school or secondary

14 school that a child of the parent will attend within the

15 State.

16 ‘‘(d) CONSIDERATION OF ASSISTANCE.—Subject to sub17 section (h), assistance made available under this section

18 that is used to pay the costs for a student to attend a private

19 or religious school shall not be considered to be Federal aid

20 to the school, and the Federal Government shall have no

21 authority to influence or regulate the operations of a private

22 or religious school as a result of assistance received under

23 this section.

24 ‘‘(e) CONTINUING ELIGIBILITY.—A student assisted

25 under this section shall remain eligible to continue receiving
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1 assistance under this section for at least 3 academic years

2 without regard to whether the student is eligible for assist3 ance under section 1114 or 1115(b).

4 ‘‘(f) TUITION CHARGES.—Assistance under this section

5 may not be used to pay tuition or required fees at a private

6 elementary school or secondary school in an amount that

7 is greater than the tuition and required fees paid by stu8 dents not assisted under this section at such school.

9 ‘‘(g) SPECIAL RULE.—Any school receiving assistance

10 provided under this section shall comply with title VI of

11 the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) and

12 not discriminate on the basis of race, color, or national ori13 gin.

14 ‘‘(h) ASSISTANCE; TAXES AND OTHER FEDERAL PRO15 GRAMS.—

16 ‘‘(1) ASSISTANCE TO FAMILIES, NOT SCHOOLS.—

17 Assistance provided under this section shall be consid18 ered to be aid to families, not schools. Use of such as19 sistance at a school shall not be construed to be Fed20 eral financial aid or assistance to that school.

21 ‘‘(2) TAXES AND DETERMINATIONS OF ELIGI22 BILITY FOR OTHER FEDERAL PROGRAMS.—Assistance

23 provided under this section to a student shall not be

24 considered to be income of the student or the parent

25 of such student for Federal, State, or local tax pur-
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1 poses or for determining eligibility for any other Fed2 eral program.

3 ‘‘(i) PART B OF THE INDIVIDUALS WITH DISABILITIES

4 EDUCATION ACT.—Nothing in this section shall be con5 strued to affect the requirements of part B of the Individ6 uals with Disabilities Education Act (20 U.S.C. 1411 et

7 seq.).

8 ‘‘(j) MAXIMUM AMOUNT.—Notwithstanding any other

9 provision of this section, the amount of assistance provided

10 under this part for a student shall not exceed the per pupil

11 expenditure for elementary or secondary education, as ap12 propriate, by the local educational agency that serves the

13 school where the criminal offense occurred for the fiscal year

14 preceding the fiscal year for which the determination is

15 made.’’.

16 SEC. 1796. TRANSFER OF REVENUES.

17 (a) IN GENERAL.—Notwithstanding any other provi18 sion of Federal law, a State, a State educational agency,

19 or a local educational agency may transfer any non-Federal

20 public funds associated with the education of a student who

21 is a victim of a violent criminal offense while in or on the

22 grounds of a public elementary school or secondary school

23 served by a local educational agency to another local edu24 cational agency or to a private elementary school or sec25 ondary school, including a religious school.
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1 (b) DEFINITIONS.—For the purpose of subsection (a),

2 the terms ‘‘elementary school’’, ‘‘secondary school’’, ‘‘local

3 educational agency’’, and ‘‘State educational agency’’ have

4 the meanings given such terms in section 14101 of the Ele5 mentary and Secondary Education Act of 1965 (20 U.S.C.

6 8801).

7 SEC. 1797. INCREASED PENALTIES FOR DISTRIBUTING

8 DRUGS TO MINORS.

9 Section 418 of the Controlled Substances Act (21

10 U.S.C. 859) is amended—

11 (1) in subsection (a), by strking ‘‘one year’’ and

12 inserting ‘‘3 years’’; and

13 (2) in subsection (b), by striking ‘‘one year’’ and

14 inserting ‘‘5 years’’.

15 SEC. 1798. INCREASED PENALTY FOR DRUG TRAFFICKING

16 IN OR NEAR A SCHOOL OR OTHER PRO17 TECTED LOCATION.

18 Section 419 of the Controlled Substances Act (21

19 U.S.C. 860) is amended—

20 (1) in subsection (a), by striking ‘‘one year’’ and

21 inserting ‘‘3 years’’; and

22 (2) in subsection (b), by striking ‘‘three years’’

23 each place that term appears and inserting ‘‘5 years’’.
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1 SEC. 1799. SEVERABILITY.

