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106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 106–126

PROVIDING FOR THE CONSIDERATION OF H.R. 833, THE

BANKRUPTCY REFORM ACT OF 1999

MAY 4, 1999.—Referred to the House Calendar and ordered to be printed

Mr. SESSIONS, from the Committee on Rules,

submitted the following

REPORT

[To accompany H. Res. 158]

The Committee on Rules, having had under consideration House

Resolution 158, by a non-record vote report the same to the House

with the recommendation that the resolution be adopted.

SUMMARY OF PROVISIONS OF RESOLUTION

The resolution provides for the consideration of H.R. 833, the

‘‘Bankruptcy Reform Act of 1999,’’ under a structured rule. The

rule provides one hour of general debate divided equally between

the chairman and ranking minority member of the Committee on

the Judiciary.

The rule waives points of order against consideration of the bill

for failure to comply with section 302 (prohibiting consideration of

legislation which exceeds a committee’s allocation of new spending

authority) or section 311 (prohibiting consideration of legislation

that would cause the total level of new budget authority or outlays

in the most recent budget resolution to be exceeded or cause revenues to be less) of the Congressional Budget Act.

The rule provides that it shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule

the amendment in the nature of a substitute recommended by the

Committee on the Judiciary now printed in the bill. The rule

waives all points or order against the committee amendment in the

nature of a substitute and amendments thereto.

The rule makes in order only those amendments printed in this

report. The rule provides that amendments made in order may be

offered only in the order printed in this report, may be offered only

by a Member designated in this report, shall be considered as read,

shall be debatable for the time specified in this report equally di-
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vided and controlled by the proponent and an opponent, shall not

be subject to amendment, and shall not be subject to a demand for

division of the question in the House or in the Committee of the

Whole.

The rule allows for the Chairman of the Committee of the Whole

to postpone votes during consideration of the bill, and to reduce

voting time to five minutes on a postponed question if the vote follows a fifteen minute vote. Finally, the rule provides one motion to

recommit with or without instructions.

The waiver of all points of order includes section 302 of the Congressional Budget Act because section 128 of the committee amendment in the nature of a substitute creates several new judgeships

and extends several existing judgeships. The waiver of all points of

order also includes section 311 of the Congressional Budget Act because section 148 of the committee amendment in the nature of a

substitute waives certain filing fees for indigent filers and section

608 waives certain fees for small businesses. Both the underlying

legislation and the Nadler substitute require similar waivers.

COMMITTEE VOTES

Pursuant to clause 3(b) of House rule XIII the results of each

record vote on an amendment or motion to report, together with

the names of those voting for and against, are printed below:

Rules Committee Record Vote No. 20

Date: May 4, 1999.

Measure: H.R. 833, Bankruptcy Reform Act of 1999.

Motion by: Mr. Moakley.

Summary of motion: To make in order Amendment No. 28 offered by Mr. Delahunt to add a new section 154 to the bill disallowing claims in bankruptcy for consumer credit card debts if, at the

time of the solicitation to open the account, the debtor was not informed in writing in a clear and conspicuous manner of 9 specific

factors.

Results: Defeated 3 to 8.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay;

Hastings—Nay; Myrick—Nay; Sessions—Nay; Reynolds—Nay;

Moakley—Yea; Frost—Yea; Hall—Yea; Dreier—Nay.

Rules Committee Record Vote No. 21

Date: May 4, 1999.

Measure: H.R. 833, Bankruptcy Reform Act of 1999.

Motion by: Mr. Moakley.

Summary of motion: To make in order Amendment No. 10 offered by Mr. Barrett of Wisconsin which caps liability for the unauthorized use of a debit card at $50, the same level as credit cards.

Results: Defeated 3 to 8.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay;

Hastings—Nay; Myrick—Nay; Sessions—Nay; Reynolds—Nay;

Moakley—Yea; Frost—Yea; Hall—Yea; Dreier—Nay.

Rules Committee Record Vote No. 22

Date: May 4, 1999.

Measure: H.R. 833, Bankruptcy Reform Act of 1999.
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Motion by: Mr. Moakley.

Summary of motion: To make in order Amendment No. 2 offered

by Mr. Scott which exempts veterans benefits from the calculations

of monthly income for the purpose of determining income available

to creditors.

Results: Defeated 4 to 7.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay;

Hastings—Nay; Myrick—Nay; Sessions—Yea; Reynolds—Nay;

Moakley—Yea; Frost—Yea; Hall—Yea; Dreier—Nay.

Rules Committee Record Vote No. 23

Date: May 4, 1999.

Measure: H.R. 833, Bankruptcy Reform Act of 1999.

Motion by: Mr. Frost.

Summary of motion: To make in order Amendment No. 21 offered by Mr. Nadler and Ms. Jackson-Lee which excludes from the

bill’s definition of a debtor’s current monthly income, which is used

to determine that debtor’s ability to repay debts, and payments received in satisfaction of a domestic support obligation.

Results: Defeated 3 to 8.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay;

Hastings—Nay; Myrick—Nay; Sessions—Nay; Reynolds—Nay;

Moakley—Yea; Frost—Yea; Hall—Yea; Dreier—Nay.

Rules Committee Record Vote No. 24

Date: May 4, 1999.

Measure: H.R. 833, Bankruptcy Reform Act of 1999.

Motion by: Mr. Frost.

Summary of motion: To make in order Amendment No. 24 offered by Mr. Conyers which excludes from the bill’s definition of

current monthly income any benefits received under the Social Security Act, in addition to excluding payment to victims of war

crimes and crimes against humanity (as the bill already does).

Results: Defeated 4 to 8.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay; DiazBalart—Nay; Hastings—Nay; Myrick—Nay; Sessions—Yea; Reynolds—Nay; Moakley—Yea; Frost—Yea; Hall—Yea; Dreier—Nay.

SUMMARY OF AMENDMENTS MADE IN ORDER TO H.R. 833—

BANKRUPTCY REFORM ACT OF 1999

Gekas (10 Minutes). Manager’s Amendment. The Amendment (1)

makes various technical changes; (2) makes a clarifying revision to

the type of expenses that a debtor may claim pursuant to the IRS

Other Necessary Expenses categories (the revision specifies that

the debtor must claim actual monthly expenses for the specified

categories); (3) revises certain provisions so that they conform with

the Bankruptcy Code’s other provisions pertaining to an award of

attorneys’ fees; (4) clarifies that the chapter 7 trustee must file a

statement as to whether or not a case should be presumed to be

an abuse in every case administered by such trustee; (5) revised

chapter 13’s requirements for confirmation to require the court to

find that the debtor filed the chapter 13 case in good faith; (6) revises the title of section 134 of the bill; (7) deletes Section 215
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(claims relating to insurance deposits in cases ancillary to foreign

proceedings) as this provision is included in title XI of the bill, as

revised by this Amendment; (8) adds a new provision to describe

to certain procedural matters pertaining to appeals, as amended by

the bill; (9) adds provisions with respect to the treatment of certain

funds subject to state insurance law or regulation for the benefit

of claim holders in the United States; (10) repeals sections of the

Bankruptcy Code that are no longer necessary’ and (11) amends a

statutory cross-reference so that it better comports with the drafters’ intent, which is to include in the definition of a ‘‘financial participant’’ certain securities contracts, forward contracts, repurchase

agreements and swap agreements in addition to certain commodity

contracts.

Moran (VA)/Dooley/Ackerman (20 Minutes). Amends the Truth in

Lending Act (TILA) to require Credit Card Issuers to make disclosures regarding minimum monthly payments. It would also ensure

that consumers have all the information they need in order to

avoid the imposition of late fees and requires that Worldwide WebBased Credit Card Solicitations are subject to the same ‘‘Schumer

Box’’ disclosures as all other credit card solicitations.

Moran (VA) (20 minutes). Inserts a disclosure requiring that a

debt relief agency providing bankruptcy assistance to an assisted

person shall provide a written notice within three business days

after the first date on which a debt relief agency first offers to provide any bankruptcy assistance services to an assisted person, advising assisted persons of their rights and responsibilities of disclosure. Requires that an attorney or bankruptcy petition preparer

give an assisted person a written contract specifying what the attorney or preparer will do and the cost. Inserts a ‘‘debtor’s bill of

rights.’’ Requires that a debt relief agency disclose in any advertisement of bankruptcy assistance services or of the benefits of bankruptcy that the services or benefits are with respect to proceedings

under this title of the Bankruptcy Code.

Velazquez (20 minutes). To allow the expansion of the credit

committee membership under chapter 11 bankruptcies to include a

small business when it is determined that the small business’

claims are disproportionately large to its gross revenues. And to ensure better access to information for those small businesses not included in the committee by allowing the committee to be open for

comment and subject to additional reports or disclosures.

Graham (20 minutes). The bankruptcy code prohibits the discharge of federally made, guaranteed or insured education loans or

education loans made by non-profit institutions. This amendment

would extend the prohibition from discharge to all qualified education loans. Includes exceptions for undue hardships.

Dooley (20 minutes). Requires the Federal Trade Commission to

set standards to be used by the United States Trustees in approving credit counseling agencies, programs described in section 109(h)

and instructional courses concerning personal financial management.

Conyers (20 minutes). Waives the provision of chapter 11 relating to small business debtors or to single asset real estate in cases

where the application of those provisions could result in the loss of

5 or more jobs.
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Watt (20 minutes). Replaces the provisions of H.R. 833 which require that all bankruptcy filers file their tax returns with the court

and instead require that a debtor file tax returns with the court

at the request of any party in interest.

Whitfield (20 minutes). Establishes a mechanism whereby bankruptcy trustees may receive compensation when they transfer cases

from chapter 7 to chapter 13. Under this provision, the level of

compensation would be determined by the bankruptcy judge.

Hyde/Conyers (40 minutes). Deletes the reported bill’s application of modified IRS expense allowances for determining permissible projected living expenses of debtors and their families during

the life of chapter 13 plans. In its place, the amendment adopts a

standard that allows only ‘‘reasonably necessary’’ expenses and directs the Executive office of United States Trustees to issue guidelines that will assist in making assessments of whether expenses

qualify. The amendment does not affect other provisions of section

102 that are designed to limit the availability of an immediate

fresh start in chapter 7, channel significant numbers of chapter 7

debtors into five-year chapter 13 repayment plans, and generate

greater recoveries from creditors.

Nadler/Conyers/Meehan/Berman (60 minutes). Substitute. Provides a realistic means test which takes into account the debtor’s

actual income and expenses. Does not omit expenses a debtor

would have to pay in a chapter 13 plan from the test used to determine whether the debtor must file for chapter 13. Does not rely on

IRS guidelines to determine how much a debtor should live on. Allows adequate judicial discretion to determine whether the debtor

appropriately belongs in chapter 7. Avoids using a debtor’s ability

to repay a specified percentage of unsecured non-priority debts

which is easy for debtors to manipulate. Holds both debtor and

creditor attorneys to strict application of Rule 9011’s penalties for

misconduct or bringing a frivolous case. Contains a safe harbor for

families below the median national income. Provides a balance by

requiring credit card lenders to behave responsibly and to provide

borrowers with the information they need to avoid bankruptcy. Prevents some of the more highly publicized cases in which creditors

illegally enforced debts after bankruptcy through ‘‘reaffirmation

agreements.’’ Deletes a section which would have denied victims in

these cases a legal remedy by prohibiting class action suits. Eliminates new grounds for making credit card debts non-dischargeable,

but leaves intact current law which makes prebankruptcy debt runup and fraudulently incurred debt non-dischargeable. Eliminates a

provision which would have allowed landlords to evict debtors without obtaining the permission of the bankruptcy court. Removes a

provision which allows secured creditors to treat the unsecured

part of some loans as secured debt. Modifies the child support portions of the bill to take away the special new rights over families

that state and local governments would have obtained in a bankruptcy case. Places families first.

Texts of amendments made in order:

1. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE GEKAS OF

PENNSYLVANIA, OR A DESIGNEE, DEBATABLE FOR 10 MINUTES

In the table of contents of the bill—
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(1) in the item relating to section 107, strike ‘‘congress’’ and

insert ‘‘Congress’’, and

(2) in the item relating to section 134, strike ‘‘Giving debtors

the ability to keep’’ and insert ‘‘Allowing a debtor to retain’’.

Page 9, line 1, strike ‘‘applicable’’ and insert ‘‘actual’’.

Page 9, beginning on line 1, strike ‘‘specifically listed’’ and insert

‘‘specified’’.

Page 10, line 3, strike ‘‘proceeding brought’’ and insert ‘‘motion

filed’’.

Beginning on page 10, strike line 22 and all that follows through

line 5 on page 11.

Page 11, line 6, strike ‘‘(D)’’ and insert ‘‘(C)’’.

Page 12, beginning on line 11, strike ‘‘in prosecuting the motion’’.

Page 16, line 13, insert ‘‘or not’’ after ‘‘whether’’.

Page 17, after line 16, insert the following (and make such technical and conforming changes as may be appropriate):

(d) DEBTOR’S DUTIES.—Section 521(a)(1)(B) of title 11, United

States Code, as amended by section 603, is amended—

(1) in clause (v) by striking ‘‘and’’ at the end;

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

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

‘‘(vii) a statement of the debtor’s current monthly income, and the calculations which determine whether a

presumption arises under section 707(b)(2)(A)(i), showing how each amount is calculated.’’.

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

Code, is amended by adding the following at the end of the 1st

paragraph:

‘‘The bankruptcy rules promulgated under this section shall prescribe a form for the statement referred to in section

521(a)(1)(B)(vii) of title 11, United States Code, and may provide

general rules on the content of such statement.’’.

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

is amended—

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

(2) in paragraph (6) by striking the period and inserting ‘‘;

and’’;

(3) by inserting the following after paragraph (6):

‘‘(7) the action of the debtor in filing the petition under this

chapter was in good faith.’’.

Page 19, line 15, strike ‘‘this title’’ and insert ‘‘title 11, United

States Code’’.

Page 22, lines 17 and 20, insert ‘‘case or’’ after ‘‘a’’.

Page 23, lines 9 and 12, strike ‘‘proceeding’’ and insert ‘‘case’’.

Page 77, strike line 1, and insert the following:

SEC. 134. ALLOWING THE DEBTOR TO RETAIN LEASED

Beginning on page 114, strike line 1 and all that follows through

line 5 on page 115 (and make such technical and conforming

changes as may be appropriate).

Page 91, line 15, insert ‘‘(a) AMENDMENT.—’’ before ‘‘Section’’.

Page 92, beginning on line 13, strike ‘‘expressly’’ and all that follows through ‘‘this paragraph’’, and insert ‘‘provides by statute’’.

Page 92, after line 15, insert the following:
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(b) APPLICATION OF AMENDMENT TO INDIVIDUAL STATES.—(1) Section 522(p) of title 11, United States Code, as added by subsection

(a), shall not apply with respect to a State before the end of the

first regular session of the State legislature following the date of

the enactment of this Act.

(2) For purposes of paragraph (1), the term ‘‘State’’ has the meaning given such term in section 101 of title 11, United States Code.

Page 115, beginning on line 20, strike ‘‘(excluding’’ and all that

follows through ‘‘secret)’’.

Page 116, line 7, insert ‘‘(excluding executory contracts that

transfer a right or interest under a filed or issued patent, copyright, trademark, trade dress, or trade secret)’’ after ‘‘contract’’.

Page 117, line 15, strike ‘‘365(b)(1)(A)’’ and insert ‘‘365(b)(2)’’.

Page 174, line 2, insert ‘‘(a) APPEALS.—’’ before ‘‘Title’’.

Page 175, line 9, strike ‘‘(b)’’ and insert ‘‘(5)’’.

Page 175, indent lines 9 through 11 2 ems to the right.

Page 175, line 12, strike ‘‘(c)(1)’’ and insert ‘‘(b)(1)’’.

Page 175, line 17, strike ‘‘(1)-(4)’’ and insert ‘‘(1) through (5)’’.

Page 175, line 24, strike ‘‘subsection (b)’’ and insert ‘‘paragraph

(1)’’

Page 176, after line 6, insert the following:

(b) PROCEDURAL RULES.—Until rules of practice and procedure

are promulgated or amended pursuant to the Rules Enabling Act

(28 U.S.C. sections 2071-77) to govern appeals to a bankruptcy appellate panel or to a court of appeals exercising jurisdiction pursuant to section 1293 of title 28, as added by this Act, the following

shall apply:

(1) A notice of appeal with respect to an appeal from an

order or judgment of a bankruptcy court to a court of appeals

or a bankruptcy appellate panel must be filed within the time

provided in Rule 8002 of the Federal Rules of Bankruptcy Procedure.

(2) An appeal to a bankruptcy appellate panel shall be taken

in the manner provided in Part VIII of the Federal Rules of

Bankruptcy Procedure and local court rules.

(3) An appeal from an order or judgment of a bankruptcy

court directly to a court of appeals shall be governed by the

rules of practice and procedure that apply to a civil appeal

from a judgment of a district court exercising original jurisdiction, as if the bankruptcy court were a district court, except as

provided in paragraph (1) regarding the time to appeal or by

local court rules.

(4) An appeal to a court of appeals from a decision, judgment, order, or decree entered by a bankruptcy appellate panel

exercising appellate jurisdiction shall be taken in the manner

provided by Rule 6(b) of the Federal Rules of Appellate Procedure.

(c) REPEALER.—(1) Section 158 of title 28, United States Code, is

repealed.

(2) The table of sections of chapter 6 of title 28, United States

Code, is amended by striking the item relating to section 158.

Page 208, line 9, insert ‘‘, other than a foreign insurance company,’’ after ‘‘entity’’.

Page 208, after line 20, insert the following:
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‘‘(d) The court may not grant relief under this chapter with respect to any deposit, escrow, trust fund, or other security required

or permitted under any applicable State insurance law or regulation for the benefit of claim holders in the United States.

Page 231, strike line 13, and insert the following:

‘‘SEC. 902. OTHER AMENDMENTS TO TITLES 11 AND 28 OF THE UNITED

STATES CODE.

Page 233, after line 11, insert the following (and make such technical and conforming changes as may be appropriate):

(d) OTHER SECTIONS OF TITLE 11.—(1) Section 109(b)(3) of title

11, United States Code, is amended to read as follows:

‘‘(3)(A) a foreign insurance company, engaged in such business in the United States; or

‘‘(B) a foreign bank, savings bank, cooperative bank, savings and

loan association, building and loan association, or credit union,

which has a branch or agency (as defined in section 3101 of title

12, United States Code) in the United States.’’.

(2) Section 303(k) of title 11, United States Code, is repealed.

(3)(A) Section 304 of title 11, United States Code, is repealed.

(B) The table of sections of chapter 3 of title 11, United States

Code, is amended by striking the item relating to section 304.

(C) Section 306 of title 11, United States Code, is amended by

striking ‘‘, 304,’’ each place it appears.

Page 279, beginning on line 1, strike ‘‘that is described in section

561(a)(2)’’ and insert ‘‘described in paragraph (1), (2), (3), (4), or (5)

of section 561(a)’’.

2. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE MORAN OF

VIRGINIA, OR REPRESENTATIVE DOOLEY OF CALIFORNIA, OR A DES- IGNEE, DEBATABLE FOR 20 MINUTES

Page 34, strike lines 7 through 25 and insert the following:

‘‘(C) the following examples:

‘‘(i) if the average account balance under a creditor’s

open-end consumer credit plan, taken as an average of

the account balances for all consumer accounts under

that open-end consumer credit plan, is $1,000 or less,

two examples, based on an annual percentage rate and

method for determining minimum periodic payments

recently in effect for that creditor, and based on outstanding balances of $250 and $500, showing the estimated minimum periodic payments, and the estimated

period of time it would take to repay those outstanding balances of $250 and $500, if the consumer paid

only the minimum periodic payment on each monthly

or periodic statement and obtained no additional extensions of credit; or

‘‘(ii) if the average account balance under a creditor’s

open-end consumer credit plan, taken as an average of

the account balances for all consumer accounts under

that open-end consumer credit plan, is more than

$1,000, three examples, based on an annual percentage rate and method for determining minimum periodic payments recently in effect for that creditor, and
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outstanding balances of $1,000, $1,500 and $2,000,

showing the estimated minimum periodic payments,

and the estimated period of time it would take to

repay those outstanding balances of $1,000, $1,500

and $2,000 if the consumer paid only the minimum

periodic payment on each monthly or periodic statement and obtained no additional extensions of credit.

‘‘(10) With respect to one billing cycle per calendar year, the

creditor shall transmit to each consumer to whom the creditor

is required to transmit a statement pursuant to subsection (b)

for such billing cycle the following information:

‘‘(A) the following statement: ‘The minimum payment

amount shown on your billing statement is the smallest

payment which you can make in order to keep the account

in good standing. This payment option is offered as a convenience and you may make larger payments at any time.

Making only the minimum payment each month will increase the amount of interest you pay and the length of

time it takes to repay your outstanding balance.’;

‘‘(B) if the plan provides that the consumer will be permitted to forgo making a minimum payment during a

specified billing cycle, a statement, if applicable, that if the

consumer chooses to forgo making the minimum payment,

finance charges will continue to accrue;

‘‘(C) an example, based on an annual percentage rate

and method for determining minimum periodic payments

recently in effect for that creditor, and a $500 outstanding

balance, showing the estimated minimum periodic payment, and the estimated period of time it would take to

repay the $500 outstanding balance if the consumer paid

only the minimum periodic payment on each monthly or

periodic statement and obtained no additional extensions

of credit; and

‘‘(D) a worksheet prescribed by the Board to assist the

consumer in determining the consumer’s household income

and debt obligations.’’.

Page 35, line 12, strike the close quotation marks and the period

at the end.

Page 35, after line 12 insert the following:

‘‘(12) the required minimum payment amount represented as

a dollar figure.

‘‘(13) the date by which or the period within which the required minimum payment must be made.’’.

(c) DISCLOSURES RELATED TO INTRODUCTORY RATES.—Section

127(c)(1)(A)(i) of the Truth in Lending Act (15 U.S.C.

1637(c)(1)(A)(i)) is amended by inserting the following at the end of

subclause (III):

‘‘(IV) Where the initial rate is temporary and will

expire within a period of less than 1 year, and is lower

than the rate that will apply after the temporary rate

expires—

‘‘(A) the time period during which the initial

rate will remain in effect; and
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‘‘(B) the annual percentage rate that will apply

to the account after the temporary rate expires, or

if that rate is a variable rate, the fact that the

rate is variable, the rate at the time of mailing,

and how the rate is determined.

‘‘(V)(A) Subject to subclauses (C) and (D), where the

initial rate may increase upon the occurrence of one or

more specific events, the following information:

‘‘(i) the initial rate and the increased rate that

may apply;

‘‘(ii) if the increased rate is a variable rate, the

fact that the increased rate is variable, the rate at

the time of mailing, and how the rate is determined; and

‘‘(iii) the specific event or events that may result

in imposing the increased rate.

‘‘(B) At the creditor’s option, the creditor may disclose the period for which the increased rate will remain in effect.

‘‘(C) If the increased rate cannot be determined at

the time disclosures are given, an explanation of the

specific event or events that may result in an increased rate must be disclosed.

‘‘(D) A creditor is not required to disclose an increased rate that is imposed when credit privileges are

permanently terminated.’’.

(d) INTERNET-BASED CREDIT CARD SOLICITATIONS.—(1)––Section

127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended

by inserting after paragraph (5) the following:

‘‘(6)(A) Any application to open a credit card account for any

person under an open-end consumer credit plan, and any solicitation to open such an account without requiring an application, that is made available through the Internet or an interactive computer service, shall disclose the following:

‘‘(i) the information.—

‘‘(I) described in paragraph (1)(A) in the form required under section 122(c) of this chapter, subject to

subsection (e), and

‘‘(II) described in paragraph (1)(B) in a clear and

conspicuous form, subject to subsections (e) and (f);

‘‘(ii) a statement, in a conspicuous and prominent location on or with the application or solicitation, that—

‘‘(I) the information is accurate as of the date the application or solicitation was posted;

‘‘(II) the information contained in the application or

solicitation is subject to change after such date;

‘‘(III) the applicant should contact the creditor for

information on any change in the information presented on or with the application or solicitation since

it was posted;

‘‘(iii) a clear and conspicuous disclosure of the date the

application or solicitation was posted and how frequently

the information described in subclause (i) is updated; and
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‘‘(iv) a disclosure, in a conspicuous and prominent location on or with the application or solicitation, of a toll-free

telephone number or e-mail address at which the applicant

may contact the creditor to obtain any change in the information provided on or with the application or solicitation

since it was posted.

‘‘(B) The disclosures required under subparagraph (A) may be

contained either:

‘‘(i) on the webpage which contains the application or solicitation; or

‘‘(ii) on a separate webpage which can be directly accessed

using a hypertext link which is contained on the webpage

which contains the application or solicitation.

‘‘(C) Upon receipt of a request for any of the information referred

to in subparagraph (A), the creditor or its agent shall promptly disclose any change in the information required to be disclosed under

subparagraph (A).

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

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

network of both Federal and non-Federal interoperable packets

switched data networks; and

‘‘(ii) the term ‘interactive computer service’ means any information service system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that

provides access to the Internet and such systems operated or

services offered by libraries or educational institutions.’’.

(2) Section 122(c)(1) of the Truth in Lending Act (15 U.S.C.

1632(c)(1)) is amended by striking ‘‘and (4)(C)(i)(I)’’ and inserting ‘‘,

(4)(C)(i)(I) and (6)(A)(i)(I)’’.

3. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE MORAN OF

VIRGINIA, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 101, after line 9, insert the following (and make such technical and conforming changes as may be appropriate):

SEC. 154. DISCLOSURES.

(a) DISCLOSURES.—Subchapter II of chapter 5 of title 11, United

States Code, as amended by section 106, is amended by adding at

the end the following:

‘‘§ 527. Disclosures

‘‘(a) A debt relief agency providing bankruptcy assistance to an

assisted person shall provide the following notices to the assisted

person:

‘‘(1) the written notice required under section 342(b)(1) of

this title; and

‘‘(2) to the extent not covered in the written notice described

in paragraph (1) of this section and no later than three business days after the first date on which a debt relief agency first

offers to provide any bankruptcy assistance services to an assisted person, a clear and conspicuous written notice advising

assisted persons of the following—
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‘‘(A) all information the assisted person is required to

provide with a petition and thereafter during a case under

this title must be complete, accurate and truthful;

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

accurately disclosed in the documents filed to commence

the case, and the replacement value of each asset as defined in section 506 of this title must be stated in those

documents where requested after reasonable inquiry to establish such value;

‘‘(C) current monthly income, the amounts specified in

section 707(b)(2) and, in a chapter 13 case, disposable income (determined in accordance with section 707(b)(2))

must be stated after reasonable inquiry; and

‘‘(D) that information an assisted person provides during

their case may be audited pursuant to this title and that

failure to provide such information may result in dismissal

of the proceeding under this title or other sanction including, in some instances, criminal sanctions.

‘‘(b) A debt relief agency providing bankruptcy assistance to an

assisted person shall provide each assisted person at the same time

as the notices required under subsection (a)(1) with the following

statement, to the extent applicable, or one substantially similar.

The statement shall be clear and conspicuous and shall be in a single document separate from other documents or notices provided to

the assisted person:

‘‘ ‘IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER

‘‘ ‘If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help

in some localities from a bankruptcy petition preparer who is not

an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN

CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW

MUCH IT WILL COST. Ask to see the contract before you hire

anyone.

‘‘ ‘The following information helps you understand what must be

done in a routine bankruptcy case to help you evaluate how much

service you need. Although bankruptcy can be complex, many cases

are routine.

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

should analyze your eligibility for different forms of debt relief

made available by the Bankruptcy Code and which form of relief

is most likely to be beneficial for you. Be sure you understand the

relief you can obtain and its limitations. To file a bankruptcy case,

documents called a Petition, Schedules and Statement of Financial

Affairs, as well as in some cases a Statement of Intention need to

be prepared correctly and filed with the bankruptcy court. You will

have to pay a filing fee to the bankruptcy court. Once your case

starts, you will have to attend the required first meeting of creditors where you may be questioned by a court official called a ‘‘trustee’’ and by creditors.
13

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

creditor to reaffirm a debt. You may want help deciding whether

to do so and a creditor is not permitted to coerce you into reaffirming your debts.

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

creditors what you can afford over three to five years, you may also

want help with preparing your chapter 13 plan and with the confirmation hearing on your plan which will be before a bankruptcy

judge.

‘‘ ‘If you select another type of relief under the Bankruptcy Code

other than chapter 7 or chapter 13, you will want to find out what

needs to be done from someone familiar with that type of relief.

‘‘ ‘Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy

court, but only attorneys, not bankruptcy petition preparers, can

give you legal advice.’.

‘‘(c) Except to the extent the debt relief agency provides the required information itself after reasonably diligent inquiry of the assisted person or others so as to obtain such information reasonably

accurately for inclusion on the petition, schedules or statement of

financial affairs, a debt relief agency providing bankruptcy assistance to an assisted person, to the extent permitted by nonbankruptcy law, shall provide each assisted person at the time required

for the notice required under subsection (a)(1) reasonably sufficient

information (which shall be provided in a clear and conspicuous

writing) to the assisted person on how to provide all the information the assisted person is required to provide under this title pursuant to section 521, including—

‘‘(1) how to value assets at replacement value, determine current monthly income, the amounts specified in section

707(b)(2)) and, in a chapter 13 case, how to determine disposable income in accordance with section 707(b)(2) and related

calculations;

‘‘(2) how to complete the list of creditors, including how to

determine what amount is owed and what address for the creditor should be shown; and

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

value exempt property at replacement value as defined in section 506 of this title.

‘‘(d) A debt relief agency shall maintain a copy of the notices required under subsection (a) of this section for two years after the

date on which the notice is given the assisted person.’’.

(b) CONFORMING AMENDMENT.—The table of sections for chapter

5 of title 11, United States Code, as amended by section 106, is

amended by inserting after the item relating to section 526 the following:

‘‘527. Disclosures.’’.

SEC. 155. DEBTOR’S BILL OF RIGHTS.

Subchapter II of chapter 5 of title 11, United States Code, as

amended by sections 106 and 154, is amended by adding at the end

the following:
14

‘‘§ 528. Debtor’s bill of rights

‘‘(a) A debt relief agency shall—

‘‘(1) no later than five business days after the first date on

which a debt relief agency provides any bankruptcy assistance

services to an assisted person, but prior to such assisted person’s petition under this title being filed, execute a written contract with the assisted person specifying clearly and conspicuously the services the agency will provide the assisted person

and the basis on which fees or charges will be made for such

services and the terms of payment, and give the assisted person a copy of the fully executed and completed contract in a

form the person can keep;

‘‘(2) disclose in any advertisement of bankruptcy assistance

services or of the benefits of bankruptcy directed to the general

public (whether in general media, seminars or specific mailings, telephonic or electronic messages or otherwise) that the

services or benefits are with respect to proceedings under this

title, clearly and conspicuously using the following statement:

‘We are a debt relief agency. We help people file Bankruptcy

petitions to obtain relief under the Bankruptcy Code.’ or a substantially similar statement. An advertisement shall be of

bankruptcy assistance services if it describes or offers bankruptcy assistance with a chapter 13 plan, regardless of whether

chapter 13 is specifically mentioned, including such statements

as ‘federally supervised repayment plan’ or ‘Federal debt restructuring help’ or other similar statements which would lead

a reasonable consumer to believe that help with debts was

being offered when in fact in most cases the help available is

bankruptcy assistance with a chapter 13 plan; and

‘‘(3) if an advertisement directed to the general public indicates that the debt relief agency provides assistance with respect to credit defaults, mortgage foreclosures, lease eviction

proceedings, excessive debt, debt collection pressure, or inability to pay any consumer debt, disclose conspicuously in that

advertisement that the assistance is with respect to or may involve proceedings under this title, using the following statement: ‘We are a debt relief agency. We help people file Bankruptcy petitions to obtain relief under the Bankruptcy Code.’ or

a substantially similar statement.’’.

(b) CONFORMING AMENDMENT.—The table of sections for chapter

5 of title 11, United States Code, as amended by sections 106 and

154, is amended by inserting after the item relating to section 527,

the following:

‘‘528. Debtor’s bill of rights.’’.

4. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE VELA ́ ZQUEZ

OF NEW YORK, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 109, line 23, insert ‘‘(a) APPOINTMENT.—’’.

Page 110, line 4, insert the following before the close quotation

marks:

The court may expand the membership of a committee to include

a creditor that is small business if the court determines that such
15

creditor holds claims of the kind represented by such committee

that are, in the aggregate, disproportionately large when compared

to the annual gross revenue of such creditor.

Page 110, after line 4, insert the following:

(b) INFORMATION.—Section 1102(b) of title 11, United States

Code, is amended by adding at the end the following:

‘‘(3) A committee appointed under subsection (a) shall provide access to information for creditors who hold claims of the kind represented by such committee and who are not appointed such committee, shall to be open for comment from such creditors, and shall

be subject to a court order compelling additional reports or disclosure to be made to such creditors.’’

5. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE GRAHAM

OF SOUTH CAROLINA, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 119, after line 9, insert the following (and make such technical and conforming changes as may be appropriate):

SEC. 219. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS AND LOANS.

Section 523(a)(8) of title 11, United States Code, is amended to

read as follows:

‘‘(8)(A) for an educational benefit overpayment or loan made,

insured or guaranteed by a governmental unit, or made under

any program funded in whole or in part by a governmental

unit or nonprofit institution, or for an obligation to repay funds

received as an educational benefit, scholarship or stipend, or

(B) for any other education loan incurred by an individual

debtor that meets the definition of ‘Qualified Education Loan’

under section 221(e)(1) of the Internal Revenue Code, unless

excepting such debt from discharge under this paragraph will

impose an undue hardship on the debtor and a debtor’s dependents;’’.

6. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE DOOLEY OF

CALIFORNIA, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 124, strike lines 13 through 20, and insert the following:

‘‘(a) The clerk of each district shall maintain a publicly available

list of credit counseling agencies and of programs described in section 109(h) and instructional courses offered by such agencies currently approved by—

‘‘(1) the United States Trustee; or

‘‘(2) the bankruptcy administrator for the district.

‘‘(b) The United States Trustee or bankruptcy administrator shall

only approve credit counseling agencies which satisfy standards set

in regulations promulgated by the Federal Trade Commission and

which are accredited by the Council on Accreditation or an equivalent third party nonprofit accrediting organization.

‘‘(c) The United States Trustee or bankruptcy administrator shall

only approve programs or courses under subsection (a) if they satisfy standards set in regulations promulgated by the Executive Of-
16

fice of the United States Trustees. The Executive Office of the

United States Trustee is authorized to promulgate regulations setting such standards.

‘‘(d) The Federal Trade Commission shall have authority to promulgate regulations setting standards for credit counseling agencies for the purposes of subsection (b). Such standards shall establish minimum requirements for such agencies with respect to providing qualified counselors, safekeeping and payment of client

funds, disclosure to clients, adequate counseling with respect to client credit problems, and such other matters as relate to the quality

and financial security of such programs. Nothing in this provision

shall limit the authority of the Federal Trade Commission pursuant to the Federal Trade Commission Act (15 U.S.C. 45 et seq.).

‘‘(e) The United States Trustee or bankruptcy administrator may

notify the clerk that a credit counseling agency, or a program or

course, is no longer approved, in which case the clerk shall remove

it from the list maintained under subsection (a).

‘‘(2) REGULATIONS.—The Federal Trade Commission and the Executive Office of United States Trustees shall promulgate regulations pursuant to the power delegated in this section within 180

days of the date of the enactment of this Act.’’.

Page 124, line 21, strike ‘‘(2)’’ and insert ‘‘(3)’’.

7. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE CONYERS

OF MICHIGAN, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 151, after line 24, insert the following (and make such technical and conforming changes as may be appropriate):

SEC. 416. APPLICABILITY OF CERTAIN PROVISIONS.

The provisions of title 11 of the United States Code relating to

small business debtors or to single asset real estate shall not apply

in a case under such title if the application of any of such provisions in such case could result in the loss of 5 or more jobs.

8. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE WATT OF

NORTH CAROLINA, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Beginning on page 160, strike line 23 and all that follows

through line 2 on page 161.

Page 162, strike lines 1 through 15, and insert the following (and

make such technical and conforming changes as may be appropriate):

‘‘(f) An individual debtor in a case under chapter 7 or 13 of this

title shall file with the court at the request of any party in

interest—

‘‘(1) all tax returns, including any schedules or attachments, with

respect to the period from the commencement of the case until such

time as the case is closed;

‘‘(2) at the time filed with the taxing authority, all tax returns,

including any schedules or attachments, that were not filed with

the taxing authority when the schedules under subsection (a)(1)

were filed with respect to the period that is 3 years before the

order of relief;
17

‘‘(3) any amendments to any of the tax returns, including schedules or attachments, described in paragraph (1) or (2); and

9. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE WHITFIELD

OF KENTUCKY, OR A DESIGNEE, DEBATABLE FOR 20 MINUTES

Page 176, after line 24, insert the following:

SEC. 614. COMPENSATING TRUSTEES.

Title 11, United States Code, is amended—

(1) in section 104(b)(1) in the material preceding subparagraph (A)—

(A) by striking ‘‘and’’; and

(B) by inserting ‘‘, 1326(b)(3)’’ before ‘‘immediately’’;

(2) in section 326, by inserting at the end the following:

‘‘(e) Notwithstanding any other provision of this section, the court

shall allow reasonable compensation under section 330(a) of this

title for the services and expenses of the trustee in taking the actions described in paragraphs (1) and (2) if—

‘‘(1) a trustee in a chapter 7 case commences a motion to dismiss or convert under section 707(b) and such motion is granted; or

‘‘(2) the trustee demonstrates by a preponderance of the evidence that the case was converted or dismissed because of the

trustee’s actions.’’; and

(3) in section 1326(b)—

(A) in paragraph (1), by striking ‘‘and’’;

(B) in paragraph (2), by striking the period at the end

thereof and inserting ‘‘; and’’; and

(C) by adding at the end the following:

‘‘(3)(A) the amount of the compensation described in subclauses (I) and (II) which is unpaid at the time of each such

payment, prorated over the remaining duration of the plan—

‘‘(i) and which has been allowed in a case—

‘‘(I) converted to this chapter; or

‘‘(II) dismissed from chapter 7 in which the debtor in

this case was a debtor, whether dismissed voluntarily

by the debtor or on motion of the trustee under section

707(b);

‘‘(ii) but only to the extent such compensation has been

allowed to a chapter 7 trustee under section 326(e);

‘‘(B) the compensation payable to the chapter 7 trustee in the

case under this chapter shall not exceed the greater of the

trustee fee allowed pursuant to section 330 of this title plus—

‘‘(i) $25 per month; or

‘‘(ii) the amount payable to unsecured nonpriority creditors as provided by the plan multiplied by 5 percent, and

the result divided by the number of months in the plan;

and

‘‘(C) notwithstanding any other provision of this title, any

such compensation awarded to a chapter 7 trustee in a converted or dismissed case shall be payable and may be collected

in a case under this chapter—
18

‘‘(i) even if such amount has been discharged in a prior

proceeding under this title; and

‘‘(ii) only to the extent permitted by this section.’’.

10. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE HYDE OF

ILLINOIS, OR REPRESENTATIVE CONYERS OF MICHIGAN, OR A DESIGNEE, DEBATABLE FOR 40 MINUTES

Page 8, beginning on line 14, strike ‘‘(which’’ and all that follows

through ‘‘104(b))’’ on line 19.

Beginning on page 8, strike line 23, and all that follows through

line 13 on page 9, and insert the following (and make such technical and conforming changes as may be appropriate):

‘‘(ii) The debtor’s monthly expenses shall be the debtor’s monthly

expenses reasonably necessary to be expended—

‘‘(I) for the maintenance or support of the debtor, the dependents of the debtor, and, in a joint case, the spouse of the debtor

if the spouse is not otherwise a dependent; and

‘‘(II) if the debtor is engaged in business, for the payment of

expenditures necessary for the continuation, preservation, and

operation of such business.

Notwithstanding any other provision of this clause, the debtor’s

monthly expenses shall not include any payments for debts described in clauses (iii) and (iv).

Page 14, line 15, add close quotation marks and a period at the

end.

Beginning on page 14, strike line 16 and all that follows through

line 3 on page 15.

Page 101, after line 9, insert the following (and make such technical and conforming changes as may be appropriate):

SEC. 154. GUIDELINES FOR ASSESSING INCOME.

Section 586 of title 28, United States Code, is amended by adding

at the end the following:

‘‘(f) Not later than 1 year after the effective date of this subsection, the Director of the Executive Office for United States

Trustees shall issue guidelines to assist in making assessments of

whether income is not reasonably necessary to be expended by a

debtor for the maintenance or support of the debtor, the dependents of the debtor, and, in a joint case, the spouse of the debtor if

the spouse is not otherwise a dependent.’’.

Page 153, line 23, insert ‘‘as amended by section 154,’’ after

‘‘Code,’’.

Page 154, line 3, strike ‘‘(f)’’ and insert ‘‘(g)’’.

Page 154, line 5, strike ‘‘(f)(1)(A)’’ and insert ‘‘(g)(1)(A)’’.

