II

103D CONGRESS

2D SESSION H.R. 5116

IN THE SENATE OF THE UNITED STATES

OCTOBER 6 (legislative day, SEPTEMBER 12), 1994

Received

AN ACT

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’’.

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

7 as follows:
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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.

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.
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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

7 ‘‘concluded’’, 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

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

12 court 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 fol19 lowing:

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

21 ‘‘(2) from interlocutory orders and decrees is22 sued under section 1121(d) of title 11 increasing or

23 reducing the time periods referred to in section 1121

24 of such title; and
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1 ‘‘(3) with leave of the court, from other inter2 locutory orders and decrees;’’.

3 SEC. 103. EXPEDITED PROCEDURE FOR REAFFIRMATION

4 OF DEBTS.

5 (a) REAFFIRMATION.—Section 524(c) of title 11,

6 United 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),

11 as 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’’

24 after ‘‘(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’’

3 after ‘‘(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

7 of the legal effect and consequences of—

8 ‘‘(i) an agreement of the kind speci9 fied 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

24 case or proceeding under this title after notice to the

25 parties in interest; and
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1 ‘‘(2) unless inconsistent with another provision

2 of this title or with applicable Federal Rules of

3 Bankruptcy Procedure, issue an order at any such

4 conference prescribing such limitations and condi5 tions as the court deems appropriate to ensure that

6 the case is handled expeditiously and economically,

7 including an order that—

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

9 must 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,

14 or trustee if one has been appointed, shall

15 file a disclosure statement and plan;

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

17 or trustee if one has been appointed, shall

18 solicit acceptances of a plan;

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

20 in interest other than a debtor may file a

21 plan;

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

23 of a plan, other than the debtor, shall so24 licit 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 sub11 section (e), and

12 (2) in the second sentence of subsection

13 (c)(2)—

14 (A) by inserting ‘‘(other than a decision

15 not to abstain in a proceeding described in sub16 section (c)(2))’’ after ‘‘subsection’’, and

17 (B) by striking ‘‘Any’’ and inserting the

18 following:

19 ‘‘(d) Any’’.

20 (c) ESTABLISHMENT, OPERATION, AND TERMI21 NATION OF BANKRUPTCY APPELLATE PANEL SERVICE.—

22 Section 158(b) of title 28, United States Code, is amend23 ed—

24 (1) by striking paragraphs (3) and (4),
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1 (2) by redesignating paragraph (2) as para2 graph (4),

3 (3) by striking paragraph (1) and inserting the

4 following:

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

6 a bankruptcy appellate panel service composed of bank7 ruptcy judges of the districts in the circuit who are ap8 pointed by the judicial council in accordance with para9 graph (3), to hear and determine, with the consent of all

10 the parties, appeals under subsection (a) unless the judi11 cial council finds that—

12 ‘‘(A) there are insufficient judicial resources

13 available in the circuit; or

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

15 in undue delay or increased cost to parties in cases

16 under title 11.

17 Not later than 90 days after making the finding, the judi18 cial council shall submit to the Judicial Conference of the

19 United States a report containing the factual basis of such

20 finding.

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

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

23 ‘‘(B) On the request of a majority of the district

24 judges in a circuit for which a bankruptcy appellate panel

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

2 service is established, the judicial council of the circuit

3 shall determine whether a circumstance specified in sub4 paragraph (A) or (B) of such paragraph exists.

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

6 3-year period beginning on the date a bankruptcy appel7 late panel service is established under paragraph (1), the

8 judicial council of the circuit may determine whether a cir9 cumstance specified in subparagraph (A) or (B) of such

10 paragraph exists.

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

12 circumstances exists, the judicial council may provide for

13 the completion of the appeals then pending before such

14 service and the orderly termination of such service.

15 ‘‘(3) Bankruptcy judges appointed under paragraph

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

17 paragraph.’’, and

18 (4) by inserting after paragraph (4), as so re19 designated, the following:

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

21 shall be heard by a panel of 3 members of the bankruptcy

22 appellate panel service, except that a member of such serv23 ice may not hear an appeal originating in the district for

24 which such member is appointed or designated under sec25 tion 152 of this title.
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1 ‘‘(6) Appeals may not be heard under this subsection

2 by a panel of the bankruptcy appellate panel service unless

3 the district judges for the district in which the appeals

4 occur, by majority vote, have authorized such service to

5 hear and determine appeals originating in such district.’’.

6 (d) APPEALS TO BE HEARD BY BANKRUPTCY AP7 PELLATE PANEL SERVICE.—Section 158 of title 28, Unit8 ed States Code, is amended—

9 (1) in subsection (c) by striking ‘‘(c)’’ and in10 serting ‘‘(2)’’, and

11 (2) by inserting after subsection (b) the follow12 ing:

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

14 subsection (a) shall be heard by a 3-judge panel of the

15 bankruptcy appellate panel service established under sub16 section (b)(1) unless—

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

18 the appeal; or

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

20 days after service of notice of the appeal;

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

22 (e) RULES OF PROCEDURE AND EVIDENCE; METHOD

23 OF PRESCRIBING.—Section 2073 of title 28, United

24 States Code, is amended—
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1 (1) in subsection (a)(2) by striking ‘‘section

2 2072’’ and inserting ‘‘sections 2072 and 2075’’, and

3 (2) in subsections (d) and (e) by inserting ‘‘or

4 2075’’ after ‘‘2072’’ each place it appears.

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

6 third undesignated paragraph of section 2075 of title 28,

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

8 ‘‘The Supreme Court shall transmit to Congress not

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

10 under this section is to become effective a copy of the pro11 posed rule. The rule shall take effect no earlier than De12 cember 1 of the year in which it is transmitted to Congress

13 unless otherwise provided by law.’’.

14 SEC. 105. PARTICIPATION BY BANKRUPTCY ADMINIS15 TRATOR AT MEETINGS OF CREDITORS AND

16 EQUITY SECURITY HOLDERS.

17 (a) PRESIDING OFFICER.—A bankruptcy adminis18 trator appointed under section 302(d)(3)(I) of the Bank19 ruptcy Judges, United States Trustees, and Family Farm20 er Bankruptcy Act of 1986 (28 U.S.C. 581 note; Public

21 Law 99–554; 100 Stat. 3123), as amended by section

22 317(a) of the Federal Courts Study Committee Implemen23 tation Act of 1990 (Public Law 101–650; 104 Stat. 5115),

24 or the bankruptcy administrator’s designee may preside

25 at the meeting of creditors convened under section 341(a)
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1 of title 11, United States Code. The bankruptcy adminis2 trator or the bankruptcy administrator’s designee may

3 preside at any meeting of equity security holders convened

4 under section 341(b) of title 11, United States Code.

5 (b) EXAMINATION OF THE DEBTOR.—The bank6 ruptcy administrator or the bankruptcy administrator’s

7 designee may examine the debtor at the meeting of credi8 tors and may administer the oath required under section

9 343 of title 11, United States Code.

10 SEC. 106. DEFINITION RELATING TO ELIGIBILITY TO SERVE

11 ON CHAPTER 11 COMMITTEES.

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

13 amended to read as follows:

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

15 and corporation, but does not include governmental

16 unit, except that a governmental unit that—

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

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

19 loan guarantee agreement; or

20 ‘‘(ii) as receiver or liquidating agent

21 of a person;

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

23 payable by or on behalf of the debtor or an af24 filiate of the debtor; or
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1 ‘‘(C) is the legal or beneficial owner of an

2 asset of—

3 ‘‘(i) an employee pension benefit plan

4 that is a governmental plan, as defined in

5 section 414(d) of the Internal Revenue

6 Code of 1986; or

7 ‘‘(ii) an eligible deferred compensation

8 plan, as defined in section 457(b) of the

9 Internal Revenue Code of 1986;

10 shall be considered, for purposes of section 1102 of

11 this title, to be a person with respect to such asset

12 or such benefit;’’.

13 SEC. 107. INCREASED INCENTIVE COMPENSATION FOR

14 TRUSTEES.

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

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

17 ‘‘$3,000’’ the last place it appears, and inserting the fol18 lowing:

19 ‘‘25 percent on the first $5,000 or less, 10 percent on any

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

21 5 percent on any amount in excess of $50,000 but not

22 in excess of $1,000,000, and reasonable compensation not

23 to exceed 3 percent of such moneys in excess of

24 $1,000,000’’.
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1 SEC. 108. DOLLAR ADJUSTMENTS.

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

3 Section 109(e) of title 11, United States Code,

4 is amended—

5 (1) by striking ‘‘$100,000’’ each place it ap6 pears and inserting ‘‘$250,000’’, and

7 (2) by striking ‘‘$350,000’’ each place it ap8 pears and inserting ‘‘$750,000’’.

9 (b) INVOLUNTARY CASES.—Section 303(b) of title

10 11, United States Code, is amended—

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

12 inserting ‘‘$10,000’’, and

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

14 inserting ‘‘$10,000’’.

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

16 States Code, is amended—

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

18 and inserting ‘‘$4,000’’,

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

20 inserting ‘‘$4,000’’, and

21 (3) in paragraph (6) by striking ‘‘$900’’ and in22 serting ‘‘$1,800’’.

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

24 States Code, is amended—

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

26 inserting ‘‘$15,000’’,
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1 (2) in paragraph (2) by striking ‘‘$1,200’’ and

2 inserting ‘‘$2,400’’,

3 (3) in paragraph (3)—

4 (A) by striking ‘‘$200’’ and inserting

5 ‘‘$400’’, and

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

7 ‘‘$8,000’’,

8 (4) in paragraph (4) by striking ‘‘$500’’ and in9 serting ‘‘$1,000’’,

10 (5) in paragraph (5)—

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

12 ‘‘$800’’, and

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

14 ‘‘$7,500’’,

15 (6) in paragraph (6) by striking ‘‘$750’’ and in16 serting ‘‘$1,500’’,

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

18 inserting ‘‘$8,000’’, and

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

20 and inserting ‘‘$15,000’’.

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

22 United States Code, is amended—

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

24 (2) by adding at the end the following:
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1 ‘‘(b)(1) On April 1, 1998, and at each 3-year interval

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

3 under sections 109(e), 303(b), 507(a), 522(d), and

4 523(a)(2)(C) immediately before such April 1 shall be ad5 justed—

6 ‘‘(A) to reflect the change in the Consumer

7 Price Index for All Urban Consumers, published by

8 the Department of Labor, for the most recent 3-year

9 period ending immediately before January 1 preced10 ing such April 1, and

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

12 amount that represents such change.

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

14 year interval ending on March 1 thereafter, the Judicial

15 Conference of the United States shall publish in the Fed16 eral Register the dollar amounts that will become effective

17 on such April 1 under sections 109(e), 303(b), 507(a),

18 522(d), and 523(a)(2)(C) of this title.

19 ‘‘(3) Adjustments made in accordance with para20 graph (1) shall not apply with respect to cases commenced

21 before the date of such adjustments.’’.

22 SEC. 109. PREMERGER NOTIFICATION.

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

24 title 11, United States Code, are amended to read as fol25 lows:
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1 ‘‘(A) notwithstanding subsection (a) of

2 such section, the notification required by such

3 subsection to be given by the debtor shall be

4 given by the trustee; and

5 ‘‘(B) notwithstanding subsection (b) of

6 such section, the required waiting period shall

7 end on the 15th day after the date of the re8 ceipt, by the Federal Trade Commission and

9 the Assistant Attorney General in charge of the

10 Antitrust Division of the Department of Jus11 tice, of the notification required under such

12 subsection (a), unless such waiting period is ex13 tended—

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

15 such section, in the same manner as such

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

17 offer;

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

19 such section; or

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

21 hearing.’’.

22 SEC. 110. ALLOWANCE OF CREDITOR COMMITTEE EX23 PENSES.

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

25 amended—
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1 (1) in subparagraph (D) by striking ‘‘or’’ at the

2 end,

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

4 the end, and

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

6 ‘‘(F) a member of a committee appointed

7 under section 1102 of this title, if such ex8 penses are incurred in the performance of the

9 duties of such committee;’’.

10 SEC. 111. SUPPLEMENTAL INJUNCTIONS.

11 (a) SUPPLEMENTAL INJUNCTIONS.—Section 524 of

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

13 end the following:

14 ‘‘(g)(1)(A) After notice and hearing, a court that en15 ters an order confirming a plan of reorganization under

16 chapter 11 may issue, in connection with such order, an

17 injunction in accordance with this subsection to supple18 ment the injunctive effect of a discharge under this sec19 tion.

20 ‘‘(B) An injunction may be issued under subpara21 graph (A) to enjoin entities from taking legal action for

22 the purpose of directly or indirectly collecting, recovering,

23 or receiving payment or recovery with respect to any claim

24 or demand that, under a plan of reorganization, is to be

25 paid in whole or in part by a trust described in paragraph
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1 (2)(B)(i), except such legal actions as are expressly al2 lowed by the injunction, the confirmation order, or the

3 plan of reorganization.

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

5 of subparagraph (B) are met at the time an injunction

6 described in paragraph (1) is entered, then after entry of

7 such injunction, any proceeding that involves the validity,

8 application, construction, or modification of such injunc9 tion, or of this subsection with respect to such injunction,

10 may be commenced only in the district court in which such

11 injunction was entered, and such court shall have exclusive

12 jurisdiction over any such proceeding without regard to

13 the amount in controversy.