2 Any provision of this title held to be invalid or unen3 forceable by its terms, or as applied to any person or cir4 cumstance, shall be construed as to give the maximum effect

5 permitted by law, unless such provision is held to be utterly

6 invalid or unenforceable, in which event such provision

7 shall be severed from this title and shall not affect the appli8 cability of the remainder of this title, or of such provision,

9 to other persons not similarly situated or to other, dis10 similar circumstances.

11 TITLE XVIII—PROTECTION FROM

12 THE IMPACT OF BANKRUPTCY

13 OF CERTAIN ELECTRIC UTILI14 TIES

15 SEC. 1801. SHORT TITLE.

16 This title may be cited as the ‘‘Emergency Imported

17 Electric Power Price Reduction Act of 2000’’.

18 SEC. 1802. FINDINGS AND PURPOSES.

19 (a) FINDINGS.—Congress finds that—

20 (1) the protection of the public health and wel21 fare, the preservation of national security, and the

22 regulation of interstate and foreign commerce require

23 that electric power imported into the United States be

24 priced fairly and competitively;
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1 (2) the importation of electric power into the

2 United States is a matter vested with the public in3 terest that—

4 (A) involves an essential and extensively

5 regulated infrastructure industry; and

6 (B) affects consumers, the cost of goods

7 manufactured and services rendered, and the eco8 nomic well-being and livelihood of individuals

9 and society;

10 (3) it is essential that imported electric power be

11 priced—

12 (A) in a manner that is competitive with

13 domestic electric power and thereby contribute to

14 robust and sound national and regional econo15 mies; and

16 (B) not at a rate that is so high as to result

17 in the imminent bankruptcy of electric utilities

18 in a State; and

19 (4) the purchase of imported electric power by

20 the Vermont Joint Owners under the Firm Power and

21 Energy Contract with Hydro-Quebec dated December

22 4, 1987—

23 (A) is not consistent with the findings stat24 ed in paragraphs (1), (2), and (3); and
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1 (B) threatens the economic well-being of the

2 States and regions in which the imported electric

3 power is provided contrary to the public policy

4 of the United States as set forth in the findings

5 stated in paragraphs (1), (2), and (3).

6 (b) PURPOSES.—The purposes of this title are—

7 (1) to facilitate the public policy of the United

8 States as set forth in the findings stated in para9 graphs (1), (2), and (3) of subsection (a);

10 (2) to remove a serious threat to the economic

11 well-being of the States and regions in which im12 ported electric power is provided under the contract

13 referred to in section 1802(a)(4); and

14 (3) to facilitate revisions to the price elements of

15 the contract referred to in section 1802(a)(4) by de16 claring and making unlawful, effective 180 days after

17 the date of enactment of this Act, the contract as it

18 exists on the date of enactment of this Act.

19 SEC. 1803. UNLAWFUL CONTRACT AND AMENDED CON20 TRACT.

21 (a) IN GENERAL.—Effective on the date that is 180

22 days after the date of enactment of this Act, the contract

23 referred to in section 1802(a)(4), as the contract exists on

24 the date of enactment of this Act, shall be void.
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1 (b) AMENDMENT OF CONTRACT.—This title does not

2 preclude the parties to the contract referred to in section

3 1802(a)(4) from amending the contract or entering into a

4 new contract after the date of enactment of this Act in a

5 manner that is consistent with the findings and purposes

6 of this title.

7 SEC. 1804. EXCLUSIVE ENFORCEMENT.

8 (a) IN GENERAL.—Only the Attorney General of a

9 State in which electric power is provided under the contract

10 referred to in section 1802(a)(4), as the contract may be

11 amended after the date of enactment of this Act, may bring

12 a civil action in United States district court for an order

13 that—

14 (1) declares the amended contract not consistent

15 with the findings and purposes of this title and is

16 therefore void;

17 (2) enjoins performance of the amended contract;

18 and

19 (3) relieves the electric utilities that are party to

20 the amended contract of any liability under the con21 tract.

