I

103D CONGRESS

2D SESSION H. R. 5116

To amend title 11 of the United States Code.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 28, 1994

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

bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 11 of the United States Code.

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

3 SECTION 1. SHORT TITLE.

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

5 ‘‘Bankruptcy Reform Act of 1994’’.

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

7 as follows:

Sec. 1. Short title.

TITLE I—IMPROVED BANKRUPTCY ADMINISTRATION

Sec. 101. Expedited hearing on automatic stay.

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

Sec. 103. Expedited procedure for reaffirmation of debts.

Sec. 104. Powers of bankruptcy courts.
2

•HR 5116 IH

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; settlement of claims and demands for payment.

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

Sec. 113. Sovereign immunity.

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. Exclusion from the estate of certain accounts and chattel paper.

Sec. 214. Timely filing of claims, interests, and adminstrative expense requests.

Sec. 215. Protection of security interest in post-petition rents.

Sec. 216. Amendment to definition of swap agreement.

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. Preservation of home mortgage liens.

Sec. 306. Interest on interest.

Sec. 307. Exception to discharge.

Sec. 308. Payments.

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.
3

•HR 5116 IH

TITLE VI—SEVERABILITY; EFFECTIVE DATE; APPLICATION OF

AMENDMENTS.

Sec. 601. Severability.

Sec. 602. Effective date; application of amendments.

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 CERTAIN TIME PERIODS

15 FOR FILING PLAN.

16 Section 158 of title 28, United States Code, is

17 amended—

18 (1) in subsection (a) by striking ‘‘from’’ the

19 first place it appears and all that follows through

20 ‘‘decrees,’’, and inserting the following:

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

22 ‘‘(2) from interlocutory orders and decrees is23 sued under section 1121(d) of title 11 increasing the
4

•HR 5116 IH

1 time periods referred to in section 1121 of such title;

2 and

3 ‘‘(3) with leave of the court, from other inter4 locutory orders and decrees;’’.

5 SEC. 103. EXPEDITED PROCEDURE FOR REAFFIRMATION

6 OF DEBTS.

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

8 United States Code, is amended—

9 (1) in paragraph (2)—

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

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

12 (C) by inserting after subparagraph (A),

13 as so designated, the following:

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

15 conspicuous statement which advises the debtor

16 that such agreement is not required under this

17 title, under nonbankruptcy law, or under any

18 agreement not in accordance with the provisions

19 of this subsection;’’, and

20 (2) in paragraph (3)—

21 (A) in the matter preceding subparagraph

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

23 it appears,

24 (B) in subparagraph (A)—
5

•HR 5116 IH

1 (i) by inserting ‘‘such agreement’’

2 after ‘‘(A)’’, and

3 (ii) by striking ‘‘and’’ at the end,

4 (C) in subparagraph (B)—

5 (i) by inserting ‘‘such agreement’’

6 after ‘‘(B)’’, and

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

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

9 ‘‘(C) the attorney fully advised the debtor

10 of the legal effect and consequences of—

11 ‘‘(i) an agreement of the kind speci12 fied in this subsection; and

13 ‘‘(ii) any default under such an agree14 ment;’’.

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

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

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

18 was not represented by an attorney during the course of

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

20 SEC. 104. POWERS OF BANKRUPTCY COURTS.

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

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

23 following:

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

25 of any party in interest, may—
6

•HR 5116 IH

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

2 case or proceeding under this title after notice to the

3 parties in interest; and

4 ‘‘(2) unless inconsistent with another provision

5 of this title or with applicable Bankruptcy Rules,

6 issue an order at any such conference prescribing

7 such limitations and conditions as the court deems

8 appropriate to ensure that the case is handled expe9 ditiously and economically, including an order that—

10 ‘‘(A) sets the date by which the debtor

11 must accept or reject an executory contract or

12 unexpired lease; or

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

14 title—

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

16 or trustee if one has been appointed, shall

17 file a disclosure statement and plan;

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

19 or trustee if one has been appointed, shall

20 solicit acceptances of a plan;

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

22 in interest other than a debtor may file a

23 plan;
7

•HR 5116 IH

1 ‘‘(iv) fixes the notice to be provided

2 regarding the hearing on approval of the

3 disclosure statement; or

4 ‘‘(v) 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),
8

•HR 5116 IH

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 a re19 port containing the factual basis of such finding.

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

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

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

23 judges in a circuit for which a bankruptcy appellate panel

24 service is established under paragraph (1), made after the

25 expiration of the 1-year period beginning on the date such
9

•HR 5116 IH

1 service is established, the judicial council of the circuit

2 shall determine whether a circumstance specified in sub3 paragraph (A) or (B) of such paragraphs exists.

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

5 3-year period beginning on the date an bankruptcy appel6 late panel service is established under paragraph (1), the

7 judicial council of the circuit may determine whether a cir8 cumstance specified in subparagraph (A) or (B) of such

9 paragraphs exists.

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

11 circumstances exists, the judicial council may provide for

12 the completion of the appeals then pending before such

13 service and the orderly termination of such service.

14 ‘‘(3) Bankruptcy judges appointed under paragraph

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

16 paragraph.’’, and

17 (4) by inserting after paragraph (4), as so re18 designated, the following:

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

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

21 appellate panel service, except that a member of such serv22 ice may not hear an appeal originating in the district for

23 which such member is appointed or designated under sec24 tion 152 of this title.
10

•HR 5116 IH

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,

8 United 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—
11

•HR 5116 IH

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.—

6 Section 2075 of title 28, United States Code, is amended

7 by striking ‘‘ninety days’’ and inserting ‘‘180 days’’.

8 SEC. 105. PARTICIPATION BY BANKRUPTCY ADMINIS9 TRATOR AT MEETINGS OF CREDITORS AND

10 EQUITY SECURITY HOLDERS.

11 (a) PRESIDING OFFICER.—A bankruptcy adminis12 trator appointed under section 302(d)(3)(I) of the Bank13 ruptcy Judges, United States Trustees, and Family Farm14 er Bankruptcy Act of 1986 (28 U.S.C. 581 note; Public

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

16 317(a) of the Federal Courts Study Committee Implemen17 tation Act of 1990 (Public Law 101–650; 104 Stat. 5115),

18 or the bankruptcy administrator’s designee may preside

19 at the meeting of creditors convened under section 341(a)

20 of title 11, United States Code. The bankruptcy adminis21 trator or the bankruptcy administrator’s designee may

22 preside at any meeting of equity security holders convened

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

24 (b) EXAMINATION OF THE DEBTOR.—The bank25 ruptcy administrator or the bankruptcy administrator’s
12

•HR 5116 IH

1 designee may examine the debtor at the meeting of credi2 tors and may administer the oath required under section

3 343 of title 11, United States Code.

4 SEC. 106. DEFINITION RELATING TO ELIGIBILITY TO SERVE

5 ON CHAPTER 11 COMMITTEES.

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

7 amended to read as follows:

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

9 and corporation, but does not include governmental

10 unit, except that a governmental unit that—

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

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

13 loan guarantee agreement; or

14 ‘‘(ii) as receiver or liquidating agent

15 of a person;

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

17 payable by or on behalf of the debtor or an af18 filiate of the debtor; or

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

20 asset of—

21 ‘‘(i) an employee pension benefit plan

22 that is a governmental plan, as defined in

23 section 414(d) of the Internal Revenue

24 Code of 1986; or
13

•HR 5116 IH

1 ‘‘(ii) an eligible deferred compensation

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

3 Internal Revenue Code of 1986;

4 shall be considered, for purposes of section 1102 of

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

6 or such benefit;’’.

7 SEC. 107. INCREASED INCENTIVE COMPENSATION FOR

8 TRUSTEES.

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

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

11 ‘‘$3,000’’ the last place it appears, and inserting the fol12 lowing:

13 ‘‘25 percent on the first $5,000 or less, 10 percent on any

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

15 5 percent on any amount in excess of $50,000 but not

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

17 to exceed 3 percent of such moneys in excess of

18 $1,000,000’’.

19 SEC. 108. DOLLAR ADJUSTMENTS.

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

21 Section 109(e) of title 11, United States Code, is amend22 ed—

23 (1) by striking ‘‘$100,000’’ each place it ap24 pears and inserting ‘‘$250,000’’, and
14

•HR 5116 IH

1 (2) by striking ‘‘$350,000’’ each place it ap2 pears and inserting ‘‘$750,000’’.

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

4 11, United States Code, is amended—

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

6 inserting ‘‘$10,000’’, and

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

8 inserting ‘‘$10,000’’.

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

10 States Code, is amended—

11 (1) in paragraph (3)(B) by striking ‘‘$2,000’’

12 and inserting ‘‘$4,000’’,

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

14 and inserting ‘‘$4,000’’,

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

16 inserting ‘‘$4,000’’, and

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

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

20 States Code, is amended—

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

22 inserting ‘‘$15,000’’,

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

24 inserting ‘‘$2,400’’,

25 (3) in paragraph (3)—
15

•HR 5116 IH

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

2 ‘‘$400’’, and

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

4 ‘‘$8,000’’,

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

7 (5) in paragraph (5)—

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

9 ‘‘$800’’, and

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

11 ‘‘$7,500’’,

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

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

15 inserting ‘‘$8,000’’, and

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

17 and inserting ‘‘$15,000’’.

