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SUSPEND THE RULES AND PASS THE BILL (H.R. 5116),

WITH AN AMENDMENT

[Note: The amendment inserts an entirely new text.]

103D CONGRESS

2D SESSION H. R. 5116

IN THE HOUSE OF REPRESENTATIVES

Mr. BROOKS (for himself, Mr. FISH, and Mr. SYNAR) introduced the following

bill; which was referred to the Committee on

lllllllllllllll

A BILL

To amend title 11 of the United States Code.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

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

5 ‘‘Bankruptcy Reform Act of 1994’’.
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1 (b) TABLE OF CONTENTS.—The table of contents is as

2 follows:

Sec. 1. Short title.

TITLE I—IMPROVED BANKRUPTCY ADMINISTRATION

Sec. 101. Expedited hearing on automatic stay.

Sec. 102. Jurisdiction to review interlocutory orders increasing or reducing certain time periods for filing plan.

Sec. 103. Expedited procedure for reaffirmation of debts.

Sec. 104. Powers of bankruptcy courts.

Sec. 105. Participation by bankruptcy administrator at meetings of creditors and

equity security holders.

Sec. 106. Definition relating to eligibility to serve on chapter 11 committees.

Sec. 107. Increased incentive compensation for trustees.

Sec. 108. Dollar adjustments.

Sec. 109. Premerger notification.

Sec. 110. Allowance of creditor committee expenses.

Sec. 111. Supplemental injunctions.

Sec. 112. Authority of bankruptcy judges to conduct jury trials in civil proceedings.

Sec. 113. Sovereign immunity.

Sec. 114. Service of process in bankruptcy proceedings on an insured depository

institution.

Sec. 115. Meetings of creditors and equity security holders.

Sec. 116. Tax assessment.

Sec. 117. Additional trustee compensation.

TITLE II—COMMERCIAL BANKRUPTCY ISSUES

Sec. 201. Aircraft equipment and vessels; rolling stock equipment.

Sec. 202. Limitation on liability of non-insider transferee for avoided transfer.

Sec. 203. Perfection of purchase-money security interest.

Sec. 204. Continued perfection.

Sec. 205. Rejection of unexpired leases of real property or timeshare interests.

Sec. 206. Contents of plan.

Sec. 207. Priority for independent sales representatives.

Sec. 208. Exclusion from the estate of interests in liquid and gaseous hydrocarbons transferred by the debtor pursuant to production payment agreements.

Sec. 209. Seller’s right to reclaim goods.

Sec. 210. Investment of money of the estate.

Sec. 211. Election of trustee under chapter 11.

Sec. 212. Rights of partnership trustee against general partners.

Sec. 213. Impairment of claims and interests.

Sec. 214. Protection of security interest in post-petition rents and lodging payments.

Sec. 215. Amendment to definition of swap agreement.

Sec. 216. Limitation on avoiding powers.

Sec. 217. Small businesses.

Sec. 218. Single asset real estate.

Sec. 219. Leases of personal property.

Sec. 220. Exemption for small business investment companies.
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Sec. 221. Payment of taxes with borrowed funds.

Sec. 222. Return of goods.

Sec. 223. Proceeds of money order agreements.

Sec. 224. Trustee duties; professional fees.

Sec. 225. Notices to creditors.

TITLE III—CONSUMER BANKRUPTCY ISSUES

Sec. 301. Period for curing default relating to principal residence.

Sec. 302. Nondischargeability of fine under chapter 13.

Sec. 303. Impairment of exemptions.

Sec. 304. Protection of child support and alimony.

Sec. 305. Interest on interest.

Sec. 306. Exception to discharge.

Sec. 307. Payments under chapter 13.

Sec. 308. Bankruptcy petition preparers.

Sec. 309. Fairness to condominium and cooperative owners.

Sec. 310. Nonavoidability of fixing of lien on tools and implements of trade, animals, and crops.

Sec. 311. Conversion of case under chapter 13.

Sec. 312. Bankruptcy fraud.

Sec. 313. Protection against discriminatory treatment of applications for student

loans.

TITLE IV—GOVERNMENTAL BANKRUPTCY ISSUES

Sec. 401. Exception from automatic stay for post-petition property taxes.

Sec. 402. Municipal bankruptcy.

TITLE V—TECHNICAL CORRECTIONS

Sec. 501. Amendments to bankruptcy definitions, necessitated by enactment of

Public Law 101–647.

Sec. 502. Title 28 of the United States Code.

TITLE VI—BANKRUPTCY REVIEW COMMISSION

Sec. 601. Short title.

Sec. 602. Establishment.

Sec. 603. Duties of the commission.

Sec. 604. Membership.

Sec. 605. Compensation of the commission.

Sec. 606. Staff of commission; experts and consultants.

Sec. 607. Powers of the commission.

Sec. 608. Report.

Sec. 609. Termination.

Sec. 610. Authorization of appropriations.

TITLE VII—SEVERABILITY; EFFECTIVE DATE; APPLICATION OF

AMENDMENTS.

Sec. 701. Severability.

Sec. 702. Effective date; application of amendments.
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1 TITLE I—IMPROVED

2 BANKRUPTCY ADMINISTRATION

3 SEC. 101. EXPEDITED HEARING ON AUTOMATIC STAY.

4 The last sentence of section 362(e) of title 11, United

5 States Code, is amended—

6 (1) by striking ‘‘commenced’’ and inserting ‘‘con7 cluded’’, and

8 (2) by inserting before the period at the end the

9 following:

10 ‘‘, unless the 30-day period is extended with the consent of

11 the parties in interest or for a specific time which the court

12 finds is required by compelling circumstances’’.

13 SEC. 102. JURISDICTION TO REVIEW INTERLOCUTORY OR14 DERS INCREASING OR REDUCING CERTAIN

15 TIME PERIODS FOR FILING PLAN.

16 Section 158(a) of title 28, United States Code, is

17 amended by striking ‘‘from’’ the first place it appears and

18 all that follows through ‘‘decrees,’’, and inserting the follow19 ing:

20 ‘‘(1) from final judgments, orders, and decrees;

21 ‘‘(2) from interlocutory orders and decrees issued

22 under section 1121(d) of title 11 increasing or reduc23 ing the time periods referred to in section 1121 of

24 such title; and
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1 ‘‘(3) with leave of the court, from other interlocu2 tory orders and decrees;’’.

3 SEC. 103. EXPEDITED PROCEDURE FOR REAFFIRMATION OF

4 DEBTS.

5 (a) REAFFIRMATION.—Section 524(c) of title 11, Unit6 ed States Code, is amended—

7 (1) in paragraph (2)—

8 (A) by inserting ‘‘(A)’’ after ‘‘(2)’’,

9 (B) by adding ‘‘and’’ at the end, and

10 (C) by inserting after subparagraph (A), as

11 so designated, the following:

12 ‘‘(B) such agreement contains a clear and

13 conspicuous statement which advises the debtor

14 that such agreement is not required under this

15 title, under nonbankruptcy law, or under any

16 agreement not in accordance with the provisions

17 of this subsection;’’, and

18 (2) in paragraph (3)—

19 (A) in the matter preceding subparagraph

20 (A) by striking ‘‘such agreement’’ the last place

21 it appears,

22 (B) in subparagraph (A)—

23 (i) by inserting ‘‘such agreement’’ after

24 ‘‘(A)’’, and

25 (ii) by striking ‘‘and’’ at the end,
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1 (C) in subparagraph (B)—

2 (i) by inserting ‘‘such agreement’’ after

3 ‘‘(B)’’, and

4 (ii) by adding ‘‘and’’ at the end, and

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

6 ‘‘(C) the attorney fully advised the debtor of

7 the legal effect and consequences of—

8 ‘‘(i) an agreement of the kind specified

9 in this subsection; and

10 ‘‘(ii) any default under such an agree11 ment;’’.

12 (b) EFFECT OF DISCHARGE.—The third sentence of

13 section 524(d) of title 11, United States Code, is amended

14 in the matter preceding paragraph (1) by inserting ‘‘and

15 was not represented by an attorney during the course of

16 negotiating such agreement’’ after ‘‘this section’’.

17 SEC. 104. POWERS OF BANKRUPTCY COURTS.

18 (a) STATUS CONFERENCES.—Section 105 of title 11,

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

20 following:

21 ‘‘(d) The court, on its own motion or on the request

22 of a party in interest, may—

23 ‘‘(1) hold a status conference regarding any case

24 or proceeding under this title after notice to the par25 ties in interest; and
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1 ‘‘(2) unless inconsistent with another provision

2 of this title or with applicable Federal Rules of Bank3 ruptcy Procedure, issue an order at any such con4 ference prescribing such limitations and conditions as

5 the court deems appropriate to ensure that the case is

6 handled expeditiously and economically, including an

7 order that—

8 ‘‘(A) sets the date by which the trustee must

9 assume or reject an executory contract or

10 unexpired lease; or

11 ‘‘(B) in a case under chapter 11 of this

12 title—

13 ‘‘(i) sets a date by which the debtor, or

14 trustee if one has been appointed, shall file

15 a disclosure statement and plan;

16 ‘‘(ii) sets a date by which the debtor, or

17 trustee if one has been appointed, shall so18 licit acceptances of a plan;

19 ‘‘(iii) sets the date by which a party in

20 interest other than a debtor may file a plan;

21 ‘‘(iv) sets a date by which a proponent

22 of a plan, other than the debtor, shall solicit

23 acceptances of such plan;
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1 ‘‘(v) fixes the scope and format of the

2 notice to be provided regarding the hearing

3 on approval of the disclosure statement; or

4 ‘‘(vi) provides that the hearing on ap5 proval of the disclosure statement may be

6 combined with the hearing on confirmation

7 of the plan.’’.

8 (b) ABSTENTION.—Section 1334 of title 28, United

9 States Code, is amended—

10 (1) by redesignating subsection (d) as subsection

11 (e), and

12 (2) in the second sentence of subsection (c)(2)—

13 (A) by inserting ‘‘(other than a decision not

14 to abstain in a proceeding described in sub15 section (c)(2))’’ after ‘‘subsection’’, and

16 (B) by striking ‘‘Any’’ and inserting the fol17 lowing:

18 ‘‘(d) Any’’.

19 (c) ESTABLISHMENT, OPERATION, AND TERMINATION

20 OF BANKRUPTCY APPELLATE PANEL SERVICE.—Section

21 158(b) of title 28, United States Code, is amended—

22 (1) by striking paragraphs (3) and (4),

23 (2) by redesignating paragraph (2) as para24 graph (4),
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1 (3) by striking paragraph (1) and inserting the

2 following:

3 ‘‘(1) The judicial council of a circuit shall establish

4 a bankruptcy appellate panel service composed of bank5 ruptcy judges of the districts in the circuit who are ap6 pointed by the judicial council in accordance with para7 graph (3), to hear and determine, with the consent of all

8 the parties, appeals under subsection (a) unless the judicial

9 council finds that—

10 ‘‘(A) there are insufficient judicial resources

11 available in the circuit; or

12 ‘‘(B) establishment of such service would result

13 in undue delay or increased cost to parties in cases

14 under title 11.

15 Not later than 90 days after making the finding, the judi16 cial council shall submit to the Judicial Conference of the

17 United States a report containing the factual basis of such

18 finding.

19 ‘‘(2)(A) A judicial council may reconsider, at any

20 time, the finding described in paragraph (1).

21 ‘‘(B) On the request of a majority of the district judges

22 in a circuit for which a bankruptcy appellate panel service

23 is established under paragraph (1), made after the expira24 tion of the 1-year period beginning on the date such service

25 is established, the judicial council of the circuit shall deter-
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1 mine whether a circumstance specified in subparagraph (A)

2 or (B) of such paragraph exists.

3 ‘‘(C) On its own motion, after the expiration of the

4 3-year period beginning on the date a bankruptcy appellate

5 panel service is established under paragraph (1), the judi6 cial council of the circuit may determine whether a cir7 cumstance specified in subparagraph (A) or (B) of such

8 paragraph exists.

9 ‘‘(D) If the judicial council finds that either of such

10 circumstances exists, the judicial council may provide for

11 the completion of the appeals then pending before such serv12 ice and the orderly termination of such service.

13 ‘‘(3) Bankruptcy judges appointed under paragraph

14 (1) shall be appointed and may be reappointed under such

15 paragraph.’’, and

16 (4) by inserting after paragraph (4), as so redes17 ignated, the following:

18 ‘‘(5) An appeal to be heard under this subsection shall

19 be heard by a panel of 3 members of the bankruptcy appel20 late panel service, except that a member of such service may

21 not hear an appeal originating in the district for which

22 such member is appointed or designated under section 152

23 of this title.

24 ‘‘(6) Appeals may not be heard under this subsection

25 by a panel of the bankruptcy appellate panel service unless
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1 the district judges for the district in which the appeals

2 occur, by majority vote, have authorized such service to hear

3 and determine appeals originating in such district.’’.

4 (d) APPEALS TO BE HEARD BY BANKRUPTCY APPEL5 LATE PANEL SERVICE.—Section 158 of title 28, United

6 States Code, is amended—

7 (1) in subsection (c) by striking ‘‘(c)’’ and in8 serting ‘‘(2)’’, and

9 (2) by inserting after subsection (b) the follow10 ing:

11 ‘‘(c)(1) Subject to subsection (b), each appeal under

12 subsection (a) shall be heard by a 3-judge panel of the bank13 ruptcy appellate panel service established under subsection

14 (b)(1) unless—

15 ‘‘(A) the appellant elects at the time of filing the

16 appeal; or

17 ‘‘(B) any other party elects, not later than 30

18 days after service of notice of the appeal;

19 to have such appeal heard by the district court.’’.

20 (e) RULES OF PROCEDURE AND EVIDENCE; METHOD OF

21 PRESCRIBING.—Section 2073 of title 28, United States

22 Code, is amended—

23 (1) in subsection (a)(2) by striking ‘‘section

24 2072’’ and inserting ‘‘sections 2072 and 2075’’, and
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1 (2) in subsections (d) and (e) by inserting ‘‘or

2 2075’’ after ‘‘2072’’ each place it appears.

3 (f) EFFECTIVE DATE OF BANKRUPTCY RULES.—The

4 third undesignated paragraph of section 2075 of title 28,

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

6 ‘‘The Supreme Court shall transmit to Congress not

7 later than May 1 of the year in which a rule prescribed

8 under this section is to become effective a copy of the pro9 posed rule. The rule shall take effect no earlier than Decem10 ber 1 of the year in which it is transmitted to Congress

11 unless otherwise provided by law.’’.

12 SEC. 105. PARTICIPATION BY BANKRUPTCY ADMINIS13 TRATOR AT MEETINGS OF CREDITORS AND

14 EQUITY SECURITY HOLDERS.

15 (a) PRESIDING OFFICER.—A bankruptcy adminis16 trator appointed under section 302(d)(3)(I) of the Bank17 ruptcy Judges, United States Trustees, and Family Farmer

18 Bankruptcy Act of 1986 (28 U.S.C. 581 note; Public Law

19 99–554; 100 Stat. 3123), as amended by section 317(a) of

20 the Federal Courts Study Committee Implementation Act

21 of 1990 (Public Law 101–650; 104 Stat. 5115), or the bank22 ruptcy administrator’s designee may preside at the meeting

23 of creditors convened under section 341(a) of title 11, Unit24 ed States Code. The bankruptcy administrator or the bank25 ruptcy administrator’s designee may preside at any meet-
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1 ing of equity security holders convened under section 341(b)

2 of title 11, United States Code.

3 (b) EXAMINATION OF THE DEBTOR.—The bankruptcy

4 administrator or the bankruptcy administrator’s designee

5 may examine the debtor at the meeting of creditors and may

6 administer the oath required under section 343 of title 11,

7 United States Code.

8 SEC. 106. DEFINITION RELATING TO ELIGIBILITY TO SERVE

9 ON CHAPTER 11 COMMITTEES.

10 Section 101(41) of title 11, United States Code, is

11 amended to read as follows:

12 ‘‘(41) ‘person’ includes individual, partnership,

13 and corporation, but does not include governmental

14 unit, except that a governmental unit that—

15 ‘‘(A) acquires an asset from a person—

16 ‘‘(i) as a result of the operation of a

17 loan guarantee agreement; or

18 ‘‘(ii) as receiver or liquidating agent of

19 a person;

20 ‘‘(B) is a guarantor of a pension benefit

21 payable by or on behalf of the debtor or an affili22 ate of the debtor; or

23 ‘‘(C) is the legal or beneficial owner of an

24 asset of—
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1 ‘‘(i) an employee pension benefit plan

2 that is a governmental plan, as defined in

3 section 414(d) of the Internal Revenue Code

4 of 1986; or

5 ‘‘(ii) an eligible deferred compensation

6 plan, as defined in section 457(b) of the In7 ternal Revenue Code of 1986;

8 shall be considered, for purposes of section 1102 of

9 this title, to be a person with respect to such asset or

10 such benefit;’’.