22 (b) TIMING.—A civil action under subsection (a) shall

23 be brought not later than 1 year after the date of the amend24 ed contract or new contract.
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1 TITLE XIX—CONSUMER CREDIT

2 DISCLOSURE

3 SEC. 1901. ENHANCED DISCLOSURES UNDER AN OPEN END

4 CREDIT PLAN.

5 (a) MINIMUM PAYMENT DISCLOSURES.—Section

6 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b))

7 is amended by adding at the end the following:

8 ‘‘(11)(A) In the case of an open end credit plan

9 that requires a minimum monthly payment of not

10 more than 4 percent of the balance on which finance

11 charges are accruing, the following statement, located

12 on the front of the billing statement, disclosed clearly

13 and conspicuously, in typeface no smaller than the

14 largest typeface used to make other clear and con15 spicuous disclosures required under this subsection:

16 ‘Minimum Payment Warning: Making only the min17 imum payment will increase the interest you pay and

18 the time it takes to repay your balance. For example,

19 making only the typical 2% minimum monthly pay20 ment on a balance of $1,000 at an interest rate of

21 17% would take 88 months to repay the balance in

22 full. For an estimate of the time it would take to

23 repay your balance, making only minimum pay24 ments, call this toll-free number: llllll.’.
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1 ‘‘(B) In the case of an open end credit plan that

2 requires a minimum monthly payment of more than

3 4 percent of the balance on which finance charges are

4 accruing, the following statement, in a prominent lo5 cation on the front of the billing statement, disclosed

6 clearly and conspicuously, in typeface no smaller

7 than the largest typeface used to make other clear and

8 conspicuous disclosures required under this sub9 section: ‘Minimum Payment Warning: Making only

10 the required minimum payment will increase the in11 terest you pay and the time it takes to repay your

12 balance. Making a typical 5% minimum monthly

13 payment on a balance of $300 at an interest rate of

14 17% would take 24 months to repay the balance in

15 full. For an estimate of the time it would take to

16 repay your balance, making only minimum monthly

17 payments, call this toll-free number: llllll.’.

18 ‘‘(C) Notwithstanding subparagraphs (A) and

19 (B), in the case of a creditor with respect to which

20 compliance with this title is enforced by the Federal

21 Trade Commission, the following statement, in a

22 prominent location on the front of the billing state23 ment, disclosed clearly and conspicuously, in typeface

24 no smaller than the largest typeface used to make

25 other clear and conspicuous disclosures under this
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1 subsection: ‘Minimum Payment Warning: Making

2 only the required minimum payment will increase the

3 interest you pay and the time it takes to repay your

4 balance. For example, making only the typical 5%

5 minimum monthly payment on a balance of $300 at

6 an interest rate of 17% would take 24 months to

7 repay the balance in full. For an estimate of the time

8 it would take to repay your balance, making only

9 minimum monthly payments, call the Federal Trade

10 Commission at this toll-free number: llllll.’

11 A creditor who is subject to this subparagraph shall

12 not be subject to subparagraph (A) or (B).

13 ‘‘(D) Notwithstanding subparagraph (A), (B), or

14 (C), in complying with any such subparagraph, a

15 creditor may substitute an example based on an in16 terest rate that is greater than 17 percent. Any cred17 itor who is subject to subparagraph (B) may elect to

18 provide the disclosure required under subparagraph

19 (A) in lieu of the disclosure required under subpara20 graph (B).

21 ‘‘(E) The Board shall, by rule, periodically recal22 culate, as necessary, the interest rate and repayment

23 period under subparagraphs (A), (B), and (C).

