I

106TH CONGRESS

1ST SESSION H. R. 833

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

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 24, 1999

Mr. GEKAS (for himself, Mr. BOUCHER, Mr. MCCOLLUM, Mr. MORAN of Virginia, Mr. ARMEY, Mr. FROST, Mr. MENENDEZ, Ms. PRYCE of Ohio,

Mrs. FOWLER, Mr. KENNEDY of Rhode Island, Mr. DREIER, Mr. CANADY

of Florida, Mr. GOODLATTE, Mr. CHABOT, Mr. BRYANT, Mr. ROTHMAN,

Mrs. BONO, Mr. ANDREWS, Mr. BAKER, Mr. BEREUTER, Mr.

CUNNINGHAM, Mr. DOOLEY of California, Ms. DUNN, Ms. HOOLEY of

Oregon, Mrs. KELLY, Mr. LARGENT, Mr. MALONEY of Connecticut, Mr.

RILEY, Mr. ROEMER, Mr. SESSIONS, Mr. SMITH of Washington, Mrs.

TAUSCHER, Ms. VELA ́ZQUEZ, Mr. WYNN, Mr. DAVIS of Virginia, Mr.

DAVIS of Florida, and Mr. HALL of Texas) introduced the following bill;

which was referred to the Committee on the Judiciary, and in addition

to the Committee on Banking and Financial Services, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

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

purposes.

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

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

3 ‘‘Bankruptcy Reform Act of 1999’’.

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

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—CONSUMER BANKRUPTCY PROVISIONS

Subtitle A—Needs based bankruptcy

Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.

Sec. 103. Notice of alternatives.

Sec. 104. Debtor financial management training test program.

Subtitle B—Consumer Bankruptcy Protections

Sec. 105. Definitions.

Sec. 106. Disclosures.

Sec. 107. Debtor’s bill of rights.

Sec. 108. Enforcement.

Sec. 109. Sense of the congress.

Sec. 110. Discouraging abuse reaffirmation practices.

Sec. 111. Promotion alternative dispute resolution.

Sec. 112. Enhanced disclosure for credit extensions secured by a dwelling.

Sec. 113. Dual use debit card.

Sec. 114. Enhanced disclosures under an open-end credit plan.

Sec. 115. Protection of savings earmarked for the postsecondary education of

children.

Sec. 116. Effect of discharge.

Sec. 117. Automatic stay.

Sec. 118. Reinforce the fresh start.

Sec. 119. Discouraging bad faith repeat filings.

Sec. 120. Curbing abusive filings.

Sec. 121. Debtor retention of personal property security.

Sec. 122. Relief from the automatic stay when the debtor does not complete intended surrender of consumer debt collateral.

Sec. 123. Giving secured creditors fair treatment in chapter 13.

Sec. 124. Restraining abusive purchases on secured credit.

Sec. 125. Fair valuation of collateral.

Sec. 126. Exemptions.

Sec. 127. Limitation.

Sec. 128. Rolling stock equipment.

Sec. 129. Discharge under chapter 13.

Sec. 130. Bankruptcy judgeships.

Sec. 131. Additional amendments to title 11, United States Code.

Sec. 132. Amendment to section 1325 of title 11, United States Code.

Sec. 133. Application of the codebtor stay only when the stay protects the

debtor.

Sec. 134. Adequate protection for investors.
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Sec. 135. Limitation on luxury goods.

Sec. 136. Giving debtors the ability to keep leased personal property by assumption.

Sec. 137. Adequate protection of lessors and purchase money secured creditors.

Sec. 139. Automatic stay.

Sec. 140. Extend period between bankruptcy discharges.

Sec. 141. Definition of domestic support obligation.

Sec. 142. Priorities for claims for domestic support obligations.

Sec. 143. Requirements to obtain confirmation and discharge in cases involving

domestic support obligations.

Sec. 144. Exceptions to automatic stay in domestic support obligation proceedings.

Sec. 145. Nondischargeability of certain debts for alimony, maintenance, and

support.

Sec. 146. Continued liability of property.

Sec. 147. Protection of domestic support claims against preferential transfer

motions.

Sec. 148. Definition of household goods and antiques.

Sec. 149. Nondischargeable debts.

TITLE II—DISCOURAGING BANKRUPTCY ABUSE

Sec. 201. Reenactment of chapter 12.

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

Sec. 203. Protection of retirement savings in bankruptcy.

Sec. 204. Protection of refinance of security interest.

Sec. 205. Executory contracts and unexpired leases.

Sec. 206. Creditors and equity security holders committees.

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

Sec. 208. Limitation.

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

Sec. 210. Postpetition disclosure and solicitation.

Sec. 211. Preferences.

Sec. 212. Venue of certain proceedings.

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

Sec. 214. Fees arising from certain ownership interests.

Sec. 215. Claims relating to insurance deposits in cases ancillary to foreign proceedings.

Sec. 216. Defaults based on nonmonetary obligations.

TITLE III—GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 301. Definition of disinterested person.

Sec. 302. Miscellaneous improvements.

TITLE IV—SMALL BUSINESS BANKRUPTCY PROVISIONS

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

Sec. 402. Definitions.

Sec. 403. Standard form disclosure Statement and plan.

Sec. 404. Uniform national reporting requirements.

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

Sec. 406. Duties in small business cases.

Sec. 407. Plan filing and confirmation deadlines.

Sec. 408. Plan confirmation deadline.

Sec. 409. Prohibition against extension of time.
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Sec. 410. Duties of the United States trustee.

Sec. 411. Scheduling conferences.

Sec. 412. Serial filer provisions.

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

trustee.

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

to small businesses.

Sec. 415. Payment of interest.

TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.

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

TITLE VI—STREAMLINING THE BANKRUPTCY SYSTEM

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

Sec. 602. Audit procedures.

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

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

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

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

Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the Federal rules of bankruptcy procedure.

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

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

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

Sec. 611. Stopping abusive conversions from chapter 13.

TITLE VII—BANKRUPTCY DATA

Sec. 701. Improved bankruptcy statistics.

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

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

TITLE VIII—BANKRUPTCY TAX PROVISIONS

Sec. 801. Treatment of certain liens.

Sec. 802. Effective notice to government.

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

Sec. 804. Rate of interest on tax claims.

Sec. 805. Tolling of priority of tax claim time periods.

Sec. 806. Priority property taxes incurred.

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

Sec. 808. Chapter 11 discharge of fraudulent taxes.

Sec. 809. Stay of tax proceedings.

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

Sec. 811. Avoidance of statutory tax liens prohibited.

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

Sec. 813. Tardily filed priority tax claims.

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

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

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

Sec. 817. Standards for tax disclosure.

Sec. 818. Setoff of tax refunds.
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TITLE IX—ANCILLARY AND OTHER CROSS-BORDER CASES

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

Sec. 902. Amendments to other chapters in title 11, United States Code.

TITLE X—FINANCIAL CONTRACT PROVISIONS

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

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

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

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

Sec. 1005. Clarifying amendment relating to master agreements.

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

Sec. 1007. Bankruptcy code amendments.

Sec. 1008. Recordkeeping requirements.

Sec. 1009. Exemptions from contemporaneous execution requirement.

Sec. 1010. Damage measure.

Sec. 1011. SIPC stay.

Sec. 1012. Asset-backed securitizations.

Sec. 1013. Federal reserve collateral requirements.

Sec. 1014. Severability; effective date; application of amendments.

TITLE XI—TECHNICAL CORRECTIONS

Sec. 1101. Definitions.

Sec. 1102. Adjustment of dollar amounts.

Sec. 1103. Extension of time.

Sec. 1104. Technical amendments.

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

Sec. 1106. Limitation on compensation of professional persons.

Sec. 1107. Special tax provisions.

Sec. 1108. Effect of conversion.

Sec. 1109. Amendment to table of sections.

Sec. 1110. Allowance of administrative expenses.

Sec. 1111. Priorities.

Sec. 1112. Exemptions.

Sec. 1113. Exceptions to discharge.

Sec. 1114. Effect of discharge.

Sec. 1115. Protection against discriminatory treatment.

Sec. 1116. Property of the estate.

Sec. 1117. Preferences.

Sec. 1118. Postpetition transactions.

Sec. 1119. Disposition of property of the estate.

Sec. 1120. General provisions.

Sec. 1121. Appointment of elected trustee.

Sec. 1122. Abandonment of railroad line.

Sec. 1123. Contents of plan.

Sec. 1124. Discharge under chapter 12.

Sec. 1125. Bankruptcy cases and proceedings.

Sec. 1126. Knowing disregard of bankruptcy law or rule.

Sec. 1127. Transfers made by nonprofit charitable corporations.

Sec. 1128. Prohibition on certain actions for failure to incur finance charges.
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Sec. 1129. Protection of valid purchase money security interests.

Sec. 1130. Trustees.

TITLE XII—GENERAL EFFECTIVE DATE; APPLICATION OF

AMENDMENTS

Sec. 1201. Effective date; application of amendments.

1 TITLE I—CONSUMER

2 BANKRUPTCY PROVISIONS

3 Subtitle A—Needs based

4 bankruptcy

5 SEC. 101. CONVERSION.

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

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

8 SEC. 102. DISMISSAL OR CONVERSION.

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

10 States Code, is amended—

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

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

14 under chapter 13’’;

15 and

16 (2) in subsection (b)—

17 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

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

19 subparagraph (A) of this paragraph—

20 (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

6 to a case under chapter 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 last sentence and

11 inserting the following:

12 ‘‘(2)(A)(i) In considering under paragraph (1) wheth13 er the granting of relief would be an abuse of the provi14 sions of this chapter, the court shall presume abuse exists

15 if the debtor’s current monthly income less amounts set

16 forth in clauses (ii), (iii), and (iv), and multiplied by 60

17 months is not less than 25 percent of the debtor’s non18 priority unsecured claims in the case or $5,000, whichever

19 is less.

20 ‘‘(ii) The debtor’s monthly expenses shall be the ap21 plicable monthly expenses under National Standards,

22 Local Standards, and Other Necessary Expenses allow23 ance (excluding payments for debts) issued by the Internal

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

25 as in effect on the date of the entry of the order for relief,
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1 for the debtor, the dependents of the debtor, and the

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

3 otherwise a dependent.

4 ‘‘(iii) The debtor’s average monthly payments on ac5 count of secured debts shall be calculated as the total of

6 all amounts scheduled as contractually due to secured

7 creditors in each month of the 60 months following the

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

9 ‘‘(iv) The debtor’s expenses for payment of all prior10 ity claims (including priority child support and alimony

11 claims), which shall be calculated as the total amount of

12 debts entitled to priority, and dividing the total by 60

13 months.

14 ‘‘(B) In any proceeding brought under this sub15 section, the presumption of abuse may be rebutted only

16 by demonstrating extraordinary circumstances that re17 quire additional expenses or adjustment of current month18 ly total income. In order to establish extraordinary cir19 cumstances, the debtor must itemize each additional ex20 pense or adjustment of income and provide documentation

21 for such expenses and a detailed explanation of the ex22 traordinary circumstances which make such expenses nec23 essary and reasonable. The debtor, and the attorney for

24 the debtor if the debtor has an attorney, shall attest under

25 oath to the accuracy of any information provided to dem-
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1 onstrate that additional expenses or adjustment to income

2 are required. The presumption of abuse may be rebutted

3 only if such additional expenses or adjustments to income

4 cause the debtor’s current monthly income less the

5 amounts set forth in clauses (ii), (iii), and (iv) of subpara6 graph (A) when multiplied by 60 to be less than 25 per7 cent of the debtor’s nonpriority unsecured claims $5,000,

8 whichever is less.

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

10 expenditures required under section 521 of this title, the

11 debtor shall include a statement of the debtor’s current

12 monthly income, and the calculations which determine

13 whether a presumption arises under subparagraph (A)(i),

14 showing how each amount is calculated. The bankruptcy

15 rules promulgated under section 2075 of title 28, United

16 States Code, shall prescribe a form for such statement and

17 may provide general rules on its content.

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

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

20 this chapter in a case in which the presumption in sub21 paragraph (A)(i) does not apply or has been rebutted, the

22 court shall consider—

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

24 bad faith; or
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1 ‘‘(B) the totality of the circumstances (includ2 ing whether the debtor seeks to reject a personal

3 services contract and the financial need for such re4 jection as sought by the debtor) of the debtor’s fi5 nancial situation demonstrates abuse.’’.

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

7 amended—

8 (1) in section 101 by inserting after paragraph

9 (10) the following:

10 ‘‘(10A) ‘currently monthly income’ means the

11 average monthly income from all sources derived

12 which the debtor, or in a joint case, the debtor and

13 the debtor’s spouse, receive without regard to wheth14 er it is taxable income, in the 180 days preceding

15 the date of determination, and includes any amount

16 paid by anyone other than the debtor or, in a joint

17 case, the debtor and the debtor’s spouse, on a regu18 lar basis to the household expenses of the debtor or

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

20 debtor’s spouse if not otherwise a dependent;’’; and

21 (2) in section 704—

22 (i) in paragraph (8) by striking ‘‘and’’ at

23 the end;

24 (ii) in paragraph (9) by striking the period

25 at the end and inserting ‘‘; and’’; and
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1 (iii) by adding at the end the following:

2 ‘‘(10) With respect to an individual debtor under this

3 chapter, the panel trustee or bankruptcy administrator

4 shall review all materials filed by the debtor and, 10 days

5 prior to the first meeting of creditors, file with the court

6 a statement as to whether the debtor’s case would be pre7 sumed to be an abuse under section 707(b) of this title,

8 and the court shall provide a copy of such statement to

9 all creditors within 5 days. If, based on the filing of such

10 statement with the court, the panel trustee or bankruptcy

11 administrator determines that the debtor’s case should be

12 presumed to be an abuse under section 707(b) of this title

13 and the debtor’s current monthly income, when multiplied

14 by 12, is not less than the highest national median family

15 income reported for a family of equal or lesser size, or

16 in the case of a household of 1 person, the national median

17 household income for 1 earner, the panel trustee or bank18 ruptcy administrator shall within 30 days file a motion

19 to dismiss or convert under section 707(b) of this title,

20 or file a statement setting forth the reasons the trustee

21 does not believe that such a motion would be appropriate.

22 ‘‘(3)(A) If a panel trustee appointed under section

23 586(a)(1) of title 28 brings a motion for dismissal or con24 version under this subsection and the court grants that

25 motion and finds that the action of the counsel for the
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1 debtor in filing under this chapter was not substantially

2 justified, the court shall order the counsel for the debtor

3 to reimburse the trustee for all reasonable costs in pros4 ecuting the motion, including reasonable attorneys’ fees.

5 ‘‘(B) If the court finds that the attorney for the debt6 or violated Rule 9011, at a minimum, the court shall

7 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

14 a 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, modi21 fication, or reversal of existing law and does not

22 constitute an abuse under paragraph (1) of this

23 subsection.

24 ‘‘(4)(A) Except as provided in subparagraph (B), the

25 court may award a debtor all reasonable costs in contest-
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1 ing a motion brought by a party in interest (other than

2 a panel trustee or United States trustee) under this sub3 section (including reasonable attorneys’ 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

9 for the purpose of coercing a debtor into

10 waiving a right guaranteed to the debtor under

11 this title.

12 ‘‘(B) A party in interest that has a claim of an aggre13 gate amount less than $1,000 shall not be subject to sub14 paragraph (A).

15 ‘‘(5) However, only the judge, United States trustee,

16 bankruptcy administrator or panel trustee may bring a

17 motion under this section if the debtor and the debtor’s

18 spouse combined, as of the date of the order for relief,

19 have current monthly total income equal to or less than

20 the national median household monthly income calculated

21 on a monthly basis for a household of equal size. However,

22 for a household of more than 4 individuals, the median

23 income shall be that of a household of 4 individuals plus

24 $583 for each additional member of that household.’’.
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1 (c) CLERICAL AMENDMENT.—The table of sections

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

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

4 707 and inserting the following:

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

5 SEC. 103. NOTICE OF ALTERNATIVES.

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

7 amended to read as follows:

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

9 title by an individual whose debts are primarily consumer

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

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

12 under subchapter 1 of chapter 5) a written notice pre13 scribed by the United States trustee for the district in

14 which the petition is filed pursuant to section 586 of title

15 28. The notice shall contain the following:

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

17 and 13 and the general purpose, benefits, and costs

18 of proceeding under each of those chapters.

19 ‘‘(2) A brief description of services that may be

20 available to that individual from a credit counseling

21 service that is approved by the United States trustee

22 for that district.’’.
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1 SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING

2 TEST PROGRAM.

3 (a) DEVELOPMENT OF FINANCIAL MANAGEMENT

4 AND TRAINING CURRICULUM AND MATERIALS.—The Di5 rector of the Executive Office for United States Trustees

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

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

8 field of debtor education, including trustees who are ap9 pointed under chapter 13 of title 11 of the United States

10 Code and who operate financial management education

11 programs for debtors, and shall develop a financial man12 agement training curriculum and materials that can be

13 used to educate individual debtors on how to better man14 age their finances.

15 (b) TEST—(1) The Director shall select 3 judicial dis16 tricts of the United States in which to test the effective17 ness of the financial management training curriculum and

18 materials developed under subsection (a).

19 (2) For a 1-year period beginning not later than 270

20 days after the date of the enactment of this Act, such cur21 riculum and materials shall be made available by the Di22 rector, directly or indirectly, on request to individual debt23 ors in cases filed in such 1-year period under chapter 7

24 or 13 of title 11 of the United States Code.
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1 (c) EVALUATION.—(1) During the 1-year period re2 ferred to in subsection (b), the Director shall evaluate the

3 effectiveness of—

4 (A) the financial management training curricu5 lum and materials developed under subsection (a);

6 and

7 (B) a sample of existing consumer education

8 programs such as those described in the Report of

9 the National Bankruptcy Review Commission (Octo10 ber 20, 1997) that are representative of consumer

11 education programs carried out by the credit indus12 try, by trustees serving under chapter 13 of title 11

13 of the United States Code, and by consumer coun14 selling groups.

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

16 evaluation, the Director shall submit a report to the

17 Speaker of the House of Representatives and the Presi18 dent pro tempore of the Senate, for referral to the appro19 priate committees of the Congress, containing the findings

20 of the Director regarding the effectiveness of such curricu21 lum, such materials, and such programs.
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1 Subtitle B—Consumer Bankruptcy

2 Protections

3 SEC. 105. DEFINITIONS.

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

5 States Code, is amended—

6 (1) by inserting after paragraph (3) the follow7 ing:

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

9 debts consist primarily of consumer debts and whose

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

11 (2) by inserting after paragraph (4) the follow12 ing:

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

14 or services sold or otherwise provided to an assisted

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

18 or appearing in a proceeding on behalf of another or

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

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

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

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

2 petition preparer pursuant to section 110 of this

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

4 the following or an officer, director, employee or

5 agent thereof—

6 ‘‘(A) any nonprofit organization which is

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

8 of the Internal Revenue Code of 1986;

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

12 creditor; or

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

14 in section 3 of the Federal Deposit Insurance

15 Act) or any Federal credit union or State credit

16 union (as those terms are defined in section

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

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

20 (b) CONFORMING AMENDMENT.—In section

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

22 SEC. 106. DISCLOSURES.

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

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

25 end the following:
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1 ‘‘§ 526. Disclosures

2 ‘‘(a) A debt relief agency providing bankruptcy assist3 ance to an assisted person shall provide the following no4 tices to the assisted person:

5 ‘‘(1) the written notice required under section

6 342(b)(1) of this title; and

7 ‘‘(2) to the extent not covered in the written no8 tice described in paragraph (1) of this section and

9 no later than three business days after the first date

10 on which a debt relief agency first offers to provide

11 any bankruptcy assistance services to an assisted

12 person, a clear and conspicuous written notice advis13 ing assisted persons of the following—

14 ‘‘(A) all information the assisted person is

15 required to provide with a petition and there16 after during a case under this title must be

17 complete, accurate and truthful;

18 ‘‘(B) all assets and all liabilities must be

19 completely and accurately disclosed in the docu20 ments filed to commence the case, and the re21 placement value of each asset as defined in sec22 tion 506 of this title must be stated in those

23 documents where requested after reasonable in24 quiry to establish such value;

25 ‘‘(C) current monthly total income, pro26 jected monthly net income and, in a chapter 13
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1 case, monthly net income must be stated after

2 reasonable inquiry; and

3 ‘‘(D) that information an assisted person

4 provides during their case may be audited pur5 suant to this title and that failure to provide

6 such information may result in dismissal of the

7 proceeding under this title or other sanction in8 cluding, in some instances, criminal sanctions.

9 ‘‘(b) A debt relief agency providing bankruptcy assist10 ance to an assisted person shall provide each assisted per11 son at the same time as the notices required under sub12 section (a)(1) with the following statement, to the extent

13 applicable, or one substantially similar. The statement

14 shall be clear and conspicuous and shall be in a single

15 document separate from other documents or notices pro16 vided to the assisted person:

17 ‘‘ ‘IMPORTANT INFORMATION ABOUT BANK18 RUPTCY ASSISTANCE SERVICES FROM AN AT19 TORNEY OR BANKRUPTCY PETITION PREPARER

20 ‘‘ ‘If you decide to seek bankruptcy relief, you can

21 represent yourself, you can hire an attorney to represent

22 you, or you can get help in some localities from a bank23 ruptcy petition preparer who is not an attorney. THE

24 LAW REQUIRES AN ATTORNEY OR BANKRUPTCY

25 PETITION PREPARER TO GIVE YOU A WRITTEN
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1 CONTRACT SPECIFYING WHAT THE ATTORNEY

2 OR BANKRUPTCY PETITION PREPARER WILL DO

3 FOR YOU AND HOW MUCH IT WILL COST. Ask to

4 see the contract before you hire anyone.

5 ‘‘ ‘The following information helps you understand

6 what must be done in a routine bankruptcy case to help

7 you evaluate how much service you need. Although bank8 ruptcy can be complex, many cases are routine.

9 ‘‘ ‘Before filing a bankruptcy case, either you or your

10 attorney should analyze your eligibility for different forms

11 of debt relief made available by the Bankruptcy Code and

12 which form of relief is most likely to be beneficial for you.

13 Be sure you understand the relief you can obtain and its

14 limitations. To file a bankruptcy case, documents called

15 a Petition, Schedules and Statement of Financial Affairs,

16 as well as in some cases a Statement of Intention need

17 to be prepared correctly and filed with the bankruptcy

18 court. You will have to pay a filing fee to the bankruptcy

19 court. Once your case starts, you will have to attend the

20 required first meeting of creditors where you may be ques21 tioned by a court official called a ‘‘trustee’’ and by credi22 tors.

23 ‘‘ ‘If you choose to file a chapter 7 case, you may be

24 asked by a creditor to reaffirm a debt. You may want help
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1 deciding whether to do so and a creditor is not permitted

2 to coerce you into reaffirming your debts.

3 ‘‘ ‘If you choose to file a chapter 13 case in which

4 you repay your creditors what you can afford over three

5 to five years, you may also want help with preparing your

6 chapter 13 plan and with the confirmation hearing on your

7 plan which will be before a bankruptcy judge.

8 ‘‘ ‘If you select another type of relief under the Bank9 ruptcy Code other than chapter 7 or chapter 13, you will

10 want to find out what needs to be done from someone fa11 miliar with that type of relief.

12 ‘‘ ‘Your bankruptcy case may also involve litigation.

13 You are generally permitted to represent yourself in litiga14 tion in bankruptcy court, but only attorneys, not bank15 ruptcy petition preparers, can give you legal advice.’.

16 ‘‘(c) Except to the extent the debt relief agency pro17 vides the required information itself after reasonably dili18 gent inquiry of the assisted person or others so as to ob19 tain such information reasonably accurately for inclusion

20 on the petition, schedules or statement of financial affairs,

21 a debt relief agency providing bankruptcy assistance to an

22 assisted person, to the extent permitted by nonbankruptcy

23 law, shall provide each assisted person at the time re24 quired for the notice required under subsection (a)(1) rea25 sonably sufficient information (which may be provided
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1 orally or in a clear and conspicuous writing) to the as2 sisted person on how to provide all the information the

3 assisted person is required to provide under this title pur4 suant to section 521, including—

5 ‘‘(1) how to value assets at replacement value,

6 determine current monthly total income, projected

7 monthly income and, in a chapter 13 case, net

8 monthly income, and related calculations;

9 ‘‘(2) how to complete the list of creditors, in10 cluding how to determine what amount is owed and

11 what address for the creditor should be shown; and

12 ‘‘(3) how to determine what property is exempt

13 and how to value exempt property at replacement

14 value as defined in section 506 of this title.

15 ‘‘(d) A debt relief agency shall maintain a copy of

16 the notices required under subsection (a) of this section

17 for two years after the later of the date on which the no18 tice is given the assisted person.’’.

19 (b) CONFORMING AMENDMENT.—The table of sec20 tions for chapter 5 of title 11, United States Code, is

21 amended by inserting after the item relating to section

22 525 the following:

‘‘526. Disclosures.’’.

23 SEC. 107. DEBTOR’S BILL OF RIGHTS.

24 (a) DEBTOR’S BILL OF RIGHTS.—Subchapter II of

25 chapter 5 of title 11, United States Code, as amended by
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1 section 106, is amended by adding at the end the follow2 ing:

3 ‘‘§ 527. Debtor’s bill of rights

4 ‘‘(a) A debt relief agency shall—

5 ‘‘(1) no later than five business days after the

6 first date on which a debt relief agency provides any

7 bankruptcy assistance services to an assisted person,

8 but prior to such assisted person’s petition under

9 this title being filed, execute a written contract with

10 the assisted person specifying clearly and conspicu11 ously the services the agency will provide the as12 sisted person and the basis on which fees or charges

13 will be made for such services and the terms of pay14 ment, and give the assisted person a copy of the

15 fully executed and completed contract in a form the

16 person can keep;

17 ‘‘(2) disclose in any advertisement of bank18 ruptcy assistance services or of the benefits of bank19 ruptcy directed to the general public (whether in

20 general media, seminars or specific mailings, tele21 phonic or electronic messages or otherwise) that the

22 services or benefits are with respect to proceedings

23 under this title, clearly and conspicuously using the

24 following statement: ‘We are a debt relief agency.

25 We help people file Bankruptcy petitions to obtain
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1 relief under the Bankruptcy Code.’ or a substantially

2 similar statement. An advertisement shall be of

3 bankruptcy assistance services if it describes or of4 fers bankruptcy assistance with a chapter 13 plan,

5 regardless of whether chapter 13 is specifically men6 tioned, including such statements as ‘federally super7 vised repayment plan’ or ‘Federal debt restructuring

8 help’ or other similar statements which would lead

9 a reasonable consumer to believe that help with

10 debts was being offered when in fact in most cases

11 the help available is bankruptcy assistance with a

12 chapter 13 plan; and

13 ‘‘(3) if an advertisement directed to the general

14 public indicates that the debt relief agency provides

15 assistance with respect to credit defaults, mortgage

16 foreclosures, lease eviction proceedings, excessive

17 debt, debt collection pressure, or inability to pay any

18 consumer debt, disclose conspicuously in that adver19 tisement that the assistance is with respect to or

20 may involve proceedings under this title, using the

21 following statement: ‘We are a debt relief agency.

22 We help people file Bankruptcy petitions to obtain

23 relief under the Bankruptcy Code.’ or a substantially

24 similar statement.

25 ‘‘(b) A debt relief agency shall not—
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1 ‘‘(1) fail to perform any service which the debt

2 relief agency has told the assisted person or prospec3 tive assisted person the agency would provide that

4 person in connection with the preparation for or ac5 tivities during a proceeding under this title;

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

7 any assisted person to make any statement in any

8 document filed in a proceeding under this title,

9 which is untrue and misleading or which upon the

10 exercise of reasonable care, should be known by the

11 debt relief agency to be untrue or misleading;

12 ‘‘(3) misrepresent to any assisted person or pro13 spective assisted person, directly or indirectly, af14 firmatively or by material omission, what services

15 the debt relief agency can reasonably expect to pro16 vide that person, or the benefits an assisted person

17 may obtain or the difficulties the person may experi18 ence if the person seeks relief in a proceeding pursu19 ant to this title; or

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

21 assisted person to incur more debt in contemplation

22 of that person filing a proceeding under this title or

23 in order to pay an attorney or bankruptcy petition

24 preparer fee or charge for services performed as part
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1 of preparing for or representing a debtor in a pro2 ceeding under this title.’’.

3 (b) CONFORMING AMENDMENT.—The table of sec4 tions for chapter 5 of title 11, United States Code, as

5 amended by section 106, is amended by inserting after the

6 item relating to section 526, the following:

‘‘527. Debtor’s bill of rights.’’.

7 SEC. 108. ENFORCEMENT.

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

9 title 11, United States Code, as amended by sections 106

10 and 107, is amended by adding at the end the following:

11 ‘‘§ 528. Debt relief agency enforcement

12 ‘‘(a) ASSISTED PERSON WAIVERS INVALID.—Any

13 waiver by any assisted person of any protection or right

14 provided by or under section 526 or 527 of this title shall

15 be void and may not be enforced by any Federal or State

16 court or any other person.

17 ‘‘(b) NONCOMPLIANCE.—

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

19 and an assisted person for bankruptcy assistance

20 which does not comply with the material require21 ments of section 526 or 527 of this title shall be

22 treated as void and may not be enforced by any Fed23 eral or State court or by any other person.

24 ‘‘(2) Any debt relief agency which has been

25 found, after notice and hearing, to have—
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1 ‘‘(A) negligently failed to comply with any

2 provision of section 526 or 527 with respect to

3 a bankruptcy case or related proceeding of an

4 assisted person;

5 ‘‘(B) provided bankruptcy assistance to an

6 assisted person in a case or related proceeding

7 which is dismissed or converted because the

8 debt relief agency’s negligent failure to file

9 bankruptcy papers, including papers specified in

10 section 521 of this title; or

11 ‘‘(C) negligently or intentionally dis12 regarded the material requirements of this title

13 or the Federal Rules of Bankruptcy Procedure

14 applicable to such debt relief agency shall be

15 liable to the assisted person in the amount of

16 any fees and charges in connection with provid17 ing bankruptcy assistance to such person which

18 the debt relief agency has already been paid on

19 account of that proceeding.

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

21 provided under State law, whenever the chief law en22 forcement officer of a State, or an official or agency

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

24 person has violated or is violating section 526 or 527

25 of this title, the State—
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1 ‘‘(A) may bring an action to enjoin such

2 violation;

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

4 residents to recover the actual damages of as5 sisted persons arising from such violation, in6 cluding any liability under paragraph (2); and

7 ‘‘(C) in the case of any successful action

8 under subparagraph (A) or (B), shall be award9 ed the costs of the action and reasonable attor10 ney fees as determined by the court.

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

12 district located in the State shall have concurrent ju13 risdiction of any action under subparagraph (A) or

14 (B) of paragraph (3).

15 ‘‘(5) Notwithstanding any other provision of

16 Federal law, if the court, on its own motion or on

17 the motion of the United States trustee, finds that

18 a person intentionally violated section 526 or 527 of

19 this title, or engaged in a clear and consistent pat20 tern or practice of violating section 526 or 527 of

21 this title, the court may—

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

23 ‘‘(B) impose an appropriate civil penalty

24 against such person.
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1 ‘‘(c) RELATION TO STATE LAW.—This section and

2 sections 526 and 527 shall not annul, alter, affect or ex3 empt any person subject to those sections from complying

4 with any law of any State except to the extent that such

5 law is inconsistent with those sections, and then only to

6 the extent of the inconsistency.’’.

7 (b) CONFORMING AMENDMENT.—The table of sec8 tions for chapter 5 of title 11, United States Code, as

9 amended by sections 106 and 107, is amended by inserting

10 after the item relating to section 527, the following:

‘‘528. Debt relief agency enforcement.’’.

11 SEC. 109. SENSE OF THE CONGRESS.

12 It is the sense of the Congress that States should de13 velop curricula relating to the subject of personal finance,

14 designed for use in elementary and secondary schools.

15 SEC. 110. DISCOURAGING ABUSE REAFFIRMATION PRAC16 TICES.

17 Section 524(c)(2) of title 11, United States Code, is

18 amended—

19 (1) in subparagraph (A) by striking ‘‘and’’ at

20 the end;

21 (2) in subparagraph (B) by adding ‘‘and’’ at

22 the end; and

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

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

25 based on a wholly unsecured consumer debt, such
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1 agreement contains a clear and conspicuous state2 ment which advises the debtor—

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

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

8 the result of a threat by the creditor to take

9 any action that cannot be legally taken or that

10 is not intended to be taken; and

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

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

13 to such a hearing by signing a statement

14 waiving the hearing, stating that the debtor is

15 represented by counsel, and identifying such

16 counsel;’’;

17 (3) in subsection (6)(A)—

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

19 (i);

20 (B) by striking the period at the end of

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

22 (C) by adding at the end thereof the fol23 lowing:

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

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

2 not intended to be taken.’’; and

3 (4) in the 3d sentence of subsection (d)—

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

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

7 the following:

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

9 a wholly unsecured consumer debt (except for debts owed

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

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

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

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

14 SEC. 111. PROMOTION ALTERNATIVE DISPUTE RESOLU15 TION.

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

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

18 following:

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

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

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

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

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

2 if—

3 ‘‘(A) such offer was made at least 60 days be4 fore the filing of the petition;

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

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

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

8 a reasonable extension thereof; and

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

10 repayment schedule is nondischargeable.

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

12 the proposed alternative repayment schedule was made in

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

14 the creditor unreasonably refused to consider the debtor’s

15 proposal.’’.

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

22 created by an approved credit counseling agency.’’.
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1 SEC. 112. ENHANCED DISCLOSURE FOR CREDIT EXTEN2 SIONS SECURED BY A DWELLING.

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

4 180 days after the date of enactment of this Act and end5 ing 18 months after the date of the enactment, the Board

6 of Governors of the Federal Reserve System (in this sec7 tion referred to as the ‘‘Board’’) shall conduct a study and

8 submit to Congress a report (including recommendations

9 for any appropriate legislation) regarding—

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

13 consumer’s principal dwelling is provided adequate

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

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

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

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

23 interest paid on such transaction.

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

2 fair market value of the dwelling.

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

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

8 disclosures. Any such regulations promulgated by the

9 Board under this section shall not take effect before the

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

12 SEC. 113. DUAL USE DEBIT CARD.

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

14 the Federal Reserve System (in this section referred to

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

18 (b) SPECIFIC CONSIDERATIONS.—In conducting the

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

21 (1) the extent to which existing provisions of

22 section 909 of the Electronic Fund Transfer Act and

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

2 rules have enhanced the level of protection afforded

3 consumers in connection with such unauthorized use

4 liability; and

5 (3) whether amendments to the Electronic

6 Funds Transfer Act or the Board’s implementing

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

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

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

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

14 cards and similar access devices. If the Board determines

15 that such protections are inadequate, the Board, pursuant

16 to its authority under the Electronic Funds Transfer Act,

17 may issue regulations to address such inadequacy. Any

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

20 Act.

21 SEC. 114. ENHANCED DISCLOSURES UNDER AN OPEN-END

22 CREDIT PLAN.

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

2 following:

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

4 account under an open-end consumer credit plan on

5 which a minimum monthly or periodic payment will

6 be required, other than an account described in

7 paragraph (8)—

8 ‘‘(A) the following statement: ‘The mini9 mum payment amount shown on your billing

10 statement is the smallest payment which you

11 can make in order to keep the account in good

12 standing. This payment option is offered as a

13 convenience and you may make larger payments

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

16 interest you pay and the length of time it takes

17 to repay your outstanding balance.’;

18 ‘‘(B) if the plan provides that the con19 sumer will be permitted to forgo making a mini20 mum payment during a specified billing cycle, a

21 statement, if applicable, that if the consumer

22 chooses to forgo making the minimum payment,

23 finance charges will continue to accrue; and

24 ‘‘(C) an example, based on an annual per25 centage rate and method for determining mini-
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1 mum periodic payments recently in effect for

2 that creditor, and a $500 outstanding balance,

3 showing the estimated minimum periodic pay4 ment, and the estimated period of time it would

5 take to repay the $500 outstanding balance if

6 the consumer paid only the minimum periodic

7 payment on each monthly or periodic statement

8 and obtained no additional extensions of credit.

9 ‘‘(10) With respect to one billing cycle per cal10 endar year, the creditor shall transmit the informa11 tion required under paragraph (9) to each consumer

12 to whom the creditor is required to transit a state13 ment pursuant to subsection (b) for such billing

14 cycle. The creditor shall also transmit to such con15 sumer for such cycle a worksheet prescribed by the

16 Board to assist the consumer in determining the

17 consumer’s household income and debt obligations.’’.

18 (b) PERIOD MINIMUM PAYMENT DISCLOSURES.—

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

20 1637(b)) is amended by adding at the end the following:

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

22 payment amount shown on your billing statement is

23 the smallest payment which you can make in order

24 to keep the account in good standing. This payment

25 option is offered as a convenience and you may
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1 make larger payments at any time. Making only the

2 minimum payment each month will increase the

3 amount of interest you pay and the length of time

4 it takes to repay your outstanding balance.’ ’’.

