II

Calendar No. 807

106TH CONGRESS

2D SESSION S. 3046

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

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 14, 2000

Mr. LOTT introduced the following bill; which was read the first time

SEPTEMBER 15, 2000

Read the second time and placed on the calendar

A BILL

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

purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Bankruptcy Reform Act of 2000’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—NEEDS-BASED BANKRUPTCY
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Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.

Sec. 103. Findings and study.

Sec. 104. Notice of alternatives.

Sec. 105. Debtor financial management training test program.

Sec. 106. Credit counseling.

TITLE II—ENHANCED CONSUMER PROTECTION

Subtitle A—Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.

Sec. 202. Effect of discharge.

Sec. 203. Discouraging abuse of reaffirmation practices.

Subtitle B—Priority Child Support

Sec. 211. Definition of domestic support obligation.

Sec. 212. Priorities for claims for domestic support obligations.

Sec. 213. Requirements to obtain confirmation and discharge in cases involving

domestic support obligations.

Sec. 214. Exceptions to automatic stay in domestic support obligation proceedings.

Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and

support.

Sec. 216. Continued liability of property.

Sec. 217. Protection of domestic support claims against preferential transfer

motions.

Sec. 218. Disposable income defined.

Sec. 219. Collection of child support.

Sec. 220. Nondischargeability of certain educational benefits and loans.

Subtitle C—Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.

Sec. 222. Sense of Congress.

Sec. 223. Additional amendments to title 11, United States Code.

Sec. 224. Protection of retirement savings in bankruptcy.

Sec. 225. Protection of education savings.

TITLE III—DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Reinforcement of the fresh start.

Sec. 302. Discouraging bad faith repeat filings.

Sec. 303. Curbing abusive filings.

Sec. 304. Debtor retention of personal property security.

Sec. 305. Relief from the automatic stay when the debtor does not complete intended surrender of consumer debt collateral.

Sec. 306. Giving secured creditors fair treatment in chapter 13.

Sec. 307. Exemptions.

Sec. 308. Residency requirement for homestead exemption.

Sec. 309. Protecting secured creditors in chapter 13 cases.

Sec. 310. Limitation on luxury goods.

Sec. 311. Automatic stay.

Sec. 312. Extension of period between bankruptcy discharges.

Sec. 313. Definition of household goods and antiques.

Sec. 314. Debt incurred to pay nondischargeable debts.
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Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.

Sec. 316. Dismissal for failure to timely file schedules or provide required information.

Sec. 317. Adequate time to prepare for hearing on confirmation of the plan.

Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.

Sec. 319. Sense of the Congress regarding expansion of rule 9011 of the Federal Rules of Bankruptcy Procedure.

Sec. 320. Prompt relief from stay in individual cases.

Sec. 321. Chapter 11 cases filed by individuals.

Sec. 322. Excluding employee benefit plan participant contributions and other

property from the estate.

Sec. 323. Clarification of postpetition wages and benefits.

Sec. 324. Limitation.

Sec. 325. Exclusive jurisdiction in matters involving bankruptcy professionals.

Sec. 326. United States trustee program filing fee increase.

Sec. 327. Compensation of trustees in certain cases under chapter 7 of title 11,

United States Code.

Sec. 328. Nondischargeability of debts incurred through the commission of violence at clinics.

TITLE IV—GENERAL AND SMALL BUSINESS BANKRUPTCY

PROVISIONS

Subtitle A—General Business Bankruptcy Provisions

Sec. 401. Rolling stock equipment.

Sec. 402. Adequate protection for investors.

Sec. 403. Meetings of creditors and equity security holders.

Sec. 404. Protection of refinance of security interest.

Sec. 405. Executory contracts and unexpired leases.

Sec. 406. Creditors and equity security holders committees.

Sec. 407. Amendment to section 546 of title 11, United States Code.

Sec. 408. Limitation.

Sec. 409. Amendment to section 330(a) of title 11, United States Code.

Sec. 410. Postpetition disclosure and solicitation.

Sec. 411. Preferences.

Sec. 412. Venue of certain proceedings.

Sec. 413. Period for filing plan under chapter 11.

Sec. 414. Fees arising from certain ownership interests.

Sec. 415. Creditor representation at first meeting of creditors.

Sec. 416. Definition of disinterested person.

Sec. 417. Factors for compensation of professional persons.

Sec. 418. Appointment of elected trustee.

Sec. 419. Utility service.

Sec. 420. Bankruptcy fees.

Sec. 421. More complete information regarding assets of the estate.

Subtitle B—Small Business Bankruptcy Provisions

Sec. 431. Flexible rules for disclosure statement and plan.

Sec. 432. Definitions; effect of discharge.

Sec. 433. Standard form disclosure statement and plan.

Sec. 434. Uniform national reporting requirements.

Sec. 435. Uniform reporting rules and forms for small business cases.

Sec. 436. Duties in small business cases.

Sec. 437. Plan filing and confirmation deadlines.
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Sec. 438. Plan confirmation deadline.

Sec. 439. Duties of the United States trustee.

Sec. 440. Scheduling conferences.

Sec. 441. Serial filer provisions.

Sec. 442. Expanded grounds for dismissal or conversion and appointment of

trustee.

Sec. 443. Study of operation of title 11, United States Code, with respect to

small businesses.

Sec. 444. Payment of interest.

Sec. 445. Technical correction.

TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.

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

TITLE VI—IMPROVED BANKRUPTCY STATISTICS AND DATA

Sec. 601. Audit procedures.

Sec. 602. Improved bankruptcy statistics.

Sec. 603. Uniform rules for the collection of bankruptcy data.

Sec. 604. Sense of Congress regarding availability of bankruptcy data.

TITLE VII—BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.

Sec. 702. Treatment of fuel tax claims.

Sec. 703. Notice of request for a determination of taxes.

Sec. 704. Rate of interest on tax claims.

Sec. 705. Priority of tax claims.

Sec. 706. Priority property taxes incurred.

Sec. 707. No discharge of fraudulent taxes in chapter 13.

Sec. 708. No discharge of fraudulent taxes in chapter 11.

Sec. 709. Stay of tax proceedings limited to prepetition taxes.

Sec. 710. Periodic payment of taxes in chapter 11 cases.

Sec. 711. Avoidance of statutory tax liens prohibited.

Sec. 712. Payment of taxes in the conduct of business.

Sec. 713. Tardily filed priority tax claims.

Sec. 714. Income tax returns prepared by tax authorities.

Sec. 715. Discharge of the estate’s liability for unpaid taxes.

Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.

Sec. 717. Standards for tax disclosure.

Sec. 718. Setoff of tax refunds.

Sec. 719. Special provisions related to the treatment of State and local taxes.

Sec. 720. Dismissal for failure to timely file tax returns.

TITLE VIII—ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 801. Amendment to add chapter 15 to title 11, United States Code.

Sec. 802. Amendments to other chapters in title 11, United States Code.

Sec. 803. Claims relating to insurance deposits in cases ancillary to foreign proceedings.

TITLE IX—FINANCIAL CONTRACT PROVISIONS

Sec. 901. Bankruptcy Code amendments.

Sec. 902. Damage measure.
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Sec. 903. Asset-backed securitizations.

Sec. 904. Effective date; application of amendments.

TITLE X—PROTECTION OF FAMILY FARMERS AND FAMILY

FISHERMEN

Sec. 1001. Reenactment of chapter 12.

Sec. 1002. Debt limit increase.

Sec. 1003. Elimination of requirement that family farmer and spouse receive

over 50 percent of income from farming operation in year prior

to bankruptcy.

Sec. 1004. Certain claims owed to governmental units.

Sec. 1005. Prohibition of retroactive assessment of disposable income.

Sec. 1006. Family fishermen.

TITLE XI—HEALTH CARE AND EMPLOYEE BENEFITS

Sec. 1101. Definitions.

Sec. 1102. Disposal of patient records.

Sec. 1103. Administrative expense claim for costs of closing a health care business.

Sec. 1104. Appointment of ombudsman to act as patient advocate.

Sec. 1105. Debtor in possession; duty of trustee to transfer patients.

Sec. 1106. Establishment of policy and protocols relating to bankruptcies of

health care businesses.

Sec. 1107. Exclusion from program participation not subject to automatic stay.

TITLE XII—TECHNICAL AMENDMENTS

Sec. 1201. Definitions.

Sec. 1202. Adjustment of dollar amounts.

Sec. 1203. Extension of time.

Sec. 1204. Technical amendments.

Sec. 1205. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions.

Sec. 1206. Limitation on compensation of professional persons.

Sec. 1207. Effect of conversion.

Sec. 1208. Allowance of administrative expenses.

Sec. 1209. Exceptions to discharge.

Sec. 1210. Effect of discharge.

Sec. 1211. Protection against discriminatory treatment.

Sec. 1212. Property of the estate.

Sec. 1213. Preferences.

Sec. 1214. Postpetition transactions.

Sec. 1215. Disposition of property of the estate.

Sec. 1216. General provisions.

Sec. 1217. Abandonment of railroad line.

Sec. 1218. Contents of plan.

Sec. 1219. Discharge under chapter 12.

Sec. 1220. Bankruptcy cases and proceedings.

Sec. 1221. Knowing disregard of bankruptcy law or rule.

Sec. 1222. Transfers made by nonprofit charitable corporations.

Sec. 1223. Protection of valid purchase money security interests.

Sec. 1224. Extensions.

Sec. 1225. Bankruptcy judgeships.

Sec. 1226. Family fishermen.
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Sec. 1227. Compensating trustees.

Sec. 1228. Amendment to section 362 of title 11, United States Code.

Sec. 1229. Provision of electronic FTC pamphlet with electronic credit card applications and solicitations.

Sec. 1230. No bankruptcy for insolvent political committees.

Sec. 1231. Federal election law fines and penalties as nondischargeable debt.

Sec. 1232. Prohibition on certain retroactive finance charges.

Sec. 1233. Sense of Senate concerning credit worthiness.

Sec. 1234. Judicial education.

Sec. 1235. United States trustee program filing fee increase.

Sec. 1236. Providing requested tax documents to the court.

Sec. 1237. Definition of family farmer.

Sec. 1238. Encouraging creditworthiness.

Sec. 1239. Property no longer subject to redemption.

Sec. 1240. Availability of toll-free access to information.

TITLE XIII—GENERAL EFFECTIVE DATE; APPLICATION OF

AMENDMENTS

Sec. 1301. Effective date; application of amendments.

TITLE XIV—FINANCIAL INSTITUTIONS INSOLVENCY

IMPROVEMENT

Sec. 1401. Short title.

Sec. 1402. Treatment of certain agreements by conservators or receivers of insured depository institutions.

Sec. 1403. Authority of the corporation with respect to failed and failing institutions.

Sec. 1404. Amendments relating to transfers of qualified financial contracts.

Sec. 1405. Amendments relating to disaffirmance or repudiation of qualified financial contracts.

Sec. 1406. Clarifying amendment relating to master agreements.

Sec. 1407. Federal Deposit Insurance Corporation Improvement Act of 1991.

Sec. 1408. Recordkeeping requirements.

Sec. 1409. Exemptions from contemporaneous execution requirement.

Sec. 1410. SIPC stay.

Sec. 1411. Federal Reserve collateral requirements.

Sec. 1412. Effective date; application of amendments.

TITLE XV—METHAMPHETAMINE AND OTHER CONTROLLED

SUBSTANCES

Sec. 1501. Short title.