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

15 that—

16 ‘‘(i) the injunction is to be implemented in con17 nection with a trust that, pursuant to the plan of re18 organization—

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

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

21 has been named as a defendant in personal in22 jury, wrongful death, or property-damage ac23 tions seeking recovery for damages allegedly

24 caused by the presence of, or exposure to, as25 bestos or asbestos-containing products;
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1 ‘‘(II) is to be funded in whole or in part

2 by the securities of 1 or more debtors involved

3 in such plan and by the obligation of such debt4 or or debtors to make future payments, includ5 ing dividends;

6 ‘‘(III) is to own, or by the exercise of

7 rights granted under such plan would be enti8 tled to own if specified contingencies occur, a

9 majority of the voting shares of—

10 ‘‘(aa) each such debtor;

11 ‘‘(bb) the parent corporation of each

12 such debtor; or

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

14 that is also a debtor; and

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

16 claims and demands; and

17 ‘‘(ii) subject to subsection (h), the court deter18 mines that—

19 ‘‘(I) the debtor is likely to be subject to

20 substantial future demands for payment arising

21 out of the same or similar conduct or events

22 that gave rise to the claims that are addressed

23 by the injunction;
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1 ‘‘(II) the actual amounts, numbers, and

2 timing of such future demands cannot be deter3 mined;

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

5 procedures prescribed by such plan is likely to

6 threaten the plan’s purpose to deal equitably

7 with claims and future demands;

8 ‘‘(IV) as part of the process of seeking

9 confirmation of such plan—

10 ‘‘(aa) the terms of the injunction pro11 posed to be issued under paragraph (1)(A),

12 including any provisions barring actions

13 against third parties pursuant to para14 graph (4)(A), are set out in such plan and

15 in any disclosure statement supporting the

16 plan; and

17 ‘‘(bb) a separate class or classes of

18 the claimants whose claims are to be ad19 dressed by a trust described in clause (i) is

20 established and votes, by at least 75 per21 cent of those voting, in favor of the plan;

22 and

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

24 court orders or otherwise, the trust will operate

25 through mechanisms such as structured, peri-
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1 odic, or supplemental payments, pro rata dis2 tributions, matrices, or periodic review of esti3 mates of the numbers and values of present

4 claims and future demands, or other com5 parable mechanisms, that provide reasonable

6 assurance that the trust will value, and be in a

7 financial position to pay, present claims and fu8 ture demands that involve similar claims in sub9 stantially the same manner.

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

11 met and the order confirming the plan of reorganization

12 was issued or affirmed by the district court that has juris13 diction over the reorganization case, then after the time

14 for appeal of the order that issues or affirms the plan—

15 ‘‘(i) the injunction shall be valid and enforce16 able and may not be revoked or modified by any

17 court except through appeal in accordance with

18 paragraph (6);

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

20 thereafter becomes a direct or indirect transferee of,

21 or successor to any assets of, a debtor or trust that

22 is the subject of the injunction shall be liable with

23 respect to any claim or demand made against such

24 entity by reason of its becoming such a transferee or

25 successor; and
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1 ‘‘(iii) no entity that pursuant to such plan or

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

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

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

5 or demand made against such entity, nor shall any

6 pledge of assets made in connection with such a loan

7 be upset or impaired for that reason;

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

9 ‘‘(i) imply that an entity described in subpara10 graph (A) (ii) or (iii) would, if this paragraph were

11 not applicable, necessarily be liable to any entity by

12 reason of any of the acts described in subparagraph

13 (A);

14 ‘‘(ii) relieve any such entity of the duty to com15 ply with, or of liability under, any Federal or State

16 law regarding the making of a fraudulent convey17 ance in a transaction described in subparagraph (A)

18 (ii) or (iii); or

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

20 to comply with the terms of the plan of reorganiza21 tion, or affect the power of the court to exercise its

22 authority under sections 1141 and 1142 to compel

23 the debtor to do so.
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1 ‘‘(4)(A)(i) Subject to subparagraph (B), an injunc2 tion described in paragraph (1) shall be valid and enforce3 able against all entities that it addresses.

4 ‘‘(ii) Notwithstanding the provisions of section

5 524(e), such an injunction may bar any action directed

6 against a third party who is identifiable from the terms

7 of such injunction (by name or as part of an identifiable

8 group) and is alleged to be directly or indirectly liable for

9 the conduct of, claims against, or demands on the debtor

10 to the extent such alleged liability of such third party

11 arises by reason of—

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

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

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

15 ‘‘(II) the third party’s involvement in the man16 agement of the debtor or a predecessor in interest

17 of the debtor, or service as an officer, director or

18 employee of the debtor or a related party;

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

20 to the debtor or a related party; or

21 ‘‘(IV) the third party’s involvement in a trans22 action changing the corporate structure, or in a loan

23 or other financial transaction affecting the financial

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

25 but not limited to—
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1 ‘‘(aa) involvement in providing financing

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

3 in such a transaction; or

4 ‘‘(bb) acquiring or selling a financial inter5 est in an entity as part of such a transaction.

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

7 party’ means—

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

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

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

11 in—

12 ‘‘(aa) the debtor;

13 ‘‘(bb) a past or present affiliate of the

14 debtor; or

15 ‘‘(cc) a predecessor in interest of the debt16 or.

17 ‘‘(B) Subject to subsection (h), if, under a plan of

18 reorganization, a kind of demand described in such plan

19 is to be paid in whole or in part by a trust described in

20 paragraph (2)(B)(i) in connection with which an injunc21 tion described in paragraph (1) is to be implemented, then

22 such injunction shall be valid and enforceable with respect

23 to a demand of such kind made, after such plan is con24 firmed, against the debtor or debtors involved, or against

25 a third party described in subparagraph (A)(ii), if—
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1 ‘‘(i) as part of the proceedings leading to issu2 ance of such injunction, the court appoints a legal

3 representative for the purpose of protecting the

4 rights of persons that might subsequently assert de5 mands of such kind, and

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

7 order confirming such plan, that identifying such

8 debtor or debtors, or such third party (by name or

9 as part of an identifiable group), in such injunction

10 with respect to such demands for purposes of this

11 subparagraph is fair and equitable with respect to

12 the persons that might subsequently assert such de13 mands, in light of the benefits provided, or to be

14 provided, to such trust on behalf of such debtor or

15 debtors or such third party.

16 ‘‘(5) In this subsection, the term ‘demand’ means a

17 demand for payment, present or future, that—

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

19 leading to the confirmation of a plan of reorganiza20 tion;

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

22 or events that gave rise to the claims addressed by

23 the injunction issued under paragraph (1); and

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

25 trust described in paragraph (2)(B)(i).
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1 ‘‘(6) Paragraph (3)(A)(i) does not bar an action

2 taken by or at the direction of an appellate court on appeal

3 of an injunction issued under paragraph (1) or of the

4 order of confirmation that relates to the injunction.

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

6 section 1144 or the power of the district court to refer

7 a proceeding under section 157 of title 28 or any reference

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

9 of this subsection.

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

11 purposes of subsection (g)—

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

13 of the kind described in subsection (g)(1)(B) was is14 sued before the date of the enactment of this Act,

15 as part of a plan of reorganization confirmed by an

16 order entered before such date, then the injunction

17 shall be considered to meet the requirements of sub18 section (g)(2)(B) for purposes of subsection

19 (g)(2)(A), and to satisfy subsection (g)(4)(A)(ii),

20 if—

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

22 plan was confirmed that the plan was fair and

23 equitable in accordance with the requirements

24 of section 1129(b);
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1 ‘‘(B) as part of the proceedings leading to

2 issuance of such injunction and confirmation of

3 such plan, the court had appointed a legal rep4 resentative for the purpose of protecting the

5 rights of persons that might subsequently assert

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

7 respect to such plan; and

8 ‘‘(C) such legal representative did not ob9 ject to confirmation of such plan or issuance of

10 such injunction; and

11 ‘‘(2) for purposes of paragraph (1), if a trust

12 described in subsection (g)(2)(B)(i) is subject to a

13 court order on the date of the enactment of this Act

14 staying such trust from settling or paying further

15 claims—

16 ‘‘(A) the requirements of subsection

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

18 such trust until such stay is lifted or dissolved;

19 and

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

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

22 trust shall be considered to have met such re23 quirements continuously from the date of the

24 enactment of this Act.’’.
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1 (b) RULE OF CONSTRUCTION.—Nothing in sub2 section (a), or in the amendments made by subsection (a),

3 shall be construed to modify, impair, or supersede any

4 other authority the court has to issue injunctions in con5 nection with an order confirming a plan of reorganization.

6 SEC. 112. AUTHORITY OF BANKRUPTCY JUDGES TO CON7 DUCT JURY TRIALS IN CIVIL PROCEEDINGS.

8 Section 157 of title 28, United States Code, is

9 amended by adding at the end the following:

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

11 that may be heard under this section by a bankruptcy

12 judge, the bankruptcy judge may conduct the jury trial

13 if specially designated to exercise such jurisdiction by the

14 district court and with the express consent of all the par15 ties.’’.

16 SEC. 113. SOVEREIGN IMMUNITY.

17 Section 106 of title 11, United States Code, is

18 amended to read as follows:

19 ‘‘§ 106. Waiver of sovereign immunity

20 ‘‘(a) Notwithstanding an assertion of sovereign im21 munity, sovereign immunity is abrogated as to a govern22 mental unit to the extent set forth in this section with

23 respect to the following:

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

25 362, 363, 364, 365, 366, 502, 503, 505, 506, 510,
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1 522, 523, 524, 525, 542, 543, 544, 545, 546, 547,

2 548, 549, 550, 551, 552, 553, 722, 724, 726, 728,

3 744, 749, 764, 901, 922, 926, 928, 929, 944, 1107,

4 1141, 1142, 1143, 1146, 1201, 1203, 1205, 1206,

5 1227, 1231, 1301, 1303, 1305, and 1327 of this

6 title.

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

8 issue arising with respect to the application of such

9 sections to governmental units.

10 ‘‘(3) The court may issue against a govern11 mental unit an order, process, or judgment under

12 such sections or the Federal Rules of Bankruptcy

13 Procedure, including an order or judgment awarding

14 a money recovery, but not including an award of pu15 nitive damages. Such order or judgment for costs or

16 fees under this title or the Federal Rules of Bank17 ruptcy Procedure against any governmental unit

18 shall be consistent with the provisions and limita19 tions of section 2412(d)(2)(A) of title 28.

20 ‘‘(4) The enforcement of any such order, proc21 ess, or judgment against any governmental unit shall

22 be consistent with appropriate nonbankruptcy law

23 applicable to such governmental unit and, in the

24 case of a money judgment against the United States,
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1 shall be paid as if it is a judgment rendered by a

2 district court of the United States.

3 ‘‘(5) Nothing in this section shall create any

4 substantive claim for relief or cause of action not

5 otherwise existing under this title, the Federal Rules

6 of Bankruptcy Procedure, or nonbankruptcy law.

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

8 claim in the case is deemed to have waived sovereign im9 munity with respect to a claim against such governmental

10 unit that is property of the estate and that arose out of

11 the same transaction or occurrence out of which the claim

12 of such governmental unit arose.

13 ‘‘(c) Notwithstanding any assertion of sovereign im14 munity by a governmental unit, there shall be offset

15 against a claim or interest of a governmental unit any

16 claim against such governmental unit that is property of

17 the estate.’’.

18 SEC. 114. SERVICE OF PROCESS IN BANKRUPTCY PROCEED19 INGS ON AN INSURED DEPOSITORY INSTITU20 TION.

21 Rule 7004 of the Federal Rules of Bankruptcy Proce22 dure is amended—

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

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

25 in addition’’, and
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1 (2) by adding at the end the following:

2 ‘‘(h) SERVICE OF PROCESS ON AN INSURED DEPOSI3 TORY INSTITUTION.—Service on an insured depository in4 stitution (as defined in section 3 of the Federal Deposit

5 Insurance Act) in a contested matter or adversary pro6 ceeding shall be made by certified mail addressed to an

7 officer of the institution unless—

8 ‘‘(1) the institution has appeared by its attor9 ney, in which case the attorney shall be served by

10 first class mail;

11 ‘‘(2) the court orders otherwise after service

12 upon the institution by certified mail of notice of an

13 application to permit service on the institution by

14 first class mail sent to an officer of the institution

15 designated by the institution; or

16 ‘‘(3) the institution has waived in writing its

17 entitlement to service by certified mail by designat18 ing an officer to receive service.’’.

19 SEC. 115. MEETINGS OF CREDITORS AND EQUITY SECURITY

20 HOLDERS.

21 Section 341 of title 11, United States Code, is

22 amended by adding at the end the following:

23 ‘‘(d) Prior to the conclusion of the meeting of credi24 tors or equity security holders, the trustee shall orally ex-
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1 amine the debtor to ensure that the debtor in a case under

2 chapter 7 of this title is aware of—

3 ‘‘(1) the potential consequences of seeking a

4 discharge in bankruptcy, including the effects on

5 credit history;

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

7 a different chapter of this title;

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

9 under this title; and

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

11 the debtor’s knowledge of the provisions of section

12 524(d) of this title.’’.

13 SEC. 116. TAX ASSESSMENT.

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

15 amended to read as follows:

16 ‘‘(9) under subsection (a), of—

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

18 determine tax liability;

19 ‘‘(B) the issuance to the debtor by a gov20 ernmental unit of a notice of tax deficiency;

21 ‘‘(C) a demand for tax returns; or

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

23 tax and issuance of a notice and demand for

24 payment of such an assessment (but any tax

25 lien that would otherwise attach to property of
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1 the estate by reason of such an assessment

2 shall not take effect unless such tax is a debt

3 of the debtor that will not be discharged in the

4 case and such property or its proceeds are

5 transferred out of the estate to, or otherwise

6 revested in, the debtor).’’.