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

19 United States Code, is amended—

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

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

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

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

24 under sections 109(e), 303(b), 507(a), 522(d), and
16

•HR 5116 IH

1 523(a)(2)(C) immediately before such April 1 shall be ad2 justed—

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

4 Price Index for All Urban Consumers, published by

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

6 period ending immediately before January 1 preced7 ing such April 1, and

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

9 amount that represents such change.

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

11 year interval ending on March 1 thereafter, the Judicial

12 Conference of the United States shall publish in the Fed13 eral Register the dollar amounts that will become effective

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

15 522(d) of this title.

16 ‘‘(3) Adjustments made in accordance with para17 graph (1) shall not apply with respect to cases commenced

18 before the date of such adjustments.’’.

19 SEC. 109. PREMERGER NOTIFICATION.

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

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

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

23 such section, the notification required by such

24 subsection to be given by the debtor shall be

25 given by the trustee; and
17

•HR 5116 IH

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

2 such section, each waiting period applicable

3 under such subsection shall end on the 10th

4 day after the date of the receipt required by

5 subsection (b)(1)(A) of such section unless such

6 waiting period is extended—

7 ‘‘(i) pursuant to subsection (g)(2) of

8 such section or, in the case of a tender

9 offer, pursuant to subsection (e)(2) of such

10 section; or

11 ‘‘(ii) by the court after notice and a

12 hearing.’’.

13 SEC. 110. ALLOWANCE OF CREDITOR COMMITTEE EX14 PENSES.

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

16 amended—

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

18 end,

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

20 the end, and

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

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

23 under section 1102 of this title, if such ex24 penses are incurred in the performance of the

25 duties of such committee;’’.
18

•HR 5116 IH

1 SEC. 111. SUPPLEMENTAL INJUNCTIONS; SETTLEMENT OF

2 CLAIMS AND DEMANDS FOR PAYMENT.

3 (a) SUPPLEMENTAL INJUNCTIONS.—Section 524 of

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

5 end the following:

6 ‘‘(g)(1)(A) After notice and hearing, a court that en7 ters an order confirming a plan of reorganization under

8 chapter 11 may issue an injunction to supplement the in9 junctive effect of a discharge under this section.

10 ‘‘(B) An injunction may be issued under subpara11 graph (A) to enjoin persons and governmental units from

12 taking legal action for the purpose of directly or indirectly

13 collecting, recovering, or receiving payment or recovery of,

14 on, or with respect to any claim or demand that, under

15 a plan of reorganization, is to be paid in whole or in part

16 by a trust described in paragraph (2)(B)(i), except such

17 legal actions as are expressly allowed by the injunction,

18 the confirmation order, or the plan of reorganization.

19 ‘‘(2)(A) If the requirements of subparagraph (B) are

20 met at any time, then, after entry of an injunction under

21 paragraph (1), any proceeding that involves the validity,

22 application, construction, or modification of the injunction

23 or of this subsection with respect to the injunction may

24 be commenced only in the district court in which the in25 junction was entered, and such court shall have exclusive
19

•HR 5116 IH

1 jurisdiction over any such proceeding without regard to

2 the amount in controversy.

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

4 that—

5 ‘‘(i) the injunction is to be implemented in con6 nection with a trust that, pursuant to the plan of re7 organization—

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

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

10 has been named as a defendant in personal in11 jury, wrongful death, or property-damage ac12 tions seeking recovery for damages allegedly

13 caused by the presence of, or exposure to, as14 bestos or asbestos-containing products;

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

16 by the securities of 1 or more debtors involved

17 in the plan of reorganization and by the obliga18 tion of such debtor or debtors to make future

19 payments, including dividends;

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

21 rights granted under the plan could own, a ma22 jority of the voting shares of—

23 ‘‘(aa) each such debtor;

24 ‘‘(bb) the parent corporation of each

25 such debtor; or
20

•HR 5116 IH

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

2 that is also a debtor; and

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

4 claims and demands; and

5 ‘‘(ii) the court, at any time pursuant to its au6 thority under the plan, over the trust, or otherwise,

7 determines that—

8 ‘‘(I) the debtor may be subject to substan9 tial future demands for payment arising out of

10 the same or similar conduct or events that gave

11 rise to the claims that are addressed by the in12 junction;

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

14 timing of such future demands cannot be deter15 mined;

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

17 procedures prescribed by the plan may threaten

18 the plan’s purpose to deal equitably with claims

19 and future demands;

20 ‘‘(IV) as part of the process of seeking ap21 proval of the plan of reorganization—

22 ‘‘(aa) the terms of the injunction pro23 posed to be issued under paragraph (1)(A),

24 including any provisions barring actions

25 against third parties pursuant to para-
21

•HR 5116 IH

1 graph (4)(A), shall be set out in the plan

2 of reorganization and in any disclosure

3 statement supporting the plan; and

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

5 the claimants whose claims are to be ad6 dressed by a trust described in clause (i) is

7 established and votes, by at least 75 per8 cent of those voting, in favor of the plan;

9 and

10 ‘‘(V) pursuant to court orders or otherwise,

11 the trust will operate through mechanisms such

12 as structured, periodic or supplemental pay13 ments, pro rata distributions, matrices, or peri14 odic review of estimates of the numbers and

15 values of present claims and future demands or

16 other comparable alternates, that provide rea17 sonable assurance that the trust will value, and

18 be in a financial position to pay, present claims

19 and future demands that involve similar claims

20 in substantially the same manner, except that

21 with respect to a trust in existence on the date

22 of the enactment of the Bankruptcy Amend23 ments of 1994 that is subject to a court order

24 staying it from settling or paying further

25 claims—
22

•HR 5116 IH

1 ‘‘(aa) the requirements of this

2 subclause shall apply as of the date such

3 stay is lifted or otherwise dissolved; and

4 ‘‘(bb) such a trust that meets the re5 quirements of the subclause as of the date

6 such stay is lifted or dissolved, shall be

7 treated for all legal purposes as being in

8 compliance with this subsection from the

9 date of the enactment of such Act.

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

11 met and the order approving the plan of reorganization

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

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

15 of reorganization—

16 ‘‘(i) the injunction shall be valid and enforce17 able and may not be revoked or modified by any

18 court except through appeal in accordance with

19 paragraph (6);

20 ‘‘(ii) no entity that pursuant to the plan of re21 organization or thereafter becomes a direct or indi22 rect transferee of, or successor to any assets of, a

23 debtor or trust that is the subject of the injunction

24 shall be liable with respect to any claim or demand
23

•HR 5116 IH

1 made against it by reason of its becoming such a

2 transferee or successor; and

3 ‘‘(iii) no entity that pursuant to the plan of re4 organization or thereafter makes a loan to such a

5 debtor or trust or to such a successor or transferee

6 shall, by reason of making the loan, be liable with

7 respect to any claim or demand made against it, nor

8 shall any pledge of assets made in connection with

9 such a loan be upset or impaired for that reason;

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

11 ‘‘(i) imply that an entity described in subpara12 graph (A) (ii) or (iii) would, if this paragraph were

13 not applicable, have liability by reason of any of the

14 acts described in subparagraph (A);

15 ‘‘(ii) relieve any such entity of the duty to com16 ply with, or of liability under, any Federal or State

17 law regarding the making of a fraudulent convey18 ance in a transaction described in subparagraph (A)

19 (ii) or (iii); or

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

21 to comply with the terms of the plan of reorganiza22 tion or affect the power of the court to exercise its

23 authority under sections 1141 and 1142 to compel

24 the debtor to do so.
24

•HR 5116 IH

1 ‘‘(4)(A)(i) Subject to subparagraph (B), an injunc2 tion under paragraph (1) shall be valid and enforceable

3 against all persons and governmental units that it ad4 dresses.

5 ‘‘(ii) Notwithstanding the provisions of section

6 524(e), such an injunction may bar any action directed

7 against a third party who is identifiable from the terms

8 of the injunction (by name or as part of an identifiable

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

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

11 by reason of—

12 ‘‘(I) the party’s ownership of a financial inter13 est in the debtor, a past or present affiliate of the

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

15 ‘‘(II) the party’s involvement in the manage16 ment of the debtor or a predecessor in interest of

17 the debtor, or service as an officer, director or em18 ployee of the debtor or a related party;

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

20 debtor or a related party; or

21 ‘‘(IV) the party’s involvement in a transaction

22 affecting the corporate structure or financial condi23 tion of the debtor or a related party, including, but

24 not limited to—
25

•HR 5116 IH

1 ‘‘(aa) involvement in providing financing

2 (debt or equity), or advice to a person or entity

3 involved 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 subparagraph (A), 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 person or entity that owned a finan11 cial interest in—

12 ‘‘(aa) the debtor;

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

14 debtor; or

15 ‘‘(cc) a predecessor interest in the debtor.