Page 156, line 22, strike ‘‘586(f)’’ and insert ‘‘586(g)’’.

Page 157, line 4, strike ‘‘586(f)’’ and insert ‘‘586(g)’’.

11. AN AMENDMENT TO BE OFFERED BY REPRESENTATIVE NADLER

OF NEW YORK, OR A DESIGNEE, DEBATABLE FOR 60 MINUTES

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Bankruptcy Reform Act of 1999’’.
19

(b) TABLE OF CONTENTS.—The table of contents of this Act is as

follows:

Sec. 1. Short title; table of contents.

TITLE I—CONSUMER BANKRUPTCY PROVISIONS

Subtitle A—Needs based bankruptcy

Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.

Sec. 103. Notice of alternatives.

Sec. 104. Debtor financial management training test program.

Subtitle B—Consumer Bankruptcy Protections

Sec. 105. Definitions.

Sec. 106. Enforcement.

Sec. 107. Sense of the congress.

Sec. 108. Discouraging abusive reaffirmation practices.

Sec. 109. Promotion of alternative dispute resolution.

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

Sec. 111. Dual use debit card.

Sec. 112. Discouraging reckless lending practices.

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

Sec. 114. Effect of discharge.

Sec. 115. Limiting trustee liability.

Sec. 116. Reinforce the fresh start.

Sec. 117. Discouraging bad faith repeat filings.

Sec. 118. Curbing abusive filings.

Sec. 119. Debtor retention of personal property security.

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

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

Sec. 123. Fair valuation of collateral.

Sec. 124. Domiciliary requirements for exemptions.

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

Sec. 126. Rolling stock equipment.

Sec. 127. Discharge under chapter 13.

Sec. 128. Bankruptcy judgeships.

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

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

Sec. 132. Adequate protection for investors.

Sec. 134. Giving debtors the ability to keep leased personal property by assumption.

Sec. 135. Adequate protection of lessors and purchase money secured creditors.

Sec. 136. Automatic stay.

Sec. 137. Extend period between bankruptcy discharges.

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

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

Sec. 143. Continued liability of property.

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

Sec. 145. Clarification of meaning of household goods.

Sec. 147. Monetary limitation on certain exempt property.

Sec. 148. Bankruptcy fees.

Sec. 149. Collection of child support.

Sec. 150. Excluding employee benefit plan participant contributions and other property from the estate.

Sec. 151. Clarification of postpetition wages and benefits.

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

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

Sec. 154. Definition of domestic support obligation.

Sec. 155. Requirements to obtain confirmation and discharge in cases involving domestic support obligations.

Sec. 156. Exceptions to automatic stay in domestic support obligation proceedings.

Sec. 157. Exemption for right to receive certain alimony, maintenance, or support.

Sec. 158. Automatic stay inapplicable to certain proceedings against the debtor.
20

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.

Sec. 217. Sharing of compensation.

Sec. 218. Priority for administrative expenses.

TITLE III—GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 301. Definition of disinterested person.

Sec. 302. Miscellaneous improvements.

Sec. 303. Extensions.

Sec. 304. Local filing of bankruptcy cases.

Sec. 305. Permitting assumption of contracts.

TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS

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

Sec. 402. Definitions.

Sec. 403. Standard form disclosure Statement and plan.

Sec. 404. Uniform national reporting requirements.

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

Sec. 406. Duties in small business cases.

Sec. 407. Plan filing and confirmation deadlines.

Sec. 408. Plan confirmation deadline.

Sec. 409. Prohibition against extension of time.

Sec. 410. Duties of the United States trustee.

Sec. 411. Scheduling conferences.

Sec. 412. Serial filer provisions.

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

or examiner.

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

small businesses.

Sec. 415. Payment of interest.

Sec. 416. Protection of jobs.

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.
21

Sec. 612. Bankruptcy appeals.

Sec. 613. GAO study.

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.

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. Effective date; application of amendments.

TITLE XI—TECHNICAL CORRECTIONS

Sec. 1101. Definitions.

Sec. 1102. Adjustment of dollar amounts.

Sec. 1103. Extension of time.

Sec. 1104. Technical amendments.

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

petitions.

Sec. 1106. Limitation on compensation of professional persons.

Sec. 1107. Special tax provisions.

Sec. 1108. Effect of conversion.

Sec. 1109. Allowance of administrative expenses.

Sec. 1110. Priorities.

Sec. 1111. Exemptions.

Sec. 1112. Exceptions to discharge.

Sec. 1113. Effect of discharge.

Sec. 1114. Protection against discriminatory treatment.
22

Sec. 1115. Property of the estate.

Sec. 1116. Preferences.

Sec. 1117. Postpetition transactions.

Sec. 1118. Disposition of property of the estate.

Sec. 1119. General provisions.

Sec. 1120. Appointment of elected trustee.

Sec. 1121. Abandonment of railroad line.

Sec. 1122. Contents of plan.

Sec. 1123. Discharge under chapter 12.

Sec. 1124. Bankruptcy cases and proceedings.

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

Sec. 1126. Transfers made by nonprofit charitable corporations.

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

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

Sec. 1129. Trustees.

TITLE XII—GENERAL EFF ECTIVE DATE; APP LICATION OF AMENDMENTS

Sec. 1201. Effective date; application of amendments.

TITLE I—CONSUMER BANKRUPTCY

PROVISIONS

Subtitle A—Needs based bankruptcy

SEC. 101. CONVERSION.

Section 706(c) of title 11, United States Code, is amended by inserting ‘‘or consents to’’ after ‘‘requests’’.

SEC. 102. DISMISSAL OR CONVERSION.

(a) IN GENERAL.—Section 707 of title 11, United States Code, is

amended—

(1) by striking the section heading and inserting the following:

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

chapter 13’’; and

(2) by amending subsection (b) to read as follows:

‘‘(b)(1) After notice and a hearing, a court, on its own motion or

on a motion by the United States trustee, the trustee, or any part

in interest who is eligible to bring a motion, may dismiss a case

filed by an individual debtor under this chapter, or with the debtor’s consent, convert such a case to a case under chapter 11 or 13

of this title if it finds that the granting of relief would be an abuse

of the provisions of this chapter, the court shall consider whether—

‘‘(A) the debtor has the ability to repay some portion of the

debtor’s unsecured nonpriority debt as determined under paragraphs (2) and (3);

‘‘(B) the debtor has filed the petition in bad faith; or

‘‘(C) the totality of the circumstances (including whether the

debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the

debtor’s financial situation demonstrates abuse.

‘‘(2) In considering under paragraph (1)(A) whether the granting

of relief would be an abuse of the provisions of this chapter, the

court shall conclusively presume abuse does not exist if the debtor’s

current monthly income, when multiplied by 12, is less than or

equal to 100 percent of the highest national or applicable State or
23

Statistical Area median family income reported for a family of

equal size, whichever is greater, or in the case of a household of

1 person, less than or equal to 100 percent of the highest national

or State or Metropolitan Statistical Area median household income

for 1 earner, whichever is greater, as adjusted, if applicable, as provided in paragraph (6).

‘‘(3) In considering under paragraph (1)(A) whether the granting

of relief would be an abuse of the provision of this chapter, the

court shall presume abuse exists if—

‘‘(A) the debtor’s current monthly income, when multiplied by

12, is less than or equal to 100 percent of the highest national

or applicable State or Metropolitan Statistical Area median

family income reported for a family of equal size, whichever is

greater, or in the case of a household of 1 person, less than or

equal to 100 percent of the highest national or State or Metropolitan Statistical Area median household income for 1 yearner, whichever is greater, as adjusted, if applicable, as provided

in paragraph (6); and

‘‘(B) the product of—

‘‘(i) the debtor’s current monthly income, reduced by allowable monthly expenses specified in paragraph (4)

(which shall include, if applicable the continuation of actual expenses of a dependent child under the age of 18 for

tuition, books, and required fees at a private elementary or

secondary school, or comparable expenses stemming from

the home education of such child, or the attendance of

such child at a public elementary or secondary school, not

exceeding $10,000) and monthly debt payments specified

in paragraph (5), and

‘‘(ii) multiplied by 36,

less estimated administrative expenses and reasonable attorneys’ fees, is not less than $6,000 of the debtor’s nonpriority

unsecured claims in the case.

‘‘(4) For the purposes of this subsection, the debtor’s allowable

monthly expenses shall be the expenses reasonably necessary—

‘‘(A) for the maintenance or support of the debtor, the dependents of the debtor, and in a joint case, the spouse of the

debtor if the spouse is not otherwise a dependent; and

‘‘(B) if the debtor is engaged in business, for the payment of

expenditures necessary for the continuation, preservation, and

operation of such business.

Notwithstanding any other provision of this clause, the debtor’s

monthly expenses shall not include payments for debts described in

paragraph (5).

‘‘(5) For purposes of this subsection, the debtor’s monthly debt

payments shall include—

‘‘(A) the total amount scheduled as contractually due on all

secured debts in each month of the 36 months following the

date of the petition and divided by 36; and

‘‘(B) the debtor’s expenses for payment of all priority claims,

including priority domestic support obligations, calculated as

the total amount of debts entitled to priority in each month of

the 36 months following the date of the petition and divided by

36.
24

‘‘(6) For the purposes of this subsection—

‘‘(A) national or applicable State or Metropolitan Statistical

Area median family income reported for a household of more

than 4 individuals shall be that of a household of 4 individuals

plus $583 per month for each additional member of that household;

‘‘(B) a family or household shall consist of the debtor, the

debtor’s spouse, and the debtor’s dependents, but not a legally

separated spouse unless the spouse files a joint case with the

debtor.

‘‘(7) In any proceeding brought under this subsection, the presumption of abuse may be rebutted by demonstrating special circumstances that justify additional reasonable expenses or adjustments of current monthly total income. In order to establish such

circumstances, the debtor shall be required to—

‘‘(A) itemize each additional expense or adjustment of income; and

‘‘(B) provide documentation of such expenses and a detailed

explanation of the circumstances that warrant such expenses.

‘‘(8)(A) As part of the schedule of current income and expenditures required under section 521, the debtor shall include—

‘‘(i) a statement of the debtor’s current monthly income and

calculations that show whether a presumption arises under

paragraph (1)(A) of this subsection; or

‘‘(ii) a statement of the debtor’s current monthly income

showing that the debtor is a debtor described in paragraph (14)

of this subsection.

‘‘(B) The Supreme Court shall promulgate rules under section

2075 of title 28, United States Code, that prescribe a form for a

statement under subparagraph (A) and may provide general rules

on the content of such statement.

‘‘(9) If a trustee brings a motion for dismissal or conversion under

this subsection, and the court grants that motion and finds that the

action of the counsel for the debtor in filing under this chapter violated Rule 9011, the courts hall assess damages, which may include

ordering—

‘‘(A) the counsel for the debtor to reimburse the trustee for

all reasonable costs in prosecuting a motion brought under section 707(b), including reasonable attorneys’ fees;

‘‘(B) the assessment of an appropriate civil penalty against

the counsel for the debtor; and

‘‘(C) the payment of the civil penalty to the trustee or the

United States trustee.

‘‘(10) The court may award a debtor all reasonable costs and

other appropriate damages in contesting a motion brought by a

party in interest (other than a trustee, bankruptcy administrator,

or United States trustee) under this subsection (including reasonable attorneys’ fees) if the court does not grant the motion and the

court finds that—

‘‘(A) the position of the party that brought the motion was

not substantially justified; or

‘‘(B) the party brought the motion solely for the purpose of

coercing the debtor into waiving a right guaranteed to the

debtor under this title.
25

‘‘(11) A party in interest may not bring a motion under this section until the United States trustee has either filed a statement

under section 704(b)(2)(A) or filed a motion under section

704(b)(2)(B).

‘‘(12) If an attorney for a party in interest (other than a trustee,

bankruptcy administrator, or United States trustee) brings a motion for dismissal or conversion under this subsection, and the

court does not grant that motion and finds that the action of the

counsel for the moving party in filing such motion under this chapter violated Rule 9011, the court shall assess damages, which may

include ordering—

‘‘(A) the counsel for the moving party to reimburse the debtor

for all reasonable costs in defending a motion brought under

section 707(b), including reasonable attorneys’ fees;

‘‘(B) the assessment of an appropriate civil penalty against

the counsel for the moving party.

‘‘(13) In making a determination whether to dismiss a case under

this section, the court may not take into consideration whether a

debtor has made, or continues to make, charitable contributions

(that meet the definition of ‘charitable contribution’ under section

548(d)(3) and as described by section 548(a)(2)of this title to any

qualified religious or charitable entity or organization (as that term

is defined in section 548(d)(4)) of this title.

‘‘(14) No court, United States trustee, bankruptcy administrator,

or other party in interest shall bring a motion under subsection

(b)(1)(A) if, as of the date of the order for relief, the debtor’s current

monthly income, when multiplied by 12, is less than or equal to

100 percent of the highest national or applicable State or Metropolitan Statistical Area median family income reported for a family

of equal size, whichever is greater, or in the case of a household

of 1 person, less than or equal to 100 percent of the highest national or State or Metropolitan Statistical Area median household

income for 1 earner, whichever is greater, as adjusted, if applicable,

as provided in paragraph(6);’’.

(b) DEFINITION.—Section 101 of title 11, United States Code, is

amended—

(1) by inserting after paragraph (10)the following:

‘‘(10A) ‘current monthly income’—

‘‘(A) means the average monthly income from all sources

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

debtor’s spouse, receive without regard to whether the income is taxable income, derived during the 180-day period

preceding the date of determination;

‘‘(B) includes any amount paid by any entity other than

the debtor (or, in a joint case, the debtor and the debtor’s

spouse), on a regular basis to the household expenses of

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

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

excludes—

‘‘(i) payments to victims of war crimes or crimes

against humanity;

‘‘(ii) benefits received from the Department of Veterans Affairs in connection with service in the armed

forces of the United States;
26

‘‘(iii) income received on account of disability;and

‘‘(iv) benefits received under the Social Security

Act.’’;

(2) by inserting after paragraph (17) the following:

‘‘(17A) ‘estimated administrative expenses’ means 10 percent

of projected payments under a chapter 13 plan;’’.

(c) DUTIES OF CHAPTER 7 TRUSTEE.—Section 704 of title 11,

United States Code, is amended—

(1) by inserting ‘‘(a)’’ before ‘‘The trustee shall—’’; and

(2) by adding at the end the following:

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

the trustee shall review all materials filed by the debtor and, not

later than 10 days after the first meeting of creditors, file with the

court and the United States trustee a statement as to whether the

debtor’s case could be presumed to be an abuse under section

707(b).

‘‘(2) Not later than 60 days after receiving a statement filed

under paragraph (1), the United States trustee or bankruptcy administrator shall—

‘‘(A) file a statement setting forth the reasons why the bankruptcy administrator does not believe that such a motion would

be appropriate or would be prohibited because the debtor is a

debtor of the kind described in section 707(b)(14) of this title;

or

‘‘(B) file a motion to dismiss or convert under section 707(b)

if, based on the filing of such statement with the court, the

United States trustee or bankruptcy administrator determines

that the case should be presumed to be an abuse under section

707(b) and the debtor’s current monthly income, when multiplied by 12, is less than or equal to 100 percent of the highest

national or applicable State or State Metropolitan Statistical

Area median family income reported for a family of equal size,

whichever is greater, or in the case of a household of 1 person,

less than or equal to 100 percent of the highest national or

State or Metropolitan Statistical Area median household income for 1 earner, whichever is greater. For the purposes of determining whether a motion would be appropriate to be filed,

the United States trustee shall consider adjustments to current

monthly income for income items received over the most recent

180 days that are not reasonably expected to be reflected in future income, or expenses likely to be due under a chapter 13

plan which are not included in the required statement of the

debtor’s expense. The debtor shall, at the request of the United

States trustee, provide documentation for any current income

items that are not reasonably expected to be reelected in future

income, and a detailed explanation of the circumstances that

warrant making such adjustments. If the United States trustee

determines that, after accounting for these adjustments, the

debtor’s current monthly income, which multiplied by 12, is

less than or equal to 100 percent of the higher of the national,

State, or Metropolitan Statistical Area median family income

reported for a family of equal or lesser size, or in the case of

a household of 1 person, the national median household income
27

for 1 earner, then the case shall be presumed not be an abuse

of the previous of this chapter.

For the purpose of this subsection, the national or applicable State

or Metropolitan Statistical Area median family income reported for

a household of more than 4 individuals shall be that of a household

of 4 individuals plus $583 per month for each additional member

of that household.

‘‘(3) Paragraph (2) shall not be construed to preclude the court

or any other party who is eligible to file a motion under section

707(b) from bringing such a motion.’’.

(d) MEETING OF CREDITORS AND EQUITY SECURITY HOLDERS.—

Section 341 of title 11, United States Code, is amended by adding

the following new subsection:

‘‘(e) The initial notice of the meeting of creditors shall indicate

whether the debtor’s current monthly income is reported to be

equal or greater than the applicable median income for purposes of

subsection 707(b) of this title.’’.

(e) GUIDELINES FOR ASSESSING INCOME.—Section 586 of title 28,

United States Code, is amended by adding the following new subsection:

‘‘(f) Not later than 1 year after the effective date of this subsection, the Director of the Executive Office for the United States

Trustees shall issue guidelines to assist in making assessment of

whether income is not reasonably necessary to be expended by a

debtor for the maintenance or support of the debtor, the dependents of the debtor, and in a joint case, the spouse of the debtor if

the spouse is not otherwise a dependent. The director shall consult

with the Department of the Treasury, and others as needed in developing the guidelines.’’.

(f) Section 104, title 11, United States Code, as amended by subsection ll of this Act, is amended by striking out ‘‘523(a)(2)(C),

and 707(b)(3)’’ each place it appears and inserting ‘‘523(a)(2)(C),

and 707(b)’’ in lieu thereof.

(g) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 7 of title 11, United States Code, is amended by

striking the item relating to section 707 and inserting the following:

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

SEC. 103. NOTICE OF ALTERNATIVES.

Section 342(b) of title 11, United States Code, is amended to read

as follows:

‘‘(b) Before the commencement of a case under this title by an individual whose debts are primarily consumer debts, the clerk shall

give to such individual written notice containing—

‘‘(1) a brief description of—

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

benefits, and costs of proceeding under each of those chapters; and

‘‘(B) the types of services available from credit counseling agencies; and

‘‘(2) statements specifying that—

‘‘(A) a person who knowingly and fraudulently conceals

assets or makes a false oath or statement under penalty
28

of perjury in connection with a bankruptcy case shall be

subject to fine, imprisonment, or both; and

‘‘(B) all information supplied by a debtor in connection

with a bankruptcy case is subject to examination by the

Attorney General.’’.

SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

(a) DEVELOPMENT OF FINANCIAL MANAGEMENT AND TRAINING

CURRICULUM AND MATERIALS.—The Director of the Executive Office

for United States Trustees (in this section referred to as the ‘‘Director’’) shall consult with a wide range of individuals who are experts

in the field of debtor education, including trustees who are appointed under chapter 13 of title 11 of the United States Code and

who operate financial management education programs for debtors,

and shall develop a financial management training curriculum and

materials that can be used to educate individual debtors on how to

better manage their finances.

(b) TEST—(1) The Director shall select 6 judicial districts of the

United States in which to test the effectiveness of the financial

management training curriculum and materials developed under

subsection (a).

(2) For a 18-month period beginning not later than 270 days

after the date of the enactment of this Act, such curriculum and

materials shall be, for the 6 judicial districts selected under paragraph (1), used as the instructional course concerning personal financial management for purposes of section 111 of this title.

(c) EVALUATION.—(1) During the 1-year period referred to in subsection (b), the Director shall evaluate the effectiveness of—

(A) the financial management training curriculum and materials developed under subsection (a); and

(B) a sample of existing consumer education programs such

as those described in the Report of the National Bankruptcy

Review Commission (October 20, 1997) that are representative

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

United States Code, and by consumer counselling groups.

(2) Not later than 3 months after concluding such evaluation, the

Director shall submit a report to the Speaker of the House of Representatives and the President pro tempore of the Senate, for referral to the appropriate committees of the Congress, containing the

findings of the Director regarding the effectiveness of such curriculum, such materials, and such programs and their costs.

Subtitle B—Consumer Bankruptcy

Protections

SEC. 105. DEFINITIONS.

(a) DEFINITIONS.—Section 101 of title 11, United States Code, is

amended—

(1) by inserting after paragraph (2) the following:

‘‘(3) ‘assisted person’ means any person whose debts consist

primarily of consumer debts and whose non-exempt assets are

less than $150,000;’’;
29

(2) by inserting after paragraph (4) the following:

‘‘(4A) ‘bankruptcy assistance’ means any goods or services

sold or otherwise provided to an assisted person with the express or implied purpose of providing information, advice,

counsel, document preparation or filing, or attendance at a

creditors’ meeting or appearing in a proceeding on behalf of another or providing legal representation with respect to a proceeding under this title;’’; and

(3) by inserting after paragraph (12A) the following:

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

any bankruptcy assistance to an assisted person in return for

the payment of money or other valuable consideration, or who

is a bankruptcy petition preparer pursuant to section 110 of

this title, but does not include any person that is any of the

following or an officer, director, employee or agent thereof—

‘‘(A) any nonprofit organization which is exempt from

taxation under section 501(c)(3) of the Internal Revenue

Code of 1986;

‘‘(B) any creditor of the person to the extent the creditor

is assisting the person to restructure any debt owed by the

person to the creditor; or

‘‘(C) any depository institution (as defined in section 3 of

the Federal Deposit Insurance Act) or any Federal credit

union or State credit union (as those terms are defined in

section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of such a depository institution or credit

union;’’.

(b) CONFORMING AMENDMENT.—In section 104(b)(1) by inserting

‘‘101(3),’’ after ‘‘sections’’.

SEC. 106. ENFORCEMENT.

(a) ENFORCEMENT.—Subchapter II of chapter 5 of title 11, United

States Code, is amended by adding at the end the following:

‘‘§ 526. Debt relief agency enforcement

‘‘(a) A debt relief agency shall not—

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

has told the assisted person or prospective assisted person the

agency would provide that person in connection with the preparation for or activities during a proceeding under this title;

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

person to make any statement in any document filed in a proceeding under this title, which is untrue and misleading or

which upon the exercise of reasonable care, should be known

by the debt relief agency to be untrue or misleading;

‘‘(3) misrepresent to any assisted person or prospective assisted person, directly or indirectly, affirmatively or by material omission, what services the debt relief agency can reasonably expect to provide that person, or the benefits an assisted

person may obtain or the difficulties the person may experience if the person seeks relief in a proceeding pursuant to this

title; or

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

to incur more debt in contemplation of that person filing a proceeding under this title or in order to pay an attorney or bank-
30

ruptcy petition preparer fee or charge for services performed as

part of preparing for or representing a debtor in a proceeding

under this title.’’.

‘‘(b) ASSISTED PERSON WAIVERS INVALID.—Any waiver by any assisted person of any protection or right provided by or under this

section shall not be enforceable against the debtor by any Federal

or State court or any other person, but may be enforced against a

debt relief agency.

‘‘(c) NONCOMPLIANCE.— ‘‘(1) Any contract between a debt relief agency and an assisted person for bankruptcy assistance which does not comply

with the material requirements of this section shall be treated

as void and may not be enforced by any Federal or State court

or by any other person.

‘‘(2) Any debt relief agency shall be liable to an assisted person in the amount of any fees or charges in connection with

providing bankruptcy assistance to such person which the debt

relief agency has received, for actual damages, and for reasonable attorneys’ fees and costs if the debt relief agency is found,

after notice and hearing, to have—

‘‘(A) intentionally or negligently failed to comply with

any provision of this section with respect to a bankruptcy

case or related proceeding of the assisted person;

‘‘(B) provided bankruptcy assistance to an assisted person in a case or related proceeding which is dismissed or

converted because of the debt relief agency’s intentional or

negligent failure to file bankruptcy papers, including papers specified in section 521 of this title; or

‘‘(C) intentionally or negligently disregarded the material

requirements of this title or the Federal Rules of Bankruptcy Procedure applicable to such debt relief agency.

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

State law, whenever the chief law enforcement officer of a

State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this

section, the State—

‘‘(A) may bring an action to enjoin such violation;

‘‘(B) may bring an action on behalf of its residents to recover the actual damages of assisted persons arising from

such violation, including any liability under paragraph (2);

and

‘‘(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action

and reasonable attorney fees as determined by the court.

‘‘(4) The United States District Court for any district located

in the State shall have concurrent jurisdiction of any action

under subparagraph (A) or (B) of paragraph (3).

‘‘(5) Notwithstanding any other provision of Federal law and

in addition to any other remedy provided under Federal or

State law, if the court, on its own motion or on the motion of

the United States trustee or the debtor, finds that a person intentionally violated this section, or engaged in a clear and consistent pattern or practice of violating this section, the court

may—
31

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

‘‘(B) impose an appropriate civil penalty against such

person.

‘‘(c) RELATION TO STATE LAW.—This section shall not annul,

alter, affect or exempt any person subject to those sections from

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

law is inconsistent with those sections, and then only to the extent

of the inconsistency.’’.

(b) CONFORMING AMENDMENT.—The table of sections for chapter

5 of title 11, United States Code, is amended by inserting after the

item relating to section 527, the following:

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

SEC. 107. SENSE OF THE CONGRESS.

It is the sense of the Congress that States should develop curricula relating to the subject of personal finance, designed for use in

elementary and secondary schools.

SEC. 108. DISCOURAGING ABUSIVE REAFFIRMATION PRACTICES.

(a) Section 524 of title 11, United States Code, is amended—

(1) in subsection (c)(2)(B) by adding at the end the following:

‘‘(C)(i) such agreement contains a clear and conspicuous

statement advising the debtor of the amount of the monthly payments, the total amount payable and number of payments if the payments are made according to schedule, the

amount of the total payment attributable to principal, interest, late fees, and creditor’s attorneys fees, the interest

rate, and the ways in which terms differ from the original

agreement; and

‘‘(ii) if the debt is secured, the agreement is accompanied

by a copy of the instrument creating the debt and any security interest or lien and the documents necessary to

show perfection of the interest, and the agreement contains a clear and conspicuous statement that advises the

debtor of the value of the collateral and the date on which

the lien will be released if payments are made according

to schedule;’’;

(2) in subsection (c)(6)(B), by inserting after ‘‘real property’’

the following: ‘‘or is a debt described in subsection (c)(7)’’; and

(3) by adding at the end of subsection (c) the following:

‘‘(7) in a case concerning an individual, if the consideration

for such agreement is based on whole or in part on an unsecured consumer debt, or is based on whole or in part upon a

debt for an item of personalty, the value of which at point of

purchase was $500 or less, and in which the creditor asserts

a security interest, the court approves such agreement as—

‘‘(A) in the best interest of the debtor in light of the debtor’s income and expenses;

‘‘(B) not imposing an undue hardship on the debtor’s future ability of the debtor to pay for the needs of children

and other dependents (including court ordered support);

‘‘(C) not requiring the debtor to pay the creditor’s attorney’s fees, expenses, or other costs relating to the collection of the debt;
32

‘‘(D) not agreed upon by the debtor to protect property

necessary for the care and maintenance of children or

other dependents that would have nominal value on repossession;

‘‘(E) not the product of coercive threats or actions by the

creditor in the creditor’s course of dealings with the debtor;

and

‘‘(F) not unfair because excessive in amount as compared

to the value of the collateral;

(4) in subsection (d)(2) by striking ‘‘subsections (c)(6)’’ and inserting ‘‘subsections (c)(6) and (c)(7)’’, and after ‘‘of this section,’’ by striking ‘‘if the consideration for such agreement is

based in whole or in part on a consumer debt that is not secured by real property of the debtor’’ and adding at the end ‘‘as

applicable’’.

(b) Section 104 of title 11, United States Code, as amended by

subsection ll of this Act, is amended by striking out

‘‘523(a)(2)(C), and 707(b)(3)’’ each place it appears and inserting

‘‘523(a)(2)(C), 524(c)(7), and 707(b)(3)’’ in lieu thereof.

SEC. 109. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.

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

Code, is amended by adding at the end the following:

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

may reduce a claim filed under this section based wholly on unsecured consumer debts by not more than 20 percent, if the debtor

can prove by clear and convincing evidence that the claim was filed

by a creditor who unreasonably refused to negotiate a reasonable

alternative repayment schedule proposed by an approved credit

counseling agency acting on behalf of the debtor, and if—

‘‘(A) such offer was made within the period beginning 60

days before the filing of the petition;

‘‘(B) such offer provided for payment of at least 60 percent

of the amount of the debt over a period not to exceed the repayment period of the loan, or a reasonable extension thereof;

and

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

schedule is nondischargeable, is entitled to priority under section 507 of this title, or would be paid a greater percentage in

a chapter 13 proceeding than offered by the debtor.

‘‘(2) The debtor shall have the burden of proving that the proposed alternative repayment schedule was made in the 60-day period specified in subparagraph (A) and that the creditor unreasonably refused to consider the debtor’s proposal.’’.

(b) LIMITATION ON AVOIDABILITY.—Section 547 of title 11, United

States Code, is amended by adding at the end the following:

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

made as a part of an alternative repayment plan between the debtor and any creditor of the debtor created by an approved credit

counseling agency.’’.

SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A DWELLING.

(a) STUDY REQUIRED.—During the period beginning 180 days

after the date of enactment of this Act and ending 18 months after
33

the date of the enactment, the Board of Governors of the Federal

Reserve System (in this section referred to as the ‘‘Board’’) shall

conduct a study and submit to Congress a report (including recommendations for any appropriate legislation) regarding—

(1) whether a consumer engaging in an open-end credit

transaction (as defined pursuant to section 103 of the Truth in

lending Act) secured by the consumer’s principal dwelling is

provided adequate information under Federal law, including

under section 127A of the Truth in Lending Act, regarding the

tax deductibility of interest paid on such transaction; and

(2) whether a consumer engaging in a closed-end credit

transaction (as defined pursuant to section 103 of the Truth in

Lending Act) secured by the consumer’s principal dwelling is

provided adequate information regarding the tax deductibility

of interest paid on such transaction.

In conducting such study, the Board shall specifically consider

whether additional disclosures are necessary with respect to such

open-end or closed-end credit transactions in which the amount of

the credit extended exceeds the fair market value of the dwelling.

(b) REGULATIONS.—If the Board determines that additional disclosures are necessary in connection with transactions described in

subsection (a), the Board, pursuant to its authority under the

Truth in Lending Act, may promulgate regulations that would require such additional disclosures. Any such regulations promulgated by the Board under this section shall not take effect before

the end of the 36-month period after the date of the enactment of

this Act.

SEC. 111. DUAL USE DEBIT CARD.

(a) STUDY REQUIRED.—The Board of Governors of the Federal Reserve System (in this section referred to as the ‘‘Board’’) shall conduct a study of existing protections provided to consumers to limit

their liability for unauthorized use of a debit card or similar access

device.

(b) SPECIFIC CONSIDERATIONS.—In conducting the study required

by subsection (a), the Board shall specifically consider the

following—

(1) the extent to which existing provisions of section 909 of

the Electronic Fund Transfer Act and the Board’s implementing regulations provide adequate unauthorized use liability

protection for consumers;

(2) the extent to which any voluntary industry rules have enhanced the level of protection afforded consumers in connection

with such unauthorized use liability; and

(3) whether amendments to the Electronic Funds Transfer

Act or the Board’s implementing regulations thereto are necessary to provide adequate protection for consumers in this

area.

(c) REPORT AND REGULATIONS.—Not later than 2 years after the

date of the enactment of this Act, the Board shall make public a

report on its findings with respect to the adequacy of existing protections afforded consumers with respect to unauthorized-use liability for debit cards and similar access devices. If the Board determines that such protections are inadequate, the Board, pursuant to

its authority under the Electronic Funds Transfer Act, may issue
34

regulations to address such inadequacy. Any regulations issued by

the Board shall not be effective before 36 months after the date of

the enactment of this Act.

SEC. 112. DISCOURAGING RECKLESS LENDING PRACTICES.

(a) LIMITING CLAIMS ARISING FROM IRRESPONSIBLE LENDING

PRACTICES.—Section 502(b) of title 11, United States Code, is

amended—

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

(2) in paragraph (9) by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following:

‘‘(10) the claim is for a consumer debt under an open end

credit plan (as defined in section 103 of the Truth in Lending

Act) and before incurring such debt under such plan the debtor

was not informed in writing in a clear and conspicuous manner

(or in the case of a worldwide web-based solicitation to open a

credit card account under such plan, at the time of solicitation

by the person making the solicitation to open such account)—

‘‘(A) of the method of determining the required minimum

payment amount, if a minimum payment is required that

is different from the amount of any finance charge, and

the charges or penalties, if any, which may be imposed for

failure by the obligor to pay the required finance charge or

minimum payment amount;

‘‘(B) of repayment information that would apply to the

outstanding balance of the consumer under the credit plan,

including—

‘‘(i) the required minimum monthly payment on that

balance, represented as both a dollar figure and a percentage of that balance;

‘‘(ii) the number of months (rounded to the nearest

month) that it would take to pay the entire amount of

that current balance if the consumer pays only the required minimum monthly payments and if no further

advances are made;

‘‘(iii) the total cost to the consumer, including interest and principal payments, of paying that balance in

full if the consumer pays only the required minimum

monthly payments and if no further advances are

made; and

(iv) the following statement: ‘If your current rate is

a temporary introductory rate, your total costs may be

higher.’ ;

‘‘(C) of the method for determining the required minimum payment amount to be paid for each billing cycle,

and the charge or penalty, if any, to be imposed for any

failure by the obligor to pay the required minimum payment amount;

‘‘(D) of any charge that may be imposed due to the failure of the obligor to make payment on or before a required

payment due date, the date that payment is due or, if different, the date on which a late payment fee will be

charged, and that the terms and conditions of such charge

will be stated prominently in a conspicuous location on
35

each billing statement, together with the amount of the

charge to be imposed if payment is made after such date;

and

‘‘(E) in any application or solicitation for a credit card

issued under such plan that offers, during an introductory

period of less than 1 year, an annual percentage rate of interest that—

‘‘(i) is less than the annual percentage rate of interest which will apply after the end of such introductory

period, of such rate in a statement that includes the

following: ‘The annual percentage rate of interest applicable during the introductory period is not the annual percentage rate which will apply after the end of

the introductory period. The permanent annual percentage rate will apply after [insert applicable date]

and will be [insert applicable percentage rate].’ ; or

‘‘(ii) varies in accordance with an index, which is

less than the current annual percentage rate under

the index which will apply after the end of such period, of such rate in a statement that includes the following: ‘The annual percentage rate of interest applicable during the introductory period is not the annual

percentage rate which will apply after the end of the

introductory period. The permanent annual percentage

rate will be determined by an index and will apply

after [insert date]. If the index which will apply after

such date were applied to your account today, the annual percentage rate would be [insert applicable percentage rate].’ ;

‘‘(11) such claim is for a debt that arose from a credit card

account under an open end credit plan (as defined in section

103 of the Truth in Lending Act, for which account a creditor

imposed a fee based on inactivity for the account during any

period in which no advances were made if the obligor maintains any outstanding balance and is charged a finance charge

applicable to such balance;

‘‘(12) such claim is for a debt that arose from a credit card

account for which a credit card that was issued to or on behalf

of, any individual who has not attained 21 years of age except

in response to a written request or application to the card

issuer to open a credit card account containing—

‘‘(A) the signature of the parent or guardian of such individual indicating joint liability for debts incurred by such

individual in connection with the account before such individual reaches the age of 21; or

‘‘(B) a submission by such individual of financial information indicating an independent means of repaying any

obligation arising from the proposed extension of credit in

connection with the account;

‘‘(13) such claim is for a debt that arose on an account that

a creditor cancelled, imposed a minimum finance charge for

any period (including any annual period), imposed any fee in

lieu of a minimum finance charge, or imposed any other charge

or penalty with regard to such account or credit extended
36

under such account solely on the basis that any credit extended has been repaid in full before the end of any grace period applicable with respect to the extension of credit, excluding a flat annual fee imposed on the consumer in advance of

any annual period to cover the cost of maintaining a credit

card account during such annual period without regard to

whether any credit is actually extended under such account

during such period, or the actual finance charge applicable

with respect to any credit extended under such account during

such annual period at the annual percentage rate disclosed to

the consumer in accordance with this title for the period of

time any such credit is outstanding;

‘‘(14) such claim is for a debt that arose from an increase in

any annual percentage rate of interest (other than an increase

due to the expiration of any introductory percentage rate of interest or due solely to a change in another rate of interest to

which such rate is indexed) applicable to any outstanding balance of credit under such plan may take effect before the beginning of the billing cycle which begins not less than 15 days

after the obligor receives notice of such increase; and

‘‘(15) that if an obligor referred to in paragraph (14) cancels

the credit card account before the beginning of the billing cycle

referred to in such paragraph—

‘‘(A) if the an annual percentage rate of interest applicable after the cancellation with respect to such outstanding

balance on such account as of the date of cancellation exceeds any annual percentage rate of interest applicable

with respect to such balance under the terms and conditions in effect before the increase referred to in paragraph

(14); and

‘‘(B) the repayment of such outstanding balance after the

cancellation is not subject to all other terms and conditions

applicable with respect to such account before the increase

referred to in such paragraph;

(b) DEFINITION.—Section 101 of title 11, United States Code, is

amended by inserting after paragraph (9) the following:

‘‘(9A) ‘credit card’ includes any dual purpose or multifunction

card, including a stored-value card, debit card, check card,

check guarantee card, or purchase-price discount card, that is

connected with an open end credit plan (as defined in section

103 of the Truth in Lending Act) and can be used, either on

issuance or upon later activation, to obtain credit directly or indirectly.’’.

SEC. 113. PROTECTION OF SAVINGS EARMARKED FOR THE POSTSECONDARY EDUCATION OF CHILDREN.

Section 522 of title 11, United States Code, is amended—

(1) in subsection (b)(2)—

(A) in subparagraph (A) by striking ‘‘and’’ at the end;

(B) in subparagraph (B) by striking the period at the end

and inserting ‘‘; and’’; and

(C) by adding at the end the following:

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

education individual retirement account (as defined in section

530(b)(1) of the Internal Revenue Code of 1986) not less than
37

365 days before the date of entry of the order of relief but only

to the extent such funds—

‘‘(i) are not pledged or promised to any entity in connection with any extension of credit; and

‘‘(ii) are not excess contributions (as described in section

4973(e) of the Internal Revenue Code of 1986).’’; and

(2) by adding at the end the following:

‘‘(n) For purposes of subsection (b)(3)(C), funds placed in an education individual retirement account shall not be exempt under this

subsection—

‘‘(1) unless the designated beneficiary of such account was a

dependent child of the debtor for the taxable year for which the

funds were placed in such account; and

‘‘(2) to the extent such funds exceed—

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

the same designated beneficiary; or

‘‘(B) $100,000 in the aggregate in all such accounts attributable to all such dependent children of the debtor.’’.

SEC. 114. EFFECT OF DISCHARGE.

Section 524 of title 11, United States Code, is amended by adding

at the end the following:

‘‘(i) The willful failure of a creditor to credit payments received

under a plan confirmed under this title (including a plan of reorganization confirmed under chapter 11 of this title) in the manner required by the plan (including crediting the amounts required under

the plan) shall constitute a violation of any injunction under subsection (a)(2) which has arisen at the time of the failure.

‘‘(j) An individual who is injured by the willful failure of a creditor to comply with the requirements for a reaffirmation agreement

under subsections (c) and (d), or by any willful violation of the injunction under subsection (a)(2), shall be entitled to recover—

‘‘(1) the greater of—

‘‘(A) the amount of actual damages; or

‘‘(B) $1,000; and

‘‘(2) costs and attorneys’ fees.’’.

SEC. 115. LIMITING TRUSTEE LIABILITY.

(a) QUALIFICATION OF TRUSTEE.—Section 322 of title 11, United

States Code, is amended—

(1) in subsection (a) by adding at the end the following:

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

or on such trustee’s bond for acts taken within the scope of the

trustee’s duties or authority as delineated by other sections of

this title or by order of the court, except to the extent that the

trustee acted with gross negligence. Gross negligence shall be

defined as reckless indifference or deliberate disregard of the

trustee’s fiduciary duty.’’; and

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

scope of the trustee’s authority defined in subsection (a)’’ before

the period at the end.

(b) ROLE AND CAPACITY OF TRUSTEE.—Section 323 of title 11,

United States Code, is amended—
38

(1) in subsection (b) by inserting at the end the following: ‘‘in

the trustee’s official capacity as representative of the estate’’

before the period at the end; and

(2) by adding at the end the following:

‘‘(c) The trustee in a case under this title may not be sued, either

personally, in a representative capacity, or against the trustee’s

bond in favor of the United States—

‘‘(1) for acts taken in furtherance of the trustee’s duties or

authority in a case in which the debtor is subsequently determined to be ineligible for relief under the chapter in which the

trustee was appointed; or

‘‘(2) for the dissemination of statistics and other information

regarding a case or cases, unless the trustee has actual knowledge that the information is false.

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

personal capacity without leave of the bankruptcy court in which

the case is pending.’’.