7 SEC. 117. ADDITIONAL TRUSTEE COMPENSATION.

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

9 amended—

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

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

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

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

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

15 and

16 ‘‘(B) may prescribe notice of appearance fees

17 and fees charged against distributions in cases under

18 this title;

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

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

21 the enactment of the Bankruptcy Reform Act of 1994,

22 such $15 shall be paid in addition to the amount paid

23 under paragraph (1).’’.
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1 TITLE II—COMMERCIAL

2 BANKRUPTCY ISSUES

3 SEC. 201. AIRCRAFT EQUIPMENT AND VESSELS; ROLLING

4 STOCK EQUIPMENT.

5 (a) AMENDMENT OF SECTION 1110.—Section 1110

6 of title 11, United States Code, is amended to read as

7 follows:

8 ‘‘§ 1110. Aircraft equipment and vessels

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

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

11 lessor or conditional vendor of such equipment to take pos12 session of such equipment in compliance with a security

13 agreement, lease, or conditional sale contract is not af14 fected by section 362, 363, or 1129 or by any power of

15 the court to enjoin the taking of possession unless—

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

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

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

19 perform all obligations of the debtor that become

20 due on or after the date of the order under such se21 curity agreement, lease, or conditional sale contract;

22 and

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

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

25 agreement, lease, or conditional sale contract—
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1 ‘‘(i) that occurs before the date of the

2 order is cured before the expiration of such 60-

3 day period; and

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

5 is cured before the later of—

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

7 date of the default; or

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

9 period.

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

11 is—

12 ‘‘(A) an aircraft, aircraft engine, propeller, ap13 pliance, or spare part (as defined in section 40102

14 of title 49) that is subject to a security interest

15 granted by, leased to, or conditionally sold to a debt16 or that is a citizen of the United States (as defined

17 in 40102 of title 49) holding an air carrier operating

18 certificate issued by the Secretary of Transportation

19 pursuant to chapter 447 of title 49 for aircraft capa20 ble of carrying 10 or more individuals or 6,000

21 pounds or more of cargo; or

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

23 30101(1) of title 46) that is subject to a security in24 terest granted by, leased to, or conditionally sold to

25 a debtor that is a water carrier that holds a certifi-
38

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1 cate of public convenience and necessity or permit is2 sued by the Interstate Commerce Commission.

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

4 or conditional vendor acting in its own behalf or acting

5 as trustee or otherwise in behalf of another party.

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

7 conditional vendor whose right to take possession is pro8 tected under subsection (a) may agree, subject to the

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

10 subsection (a)(1).

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

12 on or prior to the date of enactment of this subsection,

13 for purposes of this section—

14 ‘‘(1) the term ‘lease’ includes any written agree15 ment with respect to which the lessor and the debt16 or, as lessee, have expressed in the agreement or in

17 a substantially contemporaneous writing that the

18 agreement is to be treated as a lease for Federal in19 come tax purposes; and

20 ‘‘(2) the term ‘security interest’ means a pur21 chase-money equipment security interest.’’.

22 (b) AMENDMENT OF SECTION 1168.—Section 1168

23 of title 11, United States Code, is amended to read as

24 follows:
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1 ‘‘§ 1168. Rolling stock equipment

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

3 interest in or of a lessor or conditional vendor of equip4 ment described in paragraph (2) to take possession of such

5 equipment in compliance with an equipment security

6 agreement, lease, or conditional sale contract is not af7 fected by section 362, 363, or 1129 or by any power of

8 the court to enjoin the taking of possession, unless—

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

10 date of commencement of a case under this chapter,

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

12 perform all obligations of the debtor that become

13 due on or after the date of commencement of the

14 case under such security agreement, lease, or condi15 tional sale contract; and

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

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

18 agreement, lease, or conditional sale contract—

19 ‘‘(i) that occurs before the date of com20 mencement of the case and is an event of de21 fault therewith is cured before the expiration of

22 such 60-day period; and

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

24 default after the date of commencement of the

25 case is cured before the later of—
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1 ‘‘(I) the date that is 30 days after the

2 date of the default or event of default; or

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

4 period.

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

6 is rolling stock equipment or accessories used on such

7 equipment, including superstructures and racks, that is

8 subject to a security interest granted by, leased to, or con9 ditionally sold to the debtor.

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

11 or conditional vendor acting in its own behalf or acting

12 as trustee or otherwise in behalf of another party.

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

14 conditional vendor whose right to take possession is pro15 tected under subsection (a) may agree, subject to the

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

17 subsection (a)(1).

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

19 on or prior to the date of enactment of this subsection,

20 for purposes of this section—

21 ‘‘(1) the term ‘lease’ includes any written agree22 ment with respect to which the lessor and the debt23 or, as lessee, have expressed in the agreement or in

24 a substantially contemporaneous writing that the
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1 agreement is to be treated as a lease for Federal in2 come tax purposes; and

3 ‘‘(2) the term ‘security interest’ means a pur4 chase-money equipment security interest.

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

6 after the date of enactment of this subsection, for pur7 poses of this section, the term ‘rolling stock equipment’

8 includes rolling stock equipment that is substantially re9 built and accessories used on such equipment.’’.

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

11 TRANSFEREE FOR AVOIDED TRANSFER.

12 Section 550 of title 11, United States Code, is

13 amended—

14 (1) by redesignating subsections (c), (d), and

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

16 (2) by inserting after subsection (b) the follow17 ing:

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

19 before the filing of the petition—

20 ‘‘(1) is avoided under section 547(b) of this

21 title; and

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

23 at the time of such transfer was an insider;

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

25 transferee that is not an insider.’’.
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1 SEC. 203. PERFECTION OF PURCHASE-MONEY SECURITY IN2 TEREST.

3 Section 547 of title 11, United States Code, is

4 amended—

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

6 and inserting ‘‘20’’, and

7 (2) in subsection (e)(2)(A) by inserting ‘‘, ex8 cept as provided in subsection (c)(3)(B)’’ before the

9 semicolon at the end.

10 SEC. 204. CONTINUED PERFECTION.

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

12 United States Code, is amended by inserting ‘‘, or to

13 maintain or continue the perfection of,’’ after ‘‘to perfect’’.

14 (b) LIMITATIONS ON AVOIDING POWERS.—Section

15 546(b) of title 11, United States Code, is amended to read

16 as follows:

17 ‘‘(b)(1) The rights and powers of a trustee under sec18 tions 544, 545, and 549 of this title are subject to any

19 generally applicable law that—

20 ‘‘(A) permits perfection of an interest in prop21 erty to be effective against an entity that acquires

22 rights in such property before the date of perfection;

23 or

24 ‘‘(B) provides for the maintenance or continu25 ation of perfection of an interest in property to be

26 effective against an entity that acquires rights in
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1 such property before the date on which action is

2 taken to effect such maintenance or continuation.

3 ‘‘(2) If—

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

5 seizure of such property or commencement of an ac6 tion to accomplish such perfection, or maintenance

7 or continuation of perfection of an interest in prop8 erty; and

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

10 an action has not been commenced before the date

11 of the filing of the petition;

12 such interest in such property shall be perfected, or perfec13 tion of such interest shall be maintained or continued, by

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

15 seizure or such commencement.’’.

16 SEC. 205. REJECTION OF UNEXPIRED LEASES OF REAL

17 PROPERTY OR TIMESHARE INTERESTS.

18 (a) AMENDMENT TO SECTION 365.—Section 365(h)

19 of title 11, United States Code, is amended to read as

20 follows:

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

22 of real property under which the debtor is the lessor and—

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

24 such a breach as would entitle the lessee to treat

25 such lease as terminated by virtue of its terms, ap-
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1 plicable nonbankruptcy law, or any agreement made

2 by the lessee, then the lessee under such lease may

3 treat such lease as terminated by the rejection; or

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

5 the lessee may retain its rights under such lease (in6 cluding rights such as those relating to the amount

7 and timing of payment of rent and other amounts

8 payable by the lessee and any right of use, posses9 sion, quiet enjoyment, subletting, assignment, or

10 hypothecation) that are in or appurtenant to the real

11 property for the balance of the term of such lease

12 and for any renewal or extension of such rights to

13 the extent that such rights are enforceable under ap14 plicable nonbankruptcy law.

15 ‘‘(B) If the lessee retains its rights under subpara16 graph (A)(ii), the lessee may offset against the rent re17 served under such lease for the balance of the term after

18 the date of the rejection of such lease and for the term

19 of any renewal or extension of such lease, the value of any

20 damage caused by the nonperformance after the date of

21 such rejection, of any obligation of the debtor under such

22 lease, but the lessee shall not have any other right against

23 the estate or the debtor on account of any damage occur24 ring after such date caused by such nonperformance.
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1 ‘‘(C) The rejection of a lease of real property in a

2 shopping center with respect to which the lessee elects to

3 retain its rights under subparagraph (A)(ii) does not af4 fect the enforceability under applicable nonbankruptcy law

5 of any provision in the lease pertaining to radius, location,

6 use, exclusivity, or tenant mix or balance.

7 ‘‘(D) In this paragraph, ‘lessee’ includes any succes8 sor, assign, or mortgagee permitted under the terms of

9 such lease.

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

11 under a timeshare plan under which the debtor is the

12 timeshare interest seller and—

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

14 as would entitle the timeshare interest purchaser to

15 treat the timeshare plan as terminated under its

16 terms, applicable nonbankruptcy law, or any agree17 ment made by timeshare interest purchaser, the

18 timeshare interest purchaser under the timeshare

19 plan may treat the timeshare plan as terminated by

20 such rejection; or

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

22 commenced, then the timeshare interest purchaser

23 may retain its rights in such timeshare interest for

24 the balance of such term and for any term of re25 newal or extension of such timeshare interest to the
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1 extent that such rights are enforceable under appli2 cable nonbankruptcy law.

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

4 rights under subparagraph (A), such timeshare interest

5 purchaser may offset against the moneys due for such

6 timeshare interest for the balance of the term after the

7 date of the rejection of such timeshare interest, and the

8 term of any renewal or extension of such timeshare inter9 est, the value of any damage caused by the nonperform10 ance after the date of such rejection, of any obligation of

11 the debtor under such timeshare plan, but the timeshare

12 interest purchaser shall not have any right against the es13 tate or the debtor on account of any damage occurring

14 after such date caused by such nonperformance.’’.

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

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

17 ‘‘365(h)(2)’’ and inserting ‘‘365(h)’’.

18 SEC. 206. CONTENTS OF PLAN.

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

20 amended—

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

22 end,

23 (2) by redesignating paragraph (5) as para24 graph (6), and
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1 (3) by inserting after paragraph (4) the follow2 ing:

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

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

5 interest in real property that is the debtor’s prin6 cipal residence, or of holders of unsecured claims, or

7 leave unaffected the rights of holders of any class of

8 claims; and’’.

9 SEC. 207. PRIORITY FOR INDEPENDENT SALES REPRESENT10 ATIVES.

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

12 amended to read as follows:

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

14 to the extent of $4,000 for each individual or cor15 poration, as the case may be, earned within 90 days

16 before the date of the filing of the petition or the

17 date of the cessation of the debtor’s business, which18 ever occurs first, for—

19 ‘‘(A) wages, salaries, or commissions, in20 cluding vacation, severance, and sick leave pay

21 earned by an individual; or

22 ‘‘(B) sales commissions earned by an indi23 vidual or by a corporation with only 1 employee,

24 acting as an independent contractor in the sale

25 of goods or services for the debtor in the ordi-
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1 nary course of the debtor’s business if, and only

2 if, during the 12 months preceding that date, at

3 least 75 percent of the amount that the individ4 ual or corporation earned by acting as an inde5 pendent contractor in the sale of goods or serv6 ices was earned from the debtor;’’.

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

8 LIQUID AND GASEOUS HYDROCARBONS

9 TRANSFERRED BY THE DEBTOR PURSUANT

10 TO PRODUCTION PAYMENT AGREEMENTS.

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

12 States Code, is amended—

13 (1) by inserting after paragraph (42) the fol14 lowing:

15 ‘‘(42A) ‘production payment’ means a term

16 overriding royalty satisfiable in cash or in kind—

17 ‘‘(A) contingent on the production of a liq18 uid or gaseous hydrocarbon from particular real

19 property; and

20 ‘‘(B) from a specified volume, or a speci21 fied value, from the liquid or gaseous hydro22 carbon produced from such property, and deter23 mined without regard to production costs;’’, and

24 (2) by inserting after the first paragraph (56)

25 the following:
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1 ‘‘(56A) ‘term overriding royalty’ means an in2 terest in liquid or gaseous hydrocarbons in place or

3 to be produced from particular real property that

4 entitles the owner thereof to a share of production,

5 or the value thereof, for a term limited by time,

6 quantity, or value realized;’’.

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

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

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

10 inserting ‘‘(A)(i)’’,

11 (2) in subparagraph (B)—

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

13 (B) by striking ‘‘such interest’’ and insert14 ing ‘‘the interest referred to in clause (i)’’, and

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

16 inserting ‘‘; or’’, and

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

18 ‘‘(B)(i) the debtor has transferred such in19 terest pursuant to a written conveyance of a

20 production payment to an entity that does not

21 participate in the operation of the property

22 from which such production payment is trans23 ferred; and

24 ‘‘(ii) but for the operation of this para25 graph, the estate could include the interest re-
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1 ferred to in clause (i) only by virtue of section

2 542 of this title;’’.

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

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

5 amended to read as follows:

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

7 goods unless such seller demands in writing reclama8 tion of such goods—

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

10 goods by the debtor; or

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

12 the commencement of the case, before 20 days

13 after receipt of such goods by the debtor; and’’.

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

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

16 amended—

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

18 the end and inserting a semicolon, and

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

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

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

22 (a) ELECTION AUTHORIZED.—Section 1104 of title

23 11 of the United States Code is amended—

24 (1) by redesignating subsections (b) and (c) as

25 subsections (c) and (d), respectively, and
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1 (2) by inserting after subsection (a) the follow2 ing:

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

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

5 30 days after the court orders the appointment of a trust6 ee under subsection (a), the United States trustee shall

7 convene a meeting of creditors for the purpose of electing

8 one disinterested person to serve as trustee in the case.

9 The election of a trustee shall be conducted in the manner

10 provided in subsections (a), (b), and (c) of section 702

11 of this title.’’.

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

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

14 ‘‘1104(c)’’ and inserting ‘‘1104(d)’’.