24 ‘‘(F) The toll-free telephone number disclosed by

25 a creditor or the Federal Trade Commission under
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1 subparagraph (A), (B), or (G), as appropriate, may

2 be a toll-free telephone number established and main3 tained by the creditor or the Federal Trade Commis4 sion, as appropriate, or may be a toll-free telephone

5 number established and maintained by a third party

6 for use by the creditor or multiple creditors or the

7 Federal Trade Commission, as appropriate. The toll8 free telephone number may connect consumers to an

9 automated device through which consumers may ob10 tain information described in subparagraph (A), (B),

11 or (C), by inputting information using a touch-tone

12 telephone or similar device, if consumers whose tele13 phones are not equipped to use such automated device

14 are provided the opportunity to be connected to an in15 dividual from whom the information described in sub16 paragraph (A), (B), or (C), as applicable, may be ob17 tained. A person that receives a request for informa18 tion described in subparagraph (A), (B), or (C) from

19 an obligor through the toll-free telephone number dis20 closed under subparagraph (A), (B), or (C), as appli21 cable, shall disclose in response to such request only

22 the information set forth in the table promulgated by

23 the Board under subparagraph (H)(i).

24 ‘‘(G) The Federal Trade Commission shall estab25 lish and maintain a toll-free number for the purpose
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1 of providing to consumers the information required to

2 be disclosed under subparagraph (C).

3 ‘‘(H) The Board shall—

4 ‘‘(i) establish a detailed table illustrating

5 the approximate number of months that it would

6 take to repay an outstanding balance if the con7 sumer pays only the required minimum monthly

8 payments and if no other advances are made,

9 which table shall clearly present standardized in10 formation to be used to disclose the information

11 required to be disclosed under subparagraph (A),

12 (B), or (C), as applicable;

13 ‘‘(ii) establish the table required under

14 clause (i) by assuming—

15 ‘‘(I) a significant number of different

16 annual percentage rates;

17 ‘‘(II) a significant number of different

18 account balances;

19 ‘‘(III) a significant number of different

20 minimum payment amounts; and

21 ‘‘(IV) that only minimum monthly

22 payments are made and no additional ex23 tensions of credit are obtained; and

24 ‘‘(iii) promulgate regulations that provide

25 instructional guidance regarding the manner in
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1 which the information contained in the table es2 tablished under clause (i) should be used in re3 sponding to the request of an obligor for any in4 formation required to be disclosed under sub5 paragraph (A), (B), or (C).

6 ‘‘(I) The disclosure requirements of this para7 graph do not apply to any charge card account, the

8 primary purpose of which is to require payment of

9 charges in full each month.

10 ‘‘(J) A creditor that maintains a toll-free tele11 phone number for the purpose of providing customers

12 with the actual number of months that it will take to

13 repay the consumer’s outstanding balance is not sub14 ject to the requirements of subparagraphs (A) and

15 (B).’’.

16 (b) REGULATORY IMPLEMENTATION.—The Board of

17 Governors of the Federal Reserve System (hereafter in this

18 Act referred to as the ‘‘Board’’) shall promulgate regulations

19 implementing the requirements of section 127(b)(11) of the

20 Truth in Lending Act, as added by subsection (a) of this

21 section. Section 127(b)(11) of the Truth in Lending Act,

22 as added by subsection (a) of this section, and the regula23 tions issued under this subsection shall not take effect until

24 the later of 18 months after the date of enactment of this
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1 Act or 12 months after the publication of such regulations

2 by the Board.

3 (c) STUDY OF FINANCIAL DISCLOSURES.—

4 (1) IN GENERAL.—The Board may conduct a

5 study to determine whether consumers have adequate

6 information about borrowing activities that may re7 sult in financial problems.

8 (2) FACTORS FOR CONSIDERATION.—In con9 ducting a study under paragraph (1), the Board

10 should, in consultation with the other Federal bank11 ing agencies (as defined in section 3 of the Federal

12 Deposit Insurance Act), the National Credit Union

13 Administration, and the Federal Trade Commission,

14 consider the extent to which—

15 (A) consumers, in establishing new credit

16 arrangements, are aware of their existing pay17 ment obligations, the need to consider those obli18 gations in deciding to take on new credit, and

19 how taking on excessive credit can result in fi20 nancial difficulty;

21 (B) minimum periodic payment features of22 fered in connection with open end credit plans

23 impact consumer default rates;

24 (C) consumers make only the minimum

25 payment under open end credit plans;
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1 (D) consumers are aware that making only

2 minimum payments will increase the cost and

3 repayment period of an open end credit obliga4 tion; and

5 (E) the availability of low minimum pay6 ment options is a cause of consumers experi7 encing financial difficulty.