SEC. 116. REINFORCE THE FRESH START.

(a) RESTORATION OF AN EFFECTIVE DISCHARGE.—Section

523(a)(17) of title 11, United States Code, is amended—

(1) by striking ‘‘by a court’’ and inserting ‘‘by any court’’,

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

(3) by inserting ‘‘(or a similar non-Federal law)’’ after ‘‘title

28’’ each place it appears.

SEC. 117. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

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

(2) in paragraph (2) by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following new paragraphs:

‘‘(3) If a single or joint case is filed by or against an individual debtor under chapter 7, 11, or 13 (other than a case refiled

under a chapter other than chapter 7 after dismissal under

section 707(b) of this title), and if a single or joint case of the

debtor was pending within the previous 1-year period but was

dismissed, the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such

debt or with respect to any lease will terminate with respect

to the debtor on the 30th day after the filing of the later case.

Upon motion by a party in interest for continuation of the

automatic stay and upon notice and a hearing, the court may

extend the stay in particular cases as to any or all creditors

(subject to such conditions or limitations as the court may then

impose) after notice and a hearing completed before the expiration of the 30-day period only if the party in interest demonstrates that the filing of the later case is in good faith as to

the creditors to be stayed. A case is presumptively filed not in

good faith (but such presumption may be rebutted by clear and

convincing evidence to the contrary)—

‘‘(A) as to all creditors if—
39

‘‘(i) more than 1 previous case under any of chapter

7, 11, or 13 in which the individual was a debtor was

pending within such 1-year period;

‘‘(ii) a previous case under any of chapters 7, 11, or

13 in which the individual was a debtor was dismissed

within such 1-year period, after the debtor failed to

file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be

substantial excuse unless the dismissal was caused by

the negligence of the debtor’s attorney), failed to provide adequate protection as ordered by the court, or

failed to perform the terms of a plan confirmed by the

court; or

‘‘(iii) there has not been a substantial change in the

financial or personal affairs of the debtor since the dismissal of the next most previous case under any of

chapters 7, 11, or 13 of this title, or there is not any

other reason to conclude that the later case will be

concluded, if a case under chapter 7 of this title, with

a discharge, and if a chapter 11 or 13 case, a confirmed plan which will be fully performed;

‘‘(B) as to any creditor that commenced an action under

subsection (d) in a previous case in which the individual

was a debtor if, as of the date of dismissal of such case,

that action was still pending or had been resolved by terminating, conditioning, or limiting the stay as to actions of

such creditor.

‘‘(4) If a single or joint case is filed by or against an individual debtor under this title (other than a case refiled under a

chapter other than chapter 7 after a dismissal under section

707(b) of this title), and if 2 or more single or joint cases of the

debtor were pending within the previous year but were dismissed, the stay under subsection (a) will not go into effect

upon the filing of the later case. On request of a party in interest, the court shall promptly enter an order confirming that no

stay is in effect. If a party in interest requests within 30 days

of the filing of the later case, the court may order the stay to

take effect in the case as to any or all creditors (subject to such

conditions or limitations as the court may impose), after notice

and hearing, only if the party in interest demonstrates that the

filing of the later case is in good faith as to the creditors to be

stayed. A stay imposed pursuant to the preceding sentence will

be effective on the date of entry of the order allowing the stay

to go into effect. A case is presumptively not filed in good faith

(but such presumption may be rebutted by clear and convincing evidence to the contrary)—

‘‘(A) as to all creditors if—

‘‘(i) 2 or more previous cases under this title in

which the individual was a debtor were pending within the 1-year period;

‘‘(ii) a previous case under this title in which the individual was a debtor was dismissed within the time

period stated in this paragraph after the debtor failed
40

to file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be

substantial excuse unless the dismissal was caused by

the negligence of the debtor’s attorney), failed to provide adequate protection as ordered by the court, or

failed to perform the terms of a plan confirmed by the

court; or

‘‘(iii) there has not been a substantial change in the

financial or personal affairs of the debtor since the dismissal of the next most previous case under this title,

or there is not any other reason to conclude that the

later case will be concluded, if a case under chapter 7,

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

with a confirmed plan that will be fully performed; or

‘‘(B) as to any creditor that commenced an action under

subsection (d) in a previous case in which the individual

was a debtor if, as of the date of dismissal of such case,

such action was still pending or had been resolved by terminating, conditioning, or limiting the stay as to action of

such creditor.’’.

SEC. 118. CURBING ABUSIVE FILINGS.

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

is amended—

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

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

inserting ‘‘; or’’; and

(3) by adding at the end the following:

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

under subsection (a), by a creditor whose claim is secured by

an interest in such real estate, if the court finds that the filing

of the bankruptcy petition was part of a scheme to delay,

hinder, and defraud creditors that involved either—

‘‘(A) transfer of all or part ownership of, or other interest

in, the real property without the consent of the secured

creditor or court approval; or

‘‘(B) multiple bankruptcy filings affecting the real property.

If recorded in compliance with applicable State laws governing notices of interests or liens in real property, an order entered pursuant to this subsection shall be binding in any other case under this

title purporting to affect the real property filed not later than 2

years after that recording, except that a debtor in a subsequent

case may move for relief from such order based upon changed circumstances or for good cause shown, after notice and a hearing.

Any Federal, State, or local governmental unit which accepts notices of interests or liens in real property shall accept any certified

copy of an order described in this subsection for indexing and recording.’’.

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

Code, is amended—

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

(2) in paragraph (18) by striking the period at the end and

inserting a semicolon; and
41

(3) by inserting after paragraph (18) the following:

‘‘(19) under subsection (a), of any act to enforce any lien

against or security interest in real property following the entry

of an order under section 362(d)(4) of this title as to that property in any prior bankruptcy case for a period of 2 years after

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

changed circumstances or for other good cause shown (consistent with the standards for good faith in subsection (c)), after

notice and a hearing; or

‘‘(20) under subsection (a), of any act to enforce any lien

against or security interest in real property—

‘‘(A) if the debtor is ineligible under section 109(g) of this

title to be a debtor in a bankruptcy case; or

‘‘(B) if the bankruptcy case was filed in violation of a

bankruptcy court order in a prior bankruptcy case prohibiting the debtor from being a debtor in another bankruptcy

case.’’.

SEC. 119. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

Title 11, United States Code, is amended—

(1) in section 521—

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

inserting a semicolon;

(B) in paragraph (5) by striking the period at the end

and inserting ‘‘; and’’; and

(C) by adding at the end the following:

‘‘(6) in an individual case under chapter 7 of this title, not

retain possession of personal property as to which a creditor

has an allowed claim for the purchase price secured in whole

or in part by an interest in that personal property unless, in

the case of an individual debtor, the debtor takes 1 of the following actions within 45 days after the first meeting of creditors under section 341(a)—

‘‘(A) enters into an agreement with the creditor pursuant

to section 524(c) of this title with respect to the claim secured by such property; or

‘‘(B) redeems such property from the security interest

pursuant to section 722 of this title.

‘‘If the debtor fails to so act within the 45-day period, the stay

under section 362(a) of this title is terminated with respect to

the personal property of the estate or of the debtor which is affected, such property shall no longer be property of the estate,

and the creditor may take whatever action as to such property

as is permitted by applicable nonbankruptcy law, unless the

court determines on the motion of the trustee brought before

the expiration of such 45-day period, and after notice and a

hearing, that such property is of consequential value or benefit

to the estate, orders appropriate adequate protection of the

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

(2) in section 722 by inserting ‘‘in full at the time of redemption’’ before the period at the end.
42

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

DOES NOT COMPLETE INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.

Title 11, United States Code, is amended as follows—

(1) in section 362—

(A) by striking ‘‘(e), and (f)’’ in subsection (c) and inserting in lieu thereof ‘‘(e), (f), and (h)’’; and

(B) by redesignating subsection (h) as subsection (i) and

by inserting after subsection (g) the following:

‘‘(h) In an individual case pursuant to chapter 7, 11, or 13 the

stay provided by subsection (a) is terminated with respect to personal property of the estate or of the debtor securing in whole or

in part a claim, or subject to an unexpired lease, and such personal

property shall no longer be property of the estate if the debtor fails

within the applicable time set by section 521(a)(2) of this title—

‘‘(1) to file timely any statement of intention required under

section 521(a)(2) of this title with respect to that property or

to indicate therein that the debtor will either surrender the

property or retain it and, if retaining it, either redeem the

property pursuant to section 722 of this title, reaffirm the debt

it secures pursuant to section 524(c) of this title, or assume the

unexpired lease pursuant to section 365(p) of this title if the

trustee does not do so, as applicable; or

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

intention, as it may be amended before expiration of the period

for taking action, unless the statement of intention specifies reaffirmation and the creditor refuses to reaffirm on the original

contract terms;

unless the court determines on the motion of the trustee filed before the expiration of the applicable time set by section 521(a)(2),

and after notice and a hearing, that such property is of consequential value or benefit to the estate, orders appropriate adequate protection of the creditor’s interest, and orders the debtor to deliver

any collateral in the debtor’s possession to the trustee. If the court

does not so determine an order, the stay shall terminate upon the

conclusion of the proceeding on the motion.’’; and

(2) in section 521, as amended by sections 603 and 604—

(A) in paragraph (2) by striking ‘‘consumer’’;

(B) in paragraph (2)(B)—

(i) by striking ‘‘forty-five days after the filing of a notice of intent under this section’’ and inserting ‘‘30

days after the first date set for the meeting of creditors under section 341(a) of this title’’; and

(ii) by striking ‘‘forty-five day’’ the second place it

appears and inserting ‘‘30-day’’;

(C) in paragraph (2)(C) by inserting ‘‘except as provided

in section 362(h) of this title’’ before the semicolon; and

(D) by inserting after subsection (b) the following:

‘‘(c) If the debtor fails timely to take the action specified in subsection (a)(6) of this section, or in paragraphs (1) and (2) of section

362(h) of this title, with respect to property which a lessor or bailor

owns and has leased, rented, or bailed to the debtor or as to which

a creditor holds a security interest not otherwise voidable under

section 522(f), 544, 545, 547, 548, or 549 of this title, nothing in

this title shall prevent or limit the operation of a provision in the
43

underlying lease or agreement which has the effect of placing the

debtor in default under such lease or agreement by reason of the

occurrence, pendency, or existence of a proceeding under this title

or the insolvency of the debtor. Nothing in this subsection shall be

deemed to justify limiting such a provision in any other circumstance.’’.

SEC. 121. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.

Section 1325(a)(5)(B)(i) of title 11, United States Code, is amended to read as follows:

‘‘(i) the plan provides that the holder of such claim retain the lien securing such claim until the earlier of payment of the underlying debt determined under nonbankruptcy law or discharge under section 1328 of this title,

and that if the case under this chapter is dismissed or converted without completion of the plan, such lien shall also

be retained by such holder to the extent recognized by applicable nonbankruptcy law; and’’.

SEC. 123. FAIR VALUATION OF COLLATERAL.

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

adding at the end the following:

‘‘In the case of an individual debtor under chapters 7 and 13, such

value with respect to personal property securing an allowed claim

shall be determined based on the replacement value of such property as of the date of filing the petition without deduction for costs

of sale or marketing. With respect to property acquired for personal, family, or household purpose, replacement value shall mean

the price a retail merchant would charge for property of that kind

considering the age and condition of the property at the time value

is determined.’’.

SEC. 124. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

Section 522(b)(2)(A) of title 11, United States Code, is amended—

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

(2) by striking ‘‘, or for a longer portion of such 180-day period than in any other place’’ and inserting ‘‘or if the debtor’s

domicile has not been located at a single State for such 730-

day period, the place in which the debtor’s domicile was located

for 180 days immediately preceding the 730-day period or for

a longer portion of such 180-day period than in any other

place’’.

SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT PROPERTY OBTAINED

THROUGH FRAUD.

Section 522 of title 11, United States Code, as amended by section 113, is amended—

(1) in subsection (b)(2)(A) by inserting ‘‘subject to subsection

(o),’’ before ‘‘any property’’; and

(2) by adding at the end the following:

‘‘(o) For purposes of subsection (b)(3)(A) and notwithstanding

subsection (a), the value of an interest in—

‘‘(1) real or personal property that the debtor or a dependent

of the debtor uses as a residence;

‘‘(2) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence; or
44

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

shall be reduced to the extent such value is attributable to any portion of any property that the debtor disposed of in the 730-day period ending of the date of the filing of the petition, with the intent

to hinder, delay, or defraud a creditor and that the debtor could not

exempt, or that portion that the debtor could not exempt, under

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

disposed of.’’.

SEC. 126. ROLLING STOCK EQUIPMENT.

(a) IN GENERAL.—Section 1168 of title 11, United States Code, is

amended to read as follows:

‘‘§ 1168. Rolling stock equipment

‘‘(a)(1) The right of a secured party with a security interest in or

of a lessor or conditional vendor of equipment described in paragraph (2) to take possession of such equipment in compliance with

an equipment security agreement, lease, or conditional sale contract, and to enforce any of its other rights or remedies under such

security agreement, lease, or conditional sale contract, to sell,

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

any power of the court, except that the right to take possession and

enforce those other rights and remedies shall be subject to section

362 of this title, if—

‘‘(A) before the date that is 60 days after the date of commencement of a case under this chapter, the trustee, subject to

the court’s approval, agrees to perform all obligations of the

debtor under such security agreement, lease, or conditional

sale contract; and

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

section 365(b)(2) of this title, under such security agreement,

lease, or conditional sale contract—

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

case and is an event of default therewith is cured before

the expiration of such 60-day period;

‘‘(ii) that occurs or becomes an event of default after the

date of commencement of the case and before the expiration of such 60-day period is cured before the later of—

‘‘(I) the date that is 30 days after the date of the default or event of the default; or

‘‘(II) the expiration of such 60-day period; and

‘‘(iii) that occurs on or after the expiration of such 60-day

period is cured in accordance with the terms of such security agreement, lease, or conditional sale contract, if cure

is permitted under that agreement, lease, or conditional

sale contract.

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

‘‘(A) is rolling stock equipment or accessories used on rolling

stock equipment, including superstructures or racks, that is

subject to a security interest granted by, leased to, or conditionally sold to a debtor; and

‘‘(B) includes all records and documents relating to such

equipment that are required, under the terms of the security

agreement, lease, or conditional sale contract, that is to be sur-
45

rendered or returned by the debtor in connection with the surrender or return of such equipment.

‘‘(3) Paragraph (1) applies to a secured party, lessor, or conditional vendor acting in its own behalf or acting as trustee or otherwise in behalf of another party.

‘‘(b) The trustee and the secured party, lessor, or conditional vendor whose right to take possession is protected under subsection (a)

may agree, subject to the court’s approval, to extend the 60-day period specified in subsection (a)(1).

‘‘(c)(1) In any case under this chapter, the trustee shall immediately surrender and return to a secured party, lessor, or conditional vendor, described in subsection (a)(1), equipment described

in subsection (a)(2), if at any time after the date of commencement

of the case under this chapter such secured party, lessor, or conditional vendor is entitled pursuant to subsection (a)(1) to take possession of such equipment and makes a written demand for such

possession of the trustee.

‘‘(2) At such time as the trustee is required under paragraph (1)

to surrender and return equipment described in subsection (a)(2),

any lease of such equipment, and any security agreement or conditional sale contract relating to such equipment, if such security

agreement or conditional sale contract is an executory contract,

shall be deemed rejected.

‘‘(d) With respect to equipment first placed in service on or prior

to October 22, 1994, for purposes of this section—

‘‘(1) the term ‘lease’ includes any written agreement with respect to which the lessor and the debtor, as lessee, have expressed in the agreement or in a substantially contemporaneous writing that the agreement is to be treated as a lease

for Federal income tax purposes; and

‘‘(2) the term ‘security interest’ means a purchase-money

equipment security interest.

‘‘(e) With respect to equipment first placed in service after October 22, 1994, for purposes of this section, the term ‘rolling stock

equipment’ includes rolling stock equipment that is substantially

rebuilt and accessories used on such equipment.’’.

(b) AIRCRAFT EQUIPMENT AND VESSELS.—Section 1110 of title 11,

United States Code, is amended to read as follows:

‘‘§ 1110. Aircraft equipment and vessels

‘‘(a)(1) Except as provided in paragraph (2) and subject to subsection (b), the right of a secured party with a security interest in

equipment described in paragraph (3), or of a lessor or conditional

vendor of such equipment, to take possession of such equipment in

compliance with a security agreement, lease, or conditional sale

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

such security agreement, lease, or conditional sale contract, to sell,

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

any power of the court.

‘‘(2) The right to take possession and to enforce the other rights

and remedies described in paragraph (1) shall be subject to section

362 of this title if—
46

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

order for relief under this chapter, the trustee, subject to the

approval of the court, agrees to perform all obligations of the

debtor under such security agreement, lease, or conditional

sale contract; and

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

section 365(b)(2) of this title, under such security agreement,

lease, or conditional sale contract—

‘‘(i) that occurs before the date of the order is cured before the expiration of such 60-day period;

‘‘(ii) that occurs after the date of the order and before the

expiration of such 60-day period is cured before the later

of—

‘‘(I) the date that is 30 days after the date of the default; or

‘‘(II) the expiration of such 60-day period; and

‘‘(iii) that occurs on or after the expiration of such 60-day

period is cured in compliance with the terms of such security agreement, lease, or conditional sale contract, if a cure

is permitted under that agreement, lease, or contract.

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

‘‘(A) is—

‘‘(i) an aircraft, aircraft engine, propeller, appliance, or

spare part (as defined in section 40102 of title 49) that is

subject to a security interest granted by, leased to, or conditionally sold to a debtor that, at the time such transaction is entered into, holds an air carrier operating certificate issued pursuant to chapter 447 of title 49 for aircraft

capable of carrying 10 or more individuals or 6,000 pounds

or more of cargo; or

‘‘(ii) a documented vessel (as defined in section 30101(1)

of title 46) that is subject to a security interest granted by,

leased to, or conditionally sold to a debtor that is a water

carrier that, at the time such transaction is entered into,

holds a certificate of public convenience and necessity or

permit issued by the Department of Transportation; and

‘‘(B) includes all records and documents relating to such

equipment that are required, under the terms of the security

agreement, lease, or conditional sale contract, to be surrendered or returned by the debtor in connection with the surrender or return of such equipment.

‘‘(4) Paragraph (1) applies to a secured party, lessor, or conditional vendor acting in its own behalf or acting as trustee or otherwise in behalf of another party.

‘‘(b) The trustee and the secured party, lessor, or conditional vendor whose right to take possession is protected under subsection (a)

may agree, subject to the approval of the court, to extend the 60-

day period specified in subsection (a)(1).

‘‘(c)(1) In any case under this chapter, the trustee shall immediately surrender and return to a secured party, lessor, or conditional vendor, described in subsection (a)(1), equipment described

in subsection (a)(3), if at any time after the date of the order for

relief under this chapter such secured party, lessor, or conditional

vendor is entitled pursuant to subsection (a)(1) to take possession
47

of such equipment and makes a written demand for such possession to the trustee.

‘‘(2) At such time as the trustee is required under paragraph (1)

to surrender and return equipment described in subsection (a)(3),

any lease of such equipment, and any security agreement or conditional sale contract relating to such equipment, if such security

agreement or conditional sale contract is an executory contract,

shall be deemed rejected.

‘‘(d) With respect to equipment first placed in service on or before

October 22, 1994, for purposes of this section—

‘‘(1) the term ‘lease’ includes any written agreement with respect to which the lessor and the debtor, as lessee, have expressed in the agreement or in a substantially contemporaneous writing that the agreement is to be treated as a lease

for Federal income tax purposes; and

‘‘(2) the term ‘security interest’ means a purchase-money

equipment security interest.’’.

SEC. 127. DISCHARGE UNDER CHAPTER 13.

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

striking paragraphs (1) through (3) and inserting the following:

‘‘(1) provided for under section 1322(b)(5) of this title;

‘‘(2) of the kind specified in paragraph (2), (4), (3)(B), (5), (8),

or (9) of section 523(a) of this title;

‘‘(3) for restitution, or a criminal fine, included in a sentence

on the debtor’s conviction of a crime; or

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

against the debtor as a result of willful or malicious injury by

the debtor that caused personal injury to an individual or the

death of an individual.’’.

SEC. 128. BANKRUPTCY JUDGESHIPS.

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

Judgeship Act of 1999’’.

(b) TEMPORARY JUDGESHIPS.—

(1) APPOINTMENTS.—The following judgeship positions shall

be filled in the manner prescribed in section 152(a)(1) of title

28, United States Code, for the appointment of bankruptcy

judges provided for in section 152(a)(2) of such title:

(A) One additional bankruptcy judgeship for the eastern

district of California.

(B) Four additional bankruptcy judgeships for the central district of California.

(C) One additional bankruptcy judgeship for the southern district of Florida.

(D) Two additional bankruptcy judgeships for the district

of Maryland.

(E) One additional bankruptcy judgeship for the eastern

district of Michigan.

(F) One additional bankruptcy judgeship for the southern district of Mississippi.

(G) One additional bankruptcy judgeship for the district

of New Jersey.

(H) One additional bankruptcy judgeship for the eastern

district of New York.
48

(I) One additional bankruptcy judgeship for the northern

district of New York.

(J) One additional bankruptcy judgeship for the southern district of New York.

(K) One additional bankruptcy judgeship for the eastern

district of Pennsylvania.

(L) One additional bankruptcy judgeship for the middle

district of Pennsylvania.

(M) One additional bankruptcy judgeship for the western

district of Tennessee.

(N) One additional bankruptcy judgeship for the eastern

district of Virginia.

(2) VACANCIES.—The first vacancy occurring in the office of

a bankruptcy judge in each of the judicial districts set forth in

paragraph (1) that—

(A) results from the death, retirement, resignation, or removal of a bankruptcy judge; and

(B) occurs 5 years or more after the appointment date of

a bankruptcy judge appointed under paragraph (1);

shall not be filled.

(c) EXTENSIONS.—

(1) IN GENERAL.—The temporary bankruptcy judgeship positions authorized for the northern district of Alabama, the district of Delaware, the district of Puerto Rico, the district of

South Carolina, and the eastern district of Tennessee under

section 3(a) (1), (3), (7), (8), and (9) of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are extended until the

first vacancy occurring in the office of a bankruptcy judge in

the applicable district resulting from the death, retirement,

resignation, or removal of a bankruptcy judge and occurring—

(A) 8 years or more after November 8, 1993, with respect

to the northern district of Alabama;

(B) 10 years or more after October 28, 1993, with respect

to the district of Delaware;

(C) 8 years or more after August 29, 1994, with respect

to the district of Puerto Rico;

(D) 8 years or more after June 27, 1994, with respect to

the district of South Carolina; and

(E) 8 years or more after November 23, 1993, with respect to the eastern district of Tennessee.

(2) APPLICABILITY OF OTHER PROVISIONS.—All other provisions of section 3 of the Bankruptcy Judgeship Act of 1992 remain applicable to such temporary judgeship position.

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

152(a)(1) of title 28, United States Code, is amended to read as follows: ‘‘Each bankruptcy judge to be appointed for a judicial district

as provided in paragraph (2) shall be appointed by the United

States court of appeals for the circuit in which such district is located.’’.

(e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—Section 156 of

title 28, United States Code, is amended by adding at the end the

following new subsection:

‘‘(g)(1) In this subsection, the term ‘travel expenses’—
49

‘‘(A) means the expenses incurred by a bankruptcy judge for

travel that is not directly related to any case assigned to such

bankruptcy judge; and

‘‘(B) shall not include the travel expenses of a bankruptcy

judge if—

‘‘(i) the payment for the travel expenses is paid by such

bankruptcy judge from the personal funds of such bankruptcy judge; and

‘‘(ii) such bankruptcy judge does not receive funds (including reimbursement) from the United States or any

other person or entity for the payment of such travel expenses.

‘‘(2) Each bankruptcy judge shall annually submit the information required under paragraph (3) to the chief bankruptcy judge for

the district in which the bankruptcy judge is assigned.

‘‘(3)(A) Each chief bankruptcy judge shall submit an annual report to the Director of the Administrative Office of the United

States Courts on the travel expenses of each bankruptcy judge assigned to the applicable district (including the travel expenses of

the chief bankruptcy judge of such district).

‘‘(B) The annual report under this paragraph shall include—

‘‘(i) the travel expenses of each bankruptcy judge, with the

name of the bankruptcy judge to whom the travel expenses

apply;

‘‘(ii) a description of the subject matter and purpose of the

travel relating to each travel expense identified under clause

(i), with the name of the bankruptcy judge to whom the travel

applies; and

‘‘(iii) the number of days of each travel described under

clause (ii), with the name of the bankruptcy judge to whom the

travel applies.

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

States Courts shall—

‘‘(i) consolidate the reports submitted under paragraph (3)

into a single report; and

‘‘(ii) annually submit such consolidated report to Congress.

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

shall include the specific information required under paragraph

(3)(B), including the name of each bankruptcy judge with respect

to clauses (i), (ii), and (iii) of paragraph (3)(B).’’.

SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES

CODE.

Section 507(a) of title 11, United States Code, is amended by inserting after paragraph (9) the following:

‘‘(10) Tenth, allowed claims for death or personal injuries resulting from the operation of a motor vehicle or vessel if such

operation was unlawful because the debtor was intoxicated

from using alcohol, a drug or another substance.’’.

SEC. 131. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE

STAY PROTECTS THE DEBTOR.

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

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

(2) by adding at the end the following:
50

‘‘(2)(A) Notwithstanding subsection (c) and except as provided in

subparagraph (B), in any case in which the debtor did not receive

the consideration for the claim held by a creditor, the stay provided

by subsection (a) shall apply to that creditor for a period not to exceed 30 days beginning on the date of the order for relief, to the

extent the creditor proceeds against—

‘‘(i) the individual that received that consideration; or

‘‘(ii) property not in the possession of the debtor that secures

that claim.

‘‘(B) Notwithstanding subparagraph (A), the stay provided by

subsection (a) shall apply in any case in which the debtor is primarily obligated to pay the creditor in whole or in part with respect

to a claim described in subparagraph (A) under a legally binding

separation or property settlement agreement or divorce or dissolution decree with respect to—

‘‘(i) an individual described in subparagraph (A)(i); or

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

‘‘(3) Notwithstanding subsection (c), the stay provided by subsection (a) shall terminate as of the date of confirmation of the

plan, in any case in which the plan of the debtor provides that the

debtor’s interest in personal property subject to a lease with respect to which the debtor is the lessee will be surrendered or abandoned or no payments will be made under the plan on account of

the debtor’s obligations under the lease.’’.

SEC. 132. ADEQUATE PROTECTION FOR INVESTORS.

(a) DEFINITION.—Section 101 of title 11, United States Code, is

amended by inserting after paragraph (48) the following:

‘‘(48A) ‘securities self regulatory organization’ means either a

securities association registered with the Securities and Exchange Commission pursuant to section 15A of the Securities

Exchange Act of 1934 or a national securities exchange registered with the Securities and Exchange Commission pursuant to section 6 of the Securities Exchange Act of 1934;’’.

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

Code, as amended by section 118, is amended—

(1) in paragraph (19) by striking ‘‘or’’ at the end;

(2) in paragraph (20) by striking the period at the end and

a inserting ‘‘; or’’; and

(3) by inserting after paragraph (20) the following:

‘‘(21) under subsection (a), of the commencement or continuation of an investigation or action by a securities self regulatory organization to enforce such organization’s regulatory

power; of the enforcement of an order or decision, other than

for monetary sanctions, obtained in an action by the securities

self regulatory organization to enforce such organization’s regulatory power; or of any act taken by the securities self regulatory organization to delist, delete, or refuse to permit

quotation of any stock that does not meet applicable regulatory

requirements.’’.

SEC. 134. GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL

PROPERTY BY ASSUMPTION.

Section 365 of title 11, United States Code, is amended by adding

at the end the following:
51

‘‘(p)(1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is

no longer property of the estate and the stay under section 362(a)

of this title is automatically terminated.

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

notify the creditor in writing that the debtor desires to assume the

lease. Upon being so notified, the creditor may, at its option, notify

the debtor that it is willing to have the lease assumed by the debtor and may, at its option, condition such assumption on cure of any

outstanding default on terms set by the contract. If within 30 days

of the notice from the creditor the debtor notifies the lessor in writing that the lease is assumed, the liability under the lease will be

assumed by the debtor and not by the estate. The stay under section 362 of this title and the injunction under section 524(a) of this

title shall not be violated by notification of the debtor and negotiation of cure under this subsection. Nothing in this paragraph shall

require a debtor to assume a lease, or a creditor to permit assumption.

‘‘(3) In a case under chapter 11 of this title in which the debtor

is an individual and in a case under chapter 13 of this title, if the

debtor is the lessee with respect to personal property and the lease

is not assumed in the plan confirmed by the court, the lease is

deemed rejected as of the conclusion of the hearing on confirmation. If the lease is rejected, the stay under section 362 of this title

and any stay under section 1301 is automatically terminated with

respect to the property subject to the lease.’’.

SEC. 135. ADEQUATE PROTECTION OF LESSORS AND PURCHASE

MONEY SECURED CREDITORS.

(a) IN GENERAL.—Chapter 13 of title 11, United States Code, is

amended by adding after section 1307 the following:

‘‘§ 1307A. Adequate protection in chapter 13 cases

‘‘(a)(1)(A) On or before the date that is 30 days after the filing

of a case under this chapter, the debtor shall make cash payments

in an amount determined under paragraph (2), to—

‘‘(i) any lessor of personal property; and

‘‘(ii) any creditor holding a claim secured by personal property to the extent that the claim is attributable to the purchase

of that property by the debtor.

‘‘(B) The debtor or the plan shall continue making the adequate

protection payments required under subparagraph (A) until the

earlier of the date on which—

‘‘(i) the creditor begins to receive actual payments under the

plan; or

‘‘(ii) the debtor relinquishes possession of the property referred to in subparagraph (A) to—

‘‘(I) the lessor or creditor; or

‘‘(II) any third party acting under claim of right, as applicable.

‘‘(2) The payments referred to in paragraph (1)(A) shall be the

contract amount and shall reduce any amount payable under section 1326(a) of the title.
52

‘‘(b)(1) Subject to the limitations under paragraph (2), the court

may, after notice and hearing, change the amount and timing of

the dates of payment of payments made under subsection (a).

‘‘(2)(A) The payments referred to in paragraph (1) shall be payable not less frequently than monthly.

‘‘(B) The amount of payments referred to in paragraph (1) shall

not be less than the amount of any weekly, biweekly, monthly, or

other periodic payment scheduled as payable under the contract between the debtor and creditor.

‘‘(c) Notwithstanding section 1326(b), the payments referred to in

subsection (a)(1)(A) shall be continued in addition to plan payments

under a confirmed plan until actual payments to the creditor begin

under that plan, if the confirmed plan provides—

‘‘(1) for payments to a creditor or lessor described in subsection (a)(1); and

‘‘(2) for the deferral of payments to such creditor or lessor

under the plan until the payment of amounts described in section 1326(b).

‘‘(d) Notwithstanding sections 362, 542, and 543, a lessor or creditor described in subsection (a) may retain possession of property

described in that subsection that was obtained in accordance with

applicable law before the date of filing of the petition until the first

payment under subsection (a)(1)(A) is received by the lessor or

creditor.

‘‘(e) On or before 60 days after the filling of a case under this

chapter, a debtor retaining possession of personal property subject

to a lease or securing a claim attributable in whole or in part to

the purchase price of such property shall provide each creditor or

lessor reasonable evidence of the maintenance of any required insurance coverage with respect to the use or ownership of such property and continue to do so for so long as the debtor retains possession of such property.’’.

(b) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 13 of title 11, United States Code, is amended by

inserting after the item relating to section 1307 the following:

‘‘1307A. Adequate protection in chapter 13 cases.’’.

SEC. 136. AUTOMATIC STAY.

Section 362(b) of title 11, United States Code, as amended by sections 118 and 132, is amended—

(1) in paragraph (20), by striking ‘‘or’’ at the end;

(2) in paragraph (21), by striking the period at the end and

inserting a semicolon; and

(3) by inserting after paragraph (21) the following:

‘‘(22) under subsection (a) of any transfer that is not avoidable under section 544 of this title and that is not avoidable

under section 549 of this title; or

‘‘(23) under subsection (a)(3), of eviction actions based on

endangerment to property or person or the use of illegal

drugs.’’.

SEC. 137. EXTEND PERIOD BETWEEN BANKRUPTCY DISCHARGES.

Title 11, United States Code, is amended—

(1) in section 727(a)(8) by striking ‘‘six’’ and inserting ‘‘7’’;

and
53

(2) in section 1328 by adding at the end the following:

‘‘(f) Notwithstanding subsections (a) and (b), the court shall not

grant a discharge of all debts provided for by the plan or disallowed

under section 502 of this title if the debtor has received a discharge

in any case filed under this title within 5 years of the order for relief under this chapter.’’.

SEC. 139. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.

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

(1) by striking paragraph (7);

(2) by redesignating paragraphs (1) through (6) as paragraphs (2) through (7), respectively;

(3) in paragraph (2), as redesignated, by striking ‘‘First’’ and

inserting ‘‘Second’’;

(4) in paragraph (3), as redesignated, by striking ‘‘Second’’

and inserting ‘‘Third’’;

(5) in paragraph (4), as redesignated, by striking ‘‘Third’’ and

inserting ‘‘Fourth’’;

(6) in paragraph (5), as redesignated, by striking ‘‘Fourth’’

and inserting ‘‘Fifth’’;

(7) in paragraph (6), as redesignated, by striking ‘‘Fifth’’ and

inserting ‘‘Sixth’’;

(8) in paragraph (7), as redesignated, by striking ‘‘Sixth’’ and

inserting ‘‘Seventh’’; and

(9) by inserting before paragraph (2), as redesignated, the

following:

‘‘(1) First, allowed claims for domestic support obligations to

be paid in the following order on the condition that funds received under this paragraph by a governmental unit in a case

under this title be applied:

‘‘(A) Claims that, as of the date of entry of the order for

relief, are owed directly to a spouse, former spouse, or

child of the debtor, or the parent of such child, without regard to whether the claim is filed by the spouse, former

spouse, child, or parent, or is filed by a governmental unit

on behalf of that person.

‘‘(B) Claims that, as of the date of entry of the order for

relief, are assigned by a spouse, former spouse, child of the

debtor, or the parent of that child to a governmental unit

or are owed directly to a governmental unit under applicable nonbankruptcy law.’’.

SEC. 142. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY,

MAINTENANCE, AND SUPPORT.

Section 523 of title 11, United States Code, is amended—

(1) in subsection (a), by striking paragraph (5) and inserting

the following:

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

(2) in subsection (a)(15)—

(A) by inserting ‘‘or’’ after ‘‘court of record,’’;

(B) by striking ‘‘unless—’’ and all that follows through

‘‘debtor’’ the last place it appears; and

(3) in subsection (c), by striking ‘‘(6), or (15)’’ each place it

appears and inserting ‘‘or (6)’’.
54

SEC. 143. CONTINUED LIABILITY OF PROPERTY.

Section 522 of title 11, United States Code, is amended—

(1) in subsection (c), by striking paragraph (1) and inserting

the following:

‘‘(1) a debt of a kind specified in paragraph (1) or (5) of section 523(a) (in which case, notwithstanding any provision of

applicable nonbankruptcy law to the contrary, such property

shall be liable for a debt of a kind specified in section

523(a)(5);’’; and

(2) in subsection (f)(1)(A), by striking the dash and all that

follows through the end of the subparagraph and inserting ‘‘of

a kind that is specified in section 523(a)(5); or’’.

SEC. 144. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST

PREFERENTIAL TRANSFER MOTIONS.

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

read as follows:

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

a debt for a domestic support obligation; or’’.

SEC. 145. CLARIFICATION OF MEANING OF HOUSEHOLD GOODS.

Section 101 of title 11, United States Code, is amended by inserting after paragraph (27) the following:

‘‘(27A) ‘household goods’ includes tangible personal property

normally found in or around a residence, but does not include

motorized vehicles used for transportation purposes;’’.

SEC. 147. MONETARY LIMITATION ON CERTAIN EXEMPT PROPERTY.

Section 522 of title 11, United States Code, as amended by section 125, is amended—

(1) in subsection (b)(2)(A) by striking ‘‘subsection (o)’’ and inserting ‘‘subsections (o) and (p)’’ before ‘‘any property’’; and

(2) by adding at the end the following:

‘‘(p)(1) Except as provided in paragraphs (2) and (3), as a result

of electing under subsection (b)(3)(A) to exempt property under

State or local law, a debtor may not exempt any interest that exceeds $250,000 in value, in the aggregate, in—

‘‘(A) real or personal property that the debtor or a dependent

of the debtor uses as a residence;

‘‘(B) a cooperative that owns property that the debtor or a

dependent of the debtor uses as a residence; or

‘‘(C) a burial plot for the debtor or a dependent of the debtor.

‘‘(2) The limitation under paragraph (1) shall not apply to an exemption claimed under subsection (b)(3)(A) by a family farmer for

the principal residence of that farmer.

‘‘(3) Paragraph (1) shall not apply to debtors if applicable State

law expressly provides by a statute enacted after the effective date

of this paragraph that such paragraph shall not apply to debtors.’’.

SEC. 148. BANKRUPTCY FEES.

Section 1930 of title 28, United States Code, is amended—

(1) in subsection (a) by striking ‘‘Notwithstanding section

1915 of this title, the’’ and inserting ‘‘The’’; and

(2) by adding at the end the following:

‘‘(f)(1) Pursuant to procedures prescribed by the Judicial Conference of the United States, the district court or the bankruptcy

court may waive the filing fee in a case under chapter 7 of title 11
55

for an individual debtor who is unable to pay such fee in installments. For purposes of this paragraph, the term ‘filing fee’ means

the filing fee required by subsection (a), or any other fee prescribed

by the Judicial Conference under subsections (b) and (c) that is

payable to the clerk upon the commencement of a case under chapter 7 of title 11.

‘‘(2) The district court or the bankruptcy court may also waive for

such debtors other fees prescribed pursuant to subsections (b) and

(c).

‘‘(3) This subsection does not restrict the district court or the

bankruptcy court from waiving, in accordance with Judicial Conference policy, fees prescribed pursuant to such subsections for

other debtors and creditors.’’.

SEC. 149. COLLECTION OF CHILD SUPPORT.

(a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Section 704 of title

11, United States Code, as amended by section 102, is amended—

(1) by inserting ‘‘(a)’’ before ‘‘The trustee’’,

(2) in paragraph (9) by striking ‘‘and’’ at the end,

(3) in paragraph (10) by striking the period and inserting ‘‘;

and’’, and

(4) by adding at the end the following:

‘‘(11) if, with respect to an individual debtor, there is a claim

for support of a child of the debtor or a custodial parent of such

child entitled to receive priority under section 507(a)(1) of this

title, provide the applicable notification specified in subsection

(b).

‘‘(b)(1) In any case described in subsection (a)(11), the trustee

shall—

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

of such holder to use the services of a State child support enforcement agency established under sections 464 and 466 of

the Social Security Act for the State in which the holder resides; and

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

and telephone number of the child support enforcement agency; and

‘‘(B)(i) notify in writing the State child support agency of the

State in which the holder of the claim resides of the claim;

‘‘(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim; and

‘‘(iii) at such time as the debtor is granted a discharge under

section 727 of this title, notify the holder of such claim and the

State child support agency of the State in which such holder

resides of—

‘‘(I) the granting of the discharge;

‘‘(II) the last recent known address of the debtor; and

‘‘(III) with respect to the debtor’s case, the name of each

creditor that holds a claim that is not discharged under

paragraph (2), (4), or (14A) of section 523(a) of this title or

that was reaffirmed by the debtor under section 524(c) of

this title.

‘‘(2)(A) If, after receiving a notice under paragraph (1)(B)(iii), a

holder of a claim or a State child support agency is unable to locate

the debtor that is the subject of the notice, such holder or such
56

agency may request from a creditor described in paragraph

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

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

makes a disclosure of a last known address of a debtor in connection with a request made under subparagraph (A) shall not be liable to the debtor or any other person by reason of making such disclosure.’’.

(b) DUTIES OF TRUSTEE UNDER CHAPTER 13.—Section 1302 of

title 11, United States Code, is amended—

(1) in subsection (b)—

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

(B) in paragraph (5) by striking the period and inserting

‘‘; and’’, and

(C) by adding at the end the following:

‘‘(6) if, with respect to an individual debtor, there is a claim

for support of a child of the debtor or a custodial parent of such

child entitled to receive priority under section 507(a)(1) of this

title, provide the applicable notification specified in subsection

(d).’’, and

(2) by adding at the end the following:

‘‘(d)(1) In any case described in subsection (b)(6), the trustee

shall—

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

of such holder to use the services of a State child support enforcement agency established under sections 464 and 466 of

the Social Security Act for the State in which the holder resides; and

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

and telephone number of the child support enforcement agency; and

‘‘(B)(i) notify in writing the State child support agency of the

State in which the holder of the claim resides of the claim; and

‘‘(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim;

‘‘(iii) at such time as the debtor is granted a discharge under

section 1328 of this title, notify the holder of the claim and the

State child support agency of the State in which such holder

resides of—

‘‘(I) the granting of the discharge;

‘‘(II) the last recent known address of the debtor; and

‘‘(III) with respect to the debtor’s case, the name of each

creditor that holds a claim that is not discharged under

paragraph (2), (4), or (14A) of section 523(a) of this title or

that was reaffirmed by the debtor under section 524(c) of

this title.