15 SEC. 212. RIGHTS OF PARTNERSHIP TRUSTEE AGAINST

16 GENERAL PARTNERS.

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

18 amended by striking ‘‘for the full amount of the defi19 ciency’’ and inserting ‘‘to the extent that under applicable

20 nonbankruptcy law such general partner is personally lia21 ble for such deficiency’’.

22 SEC. 213. IMPAIRMENT OF CLAIMS AND INTERESTS.

23 (a) OBJECTION TO CLAIMS FILED UNTIMELY.—Sec24 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

2 end,

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

4 the end and inserting ‘‘; or’’, and

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

6 ‘‘(9) proof of such claim is not timely filed, ex7 cept to the extent tardily filed as permitted under

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

9 title or under the Federal Rules of Bankruptcy Pro10 cedure, except that a claim of a governmental unit

11 shall be timely filed if it is filed before 180 days

12 after the date of the order for relief or such later

13 time as the Federal Rules of Bankruptcy Procedure

14 may provide.’’.

15 (b) TARDILY FILED PRIORITY CLAIMS.—Section

16 726(a)(1) of title 11, United States Code, is amended by

17 adding before the semicolon the following: ‘‘, proof of

18 which is timely filed under section 501 of this title or tar19 dily filed before the date on which the trustee commences

20 distribution under this section’’.

21 (c) FILING OF REQUEST FOR ADMINISTRATIVE EX22 PENSES.—Section 503(a) of title 11, United States Code,

23 is amended—

24 (1) by inserting ‘‘timely’’ after ‘‘may’’, and
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1 (2) by inserting ‘‘, or may tardily file such re2 quest if permitted by the court for cause’’ before the

3 period at the end.

4 (d) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec5 tion 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 POST12 PETITION RENTS AND LODGING PAYMENTS.

13 (a) POSTPETITION EFFECT OF SECURITY INTER14 EST.—Section 552(b) of title 11, United States Code, is

15 amended—

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

23 entered into a security agreement before the commence24 ment of the case and if the security interest created by

25 such security agreement extends to property of the debtor
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1 acquired before the commencement of the case and to

2 amounts paid as rents of such property or the fees,

3 charges, accounts, or other payments for the use or occu4 pancy of rooms and other public facilities in hotels, motels,

5 or other lodging properties, then such security interest ex6 tends to such rents and such fees, charges, accounts, or

7 other payments acquired by the estate after the com8 mencement of the case to the extent provided in such secu9 rity agreement, except to any extent that the court, after

10 notice and a hearing and based on the equities of the case,

11 orders otherwise.’’.

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

13 363(a) of title 11, United States Code, is amended by in14 serting: ‘‘and the fees, charges, accounts or other pay15 ments for the use or occupancy of rooms and other public

16 facilities in hotels, motels, or other lodging properties’’

17 after ‘‘property’’.

18 SEC. 215. AMENDMENT TO DEFINITION OF SWAP AGREE19 MENT.

20 Subparagraph (A) of the first paragraph (55) of sec21 tion 101 of title 11, United States Code, is amended by

22 inserting ‘‘spot foreign exchange agreement,’’ after ‘‘for23 ward foreign exchange agreement,’’.
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1 SEC. 216. LIMITATION ON AVOIDING POWERS.

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

3 amended to read as follows:

4 ‘‘(1) the later of—

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

6 for relief; or

7 ‘‘(B) 1 year after the appointment or elec8 tion of the first trustee under section 702,

9 1104, 1163, 1202, or 1302 of this title if such

10 appointment or such election occurs before the

11 expiration of the period specified in subpara12 graph (A); or’’.

13 SEC. 217. SMALL BUSINESSES.

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

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

16 the following:

17 ‘‘(51C) ‘small business’ means a person en18 gaged in commercial or business activities (but does

19 not include a person whose primary activity is the

20 business of owning or operating real property and

21 activities incidental thereto) whose aggregate

22 noncontingent liquidated secured and unsecured

23 debts as of the date of the petition do not exceed

24 $2,000,000;’’.

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

26 title 11, United States Code, is amended—
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1 (1) in paragraph (1) by striking ‘‘As’’ and in2 serting ‘‘Except as provided in paragraph (3), as’’;

3 and

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

5 ‘‘(3) On request of a party in interest in a case in

6 which the debtor is a small business and for cause, the

7 court may order that a committee of creditors not be ap8 pointed.’’.

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

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

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

12 (d) WHO MAY FILE A PLAN.—Section 1121 of title

13 11, United States Code, is amended by adding at the end

14 the following:

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

16 and elects to be considered a small business—

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

18 100 days after the date of the order for relief under

19 this chapter;

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

21 after the date of the order for relief; and

22 ‘‘(3) on request of a party in interest made

23 within the respective periods specified in paragraphs

24 (1) and (2) and after notice and a hearing, the court

25 may—
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1 ‘‘(A) reduce the 100-day period or the

2 160-day period specified in paragraph (1) or

3 (2) for cause; and

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

5 in paragraph (1) if the debtor shows that the

6 need for an increase is caused by circumstances

7 for which the debtor should not be held ac8 countable.’’.

9 (e) POSTPETITION DISCLOSURE.—Section 1125 of

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

11 end the following:

12 ‘‘(f) Notwithstanding subsection (b), in a case in

13 which the debtor has elected under section 1121(e) to be

14 considered a small business—

15 ‘‘(1) the court may conditionally approve a dis16 closure statement subject to final approval after no17 tice and a hearing;

18 ‘‘(2) acceptances and rejections of a plan may

19 be solicited based on a conditionally approved disclo20 sure statement as long as the debtor provides ade21 quate information to each holder of a claim or inter22 est that is solicited, but a conditionally approved dis23 closure statement shall be mailed at least 10 days

24 prior to the date of the hearing on confirmation of

25 the plan; and
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1 ‘‘(3) a hearing on the disclosure statement may

2 be combined with a hearing on confirmation of a

3 plan.’’.

4 SEC. 218. SINGLE ASSET REAL ESTATE.

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

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

7 the following:

8 ‘‘(51B) ‘single asset real estate’ means real

9 property constituting a single property or project,

10 other than residential real property with fewer than

11 4 residential units, which generates substantially all

12 of the gross income of a debtor and on which no

13 substantial business is being conducted by a debtor

14 other than the business of operating the real prop15 erty and activities incidental thereto having aggre16 gate noncontingent, liquidated secured debts in an

17 amount no more than $4,000,000;’’.

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

19 United States Code, is amended—

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

21 end,

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

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

24 (3) by adding at the end the following:
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1 ‘‘(3) with respect to a stay of an act against

2 single asset real estate under subsection (a), by a

3 creditor whose claim is secured by an interest in

4 such real estate, unless, not later than the date that

5 is 90 days after the entry of the order for relief (or

6 such later date as the court may determine for cause

7 by order entered within that 90-day period)—

8 ‘‘(A) the debtor has filed a plan of reorga9 nization that has a reasonable possibility of

10 being confirmed within a reasonable time; or

11 ‘‘(B) the debtor has commenced monthly

12 payments to each creditor whose claim is se13 cured by such real estate (other than a claim

14 secured by a judgment lien or by an unmatured

15 statutory lien), which payments are in an

16 amount equal to interest at a current fair mar17 ket rate on the value of the creditor’s interest

18 in the real estate.’’.

19 SEC. 219. LEASES OF PERSONAL PROPERTY.

20 (a) ASSUMPTION.—Section 365(b)(2) of title 11,

21 United States Code is amended—

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

23 end,

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

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

2 ‘‘(D) the satisfaction of any penalty rate or pro3 vision relating to a default arising from any failure

4 by the debtor to perform nonmonetary obligations

5 under the executory contract or unexpired lease.’’.

6 (b) PERFORMANCE.—Section 365(d) of title 11,

7 United States Code is amended by adding at the end the

8 following:

9 ‘‘(10) The trustee shall timely perform all of

10 the obligations of the debtor, except those specified

11 in section 365(b)(2), first arising from or after 60

12 days after the order for relief in a case under chap13 ter 11 of this title under an unexpired lease of per14 sonal property (other than personal property leased

15 to an individual primarily for personal, family, or

16 household purposes), until such lease is assumed or

17 rejected notwithstanding section 503(b)(1) of this

18 title, unless the court, after notice and a hearing and

19 based on the equities of the case, orders otherwise

20 with respect to the obligations or timely performance

21 thereof. This subsection shall not be deemed to af22 fect the trustee’s obligations under the provisions of

23 subsection (b) or (f). Acceptance of any such per24 formance does not constitute waiver or relinquish-
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1 ment of the lessor’s rights under such lease or under

2 this title.’’.

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

4 States Code is amended by adding at the end the follow5 ing:

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

7 to any unexpired lease of personal property (to the exclu8 sion of such property being subject to an order to grant

9 relief from the stay under section 362).’’.

10 SEC. 220. EXEMPTION FOR SMALL BUSINESS INVESTMENT

11 COMPANIES.

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

13 amended by inserting after ‘‘homestead association,’’ the

14 following: ‘‘a small business investment company licensed

15 by the Small Business Administration under subsection

16 (c) or (d) of section 301 of the Small Business Investment

17 Act of 1958,’’.

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

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

20 amended—

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

22 the end and inserting a semicolon, and

23 (2) by adding at the end the following:
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1 ‘‘(14) incurred to pay a tax to the United

2 States that would be nondischargeable pursuant to

3 paragraph (1);’’.

4 SEC. 222. RETURN OF GOODS.

5 (a) LIMITATION ON AVOIDING POWERS.—Section

6 546 of title 11, United States Code, is amended by adding

7 at the end the following:

8 ‘‘(g) Notwithstanding the rights and powers of a

9 trustee under sections 544(a), 545, 547, 549, and 553,

10 if the court determines on a motion by the trustee made

11 not later than 120 days after the date of the order for

12 relief in a case under chapter 11 of this title and after

13 notice and a hearing, that a return is in the best interests

14 of the estate, the debtor, with the consent of a creditor,

15 may return goods shipped to the debtor by the creditor

16 before the commencement of the case, and the creditor

17 may offset the purchase price of such goods against any

18 claim of the creditor against the debtor that arose before

19 the commencement of the case.’’.

20 (b) SETOFF.—Section 553(b)(1) is amended by in21 serting ‘‘546(h),’’ after ‘‘365(h),’’.

22 SEC. 223. PROCEEDS OF MONEY ORDER AGREEMENTS.

23 Section 541(b) of title 11, United States Code is

24 amended—
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1 (1) in paragraph (3) by striking ‘‘or’’ at the

2 end and inserting a semicolon,

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

4 the end and inserting ‘‘; or’’, and

5 (3) by inserting after paragraph (4) the follow6 ing:

7 ‘‘(5) any interest in cash or cash equivalents

8 that constitute proceeds of a sale by the debtor of

9 a money order that is made—

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

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

12 and

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

14 order issuer that prohibits the commingling of

15 such proceeds with property of the debtor (not16 withstanding that, contrary to the agreement,

17 the proceeds may have been commingled with

18 property of the debtor),

19 unless the money order issuer had not taken action,

20 prior to the filing of the petition, to require compli21 ance with the prohibition.’’.

22 SEC. 224. TRUSTEE DUTIES; PROFESSIONAL FEES.

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

24 title 28, United States Code, is amended to read as fol25 lows:
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1 ‘‘(A)(i) reviewing, in accordance with pro2 cedural guidelines adopted by the Executive Of3 fice of the United States Trustee (which guide4 lines shall be applied uniformly by the United

5 States trustee except when circumstances war6 rant different treatment), applications filed for

7 compensation and reimbursement under section

8 330 of title 11; and

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

10 respect to such application and, if the United

11 States Trustee considers it to be appropriate,

12 objections to such application.’’.

13 (b) PROFESSIONAL FEES.—Section 330(a) of title

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

15 ‘‘(a)(1) After notice to the parties in interest and the

16 United States trustee and a hearing, and subject to sec17 tions 326, 328, and 329, the court may award to a trustee,

18 an examiner, a professional person employed under section

19 327 or 1103—

20 ‘‘(A) reasonable compensation for actual, nec21 essary services rendered by the trustee, examiner,

22 professional person, or attorney and by any para23 professional person employed by any such person;

24 and
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1 ‘‘(B) reimbursement for actual, necessary ex2 penses.

3 ‘‘(2) The court may, on its own motion or on the mo4 tion of the United States Trustee, the United States

5 Trustee for the District or Region, the trustee for the es6 tate, or any other party in interest, award compensation

7 that is less than the amount of compensation that is re8 quested.

9 ‘‘(3)(A) In determining the amount of reasonable

10 compensation to be awarded, the court shall consider the

11 nature, the extent, and the value of such services, taking

12 into account all relevant factors, including—

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

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

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

16 administration of, or beneficial at the time at which

17 the service was rendered toward the completion of,

18 a case under this title;

19 ‘‘(D) whether the services were performed with20 in a reasonable amount of time commensurate with

21 the complexity, importance, and nature of the prob22 lem, issue, or task addressed; and

23 ‘‘(E) whether the compensation is reasonable

24 based on the customary compensation charged by
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1 comparably skilled practitioners in cases other than

2 cases under this title.

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

4 court shall not allow compensation for—

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

6 ‘‘(ii) services that were not—

7 ‘‘(I) reasonably likely to benefit the debt8 or’s estate; or

9 ‘‘(II) necessary to the administration of

10 the case.

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

12 the debtor is an individual, the court may allow reasonable

13 compensation to the debtor’s attorney for representing the

14 interests of the debtor in connection with the bankruptcy

15 case based on a consideration of the benefit and necessity

16 of such services to the debtor and the other factors set

17 forth in this section.

18 ‘‘(5) The court shall reduce the amount of compensa19 tion awarded under this section by the amount of any in20 terim compensation awarded under section 331, and, if the

21 amount of such interim compensation exceeds the amount

22 of compensation awarded under this section, may order

23 the return of the excess to the estate.
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1 ‘‘(6) Any compensation awarded for the preparation

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

3 reasonably required to prepare the application.’’.