5 (c) ENFORCEMENT.—Section 127 of the Truth in

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

7 the end the following:

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

9 disclosure of an example required under subsection

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

11 disclosure to accompany the example stating that the cred12 it features shown are only an example which does not obli13 gate the creditor, but is intended to illustrate the approxi14 mate length of time it could take to repay using the as15 sumptions set forth in subsection (a)(9)(C) without regard

16 to any other factors that could impact an approximate re17 payment period, including other credit features or the con18 sumer’s payment or other behavior with respect to the ac19 count. Compliance with the disclosures required under

20 subsection (a)(9)(C) and (a)(10) shall be enforced exclu21 sively by the Federal agencies set forth in section 108.’’.

22 (d) REGULATORY IMPLEMENTATION.—The Board of

23 Governors of the Federal Reserve System (in this section

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

25 implementing the amendments made by subsections (a)
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1 and (b). Such regulations shall take effect no earlier than

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

3 the enactment of this Act.

4 (e) STUDY REQUIRED.—The Board shall conduct a

5 study to determine whether consumers have adequate in6 formation about borrowing activities which may result in

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

8 consider the extent to which—

9 (1) consumers, in establishing new credit ar10 rangements, are aware of their existing payment ob11 ligations, the need to consider those obligations in

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

13 excessive credit can result in financial difficulty;

14 (2) minimum periodic payment features offered

15 in connection with open-end credit plans impact con16 sumer default rates;

17 (3) consumers always make only the minimum

18 payment throughout the life of the plan;

19 (4) consumers are aware that making only min20 imum payments will increase the cost and repayment

21 period of an open-end loan; and

22 (5) the availability of low minimum payment

23 options is a cause of consumers experiencing finan24 cial difficulty.
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1 (f) REPORT TO CONGRESS.—Before the end of the

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

3 this Act, the Board shall submit to Congress a report con4 taining the findings of the Board in connection with the

5 study required under subsection (b).

6 (g) REGULATIONS.—The Board shall, by regulation

7 promulgated pursuant to its authority under the Truth in

8 Lending Act, require additional disclosures to consumers

9 regarding minimum payment features, including periodic

10 statement disclosures, if the Board determines that such

11 disclosures are necessary based on its findings. Any such

12 regulations promulgated by the Board shall not take effect

13 earlier than January 1, 2001.

14 SEC. 115. PROTECTION OF SAVINGS EARMARKED FOR THE

15 POSTSECONDARY EDUCATION OF CHILDREN.

16 (a) IN GENERAL.—Section 522(b) of title 11, United

17 States Code, as amended by section 330, is amended—

18 (1) in paragraph (2)—

19 (A) in subparagraph (B), by striking

20 ‘‘and’’ at the end;

21 (B) in subparagraph (C), by striking the

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

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

24 ‘‘(D) postsecondary education accounts as de25 scribed as follows:
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1 ‘‘(i) except as provided under applicable

2 State law or except as provided in paragraph

3 (5), any funds placed in a qualified tuition pro4 gram (as described in section 529(b) of the In5 ternal Revenue Code of 1986) at least 365 days

6 before the date of entry of the order for relief

7 and which has not been pledged or promised to

8 any person in connection with any extension of

9 credit; or

10 ‘‘(ii) except as provided in paragraph (5),

11 any funds placed in an education individual re12 tirement account (as defined in section

13 530(b)(1) of the Internal Revenue Code of

14 1986) at least 365 days before the date of entry

15 of the order for relief and which has not been

16 pledged or promised to any person in connec17 tion with any extension of credit;’’; and

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

19 ‘‘(5) For purposes of paragraph (3)(D), funds placed

20 in a qualified tuition program or in an education individ21 ual retirement account shall not be exempt under this

22 subsection—

23 ‘‘(A) unless the debtor has one or more depend24 ent children less than 22 years of age;
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1 ‘‘(B) if the amounts in such postsecondary ac2 counts do not exceed the lesser of $50,000 (in the

3 aggregate) in accounts attributable to each such de4 pendent child or $100,000 (in the aggregate) attrib5 utable to all such dependent children;

6 ‘‘(C) to the extent such funds contributed to

7 such account exceed $500 per year per child; and

8 ‘‘(D) any individual (other than the dependent

9 child of the debtor to whom such account is attrib10 utable) has any ownership right to such funds, or

11 the right to obtain ownership in the future of any

12 amount of such funds (other than upon the death or

13 serious mental impairment of such child), or direct

14 the application of such funds for any purpose other

15 than the postsecondary education of such child.’’.

16 SEC. 116. EFFECT OF DISCHARGE.

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

18 amended by adding at the end the following:

19 ‘‘(i) The willful failure of a creditor to credit pay20 ments received under a plan confirmed under this title (in21 cluding a plan of reorganization confirmed under chapter

22 11 of this title) in the manner required by the plan (in23 cluding crediting the amounts required under the plan)

24 shall constitute a violation of an injunction under sub25 section (a)(2).
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1 ‘‘(j)(1) An individual who is injured by the failure of

2 a creditor to comply with the requirements for a reaffirma3 tion agreement under subsections (c) and (d), or by any

4 willful violation of the injunction under subsection (a)(2),

5 shall be entitled to recover—

6 ‘‘(A) the greater of—

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

8 ‘‘(ii) $1,000; and

9 ‘‘(B) costs and attorneys’ fees.

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

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

12 SEC. 117. AUTOMATIC STAY.

13 Section 362(h) of title 11, United States Code, is

14 amended to read as follows:

15 ‘‘(h)(1) An individual who is injured by any willful

16 violation of a stay provided in this section shall be entitled

17 to recover—

18 ‘‘(A) actual damages; and

19 ‘‘(B) reasonable costs, including attorneys’ fees.

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

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

22 SEC. 118. REINFORCE THE FRESH START.

23 (a) RESTORATION OF AN EFFECTIVE DISCHARGE.—

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

25 amended—
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1 (1) by striking ‘‘by a court’’ and inserting ‘‘on

2 a prisoner by any court’’,

3 (2) by striking ‘‘section 1915(b) or (f)’’ and in4 serting ‘‘subsection (b) or (f)(2) of section 1915’’,

5 and

6 (3) by inserting ‘‘(or a similar non-Federal

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

8 SEC. 119. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

10 amended—

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

12 end;

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

14 the end and inserting a semicolon; and

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

16 paragraphs:

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

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

19 13, and if a single or joint case of the debtor was

20 pending within the previous 1-year period but was

21 dismissed, other than a case refiled under a chapter

22 other than chapter 7 after dismissal under section

23 707(b) of this title, the stay under subsection (a)

24 with respect to any action taken with respect to a

25 debt or property securing such debt or with respect
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1 to any lease will terminate with respect to the debtor

2 on the 30th day after the filing of the later case.

3 Upon motion by a party in interest for continuation

4 of the automatic stay and upon notice and a hear5 ing, the court may extend the stay in particular

6 cases as to any or all creditors (subject to such con7 ditions or limitations as the court may then impose)

8 after notice and a hearing completed before the expi9 ration of the 30-day period only if the party in inter10 est demonstrates that the filing of the later case is

11 in good faith as to the creditors to be stayed. A case

12 is presumptively filed not in good faith (but such

13 presumption may be rebutted by clear and convinc14 ing evidence to the contrary)—

15 ‘‘(A) as to all creditors if—

16 ‘‘(i) more than 1 previous case under

17 any of chapters 7, 11, or 13 in which the

18 individual was a debtor was pending within

19 such 1-year period;

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

21 chapters 7, 11, or 13 in which the individ22 ual was a debtor was dismissed within

23 such 1-year period, after the debtor failed

24 to file or amend the petition or other docu25 ments as required by this title or the court
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1 without substantial excuse (but mere inad2 vertence or negligence shall not be sub3 stantial excuse unless the dismissal was

4 caused by the negligence of the debtor’s at5 torney), failed to provide adequate protec6 tion as ordered by the court, or failed to

7 perform the terms of a plan confirmed by

8 the court; or

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

10 change in the financial or personal affairs

11 of the debtor since the dismissal of the

12 next most previous case under any of chap13 ters 7, 11, or 13 of this title, or any other

14 reason to conclude that the later case will

15 be concluded, if a case under chapter 7 of

16 this title, with a discharge, and if a chap17 ter 11 or 13 case, a confirmed plan which

18 will be fully performed;

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

20 action under subsection (d) in a previous case

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

22 the date of dismissal of such case, that action

23 was still pending or had been resolved by termi24 nating, conditioning, or limiting the stay as to

25 actions of such creditor.
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1 ‘‘(4) 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) of this

6 title, the stay under subsection (a) will not go into

7 effect upon the filing of the later case. On request

8 of a party in interest, the court shall promptly enter

9 an order confirming that no stay is in effect. If a

10 party in interest requests within 30 days of the fil11 ing of the later case, the court may order the stay

12 to take effect in the case as to any or all creditors

13 (subject to such conditions or limitations as the

14 court may impose), after notice and hearing, only if

15 the party in interest demonstrates that the filing of

16 the later case is in good faith as to the creditors

17 to be stayed. A stay imposed pursuant to the preced18 ing sentence will be effective on the date of entry

19 of the order allowing the stay to go into effect. A

20 case is presumptively not filed in good faith (but

21 such presumption may be rebutted by clear and con22 vincing evidence to the contrary)—

23 ‘‘(A) as to all creditors if—

24 ‘‘(i) 2 or more previous cases under

25 this title in which the individual was a
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1 debtor were pending within the 1-year pe2 riod;

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

4 which the individual was a debtor was dis5 missed within the time period stated in

6 this paragraph after the debtor failed to

7 file or amend the petition or other docu8 ments as required by this title or the court

9 without substantial excuse (but mere inad10 vertence or negligence shall not be sub11 stantial excuse unless the dismissal was

12 caused by the negligence of the debtor’s at13 torney), failed to pay adequate protection

14 as ordered by the court, or failed to per15 form the terms of a plan confirmed by the

16 court; or

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

18 change in the financial or personal affairs

19 of the debtor since the dismissal of the

20 next most previous case under this title, or

21 any other reason to conclude that the later

22 case will not be concluded, if a case under

23 chapter 7, with a discharge, and if a case

24 under chapter 11 or 13, with a confirmed

25 plan that will be fully performed; or
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1 ‘‘(B) as to any creditor that commenced an

2 action under subsection (d) in a previous case

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

4 the date of dismissal of such case, such action

5 was still pending or had been resolved by termi6 nating, conditioning, or limiting the stay as to

7 action of such creditor.’’.

8 SEC. 120. CURBING ABUSIVE FILINGS.

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

10 States Code, is amended—

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

12 end;

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

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

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

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

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

18 whose claim is secured by an interest in such real

19 estate, if the court finds that the filing of the bank20 ruptcy petition was part of a scheme to delay,

21 hinder, and defraud creditors that involved either—

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

23 or other interest in, the real property without

24 the consent of the secured creditor or court ap25 proval; or
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1 ‘‘(B) multiple bankruptcy filings affecting

2 the real property.

3 If recorded in compliance with applicable State laws gov4 erning notices of interests or liens in real property, an

5 order entered pursuant to this subsection shall be binding

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

7 real property filed not later than 2 years after that record8 ing, except that a debtor in a subsequent case may move

9 for relief from such order based upon changed cir10 cumstances or for good cause shown, after notice and a

11 hearing.’’.

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

13 United States Code, is amended—

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

15 end;

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

17 the end; and

18 (3) by inserting after paragraph (18) the fol19 lowing:

20 ‘‘(19) under subsection (a), of any act to en21 force any lien against or security interest in real

22 property following the entry of an order under sec23 tion 362(d)(4) of this title as to that property in any

24 prior bankruptcy case for a period of 2 years after

25 entry of such an order. The debtor in a subsequent
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1 case, however, may move the court for relief from

2 such order based upon changed circumstances or for

3 other good cause shown, after notice and a hearing;

4 or

5 ‘‘(20) under subsection (a), of any act to en6 force any lien against or security interest in real

7 property—

8 ‘‘(A) if the debtor is ineligible under sec9 tion 109(g) of this title to be a debtor in a

10 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 SEC. 121. DEBTOR RETENTION OF PERSONAL PROPERTY

16 SECURITY.

17 Title 11, United States Code, is amended—

18 (1) in section 521—

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

20 the end;

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

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

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

24 ‘‘(6) in an individual case under chapter 7 of

25 this title, not retain possession of personal property
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1 as to which a creditor has an allowed claim for the

2 purchase price secured in whole or in part by an in3 terest in that personal property unless, in the case

4 of an individual debtor, the debtor takes 1 of the fol5 lowing actions within 45 days after the first meeting

6 of creditors under section 341(a)—

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

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

9 with respect to the claim secured by such prop10 erty; or

11 ‘‘(B) redeems such property from the secu12 rity interest pursuant to section 722 of this

13 title.

14 ‘‘If the debtor fails to so act within the 45-day pe15 riod, the personal property affected shall no longer

16 be property of the estate, and the creditor may take

17 whatever action as to such property as is permitted

18 by applicable nonbankruptcy law, unless the court

19 determines on the motion of the trustee, and after

20 notice and a hearing, that such property is of con21 sequential value or benefit to the estate.’’; and

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

23 time of redemption’’ before the period at the end.
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1 SEC. 122. RELIEF FROM THE AUTOMATIC STAY WHEN THE

2 DEBTOR DOES NOT COMPLETE INTENDED

3 SURRENDER OF CONSUMER DEBT COLLAT4 ERAL.

5 Title 11, United States Code, is amended as

6 follows—

7 (1) in section 362—

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

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

10 (h)’’; and

11 (B) by redesignating subsection (h), as

12 amended by section 117, as subsection (i) and

13 by inserting after subsection (g) the following:

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

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

16 with respect to property of the estate securing in whole

17 or in part a claim, or subject to an unexpired lease, if

18 the debtor fails within the applicable time set by section

19 521(a)(2) of this title—

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

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

22 respect to that property or to indicate therein that

23 the debtor will either surrender the property or re24 tain it and, if retaining it, either redeem the prop25 erty pursuant to section 722 of this title, reaffirm

26 the debt it secures pursuant to section 524(c) of this
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1 title, or assume the unexpired lease pursuant to sec2 tion 365(p) of this title if the trustee does not do

3 so, as applicable; or

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

5 statement of intention, as it may be amended before

6 expiration of the period for taking action, unless the

7 statement of intention specifies reaffirmation and

8 the creditor refuses to reaffirm on the original con9 tract terms;

10 unless the court determines on the motion of the trustee,

11 and after notice and a hearing, that such property is of

12 consequential value or benefit to the estate.’’; and

13 (2) in section 521, as amended by sections 121

14 and 604—

15 (A) in paragraph (2) by striking ‘‘con16 sumer’’;

17 (B) in paragraph (2)(B)—

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

19 the filing of a notice of intent under this

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

21 first date set for the meeting of creditors

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

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

24 second place it appears and inserting ‘‘30-

25 day’’;
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1 (C) in paragraph (2)(C) by inserting ‘‘ex2 cept as provided in section 362(h) of this title’’

3 before the semicolon; and

4 (D) by adding at the end the following:

5 ‘‘(c) If the debtor fails timely to take the action speci6 fied in subsection (a)(6) of this section, or in paragraphs

7 (1) and (2) of section 362(h) of this title, with respect

8 to property which a lessor or bailor owns and has leased,

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

10 holds a security interest not otherwise voidable under sec11 tion 522(f), 544, 545, 547, 548, or 549 of this title, noth12 ing in this title shall prevent or limit the operation of a

13 provision in the underlying lease or agreement which has

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

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

16 existence of a proceeding under this title or the insolvency

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

18 to justify limiting such a provision in any other cir19 cumstance.’’.

20 SEC. 123. GIVING SECURED CREDITORS FAIR TREATMENT

21 IN CHAPTER 13.

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

23 Code, is amended to read as follows:

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

25 such claim retain the lien securing such claim
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1 until the earlier of payment of the underlying

2 debt determined under nonbankruptcy law or

3 discharge under section 1328 of this title, and

4 that if the case under this chapter is dismissed

5 or converted without completion of the plan,

6 such lien shall also be retained by such holder

7 to the extent recognized by applicable nonbank8 ruptcy law; and’’.

9 SEC. 124. RESTRAINING ABUSIVE PURCHASES ON SECURED

10 CREDIT.

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

12 amended by adding at the end the following:

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

14 or 13—

15 ‘‘(1) subsection (a) shall not apply to an al16 lowed claim to the extent attributable in whole or in

17 part to the purchase price of personal property ac18 quired by the debtor within 5 years of the filing of

19 the petition, except for the purpose of applying para20 graph (3) of this subsection;

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

22 purchase price is secured only by the personal prop23 erty so acquired, the value of the personal property

24 and the amount of the allowed secured claim shall

25 be the sum of the unpaid principal balance of the
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1 purchase price and accrued and unpaid interest and

2 charges at the contract rate;

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

4 purchase price is secured by the personal property so

5 acquired and other property, the value of the secu6 rity may be determined under subsection (a), but the

7 value of the security and the amount of the allowed

8 secured claim shall be not less than the unpaid prin9 cipal balance of the purchase price of the personal

10 property acquired and unpaid interest and charges

11 at the contract rate; and

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

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

14 period beginning on the date the petition is filed in

15 the original case, the value of the personal property

16 and the amount of the allowed secured claim shall

17 be deemed to be not less than the amount provided

18 under paragraphs (2) and (3).’’.

19 SEC. 125. FAIR VALUATION OF COLLATERAL.

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

21 amended by adding at the end the following:

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

23 13, such value with respect to personal property securing

24 an allowed claim shall be determined based on the replace25 ment value of such property as of the date of filing the
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1 petition without deduction for costs of sale or marketing.

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

3 household purpose, replacement value shall mean the price

4 a retail merchant would charge for property of that kind

5 considering the age and condition of the property at the

6 time value is determined.’’.

7 SEC. 126. EXEMPTIONS.

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

9 is amended—

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

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

12 such 180-day period than in any other place’’.

13 SEC. 127. LIMITATION.

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

15 amended—

16 (1) in subsection (b)(2)(A) by inserting ‘‘sub17 ject to subsection (n),’’ before ‘‘any property’’; and

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

19 ‘‘(n) For purposes of subsection (b)(2)(A) and not20 withstanding subsection (a), the value of an interest in—

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

22 or a dependent of the debtor uses as a residence;

23 ‘‘(2) a cooperative that owns property that the

24 debtor or a dependent of the debtor uses as a resi25 dence; or
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1 ‘‘(3) a burial plot for the debtor or a dependent

2 of the debtor;

3 shall be reduced to the extent such value is attributable

4 to any portion of any property that the debtor disposed

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

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

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

8 portion that the debtor could not exempt, under subsection

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

10 disposed of.’’.

11 SEC. 128. ROLLING STOCK EQUIPMENT.

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

13 States Code, is amended to read as follows:

14 ‘‘§ 1168. Rolling stock equipment

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

16 interest in or of a lessor or conditional vendor of equip17 ment described in paragraph (2) to take possession of such

18 equipment in compliance with an equipment security

19 agreement, lease, or conditional sale contract, and to en20 force any of its other rights or remedies under such secu21 rity agreement, lease, or conditional sale contract, to sell,

22 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, except that the
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1 right to take possession and enforce those other rights and

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

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

4 date of commencement of a case under this chapter,

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

6 perform all obligations of the debtor under such se7 curity agreement, lease, or conditional sale contract;

8 and

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

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

11 such security agreement, lease, or conditional sale

12 contract—

13 ‘‘(i) that occurs before the date of com14 mencement of the case and is an event of de15 fault therewith is cured before the expiration of

16 such 60-day period;

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

18 default after the date of commencement of the

19 case and before the expiration of such 60-day

20 period is cured before the later of—

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

22 date of the default or event of the default;

23 or

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

25 period; and
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1 ‘‘(iii) that occurs on or after the expiration

2 of such 60-day period is cured in accordance

3 with the terms of such security agreement,

4 lease, or conditional sale contract, if cure is per5 mitted under that agreement, lease, or condi6 tional sale 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 in11 terest granted by, leased to, or conditionally sold to

12 a debtor; and

13 ‘‘(B) includes all records and documents relat14 ing to such equipment that are required, under the

15 terms of the security agreement, lease, or conditional

16 sale contract, that is to be surrendered or returned

17 by the debtor in connection with the surrender or re18 turn of such 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

23 conditional vendor whose right to take possession is pro24 tected under subsection (a) may agree, subject to the
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1 court’s approval, to extend the 60-day period specified in

2 subsection (a)(1).

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

4 shall immediately surrender and return to a secured party,

5 lessor, or conditional vendor, described in subsection

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

7 time after the date of commencement of the case under

8 this chapter such secured party, lessor, or conditional ven9 dor is entitled pursuant to subsection (a)(1) to take pos10 session of such equipment and makes a written demand

11 for such possession of the trustee.

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

13 paragraph (1) to surrender and return equipment de14 scribed in subsection (a)(2), any lease of such equipment,

15 and any security agreement or conditional sale contract

16 relating to such equipment, if such security agreement or

17 conditional sale contract is an executory contract, shall be

18 deemed rejected.

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

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

21 section—

22 ‘‘(1) the term ‘lease’ includes any written agree23 ment with respect to which the lessor and the debt24 or, as lessee, have expressed in the agreement or in

25 a substantially contemporaneous writing that the
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1 agreement is to be treated as a lease for Federal in2 come 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

7 term ‘rolling stock equipment’ includes rolling stock equip8 ment that is substantially rebuilt and accessories used on

9 such 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

16 a security interest in equipment described in paragraph

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

18 to take possession of such equipment in compliance with

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

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

21 such security agreement, lease, or conditional sale con22 tract, to sell, lease, or otherwise retain or dispose of such

23 equipment, is not limited or otherwise affected by any

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

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

3 be subject to section 362 of this title if—

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

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

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

7 to perform all obligations of the debtor under such

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

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

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

12 such security agreement, lease, or conditional sale

13 contract—

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

15 order is cured before the expiration of such 60-

16 day period;

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

18 and before the expiration of such 60-day period

19 is cured before the later of—

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

21 date of the default; or

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

23 period; and

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

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

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

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

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

6 ‘‘(A) is—

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

8 appliance, or spare part (as defined in section

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

10 interest granted by, leased to, or conditionally

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

14 of title 49 for aircraft capable of carrying 10 or

15 more individuals or 6,000 pounds or more of

16 cargo; or

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

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

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

3 terms of the security agreement, lease, or conditional

4 sale contract, to be surrendered or returned by the

5 debtor in connection with the surrender or return of

6 such equipment.

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

8 or conditional vendor acting in its own behalf or acting

9 as trustee or otherwise in behalf of another party.

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

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

14 in subsection (a)(1).

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

16 shall immediately surrender and return to a secured party,

17 lessor, or conditional vendor, described in subsection

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

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

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

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

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

2 and any security agreement or conditional sale contract

3 relating to such equipment, if such security agreement or

4 conditional sale contract is an executory contract, shall be

5 deemed rejected.

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

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

8 section—

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

12 a substantially contemporaneous writing that the

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

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

17 SEC. 129. DISCHARGE UNDER CHAPTER 13.

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

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

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

22 this title;

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

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

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

3 or

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

5 civil action against the debtor as a result of willful

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

9 SEC. 130. BANKRUPTCY JUDGESHIPS.

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

11 ‘‘Bankruptcy Judgeship Act of 1999’’.

12 (b) TEMPORARY JUDGESHIPS.—

13 (1) APPOINTMENTS.—The following judgeship

14 positions shall be filled in the manner prescribed in

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

16 the appointment of bankruptcy judges provided for

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

18 (A) One additional bankruptcy judgeship

19 for the eastern district of California.

20 (B) Four additional bankruptcy judgeships

21 for the central district of California.

22 (C) One additional bankruptcy judgeship

23 for the southern district of Florida.

24 (D) Two additional bankruptcy judgeships

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

2 for the eastern district of Michigan.

3 (F) One additional bankruptcy judgeship

4 for the southern district of Mississippi.

5 (G) One additional bankruptcy judgeship

6 for the district of New Jersey.

7 (H) One additional bankruptcy judgeship

8 for the eastern district of New York.

9 (I) One additional bankruptcy judgeship

10 for the northern district of New York.

11 (J) One additional bankruptcy judgeship

12 for the southern district of New York.

13 (K) One additional bankruptcy judgeship

14 for the eastern district of Pennsylvania.

15 (L) One additional bankruptcy judgeship

16 for the middle district of Pennsylvania.

17 (M) One additional bankruptcy judgeship

18 for the western district of Tennessee.

19 (N) One additional bankruptcy judgeship

20 for the eastern district of Virginia.

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

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

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

4 shall not be filled.

5 (c) EXTENSIONS.—

6 (1) IN GENERAL.—The temporary bankruptcy

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

10 and the eastern district of Tennessee under section

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

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

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

16 removal of a bankruptcy judge and occurring—

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

18 1993, with respect to the northern district of

19 Alabama;

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

21 1993, with respect to the district of Delaware;

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

23 1994, with respect to the district of Puerto

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

2 with respect to the district of South Carolina;

3 and

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

5 1993, with respect to the eastern district of

6 Tennessee.

7 (2) APPLICABILITY OF OTHER PROVISIONS.—

8 All other provisions of section 3 of the Bankruptcy

9 Judgeship Act of 1992 remain applicable to such

10 temporary judgeship position.

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

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

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

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

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

18 (e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—

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

20 by adding at the end the following new subsection:

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

22 expenses’—

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

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

2 bankruptcy judge if—

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

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

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

8 United States or any other person or entity for

9 the payment of such travel expenses.

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

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

12 bankruptcy judge for the district in which the bankruptcy

13 judge is assigned.

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

15 annual report to the Director of the Administrative Office

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

17 bankruptcy judge assigned to the applicable district (in18 cluding the travel expenses of the chief bankruptcy judge

19 of such district).

20 ‘‘(B) The annual report under this paragraph shall

21 include—

22 ‘‘(i) the travel expenses of each bankruptcy

23 judge, with the name of the bankruptcy judge to

24 whom the travel expenses apply;
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1 ‘‘(ii) a description of the subject matter and

2 purpose of the travel relating to each travel expense

3 identified under clause (i), with the name of the

4 bankruptcy judge to whom the travel applies; and

5 ‘‘(iii) the number of days of each travel de6 scribed under clause (ii), with the name of the bank7 ruptcy judge to whom the travel applies.

8 ‘‘(4)(A) The Director of the Administrative Office of

9 the United States Courts shall—

10 ‘‘(i) consolidate the reports submitted under

11 paragraph (3) into a single report; and

12 ‘‘(ii) annually submit such consolidated report

13 to Congress.

14 ‘‘(B) The consolidated report submitted under this

15 paragraph shall include the specific information required

16 under paragraph (3)(B), including the name of each bank17 ruptcy judge with respect to clauses (i), (ii), and (iii) of

18 paragraph (3)(B).’’.

19 SEC. 131. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED

20 STATES CODE.

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

22 is amended by inserting after paragraph (9) the following:

23 ‘‘(10) Tenth, allowed claims for death or per24 sonal injuries resulting from the operation of a

25 motor vehicle or vessel if such operation was unlaw-
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1 ful because the debtor was intoxicated from using al2 cohol, a drug or another substance.’’.

3 (b) Section 523(a)(9) of title 11, United States Code,

4 is amended by inserting ‘‘or vessel’’ after ‘‘vehicle’’.

5 SEC. 132. AMENDMENT TO SECTION 1325 OF TITLE 11,

6 UNITED STATES CODE.

7 Section 1325(b)(2) of title 11, United States Code,

8 is amended by inserting after ‘‘received by the debtor’’,

9 ‘‘(other than child support payments, foster care pay10 ments, or disability payments for a dependent child made

11 in accordance with applicable nonbankruptcy law and

12 which is reasonably necessary to be expended)’’.

13 SEC. 133. APPLICATION OF THE CODEBTOR STAY ONLY

14 WHEN THE STAY PROTECTS THE DEBTOR.

15 Section 1301(b) of title 11, United States Code, is

16 amended—

17 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

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

19 ‘‘(2)(A) Notwithstanding subsection (c) and except as

20 provided in subparagraph (B), in any case in which the

21 debtor did not receive the consideration for the claim held

22 by a creditor, the stay provided by subsection (a) shall

23 apply to that creditor for a period not to exceed 30 days

24 beginning on the date of the order for relief, to the extent

25 the creditor proceeds against—
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1 ‘‘(i) the individual that received that consider2 ation; or

3 ‘‘(ii) property not in the possession of the debt4 or that secures that claim.

5 ‘‘(B) Notwithstanding subparagraph (A), the stay

6 provided by subsection (a) shall apply in any case in which

7 the debtor is primarily obligated to pay the creditor in

8 whole or in part with respect to a claim described in sub9 paragraph (A) under a legally binding separation or prop10 erty settlement agreement or divorce or dissolution decree

11 with respect to—

12 ‘‘(i) an individual described in subparagraph

13 (A)(i); or

14 ‘‘(ii) property described in subparagraph (A)(ii).

15 ‘‘(3) Notwithstanding subsection (c), the stay pro16 vided by subsection (a) shall terminate as of the date of

17 confirmation of the plan, in any case in which the plan

18 of the debtor provides that the debtor’s interest in per19 sonal property subject to a lease with respect to which the

20 debtor is the lessee will be surrendered or abandoned or

21 no payments will be made under the plan on account of

22 the debtor’s obligations under the lease.’’.
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1 SEC. 134. ADEQUATE PROTECTION FOR INVESTORS.

2 (a) DEFINITION.—Section 101 of title 11, United

3 States Code, is amended by inserting after paragraph (48)

4 the following:

5 ‘‘(48A) ‘securities self regulatory organization’

6 means either a securities association registered with

7 the Securities and Exchange Commission pursuant

8 to section 15A of the Securities Exchange Act of

9 1934 or a national securities exchange registered

10 with the Securities and Exchange Commission pur11 suant to section 6 of the Securities Exchange Act of

12 1934;’’.

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

14 United States Code, as amended by section 120, is

15 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 a inserting ‘‘; or’’; and

20 (3) by inserting after paragraph (20) the fol21 lowing:

22 ‘‘(21) under subsection (a), of the commence23 ment or continuation of an investigation or action by

24 a securities self regulatory organization to enforce

25 such organization’s regulatory power; of the enforce26 ment of an order or decision, other than for mone-
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1 tary sanctions, obtained in an action by the securi2 ties self regulatory organization to enforce such or3 ganization’s regulatory power; or of any act taken by

4 the securities self regulatory organization to delist,

5 delete, or refuse to permit quotation of any stock

6 that does not meet applicable regulatory require7 ments.’’.

8 SEC. 135. LIMITATION ON LUXURY GOODS.

9 Section 523(a)(2)(C) of title 11, United States Code,

10 is amended to read as follows:

11 ‘‘(C)(i) for purposes of subparagraph (A), con12 sumer debts owed to a single creditor and aggregat13 ing more than $250 for ‘luxury goods or services’ in14 curred by an individual debtor on or within 90 days

15 before the order for relief under this title, or cash

16 advances aggregating more than $250 that are ex17 tensions of consumer credit under an open end cred18 it plan obtained by an individual debtor on or within

19 90 days before the order for relief under this title,

20 are presumed to be nondischargeable; and

21 ‘‘(ii) for purposes of this subparagraph—

22 ‘‘(I) the term ‘luxury goods or services’

23 does not include goods or services reasonably

24 necessary for the support or maintenance of the

25 debtor or a dependent of the debtor; and
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1 ‘‘(II) the term ‘an extension of consumer

2 credit under an open end credit plan’ has the

3 same meaning such term has for purposes of

4 the Consumer Credit Protection Act;’’.

5 SEC. 136. GIVING DEBTORS THE ABILITY TO KEEP LEASED

6 PERSONAL PROPERTY BY ASSUMPTION.

7 Section 365 of title 11, United States Code, is

8 amended by adding at the end the following:

9 ‘‘(p)(1) If a lease of personal property is rejected or

10 not timely assumed by the trustee under subsection (d),

11 the leased property is no longer property of the estate and

12 the stay under section 362(a) of this title is automatically

13 terminated.

14 ‘‘(2) In the case of an individual under chapter 7,

15 the debtor may notify the creditor in writing that the debt16 or desires to assume the lease. Upon being so notified,

17 the creditor may, at its option, notify the debtor that it

18 is willing to have the lease assumed by the debtor and

19 may condition such assumption on cure of any outstanding

20 default on terms set by the contract. If within 30 days

21 of such notice the debtor notifies the lessor in writing that

22 the lease is assumed, the liability under the lease will be

23 assumed by the debtor and not by the estate. The stay

24 under section 362 of this title and the injunction under

25 section 524(a)(2) of this title shall not be violated by noti-
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1 fication of the debtor and negotiation of cure under this

2 subsection.

3 ‘‘(3) In a case under chapter 11 of this title in which

4 the debtor is an individual and in a case under chapter

5 13 of this title, if the debtor is the lessee with respect

6 to personal property and the lease is not assumed in the

7 plan confirmed by the court, the lease is deemed rejected

8 as of the conclusion of the hearing on confirmation. If the

9 lease is rejected, the stay under section 362 of this title

10 and any stay under section 1301 is automatically termi11 nated with respect to the property subject to the lease.’’.

12 SEC. 137. ADEQUATE PROTECTION OF LESSORS AND PUR13 CHASE MONEY SECURED CREDITORS.

14 (a) IN GENERAL.—Chapter 13 of title 11, United

15 States Code, is amended by adding after section 1307 the

16 following:

17 ‘‘§ 1307A. Adequate protection in chapter 13 cases

18 ‘‘(a)(1)(A) On or before the date that is 30 days after

19 the filing of a case under this chapter, the debtor shall

20 make cash payments in an amount determined under

21 paragraph (2)(A), to—

22 ‘‘(i) any lessor of personal property; and

23 ‘‘(ii) any creditor holding a claim secured by

24 personal property to the extent that the claim is at-
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1 tributable to the purchase of that property by the

2 debtor.

3 ‘‘(B) The debtor or the plan shall continue making

4 the adequate protection payments until the earlier of the

5 date on which—

6 ‘‘(i) the creditor begins to receive actual pay7 ments under the plan; or

8 ‘‘(ii) the debtor relinquishes possession of the

9 property referred to in subparagraph (A) to—

10 ‘‘(I) the lessor or creditor; or

11 ‘‘(II) any third party acting under claim of

12 right, as applicable.

13 ‘‘(2) The payments referred to in paragraph (1)(A)

14 shall be the contract amount.

15 ‘‘(b)(1) Subject to the limitations under paragraph

16 (2), the court may, after notice and hearing, change the

17 amount and timing of the dates of payment of payments

18 made under subsection (a).

19 ‘‘(2)(A) The payments referred to in paragraph (1)

20 shall be payable not less frequently than monthly.

21 ‘‘(B) The amount of payments referred to in para22 graph (1) shall not be less than the amount of any weekly,

23 biweekly, monthly, or other periodic payment schedules as

24 payable under the contract between the debtor and credi25 tor.
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1 ‘‘(c) Notwithstanding section 1326(b), the payments

2 referred to in subsection (a)(1)(A) shall be continued in

3 addition to plan payments under a confirmed plan until

4 actual payments to the creditor begin under that plan, if

5 the confirmed plan provides—

6 ‘‘(1) for payments to a creditor or lessor de7 scribed in subsection (a)(1); and

8 ‘‘(2) for the deferral of payments to such credi9 tor or lessor under the plan until the payment of

10 amounts described in section 1326(b).

11 ‘‘(d) Notwithstanding sections 362, 542, and 543, a

12 lessor or creditor described in subsection (a) may retain

13 possession of property described in that subsection that

14 was obtained in accordance with applicable law before the

15 date of filing of the petition until the first payment under

16 subsection (a)(1)(A) is received by the lessor or creditor.

17 ‘‘(e) On or before 60 days after the filling of a case

18 under this chapter, a debtor retaining possession of per19 sonal property subject to a lease or securing a claim attrib20 utable in whole or in part to the purchase price of such

21 property shall provide each creditor or lessor reasonable

22 evidence of the maintenance of any required insurance

23 coverage with respect to the use or ownership of such

24 property and continue to do so for so long as the debtor

25 retains possession of such property.’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of chapter 13 of title 11, United States

3 Code, is amended by inserting after the item relating to

4 section 1307 the following:

‘‘1307A. Adequate protection in chapter 13 cases.’’.

5 SEC. 139. AUTOMATIC STAY.

6 Section 362(b) of title 11, United States Code, as

7 amended by sections 120 and 134, is amended—

8 (1) in paragraph (20), by striking ‘‘or’’ at the

9 end;

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

11 the end and inserting a semicolon; and

12 (3) by inserting after paragraph (21) the fol13 lowing:

14 ‘‘(22) under subsection (a) of any transfer that

15 is not avoidable under section 544 of this title and

16 that is not avoidable under section 549 of this title;

17 ‘‘(23) under subsection (a)(3), of the continu18 ation of any eviction, unlawful detainer action, or

19 similar proceeding by a lessor against a debtor in20 volving residential real property in which the debtor

21 resides as a tenant under a rental agreement and

22 the debtor has not paid rent to the lessor pursuant

23 to the terms of the lease agreement or applicable

24 State law after the commencement and during the

25 course of the case;
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1 ‘‘(24) under subsection (a)(3), of the com2 mencement or continuation of any eviction, unlawful

3 detainer action, or similar proceeding by a lessor

4 against a debtor involving residential real property

5 in which the debtor resides as a tenant under a rent6 al agreement that has terminated pursuant to the

7 lease agreement or applicable State law;

8 ‘‘(25) under subsection (a)(3), of any eviction,

9 unlawful detainer action, or similar proceeding, if

10 the debtor has previously filed within the last year

11 and failed to pay post-petition rent during the

12 course of that case; or

13 ‘‘(26) under subsection (a)(3), of eviction ac14 tions based on endangerment to property or person

15 or the use of illegal drugs.’’.