‘‘(2)(A) If, after receiving a notice under paragraph (1)(B)(iii), a

holder of a claim or a State child support agency is unable to locate

the debtor that is the subject of the notice, such holder or such

agency may request from a creditor described in paragraph

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

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

makes a disclosure of a last known address of a debtor in connection with a request made under subparagraph (A) shall not be lia-
57

ble to the debtor or any other person by reason of making such disclosure.’’.

SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND OTHER PROPERTY FROM THE ESTATE.

(a) IN GENERAL.—Section 541(b) of title 11 of the United States

Code is amended—

(1) by striking ‘‘or’’ at the end of paragraph (4)(B)(ii);

(2) by striking the period at the end of paragraph (5) and inserting ‘‘; or’’; and

(3) by inserting after paragraph (5) the following:

‘‘(7) any amount or interest in property to the extent that an

employer has withheld amounts from the wages of employees

for contribution to an employee benefit plan subject to title I

of the Employee Retirement Income Security Act of 1974, or to

the extent that the employer has received amounts as a result

of payments by participants or beneficiaries to an employer for

contribution to an employee benefit plan subject to title I of the

Employee Retirement Income Security Act of 1974.’’.

(b) APPLICATION OF AMENDMENT.—The amendment made by this

section shall not apply to cases commenced under title 11 of the

United States Code before the expiration of the 180-day period beginning on the date of the enactment of this Act.

SEC. 151. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

Section 503(b)(1)(A) of title 11, United States Code, is amended

to read as follows:

‘‘(A) the actual, necessary costs and expenses of preserving

the estate, including wages, salaries, or commissions for services rendered after the commencement of the case, and wages

and benefits attributable to any period of time after commencement of the case as a result of the debtor’s violation of Federal

law, without regard to when the original unlawful act occurred

or to whether any services were rendered;’’.

SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT

OBLIGATION PROCEEDINGS.

Section 362(b)(2) of title 11, United States Code, is amended—

(1) in subparagraph (A) by striking ‘‘or’’ at the end;

(2) in subparagraph (B) by adding ‘‘or’’ at the end; and

(3) by adding at the end the following:

‘‘(C) under subsection (a) of—

‘‘(i) the withholding of income for payment of a domestic support obligation pursuant to a judicial or administrative order or statute for such obligation that

first becomes payable after the date on which the petition is filed; or

‘‘(ii) the withholding of income for payment of a domestic support obligation owed directly to the spouse,

former spouse or child of the debtor or the parent of

such child, pursuant to a judicial or administrative

order or statute for such obligation that becomes payable before the date on which the petition is filed unless the court finds, after notice and hearing, that

such withholding would render the plan infeasible;’’.
58

SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS AGAINST THE DEBTOR.

Section 362(b)(2) of title 11, United States Code, as amended by

section 153, is amended—

(1) in subparagraph (B) by striking ‘‘or’’ at the end;

(2) by inserting after subparagraph (C) the following:

‘‘(D) the commencement or continuation of a proceeding

concerning a child custody or visitation;

‘‘(E) the commencement or continuation of a proceeding

alleging domestic violence; or

‘‘(F) the commencement or continuation of a proceeding

seeking a dissolution of marriage, except to the extent the

proceeding concerns property of the estate;’’.

SEC. 154. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

Section 101 of title 11, United States Code, is amended—

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

(2) by inserting after paragraph (14) the following:

‘‘(14A) ‘domestic support obligation’ means a debt that accrues before or after the entry of an order for relief under this

title that is—

‘‘(A) owed to or recoverable by—

‘‘(i) a spouse, former spouse, or child of the debtor or

that child’s legal guardian; or

‘‘(ii) a governmental unit;

‘‘(B) in the nature of alimony, maintenance, or support

(including assistance provided by a governmental unit) of

such spouse, former spouse, or child, without regard to

whether such debt is expressly so designated;

‘‘(C) established or subject to establishment before or

after entry of an order for relief under this title, by reason

of applicable provisions of—

‘‘(i) a separation agreement, divorce decree, or property settlement agreement;

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

‘‘(iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and

‘‘(D) not assigned to a nongovernmental entity, unless

that obligation is assigned voluntarily by the spouse,

former spouse, child, or parent solely for the purpose of

collecting the debt.’’.

SEC. 155. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES INVOLVING DOMESTIC SUPPORT OBLIGATIONS.

Title 11, United States Code, is amended—

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

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

order or statute to pay a domestic support obligation, the debtor has paid all amounts payable under such order or statute

for such obligation that first become payable after the date on

which the petition is filed.’’;

(2) in section 1325(a)—

(A) in paragraph (5), by striking ‘‘and’’ at the end;

(B) in paragraph (6), by striking the period at the end

and inserting ‘‘; and’’; and
59

(C) by adding at the end the following:

‘‘(7) if the debtor is required by a judicial or administrative

order or statute to pay a domestic support obligation, the debtor has paid all amounts payable under such order for such obligation that become payable after the date on which the petition is filed.’’; and

(3) in section 1328(a) in the matter preceding paragraph (1),

by inserting ‘‘, after a debtor who is required by a judicial or

administrative order to pay a domestic support obligation certifies that all amounts payable under such order that are due

on or after the date the petition was filed have been paid, and

after a debtor who is required by a judicial or administrative

order to pay a domestic support obligation, certifies that all

amounts payable under such order that are due before the date

on which the petition was filed if such amounts are due solely

to a spouse, former spouse or child of the debtor or the parent

of such child pursuant to a judicial or administrative order, unless the holder of such claim agrees to a different treatment of

such claim’’ after ‘‘completion by the debtor of all payments

under the plan’’.

SEC. 156. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT

OBLIGATION PROCEEDINGS.

Section 362(b) of title 11, United States Code, as amended by sections 104 and 606, is amended—

(1) amending paragraph (2) to read as follows:

‘‘(2) under subsection (a)—

‘‘(A) of the commencement or continuation of an action

or proceeding for—

‘‘(i) the establishment of paternity as a part of an effort to collect domestic support obligations; or

‘‘(ii) the establishment or modification of an order

for domestic support obligations; or

‘‘(B) the collection of a domestic support obligation from

property that is not property of the estate; or

‘‘(C) under subsection (a) of—

‘‘(i) the withholding of income for payment of a domestic support obligation pursuant to a judicial or administrative order or statute for such obligation that

first becomes payable after the date on which the petition is filed; or

‘‘(ii) the withholding of income for payment of a domestic support obligation owed directly to the spouse,

former spouse or child of the debtor or the parent of

such child, pursuant to a judicial or administrative

order or statute for such obligation that becomes payable before the date on which the petition is filed unless the court finds, after notice and hearing, that

such withholding would render the plan infeasible;’’;

(2) in paragraph (19), by striking ‘‘or’’ at the end;

(3) in paragraph (20), by striking the period at the end and

inserting a semicolon; and

(4) by inserting after paragraph (20) the following:

‘‘(21) under subsection (a) with respect to—
60

‘‘(A) the withholding, suspension, or restriction of drivers’ licenses, professional and occupational licenses, and

recreational licenses pursuant to State law, as specified in

section 466(a)(16) of the Social Security Act (42 U.S.C.

666(a)(16)) or with respect to the reporting of overdue support owed by an absent parent to any consumer reporting

agency as specified in section 466(a)(7) of the Social Security Act (42 U.S.C. 666(a)(7)) if such debt is payable solely

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

parent of such child pursuant to a judicial or administrative order or statute, unless the holder of such claim

agrees to waive such withholding, suspension or restriction;

‘‘(B) the interception of tax refunds, as specified in sections 464 and 466(a)(3) of the Social Security Act (42

U.S.C. 664 and 666(a)(3)) if such tax refund is payable

solely to a spouse, former spouse or child of the debtor or

the parent of such child pursuant to a judicial or administrative order or statute; or

‘‘(C) the enforcement of medical obligations as specified

under title IV of the Social Security Act (42 U.S.C. 601 et

seq.).’’.

SEC. 157. EXEMPTION FOR RIGHT TO RECEIVE CERTAIN ALIMONY,

MAINTENANCE, OR SUPPORT.

Section 522(b)(3) of title 11, United States Code, as so redesignated and amended by sections 115 and 203, is amended—

(1) in subparagraph (C) by striking ‘‘and’’ at the end,

(2) in subparagraph (D) by striking the period at the end and

inserting ‘‘; and’’, and

(3) by inserting after subparagraph (D) the following:

‘‘(E) the right to receive—

‘‘(i) alimony, maintenance , support, or property traceable to alimony, maintenance , support; or

‘‘(ii) amounts payable as a result of a property settlement agreement with the debtor’s spouse or former spouse;

or of an interlocutory or final divorce decree;

to the extent reasonably necessary for the support of the debtor

or a dependent of the debtor.’’.

SEC. 158. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS AGAINST THE DEBTOR.

Section 362(b)(2) of title 11, United States Code, as amended by

section 156, is amended—

(1) in subparagraph (A) by striking ‘‘or’’ at the end;

(2) by inserting after subparagraph (B) the following:

‘‘(C) the commencement or continuation of a proceeding

concerning a child custody or visitation;

‘‘(D) the commencement or continuation of a proceeding

alleging domestic violence; or

‘‘(E) the commencement or continuation of a proceeding

seeking a dissolution of marriage, except to the extent the

proceeding concerns property of the estate;’’.
61

TITLE II—DISCOURAGING BANKRUPTCY

ABUSE

SEC. 201. REENACTMENT OF CHAPTER 12.

(a) REENACTMENT.—(1) Chapter 12 of title 11 of the United

States Code, as in effect on September 30, 1999, is hereby reenacted.

(2) Paragraph (1) shall take effect on September 30, 1999.

(b) CONTENTS OF CHAPTER 12 PLAN.—Section 1222(a)(2) of title

11, United States Code, is amended to read as follows:

‘‘(2) provide for the full payment, in deferred cash payments,

of all claims entitled to priority under section 507, unless—

‘‘(A) the claim is a claim owed to a governmental unit

that arises as a result of the sale, transfer, exchange, or

other disposition of any farm asset used in the debtor’s

farming operation, in which case the claim shall be treated

as an unsecured claim that is not entitled to priority under

section 507, but the debt shall be treated in such manner

only if the debtor receives a discharge; or

‘‘(B) the holder of a particular claim agrees to a different

treatment of that claim; and’’.

(c) SPECIAL NOTICE PROVISIONS.—Section 1231(d) of title 11,

United States Code, is amended by striking ‘‘a State or local governmental unit’’ and inserting ‘‘any governmental unit’’.

(d) EXPANDED DEFINITION OF FAMILY FARMER.—Section 101(18)

of title 11, United States Code, is amended—

(1) in subparagraph (A)—

(A) by striking ‘‘$1,500,000’’ and inserting ‘‘$3,000,000’’;

(B) by striking ‘‘80’’ and inserting ‘‘50’’; and

(C) by striking ‘‘the taxable year preceding the taxable

year’’ and inserting ‘‘at least 1 of the 3 taxable years preceding the taxable year’’; and

(2) in subparagraph (B)—

(A) in clause (i), by striking ‘‘80’’ and inserting ‘‘50’’; and

(B) in clause (ii), by striking ‘‘$1,500,000’’ and inserting

‘‘$3,000,000’’.

(e) MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.—

Section 341 of title 11, United States Code, is amended by adding

at the end the following:

‘‘(e) Notwithstanding subsections (a) and (b), the court, on the request of a party in interest and after notice and a hearing, for

cause may order that the United States trustee not convene a

meeting of creditors or equity security holders if the debtor has

filed a plan as to which the debtor solicited acceptances prior to the

commencement of the case.’’.

SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.

Section 341 of title 11, United States Code, is amended by adding

at the end the following:

‘‘(e) Notwithstanding subsections (a) and (b), the court, on the request of a party in interest and after notice and a hearing, for

cause may order that the United States trustee not convene a

meeting of creditors or equity security holders if the debtor has
62

filed a plan as to which the debtor solicited acceptances prior to the

commencement of the case.’’.

SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

(a) IN GENERAL.—Section 522 of title 11, United States Code, as

amended by sections 113, 125, and 147 is amended—

(1) in subsection (b)—

(A) in paragraph (2)—

(i) by striking ‘‘(2)(A)’’ and inserting:

‘‘(3) Property listed in this paragraph is—

‘‘(A) subject to subsections (o) and (p),’’;

(ii) in subparagraph (B), by striking ‘‘and’’ at the

end;

(iii) in subparagraph (C), by striking the period at

the end and inserting ‘‘; and’’; and

(iv) by adding at the end the following:

‘‘(D) retirement funds to the extent that those funds are in

a fund or account that is exempt from taxation under section

401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.’’;

(B) by striking paragraph (1) and inserting:

‘‘(2) Property listed in this paragraph is property that is specified

under subsection (d), unless the State law that is applicable to the

debtor under paragraph (3)(A) specifically does not so authorize.’’;

(C) in the matter preceding paragraph (2)—

(i) by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’;

(ii) by striking ‘‘paragraph (2)’’ both places it appears and inserting ‘‘paragraph (3)’’;

(iii) by striking ‘‘paragraph (1)’’ each place it appears

and inserting ‘‘paragraph (2)’’; and

(iv) by striking ‘‘Such property is—’’; and

(D) by adding at the end of the subsection the following:

‘‘(4) For purposes of paragraph (3)(D) and subsection (d)(12), the

following shall apply:

‘‘(A) If the retirement funds are in a retirement fund that

has received a favorable determination pursuant to section

7805 of the Internal Revenue Code of 1986, and that determination is in effect as of the date of the commencement of the

case under section 301, 302, or 303 of this title, those funds

shall be presumed to be exempt from the estate.

‘‘(B) If the retirement funds are in a retirement fund that

has not received a favorable determination pursuant to such

section 7805, those funds are exempt from the estate if the

debtor demonstrates that—

‘‘(i) no prior determination to the contrary has been

made by a court or the Internal Revenue Service; and

‘‘(ii) the retirement fund is in substantial compliance

with the applicable requirements of the Internal Revenue

Code of 1986.

‘‘(C) A direct transfer of retirement funds from 1 fund or account that is exempt from taxation under section 401, 403, 408,

408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986,

pursuant to section 401(a)(31) of the Internal Revenue Code of

1986, or otherwise, shall not cease to qualify for exemption
63

under paragraph (3)(D) or subsection (d)(12) by reason of that

direct transfer.

‘‘(D)(i) Any distribution that qualifies as an eligible rollover

distribution within the meaning of section 402(c) of the Internal Revenue Code of 1986 or that is described in clause (ii)

shall not cease to qualify for exemption under paragraph (3)(D)

or subsection (d)(12) by reason of that distribution.

‘‘(ii) A distribution described in this clause is an amount

that—

‘‘(I) has been distributed from a fund or account that is

exempt from taxation under section 401, 403, 408, 408A,

414, 457, or 501(a) of the Internal Revenue Code of 1986;

and

‘‘(II) to the extent allowed by law, is deposited in such

a fund or account not later than 60 days after the distribution of that amount.’’; and

(2) in subsection (d)—

(A) in the matter preceding paragraph (1), by striking

‘‘subsection (b)(1)’’ and inserting ‘‘subsection (b)(2)’’; and

(B) by adding at the end the following:

‘‘(12) Retirement funds to the extent that those funds are in

a fund or account that is exempt from taxation under section

401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.’’.

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

Code, as amended by sections 118, 132, 136, and 141 is amended—

(1) in paragraph (27), by striking ‘‘or’’ at the end;

(2) in paragraph (28), by striking the period and inserting ‘‘;

or’’;

(3) by inserting after paragraph (28) the following:

‘‘(29) under subsection (a), of withholding of income from a

debtor’s wages and collection of amounts withheld, pursuant to

the debtor’s agreement authorizing that withholding and collection for the benefit of a pension, profit-sharing, stock bonus,

or other plan established under section 401, 403, 408, 408A,

414, 457, or 501(a) of the Internal Revenue Code of 1986 that

is sponsored by the employer of the debtor, or an affiliate, successor, or predecessor of such employer—

‘‘(A) to the extent that the amounts withheld and collected are used solely for payments relating to a loan from

a plan that satisfies the requirements of section 408(b)(1)

of the Employee Retirement Income Security Act of 1974

or is subject to section 72(p) of the Internal Revenue Code

of 1986; or

‘‘(B) in the case of a loan from a thrift savings plan described in subchapter III of title 5, that satisfies the requirements of section 8433(g) of such title.’’; and

(4) by adding at the end of the flush material following paragraph (29) the following: ‘‘Paragraph (29) does not apply to any

amount owed to a plan referred to in that paragraph that is

incurred under a loan made during the 1-year period preceding

the filing of a petition. Nothing in paragraph (29) may be construed to provide that any loan made under a governmental

plan under section 414(d), or a contract or account under sec-
64

tion 403(b), of the Internal Revenue Code of 1986 constitutes

a claim or a debt under this title.’’.

(c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of title 11, United

States Code, is amended—

(1) by striking ‘‘or’’ at the end of paragraph (17);

(2) by striking the period at the end of paragraph (18) and

inserting ‘‘; or’’; and

(3) by adding at the end the following:

‘‘(19) owed to a pension, profit-sharing, stock bonus, or other

plan established under section 401, 403, 408, 408A, 414, 457,

or 501(c) of the Internal Revenue Code of 1986, pursuant to—

‘‘(A) a loan permitted under section 408(b)(1) of the Employee Retirement Income Security Act of 1974) or subject

to section 72(p) of the Internal Revenue Code of 1986; or

‘‘(B) a loan from the thrift savings plan described in subchapter III of title 5, that satisfies the requirements of section 8433(g) of such title.

Paragraph (19) does not apply to any amount owed to a plan referred to in that paragraph that is incurred under a loan made during the 1-year period preceding the filing of a petition. Nothing in

paragraph (19) may be construed to provide that any loan made

under a governmental plan under section 414(d), or a contract or

account under section 403(b), of the Internal Revenue Code of 1986

constitutes a claim or a debt under this title.’’.

(d) PLAN CONTENTS.—Section 1322 of title 11, United States

Code, is amended by adding at the end the following:

‘‘(f) A plan may not materially alter the terms of a loan described

in section 362(b)(29) of this title.’’.

SEC. 204. PROTECTION OF REFINANCE OF SECURITY INTEREST.

Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11,

United States Code, are amended by striking ‘‘10’’ each place it appears and inserting ‘‘30’’.

SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

Section 365(d)(4) of title 11, United States Code, is amended to

read as follows:

‘‘(4)(A) Subject to subparagraph (B), in any case under any chapter in this title, an unexpired lease of nonresidential real property

under which the debtor is the lessee shall be deemed rejected, and

the trustee shall immediately surrender such property to the lessor, if the trustee does not assume or reject the unexpired lease by

the earlier of—

‘‘(i) the date that is 120 days after the date of the order for

relief; or

‘‘(ii) the date of the entry of an order confirming a plan.

‘‘(B)(i) The court may extend the period determined under subparagraph (A) for 120 days upon motion of the trustee or the lessor

for cause.

‘‘(ii) If the court grants an extension under clause (i), the court

may grant a subsequent extension only upon prior written consent

of the lessor.’’.

SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

Section 1102(a)(2) of title 11, United States Code, is amended by

inserting before the first sentence the following: ‘‘On its own mo-
65

tion or on request of a party in interest, and after notice and hearing, the court may order a change in the membership of a committee appointed under this subsection, if the court determines that

the change is necessary to ensure adequate representation of creditors or equity security holders.’’.

SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES

CODE.

Section 546 of title 11, United States Code, is amended by inserting at the end thereof:

‘‘(i) Notwithstanding section 545 (2) and (3) of this title, the

trustee may not avoid a warehouseman’s lien for storage, transportation or other costs incidental to the storage and handling of

goods, as provided by section 7–209 of the Uniform Commercial

Code.’’.

SEC. 208. LIMITATION.

Section 546(c)(1)(B) of title 11, United States Code, is amended

by striking ‘‘20’’ and inserting ‘‘45’’.

SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11, UNITED

STATES CODE.

Section 330(a) of title 11, United States Code, is amended—

(1) in paragraph (3)—

(A) in subparagraph (A) after ‘‘awarded’’, by inserting ‘‘to

an examiner, chapter 11 trustee, or professional person’’;

and

(B) by redesignating subdivisions (A) through (E) as

clauses (i) through (iv), respectively; and

(2) by adding at the end the following:

‘‘(B) In determining the amount of reasonable compensation

to be awarded a trustee, the court shall treat such compensation as a commission based on the results achieved.’’.

SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.

Section 1125 of title 11, United States Code, is amended by adding at the end the following:

‘‘(g) Notwithstanding subsection (b), an acceptance or rejection of

the plan may be solicited from a holder of a claim or interest if

such solicitation complies with applicable nonbankruptcy law and

if such holder was solicited before the commencement of the case

in a manner complying with applicable nonbankruptcy law.’’.

SEC. 211. PREFERENCES.

Section 547(c) of title 11, United States Code, is amended—

(1) by amending paragraph (2) to read as follows:

‘‘(2) to the extent that such transfer was in payment of a

debt incurred by the debtor in the ordinary course of business

or financial affairs of the debtor and the transferee, and such

transfer was—

‘‘(A) made in the ordinary course of business or financial

affairs of the debtor and the transferee; or

‘‘(B) made according to ordinary business terms;’’;

(2) in paragraph (7) by striking ‘‘or’’ at the end;

(3) in paragraph (8) by striking the period at the end and inserting ‘‘; or’’; and

(4) by adding at the end the following:
66

‘‘(9) if, in a case filed by a debtor whose debts are not primarily consumer debts, the aggregate value of all property that

constitutes or is affected by such transfer is less than $5,000.’’.

SEC. 212. VENUE OF CERTAIN PROCEEDINGS.

Section 1409(b) of title 28, United States Code, is amended by inserting ‘‘, or a nonconsumer debt against a noninsider of less than

$10,000,’’ after ‘‘$5,000’’.

SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

Section 1121(d) of title 11, United States Code, is amended—

(1) by striking ‘‘On’’ and inserting ‘‘(1) Subject to paragraph

(1), on’’; and

(2) by adding at the end the following:

‘‘(2)(A) Such 120-day period may not be extended beyond a date

that is 18 months after the date of the order for relief under this

chapter.

‘‘(B) Such 180-day period may not be extended beyond a date

that is 20 months after the date of the order for relief under this

chapter.’’.

SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

Section 523(a)(16) of title 11, United States Code, is amended—

(1) by striking ‘‘dwelling’’ the first place it appears;

(2) by striking ‘‘ownership or’’ and inserting ‘‘ownership,’’;

(3) by striking ‘‘housing’’ the first place it appears; and

(4) by striking ‘‘but only’’ and all that follows through ‘‘such

period,’’, and inserting ‘‘or a lot in a homeowners association,

for as long as the debtor or the trustee has a legal, equitable,

or possessory ownership interest in such unit, such corporation, or such lot,’’.

SEC. 215. CLAIMS RELATING TO INSURANCE DEPOSITS IN CASES ANCILLARY TO FOREIGN PROCEEDINGS.

Section 304 of title 11, United States Code, is amended to read

as follows:

‘‘§ 304. Cases ancillary to foreign proceedings

‘‘(a) For purposes of this section—

‘‘(1) the term ‘domestic insurance company’ means a domestic

insurance company, as such term is used in section 109(b)(2);

‘‘(2) the term ‘foreign insurance company’ means a foreign insurance company, as such term is used in section 109(b)(3);

‘‘(3) the term ‘United States claimant’ means a beneficiary of

any deposit referred to in subsection (b) or any multibeneficiary trust referred to in subsection (b);

‘‘(4) the term ‘United States creditor’ means, with respect to

a foreign insurance company—

‘‘(A) a United States claimant; or

‘‘(B) any business entity that operates in the United

States and that is a creditor; and

‘‘(5) the term ‘United States policyholder’ means a holder of

an insurance policy issued in the United States.

‘‘(b) The court may not grant relief under chapter 15 of this title

with respect to any deposit, escrow, trust fund, or other security required or permitted under any applicable State insurance law or

regulation for the benefit of claim holders in the United States.’’.
67

SEC. 216. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

(a) EXECUTORY CONTRACTS AND UNEXPIRED LEASES.—Section 365

of title 11, United States Code, is amended—

(1) in subsection (b)—

(A) in paragraph (1)(A) by striking the semicolon at the

end and inserting the following:

‘‘other than a default that is a breach of a provision relating

to—

‘‘(i) the satisfaction of any provision (other than a penalty rate or penalty provision) relating to a default arising

from any failure to perform nonmonetary obligations under

an unexpired lease of real property (excluding executory

contracts that transfer a right or interest under a filed or

issued patent, copyright, trademark, trade dress, or trade

secret), if it is impossible for the trustee to cure such default by performing nonmonetary acts at and after the

time of assumption; or

‘‘(ii) the satisfaction of any provision (other than a penalty rate or penalty provision) relating to a default arising

from any failure to perform nonmonetary obligations under

an executory contract, if it is impossible for the trustee to

cure such default by performing nonmonetary acts at and

after the time of assumption and if the court determines,

based on the equities of the case, that this subparagraph

should not apply with respect to such default;’’; and

(B) by amending paragraph (2)(D) to read as follows:

‘‘(D) the satisfaction of any penalty rate or penalty provision

relating to a default arising from a failure to perform nonmonetary obligations under an executory contract (excluding

executory contracts that transfer a right or interest under a

filed or issued patent, copyright, trademark, trade dress, or

trade secret) or under an unexpired lease of real or personal

property.’’;

(2) in subsection (c)—

(A) in paragraph (2) by adding ‘‘or’’ at the end;

(B) in paragraph (3) by striking ‘‘; or’’ at the end and inserting a period; and

(C) by striking paragraph (4);

(3) in subsection (d)—

(A) by striking paragraphs (5) through (9); and

(B) by redesignating paragraph (10) as paragraph (5);

and

(4) in subsection (f)(1) by striking ‘‘; except that’’ and all that

follows through the end of the paragraph and inserting a period.

(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Section 1124(2) of

title 11, United States Code, is amended—

(1) in subparagraph (A) by inserting ‘‘or of a kind that section 365(b)(1)(A) of this title expressly does not require to be

cured’’ before the semicolon at the end;

(2) in subparagraph (C) by striking ‘‘and’’ at the end;

(3) by redesignating subparagraph (D) as subparagraph (E);

and

(4) by inserting after subparagraph (C) the following:
68

‘‘(D) if such claim or such interest arises from any failure to perform a nonmonetary obligation, compensates the

holder of such claim or such interest (other than the debtor or an insider) for any actual pecuniary loss incurred by

such holder as a result of such failure; and’’.

SEC. 217. SHARING OF COMPENSATION.

Section 504 of title 11, United States Code, is amended by adding

at the end the following:

‘‘(c) This section shall not apply with respect to sharing, or agreeing to share, compensation with a bona fide public service attorney

referral program that operates in accordance with non-Federal law

regulating attorney referral services and with rules of professional

responsibility applicable to attorney acceptance of referrals.’’.

SEC. 218. PRIORITY FOR ADMINISTRATIVE EXPENSES.

Section 503(b) of title 11, United States Code, is amended—

(1) by deleting ‘‘and’’ at the end of paragraph (5);

(2) by striking the period at the end of paragraph (6) and inserting ‘‘; and’’;

(3) by inserting the following after paragraph (6):

‘‘(7) with respect to a nonresidential real property lease previously assumed under section 365, and subsequently rejected,

a sum equal to all monetary obligations due, excluding those

arising from or relating to a failure to operate or penalty provisions, for the period of one year following the later of the rejection date or date of actual turnover of the premises, without

reduction or setoff for any reason whatsoever except for sums

actually received or to be received from a nondebtor; and the

claim for remaining sums due for the balance of the term of

the lease shall be a claim under section 502(b)(6).’’.

TITLE III—GENERAL BUSINESS

BANKRUPTCY PROVISIONS

SEC. 301. DEFINITION OF DISINTERESTED PERSON.

Section 101(14) of title 11, United States Code, is amended to

read as follows:

‘‘(14) ‘disinterested person’ means a person that—

‘‘(A) is not a creditor, an equity security holder, or an insider;

‘‘(B) is not and was not, within 2 years before the date

of the filing of the petition, a director, officer, or employee

of the debtor; and

‘‘(C) does not have an interest materially adverse to the

interest of the estate or of any class of creditors or equity

security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, or

for any other reason;’’.

SEC. 302. MISCELLANEOUS IMPROVEMENTS.

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

States Code, is amended by adding at the end the following:

‘‘(h)(1) Subject to paragraphs (2) and (3) and notwithstanding any

other provision of this section, an individual may not be a debtor
69

under this title unless that individual has, during the 90-day period preceding the date of filing of the petition of that individual,

received credit counseling, including, at a minimum, participation

in an individual or group briefing that outlined the opportunities

for available credit counseling and assisted that individual in performing an initial budget analysis, through a credit counseling program (offered through an approved credit counseling service described in section 111(a)).

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

who resides in a district for which the United States trustee or

bankruptcy administrator of the bankruptcy court of that district

determines that the approved credit counseling services for that

district are not reasonably able to provide adequate services to the

additional individuals who would otherwise seek credit counseling

from those programs by reason of the requirements of paragraph

(1).

‘‘(B) Each United States trustee or bankruptcy administrator

that makes a determination described in subparagraph (A) shall review that determination not later than one year after the date of

that determination, and not less frequently than every year thereafter.

‘‘(3)(A) Subject to subparagraph (B), the requirements of paragraph (1) shall not apply with respect to a debtor who submits to

the court a certification that—

‘‘(i) describes exigent circumstances that merit a waiver of

the requirements of paragraph (1);

‘‘(ii) states that the debtor requested credit counseling services from an approved credit counseling service, but was unable to obtain the services referred to in paragraph (1) during

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

made that request or that the exigent circumstances require

filing before such 5-day period expires; and

‘‘(iii) is satisfactory to the court.

‘‘(B) With respect to a debtor, an exemption under subparagraph

(A) shall cease to apply to that debtor on the date on which the

debtor meets the requirements of paragraph (1), but in no case may

the exemption apply to that debtor after the date that is 30 days

after the debtor files a petition.’’.

(b) CHAPTER 7 DISCHARGE.—Section 727(a) of title 11, United

States Code, is amended—

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

(2) in paragraph (10), by striking the period and inserting ‘‘;

or’’; and

(3) by adding at the end the following:

‘‘(11) after the filing of the petition, the debtor failed to complete an instructional course concerning personal financial

management described in section 111 unless the debtor resides

in a district for which the United States trustee or bankruptcy

administrator of the bankruptcy court of that district determines that the approved instructional courses are not adequate

to provide service to the additional individuals who would be

required to compete the instructional course by reason of the

requirements of this section. Each United States trustee or

bankruptcy administrator that makes such a determination
70

shall review that determination not later than 1 year after the

date of that determination, and not less frequently than every

year thereafter.’’.

(c) CHAPTER 13 DISCHARGE.—Section 1328 of title 11, United

States Code, as amended by section 137, is amended by adding at

the end the following:

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

a debtor, unless after filing a petition the debtor has completed an

instructional course concerning personal financial management described in section 111.

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

resides in a district for which the United States trustee or bankruptcy administrator of the bankruptcy court of that district determines that the approved instructional courses are not adequate to

provide service to the additional individuals who would be required

to complete the instructional course by reason of the requirements

of this section.

‘‘(i) Each United States trustee or bankruptcy administrator that

makes a determination described in subsection (h) shall review

that determination not later than 1 year after the date of that determination, and not less frequently than every year thereafter.’’.

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

Code, as amended by sections 604 and 120, is amended by adding

at the end the following:

‘‘(d) In addition to the requirements under subsection (a), an individual debtor shall file with the court—

‘‘(1) a certificate from the credit counseling service that provided the debtor services under section 109(h); and

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

under section 109(h) through the credit counseling service referred to in paragraph (1).’’.

(e) GENERAL PROVISIONS.— (1) IN GENERAL.—Chapter 1 of title 11, United States Code,

is amended by adding at the end the following:

‘‘§ 111. Credit counseling services; financial management instructional courses

‘‘The clerk of each district shall maintain a list of credit counseling services that provide 1 or more programs described in section

109(h) and a list of instructional courses concerning personal financial management that have been approved by—

‘‘(1) the United States trustee; or

‘‘(2) the bankruptcy administrator for the district.’’.

(2) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 1 of title 11, United States Code, is amended by adding at the end the following:

‘‘111. Credit counseling services; financial management instructional courses.’’.

(e) DEFINITIONS.—Section 101 of title 11, United States Code, is

amended—

(1) by inserting after paragraph (13) the following:

‘‘(13A) ‘debtor’s principal residence’ means a residential

structure including incidental property when the structure contains 1 to 4 units, whether or not that structure is attached to

real property, and includes, without limitation, an individual
71

condominium or cooperative unit or mobile or manufactured

home or trailer;’’;

(2) by inserting after paragraph (27A), as added by section

318 of this Act, the following:

‘‘(27B) ‘incidental property’ means property incidental to

such residence including, without limitation, property commonly conveyed with a principal residence where the real estate is located, window treatments, carpets, appliances and

equipment located in the residence, and easements, appurtenances, fixtures, rents, royalties, mineral rights, oil and gas

rights, escrow funds and insurance proceeds;’’;

(3) in section 362(b), as amended by sections 117, 118, 132,

136, 141 203, 818, and 1007,—

(A) in paragraph (28) by striking ‘‘or’’ at the end thereof;

(B) in paragraph (29) by striking the period at the end

and inserting ‘‘; or’’; and

(C) by inserting after paragraph (29) the following:

‘‘(30) under subsection (a), until a prepetition default is cured

fully in a case under chapter 13 of this title by actual payment

of all arrears as required by the plan, of the postponement,

continuation or other similar delay of a prepetition foreclosure

proceeding or sale in accordance with applicable nonbankruptcy law, but nothing herein shall imply that such postponement, continuation or other similar delay is a violation of the

stay under subsection (a).’’; and

(4) by amending section 1322(b)(2) to read as follows:

‘‘(2) modify the rights of holders of secured claims, other

than a claim secured primarily by a security interest in property used as the debtor’s principal residence at any time during

180 days prior to the filing of the petition, or of holders of unsecured claims, or leave unaffected the rights of holders of any

class of claims;’’.

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

amended by adding at the end the following:

‘‘(j) If one case commenced under chapter 7, 11, or 13 of this title

is dismissed due to the creation of a debt repayment plan administered by a credit counseling agency approved pursuant to section

111 of this title, then for purposes of section 362(c)(3) of this title

the subsequent case commenced under any such chapter shall not

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

(g) RETURN OF GOODS SHIPPED.—Section 546(g) of title 11,

United States Code, as added by section 222(a) of Public Law 103–

394, is amended to read as follows:

‘‘(h) Notwithstanding the rights and powers of a trustee under

sections 544(a), 545, 547, 549, and 553 of this title, if the court determines on a motion by the trustee made not later than 120 days

after the date of the order for relief in a case under chapter 11 of

this title and after notice and hearing, that a return is in the best

interests of the estate, the debtor, with the consent of the creditor,

and subject to the prior rights, if any, of third parties in such

goods, may return goods shipped to the debtor by the creditor before the commencement of the case, and the creditor may offset the

purchase price of such goods against any claim of the creditor
72

against the debtor that arose before the commencement of the

case.’’.

SEC. 303. EXTENSIONS.

Section 302(d)(3) of the Bankruptcy, Judges, United States

Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C.

581 note) is amended—

(1) in subparagraph (A), in the matter following clause (ii),

by striking ‘‘or October 1, 2002, whichever occurs first’’; and

(2) in subparagraph (F)—

(A) in clause (i)—

(i) in subclause (II), by striking ‘‘or October 1, 2002,

whichever occurs first’’; and

(ii) in the matter following subclause (II), by striking

‘‘October 1, 2003, or’’; and

(B) in clause (ii), in the matter following subclause (II)—

(i) by striking ‘‘before October 1, 2003, or’’; and

(ii) by striking ‘‘, whichever occurs first’’.

SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.

Section 1408 of title 28, United States Code, is amended—

(1) by striking ‘‘Except’’ and inserting ‘‘(a) Except’’; and

(2) by adding at the end the following:

‘‘(b) For the purposes of subsection (a), if the debtor is a corporation, the domicile and residence of the debtor are conclusively presumed to be where the debtor’s principal place of business in the

United States is located.’’.

SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.

(a) Section 365(c) of title 11, United States Code, is amended to

read as follows:

‘‘(c)(1) The trustee may not assume or assign an executory contract or unexpired lease of the debtor, whether or not the contract

or lease prohibits or restricts assignment of rights or delegation of

duties, if—

‘‘(A)(i) applicable law excuses a party to the contract or lease

from accepting performance from or rendering performance to

an assignee of the contract or lease, whether or not the contract or lease prohibits or restricts assignment of rights or delegation of duties; and

‘‘(ii) the party does not consent to the assumption or assignment; or

‘‘(B) the contract is a contract to make a loan, or extend

other debt financing or financial accommodations, to or for the

benefit of the debtor, or to issue a security of the debtor.

‘‘(2) Notwithstanding paragraph (1)(A) and applicable nonbankruptcy law, in a case under chapter 11 of this title, a trustee in a

case in which a debtor is a corporation, or a debtor in possession,

may assume an executory contract or unexpired lease of the debtor,

whether or not the contract or lease prohibits or restricts assignment of rights or delegation of duties.

‘‘(3) The trustee may not assume or assign an unexpired lease of

the debtor of nonresidential real property, whether or not the contract or lease prohibits or restricts assignment of rights or delegation of duties, if the lease has been terminated under applicable

nonbankruptcy law before the order for relief.’’.
73

(b) Section 365(d) of title 11, United States Code, is amended by

striking paragraphs (5), (6), (7), (8), and (9), and redesignating

paragraph (10) as paragraph (5).

(c) Section 365(e) of title 11, United States Code, is amended to

read as follows:

‘‘(e)(1) Notwithstanding a provision in an executory contract or

unexpired lease, or in applicable law, an executory contract or unexpired lease of the debtor may not be terminated or modified, and

any right or obligation under such contract or lease may not be terminated or modified, at any time after the commencement of the

case solely because of a provision in such contract or lease that is

conditioned on—

‘‘(A) the insolvency or financial condition of the debtor at any

time before the closing of the case;

‘‘(B) the commencement of a case under this title; or

‘‘(C) the appointment of or taking possession by a trustee in

a case under this title or a custodian before such commencement.

‘‘(2) Paragraph (1) does not apply to an executory contract or unexpired lease of the debtor if the trustee may not assume or assign,

and the debtor in possession may not assume, the contract or lease

by reason of the provisions of subsection (c) of this section.’’.

(d) Section 365(f)(1) of title 11, United States Code, is amended

by striking the semicolon and all that follows through ‘‘event’’.

TITLE IV SMALL BUSINESS

BANKRUPTCY PROVISIONS

SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.

(a) Section 1125(a)(1) of title 11, United States Code, is amended

by inserting before the semicolon following:

‘‘and in determining whether a disclosure statement provides adequate information, the court shall consider the complexity of the

case, the benefit of additional information to creditors and other

parties in interest, and the cost of providing additional information’’.

(b) Section 1125(f) of title 11, United States Code, is amended to

read as follows:

‘‘(f) Notwithstanding subsection (b)—

‘‘(1) the court may determine that the plan itself provides

adequate information and that a separate disclosure statement

is not necessary;

‘‘(2) the court may approve a disclosure statement submitted

on standard forms approved by the court or adopted pursuant

to section 2075 of title 28; and

‘‘(3)(A) the court may conditionally approve a disclosure

statement subject to final approval after notice and a hearing;

‘‘(B) acceptances and rejections of a plan may be solicited

based on a conditionally approved disclosure statement if the

debtor provides adequate information to each holder of a claim

or interest that is solicited, but a conditionally approved disclosure statement shall be mailed not less than 20 days before the

date of the hearing on confirmation of the plan; and
74

‘‘(C) the hearing on the disclosure statement may be combined

with the hearing on confirmation of a plan.’’.

SEC. 402. DEFINITIONS.

(a) DEFINITIONS. Section 101 of title 11, United States Code, is

amended by striking paragraph (51C) and inserting the following:

‘‘(51C) ‘small business case’ means a case filed under chapter

11 of this title in which the debtor is a small business debtor;

and

‘‘(51D) ‘small business debtor’ means (A) a person (including

affiliates of such person that are also debtors under this title)

that has aggregate noncontingent, liquidated secured and unsecured debts as of the date of the petition or the order for relief in an amount not more than $4,000,000 (excluding debts

owed to 1 or more affiliates or insiders), except that if a group

of affiliated debtors has aggregate noncontingent liquidated secured and unsecured debts greater than $4,000,000 (excluding

debt owed to 1 or more affiliates or insiders), then no member

of such group is a small business debtor;’’.

(b) CONFORMING AMENDMENT.—Section 1102(a)(3) of title 11,

United States Code, is amended by inserting ‘‘debtor’’ after ‘‘small

business’’ .

SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

The Advisory Committee on Bankruptcy Rules of the Judicial

Conference of the United States shall, within a reasonable period

of time after the date of the enactment of this Act, propose for

adoption standard form disclosure statements and plans of reorganization for small business debtors (as defined in section 101 of

title 11, United States Code, as amended by this Act), designed to

achieve a practical balance between—

(1) the reasonable needs of the courts, the United States

trustee, creditors, and other parties in interest for reasonably

complete information; and

(2) economy and simplicity for debtors.

SEC. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.

(a) REPORTING REQUIRED.—

(1) Title 11 of the United States Code is amended by inserting after section 307 the following:

‘‘§ 308. Debtor reporting requirements

‘‘A small business debtor shall file periodic financial and other

reports containing information including—

‘‘(1) the debtor’s profitability, that is, approximately how

much money the debtor has been earning or losing during current and recent fiscal periods;

‘‘(2) reasonable approximations of the debtor’s projected cash

receipts and cash disbursements over a reasonable period;

‘‘(3) comparisons of actual cash receipts and disbursements

with projections in prior reports; and

‘‘(4) whether the debtor is—

‘‘(A) in compliance in all material respects with

postpetition requirements imposed by this title and the

Federal Rules of Bankruptcy Procedure; and
75

‘‘(B) timely filing tax returns and paying taxes and other

administrative claims when due, and, if not, what the failures are and how, at what cost, and when the debtor intends to remedy such failures; and

‘‘(5) such other matters as are in the best interests of the

debtor and creditors, and in the public interest in fair and efficient procedures under chapter 11 of this title.’’.

(2) The table of sections of chapter 3 of title 11, United

States Code, is amended by inserting after the item relating to

section 307 the following:

‘‘308. Debtor reporting requirements.’’.

(b) EFFECTIVE DATE.—The amendments made by subsection (a)

shall take effect 60 days after the date on which rules are prescribed pursuant to section 2075, title 28, United States Code to establish forms to be used to comply with section 308 of title 11,

United States Code, as added by subsection (a).

SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.

(a) PROPOSAL OF RULES AND FORMS.—The Advisory Committee

on Bankruptcy Rules of the Judicial Conference of the United

States shall propose for adoption amended Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms to be used by

small business debtors to file periodic financial and other reports

containing information, including information relating to—

(1) the debtor’s profitability;

(2) the debtor’s cash receipts and disbursements; and

(3) whether the debtor is timely filing tax returns and paying

taxes and other administrative claims when due.

(b) PURPOSE.—The rules and forms proposed under subsection (a)

shall be designed to achieve a practical balance between—

(1) the reasonable needs of the bankruptcy court, the United

States trustee, creditors, and other parties in interest for reasonably complete information;

(2) the small business debtor’s interest that required reports

be easy and inexpensive to complete; and

(3) the interest of all parties that the required reports help

the small business debtor to understand its financial condition

and plan its future.

SEC. 406. DUTIES IN SMALL BUSINESS CASES.

(a) DUTIES IN CHAPTER 11 CASES.—Title 11 of the United States

Code is amended by inserting after section 1114 the following:

‘‘§ 1115. Duties of trustee or debtor in possession in small

business cases

‘‘(a) In a small business case, a trustee or the debtor in possession, in addition to the duties provided in this title and as otherwise required by law, shall—

‘‘(1) append to the voluntary petition or, in an involuntary

case, file within 3 days after the date of the order for relief—

‘‘(A) its most recent balance sheet, statement of operations, cash-flow statement, Federal income tax return; or

‘‘(B) a statement made under penalty of perjury that no

balance sheet, statement of operations, or cash-flow state-
76

ment has been prepared and no Federal tax return has

been filed;

‘‘(2) attend, through its responsible individual, meetings

scheduled by the court or the United States trustee, including

initial debtor interviews and meetings of creditors convened

under section 341 of this title;

‘‘(3) timely file all schedules and statements of financial affairs, unless the court, after notice and a hearing, grants an

extension, which shall not extend such time period to a date

later than 30 days after the date of the order for relief, absent

extraordinary and compelling circumstances;

‘‘(4) file all postpetition financial and other reports required

by the Federal Rules of Bankruptcy Procedure or by local rule

of the district court;

‘‘(5) subject to section 363(c)(2) of this title, maintain insurance customary and appropriate to the industry;

‘‘(6)(A) timely file tax returns;

‘‘(B) subject to section 363(c)(2) of this title, timely pay all

administrative expense tax claims, except those being contested by appropriate proceedings being diligently prosecuted;

and

‘‘(C) subject to section 363(c)(2) of this title, establish 1 or

more separate deposit accounts not later than 10 business days

after the date of order for relief (or as soon thereafter as possible if all banks contacted decline the business) and deposit

therein, not later than 1 business day after receipt thereof or

a responsible time set by the court, all taxes payable for periods beginning after the date the case is commenced that are

collected or withheld by the debtor for governmental units unless the court waives this requirement after notice and hearing; and

‘‘(7) allow the United States trustee, or its designated representative, to inspect the debtor’s business premises, books,

and records at reasonable times, after reasonable prior written

notice, unless notice is waived by the debtor.’’.

(b) TECHNICAL AMENDMENT.—The table of sections of chapter 11,

United States Code, is amended by inserting after the item relating

to section 1114 the following:

‘‘1115. Duties of trustee or debtor in possession in small business cases.’’.

SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

Section 1121(e) of title 11, United States Code, is amended to

read as follows:

‘‘(e) In a small business case—

‘‘(1) only the debtor may file a plan until after 90 days after

the date of the order for relief, unless a trustee has been appointed under this chapter, or unless the court, on request of

a party in interest and after notice and hearing, shortens such

time;

‘‘(2) the debtor shall file a plan, and any necessary disclosure

statement, not later than 90 days after the date of the order

for relief, unless the United States Trustee has appointed

under section 1102(a)(1) of this title a committee of unsecured

creditors that the court has determined, before the 90 days has
77

expired, is sufficiently active and representative to provide effective oversight of the debtor; and

‘‘(3) the time periods specified in paragraphs (1) and (2) of

this subsection and the time fixed in section 1129(e) of this

title for confirmation of a plan, may be extended only as follows:

‘‘(A) On request of a party in interest made within the

respective periods, and after notice and hearing, the court

may for cause grant one or more extensions, cumulatively

not to exceed 60 days, if the movant establishes—

‘‘(i) that no cause exists to dismiss or convert the

case or appoint a trustee or examiner under subparagraphs (A) (I) of section 1112(b) of this title; and

‘‘(ii) that there is a reasonable possibility the court

will confirm a plan within a reasonable time;

‘‘(B) On request of a party in interest made within the

respective periods, and after notice and hearing, the court

may for cause grant one or more extensions in excess of

those authorized under subparagraph (A) of this paragraph, if the movant establishes:

‘‘(i) that no cause exists to dismiss or convert the

case or appoint a trustee or examiner under subparagraphs (A) (I) of section 1112(b)(3) of this title; and

‘‘(ii) that it is more likely than not that the court

will confirm a plan within a reasonable time; and

‘‘(C) a new deadline shall be imposed whenever an extension is granted.’’.

SEC. 408. PLAN CONFIRMATION DEADLINE.

Section 1129 of title 11, United States Code, is amended by adding at the end the following:

‘‘(e) In a small business case, the debtor shall confirm a plan not

later than 150 days after the date of the order for relief unless—

‘‘(1) the United States Trustee has appointed, under section

1102(a)(1) of this title, a committee of unsecured creditors that

the court has determined, before the 150 days has expired, is

sufficiently active and representative to provide effective oversight of the debtor; or

‘‘(2) such 150-day period is extended as provided in section

1121(e)(3) of this title.’’.

SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

Section 105(d) of title 11, United States Code, is amended—

(1) in paragraph (2)(B)(vi) by striking the period at the end

and inserting ‘‘; and’’; and

(2) by adding at the end the following:

‘‘(3) in a small business case, not extend the time periods

specified in sections 1121(e) and 1129(e) of this title except as

provided in section 1121(e)(3) of this title.’’.

SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.

(a) DUTIES OF THE UNITED STATES TRUSTEE.—

Section 586(a) of title 28, United States Code, is amended—

(1) in paragraph (3)—

(A) in subparagraph (G) by striking ‘‘and at the end’’;
78

(B) by redesignating subparagraph (H) as subparagraph

(I); and

(C) by inserting after subparagraph (G) the following:

‘‘(H) in small business cases (as defined in section 101 of

title 11), performing the additional duties specified in title

11 pertaining to such cases’’;

(2) in paragraph (5) by striking ‘‘and at the end’’;

(3) in paragraph (6) by striking the period at the end and inserting ‘‘; and’’; and

(4) by inserting after paragraph (7) the following:

‘‘(7) in each of such small business cases—

‘‘(A) conduct an initial debtor interview as soon as practicable after the entry of order for relief but before the first

meeting scheduled under section 341(a) of title 11 at which

time the United States trustee shall begin to investigate

the debtor’s viability, inquire about the debtor’s business

plan, explain the debtor’s obligations to file monthly operating reports and other required reports, attempt to develop an agreed scheduling order, and inform the debtor of

other obligations;

‘‘(B) when determined to be appropriate and advisable,

visit the appropriate business premises of the debtor and

ascertain the state of the debtor’s books and records and

verify that the debtor has filed its tax returns; and

‘‘(C) review and monitor diligently the debtor’s activities,

to identify as promptly as possible whether the debtor will

be unable to confirm a plan; and

‘‘(8) in cases in which the United States trustee finds material grounds for any relief under section 1112 of title 11, the

United States trustee shall apply promptly to the court for relief.’’.

SEC. 411. SCHEDULING CONFERENCES.

Section 105(d) of title 11, United States Code, is amended—

(1) in the matter preceding paragraph (1) by striking ‘‘, may’’;

(2) by amending paragraph (1) to read as follows:

‘‘(1) shall hold such status conferences as are necessary to

further the expeditious and economical resolution of the case;

and’’; and

(3) in paragraph (2) by striking ‘‘unless inconsistent with another provision of this title or with applicable Federal Rules of

Bankruptcy Procedure’’, and inserting ‘‘may’’.

SEC. 412. SERIAL FILER PROVISIONS.

Section 362 of title 11, United States Code, as amended by section 302, is amended—

(1) in subsection (i) as so redesignated by section 122—

(A) by striking ‘‘An’’ and inserting ‘‘(1) Except as provided in paragraph (2), an’’; and

(B) by adding at the end the following:

‘‘(2) If such violation is based on an action taken by an entity in

the good-faith belief that subsection (h) applies to the debtor, then

recovery under paragraph (1) against such entity shall be limited

to actual damages.’’; and
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(2) by inserting after subsection (j), as added by section 302,

the following:

‘‘(k)(1) Except as provided in paragraph (2) of this subsection, the

provisions of subsection (a) of thissection shall not apply in a case

in which the debtor—

‘‘(A) is a debtor in a case under this title pending at the time

the petition is filed;

‘‘(B) was a debtor in a case under this title which was dismissed for any reason by an order that became final in the 2-

year period ending on the date of the order for relief entered

with respect to the petition;

‘‘(C) was a debtor in a case under this title in which a chapter 11, 12, or 13 plan was confirmed in the 2-year period ending on the date of the order for relief entered with respect to

the petition; or

‘‘(D) is an entity that has succeeded to substantially all of

the assets or business of a debtor described in subparagraph

(A), (B), or (C).

‘‘(2) This subsection shall not apply—

‘‘(A) to a case initiated by an involuntary petition filed by a

creditor that is not an insider or affiliate of the debtor; or

‘‘(B) after such time as the debtor, after notice and a hearing,

demonstrates by a preponderance of the evidence, that the filing of such petition resulted from circumstances beyond the

control of the debtor and not foreseeable at the time the earlier

case was filed; and that it is more likely than not that the

court will confirm a plan, other than a liquidating plan, within

a reasonable time.’’.

SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND

APPOINTMENT OF TRUSTEE OR EXAMINER.

(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION.—Section

1112(b) of title 11, United States Code, is amended to read as follows:

‘‘(b)(1) Except as provided in paragraphs (2) and (4) of this subsection, and in subsection (c) of this section, on request of a party

in interest, and after notice and a hearing, the court shall convert

a case under this chapter to a case under chapter 7 of this title or

dismiss a case under this chapter, or appoint a trustee or examiner

under section 1104(e) of this title, whichever is in the best interest

of creditors and the estate, if the movant establishes cause.

‘‘(2) The court may decline to grant the relief specified in paragraph (1) of this subsection if the debtor or another party in interest objects and establishes by a preponderance of the evidence

that—

‘‘(A) it is more likely than not that a plan will be confirmed

within a time as fixed by this title or by order of the court entered pursuant to section 1121(e)(3), or within a reasonable

time if no time has been fixed; and

‘‘(B) if the cause is an act or omission of the debtor that—

‘‘(i) there exists a reasonable justification for the act or

omission; and

‘‘(ii) the act or omission will be cured within a reasonable time fixed by the court not to exceed 30 days after the

court decides the motion, unless the movant expressly con-
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sents to a continuance for a specific period of time, or compelling circumstances beyond the control of the debtor justify an extension.

‘‘(3) For purposes of this subsection, cause includes—

‘‘(A) substantial or continuing loss to or diminution of the estate;

‘‘(B) gross mismanagement of the estate;

‘‘(C) failure to maintain insurance that poses a material risk

to the estate or the public;

‘‘(D) unauthorized use of cash collateral harmful to 1 or more

creditors;

‘‘(E) failure to comply with an order of the court;

‘‘(F) failure timely to satisfy any filing or reporting requirement established by this title or by any rule applicable to a

case under this chapter;

‘‘(G) failure to attend the meeting of creditors convened

under section 341(a) of this title;

‘‘(H) failure timely to provide information or attend meetings

reasonably requested by the United States trustee or bankruptcy administrator;

‘‘(I) failure timely to pay taxes due after the date of the order

for relief or to file tax returns due after the order for relief;

‘‘(J) failure to file a disclosure statement, or to file or confirm

a plan, within the time fixed by this title or by order of the

court;

‘‘(K) failure to pay any fees or charges required under chapter 123 of title 28;

‘‘(L) revocation of an order of confirmation under section

1144 of this title;

‘‘(M) inability to effectuate substantial consummation of a

confirmed plan;

‘‘(N) material default by the debtor with respect to a confirmed plan; and

‘‘(O) termination of a plan by reason of the occurrence of a

condition specified in the plan.

‘‘(4) The court may grant relief under this subsection for cause

as defined in subparagraphs C, F, G, H, or K of paragraph 3 of this

subsection only upon motion of the United States trustee or bankruptcy administrator or upon the court s own motion.

‘‘(5) The court shall commence the hearing on any motion under

this subsection not later than 30 days after filing of the motion,

and shall decide the motion within 15 days after commencement of

the hearing, unless the movant expressly consents to a continuance

for a specific period of time or compelling circumstances prevent

the court from meeting the time limits established by this paragraph.’’.

(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF TRUSTEE OR EXAMINER.—Section 1104 of title 11, United States Code, is amended

by adding at the end the following:

‘‘(e) If grounds exist to convert or dismiss the case under section

1112 of this title, the court may instead appoint a trustee or examiner, if it determines that such appointment is in the best interests

of creditors and the estate.’’.
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SEC. 414. STUDY OF OPERATION OF TITLE 11 OF THE UNITED STATES

CODE WITH RESPECT TO SMALL BUSINESSES.

Not later than 2 years after the date of the enactment of this

Act, the Administrator of the Small Business Administration, in

consultation with the Attorney General, the Director of the Administrative Office of United States Trustees, and the Director of the

Administrative Office of the United States Courts, shall—

(1) conduct a study to determine—

(A) the internal and external factors that cause small

businesses, especially sole proprietorships, to become debtors in cases under title 11 of the United States Code and

that cause certain small businesses to successfully complete cases under chapter 11 of such title; and

(B) how Federal laws relating to bankruptcy may be

made more effective and efficient in assisting small businesses to remain viable; and

(2) submit to the President pro tempore of the Senate and

the Speaker of the House of Representatives a report summarizing that study.

SEC. 415. PAYMENT OF INTEREST.

Section 362(d)(3) of title 11, United States Code, is amended—

(1) by inserting ‘‘or 30 days after the court determines that

the debtor is subject to this paragraph, whichever is later’’

after ‘‘90-day period)’’; and

(2) by amending subparagraph (B) to read as follows:

‘‘(B) the debtor has commenced monthly payments

(which payments may, in the debtor’s sole discretion, notwithstanding section 363(c)(2) of this title, be made from

rents or other income generated before or after the commencement of the case by or from the property) to each

creditor whose claim is secured by such real estate (other

than a claim secured by a judgment lien or by an

unmatured statutory lien), which payments are in an

amount equal to interest at the then-applicable nondefault

contract rate of interest on the value of the creditor’s interest in the real estate; or’’.

SEC. 416. PROTECTION OF JOBS.

The provisions of title 11 of the United States Code relating to

small business debtors or to single asset real estate shall not apply

in a case under such title if the application of any of such provisions in such case could result in the loss of 5 or more jobs.

TITLE V—MUNICIPAL BANKRUPTCY

PROVISIONS

SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

(a) TECHNICAL AMENDMENT RELATING TO MUNICIPALITIES.—Section 921(d) of title 11, United States Code, is amended by inserting

‘‘notwithstanding section 301(b)’’ before the period at the end.

(b) CONFORMING AMENDMENT.—Section 301 of title 11, United

States Code, is amended—

(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’; and
82

(2) by amending the last sentence to read as follows:

‘‘(b) The commencement of a voluntary case under a chapter of

this title constitutes an order for relief under such chapter.’’.

SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.

Section 901(a) of title 11, United States Code, is amended—

(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and

(2) by inserting ‘‘559, 560, 561, 562’’ after ‘‘557,’’.

TITLE VI—STREAMLINING THE

BANKRUPTCY SYSTEM

SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.

Section 341(c) of title 11, United States Code, is amended by inserting after the first sentence the following: ‘‘Notwithstanding any

local court rule, provision of a State constitution, any other Federal

or State law that is not a bankruptcy law, or other requirement

that representation at the meeting of creditors under subsection (a)

be by an attorney, a creditor holding a consumer debt or any representative of the creditor (which may include an entity or an employee of an entity and may be a representative for more than one

creditor) shall be permitted to appear at and participate in the

meeting of creditors and activities related thereto in a case under

chapter 7 or 13, either alone or in conjunction with an attorney for

the creditor. Nothing in this subsection shall be construed to require any creditor to be represented by an attorney at any meeting

of creditors.’’.

SEC. 602. AUDIT PROCEDURES.

(a) AMENDMENTS.—Section 586 of title 28, United States Code, is

amended—

(1) in subsection (a) by amending striking paragraph (6) to

read as follows:

‘‘(6) make such reports as the Attorney General directs, including the results of audits performed under subsection (f);

and’’; and

(2) by adding at the end the following:

‘‘(f)(1)(A) The Attorney General shall establish procedures to determine the accuracy, veracity, and completeness of petitions,

schedules, and other information which the debtor is required to

provide under sections 521 and 1322 of title 11, and, if applicable,

section 111 of title 11, in individual cases filed under chapter 7 or

13 of such title. Such audits shall be in accordance with generally

accepted auditing standards and performed by independent certified public accountants or independent licensed public accountants.

‘‘(B) Those procedures shall—

‘‘(i) establish a method of selecting appropriate qualified persons to contract to perform those audits;

‘‘(ii) establish a method of randomly selecting cases to be audited, except that not less than 1 out of every 250 cases in each

Federal judicial district shall be selected for audit;
83

‘‘(iii) require audits for schedules of income and expenses

which reflect greater than average variances from the statistical norm of the district in which the schedules were filed; and

‘‘(iv) establish procedures for providing, not less frequently

than annually, public information concerning the aggregate results of such audits including the percentage of cases, by district, in which a material misstatement of income or expenditures is reported.

‘‘(2) The United States trustee for each district is authorized to

contract with auditors to perform audits in cases designated by the

United States trustee according to the procedures established

under paragraph (1).

‘‘(3)(A) The report of each audit conducted under this subsection

shall be filed with the court and transmitted to the United States

trustee. Each report shall clearly and conspicuously specify any

material misstatement of income or expenditures or of assets identified by the person performing the audit. In any case where a material misstatement of income or expenditures or of assets has been

reported, the clerk of the bankruptcy court shall give notice of the

misstatement to the creditors in the case.

‘‘(B) If a material misstatement of income or expenditures or of

assets is reported, the United States trustee shall—

‘‘(i) report the material misstatement, if appropriate, to the

United States Attorney pursuant to section 3057 of title 18,

United States Code; and

‘‘(ii) if advisable, take appropriate action, including but not

limited to commencing an adversary proceeding to revoke the

debtor’s discharge pursuant to section 727(d) of title 11, United

States Code.’’.

(b) AMENDMENTS TO SECTION 521 OF TITLE 11, U.S.C.—Section

521(a) of title 11, United States Code, as amended by section 603,

is amended in paragraphs (3) and (4) by adding ‘‘or an auditor appointed pursuant to section 586 of title 28, United States Code’’

after ‘‘serving in the case’’.

(c) AMENDMENTS TO SECTION 727 OF TITLE 11, U.S.C.—Section

727(d) of title 11, United States Code, is amended—

(1) by deleting ‘‘or’’ at the end of paragraph (2);

(2) by substituting ‘‘; or’’ for the period at the end of paragraph (3); and

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

‘‘(4) the debtor has failed to explain satisfactorily—

‘‘(A) a material misstatement in an audit performed pursuant to section 586(f) of title 28, United States Code; or

‘‘(B) a failure to make available for inspection all necessary accounts, papers, documents, financial records, files,

and all other papers, things, or property belonging to the

debtor that are requested for an audit conducted pursuant

to section 586(f) of title 28, United States Code.’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall take effect 18 months after the date of enactment of this Act.

SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7 AND 13

CASES.

(a) NOTICE.—Section 342 of title 11, United States Code, is

amended—
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(1) in subsection (c)—

(A) by striking ‘‘, but the failure of such notice to contain

such information shall not invalidate the legal effect of

such notice’’; and

(B) by adding the following at the end:

‘‘If the credit agreement between the debtor and the creditor or the

last communication before the filing of the petition in a voluntary

case from the creditor to a debtor who is an individual states an

account number of the debtor which is the current account number

of the debtor with respect to any debt held by the creditor against

the debtor, the debtor shall include such account number in any

notice to the creditor required to be given under this title. If the

creditor has specified to the debtor an address at which the creditor

wishes to receive correspondence regarding the debtor’s account,

any notice to the creditor required to be given by the debtor under

this title shall be given at such address. For the purposes of this

section, ‘notice’ shall include, but shall not be limited to, any correspondence from the debtor to the creditor after the commencement of the case, any statement of the debtor’s intention under section 521(a)(2) of this title, notice of the commencement of any proceeding in the case to which the creditor is a party, and any notice

of the hearing under section 1324 of this title.’’;

(2) by adding at the end the following:

‘‘(d) At any time, a creditor in a case of an individual debtor

under chapter 7 or 13 may file with the court and serve on the

debtor a notice of the address to be used to notify the creditor in

that case. After 5 days following receipt of such notice, any notice

the court or the debtor is required to give the creditor shall be

given at that address.

‘‘(e) An entity may file with the court a notice stating its address

for notice in cases under chapters 7 and 13. After 30 days following

the filing of such notice, any notice in any case filed under chapter

7 or 13 given by the court shall be to that address unless specific

notice is given under subsection (d) with respect to a particular

case.

‘‘(f) Notice given to a creditor other than as provided in this section shall not be effective notice until it has been brought to the

attention of the creditor. If the creditor has designated a person or

department to be responsible for receiving notices concerning bankruptcy cases and has established reasonable procedures so that

bankruptcy notices received by the creditor will be delivered to

such department or person, notice will not be brought to the attention of the creditor until received by such person or department. No

sanction under section 362(h) of this title or any other sanction

which a court may impose on account of violations of the stay

under section 362(a) of this title or failure to comply with section

542 or 543 of this title may be imposed on any action of the creditor unless the action takes place after the creditor has received notice of the commencement of the case effective under this section.’’.

(b) DEBTOR’S DUTIES.—Section 521 of title 11, United States

Code, as amended by sections 604, 120, and 302, is amended—

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

(2) by striking paragraph (1) and inserting the following:

‘‘(1) file—
85

‘‘(A) a list of creditors; and

‘‘(B) unless the court orders otherwise—

‘‘(i) a schedule of assets and liabilities;

‘‘(ii) a schedule of current monthly income and current expenditures prepared in accordance with section

707(b)(2);

‘‘(iii) a statement of the debtor’s financial affairs

and, if applicable, a certificate—

‘‘(I) of an attorney whose name is on the petition

as the attorney for the debtor or any bankruptcy

petition preparer signing the petition pursuant to

section 110(b)(1) of this title indicating that such

attorney or bankruptcy petition preparer delivered

to the debtor any notice required by section 342(b)

of this title; or

‘‘(II) if no attorney for the debtor is indicated

and no bankruptcy petition preparer signed the

petition, of the debtor that such notice was obtained and read by the debtor;

‘‘(iv) copies of any Federal tax returns, including any

schedules or attachments, filed by the debtor for the

3-year period preceding the order for relief;

‘‘(v) copies of all payment advices or other evidence

of payment, if any, received by the debtor from any

employer of the debtor in the period 60 days prior to

the filing of the petition; and

‘‘(vi) a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-

month period following the date of filing;’’;

(3) by adding at the end the following:

‘‘(e)(1) At any time, a creditor, in the case of an individual under

chapter 7 or 13, may file with the court notice that the creditor requests the petition, schedules, and a statement of affairs filed by

the debtor in the case and the court shall make those documents

available to the creditor who requests those documents at a reasonable cost within 5 business days after such request.

‘‘(2) At any time, a creditor in a case under chapter 13 may file

with the court notice that the creditor requests the plan filed by

the debtor in the case, and the court shall make such plan available to the creditor who requests such plan at a reasonable cost

and not later than 5 days after such request.

‘‘(f) An individual debtor in a case under chapter 7 or 13 shall

file with the court—

‘‘(1) at the time filed with the taxing authority, all tax returns, including any schedules or attachments, with respect to

the period from the commencement of the case until such time

as the case is closed;

‘‘(2) at the time filed with the taxing authority, all tax returns, including any schedules or attachments, that were not

filed with the taxing authority when the schedules under subsection (a)(1) were filed with respect to the period that is 3

years before the order for relief;
86

‘‘(3) any amendments to any of the tax returns, including

schedules or attachments, described in paragraph (1) or (2);

and

‘‘(4) in a case under chapter 13, a statement subject to the

penalties of perjury by the debtor of the debtor’s current

monthly income and expenditures in the preceding tax year

and current monthly income less expenditures for the month

preceding the statement prepared in accordance with section

707(b)(2) that shows how the amounts are calculated—

‘‘(A) beginning on the date that is the later of 90 days

after the close of the debtor’s tax year or 1 year after the

order for relief, unless a plan has been confirmed; and

‘‘(B) thereafter, on or before the date that is 45 days before each anniversary of the confirmation of the plan until

the case is closed.

‘‘(g)(1) A statement referred to in subsection (f)(4) shall disclose—

‘‘(A) the amount and sources of income of the debtor;

‘‘(B) the identity of any persons responsible with the debtor

for the support of any dependents of the debtor; and

‘‘(C) the identity of any persons who contributed, and the

amount contributed, to the household in which the debtor resides.

‘‘(2) The tax returns, amendments, and statement of income and

expenditures described in paragraph (1) shall be available to the

United States trustee, any bankruptcy administrator, any trustee,

and any party in interest for inspection and copying, subject to the

requirements of subsection (h).

‘‘(h)(1) Not later than 30 days after the date of enactment of the

Consumer Bankruptcy Reform Act of 1999, the Director of the Administrative Office of the United States Courts shall establish procedures for safeguarding the confidentiality of any tax information

required to be provided under this section.

‘‘(2) The procedures under paragraph (1) shall include reasonable

restrictions on creditor access to tax information that is required

to be provided under this section to verify creditor identity and to

restrict use of the information except with respect to the case.

‘‘(3) Not later than 1 year after the date of enactment of the Consumer Bankruptcy Reform Act of 1999, the Director of the Administrative Office of the United States Courts shall prepare, and submit to Congress a report that—

‘‘(A) assesses the effectiveness of the procedures under paragraph (1) to provide timely and sufficient information to creditors concerning the case; and

‘‘(B) if appropriate, includes proposed legislation—

‘‘(i) to further protect the confidentiality of tax information or to make it better available to creditors; and

‘‘(ii) to provide penalties for the improper use by any person of the tax information required to be provided under

this section.

‘‘(i) If requested by the United States trustee or a trustee serving

in the case, the debtor provide a document that establishes the

identity of the debtor, including a driver’s license, passport, or

other document that contains a photograph of the debtor and such
87

other personal identifying information relating to the debtor that

establishes the identity of the debtor.’’.

(c) Section 1324 of title 11, United States Code, is amended—

(1) by inserting ‘‘(a)’’ before ‘‘After’’; and

(2) by inserting at the end thereof—

‘‘(c) Whenever a party in interest is given notice of a hearing on

the confirmation or modification of a plan under this chapter, such

notice shall include the information provided by the debtor on the

most recent statement filed with the court pursuant to section

521(a)(1)(B)(ii) or (f)(4) of this title.’’.

SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR

PROVIDE REQUIRED INFORMATION.

Section 521 of title 11, United States Code, as amended by section 603 is amended by inserting after subsection (a) the following:

‘‘(b)(1) Notwithstanding section 707(a) of this title, and subject to

paragraph (2), if an individual debtor in a voluntary case under

chapter 7 or 13 fails to file all of the information required under

subsection (a)(1) within 45 days after the filing of the petition commencing the case, the case shall be automatically dismissed effective on the 46th day after the filing of the petition.

‘‘(2) With respect to a case described in paragraph (1), any party

in interest may request the court to enter an order dismissing the

case. The court shall, if so requested, enter an order of dismissal

not later than 5 days after such request.

‘‘(3) Upon request of the debtor made within 45 days after the

filing of the petition commencing a case described in paragraph (1),

the court may allow the debtor an additional period not to exceed

45 days to file the information required under subsection (a)(1) if

the court finds justification for extending the period for the filing.’’.

SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE PLAN.

(a) HEARING.—Section 1324 of title 11, United States Code, is

amended—

(1) by striking ‘‘After’’ and inserting the following:

‘‘(a) Except as provided in subsection (b) and after’’; and

(2) by adding at the end the following:

‘‘(b) The hearing on confirmation of the plan may be held not earlier than 20 days, and not later than 45 days, after the meeting of

creditors under section 341(a) of this title.’’.

SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN CERTAIN CASES.

Title 11, United States Code, is amended—

(1) by amending section 1322(d) to read as follows:

‘‘(d) If the current monthly income of the debtor and the debtor’s

spouse combined, when multiplied by 12, is not less than the highest national median family income last reported by the Bureau of

the Census for a family of equal or lesser size or, in the case of a

household of 1 person, not less than the national median household

income for 1 earner, the plan may not provide for payments over

a period that is longer than 5 years. If the current monthly income

of the debtor and the debtor’s spouse combined, when multiplied by

12, is less than the highest national median family income for a

family of equal or lesser size, or in the case of a household of 1 per-
88

son, the national median household income for 1 earner, the plan

may not provide for payments over a period that is longer than 3

years, unless the court, for cause, approves a longer period, but the

court may not approve a period that is longer than 5 years. Notwithstanding the foregoing, the national median family income for

a family of more than 4 individuals shall be the national median

family income last reported by the Bureau of the Census for a family of 4 individuals plus $583 for each additional member of the

family.’’;

(2) in section 1325(b)(1)(B) as amended by section 130—

(A) by striking ‘‘three year period’’ and inserting ‘‘applicable commitment period’’; and

(B) by inserting at the end of subparagraph (B) the following: ‘‘The ‘applicable commitment period’ shall be not

less than 5 years if the current monthly income of the

debtor and the debtor’s spouse combined, when multiplied

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

income last reported by the Bureau of the Census for a

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

of 1 person, the national median household income for 1

earner. Notwithstanding the foregoing, the national median family income for a family of more than 4 individuals

shall be the national median family income last reported

by the Bureau of the Census for a family of 4 individuals

plus $583 for each additional member of the family.’’; and

(3) in section 1329—

(A) by striking in subsection (c) ‘‘three years’’ and inserting ‘‘the applicable commitment period under section

1325(b)(1)(B)’’; and

(B) by inserting at the end of subsection (c) the following:

‘‘The duration period shall be 5 years if the current monthly income

of the debtor and the debtor’s spouse combined, when multiplied by

12, is not less than the highest national median family income last

reported by the Bureau of the Census for a family of equal or lesser

size or, in the case of a household of 1 person, the national median

household income for 1 earner, as of the date of the modification

and shall be 3 years if the current monthly total income of the

debtor and the debtor’s spouse combined, when multiplied by 12,

is less than the highest national median family income last reported by the Bureau of the Census for a family of equal or lesser

size or, in the case of a household of 1 person, less than the national median household income for 1 earner as of the date of the

modification. Notwithstanding the foregoing, the national median

family income for a family of more than 4 individuals shall be the

national median family income last reported by the Bureau of the

Census for a family of 4 individuals plus $583 for each additional

member of the family.’’.

SEC. 607. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE

9011 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE.

It is the sense of the Congress that rule 9011 of the Federal

Rules of Bankruptcy Procedure (11 U.S.C. App) should be modified

to include a requirement that all documents (including schedules),
89

signed and unsigned, submitted to the court or to a trustee by debtors who represent themselves and debtors who are represented by

an attorney be submitted only after the debtor or the debtor’s attorney has made reasonable inquiry to verify that the information

contained in such documents is well grounded in fact, and is warranted by existing law or a good-faith argument for the extension,

modification, or reversal of existing law.

SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN CHAPTER 11

BANKRUPTCY CASES.

(a) AMENDMENTS.—Section 1930(a)(6) of title 28, United States

Code, is amended—

(1) in the 1st sentence by striking ‘‘until the case is converted or dismissed, whichever occurs first’’; and

(2) in the 2d sentence—

(A) by striking ‘‘The’’ and inserting ‘‘Until the plan is

confirmed or the case is converted (whichever occurs first)

the’’; and

(B) by striking ‘‘less than $300,000;’’ and inserting ‘‘less

than $300,000. Until the case is converted, dismissed, or

closed (whichever occurs first and without regard to confirmation of the plan) the fee shall be’’.

(b) DELAYED EFFECTIVE DATE.—The amendments made by subsection (a) shall take effect on October 1, 1999.

SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO

DEPENDENT STUDENTS.

Not later than 1 year after the date of the enactment of this Act,

the Comptroller General of the United States shall—

(1) conduct a study regarding the impact that the extension

of credit to individuals who are—

(A) claimed as dependents for purposes of the Internal

Revenue Code of 1986; and

(B) enrolled in post-secondary educational institutions,

has on the rate of cases filed under title 11 of the United

States Code; and

(2) submit to the Speaker of the House of Representatives

and the President pro tempore of the Senate a report summarizing such study.

SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.

Section 362(e) of title 11, United States Code, is amended—

(1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and

(2) by adding at the end the following:

‘‘(2) Notwithstanding paragraph (1), in the case of an individual

filing under chapter 7, 11, or 13, the stay under subsection (a) shall

terminate on the date that is 60 days after a request is made by

a party in interest under subsection (d), unless—

‘‘(A) a final decision is rendered by the court during the 60-

day period beginning on the date of the request; or

‘‘(B) that 60-day period is extended—

‘‘(i) by agreement of all parties in interest; or

‘‘(ii) by the court for such specific period of time as the

court finds is required by for good cause as described in

findings made by the court.’’.
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SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.

Section 348(f)(1) of title 11, United States Code, is amended—

(1) in subparagraph (A), by striking ‘‘and’’ at the end;

(2) in subparagraph (B)—

(A) by striking ‘‘in the converted case, with allowed secured claims’’ and inserting ‘‘only in a case converted to

chapter 11 or 12 but not in a case converted to chapter 7,

with allowed secured claims in cases under chapters 11

and 12’’; and

(B) by striking the period and inserting ‘‘; and’’; and

(3) by adding at the end the following:

‘‘(C) with respect to cases converted from chapter 13—

‘‘(i) the claim of any creditor holding security as of the

date of the petition shall continue to be secured by that security unless the full amount of such claim determined

under applicable nonbankruptcy law has been paid in full

as of the date of conversion, notwithstanding any valuation

or determination of the amount of an allowed secured

claim made for the purposes of the chapter 13 proceeding;

and

‘‘(ii) unless a prebankruptcy default has been fully cured

pursuant to the plan at the time of conversion, in any proceeding under this title or otherwise, the default shall

have the effect given under applicable nonbankruptcy

law.’’.

SEC. 612. BANKRUPTCY APPEALS.

Title 28 of the United States Code is amended by inserting after

section 1292 the following:

‘‘§ 1293. Bankruptcy appeals

‘‘(a) The courts of appeals (other than the United States Court

of Appeals for the Federal Circuit) shall have jurisdiction of appeals from the following:

‘‘(1) Final orders and judgments entered by bankruptcy

courts and district courts in cases under title 11, in proceedings arising under title 11, and in proceedings arising in or related to a case under title 11, including final orders in proceedings regarding the automatic stay of section 362 of title 11.

‘‘(2) Interlocutory orders entered by bankruptcy courts and

district courts granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions in cases under title 11, in proceedings arising under title

11, and in proceedings arising in or related to a case under

title 11, other than interlocutory orders in proceedings regarding the automatic stay of section 362 of title 11.

‘‘(3) Interlocutory orders of bankruptcy courts and district

courts entered under section 1104(a) or 1121(d) of title 11, or

the refusal to enter an order under such section.

‘‘(4) An interlocutory order of a bankruptcy court or district

court entered in a case under title 11, in a proceeding arising

under title 11, or in a proceeding arising in or related to a case

under title 11, if the court of appeals that would have jurisdiction of an appeal of a final order entered in such case or such
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proceeding permits, in its discretion, appeal to be taken from

such interlocutory order.

‘‘(b) Final decisions, judgments, orders, and decrees entered by a

bankruptcy appellate panel under subsection (b) of this section.

‘‘(c)(1) The judicial council of a circuit may establish a bankruptcy appellate panel composed of bankruptcy judges in the circuit

who are appointed by the judicial council, which panel shall exercise the jurisdiction to review orders and judgments of bankruptcy

courts described in paragraphs (1)–(4) of subsection (a) of this section unless—

‘‘(A) the appellant elects at the time of filing the appeal; or

‘‘(B) any other party elects, not later than 10 days after service of the notice of the appeal;

to have such jurisdiction exercised by the court of appeals.

‘‘(2) An appeal to be heard by a bankruptcy appellate panel

under this subsection (b) shall be heard by 3 members of the bankruptcy appellate panel, provided that a member of such panel may

not hear an appeal originating in the district for which such member is appointed or designated under section 152 of this title.

‘‘(3) If authorized by the Judicial Conference of the United

States, the judicial councils of 2 or more circuits may establish a

joint bankruptcy appellate panel.’’.

SEC. 613. GAO STUDY.

(a) STUDY.—Not later than 270 days after the date of the enactment of this Act, the Comptroller General of the United States

shall conduct a study of the feasibility, effectiveness, and cost of requiring trustees appointed under title 11 of the United States

Code, or the bankruptcy courts, to provide to the Office of Child

Support Enforcement promptly after the commencement of cases by

individual debtors under such title, the names and social security

numbers of such debtors for the purposes of allowing such Office

to determine whether such debtors have outstanding obligations for

child support (as determined on the basis of information in the

Federal Case Registry or other national database).

(b) REPORT.—Not later than 300 days after the date of the enactment of this Act, the Comptroller General shall submit to the

Speaker of the House of Representatives and the President pro

tempore of the Senate, a report containing the results of the study

required by subsection (a).

TITLE VII—BANKRUPTCY DATA

SEC. 701. IMPROVED BANKRUPTCY STATISTICS.

(a) AMENDMENT.—Chapter 6 of part I of title 28, United States

Code, is amended by adding at the end the following:

‘‘§ 159. Bankruptcy statistics

‘‘(a) The clerk of each district shall compile statistics regarding

individual debtors with primarily consumer debts seeking relief

under chapters 7, 11, and 13 of title 11. Those statistics shall be

in a form prescribed by the Director of the Administrative Office

of the United States Courts (referred to in this section as the ‘Office’).
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‘‘(b) The Director shall—

‘‘(1) compile the statistics referred to in subsection (a);

‘‘(2) make the statistics available to the public; and

‘‘(3) not later than October 31, 2000, and annually thereafter,

prepare, and submit to Congress a report concerning the information collected under subsection (a) that contains an analysis

of the information.