16 ‘‘(B) With respect to a demand (including a demand

17 directed against a third party described in subparagraph

18 (a)(ii)) that is made subsequent to the confirmation of a

19 plan against any person or entity that is the subject of

20 an injunction issued under paragraph (1), the injunction

21 shall be valid and enforceable if, as part of the proceedings

22 leading to its issuance, the court appointed a legal rep23 resentative for the purpose of protecting the rights of per24 sons that might subsequently assert such a demand.
26

•HR 5116 IH

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

2 demand for payment, present or future, that—

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

4 leading to the confirmation of a plan of reorganiza5 tion;

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

7 or events that gave rise to the claims addressed by

8 the injunction issued under paragraph (1); and

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

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

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

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

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

14 order of confirmation that relates to the injunction.

15 ‘‘(7) This subsection applies to any injunction of the

16 nature described in paragraph (1)(B) in effect, and any

17 trust of the nature described in paragraph (2)(B) in exist18 ence, on or after the date of enactment of this subsection.

19 ‘‘(8) This subsection does not affect the operation of

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

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

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

23 this subsection.

24 ‘‘(9) Nothing in subsection (g) shall affect the court’s

25 authority to issue an injunction (including an injunction
27

•HR 5116 IH

1 that requires claims and demands to be presented for pay2 ment solely to a trust or any other type of court approved

3 settlement vehicle) which is entered pursuant to an order

4 approving a plan of reorganization.’’.

5 (b) SETTLEMENT OF CLAIMS AND DEMANDS FOR

6 PAYMENT.—Section 105 of title 11, United States Code,

7 is amended by adding at the end the following:

8 ‘‘(d) A court may issue an injunction that requires

9 claims and demands to be presented for payment solely

10 to a trust or other vehicle that is established for the pur11 pose of settling such claims and demands and is approved

12 by the court and entered into pursuant to an order approv13 ing a plan of reorganization.’’.

14 SEC. 112. AUTHORITY OF BANKRUPTCY JUDGES TO CON15 DUCT JURY TRIALS IN CIVIL PROCEEDINGS.

16 Section 157(c) of title 28, United States Code, is

17 amended by adding at the end the following:

18 ‘‘(3) If the right to a jury trial applies in a proceeding

19 that may be heard under paragraph (1) or (2) of this sub20 section by a bankruptcy judge, the bankruptcy judge may

21 conduct the jury trial, and may if specially designated to

22 exercise such jurisdiction by the district and with the con23 sent of all the parties.’’.
28

•HR 5116 IH

1 SEC. 113. SOVEREIGN IMMUNITY.

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

3 amended to read as follows:

4 ‘‘§ 106. Waiver of sovereign immunity

5 ‘‘(a) Notwithstanding an assertion of sovereign im6 munity, except as provided in subsection (d)—

7 ‘‘(1) all provisions of this title shall apply to

8 governmental units;

9 ‘‘(2) the court may hear and determine any

10 issue arising with respect to the application of such

11 provisions to governmental units; and

12 ‘‘(3) the court may issue and enforce any order,

13 process, or judgment against a governmental unit,

14 including an order or judgment awarding a money

15 recovery, to the same extent as against any other en16 tity.

17 ‘‘(b) A governmental unit is deemed to have waived

18 sovereign immunity with respect to a claim against such

19 governmental unit that is property of the estate and that

20 arose out of the same transaction or occurrence out of

21 which the claim of such governmental unit arose.

22 ‘‘(c) Notwithstanding any assertion of sovereign im23 munity by a governmental unit, there shall be offset

24 against a claim or interest of a governmental unit any

25 claim against such governmental unit that is property of

26 the estate.
29

•HR 5116 IH

1 ‘‘(d) Except as provided in subsections (b) and (c),

2 a governmental unit may assert sovereign immunity with

3 respect to a claim of the estate against such governmental

4 unit only if such claim—

5 ‘‘(1) is not a tax claim or related to a tax claim

6 subject to determination under section 505; and

7 ‘‘(2)(A) is a claim of the debtor against such

8 governmental unit that arose before the commence9 ment of the case and became property of the estate

10 only under paragraph (1) or (2) of section 541(a);

11 or

12 ‘‘(B) arises under nonbankruptcy law after the

13 commencement of the case from the operation of the

14 business of the debtor.’’.

15 TITLE II—COMMERCIAL

16 BANKRUPTCY ISSUES

17 SEC. 201. AIRCRAFT EQUIPMENT AND VESSELS; ROLLING

18 STOCK EQUIPMENT.

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

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

21 follows:

22 ‘‘§ 1110. Aircraft equipment and vessels

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

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

25 lessor or conditional vendor of such equipment to take pos-
30

•HR 5116 IH

1 session of such equipment in compliance with a security

2 agreement, lease, or conditional sale contract is not af3 fected by section 362 or 363 or by any power of the court

4 to enjoin the taking of possession unless—

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

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

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

8 perform all obligations of the debtor that become

9 due on or after the date of the order under such se10 curity agreement, lease, or conditional sale contract;

11 and

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

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

14 agreement, lease, or conditional sale contract—

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

16 order is cured before the expiration of such 60-

17 day period; and

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

19 is cured before the later of—

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

21 date of the default; or

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

23 period.

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

25 is—
31

•HR 5116 IH

1 ‘‘(A) an aircraft, aircraft engine, propeller, ap2 pliance, or spare part (as defined in section 40102

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

4 granted by, leased to, or conditionally sold to a debt5 or that is a citizen of the United States (as defined

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

7 certificate issued by the Secretary of Transportation

8 pursuant to chapter 447 of title 49 for aircraft capa9 ble of carrying 10 or more individuals; or

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

11 30101(1) of title 46) that is subject to a security in12 terest granted by, leased to, or conditionally sold to

13 a debtor that is a water carrier that holds a certifi14 cate of public convenience and necessity or permit is15 sued by the Interstate Commerce Commission.

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

17 or conditional vendor acting in its own behalf or acting

18 as trustee or otherwise in behalf of another party.

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

20 conditional vendor whose right to take possession is pro21 tected under subsection (a) may agree, subject to the

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

23 subsection (a)(1).
32

•HR 5116 IH

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

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

3 for purposes of this section—

4 ‘‘(1) the term ‘lease’ includes any written agree5 ment with respect to which the lessor and the debt6 or, as lessee, have expressed in the agreement or in

7 a substantially contemporaneous writing that the

8 agreement is to be treated as a lease for Federal in9 come tax purposes; and

10 ‘‘(2) the term ‘security interest’ means a pur11 chase-money equipment security interest.’’.

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

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

14 follows:

15 ‘‘§ 1168. Rolling stock equipment

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

17 interest in or of a lessor or conditional vendor of equip18 ment described in paragraph (2) to take possession of such

19 equipment in compliance with an equipment security

20 agreement, lease, or conditional sale contract is not af21 fected by section 362 or 363 or by any power of the court

22 to enjoin the taking of possession, unless—

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

24 date of commencement of a case under this chapter,

25 the trustee, subject to the court’s approval, agrees to
33

•HR 5116 IH

1 perform all obligations of the debtor that become

2 due on or after the date of commencement of the

3 case under such security agreement, lease, or condi4 tional sale contract; and

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

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

7 agreement, lease, or conditional sale contract—

8 ‘‘(i) that occurs before the date of com9 mencement of the case and is an event of de10 fault therewith is cured before the expiration of

11 such 60-day period; and

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

13 default after the date of commencement of the

14 case is cured before the later of—

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

16 date of the default or event of default; or

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

18 period.

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

20 is rolling stock equipment or accessories used on such

21 equipment, including superstructures and racks, that is

22 subject to a security interest granted by, leased to, or con23 ditionally sold to the debtor.
34

•HR 5116 IH

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

2 or conditional vendor acting in its own behalf or acting

3 as trustee or otherwise in behalf of another party.

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

5 conditional vendor whose right to take possession is pro6 tected under subsection (a) may agree, subject to the

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

8 subsection (a)(1).

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

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

11 for purposes of this section—

12 ‘‘(1) the term ‘lease’ includes any written agree13 ment with respect to which the lessor and the debt14 or, as lessee, have expressed in the agreement or in

15 a substantially contemporaneous writing that the

16 agreement is to be treated as a lease for Federal in17 come tax purposes; and

18 ‘‘(2) the term ‘security interest’ means a pur19 chase-money equipment security interest.

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

21 after the date of enactment of this subsection, for pur22 poses of this section, the term ‘rolling stock equipment’

23 includes rolling stock equipment that is substantially re24 built and accessories used on such equipment.’’.
35

•HR 5116 IH

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

2 TRANSFEREE FOR AVOIDED TRANSFER.

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

4 amended—

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

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

7 (2) by inserting after subsection (b) the follow8 ing:

9 ‘‘(c) If a transfer made between ninety days and one

10 year before the filing of the petition—

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

12 title; and

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

14 at the time of such transfer was an insider;

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

16 transferee that is not an insider.’’.