8 (3) REPORT TO CONGRESS.—Findings of the

9 Board in connection with any study conducted under

10 this subsection shall be submitted to Congress. Such

11 report shall also include recommendations for legisla12 tive initiatives, if any, of the Board, based on its

13 findings.

14 SEC. 1902. ENHANCED DISCLOSURE FOR CREDIT EXTEN15 SIONS SECURED BY A DWELLING.

16 (a) OPEN END CREDIT EXTENSIONS.—

17 (1) CREDIT APPLICATIONS.—Section 127A(a)(13)

18 of the Truth in Lending Act (15 U.S.C. 1637a(a)(13))

19 is amended—

20 (A) by striking ‘‘CONSULTATION OF TAX AD21 VISOR.—A statement that the’’ and inserting the

22 following: ‘‘TAX DEDUCTIBILITY.—A statement

23 that—

24 ‘‘(A) the’’; and
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1 (B) by striking the period at the end and

2 inserting the following: ‘‘; and

3 ‘‘(B) in any case in which the extension of

4 credit exceeds the fair market value (as defined

5 under the Federal Internal Revenue Code) of the

6 dwelling, the interest on the portion of the credit

7 extension that is greater than the fair market

8 value of the dwelling is not tax deductible for

9 Federal income tax purposes.’’.

10 (2) CREDIT ADVERTISEMENTS.—Section 147(b)

11 of the Truth in Lending Act (15 U.S.C. 1665b(b)) is

12 amended—

13 (A) by striking ‘‘If any’’ and inserting the

14 following:

15 ‘‘(1) IN GENERAL.—If any’’; and

16 (B) by adding at the end the following:

17 ‘‘(2) CREDIT IN EXCESS OF FAIR MARKET

18 VALUE.—Each advertisement described in subsection

19 (a) that relates to an extension of credit that may ex20 ceed the fair market value of the dwelling, and which

21 advertisement is disseminated in paper form to the

22 public or through the Internet, as opposed to by radio

23 or television, shall include a clear and conspicuous

24 statement that—
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1 ‘‘(A) the interest on the portion of the credit

2 extension that is greater than the fair market

3 value of the dwelling is not tax deductible for

4 Federal income tax purposes; and

5 ‘‘(B) the consumer should consult a tax ad6 visor for further information regarding the de7 ductibility of interest and charges.’’.

8 (b) NON-OPEN END CREDIT EXTENSIONS.—

9 (1) CREDIT APPLICATIONS.—Section 128 of the

10 Truth in Lending Act (15 U.S.C. 1638) is amended—

11 (A) in subsection (a), by adding at the end

12 the following:

13 ‘‘(15) In the case of a consumer credit trans14 action that is secured by the principal dwelling of the

15 consumer, in which the extension of credit may exceed

16 the fair market value of the dwelling, a clear and con17 spicuous statement that—

18 ‘‘(A) the interest on the portion of the credit

19 extension that is greater than the fair market

20 value of the dwelling is not tax deductible for

21 Federal income tax purposes; and

22 ‘‘(B) the consumer should consult a tax ad23 visor for further information regarding the de24 ductibility of interest and charges.’’; and
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1 (B) in subsection (b), by adding at the end

2 the following:

3 ‘‘(3) In the case of a credit transaction described in

4 paragraph (15) of subsection (a), disclosures required by

5 that paragraph shall be made to the consumer at the time

6 of application for such extension of credit.’’.

7 (2) CREDIT ADVERTISEMENTS.—Section 144 of

8 the Truth in Lending Act (15 U.S.C. 1664) is amend9 ed by adding at the end the following:

10 ‘‘(e) Each advertisement to which this section applies

11 that relates to a consumer credit transaction that is secured

12 by the principal dwelling of a consumer in which the exten13 sion of credit may exceed the fair market value of the dwell14 ing, and which advertisement is disseminated in paper

15 form to the public or through the Internet, as opposed to

16 by radio or television, shall clearly and conspicuously state

17 that—

18 ‘‘(1) the interest on the portion of the credit ex19 tension that is greater than the fair market value of

20 the dwelling is not tax deductible for Federal income

21 tax purposes; and

22 ‘‘(2) the consumer should consult a tax advisor

23 for further information regarding the deductibility of

24 interest and charges.’’.
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1 (c) REGULATORY IMPLEMENTATION.—The Board of

2 Governors of the Federal Reserve System (hereafter in this

3 title referred to as the ‘‘Board’’) shall promulgate regula4 tions implementing the requirements of subsections (a) and

5 (b) of this section. Such regulations shall not take effect

6 until the later of 12 months after the date of enactment of

7 this Act or 12 months after the publication of such regula8 tions by the Board.