4 SEC. 225. NOTICES TO CREDITORS.

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

6 amended by adding at the end the following:

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

8 to a creditor under this title, any rule, any applicable law,

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

10 name, address, and taxpayer identification number of the

11 debtor, but the failure of such notice to contain such infor12 mation shall not invalidate the legal effect of such notice.’’.

13 TITLE III—CONSUMER

14 BANKRUPTCY ISSUES

15 SEC. 301. PERIOD FOR CURING DEFAULT RELATING TO

16 PRINCIPAL RESIDENCE.

17 Section 1322 of title 11, United States Code, is

18 amended—

19 (1) by redesignating subsection (c) as sub20 section (d), and

21 (2) by inserting after subsection (b) the follow22 ing:

23 ‘‘(c) Notwithstanding subsection (b)(2) and applica24 ble nonbankruptcy law—
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1 ‘‘(1) a default with respect to, or that gave rise

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

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

4 until such residence is sold at a foreclosure sale that

5 is conducted in accordance with applicable

6 nonbankruptcy law; and

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

8 original payment schedule for a claim secured only

9 by a security interest in real property that is the

10 debtor’s principal residence is due before the date on

11 which the final payment under the plan is due, the

12 plan may provide for the payment of the claim as

13 modified pursuant to section 1325(a)(5) of this

14 title.’’.

15 SEC. 302. NONDISCHARGEABILITY OF FINE UNDER CHAP16 TER 13.

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

18 is amended by inserting ‘‘, or a criminal fine,’’ after ‘‘res19 titution’’.

20 SEC. 303. IMPAIRMENT OF EXEMPTIONS.

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

22 amended—

23 (1) in paragraph (2)—
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1 (A) by redesignating subparagraphs (A),

2 (B), and (C) as clauses (i), (ii), and (iii), re3 spectively, and

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

5 (2) by redesignating paragraph (1) as subpara6 graph (A),

7 (3) by inserting ‘‘(1)’’ before ‘‘Notwithstand8 ing’’, and

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

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

11 shall be considered to impair an exemption to the extent

12 that the sum of—

13 ‘‘(i) the lien,

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

15 ‘‘(iii) the amount of the exemption that the

16 debtor could claim if there were no liens on the

17 property;

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

19 would have in the absence of any liens.

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

21 1 lien, a lien that has been avoided shall not be considered

22 in making the calculation under subparagraph (A) with

23 respect to other liens.

24 ‘‘(C) This paragraph shall not apply with respect to

25 a judgment arising out of a mortgage foreclosure.’’.
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1 SEC. 304. PROTECTION OF CHILD SUPPORT AND ALIMONY.

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

3 States Code, is amended by inserting after paragraph (12)

4 the following:

5 ‘‘(12A) ‘debt for child support’ means a debt of

6 a kind specified in section 523(a)(5) of this title for

7 maintenance or support of a child of the debtor;’’.

8 (b) RELIEF FROM AUTOMATIC STAY.—Section

9 362(b)(2) of title 11, United States Code, is amended to

10 read as follows:

11 ‘‘(2) under subsection (a) of this section—

12 ‘‘(A) of the commencement or continuation

13 of an action or proceeding for—

14 ‘‘(i) the establishment of paternity; or

15 ‘‘(ii) the establishment or modification

16 of an order for alimony, maintenance, or

17 support; or

18 ‘‘(B) of the collection of alimony, mainte19 nance, or support from property that is not

20 property of the estate;’’.

21 (c) PRIORITY OF CLAIMS.—Section 507(a) of title 11,

22 United States Code, is amended—

23 (1) in paragraph (8) by striking ‘‘(8) Eighth’’

24 and inserting ‘‘(9) Ninth’’,

25 (2) in paragraph (7) by striking ‘‘(7) Seventh’’

26 and inserting ‘‘(8) Eighth’’, and
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1 (3) by inserting after paragraph (6) the follow2 ing:

3 ‘‘(7) Seventh, allowed claims for debts to a

4 spouse, former spouse, or child of the debtor, for ali5 mony to, maintenance for, or support of such spouse

6 or child, in connection with a separation agreement,

7 divorce decree or other order of a court of record,

8 determination made in accordance with State or ter9 ritorial law by a governmental unit, or property set10 tlement agreement, but not to the extent that such

11 debt—

12 ‘‘(A) is assigned to another entity, volun13 tarily, by operation of law, or otherwise; or

14 ‘‘(B) includes a liability designated as ali15 mony, maintenance, or support, unless such li16 ability is actually in the nature of alimony,

17 maintenance or support.’’.

18 (d) PROTECTION OF LIENS.—Section 522(f)(1)(A) of

19 title 11, United States Code, as amended by section 303,

20 is amended by inserting after ‘‘lien’’ the following:

21 ‘‘, other than a judicial lien that secures a debt—

22 ‘‘(i) to a spouse, former spouse, or child of

23 the debtor, for alimony to, maintenance for, or

24 support of such spouse or child, in connection

25 with a separation agreement, divorce decree or
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1 other order of a court of record, determination

2 made in accordance with State or territorial law

3 by a governmental unit, or property settlement

4 agreement; and

5 ‘‘(ii) to the extent that such debt—

6 ‘‘(I) is not assigned to another entity,

7 voluntarily, by operation of law, or other8 wise; and

9 ‘‘(II) includes a liability designated as

10 alimony, maintenance, or support, unless

11 such liability is actually in the nature of al12 imony, maintenance or support.’’.

13 (e) EXCEPTION TO DISCHARGE.—Section 523 of title

14 11, United States Code, as amended by section 221, is

15 amended by adding at the end the following:

16 ‘‘(15) not of the kind described in paragraph

17 (5) that is incurred by the debtor in the course of

18 a divorce or separation or in connection with a sepa19 ration agreement, divorce decree or other order of a

20 court of record, a determination made in accordance

21 with State or territorial law by a governmental unit

22 unless—

23 ‘‘(A) the debtor does not have the ability

24 to pay such debt from income or property of the

25 debtor not reasonably necessary to be expended
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1 for the maintenance or support of the debtor or

2 a dependent of the debtor and, if the debtor is

3 engaged in a business, for the payment of ex4 penditures necessary for the continuation, pres5 ervation, and operation of such business; or

6 ‘‘(B) discharging such debt would result in

7 a benefit to the debtor that outweighs the det8 rimental consequences to a spouse, former

9 spouse, or child of the debtor;’’, and

10 (2) in subsection (c)(1) by striking ‘‘or (6)’’

11 each place it appears and inserting ‘‘(6), or (15)’’.

12 (f) PROTECTION AGAINST TRUSTEE AVOIDANCE.—

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

14 amended—

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

16 end,

17 (2) by redesignating paragraph (7) as para18 graph (8), and

19 (3) by inserting after paragraph (6) the follow20 ing:

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

22 payment of a debt to a spouse, former spouse, or

23 child of the debtor, for alimony to, maintenance for,

24 or support of such spouse or child, in connection

25 with a separation agreement, divorce decree or other
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1 order of a court of record, determination made in

2 accordance with State or territorial law by a govern3 mental unit, or property settlement agreement, but

4 not to the extent that such debt—

5 ‘‘(A) is assigned to another entity, volun6 tarily, by operation of law, or otherwise; or

7 ‘‘(B) includes a liability designated as ali8 mony, maintenance, or support, unless such li9 ability is actually in the nature of alimony,

10 maintenance or support; or’’.

11 (g) APPEARANCE BEFORE COURT.—Child support

12 creditors or their representatives shall be permitted to ap13 pear and intervene without charge, and without meeting

14 any special local court rule requirement for attorney ap15 pearances, in any bankruptcy case or proceeding in any

16 bankruptcy court or district court of the United States

17 if such creditors or representatives file a form in such

18 court that contains information detailing the child support

19 debt, its status, and other characteristics.

20 (h) CONFORMING AMENDMENTS—Title 11 of the

21 United States Code is amended—

22 (1) in section 502(i) by striking ‘‘507(a)(7)’’

23 and inserting ‘‘507(a)(8)’’,

24 (2) in section 503(b)(1)(B)(i) by striking

25 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,
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1 (3) in section 523(a)(1)(A) by striking

2 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,

3 (4) in section 724(b)(2) by striking ‘‘or

4 507(a)(6)’’ and inserting ‘‘507(a)(6), or 507(a)(7)’’,

5 (5) in section 726(b) by striking ‘‘or (7)’’ and

6 inserting ‘‘, (7), or (8)’’,

7 (6) in section 1123(a)(1) by striking

8 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,

9 (7) in section 1129(a)(9)—

10 (i) in subparagraph (B) by striking ‘‘or

11 507(a)(6)’’ and inserting ‘‘, 507(a)(6), or

12 507(a)(7)’’, and

13 (ii) in subparagraph (C) by striking

14 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’.

15 SEC. 305. INTEREST ON INTEREST.

16 (a) CHAPTER 11.—Section 1123 of title 11, United

17 States Code, is amended by adding at the end the follow18 ing:

19 ‘‘(d) Notwithstanding subsection (a) of this section

20 and sections 506(b), 1129(a)(7), and 1129(b) of this title,

21 if it is proposed in a plan to cure a default the amount

22 necessary to cure the default shall be determined in ac23 cordance with the underlying agreement and applicable

24 nonbankruptcy law.’’.
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1 (b) CHAPTER 12.—Section 1222 of title 11, United

2 States Code, is amended by adding at the end the follow3 ing:

4 ‘‘(d) Notwithstanding subsection (b)(2) of this sec5 tion and sections 506(b) and 1225(a)(5) of this title, if

6 it is proposed in a plan to cure a default, the amount nec7 essary to cure the default, shall be determined in accord8 ance with the underlying agreement and applicable

9 nonbankruptcy law.’’.

10 (c) CHAPTER 13.—Section 1322 of title 11, United

11 States Code, is amended by adding at the end the follow12 ing:

13 ‘‘(e) Notwithstanding subsection (b)(2) of this section

14 and sections 506(b) and 1325(a)(5) of this title, if it is

15 proposed in a plan to cure a default, the amount necessary

16 to cure the default, shall be determined in accordance with

17 the underlying agreement and applicable nonbankruptcy

18 law.’’.

19 SEC. 306. EXCEPTION TO DISCHARGE.

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

21 is amended—

22 (1) by striking ‘‘$500’’ and inserting ‘‘$1,000’’,

23 (2) by striking ‘‘forty’’ and inserting ‘‘60’’, and

24 (3) by striking ‘‘twenty’’ and inserting ‘‘60’’.
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1 SEC. 307. PAYMENTS UNDER CHAPTER 13.

2 Section 1326(a)(2) of title 11, United States Code,

3 is amended in the second sentence by striking the period

4 and inserting ‘‘as soon as practicable.’’.

5 SEC. 308. BANKRUPTCY PETITION PREPARERS.

6 (a) AMENDMENT OF CHAPTER 1.—Chapter 1 of title

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

8 the following:

9 ‘‘§ 110. Penalty for persons who negligently or fraud10 ulently prepare bankruptcy petitions

11 ‘‘(a) In this section—

12 ‘‘(1) ‘bankruptcy petition preparer’ means a

13 person, other than an attorney or an employee of an

14 attorney, who prepares for compensation a document

15 for filing; and

16 ‘‘(2) ‘document for filing’ means a petition or

17 any other document prepared for filing by a debtor

18 in a United States bankruptcy court or a United

19 States district court in connection with a case under

20 this title.

21 ‘‘(b)(1) A bankruptcy petition preparer who prepares

22 a document for filing shall sign the document and print

23 on the document the preparer’s name and address.

24 ‘‘(2) A bankruptcy petition preparer who fails to com25 ply with paragraph (1) may be fined not more than $500
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1 for each such failure unless the failure is due to reasonable

2 cause.

3 ‘‘(c)(1) A bankruptcy petition preparer who prepares

4 a document for filing shall place on the document, after

5 the preparer’s signature, an identifying number that iden6 tifies individuals who prepared the document.

7 ‘‘(2) For purposes of this section, the identifying

8 number of a bankruptcy petition preparer shall be the So9 cial Security account number of each individual who pre10 pared the document or assisted in its preparation.

11 ‘‘(3) A bankruptcy petition preparer who fails to com12 ply with paragraph (1) may be fined not more than $500

13 for each such failure unless the failure is due to reasonable

14 cause.

15 ‘‘(d)(1) A bankruptcy petition preparer shall, not

16 later than the time at which a document for filing is pre17 sented for the debtor’s signature, furnish to the debtor

18 a copy of the document.

19 ‘‘(2) A bankruptcy petition preparer who fails to com20 ply with paragraph (1) may be fined not more than $500

21 for each such failure unless the failure is due to reasonable

22 cause.

23 ‘‘(e)(1) A bankruptcy petition preparer shall not exe24 cute any document on behalf of a debtor.
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1 ‘‘(2) A bankruptcy petition preparer may be fined not

2 more than $500 for each document executed in violation

3 of paragraph (1).

4 ‘‘(f)(1) A bankruptcy petition preparer shall not use

5 the word ‘legal’ or any similar term in any advertisements,

6 or advertise under any category that includes the word

7 ‘legal’ or any similar term.

8 ‘‘(2) A bankruptcy petition preparer shall be fined

9 not more than $500 for each violation of paragraph (1).

10 ‘‘(g)(1) A bankruptcy petition preparer shall not col11 lect or receive any payment from the debtor or on behalf

12 of the debtor for the court fees in connection with filing

13 the petition.

14 ‘‘(2) A bankruptcy petition preparer shall be fined

15 not more than $500 for each violation of paragraph (1).

16 ‘‘(h)(1) Within 10 days after the date of the filing

17 of a petition, a bankruptcy petition preparer shall file a

18 declaration under penalty of perjury disclosing any fee re19 ceived from or on behalf of the debtor within 12 months

20 immediately prior to the filing of the case, and any unpaid

21 fee charged to the debtor.