‘‘(c) The compilation required under subsection (b) shall—

‘‘(1) be itemized, by chapter, with respect to title 11;

‘‘(2) be presented in the aggregate and for each district; and

‘‘(3) include information concerning—

‘‘(A) the total assets and total liabilities of the debtors

described in subsection (a), and in each category of assets

and liabilities, as reported in the schedules prescribed pursuant to section 2075 of this title and filed by those debtors;

‘‘(B) the current monthly income, and average income

and average expenses of those debtors as reported on the

schedules and statements that each such debtor files

under sections 521 and 1322 of title 11;

‘‘(C) the aggregate amount of debt discharged in the reporting period, determined as the difference between the

total amount of debt and obligations of a debtor reported

on the schedules and the amount of such debt reported in

categories which are predominantly nondischargeable;

‘‘(D) the average period of time between the filing of the

petition and the closing of the case;

‘‘(E) for the reporting period—

‘‘(i) the number of cases in which a reaffirmation

was filed; and

‘‘(ii)(I) the total number of reaffirmations filed;

‘‘(II) of those cases in which a reaffirmation was

filed, the number in which the debtor was not represented by an attorney; and

‘‘(III) of those cases, the number of cases in which

the reaffirmation was approved by the court;

‘‘(F) with respect to cases filed under chapter 13 of title

11, for the reporting period—

‘‘(i)(I) the number of cases in which a final order was

entered determining the value of property securing a

claim in an amount less than the amount of the claim;

and

‘‘(II) the number of final orders determining the

value of property securing a claim issued;

‘‘(ii) the number of cases dismissed, the number of

cases dismissed for failure to make payments under

the plan, the number of cases refiled after dismissal,

and the number of cases in which the plan was completed, separately itemized with respect to the number

of modifications made before completion of the plan, if

any; and

‘‘(iii) the number of cases in which the debtor filed

another case within the 6 years previous to the filing;
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‘‘(G) the number of cases in which creditors were fined

for misconduct and any amount of punitive damages

awarded by the court for creditor misconduct; and

‘‘(H) the number of cases in which sanctions under rule

9011 of the Federal Rules of Bankruptcy Procedure were

imposed against debtor’s counsel and damages awarded

under such Rule.’’.

(b) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 6 of title 28, United States Code, is amended by

adding at the end the following:

‘‘159. Bankruptcy statistics.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall take effect 18 months after the date of enactment of this Act.

SEC. 702. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY

DATA.

(a) AMENDMENT.—Title 28 of the United States Code is amended

by inserting after section 589a the following:

‘‘§ 589b. Bankruptcy data

‘‘(a) RULES.—The Attorney General shall, within a reasonable

time after the effective date of this section, issue rules requiring

uniform forms for (and from time to time thereafter to appropriately modify and approve)—

‘‘(1) final reports by trustees in cases under chapters 7, 12,

and 13 of title 11; and

‘‘(2) periodic reports by debtors in possession or trustees, as

the case may be, in cases under chapter 11 of title 11.

‘‘(b) REPORTS.—All reports referred to in subsection (a) shall be

designed (and the requirements as to place and manner of filing

shall be established) so as to facilitate compilation of data and

maximum possible access of the public, both by physical inspection

at 1 or more central filing locations, and by electronic access

through the Internet or other appropriate media.

‘‘(c) REQUIRED INFORMATION.—The information required to be

filed in the reports referred to in subsection (b) shall be that which

is in the best interests of debtors and creditors, and in the public

interest in reasonable and adequate information to evaluate the efficiency and practicality of the Federal bankruptcy system. In

issuing rules proposing the forms referred to in subsection (a), the

Attorney General shall strike the best achievable practical balance

between—

‘‘(1) the reasonable needs of the public for information about

the operational results of the Federal bankruptcy system; and

‘‘(2) economy, simplicity, and lack of undue burden on persons with a duty to file reports.

‘‘(d) FINAL REPORTS.—Final reports proposed for adoption by

trustees under chapters 7, 12, and 13 of title 11 shall, in addition

to such other matters as are required by law or as the Attorney

General in the discretion of the Attorney General, shall propose, include with respect to a case under such title—

‘‘(1) information about the length of time the case was pending;

‘‘(2) assets abandoned;

‘‘(3) assets exempted;
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‘‘(4) receipts and disbursements of the estate;

‘‘(5) expenses of administration;

‘‘(6) claims asserted;

‘‘(7) claims allowed; and

‘‘(8) distributions to claimants and claims discharged without

payment,

in each case by appropriate category and, in cases under chapters

12 and 13 of title 11, date of confirmation of the plan, each modification thereto, and defaults by the debtor in performance under

the plan.

‘‘(e) PERIODIC REPORTS.—Periodic reports proposed for adoption

by trustees or debtors in possession under chapter 11 of title 11

shall, in addition to such other matters as are required by law or

as the Attorney General, in the discretion of the Attorney General,

shall propose, include—

‘‘(1) information about the standard industry classification,

published by the Department of Commerce, for the businesses

conducted by the debtor;

‘‘(2) length of time the case has been pending;

‘‘(3) number of full-time employees as at the date of the order

for relief and at end of each reporting period since the case was

filed;

‘‘(4) cash receipts, cash disbursements and profitability of the

debtor for the most recent period and cumulatively since the

date of the order for relief;

‘‘(5) compliance with title 11, whether or not tax returns and

tax payments since the date of the order for relief have been

timely filed and made;

‘‘(6) all professional fees approved by the court in the case for

the most recent period and cumulatively since the date of the

order for relief (separately reported, in for the professional fees

incurred by or on behalf of the debtor, between those that

would have been incurred absent a bankruptcy case and those

not); and

‘‘(7) plans of reorganization filed and confirmed and, with respect thereto, by class, the recoveries of the holders, expressed

in aggregate dollar values and, in the case of claims, as a percentage of total claims of the class allowed.’’.

(b) TECHNICAL AMENDMENT.—The table of sections of chapter 39

of title 28, United States Code, is amended by adding at the end

the following:

‘‘589b. Bankruptcy data.’’.

SEC. 703. SENSE OF THE CONGRESS REGARDING AVAILABILITY OF

BANKRUPTCY DATA.

It is the sense of the Congress that—

(1) the national policy of the United States should be that all

data held by bankruptcy clerks in electronic form, to the extent

such data reflects only public records (as defined in section 107

of title 11 of the United States Code), should be released in a

usable electronic form in bulk to the public subject to such appropriate privacy concerns and safeguards as the Judicial Conference of the United States may determine; and

(2) there should be established a bankruptcy data system in

which—
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(A) a single set of data definitions and forms are used

to collect data nationwide; and

(B) data for any particular bankruptcy case are aggregated in the same electronic record.

TITLE VIII—BANKRUPTCY TAX

PROVISIONS

SEC. 801. TREATMENT OF CERTAIN LIENS.

(a) TREATMENT OF CERTAIN LIENS.—Section 724 of title 11,

United States Code, is amended—

(1) in subsection (b), in the matter preceding paragraph (1),

by inserting ‘‘(other than to the extent that there is a properly

perfected unavoidable tax lien arising in connection with an ad

valorem tax on real or personal property of the estate)’’ after

‘‘under this title’’;

(2) in subsection (b)(2), after ‘‘507(a)(1)’’, insert ‘‘(except that

such expenses, other than claims for wages, salaries, or commissions which arise after the filing of a petition, shall be limited to expenses incurred under chapter 7 of this title and shall

not include expenses incurred under chapter 11 of this title)’’;

and

(3) by adding at the end the following:

‘‘(e) Before subordinating a tax lien on real or personal property

of the estate, the trustee shall—

‘‘(1) exhaust the unencumbered assets of the estate; and

‘‘(2) in a manner consistent with section 506(c) of this title,

recover from property securing an allowed secured claim the

reasonable, necessary costs and expenses of preserving or disposing of that property.

‘‘(f) Notwithstanding the exclusion of ad valorem tax liens set

forth in this section and subject to the requirements of subsection

(e)—

‘‘(1) claims for wages, salaries, and commissions that are entitled to priority under section 507(a)(3) of this title; or

‘‘(2) claims for contributions to an employee benefit plan entitled to priority under section 507(a)(4) of this title,

may be paid from property of the estate which secures a tax lien,

or the proceeds of such property.’’.

(b) DETERMINATION OF TAX LIABILITY.—Section 505(a)(2) of title

11, United States Code, is amended—

(1) in subparagraph (A), by striking ‘‘or’’ at the end;

(2) in subparagraph (B), by striking the period at the end

and inserting ‘‘; or’’; and

(3) by adding at the end the following:

‘‘(C) the amount or legality of any amount arising in connection with an ad valorem tax on real or personal property of the

estate, if the applicable period for contesting or redetermining

that amount under any law (other than a bankruptcy law) has

expired.’’.
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SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.

(a) EFFECTIVE NOTICE TO GOVERNMENTAL UNITS.—Section 342 of

title 11, United States Code, as amended by section 603, is amended by adding at the end the following:

‘‘(g) If a debtor lists a governmental unit as a creditor in a list

or schedule, any notice required to be given by the debtor under

this title, any rule, any applicable law, or any order of the court,

shall identify the department, agency, or instrumentality through

which the debtor is indebted. The debtor shall identify (with information such as a taxpayer identification number, loan, account or

contract number, or real estate parcel number, where applicable),

and describe the underlying basis for the governmental unit’s

claim. If the debtor’s liability to a governmental unit arises from

a debt or obligation owed or incurred by another individual, entity,

or organization, or under a different name, the debtor shall identify

such individual, entity, organization, or name.

‘‘(h) The clerk shall keep and update quarterly, in the form and

manner as the Director of the Administrative Office of the United

States Courts prescribes, and make available to debtors, a register

in which a governmental unit may designate a safe harbor mailing

address for service of notice in cases pending in the district. A governmental unit may file a statement with the clerk designating a

safe harbor address to which notices are to be sent, unless such

governmental unit files a notice of change of address.’’.

(b) ADOPTION OF RULES PROVIDING NOTICE.—The Advisory Committee on Bankruptcy Rules of the Judicial Conference shall, within a reasonable period of time after the date of the enactment of

this Act, propose for adoption enhanced rules for providing notice

to State, Federal, and local government units that have regulatory

authority over the debtor or which may be creditors in the debtor’s

case. Such rules shall be reasonably calculated to ensure that notice will reach the representatives of the governmental unit, or subdivision thereof, who will be the proper persons authorized to act

upon the notice. At a minimum, the rules should require that the

debtor—

(1) identify in the schedules and the notice, the subdivision,

agency, or entity in respect of which such notice should be received;

(2) provide sufficient information (such as case captions, permit numbers, taxpayer identification numbers, or similar identifying information) to permit the governmental unit or subdivision thereof, entitled to receive such notice, to identify the

debtor or the person or entity on behalf of which the debtor is

providing notice where the debtor may be a successor in interest or may not be the same as the person or entity which incurred the debt or obligation; and

(3) identify, in appropriate schedules, served together with

the notice, the property in respect of which the claim or regulatory obligation may have arisen, if any, the nature of such

claim or regulatory obligation and the purpose for which notice

is being given.

(c) EFFECT OF FAILURE OF NOTICE.—Section 342 of title 11,

United States Code, as amended by section 603 and subsection (a),

is amended by adding at the end the following:
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‘‘(i) A notice that does not comply with subsections (d) and (e)

shall not be effective unless the debtor demonstrates, by clear and

convincing evidence, that timely notice was given in a manner reasonably calculated to satisfy the requirements of this section was

given, and that—

‘‘(1) either the notice was timely sent to the safe harbor address provided in the register maintained by the clerk of the

district in which the case was pending for such purposes; or

‘‘(2) no safe harbor address was provided in such list for the

governmental unit and that an officer of the governmental unit

who is responsible for the matter or claim had actual knowledge of the case in sufficient time to act.’’.

SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.

Section 505(b) of title 11, United States Code, is amended by

striking ‘‘Unless’’ at the beginning of the second sentence thereof

and inserting ‘‘If the request is made substantially in the manner

designated by the governmental unit and unless’’.

SEC. 804. RATE OF INTEREST ON TAX CLAIMS.

(a) AMENDMENT.—Chapter 5 of title 11, United States Code, is

amended by adding at the end the following:

‘‘§ 511. Rate of interest on tax claims

‘‘If any provision of this title requires the payment of interest on

a tax claim or requires the payment of interest to enable a creditor

to receive the present value of the allowed amount of a tax claim,

the rate of interest shall be as follows:

‘‘(1) In the case of ad valorem tax claims, whether secured

or unsecured, other unsecured tax claims where interest is required to be paid under section 726(a)(5) of this title, secured

tax claims, and administrative tax claims paid under section

503(b)(1) of this title, the rate shall be determined under applicable nonbankruptcy law.

‘‘(2) In the case of all other tax claims, the minimum rate of

interest shall be the Federal short-term rate rounded to the

nearest full percent, determined under section 1274(d) of the

Internal Revenue Code of 1986, plus 3 percentage points.

‘‘(A) In the case of claims for Federal income taxes, such

rate shall be subject to any adjustment that may be required under section 6621(d) of the Internal Revenue Code

of 1986.

‘‘(B) In the case of taxes paid under a confirmed plan or

reorganization, such rate shall be determined as of the calendar month in which the plan is confirmed.’’.

(b) CONFORMING AMENDMENT.—The table of sections of chapter

5 of title 11, United States Code, is amended by inserting after the

item relating to section 510 the following:

‘‘511. Rate of interest on tax claims.’’.

SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.

Section 507(a)(8)(A) of title 11, United States Code, as so redesignated, is amended—

(1) in clause (i) by inserting after ‘‘petition’’ and before the

semicolon ‘‘, plus any time, plus 6 months, during which the
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stay of proceedings was in effect in a prior case under this

title’’; and

(2) amend clause (ii) to read as follows:

‘‘(ii) assessed within 240 days before the date of the

filing of the petition, exclusive of—

‘‘(I) any time plus 30 days during which an offer

in compromise with respect of such tax, was pending or in effect during such 240-day period;

‘‘(II) any time plus 30 days during which an installment agreement with respect of such tax was

pending or in effect during such 240-day period,

up to 1 year; and

‘‘(III) any time plus 6 months during which a

stay of proceedings against collections was in effect in a prior case under this title during such

240-day period.’’.

SEC. 806. PRIORITY PROPERTY TAXES INCURRED.

Section 507(a)(8)(B) of title 11, United States Code, is amended

by striking ‘‘assessed’’ and inserting ‘‘incurred’’.

SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER

TAXES.

Section 1328(a)(2) of title 11, United States Code, is amended by

inserting ‘‘(1),’’ after ‘‘paragraph’’.

SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.

Section 1141(d) of title 11, United States Code, is amended by

adding at the end the following:

‘‘(6) Notwithstanding the provisions of paragraph (1), the confirmation of a plan does not discharge a debtor which is a corporation from any debt for a tax or customs duty with respect to which

the debtor made a fraudulent return or willfully attempted in any

manner to evade or defeat such tax.’’.

SEC. 809. STAY OF TAX PROCEEDINGS.

(a) SECTION 362 STAY LIMITED TO PREPETITION TAXES.—Section

362(a)(8) of title 11, United States Code, is amended by striking

the period at the end and inserting ‘‘, in respect of a tax liability

for a taxable period ending before the order for relief.’’.

(b) APPEAL OF TAX COURT DECISIONS PERMITTED.—Section

362(b)(9) of title 11, United States Code, is amended—

(1) in subparagraph (C) by striking ‘‘or’’ at the end;

(2) in subparagraph (D) by striking the period at the end and

inserting ‘‘; or’’; and

(3) by adding at the end the following:

‘‘(E) the appeal of a decision by a court or administrative

tribunal which determines a tax liability of the debtor

without regard to whether such determination was made

prepetition or postpetition.’’.

SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.

Section 1129(a)(9) of title 11, United States Code, is amended—

(1) in subparagraph (B) by striking ‘‘and’’ at the end; and

(2) in subparagraph (C)—

(A) by striking ‘‘deferred cash payments, over a period

not exceeding six years after the date of assessment of
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such claim,’’ and inserting ‘‘regular installment payments

in cash, but in no case with a balloon provision, and no

more than three months apart, beginning no later than the

effective date of the plan and ending on the earlier of five

years after the petition date or the last date payments are

to be made under the plan to unsecured creditors,’’;

(B) by striking the period at the end and inserting ‘‘;

and’’; and

(3) by adding at the end the following:

‘‘(D) with respect to a secured claim which would be described in section 507(a)(8) of this title but for its secured

status, the holder of such claim will receive on account of

such claim cash payments of not less than is required in

subparagraph (C) and over a period no greater than is required in such subparagraph.’’.

SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

Section 545(2) of title 11, United States Code, is amended by

striking the semicolon at the end and inserting ‘‘, except where

such purchaser is a purchaser described in section 6323 of the Internal Revenue Code of 1986 or similar provision of State or local

law;’’.

SEC. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.

(a) PAYMENT OF TAXES REQUIRED.—Section 960 of title 28,

United States Code, is amended—

(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and

(2) by adding at the end the following:

‘‘(b) Such taxes shall be paid when due in the conduct of such

business unless—

‘‘(1) the tax is a property tax secured by a lien against property that is abandoned within a reasonable time after the lien

attaches, by the trustee of a bankruptcy estate, pursuant to

section 554 of title 11; or

‘‘(2) payment of the tax is excused under a specific provision

of title 11.

‘‘(c) In a case pending under chapter 7 of title 11, payment of a

tax may be deferred until final distribution is made under section

726 of title 11 if—

‘‘(1) the tax was not incurred by a trustee duly appointed

under chapter 7 of title 11; or

‘‘(2) before the due date of the tax, the court has made a

finding of probable insufficiency of funds of the estate to pay

in full the administrative expenses allowed under section

503(b) of title 11 that have the same priority in distribution

under section 726(b) of title 11 as such tax.’’.

(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—Section

503(b)(1)(B) of title 11, United States Code, is amended in clause

(i) by inserting after ‘‘estate,’’ and before ‘‘except’’ the following:

‘‘whether secured or unsecured, including property taxes for which

liability is in rem only, in personam or both,’’.

(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE TAXES

ELIMINATED.—Section 503(b)(1) of title 11, United States Code, is

amended by adding at the end the following:
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‘‘(D) notwithstanding the requirements of subsection (a) of

this section, a governmental unit shall not be required to file

a request for the payment of a claim described in subparagraph (B) or (C);’’.

(d) PAYMENT OF TAXES AND FEES AS SECURED CLAIMS.—Section

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

(1) in subsection (b) by inserting ‘‘or State statute’’ after

‘‘agreement’’; and

(2) in subsection (c) by inserting ‘‘, including the payment of

all ad valorem property taxes in respect of the property’’ before

the period at the end.

SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.

Section 726(a)(1) of title 11, United States Code, is amended by

striking ‘‘before the date on which the trustee commences distribution under this section’’ and inserting ‘‘on or before the earlier of

10 days after the mailing to creditors of the summary of the trustee’s final report or the date on which the trustee commences final

distribution under this section’’.

SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.

Section 523(a)(1)(B) of title 11, United States Code, is amended—

(1) by inserting ‘‘or equivalent report or notice,’’ after ‘‘a return,’’;

(2) in clause (i)—

(A) by inserting ‘‘or given’’ after ‘‘filed’’; and

(B) by striking ‘‘or’’ at the end;

(3) in clause (ii)—

(A) by inserting ‘‘or given’’ after ‘‘filed’’; and

(B) by inserting ‘‘, report, or notice’’ after ‘‘return’’; and

(4) by adding at the end the following:

‘‘(iii) for purposes of this subsection, a return—

‘‘(I) must satisfy the requirements of applicable

nonbankruptcy law, and includes a return prepared pursuant to section 6020(a) of the Internal

Revenue Code of 1986, or similar State or local

law, or a written stipulation to a judgment entered by a nonbankruptcy tribunal, but does not

include a return made pursuant to section 6020(b)

of the Internal Revenue Code of 1986, or similar

State or local law; and

‘‘(II) must have been filed in a manner permitted by applicable nonbankruptcy law; or’’.

SEC. 815. DISCHARGE OF THE ESTATE’S LIABILITY FOR UNPAID

TAXES.

Section 505(b) of title 11, United States Code, is amended in the

second sentence by inserting ‘‘the estate,’’ after ‘‘misrepresentation,’’.

SEC. 816. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.

(a) FILING OF PREPETITION TAX RETURNS REQUIRED FOR PLAN

CONFIRMATION.—Section 1325(a) of title 11, United States Code, as

amended by section 140, is amended—

(1) in paragraph (6) by striking ‘‘and’’ at the end;
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(2) in paragraph (7) by striking the period at the end and inserting ‘‘; and’’; and

(3) by adding at the end the following:

‘‘(8) if the debtor has filed all Federal, State, and local tax

returns as required by section 1308 of this title.’’.

(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS.—(1)

Chapter 13 of title 11, United States Code, as amended by section

135, is amended by adding at the end the following:

‘‘§ 1308. Filing of prepetition tax returns

‘‘(a) On or before the day prior to the day on which the first

meeting of the creditors is convened under section 341(a) of this

title, the debtor shall have filed with appropriate tax authorities all

tax returns for all taxable periods ending in the 3-year period ending on the date of filing of the petition.

‘‘(b) If the tax returns required by subsection (a) have not been

filed by the date on which the first meeting of creditors is convened

under section 341(a) of this title, the trustee may continue such

meeting for a reasonable period of time, to allow the debtor additional time to file any unfiled returns, but such additional time

shall be no more than—

‘‘(1) for returns that are past due as of the date of the filing

of the petition, 120 days from such date;

‘‘(2) for returns which are not past due as of the date of the

filing of the petition, the later of 120 days from such date or

the due date for such returns under the last automatic extension of time for filing such returns to which the debtor is entitled, and for which request has been timely made, according to

applicable nonbankruptcy law; and

‘‘(3) upon notice and hearing, and order entered before the

lapse of any deadline fixed according to this subsection, where

the debtor demonstrates, by clear and convincing evidence,

that the failure to file the returns as required is because of circumstances beyond the control of the debtor, the court may extend the deadlines set by the trustee as provided in this subsection for—

‘‘(A) a period of no more than 30 days for returns described in paragraph (1) of this subsection; and

‘‘(B) for no more than the period of time ending on the

applicable extended due date for the returns described in

paragraph (2).

‘‘(c) For purposes of this section only, a return includes a return

prepared pursuant to section 6020 (a) or (b) of the Internal Revenue Code of 1986 or similar State or local law, or a written stipulation to a judgment entered by a nonbankruptcy tribunal.’’.

(2) The table of sections of chapter 13 of title 11, United States

Code, is amended by inserting after the item relating to section

1307 the following:

‘‘1308. Filing of prepetition tax returns.’’.

(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY.—Section

1307 of title 11, United States Code, is amended—

(1) by redesignating subsections (e) and (f) as subsections (f)

and (g), respectively; and

(2) by inserting after subsection (d) the following:
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‘‘(e) Upon the failure of the debtor to file tax returns under section 1308 of this title, on request of a party in interest or the

United States trustee and after notice and a hearing, the court

shall dismiss a case or convert a case under this chapter to a case

under chapter 7 of this title, whichever is in the best interests of

creditors and the estate.’’.

(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of title 11, United

States Code, is amended by striking the period at the end and inserting ‘‘, and except that in a case under chapter 13 of this title,

a claim of a governmental unit for a tax in respect of a return filed

under section 1308 of this title shall be timely if it is filed on or

before 60 days after such return or returns were filed as required.’’.

(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION.—

It is the sense of the Congress that the Advisory Committee on

Bankruptcy Rules of the Judicial Conference should, within a reasonable period of time after the date of the enactment of this Act,

propose for adoption amended Federal Rules of Bankruptcy Procedure which provide that—

(1) notwithstanding the provisions of Rule 3015(f), in cases

under chapter 13 of title 11, United States Code, a governmental unit may object to the confirmation of a plan on or before 60 days after the debtor files all tax returns required

under sections 1308 and 1325(a)(7) of title 11, United States

Code; and

(2) in addition to the provisions of Rule 3007, in a case under

chapter 13 of title 11, United States Code, no objection to a tax

in respect of a return required to be filed under such section

1308 shall be filed until such return has been filed as required.

SEC. 817. STANDARDS FOR TAX DISCLOSURE.

Section 1125(a) of title 11, United States Code, is amended in

paragraph (1)—

(1) by inserting after ‘‘records,’’ the following: ‘‘including a

full discussion of the potential material Federal, State, and

local tax consequences of the plan to the debtor, any successor

to the debtor, and a hypothetical investor domiciled in the

State in which the debtor resides or has its principal place of

business typical of the holders of claims or interests in the

case,’’;

(2) by inserting ‘‘such’’ after ‘‘enable’’; and

(3) by striking ‘‘reasonable’’ where it appears after ‘‘hypothetical’’ and by striking ‘‘typical of holders of claims or interests’’ after ‘‘investor’’.

SEC. 818. SETOFF OF TAX REFUNDS.

Section 362(b) of title 11, United States Code, as amended by sections 118, 132, 136, and 203, is amended—

(1) in paragraph (29) by striking ‘‘or’’;

(2) in paragraph (30) by striking the period at the end and

inserting ‘‘; or’’; and

(3) by inserting after paragraph (30) the following:

‘‘(31) under subsection (a) of the setoff of an income tax refund, by a governmental unit, in respect of a taxable period

which ended before the order for relief against an income tax
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liability for a taxable period which also ended before the order

for relief, unless—

‘‘(A) prior to such setoff, an action to determine the

amount or legality of such tax liability under section

505(a) was commenced; or

‘‘(B) where the setoff of an income tax refund is not permitted because of a pending action to determine the

amount or legality of a tax liability, the governmental unit

may hold the refund pending the resolution of the action.’’.

TITLE IX—ANCILLARY AND OTHER

CROSS-BORDER CASES

SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED

STATES CODE.

(a) IN GENERAL.—Title 11, United States Code, is amended by inserting after chapter 13 the following:

‘‘CHAPTER 15—ANCILLARY AND OTHER CROSS-BORDER

CASES

‘‘Sec.

‘‘1501. Purpose and scope of application.

‘‘SUBCHAPTER I—GENERAL PROVISIONS

‘‘1502. Definitions.

‘‘1503. International obligations of the United States.

‘‘1504. Commencement of ancillary case.

‘‘1505. Authorization to act in a foreign country.

‘‘1506. Public policy exception.

‘‘1507. Additional assistance.

‘‘1508. Interpretation.

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND

CREDITORS TO THE COURT

‘‘1509. Right of direct access.

‘‘1510. Limited jurisdiction.

‘‘1511. Commencement of case under section 301 or 303.

‘‘1512. Participation of a foreign representative in a case under this title.

‘‘1513. Access of foreign creditors to a case under this title.

‘‘1514. Notification to foreign creditors concerning a case under this title.

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING AND

RELIEF

‘‘1515. Application for recognition of a foreign proceeding.

‘‘1516. Presumptions concerning recognition.

‘‘1517. Order recognizing a foreign proceeding.

‘‘1518. Subsequent information.

‘‘1519. Relief that may be granted upon petition for recognition of a foreign proceeding.

‘‘1520. Effects of recognition of a foreign main proceeding.

‘‘1521. Relief that may be granted upon recognition of a foreign proceeding.

‘‘1522. Protection of creditors and other interested persons.

‘‘1523. Actions to avoid acts detrimental to creditors.

‘‘1524. Intervention by a foreign representative.

‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND FOREIGN

REPRESENTATIVES

‘‘1525. Cooperation and direct communication between the court and foreign courts

or foreign representatives.
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‘‘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.

‘‘§ 1501. Purpose and scope of application

‘‘(a) The purpose of this chapter is to incorporate the Model Law

on Cross-Border Insolvency so as to provide effective mechanisms

for dealing with cases of cross-border insolvency with the objectives

of—

‘‘(1) cooperation between—

‘‘(A) United States courts, United States trustees, trustees, examiners, debtors, and debtors in possession; and

‘‘(B) the courts and other competent authorities of foreign countries involved in cross-border insolvency cases;

‘‘(2) greater legal certainty for trade and investment;

‘‘(3) fair and efficient administration of cross-border insolvencies that protects the interests of all creditors, and other interested entities, including the debtor;

‘‘(4) protection and maximization of the value of the debtor’s

assets; and

‘‘(5) facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment.

‘‘(b) This chapter applies where—

‘‘(1) assistance is sought in the United States by a foreign

court or a foreign representative in connection with a foreign

proceeding;

‘‘(2) assistance is sought in a foreign country in connection

with a case under this title;

‘‘(3) a foreign proceeding and a case under this title with respect to the same debtor are taking place concurrently; or

‘‘(4) creditors or other interested persons in a foreign country

have an interest in requesting the commencement of, or participating in, a case or proceeding under this title.

‘‘(c) This chapter does not apply to—

‘‘(1) a proceeding concerning an entity identified by exclusion

in subsection 109(b);

‘‘(2) an individual, or to an individual and such individual’s

spouse, who have debts within the limits specified in section

109(e) and who are citizens of the United States or aliens lawfully admitted for permanent residence in the United States; or

‘‘(3) an entity subject to a proceeding under the Securities Investor Protection Act, a stockbroker subject to subchapter III

of chapter 7 of this title, or a commodity broker subject to subchapter IV of chapter 7 of this title.
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‘‘SUBCHAPTER I—GENERAL PROVISIONS

‘‘§ 1502. Definitions

‘‘For the purposes of this chapter, the term—

‘‘(1) ‘debtor’ means an entity that is the subject of a foreign

proceeding;

‘‘(2) ‘establishment’ means any place of operations where the

debtor carries out a nontransitory economic activity;

‘‘(3) ‘foreign court’ means a judicial or other authority competent to control or supervise a foreign proceeding;

‘‘(4) ‘foreign main proceeding’ means a foreign proceeding

taking place in the country where the debtor has the center of

its main interests;

‘‘(5) ‘foreign nonmain proceeding’ means a foreign proceeding,

other than a foreign main proceeding, taking place in a country

where the debtor has an establishment;

‘‘(6) ‘trustee’ includes a trustee, a debtor in possession in a

case under any chapter of this title, or a debtor under chapter

9 of this title; and

‘‘(7) ‘within the territorial jurisdiction of the United States’

when used with reference to property of a debtor refers to tangible property located within the territory of the United States

and intangible property deemed under applicable nonbankruptcy law to be located within that territory, including any

property subject to attachment or garnishment that may properly be seized or garnished by an action in a Federal or State

court in the United States.

‘‘§ 1503. International obligations of the United States

‘‘To the extent that this chapter conflicts with an obligation of

the United States arising out of any treaty or other form of agreement to which it is a party with 1 or more other countries, the requirements of the treaty or agreement prevail.

‘‘§ 1504. Commencement of ancillary case

‘‘A case under this chapter is commenced by the filing of a petition for recognition of a foreign proceeding under section 1515.

‘‘§ 1505. Authorization to act in a foreign country

‘‘A trustee or another entity (including an examiner) may be authorized by the court to act in a foreign country on behalf of an estate created under section 541. An entity authorized to act under

this section may act in any way permitted by the applicable foreign

law.

‘‘§ 1506. Public policy exception

‘‘Nothing in this chapter prevents the court from refusing to take

an action governed by this chapter if the action would be manifestly contrary to the public policy of the United States.

‘‘§ 1507. Additional assistance

‘‘(a) Subject to the specific limitations stated elsewhere in this

chapter the court, upon recognition of a foreign proceeding, the
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court may provide additional assistance to a foreign representative

under this title or under other laws of the United States.

‘‘(b) In determining whether to provide additional assistance

under this title or under other laws of the United States, the court

shall consider whether such additional assistance, consistent with

the principles of comity, will reasonably assure—

‘‘(1) just treatment of all holders of claims against or interests in the debtor’s property;

‘‘(2) protection of claim holders in the United States against

prejudice and inconvenience in the processing of claims in such

foreign proceeding;

‘‘(3) prevention of preferential or fraudulent dispositions of

property of the debtor;

‘‘(4) distribution of proceeds of the debtor’s property substantially in accordance with the order prescribed by this title; and

‘‘(5) if appropriate, the provision of an opportunity for a fresh

start for the individual that such foreign proceeding concerns.

‘‘§ 1508. Interpretation

‘‘In interpreting this chapter, the court shall consider its international origin, and the need to promote an application of this

chapter that is consistent with the application of similar statutes

adopted by foreign jurisdictions.

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES

AND CREDITORS TO THE COURT

‘‘§ 1509. Right of direct access

‘‘(a) A foreign representative may commence a case under section

1504 of this title by filing with the court a petition for recognition

of a foreign proceeding under section 1515 of this title.

‘‘(b) If the court grants recognition under section 1515 of this

title, and subject to any limitations that the court may impose consistent with the policy of this chapter—

‘‘(1) the foreign representative has the capacity to sue and be

sued in a court in the United States;

‘‘(2) the foreign representative may apply directly to a court

in the United States for appropriate relief in that court; and

‘‘(3) a court in the United States shall grant comity or cooperation to the foreign representative.

‘‘(c) A request for comity or cooperation by a foreign representative in a court in the United States shall be accompanied by a certified copy of an order granting recognition under section 1517 of

this title.

‘‘(d) If the court denies recognition under this chapter, the court

may issue any appropriate order necessary to prevent the foreign

representative from obtaining comity or cooperation from courts in

the United States.

‘‘(e) Whether or not the court grants recognition, and subject to

sections 306 and 1510 of this title, a foreign representative is subject to applicable nonbankruptcy law.

‘‘(f) Notwithstanding any other provision of this section, the failure of a foreign representative to commence a case or to obtain recognition under this chapter does not affect any right the foreign
107

representative may have to sue in a court in the United State to

collect or recover a claim which is the property of the debtor.’’.

‘‘§ 1510. Limited jurisdiction

‘‘The sole fact that a foreign representative files a petition under

section 1515 does not subject the foreign representative to the jurisdiction of any court in the United States for any other purpose.

‘‘§ 1511. Commencement of case under section 301 or 303

‘‘(a) Upon recognition, a foreign representative may commence—

‘‘(1) an involuntary case under section 303; or

‘‘(2) a voluntary case under section 301 or 302, if the foreign

proceeding is a foreign main proceeding.

‘‘(b) The petition commencing a case under subsection (a) must

be accompanied by certified copy of an order granting recognition.

The court where the petition for recognition has been filed must be

advised of the foreign representative’s intent to commence a case

under subsection (a) prior to such commencement.

‘‘§ 1512. Participation of a foreign representative in a case

under this title

‘‘Upon recognition of a foreign proceeding, the foreign representative in that proceeding is entitled to participate as a party in interest in a case regarding the debtor under this title.

‘‘§ 1513. Access of foreign creditors to a case under this title

‘‘(a) Foreign creditors have the same rights regarding the commencement of, and participation in, a case under this title as domestic creditors.

‘‘(b)(1) Subsection (a) does not change or codify present law as to

the priority of claims under section 507 or 726 of this title, except

that the claim of a foreign creditor under those sections shall not

be given a lower priority than that of general unsecured claims

without priority solely because the holder of such claim is a foreign

creditor.

‘‘(2)(A) Subsection (a) and paragraph (1) do not change or codify

present law as to the allowability of foreign revenue claims or other

foreign public law claims in a proceeding under this title.

‘‘(B) Allowance and priority as to a foreign tax claim or other foreign public law claim shall be governed by any applicable tax treaty of the United States, under the conditions and circumstances

specified therein.

‘‘§ 1514. Notification to foreign creditors concerning a case

under this title

‘‘(a) Whenever in a case under this title notice is to be given to

creditors generally or to any class or category of creditors, such notice shall also be given to the known creditors generally, or to

creditors in the notified class or category, that do not have addresses in the United States. The court may order that appropriate steps

be taken with a view to notifying any creditor whose address is not

yet known.

‘‘(b) Such notification to creditors with foreign addresses described in subsection (a) shall be given individually, unless the
108

court considers that, under the circumstances, some other form of

notification would be more appropriate. No letters rogatory or other

similar formality is required.

‘‘(c) When a notification of commencement of a case is to be given

to foreign creditors, the notification shall—

‘‘(1) indicate the time period for filing proofs of claim and

specify the place for their filing;

‘‘(2) indicate whether secured creditors need to file their

proofs of claim; and

‘‘(3) contain any other information required to be included in

such a notification to creditors under this title and the orders

of the court.

‘‘(d) Any rule of procedure or order of the court as to notice or

the filing of a claim shall provide such additional time to creditors

with foreign addresses as is reasonable under the circumstances.

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN

PROCEEDING AND RELIEF

‘‘§ 1515. Application for recognition of a foreign proceeding

‘‘(a) A foreign representative applies to the court for recognition

of the foreign proceeding in which the foreign representative has

been appointed by filing a petition for recognition.

‘‘(b) A petition for recognition shall be accompanied by—

‘‘(1) a certified copy of the decision commencing the foreign

proceeding and appointing the foreign representative;

‘‘(2) a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the

foreign representative; or

‘‘(3) in the absence of evidence referred to in paragraphs (1)

and (2), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the

foreign representative.

‘‘(c) A petition for recognition shall also be accompanied by a

statement identifying all foreign proceedings with respect to the

debtor that are known to the foreign representative.

‘‘(d) The documents referred to in paragraphs (1) and (2) of subsection (b) must be translated into English. The court may require

a translation into English of additional documents.

‘‘§ 1516. Presumptions concerning recognition

‘‘(a) If the decision or certificate referred to in section 1515(b) indicates that the foreign proceeding is a foreign proceeding as defined in section 101 and that the person or body is a foreign representative as defined in section 101, the court is entitled to so presume.

‘‘(b) The court is entitled to presume that documents submitted

in support of the petition for recognition are authentic, whether or

not they have been legalized.

‘‘(c) In the absence of evidence to the contrary, the debtor’s registered office, or habitual residence in the case of an individual, is

presumed to be the center of the debtor’s main interests.
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‘‘§ 1517. Order recognizing a foreign proceeding

‘‘(a) Subject to section 1506, after notice and a hearing an order

recognizing a foreign proceeding shall be entered if—

‘‘(1) the foreign proceeding is a foreign main proceeding or

foreign nonmain proceeding within the meaning of section

1502;

‘‘(2) the foreign representative applying for recognition is a

person or body as defined in section 101; and

‘‘(3) the petition meets the requirements of section 1515.

‘‘(b) The foreign proceeding shall be recognized—

‘‘(1) as a foreign main proceeding if it is taking place in the

country where the debtor has the center of its main interests;

or

‘‘(2) as a foreign nonmain proceeding if the debtor has an establishment within the meaning of section 1502 in the foreign

country where the proceeding is pending.

‘‘(c) A petition for recognition of a foreign proceeding shall be decided upon at the earliest possible time. Entry of an order recognizing a foreign proceeding constitutes recognition under this chapter.

‘‘(d) The provisions of this subchapter do not prevent modification

or termination of recognition if it is shown that the grounds for

granting it were fully or partially lacking or have ceased to exist,

but in considering such action the court shall give due weight to

possible prejudice to parties that have relied upon the granting of

recognition. The case under this chapter may be closed in the manner prescribed under section 350.

‘‘§ 1518. Subsequent information

‘‘From the time of filing the petition for recognition of the foreign

proceeding, the foreign representative shall file with the court

promptly a notice of change of status concerning—

‘‘(1) any substantial change in the status of the foreign proceeding or the status of the foreign representative’s appointment; and

‘‘(2) any other foreign proceeding regarding the debtor that

becomes known to the foreign representative.

‘‘§ 1519. Relief that may be granted upon petition for recognition of a foreign proceeding

‘‘(a) From the time of filing a petition for recognition until the

court rules on the petition, the court may, at the request of the foreign representative, where relief is urgently needed to protect the

assets of the debtor or the interests of the creditors, grant relief of

a provisional nature, including—

‘‘(1) staying execution against the debtor’s assets;

‘‘(2) entrusting the administration or realization of all or part

of the debtor’s assets located in the United States to the foreign representative or another person authorized by the court,

including an examiner, in order to protect and preserve the

value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy; and
110

‘‘(3) any relief referred to in paragraph (3), (4), or (7) of section 1521(a).

‘‘(b) Unless extended under section 1521(a)(6), the relief granted

under this section terminates when the petition for recognition is

decided upon.

‘‘(c) It is a ground for denial of relief under this section that such

relief would interfere with the administration of a foreign main

proceeding.

‘‘(d) The court may not enjoin a police or regulatory act of a governmental unit, including a criminal action or proceeding, under

this section.

‘‘(e) The standards, procedures, and limitations applicable to an

injunction shall apply to relief under this section.

‘‘§ 1520. Effects of recognition of a foreign main proceeding

‘‘(a) Upon recognition of a foreign proceeding that is a foreign

main proceeding—

‘‘(1) sections 361 and 362 with respect to the debtor and that

property of the debtor that is within the territorial jurisdiction

of the United States;

‘‘(2) sections 363, 549, and 552 of this title apply to a transfer of an interest of the debtor in property that is within the

territorial jurisdiction of the United States to the same extent

that the sections would apply to property of an estate;

‘‘(3) unless the court orders otherwise, the foreign representative may operate the debtor’s business and may exercise the

rights and powers of a trustee under and to the extent provided by sections 363 and 552; and

‘‘(4) section 552 applies to property of the debtor that is within the territorial jurisdiction of the United States.’’.

‘‘(b) Subsection (a) does not affect the right to commence an individual action or proceeding in a foreign country to the extent necessary to preserve a claim against the debtor.