9 SEC. 1903. DISCLOSURES RELATED TO ‘‘INTRODUCTORY

10 RATES’’.

11 (a) INTRODUCTORY RATE DISCLOSURES.—Section

12 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is

13 amended by adding at the end the following:

14 ‘‘(6) ADDITIONAL NOTICE CONCERNING ‘INTRO15 DUCTORY RATES’.—

16 ‘‘(A) IN GENERAL.—Except as provided in

17 subparagraph (B), an application or solicitation

18 to open a credit card account and all pro19 motional materials accompanying such applica20 tion or solicitation, for which a disclosure is re21 quired under paragraph (1), and that offers a

22 temporary annual percentage rate of interest,

23 shall—

24 ‘‘(i) use the term ‘introductory’ in im25 mediate proximity to each listing of the
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1 temporary annual percentage rate applica2 ble to such account, which term shall ap3 pear clearly and conspicuously;

4 ‘‘(ii) if the annual percentage rate of

5 interest that will apply after the end of the

6 temporary rate period will be a fixed rate,

7 state the following in a clear and con8 spicuous manner in a prominent location

9 closely proximate to the first listing of the

10 temporary annual percentage rate (other

11 than a listing of the temporary annual per12 centage rate in the tabular format described

13 in section 122(c)) or, if the first listing is

14 not the most prominent listing, then closely

15 proximate to the most prominent listing of

16 the temporary annual percentage rate, in

17 each document and in no smaller type size

18 than the smaller of the type size in which

19 the proximate temporary annual percentage

20 rate appears or a 12-point type size, the

21 time period in which the introductory pe22 riod will end and the annual percentage

23 rate that will apply after the end of the in24 troductory period; and
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1 ‘‘(iii) if the annual percentage rate

2 that will apply after the end of the tem3 porary rate period will vary in accordance

4 with an index, state the following in a clear

5 and conspicuous manner in a prominent lo6 cation closely proximate to the first listing

7 of the temporary annual percentage rate

8 (other than a listing in the tabular format

9 prescribed by section 122(c)) or, if the first

10 listing is not the most prominent listing,

11 then closely proximate to the most promi12 nent listing of the temporary annual per13 centage rate, in each document and in no

14 smaller type size than the smaller of the

15 type size in which the proximate temporary

16 annual percentage rate appears or a 12-

17 point type size, the time period in which the

18 introductory period will end and the rate

19 that will apply after that, based on an an20 nual percentage rate that was in effect with21 in 60 days before the date of mailing the

22 application or solicitation.

23 ‘‘(B) EXCEPTION.—Clauses (ii) and (iii) of

24 subparagraph (A) do not apply with respect to

25 any listing of a temporary annual percentage
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1 rate on an envelope or other enclosure in which

2 an application or solicitation to open a credit

3 card account is mailed.

4 ‘‘(C) CONDITIONS FOR INTRODUCTORY

5 RATES.—An application or solicitation to open a

6 credit card account for which a disclosure is re7 quired under paragraph (1), and that offers a

8 temporary annual percentage rate of interest

9 shall, if that rate of interest is revocable under

10 any circumstance or upon any event, clearly and

11 conspicuously disclose, in a prominent manner

12 on or with such application or solicitation—

13 ‘‘(i) a general description of the cir14 cumstances that may result in the revoca15 tion of the temporary annual percentage

16 rate; and

17 ‘‘(ii) if the annual percentage rate that

18 will apply upon the revocation of the tem19 porary annual percentage rate—

20 ‘‘(I) will be a fixed rate, the an21 nual percentage rate that will apply

22 upon the revocation of the temporary

23 annual percentage rate; or

24 ‘‘(II) will vary in accordance with

25 an index, the rate that will apply after
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1 the temporary rate, based on an an2 nual percentage rate that was in effect

3 within 60 days before the date of mail4 ing the application or solicitation.