11 SEC. 107. INCREASED INCENTIVE COMPENSATION FOR

12 TRUSTEES.

13 Section 326(a) of title 11, United States Code, is

14 amended by striking ‘‘fifteen’’ and all that follows through

15 ‘‘$3,000’’ the last place it appears, and inserting the follow16 ing:

17 ‘‘25 percent on the first $5,000 or less, 10 percent on any

18 amount in excess of $5,000 but not in excess of $50,000,

19 5 percent on any amount in excess of $50,000 but not in

20 excess of $1,000,000, and reasonable compensation not to

21 exceed 3 percent of such moneys in excess of $1,000,000’’.

22 SEC. 108. DOLLAR ADJUSTMENTS.

23 (a) WHO MAY BE A DEBTOR UNDER CHAPTER 13.—

24 Section 109(e) of title 11, United States Code, is amended—
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1 (1) by striking ‘‘$100,000’’ each place it appears

2 and inserting ‘‘$250,000’’, and

3 (2) by striking ‘‘$350,000’’ each place it appears

4 and inserting ‘‘$750,000’’.

5 (b) INVOLUNTARY CASES.—Section 303(b) of title 11,

6 United States Code, is amended—

7 (1) in paragraph (1) by striking ‘‘$5,000’’ and

8 inserting ‘‘$10,000’’, and

9 (2) in paragraph (2) by striking ‘‘$5,000’’ and

10 inserting ‘‘$10,000’’.

11 (c) PRIORITIES.—Section 507(a) of title 11, United

12 States Code, is amended—

13 (1) in paragraph (4)(B)(i) by striking ‘‘$2,000’’

14 and inserting ‘‘$4,000’’,

15 (2) in paragraph (5) by striking ‘‘$2,000’’ and

16 inserting ‘‘$4,000’’, and

17 (3) in paragraph (6) by striking ‘‘$900’’ and in18 serting ‘‘$1,800’’.

19 (d) EXEMPTIONS.—Section 522(d) of title 11, United

20 States Code, is amended—

21 (1) in paragraph (1) by striking ‘‘$7,500’’ and

22 inserting ‘‘$15,000’’,

23 (2) in paragraph (2) by striking ‘‘$1,200’’ and

24 inserting ‘‘$2,400’’,

25 (3) in paragraph (3)—
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1 (A) by striking ‘‘$200’’ and inserting

2 ‘‘$400’’, and

3 (B) by striking ‘‘$4,000’’ and inserting

4 ‘‘$8,000’’,

5 (4) in paragraph (4) by striking ‘‘$500’’ and in6 serting ‘‘$1,000’’,

7 (5) in paragraph (5)—

8 (A) by striking ‘‘$400’’ and inserting

9 ‘‘$800’’, and

10 (B) by striking ‘‘$3,750’’ and inserting

11 ‘‘$7,500’’,

12 (6) in paragraph (6) by striking ‘‘$750’’ and in13 serting ‘‘$1,500’’,

14 (7) in paragraph (8) by striking ‘‘$4,000’’ and

15 inserting ‘‘$8,000’’, and

16 (8) in paragraph (11)(D) by striking ‘‘$7,500’’

17 and inserting ‘‘$15,000’’.

18 (e) FUTURE ADJUSTMENTS.—Section 104 of title 11,

19 United States Code, is amended—

20 (1) by inserting ‘‘(a)’’ before ‘‘The’’, and

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

22 ‘‘(b)(1) On April 1, 1998, and at each 3-year interval

23 ending on April 1 thereafter, each dollar amount in effect

24 under sections 109(e), 303(b), 507(a), 522(d), and
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1 523(a)(2)(C) immediately before such April 1 shall be ad2 justed—

3 ‘‘(A) to reflect the change in the Consumer Price

4 Index for All Urban Consumers, published by the De5 partment of Labor, for the most recent 3-year period

6 ending immediately before January 1 preceding such

7 April 1, and

8 ‘‘(B) to round to the nearest $25 the dollar

9 amount that represents such change.

10 ‘‘(2) Not later than March 1, 1998, and at each 3-year

11 interval ending on March 1 thereafter, the Judicial Con12 ference of the United States shall publish in the Federal

13 Register the dollar amounts that will become effective on

14 such April 1 under sections 109(e), 303(b), 507(a), 522(d),

15 and 523(a)(2)(C) of this title.

16 ‘‘(3) Adjustments made in accordance with paragraph

17 (1) shall not apply with respect to cases commenced before

18 the date of such adjustments.’’.

19 SEC. 109. PREMERGER NOTIFICATION.

20 Subparagraphs (A) and (B) of section 363(b)(2) of

21 title 11, United States Code, are amended to read as follows:

22 ‘‘(A) notwithstanding subsection (a) of such

23 section, the notification required by such sub24 section to be given by the debtor shall be given

25 by the trustee; and
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1 ‘‘(B) notwithstanding subsection (b) of such

2 section, the required waiting period shall end on

3 the 15th day after the date of the receipt, by the

4 Federal Trade Commission and the Assistant At5 torney General in charge of the Antitrust Divi6 sion of the Department of Justice, of the notifica7 tion required under such subsection (a), unless

8 such waiting period is extended—

9 ‘‘(i) pursuant to subsection (e)(2) of

10 such section, in the same manner as such

11 subsection (e)(2) applies to a cash tender

12 offer;

13 ‘‘(ii) pursuant to subsection (g)(2) of

14 such section; or

15 ‘‘(iii) by the court after notice and a

16 hearing.’’.

17 SEC. 110. ALLOWANCE OF CREDITOR COMMITTEE EX18 PENSES.

19 Section 503(b)(3) of title 11, United States Code, is

20 amended—

21 (1) in subparagraph (D) by striking ‘‘or’’ at the

22 end,

23 (2) in subparagraph (E) by inserting ‘‘or’’ at the

24 end, and

25 (3) by adding at the end the following:
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1 ‘‘(F) a member of a committee appointed

2 under section 1102 of this title, if such expenses

3 are incurred in the performance of the duties of

4 such committee;’’.

5 SEC. 111. SUPPLEMENTAL INJUNCTIONS.

6 (a) SUPPLEMENTAL INJUNCTIONS.—Section 524 of

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

8 end the following:

9 ‘‘(g)(1)(A) After notice and hearing, a court that enters

10 an order confirming a plan of reorganization under chapter

11 11 may issue, in connection with such order, an injunction

12 in accordance with this subsection to supplement the in13 junctive effect of a discharge under this section.

14 ‘‘(B) An injunction may be issued under subparagraph

15 (A) to enjoin entities from taking legal action for the pur16 pose of directly or indirectly collecting, recovering, or re17 ceiving payment or recovery with respect to any claim or

18 demand that, under a plan of reorganization, is to be paid

19 in whole or in part by a trust described in paragraph

20 (2)(B)(i), except such legal actions as are expressly allowed

21 by the injunction, the confirmation order, or the plan of

22 reorganization.

23 ‘‘(2)(A) Subject to subsection (h), if the requirements

24 of subparagraph (B) are met at the time an injunction de25 scribed in paragraph (1) is entered, then after entry of such
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1 injunction, any proceeding that involves the validity, appli2 cation, construction, or modification of such injunction, or

3 of this subsection with respect to such injunction, may be

4 commenced only in the district court in which such injunc5 tion was entered, and such court shall have exclusive juris6 diction over any such proceeding without regard to the

7 amount in controversy.

8 ‘‘(B) The requirements of this subparagraph are

9 that—

10 ‘‘(i) the injunction is to be implemented in con11 nection with a trust that, pursuant to the plan of re12 organization—

13 ‘‘(I) is to assume the liabilities of a debtor

14 which at the time of entry of the order for relief

15 has been named as a defendant in personal in16 jury, wrongful death, or property-damage actions

17 seeking recovery for damages allegedly caused by

18 the presence of, or exposure to, asbestos or asbes19 tos-containing products;

20 ‘‘(II) is to be funded in whole or in part by

21 the securities of 1 or more debtors involved in

22 such plan and by the obligation of such debtor

23 or debtors to make future payments, including

24 dividends;
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1 ‘‘(III) is to own, or by the exercise of rights

2 granted under such plan would be entitled to

3 own if specified contingencies occur, a majority

4 of the voting shares of—

5 ‘‘(aa) each such debtor;

6 ‘‘(bb) the parent corporation of each

7 such debtor; or

8 ‘‘(cc) a subsidiary of each such debtor

9 that is also a debtor; and

10 ‘‘(IV) is to use its assets or income to pay

11 claims and demands; and

12 ‘‘(ii) subject to subsection (h), the court deter13 mines that—

14 ‘‘(I) the debtor is likely to be subject to sub15 stantial future demands for payment arising out

16 of the same or similar conduct or events that

17 gave rise to the claims that are addressed by the

18 injunction;

19 ‘‘(II) the actual amounts, numbers, and

20 timing of such future demands cannot be deter21 mined;

22 ‘‘(III) pursuit of such demands outside the

23 procedures prescribed by such plan is likely to

24 threaten the plan’s purpose to deal equitably

25 with claims and future demands;
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1 ‘‘(IV) as part of the process of seeking con2 firmation of such plan—

3 ‘‘(aa) the terms of the injunction pro4 posed to be issued under paragraph (1)(A),

5 including any provisions barring actions

6 against third parties pursuant to para7 graph (4)(A), are set out in such plan and

8 in any disclosure statement supporting the

9 plan; and

10 ‘‘(bb) a separate class or classes of the

11 claimants whose claims are to be addressed

12 by a trust described in clause (i) is estab13 lished and votes, by at least 75 percent of

14 those voting, in favor of the plan; and

15 ‘‘(V) subject to subsection (h), pursuant to

16 court orders or otherwise, the trust will operate

17 through mechanisms such as structured, periodic,

18 or supplemental payments, pro rata distribu19 tions, matrices, or periodic review of estimates of

20 the numbers and values of present claims and fu21 ture demands, or other comparable mechanisms,

22 that provide reasonable assurance that the trust

23 will value, and be in a financial position to pay,

24 present claims and future demands that involve
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1 similar claims in substantially the same man2 ner.

3 ‘‘(3)(A) If the requirements of paragraph (2)(B) are

4 met and the order confirming the plan of reorganization

5 was issued or affirmed by the district court that has juris6 diction over the reorganization case, then after the time for

7 appeal of the order that issues or affirms the plan—

8 ‘‘(i) the injunction shall be valid and enforceable

9 and may not be revoked or modified by any court ex10 cept through appeal in accordance with paragraph

11 (6);

12 ‘‘(ii) no entity that pursuant to such plan or

13 thereafter becomes a direct or indirect transferee of, or

14 successor to any assets of, a debtor or trust that is the

15 subject of the injunction shall be liable with respect to

16 any claim or demand made against such entity by

17 reason of its becoming such a transferee or successor;

18 and

19 ‘‘(iii) no entity that pursuant to such plan or

20 thereafter makes a loan to such a debtor or trust or

21 to such a successor or transferee shall, by reason of

22 making the loan, be liable with respect to any claim

23 or demand made against such entity, nor shall any

24 pledge of assets made in connection with such a loan

25 be upset or impaired for that reason;
24

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1 ‘‘(B) Subparagraph (A) shall not be construed to—

2 ‘‘(i) imply that an entity described in subpara3 graph (A) (ii) or (iii) would, if this paragraph were

4 not applicable, necessarily be liable to any entity by

5 reason of any of the acts described in subparagraph

6 (A);

7 ‘‘(ii) relieve any such entity of the duty to com8 ply with, or of liability under, any Federal or State

9 law regarding the making of a fraudulent conveyance

10 in a transaction described in subparagraph (A) (ii)

11 or (iii); or

12 ‘‘(iii) relieve a debtor of the debtor’s obligation to

13 comply with the terms of the plan of reorganization,

14 or affect the power of the court to exercise its author15 ity under sections 1141 and 1142 to compel the debtor

16 to do so.

17 ‘‘(4)(A)(i) Subject to subparagraph (B), an injunction

18 described in paragraph (1) shall be valid and enforceable

19 against all entities that it addresses.

20 ‘‘(ii) Notwithstanding the provisions of section 524(e),

21 such an injunction may bar any action directed against

22 a third party who is identifiable from the terms of such

23 injunction (by name or as part of an identifiable group)

24 and is alleged to be directly or indirectly liable for the con25 duct of, claims against, or demands on the debtor to the
25

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1 extent such alleged liability of such third party arises by

2 reason of—

3 ‘‘(I) the third party’s ownership of a financial

4 interest in the debtor, a past or present affiliate of the

5 debtor, or a predecessor in interest of the debtor;

6 ‘‘(II) the third party’s involvement in the man7 agement of the debtor or a predecessor in interest of

8 the debtor, or service as an officer, director or em9 ployee of the debtor or a related party;

10 ‘‘(III) the third party’s provision of insurance to

11 the debtor or a related party; or

12 ‘‘(IV) the third party’s involvement in a trans13 action changing the corporate structure, or in a loan

14 or other financial transaction affecting the financial

15 condition, of the debtor or a related party, including

16 but not limited to—

17 ‘‘(aa) involvement in providing financing

18 (debt or equity), or advice to an entity involved

19 in such a transaction; or

20 ‘‘(bb) acquiring or selling a financial inter21 est in an entity as part of such a transaction.

22 ‘‘(iii) As used in this subparagraph, the term ‘related

23 party’ means—

24 ‘‘(I) a past or present affiliate of the debtor;

25 ‘‘(II) a predecessor in interest of the debtor; or
26

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1 ‘‘(III) any entity that owned a financial interest

2 in—

3 ‘‘(aa) the debtor;

4 ‘‘(bb) a past or present affiliate of the debt5 or; or

6 ‘‘(cc) a predecessor in interest of the debtor.

7 ‘‘(B) Subject to subsection (h), if, under a plan of reor8 ganization, a kind of demand described in such plan is to

9 be paid in whole or in part by a trust described in para10 graph (2)(B)(i) in connection with which an injunction de11 scribed in paragraph (1) is to be implemented, then such

12 injunction shall be valid and enforceable with respect to a

13 demand of such kind made, after such plan is confirmed,

14 against the debtor or debtors involved, or against a third

15 party described in subparagraph (A)(ii), if—

16 ‘‘(i) as part of the proceedings leading to issu17 ance of such injunction, the court appoints a legal

18 representative for the purpose of protecting the rights

19 of persons that might subsequently assert demands of

20 such kind, and

21 ‘‘(ii) the court determines, before entering the

22 order confirming such plan, that identifying such

23 debtor or debtors, or such third party (by name or as

24 part of an identifiable group), in such injunction

25 with respect to such demands for purposes of this sub-
27

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1 paragraph is fair and equitable with respect to the

2 persons that might subsequently assert such demands,

3 in light of the benefits provided, or to be provided, to

4 such trust on behalf of such debtor or debtors or such

5 third party.

6 ‘‘(5) In this subsection, the term ‘demand’ means a de7 mand for payment, present or future, that—

8 ‘‘(A) was not a claim during the proceedings

9 leading to the confirmation of a plan of reorganiza10 tion;

11 ‘‘(B) arises out of the same or similar conduct

12 or events that gave rise to the claims addressed by the

13 injunction issued under paragraph (1); and

14 ‘‘(C) pursuant to the plan, is to be paid by a

15 trust described in paragraph (2)(B)(i).

16 ‘‘(6) Paragraph (3)(A)(i) does not bar an action taken

17 by or at the direction of an appellate court on appeal of

18 an injunction issued under paragraph (1) or of the order

19 of confirmation that relates to the injunction.

20 ‘‘(7) This subsection does not affect the operation of

21 section 1144 or the power of the district court to refer a

22 proceeding under section 157 of title 28 or any reference

23 of a proceeding made prior to the date of the enactment

24 of this subsection.
28

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1 ‘‘(h) APPLICATION TO EXISTING INJUNCTIONS.—For

2 purposes of subsection (g)—

3 ‘‘(1) subject to paragraph (2), if an injunction of

4 the kind described in subsection (g)(1)(B) was issued

5 before the date of the enactment of this Act, as part

6 of a plan of reorganization confirmed by an order en7 tered before such date, then the injunction shall be

8 considered to meet the requirements of subsection

9 (g)(2)(B) for purposes of subsection (g)(2)(A), and to

10 satisfy subsection (g)(4)(A)(ii), if—

11 ‘‘(A) the court determined at the time the

12 plan was confirmed that the plan was fair and

13 equitable in accordance with the requirements of

14 section 1129(b);

15 ‘‘(B) as part of the proceedings leading to

16 issuance of such injunction and confirmation of

17 such plan, the court had appointed a legal rep18 resentative for the purpose of protecting the

19 rights of persons that might subsequently assert

20 demands described in subsection (g)(4)(B) with

21 respect to such plan; and

22 ‘‘(C) such legal representative did not object

23 to confirmation of such plan or issuance of such

24 injunction; and
29

H.L.C.