16 SEC. 140. EXTEND PERIOD BETWEEN BANKRUPTCY DIS17 CHARGES.

18 Title 11, United States Code, is amended—

19 (1) in section 727(a)(8) by striking ‘‘six’’ and

20 inserting ‘‘8’’; and

21 (2) in section 1328 by adding at the end the

22 following:

23 ‘‘(f) Notwithstanding subsections (a) and (b), the

24 court shall not grant a discharge of all debts provided for

25 by the plan or disallowed under section 502 of this title
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1 if the debtor has received a discharge in any case filed

2 under this title within 5 years of the order for relief under

3 this chapter.’’.

4 SEC. 141. DEFINITION OF DOMESTIC SUPPORT OBLIGA5 TION.

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

7 amended—

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

9 (2) by inserting after paragraph (14) the fol10 lowing:

11 (14A) ‘domestic support obligation’ means a debt

12 that accrues before or after the entry of an order for

13 relief under this title that is—

14 ‘‘(A) owed to or recoverable by—

15 ‘‘(i) a spouse, former spouse, or child

16 of the debtor or that child’s legal guardian;

17 or

18 ‘‘(ii) a governmental unit;

19 ‘‘(B) in the nature of alimony, mainte20 nance, or support (including assistance provided

21 by a governmental unit) of such spouse, former

22 spouse, or child, without regard to whether such

23 debt is expressly so designated;

24 ‘‘(C) established or subject to establish25 ment before or after entry of an order for relief
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1 under this title, by reason of applicable provi2 sions of—

3 ‘‘(i) a separation agreement, divorce

4 decree, or property settlement agreement;

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

6 ‘‘(iii) a determination made in accord7 ance with applicable nonbankruptcy law by

8 a governmental unit; and

9 ‘‘(D) not assigned to a nongovernmental

10 entity, unless that obligation is assigned volun11 tarily by the spouse, former spouse, child, or

12 parent solely for the purpose of collecting the

13 debt.’’.

14 SEC. 142. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP15 PORT OBLIGATIONS.

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

17 amended—

18 (1) by striking paragraph (7);

19 (2) by redesignating paragraphs (1) through

20 (6) as paragraphs (2) through (7), respectively;

21 (3) in paragraph (2), as redesignated, by strik22 ing ‘‘First’’ and inserting ‘‘Second’’;

23 (4) in paragraph (3), as redesignated, by strik24 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 redes10 ignated, the following:

11 ‘‘(1) First, allowed claims for domestic support obli12 gations to be paid in the following order on the condition

13 that funds received under this paragraph by a govern14 mental unit in a case under this title be applied:

15 ‘‘(A) Claims that, as of the date of entry of the

16 order for relief, are owed directly to a spouse, former

17 spouse, or child of the debtor, or the parent of such

18 child, without regard to whether the claim is filed by

19 the spouse, former spouse, child, or parent, or is

20 filed by a governmental unit on behalf of that per21 son.

22 ‘‘(B) Claims that, as of the date of entry of the

23 order for relief, are assigned by a spouse, former

24 spouse, child of the debtor, or the parent of that

25 child to a governmental unit or are owed directly to
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1 a governmental unit under applicable nonbankruptcy

2 law.’’.

3 SEC. 143. REQUIREMENTS TO OBTAIN CONFIRMATION AND

4 DISCHARGE IN CASES INVOLVING DOMESTIC

5 SUPPORT OBLIGATIONS.

6 Title 11, United States Code, is amended—

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

8 following:

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

10 administrative order or statute to pay a domestic

11 support obligation, the debtor has paid all amounts

12 payable under such order or statute for such obliga13 tion that become payable after the date on which the

14 petition is filed.’’;

15 (2) in section 1325(a)—

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

17 the end;

18 (B) in paragraph (6), by striking the pe19 riod 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

22 administrative order or statute to pay a domestic

23 support obligation, the debtor has paid all amounts

24 payable under such order for such obligation that
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1 become payable after the date on which the petition

2 is filed.’’; and

3 (3) in section 1328(a), as amended by section

4 129, in the matter preceding paragraph (1), by in5 serting ‘‘, and with respect to a debtor who is re6 quired by a judicial or administrative order to pay

7 a domestic support obligation, certifies that all

8 amounts payable under such order or statute that

9 are due on or before the date of the certification (in10 cluding amounts due before or after the petition was

11 filed) have been paid’’ after ‘‘completion by the debt12 or of all payments under the plan’’.

13 SEC. 144. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC

14 SUPPORT OBLIGATION PROCEEDINGS.

15 Section 362(b) of title 11, United States Code, as

16 amended by sections 120, 134, and 139, is amended—

17 (1) by striking paragraph (2) and inserting the

18 following:

19 ‘‘(2) under subsection (a)—

20 ‘‘(A) of the commencement or continuation

21 of an action or proceeding for—

22 ‘‘(i) the establishment of paternity as

23 a part of an effort to collect domestic sup24 port obligations; or
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1 ‘‘(ii) the establishment or modification

2 of an order for domestic support obliga3 tions; or

4 ‘‘(B) the collection of a domestic support

5 obligation from property that is not property of

6 the estate;’’;

7 (2) in paragraph (25), by striking ‘‘or’’ at the

8 end;

9 (3) in paragraph (26), by striking the period at

10 the end and inserting a semicolon; and

11 (4) by inserting after paragraph (26) the fol12 lowing:

13 ‘‘(27) under subsection (a) with respect to the

14 withholding of income pursuant to an order as speci15 fied in section 466(b) of the Social Security Act (42

16 U.S.C. 666(b)); or

17 ‘‘(28) under subsection (a) with respect to—

18 ‘‘(A) the withholding, suspension, or re19 striction of drivers’ licenses, professional and

20 occupational licenses, and recreational licenses

21 pursuant to State law, as specified in section

22 466(a)(16) of the Social Security Act (42

23 U.S.C. 666(a)(16)) or with respect to the re24 porting of overdue support owed by an absent

25 parent to any consumer reporting agency as
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1 specified in section 466(a)(7) of the Social Se2 curity Act (42 U.S.C. 666(a)(7));

3 ‘‘(B) the interception of tax refunds, as

4 specified in sections 464 and 466(a)(3) of the

5 Social Security Act (42 U.S.C. 664 and

6 666(a)(3)); or

7 ‘‘(C) the enforcement of medical obliga8 tions as specified under title IV of the Social

9 Security Act (42 U.S.C. 601 et seq.).’’.

10 SEC. 145. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR

11 ALIMONY, MAINTENANCE, AND SUPPORT.

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

13 amended—

14 (1) in subsection (a), by striking paragraph (5)

15 and inserting the following:

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

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

18 and inserting ‘‘or (6)’’; and

19 (3) in paragraph (15), by striking ‘‘govern20 mental unit’’ and all through the end of the para21 graph and inserting a semicolon.

22 SEC. 146. CONTINUED LIABILITY OF PROPERTY.

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

24 amended—
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1 (1) in subsection (c), by striking paragraph (1)

2 and inserting the following:

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

4 or (5) of section 523(a) (in which case, notwith5 standing any provision of applicable nonbankruptcy

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

7 a debt of a kind specified in section 523(a)(5);’’; and

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

9 and all that follows through the end of the subpara10 graph and inserting ‘‘of a kind that is specified in

11 section 523(a)(5); or’’.

12 SEC. 147. PROTECTION OF DOMESTIC SUPPORT CLAIMS

13 AGAINST PREFERENTIAL TRANSFER MO14 TIONS.

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

16 amended to read as follows:

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

18 payment of a debt for a domestic support obligation;

19 or’’.

20 SEC. 148. DEFINITION OF HOUSEHOLD GOODS AND AN21 TIQUES.

22 Section 522(f)(1)(B) of title 11, United States Code,

23 is amended as follows:

24 (1) by inserting ‘‘(i)’’ after ‘‘(B)’’; and

25 (2) by striking ‘‘(i)’’ and inserting ‘‘(aa)’’; and
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1 (3) by striking ‘‘(ii)’’ and inserting ‘‘(bb)’’;

2 (4) by striking ‘‘(iii)’’ and inserting ‘‘(cc)’’;

3 (5) by adding at the end thereof the following:

4 ‘‘(ii) ‘household goods’ shall mean for the

5 purposes of this subparagraph (B) clothing;

6 furniture; appliances; one radio; one television;

7 one VCR; linens; china; crockery; kitchenware;

8 educational materials and educational equip9 ment primarily for the use of minor dependent

10 children of the debtor, but only one personal

11 computer only if used primarily for the edu12 cation or entertainment of such minor children;

13 medical equipment and supplies; furniture ex14 clusively for the use of minor children, elderly

15 or disabled dependents of the debtor; and per16 sonal effects (including wedding rings and the

17 toys and hobby equipment of minor dependent

18 children) of the debtor and his or her depend19 ents: Provided, That the following are not in20 cluded within the scope of the term ‘household

21 goods’:

22 ‘‘(aa) works of art (unless by or of the

23 debtor or his or her dependents);
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1 ‘‘(bb) electronic entertainment equip2 ment (except one television, one radio, and

3 one VCR);

4 ‘‘(cc) items acquired as antiques;

5 ‘‘(dd) jewelry (except wedding rings);

6 ‘‘(ee) a computer (except as otherwise

7 provided for in this section), motor vehicle

8 (including a tractor or lawn tractor), boat,

9 or a motorized recreational device, convey10 ance, vehicle, watercraft, or aircraft.’’.

11 SEC. 149. NONDISCHARGEABLE DEBTS.

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

13 amended by inserting after paragraph (14) the following:

14 ‘‘(14A) incurred to pay a debt that is non15 dischargeable by reason of section 727, 1141,

16 1228(a), 1228(b), or 1328(b), or any other provision

17 of this subsection, if the debtor incurred the debt to

18 pay such a nondischargeable debt with the intent to

19 discharge in bankruptcy the newly-created debt, ex20 cept that all debts incurred to pay nondischargeable

21 debts, without regard to intent, are nondischargeable

22 if incurred within 90 days of the filing of the peti23 tion;’’.
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1 TITLE II—DISCOURAGING

2 BANKRUPTCY ABUSE

3 SEC. 201. REENACTMENT OF CHAPTER 12.

4 (a) REENACTMENT.—Chapter 12 of title 11 of the

5 United States Code, as in effect on March 31, 1999, is

6 hereby reenacted.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall take effect on March 31, 1999.

9 SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY

10 HOLDERS.

11 Section 341 of title 11, United States Code, is

12 amended by adding at the end the following:

13 ‘‘(e) Notwithstanding subsections (a) and (b), the

14 court, on the request of a party in interest and after notice

15 and a hearing, for cause may order that the United States

16 trustee not convene a meeting of creditors or equity secu17 rity holders if the debtor has filed a plan as to which the

18 debtor solicited acceptances prior to the commencement

19 of the case.’’.

20 SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANK21 RUPTCY.

22 (a) IN GENERAL.—Section 522 of title 11, United

23 States Code, is amended—

24 (1) in subsection (b)—

25 (A) in paragraph (2)—
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1 (i) by striking ‘‘(2)(A) any property’’

2 and inserting:

3 ‘‘(3) Property listed in this paragraph is—

4 ‘‘(A) any property’’;

5 (ii) in subparagraph (A), by striking

6 ‘‘and’’ at the end;

7 (iii) in subparagraph (B), by striking

8 the period at the end and inserting ‘‘;

9 and’’; and

10 (iv) by adding at the end the follow11 ing:

12 ‘‘(C) retirement funds to the extent that those

13 funds are in a fund or account that is exempt from

14 taxation under section 401, 403, 408, 408A, 414,

15 457, or 501(a) of the Internal Revenue Code of

16 1986.’’;

17 (B) by striking paragraph (1) and insert18 ing:

19 ‘‘(2) Property listed in this paragraph is property

20 that is specified under subsection (d), unless the State law

21 that is applicable to the debtor under paragraph (3)(A)

22 specifically does not so authorize.’’;

23 (C) in the matter preceding paragraph

24 (2)—
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1 (i) by striking ‘‘(b)’’ and inserting

2 ‘‘(b)(1)’’;

3 (ii) by striking ‘‘paragraph (2)’’ both

4 places it appears and inserting ‘‘paragraph

5 (3)’’;

6 (iii) by striking ‘‘paragraph (1)’’ each

7 place it appears and inserting ‘‘paragraph

8 (2)’’; and

9 (iv) by striking ‘‘Such property is—’’;

10 and

11 (D) by adding at the end of the subsection

12 the following:

13 ‘‘(4) For purposes of paragraph (3)(C), the following

14 shall apply:

15 ‘‘(A) If the retirement funds are in a retirement

16 fund that has received a favorable determination

17 pursuant to section 7805 of the Internal Revenue

18 Code of 1986, and that determination is in effect as

19 of the date of the commencement of the case under

20 section 301, 302, or 303 of this title, those funds

21 shall be presumed to be exempt from the estate.

22 ‘‘(B) If the retirement funds are in a retirement

23 fund that has not received a favorable determination

24 pursuant to such section 7805, those funds are ex-
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1 empt from the estate if the debtor demonstrates

2 that—

3 ‘‘(i) no prior determination to the contrary

4 has been made by a court or the Internal Reve5 nue Service; and

6 ‘‘(ii) the retirement fund is in substantial

7 compliance with the applicable requirements of

8 the Internal Revenue Code of 1986.

9 ‘‘(C) A direct transfer of retirement funds from

10 1 fund or account that is exempt from taxation

11 under section 401, 403, 408, 408A, 414, 457, or

12 501(a) of the Internal Revenue Code of 1986, pur13 suant to section 401(a)(31) of the Internal Revenue

14 Code of 1986, or otherwise, shall not cease to qualify

15 for exemption under paragraph (3)(C) by reason of

16 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

21 qualify for exemption under paragraph (3)(C) by

22 reason of that distribution.

23 ‘‘(ii) A distribution described in this clause is

24 an amount that—
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1 ‘‘(I) has been distributed from a fund or

2 account that is exempt from taxation under sec3 tion 401, 403, 408, 408A, 414, 457, or 501(a)

4 of the Internal Revenue Code of 1986; and

5 ‘‘(II) to the extent allowed by law, is de6 posited in such a fund or account not later than

7 60 days after the distribution of that amount.’’;

8 and

9 (2) in subsection (d)—

10 (A) in the matter preceding paragraph (1),

11 by striking ‘‘subsection (b)(1)’’ and inserting

12 ‘‘subsection (b)(2)’’; and

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

14 ‘‘(12) Retirement funds to the extent that those

15 funds are in a fund or account that is exempt from tax16 ation under section 401, 403, 408, 408A, 414, 457, or

17 501(a) of the Internal Revenue Code of 1986.’’.

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

19 United States Code, as amended by sections 120, 134,

20 139, and 144 is amended—

21 (1) in paragraph (27), by striking ‘‘or’’ at the

22 end;

23 (2) in paragraph (28), by striking the period

24 and inserting ‘‘; or’’;
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1 (3) by inserting after paragraph (28) the fol2 lowing:

3 ‘‘(29) under subsection (a), of withholding of

4 income from a debtor’s wages and collection of

5 amounts withheld, pursuant to the debtor’s agree6 ment authorizing that withholding and collection for

7 the benefit of a pension, profit-sharing, stock bonus,

8 or other plan established under section 401, 403,

9 408, 408A, 414, 457, or 501(a) of the Internal Rev10 enue Code of 1986 that is sponsored by the em11 ployer of the debtor, or an affiliate, successor, or

12 predecessor of such employer—

13 ‘‘(A) to the extent that the amounts with14 held and collected are used solely for payments

15 relating to a loan from a plan that satisfies the

16 requirements of section 408(b)(1) of the Em17 ployee Retirement Income Security Act of 1974

18 or is subject to section 72(p) of the Internal

19 Revenue Code of 1986; or

20 ‘‘(B) in the case of a loan from a thrift

21 savings plan described in subchapter III of title

22 5, that satisfies the requirements of section

23 8433(g) of such title.’’; and

24 (4) by adding at the end of the flush material

25 following paragraph (19) the following: ‘‘Paragraph
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1 (19) does not apply to any amount owed to a plan

2 referred to in that paragraph that is incurred under

3 a loan made during the 1-year period preceding the

4 filing of a petition. Nothing in paragraph (19) may

5 be construed to provide that any loan made under

6 a governmental plan under section 414(d), or a con7 tract or account under section 403(b), of the Inter8 nal Revenue Code of 1986 constitutes a claim or a

9 debt under this title.’’.

10 (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of

11 title 11, United States Code, is amended—

12 (1) by striking ‘‘or’’ at the end of paragraph

13 (17);

14 (2) by striking the period at the end of para15 graph (18) and inserting ‘‘; or’’; and

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

17 ‘‘(19) owed to a pension, profit-sharing, stock

18 bonus, or other plan established under section 401,

19 403, 408, 408A, 414, 457, or 501(c) of the Internal

20 Revenue Code of 1986, pursuant to—

21 ‘‘(A) a loan permitted under section

22 408(b)(1) of the Employee Retirement Income

23 Security Act of 1974) or subject to section

24 72(p) of the Internal Revenue Code of 1986; or
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1 ‘‘(B) a loan from the thrift savings plan

2 described in subchapter III of title 5, that satis3 fies the requirements of section 8433(g) of such

4 title.

5 Paragraph (19) does not apply to any amount owed to

6 a plan referred to in that paragraph that is incurred under

7 a loan made during the 1-year period preceding the filing

8 of a petition. Nothing in paragraph (19) may be construed

9 to provide that any loan made under a governmental plan

10 under section 414(d), or a contract or account under sec11 tion 403(b), of the Internal Revenue Code of 1986 con12 stitutes a claim or a debt under this title.’’.

13 (d) PLAN CONTENTS.—Section 1322 of title 11,

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

15 following:

16 ‘‘(f) A plan may not materially alter the terms of a

17 loan described in section 362(b)(19) of this title.’’.

18 SEC. 204. PROTECTION OF REFINANCE OF SECURITY IN19 TEREST.

20 Subparagraphs (A), (B), and (C) of section 547(e)(2)

21 of title 11, United States Code, are amended by striking

22 ‘‘10’’ each place it appears and inserting ‘‘30’’.
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1 SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED

2 LEASES.

3 Section 365(d)(4) of title 11, United States Code, is

4 amended to read as follows:

5 ‘‘(4)(A) Subject to subparagraph (B), in any case

6 under any chapter of this title, an unexpired lease of non7 residential real property under which the debtor is the les8 see shall be deemed rejected and the trustee shall imme9 diately surrender that nonresidential real property to the

10 lessor if the trustee does not assume or reject the unex11 pired lease by the earlier of—

12 ‘‘(i) the date that is 180 days after the date of

13 the order for relief; or

14 ‘‘(ii) the date of the entry of an order confirm15 ing a plan.

16 ‘‘(B) The court may extend the period determined

17 under subparagraph (A) only upon a motion of the les18 sor.’’.

19 SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS

20 COMMITTEES.

21 Section 1102(a)(2) of title 11, United States Code,

22 is amended by inserting before the first sentence the fol23 lowing: ‘‘On its own motion or on request of a party in

24 interest, and after notice and hearing, the court may order

25 a change in the membership of a committee appointed

26 under this subsection, if the court determines that the
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1 change is necessary to ensure adequate representation of

2 creditors or equity security holders.’’.

3 SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11,

4 UNITED STATES CODE.

5 Section 546 of title 11, United States Code, is

6 amended by inserting at the end thereof:

7 ‘‘(I) Notwithstanding section 545 (2) and (3) of

8 this title, the trustee may not avoid a

9 warehouseman’s lien for storage, transportation or

10 other costs incidental to the storage and handling of

11 goods, as provided by section 7–209 of the Uniform

12 Commercial Code.’’.

13 SEC. 208. LIMITATION.

14 Section 546(c)(1)(B) of title 11, United States Code,

15 is amended by striking ‘‘20’’ and inserting ‘‘45’’.

16 SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11,

17 UNITED STATES CODE.

18 Section 330(a) of title 11, United States Code, is

19 amended—

20 (1) in subsection (3)(A) after the word ‘‘award21 ed’’, by inserting ‘‘to an examiner, chapter 11 trust22 ee, or professional person’’; and

23 (2) by adding at the end of subsection (3)(A)

24 the following:
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1 ‘‘(3)(B) In determining the amount of reason2 able compensation to be awarded a trustee, the court

3 shall treat such compensation as a commission based

4 on the results achieved.’’.

5 SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.

6 Section 1125 of title 11, United States Code, is

7 amended by adding at the end the following:

8 ‘‘(g) Notwithstanding subsection (b), an acceptance

9 or rejection of the plan may be solicited from a holder

10 of a claim or interest if such solicitation complies with ap11 plicable nonbankruptcy law and if such holder was solic12 ited before the commencement of the case in a manner

13 complying with applicable nonbankruptcy law.’’.

14 SEC. 211. PREFERENCES.

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

16 amended—

17 (1) by amending paragraph (2) to read as fol18 lows:

19 ‘‘(2) to the extent that such transfer was in

20 payment of a debt incurred by the debtor in the or21 dinary course of business or financial affairs of the

22 debtor and the transferee, and such transfer was—

23 ‘‘(A) made in the ordinary course of busi24 ness or financial affairs of the debtor and the

25 transferee; or
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1 ‘‘(B) made according to ordinary business

2 terms;’’;

3 (2) in paragraph (7) by striking ‘‘or’’ at the

4 end;

5 (3) in paragraph (8) by striking the period at

6 the end and inserting ‘‘; or’’; and

7 (4) by adding at the end the following:

8 ‘‘(9) if, in a case filed by a debtor whose debts

9 are not primarily consumer debts, the aggregate

10 value of all property that constitutes or is affected

11 by such transfer is less than $5000.’’.

12 SEC. 212. VENUE OF CERTAIN PROCEEDINGS.

13 Section 1409(b) of title 28, United States Code, is

14 amended by inserting ‘‘, or a nonconsumer debt against

15 a noninsider of less than $10,000,’’ after ‘‘$5,000’’.

16 SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

17 Section 1121(d) of title 11, United States Code, is

18 amended—

19 (1) by striking ‘‘On’’ and inserting ‘‘(1) Subject

20 to paragraph (1), on’’; and

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

22 ‘‘(2)(A) Such 120-day period may not be extended

23 beyond a date that is 18 months after the date of the order

24 for relief under this chapter.
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1 ‘‘(B) Such 180-day period may not be extended be2 yond a date that is 20 months after the date of the order

3 for relief under this chapter.’’.

4 SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP IN5 TERESTS.

6 Section 523(a)(16) of title 11, United States Code,

7 is amended—

8 (1) by striking ‘‘dwelling’’ the first place it ap9 pears;

10 (2) by striking ‘‘ownership or’’ and inserting

11 ‘‘ownership,’’;

12 (3) by striking ‘‘housing’’ the first place it ap13 pears; and

14 (4) by striking ‘‘but only’’ and all that follows

15 through ‘‘such period,’’, and inserting ‘‘or a lot in a

16 homeowners association, for as long as the debtor or

17 the trustee has a legal, equitable, or possessory own18 ership interest in such unit, such corporation, or

19 such lot, and until such time as the debtor or trustee

20 has surrendered any legal, equitable or possessory

21 interest in such unit, such corporation, or such lot,’’.
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1 SEC. 215. CLAIMS RELATING TO INSURANCE DEPOSITS IN

2 CASES ANCILLARY TO FOREIGN PROCEED3 INGS.

4 Section 304 of title 11, United States Code, is

5 amended to read as follows:

6 ‘‘§ 304. Cases ancillary to foreign proceedings

7 ‘‘(a) For purposes of this section—

8 ‘‘(1) the term ‘domestic insurance company’

9 means a domestic insurance company, as such term

10 is used in section 109(b)(2);

11 ‘‘(2) the term ‘foreign insurance company’

12 means a foreign insurance company, as such term is

13 used in section 109(b)(3);

14 ‘‘(3) the term ‘United States claimant’ means a

15 beneficiary of any deposit referred to in subsection

16 (b) or any multibeneficiary trust referred to in sub17 section (b);

18 ‘‘(4) the term ‘United States creditor’ means,

19 with respect to a foreign insurance company—

20 ‘‘(i) a United States claimant; or

21 ‘‘(ii) any business entity that operates in

22 the United States and that is a creditor; and

23 ‘‘(5) the term ‘United States policyholder’

24 means a holder of an insurance policy issued in the

25 United States.
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1 ‘‘(b) The court may not grant relief under chapter

2 15 of this title with respect to any deposit, escrow, trust

3 fund, or other security required or permitted under any

4 applicable State insurance law or regulation for the benefit

5 of claim holders in the United States.’’.

6 SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGA7 TIONS.

8 (a) EXECUTORY CONTRACTS AND UNEXPIRED

9 LEASES.—Section 365 of title 11, United States Code, is

10 amended—

11 (1) in subsection (b)—

12 (A) in paragraph (1)(A) by striking the

13 semicolon at the end and inserting the follow14 ing:

15 ‘‘other than a default that is a breach of a provision

16 relating to—

17 ‘‘(i) the satisfaction of any provision (other

18 than a penalty rate or penalty provision) relat19 ing to a default arising from any failure to per20 form nonmonetary obligations under an unex21 pired lease of real property (excluding executory

22 contracts that transfer a right or interest under

23 a filed or issued patent, copyright, trademark,

24 trade dress, or trade secret), if it is impossible

25 for the trustee to cure such default by perform-
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1 ing nonmonetary acts at and after the time of

2 assumption; or

3 ‘‘(ii) the satisfaction of any provision

4 (other than a penalty rate or penalty provision)

5 relating to a default arising from any failure to

6 perform nonmonetary obligations under an ex7 ecutory contract, if it is impossible for the

8 trustee to cure such default by performing non9 monetary acts at and after the time of assump10 tion and if the court determines, based on the

11 equities of the case, that this subparagraph

12 should not apply with respect to such default;’’;

13 and

14 (B) by amending paragraph (2)(D) to read

15 as follows:

16 ‘‘(D) the satisfaction of any penalty rate or

17 penalty provision relating to a default arising from

18 a failure to perform nonmonetary obligations under

19 an executory contract (excluding executory contracts

20 that transfer a right or interest under a filed or

21 issued patent, copyright, trademark, trade dress, or

22 trade secret) or under an unexpired lease of real or

23 personal property.’’;

24 (2) in subsection (c)—
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1 (A) in paragraph (2) by adding ‘‘or’’ at the

2 end;

3 (B) in paragraph (3) by striking ‘‘; or’’ at

4 the end and inserting a period; and

5 (C) by striking paragraph (4);

6 (3) in subsection (d)—

7 (A) by striking paragraphs (5) through

8 (9); and

9 (B) by redesignating paragraph (10) as

10 paragraph (5); and

11 (4) in subsection (f)(1) by striking ‘‘; except

12 that’’ and all that follows through the end of the

13 paragraph and inserting a period.

14 (b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec15 tion 1124(2) of title 11, United States Code, is

16 amended—

17 (1) in subparagraph (A) by inserting ‘‘or of a

18 kind that section 365(b)(1)(A) of this title expressly

19 does not require to be cured’’ before the semicolon

20 at the end;

21 (2) in subparagraph (C) by striking ‘‘and’’ at

22 the end;

23 (3) by redesignating subparagraph (D) as sub24 paragraph (E); and
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1 (4) by inserting after subparagraph (C) the fol2 lowing:

3 ‘‘(D) if such claim or such interest arises

4 from any failure to perform a nonmonetary ob5 ligation, compensates the holder of such claim

6 or such interest (other than the debtor or an in7 sider) for any actual pecuniary loss incurred by

8 such holder as a result of such failure; and’’.

9 TITLE III—GENERAL BUSINESS

10 BANKRUPTCY PROVISIONS

11 SEC. 301. DEFINITION OF DISINTERESTED PERSON.

12 Section 101(14) of title 11, United States Code, is

13 amended to read as follows:

14 ‘‘(14) ‘disinterested person’ means a person

15 that—

16 ‘‘(A) is not a creditor, an equity security

17 holder, or an insider;

18 ‘‘(B) is not and was not, within 2 years be19 fore the date of the filing of the petition, a di20 rector, officer, or employee of the debtor; and

21 ‘‘(C) does not have an interest materially

22 adverse to the interest of the estate or of any

23 class of creditors or equity security holders, by

24 reason of any direct or indirect relationship to,
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1 connection with, or interest in, the debtor, or

2 for any other reason;’’.

3 SEC. 302. MISCELLANEOUS IMPROVEMENTS.

4 (a) WHO MAY BE A DEBTOR.—Section 109 of title

5 11, United States Code, is amended by adding at the end

6 the following:

7 ‘‘(h)(1) Subject to paragraphs (2) and (3) and not8 withstanding any other provision of this section, an indi9 vidual may not be a debtor under this title unless that

10 individual has, during the 90-day period preceding the

11 date of filing of the petition of that individual, received

12 credit counseling, including, at a minimum, participation

13 in an individual or group briefing that outlined the oppor14 tunities for available credit counseling and assisted that

15 individual in performing an initial budget analysis,

16 through a credit counseling program (offered through an

17 approved credit counseling service described in section

18 111(a)).

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

20 to a debtor who resides in a district for which the United

21 States trustee or bankruptcy administrator of the bank22 ruptcy court of that district determines that the approved

23 credit counseling services for that district are not reason24 ably able to provide adequate services to the additional

25 individuals who would otherwise seek credit counseling
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1 from those programs by reason of the requirements of

2 paragraph (1).

3 ‘‘(B) Each United States trustee or bankruptcy ad4 ministrator that makes a determination described in sub5 paragraph (A) shall review that determination not later

6 than one year after the date of that determination, and

7 not less frequently than every year thereafter.

8 ‘‘(3)(A) Subject to subparagraph (B), the require9 ments of paragraph (1) shall not apply with respect to

10 a debtor who submits to the court a certification that—

11 ‘‘(i) describes exigent circumstances that merit

12 a waiver of the requirements of paragraph (1);

13 ‘‘(ii) states that the debtor requested credit

14 counseling services from an approved credit counsel15 ing service, but was unable to obtain the services re16 ferred to in paragraph (1) during the 5-day period

17 beginning on the date on which the debtor made

18 that request; and

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

20 ‘‘(B) With respect to a debtor, an exemption under

21 subparagraph (A) shall cease to apply to that debtor on

22 the date on which the debtor meets the requirements of

23 paragraph (1), but in no case may the exemption apply

24 to that debtor after the date that is 30 days after the debt25 or files a petition.’’.
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1 (b) CHAPTER 7 DISCHARGE.—Section 727(a) of title

2 11, United States Code, is amended—

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

4 end;

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

6 and inserting ‘‘; or’’; and

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

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

9 failed to complete an instructional course concerning

10 personal financial management described in section

11 111.’’.

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

13 11, United States Code, is amended by adding at the end

14 the following:

15 ‘‘(f) The court shall not grant a discharge under this

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

17 has completed an instructional course concerning personal

18 financial management described in section 111.

19 ‘‘(g) Subsection (f) shall not apply with respect to

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

21 States trustee or bankruptcy administrator of the bank22 ruptcy court of that district determines that the approved

23 instructional courses are not adequate to service the addi24 tional individuals who would be required to complete the
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1 instructional course by reason of the requirements of this

2 section.

3 ‘‘(h) Each United States trustee or bankruptcy ad4 ministrator that makes a determination described in sub5 section (g) shall review that determination not later than

6 1 year after the date of that determination, and not less

7 frequently than every year thereafter.

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

9 United States Code, as amended by sections 121, 604, and

10 122, is amended by adding at the end the following:

11 ‘‘(d) In addition to the requirements under subsection

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

13 ‘‘(1) a certificate from the credit counseling

14 service that provided the debtor services under sec15 tion 109(h); and

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

17 developed under section 109(h) through the credit

18 counseling service referred to in paragraph (1).’’.

19 (e) EXCEPTIONS TO DISCHARGE.—Section 523(d) of

20 title 11, United States Code, as amended by section 202

21 of this Act, is amended by striking paragraph (3)(A)(i)

22 and inserting the following:

23 ‘‘(i) within the applicable period of time pre24 scribed under section 109(h), the debtor received
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1 credit counseling through a credit counseling pro2 gram in accordance with section 109(h); and’’.

3 (f) GENERAL PROVISIONS.—

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

5 States Code, is amended by adding at the end the

6 following:

7 ‘‘§ 111. Credit counseling services; financial manage8 ment instructional courses

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

10 of credit counseling services that provide 1 or more pro11 grams described in section 109(h) and a list of instruc12 tional courses concerning personal financial management

13 that have been approved by—

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

15 ‘‘(2) the bankruptcy administrator for the dis16 trict.’’.

17 (2) CLERICAL AMENDMENT.—The table of sec18 tions at the beginning of chapter 1 of title 11,

19 United States Code, is amended by adding at the

20 end the following:

‘‘111. Credit counseling services; financial management instructional courses.’’.

21 (g) DEFINITIONS.—Section 101 of title 11, United

22 States Code, as amended by section 317 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 (27A), as

9 added by section 318 of this Act, the following:

10 ‘‘(27B) ‘incidental property’ means, with re11 spect to a debtor’s principal residence—

12 ‘‘(A) property commonly conveyed with a

13 principal residence in the area where the real

14 estate is located;

15 ‘‘(B) all easements, rights, appurtenances,

16 fixtures, rents, royalties, mineral rights, oil or

17 gas rights or profits, water rights, escrow

18 funds, or insurance proceeds; and

19 ‘‘(C) all replacements or additions;’’.

20 (h) LIMITATION.—Section 362 of title 11, United

21 States Code, is amended by adding at the end the follow22 ing:

23 ‘‘(j) If 1 case commenced under chapter 7, 11, or 13

24 of this title is dismissed due to the creation of a debt re25 payment plan, then for purposes of section 362(c)(3) of
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1 this title the subsequent case commenced under any such

2 chapter shall not be presumed to be filed not in good

3 faith.’’.

4 SEC. 303. EXTENSIONS.

5 Section 302(d)(3) of the Bankruptcy, Judges, United

6 States Trustees, and Family Farmer Bankruptcy Act of

7 1986 (28 U.S.C. 581 note) is amended—

8 (1) in subparagraph (A), in the matter follow9 ing clause (ii), by striking ‘‘or October 1, 2002,

10 whichever occurs first’’; and

11 (2) in subparagraph (F)—

12 (A) in clause (i)—

13 (i) in subclause (II), by striking ‘‘or

14 October 1, 2002, whichever occurs first’’;

15 and

16 (ii) in the matter following subclause

17 (II), by striking ‘‘October 1, 2003, or’’;

18 and

19 (B) in clause (ii), in the matter following

20 subclause (II)—

21 (i) by striking ‘‘before October 1,

22 2003, or’’; and

23 (ii) by striking ‘‘, whichever occurs

24 first’’.
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1 TITLE IV—SMALL BUSINESS

2 BANKRUPTCY PROVISIONS

3 SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT

4 AND PLAN.

5 Section 1125(f) of title 11, United States Code, is

6 amended to read as follows:

7 ‘‘(f) Notwithstanding subsection (b), in a small busi8 ness case—

9 ‘‘(1) in determining whether a disclosure state10 ment provides adequate information, the court shall

11 consider the complexity of the case, the benefit of

12 additional information to creditors and other parties

13 in interest, and the cost of providing additional in14 formation;

15 ‘‘(2) the court may determine that the plan

16 itself provides adequate information and that a sepa17 rate disclosure statement is not necessary;

18 ‘‘(3) the court may approve a disclosure state19 ment submitted on standard forms approved by the

20 court or adopted pursuant to section 2075 of title

21 28; and

22 ‘‘(4)(A) the court may conditionally approve a

23 disclosure statement subject to final approval after

24 notice and a hearing;
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1 ‘‘(B) acceptances and rejections of a plan may

2 be solicited based on a conditionally approved disclo3 sure statement if the debtor provides adequate infor4 mation to each holder of a claim or interest that is

5 solicited, but a conditionally approved disclosure

6 statement shall be mailed not less than 20 days be7 fore the date of the hearing on confirmation of the

8 plan; and

9 ‘‘(C) the hearing on the disclosure statement

10 may be combined with the hearing on confirmation

11 of a plan.’’.

12 SEC. 402. DEFINITIONS.

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

14 States Code, is amended by striking paragraph (51C) and

15 inserting the following:

16 ‘‘(51C) ‘small business case’ means a case filed

17 under chapter 11 of this title in which the debtor is

18 a small business debtor;

19 ‘‘(51D) ‘small business debtor’ means—

20 ‘‘(A) a person (including affiliates of such

21 person that are also debtors under this title)

22 that has aggregate noncontingent, liquidated se23 cured and unsecured debts as of the date of the

24 petition or the order for relief in an amount not

25 more than $4,000,000 (excluding debts owed to
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1 1 or more affiliates or insiders) a case in which

2 the United States trustee has appointed under

3 section 1102(a)(1) of this title a committee of

4 unsecured creditors that ‘the court has deter5 mined’ is sufficiently active and representative

6 to provide effective oversight of the debtor, ex7 cept that if a group of affiliated debtors has ag8 gregate noncontingent liquidated secured and

9 unsecured debts greater than $4,000,000 (ex10 cluding debt owed to 1 or more affiliates or in11 siders), then no member of such group is a

12 small business debtor;’’.