Subtitle A—Methamphetamine Production, Trafficking, and Abuse

CHAPTER 1—CRIMINAL PENALTIES

Sec. 1511. Enhanced punishment of amphetamine laboratory operations.

Sec. 1512. Enhanced punishment of amphetamine or methamphetamine laboratory operators.

Sec. 1513. Mandatory restitution for violations of Controlled Substances Act

and Controlled Substances Import and Export Act relating to

amphetamine and methamphetamine.

Sec. 1514. Methamphetamine paraphernalia.
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CHAPTER 2—ENHANCED LAW ENFORCEMENT

Sec. 1521. Environmental hazards associated with illegal manufacture of amphetamine and methamphetamine.

Sec. 1522. Reduction in retail sales transaction threshold for non-safe harbor

products containing pseudoephedrine or phenlypropanolamine.

Sec. 1523. Training for Drug Enforcement Administration and State and local

law enforcement personnel relating to clandestine laboratories.

Sec. 1524. Combating methamphetamine and amphetamine in high intensity

drug trafficking areas.

Sec. 1525. Combating amphetamine and methamphetamine manufacturing and

trafficking.

CHAPTER 3—ABUSE PREVENTION AND TREATMENT

Sec. 1531. Expansion of methamphetamine research.

Sec. 1532. Methamphetamine and amphetamine treatment initiative by Center

for Substance Abuse Treatment.

Sec. 1533. Expansion of methamphetamine abuse prevention efforts.

Sec. 1534. Study of methamphetamine treatment.

CHAPTER 4—REPORTS

Sec. 1541. Reports on consumption of methamphetamine and other illicit drugs

in rural areas, metropolitan areas, and consolidated metropolitan areas.

Sec. 1542. Report on diversion of ordinary over-the-counter pseudoephedrine

and phenylpropanolamine products.

Subtitle B—Controlled Substances Generally

CHAPTER 1—CRIMINAL MATTERS

Sec. 1551. Enhanced punishment for trafficking in list I chemicals.

Sec. 1552. Mail order requirements.

Sec. 1553. Increased penalties for distributing drugs to minors.

Sec. 1554. Increased penalty for drug trafficking in or near a school or other

protected location.

Sec. 1555. Advertisments for drug paraphernalia and schedule I controlled substances.

Sec. 1556. Theft and transportation of anhydrous ammonia for purposes of illicit production of controlled substances.

Sec. 1557. Criminal prohibition on distribution of certain information relating

to the manufacture of controlled substances.

CHAPTER 2—OTHER MATTERS

Sec. 1561. Waiver authority for physicians who dispense or prescribe certain

narcotic drugs for maintenance treatment or detoxification

treatment.

Subtitle C—Cocaine Powder

Sec. 1571. Short title.

Sec. 1572. Sentencing for violations involving cocaine powder.

Subtitle D—Education Matters
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Sec. 1581. Safe schools.

Sec. 1582. Student safety and family school choice.

Sec. 1583. Transfer of revenues.

Subtitle E—Miscellaneous

Sec. 1591. Notice; clarification.

Sec. 1592. Domestic terrorism assessment and recovery.

Sec. 1593. Antidrug messages on Federal Government Internet websites.

Sec. 1594. State schools.

Sec. 1595. Student safety and family school choice.

Sec. 1596. Transfer of revenues.

Sec. 1597. Increased penalties for distributing drugs to minors.

Sec. 1598. Increased penalty for drug trafficking in or near a school or other

protected location.

Sec. 1599. Severability.

TITLE XVI—PROTECTION FROM THE IMPACT OF BANKRUPTCY

OF CERTAIN ELECTRIC UTILITIES

Sec. 1601. Short title.

Sec. 1602. Findings and purposes.

Sec. 1603. Unlawful contract and amended contract.

Sec. 1604. Exclusive enforcement.

TITLE VII—CONSUMER CREDIT DISCLOSURE

Sec. 1701. Enhanced disclosures under an open end credit plan.

Sec. 1702. Enhanced disclosure for credit extensions secured by a dwelling.

Sec. 1703. Disclosures related to ‘‘introductory rates’’.

Sec. 1704. Internet-based credit card solicitations.

Sec. 1705. Disclosures related to late payment deadlines and penalties.

Sec. 1706. Prohibition on certain actions for failure to incur finance charges.

Sec. 1707. Dual use debit card.

Sec. 1708. Study of bankruptcy impact of credit extended to dependent students.

1 TITLE I—NEEDS-BASED

2 BANKRUPTCY

3 SEC. 101. CONVERSION.

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

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

6 SEC. 102. DISMISSAL OR CONVERSION.

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

8 States Code, is amended—
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1 (1) by striking the section heading and insert2 ing the following:

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

4 under chapter 11 or 13’’;

5 and

6 (2) in subsection (b)—

7 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’;

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

9 subparagraph (A) of this paragraph—

10 (i) in the first sentence—

11 (I) by striking ‘‘but not at the re12 quest or suggestion’’ and inserting ‘‘,

13 panel trustee or’’;

14 (II) by inserting ‘‘, or, with the

15 debtor’s consent, convert such a case

16 to a case under chapter 11 or 13 of

17 this title,’’ after ‘‘consumer debts’’;

18 and

19 (III) by striking ‘‘substantial

20 abuse’’ and inserting ‘‘abuse’’; and

21 (ii) by striking the next to last sen22 tence; and

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

24 ‘‘(2)(A)(i) In considering under paragraph (1) wheth25 er the granting of relief would be an abuse of the provi-
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1 sions of this chapter, the court shall presume abuse exists

2 if the debtor’s current monthly income reduced by the

3 amounts determined under clauses (ii), (iii), and (iv), and

4 multiplied by 60 is not less than the lesser of—

5 ‘‘(I) 25 percent of the debtor’s nonpriority un6 secured claims in the case; or

7 ‘‘(II) $15,000.

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

9 applicable monthly (excluding payments for debts) ex10 penses under standards issued by the Internal Revenue

11 Service for the area in which the debtor resides, as in ef12 fect on the date of the entry of the order for relief, for

13 the debtor, the dependents of the debtor, and the spouse

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

15 a dependent. In addition, the debtor’s monthly expenses

16 shall include the debtor’s reasonably necessary expenses

17 incurred to maintain the safety of the debtor and the fam18 ily of the debtor from family violence as identified under

19 section 309 of the Family Violence Prevention and Serv20 ices Act (42 U.S.C. 10408), or other applicable Federal

21 law. The expenses included in the debtor’s monthly ex22 penses described in the preceding sentence shall be kept

23 confidential by the court.

24 ‘‘(II) In addition, the debtor’s monthly expenses may

25 include, if applicable, the continuation of actual expenses
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1 paid by the debtor that are reasonable and necessary for

2 care and support of an elderly, chronically ill, or disabled

3 household member or member of the debtor’s immediate

4 family (including parents, grandparents, and siblings of

5 the debtor, the dependents of the debtor, and the spouse

6 of the debtor in a joint case) who is not a dependent and

7 who is unable to pay for such reasonable and necessary

8 expenses.

9 ‘‘(iii) The debtor’s average monthly payments on ac10 count of secured debts shall be calculated as—

11 ‘‘(I) the sum of—

12 ‘‘(aa) the total of all amounts scheduled as

13 contractually due to secured creditors in each

14 month of the 60 months following the date of

15 the petition; and

16 ‘‘(bb) any additional payments to secured

17 creditors necessary for the debtor, in filing a

18 plan under chapter 13 of this title, to maintain

19 possession of the debtor’s primary residence,

20 motor vehicle, or other property necessary for

21 the support of the debtor and the debtor’s de22 pendents, that serves as collateral for secured

23 debts; divided by

24 ‘‘(II) 60.
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1 ‘‘(iv) The debtor’s expenses for payment of all pri2 ority claims (including priority child support and alimony

3 claims) shall be calculated as—

4 ‘‘(I) the total amount of debts entitled to pri5 ority; divided by

6 ‘‘(II) 60.

7 ‘‘(B)(i) In any proceeding brought under this sub8 section, the presumption of abuse may be rebutted by

9 demonstrating special circumstances that justify addi10 tional expenses or adjustments of current monthly total

11 income. In order to establish special circumstances, the

12 debtor shall be required to—

13 ‘‘(I) itemize each additional expense or adjust14 ment of income; and

15 ‘‘(II) provide—

16 ‘‘(aa) documentation for such expenses;

17 and

18 ‘‘(bb) a detailed explanation of the special

19 circumstances that make such expenses nec20 essary and reasonable.

21 ‘‘(ii) The debtor, and the attorney for the debtor if

22 the debtor has an attorney, shall attest under oath to the

23 accuracy of any information provided to demonstrate that

24 additional expenses or adjustments to income are required.
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1 ‘‘(iii) The presumption of abuse may be rebutted if

2 the additional expenses or adjustments to income referred

3 to in clause (i) cause the product of the debtor’s current

4 monthly income reduced by the amounts determined under

5 clauses (ii), (iii), and (iv) of subparagraph (A) multiplied

6 by 60 to be less than the lesser of—

7 ‘‘(I) 25 percent of the debtor’s nonpriority un8 secured claims; or

9 ‘‘(II) $15,000.

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

11 expenditures required under section 521, the debtor shall

12 include a statement of the debtor’s current monthly in13 come, and the calculations that determine whether a pre14 sumption arises under subparagraph (A)(i), that shows

15 how each such amount is calculated.

16 ‘‘(ii) The Supreme Court shall promulgate rules

17 under section 2075 of title 28, that prescribe a form for

18 a statement under clause (i) and may provide general rules

19 on the content of the statement.

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

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

22 this chapter in a case in which the presumption in sub23 paragraph (A)(i) of such paragraph does not apply or has

24 been rebutted, the court shall consider—
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1 ‘‘(A) whether the debtor filed the petition in

2 bad faith; or

3 ‘‘(B) the totality of the circumstances (includ4 ing whether the debtor seeks to reject a personal

5 services contract and the financial need for such re6 jection as sought by the debtor) of the debtor’s fi7 nancial situation demonstrates abuse.’’.

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

9 amended—

10 (1) in section 101, by inserting after paragraph

11 (10) the following:

12 ‘‘(10A) ‘current monthly income’—

13 ‘‘(A) means the average monthly income

14 from all sources which the debtor, or in a joint

15 case, the debtor and the debtor’s spouse, receive

16 without regard to whether the income is taxable

17 income, derived during the 180-day period pre18 ceding the date of determination; and

19 ‘‘(B) includes any amount paid by any en20 tity other than the debtor (or, in a joint case,

21 the debtor and the debtor’s spouse), on a reg22 ular basis to the household expenses of the

23 debtor or the debtor’s dependents (and, in a

24 joint case, the debtor’s spouse if not otherwise
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1 a dependent), but excludes benefits received

2 under the Social Security Act;’’; and

3 (2) in section 704—

4 (A) by inserting ‘‘(a)’’ before ‘‘The trustee

5 shall—’’; and

6 (B) by adding at the end the following:

7 ‘‘(b)(1) With respect to an individual debtor under

8 this chapter—

9 ‘‘(A) the United States trustee or bankruptcy

10 administrator shall review all materials filed by the

11 debtor and, not later than 10 days before the first

12 meeting of creditors, file with the court a statement

13 as to whether the debtor’s case would be presumed

14 to be an abuse under section 707(b); and

15 ‘‘(B) not later than 5 days after receiving a

16 statement under subparagraph (A), the court shall

17 provide a copy of the statement to all creditors.