17 SEC. 203. PERFECTION OF PURCHASE-MONEY SECURITY IN18 TEREST.

19 Section 547(c)(3)(B) of title 11, United States Code,

20 is amended by striking ‘‘10’’ and inserting ‘‘20’’.

21 SEC. 204. CONTINUED PERFECTION.

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

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

24 maintain or continue the perfection of,’’ after ‘‘to perfect’’.
36

•HR 5116 IH

1 (b) LIMITATIONS ON AVOIDING POWERS.—Section

2 546(b) of title 11, United States Code, is amended to read

3 as follows:

4 ‘‘(b)(1) The rights and powers of a trustee under sec5 tions 544, 545, and 549 of this title are subject to any

6 generally applicable law that—

7 ‘‘(A) permits perfection of an interest in prop8 erty to be effective against an entity that acquires

9 rights in such property before the date of perfection;

10 or

11 ‘‘(B) provides for the maintenance or continu12 ation of perfection of an interest in property to be

13 effective against an entity that acquires rights in

14 such property before the date on which action is

15 taken to effect such maintenance or continuation.

16 ‘‘(2) If—

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

18 seizure of such property or commencement of an ac19 tion to accomplish such perfection, or maintenance

20 or continuation of perfection of an interest in prop21 erty; and

22 ‘‘(B) such property has not been seized or an

23 action has not been commenced before the date of

24 the filing of the petition;
37

•HR 5116 IH

1 such interest in such property shall be perfected, or perfec2 tion of such interest shall be maintained or continued, by

3 notice within the time fixed by such law for such seizure

4 or such commencement.’’.

5 SEC. 205. REJECTION OF UNEXPIRED LEASES OF REAL

6 PROPERTY OR TIMESHARE INTERESTS.

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

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

9 follows:

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

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

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

13 such a breach as would entitle the lessee to treat

14 such lease as terminated by virtue of its terms, ap15 plicable nonbankruptcy law, or any agreement made

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

17 treat such lease as terminated by the rejection; or

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

19 the lessee may retain its rights under such lease (in20 cluding rights such as those relating to the amount

21 and timing of payment of rent and other amounts

22 payable by the lessee and any right of use, posses23 sion, quiet enjoyment, subletting, assignment, or

24 hypothecation) that are in or appurtenant to the real

25 property for the balance of the term of such lease
38

•HR 5116 IH

1 and for any renewal or extension of such rights are

2 enforceable under applicable nonbankruptcy law.

3 ‘‘(B) If the lessee retains its rights under subpara4 graph (A)(ii), the lessee may offset against the rent re5 served under such lease for the balance of the term after

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

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

8 damage caused by the nonperformance after the date of

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

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

11 the estate or the debtor on account of any damage occur12 ring after such date caused by such nonperformance.

13 ‘‘(C) The rejection of a lease of real property in a

14 shopping center with respect to which the lessee elects to

15 retain its rights under subparagraph (A)(ii) does not af16 fect the enforceability under applicable nonbankruptcy law

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

18 use, exclusivity, or tenant mix or balance.

19 ‘‘(D) In this paragraph, ‘lessee’ includes any succes20 sor, assign, or mortgagee permitted under the terms of

21 such lease.

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

23 under a timeshare plan under which the debtor is the

24 timeshare interest seller and—
39

•HR 5116 IH

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

2 as would entitle the timeshare interest purchaser to

3 treat the timeshare plan as terminated under its

4 terms, applicable nonbankruptcy law, or any agree5 ment made by timeshare interest purchaser, the

6 timeshare interest purchaser under the timeshare

7 plan may treat the timeshare plan as terminated by

8 such rejection; or

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

10 commenced, then the timeshare interest purchaser

11 may retain its rights in such timeshare interest for

12 the balance of such term and for any term of re13 newal or extension of such timeshare interest to the

14 extent that such rights are enforceable under appli15 cable nonbankruptcy law.

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

17 rights under subparagraph (A), such timeshare interest

18 purchaser may offset against the moneys due for such

19 timeshare interest for the balance of the term after the

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

21 term of any renewal or extension of such timeshare inter22 est, the value of any damage caused by the nonperform23 ance after the date of such rejection, of any obligation of

24 the debtor under such timeshare plan, but the timeshare

25 interest purchaser shall not have any right against the es-
40

•HR 5116 IH

1 tate or the debtor on account of any damage occurring

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

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

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

5 ‘‘365(h)(2)’’ and inserting ‘‘365(h)’’.

6 SEC. 206. CONTENTS OF PLAN.

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

8 amended—

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

10 end,

11 (2) by redesignating paragraph (5) as para12 graph (6), and

13 (3) by inserting after paragraph (4) the follow14 ing:

15 ‘‘(5) in a case in which the debtor is a small

16 business, modify the rights of holders of secured

17 claims, except that—

18 ‘‘(A) the rights of a holder of a claim se19 cured only by a security interest in real prop20 erty that is the debtor’s principal residence may

21 not be modified; and

22 ‘‘(B) notwithstanding section 506(a), the

23 rights of the holder of the most senior security

24 interest in real property that is the debtor’s

25 principal residence may not be modified to re-
41

•HR 5116 IH

1 duce the secured claim to a value that is less

2 than the value of the allowed claim; and’’.

3 SEC. 207. PRIORITY FOR INDEPENDENT SALES REPRESENT4 ATIVES.

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

6 amended to read as follows:

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

8 to the extent of $2,000 for each individual or cor9 poration, as the case may be, earned within 90 days

10 before the date of the filing of the petition or the

11 date of the cessation of the debtor’s business, which12 ever occurs first, for—

13 ‘‘(A) wages, salaries, or commissions, in14 cluding vacation, severance, and sick leave pay

15 earned by an individual; or

16 ‘‘(B) sales commissions earned by an indi17 vidual or by a corporation with only 1 employee,

18 acting as an independent contractor in the sale

19 of goods or services for the debtor in the ordi20 nary course of the debtor’s business if, and only

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

22 least 75 percent of the amount that the individ23 ual or corporation earned by acting as an inde24 pendent contractor in the sale of goods or serv25 ices was earned from the debtor;’’.
42

•HR 5116 IH

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

2 LIQUID AND GASEOUS HYDROCARBONS

3 TRANSFERRED BY THE DEBTOR PURSUANT

4 TO PRODUCTION PAYMENT AGREEMENTS.

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

6 States Code, is amended—

7 (1) by inserting after paragraph (42) the fol8 lowing:

9 ‘‘(42A) ‘production payment’ means a payment

10 (in cash or in kind)—

11 ‘‘(A) contingent on the production of a liq12 uid or gaseous hydrocarbon from particular real

13 property; and

14 ‘‘(B) attributable to part of a specified vol15 ume, or part of a specified value, of the liquid

16 or gaseous hydrocarbon produced from such

17 property, and determined without regard to

18 production costs.’’.

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

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

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

22 inserting ‘‘(A)(i)’’,

23 (2) in subparagraph (B)—

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

25 (B) by striking ‘‘such interest’’ and insert26 ing ‘‘the interest referred to in clause (i)’’, and
43

•HR 5116 IH

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

2 inserting ‘‘; or’’, and

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

4 ‘‘(B)(i) the debtor has transferred or has

5 agreed to transfer such interest pursuant to a

6 written agreement to make production pay7 ments to a person who does not participate in

8 the production of the liquid or gaseous hydro9 carbon with respect to which such payments are

10 made; and

11 ‘‘(ii) but for the operation of this para12 graph, the estate could include the interest re13 ferred to in clause (i) only by virtue of section

14 365 of this title.’’.

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

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

17 amended by striking ‘‘ten’’ and inserting ‘‘20’’.

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

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

20 amended—

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

22 the end and inserting a semicolon, and

23 (2) by adding ‘‘unless the court for cause orders

24 otherwise.’’ at the end of such subsection.
44

•HR 5116 IH

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

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

3 11 of the United States Code is amended—

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

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

6 (2) by inserting after subsection (a) the follow7 ing:

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

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

10 30 days after the court orders the appointment of a trust11 ee under subsection (a), the United States trustee shall

12 convene a meeting of creditors for the purpose of electing

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

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

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

16 of this title.’’.

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

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

19 ‘‘1104(c)’’ and inserting ‘‘1104(d)’’.