13 (b) EFFECT OF DISCHARGE.—Section 524 of title 11,

14 United States Code, as amended by section 402, is amend15 ed by adding at the end the following:

16 ‘‘(k)(1) An individual who is injured by the willful

17 failure of a creditor to substantially comply with the re18 quirements specified in subsections (c) and (d), or by any

19 willful violation of the injunction operating under sub20 section (a)(2), shall be entitled to recover—

21 ‘‘(A) the greater of—

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

23 ‘‘(ii) $1,000; and

24 ‘‘(B) costs and attorneys’ fees.
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1 ‘‘(2) An action to recover for a violation specified in

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

3 (c) CONFORMING AMENDMENT.—Section 1102(a)(3)

4 of title 11, United States Code, is amended by inserting

5 ‘‘debtor’’ after ‘‘small business’’.

6 SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND

7 PLAN.

8 The Advisory Committee on Bankruptcy Rules of the

9 Judicial Conference of the United States shall, within a

10 reasonable period of time after the date of the enactment

11 of this Act, propose for adoption standard form disclosure

12 statements and plans of reorganization for small business

13 debtors (as defined in section 101 of title 11, United

14 States Code, as amended by this Act), designed to achieve

15 a practical balance between—

16 (1) the reasonable needs of the courts, the

17 United States trustee, creditors, and other parties in

18 interest for reasonably complete information; and

19 (2) economy and simplicity for debtors.

20 SEC. 404. UNIFORM NATIONAL REPORTING REQUIRE21 MENTS.

22 (a) REPORTING REQUIRED.—(1) Title 11 of the

23 United States Code is amended by inserting after section

24 307 the following:
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1 ‘‘§ 308. Debtor reporting requirements

2 ‘‘A small business debtor shall file periodic financial

3 and other reports containing information including—

4 ‘‘(1) the debtor’s profitability, that is, approxi5 mately how much money the debtor has been earn6 ing or losing during current and recent fiscal peri7 ods;

8 ‘‘(2) reasonable approximations of the debtor’s

9 projected cash receipts and cash disbursements over

10 a reasonable period;

11 ‘‘(3) comparisons of actual cash receipts and

12 disbursements with projections in prior reports;

13 ‘‘(4) whether the debtor is—

14 ‘‘(A) in compliance in all material respects

15 with postpetition requirements imposed by this

16 title and the Federal Rules of Bankruptcy Pro17 cedure; and

18 ‘‘(B) timely filing tax returns and paying

19 taxes and other administrative claims when due,

20 and, if not, what the failures are and how, at

21 what cost, and when the debtor intends to rem22 edy such failures; and

23 ‘‘(5) such other matters as are in the best inter24 ests of the debtor and creditors, and in the public

25 interest in fair and efficient procedures under chap26 ter 11 of this title.’’.
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1 (2) The table of sections of chapter 3 of title 11,

2 United States Code, is amended by inserting after the

3 item relating to section 307 the following:

‘‘308. Debtor reporting requirements.’’.

4 (b) EFFECTIVE DATE.—The amendments made by

5 subsection (a) shall take effect 60 days after the date on

6 which rules are prescribed pursuant to section 2075, title

7 28, United States Code to establish forms to be used to

8 comply with section 308 of title 11, United States Code,

9 as added by subsection (a).

10 SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR

11 SMALL BUSINESS CASES.

12 (a) PROPOSAL OF RULES AND FORMS.—The Advi13 sory Committee on Bankruptcy Rules of the Judicial Con14 ference of the United States shall propose for adoption

15 amended Federal Rules of Bankruptcy Procedure and Of16 ficial Bankruptcy Forms to be used by small business

17 debtors to file periodic financial and other reports contain18 ing information, including information relating to—

19 (1) the debtor’s profitability;

20 (2) the debtor’s cash receipts and disburse21 ments; and

22 (3) whether the debtor is timely filing tax re23 turns and paying taxes and other administrative

24 claims when due.
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1 (b) PURPOSE.—The rules and forms proposed under

2 subsection (a) shall be designed to achieve a practical bal3 ance between—

4 (1) the reasonable needs of the bankruptcy

5 court, the United States trustee, creditors, and other

6 parties in interest for reasonably complete informa7 tion;

8 (2) the small business debtor’s interest that re9 quired reports be easy and inexpensive to complete;

10 and

11 (3) the interest of all parties that the required

12 reports help the small business debtor to understand

13 its financial condition and plan its future.

14 SEC. 406. DUTIES IN SMALL BUSINESS CASES.

15 (a) DUTIES IN CHAPTER 11 CASES.—Title 11 of the

16 United States Code is amended by inserting after section

17 1114 the following:

18 ‘‘§ 1115. Duties of trustee or debtor in possession in

19 small business cases

20 ‘‘In a small business case, a trustee or the debtor in

21 possession, in addition to the duties provided in this title

22 and as otherwise required by law, shall—

23 ‘‘(1) append to the voluntary petition or, in an

24 involuntary case, file within 3 days after the date of

25 the order for relief—
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1 ‘‘(A) its most recent balance sheet, state2 ment of operations, cash-flow statement, Fed3 eral income tax return; or

4 ‘‘(B) a statement made under penalty of

5 perjury that no balance sheet, statement of op6 erations, or cash-flow statement has been pre7 pared and no Federal tax return has been filed;

8 ‘‘(2) attend, through its senior management

9 personnel and counsel, meetings scheduled by the

10 court or the United States trustee, including initial

11 debtor interviews, scheduling conferences, and meet12 ings of creditors convened under section 341 of this

13 title unless the court waives this requirement after

14 notice and hearing, upon a finding of extraordinary

15 and compelling circumstances;

16 ‘‘(3) timely file all schedules and statements of

17 financial affairs, unless the court, after notice and a

18 hearing, grants an extension, which shall not extend

19 such time period to a date later than 30 days after

20 the date of the order for relief, absent extraordinary

21 and compelling circumstances;

22 ‘‘(4) file all postpetition financial and other re23 ports required by the Federal Rules of Bankruptcy

24 Procedure or by local rule of the district court;
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1 ‘‘(5) subject to section 363(c)(2) of this title,

2 maintain insurance customary and appropriate to

3 the industry;

4 ‘‘(6)(A) timely file tax returns;

5 ‘‘(B) subject to section 363(c)(2) of this title,

6 timely pay all administrative expense tax claims, ex7 cept those being contested by appropriate proceed8 ings being diligently prosecuted; and

9 ‘‘(C) subject to section 363(c)(2) of this title,

10 establish 1 or more separate deposit accounts not

11 later than 10 business days after the date of order

12 for relief (or as soon thereafter as possible if all

13 banks contacted decline the business) and deposit

14 therein, not later than 1 business day after receipt

15 thereof, all taxes payable for periods beginning after

16 the date the case is commenced that are collected or

17 withheld by the debtor for governmental units unless

18 the court waives this requirement after notice and

19 hearing, upon a finding of extraordinary and com20 pelling circumstances; and

21 ‘‘(7) allow the United States trustee, or its des22 ignated representative, to inspect the debtor’s busi23 ness premises, books, and records at reasonable

24 times, after reasonable prior written notice, unless

25 notice is waived by the debtor.’’.
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1 (b) TECHNICAL AMENDMENT.—The table of sections

2 of chapter 11, United States Code, is amended by insert3 ing after the item relating to section 1114 the following:

‘‘1115. Duties of trustee or debtor in possession in small business cases.’’.

4 SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

5 Section 1121(e) of title 11, United States Code, is

6 amended to read as follows:

7 ‘‘(e) In a small business case—

8 ‘‘(1) only the debtor may file a plan until after

9 90 days after the date of the order for relief, unless

10 shortened on request of a party in interest made

11 during the 90-day period, or unless extended as pro12 vided by this subsection, after notice and hearing the

13 court, for cause, orders otherwise;

14 ‘‘(2) the plan, and any necessary disclosure

15 statement, shall be filed not later than 90 days after

16 the date of the order for relief; and

17 ‘‘(3) the time periods specified in paragraphs

18 (1) and (2), and the time fixed in section 1129(e)

19 of this title, within which the plan shall be confirmed

20 may be extended only if—

21 ‘‘(A) the debtor, after providing notice to

22 parties in interest (including the United States

23 trustee), demonstrates by a preponderance of

24 the evidence that it is more likely than not that
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1 the court will confirm a plan within a reason2 able time;

3 ‘‘(B) a new deadline is imposed at the time

4 the extension is granted; and

5 ‘‘(C) the order extending time is signed be6 fore the existing deadline has expired.’’.

7 SEC. 408. PLAN CONFIRMATION DEADLINE.

8 Section 1129 of title 11, United States Code, is

9 amended by adding at the end the following:

10 ‘‘(e) In a small business case, the plan shall be con11 firmed not later than 150 days after the date of the order

12 for relief unless such 150-day period is extended as pro13 vided in section 1121(e)(3) of this title.’’.

14 SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

15 Section 105(d) of title 11, United States Code, is

16 amended—

17 (1) in paragraph (2)(B)(vi) by striking the pe18 riod at the end and inserting ‘‘; and’’; and

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

20 ‘‘(3) in a small business case, not extend the

21 time periods specified in sections 1121(e) and

22 1129(e) of this title except as provided in section

23 1121(e)(3) of this title.’’.
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1 SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.

2 (a) DUTIES OF THE UNITED STATES TRUSTEE.—

3 Section 586(a) of title 28, United States Code, is

4 amended—

5 (1) in paragraph (3)—

6 (A) in subparagraph (G) by striking ‘‘and’’

7 at the end;

8 (B) by redesignating subparagraph (H) as

9 subparagraph (I); and

10 (C) by inserting after subparagraph (G)

11 the following:

12 ‘‘(H) in small business cases (as defined in

13 section 101 of title 11), performing the addi14 tional duties specified in title 11 pertaining to

15 such cases;’’;

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

17 end;

18 (3) in paragraph (7) by striking the period at

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

20 (4) by inserting after paragraph (7) the follow21 ing:

22 ‘‘(8) in each of such small business cases—

23 ‘‘(A) conduct an initial debtor interview as

24 soon as practicable after the entry of order for

25 relief but before the first meeting scheduled

26 under section 341(a) of title 11 at which time
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1 the United States trustee shall begin to inves2 tigate the debtor’s viability, inquire about the

3 debtor’s business plan, explain the debtor’s obli4 gations to file monthly operating reports and

5 other required reports, attempt to develop an

6 agreed scheduling order, and inform the debtor

7 of other obligations;

8 ‘‘(B) when determined to be appropriate

9 and advisable, visit the appropriate business

10 premises of the debtor and ascertain the state

11 of the debtor’s books and records and verify

12 that the debtor has filed its tax returns; and

13 ‘‘(C) review and monitor diligently the

14 debtor’s activities, to identify as promptly as

15 possible whether the debtor will be unable to

16 confirm a plan; and

17 ‘‘(9) in cases in which the United States trustee

18 finds material grounds for any relief under section

19 1112 of title 11, the United States trustee shall

20 apply promptly to the court for relief.’’.

21 SEC. 411. SCHEDULING CONFERENCES.

22 Section 105(d) of title 11, United States Code, is

23 amended—

24 (1) in the matter preceding paragraph (1) by

25 striking ‘‘, may’’;
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1 (2) by amending paragraph (1) to read as fol2 lows:

3 ‘‘(1) shall hold such status conferences as are

4 necessary to further the expeditious and economical

5 resolution of the case; and’’; and

6 (3) in paragraph (2) by striking ‘‘unless incon7 sistent with another provision of this title or with

8 applicable Federal Rules of Bankruptcy Procedure,’’

9 and inserting ‘‘may’’.

10 SEC. 412. SERIAL FILER PROVISIONS.

11 Section 362 of title 11, United States Code, is

12 amended—

13 (1) in subsection (i) as so redesignated by sec14 tion 124—

15 (A) by striking ‘‘An’’ and inserting ‘‘(1)

16 Except as provided in paragraph (2), an’’; and

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

18 ‘‘(2) If such violation is based on an action taken by

19 an entity in the good-faith belief that subsection (h) ap20 plies to the debtor, then recovery under paragraph (1)

21 against such entity shall be limited to actual damages.’’;

22 and

23 (2) by inserting after subsection (i), as redesig24 nated by section 124, the following:
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1 ‘‘(j) The filing of a petition under chapter 11 of this

2 title operates as a stay of the acts described in subsection

3 (a) only in an involuntary case involving no collusion by

4 the debtor with creditors and in which the debtor—

5 ‘‘(1) is a debtor in a small business case pend6 ing at the time the petition is filed;

7 ‘‘(2) was a debtor in a small business case

8 which was dismissed for any reason by an order that

9 became final in the 2-year period ending on the date

10 of the order for relief entered with respect to the pe11 tition;

12 ‘‘(3) was a debtor in a small business case in

13 which a plan was confirmed in the 2-year period

14 ending on the date of the order for relief entered

15 with respect to the petition; or

16 ‘‘(4) is an entity that has succeeded to substan17 tially all of the assets or business of a small business

18 debtor described in subparagraph (A), (B), or (C);

19 unless the debtor proves, by a preponderance of the

20 evidence, that the filing of such petition resulted

21 from circumstances beyond the control of the debtor

22 not foreseeable at the time the case then pending

23 was filed; and that it is more likely than not that

24 the court will confirm a feasible plan, but not a liq25 uidating plan, within a reasonable time.’’.
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1 SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CON2 VERSION AND APPOINTMENT OF TRUSTEE.

3 (a) EXPANDED GROUNDS FOR DISMISSAL OR CON4 VERSION.—Section 1112(b) of title 11, United States

5 Code, is amended to read as follows:

6 ‘‘(b)(1) Except as provided in paragraph (2), in sub7 section (c), and in section 1104(a)(3) of this title, on re8 quest of a party in interest, and after notice and a hear9 ing, the court shall convert a case under this chapter to

10 a case under chapter 7 of this title or dismiss a case under

11 this chapter, whichever is in the best interest of creditors

12 and the estate, if the movant establishes cause.

13 ‘‘(2) The relief provided in paragraph (1) shall not

14 be granted if the debtor or another party in interest ob15 jects and establishes, by a preponderance of the evidence

16 that—

17 ‘‘(A) it is more likely than not that a plan will

18 be confirmed within a time as fixed by this title or

19 by order of the court entered pursuant to section

20 1121(e)(3), or within a reasonable time if no time

21 has been fixed; and

22 ‘‘(B) if the reason is an act or omission of the

23 debtor that—

24 ‘‘(i) there exists a reasonable justification

25 for the act or omission; and
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1 ‘‘(ii) the act or omission will be cured with2 in a reasonable time fixed by the court not to

3 exceed 30 days after the court decides the mo4 tion, unless the movant expressly consents to a

5 continuance for a specific period of time, or

6 compelling circumstances beyond the control of

7 the debtor justify an extension.

8 ‘‘(3) For purposes of this subsection, cause

9 includes—

10 ‘‘(A) substantial or continuing loss to or dimi11 nution of the estate;

12 ‘‘(B) gross mismanagement of the estate;

13 ‘‘(C) failure to maintain appropriate insurance;

14 ‘‘(D) unauthorized use of cash collateral harm15 ful to 1 or more creditors;

16 ‘‘(E) failure to comply with an order of the

17 court;

18 ‘‘(F) failure timely to satisfy any filing or re19 porting requirement established by this title or by

20 any rule applicable to a case under this chapter;

21 ‘‘(G) failure to attend the meeting of creditors

22 convened under section 341(a) of this title or an ex23 amination ordered under rule 2004 of the Federal

24 Rules of Bankruptcy Procedure;
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1 ‘‘(H) failure timely to provide information or

2 attend meetings reasonably requested by the United

3 States trustee;

4 ‘‘(I) failure timely to pay taxes due after the

5 date of the order for relief or to file tax returns due

6 after the order for relief;

7 ‘‘(J) failure to file a disclosure statement, or to

8 file or confirm a plan, within the time fixed by this

9 title or by order of the court;

10 ‘‘(K) failure to pay any fees or charges required

11 under chapter 123 of title 28;

12 ‘‘(L) revocation of an order of confirmation

13 under section 1144 of this title;

14 ‘‘(M) inability to effectuate substantial con15 summation of a confirmed plan;

16 ‘‘(N) material default by the debtor with re17 spect to a confirmed plan; and

18 ‘‘(O) termination of a plan by reason of the oc19 currence of a condition specified in the plan.

20 ‘‘(4) The court shall commence the hearing on any

21 motion under this subsection not later than 30 days after

22 filing of the motion, and shall decide the motion within

23 15 days after commencement of the hearing, unless the

24 movant expressly consents to a continuance for a specific

25 period of time or compelling circumstances prevent the
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1 court from meeting the time limits established by this

2 paragraph.’’.

3 (b) ADDITIONAL GROUNDS FOR APPOINTMENT OF

4 TRUSTEE.—Section 1104(a) of title 11, United States

5 Code, is amended—

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

7 end;

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

9 the end and inserting ‘‘; or’’; and

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

11 ‘‘(3) if grounds exist to convert or dismiss the

12 case under section 1112 of this title, but the court

13 determines that the appointment of a trustee is in

14 the best interests of creditors and the estate.’’.

15 SEC. 414. STUDY OF OPERATION OF TITLE 11 OF THE

16 UNITED STATES CODE WITH RESPECT TO

17 SMALL BUSINESSES.

18 Not later than 2 years after the date of the enact19 ment of this Act, the Administrator of the Small Business

20 Administration, in consultation with the Attorney General,

21 the Director of the Administrative Office of United States

22 Trustees, and the Director of the Administrative Office

23 of the United States Courts, shall—

24 (1) conduct a study to determine—
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1 (A) the internal and external factors that

2 cause small businesses, especially sole propri3 etorships, to become debtors in cases under title

4 11 of the United States Code and that cause

5 certain small businesses to successfully com6 plete cases under chapter 11 of such title; and

7 (B) how Federal laws relating to bank8 ruptcy may be made more effective and efficient

9 in assisting small businesses to remain viable;

10 and

11 (2) submit to the President pro tempore of the

12 Senate and the Speaker of the House of Representa13 tives a report summarizing that study.

14 SEC. 415. PAYMENT OF INTEREST.

15 Section 362(d)(3) of title 11, United States Code, is

16 amended—

17 (1) by inserting ‘‘or 30 days after the court de18 termines that the debtor is subject to this para19 graph, whichever is later’’ after ‘‘90-day period)’’;

20 and

21 (2) by amending subparagraph (B) to read as

22 follows:

23 ‘‘(B) the debtor has commenced monthly

24 payments (which payments may, in the debtor’s

25 sole discretion, notwithstanding section
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1 363(c)(2) of this title, be made from rents or

2 other income generated before or after the com3 mencement of the case by or from the property)

4 to each creditor whose claim is secured by such

5 real estate (other than a claim secured by a

6 judgment lien or by an unmatured statutory

7 lien), which payments are in an amount equal

8 to interest at the then-applicable nondefault

9 contract rate of interest on the value of the

10 creditor’s interest in the real estate; or’’.

11 TITLE V—MUNICIPAL

12 BANKRUPTCY PROVISIONS

13 SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI14 TION.

15 (a) TECHNICAL AMENDMENT RELATING TO MUNICI16 PALITIES.—Section 921(d) of title 11, United States

17 Code, is amended by inserting ‘‘notwithstanding section

18 301(b)’’ before the period at the end.

19 (b) CONFORMING AMENDMENT.—Section 301 of title

20 11, United States Code, is amended—

21 (1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;

22 and

23 (2) by amending the last sentence to read as

24 follows:
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1 ‘‘(b) The commencement of a voluntary case under

2 a chapter of this title constitutes an order for relief under

3 such chapter.’’.

4 SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP5 TER 9.

6 Section 901 of title 11, United States Code, is

7 amended—

8 (1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and

9 (2) by inserting ‘‘559, 560,’’ after ‘‘557,’’.

10 TITLE VI—STREAMLINING THE

11 BANKRUPTCY SYSTEM

12 SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING

13 OF CREDITORS.

14 Section 341(c) of title 11, United States Code, is

15 amended by inserting after the first sentence the follow16 ing: ‘‘Notwithstanding any local court rule, provision of

17 a State constitution, any other Federal or State law that

18 is not a bankruptcy law, or other requirement that rep19 resentation at the meeting of creditors under subsection

20 (a) be by an attorney, a creditor holding a consumer debt

21 or any representative of the creditor (which may include

22 an entity or an employee of an entity and may be a rep23 resentative for more than one creditor) shall be permitted

24 to appear at and participate in the meeting of creditors

25 in a case under chapter 7 or 13, either alone or in conjunc-
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1 tion with an attorney for the creditor. Nothing in this sub2 section shall be construed to require any creditor to be

3 represented by an attorney at any meeting of creditors.’’.

4 SEC. 602. AUDIT PROCEDURES.

5 (a) AMENDMENTS.—Section 586 of title 28, United

6 States Code, is amended—

7 (1) in subsection (a) by amending striking

8 paragraph (6) to read as follows:

9 ‘‘(6) make such reports as the Attorney General

10 directs, including the results of audits performed

11 under subsection (f); and’’; and

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

13 ‘‘(f)(1)(A) The Attorney General shall establish pro14 cedures to determine the accuracy, veracity, and complete15 ness of petitions, schedules, and other information which

16 the debtor is required to provide under sections 521 and

17 1322 of title 11, and, if applicable, section 111 of title

18 11, in individual cases filed under chapter 7 or 13 of such

19 title. Such audits shall be in accordance with generally ac20 cepted auditing standards and performed by independent

21 certified public accountants or independent licensed public

22 accountants.

23 ‘‘(B) Those procedures shall—
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1 ‘‘(i) establish a method of selecting appropriate

2 qualified persons to contract to perform those au3 dits;

4 ‘‘(ii) establish a method of randomly selecting

5 cases to be audited, except that not less than 1 out

6 of every 250 cases in each Federal judicial district

7 shall be selected for audit;

8 ‘‘(iii) require audits for schedules of income and

9 expenses which reflect greater than average

10 variances from the statistical norm of the district in

11 which the schedules were filed; and

12 ‘‘(iv) establish procedures for providing, not less

13 frequently than annually, public information con14 cerning the aggregate results of such audits includ15 ing the percentage of cases, by district, in which a

16 material misstatement of income or expenditures is

17 reported.

18 ‘‘(2) The United States trustee for each district is

19 authorized to contract with auditors to perform audits in

20 cases designated by the United States trustee according

21 to the procedures established under paragraph (1).

22 ‘‘(3)(A) The report of each audit conducted under

23 this subsection shall be filed with the court and transmit24 ted to the United States trustee. Each report shall clearly

25 and conspicuously specify any material misstatement of
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1 income or expenditures or of assets identified by the per2 son performing the audit. In any case where a material

3 misstatement of income or expenditures or of assets has

4 been reported, the clerk of the bankruptcy court shall give

5 notice of the misstatement to the creditors in the case.

6 ‘‘(B) If a material misstatement of income or expend7 itures or of assets is reported, the United States trustee

8 shall—

9 ‘‘(i) report the material misstatement, if appro10 priate, to the United States Attorney pursuant to

11 section 3057 of title 18, United States Code; and

12 ‘‘(ii) if advisable, take appropriate action, in13 cluding but not limited to commencing an adversary

14 proceeding to revoke the debtor’s discharge pursuant

15 to section 727(d) of title 11, United States Code.’’.

16 (b) AMENDMENTS TO SECTION 521 OF TITLE 11,

17 U.S.C.—Section 521(a) of title 11, United States Code,

18 as amended by section 604, is amended in paragraphs (3)

19 and (4) by adding ‘‘or an auditor appointed pursuant to

20 section 586 of title 28, United States Code’’ after ‘‘serving

21 in the case’’.

22 (c) AMENDMENTS TO SECTION 727 OF TITLE 11,

23 U.S.C.—Section 727(d) of title 11, United States Code,

24 is amended—
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1 (1) by deleting ‘‘or’’ at the end of paragraph

2 (2);

3 (2) by substituting ‘‘; or’’ for the period at the

4 end of paragraph (3); and

5 (3) by adding the following at the end the fol6 lowing:

7 ‘‘(4) the debtor has failed to explain

8 satisfactorily—

9 ‘‘(A) a material misstatement in an audit

10 performed pursuant to section 586(f) of title

11 28, United States Code; or

12 ‘‘(B) a failure to make available for inspec13 tion all necessary accounts, papers, documents,

14 financial records, files, and all other papers,

15 things, or property belonging to the debtor that

16 are requested for an audit conducted pursuant

17 to section 586(f) of title 28, United States

18 Code.’’.

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall take effect 18 months after the date of

21 enactment of this Act.

22 SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7

23 AND 13 CASES.

24 (a) NOTICE.—Section 342 of title 11, United States

25 Code, is amended—
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1 (1) in subsection (c)—

2 (A) by striking ‘‘, but the failure of such

3 notice to contain such information shall not in4 validate the legal effect of such notice’’; and

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

6 ‘‘If the credit agreement between the debtor and the credi7 tor or the last communication before the filing of the peti8 tion in a voluntary case from the creditor to a debtor who

9 is an individual states an account number of the debtor

10 which is the current account number of the debtor with

11 respect to any debt held by the creditor against the debtor,

12 the debtor shall include such account number in any notice

13 to the creditor required to be given under this title. If the

14 creditor has specified to the debtor an address at which

15 the creditor wishes to receive correspondence regarding

16 the debtor’s account, any notice to the creditor required

17 to be given by the debtor under this title shall be given

18 at such address. For the purposes of this section, ‘notice’

19 shall include, but shall not be limited to, any correspond20 ence from the debtor to the creditor after the commence21 ment of the case, any statement of the debtor’s intention

22 under section 521(a)(2) of this title, notice of the com23 mencement of any proceeding in the case to which the

24 creditor is a party, and any notice of the hearing under

25 section 1324 of this title.’’;
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1 (2) by adding at the end the following:

2 ‘‘(d) At any time, a creditor in a case of an individual

3 debtor under chapter 7 or 13 may file with the court and

4 serve on the debtor a notice of the address to be used to

5 notify the creditor in that case. Five days after receipt

6 of such notice, if the court or the debtor is required to

7 give the creditor notice, such notice shall be given at that

8 address.

9 ‘‘(e) An entity may file with the court a notice stating

10 its address for notice in cases under chapters 7 and 13.

11 After 30 days following the filing of such notice, any notice

12 in any case filed under chapter 7 or 13 given by the court

13 shall be to that address unless specific notice is given

14 under subsection (d) with respect to a particular case.

15 ‘‘(f) Notice given to a creditor other than as provided

16 in this section shall not be effective notice until it has been

17 brought to the attention of the creditor. If the creditor

18 has designated a person or department to be responsible

19 for receiving notices concerning bankruptcy cases and has

20 established reasonable procedures so that bankruptcy no21 tices received by the creditor will be delivered to such de22 partment or person, notice will not be brought to the at23 tention of the creditor until received by such person or

24 department. No sanction under section 362(h) of this title

25 or any other sanction which a court may impose on ac-
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1 count of violations of the stay under section 362(a) of this

2 title or failure to comply with section 542 or 543 of this

3 title may be imposed on any action of the creditor unless

4 the action takes place after the creditor has received notice

5 of the commencement of the case effective under this sec6 tion.’’.

7 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

8 United States Code, as amended by sections 121, 604,

9 122, 301, and 302, is amended—

10 (1) by inserting ‘‘(a)’’ before ‘‘The debtor

11 shall—’’;

12 (2) by striking paragraph (1) and inserting the

13 following:

14 ‘‘(1) file—

15 ‘‘(A) a list of creditors; and

16 ‘‘(B) unless the court orders otherwise—

17 ‘‘(i) a schedule of assets and liabil18 ities;

19 ‘‘(ii) a schedule of current income and

20 current expenditures;

21 ‘‘(iii) a statement of the debtor’s fi22 nancial affairs and, if applicable, a

23 certificate—

24 ‘‘(I) of an attorney whose name

25 is on the petition as the attorney for
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1 the debtor or any bankruptcy petition

2 preparer signing the petition pursuant

3 to section 110(b)(1) of this title indi4 cating that such attorney or bank5 ruptcy petition preparer delivered to

6 the debtor any notice required by sec7 tion 342(b) of this title; or

8 ‘‘(II) if no attorney for the debt9 or is indicated and no bankruptcy pe10 tition preparer signed the petition, of

11 the debtor that such notice was ob12 tained and read by the debtor;

13 ‘‘(iv) copies of any Federal tax re14 turns, including any schedules or attach15 ments, filed by the debtor for the 3-year

16 period preceding the order for relief;

17 ‘‘(v) copies of all payment advices or

18 other evidence of payment, if any, received

19 by the debtor from any employer of the

20 debtor in the period 60 days prior to the

21 filing of the petition;

22 ‘‘(vi) a statement of the amount of

23 projected monthly net income, itemized to

24 show how calculated; and
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1 ‘‘(vii) a statement disclosing any rea2 sonably anticipated increase in income or

3 expenditures over the 12-month period fol4 lowing the date of filing;’’; and

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

6 ‘‘(e)(1) At any time, a creditor, in the case of an indi7 vidual under chapter 7 or 13, may file with the court no8 tice that the creditor requests the petition, schedules, and

9 a statement of affairs filed by the debtor in the case and

10 the court shall make those documents available to the

11 creditor who requests those documents.

12 ‘‘(2) At any time, a creditor in a case under chapter

13 13 may file with the court notice that the creditor requests

14 the plan filed by the debtor in the case, and the court

15 shall make such plan available to the creditor who requests

16 such plan at a reasonable cost and not later than 5 days

17 after such request.

18 ‘‘(f) An individual debtor in a case under chapter 7

19 or 13 shall file with the court—

20 ‘‘(1) at the time filed with the taxing authority,

21 all tax returns, including any schedules or attach22 ments, with respect to the period from the com23 mencement of the case until such time as the case

24 is closed;
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1 ‘‘(2) at the time filed with the taxing authority,

2 all tax returns, including any schedules or attach3 ments, that were not filed with the taxing authority

4 when the schedules under subsection (a)(1) were

5 filed with respect to the period that is 3 years before

6 the order for relief;

7 ‘‘(3) any amendments to any of the tax returns,

8 including schedules or attachments, described in

9 paragraph (1) or (2); and

10 ‘‘(4) in a case under chapter 13, a statement

11 subject to the penalties of perjury by the debtor of

12 the debtor’s income and expenditures in the preced13 ing tax year and monthly income, that shows how

14 the amounts are calculated—

15 ‘‘(A) beginning on the date that is the

16 later of 90 days after the close of the debtor’s

17 tax year or 1 year after the order for relief, un18 less a plan has been confirmed; and

19 ‘‘(B) thereafter, on or before the date that

20 is 45 days before each anniversary of the con21 firmation of the plan until the case is closed.

22 ‘‘(d)(1) A statement referred to in subsection (c)(4)

23 shall disclose—

24 ‘‘(A) the amount and sources of income of the

25 debtor;
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1 ‘‘(B) the identity of any persons responsible

2 with the debtor for the support of any dependents of

3 the debtor; and

4 ‘‘(C) the identity of any persons who contrib5 uted, and the amount contributed, to the household

6 in which the debtor resides.

7 ‘‘(2) The tax returns, amendments, and statement of

8 income and expenditures described in paragraph (1) shall

9 be available to the United States trustee, any bankruptcy

10 administrator, any trustee, and any party in interest for

11 inspection and copying, subject to the requirements of

12 subsection (e).

13 ‘‘(g)(1) Not later than 30 days after the date of en14 actment of the Consumer Bankruptcy Reform Act of

15 1999, the Director of the Administrative Office of the

16 United States Courts shall establish procedures for safe17 guarding the confidentiality of any tax information re18 quired to be provided under this section.

19 ‘‘(2) The procedures under paragraph (1) shall in20 clude restrictions on creditor access to tax information

21 that is required to be provided under this section.

22 ‘‘(3) Not later than 1 year after the date of enact23 ment of the Consumer Bankruptcy Reform Act of 1999,

24 the Director of the Administrative Office of the United
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1 States Courts shall prepare, and submit to Congress a re2 port that—

3 ‘‘(A) assesses the effectiveness of the proce4 dures under paragraph (1); and

5 ‘‘(B) if appropriate, includes proposed

6 legislation—

7 ‘‘(i) to further protect the confidentiality of

8 tax information; and

9 ‘‘(ii) to provide penalties for the improper

10 use by any person of the tax information re11 quired to be provided under this section.

12 ‘‘(h) If requested by the United States trustee or a

13 trustee serving in the case, the debtor provide a document

14 that establishes the identity of the debtor, including a

15 driver’s license, passport, or other document that contains

16 a photograph of the debtor and such other personal identi17 fying information relating to the debtor that establishes

18 the identity of the debtor.’’.

19 SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED20 ULES OR PROVIDE REQUIRED INFORMATION.

21 Section 521 of title 11, United States Code, is

22 amended—

23 (1) by inserting ‘‘(a)’’ before ‘‘The debtor’’; and

24 (2) by adding at the end the following:
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1 ‘‘(b)(1) Notwithstanding section 707(a) of this title,

2 and subject to paragraph (2), if an individual debtor in

3 a voluntary case under chapter 7 or 13 fails to file all

4 of the information required under subsection (a)(1) within

5 45 days after the filing of the petition commencing the

6 case, the case shall be automatically dismissed effective

7 on the 46th day after the filing of the petition.

8 ‘‘(2) With respect to a case described in paragraph

9 (1), any party in interest may request the court to enter

10 an order dismissing the case. The court shall, if so re11 quested, enter an order of dismissal not later than 5 days

12 after such request.

13 ‘‘(3) Upon request of the debtor made within 45 days

14 after the filing of the petition commencing a case de15 scribed in paragraph (1), the court may allow the debtor

16 an additional period of not to exceed 45 days to file the

17 information required under subsection (a)(1) if the court

18 finds justification for extending the period for the filing.’’.

19 SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON

20 CONFIRMATION OF THE PLAN.

21 (a) HEARING.—Section 1324 of title 11, United

22 States Code, is amended—

23 (1) by striking ‘‘After’’ and inserting the follow24 ing:
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1 ‘‘(a) Except as provided in subsection (b) and after’’;

2 and

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

4 ‘‘(b) The hearing on confirmation of the plan may

5 be held not earlier than 20 days, and not later than 45

6 days, after the meeting of creditors under section 341(a)

7 of this title.’’.

8 (b) FILING OF PLAN.—Section 1321 of title 11,

9 United States Code, is amended to read as follows:

10 ‘‘§ 1321. Filing of plan

11 ‘‘The debtor shall file a plan not later than 90 days

12 after the order for relief under this chapter, except that

13 the court may extend such period if the need for an exten14 sion is attributable to circumstances for which the debtor

15 should not justly be held accountable.’’.

16 SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION

17 IN CERTAIN CASES.

18 Title 11, United States Code, is amended—

19 (1) by amending section 1322(d) to read as fol20 lows:

21 ‘‘(d) If the current monthly total income of the debtor

22 and in a joint case, the debtor and the debtor’s spouse

23 combined, is not less than the highest national median

24 family income reported for a family of equal or lesser size

25 or, in the case of a household of 1 person, not less than
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1 the national median household income for 1 earner, the

2 plan may not provide for payments over a period that is

3 longer than 5 years. If the current monthly total income

4 of the debtor or in a joint case, the debtor and the debtor’s

5 spouse combined, is less than the highest national median

6 family income reported for a family of equal or lesser size,

7 or in the case of a household of 1 person less than the

8 national median household income for 1 earner, the plan

9 may not provide for payments over a period that is longer

10 than 3 years, unless the court, for cause, approves a longer

11 period, but the court may not approve a period that is

12 longer than 5 years.’’; and

13 (2) in section 1329—

14 (A) by striking in subsection (c) ‘‘three

15 years’’ and inserting ‘‘the applicable commit16 ment period under section 1325(b)(1)(B)(ii)’’;

17 and

18 (B) by inserting at the end of subsection

19 (c) the following:

20 ‘‘The duration period shall be 5 years if the current

21 monthly total income of the debtor, and in a joint case,

22 the debtor and the debtor’s spouse combined, is not less

23 than the highest national median family income reported

24 for a family of equal or lesser size or, in the case of a

25 household of 1 person, not less than the national median
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1 household income for 1 earner, as of the date of the modi2 fication and shall be 3 years if the current monthly total

3 income is less than the highest national median family in4 come reported for a family of equal or lesser size or, in

5 the case of a household of 1 person, less than the national

6 median household income for 1 earner as of the date of

7 the modification.’’.

8 SEC. 607. SENSE OF THE CONGRESS REGARDING EXPAN9 SION OF RULE 9011 OF THE FEDERAL RULES

10 OF BANKRUPTCY PROCEDURE.

11 It is the sense of the Congress that rule 9011 of the

12 Federal Rules of Bankruptcy Procedure (11 U.S.C. App)

13 should be modified to include a requirement that all docu14 ments (including schedules), signed and unsigned, submit15 ted to the court or to a trustee by debtors who represent

16 themselves and debtors who are represented by an attor17 ney be submitted only after the debtor or the debtor’s at18 torney has made reasonable inquiry to verify that the in19 formation contained in such documents is well grounded

20 in fact, and is warranted by existing law or a good-faith

21 argument for the extension, modification, or reversal of

22 existing law.
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1 SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN

2 CHAPTER 11 BANKRUPTCY CASES.

3 (a) AMENDMENTS.—Section 1930(a)(6) of title 28,

4 United States Code, is amended—

5 (1) in the 1st sentence by striking ‘‘until the

6 case is converted or dismissed, whichever occurs

7 first’’; and

8 (2) in the 2d sentence—

9 (A) by striking ‘‘The’’ and inserting ‘‘Until

10 the plan is confirmed or the case is converted

11 (whichever occurs first) the’’; and

12 (B) by striking ‘‘less than $300,000;’’ and

13 inserting ‘‘less than $300,000. Until the case is

14 converted, dismissed, or closed (whichever oc15 curs first and without regard to confirmation of

16 the plan) the fee shall be’’.