18 ‘‘(2) The United States trustee or bankruptcy admin19 istrator shall not later than 30 days after receiving a

20 statement filed under paragraph (1) file a motion to dis21 miss or convert under section 707(b), or file a statement

22 setting forth the reasons the United States trustee or

23 bankruptcy administrator does not believe that such a mo24 tion would be appropriate, if based on the filing of such

25 statement with the court, the United States trustee or
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1 bankruptcy administrator determines that the debtor’s

2 case should be presumed to be an abuse under section

3 707(b) and the product of the debtor’s current monthly

4 income, multiplied by 12 is not less than—

5 ‘‘(A) the highest national or applicable State

6 median family income reported for a family of equal

7 or lesser size, whichever is greater; or

8 ‘‘(B) in the case of a household of 1 person, the

9 national or applicable State median household in10 come for 1 earner, whichever is greater.

11 ‘‘(3) In any case in which a motion to dismiss or con12 vert, or a statement is required to be filed by this sub13 section, the United States trustee or bankruptcy adminis14 trator may decline to file a motion to dismiss or convert

15 pursuant to section 704(b)(2) or if the product of the

16 debtor’s current monthly income multiplied by 12—

17 ‘‘(A)(i) exceeds 100 percent, but does not ex18 ceed 150 percent of the national or applicable State

19 median household income reported for a household

20 of equal size, whichever is greater; or

21 ‘‘(ii) in the case of a household of 1 person, ex22 ceeds 100 percent but does not exceed 150 percent

23 of the national or applicable State median household

24 income reported for 1 earner, whichever is greater;

25 and
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1 ‘‘(B) the product of the debtor’s current month2 ly income (reduced by the amounts determined

3 under section 707(b)(2)(A)(ii)) (except for the

4 amount calculated under the other necessary ex5 penses standard issued by the Internal Revenue

6 Service and section 707(b)(2)(A) (iii) and (iv)) mul7 tiplied by 60 is less than the greater of—

8 ‘‘(i) 25 percent of the debtor’s nonpriority

9 unsecured claims in the case; or

10 ‘‘(ii) $15,000.

11 ‘‘(4)(A) The court shall order the counsel for the

12 debtor to reimburse the panel trustee for all reasonable

13 costs in prosecuting a motion brought under section

14 707(b), including reasonable attorneys’ fees, if—

15 ‘‘(i) a panel trustee appointed under section

16 586(a)(1) of title 28 brings a motion for dismissal

17 or conversion under this subsection; and

18 ‘‘(ii) the court—

19 ‘‘(I) grants that motion; and

20 ‘‘(II) finds that the action of the counsel

21 for the debtor in filing under this chapter was

22 frivolous.

23 ‘‘(B) If the court finds that the attorney for the debt24 or violated Rule 9011, at a minimum, the court shall

25 order—
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1 ‘‘(i) the assessment of an appropriate civil pen2 alty against the counsel for the debtor; and

3 ‘‘(ii) the payment of the civil penalty to the

4 panel trustee or the United States trustee.

5 ‘‘(C) In the case of a petition referred to in subpara6 graph (B), the signature of an attorney shall constitute

7 a certificate that the attorney has—

8 ‘‘(i) performed a reasonable investigation into

9 the circumstances that gave rise to the petition; and

10 ‘‘(ii) determined that the petition—

11 ‘‘(I) is well grounded in fact; and

12 ‘‘(II) is warranted by existing law or a

13 good faith argument for the extension, modi14 fication, or reversal of existing law and does not

15 constitute an abuse under paragraph (1).

16 ‘‘(5)(A) Except as provided in subparagraph (B) and

17 subject to paragraph (6), the court may award a debtor

18 all reasonable costs in contesting a motion brought by a

19 party in interest (other than a panel trustee or United

20 States trustee) under this subsection (including reasonable

21 attorneys’ fees) if—

22 ‘‘(i) the court does not grant the motion; and

23 ‘‘(ii) the court finds that—

24 ‘‘(I) the position of the party that brought

25 the motion was not substantially justified; or
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1 ‘‘(II) the party brought the motion solely

2 for the purpose of coercing a debtor into

3 waiving a right guaranteed to the debtor under

4 this title.

5 ‘‘(B) A party in interest that has a claim of an aggre6 gate amount less than $1,000 shall not be subject to sub7 paragraph (A).

8 ‘‘(6)(A) Only the judge, United States trustee, bank9 ruptcy administrator, or panel trustee may bring a motion

10 under section 707(b), if the current monthly income of the

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

12 spouse, as of the date of the order for relief, when multi13 plied by 12, is equal to or less than—

14 ‘‘(i) the national or applicable State median

15 family income reported for a family of equal or less16 er size, whichever is greater; or

17 ‘‘(ii) in the case of a household of 1 person, the

18 national or applicable State median household in19 come last reported by the Bureau of the Census for

20 1 earner, whichever is greater.

21 ‘‘(B) Notwithstanding subparagraph (A), the na22 tional or applicable State median family income for a fam23 ily of more than 4 individuals shall be the national or ap24 plicable State median family income last reported by the

25 Bureau of the Census for a family of 4 individuals, which-
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1 ever is greater, plus $583 for each additional member of

2 that family.’’.

3 (c) NONLIMITATION OF INFORMATION.—Nothing in

4 this title shall limit the ability of a creditor to provide in5 formation to a judge, United States trustee, bankruptcy

6 administrator or panel trustee.

7 (d) DISMISSAL FOR CERTAIN CRIMES.—Section 707

8 of title 11, United States Code, as amended by subsection

9 (a) of this section, is amended by adding at the end the

10 following:

11 ‘‘(c)(1) In this subsection—

12 ‘‘(A) the term ‘crime of violence’ has the mean13 ing given that term in section 16 of title 18; and

14 ‘‘(B) the term ‘drug trafficking crime’ has the

15 meaning given that term in section 924(c)(2) of title

16 18.

17 ‘‘(2) Except as provided in paragraph (3), after no18 tice and a hearing, the court, on a motion by the victim

19 of a crime of violence or a drug trafficking crime, or at

20 the request of a party in interest, shall dismiss a voluntary

21 case filed by an individual debtor under this chapter if

22 that individual was convicted of that crime.

23 ‘‘(3) The court may not dismiss a case under para24 graph (2) if the debtor establishes by a preponderance of

25 the evidence that the filing of a case under this chapter
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1 is necessary to satisfy a claim for a domestic support obli2 gation.’’.

3 (e) CLERICAL AMENDMENT.—The table of sections

4 for chapter 7 of title 11, United States Code, is amended

5 by striking the item relating to section 707 and inserting

6 the following:

‘‘707. Dismissal of a case or conversion to a case under chapter 11 or 13.’’.

7 SEC. 103. FINDINGS AND STUDY.

8 (a) FINDINGS.—Congress finds that the Secretary of

9 the Treasury has the inherent authority to alter the Inter10 nal Revenue Service standards established to set guide11 lines for repayment plans as needed to accommodate their

12 use under section 707(b) of title 11, United States Code.

13 (b) STUDY.—

14 (1) IN GENERAL.—Not later than 3 years after

15 the date of enactment of this Act, the Secretary of

16 the Treasury, in consultation with the Director of

17 the Executive Office of United States Trustees, shall

18 submit a report to the Committee on the Judiciary

19 of the Senate and the Committee on the Judiciary

20 of the House of Representatives containing the find21 ings of the Secretary concerning the utilization of

22 Internal Revenue Service standards for

23 determining—
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1 (A) the current monthly expenses of a

2 debtor under section 707(b) of title 11, United

3 States Code; and

4 (B) the impact that the application of

5 those standards has had on debtors and on the

6 bankruptcy courts.

7 (2) RECOMMENDATION.—The report under

8 paragraph (1) may include recommendations for

9 amendments to title 11, United States Code, that

10 are consistent with the findings of the Secretary of

11 the Treasury under paragraph (1).

12 SEC. 104. NOTICE OF ALTERNATIVES.

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

14 amended to read as follows:

15 ‘‘(b)(1) Before the commencement of a case under

16 this title by an individual whose debts are primarily con17 sumer debts, that individual shall be given or obtain (as

18 required in section 521(a)(1), as part of the certification

19 process under subchapter I of chapter 5) a written notice

20 prescribed by the United States trustee for the district in

21 which the petition is filed under section 586 of title 28.

22 ‘‘(2) The notice shall contain the following:

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

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

25 of proceeding under each of those chapters.
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1 ‘‘(B) A brief description of services that may be

2 available to that individual from a nonprofit budget

3 and credit counseling agency that is approved by the

4 United States trustee for that district.’’.

5 SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING

6 TEST PROGRAM.

7 (a) DEVELOPMENT OF FINANCIAL MANAGEMENT

8 AND TRAINING CURRICULUM AND MATERIALS.—The Di9 rector of the Executive Office for United States Trustees

10 (in this section referred to as the ‘‘Director’’) shall—

11 (1) consult with a wide range of individuals who

12 are experts in the field of debtor education, includ13 ing trustees who are appointed under chapter 13 of

14 title 11, United States Code, and who operate finan15 cial management education programs for debtors;

16 and

17 (2) develop a financial management training

18 curriculum and materials that may be used to edu19 cate individual debtors concerning how to better

20 manage their finances.

21 (b) TEST.—

22 (1) IN GENERAL.—The Director shall select 3

23 judicial districts of the United States in which to

24 test the effectiveness of the financial management
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1 training curriculum and materials developed under

2 subsection (a).

3 (2) AVAILABILITY OF CURRICULUM AND MATE4 RIALS.—For a 1-year period beginning not later

5 than 270 days after the date of enactment of this

6 Act, the curriculum and materials referred to in

7 paragraph (1) shall be made available by the Direc8 tor, directly or indirectly, on request to individual

9 debtors in cases filed during that 1-year period

10 under chapter 7 or 13 of title 11, United States

11 Code.

12 (c) EVALUATION.—

13 (1) IN GENERAL.—During the 1-year period re14 ferred to in subsection (b), the Director shall evalu15 ate the effectiveness of—

16 (A) the financial management training cur17 riculum and materials developed under sub18 section (a); and

19 (B) a sample of existing consumer edu20 cation programs such as those described in the

21 report of the National Bankruptcy Review Com22 mission issued on October 20, 1997, that are

23 representative of consumer education programs

24 carried out by—

25 (i) the credit industry;
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1 (ii) trustees serving under chapter 13

2 of title 11, United States Code; and

3 (iii) consumer counseling groups.

4 (2) REPORT.—Not later than 3 months after

5 concluding the evaluation under paragraph (1), the

6 Director shall submit a report to the Speaker of the

7 House of Representatives and the President pro

8 tempore of the Senate, for referral to the appro9 priate committees of Congress, containing the find10 ings of the Director regarding the effectiveness of

11 such curriculum, such materials, and such programs.

12 SEC. 106. CREDIT COUNSELING.

13 (a) WHO MAY BE A DEBTOR.—Section 109 of title

14 11, United States Code, is amended by adding at the end

15 the following:

16 ‘‘(h)(1) Subject to paragraphs (2) and (3), and not17 withstanding any other provision of this section, an indi18 vidual may not be a debtor under this title unless that

19 individual has, during the 180-day period preceding the

20 date of filing of the petition of that individual, received

21 from an approved nonprofit budget and credit counseling

22 agency described in section 111(a) an individual or group

23 briefing (including a briefing conducted by telephone or

24 on the Internet) that outlined the opportunities for avail-
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1 able credit counseling and assisted that individual in per2 forming a related budget analysis.