20 SEC. 212. RIGHTS OF PARTNERSHIP TRUSTEE AGAINST

21 GENERAL PARTNERS.

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

23 amended by striking ‘‘for the full amount of the defi24 ciency’’ and inserting ‘‘to the extent that under applicable

25 nonbankruptcy law such general partner is personally lia26 ble for the debts of the partnership’’.
45

•HR 5116 IH

1 SEC. 213. EXCLUSION FROM THE ESTATE OF CERTAIN AC2 COUNTS AND CHATTEL PAPER.

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

4 amended—

5 (1) in subsection (b)—

6 (A) in paragraph (3) by striking ‘‘or’’ at

7 the end,

8 (B) in paragraph (4) by striking the period

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

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

11 ‘‘(5) any interest of the debtor in any account

12 or chattel paper to the extent that—

13 ‘‘(A) such interest was actually sold under

14 applicable nonbankruptcy law by the debtor be15 fore the date of commencement of the case, but

16 without taking into consideration whether the

17 purchaser filed a financing statement before

18 such date; and

19 ‘‘(B) but for the operation, the estate

20 could include such interest only by virtue of sec21 tion 542 of this title.’’, and

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

23 ‘‘(e) For purposes of this section—

24 ‘‘(1) ‘account’ means any right to payment for

25 goods sold or leased or for services rendered that is

26 not evidence by an instrument or chattel paper,
46

•HR 5116 IH

1 whether or not it has been earned by performance,

2 and includes all right to payment earned or un3 earned under a charter or other contract involving

4 the use or hire of a vessel and all rights incident to

5 such charter or such contract; and

6 ‘‘(2) ‘chattel paper’ means—

7 ‘‘(A) a writing or writings that evidence

8 both a monetary obligation and a security inter9 est in or lease of specific goods (excluding a

10 charter or other contract involving the use or

11 hire of a vessel); or

12 ‘‘(B) if a transaction described in subpara13 graph (A) is evidenced both by such a security

14 agreement or a lease and by an instrument or

15 a series of instruments, the group of these

16 writings taken together.’’.

17 SEC. 214. TIMELY FILING OF CLAIMS, INTERESTS, AND

18 ADMINSTRATIVE EXPENSE REQUESTS.

19 (a) OBJECTION TO CLAIMS FILED UNTIMELY.—Sec20 tion 502(b) of title 11, United States Code, is amended—

21 (1) in paragraph (7) by striking ‘‘or’’ at the

22 end,

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

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

25 (3) by adding at the end the following:
47

•HR 5116 IH

1 ‘‘(9) such claim is not timely filed, except to the

2 extent tardily filing permitted under paragraph (2)

3 or (3) of section 726(a).’’.

4 (b) FILING OF REQUEST FOR ADMINISTRATIVE EX5 PENSES.—Section 503(a) of title 11, United States Code,

6 is amended—

7 (1) by inserting ‘‘timely’’ after ‘‘may’’, and

8 (2) by inserting ‘‘, or may tardily file such re9 quest if permitted by the court for cause’’ before the

10 period at the end.

11 SEC. 215. PROTECTION OF SECURITY INTEREST IN POST12 PETITION RENTS.

13 Section 552(b) of title 11, United States Code, is

14 amended—

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

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

17 and

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

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

20 544, 545, 547, and 548 of this title, if the debtor and

21 an entity entered into a security agreement before the

22 commencement of the case and if the security interest cre23 ated by such security agreement extends to property of

24 the debtor acquired before the commencement of the case

25 and to rents of such property, then such security interest
48

•HR 5116 IH

1 extends to such rents acquired by the estate after the com2 mencement of the case to the extent provided in such secu3 rity agreement, except to any extent that the court, after

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

5 orders otherwise.’’.

6 SEC. 216. AMENDMENT TO DEFINITION OF SWAP AGREE7 MENT.

8 Section 101(55)(A) of title 11, United States Code,

9 is amended by inserting ‘‘spot foreign exchange agree10 ment,’’ after ‘‘forward foreign exchange agreement’’.

11 TITLE III—CONSUMER

12 BANKRUPTCY ISSUES

13 SEC. 301. PERIOD FOR CURING DEFAULT RELATING TO

14 PRINCIPAL RESIDENCE.

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

16 amended—

17 (1) by redesignating subsection (c) as sub18 section (d), and

19 (2) by inserting after subsection (b) the follow20 ing:

21 ‘‘(c) Notwithstanding subsection (b)(2) and applica22 ble nonbankruptcy law—

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

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

25 cured under paragraph (3) or (5) of subsection (b)
49

•HR 5116 IH

1 until such residence is sold under such lien and in

2 accordance with applicable nonbankruptcy law; and

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

4 original payment schedule for a claim secured only

5 by a security interest in real property that is the

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

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

8 plan may provide for the payment of the claim as

9 modified pursuant to 1325(a)(5).’’.

10 SEC. 302. NONDISCHARGEABILITY OF FINE UNDER CHAP11 TER 13.

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

13 is amended by inserting ‘‘, or a fine (other than a fine

14 imposed under subchapter C of chapter 227 of title 18

15 of the United States Code) to the extent such fine exceeds

16 $500, ’’ after ‘‘restitution’’.

17 SEC. 303. IMPAIRMENT OF EXEMPTIONS.

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

19 amended—

20 (1) by inserting ‘‘(1)’’ before ‘‘Notwithstand21 ing’’,

22 (2) by redesignating paragraph (1) as subpara23 graph (A),
50

•HR 5116 IH

1 (3) by redesignating paragraph (2) as subpara2 graph (B) and subparagraphs (A), (B), and (C) of

3 that paragraph as clauses (i), (ii), and (iii), and

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

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

6 lien shall be considered to impair an exemption to

7 the extent that the sum of—

8 ‘‘(i) the lien,

9 ‘‘(ii) all other liens on the property that

10 are equal or greater in seniority to the lien; and

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

12 debtor could claim if there were no liens on the

13 property,

14 exceeds the value that the debtor’s interest in the

15 property would have in the absence of any liens.

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

17 than 1 lien, a lien that has been avoided shall not

18 be considered in making the calculation under sub19 paragraph (A) with respect to other liens.’’.

20 SEC. 304. PROTECTION OF CHILD SUPPORT AND ALIMONY.

21 (a) RELIEF FROM AUTOMATIC STAY.—Section

22 362(b)(2) of title 11, United States Code, is amended to

23 read as follows:

24 ‘‘(2) under subsection (a) of this section—
51

•HR 5116 IH

1 ‘‘(A) of the commencement or continuation

2 of an action or proceeding for—

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

4 ‘‘(ii) the establishment or modification

5 of an order for alimony, maintenance, or

6 support; or

7 ‘‘(B) of the collection of alimony, mainte8 nance, or support from property that is not

9 property of the estate;’’.

10 (b) PRIORITY OF CLAIMS.—Section 507(a) of title

11 11, United States Code, is amended—

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

13 and inserting ‘‘(9) Ninth’’,

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

15 and inserting ‘‘(8) Eighth’’, and

16 (3) by inserting after paragraph (6) the follow17 ing:

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

19 spouse, former spouse, or child of the debtor, for ali20 mony to, maintenance for, or support of such spouse

21 or child, in connection with a separation agreement,

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

23 determination made in accordance with State or ter24 ritorial law by a governmental unit, or property set-
52

•HR 5116 IH

1 tlement agreement, but not to the extent that such

2 debt—

3 ‘‘(A) is assigned to another entity, volun4 tarily, by operation of law, or otherwise; or

5 ‘‘(B) includes a liability designated as ali6 mony, maintenance, or support, unless such li7 ability is actually in the nature of alimony,

8 maintenance or support.’’.

9 (c) PROTECTION OF LIENS.—Section 522(f)(1) of

10 title 11, United States Code, is amended by inserting after

11 ‘‘lien’’ the following:

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

13 ‘‘(A) to a spouse, former spouse, or child

14 of the debtor, for alimony to, maintenance for,

15 or support of such spouse or child, in connec16 tion with a separation agreement, divorce de17 cree or other order of a court of record, deter18 mination made in accordance with State or ter19 ritorial law by a governmental unit, or property

20 settlement agreement; and

21 ‘‘(B) to the extent that such debt—

22 ‘‘(i) is not assigned to another entity,

23 voluntarily, by operation of law, or other24 wise; and
53

•HR 5116 IH

1 ‘‘(ii) includes a liability designated as

2 alimony, maintenance, or support, unless

3 such liability is actually in the nature of al4 imony, maintenance or support.’’.

5 (d) EXCEPTION TO DISCHARGE.—Section 523 of

6 Title 11, United States Code, is amended—

7 (1) in subsection (a)—

8 (A) in paragraph (11) by striking ‘‘or’’ at

9 the end,

10 (B) in paragraph (12) by inserting ‘‘or’’

11 after the semicolon at the end, and

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

13 ‘‘(13) assumed or incurred by the debtor in the

14 course of a divorce or separation or in connection

15 with a separation agreement, divorce decree or other

16 order of a court of record, a determination made in

17 accordance with State or territorial law by a govern18 mental unit, or property settlement agreement, un19 less—

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

21 to pay such debt from income or property of the

22 debtor not reasonably necessary to be expended

23 for the maintenance or support of the debtor or

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

25 engaged in a business, for the payment of ex-
54

•HR 5116 IH

1 penditures necessary for the continuation, pres2 ervation, and operation of such business; or

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

4 a benefit to the debtor that outweighs the det5 rimental consequences to a spouse, former

6 spouse, or child of the debtor.’’, and

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

8 each place it appears and inserting ‘‘(6), or (13)’’.