17 (b) DELAYED EFFECTIVE DATE.—The amendments

18 made by subsection (a) shall take effect on October 1,

19 1999.

20 SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX21 TENDED TO DEPENDENT STUDENTS.

22 Not later than 1 year after the date of the enactment

23 of this Act, the Comptroller General of the United States

24 shall—

25 (1) conduct a study regarding the impact that

26 the extension of credit to individuals who are—
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1 (A) claimed as dependents for purposes of

2 the Internal Revenue Code of 1986; and

3 (B) enrolled in post-secondary educational

4 institutions,

5 has on the rate of cases filed under title 11 of the

6 United States Code; and

7 (2) submit to the Speaker of the House of Rep8 resentatives and the President pro tempore of the

9 Senate a report summarizing such study.

10 SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL

11 CASES.

12 Section 362(e) of title 11, United States Code, is

13 amended—

14 (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and

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

16 ‘‘(2) Notwithstanding paragraph (1), in the case of

17 an individual filing under chapter 7, 11, or 13, the stay

18 under subsection (a) shall terminate on the date that is

19 60 days after a request is made by a party in interest

20 under subsection (d), unless—

21 ‘‘(A) a final decision is rendered by the court

22 during the 60-day period beginning on the date of

23 the request; or

24 ‘‘(B) that 60-day period is extended—
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1 ‘‘(i) by agreement of all parties in interest;

2 or

3 ‘‘(ii) by the court for such specific period

4 of time as the court finds is required by for

5 good cause as described in findings made by the

6 court.’’.

7 SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAP8 TER 13.

9 Section 348(f)(1) of title 11, United States Code, is

10 amended—

11 (1) in subparagraph (A), by striking ‘‘and’’ at

12 the end;

13 (2) in subparagraph (B)—

14 (A) by striking ‘‘in the converted case,

15 with allowed secured claims’’ and inserting

16 ‘‘only in a case converted to chapter 11 or 12

17 but not in a case converted to chapter 7, with

18 allowed secured claims in cases under chapters

19 11 and 12’’; and

20 (B) by striking the period and inserting ‘‘;

21 and’’; and

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

23 ‘‘(C) with respect to cases converted from chap24 ter 13—
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1 ‘‘(i) the claim of any creditor holding secu2 rity as of the date of the petition shall continue

3 to be secured by that security unless the full

4 amount of such claim determined under appli5 cable nonbankruptcy law has been paid in full

6 as of the date of conversion, notwithstanding

7 any valuation or determination of the amount

8 of an allowed secured claim made for the pur9 poses of the chapter 13 proceeding; and

10 ‘‘(ii) unless a prebankruptcy default has

11 been fully cured pursuant to the plan at the

12 time of conversion, in any proceeding under this

13 title or otherwise, the default shall have the ef14 fect given under applicable nonbankruptcy

15 law.’’.

16 TITLE VII—BANKRUPTCY DATA

17 SEC. 701. IMPROVED BANKRUPTCY STATISTICS.

18 (a) AMENDMENT.—Chapter 6 of part I of title 28,

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

20 following:

21 ‘‘§ 159. Bankruptcy statistics

22 ‘‘(a) The clerk of each district shall compile statistics

23 regarding individual debtors with primarily consumer

24 debts seeking relief under chapters 7, 11, and 13 of title

25 11. Those statistics shall be in a form prescribed by the
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1 Director of the Administrative Office of the United States

2 Courts (referred to in this section as the ‘Office’).

3 ‘‘(b) The Director shall—

4 ‘‘(1) compile the statistics referred to in sub5 section (a);

6 ‘‘(2) make the statistics available to the public;

7 and

8 ‘‘(3) not later than October 31, 1999, and an9 nually thereafter, prepare, and submit to Congress a

10 report concerning the information collected under

11 subsection (a) that contains an analysis of the infor12 mation.

13 ‘‘(c) The compilation required under subsection (b)

14 shall—

15 ‘‘(1) be itemized, by chapter, with respect to

16 title 11;

17 ‘‘(2) be presented in the aggregate and for each

18 district; and

19 ‘‘(3) include information concerning—

20 ‘‘(A) the total assets and total liabilities of

21 the debtors described in subsection (a), and in

22 each category of assets and liabilities, as re23 ported in the schedules prescribed pursuant to

24 section 2075 of this title and filed by those

25 debtors;
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1 ‘‘(B) the current total monthly income,

2 projected monthly net income, and average in3 come and average expenses of those debtors as

4 reported on the schedules and statements that

5 each such debtor files under sections 111, 521,

6 and 1322 of title 11;

7 ‘‘(C) the aggregate amount of debt dis8 charged in the reporting period, determined as

9 the difference between the total amount of debt

10 and obligations of a debtor reported on the

11 schedules and the amount of such debt reported

12 in categories which are predominantly non13 dischargeable;

14 ‘‘(D) the average period of time between

15 the filing of the petition and the closing of the

16 case;

17 ‘‘(E) for the reporting period—

18 ‘‘(i) the number of cases in which a

19 reaffirmation was filed; and

20 ‘‘(ii)(I) the total number of reaffirma21 tions filed;

22 ‘‘(II) of those cases in which a reaffir23 mation was filed, the number in which the

24 debtor was not represented by an attorney;

25 and
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1 ‘‘(III) of those cases, the number of

2 cases in which the reaffirmation was ap3 proved by the court;

4 ‘‘(F) with respect to cases filed under

5 chapter 13 of title 11, for the reporting

6 period—

7 ‘‘(i)(I) the number of cases in which a

8 final order was entered determining the

9 value of property securing a claim in an

10 amount less than the amount of the claim;

11 and

12 ‘‘(II) the number of final orders deter13 mining the value of property securing a

14 claim issued;

15 ‘‘(ii) the number of cases dismissed

16 for failure to make payments under the

17 plan; and

18 ‘‘(iii) the number of cases in which

19 the debtor filed another case within the 6

20 years previous to the filing;

21 ‘‘(G) the number of cases in which credi22 tors were fined for misconduct and any amount

23 of punitive damages awarded by the court for

24 creditor misconduct; and
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1 ‘‘(H) the number of cases in which sanc2 tions under rule 9011 of the Federal Rules of

3 Bankruptcy Procedure were imposed against

4 debtor’s counsel and damages awarded under

5 such Rule.’’.

6 (b) CLERICAL AMENDMENT.—The table of sections

7 at the beginning of chapter 6 of title 28, United States

8 Code, is amended by adding at the end the following:

‘‘159. Bankruptcy statistics.’’.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall take effect 18 months after the date of

11 enactment of this Act.

12 SEC. 702. UNIFORM RULES FOR THE COLLECTION OF BANK13 RUPTCY DATA.

14 (a) AMENDMENT.—Title 28 of the United States

15 Code is amended by inserting after section 589a the fol16 lowing:

17 ‘‘§ 589b. Bankruptcy data

18 ‘‘(a) RULES.—The Attorney General shall, within a

19 reasonable time after the effective date of this section,

20 issue rules requiring uniform forms for (and from time

21 to time thereafter to appropriately modify and approve)—

22 ‘‘(1) final reports by trustees in cases under

23 chapters 7, 12, and 13 of title 11; and
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1 ‘‘(2) periodic reports by debtors in possession or

2 trustees, as the case may be, in cases under chapter

3 11 of title 11.

4 ‘‘(b) REPORTS.—All reports referred to in subsection

5 (a) shall be designed (and the requirements as to place

6 and manner of filing shall be established) so as to facili7 tate compilation of data and maximum possible access of

8 the public, both by physical inspection at 1 or more central

9 filing locations, and by electronic access through the Inter10 net or other appropriate media.

11 ‘‘(c) REQUIRED INFORMATION.—The information re12 quired to be filed in the reports referred to in subsection

13 (b) shall be that which is in the best interests of debtors

14 and creditors, and in the public interest in reasonable and

15 adequate information to evaluate the efficiency and practi16 cality of the Federal bankruptcy system. In issuing rules

17 proposing the forms referred to in subsection (a), the At18 torney General shall strike the best achievable practical

19 balance between—

20 ‘‘(1) the reasonable needs of the public for in21 formation about the operational results of the Fed22 eral bankruptcy system; and

23 ‘‘(2) economy, simplicity, and lack of undue

24 burden on persons with a duty to file reports.
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1 ‘‘(d) FINAL REPORTS.—Final reports proposed for

2 adoption by trustees under chapters 7, 12, and 13 of title

3 11 shall, in addition to such other matters as are required

4 by law or as the Attorney General in the discretion of the

5 Attorney General, shall propose, include with respect to

6 a case under such title—

7 ‘‘(1) information about the length of time the

8 case was pending;

9 ‘‘(2) assets abandoned;

10 ‘‘(3) assets exempted;

11 ‘‘(4) receipts and disbursements of the estate;

12 ‘‘(5) expenses of administration;

13 ‘‘(6) claims asserted;

14 ‘‘(7) claims allowed; and

15 ‘‘(8) distributions to claimants and claims dis16 charged without payment,

17 in each case by appropriate category and, in cases under

18 chapters 12 and 13 of title 11, date of confirmation of

19 the plan, each modification thereto, and defaults by the

20 debtor in performance under the plan.

21 ‘‘(e) PERIODIC REPORTS.—Periodic reports proposed

22 for adoption by trustees or debtors in possession under

23 chapter 11 of title 11 shall, in addition to such other mat24 ters as are required by law or as the Attorney General,
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1 in the discretion of the Attorney General, shall propose,

2 include—

3 ‘‘(1) information about the standard industry

4 classification, published by the Department of Com5 merce, for the businesses conducted by the debtor;

6 ‘‘(2) length of time the case has been pending;

7 ‘‘(3) number of full-time employees as at the

8 date of the order for relief and at end of each re9 porting period since the case was filed;

10 ‘‘(4) cash receipts, cash disbursements and

11 profitability of the debtor for the most recent period

12 and cumulatively since the date of the order for re13 lief;

14 ‘‘(5) compliance with title 11, whether or not

15 tax returns and tax payments since the date of the

16 order for relief have been timely filed and made;

17 ‘‘(6) all professional fees approved by the court

18 in the case for the most recent period and cumula19 tively since the date of the order for relief (sepa20 rately reported, in for the professional fees incurred

21 by or on behalf of the debtor, between those that

22 would have been incurred absent a bankruptcy case

23 and those not); and

24 ‘‘(7) plans of reorganization filed and confirmed

25 and, with respect thereto, by class, the recoveries of
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1 the holders, expressed in aggregate dollar values

2 and, in the case of claims, as a percentage of total

3 claims of the class allowed.’’.

4 (b) TECHNICAL AMENDMENT.—The table of sections

5 of chapter 39 of title 28, United States Code, is amended

6 by adding at the end the following:

‘‘589b. Bankruptcy data.’’.

7 SEC. 703. SENSE OF THE CONGRESS REGARDING AVAIL8 ABILITY OF BANKRUPTCY DATA.

9 It is the sense of the Congress that—

10 (1) the national policy of the United States

11 should be that all data held by bankruptcy clerks in

12 electronic form, to the extent such data reflects only

13 public records (as defined in section 107 of title 11

14 of the United States Code), should be released in a

15 usable electronic form in bulk to the public subject

16 to such appropriate privacy concerns and safeguards

17 as the Judicial Conference of the United States may

18 determine; and

19 (2) there should be established a bankruptcy

20 data system in which—

21 (A) a single set of data definitions and

22 forms are used to collect data nationwide; and

23 (B) data for any particular bankruptcy

24 case are aggregated in the same electronic

25 record.
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1 TITLE VIII—BANKRUPTCY TAX

2 PROVISIONS

3 SEC. 801. TREATMENT OF CERTAIN LIENS.

4 (a) TREATMENT OF CERTAIN LIENS.—Section 724

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

6 (1) in subsection (b), in the matter preceding

7 paragraph (1), by inserting ‘‘(other than to the ex8 tent that there is a properly perfected unavoidable

9 tax lien arising in connection with an ad valorem tax

10 on real or personal property of the estate)’’ after

11 ‘‘under this title’’;

12 (2) in subsection (b)(2), after ‘‘507(a)(1)’’, in13 sert ‘‘(except that such expenses, other than claims

14 for wages, salaries, or commissions which arise after

15 the filing of a petition, shall be limited to expenses

16 incurred under chapter 7 of this title and shall not

17 include expenses incurred under chapter 11 of this

18 title)’’; and

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

20 ‘‘(e) Before subordinating a tax lien on real or per21 sonal property of the estate, the trustee shall—

22 ‘‘(1) exhaust the unencumbered assets of the

23 estate; and

24 ‘‘(2) in a manner consistent with section 506(c)

25 of this title, recover from property securing an al-
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1 lowed secured claim the reasonable, necessary costs

2 and expenses of preserving or disposing of that prop3 erty.

4 ‘‘(f) Notwithstanding the exclusion of ad valorem tax

5 liens set forth in this section and subject to the require6 ments of subsection (e)—

7 ‘‘(1) claims for wages, salaries, and commis8 sions that are entitled to priority under section

9 507(a)(3) of this title; or

10 ‘‘(2) claims for contributions to an employee

11 benefit plan entitled to priority under section

12 507(a)(4) of this title,

13 may be paid from property of the estate which secures

14 a tax lien, or the proceeds of such property.’’.

15 (b) DETERMINATION OF TAX LIABILITY.—Section

16 505(a)(2) of title 11, United States Code, is amended—

17 (1) in subparagraph (A), by striking ‘‘or’’ at

18 the end;

19 (2) in subparagraph (B), by striking the period

20 at the end and inserting ‘‘; or’’; and

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

22 ‘‘(C) the amount or legality of any amount aris23 ing in connection with an ad valorem tax on real or

24 personal property of the estate, if the applicable pe25 riod for contesting or redetermining that amount
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1 under any law (other than a bankruptcy law) has

2 expired.’’.

3 SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.

4 (a) EFFECTIVE NOTICE TO GOVERNMENTAL

5 UNITS.—Section 342 of title 11, United States Code, is

6 amended by adding at the end the following:

7 ‘‘(d) If a debtor lists a governmental unit as a credi8 tor in a list or schedule, any notice required to be given

9 by the debtor under this title, any rule, any applicable law,

10 or any order of the court, shall identify the department,

11 agency, or instrumentality through which the debtor is in12 debted. The debtor shall identify (with information such

13 as a taxpayer identification number, loan, account or con14 tract number, or real estate parcel number, where applica15 ble), and describe the underlying basis for the govern16 mental unit’s claim. If the debtor’s liability to a govern17 mental unit arises from a debt or obligation owed or in18 curred by another individual, entity, or organization, or

19 under a different name, the debtor shall identify such indi20 vidual, entity, organization, or name.

21 ‘‘(e) The clerk shall keep and update quarterly, in

22 the form and manner as the Director of the Administra23 tive Office of the United States Courts prescribes, and

24 make available to debtors, a register in which a govern25 mental unit may designate a safe harbor mailing address
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1 for service of notice in cases pending in the district. A

2 governmental unit may file a statement with the clerk des3 ignating a safe harbor address to which notices are to be

4 sent, unless such governmental unit files a notice of

5 change of address.’’.

6 (b) ADOPTION OF RULES PROVIDING NOTICE.—The

7 Advisory Committee on Bankruptcy Rules of the Judicial

8 Conference shall, within a reasonable period of time after

9 the date of the enactment of this Act, propose for adoption

10 enhanced rules for providing notice to State, Federal, and

11 local government units that have regulatory authority over

12 the debtor or which may be creditors in the debtor’s case.

13 Such rules shall be reasonably calculated to ensure that

14 notice will reach the representatives of the governmental

15 unit, or subdivision thereof, who will be the proper persons

16 authorized to act upon the notice. At a minimum, the rules

17 should require that the debtor—

18 (1) identify in the schedules and the notice, the

19 subdivision, agency, or entity in respect of which

20 such notice should be received;

21 (2) provide sufficient information (such as case

22 captions, permit numbers, taxpayer identification

23 numbers, or similar identifying information) to per24 mit the governmental unit or subdivision thereof, en25 titled to receive such notice, to identify the debtor or
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1 the person or entity on behalf of which the debtor

2 is providing notice where the debtor may be a suc3 cessor in interest or may not be the same as the per4 son or entity which incurred the debt or obligation;

5 and

6 (3) identify, in appropriate schedules, served to7 gether with the notice, the property in respect of

8 which the claim or regulatory obligation may have

9 arisen, if any, the nature of such claim or regulatory

10 obligation and the purpose for which notice is being

11 given.

12 (c) EFFECT OF FAILURE OF NOTICE.—Section 342

13 of title 11, United States Code, as amended by subsection

14 (a), is amended by adding at the end the following:

15 ‘‘(f) A notice that does not comply with subsections

16 (d) and (e) shall not be effective unless the debtor dem17 onstrates, by clear and convincing evidence, that timely

18 notice was given in a manner reasonably calculated to sat19 isfy the requirements of this section was given, and that—

20 ‘‘(1) either the notice was timely sent to the

21 safe harbor address provided in the register main22 tained by the clerk of the district in which the case

23 was pending for such purposes; or

24 ‘‘(2) no safe harbor address was provided in

25 such list for the governmental unit and that an offi-
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1 cer of the governmental unit who is responsible for

2 the matter or claim had actual knowledge of the case

3 in sufficient time to act.’’.

4 SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF

5 TAXES.

6 Section 505(b) of title 11, United States Code, is

7 amended by striking ‘‘Unless’’ at the beginning of the sec8 ond sentence thereof and inserting ‘‘If the request is made

9 substantially in the manner designated by the govern10 mental unit and unless’’.

11 SEC. 804. RATE OF INTEREST ON TAX CLAIMS.

12 Chapter 5 of title 11, United States Code, is amended

13 by adding at the end the following:

14 ‘‘§ 511. Rate of interest on tax claims

15 ‘‘If any provision of this title requires the payment

16 of interest on a tax claim or requires the payment of inter17 est to enable a creditor to receive the present value of the

18 allowed amount of a tax claim, the rate of interest shall

19 be as follows:

20 ‘‘(1) In the case of ad valorem tax claims,

21 whether secured or unsecured, other unsecured tax

22 claims where interest is required to be paid under

23 section 726(a)(5) of this title, secured tax claims,

24 and administrative tax claims paid under section
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1 503(b)(1) of this title, the rate shall be determined

2 under applicable nonbankruptcy law.

3 ‘‘(2) In the case of all other tax claims, the

4 minimum rate of interest shall be the Federal short5 term rate rounded to the nearest full percent, deter6 mined under section 1274(d) of the Internal Reve7 nue Code of 1986, plus 3 percentage points.

8 ‘‘(A) In the case of claims for Federal in9 come taxes, such rate shall be subject to any

10 adjustment that may be required under section

11 6621(d) of the Internal Revenue Code of 1986.

12 ‘‘(B) In the case of taxes paid under a con13 firmed plan or reorganization, such rate shall

14 be determined as of the calendar month in

15 which the plan is confirmed.’’.

16 SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERI17 ODS.

18 Section 507(a)(9)(A) of title 11, United States Code,

19 as so redesignated, is amended—

20 (1) in clause (i) by inserting after ‘‘petition’’

21 and before the semicolon ‘‘, plus any time, plus 6

22 months, during which the stay of proceedings was in

23 effect in a prior case under this title’’; and

24 (2) amend clause (ii) to read as follows:
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1 ‘‘(ii) assessed within 240 days before

2 the date of the filing of the petition, exclu3 sive of—

4 ‘‘(I) any time plus 30 days dur5 ing which an offer in compromise with

6 respect of such tax, was pending or in

7 effect during such 240-day period;

8 ‘‘(II) any time plus 30 days dur9 ing which an installment agreement

10 with respect of such tax was pending

11 or in effect during such 240-day pe12 riod, up to 1 year; and

13 ‘‘(III) any time plus 6 months

14 during which a stay of proceedings

15 against collections was in effect in a

16 prior case under this title during such

17 240-day period.’’.

18 SEC. 806. PRIORITY PROPERTY TAXES INCURRED.

19 Section 507(a)(8)(B) of title 11, United States Code,

20 is amended by striking ‘‘assessed’’ and inserting ‘‘in21 curred’’.

22 SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND

23 OTHER TAXES.

24 Section 1328(a)(2) of title 11, United States Code,

25 is amended by inserting ‘‘(1),’’ after ‘‘paragraph’’.
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1 SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

2 Section 1141(d) of title 11, United States Code, as

3 amended by section 119A, is amended by adding at the

4 end the following:

5 ‘‘(6) Notwithstanding the provisions of paragraph

6 (1), the confirmation of a plan does not discharge a debtor

7 which is a corporation from any debt for a tax or customs

8 duty with respect to which the debtor made a fraudulent

9 return or willfully attempted in any manner to evade or

10 defeat such tax.’’.

11 SEC. 809. STAY OF TAX PROCEEDINGS.

12 (a) SECTION 362 STAY LIMITED TO PREPETITION

13 TAXES.—Section 362(a)(8) of title 11, United States

14 Code, is amended by striking the period at the end and

15 inserting ‘‘, in respect of a tax liability for a taxable period

16 ending before the order for relief.’’.

17 (b) APPEAL OF TAX COURT DECISIONS PER18 MITTED.—Section 362(b)(9) of title 11, United States

19 Code, is amended—

20 (1) in subparagraph (C) by striking ‘‘or’’ at the

21 end;

22 (2) in subparagraph (D) by striking the period

23 at the end and inserting ‘‘; or’’; and

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

25 ‘‘(E) the appeal of a decision by a court or

26 administrative tribunal which determines a tax
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1 liability of the debtor without regard to whether

2 such determination was made prepetition or

3 postpetition.’’.

4 SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAPTER 11

5 CASES.

6 Section 1129(a)(9) of title 11, United States Code,

7 is amended—

8 (1) in subparagraph (B) by striking ‘‘and’’ at

9 the end; and

10 (2) in subparagraph (C)—

11 (A) by striking ‘‘deferred cash payments,

12 over a period not exceeding six years after the

13 date of assessment of such claim,’’ and insert14 ing ‘‘regular installment payments in cash, but

15 in no case with a balloon provision, and no

16 more than three months apart, beginning no

17 later than the effective date of the plan and

18 ending on the earlier of five years after the pe19 tition date or the last date payments are to be

20 made under the plan to unsecured creditors,’’;

21 (B) by striking the period at the end and

22 inserting ‘‘; and’’; and

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

24 ‘‘(D) with respect to a secured claim which

25 would be described in section 507(a)(8) of this
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1 title but for its secured status, the holder of

2 such claim will receive on account of such claim

3 cash payments of not less than is required in

4 subparagraph (C) and over a period no greater

5 than is required in such subparagraph.’’.

6 SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIB7 ITED.

8 Section 545(2) of title 11, United States Code, is

9 amended by striking the semicolon at the end and insert10 ing ‘‘, except where such purchaser is a purchaser de11 scribed in section 6323 of the Internal Revenue Code of

12 1986 or similar provision of State or local law;’’.

13 SEC. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSI14 NESS.

15 (a) PAYMENT OF TAXES REQUIRED.—Section 960 of

16 title 28, United States Code, is amended—

17 (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and

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

19 ‘‘(b) Such taxes shall be paid when due in the conduct

20 of such business unless—

21 ‘‘(1) the tax is a property tax secured by a lien

22 against property that is abandoned within a reason23 able time after the lien attaches, by the trustee of

24 a bankruptcy estate, pursuant to section 554 of title

25 11; or
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1 ‘‘(2) payment of the tax is excused under a spe2 cific provision of title 11.

3 ‘‘(c) In a case pending under chapter 7 of title 11,

4 payment of a tax may be deferred until final distribution

5 is made under section 726 of title 11 if—

6 ‘‘(1) the tax was not incurred by a trustee duly

7 appointed under chapter 7 of title 11; or

8 ‘‘(2) before the due date of the tax, the court

9 has made a finding of probable insufficiency of

10 funds of the estate to pay in full the administrative

11 expenses allowed under section 503(b) of title 11

12 that have the same priority in distribution under

13 section 726(b) of title 11 as such tax.’’.

14 (b) PAYMENT OF AD VALOREM TAXES REQUIRED.—

15 Section 503(b)(1)(B) of title 11, United States Code, is

16 amended in clause (i) by inserting after ‘‘estate,’’ and be17 fore ‘‘except’’ the following: ‘‘whether secured or unse18 cured, including property taxes for which liability is in rem

19 only, in personam or both,’’.

20 (c) REQUEST FOR PAYMENT OF ADMINISTRATIVE

21 EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of

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

23 end the following:

24 ‘‘(D) notwithstanding the requirements of sub25 section (a) of this section, a governmental unit shall
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1 not be required to file a request for the payment of

2 a claim described in subparagraph (B) or (C);’’.

3 (d) PAYMENT OF TAXES AND FEES AS SECURED

4 CLAIMS.—Section 506 of title 11, United States Code, is

5 amended—

6 (1) in subsection (b) by inserting ‘‘or State

7 statute’’ after ‘‘agreement’’; and

8 (2) in subsection (c) by inserting ‘‘, including

9 the payment of all ad valorem property taxes in re10 spect of the property’’ before the period at the end.

11 SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.

12 Section 726(a)(1) of title 11, United States Code, is

13 amended by striking ‘‘before the date on which the trustee

14 commences distribution under this section’’ and inserting

15 ‘‘on or before the earlier of 10 days after the mailing to

16 creditors of the summary of the trustee’s final report or

17 the date on which the trustee commences final distribution

18 under this section’’.

19 SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AU20 THORITIES.

21 Section 523(a)(1)(B) of title 11, United States Code,

22 is amended—

23 (1) by inserting ‘‘or equivalent report or no24 tice,’’ after ‘‘a return,’’;

25 (2) in clause (i)—
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1 (A) by inserting ‘‘or given’’ after ‘‘filed’’;

2 and

3 (B) by striking ‘‘or’’ at the end;

4 (3) in clause (ii)—

5 (A) by inserting ‘‘or given’’ after ‘‘filed’’;

6 and

7 (B) by inserting ‘‘, report, or notice’’ after

8 ‘‘return’’; and

9 (4) by adding at the end the following:

10 ‘‘(iii) for purposes of this subsection,

11 a return—

12 ‘‘(I) must satisfy the require13 ments of applicable nonbankruptcy

14 law, and includes a return prepared

15 pursuant to section 6020(a) of the In16 ternal Revenue Code of 1986, or simi17 lar State or local law, or a written

18 stipulation to a judgment entered by a

19 nonbankruptcy tribunal, but does not

20 include a return made pursuant to

21 section 6020(b) of the Internal Reve22 nue Code of 1986, or similar State or

23 local law; and
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1 ‘‘(II) must have been filed in a

2 manner permitted by applicable non3 bankruptcy law; or’’.

4 SEC. 815. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN5 PAID TAXES.

6 Section 505(b) of title 11, United States Code, is

7 amended in the second sentence by inserting ‘‘the estate,’’

8 after ‘‘misrepresentation,’’.

9 SEC. 816. REQUIREMENT TO FILE TAX RETURNS TO CON10 FIRM CHAPTER 13 PLANS.

11 (a) FILING OF PREPETITION TAX RETURNS RE12 QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of

13 title 11, United States Code, as amended by section 143,

14 is amended—

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

16 end;

17 (2) in paragraph (7) by striking the period at

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

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

20 ‘‘(8) if the debtor has filed all Federal, State,

21 and local tax returns as required by section 1308 of

22 this title.’’.

23 (b) ADDITIONAL TIME PERMITTED FOR FILING TAX

24 RETURNS.—(1) Chapter 13 of title 11, United States
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1 Code, as amended by section 137, is amended by adding

2 at the end the following:

3 ‘‘§ 1308. Filing of prepetition tax returns

4 ‘‘(a) On or before the day prior to the day on which

5 the first meeting of the creditors is convened under section

6 341(a) of this title, the debtor shall have filed with appro7 priate tax authorities all tax returns for all taxable periods

8 ending in the 3-year period ending on the date of filing

9 of the petition.

10 ‘‘(b) If the tax returns required by subsection (a)

11 have not been filed by the date on which the first meeting

12 of creditors is convened under section 341(a) of this title,

13 the trustee may continue such meeting for a reasonable

14 period of time, to allow the debtor additional time to file

15 any unfiled returns, but such additional time shall be no

16 more than—

17 ‘‘(1) for returns that are past due as of the

18 date of the filing of the petition, 120 days from such

19 date;

20 ‘‘(2) for returns which are not past due as of

21 the date of the filing of the petition, the later of 120

22 days from such date or the due date for such re23 turns under the last automatic extension of time for

24 filing such returns to which the debtor is entitled,
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1 and for which request has been timely made, accord2 ing to applicable nonbankruptcy law; and

3 ‘‘(3) upon notice and hearing, and order en4 tered before the lapse of any deadline fixed accord5 ing to this subsection, where the debtor dem6 onstrates, by clear and convincing evidence, that the

7 failure to file the returns as required is because of

8 circumstances beyond the control of the debtor, the

9 court may extend the deadlines set by the trustee as

10 provided in this subsection for—

11 ‘‘(A) a period of no more than 30 days for

12 returns described in paragraph (1) of this sub13 section; and

14 ‘‘(B) for no more than the period of time

15 ending on the applicable extended due date for

16 the returns described in paragraph (2).

17 ‘‘(c) For purposes of this section only, a return in18 cludes a return prepared pursuant to section 6020 (a) or

19 (b) of the Internal Revenue Code of 1986 or similar State

20 or local law, or a written stipulation to a judgment entered

21 by a nonbankruptcy tribunal.’’.

22 (2) The table of sections of chapter 13 of title 11,

23 United States Code, is amended by inserting after the

24 item relating to section 1307 the following:

‘‘1308. Filing of prepetition tax returns.’’.
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1 (c) DISMISSAL OR CONVERSION ON FAILURE TO

2 COMPLY.—Section 1307 of title 11, United States Code,

3 is amended—

4 (1) by redesignating subsections (e) and (f) as

5 subsections (f) and (g), respectively; and

6 (2) by inserting after subsection (d) the follow7 ing:

8 ‘‘(e) Upon the failure of the debtor to file tax returns

9 under section 1308 of this title, on request of a party in

10 interest or the United States trustee and after notice and

11 a hearing, the court shall dismiss a case or convert a case

12 under this chapter to a case under chapter 7 of this title,

13 whichever is in the best interests of creditors and the es14 tate.’’.

15 (d) TIMELY FILED CLAIMS.—Section 502(b)(9) of

16 title 11, United States Code, is amended by striking the

17 period at the end and inserting ‘‘, and except that in a

18 case under chapter 13 of this title, a claim of a govern19 mental unit for a tax in respect of a return filed under

20 section 1308 of this title shall be timely if it is filed on

21 or before 60 days after such return or returns were filed

22 as required.’’.

23 (e) RULES FOR OBJECTIONS TO CLAIMS AND TO

24 CONFIRMATION.—It is the sense of the Congress that the

25 Advisory Committee on Bankruptcy Rules of the Judicial
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1 Conference should, within a reasonable period of time

2 after the date of the enactment of this Act, propose for

3 adoption amended Federal Rules of Bankruptcy Proce4 dure which provide that—

5 (1) notwithstanding the provisions of Rule

6 3015(f), in cases under chapter 13 of title 11,

7 United States Code, a governmental unit may object

8 to the confirmation of a plan on or before 60 days

9 after the debtor files all tax returns required under

10 sections 1308 and 1325(a)(7) of title 11, United

11 States Code; and

12 (2) in addition to the provisions of Rule 3007,

13 in a case under chapter 13 of title 11, United States

14 Code, no objection to a tax in respect of a return re15 quired to be filed under such section 1308 shall be

16 filed until such return has been filed as required.

17 SEC. 817. STANDARDS FOR TAX DISCLOSURE.

18 Section 1125(a) of title 11, United States Code, is

19 amended in paragraph (1)—

20 (1) by inserting after ‘‘records,’’ the following:

21 ‘‘including a full discussion of the potential material

22 Federal, State, and local tax consequences of the

23 plan to the debtor, any successor to the debtor, and

24 a hypothetical investor domiciled in the State in

25 which the debtor resides or has its principal place of
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1 business typical of the holders of claims or interests

2 in the case,’’;

3 (2) by inserting ‘‘such’’ after ‘‘enable’’; and

4 (3) by striking ‘‘reasonable’’ where it appears

5 after ‘‘hypothetical’’ and by striking ‘‘typical of hold6 ers of claims or interests’’ after ‘‘investor’’.

7 SEC. 818. SETOFF OF TAX REFUNDS.

8 Section 362(b) of title 11, United States Code, as

9 amended by sections 120, 134, 139, and 203, is

10 amended—

11 (1) in paragraph (29) by striking ‘‘or’’;

12 (2) in paragraph (29) by striking the period at

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

14 (3) by inserting after paragraph (29) the fol15 lowing:

16 ‘‘(30) under subsection (a) of the setoff of an

17 income tax refund, by a governmental unit, in re18 spect of a taxable period which ended before the

19 order for relief against an income tax liability for a

20 taxable period which also ended before the order for

21 relief, unless—

22 ‘‘(A) prior to such setoff, an action to de23 termine the amount or legality of such tax li24 ability under section 505(a) was commenced; or
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1 ‘‘(B) where the setoff of an income tax re2 fund is not permitted because of a pending ac3 tion to determine the amount or legality of a

4 tax liability, the governmental unit may hold

5 the refund pending the resolution of the ac6 tion.’’.

7 TITLE IX—ANCILLARY AND

8 OTHER CROSS-BORDER CASES

9 SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11,

10 UNITED STATES CODE.

11 (a) IN GENERAL.—Title 11, United States Code, is

12 amended by inserting after chapter 13 the following:

13 ‘‘CHAPTER 15—ANCILLARY AND OTHER

14 CROSS-BORDER CASES

‘‘Sec.

‘‘1501. Purpose and scope of application.

‘‘SUBCHAPTER I—GENERAL PROVISIONS

‘‘1502. Definitions.

‘‘1503. International obligations of the United States.

‘‘1504. Commencement of ancillary case.

‘‘1505. Authorization to act in a foreign country.

‘‘1506. Public policy exception.

‘‘1507. Additional assistance.

‘‘1508. Interpretation.

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND

CREDITORS TO THE COURT

‘‘1509. Right of direct access.

‘‘1510. Limited jurisdiction.

‘‘1511. Commencement of case under section 301 or 303.

‘‘1512. Participation of a foreign representative in a case under this title.

‘‘1513. Access of foreign creditors to a case under this title.

‘‘1514. Notification to foreign creditors concerning a case under this title.

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING

AND RELIEF
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‘‘1515. Application for recognition of a foreign proceeding.

‘‘1516. Presumptions concerning recognition.

‘‘1517. Order recognizing a foreign proceeding.

‘‘1518. Subsequent information.

‘‘1519. Relief that may be granted upon petition for recognition of a foreign

proceeding.

‘‘1520. Effects of recognition of a foreign main proceeding.

‘‘1521. Relief that may be granted upon recognition of a foreign proceeding.

‘‘1522. Protection of creditors and other interested persons.

‘‘1523. Actions to avoid acts detrimental to creditors.

‘‘1524. Intervention by a foreign representative.

‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND

FOREIGN REPRESENTATIVES

‘‘1525. Cooperation and direct communication between the court and foreign

courts or foreign representatives.

‘‘1526. Cooperation and direct communication between the trustee and foreign

courts or foreign representatives.

‘‘1527. Forms of cooperation.

‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

‘‘1528. Commencement of a case under this title after recognition of a foreign

main proceeding.

‘‘1529. Coordination of a case under this title and a foreign proceeding.

‘‘1530. Coordination of more than 1 foreign proceeding.

‘‘1531. Presumption of insolvency based on recognition of a foreign main proceeding.

‘‘1532. Rule of payment in concurrent proceedings.

1 ‘‘§ 1501. Purpose and scope of application

2 ‘‘(a) The purpose of this of chapter is to incorporate

3 the Model Law on Cross-Border Insolvency so as to pro4 vide effective mechanisms for dealing with cases of cross5 border insolvency with the objectives of—

6 ‘‘(1) cooperation between—

7 ‘‘(A) United States courts, United States

8 Trustees, trustees, examiners, debtors, and

9 debtors in possession; and

10 ‘‘(B) the courts and other competent au11 thorities of foreign countries involved in cross12 border insolvency cases;
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1 ‘‘(2) greater legal certainty for trade and in2 vestment;

3 ‘‘(3) fair and efficient administration of cross4 border insolvencies that protects the interests of all

5 creditors, and other interested entities, including the

6 debtor;

7 ‘‘(4) protection and maximization of the value

8 of the debtor’s assets; and

9 ‘‘(5) facilitation of the rescue of financially

10 troubled businesses, thereby protecting investment

11 and preserving employment.