3 ‘‘(2)(A) Paragraph (1) shall not apply with respect

4 to a debtor who resides in a district for which the United

5 States trustee or bankruptcy administrator of the bank6 ruptcy court of that district determines that the approved

7 nonprofit budget and credit counseling agency for that dis8 trict is not reasonably able to provide adequate services

9 to the additional individuals who would otherwise seek

10 credit counseling from that agency by reason of the re11 quirements of paragraph (1).

12 ‘‘(B) Each United States trustee or bankruptcy ad13 ministrator that makes a determination described in sub14 paragraph (A) shall review that determination not later

15 than 1 year after the date of that determination, and not

16 less frequently than every year thereafter. Notwith17 standing the preceding sentence, a nonprofit budget and

18 credit counseling service may be disapproved by the

19 United States trustee or bankruptcy administrator at any

20 time.

21 ‘‘(3)(A) Subject to subparagraph (B), the require22 ments of paragraph (1) shall not apply with respect to

23 a debtor who submits to the court a certification that—

24 ‘‘(i) describes exigent circumstances that merit

25 a waiver of the requirements of paragraph (1);
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1 ‘‘(ii) states that the debtor requested credit

2 counseling services from an approved nonprofit

3 budget and credit counseling agency, but was unable

4 to obtain the services referred to in paragraph (1)

5 during the 5-day period beginning on the date on

6 which the debtor made that request; and

7 ‘‘(iii) is satisfactory to the court.

8 ‘‘(B) With respect to a debtor, an exemption under

9 subparagraph (A) shall cease to apply to that debtor on

10 the date on which the debtor meets the requirements of

11 paragraph (1), but in no case may the exemption apply

12 to that debtor after the date that is 30 days after the debt13 or files a petition, except that the court, for cause, may

14 order an additional 15 days.’’.

15 (b) CHAPTER 7 DISCHARGE.—Section 727(a) of title

16 11, United States Code, is amended—

17 (1) in paragraph (9), by striking ‘‘or’’ at the

18 end;

19 (2) in paragraph (10), by striking the period

20 and inserting ‘‘; or’’; and

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

22 ‘‘(11) after the filing of the petition, the debtor

23 failed to complete an instructional course concerning

24 personal financial management described in section

25 111.’’.
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1 (c) CHAPTER 13 DISCHARGE.—Section 1328 of title

2 11, United States Code, is amended by adding at the end

3 the following:

4 ‘‘(g) The court shall not grant a discharge under this

5 section to a debtor, unless after filing a petition the debtor

6 has completed an instructional course concerning personal

7 financial management described in section 111.

8 ‘‘(h) Subsection (g) shall not apply with respect to

9 a debtor who resides in a district for which the United

10 States trustee or bankruptcy administrator of the bank11 ruptcy court of that district determines that the approved

12 instructional courses are not adequate to service the addi13 tional individuals who would be required to complete the

14 instructional course by reason of the requirements of this

15 section.

16 ‘‘(i) Each United States trustee or bankruptcy ad17 ministrator that makes a determination described in sub18 section (h) shall review that determination not later than

19 1 year after the date of that determination, and not less

20 frequently than every year thereafter.’’.

21 (d) DEBTOR’S DUTIES.—Section 521 of title 11,

22 United States Code, is amended—

23 (1) by inserting ‘‘(a)’’ before ‘‘The debtor

24 shall—’’; and

25 (2) by adding at the end the following:
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1 ‘‘(b) In addition to the requirements under subsection

2 (a), an individual debtor shall file with the court—

3 ‘‘(1) a certificate from the approved nonprofit

4 budget and credit counseling agency that provided

5 the debtor services under section 109(h); and

6 ‘‘(2) a copy of the debt repayment plan, if any,

7 developed under section 109(h) through the ap8 proved nonprofit budget and credit counseling agen9 cy referred to in paragraph (1).’’.

10 (e) GENERAL PROVISIONS.—

11 (1) IN GENERAL.—Chapter 1 of title 11, United

12 States Code, is amended by adding at the end the

13 following:

14 ‘‘§ 111. Nonprofit budget and credit counseling agen15 cies; financial management instructional

16 courses

17 ‘‘(a) The clerk of each district shall maintain a list

18 of nonprofit budget and credit counseling ageancies that

19 provide 1 or more programs described in section 109(h)

20 and a list of instructional courses concerning personal fi21 nancial management that have been approved by—

22 ‘‘(1) the United States trustee; or

23 ‘‘(2) the bankruptcy administrator for the dis24 trict.
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1 ‘‘(b) For inclusion on the approved list under sub2 section (a), the United States trustee or bankruptcy ad3 ministrator shall require the credit counseling service, at

4 a minimum—

5 ‘‘(1) to be a nonprofit budget and credit coun6 seling agency, the majority of the board of directors

7 of which—

8 ‘‘(A) are not employed by the agency; and

9 ‘‘(B) will not directly or indirectly benefit

10 financially from the outcome of a credit coun11 seling session;

12 ‘‘(2) if a fee is charged for counseling services,

13 to charge a reasonable fee, and to provide services

14 without regard to ability to pay the fee;

15 ‘‘(3) to provide for safekeeping and payment of

16 client funds, including an annual audit of the trust

17 accounts and appropriate employee bonding;

18 ‘‘(4) to provide full disclosures to clients, in19 cluding funding sources, counselor qualifications,

20 and possible impact on credit reports;

21 ‘‘(5) to provide adequate counseling with re22 spect to client credit problems that includes an anal23 ysis of their current situation, what brought them to

24 that financial status, and how they can develop a
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1 plan to handle the problem without incurring nega2 tive amortization of their debts; and

3 ‘‘(6) to provide trained counselors who receive

4 no commissions or bonuses based on the counseling

5 session outcome.

6 ‘‘(c)(1) No credit counseling service may provide to

7 a credit reporting agency information concerning whether

8 an individual debtor has received or sought instruction

9 concerning personal financial management from the credit

10 counseling service.

11 ‘‘(2) A credit counseling service that willfully or neg12 ligently fails to comply with any requirement under this

13 title with respect to a debtor shall be liable for damages

14 in an amount equal to the sum of—

15 ‘‘(A) any actual damages sustained by the debt16 or as a result of the violation; and

17 ‘‘(B) any court costs or reasonable attorneys’

18 fees (as determined by the court) incurred in an ac19 tion to recover those damages.’’.

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions for chapter 1 of title 11, United States Code,

22 is amended by adding at the end the following:

‘‘111. Nonprofit budget and credit counseling agencies; financial management

instructional courses.’’.
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1 (f) LIMITATION.—Section 362 of title 11, United

2 States Code, is amended by adding at the end the fol3 lowing:

4 ‘‘(i) If a case commenced under chapter 7, 11, or 13

5 is dismissed due to the creation of a debt repayment plan,

6 for purposes of subsection (c)(3), any subsequent case

7 commenced by the debtor under any such chapter shall

8 not be presumed to be filed not in good faith.’’.

9 TITLE II—ENHANCED

10 CONSUMER PROTECTION

11 Subtitle A—Penalties for Abusive

12 Creditor Practices

13 SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLU14 TION.

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

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

17 following:

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

19 after a hearing, may reduce a claim filed under this sec20 tion based in whole on unsecured consumer debts by not

21 more than 20 percent of the claim, if—

22 ‘‘(A) the claim was filed by a creditor who un23 reasonably refused to negotiate a reasonable alter24 native repayment schedule proposed by an approved
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1 credit counseling agency acting on behalf of the

2 debtor;

3 ‘‘(B) the offer of the debtor under subpara4 graph (A)—

5 ‘‘(i) was made at least 60 days before the

6 filing of the petition; and

7 ‘‘(ii) provided for payment of at least 60

8 percent of the amount of the debt over a period

9 not to exceed the repayment period of the loan,

10 or a reasonable extension thereof; and

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

12 repayment schedule is nondischargeable.

13 ‘‘(2) The debtor shall have the burden of proving, by

14 clear and convincing evidence, that—

15 ‘‘(A) the creditor unreasonably refused to con16 sider the debtor’s proposal; and

17 ‘‘(B) the proposed alternative repayment sched18 ule was made in the 60-day period specified in para19 graph (1)(B)(i).’’.

20 (b) LIMITATION ON AVOIDABILITY.—Section 547 of

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

22 end the following:

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

24 transfer was made as a part of an alternative repayment
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1 plan between the debtor and any creditor of the debtor

2 created by an approved credit counseling agency.’’.

3 SEC. 202. EFFECT OF DISCHARGE.

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

5 amended by adding at the end the following:

6 ‘‘(i) The willful failure of a creditor to credit pay7 ments received under a plan confirmed under this title (in8 cluding a plan of reorganization confirmed under chapter

9 11 of this title) in the manner required by the plan (in10 cluding crediting the amounts required under the plan)

11 shall constitute a violation of an injunction under sub12 section (a)(2).’’.

13 SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION

14 PRACTICES.

15 (a) IN GENERAL.—Section 524 of title 11, United

16 States Code, as amended by section 202 of this Act, is

17 amended—

18 (1) in subsection (c) by striking paragraph (2)

19 and inserting the following:

20 ‘‘(2) the debtor received the disclosures de21 scribed in subsection (i) at or before the time the

22 debtor signed the agreement.’’;

23 (2) by inserting at the end of the section the

24 following:
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1 ‘‘(i)(1) The disclosures required under subsection (c)

2 paragraph (2) of this section shall consist of the disclosure

3 statement described in paragraph (3), completed as re4 quired in that paragraph, together with the agreement,

5 statement, declaration, motion and order described, re6 spectively, in paragraphs (4) through (8) of this sub7 section, and shall be the only disclosures required in con8 nection with the reaffirmation.

9 ‘‘(2) Disclosures made under this paragraph shall be

10 made clearly and conspicuously and in writing. The terms

11 ‘Amount Reaffirmed’ and ‘Annual Percentage Rate’ shall

12 be disclosed more conspicuously than other terms, data or

13 information provided in connection with this disclosure,

14 except that the phrases ‘Before agreeing to reaffirm a

15 debt, review these important disclosures’ and ‘Summary

16 of Reaffirmation Agreement’ may be equally conspicuous.

17 Disclosures may be made in a different order and may

18 use terminology different from that set forth in para19 graphs (2) through (8), except that the terms ‘Amount

20 Reaffirmed’ and ‘Annual Percentage Rate’ must be used

21 where indicated.

22 ‘‘(3) The disclosure statement required under this

23 paragraph shall consist of the following:
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1 ‘‘(A) The statement: ‘Part A: Before agreeing

2 to reaffirm a debt, review these important disclo3 sures:’;

4 ‘‘(B) Under the heading ‘Summary of Reaffir5 mation Agreement’, the statement: ‘This Summary

6 is made pursuant to the requirements of the Bank7 ruptcy Code’;

8 ‘‘(C) The ‘Amount Reaffirmed’, using that

9 term, which shall be—

10 ‘‘(i) the total amount which the debtor

11 agrees to reaffirm, and

12 ‘‘(ii) the total of any other fees or cost ac13 crued as of the date of the disclosure statement.

14 ‘‘(D) In conjunction with the disclosure of the

15 ‘Amount Reaffirmed’, the statements—

16 ‘‘(i) ‘The amount of debt you have agreed

17 to reaffirm’; and

18 ‘‘(ii) ‘Your credit agreement may obligate

19 you to pay additional amounts which may come

20 due after the date of this disclosure. Consult

21 your credit agreement.’.