1 ‘‘(2) for purposes of paragraph (1), if a trust de2 scribed in subsection (g)(2)(B)(i) is subject to a court

3 order on the date of the enactment of this Act staying

4 such trust from settling or paying further claims—

5 ‘‘(A) the requirements of subsection

6 (g)(2)(B)(ii)(V) shall not apply with respect to

7 such trust until such stay is lifted or dissolved;

8 and

9 ‘‘(B) if such trust meets such requirements

10 on the date such stay is lifted or dissolved, such

11 trust shall be considered to have met such re12 quirements continuously from the date of the en13 actment of this Act.’’.

14 (b) RULE OF CONSTRUCTION.—Nothing in subsection

15 (a), or in the amendments made by subsection (a), shall

16 be construed to modify, impair, or supersede any other au17 thority the court has to issue injunctions in connection with

18 an order confirming a plan of reorganization.

19 SEC. 112. AUTHORITY OF BANKRUPTCY JUDGES TO CON20 DUCT JURY TRIALS IN CIVIL PROCEEDINGS.

21 Section 157 of title 28, United States Code, is amended

22 by adding at the end the following:

23 ‘‘(e) If the right to a jury trial applies in a proceeding

24 that may be heard under this section by a bankruptcy judge,

25 the bankruptcy judge may conduct the jury trial if specially
30

H.L.C.

1 designated to exercise such jurisdiction by the district court

2 and with the express consent of all the parties.’’.

3 SEC. 113. SOVEREIGN IMMUNITY.

4 Section 106 of title 11, United States Code, is amended

5 to read as follows:

6 ‘‘§ 106. Waiver of sovereign immunity

7 ‘‘(a) Notwithstanding an assertion of sovereign immu8 nity, sovereign immunity is abrogated as to a governmental

9 unit to the extent set forth in this section with respect to

10 the following:

11 ‘‘(1) Sections 105, 106, 107, 108, 303, 346, 362,

12 363, 364, 365, 366, 502, 503, 505, 506, 510, 522, 523,

13 524, 525, 542, 543, 544, 545, 546, 547, 548, 549, 550,

14 551, 552, 553, 722, 724, 726, 728, 744, 749, 764, 901,

15 922, 926, 928, 929, 944, 1107, 1141, 1142, 1143,

16 1146, 1201, 1203, 1205, 1206, 1227, 1231, 1301,

17 1303, 1305, and 1327 of this title.

18 ‘‘(2) The court may hear and determine any

19 issue arising with respect to the application of such

20 sections to governmental units.

21 ‘‘(3) The court may issue against a governmental

22 unit an order, process, or judgment under such sec23 tions or the Federal Rules of Bankruptcy Procedure,

24 including an order or judgment awarding a money

25 recovery, but not including an award of punitive
31

H.L.C.

1 damages. Such order or judgment for costs or fees

2 under this title or the Federal Rules of Bankruptcy

3 Procedure against any governmental unit shall be

4 consistent with the provisions and limitations of sec5 tion 2412(d)(2)(A) of title 28.

6 ‘‘(4) The enforcement of any such order, process,

7 or judgment against any governmental unit shall be

8 consistent with appropriate nonbankruptcy law ap9 plicable to such governmental unit and, in the case of

10 a money judgment against the United States, shall be

11 paid as if it is a judgment rendered by a district

12 court of the United States.

13 ‘‘(5) Nothing in this section shall create any sub14 stantive claim for relief or cause of action not other15 wise existing under this title, the Federal Rules of

16 Bankruptcy Procedure, or nonbankruptcy law.

17 ‘‘(b) A governmental unit that has filed a proof of

18 claim in the case is deemed to have waived sovereign immu19 nity with respect to a claim against such governmental unit

20 that is property of the estate and that arose out of the same

21 transaction or occurrence out of which the claim of such

22 governmental unit arose.

23 ‘‘(c) Notwithstanding any assertion of sovereign im24 munity by a governmental unit, there shall be offset against

25 a claim or interest of a governmental unit any claim
32

H.L.C.

1 against such governmental unit that is property of the es2 tate.’’.

3 SEC. 114. SERVICE OF PROCESS IN BANKRUPTCY PROCEED4 INGS ON AN INSURED DEPOSITORY INSTITU5 TION.

6 Rule 7004 of the Federal Rules of Bankruptcy Proce7 dure is amended—

8 (1) in subdivision (b) by striking ‘‘In addition’’

9 and inserting ‘‘Except as provided in subdivision (h),

10 in addition’’, and

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

12 ‘‘(h) SERVICE OF PROCESS ON AN INSURED DEPOSI13 TORY INSTITUTION.—Service on an insured depository in14 stitution (as defined in section 3 of the Federal Deposit In15 surance Act) in a contested matter or adversary proceeding

16 shall be made by certified mail addressed to an officer of

17 the institution unless—

18 ‘‘(1) the institution has appeared by its attorney,

19 in which case the attorney shall be served by first

20 class mail;

21 ‘‘(2) the court orders otherwise after service upon

22 the institution by certified mail of notice of an appli23 cation to permit service on the institution by first

24 class mail sent to an officer of the institution des25 ignated by the institution; or
33

H.L.C.

1 ‘‘(3) the institution has waived in writing its en2 titlement to service by certified mail by designating

3 an officer to receive service.’’.

4 SEC. 115. MEETINGS OF CREDITORS AND EQUITY SECURITY

5 HOLDERS.

6 Section 341 of title 11, United States Code, is amended

7 by adding at the end the following:

8 ‘‘(d) Prior to the conclusion of the meeting of creditors

9 or equity security holders, the trustee shall orally examine

10 the debtor to ensure that the debtor in a case under chapter

11 7 of this title is aware of—

12 ‘‘(1) the potential consequences of seeking a dis13 charge in bankruptcy, including the effects on credit

14 history;

15 ‘‘(2) the debtor’s ability to file a petition under

16 a different chapter of this title;

17 ‘‘(3) the effect of receiving a discharge of debts

18 under this title; and

19 ‘‘(4) the effect of reaffirming a debt, including

20 the debtor’s knowledge of the provisions of section

21 524(d) of this title.’’.

22 SEC. 116. TAX ASSESSMENT.

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

24 amended to read as follows:

25 ‘‘(9) under subsection (a), of—
34

H.L.C.

1 ‘‘(A) an audit by a governmental unit to

2 determine tax liability;

3 ‘‘(B) the issuance to the debtor by a govern4 mental unit of a notice of tax deficiency;

5 ‘‘(C) a demand for tax returns; or

6 ‘‘(D) the making of an assessment for any

7 tax and issuance of a notice and demand for

8 payment of such an assessment (but any tax lien

9 that would otherwise attach to property of the es10 tate by reason of such an assessment shall not

11 take effect unless such tax is a debt of the debtor

12 that will not be discharged in the case and such

13 property or its proceeds are transferred out of

14 the estate to, or otherwise revested in, the debt15 or).’’.

16 SEC. 117. ADDITIONAL TRUSTEE COMPENSATION.

17 Section 330(b) of title 11, United States Code, is

18 amended—

19 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’, and

20 (2) by adding at the end thereof the following:

21 ‘‘(2) The Judicial Conference of the United States—

22 ‘‘(A) shall prescribe additional fees of the same

23 kind as prescribed under section 1914(b) of title 28;

24 and
35

H.L.C.

1 ‘‘(B) may prescribe notice of appearance fees and

2 fees charged against distributions in cases under this

3 title;

4 to pay $15 to trustees serving in cases after such trustees’

5 services are rendered. Beginning 1 year after the date of

6 the enactment of the Bankruptcy Reform Act of 1994, such

7 $15 shall be paid in addition to the amount paid under

8 paragraph (1).’’.

9 TITLE II—COMMERCIAL

10 BANKRUPTCY ISSUES

11 SEC. 201. AIRCRAFT EQUIPMENT AND VESSELS; ROLLING

12 STOCK EQUIPMENT.

13 (a) AMENDMENT OF SECTION 1110.—Section 1110 of

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

15 ‘‘§ 1110. Aircraft equipment and vessels

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

17 interest in equipment described in paragraph (2) or of a

18 lessor or conditional vendor of such equipment to take pos19 session of such equipment in compliance with a security

20 agreement, lease, or conditional sale contract is not affected

21 by section 362, 363, or 1129 or by any power of the court

22 to enjoin the taking of possession unless—

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

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

25 trustee, subject to the court’s approval, agrees to per-
36

H.L.C.

1 form all obligations of the debtor that become due on

2 or after the date of the order under such security

3 agreement, lease, or conditional sale contract; and

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

5 specified in section 365(b)(2), under such security

6 agreement, lease, or conditional sale contract—

7 ‘‘(i) that occurs before the date of the order

8 is cured before the expiration of such 60-day pe9 riod; and

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

11 is cured before the later of—

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

13 date of the default; or

14 ‘‘(II) the expiration of such 60-day pe15 riod.

16 ‘‘(2) Equipment is described in this paragraph if it

17 is—

18 ‘‘(A) an aircraft, aircraft engine, propeller, ap19 pliance, or spare part (as defined in section 40102 of

20 title 49) that is subject to a security interest granted

21 by, leased to, or conditionally sold to a debtor that is

22 a citizen of the United States (as defined in 40102 of

23 title 49) holding an air carrier operating certificate

24 issued by the Secretary of Transportation pursuant to

25 chapter 447 of title 49 for aircraft capable of carrying
37

H.L.C.

1 10 or more individuals or 6,000 pounds or more of

2 cargo; or

3 ‘‘(B) a documented vessel (as defined in section

4 30101(1) of title 46) that is subject to a security in5 terest granted by, leased to, or conditionally sold to

6 a debtor that is a water carrier that holds a certifi7 cate of public convenience and necessity or permit is8 sued by the Interstate Commerce Commission.

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

10 or conditional vendor acting in its own behalf or acting

11 as trustee or otherwise in behalf of another party.

12 ‘‘(b) The trustee and the secured party, lessor, or condi13 tional vendor whose right to take possession is protected

14 under subsection (a) may agree, subject to the court’s ap15 proval, to extend the 60-day period specified in subsection

16 (a)(1).

17 ‘‘(c) With respect to equipment first placed in service

18 on or prior to the date of enactment of this subsection, for

19 purposes of this section—

20 ‘‘(1) the term ‘lease’ includes any written agree21 ment with respect to which the lessor and the debtor,

22 as lessee, have expressed in the agreement or in a sub23 stantially contemporaneous writing that the agree24 ment is to be treated as a lease for Federal income

25 tax purposes; and
38

H.L.C.

1 ‘‘(2) the term ‘security interest’ means a pur2 chase-money equipment security interest.’’.

3 (b) AMENDMENT OF SECTION 1168.—Section 1168 of

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

5 ‘‘§ 1168. Rolling stock equipment

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

7 interest in or of a lessor or conditional vendor of equipment

8 described in paragraph (2) to take possession of such equip9 ment in compliance with an equipment security agreement,

10 lease, or conditional sale contract is not affected by section

11 362, 363, or 1129 or by any power of the court to enjoin

12 the taking of possession, unless—

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

14 date of commencement of a case under this chapter,

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

16 perform all obligations of the debtor that become due

17 on or after the date of commencement of the case

18 under such security agreement, lease, or conditional

19 sale contract; and

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

21 described in section 365(b)(2), under such security

22 agreement, lease, or conditional sale contract—

23 ‘‘(i) that occurs before the date of com24 mencement of the case and is an event of default
39

H.L.C.

1 therewith is cured before the expiration of such

2 60-day period; and

3 ‘‘(ii) that occurs or becomes an event of de4 fault after the date of commencement of the case

5 is cured before the later of—

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

7 date of the default or event of default; or

8 ‘‘(II) the expiration of such 60-day pe9 riod.

10 ‘‘(2) Equipment is described in this paragraph if it

11 is rolling stock equipment or accessories used on such equip12 ment, including superstructures and racks, that is subject

13 to a security interest granted by, leased to, or conditionally

14 sold to the debtor.

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

16 or conditional vendor acting in its own behalf or acting

17 as trustee or otherwise in behalf of another party.

18 ‘‘(b) The trustee and the secured party, lessor, or condi19 tional vendor whose right to take possession is protected

20 under subsection (a) may agree, subject to the court’s ap21 proval, to extend the 60-day period specified in subsection

22 (a)(1).

23 ‘‘(c) With respect to equipment first placed in service

24 on or prior to the date of enactment of this subsection, for

25 purposes of this section—
40

H.L.C.

1 ‘‘(1) the term ‘lease’ includes any written agree2 ment with respect to which the lessor and the debtor,

3 as lessee, have expressed in the agreement or in a sub4 stantially contemporaneous writing that the agree5 ment is to be treated as a lease for Federal income

6 tax purposes; and

7 ‘‘(2) the term ‘security interest’ means a pur8 chase-money equipment security interest.

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

10 after the date of enactment of this subsection, for purposes

11 of this section, the term ‘rolling stock equipment’ includes

12 rolling stock equipment that is substantially rebuilt and ac13 cessories used on such equipment.’’.

14 SEC. 202. LIMITATION ON LIABILITY OF NON-INSIDER

15 TRANSFEREE FOR AVOIDED TRANSFER.

16 Section 550 of title 11, United States Code, is amend17 ed—

18 (1) by redesignating subsections (c), (d), and (e)

19 as subsections (d), (e), and (f), respectively, and

20 (2) by inserting after subsection (b) the follow21 ing:

22 ‘‘(c) If a transfer made between 90 days and one year

23 before the filing of the petition—

24 ‘‘(1) is avoided under section 547(b) of this title;

25 and
41

H.L.C.

1 ‘‘(2) was made for the benefit of a creditor that

2 at the time of such transfer was an insider;

3 the trustee may not recover under subsection (a) from a

4 transferee that is not an insider.’’.

5 SEC. 203. PERFECTION OF PURCHASE-MONEY SECURITY IN6 TEREST.

7 Section 547 of title 11, United States Code, is amend8 ed—

9 (1) in subsection (c)(3)(B) by striking ‘‘10’’ and

10 inserting ‘‘20’’, and

11 (2) in subsection (e)(2)(A) by inserting ‘‘, except

12 as provided in subsection (c)(3)(B)’’ before the semi13 colon at the end.

14 SEC. 204. CONTINUED PERFECTION.

15 (a) AUTOMATIC STAY.—Section 362(b)(3) of title 11,

16 United States Code, is amended by inserting ‘‘, or to main17 tain or continue the perfection of,’’ after ‘‘to perfect’’.

18 (b) LIMITATIONS ON AVOIDING POWERS.—Section

19 546(b) of title 11, United States Code, is amended to read

20 as follows:

21 ‘‘(b)(1) The rights and powers of a trustee under sec22 tions 544, 545, and 549 of this title are subject to any gen23 erally applicable law that—

24 ‘‘(A) permits perfection of an interest in prop25 erty to be effective against an entity that acquires
42

H.L.C.

1 rights in such property before the date of perfection;

2 or

3 ‘‘(B) provides for the maintenance or continu4 ation of perfection of an interest in property to be ef5 fective against an entity that acquires rights in such

6 property before the date on which action is taken to

7 effect such maintenance or continuation.

8 ‘‘(2) If—

9 ‘‘(A) a law described in paragraph (1) requires

10 seizure of such property or commencement of an ac11 tion to accomplish such perfection, or maintenance or

12 continuation of perfection of an interest in property;

13 and

14 ‘‘(B) such property has not been seized or such

15 an action has not been commenced before the date of

16 the filing of the petition;

17 such interest in such property shall be perfected, or perfec18 tion of such interest shall be maintained or continued, by

19 giving notice within the time fixed by such law for such

20 seizure or such commencement.’’.

21 SEC. 205. REJECTION OF UNEXPIRED LEASES OF REAL

22 PROPERTY OR TIMESHARE INTERESTS.

23 (a) AMENDMENT TO SECTION 365.—Section 365(h) of

24 title 11, United States Code, is amended to read as follows:
43

H.L.C.

1 ‘‘(h)(1)(A) If the trustee rejects an unexpired lease of

2 real property under which the debtor is the lessor and—

3 ‘‘(i) if the rejection by the trustee amounts to

4 such a breach as would entitle the lessee to treat such

5 lease as terminated by virtue of its terms, applicable

6 nonbankruptcy law, or any agreement made by the

7 lessee, then the lessee under such lease may treat such

8 lease as terminated by the rejection; or

9 ‘‘(ii) if the term of such lease has commenced, the

10 lessee may retain its rights under such lease (includ11 ing rights such as those relating to the amount and

12 timing of payment of rent and other amounts payable

13 by the lessee and any right of use, possession, quiet

14 enjoyment, subletting, assignment, or hypothecation)

15 that are in or appurtenant to the real property for

16 the balance of the term of such lease and for any re17 newal or extension of such rights to the extent that

18 such rights are enforceable under applicable

19 nonbankruptcy law.