22 ‘‘(2) The court shall disallow and order the imme23 diate turnover to the bankruptcy trustee of any fee re24 ferred to in paragraph (1) found to be in excess of the

25 value of services rendered for the documents prepared. An
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1 individual debtor may exempt any funds so recovered

2 under section 522(b).

3 ‘‘(3) The debtor, the trustee, a creditor, or the United

4 States trustee may file a motion for an order under para5 graph (2).

6 ‘‘(4) A bankruptcy petition preparer shall be fined

7 not more than $500 for each failure to comply with a court

8 order to turn over funds within 30 days of service of such

9 order.

10 ‘‘(i)(1) If a bankruptcy case or related proceeding is

11 dismissed because of the failure to file bankruptcy papers,

12 including papers specified in section 521(1) of this title,

13 the negligence or intentional disregard of this title or the

14 Federal Rules of Bankruptcy Procedure by a bankruptcy

15 petition preparer, or if a bankruptcy petition preparer vio16 lates this section or commits any fraudulent, unfair, or

17 deceptive act, the bankruptcy court shall certify that fact

18 to the district court, and the district court, on motion of

19 the debtor, the trustee, or a creditor and after a hearing,

20 shall order the bankruptcy petition preparer to pay to the

21 debtor—

22 ‘‘(A) the debtor’s actual damages;

23 ‘‘(B) the greater of—

24 ‘‘(i) $2,000; or
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1 ‘‘(ii) twice the amount paid by the debtor

2 to the bankruptcy petition preparer for the pre3 parer’s services; and

4 ‘‘(C) reasonable attorneys’ fees and costs in

5 moving for damages under this subsection.

6 ‘‘(2) If the trustee or creditor moves for damages on

7 behalf of the debtor under this subsection, the bankruptcy

8 petition preparer shall be ordered to pay the movant the

9 additional amount of $1,000 plus reasonable attorneys’

10 fees and costs incurred.

11 ‘‘(j)(1) A debtor for whom a bankruptcy petition pre12 parer has prepared a document for filing, the trustee, a

13 creditor, or the United States trustee in the district in

14 which the bankruptcy petition preparer resides, has con15 ducted business, or the United States trustee in any other

16 district in which the debtor resides may bring a civil action

17 to enjoin a bankruptcy petition preparer from engaging

18 in any conduct in violation of this section or from further

19 acting as a bankruptcy petition preparer.

20 ‘‘(2)(A) In an action under paragraph (1), if the

21 court finds that—

22 ‘‘(i) a bankruptcy petition preparer has—

23 ‘‘(I) engaged in conduct in violation of this

24 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

11 from engaging in such conduct.

12 ‘‘(B) If the court finds that a bankruptcy petition

13 preparer has continually engaged in conduct described in

14 subclause (I), (II), or (III) of clause (i) and that an in15 junction prohibiting such conduct would not be sufficient

16 to prevent such person’s interference with the proper ad17 ministration of this title, or has not paid a penalty im18 posed under this section, the court may enjoin the person

19 from acting as a bankruptcy petition preparer.

20 ‘‘(3) The court shall award to a debtor, trustee, or

21 creditor that brings a successful action under this sub22 section reasonable attorney’s fees and costs of the action,

23 to be paid 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,

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

5 following 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 asso3 ciation 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

12 to 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

23 the fixing of a consensual lien on any property or

24 prohibits avoidance of a consensual lien on property

25 otherwise 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

3 if the lien is a nonpossessory, nonpurchase-money security

4 interest in implements, professional books, or tools of the

5 trade of the debtor or a dependent of the debtor or farm

6 animals or crops of the debtor or a dependent of the debt7 or to the extent the value of such implements, professional

8 books, tools of the trade, animals, and crops exceeds

9 $5,000.’’.

10 SEC. 311. CONVERSION OF CASE UNDER CHAPTER 13.

11 Section 348 of title 11, United States Code, is

12 amended by adding at the end the following:

13 ‘‘(f)(1) Except as provided in paragraph (2), when

14 a case under chapter 13 of this title is converted to a case

15 under another chapter under this title—

16 ‘‘(A) property of the estate in the converted

17 case shall consist of property of the estate, as of the

18 date of filing of the petition, that remains in the

19 possession of or is under the control of the debtor

20 on the date of conversion; and

21 ‘‘(B) valuations of property and of allowed se22 cured claims in the chapter 13 case shall apply in

23 the converted case, with allowed secured claims re24 duced to the extent that they have been paid in ac25 cordance with the chapter 13 plan.
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1 ‘‘(2) If the debtor converts a case under chapter 13

2 of this title to a case under another chapter under this

3 title in bad faith, the property in the converted case shall

4 consist of the property of the estate as of the date of con5 version.’’.

6 SEC. 312. BANKRUPTCY FRAUD.

7 (a) IN GENERAL.—

8 (1) OFFENSES.—Chapter 9 of title 18, United

9 States Code, is amended—

10 (A) by amending sections 152, 153, and

11 154 to read as follows:

12 ‘‘§ 152. Concealment of assets; false oaths and claims;

13 bribery

14 ‘‘A person who—

15 ‘‘(1) knowingly and fraudulently conceals from

16 a custodian, trustee, marshal, or other officer of the

17 court charged with the control or custody of prop18 erty, or, in connection with a case under title 11,

19 from creditors or the United States Trustee, any

20 property belonging to the estate of a debtor;

21 ‘‘(2) knowingly and fraudulently makes a false

22 oath or account in or in relation to any case under

23 title 11;

24 ‘‘(3) knowingly and fraudulently makes a false

25 declaration, certificate, verification, or statement
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1 under penalty of perjury as permitted under section

2 1746 of title 28, in or in relation to any case under

3 title 11;

4 ‘‘(4) knowingly and fraudulently presents any

5 false claim for proof against the estate of a debtor,

6 or uses any such claim in any case under title 11,

7 in a personal capacity or as or through an agent,

8 proxy, or attorney;

9 ‘‘(5) knowingly and fraudulently receives any

10 material amount of property from a debtor after the

11 filing of a case under title 11, with intent to defeat

12 the provisions of title 11;

13 ‘‘(6) knowingly and fraudulently gives, offers,

14 receives, or attempts to obtain any money or prop15 erty, remuneration, compensation, reward, advan16 tage, or promise thereof for acting or forbearing to

17 act in any case under title 11;

18 ‘‘(7) in a personal capacity or as an agent or

19 officer of any person or corporation, in contempla20 tion of a case under title 11 by or against the person

21 or any other person or corporation, or with intent to

22 defeat the provisions of title 11, knowingly and

23 fraudulently transfers or conceals any of his prop24 erty or the property of such other person or corpora25 tion;
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1 ‘‘(8) after the filing of a case under title 11 or

2 in contemplation thereof, knowingly and fraudulently

3 conceals, destroys, mutilates, falsifies, or makes a

4 false entry in any recorded information (including

5 books, documents, records, and papers) relating to

6 the property or financial affairs of a debtor; or

7 ‘‘(9) after the filing of a case under title 11,

8 knowingly and fraudulently withholds from a custo9 dian, trustee, marshal, or other officer of the court

10 or a United States Trustee entitled to its possession,

11 any recorded information (including books, docu12 ments, records, and papers) relating to the property

13 or financial affairs of a debtor,

14 shall be fined not more than $5,000, imprisoned not more

15 than 5 years, or both.

16 ‘‘§ 153. Embezzlement against estate

17 ‘‘(a) OFFENSE.—A person described in subsection (b)

18 who knowingly and fraudulently appropriates to the per19 son’s own use, embezzles, spends, or transfers any prop20 erty or secretes or destroys any document belonging to the

21 estate of a debtor shall be fined not more than $5,000,

22 imprisoned not more than 5 years, or both.

23 ‘‘(b) PERSON TO WHOM SECTION APPLIES.—A per24 son described in this subsection is one who has access to

25 property or documents belonging to an estate by virtue
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1 of the person’s participation in the administration of the

2 estate as a trustee, custodian, marshal, attorney, or other

3 officer of the court or as an agent, employee, or other per4 son engaged by such an officer to perform a service with

5 respect to the estate.

6 ‘‘§ 154. Adverse interest and conduct of officers

7 ‘‘A person who, being a custodian, trustee, marshal,

8 or other officer of the court—

9 ‘‘(1) knowingly purchases, directly or indirectly,

10 any property of the estate of which the person is

11 such an officer in a case under title 11;

12 ‘‘(2) knowingly refuses to permit a reasonable

13 opportunity for the inspection by parties in interest

14 of the documents and accounts relating to the af15 fairs of estates in the person’s charge by parties

16 when directed by the court to do so; or

17 ‘‘(3) knowingly refuses to permit a reasonable

18 opportunity for the inspection by the United States

19 Trustee of the documents and accounts relating to

20 the affairs of an estate in the person’s charge,

21 shall be fined not more than $5,000 and shall forfeit the

22 person’s office, which shall thereupon become vacant.’’;

23 and

24 (B) by adding at the end the following:
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1 ‘‘§ 156. Knowing disregard of bankruptcy law or rule

2 ‘‘(a) DEFINITIONS.—In this section—

3 ‘‘ ‘bankruptcy petition preparer’ means a per4 son, other than the debtor’s attorney or an employee

5 of such an attorney, who prepares for compensation

6 a document for filing.

7 ‘‘ ‘document for filing’ means a petition or any

8 other document prepared for filing by a debtor in a

9 United States bankruptcy court or a United States

10 district court in connection with a case under this

11 title.

12 ‘‘(b) OFFENSE.—If a bankruptcy case or related pro13 ceeding is dismissed because of a knowing attempt by a

14 bankruptcy petition preparer in any manner to disregard

15 the requirements of title 11, United States Code, or the

16 Federal Rules of Bankruptcy Procedure, the bankruptcy

17 petition preparer shall be fined under this title, imprisoned

18 not more than 1 year, or both.

19 ‘‘§ 157. Bankruptcy fraud

20 ‘‘A person who, having devised or intending to devise

21 a scheme or artifice to defraud and for the purpose of exe22 cuting or concealing such a scheme or artifice or attempt23 ing to do so—

24 ‘‘(1) files a petition under title 11;

25 ‘‘(2) files a document in a proceeding under

26 title 11; or
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1 ‘‘(3) makes a false or fraudulent representation,

2 claim, or promise concerning or in relation to a pro3 ceeding under title 11, at any time before or after

4 the filing of the petition, or in relation to a proceed5 ing falsely asserted to be pending under such title,

6 shall be fined under this title, imprisoned not more than

7 5 years, or both.’’.

8 (2) TECHNICAL AMENDMENTS.—The chapter

9 analysis for chapter 9 of title 18, United States

10 Code, is amended—

11 (A) by amending the item relating to sec12 tion 153 to read as follows:

‘‘Sec. 153. Embezzlement against estate.’’;

13 and

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

15 items:

‘‘Sec. 156. Knowing disregard of bankruptcy law or rule.

‘‘Sec. 157. Bankruptcy fraud.’’.

16 (b) RICO.—Section 1961(1)(D) of title 18, United

17 States Code, is amended by inserting ‘‘(except a case

18 under section 157 of that title)’’ after ‘‘title 11’’.

19 SEC. 313. PROTECTION AGAINST DISCRIMINATORY TREAT20 MENT OF APPLICATIONS FOR STUDENT

21 LOANS.

22 Section 525 of title 11, United States Code, is

23 amended by adding at the end the following:
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1 ‘‘(c)(1) A governmental unit that operates a student

2 grant or loan program and a person engaged in a business

3 that includes the making of loans guaranteed or insured

4 under a student loan program may not deny a grant, loan,

5 loan guarantee, or loan insurance to a person that is or

6 has been a debtor under this title or a bankrupt or debtor

7 under the Bankruptcy Act, or another person with whom

8 the debtor or bankrupt has been associated, because the

9 debtor or bankrupt is or has been a debtor under this title

10 or a bankrupt or debtor under the Bankruptcy Act, has

11 been insolvent before the commencement of a case under

12 this title or during the pendency of the case but before

13 the debtor is granted or denied a discharge, or has not

14 paid a debt that is dischargeable in the case under this

15 title or that was discharged under the Bankruptcy Act.

16 ‘‘(2) In this section, ‘student loan program’ means

17 the program operated under part B, D, or E of title IV

18 of the Higher Education Act of 1965 or a similar program

19 operated under State or local law.’’.

20 TITLE IV—GOVERNMENTAL

21 BANKRUPTCY ISSUES

22 SEC. 401. EXCEPTION FROM AUTOMATIC STAY FOR POST23 PETITION PROPERTY TAXES.

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

25 amended by inserting after paragraph (16) the following:
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1 ‘‘(18) under subsection (a) of the creation or

2 perfection of a statutory lien for an ad valorem

3 property tax imposed by the District of Columbia, or

4 a political subdivision of a State, if such tax comes

5 due after the filing of the petition.’’.

6 SEC. 402. MUNICIPAL BANKRUPTCY.

7 Section 109(c)(2) of title 11, United States Code, is

8 amended by striking ‘‘generally authorized’’ and inserting

9 ‘‘specifically authorized, in its capacity as a municipality

10 or by name,’’.

11 TITLE V—TECHNICAL

12 CORRECTIONS

13 SEC. 501. AMENDMENTS TO BANKRUPTCY DEFINITIONS,

14 NECESSITATED BY ENACTMENT OF PUBLIC

15 LAW 101–647.

16 (a) ALPHABETIZING AND REDESIGNATING DEFINI17 TIONS.—Section 101 of title 11 of the United States Code,

18 as amended by sections 208, 217, 218, and 304, is amend19 ed—

20 (1) by redesignating paragraph (3) as para21 graph (21B) and transferring such paragraph so as

22 to insert it after paragraph (21A),

23 (2) by redesignating paragraph (39) as para24 graph (51A) and transferring such paragraph so as

25 to insert it after paragraph (51),
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1 (3) by redesignating paragraphs (54) through

2 (57), as so redesignated by section 2522(e) of Public

3 Law 101–647, as paragraphs (53A) through (53D),

4 respectively,

5 (4) by redesignating paragraph (56) as in effect

6 immediately before the enactment of Public Law

7 101–647, as paragraph (35A) and transferring such

8 paragraph so as to insert it after paragraph (35),

9 and

10 (5) by redesignating paragraph (57), as in ef11 fect immediately before the enactment of Public Law

12 101–647, as paragraph (39) and transferring such

13 paragraph so as to insert it after paragraph (38).