9 (e) PROTECTION AGAINST TRUSTEE AVOIDANCE.—

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

11 amended—

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

13 end,

14 (2) by redesignating paragraph (7) as para15 graph (8), and

16 (3) by inserting after paragraph (6) the follow17 ing:

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

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

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

21 or support of such spouse or child, in connection

22 with a separation agreement, divorce decree or other

23 order of a court of record, determination made in

24 accordance with State or territorial law by a govern-
55

•HR 5116 IH

1 mental unit, or property settlement agreement, but

2 not to the extent that such debt—

3 ‘‘(A) is assigned to another entity, volun4 tarily, by operation of law, or otherwise; or

5 ‘‘(B) includes a liability designated as ali6 mony, maintenance, or support, unless such li7 ability is actually in the nature of alimony,

8 maintenance or support.’’.

9 (f) APPEARANCE BEFORE COURT.—Child support

10 creditors or their representatives shall be permitted to ap11 pear and intervene without charge, and without meeting

12 any special local court rule requirement for attorney ap13 pearances, in any bankruptcy proceeding in any bank14 ruptcy court or district court of the United States if such

15 representatives file a form in such court that contains in16 formation detailing the child support debt, its status, and

17 other characteristics.

18 (g) CONFORMING AMENDMENTS—Title 11 of the

19 United States Code is amended—

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

21 and inserting ‘‘507(a)(8)’’,

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

23 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,

24 (3) in section 523(a)(1)(A) by striking

25 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,
56

•HR 5116 IH

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

2 507(a)(6)’’ and inserting ‘‘507(a)(6), or 507(a)(7)’’,

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

4 inserting ‘‘, (7), or (8)’’,

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

6 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,

7 (7) in section 1129(a)(9)—

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

9 507(a)(6)’’ and inserting ‘‘, 507(a)(6), or

10 507(a)(7)’’, and

11 (ii) in subparagraph (C) by striking

12 ‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’.

13 SEC. 305. PRESERVATION OF HOME MORTGAGE LIENS.

14 Section 1322(b)(2) of title 11, United States Code,

15 is amended—

16 (1) by striking ‘‘, other than a claim secured

17 only by a security interest in real property that is

18 the debtor’s principal residence,’’, and

19 (2) by striking the semicolon at the end and in20 serting the following:

21 ‘‘, except that—

22 ‘‘(A) the rights of a holder of a claim se23 cured only by a security interest in real prop24 erty that is the debtor’s principal residence may

25 not be modified; and
57

•HR 5116 IH

1 ‘‘(B) notwithstanding section 506(a), the

2 rights of the holder of the most senior security

3 interest in real property that is the debtor’s

4 principal residence may not be modified to re5 duce the secured claim to a value that is less

6 than the value of the allowed claim;’’.

7 SEC. 306. INTEREST ON INTEREST.

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

9 States Code, is amended by adding at the end the follow10 ing:

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

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

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

14 necessary to cure the default, shall be determined in ac15 cordance with the underlying agreement and applicable

16 nonbankruptcy law.’’.

17 (b) CHAPTER 12.—Section 1222 of title 11, United

18 States Code, is amended by adding at the end the follow19 ing:

20 ‘‘(d) Notwithstanding subsection (b)(2) of this sec21 tion and sections 506(b) and 1225(a)(5) of this title, if

22 it is proposed in a plan to cure a default, the amount nec23 essary to cure the default, shall be determined in accord24 ance with the underlying agreement and applicable

25 nonbankruptcy law.’’.
58

•HR 5116 IH

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

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

4 ‘‘(f) Notwithstanding subsection (b)(2) of this section

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

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

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

8 the underlying agreement and applicable nonbankruptcy

9 law.’’.

10 SEC. 307. EXCEPTION TO DISCHARGE.

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

12 amended—

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

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

15 (3) by striking ‘‘twenty’’ and inserting ‘‘60’’.

16 SEC. 308. PAYMENTS.

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

18 is amended in the second sentence by striking the period

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

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:
59

•HR 5116 IH

1 ‘‘(18) under subsection (a) of this section, of

2 the creation or perfection of a statutory lien for an

3 ad valorem property tax imposed by the District of

4 Columbia, or a political subdivision of a State, if

5 such tax comes 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 section 208, is amended—

19 (1) by redesignating paragraph (3) as para20 graph (21),

21 (2) by redesignating paragraph (4) and subse22 quent paragraphs through paragraph (21) as para23 graphs (3) through (20), respectively,
60

•HR 5116 IH

1 (3) by transferring paragraph (21), as so redes2 ignated by paragraph (1), so as to insert such para3 graph after paragraph (20),

4 (4) by redesignating paragraphs (54) through

5 (57), as in effect immediately before the enactment

6 of Public Law 101–647, as paragraphs (61), (62),

7 (36), and (40), respectively,

8 (5) in paragraph (61), as so redesignated by

9 paragraph (4), by inserting ‘‘and’’ after the semi10 colon at the end,

11 (6) in paragraph (62), as so redesignated by

12 paragraph (4), by striking the semicolon at the end

13 and inserting a period,

14 (7) in paragraph (36), as so redesignated by

15 paragraph (4), by striking ‘‘and’’ at the end,

16 (8) in paragraph (40), as so redesignated by

17 paragraph (4), by striking the period at the end and

18 inserting a semicolon,

19 (9) by redesignating paragraphs (52) through

20 (57), as so redesignated by section 2522(e) of Public

21 Law 101–647, as paragraphs (55) through (60), re22 spectively,

23 (10) by transferring paragraph (39) so as to in24 sert such paragraph before paragraph (55), as so re25 designated by paragraph (9) of this subsection,
61

•HR 5116 IH

1 (11) by redesignating paragraph (39) as para2 graph (54),

3 (12) by redesignating successively numbered

4 paragraphs (40) through (51) as paragraphs (41)

5 through (53), respectively,

6 (13) by transferring paragraph (40), as so re7 designated by paragraph (4) of this subsection, so as

8 to insert such paragraph before paragraph (41), as

9 so redesignated by paragraph (12) this subsection,

10 (14) by redesignating paragraph (36) and sub11 sequent paragraphs through paragraph (38) as

12 paragraphs (37) through (39), respectively, and

13 (15) by transferring paragraph (36), as so re14 designated by paragraph (4) of this subsection, so as

15 to insert such paragraph after paragraph (35).

16 (b) CONFORMING AND RELATED AMENDMENTS TO

17 TITLE 11 OF THE UNITED STATES CODE, BASED ON RE18 DESIGNATED DEFINITIONS.—(1) Section 101 of title 11

19 of the United States Code is amended—

20 (A) in paragraph (5), as so redesignated by

21 subsection (a), by striking ‘‘section 761(9)’’ and in22 serting ‘‘section 761’’,

23 (B) in paragraph (22) by striking ‘‘section

24 741(7)’’ and inserting ‘‘section 741’’,
62

•HR 5116 IH

1 (C) in paragraph (35)(B) by striking ‘‘para2 graphs (3)’’ and inserting ‘‘paragraphs (21)’’,

3 (D) in paragraph (50)(B)(ii), as so redesig4 nated by subsection (a), by striking ‘‘section

5 761(13)’’ and inserting ‘‘section 761’’, and

6 (E) in paragraph (56)(A), as so redesignated by

7 subsection (a), by striking ‘‘section 741(2)’’ and in8 serting ‘‘section 741’’.

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

10 is amended—

11 (A) in paragraph (6)—

12 (i) by striking ‘‘section 761(4)’’ and insert13 ing ‘‘section 761’’,

14 (ii) by striking ‘‘section 741(7)’’ and in15 serting ‘‘section 741’’,

16 (iii) by striking ‘‘section 101(34), 741(5),

17 or 761(15)’’ and inserting ‘‘section 101, 741, or

18 761’’, and

19 (iv) by striking ‘‘section 101(35) or

20 741(8)’’ and inserting ‘‘section 101 or 741’’,

21 and

22 (B) in paragraph (7)—

23 (i) by striking ‘‘section 741(5) or 761(15)’’

24 and inserting ‘‘section 741 or 761’’, and
63

•HR 5116 IH

1 (ii) by striking ‘‘section 741(8)’’ and in2 serting ‘‘section 741’’.

3 (3) Section 507(a)(5) of title 11, United States Code,

4 is amended—

5 (A) by striking ‘‘section 557(b)(1)’’ and insert6 ing ‘‘section 557(b)’’, and

7 (B) by striking ‘‘section 557(b)(2)’’ and insert8 ing ‘‘section 557(b)’’.

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

10 amended—

11 (A) in subsection (e)—

12 (i) by striking ‘‘section 101(34), 741(5), or

13 761(15)’’ and inserting ‘‘section 101, 741, or

14 761’’, and

15 (ii) by striking ‘‘section 101(35) or

16 741(8)’’ and inserting ‘‘section 101 or 741’’,

17 and

18 (B) in subsection (f)—

19 (i) by striking ‘‘section 741(5) or 761(15)’’

20 and inserting ‘‘section 741 or 761’’, and

21 (ii) by striking ‘‘section 741(8)’’ and in22 serting ‘‘section 741’’.