20 ‘‘(B) If the lessee retains its rights under subparagraph

21 (A)(ii), the lessee may offset against the rent reserved under

22 such lease for the balance of the term after the date of the

23 rejection of such lease and for the term of any renewal or

24 extension of such lease, the value of any damage caused by

25 the nonperformance after the date of such rejection, of any
44

H.L.C.

1 obligation of the debtor under such lease, but the lessee shall

2 not have any other right against the estate or the debtor

3 on account of any damage occurring after such date caused

4 by such nonperformance.

5 ‘‘(C) The rejection of a lease of real property in a shop6 ping center with respect to which the lessee elects to retain

7 its rights under subparagraph (A)(ii) does not affect the

8 enforceability under applicable nonbankruptcy law of any

9 provision in the lease pertaining to radius, location, use,

10 exclusivity, or tenant mix or balance.

11 ‘‘(D) In this paragraph, ‘lessee’ includes any successor,

12 assign, or mortgagee permitted under the terms of such

13 lease.

14 ‘‘(2)(A) If the trustee rejects a timeshare interest under

15 a timeshare plan under which the debtor is the timeshare

16 interest seller and—

17 ‘‘(i) if the rejection amounts to such a breach as

18 would entitle the timeshare interest purchaser to treat

19 the timeshare plan as terminated under its terms, ap20 plicable nonbankruptcy law, or any agreement made

21 by timeshare interest purchaser, the timeshare interest

22 purchaser under the timeshare plan may treat the

23 timeshare plan as terminated by such rejection; or

24 ‘‘(ii) if the term of such timeshare interest has

25 commenced, then the timeshare interest purchaser
45

H.L.C.

1 may retain its rights in such timeshare interest for

2 the balance of such term and for any term of renewal

3 or extension of such timeshare interest to the extent

4 that such rights are enforceable under applicable

5 nonbankruptcy law.

6 ‘‘(B) If the timeshare interest purchaser retains its

7 rights under subparagraph (A), such timeshare interest

8 purchaser may offset against the moneys due for such

9 timeshare interest for the balance of the term after the date

10 of the rejection of such timeshare interest, and the term of

11 any renewal or extension of such timeshare interest, the

12 value of any damage caused by the nonperformance after

13 the date of such rejection, of any obligation of the debtor

14 under such timeshare plan, but the timeshare interest pur15 chaser shall not have any right against the estate or the

16 debtor on account of any damage occurring after such date

17 caused by such nonperformance.’’.

18 (b) TECHNICAL AMENDMENT.—Section 553(b)(1) of

19 title 11, United States Code, is amended by striking

20 ‘‘365(h)(2)’’ and inserting ‘‘365(h)’’.

21 SEC. 206. CONTENTS OF PLAN.

22 Section 1123(b) of title 11, United States Code, is

23 amended—

24 (1) in paragraph (4) by striking ‘‘and’’ at the

25 end,
46

H.L.C.

1 (2) by redesignating paragraph (5) as para2 graph (6), and

3 (3) by inserting after paragraph (4) the follow4 ing:

5 ‘‘(5) modify the rights of holders of secured

6 claims, other than a claim secured only by a security

7 interest in real property that is the debtor’s principal

8 residence, or of holders of unsecured claims, or leave

9 unaffected the rights of holders of any class of claims;

10 and’’.

11 SEC. 207. PRIORITY FOR INDEPENDENT SALES REPRESENT12 ATIVES.

13 Section 507(a)(3) of title 11, United States Code, is

14 amended to read as follows:

15 ‘‘(3) Third, allowed unsecured claims, but only

16 to the extent of $4,000 for each individual or corpora17 tion, as the case may be, earned within 90 days before

18 the date of the filing of the petition or the date of the

19 cessation of the debtor’s business, whichever occurs

20 first, for—

21 ‘‘(A) wages, salaries, or commissions, in22 cluding vacation, severance, and sick leave pay

23 earned by an individual; or

24 ‘‘(B) sales commissions earned by an indi25 vidual or by a corporation with only 1 employee,
47

H.L.C.

1 acting as an independent contractor in the sale

2 of goods or services for the debtor in the ordinary

3 course of the debtor’s business if, and only if,

4 during the 12 months preceding that date, at

5 least 75 percent of the amount that the individ6 ual or corporation earned by acting as an inde7 pendent contractor in the sale of goods or serv8 ices was earned from the debtor;’’.

9 SEC. 208. EXCLUSION FROM THE ESTATE OF INTERESTS IN

10 LIQUID AND GASEOUS HYDROCARBONS

11 TRANSFERRED BY THE DEBTOR PURSUANT

12 TO PRODUCTION PAYMENT AGREEMENTS.

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

14 States Code, is amended—

15 (1) by inserting after paragraph (42) the follow16 ing:

17 ‘‘(42A) ‘production payment’ means a term over18 riding royalty satisfiable in cash or in kind—

19 ‘‘(A) contingent on the production of a liq20 uid or gaseous hydrocarbon from particular real

21 property; and

22 ‘‘(B) from a specified volume, or a specified

23 value, from the liquid or gaseous hydrocarbon

24 produced from such property, and determined

25 without regard to production costs;’’, and
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1 (2) by inserting after the first paragraph (56)

2 the following:

3 ‘‘(56A) ‘term overriding royalty’ means an inter4 est in liquid or gaseous hydrocarbons in place or to

5 be produced from particular real property that enti6 tles the owner thereof to a share of production, or the

7 value thereof, for a term limited by time, quantity, or

8 value realized;’’.

9 (b) PROPERTY OF THE ESTATE.—Section 541(b)(4) of

10 title 11, United States Code, is amended—

11 (1) in subparagraph (A) by striking ‘‘(A)’’ and

12 inserting ‘‘(A)(i)’’,

13 (2) in subparagraph (B)—

14 (A) by striking ‘‘(B)’’ and inserting ‘‘(ii),

15 (B) by striking ‘‘such interest’’ and insert16 ing ‘‘the interest referred to in clause (i)’’, and

17 (C) by striking the period at the end and

18 inserting ‘‘; or’’, and

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

20 ‘‘(B)(i) the debtor has transferred such in21 terest pursuant to a written conveyance of a pro22 duction payment to an entity that does not par23 ticipate in the operation of the property from

24 which such production payment is transferred;

25 and
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1 ‘‘(ii) but for the operation of this para2 graph, the estate could include the interest re3 ferred to in clause (i) only by virtue of section

4 542 of this title;’’.

5 SEC. 209. SELLER’S RIGHT TO RECLAIM GOODS.

6 Section 546(c)(1) of title 11, United States Code, is

7 amended to read as follows:

8 ‘‘(1) such a seller may not reclaim any such

9 goods unless such seller demands in writing reclama10 tion of such goods—

11 ‘‘(A) before 10 days after receipt of such

12 goods by the debtor; or

13 ‘‘(B) if such 10-day period expires after the

14 commencement of the case, before 20 days after

15 receipt of such goods by the debtor; and’’.

16 SEC. 210. INVESTMENT OF MONEY OF THE ESTATE.

17 Section 345(b) of title 11, United States Code, is

18 amended—

19 (1) in paragraph (2) by striking the period at

20 the end and inserting a semicolon, and

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

22 ‘‘unless the court for cause orders otherwise.’’.

23 SEC. 211. ELECTION OF TRUSTEE UNDER CHAPTER 11.

24 (a) ELECTION AUTHORIZED.—Section 1104 of title 11

25 of the United States Code is amended—
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1 (1) by redesignating subsections (b) and (c) as

2 subsections (c) and (d), respectively, and

3 (2) by inserting after subsection (a) the follow4 ing:

5 ‘‘(b) Except as provided in section 1163 of this title,

6 on the request of a party in interest made not later than

7 30 days after the court orders the appointment of a trustee

8 under subsection (a), the United States trustee shall convene

9 a meeting of creditors for the purpose of electing one disin10 terested person to serve as trustee in the case. The election

11 of a trustee shall be conducted in the manner provided in

12 subsections (a), (b), and (c) of section 702 of this title.’’.

13 (b) CONFORMING AMENDMENT.—Section 1106(b) of

14 title 11, United States Code, is amended by striking

15 ‘‘1104(c)’’ and inserting ‘‘1104(d)’’.

16 SEC. 212. RIGHTS OF PARTNERSHIP TRUSTEE AGAINST

17 GENERAL PARTNERS.

18 Section 723(a) of title 11, United States Code, is

19 amended by striking ‘‘for the full amount of the deficiency’’

20 and inserting ‘‘to the extent that under applicable

21 nonbankruptcy law such general partner is personally lia22 ble for such deficiency’’.

23 SEC. 213. IMPAIRMENT OF CLAIMS AND INTERESTS.

24 (a) OBJECTION TO CLAIMS FILED UNTIMELY.—Sec25 tion 502(b) of title 11, United States Code, is amended—
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1 (1) in paragraph (7) by striking ‘‘or’’ at the end,

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

3 the end and inserting ‘‘; or’’, and

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

5 ‘‘(9) proof of such claim is not timely filed, ex6 cept to the extent tardily filed as permitted under

7 paragraph (1), (2), or (3) of section 726(a) of this

8 title or under the Federal Rules of Bankruptcy Proce9 dure, except that a claim of a governmental unit shall

10 be timely filed if it is filed before 180 days after the

11 date of the order for relief or such later time as the

12 Federal Rules of Bankruptcy Procedure may pro13 vide.’’.

14 (b) TARDILY FILED PRIORITY CLAIMS.—Section

15 726(a)(1) of title 11, United States Code, is amended by

16 adding before the semicolon the following: ‘‘, proof of which

17 is timely filed under section 501 of this title or tardily filed

18 before the date on which the trustee commences distribution

19 under this section’’.

20 (c) FILING OF REQUEST FOR ADMINISTRATIVE EX21 PENSES.—Section 503(a) of title 11, United States Code,

22 is amended—

23 (1) by inserting ‘‘timely’’ after ‘‘may’’, and
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1 (2) by inserting ‘‘, or may tardily file such request

2 if permitted by the court for cause’’ before the period at

3 the end.

4 (d) IMPAIRMENT OF CLAIMS OR INTERESTS.—Section

5 1124 of title 11, United States Code, is amended—

6 (1) in paragraph (1) by inserting ‘‘or’’ at the

7 end,

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

9 end and inserting a period, and

10 (3) by striking paragraph (3).

11 SEC. 214. PROTECTION OF SECURITY INTEREST IN POST-PE12 TITION RENTS AND LODGING PAYMENTS.

13 (a) POSTPETITION EFFECT OF SECURITY INTEREST.—

14 Section 552(b) of title 11, United States Code, is amend15 ed—

16 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’,

17 (2) by striking ‘‘rents,’’ each place it appears,

18 and

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

20 ‘‘(2) Except as provided in sections 363, 506(c), 522,

21 544, 545, 547, and 548 of this title, and notwithstanding

22 section 546(b) of this title, if the debtor and an entity en23 tered into a security agreement before the commencement

24 of the case and if the security interest created by such secu25 rity agreement extends to property of the debtor acquired
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1 before the commencement of the case and to amounts paid

2 as rents of such property or the fees, charges, accounts, or

3 other payments for the use or occupancy of rooms and other

4 public facilities in hotels, motels, or other lodging prop5 erties, then such security interest extends to such rents and

6 such fees, charges, accounts, or other payments acquired by

7 the estate after the commencement of the case to the extent

8 provided in such security agreement, except to any extent

9 that the court, after notice and a hearing and based on the

10 equities of the case, orders otherwise.’’.

11 (b) USE SALE, OR LEASE OF PROPERTY.—Section

12 363(a) of title 11, United States Code, is amended by insert13 ing: ‘‘and the fees, charges, accounts or other payments for

14 the use or occupancy of rooms and other public facilities

15 in hotels, motels, or other lodging properties’’ after ‘‘prop16 erty’’.

17 SEC. 215. AMENDMENT TO DEFINITION OF SWAP AGREE18 MENT.

19 Subparagraph (A) of the first paragraph (55) of sec20 tion 101 of title 11, United States Code, is amended by in21 serting ‘‘spot foreign exchange agreement,’’ after ‘‘forward

22 foreign exchange agreement,’’.

23 SEC. 216. LIMITATION ON AVOIDING POWERS.

24 Section 546(a)(1) of title 11, United States Code, is

25 amended to read as follows:
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1 ‘‘(1) the later of—

2 ‘‘(A) 2 years after the entry of the order for

3 relief; or

4 ‘‘(B) 1 year after the appointment or elec5 tion of the first trustee under section 702, 1104,

6 1163, 1202, or 1302 of this title if such appoint7 ment or such election occurs before the expiration

8 of the period specified in subparagraph (A); or’’.

9 SEC. 217. SMALL BUSINESSES.

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

11 States Code, is amended by inserting after paragraph (51)

12 the following:

13 ‘‘(51C) ‘small business’ means a person engaged

14 in commercial or business activities (but does not in15 clude a person whose primary activity is the business

16 of owning or operating real property and activities

17 incidental thereto) whose aggregate noncontingent liq18 uidated secured and unsecured debts as of the date of

19 the petition do not exceed $2,000,000;’’.

20 (b) CREDITORS’ COMMITTEES.—Section 1102(a) of

21 title 11, United States Code, is amended—

22 (1) in paragraph (1) by striking ‘‘As’’ and in23 serting ‘‘Except as provided in paragraph (3), as’’;

24 and

25 (2) by adding at the end the following:
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1 ‘‘(3) On request of a party in interest in a case in

2 which the debtor is a small business and for cause, the court

3 may order that a committee of creditors not be appointed.’’.

4 (c) CONVERSION OR DISMISSAL.—Section 1112(b) of

5 title 11, United States Code, is amended by inserting ‘‘or

6 bankruptcy administrator’’ after ‘‘United States trustee’’.

7 (d) WHO MAY FILE A PLAN.—Section 1121 of title 11,

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

9 following:

10 ‘‘(e) In a case in which the debtor is a small business

11 and elects to be considered a small business—

12 ‘‘(1) only the debtor may file a plan until after

13 100 days after the date of the order for relief under

14 this chapter;

15 ‘‘(2) all plans shall be filed within 160 days

16 after the date of the order for relief; and

17 ‘‘(3) on request of a party in interest made with18 in the respective periods specified in paragraphs (1)

19 and (2) and after notice and a hearing, the court

20 may—

21 ‘‘(A) reduce the 100-day period or the 160-

22 day period specified in paragraph (1) or (2) for

23 cause; and

24 ‘‘(B) increase the 100-day period specified

25 in paragraph (1) if the debtor shows that the
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1 need for an increase is caused by circumstances

2 for which the debtor should not be held account3 able.’’.

4 (e) POSTPETITION DISCLOSURE.—Section 1125 of title

5 11, United States Code, is amended by adding at the end

6 the following:

7 ‘‘(f) Notwithstanding subsection (b), in a case in which

8 the debtor has elected under section 1121(e) to be considered

9 a small business—

10 ‘‘(1) the court may conditionally approve a dis11 closure statement subject to final approval after notice

12 and a hearing;

13 ‘‘(2) acceptances and rejections of a plan may be

14 solicited based on a conditionally approved disclosure

15 statement as long as the debtor provides adequate in16 formation to each holder of a claim or interest that

17 is solicited, but a conditionally approved disclosure

18 statement shall be mailed at least 10 days prior to the

19 date of the hearing on confirmation of the plan; and

20 ‘‘(3) a hearing on the disclosure statement may

21 be combined with a hearing on confirmation of a

22 plan.’’.
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1 SEC. 218. SINGLE ASSET REAL ESTATE.

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

3 States Code, is amended by inserting after paragraph (51)

4 the following:

5 ‘‘(51B) ‘single asset real estate’ means real prop6 erty constituting a single property or project, other

7 than residential real property with fewer than 4 resi8 dential units, which generates substantially all of the

9 gross income of a debtor and on which no substantial

10 business is being conducted by a debtor other than the

11 business of operating the real property and activities

12 incidental thereto having aggregate noncontingent,

13 liquidated secured debts in an amount no more than

14 $4,000,000;’’.