5 ‘‘(D) DEFINITIONS.—In this paragraph—

6 ‘‘(i) the terms ‘temporary annual per7 centage rate of interest’ and ‘temporary an8 nual percentage rate’ mean any rate of in9 terest applicable to a credit card account for

10 an introductory period of less than 1 year,

11 if that rate is less than an annual percent12 age rate that was in effect within 60 days

13 before the date of mailing the application or

14 solicitation; and

15 ‘‘(ii) the term ‘introductory period’

16 means the maximum time period for which

17 the temporary annual percentage rate may

18 be applicable.

19 ‘‘(E) RELATION TO OTHER DISCLOSURE RE20 QUIREMENTS.—Nothing in this paragraph may

21 be construed to supersede subsection (a) of sec22 tion 122, or any disclosure required by para23 graph (1) or any other provision of this sub24 section.’’.
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1 (b) REGULATORY IMPLEMENTATION.—The Board of

2 Governors of the Federal Reserve System (hereafter in this

3 title referred to as the (‘‘Board’’) shall promulgate regula4 tions implementing the requirements of section 127 of the

5 Truth in Lending Act, as amended by subsection (a) of this

6 section. Any provision set forth in subsection (a) and such

7 regulations shall not take effect until the later of 12 months

8 after the date of enactment of this Act or 12 months after

9 the publication of such regulations by the Board.

10 SEC. 1904. INTERNET-BASED CREDIT CARD SOLICITATIONS.

11 (a) INTERNET-BASED APPLICATIONS AND SOLICITA12 TIONS.—Section 127(c) of the Truth in Lending Act (15

13 U.S.C. 1637(c)) is amended by adding at the end the fol14 lowing:

15 ‘‘(7) INTERNET-BASED APPLICATIONS AND SO16 LICITATIONS.—

17 ‘‘(A) IN GENERAL.—In any solicitation to

18 open a credit card account for any person under

19 an open end consumer credit plan using the

20 Internet or other interactive computer service,

21 the person making the solicitation shall clearly

22 and conspicuously disclose—

23 ‘‘(i) the information described in sub24 paragraphs (A) and (B) of paragraph (1);

25 and
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1 ‘‘(ii) the disclosures described in para2 graph (6).

3 ‘‘(B) FORM OF DISCLOSURE.—The disclo4 sures required by subparagraph (A) shall be—

5 ‘‘(i) readily accessible to consumers in

6 close proximity to the solicitation to open a

7 credit card account; and

8 ‘‘(ii) updated regularly to reflect the

9 current policies, terms, and fee amounts ap10 plicable to the credit card account.

11 ‘‘(C) DEFINITIONS.—For purposes of this

12 paragraph—

13 ‘‘(i) the term ‘Internet’ means the

14 international computer network of both

15 Federal and non-Federal interoperable

16 packet switched data networks; and

17 ‘‘(ii) the term ‘interactive computer

18 service’ means any information service, sys19 tem, or access software provider that pro20 vides or enables computer access by multiple

21 users to a computer server, including spe22 cifically a service or system that provides

23 access to the Internet and such systems op24 erated or services offered by libraries or edu25 cational institutions.’’.
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1 (b) REGULATORY IMPLEMENTATION.—The Board of

2 Governors of the Federal Reserve System (hereafter in this

3 title referred to as the (‘‘Board’’) shall promulgate regula4 tions implementing the requirements of section 127 of the

5 Truth in Lending Act, as amended by subsection (a) of this

6 section. Any provision set forth in subsection (a) and such

7 regulations shall not take effect until the later of 12 months

8 after the date of enactment of this Act or 12 months after

9 the publication of such regulations by the Board.

10 SEC. 1905. DISCLOSURES RELATED TO LATE PAYMENT

11 DEADLINES AND PENALTIES.

12 (a) DISCLOSURES RELATED TO LATE PAYMENT DEAD13 LINES AND PENALTIES.—Section 127(b) of the Truth in

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

15 the end the following:

16 ‘‘(12) If a late payment fee is to be imposed due

17 to the failure of the obligor to make payment on or

18 before a required payment due date the following shall

19 be stated clearly and conspicuously on the billing

20 statement:

21 ‘‘(A) The date on which that payment is

22 due or, if different, the earliest date on which a

23 late payment fee may be charged.