‘‘(c) Subsection (a) does not affect the right of a foreign representative or an entity to file a petition commencing a case under this

title or the right of any party to file claims or take other proper

actions in such a case.

‘‘§ 1521. Relief that may be granted upon recognition of a

foreign proceeding

‘‘(a) Upon recognition of a foreign proceeding, whether main or

nonmain, where necessary to effectuate the purpose of this chapter

and to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative,

grant any appropriate relief, including—

‘‘(1) staying the commencement or continuation of an individual action or proceeding concerning the debtor’s assets, rights,

obligations or liabilities to the extent they have not been

stayed under section 1520(a);

‘‘(2) staying execution against the debtor’s assets to the extent it has not been stayed under section 1520(a);

‘‘(3) suspending the right to transfer, encumber or otherwise

dispose of any assets of the debtor to the extent this right has

not been suspended under section 1520(a);
111

‘‘(4) providing for the examination of witnesses, the taking of

evidence or the delivery of information concerning the debtor’s

assets, affairs, rights, obligations or liabilities;

‘‘(5) entrusting the administration or realization of all or part

of the debtor’s assets within the territorial jurisdiction of the

United States to the foreign representative or another person,

including an examiner, authorized by the court;

‘‘(6) extending relief granted under section 1519(a); and

‘‘(7) granting any additional relief that may be available to

a trustee, except for relief available under sections 522, 544,

545, 547, 548, 550, and 724(a).

‘‘(b) Upon recognition of a foreign proceeding, whether main or

nonmain, the court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor’s assets located in the United States to the foreign representative or another

person, including an examiner, authorized by the court, provided

that the court is satisfied that the interests of creditors in the

United States are sufficiently protected.

‘‘(c) In granting relief under this section to a representative of a

foreign nonmain proceeding, the court must be satisfied that the

relief relates to assets that, under the law of the United States,

should be administered in the foreign nonmain proceeding or concerns information required in that proceeding.

‘‘(d) The court may not enjoin a police or regulatory act of a governmental unit, including a criminal action or proceeding, under

this section.

‘‘(e) The standards, procedures, and limitations applicable to an

injunction shall apply to relief under paragraphs (1), (2), (3), and

(6) of subsection (a).

‘‘§ 1522. Protection of creditors and other interested persons

‘‘(a) The court may grant relief under section 1519 or 1521, or

may modify or terminate relief under subsection (c), only if the interests of the creditors and other interested entities, including the

debtor, are sufficiently protected.

‘‘(b) The court may subject relief granted under section 1519 or

1521, or the operation of the debtor’s business under section

1520(a)(3) of this title, to conditions it considers appropriate, including the giving of security or the filing of a bond.

‘‘(c) The court may, at the request of the foreign representative

or an entity affected by relief granted under section 1519 or 1521,

or at its own motion, modify or terminate such relief.

‘‘(d) Section 1104(d) shall apply to the appointment of an examiner under this chapter. Any examiner shall comply with the qualification requirements imposed on a trustee by section 322.

‘‘§ 1523. Actions to avoid acts detrimental to creditors

‘‘(a) Upon recognition of a foreign proceeding, the foreign representative has standing in a case concerning the debtor pending

under another chapter of this title to initiate actions under sections

522, 544, 545, 547, 548, 550, and 724(a).

‘‘(b) When the foreign proceeding is a foreign nonmain proceeding, the court must be satisfied that an action under subsection
112

(a) relates to assets that, under United States law, should be administered in the foreign nonmain proceeding.

‘‘§ 1524. Intervention by a foreign representative

‘‘Upon recognition of a foreign proceeding, the foreign representative may intervene in any proceedings in a State or Federal court

in the United States in which the debtor is a party.

‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS

AND FOREIGN REPRESENTATIVES

‘‘§ 1525. Cooperation and direct communication between the

court and foreign courts or foreign representatives

‘‘(a) Consistent with section 1501, the court shall cooperate to the

maximum extent possible with foreign courts or foreign representatives, either directly or through the trustee.

‘‘(b) The court is entitled to communicate directly with, or to request information or assistance directly from, foreign courts or foreign representatives, subject to the rights of parties in interest to

notice and participation.

‘‘§ 1526. Cooperation and direct communication between the

trustee and foreign courts or foreign representatives

‘‘(a) Consistent with section 1501, the trustee or other person, including an examiner, authorized by the court, shall, subject to the

supervision of the court, cooperate to the maximum extent possible

with foreign courts or foreign representatives.

‘‘(b) The trustee or other person, including an examiner, authorized by the court is entitled, subject to the supervision of the court,

to communicate directly with foreign courts or foreign representatives.

‘‘§ 1527. Forms of cooperation

‘‘Cooperation referred to in sections 1525 and 1526 may be implemented by any appropriate means, including—

‘‘(1) appointment of a person or body, including an examiner,

to act at the direction of the court;

‘‘(2) communication of information by any means considered

appropriate by the court;

‘‘(3) coordination of the administration and supervision of the

debtor’s assets and affairs;

‘‘(4) approval or implementation of agreements concerning

the coordination of proceedings; and

‘‘(5) coordination of concurrent proceedings regarding the

same debtor.

‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

‘‘§ 1528. Commencement of a case under this title after recognition of a foreign main proceeding

‘‘After recognition of a foreign main proceeding, a case under another chapter of this title may be commenced only if the debtor has

assets in the United States. The effects of such case shall be re-
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stricted to the assets of the debtor that are within the territorial

jurisdiction of the United States and, to the extent necessary to implement cooperation and coordination under sections 1525, 1526,

and 1527, to other assets of the debtor that are within the jurisdiction of the court under sections 541(a) of this title, and 1334(e) of

title 28, to the extent that such other assets are not subject to the

jurisdiction and control of a foreign proceeding that has been recognized under this chapter.

‘‘§ 1529. Coordination of a case under this title and a foreign

proceeding

‘‘Where a foreign proceeding and a case under another chapter

of this title are taking place concurrently regarding the same debtor, the court shall seek cooperation and coordination under sections

1525, 1526, and 1527, and the following shall apply:

‘‘(1) When the case in the United States is taking place at

the time the petition for recognition of the foreign proceeding

is filed—

‘‘(A) any relief granted under sections 1519 or 1521 must

be consistent with the relief granted in the case in the

United States; and

‘‘(B) even if the foreign proceeding is recognized as a foreign main proceeding, section 1520 does not apply.

‘‘(2) When a case in the United States under this title commences after recognition, or after the filing of the petition for

recognition, of the foreign proceeding—

‘‘(A) any relief in effect under sections 1519 or 1521 shall

be reviewed by the court and shall be modified or terminated if inconsistent with the case in the United States;

and

‘‘(B) if the foreign proceeding is a foreign main proceeding, the stay and suspension referred to in section 1520(a)

shall be modified or terminated if inconsistent with the relief granted in the case in the United States.

‘‘(3) In granting, extending, or modifying relief granted to a

representative of a foreign nonmain proceeding, the court must

be satisfied that the relief relates to assets that, under the law

of the United States, should be administered in the foreign

nonmain proceeding or concerns information required in that

proceeding.

‘‘(4) In achieving cooperation and coordination under sections

1528 and 1529, the court may grant any of the relief authorized under section 305.

‘‘§ 1530. Coordination of more than 1 foreign proceeding

‘‘In matters referred to in section 1501, with respect to more than

1 foreign proceeding regarding the debtor, the court shall seek cooperation and coordination under sections 1525, 1526, and 1527,

and the following shall apply:

‘‘(1) Any relief granted under section 1519 or 1521 to a representative of a foreign nonmain proceeding after recognition of

a foreign main proceeding must be consistent with the foreign

main proceeding.
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‘‘(2) If a foreign main proceeding is recognized after recognition, or after the filing of a petition for recognition, of a foreign

nonmain proceeding, any relief in effect under section 1519 or

1521 shall be reviewed by the court and shall be modified or

terminated if inconsistent with the foreign main proceeding.

‘‘(3) If, after recognition of a foreign nonmain proceeding, another foreign nonmain proceeding is recognized, the court shall

grant, modify, or terminate relief for the purpose of facilitating

coordination of the proceedings.

‘‘§ 1531. Presumption of insolvency based on recognition of

a foreign main proceeding

‘‘In the absence of evidence to the contrary, recognition of a foreign main proceeding is for the purpose of commencing a proceeding under section 303, proof that the debtor is generally not paying

its debts as such debts become due.

‘‘§ 1532. Rule of payment in concurrent proceedings

‘‘Without prejudice to secured claims or rights in rem, a creditor

who has received payment with respect to its claim in a foreign

proceeding pursuant to a law relating to insolvency may not receive

a payment for the same claim in a case under any other chapter

of this title regarding the debtor, so long as the payment to other

creditors of the same class is proportionately less than the payment

the creditor has already received.’’.

(b) CLERICAL AMENDMENT.—The table of chapters for title 11,

United States Code, is amended by inserting after the item relating

to chapter 13 the following:

‘‘15. Ancillary and Other Cross-Border Cases ............................................. 1501’’.

SEC. 902. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, UNITED

STATES CODE.

(a) APPLICABILITY OF CHAPTERS.—Section 103 of title 11, United

States Code, is amended—

(1) in subsection (a), by inserting before the period the following: ‘‘, and this chapter, sections 307, 304, 555 through 557,

559, and 560 apply in a case under chapter 15’’; and

(2) by adding at the end the following:

‘‘(j) Chapter 15 applies only in a case under such chapter, except

that—

‘‘(1) sections 1505, 1513, and 1514 apply in all cases under

this title; and

‘‘(2) section 1509 applies whether or not a case under this

title is pending.’’.

(b) DEFINITIONS.—Paragraphs (23) and (24) of title 11, United

States Code, are amended to read as follows:

‘‘(23) ‘foreign proceeding’ means a collective judicial or administrative proceeding in a foreign country, including an interim proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the assets and affairs of the

debtor are subject to control or supervision by a foreign court,

for the purpose of reorganization or liquidation;

‘‘(24) ‘foreign representative’ means a person or body, including a person or body appointed on an interim basis, authorized

in a foreign proceeding to administer the reorganization or the
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liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding;’’.

(c) AMENDMENTS TO TITLE 28, UNITED STATES CODE.—

(1) PROCEDURES.—Section 157(b)(2) of title 28, United States

Code, is amended—

(A) in subparagraph (N), by striking ‘‘and’’ at the end;

(B) in subparagraph (O), by striking the period at the

end and inserting ‘‘; and’’; and

(C) by adding at the end the following:

‘‘(P) recognition of foreign proceedings and other matters

under chapter 15 of title 11.’’.

(2) BANKRUPTCY CASES AND PROCEEDINGS.—Section 1334(c)

of title 28, United States Code, is amended by striking ‘‘Nothing in’’ and inserting ‘‘Except with respect to a case under

chapter 15 of title 11, nothing in’’.

(3) DUTIES OF TRUSTEES.—Section 586(a)(3) of title 28,

United States Code, is amended by striking ‘‘or 13’’ and inserting ‘‘13, or 15,’’ after ‘‘chapter’’.

(4) Section 305(a)(2) of title 11, United States Code, is

amended to read:

‘‘(2)(A) a petition under section 1515 of this title for recognition of a foreign proceeding has been granted; and

‘‘(B) the purposes of chapter 15 of this title would be best

served by such dismissal or suspension.’’.

(5) Section 508 of title 11, United States Code, is amended

by striking subsection (a) and by striking out the letter ‘‘(b)’’

at the beginning of the second paragraph.

TITLE X—FINANCIAL CONTRACT

PROVISIONS

SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS

OR RECEIVERS OF INSURED DEPOSITORY INSTITUTIONS.

(a) DEFINITION OF QUALIFIED FINANCIAL CONTRACT.—Section

11(e)(8)(D)(i) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)(8)(D)(i)) is amended by inserting ‘‘, resolution or order’’

after ‘‘any similar agreement that the Corporation determines by

regulation’’.

(b) DEFINITION OF SECURITIES CONTRACT.—Section 11(e)(8)(D)(ii)

of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is

amended to read as follows:

‘‘(ii) SECURITIES CONTRACT.—The term ‘securities

contract’—

‘‘(I) means a contract for the purchase, sale, or

loan of a security, a certificate of deposit, a mortgage loan, or any interest in a mortgage loan, a

group or index of securities, certificates of deposit,

or mortgage loans or interests therein (including

any interest therein or based on the value thereof)

or any option on any of the foregoing, including

any option to purchase or sell any such security,

certificate of deposit, loan, interest, group or

index, or option;
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‘‘(II) does not include any purchase, sale, or repurchase obligation under a participation in a

commercial mortgage loan unless the Corporation

determines by regulation, resolution, or order to

include any such agreement within the meaning

of such term;

‘‘(III) means any option entered into on a national securities exchange relating to foreign currencies;

‘‘(IV) means the guarantee by or to any securities clearing agency of any settlement of cash, securities, certificates of deposit, mortgage loans or

interests therein, group or index of securities, certificates of deposit, or mortgage loans or interests

therein (including any interest therein or based on

the value thereof) or option on any of the foregoing, including any option to purchase or sell any

such security, certificate of deposit, loan, interest,

group or index or option;

‘‘(V) means any margin loan;

‘‘(VI) means any other agreement or transaction

that is similar to any agreement or transaction referred to in this clause;

‘‘(VII) means any combination of the agreements

or transactions referred to in this clause;

‘‘(VIII) means any option to enter into any

agreement or transaction referred to in this

clause;

‘‘(IX) means a master agreement that provides

for an agreement or transaction referred to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master

agreement, without regard to whether the master

agreement provides for an agreement or transaction that is not a securities contract under this

clause, except that the master agreement shall be

considered to be a securities contract under this

clause only with respect to each agreement or

transaction under the master agreement that is

referred to in subclause (I), (III), (IV), (V), (VI),

(VII), or (VIII); and

‘‘(X) means any security agreement or arrangement or other credit enhancement related to any

agreement or transaction referred to in this

clause.’’.

(c) DEFINITION OF COMMODITY CONTRACT.—Section 11(e)(8)(D)(iii)

of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii))

is amended to read as follows:

‘‘(iii) COMMODITY CONTRACT.—The term ‘commodity

contract’ means—

‘‘(I) with respect to a futures commission merchant, a contract for the purchase or sale of a

commodity for future delivery on, or subject to the

rules of, a contract market or board of trade;
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‘‘(II) with respect to a foreign futures commission merchant, a foreign future;

‘‘(III) with respect to a leverage transaction merchant, a leverage transaction;

‘‘(IV) with respect to a clearing organization, a

contract for the purchase or sale of a commodity

for future delivery on, or subject to the rules of, a

contract market or board of trade that is cleared

by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by

such clearing organization;

‘‘(V) with respect to a commodity options dealer,

a commodity option;

‘‘(VI) any other agreement or transaction that is

similar to any agreement or transaction referred

to in this clause;

‘‘(VII) any combination of the agreements or

transactions referred to in this clause;

‘‘(VIII) any option to enter into any agreement

or transaction referred to in this clause;

‘‘(IX) a master agreement that provides for an

agreement or transaction referred to in subclause

(I), (II), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master

agreement, without regard to whether the master

agreement provides for an agreement or transaction that is not a commodity contract under this

clause, except that the master agreement shall be

considered to be a commodity contract under this

clause only with respect to each agreement or

transaction under the master agreement that is

referred to in subclause (I), (II), (III), (IV), (V),

(VI), (VII), or (VIII); or

‘‘(X) a security agreement or arrangement or

other credit enhancement related to any agreement or transaction referred to in this clause.’’.

(d) DEFINITION OF FORWARD CONTRACT.—Section 11(e)(8)(D)(iv)

of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv))

is amended to read as follows:

‘‘(iv) FORWARD CONTRACT.—The term ‘forward contract’ means—

‘‘(I) a contract (other than a commodity contract)

for the purchase, sale, or transfer of a commodity

or any similar good, article, service, right, or interest which is presently or in the future becomes the

subject of dealing in the forward contract trade, or

product or byproduct thereof, with a maturity date

more than 2 days after the date the contract is entered into, including, but not limited to, a repurchase agreement, reverse repurchase agreement,

consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction,
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unallocated transaction, or any other similar

agreement;

‘‘(II) any combination of agreements or transactions referred to in subclauses (I) and (III);

‘‘(III) any option to enter into any agreement or

transaction referred to in subclause (I) or (II);

‘‘(IV) a master agreement that provides for an

agreement or transaction referred to in subclauses

(I), (II), or (III), together with all supplements to

any such master agreement, without regard to

whether the master agreement provides for an

agreement or transaction that is not a forward

contract under this clause, except that the master

agreement shall be considered to be a forward

contract under this clause only with respect to

each agreement or transaction under the master

agreement that is referred to in subclause (I), (II),

or (III); or

‘‘(V) a security agreement or arrangement or

other credit enhancement related to any agreement or transaction referred to in subclause (I),

(II), (III), or (IV).’’.

(e) DEFINITION OF REPURCHASE AGREEMENT.—Section

11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)(8)(D)(v)) is amended to read as follows:

‘‘(v) REPURCHASE AGREEMENT.—The term ‘repurchase agreement’ (which definition also applies to a reverse repurchase agreement)—

‘‘(I) mean an agreement, including related

terms, which provides for the transfer of 1 or more

certificates of deposit, mortgage-related securities

(as such term is defined in the Securities Exchange Act of 1934), mortgage loans, interests in

mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified foreign government securities or securities that are direct obligations of, or that are fully guaranteed by, the

United States or any agency of the United States

against the transfer of funds by the transferee of

such certificates of deposit, eligible bankers’ acceptances, securities, loans, or interests with a simultaneous agreement by such transferee to

transfer to the transferor thereof certificates of deposit, eligible bankers’ acceptances, securities,

loans, or interests as described above, at a date

certain not later than 1 year after such transfers

or on demand, against the transfer of funds, or

any other similar agreement;

‘‘(II) does not include any repurchase obligation

under a participation in a commercial mortgage

loan unless the Corporation determines by regulation, resolution, or order to include any such participation within the meaning of such term;
119

‘‘(III) means any combination of agreements or

transactions referred to in subclauses (I) and (IV);

‘‘(IV) means any option to enter into any agreement or transaction referred to in subclause (I) or

(III);

‘‘(V) means a master agreement that provides

for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides

for an agreement or transaction that is not a repurchase agreement under this clause, except that

the master agreement shall be considered to be a

repurchase agreement under this subclause only

with respect to each agreement or transaction

under the master agreement that is referred to in

subclause (I), (III), or (IV); and

‘‘(VI) means a security agreement or arrangement or other credit enhancement related to any

agreement or transaction referred to in subclause

(I), (III), (IV), or (V).

For purposes of this clause, the term ‘qualified foreign

government security’ means a security that is a direct

obligation of, or that is fully guaranteed by, the central government of a member of the Organization for

Economic Cooperation and Development (as determined by regulation or order adopted by the appropriate Federal banking authority).’’.

(f) DEFINITION OF SWAP AGREEMENT.—Section 11(e)(8)(D)(iv) of

the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is

amended to read as follows:

‘‘(vi) SWAP AGREEMENT.—The term ‘swap agreement’

means—

‘‘(I) any agreement, including the terms and

conditions incorporated by reference in any such

agreement, which is an interest rate swap, option,

future, or forward agreement, including a rate

floor, rate cap, rate collar, cross-currency rate

swap, and basis swap; a spot, same day-tomorrow,

tomorrow-next, forward, or other foreign exchange

or precious metals agreement; a currency swap,

option, future, or forward agreement; an equity

index or equity swap, option, future, or forward

agreement; a debt index or debt swap, option, future, or forward agreement; a credit spread or

credit swap, option, future, or forward agreement;

a commodity index or commodity swap, option, future, or forward agreement;

‘‘(II) any agreement or transaction similar to

any other agreement or transaction referred to in

this clause that is presently, or in the future becomes, regularly entered into in the swap market

(including terms and conditions incorporated by

reference in such agreement) and that is a for-
120

ward, swap, future, or option on 1 or more rates,

currencies, commodities, equity securities or other

equity instruments, debt securities or other debt

instruments, or economic indices or measures of

economic risk or value;

‘‘(III) any combination of agreements or transactions referred to in this clause;

‘‘(IV) any option to enter into any agreement or

transaction referred to in this clause;

‘‘(V) a master agreement that provides for an

agreement or transaction referred to in subclause

(I), (II), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains

an agreement or transaction that is not a swap

agreement under this clause, except that the master agreement shall be considered to be a swap

agreement under this clause only with respect to

each agreement or transaction under the master

agreement that is referred to in subclause (I), (II),

(III), or (IV); and

‘‘(VI) any security agreement or arrangement or

other credit enhancement related to any agreements or transactions referred to in subparagraph

(I), (II), (III), or (IV).

Such term is applicable for purposes of this title only

and shall not be construed or applied so as to challenge or affect the characterization, definition, or

treatment of any swap agreement under any other

statute, regulation, or rule, including the Securities

Act of 1933, the Securities Exchange Act of 1934, the

Public Utility Holding Company Act of 1935, the Trust

Indenture Act of 1939, the Investment Company Act of

1940, the Investment Advisers Act of 1940, the Securities Investor Protection Act of 1970, the Commodity

Exchange Act, and the regulations promulgated by the

Securities and Exchange Commission or the Commodity Futures Trading Commission.’’.

(g) DEFINITION OF TRANSFER.—Section 11(e)(8)(D)(viii) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is

amended to read as follows:

‘‘(viii) TRANSFER.—The term ‘transfer’ means every

mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with

property or with an interest in property, including retention of title as a security interest and foreclosure of

the depository institutions’s equity of redemption.’’.

(h) TREATMENT OF QUALIFIED FINANCIAL CONTRACTS.—Section

11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8))

is amended—

(1) in subparagraph (A), by striking ‘‘paragraph (10)’’ and inserting ‘‘paragraphs (9) and (10)’’;
121

(2) in subparagraph (A)(i), by striking ‘‘to cause the termination or liquidation’’ and inserting ‘‘such person has to cause

the termination, liquidation, or acceleration’’;

(3) by amending subparagraph (A)(ii) to read as follows:

‘‘(ii) any right under any security agreement or arrangement or other credit enhancement related to 1 or

more qualified financial contracts described in clause

(i);’’; and

(4) by amending subparagraph (E)(ii) to read as follows:

‘‘(ii) any right under any security agreement or arrangement or other credit enhancement related to 1 or

more qualified financial contracts described in clause

(i);’’.

(i) AVOIDANCE OF TRANSFERS.—Section 11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended

by inserting ‘‘section 5242 of the Revised Statutes of the United

States (12 U.S.C. 91) or any other Federal or State law relating to

the avoidance of preferential or fraudulent transfers,’’ before ‘‘the

Corporation’’.

SEC. 1002. AUTHORITY OF THE CORPORATION WITH RESPECT TO

FAILED AND FAILING INSTITUTIONS.

(a) IN GENERAL.—Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended—

(1) in subparagraph (E), by striking ‘‘other than paragraph

(12) of this subsection, subsection (d)(9)’’ and inserting ‘‘other

than subsections (d)(9) and (e)(10)’’; and

(2) by adding at the end the following new subparagraphs:

‘‘(F) CLARIFICATION.—No provision of law shall be construed as limiting the right or power of the Corporation,

or authorizing any court or agency to limit or delay, in any

manner, the right or power of the Corporation to transfer

any qualified financial contract in accordance with paragraphs (9) and (10) of this subsection or to disaffirm or repudiate any such contract in accordance with subsection

(e)(1) of this section.

‘‘(G) WALKAWAY CLAUSES NOT EFFECTIVE.—

‘‘(i) IN GENERAL.—Notwithstanding the provisions of

subparagraphs (A) and (E), and sections 403 and 404

of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause shall be enforceable in a qualified financial contract of an insured

depository institution in default.

‘‘(ii) WALKAWAY CLAUSE DEFINED.—For purposes of

this subparagraph, the term ‘walkaway clause’ means

a provision in a qualified financial contract that, after

calculation of a value of a party’s position or an

amount due to or from 1 of the parties in accordance

with its terms upon termination, liquidation, or acceleration of the qualified financial contract, either does

not create a payment obligation of a party or extinguishes a payment obligation of a party in whole or in

part solely because of such party’s status as a nondefaulting party.’’.
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(b) TECHNICAL AND CONFORMING AMENDMENT.—Section

11(e)(12)(A) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)(12)(A)) is amended by inserting ‘‘or the exercise of rights or

powers’’ after ‘‘the appointment’’.

SEC. 1003. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS.

(a) TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS TO FINAN- CIAL INSTITUTIONS.—Section 11(e)(9) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(9)) is amended to read as follows:

‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS.— ‘‘(A) IN GENERAL.—In making any transfer of assets or liabilities of a depository institution in default which includes any qualified financial contract, the conservator or

receiver for such depository institution shall either—

‘‘(i) transfer to 1 financial institution, other than a

financial institution for which a conservator, receiver,

trustee in bankruptcy, or other legal custodian has

been appointed or which is otherwise the subject of a

bankruptcy or insolvency proceeding—

‘‘(I) all qualified financial contracts between any

person or any affiliate of such person and the depository institution in default;

‘‘(II) all claims of such person or any affiliate of

such person against such depository institution

under any such contract (other than any claim

which, under the terms of any such contract, is

subordinated to the claims of general unsecured

creditors of such institution);

‘‘(III) all claims of such depository institution

against such person or any affiliate of such person

under any such contract; and

‘‘(IV) all property securing or any other credit

enhancement for any contract described in subclause (I) or any claim described in subclause (II)

or (III) under any such contract; or

‘‘(ii) transfer none of the qualified financial contracts, claims, property or other credit enhancement

referred to in clause (i) (with respect to such person

and any affiliate of such person).

‘‘(B) TRANSFER TO FOREIGN BANK, FOREIGN FINANCIAL IN- STITUTION, OR BRANCH OR AGENCY OF A FOREIGN BANK OR

FINANCIAL INSTITUTION.—In transferring any qualified financial contracts and related claims and property pursuant to subparagraph (A)(i), the conservator or receiver for

such depository institution shall not make such transfer to

a foreign bank, financial institution organized under the

laws of a foreign country, or a branch or agency of a foreign bank or financial institution unless, under the law applicable to such bank, financial institution, branch or agency, to the qualified financial contracts, and to any netting

contract, any security agreement or arrangement or other

credit enhancement related to 1 or more qualified financial

contracts, the contractual rights of the parties to such

qualified financial contracts, netting contracts, security
123

agreements or arrangements, or other credit enhancements are enforceable substantially to the same extent as

permitted under this section.

‘‘(C) TRANSFER OF CONTRACTS SUBJECT TO THE RULES OF

A CLEARING ORGANIZATION.—In the event that a conservator or receiver transfers any qualified financial contract

and related claims, property and credit enhancements pursuant to subparagraph (A)(i) and such contract is subject

to the rules of a clearing organization, the clearing organization shall not be required to accept the transferee as a

member by virtue of the transfer.

‘‘(D) DEFINITION.—For purposes of this section, the term

‘financial institution’ means a broker or dealer, a depository institution, a futures commission merchant, or any

other institution as determined by the Corporation by regulation to be a financial institution.’’.

(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT

COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended by amending the

flush material following clause (ii) to read as follows: ‘‘the conservator or receiver shall notify any person who is a party to any such

contract of such transfer by 5:00 p.m. (eastern time) on the business day following the date of the appointment of the receiver, in

the case of a receivership, or the business day following such transfer, in the case of a conservatorship.’’.

(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF BRIDGE

BANKS.—Section 11(e)(10) of the Federal Deposit Insurance Act (12

U.S.C. 1821(e)(10)) is further amended—

(1) by redesignating subparagraph (B) as subparagraph (D);

and

(2) by inserting after subparagraph (A) the following new

subparagraphs:

‘‘(B) CERTAIN RIGHTS NOT ENFORCEABLE.—

‘‘(i) RECEIVERSHIP.—A person who is a party to a

qualified financial contract with an insured depository

institution may not exercise any right such person has

to terminate, liquidate, or net such contract under

paragraph (8)(A) or section 403 or 404 of the Federal

Deposit Insurance Corporation Improvement Act of

1991 solely by reason of or incidental to the appointment of a receiver for the depository institution (or the

insolvency or financial condition of the depository institution for which the receiver has been appointed)—

‘‘(I) until 5:00 p.m. (eastern time) on the business day following the date of the appointment of

the receiver; or

‘‘(II) after the person has received notice that

the contract has been transferred pursuant to

paragraph (9)(A).

‘‘(ii) CONSERVATORSHIP.—A person who is a party to

a qualified financial contract with an insured depository institution may not exercise any right such person has to terminate, liquidate, or net such contract

under paragraph (8)(E) or sections 403 or 404 of the
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Federal Deposit Insurance Corporation Improvement

Act of 1991, solely by reason of or incidental to the appointment of a conservator for the depository institution (or the insolvency or financial condition of the depository institution for which the conservator has been

appointed).

‘‘(iii) NOTICE.—For purposes of this subsection, the

Corporation as receiver or conservator of an insured

depository institution shall be deemed to have notified

a person who is a party to a qualified financial contract with such depository institution if the Corporation has taken steps reasonably calculated to provide

notice to such person by the time specified in subparagraph (A) of this subsection.

‘‘(C) TREATMENT OF BRIDGE BANKS.—The following institutions shall not be considered a financial institution for

which a conservator, receiver, trustee in bankruptcy, or

other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding

for purposes of subsection (e)(9)—

‘‘(i) a bridge bank; or

‘‘(ii) a depository institution organized by the Corporation, for which a conservator is appointed either—

‘‘(I) immediately upon the organization of the institution; or

‘‘(II) at the time of a purchase and assumption

transaction between such institution and the Corporation as receiver for a depository institution in

default.’’.

SEC. 1004. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS.

Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)) is further amended—

(1) by redesignating paragraphs (11) through (15) as paragraphs (12) through (16), respectively; and

(2) by inserting after paragraph (10) the following new paragraph:

‘‘(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINAN- CIAL CONTRACTS.—In exercising the rights of disaffirmance or

repudiation of a conservator or receiver with respect to any

qualified financial contract to which an insured depository institution is a party, the conservator or receiver for such institution shall either—

‘‘(A) disaffirm or repudiate all qualified financial contracts between—

‘‘(i) any person or any affiliate of such person; and

‘‘(ii) the depository institution in default; or

‘‘(B) disaffirm or repudiate none of the qualified financial

contracts referred to in subparagraph (A) (with respect to

such person or any affiliate of such person).’’.

SEC. 1005. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance Act (12

U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:
125

‘‘(vii) TREATMENT OF MASTER AGREEMENT AS 1

AGREEMENT.—Any master agreement for any contract

or agreement described in any preceding clause of this

subparagraph (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated

as a single agreement and a single qualified financial

contract. If a master agreement contains provisions relating to agreements or transactions that are not

themselves qualified financial contracts, the master

agreement shall be deemed to be a qualified financial

contract only with respect to those transactions that

are themselves qualified financial contracts.’’.

SEC. 1006. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991.

(a) DEFINITIONS.—Section 402 of the Federal Deposit Insurance

Corporation Improvement Act of 1991 (12 U.S.C. 4402) is

amended—

(1) in paragraph (6)—

(A) by redesignating subparagraphs (B) through (D) as

subparagraphs (C) through (E), respectively;

(B) by inserting after subparagraph (A) the following

new subparagraph:

‘‘(B) an uninsured national bank or an uninsured State

bank that is a member of the Federal Reserve System if

the national bank or State member bank is not eligible to

make application to become an insured bank under section

5 of the Federal Deposit Insurance Act;’’; and

(C) by amending subparagraph (C) (as redesignated) to

read as follows:

‘‘(C) a branch or agency of a foreign bank, a foreign bank

and any branch or agency of the foreign bank, or the foreign bank that established the branch or agency, as those

terms are defined in section 1(b) of the International

Banking Act of 1978;’’;

(2) in paragraph (11), by adding before the period ‘‘and any

other clearing organization with which such clearing organization has a netting contract’’;

(3) by amending paragraph (14)(A)(i) to read as follows:

‘‘(i) means a contract or agreement between 2 or

more financial institutions, clearing organizations, or

members that provides for netting present or future

payment obligations or payment entitlements (including liquidation or closeout values relating to such obligations or entitlements) among the parties to the

agreement; and’’; and

(4) by adding at the end the following new paragraph:

‘‘(15) PAYMENT.—The term ‘payment’ means a payment of

United States dollars, another currency, or a composite currency, and a noncash delivery, including a payment or delivery

to liquidate an unmatured obligation.’’.

(b) ENFORCEABILITY OF BILATERAL NETTING CONTRACTS.—Section

403 of the Federal Deposit Insurance Corporation Improvement Act

of 1991 (12 U.S.C. 4403) is amended—
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(1) by amending subsection (a) to read as follows:

‘‘(a) GENERAL RULE.—Notwithstanding any other provision of

State or Federal law (other than paragraphs (8)(E), (8)(F), and

(10)(B) of section 11(e) of the Federal Deposit Insurance Act or any

order authorized under section 5(b)(2) of the Securities Investor

Protection Act of 1970, the covered contractual payment obligations

and the covered contractual payment entitlements between any 2

financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract (except as provided in section 561(b)(2) of title 11).’’; and

(2) by adding at the end the following new subsection:

‘‘(f) ENFORCEABILITY OF SECURITY AGREEMENTS.—The provisions

of any security agreement or arrangement or other credit enhancement related to 1 or more netting contracts between any 2 financial

institutions shall be enforceable in accordance with their terms (except as provided in section 561(b)(2) of title 11) and shall not be

stayed, avoided, or otherwise limited by any State or Federal law

(other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of

the Federal Deposit Insurance Act and section 5(b)(2) of the Securities Investor Protection Act of 1970).’’.

(c) ENFORCEABILITY OF CLEARING ORGANIZATION NETTING CONTRACTS.—Section 404 of the Federal Deposit Insurance Corporation

Improvement Act of 1991 (12 U.S.C. 4404) is amended—

(1) by amending subsection (a) to read as follows:

‘‘(a) GENERAL RULE.—Notwithstanding any other provision of

State or Federal law (other than paragraphs (8)(E), (8)(F), and

(10)(B) of section 11(e) of the Federal Deposit Insurance Act and

any order authorized under section 5(b)(2) of the Securities Investor Protection Act of 1970, the covered contractual payment obligations and the covered contractual payment entitlements of a member of a clearing organization to and from all other members of a

clearing organization shall be netted in accordance with and subject to the conditions of any applicable netting contract (except as

provided in section 561(b)(2) of title 11, United States Code).’’; and

(2) by adding at the end the following new subsection:

‘‘(h) ENFORCEABILITY OF SECURITY AGREEMENTS.—The provisions

of any security agreement or arrangement or other credit enhancement related to 1 or more netting contracts between any 2 members of a clearing organization shall be enforceable in accordance

with their terms (except as provided in section 561(b)(2) of title 11,

United States Code) and shall not be stayed, avoided, or otherwise

limited by any State or Federal law other than paragraphs (8)(E),

(8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance

Act and section 5(b)(2) of the Securities Investor Protection Act of

1970.’’.

(d) ENFORCEABILITY OF CONTRACTS WITH UNINSURED NATIONAL

BANKS AND UNINSURED FEDERAL BRANCHES AND AGENCIES.—The

Federal Deposit Insurance Corporation Improvement Act of 1991

(12 U.S.C. 4401 et seq.) is amended—

(1) by redesignating section 407 as section 408; and

(2) by adding after section 406 the following new section:
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‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL

BANKS AND UNINSURED FEDERAL BRANCHES AND AGENCIES.

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law,

paragraphs (8), (9), (10), and (11) of section 11(e) of the Federal Deposit Insurance Act shall apply to an uninsured national bank or

uninsured Federal branch or Federal agency except—

‘‘(1) any reference to the ‘Corporation as receiver’ or ‘the receiver or the Corporation’ shall refer to the receiver of an uninsured national bank or uninsured Federal branch or Federal

agency appointed by the Comptroller of the Currency;

‘‘(2) any reference to the ‘Corporation’ (other than in section

11(e)(8)(D) of such Act), the ‘Corporation, whether acting as

such or as conservator or receiver’, a ‘receiver’, or a ‘conservator’ shall refer to the receiver or conservator of an uninsured

national bank or uninsured Federal branch or Federal agency

appointed by the Comptroller of the Currency; and

‘‘(3) any reference to an ‘insured depository institution’ or

‘depository institution’ shall refer to an uninsured national

bank or an uninsured Federal branch or Federal agency.

‘‘(b) LIABILITY.—The liability of a receiver or conservator of an

uninsured national bank or uninsured Federal branch or agency

shall be determined in the same manner and subject to the same

limitations that apply to receivers and conservators of insured depository institutions under section 11(e) of the Federal Deposit Insurance Act.

‘‘(c) REGULATORY AUTHORITY.—

‘‘(1) IN GENERAL.—The Comptroller of the Currency, in consultation with the Federal Deposit Insurance Corporation, may

promulgate regulations to implement this section.

‘‘(2) SPECIFIC REQUIREMENT.—In promulgating regulations to

implement this section, the Comptroller of the Currency shall

ensure that the regulations generally are consistent with the

regulations and policies of the Federal Deposit Insurance Corporation adopted pursuant to the Federal Deposit Insurance

Act.

‘‘(d) DEFINITIONS.—For purposes of this section, the terms ‘Federal branch’, ‘Federal agency’, and ‘foreign bank’ have the same

meaning as in section 1(b) of the International Banking Act.’’.

SEC. 1007. BANKRUPTCY CODE AMENDMENTS.