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

16 United States Code, is amended—

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

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

19 the end and inserting ‘‘; or’’, and

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

21 ‘‘(3) with respect to a stay of an act against sin22 gle asset real estate under subsection (a), by a creditor

23 whose claim is secured by an interest in such real es24 tate, unless, not later than the date that is 90 days

25 after the entry of the order for relief (or such later
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1 date as the court may determine for cause by order

2 entered within that 90-day period)—

3 ‘‘(A) the debtor has filed a plan of reorga4 nization that has a reasonable possibility of

5 being confirmed within a reasonable time; or

6 ‘‘(B) the debtor has commenced monthly

7 payments to each creditor whose claim is secured

8 by such real estate (other than a claim secured

9 by a judgment lien or by an unmatured statu10 tory lien), which payments are in an amount

11 equal to interest at a current fair market rate on

12 the value of the creditor’s interest in the real es13 tate.’’.

14 SEC. 219. LEASES OF PERSONAL PROPERTY.

15 (a) ASSUMPTION.—Section 365(b)(2) of title 11, Unit16 ed States Code is amended—

17 (1) in subparagraph (B) by striking ‘‘or’’ at the

18 end,

19 (2) in subparagraph (C) by striking the period

20 and inserting ‘‘; or’’,

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

22 ‘‘(D) the satisfaction of any penalty rate or pro23 vision relating to a default arising from any failure

24 by the debtor to perform nonmonetary obligations

25 under the executory contract or unexpired lease.’’.
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1 (b) PERFORMANCE.—Section 365(d) of title 11, United

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

3 ‘‘(10) The trustee shall timely perform all of the

4 obligations of the debtor, except those specified in sec5 tion 365(b)(2), first arising from or after 60 days

6 after the order for relief in a case under chapter 11

7 of this title under an unexpired lease of personal

8 property (other than personal property leased to an

9 individual primarily for personal, family, or house10 hold purposes), until such lease is assumed or rejected

11 notwithstanding section 503(b)(1) of this title, unless

12 the court, after notice and a hearing and based the

13 equities of the case, orders otherwise with respect to

14 the obligations or timely performance thereof. This

15 subsection shall not be deemed to affect the trustee’s

16 obligations under the provisions of subsection (b) or

17 (f). Acceptance of any such performance does not con18 stitute waiver or relinquishment of the lessor’s rights

19 under such lease or under this title.’’.

20 (c) LIMITATION.—Section 363(e) of title 11, United

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

22 ‘‘This subsection also applies to property that is subject to

23 any unexpired lease of personal property (to the exclusion

24 of such property being subject to an order to grant relief

25 from the stay under section 362).’’.
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1 SEC. 220. EXEMPTION FOR SMALL BUSINESS INVESTMENT

2 COMPANIES.

3 Section 109(b)(2) of title 11, United States Code, is

4 amended by inserting after ‘‘homestead association,’’ the fol5 lowing: ‘‘a small business investment company licensed by

6 the Small Business Administration under subsection (c) or

7 (d) of section 301 of the Small Business Investment Act of

8 1958,’’.

9 SEC. 221. PAYMENT OF TAXES WITH BORROWED FUNDS.

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

11 amended—

12 (1) in paragraph (13) by striking the period at

13 the end and inserting a semicolon, and

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

15 ‘‘(14) incurred to pay a tax to the United States

16 that would be nondischargeable pursuant to para17 graph (1);’’.

18 SEC. 222. RETURN OF GOODS.

19 (a) LIMITATION ON AVOIDING POWERS.—Section 546

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

21 the end the following:

22 ‘‘(g) Notwithstanding the rights and powers of a trust23 ee under sections 544(a), 545, 547, 549, and 553, if the

24 court determines on a motion by the trustee made not later

25 than 120 days after the date of the order for relief in a

26 case under chapter 11 of this title and after notice and a
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1 hearing, that a return is in the best interests of the estate,

2 the debtor, with the consent of a creditor, may return goods

3 shipped to the debtor by the creditor before the commence4 ment of the case, and the creditor may offset the purchase

5 price of such goods against any claim of the creditor against

6 the debtor that arose before the commencement of the case.’’.

7 (b) SETOFF.—Section 553(b)(1) is amended by insert8 ing ‘‘546(h),’’ after ‘‘365(h),’’.

9 SEC. 223. PROCEEDS OF MONEY ORDER AGREEMENTS.

10 Section 541(b) of title 11, United States Codeis amend11 ed—

12 (1) in paragraph (3) by striking ‘‘or’’ at the end

13 and inserting a semicolon,

14 (2) in paragraph (4) by striking the period at

15 the end and inserting ‘‘; or’’, and

16 (3) by inserting after paragraph (4) the follow17 ing:

18 ‘‘(5) any interest in cash or cash equivalents that

19 constitute proceeds of a sale by the debtor of a money

20 order that is made—

21 ‘‘(A) on or after the date that is 14 days

22 prior to the date on which the petition is filed;

23 and

24 ‘‘(B) under an agreement with a money

25 order issuer that prohibits the commingling of
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1 such proceeds with property of the debtor (not2 withstanding that, contrary to the agreement, the

3 proceeds may have been commingled with prop4 erty of the debtor),

5 unless the money order issuer had not taken action,

6 prior to the filing of the petition, to require compli7 ance with the prohibition.’’.

8 SEC. 224. TRUSTEE DUTIES; PROFESSIONAL FEES.

9 (a) TRUSTEE’S DUTIES.—Section 586(a)(3)(A) of title

10 28, United States Code, is amended to read as follows:

11 ‘‘(A)(i) reviewing, in accordance with proce12 dural guidelines adopted by the Executive Office

13 of the United States Trustee (which guidelines

14 shall be applied uniformly by the United States

15 trustee except when circumstances warrant dif16 ferent treatment), applications filed for com17 pensation and reimbursement under section 330

18 of title 11; and

19 ‘‘(ii) filing with the court comments with

20 respect to such application and, if the United

21 States Trustee considers it to be appropriate, ob22 jections to such application.’’.

23 (b) PROFESSIONAL FEES.—Section 330(a) of title 11,

24 United States Code, is amended to read as follows:
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1 ‘‘(a)(1) After notice to the parties in interest and the

2 United States trustee and a hearing, and subject to sections

3 326, 328, and 329, the court may award to a trustee, an

4 examiner, a professional person employed under section 327

5 or 1103—

6 ‘‘(A) reasonable compensation for actual, nec7 essary services rendered by the trustee, examiner, pro8 fessional person, or attorney and by any paraprofes9 sional person employed by any such person; and

10 ‘‘(B) reimbursement for actual, necessary ex11 penses.

12 ‘‘(2) The court may, on its own motion or on the mo13 tion of the United States Trustee, the United States Trustee

14 for the District or Region, the trustee for the estate, or any

15 other party in interest, award compensation that is less

16 than the amount of compensation that is requested.

17 ‘‘(3)(A) In determining the amount of reasonable com18 pensation to be awarded, the court shall consider the nature,

19 the extent, and the value of such services, taking into ac20 count all relevant factors, including—

21 ‘‘(A) the time spent on such services;

22 ‘‘(B) the rates charged for such services;

23 ‘‘(C) whether the services were necessary to the

24 administration of, or beneficial at the time at which
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1 the service was rendered toward the completion of, a

2 case under this title;

3 ‘‘(D) whether the services were performed within

4 a reasonable amount of time commensurate with the

5 complexity, importance, and nature of the problem,

6 issue, or task addressed; and

7 ‘‘(E) whether the compensation is reasonable

8 based on the customary compensation charged by

9 comparably skilled practitioners in cases other than

10 cases under this title.

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

12 court shall not allow compensation for—

13 ‘‘(i) unnecessary duplication of services; or

14 ‘‘(ii) services that were not—

15 ‘‘(I) reasonably likely to benefit the debtor’s

16 estate; or

17 ‘‘(II) necessary to the administration of the

18 case.

19 ‘‘(B) In a chapter 12 or chapter 13 case in which the

20 debtor is an individual, the court may allow reasonable

21 compensation to the debtor’s attorney for representing the

22 interests of the debtor in connection with the bankruptcy

23 case based on a consideration of the benefit and necessity

24 of such services to the debtor and the other factors set forth

25 in this section.
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1 ‘‘(5) The court shall reduce the amount of compensa2 tion awarded under this section by the amount of any in3 terim compensation awarded under section 331, and, if the

4 amount of such interim compensation exceeds the amount

5 of compensation awarded under this section, may order the

6 return of the excess to the estate.

7 ‘‘(6) Any compensation awarded for the preparation

8 of a fee application shall be based on the level and skill

9 reasonably required to prepare the application.’’.

10 SEC. 225. NOTICES TO CREDITORS.

11 Section 342 of title 11, United States Code, is amended

12 by adding at the end the following:

13 ‘‘(c) If notice is required to be given by the debtor to

14 a creditor under this title, any rule, any applicable law,

15 or any order of the court, such notice shall contain the

16 name, address, and taxpayer identification number of the

17 debtor, but the failure of such notice to contain such infor18 mation shall not invalidate the legal effect of such notice.’’.

19 TITLE III—CONSUMER

20 BANKRUPTCY ISSUES

21 SEC. 301. PERIOD FOR CURING DEFAULT RELATING TO

22 PRINCIPAL RESIDENCE.

23 Section 1322 of title 11, United States Code, is amend24 ed—
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1 (1) by redesignating subsection (c) as subsection

2 (d), and

3 (2) by inserting after subsection (b) the follow4 ing:

5 ‘‘(c) Notwithstanding subsection (b)(2) and applicable

6 nonbankruptcy law—

7 ‘‘(1) a default with respect to, or that gave rise

8 to, a lien on the debtor’s principal residence may be

9 cured under paragraph (3) or (5) of subsection (b)

10 until such residence is sold at a foreclosure sale that

11 is conducted in accordance with applicable

12 nonbankruptcy law; and

13 ‘‘(2) in a case in which the last payment on the

14 original payment schedule for a claim secured only by

15 a security interest in real property that is the debtor’s

16 principal residence is due before the date on which the

17 final payment under the plan is due, the plan may

18 provide for the payment of the claim as modified pur19 suant to section 1325(a)(5) of this title.’’.

20 SEC. 302. NONDISCHARGEABILITY OF FINE UNDER CHAP21 TER 13.

22 Section 1328(a)(3) of title 11, United States Code, is

23 amended by inserting ‘‘, or a criminal fine,’’ after ‘‘restitu24 tion’’.
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1 SEC. 303. IMPAIRMENT OF EXEMPTIONS.

2 Section 522(f) of title 11, United States Code, is

3 amended—

4 (1) in paragraph (2)—

5 (A) by redesignating subparagraphs (A),

6 (B), and (C) as clauses (i), (ii), and (iii), respec7 tively, and

8 (B) by striking ‘‘(2)’’ and inserting ‘‘(B),

9 (2) by redesignating paragraph (1) as subpara10 graph (A),

11 (3) by inserting ‘‘(1)’’ before ‘‘Notwithstanding’’,

12 and

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

14 ‘‘(2)(A) For the purposes of this subsection, a lien shall

15 be considered to impair an exemption to the extent that the

16 sum of—

17 ‘‘(i) the lien,

18 ‘‘(ii) all other liens on the property; and

19 ‘‘(iii) the amount of the exemption that the debt20 or could claim if there were no liens on the property;

21 exceeds the value that the debtor’s interest in the property

22 would have in the absence of any liens.

23 ‘‘(B) In the case of a property subject to more than

24 1 lien, a lien that has been avoided shall not be considered

25 in making the calculation under subparagraph (A) with re26 spect to other liens.
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1 ‘‘(C) This paragraph shall not apply with re2 spect to a judgment arising out of a mortgage fore3 closure.’’.

4 SEC. 304. PROTECTION OF CHILD SUPPORT AND ALIMONY.

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

6 States Code, is amended by inserting after paragraph (12)

7 the following:

8 ‘‘(12A) ‘debt for child support’ means a debt of

9 a kind specified in section 523(a)(5) of this title for

10 maintenance or support of a child of the debtor;’’.

11 (b) RELIEF FROM AUTOMATIC STAY.—Section

12 362(b)(2) of title 11, United States Code, is amended to

13 read as follows:

14 ‘‘(2) under subsection (a) of this section—

15 ‘‘(A) of the commencement or continuation

16 of an action or proceeding for—

17 ‘‘(i) the establishment of paternity; or

18 ‘‘(ii) the establishment or modification

19 of an order for alimony, maintenance, or

20 support; or

21 ‘‘(B) of the collection of alimony, mainte22 nance, or support from property that is not

23 property of the estate;’’.

24 (c) PRIORITY OF CLAIMS.—Section 507(a) of title 11,

25 United States Code, is amended—
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1 (1) in paragraph (8) by striking ‘‘(8) Eighth’’

2 and inserting ‘‘(9) Ninth’’,

3 (2) in paragraph (7) by striking ‘‘(7) Seventh’’

4 and inserting ‘‘(8) Eighth’’, and

5 (3) by inserting after paragraph (6) the follow6 ing:

7 ‘‘(7) Seventh, allowed claims for debts to a

8 spouse, former spouse, or child of the debtor, for ali9 mony to, maintenance for, or support of such spouse

10 or child, in connection with a separation agreement,

11 divorce decree or other order of a court of record, de12 termination made in accordance with State or terri13 torial law by a governmental unit, or property settle14 ment agreement, but not to the extent that such

15 debt—

16 ‘‘(A) is assigned to another entity, volun17 tarily, by operation of law, or otherwise; or

18 ‘‘(B) includes a liability designated as ali19 mony, maintenance, or support, unless such li20 ability is actually in the nature of alimony,

21 maintenance or support.’’.

22 (d) PROTECTION OF LIENS.—Section 522(f)(1)(A) of

23 title 11, United States Code, as amended by section 303,

24 is amended by inserting after ‘‘lien’’ the following:

25 ‘‘, other than a judicial a lien that secures a debt—
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1 ‘‘(i) to a spouse, former spouse, or child of

2 the debtor, for alimony to, maintenance for, or

3 support of such spouse or child, in connection

4 with a separation agreement, divorce decree or

5 other order of a court of record, determination

6 made in accordance with State or territorial law

7 by a governmental unit, or property settlement

8 agreement; and

9 ‘‘(ii) to the extent that such debt—

10 ‘‘(I) is not assigned to another entity,

11 voluntarily, by operation of law, or other12 wise; and

13 ‘‘(II) includes a liability designated as

14 alimony, maintenance, or support, unless

15 such liability is actually in the nature of

16 alimony, maintenance or support.’’.

17 (e) EXCEPTION TO DISCHARGE.—Section 523 of title

18 11, United States Code, as amended by section 221, is

19 amended by adding at the end the following:

20 ‘‘(15) not of the kind described in paragraph (5)

21 that is incurred by the debtor in the course of a di22 vorce or separation or in connection with a separa23 tion agreement, divorce decree or other order of a

24 court of record, a determination made in accordance
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1 with State or territorial law by a governmental unit

2 unless—

3 ‘‘(A) the debtor does not have the ability to

4 pay such debt from income or property of the

5 debtor not reasonably necessary to be expended

6 for the maintenance or support of the debtor or

7 a dependent of the debtor and, if the debtor is en8 gaged in a business, for the payment of expendi9 tures necessary for the continuation, preserva10 tion, and operation of such business; or

11 ‘‘(B) discharging such debt would result in

12 a benefit to the debtor that outweighs the det13 rimental consequences to a spouse, former spouse,

14 or child of the debtor;’’, and

15 (2) in subsection (c)(1) by striking ‘‘or (6)’’ each

16 place it appears and inserting ‘‘(6), or (15)’’.

17 (f) PROTECTION AGAINST TRUSTEE AVOIDANCE.—Sec18 tion 547(c) of title 11, United States Code, is amended—

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

20 end,

21 (2) by redesignating paragraph (7) as para22 graph (8), and

23 (3) by inserting after paragraph (6) the fol24 lowing:
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1 ‘‘(7) to the extent such transfer was a bona fide

2 payment of a debt to a spouse, former spouse, or child

3 of the debtor, for alimony to, maintenance for, or sup4 port of such spouse or child, in connection with a sep5 aration agreement, divorce decree or other order of a

6 court of record, determination made in accordance

7 with State or territorial law by a governmental unit,

8 or property settlement agreement, but not to the ex9 tent that such debt—

10 ‘‘(A) is assigned to another entity, volun11 tarily, by operation of law, or otherwise; or

12 ‘‘(B) includes a liability designated as ali13 mony, maintenance, or support, unless such li14 ability is actually in the nature of alimony,

15 maintenance or support; or’’.