23 (5) Section 548(d)(2) of title 11, United States Code,

24 is amended—

25 (A) in subparagraph (B)—
64

•HR 5116 IH

1 (i) by striking ‘‘section 101(34), 741(5) or

2 761(15)’’ and inserting ‘‘section 101, 741, or

3 761’’, and

4 (ii) by striking ‘‘section 101(35) or

5 741(8)’’ and inserting ‘‘section 101 or 741’’,

6 and

7 (B) in subparagraph (C)—

8 (i) by striking ‘‘section 741(5) or 761(15)’’

9 and inserting ‘‘section 741 or 761’’, and

10 (ii) by striking ‘‘section 741(8)’’ and in11 serting ‘‘section 741’’.

12 (6) Section 555 of title 11, United States Code, is

13 amended by striking ‘‘section 741(7)’’ and inserting ‘‘sec14 tion 741 of this title’’.

15 (7) Section 556 of title 11, United States Code, is

16 amended by striking ‘‘section 761(4)’’ and inserting ‘‘sec17 tion 761 of this title’’.

18 (c) CONFORMING AMENDMENTS TO OTHER LAWS

19 BASED ON REDESIGNATED DEFINITIONS.—(1) Section

20 207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C.

21 1787(c)(8)(D)) is amended—

22 (A) in clause (ii)(I) by striking ‘‘section

23 741(7)’’ and inserting ‘‘section 741’’,

24 (B) in clause (iii) by striking ‘‘section 101(24)’’

25 and inserting ‘‘section 101’’,
65

•HR 5116 IH

1 (C) in clause (iv)(I) by striking ‘‘section

2 101(41)’’ and inserting ‘‘section 101’’, and

3 (D) in clause (v) by striking ‘‘section 101(50)’’

4 and inserting ‘‘section 101’’.

5 (2) Section 11(e)(8)(D) of the Federal Deposit Insur6 ance Act (12 U.S.C. 1821(e)(8)(D)) is amended—

7 (A) in clause (ii)(I) by striking ‘‘section

8 741(7)’’ and inserting ‘‘section 741’’,

9 (B) in clause (iii) by striking ‘‘section 761(4)’’

10 and inserting ‘‘section 761’’,

11 (C) in clause (iv) by striking ‘‘section 101(24)’’

12 and inserting ‘‘section 101’’,

13 (D) in clause (v)(I) by striking ‘‘section

14 101(41)’’ and inserting ‘‘section 101’’, and

15 (E) in clause (viii) by striking ‘‘section

16 101(50)’’ and inserting ‘‘section 101’’.

17 (d) OTHER TECHNICAL AMENDMENTS.—Title 11 of

18 the United States Code is amended—

19 (1) in section 101—

20 (A) in paragraph (33)—

21 (i) in subparagraph (A) by striking

22 ‘‘(12 U.S.C. 1813(u))’’, and

23 (ii) in subparagraph (B) by striking

24 ‘‘(12 U.S.C. 1786(r))’’,
66

•HR 5116 IH

1 (B) in paragraph (34) by striking ‘‘(12

2 U.S.C. 1752(7))’’,

3 (C) in paragraph (35)(A) by striking ‘‘(12

4 U.S.C. 1813(c)(2))’’,

5 (D) in paragraph (50), as so redesignated

6 by subsection (a)—

7 (i) by striking ‘‘(15 U.S.C. 78q–1)’’,

8 and

9 (ii) by striking ‘‘(15 U.S.C.

10 78c(12))’’,

11 (E) in paragraph (51), as so redesignated

12 by subsection (a)—

13 (i) in subparagraph (A)(xii)—

14 (I) by striking ‘‘(15 U.S.C. 77a

15 et seq.)’’, and

16 (II) by striking ‘‘(15 U.S.C.

17 77c(b))’’, and

18 (ii) in subparagraph (B)(vi) by strik19 ing ‘‘(15 U.S.C. 77c(b))’’, and

20 (F) in paragraph (59), as so redesignated

21 by subsection (a), by striking the period at the

22 end and inserting a semicolon,

23 (2) in section 109(b)(2) by striking ‘‘(12 U.S.C.

24 1813(h))’’,
67

•HR 5116 IH

1 (3) in section 322(a) by striking ‘‘1302, or

2 1202’’ and inserting ‘‘1202, or 1302’’,

3 (4) in section 346—

4 (A) in subsection (a) by striking ‘‘Internal

5 Revenue Code of 1954 (26 U.S.C. 1 et seq.)’’

6 and inserting ‘‘Internal Revenue Code of

7 1986’’, and

8 (B) in subsection (g)(1)(C) by striking

9 ‘‘Internal Revenue Code of 1954 (26 U.S.C.

10 371)’’ and inserting ‘‘Internal Revenue Code of

11 1986’’,

12 (5) in section 348—

13 (A) in subsection (b) by striking ‘‘1301(a),

14 1305(a), 1201(a), 1221, and 1228(a)’’ and in15 serting ‘‘1201(a), 1221, 1228(a), 1301(a), and

16 1305(a)’’, and

17 (B) in subsections (b), (c), (d), and (e) by

18 striking ‘‘1307, or 1208’’ each place it appears

19 and inserting ‘‘1208, or 1307’’,

20 (6) in section 349(a) by striking ‘‘109(f)’’ and

21 inserting ‘‘109(g)’’,

22 (7) in section 362—

23 (A) in subsection (a) by striking ‘‘(15

24 U.S.C. 78eee(a)(3))’’, and

25 (B) in subsection (b)—
68

•HR 5116 IH

1 (i) by striking ‘‘(15 U.S.C.

2 78eee(a)(3))’’,

3 (ii) in paragraph (10) by striking

4 ‘‘or’’ at the end,

5 (iii) in paragraph (12)—

6 (I) by striking ‘‘the Ship Mort7 gage Act, 1920 (46 App. U.S.C. 911

8 et seq.)’’ and inserting ‘‘section 31325

9 of title 46’’,

10 (II) by striking ‘‘(46 App. U.S.C.

11 911 et seq.)’’, and

12 (III) by striking ‘‘(46 App.

13 U.S.C. 1117 and 1271 et seq., respec14 tively)’’,

15 (iv) in paragraph (13)—

16 (I) by striking ‘‘the Ship Mort17 gage Act, 1920 (46 App. U.S.C. 911

18 et seq.)’’ each place it appears and in19 serting ‘‘section 31325 of title 46’’,

20 (II) by striking ‘‘(46 App. U.S.C.

21 1117 and 1271 et seq., respectively)’’,

22 and

23 (III) by striking ‘‘or’’ at the end,
69

•HR 5116 IH

1 (v) in paragraph (15), as added by

2 Public Law 101–508, by striking ‘‘or’’ at

3 the end,

4 (vi) in paragraph (16), as added by

5 Public Law 101–508—

6 (I) by striking ‘‘(20 U.S.C. 1001

7 et seq.)’’, and

8 (II) by striking the period at the

9 end and inserting a semicolon, and

10 (vii) in paragraph (14), as added by

11 Public Law 101–311—

12 (I) by striking the period at the

13 end and inserting ‘‘; or’’,

14 (II) by redesignating such para15 graph as paragraph (17), and

16 (III) by transferring such para17 graph so as to insert such paragraph

18 after paragraph (16),

19 (8) in section 363—

20 (A) in subsection (b)(2) by striking ‘‘(15

21 U.S.C. 18a)’’, and

22 (B) in subsection (c)(1) by striking ‘‘1304,

23 1203, or 1204’’ and inserting ‘‘1203, 1204, or

24 1304’’,

25 (9) in section 364—
70

•HR 5116 IH

1 (A) in subsection (a) by striking ‘‘1304,

2 1203, or 1204’’ and inserting ‘‘1203, 1204, or

3 1304’’, and

4 (B) in subsection (f)—

5 (i) by striking ‘‘(15 U.S.C. 77e)’’, and

6 (ii) by striking ‘‘(15 U.S.C. 77aaa et

7 seq.)’’,

8 (10) in section 365—

9 (A) in subsection (d)(6)(C) by striking

10 ‘‘the Federal Aviation Act of 1958 (49 U.S.C.