22 ‘‘(E) The ‘Annual Percentage Rate’, using that

23 term, which shall be disclosed as—

24 ‘‘(i) if, at the time the petition is filed, the

25 debt is open end credit as defined pursuant to
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1 the Truth in Lending Act, title 15, United

2 States Code, section 1601 et. seq., then—

3 ‘‘(I) the annual percentage rate deter4 mined pursuant to title 15, United States

5 Code, section 1637(b) (5) and (6), as ap6 plicable, as disclosed to the debtor in the

7 most recent periodic statement prior to the

8 agreement or, if no such periodic state9 ment has been provided the debtor during

10 the prior six months, the annual percent11 age rate as it would have been so disclosed

12 at the time the disclosure statement is

13 given the debtor, or to the extent this an14 nual percentage rate is not readily avail15 able or not applicable, then

16 ‘‘(II) the simple interest rate applica17 ble to the amount reaffirmed as of the date

18 the disclosure statement is given to the

19 debtor, or if different simple interest rates

20 apply to different balances, the simple in21 terest rate applicable to each such balance,

22 identifying the amount of each such bal23 ance included in the amount reaffirmed, or

24 ‘‘(III) if the entity making the disclo25 sure elects, to disclose the annual percent-
38

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1 age rate under (I) and the simple interest

2 rate under (II);

3 ‘‘(ii) if, at the time the petition is filed, the

4 debt is closed end credit as defined pursuant to

5 the Truth in Lending Act, title 15, United

6 States Code, section 1601 et seq., then—

7 ‘‘(I) the annual percentage rate pur8 suant to title 15, United States Code, sec9 tion 1638(a)(4) as disclosed to the debtor

10 in the most recent disclosure statement

11 given the debtor prior to the reaffirmation

12 agreement with respect to the debt, or, if

13 no such disclosure statement was provided

14 the debtor, the annual percentage rate as

15 it would have been so disclosed at the time

16 the disclosure statement is given the debt17 or, or to the extent this annual percentage

18 rate is not readily available or not applica19 ble, then

20 ‘‘(II) the simple interest rate applica21 ble to the amount reaffirmed as of the date

22 the disclosure statement is given the debt23 or, or if different simple interest rates

24 apply to different balances, the simple in25 terest rate applicable to each such balance,
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1 identifying the amount of such balance in2 cluded in the amount reaffirmed, or

3 ‘‘(III) if the entity making the disclo4 sure elects, to disclose the annual percent5 age rate under (I) and the simple interest

6 rate under (II).

7 ‘‘(F) If the underlying debt transaction was dis8 closed as a variable rate transaction on the most re9 cent disclosure given pursuant to the Truth in Lend10 ing Act, title 15, United States Code, section 1601

11 et seq., by stating ‘The interest rate on your loan

12 may be a variable interest rate which changes from

13 time to time, so that the annual percentage rate dis14 closed here may be higher or lower.’.

15 ‘‘(G) If the debt is secured by a security inter16 est which has not been waived in whole or in part

17 or determined to be void by a final order of the

18 court at the time of the disclosure, by disclosing that

19 a security interest or lien in goods or property is as20 serted over some or all of the obligations you are re21 affirming and listing the items and their original

22 purchase price that are subject to the asserted secu23 rity interest, or if not a purchase-money security in24 terest then listing by items or types and the original

25 amount of the loan.
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1 ‘‘(H) At the election of the creditor, a state2 ment of the repayment schedule using one or a com3 bination of the following—

4 ‘‘(i) by making the statement: ‘Your first

5 payment in the amount $lll is due on

6 lll but the future payment amount may be

7 different. Consult your reaffirmation or credit

8 agreement, as applicable.’, and stating the

9 amount of the first payment and the due date

10 of that payment in the places provided;

11 ‘‘(ii) by making the statement: ‘Your pay12 ment schedule will be:’, and describing the re13 payment schedule with the number, amount and

14 due dates or period of payments scheduled to

15 repay the obligations reaffirmed to the extent

16 then known by the disclosing party; or

17 ‘‘(iii) by describing the debtor’s repayment

18 obligations with reasonable specificity to the ex19 tent then known by the disclosing party.

20 ‘‘(I) The following statement: ‘Note: When this

21 disclosure talks about what a creditor ‘‘may’’ do, it

22 does not use the word ‘‘may’’ to give the creditor

23 specific permission. The word ‘‘may’’ is used to tell

24 you what might occur if the law permits the creditor

25 to take the action. If you have questions about your
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1 reaffirmation or what the law requires, talk to the

2 attorney who helped you negotiate this agreement. If

3 you don’t have an attorney helping you, the judge

4 will explain the effect of your reaffirmation when the

5 reaffirmation hearing is held.’.

6 ‘‘(J) The following additional statements:

7 ‘‘ ‘Reaffirming a debt is a serious financial decision.

8 The law requires you to take certain steps to make sure

9 the decision is in your best interest. If these steps are not

10 completed, the reaffirmation agreement is not effective,

11 even though you have signed it.

12 ‘‘ ‘1. Read the disclosures in this Part A care13 fully. Consider the decision to reaffirm carefully.

14 Then, if you want to reaffirm, sign the reaffirmation

15 agreement in Part B (or you may use a separate

16 agreement you and your creditor agree on).

17 ‘‘ ‘2. Complete and sign Part D and be sure you

18 can afford to make the payments you are agreeing

19 to make and have received a copy of the disclosure

20 statement and a completed and signed reaffirmation

21 agreement.

22 ‘‘ ‘3. If you were represented by an attorney

23 during the negotiation of the reaffirmation agree24 ment, the attorney must have signed the certification

25 in Part C.
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1 ‘‘ ‘4. If you were not represented by an attorney

2 during the negotiation of the reaffirmation agree3 ment, you must have completed and signed Part E.

4 ‘‘ ‘5. The original of this disclosure must be

5 filed with the court by you or your creditor. If a sep6 arate reaffirmation agreement (other than the one in

7 Part B) has been signed, it must be attached.

8 ‘‘ ‘6. If you were represented by an attorney

9 during the negotiation of the reaffirmation agree10 ment, your reaffirmation agreement becomes effec11 tive upon filing with the court unless the reaffirma12 tion is presumed to be an undue hardship as ex13 plained in Part D.

14 ‘‘ ‘7. If you were not represented by an attorney

15 during the negotiation of the reaffirmation agree16 ment, it will not be effective unless the court ap17 proves it. The court will notify you of the hearing on

18 your reaffirmation agreement. You must attend this

19 hearing in bankruptcy court where the judge will re20 view your agreement. The bankruptcy court must

21 approve the agreement as consistent with your best

22 interests, except that no court approval is required

23 if the agreement is for a consumer debt secured by

24 a mortgage, deed of trust, security deed or other lien

25 on your real property, like your home.
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1 ‘‘ ‘Your right to rescind a reaffirmation. You may re2 scind (cancel) your reaffirmation at any time before the

3 bankruptcy court enters a discharge order or within 60

4 days after the agreement is filed with the court, whichever

5 is longer. To rescind or cancel, you must notify the cred6 itor that the agreement is canceled.

7 ‘‘ ‘What are your obligations if you reaffirm the debt?

8 A reaffirmed debt remains your personal legal obligation.

9 It is not discharged in your bankruptcy. That means that

10 if you default on your reaffirmed debt after your bank11 ruptcy is over, your creditor may be able to take your

12 property or your wages. Otherwise, your obligations will

13 be determined by the reaffirmation agreement which may

14 have changed the terms of the original agreement. For ex15 ample, if you are reaffirming an open end credit agree16 ment, the creditor may be permitted by that agreement

17 and/or applicable law to change the terms of the agree18 ment in the future under certain conditions.

19 ‘‘ ‘Are you required to enter into a reaffirmation

20 agreement by any law? No, you are not required to reaf21 firm a debt by any law. Only agree to reaffirm a debt if

22 it is in your best interest. Be sure you can afford the pay23 ments you agree to make.

24 ‘‘ ‘What if your creditor has a security interest or

25 lien? Your bankruptcy discharge does not eliminate any
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1 lien on your property. A ‘‘lien’’ is often referred to as a

2 security interest, deed of trust, mortgage or security deed.

3 Even if you do not reaffirm and your personal liability

4 on the debt is discharged, because of the lien your creditor

5 may still have the right to take the security property if

6 you do not pay the debt or default on it. If the lien is

7 on an item of personal property that is exempt under your

8 State’s law or that the trustee has abandoned, you may

9 be able to redeem the item rather than reaffirm the debt.

10 To redeem, you make a single payment to the creditor

11 equal to the current value of the security property, as

12 agreed by the parties or determined by the court.’.

13 ‘‘(4) The form of reaffirmation agreement required

14 under this paragraph shall consist of the following:

15 ‘‘ ‘Part B: Reaffirmation Agreement. I/we agree to re16 affirm the obligations arising under the credit agreement

17 described below.

18 ‘‘ ‘Brief description of credit agreement:

19 ‘‘ ‘Description of any changes to the credit agreement

20 made as part of this reaffirmation agreement:

21 ‘‘ ‘Signature: Date:

22 ‘‘ ‘Borrower:

23 ‘‘ ‘Co-borrower, if also reaffirming:

24 ‘‘ ‘Accepted by creditor:

25 ‘‘ ‘Date of creditor acceptance:’.
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1 ‘‘(5)(A) The declaration shall consist of the following:

2 ‘‘ ‘Part C: Certification by Debtor’s Attorney (If

3 Any).

4 ‘‘ ‘I hereby certify that (1) this agreement represents

5 a fully informed and voluntary agreement by the debtor(s);

6 (2) this agreement does not impose an undue hardship on

7 the debtor or any dependent of the debtor; and (3) I have

8 fully advised the debtor of the legal effect and con9 sequences of this agreement and any default under this

10 agreement.

11 ‘‘ ‘Signature of Debtor’s Attorney: Date:’.

12 ‘‘(B) In the case of reaffirmations in which a pre13 sumption of undue hardship has been established, the cer14 tification shall state that in the opinion of the attorney,

15 the debtor is able to make the payment.

16 ‘‘(6) The statement in support of reaffirmation agree17 ment, which the debtor shall sign and date prior to filing

18 with the court, shall consist of the following:

19 ‘‘ ‘Part D: Debtor’s Statement in Support of Reaffir20 mation Agreement.

21 ‘‘ ‘1. I believe this agreement will not impose an

22 undue hardship on my dependents or me. I can afford to

23 make the payments on the reaffirmed debt because my

24 monthly income (take home pay plus any other income re25 ceived) is $lll, and my actual current monthly ex-
46

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1 penses including monthly payments on post-bankruptcy

2 debt and other reaffirmation agreements total $lll,

3 leaving $lll to make the required payments on this

4 reaffirmed debt. I understand that if my income less my

5 monthly expenses does not leave enough to make the pay6 ments, this reaffirmation agreement is presumed to be an

7 undue hardship on me and must be reviewed by the court.

8 However, this presumption may be overcome if I explain

9 to the satisfaction of the court how I can afford to make

10 the payments here: lll.