12 ‘‘(b) This chapter applies where—

13 ‘‘(1) assistance is sought in the United States

14 by a foreign court or a foreign representative in con15 nection with a foreign proceeding;

16 ‘‘(2) assistance is sought in a foreign country in

17 connection with a case under this title;

18 ‘‘(3) a foreign proceeding and a case under this

19 title with respect to the same debtor are taking place

20 concurrently; or

21 ‘‘(4) creditors or other interested persons in a

22 foreign country have an interest in requesting the

23 commencement of, or participating in, a case or pro24 ceeding under this title.

25 ‘‘(c) This chapter does not apply to—
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1 ‘‘(1) a proceeding concerning an entity identi2 fied by exclusion in subsection 109(b);

3 ‘‘(2) an individual, or to an individual and such

4 individual’s spouse, who have debts within the limits

5 specified in section 109(e) and who are citizens of

6 the United States or aliens lawfully admitted for

7 permanent residence in the United States; or

8 ‘‘(3) an entity subject to a proceeding under the

9 Securities Investor Protection Act, a stockbroker

10 subject to subchapter III of chapter 7 of this title,

11 or a commodity broker subject to subchapter IV of

12 chapter 7 of this title.

13 ‘‘SUBCHAPTER I—GENERAL PROVISIONS

14 ‘‘§ 1502. Definitions

15 ‘‘For the purposes of this chapter, the term—

16 ‘‘(1) ‘debtor’ means an entity that is the subject

17 of a foreign proceeding;

18 ‘‘(2) ‘establishment’ means any place of oper19 ations where the debtor carries out a nontransitory

20 economic activity;

21 ‘‘(3) ‘foreign court’ means a judicial or other

22 authority competent to control or supervise a foreign

23 proceeding;
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1 ‘‘(4) ‘foreign main proceeding’ means a foreign

2 proceeding taking place in the country where the

3 debtor has the center of its main interests;

4 ‘‘(5) ‘foreign nonmain proceeding’ means a for5 eign proceeding, other than a foreign main proceed6 ing, taking place in a country where the debtor has

7 an establishment;

8 ‘‘(6) ‘trustee’ includes a trustee, a debtor in

9 possession in a case under any chapter of this title,

10 or a debtor under chapter 9 of this title; and

11 ‘‘(7) ‘within the territorial jurisdiction of the

12 United States’ when used with reference to property

13 of a debtor refers to tangible property located within

14 the territory of the United States and intangible

15 property deemed under applicable nonbankruptcy

16 law to be located within that territory, including any

17 property subject to attachment or garnishment that

18 may properly be seized or garnished by an action in

19 a Federal or State court in the United States.

20 ‘‘§ 1503. International obligations of the United States

21 ‘‘To the extent that this chapter conflicts with an ob22 ligation of the United States arising out of any treaty or

23 other form of agreement to which it is a party with 1 or

24 more other countries, the requirements of the treaty or

25 agreement prevail.
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1 ‘‘§ 1504. Commencement of ancillary case

2 ‘‘A case under this chapter is commenced by the filing

3 of a petition for recognition of a foreign proceeding under

4 section 1515.

5 ‘‘§ 1505. Authorization to act in a foreign country

6 ‘‘A trustee or another entity, including an examiner,

7 may be authorized by the court to act in a foreign country

8 on behalf of an estate created under section 541. An entity

9 authorized to act under this section may act in any way

10 permitted by the applicable foreign law.

11 ‘‘§ 1506. Public policy exception

12 ‘‘Nothing in this chapter prevents the court from re13 fusing to take an action governed by this chapter if the

14 action would be manifestly contrary to the public policy

15 of the United States.

16 ‘‘§ 1507. Additional assistance

17 ‘‘(a) Subject to the specific limitations stated else18 where in this chapter the court, upon recognition of a for19 eign proceeding, to provide additional assistance to a for20 eign representative under this title or under other laws

21 of the United States.

22 ‘‘(b) In determining whether to provide additional as23 sistance under this title or under other laws of the United

24 States, the court shall consider whether such additional

25 assistance, consistent with the principles of comity, will

26 reasonably assure—
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1 ‘‘(1) just treatment of all holders of claims

2 against or interests in the debtor’s property;

3 ‘‘(2) protection of claim holders in the United

4 States against prejudice and inconvenience in the

5 processing of claims in such foreign proceeding;

6 ‘‘(3) prevention of preferential or fraudulent

7 dispositions of property of the debtor;

8 ‘‘(4) distribution of proceeds of the debtor’s

9 property substantially in accordance with the order

10 prescribed by this title; and

11 ‘‘(5) if appropriate, the provision of an oppor12 tunity for a fresh start for the individual that such

13 foreign proceeding concerns.

14 ‘‘§ 1508. Interpretation

15 ‘‘In interpreting this chapter, the court shall consider

16 its international origin, and the need to promote an appli17 cation of this chapter that is consistent with the applica18 tion of similar statutes adopted by foreign jurisdictions.

19 ‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP20 RESENTATIVES AND CREDITORS TO THE

21 COURT

22 ‘‘§ 1509. Right of direct access

23 ‘‘(a) A foreign representative is entitled to commence

24 a case under section 1504 by filing a petition for recogni25 tion under section 1515, and upon recognition, to apply
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1 directly to other Federal and State courts for appropriate

2 relief in those courts.

3 ‘‘(b) Upon recognition, and subject to section 1510,

4 a foreign representative has the capacity to sue and be

5 sued, and shall be subject to the laws of the United States

6 of general applicability.

7 ‘‘(c) Subject to section 1510 of this title, a foreign

8 representative is subject to laws of general application.

9 ‘‘(d) Recognition under this chapter is prerequisite to

10 the granting of comity or cooperation to a foreign rep11 resentative in any State or Federal court in the United

12 States. Any request for comity or cooperation by a foreign

13 representative in any court shall be accompanied by a

14 sworn statement setting forth whether recognition under

15 section 1515 has been sought and the status of any such

16 petition.

17 ‘‘(e) Upon denial of recognition under this chapter,

18 the court may issue appropriate orders necessary to pre19 vent an attempt to obtain comity or cooperation from

20 courts in the United States without such recognition.

21 ‘‘§ 1510. Limited jurisdiction

22 ‘‘The sole fact that a foreign representative files a

23 petition under section 1515 does not subject the foreign

24 representative to the jurisdiction of any court in the

25 United States for any other purpose.
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1 ‘‘§ 1511. Commencement of case under section 301 or

2 303

3 ‘‘(a) Upon recognition, a foreign representative may

4 commence—

5 ‘‘(1) an involuntary case under section 303; or

6 ‘‘(2) a voluntary case under section 301 or 302,

7 if the foreign proceeding is a foreign main proceed8 ing.

9 ‘‘(b) The petition commencing a case under sub10 section (a) must be accompanied by a statement describ11 ing the petition for recognition and its current status. The

12 court where the petition for recognition has been filed

13 must be advised of the foreign representative’s intent to

14 commence a case under subsection (a) prior to such com15 mencement.

16 ‘‘§ 1512. Participation of a foreign representative in a

17 case under this title

18 ‘‘Upon recognition of a foreign proceeding, the for19 eign representative in that proceeding is entitled to par20 ticipate as a party in interest in a case regarding the debt21 or under this title.

22 ‘‘§ 1513. Access of foreign creditors to a case under

23 this title

24 ‘‘(a) Foreign creditors have the same rights regarding

25 the commencement of, and participation in, a case under

26 this title as domestic creditors.
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1 ‘‘(b)(1) Subsection (a) does not change or codify

2 present law as to the priority of claims under section 507

3 or 726 of this title, except that the claim of a foreign cred4 itor under those sections shall not be given a lower priority

5 than that of general unsecured claims without priority

6 solely because the holder of such claim is a foreign credi7 tor.

8 ‘‘(2)(A) Subsection (a) and paragraph (1) do not

9 change or codify present law as to the allowability of for10 eign revenue claims or other foreign public law claims in

11 a proceeding under this title.

12 ‘‘(B) Allowance and priority as to a foreign tax claim

13 or other foreign public law claim shall be governed by any

14 applicable tax treaty of the United States, under the con15 ditions and circumstances specified therein.

16 ‘‘§ 1514. Notification to foreign creditors concerning a

17 case under this title

18 ‘‘(a) Whenever in a case under this title notice is to

19 be given to creditors generally or to any class or category

20 of creditors, such notice shall also be given to the known

21 creditors generally, or to creditors in the notified class or

22 category, that do not have addresses in the United States.

23 The court may order that appropriate steps be taken with

24 a view to notifying any creditor whose address is not yet

25 known.
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1 ‘‘(b) Such notification to creditors with foreign ad2 dresses described in subsection (a) shall be given individ3 ually, unless the court considers that, under the cir4 cumstances, some other form of notification would be

5 more appropriate. No letters rogatory or other similar for6 mality is required.

7 ‘‘(c) When a notification of commencement of a case

8 is to be given to foreign creditors, the notification shall—

9 ‘‘(1) indicate the time period for filing proofs of

10 claim and specify the place for their filing;

11 ‘‘(2) indicate whether secured creditors need to

12 file their proofs of claim; and

13 ‘‘(3) contain any other information required to

14 be included in such a notification to creditors pursu15 ant to this title and the orders of the court.

16 ‘‘(d) Any rule of procedure or order of the court as

17 to notice or the filing of a claim shall provide such addi18 tional time to creditors with foreign addresses as is rea19 sonable under the circumstances.

20 ‘‘SUBCHAPTER III—RECOGNITION OF A

21 FOREIGN PROCEEDING AND RELIEF

22 ‘‘§ 1515. Application for recognition of a foreign pro23 ceeding

24 ‘‘(a) A foreign representative applies to the court for

25 recognition of the foreign proceeding in which the foreign
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1 representative has been appointed by filing a petition for

2 recognition.

3 ‘‘(b) A petition for recognition shall be accompanied

4 by—

5 ‘‘(1) a certified copy of the decision commenc6 ing the foreign proceeding and appointing the for7 eign representative;

8 ‘‘(2) a certificate from the foreign court affirm9 ing the existence of the foreign proceeding and of

10 the appointment of the foreign representative; or

11 ‘‘(3) in the absence of evidence referred to in

12 paragraphs (1) and (2), any other evidence accept13 able to the court of the existence of the foreign pro14 ceeding and of the appointment of the foreign rep15 resentative.

16 ‘‘(c) A petition for recognition shall also be accom17 panied by a statement identifying all foreign proceedings

18 with respect to the debtor that are known to the foreign

19 representative.

20 ‘‘(d) The documents referred to in paragraphs (1)

21 and (2) of subsection (b) must be translated into English.

22 The court may require a translation into English of addi23 tional documents.
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1 ‘‘§ 1516. Presumptions concerning recognition

2 ‘‘(a) If the decision or certificate referred to in section

3 1515(b) indicates that the foreign proceeding is a foreign

4 proceeding as defined in section 101 and that the person

5 or body is a foreign representative as defined in section

6 101, the court is entitled to so presume.

7 ‘‘(b) The court is entitled to presume that documents

8 submitted in support of the petition for recognition are

9 authentic, whether or not they have been legalized.

10 ‘‘(c) In the absence of evidence to the contrary, the

11 debtor’s registered office, or habitual residence in the case

12 of an individual, is presumed to be the center of the debt13 or’s main interests.

14 ‘‘§ 1517. Order recognizing a foreign proceeding

15 ‘‘(a) Subject to section 1506, after notice and a hear16 ing an order recognizing a foreign proceeding shall be en17 tered if—

18 ‘‘(1) the foreign proceeding is a foreign main

19 proceeding or foreign nonmain proceeding within the

20 meaning of section 1502;

21 ‘‘(2) the foreign representative applying for rec22 ognition is a person or body as defined in section

23 101; and

24 ‘‘(3) the petition meets the requirements of sec25 tion 1515.

26 ‘‘(b) The foreign proceeding shall be recognized—
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1 ‘‘(1) as a foreign main proceeding if it is taking

2 place in the country where the debtor has the center

3 of its main interests; or

4 ‘‘(2) as a foreign nonmain proceeding if the

5 debtor has an establishment within the meaning of

6 section 1502 in the foreign country where the pro7 ceeding is pending.

8 ‘‘(c) A petition for recognition of a foreign proceeding

9 shall be decided upon at the earliest possible time. Entry

10 of an order recognizing a foreign proceeding shall con11 stitute recognition under this chapter.

12 ‘‘(d) The provisions of this subchapter do not prevent

13 modification or termination of recognition if it is shown

14 that the grounds for granting it were fully or partially

15 lacking or have ceased to exist, but in considering such

16 action the court shall give due weight to possible prejudice

17 to parties that have relied upon the granting of recogni18 tion. The case under this chapter may be closed in the

19 manner prescribed for a case under section 350.

20 ‘‘§ 1518. Subsequent information

21 ‘‘From the time of filing the petition for recognition

22 of the foreign proceeding, the foreign representative shall

23 file with the court promptly a notice of change of status

24 concerning—
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1 ‘‘(1) any substantial change in the status of the

2 foreign proceeding or the status of the foreign rep3 resentative’s appointment; and

4 ‘‘(2) any other foreign proceeding regarding the

5 debtor that becomes known to the foreign represent6 ative.

7 ‘‘§ 1519. Relief that may be granted upon petition for

8 recognition of a foreign proceeding

9 ‘‘(a) From the time of filing a petition for recognition

10 until the petition is decided upon, the court may, at the

11 request of the foreign representative, where relief is ur12 gently needed to protect the assets of the debtor or the

13 interests of the creditors, grant relief of a provisional na14 ture, including—

15 ‘‘(1) staying execution against the debtor’s as16 sets;

17 ‘‘(2) entrusting the administration or realiza18 tion of all or part of the debtor’s assets located in

19 the United States to the foreign representative or

20 another person authorized by the court, including an

21 examiner, in order to protect and preserve the value

22 of assets that, by their nature or because of other

23 circumstances, are perishable, susceptible to devalu24 ation or otherwise in jeopardy; and
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1 ‘‘(3) any relief referred to in paragraph (3),

2 (4), or (7) of section 1521(a).

3 ‘‘(b) Unless extended under section 1521(a)(6), the

4 relief granted under this section terminates when the peti5 tion for recognition is decided upon.

6 ‘‘(c) It is a ground for denial of relief under this sec7 tion that such relief would interfere with the administra8 tion of a foreign main proceeding.

9 ‘‘(d) The court may not enjoin a police or regulatory

10 act of a governmental unit, including a criminal action or

11 proceeding, under this section.

12 ‘‘(e) The standards, procedures, and limitations ap13 plicable to an injunction shall apply to relief under this

14 section.

15 ‘‘§ 1520. Effects of recognition of a foreign main pro16 ceeding

17 ‘‘(a) Upon recognition of a foreign proceeding that

18 is a foreign main proceeding—

19 ‘‘(1) section 362 applies with respect to the

20 debtor and that property of the debtor that is within

21 the territorial jurisdiction of the United States;

22 ‘‘(2) a transfer, an encumbrance, or any other

23 disposition of an interest of the debtor in property

24 within the territorial jurisdiction of the United

25 States is restrained as and to the extent that is pro-
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1 vided for property of an estate under sections 363,

2 549, and 552; and

3 ‘‘(3) unless the court orders otherwise, the for4 eign representative may operate the debtor’s busi5 ness and may exercise the powers of a trustee under

6 section 549, subject to sections 363 and 552.

7 ‘‘(b) The scope, and the modification or termination,

8 of the stay and restraints referred to in subsection (a) are

9 subject to the exceptions and limitations provided in sub10 sections (b), (c), and (d) of section 362, subsections (b)

11 and (c) of section 363, and sections 552, 555 through 557,

12 559, and 560.

13 ‘‘(c) Subsection (a) does not affect the right to com14 mence individual actions or proceedings in a foreign coun15 try to the extent necessary to preserve a claim against the

16 debtor.

17 ‘‘(d) Subsection (a) does not affect the right of a for18 eign representative or an entity to file a petition commenc19 ing a case under this title or the right of any party to

20 file claims or take other proper actions in such a case.

21 ‘‘§ 1521. Relief that may be granted upon recognition

22 of a foreign proceeding

23 ‘‘(a) Upon recognition of a foreign proceeding, wheth24 er main or nonmain, where necessary to effectuate the

25 purpose of this chapter and to protect the assets of the
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1 debtor or the interests of the creditors, the court may, at

2 the request of the foreign representative, grant any appro3 priate relief, including—

4 ‘‘(1) staying the commencement or continuation

5 of individual actions or individual proceedings con6 cerning the debtor’s assets, rights, obligations or li7 abilities to the extent they have not been stayed

8 under section 1520(a);

9 ‘‘(2) staying execution against the debtor’s as10 sets to the extent it has not been stayed under sec11 tion 1520(a);

12 ‘‘(3) suspending the right to transfer, encumber

13 or otherwise dispose of any assets of the debtor to

14 the extent this right has not been suspended under

15 section 1520(a);

16 ‘‘(4) providing for the examination of witnesses,

17 the taking of evidence or the delivery of information

18 concerning the debtor’s assets, affairs, rights, obliga19 tions or liabilities;

20 ‘‘(5) entrusting the administration or realiza21 tion of all or part of the debtor’s assets within the

22 territorial jurisdiction of the United States to the

23 foreign representative or another person, including

24 an examiner, authorized by the court;
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1 ‘‘(6) extending relief granted under section

2 1519(a); and

3 ‘‘(7) granting any additional relief that may be

4 available to a trustee, except for relief available

5 under sections 522, 544, 545, 547, 548, 550, and

6 724(a).

7 ‘‘(b) Upon recognition of a foreign proceeding, wheth8 er main or nonmain, the court may, at the request of the

9 foreign representative, entrust the distribution of all or

10 part of the debtor’s assets located in the United States

11 to the foreign representative or another person, including

12 an examiner, authorized by the court, provided that the

13 court is satisfied that the interests of creditors in the

14 United States are sufficiently protected.

15 ‘‘(c) In granting relief under this section to a rep16 resentative of a foreign nonmain proceeding, the court

17 must be satisfied that the relief relates to assets that,

18 under the law of the United States, should be adminis19 tered in the foreign nonmain proceeding or concerns infor20 mation required in that proceeding.

21 ‘‘(d) The court may not enjoin a police or regulatory

22 act of a governmental unit, including a criminal action or

23 proceeding, under this section.
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1 ‘‘(e) The standards, procedures, and limitations ap2 plicable to an injunction shall apply to relief under para3 graphs (1), (2), (3), and (6) of subsection (a).

4 ‘‘§ 1522. Protection of creditors and other interested

5 persons

6 ‘‘(a) The court may grant relief under section 1519

7 or 1521, or may modify or terminate relief under sub8 section (c), only if the interests of the creditors and other

9 interested entities, including the debtor, are sufficiently

10 protected.

11 ‘‘(b) The court may subject relief granted under sec12 tion 1519 or 1521, or the operation of the debtor’s busi13 ness under section 1520(a)(2) of this title, to conditions

14 it considers appropriate, including the giving of security

15 or the filing of a bond.

16 ‘‘(c) The court may, at the request of the foreign rep17 resentative or an entity affected by relief granted under

18 section 1519 or 1521, or at its own motion, modify or

19 terminate such relief.

20 ‘‘(d) Section 1104(d) shall apply to the appointment

21 of an examiner under this chapter. Any examiner shall

22 comply with the qualification requirements imposed on a

23 trustee by section 322.
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1 ‘‘§ 1523. Actions to avoid acts detrimental to creditors

2 ‘‘(a) Upon recognition of a foreign proceeding, the

3 foreign representative has standing in a case concerning

4 the debtor pending under another chapter of this title to

5 initiate actions under sections 522, 544, 545, 547, 548,

6 550, and 724(a).

7 ‘‘(b) When the foreign proceeding is a foreign

8 nonmain proceeding, the court must be satisfied that an

9 action under subsection (a) relates to assets that, under

10 United States law, should be administered in the foreign

11 nonmain proceeding.

12 ‘‘§ 1524. Intervention by a foreign representative

13 ‘‘Upon recognition of a foreign proceeding, the for14 eign representative may intervene in any proceedings in

15 a State or Federal court in the United States in which

16 the debtor is a party.

17 ‘‘SUBCHAPTER IV—COOPERATION WITH FOR18 EIGN COURTS AND FOREIGN REPRESENTA19 TIVES

20 ‘‘§ 1525. Cooperation and direct communication be21 tween the court and foreign courts or for22 eign representatives

23 ‘‘(a) Consistent with section 1501, the court shall co24 operate to the maximum extent possible with foreign

25 courts or foreign representatives, either directly or

26 through the trustee.
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1 ‘‘(b) The court is entitled to communicate directly

2 with, or to request information or assistance directly from,

3 foreign courts or foreign representatives, subject to the

4 rights of parties in interest to notice and participation.

5 ‘‘§ 1526. Cooperation and direct communication be6 tween the trustee and foreign courts or

7 foreign representatives

8 ‘‘(a) Consistent with section 1501, the trustee or

9 other person, including an examiner, authorized by the

10 court, shall, subject to the supervision of the court, cooper11 ate to the maximum extent possible with foreign courts

12 or foreign representatives.

13 ‘‘(b) The trustee or other person, including an exam14 iner, authorized by the court is entitled, subject to the su15 pervision of the court, to communicate directly with for16 eign courts or foreign representatives.

17 ‘‘§ 1527. Forms of cooperation

18 ‘‘Cooperation referred to in sections 1525 and 1526

19 may be implemented by any appropriate means,

20 including—

21 ‘‘(1) appointment of a person or body, including

22 an examiner, to act at the direction of the court;

23 ‘‘(2) communication of information by any

24 means considered appropriate by the court;
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1 ‘‘(3) coordination of the administration and su2 pervision of the debtor’s assets and affairs;

3 ‘‘(4) approval or implementation of agreements

4 concerning the coordination of proceedings; and

5 ‘‘(5) coordination of concurrent proceedings re6 garding the same debtor.

7 ‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

8 ‘‘§ 1528. Commencement of a case under this title

9 after recognition of a foreign main pro10 ceeding

11 ‘‘After recognition of a foreign main proceeding, a

12 case under another chapter of this title may be commenced

13 only if the debtor has assets in the United States. The

14 effects of such case shall be restricted to the assets of the

15 debtor that are within the territorial jurisdiction of the

16 United States and, to the extent necessary to implement

17 cooperation and coordination under sections 1525, 1526,

18 and 1527, to other assets of the debtor that are within

19 the jurisdiction of the court under sections 541(a) of this

20 title, and 1334(e) of title 28, to the extent that such other

21 assets are not subject to the jurisdiction and control of

22 a foreign proceeding that has been recognized under this

23 chapter.
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1 ‘‘§ 1529. Coordination of a case under this title and a

2 foreign proceeding

3 ‘‘Where a foreign proceeding and a case under an4 other chapter of this title are taking place concurrently

5 regarding the same debtor, the court shall seek coopera6 tion and coordination under sections 1525, 1526, and

7 1527, and the following shall apply:

8 ‘‘(1) When the case in the United States is tak9 ing place at the time the petition for recognition of

10 the foreign proceeding is filed—

11 ‘‘(A) any relief granted under sections

12 1519 or 1521 must be consistent with the relief

13 granted in the case in the United States; and

14 ‘‘(B) even if the foreign proceeding is rec15 ognized as a foreign main proceeding, section

16 1520 does not apply.

17 ‘‘(2) When a case in the United States under

18 this title commences after recognition, or after the

19 filing of the petition for recognition, of the foreign

20 proceeding—

21 ‘‘(A) any relief in effect under sections

22 1519 or 1521 shall be reviewed by the court

23 and shall be modified or terminated if inconsist24 ent with the case in the United States; and

25 ‘‘(B) if the foreign proceeding is a foreign

26 main proceeding, the stay and suspension re-
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1 ferred to in section 1520(a) shall be modified or

2 terminated if inconsistent with the relief grant3 ed in the case in the United States.

4 ‘‘(3) In granting, extending, or modifying relief

5 granted to a representative of a foreign nonmain

6 proceeding, the court must be satisfied that the re7 lief relates to assets that, under the law of the

8 United States, should be administered in the foreign

9 nonmain proceeding or concerns information re10 quired in that proceeding.

11 ‘‘(4) In achieving cooperation and coordination

12 under sections 1528 and 1529, the court may grant

13 any of the relief authorized under section 305.

14 ‘‘§ 1530. Coordination of more than 1 foreign proceed15 ing

16 ‘‘In matters referred to in section 1501, with respect

17 to more than 1 foreign proceeding regarding the debtor,

18 the court shall seek cooperation and coordination under

19 sections 1525, 1526, and 1527, and the following shall

20 apply:

21 ‘‘(1) Any relief granted under section 1519 or

22 1521 to a representative of a foreign nonmain pro23 ceeding after recognition of a foreign main proceed24 ing must be consistent with the foreign main pro25 ceeding.
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1 ‘‘(2) If a foreign main proceeding is recognized

2 after recognition, or after the filing of a petition for

3 recognition, of a foreign nonmain proceeding, any

4 relief in effect under section 1519 or 1521 shall be

5 reviewed by the court and shall be modified or termi6 nated if inconsistent with the foreign main proceed7 ing.

8 ‘‘(3) If, after recognition of a foreign nonmain

9 proceeding, another foreign nonmain proceeding is

10 recognized, the court shall grant, modify, or termi11 nate relief for the purpose of facilitating coordina12 tion of the proceedings.

13 ‘‘§ 1531. Presumption of insolvency based on recogni14 tion of a foreign main proceeding

15 ‘‘In the absence of evidence to the contrary, recogni16 tion of a foreign main proceeding is for the purpose of

17 commencing a proceeding under section 303, proof that

18 the debtor is generally not paying its debts as such debts

19 become due.

20 ‘‘§ 1532. Rule of payment in concurrent proceedings

21 ‘‘Without prejudice to secured claims or rights in

22 rem, a creditor who has received payment with respect to

23 its claim in a foreign proceeding pursuant to a law relating

24 to insolvency may not receive a payment for the same

25 claim in a case under any other chapter of this title re-
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1 garding the debtor, so long as the payment to other credi2 tors of the same class is proportionately less than the pay3 ment the creditor has already received.’’.

4 (b) CLERICAL AMENDMENT.—The table of chapters

5 for title 11, United States Code, is amended by inserting

6 after the item relating to chapter 13 the following:

‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’.

7 SEC. 902. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11,

8 UNITED STATES CODE.

9 (a) APPLICABILITY OF CHAPTERS.—Section 103 of

10 title 11, United States Code, is amended—

11 (1) in subsection (a), by inserting before the pe12 riod the following: ‘‘, and this chapter, sections 307,

13 304, 555 through 557, 559, and 560 apply in a case

14 under chapter 15’’; and

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

16 ‘‘(j) Chapter 15 applies only in a case under such

17 chapter, except that—

18 ‘‘(1) sections 1513 and 1514 apply in all cases

19 under this title; and

20 ‘‘(2) section 1505 applies to trustees and to any

21 other entity (including an examiner) authorized by

22 the court under chapters 7, 11, and 12, to debtors

23 in possession under chapters 11 and 12, and to

24 debtors under chapter 9 who are authorized to act

25 under section 1505.’’.
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1 (b) DEFINITIONS.—Paragraphs (23) and (24) of title

2 11, United States Code, are amended to read as follows:

3 ‘‘(23) ‘foreign proceeding’ means a collective ju4 dicial or administrative proceeding in a foreign coun5 try, including an interim proceeding, pursuant to a

6 law relating to insolvency in which proceeding the

7 assets and affairs of the debtor are subject to con8 trol or supervision by a foreign court, for the pur9 pose of reorganization or liquidation;

10 ‘‘(24) ‘foreign representative’ means a person

11 or body, including a person or body appointed on an

12 interim basis, authorized in a foreign proceeding to

13 administer the reorganization or the liquidation of

14 the debtor’s assets or affairs or to act as a rep15 resentative of the foreign proceeding;’’.

16 (c) AMENDMENTS TO TITLE 28, UNITED STATES

17 CODE.—

18 (1) PROCEDURES.—Section 157(b)(2) of title

19 28, United States Code, is amended—

20 (A) in subparagraph (N), by striking

21 ‘‘and’’ at the end;

22 (B) in subparagraph (O), by striking the

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

24 (C) by adding at the end the following:
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1 ‘‘(P) recognition of foreign proceedings and

2 other matters under chapter 15 of title 11.’’.

3 (2) BANKRUPTCY CASES AND PROCEEDINGS.—

4 Section 1334(c)(1) of title 28, United States Code,

5 is amended by striking ‘‘Nothing in’’ and inserting

6 ‘‘Except with respect to a case under chapter 15 of

7 title 11, nothing in’’.

8 (3) DUTIES OF TRUSTEES.—Section 586(a)(3)

9 of title 28, United States Code, is amended by in10 serting ‘‘15,’’ after ‘‘chapter’’.

11 TITLE X—FINANCIAL CONTRACT

12 PROVISIONS

13 SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CON14 SERVATORS OR RECEIVERS OF INSURED DE15 POSITORY INSTITUTIONS.

16 (a) DEFINITION OF QUALIFIED FINANCIAL CON17 TRACT.—Section 11(e)(8)(D)(i) of the Federal Deposit In18 surance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by

19 inserting ‘‘, resolution or order’’ after ‘‘any similar agree20 ment that the Corporation determines by regulation’’.

21 (b) DEFINITION OF SECURITIES CONTRACT.—Sec22 tion 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act

23 (12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as fol24 lows:
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1 ‘‘(ii) SECURITIES CONTRACT.—The

2 term ‘securities contract’—

3 ‘‘(I) means a contract for the

4 purchase, sale, or loan of a security, a

5 certificate of deposit, a mortgage loan,

6 or any interest in a mortgage loan, a

7 group or index of securities, certifi8 cates of deposit, or mortgage loans or

9 interests therein (including any inter10 est therein or based on the value

11 thereof) or any option on any of the

12 foregoing, including any option to

13 purchase or sell any such security,

14 certificate of deposit, loan, interest,

15 group or index, or option;

16 ‘‘(II) does not include any pur17 chase, sale, or repurchase obligation

18 under a participation in a commercial

19 mortgage loan unless the Corporation

20 determines by regulation, resolution,

21 or order to include any such agree22 ment within the meaning of such

23 term;
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1 ‘‘(III) means any option entered

2 into on a national securities exchange

3 relating to foreign currencies;

4 ‘‘(IV) means the guarantee by or

5 to any securities clearing agency of

6 any settlement of cash, securities, cer7 tificates of deposit, mortgage loans or

8 interests therein, group or index of se9 curities, certificates of deposit, or

10 mortgage loans or interests therein

11 (including any interest therein or

12 based on the value thereof) or option

13 on any of the foregoing, including any

14 option to purchase or sell any such se15 curity, certificate of deposit, loan, in16 terest, group or index or option;

17 ‘‘(V) means any margin loan;

18 ‘‘(VI) means any other agree19 ment or transaction that is similar to

20 any agreement or transaction referred

21 to in this clause;

22 ‘‘(VII) means any combination of

23 the agreements or transactions re24 ferred to in this clause;
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1 ‘‘(VIII) means any option to

2 enter into any agreement or trans3 action referred to in this clause;

4 ‘‘(IX) means a master agreement

5 that provides for an agreement or

6 transaction referred to in subclause

7 (I), (III), (IV), (V), (VI), (VII), or

8 (VIII), together with all supplements

9 to any such master agreement, with10 out regard to whether the master

11 agreement provides for an agreement

12 or transaction that is not a securities

13 contract under this clause, except that

14 the master agreement shall be consid15 ered to be a securities contract under

16 this clause only with respect to each

17 agreement or transaction under the

18 master agreement that is referred to

19 in subclause (I), (III), (IV), (V), (VI),

20 (VII), or (VIII); and

21 ‘‘(X) means any security agree22 ment or arrangement or other credit

23 enhancement related to any agree24 ment or transaction referred to in this

25 clause.’’.
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1 (c) DEFINITION OF COMMODITY CONTRACT.—Sec2 tion 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act

3 (12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as fol4 lows:

5 ‘‘(iii) COMMODITY CONTRACT.—The

6 term ‘commodity contract’ means—

7 ‘‘(I) with respect to a futures

8 commission merchant, a contract for

9 the purchase or sale of a commodity

10 for future delivery on, or subject to

11 the rules of, a contract market or

12 board of trade;

13 ‘‘(II) with respect to a foreign fu14 tures commission merchant, a foreign

15 future;

16 ‘‘(III) with respect to a leverage

17 transaction merchant, a leverage

18 transaction;

19 ‘‘(IV) with respect to a clearing

20 organization, a contract for the pur21 chase or sale of a commodity for fu22 ture delivery on, or subject to the

23 rules of, a contract market or board

24 of trade that is cleared by such clear25 ing organization, or commodity option
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1 traded on, or subject to the rules of,

2 a contract market or board of trade

3 that is cleared by such clearing orga4 nization;

5 ‘‘(V) with respect to a commodity

6 options dealer, a commodity option;

7 ‘‘(VI) any other agreement or

8 transaction that is similar to any

9 agreement or transaction referred to

10 in this clause;

11 ‘‘(VII) any combination of the

12 agreements or transactions referred to

13 in this clause;

14 ‘‘(VIII) any option to enter into

15 any agreement or transaction referred

16 to in this clause;

17 ‘‘(IX) a master agreement that

18 provides for an agreement or trans19 action referred to in subclause (I),

20 (II), (III), (IV), (V), (VI), (VII), or

21 (VIII), together with all supplements

22 to any such master agreement, with23 out regard to whether the master

24 agreement provides for an agreement

25 or transaction that is not a commod-
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1 ity contract under this clause, except

2 that the master agreement shall be

3 considered to be a commodity contract

4 under this clause only with respect to

5 each agreement or transaction under

6 the master agreement that is referred

7 to in subclause (I), (II), (III), (IV),

8 (V), (VI), (VII), or (VIII); or

9 ‘‘(X) a security agreement or ar10 rangement or other credit enhance11 ment related to any agreement or

12 transaction referred to in this

13 clause.’’.

14 (d) DEFINITION OF FORWARD CONTRACT.—Section

15 11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12

16 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:

17 ‘‘(iv) FORWARD CONTRACT.—The

18 term ‘forward contract’ means—

19 ‘‘(I) a contract (other than a

20 commodity contract) for the purchase,

21 sale, or transfer of a commodity or

22 any similar good, article, service,

23 right, or interest which is presently or

24 in the future becomes the subject of

25 dealing in the forward contract trade,
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1 or product or byproduct thereof, with

2 a maturity date more than 2 days

3 after the date the contract is entered

4 into, including a repurchase agree5 ment, reverse repurchase agreement,

6 consignment, lease, swap, hedge

7 transaction, deposit, loan, option, allo8 cated transaction, unallocated trans9 action, or any other similar agree10 ment;

11 ‘‘(II) any combination of agree12 ments or transactions referred to in

13 subclauses (I) and (III);

14 ‘‘(III) any option to enter into

15 any agreement or transaction referred

16 to in subclause (I) or (II);

17 ‘‘(IV) a master agreement that

18 provides for an agreement or trans19 action referred to in subclauses (I),

20 (II), or (III), together with all supple21 ments to any such master agreement,

22 without regard to whether the master

23 agreement provides for an agreement

24 or transaction that is not a forward

25 contract under this clause, except that
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1 the master agreement shall be consid2 ered to be a forward contract under

3 this clause only with respect to each

4 agreement or transaction under the

5 master agreement that is referred to

6 in subclause (I), (II), or (III); or

7 ‘‘(V) a security agreement or ar8 rangement or other credit enhance9 ment related to any agreement or

10 transaction referred to in subclause

11 (I), (II), (III), or (IV).’’.

12 (e) DEFINITION OF REPURCHASE AGREEMENT.—

13 Section 11(e)(8)(D)(v) of the Federal Deposit Insurance

14 Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read as

15 follows:

16 ‘‘(v) REPURCHASE AGREEMENT.—The

17 terms ‘repurchase agreement’ and ‘reverse

18 repurchase agreement’—

19 ‘‘(I) mean an agreement, includ20 ing related terms, which provides for

21 the transfer of 1 or more certificates

22 of deposit, mortgage-related securities

23 (as such term is defined in the Securi24 ties Exchange Act of 1934), mortgage

25 loans, interests in mortgage-related
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1 securities or mortgage loans, eligible

2 bankers’ acceptances, qualified foreign

3 government securities or securities

4 that are direct obligations of, or that

5 are fully guaranteed by, the United

6 States or any agency of the United

7 States against the transfer of funds

8 by the transferee of such certificates

9 of deposit, eligible bankers’ accept10 ances, securities, loans, or interests

11 with a simultaneous agreement by

12 such transferee to transfer to the

13 transferor thereof certificates of de14 posit, eligible bankers’ acceptances,

15 securities, loans, or interests as de16 scribed above, at a date certain not

17 later than 1 year after such transfers

18 or on demand, against the transfer of

19 funds, or any other similar agreement;

20 ‘‘(II) does not include any repur21 chase obligation under a participation

22 in a commercial mortgage loan unless

23 the Corporation determines by regula24 tion, resolution, or order to include
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1 any such participation within the

2 meaning of such term;

3 ‘‘(III) means any combination of

4 agreements or transactions referred to

5 in subclauses (I) and (IV);

6 ‘‘(IV) means any option to enter

7 into any agreement or transaction re8 ferred to in subclause (I) or (III);

9 ‘‘(V) means a master agreement

10 that provides for an agreement or

11 transaction referred to in subclause

12 (I), (III), or (IV), together with all

13 supplements to any such master

14 agreement, without regard to whether

15 the master agreement provides for an

16 agreement or transaction that is not a

17 repurchase agreement under this

18 clause, except that the master agree19 ment shall be considered to be a re20 purchase agreement under this sub21 clause only with respect to each agree22 ment or transaction under the master

23 agreement that is referred to in sub24 clause (I), (III), or (IV); and
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1 ‘‘(VI) means a security agree2 ment or arrangement or other credit

3 enhancement related to any agree4 ment or transaction referred to in

5 subclause (I), (III), (IV), or (V).