14 (b) CONFORMING AND RELATED AMENDMENTS TO

15 TITLE 11 OF THE UNITED STATES CODE, BASED ON RE16 DESIGNATED DEFINITIONS.—(1) Section 101 of title 11

17 of the United States Code, as amended by subsection (a),

18 is amended—

19 (A) in paragraph (6) by striking ‘‘section

20 761(9)’’ and inserting ‘‘section 761’’,

21 (B) in paragraph (22) by striking ‘‘section

22 741(7)’’ and inserting ‘‘section 741’’,

23 (C) in paragraph (35)(B) by striking ‘‘para24 graphs (3)’’ and inserting ‘‘paragraphs (21B)’’,
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1 (D) in paragraph (49)(B)(ii) by striking ‘‘sec2 tion 761(13)’’ and inserting ‘‘section 761’’, and

3 (E) in paragraph (53A)(A), as so redesignated,

4 by striking ‘‘section 741(2)’’ and inserting ‘‘section

5 741’’.

6 (2) Section 362(b) of title 11, United States Code,

7 is amended—

8 (A) in paragraph (6)—

9 (i) by striking ‘‘section 761(4)’’ and insert10 ing ‘‘section 761’’,

11 (ii) by striking ‘‘section 741(7)’’ and in12 serting ‘‘section 741’’,

13 (iii) by striking ‘‘section 101(34), 741(5),

14 or 761(15)’’ and inserting ‘‘section 101, 741, or

15 761’’, and

16 (iv) by striking ‘‘section 101(35) or

17 741(8)’’ and inserting ‘‘section 101 or 741’’,

18 and

19 (B) in paragraph (7)—

20 (i) by striking ‘‘section 741(5) or 761(15)’’

21 and inserting ‘‘section 741 or 761’’, and

22 (ii) by striking ‘‘section 741(8)’’ and in23 serting ‘‘section 741’’.

24 (3) Section 507(a)(5) of title 11, United States Code,

25 is amended—
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1 (A) by striking ‘‘section 557(b)(1)’’ and insert2 ing ‘‘section 557(b)’’, and

3 (B) by striking ‘‘section 557(b)(2)’’ and insert4 ing ‘‘section 557(b)’’.

5 (4) Section 546 of title 11, United States Code, is

6 amended—

7 (A) in subsection (e)—

8 (i) by striking ‘‘section 101(34), 741(5), or

9 761(15)’’ and inserting ‘‘section 101, 741, or

10 761’’, and

11 (ii) by striking ‘‘section 101(35) or

12 741(8)’’ and inserting ‘‘section 101 or 741’’,

13 and

14 (B) in subsection (f)—

15 (i) by striking ‘‘section 741(5) or 761(15)’’

16 and inserting ‘‘section 741 or 761’’, and

17 (ii) by striking ‘‘section 741(8)’’ and in18 serting ‘‘section 741’’.

19 (5) Section 548(d)(2) of title 11, United States Code,

20 is amended—

21 (A) in subparagraph (B)—

22 (i) by striking ‘‘section 101(34), 741(5) or

23 761(15)’’ and inserting ‘‘section 101, 741, or

24 761’’, and
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1 (ii) by striking ‘‘section 101(35) or

2 741(8)’’ and inserting ‘‘section 101 or 741’’,

3 and

4 (B) in subparagraph (C)—

5 (i) by striking ‘‘section 741(5) or 761(15)’’

6 and inserting ‘‘section 741 or 761’’, and

7 (ii) by striking ‘‘section 741(8)’’ and in8 serting ‘‘section 741’’.

9 (6) Section 555 of title 11, United States Code, is

10 amended by striking ‘‘section 741(7)’’ and inserting ‘‘sec11 tion 741 of this title’’.

12 (7) Section 556 of title 11, United States Code, is

13 amended by striking ‘‘section 761(4)’’ and inserting ‘‘sec14 tion 761 of this title’’.

15 (c) CONFORMING AMENDMENTS TO OTHER LAWS

16 BASED ON REDESIGNATED DEFINITIONS.—(1) Section

17 207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C.

18 1787(c)(8)(D)) is amended—

19 (A) in clause (ii)(I) by striking ‘‘section

20 741(7)’’ and inserting ‘‘section 741’’,

21 (B) in clause (iii) by striking ‘‘section 101(24)’’

22 and inserting ‘‘section 101’’,

23 (C) in clause (iv)(I) by striking ‘‘section

24 101(41)’’ and inserting ‘‘section 101’’, and
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1 (D) in clause (v) by striking ‘‘section 101(50)’’

2 and inserting ‘‘section 101’’.

3 (2) Section 11(e)(8)(D) of the Federal Deposit Insur4 ance Act (12 U.S.C. 1821(e)(8)(D)) is amended—

5 (A) in clause (ii)(I) by striking ‘‘section

6 741(7)’’ and inserting ‘‘section 741’’,

7 (B) in clause (iii) by striking ‘‘section 761(4)’’

8 and inserting ‘‘section 761’’,

9 (C) in clause (iv) by striking ‘‘section 101(24)’’

10 and inserting ‘‘section 101’’,

11 (D) in clause (v)(I) by striking ‘‘section

12 101(41)’’ and inserting ‘‘section 101’’, and

13 (E) in clause (viii) by striking ‘‘section

14 101(50)’’ and inserting ‘‘section 101’’.

15 (d) OTHER TECHNICAL AMENDMENTS.—Title 11 of

16 the United States Code is amended—

17 (1) in section 101—

18 (A) in paragraph (33)—

19 (i) in subparagraph (A) by striking

20 ‘‘(12 U.S.C. 1813(u))’’, and

21 (ii) in subparagraph (B) by striking

22 ‘‘(12 U.S.C. 1786(r))’’,

23 (B) in paragraph (34) by striking ‘‘(12

24 U.S.C. 1752(7))’’,
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1 (C) in paragraph (35)(A) by striking ‘‘(12

2 U.S.C. 1813(c)(2))’’,

3 (D) in paragraph (48)—

4 (i) by striking ‘‘(15 U.S.C. 78q-1)’’,

5 and

6 (ii) by striking ‘‘(15 U.S.C.

7 78c(12))’’,

8 (E) in paragraph (49)—

9 (i) in subparagraph (A)(xii)—

10 (I) by striking ‘‘(15 U.S.C. 77a

11 et seq.)’’, and

12 (II) by striking ‘‘(15 U.S.C.

13 77c(b))’’, and

14 (ii) in subparagraph (B)(vi) by strik15 ing ‘‘(15 U.S.C. 77c(b))’’, and

16 (F) in paragraph (53D), as so redesig17 nated by subsection (a), by striking the period

18 at the end and inserting a semicolon,

19 (2) in section 109(b)(2) by striking ‘‘(12 U.S.C.

20 1813(h))’’,

21 (3) in section 322(a) by striking ‘‘1302, or

22 1202’’ and inserting ‘‘1202, or 1302’’,

23 (4) in section 346—

24 (A) in subsection (a) by striking ‘‘Internal

25 Revenue Code of 1954 (26 U.S.C. 1 et seq.)’’
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1 and inserting ‘‘Internal Revenue Code of

2 1986’’, and

3 (B) in subsection (g)(1)(C) by striking

4 ‘‘Internal Revenue Code of 1954 (26 U.S.C.

5 371)’’ and inserting ‘‘Internal Revenue Code of

6 1986’’,

7 (5) in section 348—

8 (A) in subsection (b) by striking ‘‘1301(a),

9 1305(a), 1201(a), 1221, and 1228(a)’’ and in10 serting ‘‘1201(a), 1221, 1228(a), 1301(a), and

11 1305(a)’’, and

12 (B) in subsections (b), (c), (d), and (e) by

13 striking ‘‘1307, or 1208’’ each place it appears

14 and inserting ‘‘1208, or 1307’’,

15 (6) in section 349(a) by striking ‘‘109(f)’’ and

16 inserting ‘‘109(g)’’,

17 (7) in section 362—

18 (A) in subsection (a) by striking ‘‘(15

19 U.S.C. 78eee(a)(3))’’, and

20 (B) in subsection (b)—

21 (i) by striking ‘‘(15 U.S.C.

22 78eee(a)(3))’’,

23 (ii) in paragraph (10) by striking

24 ‘‘or’’ at the end,

25 (iii) in paragraph (12)—
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1 (I) by striking ‘‘the Ship Mort2 gage Act, 1920 (46 App. U.S.C. 911

3 et seq.)’’ and inserting ‘‘section 31325

4 of title 46’’, and

5 (II) by striking ‘‘(46 App. U.S.C.

6 1117 and 1271 et seq., respectively)’’,

7 (iv) in paragraph (13)—

8 (I) by striking ‘‘the Ship Mort9 gage Act, 1920 (46 App. U.S.C. 911

10 et seq.)’’ each place it appears and in11 serting ‘‘section 31325 of title 46’’,

12 (II) by striking ‘‘(46 App. U.S.C.

13 1117 and 1271 et seq., respectively)’’,

14 and

15 (III) by striking ‘‘or’’ at the end,

16 (v) in paragraph (15), as added by

17 Public Law 101–508, by striking ‘‘or’’ at

18 the end,

19 (vi) in paragraph (16), as added by

20 Public Law 101–508—

21 (I) by striking ‘‘(20 U.S.C. 1001

22 et seq.)’’, and

23 (II) by striking the period at the

24 end and inserting a semicolon, and
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1 (vii) in paragraph (14), as added by

2 Public Law 101–311—

3 (I) by striking the period at the

4 end and inserting ‘‘; or’’,

5 (II) by redesignating such para6 graph as paragraph (17), and

7 (III) by transferring such para8 graph so as to insert such paragraph

9 after paragraph (16),

10 (8) in section 363—

11 (A) in subsection (b)(2) by striking ‘‘(15

12 U.S.C. 18a)’’, and

13 (B) in subsection (c)(1) by striking ‘‘1304,

14 1203, or 1204’’ and inserting ‘‘1203, 1204, or

15 1304’’,

16 (9) in section 364—

17 (A) in subsection (a) by striking ‘‘1304,

18 1203, or 1204’’ and inserting ‘‘1203, 1204, or

19 1304’’, and

20 (B) in subsection (f)—

21 (i) by striking ‘‘(15 U.S.C. 77e)’’, and

22 (ii) by striking ‘‘(15 U.S.C. 77aaa et

23 seq.)’’,

24 (10) in section 365—
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1 (A) in subsection (d)(6)(C) by striking

2 ‘‘the Federal Aviation Act of 1958 (49 U.S.C.

3 1301)’’ and inserting ‘‘section 40102 of title

4 49’’,

5 (B) in subparagraphs (A) and (B) of sub6 section (g)(2) by striking ‘‘1307, or 1208’’ each

7 place it appears and inserting ‘‘1208, or 1307’’,

8 (C) in subsection (n)(1)(B) by striking ‘‘to

9 to’’ and inserting ‘‘to’’,

10 (D) in subsection (o) by striking ‘‘the Fed11 eral’’ the first place it appears and all that fol12 lows through ‘‘successors,’’, and inserting ‘‘a

13 Federal depository institutions regulatory agen14 cy (or predecessor to such agency)’’, and

15 (E) by striking subsection (p),

16 (11) in section 507, as amended by section

17 304—

18 (A) in subsection (a)(9) by striking ‘‘the

19 Federal’’ the first place it appears and all that

20 follows through ‘‘successors,’’, and inserting ‘‘a

21 Federal depository institutions regulatory agen22 cy (or predecessor to such agency)’’, and

23 (B) in subsection (d) by striking ‘‘or

24 (a)(6)’’ and inserting ‘‘(a)(6), (a)(7), (a)(8), or

25 (a)(9)’’,
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1 (12) in section 522—

2 (A) in subsection (b) by striking ‘‘Bank3 ruptcy Rules’’ and inserting ‘‘Federal Rules of

4 Bankruptcy Procedure’’, and

5 (B) in subsection (d)(10)(E)(iii)—

6 (i) by striking ‘‘408, or 409’’ the first

7 place it appears and inserting ‘‘or 408’’,

8 and

9 (ii) by striking ‘‘Internal Revenue

10 Code of 1954 (26 U.S.C. 401(a), 403(a),

11 403(b), 408, or 409)’’ and inserting ‘‘In12 ternal Revenue Code of 1986’’,

13 (13) in section 523—

14 (A) in subsection (a)—

15 (i) by striking ‘‘1141,,’’ and inserting

16 ‘‘1141,’’, and

17 (ii) in paragraph (2)(C) by striking

18 ‘‘(15 U.S.C. 1601 et seq.)’’,

19 (B) in subsection (b)—

20 (i) by striking ‘‘(20 U.S.C. 1087-3)’’,

21 and

22 (ii) by striking ‘‘(42 U.S.C. 294f)’’,

23 and
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1 (C) in subsection (e) by striking ‘‘deposi2 tory institution or insured credit union’’ and in3 serting ‘‘insured depository institution’’,

4 (14) in section 524—

5 (A) in subsection (a)(3) by striking

6 ‘‘1328(c)(1)’’ and inserting ‘‘1328(a)(1)’’,

7 (B) in subsection (c)(4) by striking

8 ‘‘recission’’ and inserting ‘‘rescission’’, and

9 (C) in subsection (d)(1)(B)(ii) by adding

10 ‘‘and’’ at the end,

11 (15) in section 525(a)—

12 (A) by striking ‘‘(7 U.S.C. 499a-499s)’’,

13 (B) by striking ‘‘(7 U.S.C. 181-229)’’, and

14 (C) by striking ‘‘(57 Stat. 422; 7 U.S.C.