11 1301)’’ and inserting ‘‘section 40102 of title

12 49’’,

13 (B) in subparagraphs (A) and (B) of sub14 section (g)(2) by striking ‘‘1307, or 1208’’ each

15 place it appears and inserting ‘‘1208, or 1307’’,

16 (C) in subsection (n)(1)(B) by striking ‘‘to

17 to’’ and inserting ‘‘to’’,

18 (D) in subsection (o) by striking ‘‘the Fed19 eral’’ the first place it appears and all that fol20 lows through ‘‘successors,’’, and inserting ‘‘a

21 Federal depository institutions regulatory agen22 cy (or predecessor to such agency)’’, and

23 (E) by striking subsection (p),

24 (11) in section 507—
71

•HR 5116 IH

1 (A) in subsection (a)(8) by striking ‘‘the

2 Federal’’ the first place it appears and all that

3 follows through ‘‘successors,’’, and inserting ‘‘a

4 Federal depository institutions regulatory agen5 cy (or predecessor to such agency)’’, and

6 (B) in subsection (d) by striking ‘‘or

7 (a)(6)’’ and inserting ‘‘(a)(6), (a)(7), (a)(8), or

8 (a)(9)’’,

9 (12) in section 522(d)(10)(E)(iii)—

10 (A) by striking ‘‘408, or 409’’ the first

11 place it appears and inserting ‘‘or 408’’, and

12 (B) by striking ‘‘Internal Revenue Code of

13 1954 (26 U.S.C. 401(a), 403(a), 403(b), 408,

14 or 409)’’ and inserting ‘‘Internal Revenue Code

15 of 1986’’,

16 (13) in section 523—

17 (A) in subsection (a)—

18 (i) by striking ‘‘1141,,’’ and inserting

19 ‘‘1141,’’,

20 (ii) in paragraph (2)(C) by striking

21 ‘‘(15 U.S.C. 1601 et seq.)’’, and

22 (iii) in paragraph (12) by striking the

23 semicolon at the end and inserting a pe24 riod,

25 (B) in subsection (b)—
72

•HR 5116 IH

1 (i) by striking ‘‘(20 U.S.C. 1087-3)’’,

2 and

3 (ii) by striking ‘‘(42 U.S.C. 294f)’’,

4 and

5 (C) in subsection (e) by striking ‘‘deposi6 tory institution or insured credit union’’ and in7 serting ‘‘insured depository institution’’,

8 (14) in section 524—

9 (A) in subsection (a)(3) by striking ‘‘or

10 1328(c)(1)’’ and inserting ‘‘, 1228(a)(1), or

11 1328(a)(1)’’,

12 (B) in subsection (c)(4) by striking

13 ‘‘recission’’ and inserting ‘‘rescission’’, and

14 (C) in subsection (d)(1)(B)(ii) by adding

15 ‘‘and’’ at the end,

16 (15) in section 525(a)—

17 (A) by striking ‘‘(7 U.S.C. 499a-499s)’’,

18 (B) by striking ‘‘(7 U.S.C. 181-229)’’, and

19 (C) by striking ‘‘(57 Stat. 422; 7 U.S.C.

20 204)’’,

21 (16) in section 542(e) by striking ‘‘to to’’ and

22 inserting ‘‘to’’,

23 (17) in section 543(d)(1) by striking ‘‘section,’’

24 and inserting ‘‘section’’,
73

•HR 5116 IH

1 (18) in section 546(a)(1) by striking ‘‘1302, or

2 1202’’ and inserting ‘‘1202, or 1302’’,

3 (19) in section 549(b) inserting ‘‘the trustee

4 may not avoid under subsection (a) of this section’’

5 after ‘‘involuntary case,’’,

6 (20) in section 553—

7 (A) in subsection (a)(1) by striking ‘‘other

8 than under section 502(b)(3) of this title’’, and

9 (B) in subsection (b)(1) by striking

10 ‘‘362(b)(14),,’’ and inserting ‘‘362(b)(14),’’,

11 (21) in section 555 by striking ‘‘(15 U.S.C.

12 78aaa et seq.)’’,

13 (22) in section 559 by striking ‘‘(15 U.S.C.

14 78aaa et seq.)’’,

15 (23) in section 706(a) by striking ‘‘1307, or

16 1208’’ and inserting ‘‘1208, or 1307’’,

17 (24) in section 724(d) by striking ‘‘Internal

18 Revenue Code of 1954 (26 U.S.C. 6323)’’ and in19 serting ‘‘Internal Revenue Code of 1986’’,

20 (25) in section 726(b)—

21 (A) inserting a comma after ‘‘section

22 1112’’, and

23 (B) by inserting ‘‘1009,’’ after ‘‘chapter

24 under section’’,
74

•HR 5116 IH

1 (26) in section 741(4)(A)(iii) by striking ‘‘(15

2 U.S.C. 78a et seq.)’’,

3 (27) in section 742 by striking ‘‘(15 U.S.C.

4 78aaa et seq.)’’,

5 (28) in section 743 by striking ‘‘342(a)’’ and

6 inserting ‘‘342’’,

7 (29) in section 745(c) by striking ‘‘Internal

8 Revenue Code of 1954 (26 U.S.C. 1 et seq.)’’ and

9 inserting ‘‘Internal Revenue Code of 1986’’,

10 (30) in section 761—

11 (A) in paragraph (1) by striking ‘‘(7

12 U.S.C. 1 et seq.)’’,

13 (B) in paragraph (5) by striking ‘‘(7

14 U.S.C. 6c(b))’’, and

15 (C) in paragraph (13) by striking ‘‘(7

16 U.S.C. 23)’’,

17 (31) in section 1104(c) inserting a comma after

18 ‘‘interest’’,

19 (32) in section 1123(a)(1) inserting a comma

20 after ‘‘title’’ the last place it appears,

21 (33) in section 1129—

22 (A) in subsection (a)—

23 (i) in paragraph (4) by striking the

24 semicolon at the end and inserting a pe25 riod, and
75

•HR 5116 IH

1 (ii) in paragraph (12) inserting ‘‘of

2 title 28’’ after ‘‘section 1930’’, and

3 (B) in subsection (d) by striking ‘‘(15

4 U.S.C. 77e)’’,

5 (34) in section 1145—

6 (A) in subsection (a)—

7 (i) by striking ‘‘does’’ and inserting

8 ‘‘do’’,

9 (ii) by striking ‘‘(15 U.S.C. 77e)’’,

10 and

11 (iii) in paragraph (3)(B)(i) by striking

12 ‘‘(15 U.S.C. 78m or 78o(d))’’,

13 (B) in subsection (b)(1) by striking ‘‘(15

14 U.S.C. 77b(11))’’, and

15 (C) in subsection (d) by striking ‘‘(15

16 U.S.C. 77aaa et seq.)’’,

17 (35) in section 1166(2) by striking ‘‘(45 U.S.C.

18 791(b))’’,

19 (36) in section 1167—

20 (A) by striking ‘‘(45 U.S.C. 151 et seq.)’’,

21 and

22 (B) by striking ‘‘(45 U.S.C. 156)’’,

23 (37) in section 1226(b)(2)—

24 (A) by striking ‘‘1202(d)’’ and inserting

25 ‘‘1202(c)’’, and
76

•HR 5116 IH

1 (B) by striking ‘‘1202(e)’’ and inserting

2 ‘‘1202(d)’’,

3 (38) in section 1302(b)(3) by striking ‘‘and’’ at

4 the end, and

5 (39) in section 1328(a)—

6 (A) in paragraph (2) by striking ‘‘(5) or

7 (8)’’ and inserting ‘‘(5), (8), or (9)’’, and

8 (B) by striking the last paragraph (3), and

9 (40) in the table of chapters by striking the

10 item relating to chapter 15.

11 SEC. 502. TITLE 28 OF THE UNITED STATES CODE.

12 Section 586(a)(3) of title 28, United States Code, is

13 amended in the matter preceding subparagraph (A) by in14 serting ‘‘12,’’ after ‘‘11,’’.

15 TITLE VI—SEVERABILITY; EF16 FECTIVE DATE; APPLICATION

17 OF AMENDMENTS.

18 SEC. 601. SEVERABILITY.

19 If any provision of this Act or amendment made by

20 this Act or the application of such provision or amendment

21 to any person or circumstance is held to be unconstitu22 tional, the remaining provisions of and amendments made

23 by this Act and the application of such other provisions

24 and amendments to any person or circumstance shall not

25 be affected thereby.
77

•HR 5116 IH

1 SEC. 602. EFFECTIVE DATE; APPLICATION OF AMEND2 MENTS.

3 (a) EFFECTIVE DATE.—Except as provided in sub4 section (b), this Act shall take effect on the date of the

5 enactment of this Act.

6 (b) APPLICATION OF AMENDMENTS.—(1) Except as

7 provided in paragraph (2), the amendments made by this

8 Act shall not apply with respect to cases commenced under

9 title 11 of the United States Code before the date of the

10 enactment of this Act.

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

12 the amendment made by section 111(a) .

13 (B) The amendment made by section 113 shall apply

14 with respect to cases commenced under title 11 of the

15 United States Code before, on, and after the date of the

16 enactment of this Act.

17 (C) Section 1110 of title 11, United States Code, as

18 amended by section 201 of this Act, shall apply with re19 spect to any lease, as defined in such section 1110(c) as

20 so amended, entered into in connection with a settlement

21 of any proceeding in any case pending under title 11 of

22 the United States Code on the date of the enactment of

23 this Act.
78

•HR 5116 IH

1 (D) The amendments made by section 306 shall

2 apply only to agreements entered into after the date of

3 enactment of this Act.

Æ

HR 5116 IH——2

HR 5116 IH——3

HR 5116 IH——4

HR 5116 IH——5

HR 5116 IH——6