24 ‘‘(B) The amount of the late payment fee to

25 be imposed if payment is made after such date.’’.
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1 (b) REGULATORY IMPLEMENTATION.—The Board of

2 Governors of the Federal Reserve System (hereafter in this

3 title referred to as the (‘‘Board’’) shall promulgate regula4 tions implementing the requirements of section 127 of the

5 Truth in Lending Act, as amended by subsection (a) of this

6 section. Any provision set forth in subsection (a) and such

7 regulations shall not take effect until the later of 12 months

8 after the date of enactment of this Act or 12 months after

9 the publication of such regulations by the Board.

10 SEC. 1906. PROHIBITION ON CERTAIN ACTIONS FOR FAIL11 URE TO INCUR FINANCE CHARGES.

12 (a) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE

13 TO INCUR FINANCE CHARGES.—Section 127 of the Truth

14 in Lending Act (15 U.S.C. 1637) is amended by adding

15 at the end the following:

16 ‘‘(h) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE

17 TO INCUR FINANCE CHARGES.—A creditor of an account

18 under an open end consumer credit plan may not terminate

19 an account prior to its expiration date solely because the

20 consumer has not incurred finance charges on the account.

21 Nothing in this subsection shall prohibit a creditor from

22 terminating an account for inactivity in 3 or more consecu23 tive months.’’.

24 (b) REGULATORY IMPLEMENTATION.—The Board of

25 Governors of the Federal Reserve System (hereafter in this
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1 title referred to as the (‘‘Board’’) shall promulgate regula2 tions implementing the requirements of section 127 of the

3 Truth in Lending Act, as amended by subsection (a) of this

4 section. Any provision set forth in subsection (a) and such

5 regulations shall not take effect until the later of 12 months

6 after the date of enactment of this Act or 12 months after

7 the publication of such regulations by the Board.

8 SEC. 1907. DUAL USE DEBIT CARD.

9 (a) REPORT.—The Board may conduct a study of, and

10 present to Congress a report containing its analysis of, con11 sumer protections under existing law to limit the liability

12 of consumers for unauthorized use of a debit card or similar

13 access device. Such report, if submitted, shall include rec14 ommendations for legislative initiatives, if any, of the

15 Board, based on its findings.

16 (b) CONSIDERATIONS.—In preparing a report under

17 subsection (a), the Board may include—

18 (1) the extent to which section 909 of the Elec19 tronic Fund Transfer Act (15 U.S.C. 1693g), as in ef20 fect at the time of the report, and the implementing

21 regulations promulgated by the Board to carry out

22 that section provide adequate unauthorized use liabil23 ity protection for consumers;

24 (2) the extent to which any voluntary industry

25 rules have enhanced or may enhance the level of pro-
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1 tection afforded consumers in connection with such

2 unauthorized use liability; and

3 (3) whether amendments to the Electronic Fund

4 Transfer Act (15 U.S.C. 1693 et seq.), or revisions to

5 regulations promulgated by the Board to carry out

6 that Act, are necessary to further address adequate

7 protection for consumers concerning unauthorized use

8 liability.

9 SEC. 1908. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX10 TENDED TO DEPENDENT STUDENTS.

11 (a) STUDY.—

12 (1) IN GENERAL.—The Comptroller General of

13 the United States shall conduct a study regarding the

14 impact that the extension of credit described in para15 graph (2) has on the rate of bankruptcy cases filed

16 under title 11, United States Code.

17 (2) EXTENSION OF CREDIT.—The extension of

18 credit referred to in paragraph (1) is the extension of

19 credit to individuals who are—

20 (A) claimed as dependents for purposes of

21 the Internal Revenue Code of 1986; and

22 (B) enrolled in postsecondary educational

23 institutions.

24 (b) REPORT.—Not later than 1 year after the date of

25 enactment of this Act, the Comptroller General of the United
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1 States shall submit to the Senate and the House of Rep2 resentatives a report summarizing the results of the study

3 conducted under subsection (a).

Attest:

Secretary.
106TH CONGRESS

2D SESSION H. R. 833

AMENDMENT
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