16 (g) APPEARANCE BEFORE COURT.—Child support

17 creditors or their representatives shall be permitted to ap18 pear and intervene without charge, and without meeting

19 any special local court rule requirement for attorney ap20 pearances, in any bankruptcy case or proceeding in any

21 bankruptcy court or district court of the United States if

22 such creditors or representatives file a form in such court

23 that contains information detailing the child support debt,

24 its status, and other characteristics.
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1 (h) CONFORMING AMENDMENTS—Title 11 of the Unit2 ed States Code is amended—

3 (1) in section 502(i) by striking ‘‘507(a)(7)’’ and

4 inserting ‘‘507(a)(8)’’,

5 (2) in section 503(b)(1)(B)(i) by striking

6 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,

7 (3) in section 523(a)(1)(A) by striking

8 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,

9 (4) in section 724(b)(2) by striking ‘‘or

10 507(a)(6)’’ and inserting ‘‘507(a)(6), or 507(a)(7)’’,

11 (5) in section 726(b) by striking ‘‘or (7)’’ and

12 inserting ‘‘, (7), or (8)’’,

13 (6) in section 1123(a)(1) by striking ‘‘507(a)(7)’’

14 and inserting ‘‘507(a)(8)’’,

15 (7) in section 1129(a)(9)—

16 (i) in subparagraph (B) by striking ‘‘or

17 507(a)(6)’’ and inserting ‘‘, 507(a)(6), or

18 507(a)(7)’’, and

19 (ii) in subparagraph (C) by striking

20 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’.

21 SEC. 305. INTEREST ON INTEREST.

22 (a) CHAPTER 11.—Section 1123 of title 11, United

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

24 ‘‘(d) Notwithstanding subsection (a) of this section and

25 sections 506(b), 1129(a)(7), and 1129(b) of this title, if it
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1 is proposed in a plan to cure a default the amount nec2 essary to cure the default shall be determined in accordance

3 with the underlying agreement and applicable

4 nonbankruptcy law.’’.

5 (b) CHAPTER 12.—Section 1222 of title 11, United

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

7 ‘‘(d) Notwithstanding subsection (b)(2) of this section

8 and sections 506(b) and 1225(a)(5) of this title, if it is pro9 posed in a plan to cure a default, the amount necessary

10 to cure the default, shall be determined in accordance with

11 the underlying agreement and applicable nonbankruptcy

12 law.’’.

13 (c) CHAPTER 13.—Section 1322 of title 11, United

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

15 ‘‘(e) Notwithstanding subsection (b)(2) of this section

16 and sections 506(b) and 1325(a)(5) of this title, if it is pro17 posed in a plan to cure a default, the amount necessary

18 to cure the default, shall be determined in accordance with

19 the underlying agreement and applicable nonbankruptcy

20 law.’’.

21 SEC. 306. EXCEPTION TO DISCHARGE.

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

23 is amended—

24 (1) by striking ‘‘$500’’ and inserting ‘‘$1,000’’,

25 (2) by striking ‘‘forty’’ and inserting ‘‘60’’, and
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1 (3) by striking ‘‘twenty’’ and inserting ‘‘60’’.

2 SEC. 307. PAYMENTS UNDER CHAPTER 13.

3 Section 1326(a)(2) of title 11, United States Code, is

4 amended in the second sentence by striking the period and

5 inserting ‘‘as soon as practicable.’’.

6 SEC. 308. BANKRUPTCY PETITION PREPARERS.

7 (a) AMENDMENT OF CHAPTER 1.—Chapter 1 of title

8 11, United States Code, is amended by adding at the end

9 the following:

10 ‘‘§ 110. Penalty for persons who negligently or fraudu11 lently prepare bankruptcy petitions

12 ‘‘(a) In this section—

13 ‘‘(1) ‘bankruptcy petition preparer’ means a per14 son, other than an attorney or an employee of an at15 torney, who prepares for compensation a document

16 for filing; and

17 ‘‘(2) ‘document for filing’ means a petition or

18 any other document prepared for filing by a debtor

19 in a United States bankruptcy court or a United

20 States district court in connection with a case under

21 this title.

22 ‘‘(b)(1) A bankruptcy petition preparer who prepares

23 a document for filing shall sign the document and print

24 on the document the preparer’s name and address.
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1 ‘‘(2) A bankruptcy petition preparer who fails to com2 ply with paragraph (1) may be fined not more than $500

3 for each such failure unless the failure is due to reasonable

4 cause.

5 ‘‘(c)(1) A bankruptcy petition preparer who prepares

6 a document for filing shall place on the document, after the

7 preparer’s signature, an identifying number that identifies

8 individuals who prepared the document.

9 ‘‘(2) For purposes of this section, the identifying num10 ber of a bankruptcy petition preparer shall be the Social

11 Security account number of each individual who prepared

12 the document or assisted in its preparation.

13 ‘‘(3) A bankruptcy petition preparer who fails to com14 ply with paragraph (1) may be fined not more than $500

15 for each such failure unless the failure is due to reasonable

16 cause.

17 ‘‘(d)(1) A bankruptcy petition preparer shall, not later

18 than the time at which a document for filing is presented

19 for the debtor’s signature, furnish to the debtor a copy of

20 the document.

21 ‘‘(2) A bankruptcy petition preparer who fails to com22 ply with paragraph (1) may be fined not more than $500

23 for each such failure unless the failure is due to reasonable

24 cause.
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1 ‘‘(e)(1) A bankruptcy petition preparer shall not exe2 cute any document on behalf of a debtor.

3 ‘‘(2) A bankruptcy petition preparer may be fined not

4 more than $500 for each document executed in violation

5 of paragraph (1).

6 ‘‘(f)(1) A bankruptcy petition preparer shall not use

7 the word ‘legal’ or any similar term in any advertisements,

8 or advertise under any category that includes the word

9 ‘legal’ or any similar term.

10 ‘‘(2) A bankruptcy petition preparer shall be fined not

11 more than $500 for each violation of paragraph (1).

12 ‘‘(g)(1) A bankruptcy petition preparer shall not col13 lect or receive any payment from the debtor or on behalf

14 of the debtor for the court fees in connection with filing the

15 petition.

16 ‘‘(2) A bankruptcy petition preparer shall be fined not

17 more than $500 for each violation of paragraph (1).

18 ‘‘(h)(1) Within 10 days after the date of the filing of

19 a petition, a bankruptcy petition preparer shall file a dec20 laration under penalty of perjury disclosing any fee re21 ceived from or on behalf of the debtor within 12 months

22 immediately prior to the filing of the case, and any unpaid

23 fee charged to the debtor.

24 ‘‘(2) The court shall disallow and order the immediate

25 turnover to the bankruptcy trustee of any fee referred to
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1 in paragraph (1) found to be in excess of the value of serv2 ices rendered for the documents prepared. An individual

3 debtor may exempt any funds so recovered under section

4 522(b).

5 ‘‘(3) The debtor, the trustee, a creditor, or the United

6 States trustee may file a motion for an order under para7 graph (2).

8 ‘‘(4) A bankruptcy petition preparer shall be fined not

9 more than $500 for each failure to comply with a court

10 order to turn over funds within 30 days of service of such

11 order.

12 ‘‘(i)(1) If a bankruptcy case or related proceeding is

13 dismissed because of the failure to file bankruptcy papers,

14 including papers specified in section 521(1) of this title,

15 the negligence or intentional disregard of this title or the

16 Federal Rules of Bankruptcy Procedure by a bankruptcy

17 petition preparer, or if a bankruptcy petition preparer vio18 lates this section or commits any fraudulent, unfair, or de19 ceptive act, the bankruptcy court shall certify that fact to

20 the district court, and the district court, on motion of the

21 debtor, the trustee, or a creditor and after a hearing, shall

22 order the bankruptcy petition preparer to pay to the debt23 or—

24 ‘‘(A) the debtor’s actual damages;

25 ‘‘(B) the greater of—
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1 ‘‘(i) $2,000; or

2 ‘‘(ii) twice the amount paid by the debtor to

3 the bankruptcy petition preparer for the prepar4 er’s services; and

5 ‘‘(C) reasonable attorneys’ fees and costs in mov6 ing for damages under this subsection.

7 ‘‘(2) If the trustee or creditor moves for damages on

8 behalf of the debtor under this subsection, the bankruptcy

9 petition preparer shall be ordered to pay the movant the

10 additional amount of $1,000 plus reasonable attorneys’ fees

11 and costs incurred.

12 ‘‘(j)(1) A debtor for whom a bankruptcy petition pre13 parer has prepared a document for filing, the trustee, a

14 creditor, or the United States trustee in the district in

15 which the bankruptcy petition preparer resides, has con16 ducted business, or the United States trustee in any other

17 district in which the debtor resides may bring a civil action

18 to enjoin a bankruptcy petition preparer from engaging in

19 any conduct in violation of this section or from further act20 ing as a bankruptcy petition preparer.

21 ‘‘(2)(A) In an action under paragraph (1), if the court

22 finds that—

23 ‘‘(i) a bankruptcy petition preparer has—

24 ‘‘(I) engaged in conduct in violation of this

25 section or of any provision of this title a viola-
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1 tion of which subjects a person to criminal pen2 alty;

3 ‘‘(II) misrepresented the preparer’s experi4 ence or education as a bankruptcy petition pre5 parer; or

6 ‘‘(III) engaged in any other fraudulent, un7 fair, or deceptive conduct; and

8 ‘‘(ii) injunctive relief is appropriate to prevent

9 the recurrence of such conduct,

10 the court may enjoin the bankruptcy petition preparer from

11 engaging in such conduct.

12 ‘‘(B) If the court finds that a bankruptcy petition pre13 parer has continually engaged in conduct described in

14 subclause (I), (II), or (III) of clause (i) and that an injunc15 tion prohibiting such conduct would not be sufficient to pre16 vent such person’s interference with the proper administra17 tion of this title, or has not paid a penalty imposed under

18 this section, the court may enjoin the person from acting

19 as a bankruptcy petition preparer.

20 ‘‘(3) The court shall award to a debtor, trustee, or cred21 itor that brings a successful action under this subsection

22 reasonable attorney’s fees and costs of the action, to be paid

23 by the bankruptcy petition preparer.

24 ‘‘(k) Nothing in this section shall be construed to per25 mit activities that are otherwise prohibited by law, includ-
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1 ing rules and laws that prohibit the unauthorized practice

2 of law.’’.

3 (b) The chapter analysis for chapter 1 of title 11, Unit4 ed States Code, is amended by adding at the end the follow5 ing new item:

‘‘110. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions.’’.

6 SEC. 309. FAIRNESS TO CONDOMINIUM AND COOPERATIVE

7 OWNERS.

8 Section 523(a) of title 11, United States Code, as

9 amended by sections 221 and 304, is amended by adding

10 at the end the following:

11 ‘‘(16) for a fee or assessment that becomes due

12 and payable after the order for relief to a membership

13 association with respect to the debtor’s interest in a

14 dwelling unit that has condominium ownership or in

15 a share of a cooperative housing corporation, but only

16 if such fee or assessment is payable for a period dur17 ing which—

18 ‘‘(A) the debtor physically occupied a dwell19 ing unit in the condominium or cooperative

20 project; or

21 ‘‘(B) the debtor rented the dwelling unit to

22 a tenant and received payments from the tenant

23 for such period,
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1 but nothing in this paragraph shall except from dis2 charge the debt of a debtor for a membership associa3 tion fee or assessment for a period arising before

4 entry of the order for relief in a pending or subse5 quent bankruptcy case.’’.

6 SEC. 310. NONAVOIDABILITY OF FIXING OF LIEN ON TOOLS

7 AND IMPLEMENTS OF TRADE, ANIMALS, AND

8 CROPS.

9 Section 522(f) of title 11, United States Code, as

10 amended by sections 303 and 304, is amended—

11 (1) in paragraph (1) by inserting ‘‘but subject to

12 paragraph (3)’’ after ‘‘waiver of exemptions’’, and

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

14 ‘‘(3) In a case in which State law that is applicable

15 to the debtor—

16 ‘‘(A) permits a person to voluntarily waive a

17 right to claim exemptions under subsection (d) or

18 prohibits a debtor from claiming exemptions under

19 subsection (d); and

20 ‘‘(B) either permits the debtor to claim exemp21 tions under State law without limitation in amount,

22 except to the extent that the debtor has permitted the

23 fixing of a consensual lien on any property or pro24 hibits avoidance of a consensual lien on property oth25 erwise eligible to be claimed as exempt property;
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1 the debtor may not avoid the fixing of a lien on an interest

2 of the debtor or a dependent of the debtor in property if

3 the lien is a nonpossessory, nonpurchase-money security in4 terest in implements, professional books, or tools of the trade

5 of the debtor or a dependent of the debtor or farm animals

6 or crops of the debtor or a dependent of the debtor to the

7 extent the value of such implements, professional books, tools

8 of the trade, animals, and crops exceeds $5,000.’’.

9 SEC. 311. CONVERSION OF CASE UNDER CHAPTER 13.

10 Section 348 of title 11, United States Code, is amended

11 by adding at the end the following:

12 ‘‘(f)(1) Except as provided in paragraph (2), when a

13 case under chapter 13 of this title is converted to a case

14 under another chapter under this title—

15 ‘‘(A) property of the estate in the converted case

16 shall consist of property of the estate, as of the date

17 of filing of the petition, that remains in the possession

18 of or is under the control of the debtor on the date of

19 conversion; and

20 ‘‘(B) valuations of property and of allowed se21 cured claims in the chapter 13 case shall apply in the

22 converted case, with allowed secured claims reduced to

23 the extent that they have been paid in accordance

24 with the chapter 13 plan.
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1 ‘‘(2) If the debtor converts a case under chapter 13 of

2 this title to a case under another chapter under this title

3 in bad faith, the property in the converted case shall consist

4 of the property of the estate as of the date of conversion.’’.

5 SEC. 312. BANKRUPTCY FRAUD.

6 (a) IN GENERAL.—

7 (1) OFFENSES.—Chapter 9 of title 18, United

8 States Code, is amended—

9 (A) by amending sections 152, 153, and 154

10 to read as follows:

11 ‘‘§ 152. Concealment of assets; false oaths and claims;

12 bribery

13 ‘‘A person who—

14 ‘‘(1) knowingly and fraudulently conceals from a

15 custodian, trustee, marshal, or other officer of the

16 court charged with the control or custody of property,

17 or, in connection with a case under title 11, from

18 creditors or the United States Trustee, any property

19 belonging to the estate of a debtor;

20 ‘‘(2) knowingly and fraudulently makes a false

21 oath or account in or in relation to any case under

22 title 11;

23 ‘‘(3) knowingly and fraudulently makes a false

24 declaration, certificate, verification, or statement

25 under penalty of perjury as permitted under section
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1 1746 of title 28, in or in relation to any case under

2 title 11;

3 ‘‘(4) knowingly and fraudulently presents any

4 false claim for proof against the estate of a debtor, or

5 uses any such claim in any case under title 11, in

6 a personal capacity or as or through an agent, proxy,

7 or attorney;

8 ‘‘(5) knowingly and fraudulently receives any

9 material amount of property from a debtor after the

10 filing of a case under title 11, with intent to defeat

11 the provisions of title 11;

12 ‘‘(6) knowingly and fraudulently gives, offers, re13 ceives, or attempts to obtain any money or property,

14 remuneration, compensation, reward, advantage, or

15 promise thereof for acting or forbearing to act in any

16 case under title 11;

17 ‘‘(7) in a personal capacity or as an agent or of18 ficer of any person or corporation, in contemplation

19 of a case under title 11 by or against the person or

20 any other person or corporation, or with intent to de21 feat the provisions of title 11, knowingly and fraudu22 lently transfers or conceals any of his property or the

23 property of such other person or corporation;

24 ‘‘(8) after the filing of a case under title 11 or

25 in contemplation thereof, knowingly and fraudulently
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1 conceals, destroys, mutilates, falsifies, or makes a false

2 entry in any recorded information (including books,

3 documents, records, and papers) relating to the prop4 erty or financial affairs of a debtor; or

5 ‘‘(9) after the filing of a case under title 11,

6 knowingly and fraudulently withholds from a custo7 dian, trustee, marshal, or other officer of the court or

8 a United States Trustee entitled to its possession, any

9 recorded information (including books, documents,

10 records, and papers) relating to the property or fi11 nancial affairs of a debtor,

12 shall be fined not more than $5,000, imprisoned not more

13 than 5 years, or both.

14 ‘‘§ 153. Embezzlement against estate

15 ‘‘(a) OFFENSE.—A person described in subsection (b)

16 who knowingly and fraudulently appropriates to the per17 son’s own use, embezzles, spends, or transfers any property

18 or secretes or destroys any document belonging to the estate

19 of a debtor shall be fined not more than $5,000, imprisoned

20 not more than 5 years, or both.

21 ‘‘(b) PERSON TO WHOM SECTION APPLIES.—A person

22 described in this subsection is one who has access to prop23 erty or documents belonging to an estate by virtue of the

24 person’s participation in the administration of the estate

25 as a trustee, custodian, marshal, attorney, or other officer
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1 of the court or as an agent, employee, or other person en2 gaged by such an officer to perform a service with respect

3 to the estate.