11 ‘‘ ‘2. I received a copy of the Reaffirmation Disclosure

12 Statement in Part A and a completed and signed reaffir13 mation agreement.’.

14 ‘‘(7) The motion, which may be used if approval of

15 the agreement by the court is required in order for it to

16 be effective and shall be signed and dated by the moving

17 party, shall consist of the following:

18 ‘‘ ‘Part E: Motion for Court Approval (To be com19 pleted only where debtor is not represented by an attor20 ney.). I (we), the debtor, affirm the following to be true

21 and correct:

22 ‘‘ ‘I am not represented by an attorney in connection

23 with this reaffirmation agreement.

24 ‘‘ ‘I believe this agreement is in my best interest

25 based on the income and expenses I have disclosed in my
47

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1 Statement in Support of this reaffirmation agreement

2 above, and because (provide any additional relevant rea3 sons the court should consider):

4 ‘‘ ‘Therefore, I ask the court for an order approving

5 this reaffirmation agreement.’.

6 ‘‘(8) The court order, which may be used to approve

7 a reaffirmation, shall consist of the following:

8 ‘‘ ‘Court Order: The court grants the debtor’s motion

9 and approves the reaffirmation agreement described

10 above.’.

11 ‘‘(j) Notwithstanding any other provision of this title:

12 ‘‘(1) A creditor may accept payments from a

13 debtor before and after the filing of a reaffirmation

14 agreement with the court.

15 ‘‘(2) A creditor may accept payments from a

16 debtor under a reaffirmation agreement which the

17 creditor believes in good faith to be effective.

18 ‘‘(3) The requirements of subsections (c)(2) and

19 (i) shall be satisfied if disclosures required under

20 those subsections are given in good faith.

21 ‘‘(k) Until 60 days after a reaffirmation agreement

22 is filed with the court (or such additional period as the

23 court, after notice and hearing and for cause, orders be24 fore the expiration of such period), it shall be presumed

25 that the reaffirmation agreement is an undue hardship on
48

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1 the debtor if the debtor’s monthly income less the debtor’s

2 monthly expenses as shown on the debtor’s completed and

3 signed statement in support of the reaffirmation agree4 ment required under subsection (i)(6) of this section is

5 less than the scheduled payments on the reaffirmed debt.

6 This presumption must be reviewed by the court. The pre7 sumption may be rebutted in writing by the debtor if the

8 statement includes an explanation which identifies addi9 tional sources of funds to make the payments as agreed

10 upon under the terms of the reaffirmation agreement. If

11 the presumption is not rebutted to the satisfaction of the

12 court, the court may disapprove the agreement. However,

13 no agreement shall be disapproved without notice and

14 hearing to the debtor and creditor and such hearing must

15 be concluded before the entry of the debtor’s discharge.’’.

16 (b) LAW ENFORCEMENT.—

17 (1) IN GENERAL.—Chapter 9 of title 18, United

18 States Code, is amended by adding at the end the

19 following:
49

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1 ‘‘§ 158. Designation of United States attorneys and

2 agents of the Federal Bureau of Inves3 tigation to address abusive reaffirma4 tions of debt and materially fraudulent

5 statements in bankruptcy schedules

6 ‘‘(a) IN GENERAL.—The Attorney General of the

7 United States shall designate the individuals described in

8 subsection (b) to have primary responsibility in carrying

9 out enforcement activities in addressing violations of sec10 tion 152 or 157 relating to abusive reaffirmations of debt.

11 In addition to addressing the violations referred to in the

12 preceding sentence, the individuals described under sub13 section (b) shall address violations of section 152 or 157

14 relating to materially fraudulent statements in bankruptcy

15 schedules that are intentionally false or intentionally mis16 leading.

17 ‘‘(b) UNITED STATES DISTRICT ATTORNEYS AND

18 AGENTS OF THE FEDERAL BUREAU OF INVESTIGATION—

19 The individuals referred to in subsection (a) are—

20 ‘‘(1) a United States attorney for each judicial

21 district of the United States; and

22 ‘‘(2) an agent of the Federal Bureau of Inves23 tigation (within the meaning of section 3107) for

24 each field office of the Federal Bureau of Investiga25 tion.
50

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1 ‘‘(c) BANKRUPTCY INVESTIGATIONS.—Each United

2 States attorney designated under this section shall have

3 primary responsibility for carrying out the duties of a

4 United States attorney under section 3057.

5 ‘‘(d) BANKRUPTCY PROCEDURES.—The bankruptcy

6 courts shall establish procedures for referring any case

7 which may contain a materially fraudulent statement in

8 a bankruptcy schedule to the individuals designated under

9 this section.’’.

10 (2) CLERICAL AMENDMENT.—The analysis for

11 chapter 9 of title 18, United States Code, is amend12 ed by adding at the end the following:

‘‘158. Designation of United States attorneys and agents of the Federal Bureau

of Investigation to address abusive reaffirmations of debt and

materially fraudulent statements in bankruptcy schedules.’’.

13 Subtitle B—Priority Child Support

14 SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGA15 TION.

16 Section 101 of title 11, United States Code, is

17 amended—

18 (1) by striking paragraph (12A); and

19 (2) by inserting after paragraph (14) the fol20 lowing:

21 ‘‘(14A) ‘domestic support obligation’ means a

22 debt that accrues before or after the entry of an

23 order for relief under this title, including interest

24 that accrues on that debt as provided under applica-
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1 ble nonbankruptcy law notwithstanding any other

2 provision of this title, that is—

3 ‘‘(A) owed to or recoverable by—

4 ‘‘(i) a spouse, former spouse, or child

5 of the debtor or such child’s parent, legal

6 guardian, or responsible relative; or

7 ‘‘(ii) a governmental unit;

8 ‘‘(B) in the nature of alimony, mainte9 nance, or support (including assistance provided

10 by a governmental unit) of such spouse, former

11 spouse, or child of the debtor or such child’s

12 parent, without regard to whether such debt is

13 expressly so designated;

14 ‘‘(C) established or subject to establish15 ment before or after entry of an order for relief

16 under this title, by reason of applicable provi17 sions of—

18 ‘‘(i) a separation agreement, divorce

19 decree, or property settlement agreement;

20 ‘‘(ii) an order of a court of record; or

21 ‘‘(iii) a determination made in accord22 ance with applicable nonbankruptcy law by

23 a governmental unit; and

24 ‘‘(D) not assigned to a nongovernmental

25 entity, unless that obligation is assigned volun-
52

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1 tarily by the spouse, former spouse, child, or

2 parent, legal guardian, or responsible relative of

3 the child for the purpose of collecting the

4 debt.’’.

5 SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP6 PORT OBLIGATIONS.

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

8 amended—

9 (1) by striking paragraph (7);

10 (2) by redesignating paragraphs (1) through

11 (6) as paragraphs (2) through (7), respectively;

12 (3) in paragraph (2), as redesignated, by strik13 ing ‘‘First’’ and inserting ‘‘Second’’;

14 (4) in paragraph (3), as redesignated, by strik15 ing ‘‘Second’’ and inserting ‘‘Third’’;

16 (5) in paragraph (4), as redesignated, by strik17 ing ‘‘Third’’ and inserting ‘‘Fourth’’;

18 (6) in paragraph (5), as redesignated, by strik19 ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;

20 (7) in paragraph (6), as redesignated, by strik21 ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;

22 (8) in paragraph (7), as redesignated, by strik23 ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and

24 (9) by inserting before paragraph (2), as redes25 ignated, the following:
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1 ‘‘(1) First:

2 ‘‘(A) Allowed unsecured claims for domes3 tic support obligations that, as of the date of

4 the filing of the petition, are owed to or recover5 able by a spouse, former spouse, or child of the

6 debtor, or the parent, legal guardian, or respon7 sible relative of such child, without regard to

8 whether the claim is filed by such person or is

9 filed by a governmental unit on behalf of that

10 person, on the condition that funds received

11 under this paragraph by a governmental unit

12 under this title after the date of filing of the pe13 tition shall be applied and distributed in accord14 ance with applicable nonbankruptcy law.

15 ‘‘(B) Subject to claims under subpara16 graph (A), allowed unsecured claims for domes17 tic support obligations that, as of the date the

18 petition was filed are assigned by a spouse,

19 former spouse, child of the debtor, or such

20 child’s parent, legal guardian, or responsible

21 relative to a governmental unit (unless such ob22 ligation is assigned voluntarily by the spouse,

23 former spouse, child, parent, legal guardian, or

24 responsible relative of the child for the purpose

25 of collecting the debt) or are owed directly to or
54

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1 recoverable by a government unit under applica2 ble nonbankruptcy law, on the condition that

3 funds received under this paragraph by a gov4 ernmental unit under this title after the date of

5 filing of the petition be applied and distributed

6 in accordance with applicable nonbankruptcy

7 law.’’.

8 SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND

9 DISCHARGE IN CASES INVOLVING DOMESTIC

10 SUPPORT OBLIGATIONS.

11 Title 11, United States Code, is amended—

12 (1) in section 1129(a), by adding at the end the

13 following:

14 ‘‘(14) If the debtor is required by a judicial or

15 administrative order or statute to pay a domestic

16 support obligation, the debtor has paid all amounts

17 payable under such order or statute for such obliga18 tion that first become payable after the date on

19 which the petition is filed.’’;

20 (2) in section 1208(c)—

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

22 the end;

23 (B) in paragraph (9), by striking the pe24 riod at the end and inserting ‘‘; and’’; and

25 (C) by adding at the end the following:
55

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1 ‘‘(10) failure of the debtor to pay any domestic

2 support obligation that first becomes payable after

3 the date on which the petition is filed.’’;

4 (3) in section 1222(a)—

5 (A) in paragraph (2), by striking ‘‘and’’ at

6 the end;

7 (B) in paragraph (3), by striking the pe8 riod at the end and inserting ‘‘; and’’; and

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

10 ‘‘(4) notwithstanding any other provision of this

11 section, a plan may provide for less than full pay12 ment of all amounts owed for a claim entitled to pri13 ority under section 507(a)(1)(B) only if the plan

14 provides that all of the debtor’s projected disposable

15 income for a 5-year period, beginning on the date

16 that the first payment is due under the plan, will be

17 applied to make payments under the plan.’’;

18 (4) in section 1222(b)—

19 (A) by redesignating paragraph (10) as

20 paragraph (11); and

21 (B) by inserting after paragraph (9) the

22 following:

23 ‘‘(10) provide for the payment of interest accru24 ing after the date of the filing of the petition on un25 secured claims that are nondischargeable under sec-
56

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1 tion 1328(a), except that such interest may be paid

2 only to the extent that the debtor has disposable in3 come available to pay such interest after making

4 provision for full payment of all allowed claims;’’;

5 (5) in section 1225(a)—

6 (A) in paragraph (5), by striking ‘‘and’’ at

7 the end;

8 (B) in paragraph (6), by striking the pe9 riod at the end and inserting ‘‘; and’’; and

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

11 ‘‘(7) if the debtor is required by a judicial or

12 administrative order or statute to pay a domestic

13 support obligation, the debtor has paid all amounts

14 payable under such order for such obligation that

15 first become payable after the date on which the pe16 tition is filed.’’;

17 (6) in section 1228(a), in the matter preceding

18 paragraph (1), by inserting ‘‘, and in the case of a

19 debtor who is required by a judicial or administra20 tive order to pay a domestic support obligation, after

21 such debtor certifies that all amounts payable under

22 such order or statute that are due on or before the

23 date of the certification (including amounts due be24 fore the petition was filed, but only to the extent

25 provided for in the plan) have been paid’’ after
57

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1 ‘‘completion by the debtor of all payments under the

2 plan’’;