6 For purposes of this clause, the term

7 ‘qualified foreign government security’

8 means a security that is a direct obligation

9 of, or that is fully guaranteed by, the cen10 tral government of a member of the Orga11 nization for Economic Cooperation and

12 Development (as determined by regulation

13 or order adopted by the appropriate Fed14 eral banking authority).’’.

15 (f) DEFINITION OF SWAP AGREEMENT.—The Fed16 eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi))

17 is amended to read as follows:

18 ‘‘(vi) SWAP AGREEMENT.—The term

19 ‘swap agreement’ means—

20 ‘‘(I) any agreement, including the

21 terms and conditions incorporated by

22 reference in any such agreement,

23 which is an interest rate swap, option,

24 future, or forward agreement, includ25 ing a rate floor, rate cap, rate collar,
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1 cross-currency rate swap, and basis

2 swap; a spot, same day-tomorrow, to3 morrow-next, forward, or other for4 eign exchange or precious metals

5 agreement; a currency swap, option,

6 future, or forward agreement; an eq7 uity index or equity swap, option, fu8 ture, or forward agreement; a debt

9 index or debt swap, option, future, or

10 forward agreement; a credit spread or

11 credit swap, option, future, or forward

12 agreement; a commodity index or

13 commodity swap, option, future, or

14 forward agreement;

15 ‘‘(II) any agreement or trans16 action similar to any other agreement

17 or transaction referred to in this

18 clause that is presently, or in the fu19 ture becomes, regularly entered into

20 in the swap market (including terms

21 and conditions incorporated by ref22 erence in such agreement) and that is

23 a forward, swap, future, or option on

24 1 or more rates, currencies, commod25 ities, equity securities or other equity
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1 instruments, debt securities or other

2 debt instruments, or economic indices

3 or measures of economic risk or value;

4 ‘‘(III) any combination of agree5 ments or transactions referred to in

6 this clause;

7 ‘‘(IV) any option to enter into

8 any agreement or transaction referred

9 to in this clause;

10 ‘‘(V) a master agreement that

11 provides for an agreement or trans12 action referred to in subclause (I),

13 (II), (III), or (IV), together with all

14 supplements to any such master

15 agreement, without regard to whether

16 the master agreement contains an

17 agreement or transaction that is not a

18 swap agreement under this clause, ex19 cept that the master agreement shall

20 be considered to be a swap agreement

21 under this clause only with respect to

22 each agreement or transaction under

23 the master agreement that is referred

24 to in subclause (I), (II), (III), or (IV);

25 and
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1 ‘‘(VI) any security agreement or

2 arrangement or other credit enhance3 ment related to any agreements or

4 transactions referred to in subpara5 graph (I), (II), (III), or (IV).

6 Such term is applicable for purposes of

7 this Act only and shall not be construed or

8 applied so as to challenge or affect the

9 characterization, definition, or treatment of

10 any swap agreement under any other stat11 ute, regulation, or rule, including the Secu12 rities Act of 1933, the Securities Exchange

13 Act of 1934, the Public Utility Holding

14 Company Act of 1935, the Trust Indenture

15 Act of 1939, the Investment Company Act

16 of 1940, the Investment Advisers Act of

17 1940, the Securities Investor Protection

18 Act of 1970, the Commodity Exchange

19 Act, and the regulations promulgated by

20 the Securities and Exchange Commission

21 or the Commodity Futures Trading Com22 mission.’’.

23 (g) DEFINITION OF TRANSFER.—Section

24 11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12

25 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 Insur11 ance Act (12 U.S.C. 1821(e)(8)) is amended—

12 (1) in subparagraph (A), by striking ‘‘para13 graph (10)’’ and inserting ‘‘paragraphs (9) and

14 (10)’’;

15 (2) in subparagraph (A)(i), by striking ‘‘to

16 cause the termination or liquidation’’ and inserting

17 ‘‘such person has to cause the termination, liquida18 tion, or acceleration’’;

19 (3) by amending subparagraph (A)(ii) to read

20 as follows:

21 ‘‘(ii) any right under any security

22 agreement or arrangement or other credit

23 enhancement related to 1 or more qualified

24 financial contracts described in clause

25 (i);’’; and
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1 (4) by amending subparagraph (E)(ii) to read

2 as follows:

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

7 (i);’’.

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 Corpora14 tion’’.

15 SEC. 1002. AUTHORITY OF THE CORPORATION WITH RE16 SPECT TO FAILED AND FAILING INSTITU17 TIONS.

18 (a) IN GENERAL.—Section 11(e)(8) of the Federal

19 Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is

20 amended—

21 (1) in subparagraph (E), by striking ‘‘other

22 than paragraph (12) of this subsection, subsection

23 (d)(9)’’ and inserting ‘‘other than subsections (d)(9)

24 and (e)(10)’’; and
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1 (2) by adding at the end the following new sub2 paragraphs:

3 ‘‘(F) CLARIFICATION.—No provision of law

4 shall be construed as limiting the right or

5 power of the Corporation, or authorizing any

6 court or agency to limit or delay, in any man7 ner, the right or power of the Corporation to

8 transfer any qualified financial contract in ac9 cordance with paragraphs (9) and (10) of this

10 subsection or to disaffirm or repudiate any such

11 contract in accordance with subsection (e)(1) of

12 this section.

13 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC14 TIVE.—

15 ‘‘(i) IN GENERAL.—Notwithstanding

16 the provisions of subparagraphs (A) and

17 (E), and sections 403 and 404 of the Fed18 eral Deposit Insurance Corporation Im19 provement Act of 1991, no walkaway

20 clause shall be enforceable in a qualified fi21 nancial contract of an insured depository

22 institution in default.

23 ‘‘(ii) WALKAWAY CLAUSE DEFINED.—

24 For purposes of this subparagraph, the

25 term ‘walkaway clause’ means a provision
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1 in a qualified financial contract that, after

2 calculation of a value of a party’s position

3 or an amount due to or from 1 of the par4 ties in accordance with its terms upon ter5 mination, liquidation, or acceleration of the

6 qualified financial contract, either does not

7 create a payment obligation of a party or

8 extinguishes a payment obligation of a

9 party in whole or in part solely because of

10 such party’s status as a nondefaulting

11 party.’’.

12 (b) TECHNICAL AND CONFORMING AMENDMENT.—

13 Section 11(e)(12)(A) of the Federal Deposit Insurance

14 Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting

15 ‘‘or the exercise of rights or powers’’ after ‘‘the appoint16 ment’’.

17 SEC. 1003. AMENDMENTS RELATING TO TRANSFERS OF

18 QUALIFIED FINANCIAL CONTRACTS.

19 (a) TRANSFERS OF QUALIFIED FINANCIAL CON20 TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9)

21 of the Federal Deposit Insurance Act (12 U.S.C.

22 1821(e)(9)) is amended to read as follows:

23 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON24 TRACTS.—
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1 ‘‘(A) IN GENERAL.—In making any trans2 fer of assets or liabilities of a depository institu3 tion in default which includes any qualified fi4 nancial contract, the conservator or receiver for

5 such depository institution shall either—

6 ‘‘(i) transfer to 1 financial institution,

7 other than a financial institution for which

8 a conservator, receiver, trustee in bank9 ruptcy, or other legal custodian has been

10 appointed or which is otherwise the subject

11 of a bankruptcy or insolvency proceeding—

12 ‘‘(I) all qualified financial con13 tracts between any person or any af14 filiate of such person and the deposi15 tory institution in default;

16 ‘‘(II) all claims of such person or

17 any affiliate of such person against

18 such depository institution under any

19 such contract (other than any claim

20 which, under the terms of any such

21 contract, is subordinated to the claims

22 of general unsecured creditors of such

23 institution);

24 ‘‘(III) all claims of such deposi25 tory institution against such person or
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1 any affiliate of such person under any

2 such contract; and

3 ‘‘(IV) all property securing or

4 any other credit enhancement for any

5 contract described in subclause (I) or

6 any claim described in subclause (II)

7 or (III) under any such contract; or

8 ‘‘(ii) transfer none of the qualified fi9 nancial contracts, claims, property or other

10 credit enhancement referred to in clause (i)

11 (with respect to such person and any affili12 ate of such person).

13 ‘‘(B) TRANSFER TO FOREIGN BANK, FOR14 EIGN FINANCIAL INSTITUTION, OR BRANCH OR

15 AGENCY OF A FOREIGN BANK OR FINANCIAL IN16 STITUTION.—In transferring any qualified fi17 nancial contracts and related claims and prop18 erty pursuant to subparagraph (A)(i), the con19 servator or receiver for such depository institu20 tion shall not make such transfer to a foreign

21 bank, financial institution organized under the

22 laws of a foreign country, or a branch or agency

23 of a foreign bank or financial institution unless,

24 under the law applicable to such bank, financial

25 institution, branch or agency, to the qualified
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1 financial contracts, and to any netting contract,

2 any security agreement or arrangement or other

3 credit enhancement related to 1 or more quali4 fied financial contracts the contractual rights of

5 the parties to such qualified financial contracts,

6 netting contracts, security agreements or ar7 rangements, or other credit enhancements are

8 enforceable substantially to the same extent as

9 permitted under this section.

10 ‘‘(C) TRANSFER OF CONTRACTS SUBJECT

11 TO THE RULES OF A CLEARING ORGANIZA12 TION.—In the event that a conservator or re13 ceiver transfers any qualified financial contract

14 and related claims, property and credit en15 hancements pursuant to subparagraph (A)(i)

16 and such contract is subject to the rules of a

17 clearing organization, the clearing organization

18 shall not be required to accept the transferee as

19 a member by virtue of the transfer.

20 ‘‘(D) DEFINITION.—For purposes of this

21 section, the term ‘financial institution’ means a

22 broker or dealer, a depository institution, a fu23 tures commission merchant, or any other insti24 tution as determined by the Corporation by reg25 ulation to be a financial institution.’’.
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1 (b) NOTICE TO QUALIFIED FINANCIAL CONTRACT

2 COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal

3 Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is

4 amended by amending the flush material following clause

5 (ii) to read as follows: ‘‘the conservator or receiver shall

6 notify any person who is a party to any such contract of

7 such transfer by 5:00 p.m. (eastern time) on the business

8 day following the date of the appointment of the receiver,

9 in the case of a receivership, or the business day following

10 such transfer, in the case of a conservatorship.’’.

11 (c) RIGHTS AGAINST RECEIVER AND TREATMENT OF

12 BRIDGE BANKS.—Section 11(e)(10) of the Federal De13 posit Insurance Act (12 U.S.C. 1821(e)(10)) is further

14 amended—

15 (1) by redesignating subparagraph (B) as sub16 paragraph (D); and

17 (2) by inserting after subparagraph (A) the fol18 lowing new subparagraphs:

19 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE20 ABLE.—

21 ‘‘(i) RECEIVERSHIP.—A person who is

22 a party to a qualified financial contract

23 with an insured depository institution may

24 not exercise any right such person has to

25 terminate, liquidate, or net such contract
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1 under paragraph (8)(A) or section 403 or

2 404 of the Federal Deposit Insurance Cor3 poration Improvement Act of 1991 solely

4 by reason of or incidental to the appoint5 ment of a receiver for the depository insti6 tution (or the insolvency or financial condi7 tion of the depository institution for which

8 the receiver has been appointed)—

9 ‘‘(I) until 5:00 p.m. (eastern

10 time) on the business day following

11 the date of the appointment of the re12 ceiver; or

13 ‘‘(II) after the person has re14 ceived notice that the contract has

15 been transferred pursuant to para16 graph (9)(A).

17 ‘‘(ii) CONSERVATORSHIP.—A person

18 who is a party to a qualified financial con19 tract with an insured depository institution

20 may not exercise any right such person has

21 to terminate, liquidate, or net such con22 tract under paragraph (8)(E) or sections

23 403 or 404 of the Federal Deposit Insur24 ance Corporation Improvement Act of

25 1991, solely by reason of or incidental to
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1 the appointment of a conservator for the

2 depository institution (or the insolvency or

3 financial condition of the depository insti4 tution for which the conservator has been

5 appointed).

6 ‘‘(iii) NOTICE.—For purposes of this

7 subsection, the Corporation as receiver or

8 conservator of an insured depository insti9 tution shall be deemed to have notified a

10 person who is a party to a qualified finan11 cial contract with such depository institu12 tion if the Corporation has taken steps

13 reasonably calculated to provide notice to

14 such person by the time specified in sub15 paragraph (A) of this subsection.

16 ‘‘(C) TREATMENT OF BRIDGE BANKS.—

17 The following institutions shall not be consid18 ered a financial institution for which a con19 servator, receiver, trustee in bankruptcy, or

20 other legal custodian has been appointed or

21 which is otherwise the subject of a bankruptcy

22 or insolvency proceeding for purposes of sub23 section (e)(9)—

24 ‘‘(i) a bridge bank; or
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1 ‘‘(ii) a depository institution organized

2 by the Corporation, for which a conserva3 tor is appointed either—

4 ‘‘(I) immediately upon the orga5 nization of the institution; or

6 ‘‘(II) at the time of a purchase

7 and assumption transaction between

8 such institution and the Corporation

9 as receiver for a depository institution

10 in default.’’.

11 SEC. 1004. AMENDMENTS RELATING TO DISAFFIRMANCE

12 OR REPUDIATION OF QUALIFIED FINANCIAL

13 CONTRACTS.

14 Section 11(e) of the Federal Deposit Insurance Act

15 (12 U.S.C. 1821(e)) is further amended—

16 (1) by redesignating paragraphs (11) through

17 (15) as paragraphs (12) through (16), respectively;

18 and

19 (2) by inserting after paragraph (10) the fol20 lowing new paragraph:

21 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

22 QUALIFIED FINANCIAL CONTRACTS.—In exercising

23 the rights of disaffirmance or repudiation of a con24 servator or receiver with respect to any qualified fi25 nancial contract to which an insured depository in-
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1 stitution is a party, the conservator or receiver for

2 such institution shall either—

3 ‘‘(A) disaffirm or repudiate all qualified fi4 nancial contracts between—

5 ‘‘(i) any person or any affiliate of

6 such person; and

7 ‘‘(ii) the depository institution in de8 fault; or

9 ‘‘(B) disaffirm or repudiate none of the

10 qualified financial contracts referred to in sub11 paragraph (A) (with respect to such person or

12 any affiliate of such person).’’.

13 SEC. 1005. CLARIFYING AMENDMENT RELATING TO MAS14 TER AGREEMENTS.

15 Section 11(e)(8)(D)(vii) of the Federal Deposit In16 surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to

17 read as follows:

18 ‘‘(vii) TREATMENT OF MASTER

19 AGREEMENT AS 1 AGREEMENT.—Any mas20 ter agreement for any contract or agree21 ment described in any preceding clause of

22 this subparagraph (or any master agree23 ment for such master agreement or agree24 ments), together with all supplements to

25 such master agreement, shall be treated as
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1 a single agreement and a single qualified

2 financial contract. If a master agreement

3 contains provisions relating to agreements

4 or transactions that are not themselves

5 qualified financial contracts, the master

6 agreement shall be deemed to be a quali7 fied financial contract only with respect to

8 those transactions that are themselves

9 qualified financial contracts.’’.

10 SEC. 1006. FEDERAL DEPOSIT INSURANCE CORPORATION

11 IMPROVEMENT ACT OF 1991.

12 (a) DEFINITIONS.—Section 402 of the Federal De13 posit Insurance Corporation Improvement Act of 1991 (12

14 U.S.C. 4402) is amended—

15 (1) in paragraph (6)—

16 (A) by redesignating subparagraphs (B)

17 through (D) as subparagraphs (C) through (E),

18 respectively;

19 (B) by inserting after subparagraph (A)

20 the following new subparagraph:

21 ‘‘(B) an uninsured national bank or an un22 insured State bank that is a member of the

23 Federal Reserve System if the national bank or

24 State member bank is not eligible to make ap25 plication to become an insured bank under sec-
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1 tion 5 of the Federal Deposit Insurance Act;’’;

2 and

3 (C) by amending subparagraph (C) (as re4 designated) to read as follows:

5 ‘‘(C) a branch or agency of a foreign bank,

6 a foreign bank and any branch or agency of the

7 foreign bank, or the foreign bank that estab8 lished the branch or agency, as those terms are

9 defined in section 1(b) of the International

10 Banking Act of 1978;’’;

11 (2) in paragraph (11), by adding before the pe12 riod ‘‘and any other clearing organization with which

13 such clearing organization has a netting contract’’;

14 (3) by amending paragraph (14)(A)(i) to read

15 as follows:

16 ‘‘(i) means a contract or agreement

17 between 2 or more financial institutions,

18 clearing organizations, or members that

19 provides for netting present or future pay20 ment obligations or payment entitlements

21 (including liquidation or closeout values re22 lating to such obligations or entitlements)

23 among the parties to the agreement; and’’;

24 and
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1 (4) by adding at the end the following new

2 paragraph:

3 ‘‘(15) PAYMENT.—The term ‘payment’ means a

4 payment of United States dollars, another currency,

5 or a composite currency, and a noncash delivery, in6 cluding a payment or delivery to liquidate an

7 unmatured obligation.’’.

8 (b) ENFORCEABILITY OF BILATERAL NETTING CON9 TRACTS.—Section 403 of the Federal Deposit Insurance

10 Corporation Improvement Act of 1991 (12 U.S.C. 4403)

11 is amended—

12 (1) by amending subsection (a) to read as fol13 lows:

14 ‘‘(a) GENERAL RULE.—Notwithstanding any other

15 provision of State or Federal law (other than paragraphs

16 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

17 Deposit Insurance Act or any order authorized under sec18 tion 5(b)(2) of the Securities Investor Protection Act of

19 1970, the covered contractual payment obligations and the

20 covered contractual payment entitlements between any 2

21 financial institutions shall be netted in accordance with,

22 and subject to the conditions of, the terms of any applica23 ble netting contract (except as provided in section

24 561(b)(2) of title 11).’’; and
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1 (2) by adding at the end the following new sub2 section:

3 ‘‘(f) ENFORCEABILITY OF SECURITY AGREE4 MENTS.—The provisions of any security agreement or ar5 rangement or other credit enhancement related to 1 or

6 more netting contracts between any 2 financial institu7 tions shall be enforceable in accordance with their terms

8 (except as provided in section 561(b)(2) of title 11) and

9 shall not be stayed, avoided, or otherwise limited by any

10 State or Federal law (other than paragraphs (8)(E),

11 (8)(F), and (10)(B) of section 11(e) of the Federal De12 posit Insurance Act and section 5(b)(2) of the Securities

13 Investor Protection Act of 1970).’’.

14 (c) ENFORCEABILITY OF CLEARING ORGANIZATION

15 NETTING CONTRACTS.—Section 404 of the Federal De16 posit Insurance Corporation Improvement Act of 1991 (12

17 U.S.C. 4404) is amended—

18 (1) by amending subsection (a) to read as fol19 lows:

20 ‘‘(a) GENERAL RULE.—Notwithstanding any other

21 provision of State or Federal law (other than paragraphs

22 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

23 Deposit Insurance Act and any order authorized under

24 section 5(b)(2) of the Securities Investor Protection Act

25 of 1970, the covered contractual payment obligations and
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1 the covered contractual payment entitlements of a member

2 of a clearing organization to and from all other members

3 of a clearing organization shall be netted in accordance

4 with and subject to the conditions of any applicable net5 ting contract (except as provided in section 561(b)(2) of

6 title 11, United States Code).’’; and

7 (2) by adding at the end the following new sub8 section:

9 ‘‘(h) ENFORCEABILITY OF SECURITY AGREE10 MENTS.—The provisions of any security agreement or ar11 rangement or other credit enhancement related to 1 or

12 more netting contracts between any 2 members of a clear13 ing organization shall be enforceable in accordance with

14 their terms (except as provided in section 561(b)(2) of

15 title 11, United States Code) and shall not be stayed,

16 avoided, or otherwise limited by any State or Federal law

17 other than paragraphs (8)(E), (8)(F), and (10)(B) of sec18 tion 11(e) of the Federal Deposit Insurance Act and sec19 tion 5(b)(2) of the Securities Investor Protection Act of

20 1970.’’.

21 (d) ENFORCEABILITY OF CONTRACTS WITH UNIN22 SURED NATIONAL BANKS AND UNINSURED FEDERAL

23 BRANCHES AND AGENCIES.—The Federal Deposit Insur24 ance Corporation Improvement Act of 1991 (12 U.S.C.

25 4401 et seq.) is amended—
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1 (1) by redesignating section 407 as section 408;

2 and

3 (2) by adding after section 406 the following

4 new section:

5 ‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED

6 NATIONAL BANKS AND UNINSURED FEDERAL

7 BRANCHES AND AGENCIES.

8 ‘‘(a) IN GENERAL.—Notwithstanding any other pro9 vision of law, paragraphs (8), (9), (10), and (11) of section

10 11(e) of the Federal Deposit Insurance Act shall apply

11 to an uninsured national bank or uninsured Federal

12 branch or Federal agency except—

13 ‘‘(1) any reference to the ‘Corporation as re14 ceiver’ or ‘the receiver or the Corporation’ shall refer

15 to the receiver of an uninsured national bank or un16 insured Federal branch or Federal agency appointed

17 by the Comptroller of the Currency;

18 ‘‘(2) any reference to the ‘Corporation’ (other

19 than in section 11(e)(8)(D) of such Act), the ‘Cor20 poration, whether acting as such or as conservator

21 or receiver’, a ‘receiver’, or a ‘conservator’ shall refer

22 to the receiver or conservator of an uninsured na23 tional bank or uninsured Federal branch or Federal

24 agency appointed by the Comptroller of the Cur25 rency; and
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1 ‘‘(3) any reference to an ‘insured depository in2 stitution’ or ‘depository institution’ shall refer to an

3 uninsured national bank or an uninsured Federal

4 branch or Federal agency.

5 ‘‘(b) LIABILITY.—The liability of a receiver or con6 servator of an uninsured national bank or uninsured Fed7 eral branch or agency shall be determined in the same

8 manner and subject to the same limitations that apply to

9 receivers and conservators of insured depository institu10 tions under section 11(e) of the Federal Deposit Insurance

11 Act.

12 ‘‘(c) REGULATORY AUTHORITY.—

13 ‘‘(1) IN GENERAL.—The Comptroller of the

14 Currency, in consultation with the Federal Deposit

15 Insurance Corporation, may promulgate regulations

16 to implement this section.

17 ‘‘(2) SPECIFIC REQUIREMENT.—In promulgat18 ing regulations to implement this section, the Comp19 troller of the Currency shall ensure that the regula20 tions generally are consistent with the regulations

21 and policies of the Federal Deposit Insurance Cor22 poration adopted pursuant to the Federal Deposit

23 Insurance Act.

24 ‘‘(d) DEFINITIONS.—For purposes of this section, the

25 terms ‘Federal branch’, ‘Federal agency’, and ‘foreign
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1 bank’ have the same meaning as in section 1(b) of the

2 International Banking Act.’’.

3 SEC. 1007. BANKRUPTCY CODE AMENDMENTS.

4 (a) DEFINITIONS OF FORWARD CONTRACT, REPUR5 CHASE AGREEMENT, SECURITIES CLEARING AGENCY,

6 SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU7 RITIES CONTRACT.—Title 11, United States Code, is

8 amended—

9 (1) in section 101—

10 (A) in paragraph (25)—

11 (i) by striking ‘‘means a contract’’

12 and inserting ‘‘means—

13 ‘‘(A) a contract’’;

14 (ii) by striking ‘‘, or any combination

15 thereof or option thereon;’’ and inserting

16 ‘‘, or any other similar agreement;’’; and

17 (iii) by adding at the end the follow18 ing:

19 ‘‘(B) a combination of agreements or

20 transactions referred to in subparagraphs (A)

21 and (C);

22 ‘‘(C) an option to enter into an agreement

23 or transaction referred to in subparagraph (A)

24 or (B);
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1 ‘‘(D) a master netting agreement that pro2 vides for an agreement or transaction referred

3 to in subparagraph (A), (B), or (C), together

4 with all supplements to such master netting

5 agreement, without regard to whether such

6 master netting agreement provides for an

7 agreement or transaction that is not a forward

8 contract under this paragraph, except that such

9 master netting agreement shall be considered to

10 be a forward contract under this paragraph

11 only with respect to each agreement or trans12 action under such master netting agreement

13 that is referred to in subparagraph (A), (B) or

14 (C); or

15 ‘‘(E) a security agreement or arrangement,

16 or other credit enhancement, directly pertaining

17 to a contract, option, agreement, or transaction

18 referred to in subparagraph (A), (B), (C), or

19 (D), but not to exceed the actual value of such

20 contract, option, agreement, or transaction on

21 the date of the filing of the petition;’’;

22 (B) by amending paragraph (47) to read

23 as follows:

24 ‘‘(47) ‘repurchase agreement’ and ‘reverse re25 purchase agreement’—
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1 ‘‘(A) mean—

2 ‘‘(i) an agreement, including related

3 terms, which provides for the transfer of—

4 ‘‘(I) a certificate of deposit,

5 mortgage-related security (as defined

6 in the Securities Exchange Act of

7 1934), mortgage loan, interest in a

8 mortgage-related security or mortgage

9 loan, eligible bankers’ acceptance,

10 qualified foreign government security;

11 or

12 ‘‘(II) security that is a direct ob13 ligation of, or that is fully guaranteed

14 by, the United States or an agency of

15 the United States against the transfer

16 of funds by the transferee of such cer17 tificate of deposit, eligible bankers’ ac18 ceptance, security, loan, or interest;

19 with a simultaneous agreement by such

20 transferee to transfer to the transferor

21 thereof a certificate of deposit, eligible

22 bankers’ acceptance, security, loan, or in23 terest of the kind described in subclause

24 (I) or (II), at a date certain not later than
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1 1 year after the transferor’s transfer or on

2 demand, against the transfer of funds;

3 ‘‘(ii) a combination of agreements or

4 transactions referred to in clauses (i) and

5 (iii);

6 ‘‘(iii) an option to enter into an agree7 ment or transaction referred to in clause

8 (i) or (ii);

9 ‘‘(iv) a master netting agreement that

10 provides for an agreement or transaction

11 referred to in clause (i), (ii), or (iii), to12 gether with all supplements to such master

13 netting agreement, without regard to

14 whether such master netting agreement

15 provides for an agreement or transaction

16 that is not a repurchase agreement under

17 this subparagraph, except that such master

18 netting agreement shall be considered to be

19 a repurchase agreement under this sub20 paragraph only with respect to each agree21 ment or transaction under such master

22 netting agreement that is referred to in

23 clause (i), (ii), or (iii); or

24 ‘‘(v) a security agreement or arrange25 ment, or other credit enhancement, directly
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1 pertaining to a contract referred to in

2 clause (i), (ii), (iii), or (iv), but not to ex3 ceed the actual value of such contract on

4 the date of the filing of the petition; and

5 ‘‘(B) do not include a repurchase obliga6 tion under a participation in a commercial

7 mortgage loan;

8 and, for purposes of this paragraph, the term ‘quali9 fied foreign government security’ means a security

10 that is a direct obligation of, or that is fully guaran11 teed by, the central government of a member of the

12 Organization for Economic Cooperation and Devel13 opment;’’;

14 (C) in paragraph (48) by inserting ‘‘or ex15 empt from such registration under such section

16 pursuant to an order of the Securities and Ex17 change Commission’’ after ‘‘1934’’; and

18 (D) by amending paragraph (53B) to read

19 as follows:

20 ‘‘(53B) ‘swap agreement’ means—

21 ‘‘(A) an agreement, including the terms

22 and conditions incorporated by reference in

23 such agreement, that is—

24 ‘‘(i) an interest rate swap, option, fu25 ture, or forward agreement, including a
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1 rate floor, rate cap, rate collar, cross-cur2 rency rate swap, and basis swap;

3 ‘‘(ii) a spot, same day-tomorrow, to4 morrow-next, forward, or other foreign ex5 change or precious metals agreement;

6 ‘‘(iii) a currency swap, option, future,

7 or forward agreement;

8 ‘‘(iv) an equity index or an equity

9 swap, option, future, or forward agree10 ment;

11 ‘‘(v) a debt index or a debt swap, op12 tion, future, or forward agreement;

13 ‘‘(vi) a credit spread or a credit swap,

14 option, future, or forward agreement; or

15 ‘‘(vii) a commodity index or a com16 modity swap, option, future, or forward

17 agreement;

18 ‘‘(B) an agreement or transaction similar

19 to an agreement or transaction referred to in

20 this paragraph that—

21 ‘‘(i) is currently, or in the future be22 comes, regularly entered into in the swap

23 market (including terms and conditions in24 corporated by reference therein); and
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1 ‘‘(ii) is a forward, swap, future, or op2 tion on a rate, currency, commodity, equity

3 security, or other equity instrument, on a

4 debt security or other debt instrument, or

5 on an economic index or measure of eco6 nomic risk or value;

7 ‘‘(C) a combination of agreements or

8 transactions referred to in this paragraph;

9 ‘‘(D) an option to enter into an agreement

10 or transaction referred to in this paragraph;

11 ‘‘(E) a master netting agreement that pro12 vides for an agreement or transaction referred

13 to in subparagraph (A), (B), (C), or (D), to14 gether with all supplements to such master net15 ting agreement and without regard to whether

16 such master netting agreement contains an

17 agreement or transaction described in any such

18 subparagraph, but only with respect to each

19 agreement or transaction referred to in any

20 such subparagraph that is under such master

21 netting agreement; or

22 ‘‘(F) is applicable for purposes of this title

23 only and shall not be construed or applied so as

24 to challenge or affect the characterization, defi25 nition, or treatment of any swap agreement
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1 under any other statute, regulation, or rule, in2 cluding the Securities Act of 1933, the Securi3 ties Exchange Act of 1934, the Public Utility

4 Holding Company Act of 1935, the Trust In5 denture Act of 1939, the Investment Company

6 Act of 1940, the Investment Advisers Act of

7 1940, the Securities Investor Protection Act of

8 1970, the Commodity Exchange Act, and the

9 regulations prescribed by the Securities and Ex10 change Commission or the Commodity Futures

11 Trading Commission.’’;

12 (2) by amending section 741(7) to read as fol13 lows:

14 ‘‘(7) ‘securities contract’—

15 ‘‘(A) means—

16 ‘‘(i) a contract for the purchase, sale,

17 or loan of a security, a mortgage loan or

18 an interest in a mortgage loan, a group or

19 index of securities, or mortgage loans or

20 interests therein (including an interest

21 therein or based on the value thereof), or

22 option on any of the foregoing, including

23 an option to purchase or sell any of the

24 foregoing;
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1 ‘‘(ii) an option entered into on a na2 tional securities exchange relating to for3 eign currencies;

4 ‘‘(iii) the guarantee by or to a securi5 ties clearing agency of a settlement of

6 cash, securities, mortgage loans or inter7 ests therein, group or index of securities,

8 or mortgage loans or interests therein (in9 cluding any interest therein or based on

10 the value thereof), or option on any of the

11 foregoing, including an option to purchase

12 or sell any of the foregoing;

13 ‘‘(iv) a margin loan;

14 ‘‘(v) any other agreement or trans15 action that is similar to an agreement or

16 transaction referred to in this subpara17 graph;

18 ‘‘(vi) a combination of the agreements

19 or transactions referred to in this subpara20 graph;

21 ‘‘(vii) an option to enter into an

22 agreement or transaction referred to in

23 this subparagraph;

24 ‘‘(viii) a master netting agreement

25 that provides for an agreement or trans-
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1 action referred to in clause (i), (ii), (iii),

2 (iv), (v), (vi), or (vii), together with all

3 supplements to such master netting agree4 ment, without regard to whether such mas5 ter netting agreement provides for an

6 agreement or transaction that is not a se7 curities contract under this subparagraph,

8 except that such master netting agreement

9 shall be considered to be a securities con10 tract under this subparagraph only with

11 respect to each agreement or transaction

12 under such master netting agreement that

13 is referred to in clause (i), (ii), (iii), (iv),

14 (v), (vi), or (vii); or

15 ‘‘(ix) a security agreement or arrange16 ment, or other credit enhancement, directly

17 pertaining to a contract referred to in this

18 subparagraph, but not to exceed the actual

19 value of such contract on the date of the

20 filing of the petition; and

21 ‘‘(B) does not include a purchase, sale, or

22 repurchase obligation under a participation in a

23 commercial mortgage loan;’’; and

24 (3) in section 761(4)—
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1 (A) by striking ‘‘or’’ at the end of subpara2 graph (D); and

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

4 ‘‘(F) any other agreement or transaction

5 that is similar to an agreement or transaction

6 referred to in this paragraph;

7 ‘‘(G) a combination of the agreements or

8 transactions referred to in this paragraph;

9 ‘‘(H) an option to enter into an agreement

10 or transaction referred to in this paragraph;

11 ‘‘(I) a master netting agreement that pro12 vides for an agreement or transaction referred

13 to in subparagraph (A), (B), (C), (D), (E), (F),

14 (G), or (H), together with all supplements to

15 such master netting agreement, without regard

16 to whether such master netting agreement pro17 vides for an agreement or transaction that is

18 not a commodity contract under this paragraph,

19 except that such master netting agreement shall

20 be considered to be a commodity contract under

21 this paragraph only with respect to each agree22 ment or transaction under such master netting

23 agreement that is referred to in subparagraph

24 (A), (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

5 on the date of the filing of the petition;’’.

6 (b) DEFINITIONS OF FINANCIAL INSTITUTION, FI7 NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER8 CHANT.—Section 101 of title 11, United States Code, is

9 amended—

10 (1) by amending paragraph (22) to read as fol11 lows:

12 ‘‘(22) ‘financial institution’ means—

13 ‘‘(A) a Federal reserve bank, or an entity

14 that is a commercial or savings bank, industrial

15 savings bank, savings and loan association,

16 trust company, or receiver or conservator for

17 such entity and, when such Federal reserve

18 bank, receiver, or conservator or entity is acting

19 as agent or custodian for a customer in connec20 tion with a securities contract, as defined in

21 section 741 of this title, such customer; or

22 ‘‘(B) in connection with a securities con23 tract, as defined in section 741 of this title, an

24 investment company registered under the In25 vestment Company Act of 1940;’’;
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1 (2) by inserting after paragraph (22) the fol2 lowing:

3 ‘‘(22A) ‘financial participant’ means an entity

4 that is a party to a securities contract, commodity

5 contract or forward contract, or on the date of the

6 filing of the petition, has a commodity contract (as

7 defined in section 761 of this title) with the debtor

8 or any other entity (other than an affiliate) of a

9 total gross dollar value of at least $1,000,000,000 in

10 notional or actual principal amount outstanding on

11 any day during the previous 15-month period, or has

12 gross mark-to-market positions of at least

13 $100,000,000 (aggregated across counterparties) in

14 any such agreement or transaction with the debtor

15 or any other entity (other than an affiliate) on any

16 day during the previous 15-month period;’’; and

17 (3) by amending paragraph (26) to read as fol18 lows:

19 ‘‘(26) ‘forward contract merchant’ means a

20 Federal reserve bank, or an entity whose business

21 consists in whole or in part of entering into forward

22 contracts as or with merchants or in a commodity,

23 as defined or in section 761 of this title, or any simi24 lar good, article, service, right, or interest which is
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1 presently or in the future becomes the subject of

2 dealing or in the forward contract trade;’’.

3 (c) DEFINITION OF MASTER NETTING AGREEMENT

4 AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec5 tion 101 of title 11, United States Code, is amended by

6 inserting after paragraph (38) the following new para7 graphs:

8 ‘‘(38A) the term ‘master netting agreement’

9 means an agreement providing for the exercise of

10 rights, including rights of netting, setoff, liquidation,

11 termination, acceleration, or closeout, under or in

12 connection with 1 or more contracts that are de13 scribed in any 1 or more of paragraphs (1) through

14 (5) of section 561(a), or any security agreement or

15 arrangement or other credit enhancement related to

16 1 or more of the foregoing. If a master netting

17 agreement contains provisions relating to agree18 ments or transactions that are not contracts de19 scribed in paragraphs (1) through (5) of section

20 561(a), the master netting agreement shall be

21 deemed to be a master netting agreement only with

22 respect to those agreements or transactions that are

23 described in any 1 or more of the paragraphs (1)

24 through (5) of section 561(a);
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1 ‘‘(38B) the term ‘master netting agreement

2 participant’ means an entity that, at any time before

3 the filing of the petition, is a party to an outstand4 ing master netting agreement with the debtor;’’.