4 ‘‘§ 154. Adverse interest and conduct of officers

5 ‘‘A person who, being a custodian, trustee, marshal,

6 or other officer of the court—

7 ‘‘(1) knowingly purchases, directly or indirectly,

8 any property of the estate of which the person is such

9 an officer in a case under title 11;

10 ‘‘(2) knowingly refuses to permit a reasonable

11 opportunity for the inspection by parties in interest

12 of the documents and accounts relating to the affairs

13 of estates in the person’s charge by parties when di14 rected by the court to do so; or

15 ‘‘(3) knowingly refuses to permit a reasonable

16 opportunity for the inspection by the United States

17 Trustee of the documents and accounts relating to the

18 affairs of an estate in the person’s charge,

19 shall be fined not more than $5,000 and shall forfeit the

20 person’s office, which shall thereupon become vacant.’’; and

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

22 ‘‘§ 156. Knowing disregard of bankruptcy law or rule

23 ‘‘(a) DEFINITIONS.—In this section—

24 ‘‘ ‘bankruptcy petition preparer’ means a person,

25 other than the debtor’s attorney or an employee of
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1 such an attorney, who prepares for compensation a

2 document for filing.

3 ‘‘ ‘document for filing’ means a petition or any

4 other document prepared for filing by a debtor in a

5 United States bankruptcy court or a United States

6 district court in connection with a case under this

7 title.

8 ‘‘(b) OFFENSE.—If a bankruptcy case or related pro9 ceeding is dismissed because of a knowing attempt by a

10 bankruptcy petition preparer in any manner to disregard

11 the requirements of title 11, United States Code, or the Fed12 eral Rules of Bankruptcy Procedure, the bankruptcy peti13 tion preparer shall be fined under this title, imprisoned not

14 more than 1 year, or both.

15 ‘‘§ 157. Bankruptcy fraud

16 ‘‘A person who, having devised or intending to devise

17 a scheme or artifice to defraud and for the purpose of exe18 cuting or concealing such a scheme or artifice or attempting

19 to do so—

20 ‘‘(1) files a petition under title 11;

21 ‘‘(2) files a document in a proceeding under title

22 11; or

23 ‘‘(3) makes a false or fraudulent representation,

24 claim, or promise concerning or in relation to a pro25 ceeding under title 11, at any time before or after the
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1 filing of the petition, or in relation to a proceeding

2 falsely asserted to be pending under such title,

3 shall be fined under this title, imprisoned not more than

4 5 years, or both.’’.

5 (2) TECHNICAL AMENDMENTS.—The chapter

6 analysis for chapter 9 of title 18, United States Code,

7 is amended—

8 (A) by amending the item relating to sec9 tion 153 to read as follows:

‘‘Sec. 153. Embezzlement against estate.’’;

10 and

11 (B) by adding at the end the following new

12 items:

‘‘Sec. 156. Knowing disregard of bankruptcy law or rule.

‘‘Sec. 157. Bankruptcy fraud.’’.

13 (b) RICO.—Section 1961(1)(D) of title 18, United

14 States Code, is amended by inserting ‘‘(except a case under

15 section 157 of that title)’’ after ‘‘title 11’’.

16 SEC. 313. PROTECTION AGAINST DISCRIMINATORY TREAT17 MENT OF APPLICATIONS FOR STUDENT

18 LOANS.

19 Section 525 of title 11, United States Code, is amended

20 by adding at the end the following:

21 ‘‘(c)(1) A governmental unit that operates a student

22 grant or loan program and a person engaged in a business

23 that includes the making of loans guaranteed or insured
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1 under a student loan program may not deny a grant, loan,

2 loan guarantee, or loan insurance to a person that is or

3 has been a debtor under this title or a bankrupt or debtor

4 under the Bankruptcy Act, or another person with whom

5 the debtor or bankrupt has been associated, because the debt6 or or bankrupt is or has been a debtor under this title or

7 a bankrupt or debtor under the Bankruptcy Act, has been

8 insolvent before the commencement of a case under this title

9 or during the pendency of the case but before the debtor is

10 granted or denied a discharge, or has not paid a debt that

11 is dischargeable in the case under this title or that was dis12 charged under the Bankruptcy Act.

13 ‘‘(2) In this section, ‘student loan program’ means the

14 program operated under part B, D, or E of title IV of the

15 Higher Education Act of 1965 or a similar program oper16 ated under State or local law.’’.

17 TITLE IV—GOVERNMENTAL

18 BANKRUPTCY ISSUES

19 SEC. 401. EXCEPTION FROM AUTOMATIC STAY FOR POST20 PETITION PROPERTY TAXES.

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

22 amended by inserting after paragraph (16) the following:

23 ‘‘(18) under subsection (a) of the creation or per24 fection of a statutory lien for an ad valorem property

25 tax imposed by the District of Columbia, or a politi-
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1 cal subdivision of a State, if such tax comes due after

2 the filing of the petition.’’.

3 SEC. 402. MUNICIPAL BANKRUPTCY.

4 Section 109(c)(2) of title 11, United States Code, is

5 amended by striking ‘‘generally authorized’’ and inserting

6 ‘‘specifically authorized, in its capacity as a municipality

7 or by name,’’.

8 TITLE V—TECHNICAL

9 CORRECTIONS

10 SEC. 501. AMENDMENTS TO BANKRUPTCY DEFINITIONS, NE11 CESSITATED BY ENACTMENT OF PUBLIC LAW

12 101–647.

13 (a) ALPHABETIZING AND REDESIGNATING DEFINI14 TIONS.—Section 101 of title 11 of the United States Code,

15 as amended by sections 208, 217, 218, and 304, is amend16 ed—

17 (1) by redesignating paragraph (3) as para18 graph (21B) and transferring such paragraph so as

19 to insert it after paragraph (21A),

20 (2) by redesignating paragraph (39) as para21 graph (51A) and transferring such paragraph so as

22 to insert it after paragraph (51),

23 (3) by redesignating paragraphs (54) through

24 (57), as so redesignated by section 2522(e) of Public
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1 Law 101–647, as paragraphs (53A) through (53D),

2 respectively,

3 (4) by redesignating paragraph (56) as in effect

4 immediately before the enactment of Public Law 101–

5 647, as paragraph (35A) and transferring such para6 graph so as to insert it after paragraph (35), and

7 (5) by redesignating paragraph (57), as in effect

8 immediately before the enactment of Public Law 101–

9 647, as paragraph (39) and transferring such para10 graph so as to insert it after paragraph (38).

11 (b) CONFORMING AND RELATED AMENDMENTS TO

12 TITLE 11 OF THE UNITED STATES CODE, BASED ON RE13 DESIGNATED DEFINITIONS.—(1) Section 101 of title 11 of

14 the United States Code, as amended by subsection (a), is

15 amended—

16 (A) in paragraph (6) by striking ‘‘section

17 761(9)’’ and inserting ‘‘section 761’’,

18 (B) in paragraph (22) by striking ‘‘section

19 741(7)’’ and inserting ‘‘section 741’’,

20 (C) in paragraph (35)(B) by striking ‘‘para21 graphs (3)’’ and inserting ‘‘paragraphs (21B)’’,

22 (D) in paragraph (49)(B)(ii) by striking ‘‘sec23 tion 761(13)’’ and inserting ‘‘section 761’’, and
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1 (E) in paragraph (53A)(A), as so redesignated,

2 by striking ‘‘section 741(2)’’ and inserting ‘‘section

3 741’’.

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

5 amended—

6 (A) in paragraph (6)—

7 (i) by striking ‘‘section 761(4)’’ and insert8 ing ‘‘section 761’’,

9 (ii) by striking ‘‘section 741(7)’’ and insert10 ing ‘‘section 741’’,

11 (iii) by striking ‘‘section 101(34), 741(5), or

12 761(15)’’ and inserting ‘‘section 101, 741, or

13 761’’, and

14 (iv) by striking ‘‘section 101(35) or 741(8)’’

15 and inserting ‘‘section 101 or 741’’, and

16 (B) in paragraph (7)—

17 (i) by striking ‘‘section 741(5) or 761(15)’’

18 and inserting ‘‘section 741 or 761’’, and

19 (ii) by striking ‘‘section 741(8)’’ and insert20 ing ‘‘section 741’’.

21 (3) Section 507(a)(5) of title 11, United States Code,

22 is amended—

23 (A) by striking ‘‘section 557(b)(1)’’ and inserting

24 ‘‘section 557(b)’’, and
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1 (B) by striking ‘‘section 557(b)(2)’’ and inserting

2 ‘‘section 557(b)’’.

3 (4) Section 546 of title 11, United States Code, is

4 amended—

5 (A) in subsection (e)—

6 (i) by striking ‘‘section 101(34), 741(5), or

7 761(15)’’ and inserting ‘‘section 101, 741, or

8 761’’, and

9 (ii) by striking ‘‘section 101(35) or 741(8)’’

10 and inserting ‘‘section 101 or 741’’, and

11 (B) in subsection (f)—

12 (i) by striking ‘‘section 741(5) or 761(15)’’

13 and inserting ‘‘section 741 or 761’’, and

14 (ii) by striking ‘‘section 741(8)’’ and insert15 ing ‘‘section 741’’.

16 (5) Section 548(d)(2) of title 11, United States Code,

17 is amended—

18 (A) in subparagraph (B)—

19 (i) by striking ‘‘section 101(34), 741(5) or

20 761(15)’’ and inserting ‘‘section 101, 741, or

21 761’’, and

22 (ii) by striking ‘‘section 101(35) or 741(8)’’

23 and inserting ‘‘section 101 or 741’’, and

24 (B) in subparagraph (C)—
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1 (i) by striking ‘‘section 741(5) or 761(15)’’

2 and inserting ‘‘section 741 or 761’’, and

3 (ii) by striking ‘‘section 741(8)’’ and insert4 ing ‘‘section 741’’.

5 (6) Section 555 of title 11, United States Code, is

6 amended by striking ‘‘section 741(7)’’ and inserting ‘‘sec7 tion 741 of this title’’.

8 (7) Section 556 of title 11, United States Code, is

9 amended by striking ‘‘section 761(4)’’ and inserting ‘‘sec10 tion 761 of this title’’.

11 (c) CONFORMING AMENDMENTS TO OTHER LAWS

12 BASED ON REDESIGNATED DEFINITIONS.—(1) Section

13 207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C.

14 1787(c)(8)(D)) is amended—

15 (A) in clause (ii)(I) by striking ‘‘section 741(7)’’

16 and inserting ‘‘section 741’’,

17 (B) in clause (iii) by striking ‘‘section 101(24)’’

18 and inserting ‘‘section 101’’,

19 (C) in clause (iv)(I) by striking ‘‘section

20 101(41)’’ and inserting ‘‘section 101’’, and

21 (D) in clause (v) by striking ‘‘section 101(50)’’

22 and inserting ‘‘section 101’’.

23 (2) Section 11(e)(8)(D) of the Federal Deposit Insur24 ance Act (12 U.S.C. 1821(e)(8)(D)) is amended—
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1 (A) in clause (ii)(I) by striking ‘‘section 741(7)’’

2 and inserting ‘‘section 741’’,

3 (B) in clause (iii) by striking ‘‘section 761(4)’’

4 and inserting ‘‘section 761’’,

5 (C) in clause (iv) by striking ‘‘section 101(24)’’

6 and inserting ‘‘section 101’’,

7 (D) in clause (v)(I) by striking ‘‘section

8 101(41)’’ and inserting ‘‘section 101’’, and

9 (E) in clause (viii) by striking ‘‘section 101(50)’’

10 and inserting ‘‘section 101’’.

11 (d) OTHER TECHNICAL AMENDMENTS.—Title 11 of the

12 United States Code is amended—

13 (1) in section 101—

14 (A) in paragraph (33)—

15 (i) in subparagraph (A) by striking

16 ‘‘(12 U.S.C. 1813(u))’’, and

17 (ii) in subparagraph (B) by striking

18 ‘‘(12 U.S.C. 1786(r))’’,

19 (B) in paragraph (34) by striking ‘‘(12

20 U.S.C. 1752(7))’’,

21 (C) in paragraph (35)(A) by striking ‘‘(12

22 U.S.C. 1813(c)(2))’’,

23 (D) in paragraph (48)—

24 (i) by striking ‘‘(15 U.S.C. 78q-1)’’,

25 and
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1 (ii) by striking ‘‘(15 U.S.C. 78c(12))’’,

2 (E) in paragraph (49)—

3 (i) in subparagraph (A)(xii)—

4 (I) by striking ‘‘(15 U.S.C. 77a et

5 seq.)’’, and

6 (II) by striking ‘‘(15 U.S.C.

7 77c(b))’’, and

8 (ii) in subparagraph (B)(vi) by strik9 ing ‘‘(15 U.S.C. 77c(b))’’, and

10 (F) in paragraph (53D), as so redesignated

11 by subsection (a), by striking the period at the

12 end and inserting a semicolon,

13 (2) in section 109(b)(2) by striking ‘‘(12 U.S.C.

14 1813(h))’’,

15 (3) in section 322(a) by striking ‘‘1302, or 1202’’

16 and inserting ‘‘1202, or 1302’’,

17 (4) in section 346—

18 (A) in subsection (a) by striking ‘‘Internal

19 Revenue Code of 1954 (26 U.S.C. 1 et seq.)’’ and

20 inserting ‘‘Internal Revenue Code of 1986’’, and

21 (B) in subsection (g)(1)(C) by striking ‘‘In22 ternal Revenue Code of 1954 (26 U.S.C. 371)’’

23 and inserting ‘‘Internal Revenue Code of 1986’’,

24 (5) in section 348—
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1 (A) in subsection (b) by striking ‘‘1301(a),

2 1305(a), 1201(a), 1221, and 1228(a)’’ and in3 serting ‘‘1201(a), 1221, 1228(a), 1301(a), and

4 1305(a)’’, and

5 (B) in subsections (b), (c), (d), and (e) by

6 striking ‘‘1307, or 1208’’ each place it appears

7 and inserting ‘‘1208, or 1307’’,

8 (6) in section 349(a) by striking ‘‘109(f)’’ and

9 inserting ‘‘109(g)’’,

10 (7) in section 362—

11 (A) in subsection (a) by striking ‘‘(15

12 U.S.C. 78eee(a)(3))’’, and

13 (B) in subsection (b)—

14 (i) by striking ‘‘(15 U.S.C.

15 78eee(a)(3))’’,

16 (ii) in paragraph (10) by striking ‘‘or’’

17 at the end,

18 (iii) in paragraph (12)—

19 (I) by striking ‘‘the Ship Mort20 gage Act, 1920 (46 App. U.S.C. 911 et

21 seq.)’’ and inserting ‘‘section 31325 of

22 title 46’’, and

23 (II) by striking ‘‘(46 App. U.S.C.

24 1117 and 1271 et seq., respectively)’’,

25 (iv) in paragraph (13)—
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1 (I) by striking ‘‘the Ship Mort2 gage Act, 1920 (46 App. U.S.C. 911 et

3 seq.)’’ each place it appears and insert4 ing ‘‘section 31325 of title 46’’,

5 (II) by striking ‘‘(46 App. U.S.C.

6 1117 and 1271 et seq., respectively)’’,

7 and

8 (III) by striking ‘‘or’’ at the end,

9 (v) in paragraph (15), as added by

10 Public Law 101–508, by striking ‘‘or’’ at

11 the end,

12 (vi) in paragraph (16), as added by

13 Public Law 101–508—

14 (I) by striking ‘‘(20 U.S.C. 1001

15 et seq.)’’, and

16 (II) by striking the period at the

17 end and inserting a semicolon, and

18 (vii) in paragraph (14), as added by

19 Public Law 101–311—

20 (I) by striking the period at the

21 end and inserting ‘‘; or’’,

22 (II) by redesignating such para23 graph as paragraph (17), and
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1 (III) by transferring such para2 graph so as to insert such paragraph

3 after paragraph (16),

4 (8) in section 363—

5 (A) in subsection (b)(2) by striking ‘‘(15

6 U.S.C. 18a)’’, and

7 (B) in subsection (c)(1) by striking ‘‘1304,

8 1203, or 1204’’ and inserting ‘‘1203, 1204, or

9 1304’’,

10 (9) in section 364—

11 (A) in subsection (a) by striking ‘‘1304,

12 1203, or 1204’’ and inserting ‘‘1203, 1204, or

13 1304’’, and

14 (B) in subsection (f)—

15 (i) by striking ‘‘(15 U.S.C. 77e)’’, and

16 (ii) by striking ‘‘(15 U.S.C. 77aaa et

17 seq.)’’,

18 (10) in section 365—

19 (A) in subsection (d)(6)(C) by striking ‘‘the

20 Federal Aviation Act of 1958 (49 U.S.C. 1301)’’

21 and inserting ‘‘section 40102 of title 49’’,

22 (B) in subparagraphs (A) and (B) of sub23 section (g)(2) by striking ‘‘1307, or 1208’’ each

24 place it appears and inserting ‘‘1208, or 1307’’,
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1 (C) in subsection (n)(1)(B) by striking ‘‘to

2 to’’ and inserting ‘‘to’’,

3 (D) in subsection (o) by striking ‘‘the Fed4 eral’’ the first place it appears and all that fol5 lows through ‘‘successors,’’, and inserting ‘‘a Fed6 eral depository institutions regulatory agency (or

7 predecessor to such agency)’’, and

8 (E) by striking subsection (p),

9 (11) in section 507, as amended by section 304—

10 (A) in subsection (a)(9) by striking ‘‘the

11 Federal’’ the first place it appears and all that

12 follows through ‘‘successors,’’, and inserting ‘‘a

13 Federal depository institutions regulatory agency

14 (or predecessor to such agency)’’, and

15 (B) in subsection (d) by striking ‘‘or (a)(6)’’

16 and inserting ‘‘(a)(6), (a)(7), (a)(8), or (a)(9)’’,

17 (12) in section 522—

18 (A) in subsection (b) by striking ‘‘Bank19 ruptcy Rules’’ and inserting ‘‘Federal Rules of

20 Bankruptcy Procedure’’, and

21 (B) in subsection (d)(10)(E)(iii)—

22 (i) by striking ‘‘408, or 409’’ the first

23 place it appears and inserting ‘‘or 408’’,

24 and
102

H.L.C.