3 (7) in section 1307(c)—

4 (A) in paragraph (9), by striking ‘‘or’’ at

5 the end;

6 (B) in paragraph (10), by striking the pe7 riod at the end and inserting ‘‘; or’’; and

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

9 ‘‘(11) failure of the debtor to pay any domestic

10 support obligation that first becomes payable after

11 the date on which the petition is filed.’’;

12 (8) in section 1322(a)—

13 (A) in paragraph (2), by striking ‘‘and’’ at

14 the end;

15 (B) in paragraph (3), by striking the pe16 riod at the end and inserting ‘‘; and’’; and

17 (C) by adding in the end the following:

18 ‘‘(4) notwithstanding any other provision of this

19 section, a plan may provide for less than full pay20 ment of all amounts owed for a claim entitled to pri21 ority under section 507(a)(1)(B) only if the plan

22 provides that all of the debtor’s projected disposable

23 income for a 5-year period beginning on the date

24 that the first payment is due under the plan will be

25 applied to make payments under the plan.’’;
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1 (9) in section 1322(b)—

2 (A) in paragraph (9), by striking ‘‘; and’’

3 and inserting a semicolon;

4 (B) by redesignating paragraph (10) as

5 paragraph (11); and

6 (C) inserting after paragraph (9) the fol7 lowing:

8 ‘‘(10) provide for the payment of interest accru9 ing after the date of the filing of the petition on un10 secured claims that are nondischargeable under sec11 tion 1328(a), except that such interest may be paid

12 only to the extent that the debtor has disposable in13 come available to pay such interest after making

14 provision for full payment of all allowed claims;

15 and’’;

16 (10) in section 1325(a)—

17 (A) in paragraph (5), by striking ‘‘and’’ at

18 the end;

19 (B) in paragraph (6), by striking the pe20 riod at the end and inserting ‘‘; and’’; and

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

22 ‘‘(7) if the debtor is required by a judicial or

23 administrative order or statute to pay a domestic

24 support obligation, the debtor has paid amounts pay-
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1 able after the date on which the petition is filed.’’;

2 and

3 (11) in section 1328(a), in the matter preceding

4 paragraph (1), by inserting ‘‘, and in the case of a

5 debtor who is required by a judicial or administra6 tive order to pay a domestic support obligation, after

7 such debtor certifies that all amounts payable under

8 such order or statute that are due on or before the

9 date of the certification (including amounts due be10 fore the petition was filed, but only to the extent

11 provided for in the plan) have been paid’’ after

12 ‘‘completion by the debtor of all payments under the

13 plan’’.

14 SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC

15 SUPPORT OBLIGATION PROCEEDINGS.

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

17 amended by striking paragraph (2) and inserting the fol18 lowing:

19 ‘‘(2) under subsection (a)—

20 ‘‘(A) of the commencement or continuation

21 of a civil action or proceeding—

22 ‘‘(i) for the establishment of paternity;

23 ‘‘(ii) for the establishment or modi24 fication of an order for domestic support

25 obligations;
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1 ‘‘(iii) concerning child custody or visi2 tation;

3 ‘‘(iv) for the dissolution of a marriage

4 except to the extent that such a proceeding

5 seeks to determine the division of property

6 which is property of the estate; or

7 ‘‘(v) regarding domestic violence;

8 ‘‘(B) the collection of a domestic support

9 obligation from property that is not property of

10 the estate;

11 ‘‘(C) with respect to the withholding of in12 come that is property of the estate or property

13 of the debtor for payment of a domestic support

14 obligation pursuant to a judicial or administra15 tive order;

16 ‘‘(D) the withholding, suspension, or re17 striction of drivers’ licenses, professional and

18 occupational licenses, and recreational licenses

19 under State law, as specified in section

20 466(a)(16) of the Social Security Act (42

21 U.S.C. 666(a)(16));

22 ‘‘(E) the reporting of overdue support

23 owed by a parent to any consumer reporting

24 agency as specified in section 466(a)(7) of the

25 Social Security Act (42 U.S.C. 666(a)(7));
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1 ‘‘(F) the interception of tax refunds, as

2 specified in sections 464 and 466(a)(3) of the

3 Social Security Act (42 U.S.C. 664 and

4 666(a)(3)) or under an analogous State law; or

5 ‘‘(G) the enforcement of medical obliga6 tions as specified under title IV of the Social

7 Security Act (42 U.S.C. 601 et seq.).’’;

8 SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR

9 ALIMONY, MAINTENANCE, AND SUPPORT.

10 Section 523 of title 11, United States Code, is

11 amended—

12 (1) in subsection (a)—

13 (A) by striking paragraph (5) and insert14 ing the following:

15 ‘‘(5) for a domestic support obligation;’’;

16 (B) in paragraph (15)—

17 (i) by inserting ‘‘to a spouse, former

18 spouse, or child of the debtor and’’ before

19 ‘‘not of the kind’’;

20 (ii) by inserting ‘‘or’’ after ‘‘court of

21 record’’; and

22 (iii) by striking ‘‘unless—’’ and all

23 that follows through the end of the para24 graph and inserting a semicolon; and

25 (C) by striking paragraph (18); and
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1 (2) in subsection (c), by striking ‘‘(6), or (15)’’

2 and inserting ‘‘or (6)’’.

3 SEC. 216. CONTINUED LIABILITY OF PROPERTY.

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

5 amended—

6 (1) in subsection (c), by striking paragraph (1)

7 and inserting the following:

8 ‘‘(1) a debt of a kind specified in paragraph (1)

9 or (4) of section 523(a) (in which case, notwith10 standing any provision of applicable nonbankruptcy

11 law to the contrary, such property shall be liable for

12 a debt of a kind specified in section 523(a)(4));’’;

13 and

14 (2) in subsection (f)(1)(A), by striking the dash

15 and all that follows through the end of the subpara16 graph and inserting ‘‘of a kind that is specified in

17 section 523(a)(4); or’’.

18 SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS

19 AGAINST PREFERENTIAL TRANSFER MO20 TIONS.

21 Section 547(c)(7) of title 11, United States Code, is

22 amended to read as follows:

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

24 payment of a debt for a domestic support obligation;

25 or’’.
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1 SEC. 218. DISPOSABLE INCOME DEFINED.

2 (a) CONFIRMATION OF PLAN UNDER CHAPTER 12.—

3 Section 1225(b)(2)(A) of title 11, United States Code, is

4 amended by inserting ‘‘or for a domestic support obliga5 tion that first becomes payable after the date on which

6 the petition is filed’’ after ‘‘dependent of the debtor’’.

7 (b) CONFIRMATION OF PLAN UNDER CHAPTER 13.—

8 Section 1325(b)(2)(A) of title 11, United States Code, is

9 amended by inserting ‘‘or for a domestic support obliga10 tion that first becomes payable after the date on which

11 the petition is filed’’ after ‘‘dependent of the debtor’’.

12 SEC. 219. COLLECTION OF CHILD SUPPORT.

13 (a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec14 tion 704 of title 11, United States Code, as amended by

15 section 102(b) of this Act, is amended—

16 (1) in subsection (a)—

17 (A) in paragraph (8), by striking ‘‘and’’ at

18 the end;

19 (B) in paragraph (9), by striking the pe20 riod and inserting ‘‘; and’’; and

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

22 ‘‘(10) if, with respect to an individual debtor,

23 there is a claim for a domestic support obligation,

24 provide the applicable notification specified in sub25 section (c).’’; and

26 (2) by adding at the end the following:
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1 ‘‘(c)(1) In any case described in subsection (a)(10),

2 the trustee shall—

3 ‘‘(A)(i) notify in writing the holder of the claim

4 of the right of that holder to use the services of a

5 State child support enforcement agency established

6 under sections 464 and 466 of the Social Security

7 Act (42 U.S.C. 664 and 666, respectively) for the

8 State in which the holder resides for assistance in

9 collecting child support during and after the bank10 ruptcy procedures;

11 ‘‘(ii) include in the notice under this paragraph

12 the address and telephone number of the child sup13 port enforcement agency; and

14 ‘‘(iii) include in the notice an explanation of the

15 rights of the holder of the claim to payment of the

16 claim under this chapter; and

17 ‘‘(B)(i) notify in writing the State child support

18 agency of the State in which the holder of the claim

19 resides of the claim;

20 ‘‘(ii) include in the notice under this paragraph

21 the name, address, and telephone number of the

22 holder of the claim; and

23 ‘‘(iii) at such time as the debtor is granted a

24 discharge under section 727, notify the holder of
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1 that claim and the State child support agency of the

2 State in which that holder resides of—

3 ‘‘(I) the granting of the discharge;

4 ‘‘(II) the last recent known address of the

5 debtor;

6 ‘‘(III) the last recent known name and ad7 dress of the debtor’s employer; and

8 ‘‘(IV) with respect to the debtor’s case, the

9 name of each creditor that holds a claim that—

10 ‘‘(aa) is not discharged under para11 graph (2), (4), or (14A) of section 523(a);

12 or

13 ‘‘(bb) was reaffirmed by the debtor

14 under section 524(c).

15 ‘‘(2)(A) A holder of a claim or a State child support

16 agency may request from a creditor described in para17 graph (1)(B)(iii)(IV) the last known address of the debtor.

18 ‘‘(B) Notwithstanding any other provision of law, a

19 creditor that makes a disclosure of a last known address

20 of a debtor in connection with a request made under sub21 paragraph (A) shall not be liable to the debtor or any

22 other person by reason of making that disclosure.’’.

23 (b) DUTIES OF TRUSTEE UNDER CHAPTER 11.—

24 Section 1106 of title 11, United States Code, is

25 amended—
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1 (1) in subsection (a)—

2 (A) in paragraph (6), by striking ‘‘and’’ at

3 the end;

4 (B) in paragraph (7), by striking the pe5 riod and inserting ‘‘; and’’; and

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

7 ‘‘(8) if, with respect to an individual debtor,

8 there is a claim for a domestic support obligation,

9 provide the applicable notification specified in sub10 section (c).’’; and

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

12 ‘‘(c)(1) In any case described in subsection (a)(7), the

13 trustee shall—

14 ‘‘(A)(i) notify in writing the holder of the claim

15 of the right of that holder to use the services of a

16 State child support enforcement agency established

17 under sections 464 and 466 of the Social Security

18 Act (42 U.S.C. 664 and 666) for the State in which

19 the holder resides; and

20 ‘‘(ii) include in the notice under this paragraph

21 the address and telephone number of the child sup22 port enforcement agency; and

23 ‘‘(B)(i) notify, in writing, the State child sup24 port agency (of the State in which the holder of the

25 claim resides) of the claim;
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1 ‘‘(ii) include in the notice under this paragraph

2 the name, address, and telephone number of the

3 holder of the claim; and

4 ‘‘(iii) at such time as the debtor is granted a

5 discharge under section 1141, notify the holder of

6 the claim and the State child support agency of the

7 State in which that holder resides of—

8 ‘‘(I) the granting of the discharge;

9 ‘‘(II) the last recent known address of the

10 debtor;

11 ‘‘(III) the last recent known name and ad12 dress of the debtor’s employer; and

13 ‘‘(IV) with respect to the debtor’s case, the

14 name of each creditor that holds a claim that—

15 ‘‘(aa) is not discharged under para16 graph (2), (3), or (14) of section 523(a);

17 or

18 ‘‘(bb) was reaffirmed by the debtor

19 under section 524(c).

20 ‘‘(2)(A) A holder of a claim or a State child support

21 agency may request from a creditor described in para22 graph (1)(B)(iii)(IV) the last known address of the debtor.