(a) DEFINITIONS OF FORWARD CONTRACT, REPURCHASE AGREEMENT, SECURITIES CLEARING AGENCY, SWAP AGREEMENT, COMMODITY CONTRACT, AND SECURITIES CONTRACT.—Title 11, United States

Code, is amended—

(1) in section 101—

(A) in paragraph (25)—

(i) by striking ‘‘means a contract’’ and inserting

‘‘means—

‘‘(A) a contract’’;

(ii) by striking ‘‘, or any combination thereof or option thereon;’’ and inserting ‘‘, or any other similar

agreement;’’; and

(iii) by adding at the end the following:
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‘‘(B) any combination of agreements or transactions referred to in subparagraphs (A) and (C);

‘‘(C) any option to enter into an agreement or transaction referred to in subparagraph (A) or (B);

‘‘(D) a master agreement that provides for an agreement

or transaction referred to in subparagraph (A), (B), or (C),

together with all supplements to any such master agreement, without regard to whether such master agreement

provides for an agreement or transaction that is not a forward contract under this paragraph, except that such master agreement shall be considered to be a forward contract

under this paragraph only with respect to each agreement

or transaction under such master agreement that is referred to in subparagraph (A), (B) or (C); or

‘‘(E) a security agreement or arrangement, or other credit enhancement related to any agreement or transaction

referred to in subparagraph (A), (B), (C), or (D), but not to

exceed the actual value of such contract, option, agreement, or transaction on the date of the filing of the petition;’’;

(B) in paragraph (46), by striking ‘‘on any day during the

period beginning 90 days before the date of’’ and replacing

it with ‘‘at any time before’’;

(C) by amending paragraph (47) to read as follows:

‘‘(47) ‘repurchase agreement’ (which definition also applies to

a reverse repurchase agreement) means—

‘‘(i) an agreement, including related terms, which

provides for the transfer of 1 or more certificates of deposit, mortgage-related securities (as defined in the

Securities Exchange Act of 1934), mortgage loans, interests in mortgage-related securities or mortgage

loans, eligible bankers’ acceptances, qualified foreign

government securities; or securities that are direct obligations of, or that are fully guaranteed by, the

United States or any agency of the United States

against the transfer of funds by the transferee of such

certificates of deposit, eligible bankers’ acceptances,

securities, loans, or interests; with a simultaneous

agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers’

acceptance, securities, loans, or interests of the kind

described above, at a date certain not later than 1

year after such transfer or on demand, against the

transfer of funds;

‘‘(ii) any combination of agreements or transactions

referred to in clauses (i) and (iii);

‘‘(iii) an option to enter into an agreement or transaction referred to in clause (i) or (ii);

‘‘(iv) a master agreement that provides for an agreement or transaction referred to in clause (i), (ii), or

(iii), together with all supplements to any such master

agreement, without regard to whether such master

agreement provides for an agreement or transaction

that is not a repurchase agreement under this para-
129

graph, except that such master agreement shall be

considered to be a repurchase agreement under this

paragraph only with respect to each agreement or

transaction under the master agreement that is referred to in clause (i), (ii), or (iii); or

‘‘(v) a security agreement or arrangement or other

credit enhancement related to any agreement or transaction referred to in clause (i), (ii), (iii), or (iv), but not

to exceed the actual value of such contract on the date

of the filing of the petition; and

‘‘(B) does not include a repurchase obligation under a

participation in a commercial mortgage loan;

and, for purposes of this paragraph, the term ‘qualified foreign

government security’ means a security that is a direct obligation of, or that is fully guaranteed by, the central government

of a member of the Organization for Economic Cooperation and

Development;’’;

(D) in paragraph (48) by inserting ‘‘or exempt from such

registration under such section pursuant to an order of the

Securities and Exchange Commission’’ after ‘‘1934’’; and

(E) by amending paragraph (53B) to read as follows:

‘‘(53B) ‘swap agreement’

‘‘(A) means—

‘‘(i) any agreement, including the terms and conditions incorporated by reference in such agreement,

which is an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate

collar, cross-currency rate swap, and basis swap; a

spot, same day-tomorrow, tomorrow-next, forward, or

other foreign exchange or precious metals agreement;

a currency swap, option, future, or forward agreement;

an equity index or an equity swap, option, future, or

forward agreement; a debt index or a debt swap, option, future, or forward agreement; a credit spread or

a credit swap, option, future, or forward agreement; or

a commodity index or a commodity swap, option, future, or forward agreement;

‘‘(ii) any agreement or transaction similar to any

other agreement or transaction referred to in this

paragraph that—

‘‘(I) is presently, or in the future becomes, regularly entered into in the swap market (including

terms and conditions incorporated by reference

therein); and

‘‘(II) is a forward, swap, future, or option on 1

or more rates, currencies commodities, equity securities, or other equity instruments, debt securities or other debt instruments, or on an economic

index or measure of economic risk or value;

‘‘(iii) any combination of agreements or transactions

referred to in this paragraph;

‘‘(iv) any option to enter into an agreement or transaction referred to in this paragraph;
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‘‘(v) a master agreement that provides for an agreement or transaction referred to in clause (i), (ii), (iii),

or (iv), together with all supplements to any such master agreement, and without regard to whether the

master agreement contains an agreement or transaction that is not a swap agreement under this paragraph, except that the master agreement shall be considered to be a swap agreement under this paragraph

only with respect to each agreement or transaction

under the master agreement that is referred to in

clause (i), (ii), (iii), or (iv); or

‘‘(B) any security agreement or arrangement or other

credit enhancement related to any agreements or transactions referred to in subparagraph (A); and

‘‘(C) is applicable for purposes of this title only and shall

not be construed or applied so as to challenge or affect the

characterization, definition, or treatment of any swap

agreement under any other statute, regulation, or rule, including the Securities Act of 1933, the Securities Exchange

Act of 1934, the Public Utility Holding Company Act of

1935, the Trust Indenture Act of 1939, the Investment

Company Act of 1940, the Investment Advisers Act of

1940, the Securities Investor Protection Act of 1970, the

Commodity Exchange Act, and the regulations prescribed

by the Securities and Exchange Commission or the Commodity Futures Trading Commission.’’;

(2) by amending section 741(7) to read as follows:

‘‘(7) ‘securities contract’—

‘‘(A) means—

‘‘(i) a contract for the purchase, sale, or loan of a security, a certificate of deposit, a mortgage loan or any

interest in a mortgage loan, a group or index of securities, certificates of deposit or mortgage loans or interests therein (including an interest therein or based on

the value thereof), or option on any of the foregoing,

including an option to purchase or sell any such security certificate of deposit, loan, interest, group or index

or option;

‘‘(ii) any option entered into on a national securities

exchange relating to foreign currencies;

‘‘(iii) the guarantee by or to any securities clearing

agency of a settlement of cash, securities, certificates

of deposit mortgage loans or interests therein, group

or index of securities, or mortgage loans or interests

therein (including any interest therein or based on the

value thereof), or option on any of the foregoing, including an option to purchase or sell any such security

certificate of deposit, loan, interest, group or index or

option;

‘‘(iv) any margin loan;

‘‘(v) any other agreement or transaction that is similar to an agreement or transaction referred to in this

paragraph;
131

‘‘(vi) any combination of the agreements or transactions referred to in this paragraph;

‘‘(vii) any option to enter into any agreement or

transaction referred to in this paragraph;

‘‘(viii) a master agreement that provides for an

agreement or transaction referred to in clause (i), (ii),

(iii), (iv), (v), (vi), or (vii), together with all supplements to any such master agreement, without regard

to whether the master agreement provides for an

agreement or transaction that is not a securities contract under this paragraph, except that such master

agreement shall be considered to be a securities contract under this paragraph only with respect to each

agreement or transaction under such master agreement that is referred to in clause (i), (ii), (iii), (iv), (v),

(vi), or (vii); or

‘‘(ix) any security agreement or arrangement, or

other credit enhancement, related to any agreement or

transaction referred to in this paragraph, but not to

exceed the actual value of such contract on the date of

the filing of the petition; and

‘‘(B) does not include any purchase, sale, or repurchase

obligation under a participation in a commercial mortgage

loan.’’; and

(3) in section 761(4)—

(A) by striking ‘‘or’’ at the end of subparagraph (D); and

(B) by adding at the end the following:

‘‘(F) any other agreement or transaction that is similar

to an agreement or transaction referred to in this paragraph;

‘‘(G) any combination of the agreements or transactions

referred to in this paragraph;

‘‘(H) any option to enter into an agreement or transaction referred to in this paragraph;

‘‘(I) a master agreement that provides for an agreement

or transaction referred to in subparagraph (A), (B), (C),

(D), (E), (F), (G), or (H), together with all supplements to

such master netting agreement, without regard to whether

the master netting agreement provides for an agreement

or transaction that is not a commodity contract under this

paragraph, except that the master agreement shall be considered to be a commodity contract under this paragraph

only with respect to each agreement or transaction under

the master agreement that is referred to in subparagraph

(A), (B), (C), (D), (E), (F), (G), or (H); or

‘‘(J) a security agreement or arrangement, or other credit

enhancement related to any agreement or transaction referred to in this paragraph, but not to exceed the actual

value of such contract on the date of the filing of the petition;’’.

(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINANCIAL PARTICIPANT, AND FORWARD CONTRACT MERCHANT.—Section 101 of title

11, United States Code, is amended—

(1) by amending paragraph (22) to read as follows:
132

‘‘(22) ‘financial institution’ means—

‘‘(A) a Federal reserve bank, or an entity (domestic or

foreign) that is a commercial or savings bank, industrial

savings bank, savings and loan association, trust company,

or receiver or conservator for such entity and, when any

such Federal reserve bank, receiver, conservator or entity

is acting as agent or custodian for a customer in connection with a securities contract, as defined in section 741 of

this title, such customer; or

‘‘(B) in connection with a securities contract, as defined

in section 741 of this title, an investment company registered under the Investment Company Act of 1940;’’;

(2) by inserting after paragraph (22) the following:

‘‘(22A) ‘financial participant’ means an entity that, at the

time it enters into a securities contract, commodity contract or

forward contract, or at the time of the filing of the petition, has

1 or more agreements or transactions that is described in section 561(a)(2) with the debtor or any other entity (other than

an affiliate) of a total gross dollar value of at least

$1,000,000,000 in notional or actual principal amount outstanding on any day during the previous 15-month period, or

has gross mark-to-market positions of at least $100,000,000

(aggregated across counterparties) in 1 or more such agreement or transaction with the debtor or any other entity (other

than an affiliate) on any day during the previous 15-month period;’’; and

(3) by amending paragraph (26) to read as follows:

‘‘(26) ‘forward contract merchant’ means a Federal reserve

bank, or an entity whose business consists in whole or in part

of entering into forward contracts as or with merchants or in

a commodity, as defined or in section 761 of this title, or any

similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing or in the

forward contract trade;’’.

(c) DEFINITION OF MASTER NETTING AGREEMENT AND MASTER

NETTING AGREEMENT PARTICIPANT.—Section 101 of title 11, United

States Code, is amended by inserting after paragraph (38) the following new paragraphs:

‘‘(38A) ‘master netting agreement’ means an agreement providing for the exercise of rights, including rights of netting,

setoff, liquidation, termination, acceleration, or closeout, under

or in connection with 1 or more contracts that are described in

any 1 or more of paragraphs (1) through (5) of section 561(a),

or any security agreement or arrangement or other credit enhancement related to 1 or more of the foregoing. If a master

netting agreement contains provisions relating to agreements

or transactions that are not contracts described in paragraphs

(1) through (5) of section 561(a), the master netting agreement

shall be deemed to be a master netting agreement only with

respect to those agreements or transactions that are described

in any 1 or more of the paragraphs (1) through (5) of section

561(a);
133

‘‘(38B) ‘master netting agreement participant’ means an entity that, at any time before the filing of the petition, is a party

to an outstanding master netting agreement with the debtor;’’.

(d) SWAP AGREEMENTS, SECURITIES CONTRACTS, COMMODITY

CONTRACTS, FORWARD CONTRACTS, REPURCHASE AGREEMENTS, AND

MASTER NETTING AGREEMENTS UNDER THE AUTOMATIC-STAY.—

(1) IN GENERAL.—Section 362(b) of title 11, United States

Code, as amended by sections 118, 132, 136, 142, 203 and 818,

is amended—

(A) in paragraph (6), by inserting ‘‘, pledged to, and

under the control of,’’ after ‘‘held by’’;

(B) in paragraph (7), by inserting ‘‘, pledged to, and

under the control of,’’ after ‘‘held by’’;

(C) by amending paragraph (17) to read as follows:

‘‘(17) under subsection (a), of the setoff by a swap participant

of a mutual debt and claim under or in connection with 1 or

more swap agreements that constitutes the setoff of a claim

against the debtor for any payment or other transfer of property due from the debtor under or in connection with any swap

agreement against any payment due to the debtor from the

swap participant under or in connection with any swap agreement or against cash, securities, or other property held by,

pledged to, and under the control of, or due from such swap

participant to margin guarantee, secure, or settle a swap

agreement;’’;

(D) in paragraph (30) by striking ‘‘or’’ at the end;

(E) in paragraph (31) by striking the period at the end

and inserting ‘‘; or’’; and

(F) by inserting after paragraph (31) the following new

paragraph:

‘‘(32) under subsection (a), of the setoff by a master netting

agreement participant of a mutual debt and claim under or in

connection with 1 or more master netting agreements or any

contract or agreement subject to such agreements that constitutes the setoff of a claim against the debtor for any payment or other transfer of property due from the debtor under

or in connection with such agreements or any contract or

agreement subject to such agreements against any payment

due to the debtor from such master netting agreement participant under or in connection with such agreements or any contract or agreement subject to such agreements or against cash,

securities, or other property held by, pledged or and under the

control of, or due from such master netting agreement participant to margin, guarantee, secure, or settle such agreements

or any contract or agreement subject to such agreements, to

the extent such participant is eligible to exercise such offset

rights under paragraph (6), (7), or (17) for each individual contract covered by the master netting agreement in issue.’’.

(2) LIMITATION.—Section 362 of title 11, United States Code,

as amended by sections 120, 302, and 412, is amended by adding at the end the following:

‘‘(l) LIMITATION.—The exercise of rights not subject to the stay

arising under subsection (a) pursuant to paragraph (6), (7), or (17),
134

or (31) of subsection (b) shall not be stayed by any order of a court

or administrative agency in any proceeding under this title.’’.

(e) LIMITATION OF AVOIDANCE POWERS UNDER MASTER NETTING

AGREEMENT.—Section 546 of title 11, United States Code, as

amended by sections 207 and 302, is amended—

(1) in subsection (g) (as added by section 103 of Public Law

101–311)—

(A) by striking ‘‘under a swap agreement’’;

(B) by striking ‘‘in connection with a swap agreement’’

and inserting ‘‘under or in connection with any swap

agreement’’; and

(2) by adding at the end the following:

‘‘(j) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), and

548(b) of this title, the trustee may not avoid a transfer made by

or to a master netting agreement participant under or in connection with any master netting agreement or any individual contract

covered thereby that is made before the commencement of the case,

except under section 548(a)(1)(A) of this title, and except to the extent the trustee could otherwise avoid such a transfer made under

an individual contract covered by such master netting agreement.’’.

(f) FRAUDULENT TRANSFERS OF MASTER NETTING AGREEMENTS.— Section 548(d)(2) of title 11, United States Code, is amended—

(1) in subparagraph (C), by striking ‘‘and’’;

(2) in subparagraph (D), by striking the period and inserting

‘‘; and’’; and

(3) by adding at the end the following new subparagraph:

‘‘(E) a master netting agreement participant that receives a

transfer in connection with a master netting agreement or any

individual contract covered thereby takes for value to the extent of such transfer, except, with respect to a transfer under

any individual contract covered thereby, to the extent such

master netting agreement participant otherwise did not take

(or is otherwise not deemed to have taken) such transfer for

value.’’.

(g) TERMINATION OR ACCELERATION OF SECURITIES CONTRACTS.—

Section 555 of title 11, United States Code, is amended—

(1) by amending the section heading to read as follows:

‘‘§ 555. Contractual right to liquidate, terminate, or accelerate a securities contract’’; and

(2) in the first sentence, by striking ‘‘liquidation’’ and inserting ‘‘liquidation, termination, or acceleration’’.

(h) TERMINATION OR ACCELERATION OF COMMODITIES OR FORWARD CONTRACTS.—Section 556 of title 11, United States Code, is

amended—

(1) by amending the section heading to read as follows:

‘‘§ 556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract’’;

and

(2) in the first sentence, by striking ‘‘liquidation’’ and inserting ‘‘liquidation, termination, or acceleration’’.

(i) TERMINATION OR ACCELERATION OF REPURCHASE AGREEMENTS.—Section 559 of title 11, United States Code, is amended—
135

(1) by amending the section heading to read as follows:

‘‘§ 559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement’’; and

(2) in the first sentence, by striking ‘‘liquidation’’ and inserting ‘‘liquidation, termination, or acceleration’’.

(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF SWAP

AGREEMENTS.—Section 560 of title 11, United States Code, is

amended—

(1) by amending the section heading to read as follows:

‘‘§ 560. Contractual right to liquidate, terminate, or accelerate a swap agreement’’; and

(2) in the first sentence, by striking ‘‘termination of a swap

agreement’’ and inserting ‘‘liquidation, termination, or acceleration of 1 or more swap agreements’’; and

(3) by striking ‘‘in connection with any swap agreement’’ and

inserting ‘‘in connection with the termination, liquidation, or

acceleration of 1 or more swap agreements’’.

(k) LIQUIDATION, TERMINATION, ACCELERATION, OR OFFSET

UNDER A MASTER NETTING AGREEMENT AND ACROSS CONTRACTS.— (1) Title 11, United States Code, is amended by inserting after section 560 the following:

‘‘§ 561. Contractual right to terminate, liquidate, accelerate,

or offset under a master netting agreement and

across contracts

‘‘(a) IN GENERAL.—Subject to subsection (b), the exercise of any

contractual right, because of a condition of the kind specified in

section 365(e)(1), to cause the termination, liquidation, or acceleration of or to offset or net termination values, payment amounts or

other transfer obligations arising under or in connection with 1 or

more (or the termination, liquidation, or acceleration of 1 or

more)—

‘‘(1) securities contracts, as defined in section 741(7);

‘‘(2) commodity contracts, as defined in section 761(4);

‘‘(3) forward contracts;

‘‘(4) repurchase agreements;

‘‘(5) swap agreements; or

‘‘(6) master netting agreements,

shall not be stayed, avoided, or otherwise limited by operation of

any provision of this title or by any order of a court or administrative agency in any proceeding under this title.

‘‘(b) EXCEPTION.—

‘‘(1) A party may exercise a contractual right described in

subsection (a) to terminate, liquidate, or accelerate only to the

extent that such party could exercise such a right under section 555, 556, 559, or 560 for each individual contract covered

by the master netting agreement in issue.

‘‘(2) If a debtor is a commodity broker subject to subchapter

IV of chapter 7 of this title—

‘‘(A) a party may not net or offset an obligation to the

debtor arising under, or in connection with, a commodity

contract against any claim arising under, or in connection
136

with, other instruments, contracts, or agreements listed in

subsection (a) except to the extent the party has positive

net equity in the commodity accounts at the debtor, as calculated under subchapter IV; and

‘‘(B) another commodity broker may not net or offset an

obligation to the debtor arising under, or in connection

with, a commodity contract entered into or held on behalf

of a customer of the debtor against any claim arising

under, or in connection with, other instruments, contracts,

or agreements listed in subsection (a).

‘‘(c) DEFINITION.—As used in this section, the term ‘contractual

right’ includes a right set forth in a rule or bylaw of a national securities exchange, a national securities association, or a securities

clearing agency, a right set forth in a bylaw of a clearing organization or contract market or in a resolution of the governing board

thereof, and a right, whether or not evidenced in writing, arising

under common law, under law merchant, or by reason of normal

business practice.’’.

(2) CONFORMING AMENDMENT.—The table of sections of chapter 9

of title 11, United States Code, is amended by inserting after the

item relating to section 560 the following:

‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a master

netting agreement and across contracts.

(l) ANCILLARY PROCEEDINGS.—Section 304 of title 11, United

States Code, as amended by section 215, is amended by adding at

the end the following:

‘‘(c) Any provisions of this title relating to securities contracts,

commodity contracts, forward contracts, repurchase agreements,

swap agreements, or master netting agreements shall apply in a

case ancillary to a foreign proceeding under this section or any

other section of this title, so that enforcement of contractual provisions of such contracts and agreements in accordance with their

terms will not be stayed or otherwise limited by operation of any

provision of this title or by order of a court in any case under this

title, and to limit avoidance powers to the same extent as in a proceeding under chapter 7 or 11 of this title (such enforcement not

to be limited based on the presence or absence of assets of the debtor in the United States).’’.

(m) COMMODITY BROKER LIQUIDATIONS.—Title 11, United States

Code, is amended by inserting after section 766 the following:

‘‘§ 767. Commodity broker liquidation and forward contract

merchants, commodity brokers, stockbrokers, financial institutions, securities clearing agencies,

swap participants, repo participants, and master

netting agreement participants

‘‘Notwithstanding any other provision of this title, the exercise of

rights by a forward contract merchant, commodity broker, stockbroker, financial institution, securities clearing agency, swap participant, repo participant, or master netting agreement participant

under this title shall not affect the priority of any unsecured claim

it may have after the exercise of such rights.’’.

(n) STOCKBROKER LIQUIDATIONS.—Title 11, United States Code,

is amended by inserting after section 752 the following:
137

‘‘§ 753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial

institutions, securities clearing agencies, swap participants, repo participants, and master netting

agreement participants

‘‘Notwithstanding any other provision of this title, the exercise of

rights by a forward contract merchant, commodity broker, stockbroker, financial institution, securities clearing agency, swap participant, repo participant, financial participant, or master netting

agreement participant under this title shall not affect the priority

of any unsecured claim it may have after the exercise of such

rights.’’.

(o) SETOFF.—Section 553 of title 11, United States Code, is

amended—

(1) in subsection (a)(3)(C), by inserting ‘‘(except for a setoff

of a kind described in section 362(b)(6), 362(b)(7), 362(b)(17),

362(b)(19), 555, 556, 559, 560 or 561 of this title)’’ before the

period; and

(2) in subsection (b)(1), by striking ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 362(b)(19), 555, 556, 559, 560, 561’’.

(p) SECURITIES CONTRACTS, COMMODITY CONTRACTS, AND FORWARD CONTRACTS.—Title 11, United States Code, is amended—

(1) in section 362(b)(6), by striking ‘‘financial institutions,’’

each place such term appears and inserting ‘‘financial institution, financial participant’’;

(2) in section 546(e), by inserting ‘‘financial participant,’’

after ‘‘financial institution,’’;

(3) in section 548(d)(2)(B), by inserting ‘‘financial participant,’’ after ‘‘financial institution,’’;

(4) in section 555—

(A) by inserting ‘‘financial participant,’’ after ‘‘financial

institution,’’; and

(B) by inserting before the period at the end ‘‘, a right

set forth in a bylaw of a clearing organization or contract

market or in a resolution of the governing board thereof,

and a right, whether or not in writing, arising under common law, under law merchant, or by reason of normal

business practice’’; and

(5) in section 556, by inserting ‘‘, financial participant’’ after

‘‘commodity broker’’.

(q) CONFORMING AMENDMENTS.—Title 11 of the United States

Code is amended—

(1) in the table of sections of chapter 5—

(A) by amending the items relating to sections 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

(B) by amending the items relating to sections 559 and

560 to read as follows:

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement.

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;

and
138

(2) in the table of sections of chapter 7—

(A) by inserting after the item relating to section 766 the

following:

‘‘767. Commodity broker liquidation and forward contract merchants, commodity

brokers, stockbrokers, financial institutions, securities clearing agencies, swap participants, repo participants, and master netting agreement participants.’’; and

(B) by inserting after the item relating to 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.’’.

SEC. 1008. RECORDKEEPING REQUIREMENTS.

Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)(8)) is amended by adding at the end the following new subparagraph:

‘‘(H) RECORDKEEPING REQUIREMENTS.—The Corporation,

in consultation with the appropriate Federal banking

agencies, may prescribe regulations requiring more detailed recordkeeping with respect to qualified financial

contracts (including market valuations) by insured depository institutions.’’.

SEC. 1009. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION –––

REQUIREMENT.

Section 13(e)(2) of the Federal Deposit Insurance Act (12 U.S.C.

1823(e)(2)) is amended to read as follows:

‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.—An agreement to provide for the lawful

collateralization of—

‘‘(A) deposits of, or other credit extension by, a Federal,

State, or local governmental entity, or of any depositor referred to in section 11(a)(2), including an agreement to provide collateral in lieu of a surety bond;

‘‘(B) bankruptcy estate funds pursuant to section

345(b)(2) of title 11, United States Code;

‘‘(C) extensions of credit, including any overdraft, from a

Federal reserve bank or Federal home loan bank; or

‘‘(D) 1 or more qualified financial contracts, as defined in

section 11(e)(8)(D),

shall not be deemed invalid pursuant to paragraph (1)(B) solely

because such agreement was not executed contemporaneously

with the acquisition of the collateral or because of pledges, delivery, or substitution of the collateral made in accordance with

such agreement.’’.

SEC. 1010. DAMAGE MEASURE.

(a) Title 11, United States Code, as amended by section 1007, is

amended—

(1) by inserting after section 561 the following:
139

‘‘§ 562. Damage measure in connection with swap agreements, securities contracts, forward contracts,

commodity contracts, repurchase agreements, or

master netting agreements

‘‘If the trustee rejects a swap agreement, securities contract as

defined in section 741 of this title, forward contract, commodity

contract (as defined in section 761 of this title) repurchase agreement, or master netting agreement pursuant to section 365(a) of

this title, or if a forward contract merchant, stockbroker, financial

institution, securities clearing agency, repo participant, financial

participant, master netting agreement participant, or swap participant liquidates, terminates, or accelerates such contract or agreement, damages shall be measured as of the earlier of—

‘‘(1) the date of such rejection; or

‘‘(2) the date of such liquidation, termination, or acceleration.’’; and

(2) in the table of sections of chapter 5 by inserting after the

item relating to section 561 the following:

‘‘562. Damage measure in connection with swap agreements, securities contracts,

forward contracts, commodity contracts, repurchase agreements, or

master netting agreements.’’.

(b) CLAIMS ARISING FROM REJECTION.—Section 502(g) of title 11,

United States Code, is amended—

(1) by designating the existing text as paragraph (1); and

(2) by adding at the end the following:

‘‘(2) A claim for damages calculated in accordance with section

561 of this title shall be allowed under subsection (a), (b), or (c),

or disallowed under subsection (d) or (e), as if such claim had arisen before the date of the filing of the petition.’’.

SEC. 1011. SIPC STAY.

Section 5(b)(2) of the Securities Investor Protection Act of 1970

(15 U.S.C. 78eee(b)(2)) is amended by adding after subparagraph

(B) the following new subparagraph:

‘‘(C) EXCEPTION FROM STAY.—

‘‘(i) Notwithstanding section 362 of title 11, United

States Code, neither the filing of an application under

subsection (a)(3) nor any order or decree obtained by

Securities Investor Protection Corporation from the

court shall operate as a stay of any contractual rights

of a creditor to liquidate, terminate, or accelerate a securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, or master netting agreement, each as defined in title 11, to

offset or net termination values, payment amounts, or

other transfer obligations arising under or in connection with 1 or more of such contracts or agreements,

or to foreclose on any cash collateral pledged by the

debtor whether or not with respect to 1 or more of

such contracts or agreements.

‘‘(ii) Notwithstanding clause (i), such application,

order, or decree may operate as a stay of the foreclosure on securities collateral pledged by the debtor,

whether or not with respect to 1 or more of such con-
140

tracts or agreements, securities sold by the debtor

under a repurchase agreement or securities lent under

a securities lending agreement.

‘‘(iii) As used in this section, the term ‘contractual

right’ includes a right set forth in a rule or bylaw of

a national securities exchange, a national securities

association, or a securities clearing agency, a right set

forth in a bylaw of a clearing organization or contract

market or in a resolution of the governing board thereof, and a right, whether or not in writing, arising

under common law, under law merchant, or by reason

of normal business practice.’’.

SEC. 1012. ASSET-BACKED SECURITIZATIONS.

Section 541 of title 11, United States Code, as amended by section 150, is amended—

(1) by redesignating paragraph (5) of subsection (b) as paragraph (6);

(2) by inserting after paragraph (4) of subsection (b) the following new paragraph:

‘‘(5) any eligible asset (or proceeds thereof), to the extent that

such eligible asset was transferred by the debtor, before the

date of commencement of the case, to an eligible entity in connection with an asset-backed securitization, except to the extent such asset (or proceeds or value thereof) may be recovered

by the trustee under section 550 by virtue of avoidance under

section 548(a);’’; and

(3) by adding at the end the following new subsection:

‘‘(e) For purposes of this section, the following definitions shall

apply:

‘‘(1) the term ‘asset-backed securitization’ means a transaction in which eligible assets transferred to an eligible entity

are used as the source of payment on securities, the most senior of which are rated investment grade by 1 or more nationally recognized securities rating organizations, issued by an

issuer;

‘‘(2) the term ‘eligible asset’ means—

‘‘(A) financial assets (including interests therein and proceeds thereof), either fixed or revolving, including residential and commercial mortgage loans, consumer receivables,

trade receivables, and lease receivables, that, by their

terms, convert into cash within a finite time period, plus

any residual interest in property subject to receivables included in such financial assets plus any rights or other assets designed to assure the servicing or timely distribution

of proceeds to security holders;

‘‘(B) cash; and

‘‘(C) securities.

‘‘(3) the term ‘eligible entity’ means—

‘‘(A) an issuer; or

‘‘(B) a trust, corporation, partnership, or other entity engaged exclusively in the business of acquiring and transferring eligible assets directly or indirectly to an issuer

and taking actions ancillary thereto;
141

‘‘(4) the term ‘issuer’ means a trust, corporation, partnership,

or other entity engaged exclusively in the business of acquiring

and holding eligible assets, issuing securities backed by eligible

assets, and taking actions ancillary thereto; and

‘‘(5) the term ‘transferred’ means the debtor, pursuant to a

written agreement, represented and warranted that eligible assets were sold, contributed, or otherwise conveyed with the intention of removing them from the estate of the debtor pursuant to subsection (b)(5), irrespective, without limitation of—

‘‘(A) whether the debtor directly or indirectly obtained or

held an interest in the issuer or in any securities issued

by the issuer;

‘‘(B) whether the debtor had an obligation to repurchase

or to service or supervise the servicing of all or any portion

of such eligible assets; or

‘‘(C) the characterization of such sale, contribution, or

other conveyance for tax, accounting, regulatory reporting,

or other purposes.’’.

SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIREMENTS.

The 3d sentence of the 3d undesignated paragraph of section 16

of the Federal Reserve Act (12 U.S.C. 412) is amended by striking

‘‘acceptances acquired under the provisions of section 13 of this

Act’’ and inserting ‘‘acceptances acquired under section 10A, 10B,

13, or 13A of this Act’’.

SEC. 1014. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) EFFECTIVE DATE.—This title shall take effect on the date of

the enactment of this Act.

(b) APPLICATION OF AMENDMENTS.—The amendments made by

this title shall apply with respect to cases commenced or appointments made under any Federal or State law after the date of enactment of this Act, but shall not apply with respect to cases commenced or appointments made under any Federal or State law before the date of enactment of this Act.

TITLE XI—TECHNICAL CORRECTIONS

SEC. 1101. DEFINITIONS.

Section 101 of title 11, United States Code, as amended by sections 102, 105, 132, 138, 301, 302, 402, 902, and 1007, is

amended—

(1) by striking ‘‘In this title—’’ and inserting ‘‘In this title:’’;

(2) in each paragraph, by inserting ‘‘The term’’ after the

paragraph designation;

(3) in paragraph (35)(B), by striking ‘‘paragraphs (21B) and

(33)(A)’’ and inserting ‘‘paragraphs (23) and (35)’’;

(4) in each of paragraphs (35A) and (38), by striking ‘‘; and’’

at the end and inserting a period;

(5) in paragraph (51B)—

(A) by inserting ‘‘who is not a family farmer’’ after ‘‘debtor’’ the first place it appears; and

(B) by striking ‘‘thereto having aggregate’’ and all that

follows through the end of the paragraph;

(6) by amending paragraph (54) to read as follows:
142

‘‘(54) The term ‘transfer’ means—

‘‘(A) the creation of a lien;

‘‘(B) the retention of title as a security interest;

‘‘(C) the foreclosure of a debtor’s equity of redemption; or

‘‘(D) each mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting

with—

‘‘(i) property; or

‘‘(ii) an interest in property;’’;

(7) in each of paragraphs (1) through (35), in each of paragraphs (36) and (37), and in each of paragraphs (40) through

(55) (including paragraph (54), as amended by paragraph (6) of

this section), by striking the semicolon at the end and inserting

a period; and

(8) by redesignating paragraphs (4) through (55), including

paragraph (54), as amended by paragraph (6) of this section,

in entirely numerical sequence.

SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.

Section 104 of title 11, United States Code, is amended by inserting ‘‘522(f)(3), 707(b)(5),’’ after ‘‘522(d),’’ each place it appears.

SEC. 1103. EXTENSION OF TIME.

Section 108(c)(2) of title 11, United States Code, is amended by

striking ‘‘922’’ and all that follows through ‘‘or’’, and inserting ‘‘922,

1201, or’’.

SEC. 1104. TECHNICAL AMENDMENTS.

Title 11 of the United States Code is amended—

(1) in section 109(b)(2) by striking ‘‘subsection (c) or (d) of’’;

and

(2) in section 552(b)(1) by striking ‘‘product’’ each place it appears and inserting ‘‘products’’.

SEC. 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE BANKRUPTCY PETITIONS.

Section 110(j)(3) of title 11, United States Code, is amended by

striking ‘‘attorney’s’’ and inserting ‘‘attorneys’ ’’.

SEC. 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.

Section 328(a) of title 11, United States Code, is amended by inserting ‘‘on a fixed or percentage fee basis,’’ after ‘‘hourly basis,’’.

SEC. 1107. SPECIAL TAX PROVISIONS.

Section 346(g)(1)(C) of title 11, United States Code, is amended

by striking ‘‘, except’’ and all that follows through ‘‘1986’’.

SEC. 1108. EFFECT OF CONVERSION.

Section 348(f)(2) of title 11, United States Code, is amended by

inserting ‘‘of the estate’’ after ‘‘property’’ the first place it appears.

SEC. 1109. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

Section 503(b)(4) of title 11, United States Code, is amended by

inserting ‘‘subparagraph (A), (B), (C), (D), or (E) of’’ before ‘‘paragraph (3)’’.

SEC. 1110. PRIORITIES.

Section 507(a) of title 11, United States Code, as amended by section 323, is amended in paragraph (4), as so redesignated by sec-
143

tion 142, by striking the semicolon at the end and inserting a period.

SEC. 1111. EXEMPTIONS.

Section 522(g)(2) of title 11, United States Code, is amended by

striking ‘‘subsection (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.

SEC. 1112. EXCEPTIONS TO DISCHARGE.

Section 523 of title 11, United States Code, as amended by section 146, is amended—

(1) in subsection (a)(3), by striking ‘‘or (6)’’ each place it appears and inserting ‘‘(6), or (15)’’;

(2) as amended by section 304(e) of Public Law 103–394 (108

Stat. 4133), in paragraph (15), by transferring such paragraph

so as to insert it after paragraph (14A) of subsection (a);

(3) in subsection (a)(9), by inserting ‘‘, watercraft, or aircraft’’ after ‘‘motor vehicle’’;

(4) in subsection (a)(15), as so redesignated by paragraph (2)

of this subsection, by inserting ‘‘to a spouse, former spouse, or

child of the debtor and’’ after ‘‘(15)’’; and

(5) in subsection (e), by striking ‘‘a insured’’ and inserting

‘‘an insured’’.

SEC. 1113. EFFECT OF DISCHARGE.

Section 524(a)(3) of title 11, United States Code, is amended by

striking ‘‘section 523’’ and all that follows through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1), or 1328(a)(1) of this title, or that’’.

SEC. 1114. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

Section 525(c) of title 11, United States Code, is amended—

(1) in paragraph (1), by inserting ‘‘student’’ before ‘‘grant’’ the

second place it appears; and

(2) in paragraph (2), by striking ‘‘the program operated

under part B, D, or E of’’ and inserting ‘‘any program operated

under’’.

SEC. 1115. PROPERTY OF THE ESTATE.

Section 541(b)(4)(B)(ii) of title 11, United States Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.

SEC. 1116. PREFERENCES.

(a) IN GENERAL.—Section 547 of title 11, United States Code, is

amended—

(1) in subsection (b), by striking ‘‘subsection (c)’’ and inserting ‘‘subsections (c) and (i)’’; and

(2) by adding at the end the following:

‘‘(i) If the trustee avoids under subsection (b) a transfer made between 90 days and 1 year before the date of the filing of the petition, by the debtor to an entity that is not an insider for the benefit

of a creditor that is an insider, such transfer may be avoided under

this section only with respect to the creditor that is an insider.’’.

(b) APPLICABILITY.—The amendments made by this section shall

apply to any case that is pending or commenced on or after the

date of enactment of this Act.

SEC. 1117. POSTPETITION TRANSACTIONS.

Section 549(c) of title 11, United States Code, is amended—

(1) by inserting ‘‘an interest in’’ after ‘‘transfer of’’;
144

(2) by striking ‘‘such property’’ and inserting ‘‘such real property’’; and

(3) by striking ‘‘the interest’’ and inserting ‘‘such interest’’.

SEC. 1118. DISPOSITION OF PROPERTY OF THE ESTATE.

Section 726(b) of title 11, United States Code, is amended by

striking ‘‘1009,’’.

SEC. 1119. GENERAL PROVISIONS.

Section 901(a) of title 11, United States Code, is amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.

SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE.

Section 1104(b) of title 11, United States Code, is amended—

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

(2) by adding at the end the following:

‘‘(2)(A) If an eligible, disinterested trustee is elected at a meeting

of creditors under paragraph (1), the United States trustee shall

file a report certifying that election. Upon the filing of a report

under the preceding sentence—

‘‘(i) the trustee elected under paragraph (1) shall be considered to have been selected and appointed for purposes of this

section; and

‘‘(ii) the service of any trustee appointed under subsection (d)

shall terminate.

‘‘(B) In the case of any dispute arising out of an election under

subparagraph (A), the court shall resolve the dispute.’’.

SEC. 1121. ABANDONMENT OF RAILROAD LINE.

Section 1170(e)(1) of title 11, United States Code, is amended by

striking ‘‘section 11347’’ and inserting ‘‘section 11326(a)’’.

SEC. 1122. CONTENTS OF PLAN.

Section 1172(c)(1) of title 11, United States Code, is amended by

striking ‘‘section 11347’’ and inserting ‘‘section 11326(a)’’.

SEC. 1123. DISCHARGE UNDER CHAPTER 12.

Subsections (a) and (c) of section 1228 of title 11, United States

Code, are amended by striking ‘‘1222(b)(10)’’ each place it appears

and inserting ‘‘1222(b)(9)’’.

SEC. 1124. BANKRUPTCY CASES AND PROCEEDINGS.

Section 1334(d) of title 28, United States Code, is amended—

(1) by striking ‘‘made under this subsection’’ and inserting

‘‘made under subsection (c)’’; and

(2) by striking ‘‘This subsection’’ and inserting ‘‘Subsection

(c) and this subsection’’.

SEC. 1125. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.

Section 156(a) of title 18, United States Code, is amended—

(1) in the first undesignated paragraph—

(A) by inserting ‘‘(1) the term’’ before ‘‘ ‘bankruptcy’’; and

(B) by striking the period at the end and inserting ‘‘;

and’’; and

(2) in the second undesignated paragraph—

(A) by inserting ‘‘(2) the term’’ before ‘‘ ‘document’’; and

(B) by striking ‘‘this title’’ and inserting ‘‘title 11’’.
145

SEC. 1126. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.

(a) SALE OF PROPERTY OF ESTATE.—Section 363(d) of title 11,

United States Code, is amended—

(1) by striking ‘‘only’’ and all that follows through the end of

the subsection and inserting ‘‘only—

‘‘(1) in accordance with applicable nonbankruptcy law that

governs the transfer of property by a corporation or trust that

is not a moneyed, business, or commercial corporation or trust;

and

‘‘(2) to the extent not inconsistent with any relief granted

under subsection (c), (d), (e), or (f) of section 362 of this title.’’.

(b) CONFIRMATION OF PLAN FOR REORGANIZATION.—Section

1129(a) of title 11, United States Code, as amended by section 140,

is amended by adding at the end the following:

‘‘(15) All transfers of property of the plan shall be made in

accordance with any applicable provisions of nonbankruptcy

law that govern the transfer of property by a corporation or

trust that is not a moneyed, business, or commercial corporation or trust.’’.

(c) TRANSFER OF PROPERTY.—Section 541 of title 11, United

States Code, as amended by section 1102, is amended by adding at

the end the following:

‘‘(f) Notwithstanding any other provision of this title, property

that is held by a debtor that is a corporation described in section

501(c)(3) of the Internal Revenue Code of 1986 and exempt from

tax under section 501(a) of such Code may be transferred to an entity that is not such a corporation, but only under the same conditions as would apply if the debtor had not filed a case under this

title.’’.

(d) APPLICABILITY.—The amendments made by this section shall

apply to a case pending under title 11, United States Code, on the

date of enactment of this Act, except that the court shall not confirm a plan under chapter 11 of this title without considering

whether this section would substantially affect the rights of a party

in interest who first acquired rights with respect to the debtor after

the date of the petition. The parties who may appear and be heard

in a proceeding under this section include the attorney general of

the State in which the debtor is incorporated, was formed, or does

business.

(e) RULE OF CONSTRUCTION.—Nothing in this section shall be

deemed to require the court in which a case under chapter 11 is

pending to remand or refer any proceeding, issue, or controversy to

any other court or to require the approval of any other court for

the transfer of property.

SEC. 1127. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO

INCUR FINANCE CHARGES.

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is

amended by adding at the end the following:

‘‘(i) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE CHARGES.—A creditor of an account under an open end consumer credit plan may not terminate an account prior to its expiration date solely because the consumer has not incurred finance

charges on the account. Nothing in this subsection shall prohibit a
146

creditor from terminating an account for inactivity in 3 or more

consecutive months.’’.

SEC. 1128. PROTECTION OF VALID PURCHASE MONEY SECURITY INTERESTS.

Section 547(c)(3)(B) of title 11, United States Code, is amended

by striking ‘‘20’’ and inserting ‘‘30’’.

SEC. 1129. TRUSTEES.

(a) SUSPENSION AND TERMINATION OF PANEL TRUSTEES AND

STANDING TRUSTEES.—Section 586(d) of title 28, United States

Code, is amended—

(1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and

(2) by adding at the end the following:

‘‘(2) A trustee whose appointment under subsection (a)(1) or

under subsection (b) is terminated or who ceases to be assigned to

cases filed under title 11 of the United States Code may obtain judicial review of the final agency decision by commencing an action

in the United States district court for the district for which the

panel to which the trustee is appointed under subsection (a)(1), or

in the United States district court for the district in which the

trustee is appointed under subsection (b) resides, after first exhausting all available administrative remedies, which if the trustee

so elects, shall also include an administrative hearing on the

record. Unless the trustee elects to have an administrative hearing

on the record, the trustee shall be deemed to have exhausted all

administrative remedies for purposes of this paragraph if the agency fails to make a final agency decision within 90 days after the

trustee requests administrative remedies. The Attorney General

shall prescribe procedures to implement this paragraph. The decision of the agency shall be affirmed by the district court unless it

is unreasonable and without cause based on the administrative

record before the agency.’’.

(b) EXPENSES OF STANDING TRUSTEES.—Section 586(e) of title 28,

United States Code, is amended by adding at the end the following:

‘‘(3) After first exhausting all available administrative remedies,

an individual appointed under subsection (b) may obtain judicial

review of final agency action to deny a claim of actual, necessary

expenses under this subsection by commencing an action in the

United States district court in the district where the individual resides. The decision of the agency shall be affirmed by the district

court unless it is unreasonable and without cause based upon the

administrative record before the agency.

‘‘(4) The Attorney General shall prescribe procedures to implement this subsection.’’.

TITLE XII—GENERAL EFFECTIVE DATE;

APPLICATION OF AMENDMENTS

SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) EFFECTIVE DATE.—Except as provided otherwise in this Act,

this Act and the amendments made by this Act shall take effect

180 days after the date of the enactment of this Act.
147

(b) APPLICATION OF AMENDMENTS.—Except as otherwise provided

in this Act, the amendments made by this Act shall not apply with

respect to cases commenced under title 11 of the United States

Code before the effective date of this Act.

Æ