1 (ii) by striking ‘‘Internal Revenue

2 Code of 1954 (26 U.S.C. 401(a), 403(a),

3 403(b), 408, or 409)’’ and inserting ‘‘Inter4 nal Revenue Code of 1986’’,

5 (13) in section 523—

6 (A) in subsection (a)—

7 (i) by striking ‘‘1141,,’’ and inserting

8 ‘‘1141,’’, and

9 (ii) in paragraph (2)(C) by striking

10 ‘‘(15 U.S.C. 1601 et seq.)’’,

11 (B) in subsection (b)—

12 (i) by striking ‘‘(20 U.S.C. 1087-3)’’,

13 and

14 (ii) by striking ‘‘(42 U.S.C. 294f)’’,

15 and

16 (C) in subsection (e) by striking ‘‘depository

17 institution or insured credit union’’ and insert18 ing ‘‘insured depository institution’’,

19 (14) in section 524—

20 (A) in subsection (a)(3) by striking

21 ‘‘1328(c)(1)’’ and inserting ‘‘1328(a)(1)’’,

22 (B) in subsection (c)(4) by striking

23 ‘‘recission’’ and inserting ‘‘rescission’’, and

24 (C) in subsection (d)(1)(B)(ii) by adding

25 ‘‘and’’ at the end,
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1 (15) in section 525(a)—

2 (A) by striking ‘‘(7 U.S.C. 499a-499s)’’,

3 (B) by striking ‘‘(7 U.S.C. 181-229)’’, and

4 (C) by striking ‘‘(57 Stat. 422; 7 U.S.C.

5 204)’’,

6 (16) in section 542(e) by striking ‘‘to to’’ and in7 serting ‘‘to’’,

8 (17) in section 543(d)(1) by striking ‘‘section,’’

9 and inserting ‘‘section’’,

10 (18) in section 549(b) inserting ‘‘the trustee may

11 not avoid under subsection (a) of this section’’ after

12 ‘‘involuntary case,’’,

13 (19) in section 553—

14 (A) in subsection (a)(1) by striking ‘‘other

15 than under section 502(b)(3) of this title’’, and

16 (B) in subsection (b)(1) by striking

17 ‘‘362(b)(14),,’’ and inserting ‘‘362(b)(14),’’,

18 (20) in section 555 by striking ‘‘(15 U.S.C.

19 78aaa et seq.)’’,

20 (21) in section 559 by striking ‘‘(15 U.S.C.

21 78aaa et seq.)’’,

22 (22) in section 706(a) by striking ‘‘1307, or

23 1208’’ and inserting ‘‘1208, or 1307’’,
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1 (23) in section 724(d) by striking ‘‘Internal Rev2 enue Code of 1954 (26 U.S.C. 6323)’’ and inserting

3 ‘‘Internal Revenue Code of 1986’’,

4 (24) in section 726(b)—

5 (A) inserting a comma after ‘‘section 1112’’,

6 and

7 (B) by inserting ‘‘1009,’’ after ‘‘chapter

8 under section’’,

9 (25) in section 741(4)(A)(iii) by striking ‘‘(15

10 U.S.C. 78a et seq.)’’,

11 (26) in section 742 by striking ‘‘(15 U.S.C.

12 78aaa et seq.)’’,

13 (27) in section 743 by striking ‘‘342(a)’’ and in14 serting ‘‘342’’,

15 (28) in section 745(c) by striking ‘‘Internal Rev16 enue Code of 1954 (26 U.S.C. 1 et seq.)’’ and insert17 ing ‘‘Internal Revenue Code of 1986’’,

18 (29) in section 761—

19 (A) in paragraph (1) by striking ‘‘(7 U.S.C.

20 1 et seq.)’’,

21 (B) in paragraph (5) by striking ‘‘(7 U.S.C.

22 6c(b))’’, and

23 (C) in paragraph (13) by striking ‘‘(7

24 U.S.C. 23)’’,
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1 (30) in section 1104(d), as redesignated by sec2 tion 211, inserting a comma after ‘‘interest’’,

3 (31) in section 1123(a)(1) inserting a comma

4 after ‘‘title’’ the last place it appears,

5 (32) in section 1129—

6 (A) in subsection (a)—

7 (i) in paragraph (4) by striking the

8 semicolon at the end and inserting a period,

9 and

10 (ii) in paragraph (12) inserting ‘‘of

11 title 28’’ after ‘‘section 1930’’, and

12 (B) in subsection (d) by striking ‘‘(15

13 U.S.C. 77e)’’,

14 (33) in section 1145—

15 (A) in subsection (a)—

16 (i) by striking ‘‘does’’ and inserting

17 ‘‘do’’,

18 (ii) by striking ‘‘(15 U.S.C. 77e)’’, and

19 (iii) in paragraph (3)(B)(i) by strik20 ing ‘‘(15 U.S.C. 78m or 78o(d))’’,

21 (B) in subsection (b)(1) by striking ‘‘(15

22 U.S.C. 77b(11))’’, and

23 (C) in subsection (d) by striking ‘‘(15

24 U.S.C. 77aaa et seq.)’’,
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1 (34) in section 1166(2) by striking ‘‘(45 U.S.C.

2 791(b))’’,

3 (35) in section 1167—

4 (A) by striking ‘‘(45 U.S.C. 151 et seq.)’’,

5 and

6 (B) by striking ‘‘(45 U.S.C. 156)’’,

7 (36) in section 1226(b)(2)—

8 (A) by striking ‘‘1202(d)’’ and inserting

9 ‘‘1202(c)’’, and

10 (B) by striking ‘‘1202(e)’’ and inserting

11 ‘‘1202(d)’’,

12 (37) in section 1302(b)(3) by striking ‘‘and’’ at

13 the end, and

14 (38) in section 1328(a)—

15 (A) in paragraph (2) by striking ‘‘(5) or

16 (8)’’ and inserting ‘‘(5), (8), or (9)’’, and

17 (B) by striking the last paragraph (3), and

18 (39) in the table of chapters by striking the item

19 relating to chapter 15.

20 SEC. 502. TITLE 28 OF THE UNITED STATES CODE.

21 Section 586(a)(3) of title 28, United States Code, is

22 amended in the matter preceding subparagraph (A) by in23 serting ‘‘12,’’ after ‘‘11,’’.
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1 TITLE VI—BANKRUPTCY REVIEW

2 COMMISSION

3 SEC. 601. SHORT TITLE.

4 This title may be cited as the ‘‘National Bankruptcy

5 Review Commission Act’’.

6 SEC. 602. ESTABLISHMENT.

7 There is established the National Bankruptcy Review

8 Commission (referred to as the ‘‘Commission’’).

9 SEC. 603. DUTIES OF THE COMMISSION.

10 The duties of the Commission are—

11 (1) to investigate and study issues and problems

12 relating to title 11, United States Code (commonly

13 known as the ‘‘Bankruptcy Code’’);

14 (2) to evaluate the advisability of proposals and

15 current arrangements with respect to such issues and

16 problems;

17 (3) to prepare and submit to the Congress, the

18 Chief Justice, and the President a report in accord19 ance with section 608; and

20 (4) to solicit divergent views of all parties con21 cerned with the operation of the bankruptcy system.

22 SEC. 604. MEMBERSHIP.

23 (a) NUMBER AND APPOINTMENT.—The Commission

24 shall be composed of 9 members as follows:
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1 (1) Three members appointed by the President, 1

2 of whom shall be designated as chairman by the

3 President.

4 (2) One member shall be appointed by the Presi5 dent pro tempore of the Senate.

6 (3) One member shall be appointed by the Mi7 nority Leader of the Senate.

8 (4) One member shall be appointed by the

9 Speaker of the House of Representatives.

10 (5) One member shall be appointed by the Mi11 nority Leader of the House of Representatives.

12 (6) Two members appointed by the Chief Justice.

13 Members of Congress, and officers and employees of the exec14 utive branch, shall be ineligible for appointment to the

15 Commission.

16 (b) TERM.—Members of the Commission shall be ap17 pointed for the life of the Commission.

18 (c) QUORUM.—Five members of the Commission shall

19 constitute a quorum, but a lesser number may conduct

20 meetings.

21 (d) APPOINTMENT DEADLINE.—The first appoint22 ments made under subsection (a) shall be made within 60

23 days after the date of enactment of this Act.
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1 (e) FIRST MEETING.—The first meeting of the Com2 mission shall be called by the chairman and shall be held

3 within 210 days after the date of enactment of this Act.

4 (f) VACANCY.—A vacancy on the Commission resulting

5 from the death or resignation of a member shall not affect

6 its powers and shall be filled in the same manner in which

7 the original appointment was made.

8 (g) CONTINUATION OF MEMBERSHIP.—If any member

9 of the Commission who was appointed to the Commission

10 as an officer or employee of a government leaves that office,

11 or if any member of the Commission who was not appointed

12 in such a capacity becomes an officer or employee of a gov13 ernment, the member may continue as a member of the

14 Commission for not longer than the 90-day period begin15 ning on the date the member leaves that office or becomes

16 such an officer or employee, as the case may be.

17 (h) CONSULTATION PRIOR TO APPOINTMENT.—Prior

18 to the appointment of members of the Commission, the

19 President, the President pro tempore of the Senate, the

20 Speaker of the House of Representatives, and the Chief Jus21 tice shall consult with each other to ensure fair and equi22 table representation of various points of view in the Com23 mission and its staff.

24 SEC. 605. COMPENSATION OF THE COMMISSION.

25 (a) PAY.—
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1 (1) NONGOVERNMENT EMPLOYEES.—Each mem2 ber of the Commission who is not otherwise employed

3 by the United States Government shall be entitled to

4 receive the daily equivalent of the annual rate of basic

5 pay payable for level IV of the Executive Schedule

6 under section 5315 of title 5, United States Code, for

7 each day (including travel time) during which he or

8 she is engaged in the actual performance of duties as

9 a member of the Commission.

10 (2) GOVERNMENT EMPLOYEES.—A member of the

11 Commission who is an officer or employee of the

12 United States Government shall serve without addi13 tional compensation.

14 (b) TRAVEL.—Members of the Commission shall be re15 imbursed for travel, subsistence, and other necessary ex16 penses incurred by them in the performance of their duties.

17 SEC. 606. STAFF OF COMMISSION; EXPERTS AND CONSULT18 ANTS.

19 (a) STAFF.—

20 (1) APPOINTMENT.—The chairman of the Com21 mission may, without regard to the civil service laws

22 and regulations, appoint, and terminate an executive

23 director and such other personnel as are necessary to

24 enable the Commission to perform its duties. The em-
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1 ployment of an executive director shall be subject to

2 confirmation by the Commission.

3 (2) COMPENSATION.—The chairman of the Com4 mission may fix the compensation of the executive di5 rector and other personnel without regard to the pro6 visions of chapter 51 and subchapter II of chapter 53

7 of title 5, United States Code, relating to classifica8 tion of positions and General Schedule pay rates, ex9 cept that the rate of pay for the executive director and

10 other personnel may not exceed the rate payable for

11 level V of the Executive Schedule under section 5316

12 of that title.

13 (b) EXPERTS AND CONSULTANTS.—The Commission

14 may procure temporary and intermittent services of experts

15 and consultants under section 3109(b) of title 5, United

16 States Code.

17 SEC. 607. POWERS OF THE COMMISSION.

18 (a) HEARINGS AND MEETINGS.—The Commission or,

19 on authorization of the Commission, a member of the Com20 mission, may hold such hearings, sit and act at such time

21 and places, take such testimony, and receive such evidence,

22 as the Commission considers appropriate. The Commission

23 or a member of the Commission may administer oaths or

24 affirmations to witnesses appearing before it.
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1 (b) OFFICIAL DATA.—The Commission may secure di2 rectly from any Federal department, agency, or court infor3 mation necessary to enable it to carry out this title. Upon

4 request of the chairman of the Commission, the head of a

5 Federal department or agency or chief judge of a Federal

6 court shall furnish such information, consistent with law,

7 to the Commission.

8 (c) FACILITIES AND SUPPORT SERVICES.—The Ad9 ministrator of General Services shall provide to the Com10 mission on a reimbursable basis such facilities and support

11 services as the Commission may request. Upon request of

12 the Commission, the head of a Federal department or agen13 cy may make any of the facilities or services of the agency

14 available to the Commission to assist the Commission in

15 carrying out its duties under this title.

16 (d) EXPENDITURES AND CONTRACTS.—The Commis17 sion or, on authorization of the Commission, a member of

18 the Commission may make expenditures and enter into con19 tracts for the procurement of such supplies, services, and

20 property as the Commission or member considers appro21 priate for the purposes of carrying out the duties of the

22 Commission. Such expenditures and contracts may be made

23 only to such extent or in such amounts as are provided in

24 appropriation Acts.
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H.L.C.

1 (e) MAILS.—The Commission may use the United

2 States mails in the same manner and under the same condi3 tions as other Federal departments and agencies of the

4 United States.

5 (f) GIFTS.—The Commission may accept, use, and dis6 pose of gifts or donations of services or property.

7 SEC. 608. REPORT.

8 The Commission shall submit to the Congress, the Chief

9 Justice, and the President a report not later than 2 years

10 after the date of its first meeting. The report shall contain

11 a detailed statement of the findings and conclusions of the

12 Commission, together with its recommendations for such

13 legislative or administrative action as it considers appro14 priate.

15 SEC. 609. TERMINATION.

16 The Commission shall cease to exist on the date that

17 is 30 days after the date on which it submits its report

18 under section 608.

19 SEC. 610. AUTHORIZATION OF APPROPRIATIONS.

20 There is authorized to be appropriated $1,500,000 to

21 carry out this title.
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1 TITLE VII—SEVERABILITY; EF2 FECTIVE DATE; APPLICATION

3 OF AMENDMENTS.

4 SEC. 701. SEVERABILITY.

5 If any provision of this Act or amendment made by

6 this Act or the application of such provision or amendment

7 to any person or circumstance is held to be unconstitu8 tional, the remaining provisions of and amendments made

9 by this Act and the application of such other provisions

10 and amendments to any person or circumstance shall not

11 be affected thereby.

12 SEC. 702. EFFECTIVE DATE; APPLICATION OF AMEND13 MENTS.

14 (a) EFFECTIVE DATE.—Except as provided in sub15 section (b), this Act shall take effect on the date of the enact16 ment of this Act.

17 (b) APPLICATION OF AMENDMENTS.—(1) Except as

18 provided in paragraph (2), the amendments made by this

19 Act shall not apply with respect to cases commenced under

20 title 11 of the United States Code before the date of the en21 actment of this Act.

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

23 the amendment made by section 111.

24 (B) The amendments made by sections 113 and 117

25 shall apply with respect to cases commenced under title 11
115

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1 of the United States Code before, on, and after the date of

2 the enactment of this Act.

3 (C) Section 1110 of title 11, United States Code, as

4 amended by section 201 of this Act, shall apply with respect

5 to any lease, as defined in such section 1110(c) as so amend6 ed, entered into in connection with a settlement of any pro7 ceeding in any case pending under title 11 of the United

8 States Code on the date of the enactment of this Act.

9 (D) The amendments made by section 305 shall apply

10 only to agreements entered into after the date of enactment

11 of this Act.