5 (d) SWAP AGREEMENTS, SECURITIES CONTRACTS,

6 COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR7 CHASE AGREEMENTS, AND MASTER NETTING AGREE8 MENTS UNDER THE AUTOMATIC-STAY.—

9 (1) IN GENERAL.—Section 362(b) of title 11,

10 United States Code, as amended by sections 120,

11 134, 139, 203 and 818, is amended—

12 (A) in paragraph (6), by inserting ‘‘,

13 pledged to, and under the control of,’’ after

14 ‘‘held by’’;

15 (B) in paragraph (7), by inserting ‘‘,

16 pledged to, and under the control of,’’ after

17 ‘‘held by’’;

18 (C) by amending paragraph (17) to read

19 as follows:

20 ‘‘(17) under subsection (a), of the setoff by a

21 swap participant of a mutual debt and claim under

22 or in connection with a swap agreement that con23 stitutes the setoff of a claim against the debtor for

24 a payment or transfer due from the debtor under or

25 in connection with a swap agreement against a pay-
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1 ment due to the debtor from the swap participant

2 under or in connection with a swap agreement or

3 against cash, securities, or other property held by,

4 pledged to, and under the control of, or due from

5 such swap participant to guarantee, secure, or settle

6 a swap agreement;’’;

7 (D) in paragraph (27), by striking ‘‘or’’ at

8 the end;

9 (E) in paragraph (28) by striking the pe10 riod at the end and inserting ‘‘; and’’; and

11 (F) by inserting after paragraph (28) the

12 following new paragraph:

13 ‘‘(29) under subsection (a), of the setoff by a

14 master netting agreement participant of a mutual

15 debt and claim under or in connection with 1 or

16 more master netting agreements or any contract or

17 agreement subject to such agreements that con18 stitutes the setoff of a claim against the debtor for

19 any payment or other transfer of property due from

20 the debtor under or in connection with such agree21 ments or any contract or agreement subject to such

22 agreements against any payment due to the debtor

23 from such master netting agreement participant

24 under or in connection with such agreements or any

25 contract or agreement subject to such agreements or
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1 against cash, securities, or other property held by,

2 pledged or and under the control of, or due from

3 such master netting agreement participant to mar4 gin, guarantee, secure, or settle such agreements or

5 any contract or agreement subject to such agree6 ments, to the extent such participant is eligible to

7 exercise such offset rights under paragraph (6), (7),

8 or (17) for each individual contract covered by the

9 master netting agreement in issue.’’.

10 (2) LIMITATION.—Section 362 of title 11,

11 United States Code, is amended by adding at the

12 end the following:

13 ‘‘(i) LIMITATION.—The exercise of rights not subject

14 to the stay arising under subsection (a) pursuant to para15 graph (6), (7), or (17) of subsection (b) shall not be stayed

16 by an order of a court or administrative agency in any

17 proceeding under this title.’’.

18 (e) LIMITATION OF AVOIDANCE POWERS UNDER

19 MASTER NETTING AGREEMENT.—Section 546 of title 11,

20 United States Code, is amended—

21 (1) in subsection (g) (as added by section 103

22 of Public Law 101–311)—

23 (A) by striking ‘‘under a swap agreement’’;
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1 (B) by striking ‘‘in connection with a swap

2 agreement’’ and inserting ‘‘under or in connec3 tion with any swap agreement’’;

4 (2) by redesignating subsection (g) (as added

5 by section 222(a) of Public Law 103–394) as sub6 section (i); and

7 (3) by inserting before subsection (i) (as redes8 ignated) the following new subsection:

9 ‘‘(h) Notwithstanding sections 544, 545, 547,

10 548(a)(2)(B), and 548(b) of this title, the trustee may not

11 avoid a transfer made by or to a master netting agreement

12 participant under or in connection with any master netting

13 agreement or any individual contract covered thereby that

14 is made before the commencement of the case, and except

15 to the extent the trustee could otherwise avoid such a

16 transfer made under an individual contract covered by

17 such master netting agreement, except under section

18 548(a)(1)(A) of this title.’’.

19 (f) FRAUDULENT TRANSFERS OF MASTER NETTING

20 AGREEMENTS.—Section 548(d)(2) of title 11, United

21 States Code, is amended—

22 (1) in subparagraph (C), by striking ‘‘and’’;

23 (2) in subparagraph (D), by striking the period

24 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

7 extent of such transfer, except, with respect to

8 a transfer under any individual contract covered

9 thereby, to the extent such master netting

10 agreement participant otherwise did not take

11 (or 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 amending the section heading to read as

17 follows:

18 ‘‘§ 555. Contractual right to liquidate, terminate, or

19 accelerate a securities contract’’; and

20 (2) in the first sentence, by striking ‘‘liquida21 tion’’ and inserting ‘‘liquidation, termination, or ac22 celeration’’.

23 (h) TERMINATION OR ACCELERATION OF COMMOD24 ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,

25 United States Code, is amended—
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1 (1) by amending the section heading to read as

2 follows:

3 ‘‘§ 556. Contractual right to liquidate, terminate, or

4 accelerate a commodities contract or for5 ward contract’’; and

6 (2) in the first sentence, by striking ‘‘liquida7 tion’’ and inserting ‘‘liquidation, termination, or ac8 celeration’’.

9 (i) TERMINATION OR ACCELERATION OF REPUR10 CHASE AGREEMENTS.—Section 559 of title 11, United

11 States Code, is amended—

12 (1) by amending the section heading to read as

13 follows:

14 ‘‘§ 559. Contractual right to liquidate, terminate, or

15 accelerate a repurchase agreement’’; and

16 (2) in the first sentence, by striking ‘‘liquida17 tion’’ and inserting ‘‘liquidation, termination, or ac18 celeration’’.

19 (j) LIQUIDATION, TERMINATION, OR ACCELERATION

20 OF SWAP AGREEMENTS.—Section 560 of title 11, United

21 States Code, is amended—

22 (1) by amending the section heading to read as

23 follows:
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1 ‘‘§ 560. Contractual right to liquidate, terminate, or

2 accelerate a swap agreement’’; and

3 (2) in the first sentence, by striking ‘‘termi4 nation of a swap agreement’’ and inserting ‘‘liquida5 tion, termination, or acceleration of a swap agree6 ment’’; and

7 (3) by striking ‘‘in connection with any swap

8 agreement’’ and inserting ‘‘in connection with the

9 termination, liquidation, or acceleration of a swap

10 agreement’’.

11 (k) LIQUIDATION, TERMINATION, ACCELERATION, OR

12 OFFSET UNDER A MASTER NETTING AGREEMENT AND

13 ACROSS CONTRACTS.—Title 11, United States Code, is

14 amended by inserting after section 560 the following new

15 section:

16 ‘‘§ 561. Contractual right to terminate, liquidate, ac17 celerate, or offset under a master netting

18 agreement and across contracts

19 ‘‘(a) IN GENERAL.—Subject to subsection (b), the ex20 ercise of any contractual right, because of a condition of

21 the kind specified in section 365(e)(1), to cause the termi22 nation, liquidation, or acceleration of or to offset or net

23 termination values, payment amounts or other transfer ob24 ligations arising under or in connection with 1 or more

25 (or the termination, liquidation, or acceleration of 1 or

26 more—
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1 ‘‘(1) securities contracts, as defined in section

2 741(7);

3 ‘‘(2) commodity contracts, as defined in section

4 761(4);

5 ‘‘(3) forward contracts;

6 ‘‘(4) repurchase agreements;

7 ‘‘(5) swap agreements; or

8 ‘‘(6) master netting agreements,

9 shall not be stayed, avoided, or otherwise limited by oper10 ation of any provision of this title or by any order of a

11 court or administrative agency in any proceeding under

12 this title.

13 ‘‘(b) EXCEPTION.—

14 ‘‘(1) A party may exercise a contractual right

15 described in subsection (a) to terminate, liquidate, or

16 accelerate only to the extent that such party could

17 exercise such a right under section 555, 556, 559,

18 or 560 for each individual contract covered by the

19 master netting agreement in issue.

20 ‘‘(2) If a debtor is a commodity broker subject

21 to subchapter IV of chapter 7 of this title—

22 ‘‘(A) a party may not net or offset an obli23 gation to the debtor arising under, or in con24 nection with, a commodity contract against any

25 claim arising under, or in connection with,
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1 other instruments, contracts, or agreements

2 listed in subsection (a) except to the extent the

3 party has no positive net equity in the commod4 ity accounts at the debtor, as calculated under

5 subchapter IV;

6 ‘‘(B) another commodity broker may not

7 net or offset an obligation to the debtor arising

8 under, or in connection with, a commodity con9 tract entered into or held on behalf of a cus10 tomer of the debtor against any claim arising

11 under, or in connection with, other instruments,

12 contracts, or agreements listed in subsection

13 (a).

14 ‘‘(c) DEFINITION.—As used in this section, the term

15 ‘contractual right’ includes a right set forth in a rule or

16 bylaw of a national securities exchange, a national securi17 ties association, or a securities clearing agency, a right

18 set forth in a bylaw of a clearing organization or contract

19 market or in a resolution of the governing board thereof,

20 and a right, whether or not evidenced in writing, arising

21 under common law, under law merchant, or by reason of

22 normal business practice.’’.

23 (l) MUNICIPAL BANKRUPTCIES.—Section 901 of title

24 11, United States Code, is amended—

25 (1) by inserting ‘‘, 555, 556’’ after ‘‘553’’; and
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1 (2) by inserting ‘‘, 559, 560, 561,’’ after ‘‘557’’.

2 (m) ANCILLARY PROCEEDINGS.—Section 304 of title

3 11, United States Code, is amended by adding at the end

4 the following:

5 ‘‘(d) Any provisions of this title relating to securities

6 contracts, commodity contracts, forward contracts, repur7 chase agreements, swap agreements, or master netting

8 agreements shall apply in a case ancillary to a foreign pro9 ceeding under this section or any other section of this title,

10 so that enforcement of contractual provisions of such con11 tracts and agreements in accordance with their terms will

12 not be stayed or otherwise limited by operation of any pro13 vision of this title or by order of a court in any case under

14 this title, and to limit avoidance powers to the same extent

15 as in a proceeding under chapter 7 or 11 of this title (such

16 enforcement not to be limited based on the presence or

17 absence of assets of the debtor in the United States).’’.

18 (n) COMMODITY BROKER LIQUIDATIONS.—Title 11,

19 United States Code, is amended by inserting after section

20 766 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,

8 the exercise of rights by a forward contract merchant,

9 commodity broker, stockbroker, financial institution, secu10 rities clearing agency, swap participant, repo participant,

11 or master netting agreement participant under this title

12 shall not affect the priority of any unsecured claim it may

13 have after the exercise of such rights.’’.

14 (o) 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,

21 repo participants, and master netting

22 agreement participants

23 ‘‘Notwithstanding any other provision of this title,

24 the exercise of rights by a forward contract merchant,

25 commodity broker, stockbroker, financial institution, secu26 rities clearing agency, swap participant, repo participant,
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1 financial participant, or master netting agreement partici2 pant under this title shall not affect the priority of any

3 unsecured claim it may have after the exercise of such

4 rights.’’.

5 (p) SETOFF.—Section 553 of title 11, United States

6 Code, is amended—

7 (1) in subsection (a)(3)(C), by inserting ‘‘(ex8 cept for a setoff of a kind described in section

9 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(19), 555,

10 556, 559, or 560 of this title)’’ before the period;

11 and

12 (2) in subsection (b)(1), by striking

13 ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17),

14 362(b)(19), 555, 556, 559, 560,’’.

15 (q) SECURITIES CONTRACTS, COMMODITY CON16 TRACTS, AND FORWARD CONTRACTS.—Title 11, United

17 States Code, is amended—

18 (1) in section 362(b)(6), by striking ‘‘financial

19 institutions,’’ each place such term appears and in20 serting ‘‘financial institution, financial participant’’;

21 (2) in section 546(e), by inserting ‘‘financial

22 participant’’ after ‘‘financial institution,’’;

23 (3) in section 548(d)(2)(B), by inserting ‘‘fi24 nancial participant’’ after ‘‘financial institution,’’;

25 (4) in section 555—
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1 (A) by inserting ‘‘financial participant’’

2 after ‘‘financial institution,’’; and

3 (B) by inserting before the period ‘‘, a

4 right set forth in a bylaw of a clearing organi5 zation or contract market or in a resolution of

6 the governing board thereof, and a right,

7 whether or not in writing, arising under com8 mon law, under law merchant, or by reason of

9 normal business practice’’; and

10 (5) in section 556, by inserting ‘‘, financial par11 ticipant’’ after ‘‘commodity broker’’.

12 (r) CONFORMING AMENDMENTS.—Title 11 of the

13 United States Code is amended—

14 (1) in the table of sections of chapter 5—

15 (A) by amending the items relating to sec16 tions 555 and 556 to read as follows:

‘‘555. Contractual right to liquidate, terminate, or accelerate a securities contract.

‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract.’’; and

17 (B) by amending the items relating to sec18 tions 555 and 556 to read as follows:

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase

agreement.

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’; and

19 (2) in the table of sections of chapter 7—

20 (A) by inserting after the item relating to

21 section 766 the following:
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‘‘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.’’; and

1 (B) by inserting after the item relating to

2 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.’’.

3 SEC. 1008. RECORDKEEPING REQUIREMENTS.

4 Section 11(e)(8) of the Federal Deposit Insurance

5 Act (12 U.S.C. 1821(e)(8)) is amended by adding at the

6 end the following new subparagraph:

7 ‘‘(H) RECORDKEEPING REQUIREMENTS.—

8 The Corporation, in consultation with the ap9 propriate Federal banking agencies, may pre10 scribe regulations requiring more detailed rec11 ordkeeping with respect to qualified financial

12 contracts (including market valuations) by in13 sured depository institutions.’’.

14 SEC. 1009. EXEMPTIONS FROM CONTEMPORANEOUS EXE15 CUTION –––REQUIREMENT.

16 Section 13(e)(2) of the Federal Deposit Insurance

17 Act (12 U.S.C. 1823(e)(2)) is amended to read as follows:

18 ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS

19 EXECUTION REQUIREMENT.—An agreement to pro20 vide for the lawful collateralization of—
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1 ‘‘(A) deposits of, or other credit extension

2 by, a Federal, State, or local governmental en3 tity, or of any depositor referred to in section

4 11(a)(2), including an agreement to provide col5 lateral in lieu of a surety bond;

6 ‘‘(B) bankruptcy estate funds pursuant to

7 section 345(b)(2) of title 11, United States

8 Code;

9 ‘‘(C) extensions of credit, including any

10 overdraft, from a Federal reserve bank or Fed11 eral home loan bank; or

12 ‘‘(D) 1 or more qualified financial con13 tracts, as defined in section 11(e)(8)(D),

14 shall not be deemed invalid pursuant to paragraph

15 (1)(B) solely because such agreement was not exe16 cuted contemporaneously with the acquisition of the

17 collateral or because of pledges, delivery, or substi18 tution of the collateral made in accordance with such

19 agreement.’’.

20 SEC. 1010. DAMAGE MEASURE.

21 (a) Title 11, United States Code, is amended—

22 (1) by inserting after section 561 the following:
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1 ‘‘§ 562. Damage measure in connection with swap

2 agreements, securities contracts, forward

3 contracts, commodity contracts, repur4 chase agreements, or master netting

5 agreements

6 ‘‘If the trustee rejects a swap agreement, securities

7 contract as defined in section 741 of this title, forward

8 contract, commodity contract (as defined in section 761

9 of this title) repurchase agreement, or master netting

10 agreement pursuant to section 365(a) of this title, or if

11 a forward contract merchant, stockbroker, financial insti12 tution, securities clearing agency, repo participant, finan13 cial participant, master netting agreement participant, or

14 swap participant liquidates, terminates, or accelerates

15 such contract or agreement, damages shall be measured

16 as of the earlier of—

17 ‘‘(1) the date of such rejection; or

18 ‘‘(2) the date of such liquidation, termination,

19 or acceleration.’’; and

20 (2) in the table of sections of chapter 5 by in21 serting after the item relating to section 561 the fol22 lowing:

‘‘562. Damage measure in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase

agreements, or master netting agreements.’’.

23 (b) CLAIMS ARISING FROM REJECTION.—Section

24 502(g) of title 11, United States Code, is amended—
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1 (1) by designating the existing text as para2 graph (1); and

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

4 ‘‘(2) A claim for damages calculated in accordance

5 with section 561 of this title shall be allowed under sub6 section (a), (b), or (c), or disallowed under subsection (d)

7 or (e), as if such claim had arisen before the date of the

8 filing of the petition.’’.

9 SEC. 1011. SIPC STAY.

10 Section 5(b)(2) of the Securities Investor Protection

11 Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding

12 after subparagraph (B) the following new subparagraph:

13 ‘‘(C) EXCEPTION FROM STAY.—

14 ‘‘(i) Notwithstanding section 362 of

15 title 11, United States Code, neither the

16 filing of an application under subsection

17 (a)(3) nor any order or decree obtained by

18 Securities Investor Protection Corporation

19 from the court shall operate as a stay of

20 any contractual rights of a creditor to liq21 uidate, terminate, or accelerate a securities

22 contract, commodity contract, forward con23 tract, repurchase agreement, swap agree24 ment, or master netting agreement, each

25 as defined in title 11, to offset or net ter-
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1 mination values, payment amounts, or

2 other transfer obligations arising under or

3 in connection with 1 or more of such con4 tracts or agreements, or to foreclose on

5 any cash collateral pledged by the debtor

6 whether or not with respect to 1 or more

7 of such contracts or agreements.

8 ‘‘(ii) Notwithstanding clause (i), such

9 application, order, or decree may operate

10 as a stay of the foreclosure on securities

11 collateral pledged by the debtor, whether

12 or not with respect to 1 or more of such

13 contracts or agreements, securities sold by

14 the debtor under a repurchase agreement

15 or securities lent under a securities lending

16 agreement.

17 ‘‘(iii) As used in this section, the term

18 ‘contractual right’ includes a right set

19 forth in a rule or bylaw of a national secu20 rities exchange, a national securities asso21 ciation, or a securities clearing agency, a

22 right set forth in a bylaw of a clearing or23 ganization or contract market or in a reso24 lution of the governing board thereof, and

25 a right, whether or not in writing, arising
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1 under common law, under law merchant,

2 or by reason of normal business practice.’’.

3 SEC. 1012. ASSET-BACKED SECURITIZATIONS.

4 Section 541 of title 11, United States Code, is

5 amended—

6 (1) in subsection (b), by striking ‘‘or’’ at the

7 end of paragraph (4);

8 (2) by redesignating paragraph (5) of sub9 section (b) as paragraph (6);

10 (3) by inserting after paragraph (4) of sub11 section (b) the following new paragraph:

12 ‘‘(5) any eligible asset (or proceeds thereof), to

13 the extent that such eligible asset was transferred by

14 the debtor, before the date of commencement of the

15 case, to an eligible entity in connection with an

16 asset-backed securitization, except to the extent such

17 asset (or proceeds or value thereof) may be recov18 ered by the trustee under section 550 by virtue of

19 avoidance under section 548(a); or’’; and

20 (4) by adding at the end the following new sub21 section:

22 ‘‘(e) DEFINITIONS.—For purposes of this section, the

23 following definitions shall apply:

24 ‘‘(1) ASSET-BACKED SECURITIZATION.—The

25 term ‘asset-backed securitization’ means a trans-
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1 action in which eligible assets transferred to an eligi2 ble entity are used as the source of payment on se3 curities, the most senior of which are rated invest4 ment grade by 1 or more nationally recognized secu5 rities rating organizations, issued by an issuer;

6 ‘‘(2) ELIGIBLE ASSET.—The term ‘eligible

7 asset’ means—

8 ‘‘(A) financial assets (including interests

9 therein and proceeds thereof), either fixed or re10 volving, including residential and commercial

11 mortgage loans, consumer receivables, trade re12 ceivables, and lease receivables, that, by their

13 terms, convert into cash within a finite time pe14 riod, plus any rights or other assets designed to

15 assure the servicing or timely distribution of

16 proceeds to security holders;

17 ‘‘(B) cash; and

18 ‘‘(C) securities.

19 ‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible en20 tity’ means—

21 ‘‘(A) an issuer; or

22 ‘‘(B) a trust, corporation, partnership, or

23 other entity engaged exclusively in the business

24 of acquiring and transferring eligible assets di-
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1 rectly or indirectly to an issuer and taking ac2 tions ancillary thereto;

3 ‘‘(4) ISSUER.—The term ‘issuer’ means a trust,

4 corporation, partnership, or other entity engaged ex5 clusively in the business of acquiring and holding eli6 gible assets, issuing securities backed by eligible as7 sets, and taking actions ancillary thereto.

8 ‘‘(5) TRANSFERRED.—The term ‘transferred’

9 means the debtor, pursuant to a written agreement,

10 represented and warranted that eligible assets were

11 sold, contributed, or otherwise conveyed with the in12 tention of removing them from the estate of the

13 debtor pursuant to subsection (b)(5), irrespective,

14 without limitation of—

15 ‘‘(A) whether the debtor directly or indi16 rectly obtained or held an interest in the issuer

17 or in any securities issued by the issuer;

18 ‘‘(B) whether the debtor had an obligation

19 to repurchase or to service or supervise the

20 servicing of all or any portion of such eligible

21 assets; or

22 ‘‘(C) the characterization of such sale, con23 tribution, or other conveyance for tax, account24 ing, regulatory reporting, or other purposes.’’.
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1 SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIRE2 MENTS.

3 The 2d sentence of the 2d undesignated paragraph

4 of section 16 of the Federal Reserve Act (12 U.S.C. 412)

5 is amended by striking ‘‘acceptances acquired under sec6 tion 13 of this Act’’ and inserting ‘‘acceptances acquired

7 under section 10A, 10B, 13, or 13A of this Act’’.

8 SEC. 1014. SEVERABILITY; EFFECTIVE DATE; APPLICATION

9 OF AMENDMENTS.

10 (a) SEVERABILITY.—If any provision of this Act or

11 any amendment made by this Act, or the application of

12 any such provision or amendment to any person or cir13 cumstance, is held to be unconstitutional, the remaining

14 provisions of and amendments made by this Act and the

15 application of such other provisions and amendments to

16 any person or circumstance shall not be affected thereby.

17 (b) EFFECTIVE DATE.—This Act shall take effect on

18 the date of the enactment of this Act.

19 (c) APPLICATION OF AMENDMENTS.—The amend20 ments made by this Act shall apply with respect to cases

21 commenced or appointments made under any Federal or

22 State law after the date of enactment of this Act, but shall

23 not apply with respect to cases commenced or appoint24 ments made under any Federal or State law before the

25 date of enactment of this Act.
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1 TITLE XI—TECHNICAL

2 CORRECTIONS

3 SEC. 1101. DEFINITIONS.

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

5 amended by section 317, 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;

18 and

19 (B) by striking ‘‘thereto having aggregate’’

20 and all that follows through the end of the

21 paragraph;

22 (6) by amending paragraph (54) to read as fol23 lows:

24 ‘‘(54) The term ‘transfer’ means—

25 ‘‘(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, abso6 lute or conditional, voluntary or involuntary, of

7 disposing 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. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

21 Section 104 of title 11, United States Code, is

22 amended by inserting ‘‘522(f)(3), 707(b)(5),’’ after

23 ‘‘522(d),’’ each place it appears.
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1 SEC. 1103. 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. 1104. TECHNICAL AMENDMENTS.

6 Title 11 of the United States Code is amended—

7 (1) in section 109(b)(2) by striking ‘‘subsection

8 (c) or (d) of’’;

9 (2) in section 541(b)(4) by adding ‘‘or’’ at the

10 end; and

11 (3) in section 552(b)(1) by striking ‘‘product’’

12 each place it appears and inserting ‘‘products’’.

13 SEC. 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

14 FRAUDULENTLY PREPARE BANKRUPTCY PE15 TITIONS.

16 Section 110(j)(3) of title 11, United States Code, is

17 amended by striking ‘‘attorney’s’’ and inserting

18 ‘‘attorneys’ ’’.

19 SEC. 1106. LIMITATION ON COMPENSATION OF PROFES20 SIONAL PERSONS.

21 Section 328(a) of title 11, United States Code, is

22 amended by inserting ‘‘on a fixed or percentage fee basis,’’

23 after ‘‘hourly basis,’’.
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1 SEC. 1107. SPECIAL TAX PROVISIONS.

2 Section 346(g)(1)(C) of title 11, United States Code,

3 is amended by striking ‘‘, except’’ and all that follows

4 through ‘‘1986’’.

5 SEC. 1108. EFFECT OF CONVERSION.

6 Section 348(f)(2) of title 11, United States Code, is

7 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

8 first place it appears.

9 SEC. 1109. AMENDMENT TO TABLE OF SECTIONS.

10 The table of sections for chapter 5 of title 11, United

11 States Code, is amended by striking the item relating to

12 section 556 and inserting the following:

‘‘556. Contractual right to liquidate a commodities contract or forward contract.’’.

13 SEC. 1110. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

14 Section 503(b)(4) of title 11, United States Code, is

15 amended by inserting ‘‘subparagraph (A), (B), (C), (D),

16 or (E) of’’ before ‘‘paragraph (3)’’.

17 SEC. 1111. PRIORITIES.

18 Section 507(a) of title 11, United States Code, as

19 amended by section 323, is amended—

20 (1) in paragraph (3)(B), by striking the semi21 colon at the end and inserting a period; and

22 (2) in paragraph (7), by inserting ‘‘unsecured’’

23 after ‘‘allowed’’.
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1 SEC. 1112. EXEMPTIONS.

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

3 amended by section 320, is amended—

4 (1) in subsection (f)(1)(A)(ii)(II)—

5 (A) by striking ‘‘includes a liability des6 ignated as’’ and inserting ‘‘is for a liability that

7 is designated as, and is actually in the nature

8 of,’’; and

9 (B) by striking ‘‘, unless’’ and all that fol10 lows through ‘‘support’’; and

11 (2) in subsection (g)(2), by striking ‘‘subsection

12 (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.

13 SEC. 1113. EXCEPTIONS TO DISCHARGE.

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

15 amended—

16 (1) in subsection (a)(3), by striking ‘‘or (6)’’

17 each place it appears and inserting ‘‘(6), or (15)’’;

18 (2) as amended by section 304(e) of Public Law

19 103–394 (108 Stat. 4133), in paragraph (15), by

20 transferring such paragraph so as to insert it after

21 paragraph (14) of subsection (a);

22 (3) in subsection (a)(9), by inserting

23 ‘‘, watercraft, or aircraft’’ after ‘‘motor vehicle’’;

24 (4) in subsection (a)(15), as so redesignated by

25 paragraph (2) of this subsection, by inserting ‘‘to a
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1 spouse, former spouse, or child of the debtor and’’

2 after ‘‘(15)’’;

3 (5) in subsection (a)(17)—

4 (A) by striking ‘‘by a court’’ and inserting

5 ‘‘on a prisoner by any court’’;

6 (B) by striking ‘‘section 1915 (b) or (f)’’

7 and inserting ‘‘subsection (b) or (f)(2) of sec8 tion 1915’’; and

9 (C) by inserting ‘‘(or a similar non-Federal

10 law)’’ after ‘‘title 28’’ each place it appears; and

11 (6) in subsection (e), by striking ‘‘a insured’’

12 and inserting ‘‘an insured’’.

13 SEC. 1114. EFFECT OF DISCHARGE.

14 Section 524(a)(3) of title 11, United States Code, is

15 amended by striking ‘‘section 523’’ and all that follows

16 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

17 or 1328(a)(1) of this title, or that’’.

18 SEC. 1115. PROTECTION AGAINST DISCRIMINATORY TREAT19 MENT.

20 Section 525(c) of title 11, United States Code, is

21 amended—

22 (1) in paragraph (1), by inserting ‘‘student’’ be23 fore ‘‘grant’’ the second place it appears; and
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1 (2) in paragraph (2), by striking ‘‘the program

2 operated under part B, D, or E of’’ and inserting

3 ‘‘any program operated under’’.

4 SEC. 1116. PROPERTY OF THE ESTATE.

5 Section 541(b)(4)(B)(ii) of title 11, United States

6 Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.

7 SEC. 1117. PREFERENCES.

8 Section 547 of title 11, United States Code, is

9 amended—

10 (1) in subsection (b), by striking ‘‘subsection

11 (c)’’ and inserting ‘‘subsections (c) and (h)’’; and

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

13 ‘‘(h) If the trustee avoids under subsection (b) a secu14 rity interest given between 90 days and 1 year before the

15 date of the filing of the petition, by the debtor to an entity

16 that is not an insider for the benefit of a creditor that

17 is an insider, such security interest shall be considered to

18 be avoided under this section only with respect to the cred19 itor that is an insider.’’.

20 SEC. 1118. POSTPETITION TRANSACTIONS.

21 Section 549(c) of title 11, United States Code, is

22 amended—

23 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

24 of’’;
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1 (2) by striking ‘‘such property’’ and inserting

2 ‘‘such real property’’; and

3 (3) by striking ‘‘the interest’’ and inserting

4 ‘‘such interest’’.

5 SEC. 1119. DISPOSITION OF PROPERTY OF THE ESTATE.

6 Section 726(b) of title 11, United States Code, is

7 amended by striking ‘‘1009,’’.

8 SEC. 1120. GENERAL PROVISIONS.

9 Section 901(a) of title 11, United States Code, as

10 amended by section 408, is amended by inserting

11 ‘‘1123(d),’’ after ‘‘1123(b),’’.

12 SEC. 1121. APPOINTMENT OF ELECTED TRUSTEE.

13 Section 1104(b) of title 11, United States Code, is

14 amended—

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

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

17 ‘‘(2)(A) If an eligible, disinterested trustee is elected

18 at a meeting of creditors under paragraph (1), the United

19 States trustee shall file a report certifying that election.

20 Upon the filing of a report under the preceding sentence—

21 ‘‘(i) the trustee elected under paragraph (1)

22 shall be considered to have been selected and ap23 pointed for purposes of this section; and

24 ‘‘(ii) the service of any trustee appointed under

25 subsection (d) shall terminate.
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1 ‘‘(B) In the case of any dispute arising out of an elec2 tion under subparagraph (A), the court shall resolve the

3 dispute.’’.

4 SEC. 1122. ABANDONMENT OF RAILROAD LINE.

5 Section 1170(e)(1) of title 11, United States Code,

6 is amended by striking ‘‘section 11347’’ and inserting

7 ‘‘section 11326(a)’’.

8 SEC. 1123. CONTENTS OF PLAN.

9 Section 1172(c)(1) of title 11, United States Code,

10 is amended by striking ‘‘section 11347’’ and inserting

11 ‘‘section 11326(a)’’.

12 SEC. 1124. DISCHARGE UNDER CHAPTER 12.

13 Subsections (a) and (c) of section 1228 of title 11,

14 United States Code, are amended by striking

15 ‘‘1222(b)(10)’’ each place it appears and inserting

16 ‘‘1222(b)(9)’’.

17 SEC. 1125. BANKRUPTCY CASES AND PROCEEDINGS.

18 Section 1334(d) of title 28, United States Code, is

19 amended—

20 (1) by striking ‘‘made under this subsection’’

21 and inserting ‘‘made under subsection (c)’’; and

22 (2) by striking ‘‘This subsection’’ and inserting

23 ‘‘Subsection (c) and this subsection’’.
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1 SEC. 1126. KNOWING DISREGARD OF BANKRUPTCY LAW OR

2 RULE.

3 Section 156(a) of title 18, United States Code, is

4 amended—

5 (1) in the first undesignated paragraph—

6 (A) by inserting ‘‘(1) the term’’ before

7 ‘‘ ‘bankruptcy’’; and

8 (B) by striking the period at the end and

9 inserting ‘‘; and’’; and

10 (2) in the second undesignated paragraph—

11 (A) by inserting ‘‘(2) the term’’ before

12 ‘‘ ‘document’’; and

13 (B) by striking ‘‘this title’’ and inserting

14 ‘‘title 11’’.

15 SEC. 1127. TRANSFERS MADE BY NONPROFIT CHARITABLE

16 CORPORATIONS.

17 (a) SALE OF PROPERTY OF ESTATE.—Section 363(d)

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

19 (1) by striking ‘‘only’’ and all that follows

20 through the end of the subsection and inserting

21 ‘‘only—

22 ‘‘(1) in accordance with applicable nonbank23 ruptcy law that governs the transfer of property by

24 a corporation or trust that is not a moneyed, busi25 ness, or commercial corporation or trust; and
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1 ‘‘(2) to the extent not inconsistent with any re2 lief granted under subsection (c), (d), (e), or (f) of

3 section 362 of this title.’’.

4 (b) CONFIRMATION OF PLAN FOR REORGANIZA5 TION.—Section 1129(a) of title 11, United States Code,

6 as amended by section 143, is amended by adding at the

7 end the following:

8 ‘‘(15) All transfers of property of the plan shall

9 be made in accordance with any applicable provi10 sions of nonbankruptcy law that govern the transfer

11 of property by a corporation or trust that is not a

12 moneyed, business, or commercial corporation or

13 trust.’’.

14 (c) TRANSFER OF PROPERTY.—Section 541 of title

15 11, United States Code, is amended by adding at the end

16 the following:

17 ‘‘(e) Notwithstanding any other provision of this title,

18 property that is held by a debtor that is a corporation de19 scribed in section 501(c)(3) of the Internal Revenue Code

20 of 1986 and exempt from tax under section 501(a) of such

21 Code may be transferred to an entity that is not such a

22 corporation, but only under the same conditions as would

23 apply if the debtor had not filed a case under this title.’’.

24 (d) APPLICABILITY.—The amendments made by this

25 section shall apply to a case pending under title 11, United
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1 States Code, on the date of enactment of this Act, except

2 that the court shall not confirm a plan under chapter 11

3 of this title without considering whether this section would

4 substantially affect the rights of a party in interest who

5 first acquired rights with respect to the debtor after the

6 date of the petition. The parties who may appear and be

7 heard in a proceeding under this section include the attor8 ney general of the State in which the debtor is incor9 porated, was formed, or does business.

10 (e) RULE OF CONSTRUCTION.—Nothing in this sec11 tion shall be deemed to require the court in which a case

12 under chapter 11 is pending to remand or refer any pro13 ceeding, issue, or controversy to any other court or to re14 quire the approval of any other court for the transfer of

15 property.

16 SEC. 1128. PROHIBITION ON CERTAIN ACTIONS FOR FAIL17 URE TO INCUR FINANCE CHARGES.

18 Section 127 of the Truth in Lending Act (15 U.S.C.

19 1637) is amended by adding at the end the following:

20 ‘‘(h) PROHIBITION ON CERTAIN ACTIONS FOR FAIL21 URE TO INCUR FINANCE CHARGES.—A creditor of an ac22 count under an open end consumer credit plan may not

23 terminate an account prior to its expiration date solely be24 cause the consumer has not incurred finance charges on

25 the account. Nothing in this subsection shall prohibit a
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1 creditor from terminating an account for inactivity in 3

2 or more consecutive months.’’.

3 SEC. 1129. PROTECTION OF VALID PURCHASE MONEY SE4 CURITY INTERESTS.

5 Section 547(c)(3)(B) of title 11, United States Code,

6 is amended by striking ‘‘20’’ and inserting ‘‘30’’.

7 SEC. 1130. TRUSTEES.

8 (a) SUSPENSION AND TERMINATION OF PANEL

9 TRUSTEES AND STANDING TRUSTEES.—Section 586(d) of

10 title 28, United States Code, is amended—

11 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and

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

13 ‘‘(2) A trustee whose appointment under subsection

14 (a)(1) or under subsection (b) is terminated or who ceases

15 to be assigned to cases filed under title 11 of the United

16 States Code may obtain judicial review of the final agency

17 decision by commencing an action in the United States

18 district court for the district for which the panel to which

19 the trustee is appointed under subsection (a)(1), or in the

20 United States district court for the district in which the

21 trustee is appointed under subsection (b) resides, after

22 first exhausting all available administrative remedies,

23 which if the trustee so elects, shall also include an admin24 istrative hearing on the record. Unless the trustee elects

25 to have an administrative hearing on the record, the trust-
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1 ee shall be deemed to have exhausted all administrative

2 remedies for purposes of this paragraph if the agency fails

3 to make a final agency decision within 90 days after the

4 trustee requests administrative remedies. The Attorney

5 General shall prescribe procedures to implement this para6 graph. The decision of the agency shall be affirmed by

7 the district court unless it is unreasonable and without

8 cause based on the administrative record before the agen9 cy.’’.

10 (b) EXPENSES OF STANDING TRUSTEES.—Section

11 586(e) of title 28, United States Code, is amended by add12 ing at the end the following:

13 ‘‘(3) After first exhausting all available administra14 tive remedies, an individual appointed under subsection

15 (b) may obtain judicial review of final agency action to

16 deny a claim of actual, necessary expenses under this sub17 section by commencing an action in the United States dis18 trict court in the district where the individual resides. The

19 decision of the agency shall be affirmed by the district

20 court unless it is unreasonable or without cause based

21 upon the administrative record before the agency.

22 ‘‘(4) The Attorney General shall prescribe procedures

23 to implement this subsection.’’.
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1 TITLE XII—GENERAL EFFECTIVE

2 DATE; APPLICATION OF

3 AMENDMENTS

4 SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMEND5 MENTS.

6 (a) EFFECTIVE DATE.—Except as provided otherwise

7 in this Act, this Act and the amendments made by this

8 Act shall take effect 180 days after the date of the enact9 ment of this Act.

10 (b) APPLICATION OF AMENDMENTS.—The amend11 ments made by this Act shall not apply with respect to

12 cases commenced under title 11 of the United States Code

13 before the effective date of this Act.

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