15 204)’’,

16 (16) in section 542(e) by striking ‘‘to to’’ and

17 inserting ‘‘to’’,

18 (17) in section 543(d)(1) by striking ‘‘section,’’

19 and inserting ‘‘section’’,

20 (18) in section 549(b) inserting ‘‘the trustee

21 may not avoid under subsection (a) of this section’’

22 after ‘‘involuntary case,’’,

23 (19) in section 553—

24 (A) in subsection (a)(1) by striking ‘‘other

25 than under section 502(b)(3) of this title’’, and
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1 (B) in subsection (b)(1) by striking

2 ‘‘362(b)(14),,’’ and inserting ‘‘362(b)(14),’’,

3 (20) in section 555 by striking ‘‘(15 U.S.C.

4 78aaa et seq.)’’,

5 (21) in section 559 by striking ‘‘(15 U.S.C.

6 78aaa et seq.)’’,

7 (22) in section 706(a) by striking ‘‘1307, or

8 1208’’ and inserting ‘‘1208, or 1307’’,

9 (23) in section 724(d) by striking ‘‘Internal

10 Revenue Code of 1954 (26 U.S.C. 6323)’’ and in11 serting ‘‘Internal Revenue Code of 1986’’,

12 (24) in section 726(b)—

13 (A) inserting a comma after ‘‘section

14 1112’’, and

15 (B) by inserting ‘‘1009,’’ after ‘‘chapter

16 under section’’,

17 (25) in section 741(4)(A)(iii) by striking ‘‘(15

18 U.S.C. 78a et seq.)’’,

19 (26) in section 742 by striking ‘‘(15 U.S.C.

20 78aaa et seq.)’’,

21 (27) in section 743 by striking ‘‘342(a)’’ and

22 inserting ‘‘342’’,

23 (28) in section 745(c) by striking ‘‘Internal

24 Revenue Code of 1954 (26 U.S.C. 1 et seq.)’’ and

25 inserting ‘‘Internal Revenue Code of 1986’’,
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1 (29) in section 761—

2 (A) in paragraph (1) by striking ‘‘(7

3 U.S.C. 1 et seq.)’’,

4 (B) in paragraph (5) by striking ‘‘(7

5 U.S.C. 6c(b))’’, and

6 (C) in paragraph (13) by striking ‘‘(7

7 U.S.C. 23)’’,

8 (30) in section 1104(d), as redesignated by sec9 tion 211, inserting a comma after ‘‘interest’’,

10 (31) in section 1123(a)(1) inserting a comma

11 after ‘‘title’’ the last place it appears,

12 (32) in section 1129—

13 (A) in subsection (a)—

14 (i) in paragraph (4) by striking the

15 semicolon at the end and inserting a pe16 riod, and

17 (ii) in paragraph (12) inserting ‘‘of

18 title 28’’ after ‘‘section 1930’’, and

19 (B) in subsection (d) by striking ‘‘(15

20 U.S.C. 77e)’’,

21 (33) in section 1145—

22 (A) in subsection (a)—

23 (i) by striking ‘‘does’’ and inserting

24 ‘‘do’’,
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1 (ii) by striking ‘‘(15 U.S.C. 77e)’’,

2 and

3 (iii) in paragraph (3)(B)(i) by striking

4 ‘‘(15 U.S.C. 78m or 78o(d))’’,

5 (B) in subsection (b)(1) by striking ‘‘(15

6 U.S.C. 77b(11))’’, and

7 (C) in subsection (d) by striking ‘‘(15

8 U.S.C. 77aaa et seq.)’’,

9 (34) in section 1166(2) by striking ‘‘(45 U.S.C.

10 791(b))’’,

11 (35) in section 1167—

12 (A) by striking ‘‘(45 U.S.C. 151 et seq.)’’,

13 and

14 (B) by striking ‘‘(45 U.S.C. 156)’’,

15 (36) in section 1226(b)(2)—

16 (A) by striking ‘‘1202(d)’’ and inserting

17 ‘‘1202(c)’’, and

18 (B) by striking ‘‘1202(e)’’ and inserting

19 ‘‘1202(d)’’,

20 (37) in section 1302(b)(3) by striking ‘‘and’’ at

21 the end, and

22 (38) in section 1328(a)—

23 (A) in paragraph (2) by striking ‘‘(5) or

24 (8)’’ and inserting ‘‘(5), (8), or (9)’’, and

25 (B) by striking the last paragraph (3), and
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1 (39) in the table of chapters by striking the

2 item relating to chapter 15.

3 SEC. 502. TITLE 28 OF THE UNITED STATES CODE.

4 Section 586(a)(3) of title 28, United States Code, is

5 amended in the matter preceding subparagraph (A) by in6 serting ‘‘12,’’ after ‘‘11,’’.

7 TITLE VI—BANKRUPTCY REVIEW

8 COMMISSION

9 SEC. 601. SHORT TITLE.

10 This title may be cited as the ‘‘National Bankruptcy

11 Review Commission Act’’.

12 SEC. 602. ESTABLISHMENT.

13 There is established the National Bankruptcy Review

14 Commission (referred to as the ‘‘Commission’’).

15 SEC. 603. DUTIES OF THE COMMISSION.

16 The duties of the Commission are—

17 (1) to investigate and study issues and prob18 lems relating to title 11, United States Code (com19 monly known as the ‘‘Bankruptcy Code’’);

20 (2) to evaluate the advisability of proposals and

21 current arrangements with respect to such issues

22 and problems;

23 (3) to prepare and submit to the Congress, the

24 Chief Justice, and the President a report in accord25 ance with section 608; and
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1 (4) to solicit divergent views of all parties con2 cerned with the operation of the bankruptcy system.

3 SEC. 604. MEMBERSHIP.

4 (a) NUMBER AND APPOINTMENT.—The Commission

5 shall be composed of 9 members as follows:

6 (1) Three members appointed by the President,

7 1 of whom shall be designated as chairman by the

8 President.

9 (2) One member shall be appointed by the

10 President pro tempore of the Senate.

11 (3) One member shall be appointed by the Mi12 nority Leader of the Senate.

13 (4) One member shall be appointed by the

14 Speaker of the House of Representatives.

15 (5) One member shall be appointed by the Mi16 nority Leader of the House of Representatives.

17 (6) Two members appointed by the Chief Jus18 tice.

19 Members of Congress, and officers and employees of the

20 executive branch, shall be ineligible for appointment to the

21 Commission.

22 (b) TERM.—Members of the Commission shall be ap23 pointed for the life of the Commission.
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1 (c) QUORUM.—Five members of the Commission

2 shall constitute a quorum, but a lesser number may con3 duct meetings.

4 (d) APPOINTMENT DEADLINE.—The first appoint5 ments made under subsection (a) shall be made within 60

6 days after the date of enactment of this Act.

7 (e) FIRST MEETING.—The first meeting of the Com8 mission shall be called by the chairman and shall be held

9 within 210 days after the date of enactment of this Act.

10 (f) VACANCY.—A vacancy on the Commission result11 ing from the death or resignation of a member shall not

12 affect its powers and shall be filled in the same manner

13 in which the original appointment was made.

14 (g) CONTINUATION OF MEMBERSHIP.—If any mem15 ber of the Commission who was appointed to the Commis16 sion as an officer or employee of a government leaves that

17 office, or if any member of the Commission who was not

18 appointed in such a capacity becomes an officer or em19 ployee of a government, the member may continue as a

20 member of the Commission for not longer than the 90-

21 day period beginning on the date the member leaves that

22 office or becomes such an officer or employee, as the case

23 may be.

24 (h) CONSULTATION PRIOR TO APPOINTMENT.—Prior

25 to the appointment of members of the Commission, the
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1 President, the President pro tempore of the Senate, the

2 Speaker of the House of Representatives, and the Chief

3 Justice shall consult with each other to ensure fair and

4 equitable representation of various points of view in the

5 Commission and its staff.

6 SEC. 605. COMPENSATION OF THE COMMISSION.

7 (a) PAY.—

8 (1) NONGOVERNMENT EMPLOYEES.—Each

9 member of the Commission who is not otherwise em10 ployed by the United States Government shall be en11 titled to receive the daily equivalent of the annual

12 rate of basic pay payable for level IV of the Execu13 tive Schedule under section 5315 of title 5, United

14 States Code, for each day (including travel time)

15 during which he or she is engaged in the actual per16 formance of duties as a member of the Commission.

17 (2) GOVERNMENT EMPLOYEES.—A member of

18 the Commission who is an officer or employee of the

19 United States Government shall serve without addi20 tional compensation.

21 (b) TRAVEL.—Members of the Commission shall be

22 reimbursed for travel, subsistence, and other necessary ex23 penses incurred by them in the performance of their du24 ties.
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1 SEC. 606. STAFF OF COMMISSION; EXPERTS AND CONSULT2 ANTS.

3 (a) STAFF.—

4 (1) APPOINTMENT.—The chairman of the Com5 mission may, without regard to the civil service laws

6 and regulations, appoint, and terminate an executive

7 director and such other personnel as are necessary

8 to enable the Commission to perform its duties. The

9 employment of an executive director shall be subject

10 to confirmation by the Commission.

11 (2) COMPENSATION.—The chairman of the

12 Commission may fix the compensation of the execu13 tive director and other personnel without regard to

14 the provisions of chapter 51 and subchapter II of

15 chapter 53 of title 5, United States Code, relating

16 to classification of positions and General Schedule

17 pay rates, except that the rate of pay for the execu18 tive director and other personnel may not exceed the

19 rate payable for level V of the Executive Schedule

20 under section 5316 of that title.

21 (b) EXPERTS AND CONSULTANTS.—The Commission

22 may procure temporary and intermittent services of ex23 perts and consultants under section 3109(b) of title 5,

24 United States Code.
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1 SEC. 607. POWERS OF THE COMMISSION.

2 (a) HEARINGS AND MEETINGS.—The Commission or,

3 on authorization of the Commission, a member of the

4 Commission, may hold such hearings, sit and act at such

5 time and places, take such testimony, and receive such evi6 dence, as the Commission considers appropriate. The

7 Commission or a member of the Commission may admin8 ister oaths or affirmations to witnesses appearing before

9 it.

10 (b) OFFICIAL DATA.—The Commission may secure

11 directly from any Federal department, agency, or court

12 information necessary to enable it to carry out this title.

13 Upon request of the chairman of the Commission, the

14 head of a Federal department or agency or chief judge

15 of a Federal court shall furnish such information, consist16 ent with law, to the Commission.

17 (c) FACILITIES AND SUPPORT SERVICES.—The Ad18 ministrator of General Services shall provide to the Com19 mission on a reimbursable basis such facilities and support

20 services as the Commission may request. Upon request of

21 the Commission, the head of a Federal department or

22 agency may make any of the facilities or services of the

23 agency available to the Commission to assist the Commis24 sion in carrying out its duties under this title.

25 (d) EXPENDITURES AND CONTRACTS.—The Commis26 sion or, on authorization of the Commission, a member
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1 of the Commission may make expenditures and enter into

2 contracts for the procurement of such supplies, services,

3 and property as the Commission or member considers ap4 propriate for the purposes of carrying out the duties of

5 the Commission. Such expenditures and contracts may be

6 made only to such extent or in such amounts as are pro7 vided in appropriation Acts.

8 (e) MAILS.—The Commission may use the United

9 States mails in the same manner and under the same con10 ditions as other Federal departments and agencies of the

11 United States.

12 (f) GIFTS.—The Commission may accept, use, and

13 dispose of gifts or donations of services or property.

14 SEC. 608. REPORT.

15 The Commission shall submit to the Congress, the

16 Chief Justice, and the President a report not later than

17 2 years after the date of its first meeting. The report shall

18 contain a detailed statement of the findings and conclu19 sions of the Commission, together with its recommenda20 tions for such legislative or administrative action as it con21 siders appropriate.

22 SEC. 609. TERMINATION.

23 The Commission shall cease to exist on the date that

24 is 30 days after the date on which it submits its report

25 under section 608.
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1 SEC. 610. AUTHORIZATION OF APPROPRIATIONS.

2 There is authorized to be appropriated $1,500,000 to

3 carry out this title.

4 TITLE VII—SEVERABILITY; EF5 FECTIVE DATE; APPLICATION

6 OF AMENDMENTS.

7 SEC. 701. SEVERABILITY.

8 If any provision of this Act or amendment made by

9 this Act or the application of such provision or amendment

10 to any person or circumstance is held to be unconstitu11 tional, the remaining provisions of and amendments made

12 by this Act and the application of such other provisions

13 and amendments to any person or circumstance shall not

14 be affected thereby.

15 SEC. 702. EFFECTIVE DATE; APPLICATION OF AMEND16 MENTS.

17 (a) EFFECTIVE DATE.—Except as provided in sub18 section (b), this Act shall take effect on the date of the

19 enactment of this Act.

20 (b) APPLICATION OF AMENDMENTS.—(1) Except as

21 provided in paragraph (2), the amendments made by this

22 Act shall not apply with respect to cases commenced under

23 title 11 of the United States Code before the date of the

24 enactment of this Act.

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

26 the amendment made by section 111.
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1 (B) The amendments made by sections 113 and 117

2 shall apply with respect to cases commenced under title

3 11 of the United States Code before, on, and after the

4 date of the enactment of this Act.

5 (C) Section 1110 of title 11, United States Code, as

6 amended by section 201 of this Act, shall apply with re7 spect to any lease, as defined in such section 1110(c) as

8 so amended, entered into in connection with a settlement

9 of any proceeding in any case pending under title 11 of

10 the United States Code on the date of the enactment of

11 this Act.

12 (D) The amendments made by section 305 shall

13 apply only to agreements entered into after the date of

14 enactment of this Act.

Passed the House of Representatives October 5,

1994.

Attest: DONNALD K. ANDERSON,

Clerk.

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