23 ‘‘(B) Notwithstanding any other provision of law, a

24 creditor that makes a disclosure of a last known address

25 of a debtor in connection with a request made under sub-
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1 paragraph (A) shall not be liable to the debtor or any

2 other person by reason of making that disclosure.’’.

3 (c) DUTIES OF TRUSTEE UNDER CHAPTER 12.—

4 Section 1202 of title 11, United States Code, is

5 amended—

6 (1) in subsection (b)—

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

8 the end;

9 (B) in paragraph (5), by striking the pe10 riod and inserting ‘‘; and’’; and

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

12 ‘‘(6) if, with respect to an individual debtor,

13 there is a claim for a domestic support obligation,

14 provide the applicable notification specified in sub15 section (c).’’; and

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

17 ‘‘(c)(1) In any case described in subsection (b)(6), the

18 trustee shall—

19 ‘‘(A)(i) notify in writing the holder of the claim

20 of the right of that holder to use the services of a

21 State child support enforcement agency established

22 under sections 464 and 466 of the Social Security

23 Act (42 U.S.C. 664 and 666) for the State in which

24 the holder resides; and
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1 ‘‘(ii) include in the notice under this paragraph

2 the address and telephone number of the child sup3 port enforcement agency; and

4 ‘‘(B)(i) notify, in writing, the State child sup5 port agency (of the State in which the holder of the

6 claim resides) of the claim;

7 ‘‘(ii) include in the notice under this paragraph

8 the name, address, and telephone number of the

9 holder of the claim; and

10 ‘‘(iii) at such time as the debtor is granted a

11 discharge under section 1228, notify the holder of

12 the claim and the State child support agency of the

13 State in which that holder resides of—

14 ‘‘(I) the granting of the discharge;

15 ‘‘(II) the last recent known address of the

16 debtor;

17 ‘‘(III) the last recent known name and ad18 dress of the debtor’s employer; and

19 ‘‘(IV) with respect to the debtor’s case, the

20 name of each creditor that holds a claim that—

21 ‘‘(aa) is not discharged under para22 graph (2), (3), or (14) of section 523(a);

23 or

24 ‘‘(bb) was reaffirmed by the debtor

25 under section 524(c).
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1 ‘‘(2)(A) A holder of a claim or a State child support

2 agency may request from a creditor described in para3 graph (1)(B)(iii)(IV) the last known address of the debtor.

4 ‘‘(B) Notwithstanding any other provision of law, a

5 creditor that makes a disclosure of a last known address

6 of a debtor in connection with a request made under sub7 paragraph (A) shall not be liable to the debtor or any

8 other person by reason of making that disclosure.’’.

9 (d) DUTIES OF TRUSTEE UNDER CHAPTER 13.—

10 Section 1302 of title 11, United States Code, is

11 amended—

12 (1) in subsection (b)—

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

14 the end;

15 (B) in paragraph (5), by striking the pe16 riod and inserting ‘‘; and’’; and

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

18 ‘‘(6) if, with respect to an individual debtor,

19 there is a claim for a domestic support obligation,

20 provide the applicable notification specified in sub21 section (d); and

22 ‘‘(7) provide information relating to the admin23 istration of cases that is practical to any not-for24 profit entity which shall provide information to par25 ties in interest in a timely and convenient manner,
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1 including telephonic and Internet access, at no cost

2 or a nominal cost.

3 An entity described in paragraph (7) shall provide

4 parties in interest with reasonable information about

5 each case on behalf of the trustee of that case, in6 cluding the status of the debtor’s payments to the

7 plan, the unpaid balance payable to each creditor

8 treated by the plan, and the amount and date of

9 payments made under the plan. The trustee shall

10 have no duty to provide information under para11 graph (7) if no such entity has been established.’’;

12 and

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

14 ‘‘(d)(1) In any case described in subsection (b)(6),

15 the trustee shall—

16 ‘‘(A)(i) notify in writing the holder of the claim

17 of the right of that holder to use the services of a

18 State child support enforcement agency established

19 under sections 464 and 466 of the Social Security

20 Act (42 U.S.C. 664 and 666, respectively) for the

21 State in which the holder resides; and

22 ‘‘(ii) include in the notice under this paragraph

23 the address and telephone number of the child sup24 port enforcement agency; and
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1 ‘‘(B)(i) notify in writing the State child support

2 agency of the State in which the holder of the claim

3 resides of the claim;

4 ‘‘(ii) include in the notice under this paragraph

5 the name, address, and telephone number of the

6 holder of the claim; and

7 ‘‘(iii) at such time as the debtor is granted a

8 discharge under section 1328, notify the holder of

9 the claim and the State child support agency of the

10 State in which that holder resides of—

11 ‘‘(I) the granting of the discharge;

12 ‘‘(II) the last recent known address of the

13 debtor;

14 ‘‘(III) the last recent known name and ad15 dress of the debtor’s employer; and

16 ‘‘(IV) with respect to the debtor’s case, the

17 name of each creditor that holds a claim that—

18 ‘‘(aa) is not discharged under para19 graph (2), (3), or (14) of section 523(a);

20 or

21 ‘‘(bb) was reaffirmed by the debtor

22 under section 524(c).

23 ‘‘(2)(A) A holder of a claim or a State child support

24 agency may request from a creditor described in para25 graph (1)(B)(iii)(IV) the last known address of the debtor.
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1 ‘‘(B) Notwithstanding any other provision of law, a

2 creditor that makes a disclosure of a last known address

3 of a debtor in connection with a request made under sub4 paragraph (A) shall not be liable to the debtor or any

5 other person by reason of making that disclosure.’’.

6 SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDU7 CATIONAL BENEFITS AND LOANS.

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

9 amended by striking paragraph (8) and inserting the fol10 lowing:

11 ‘‘(8) unless excepting such debt from discharge

12 under this paragraph would impose an undue hard13 ship on the debtor and the debtor’s dependents,

14 for—

15 ‘‘(A)(i) an educational benefit overpayment

16 or loan made, insured, or guaranteed by a gov17 ernmental unit, or made under any program

18 funded in whole or in part by a governmental

19 unit or nonprofit institution; or

20 ‘‘(ii) an obligation to repay funds received

21 as an educational benefit, scholarship, or sti22 pend; or

23 ‘‘(B) any other educational loan that is a

24 qualified education loan, as that term is defined

25 in section 221(e)(1) of the Internal Revenue
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1 Code of 1986, incurred by an individual debt2 or;’’.

3 Subtitle C—Other Consumer

4 Protections

5 SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANK6 RUPTCY FILINGS.

7 Section 110 of title 11, United States Code, is

8 amended—

9 (1) in subsection (a)(1), by inserting ‘‘, under

10 the direct supervision of an attorney,’’ after ‘‘who’’;

11 (2) in subsection (b)—

12 (A) in paragraph (1), by adding at the end

13 the following: ‘‘If a bankruptcy petition pre14 parer is not an individual, then an officer, prin15 cipal, responsible person, or partner of the pre16 parer shall be required to—

17 ‘‘(A) sign the document for filing; and

18 ‘‘(B) print on the document the name and ad19 dress of that officer, principal, responsible person or

20 partner.’’;

21 (B) by striking paragraph (2) and insert22 ing the following:

23 ‘‘(2)(A) Before preparing any document for filing or

24 accepting any fees from a debtor, the bankruptcy petition

25 preparer shall provide to the debtor a written notice to
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1 debtors concerning bankruptcy petition preparers, which

2 shall be on an official form issued by the Judicial Con3 ference of the United States.

4 ‘‘(B) The notice under subparagraph (A)—

5 ‘‘(i) shall inform the debtor in simple language

6 that a bankruptcy petition preparer is not an attor7 ney and may not practice law or give legal advice;

8 ‘‘(ii) may contain a description of examples of

9 legal advice that a bankruptcy petition preparer is

10 not authorized to give, in addition to any advice that

11 the preparer may not give by reason of subsection

12 (e)(2); and

13 ‘‘(iii) shall—

14 ‘‘(I) be signed by—

15 ‘‘(aa) the debtor; and

16 ‘‘(bb) the bankruptcy petition pre17 parer, under penalty of perjury; and

18 ‘‘(II) be filed with any document for fil19 ing.’’;

20 (3) in subsection (c)—

21 (A) in paragraph (2)—

22 (i) by striking ‘‘(2) For purposes’’ and

23 inserting ‘‘(2)(A) Subject to subparagraph

24 (B), for purposes’’; and
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1 (ii) by adding at the end the fol2 lowing:

3 ‘‘(B) If a bankruptcy petition preparer is not an indi4 vidual, the identifying number of the bankruptcy petition

5 preparer shall be the Social Security account number of

6 the officer, principal, responsible person, or partner of the

7 preparer.’’; and

8 (B) by striking paragraph (3);

9 (4) in subsection (d)—

10 (A) by striking ‘‘(d)(1)’’ and inserting

11 ‘‘(d)’’; and

12 (B) by striking paragraph (2);

13 (5) in subsection (e)—

14 (A) by striking paragraph (2); and

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

16 ‘‘(2)(A) A bankruptcy petition preparer may not offer

17 a potential bankruptcy debtor any legal advice, including

18 any legal advice described in subparagraph (B).

19 ‘‘(B) The legal advice referred to in subparagraph

20 (A) includes advising the debtor—

21 ‘‘(i) whether—

22 ‘‘(I) to file a petition under this title; or

23 ‘‘(II) commencing a case under chapter 7,

24 11, 12, or 13 is appropriate;
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1 ‘‘(ii) whether the debtor’s debts will be elimi2 nated or discharged in a case under this title;

3 ‘‘(iii) whether the debtor will be able to retain

4 the debtor’s home, car, or other property after com5 mencing a case under this title;

6 ‘‘(iv) concerning—

7 ‘‘(I) the tax consequences of a case

8 brought under this title; or

9 ‘‘(II) the dischargeability of tax claims;

10 ‘‘(v) whether the debtor may or should promise

11 to repay debts to a creditor or enter into a reaffir12 mation agreement with a creditor to reaffirm a debt;

13 ‘‘(vi) concerning how to characterize the nature

14 of the debtor’s interests in property or the debtor’s

15 debts; or

16 ‘‘(vii) concerning bankruptcy procedures and

17 rights.’’;

18 (6) in subsection (f)—

19 (A) by striking ‘‘(f)(1)’’ and inserting

20 ‘‘(f)’’; and

21 (B) by striking paragraph (2);

22 (7) in subsection (g)—

23 (A) by striking ‘‘(g)(1)’’ and inserting

24 ‘‘(g)’’; and

25 (B) by striking paragraph (2);
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1 (8) in subsection (h)—

2 (A) by redesignating paragraphs (1)

3 through (4) as paragraphs (2) through (5), re4 spectively;

5 (B) by inserting before paragraph (2), as

6 so redesignated, the following:

7 ‘‘(h)(1) The Supreme Court may promulgate rules

8 under section 2075 of title 28, or the Judicial Conference

9 of the United States may prescribe guidelines, for setting

10 a maximum allowable fee chargeable by a bankruptcy peti11 tion preparer. A bankruptcy petition preparer shall notify

12 the debtor of any such maximum amount before preparing

13 any document for filing for a debtor or accepting any fee

14 from the debtor.’’;

15 (C) in paragraph (2), as redesignated by

16 subparagraph (A) of this paragraph—

17 (i) by striking ‘‘Within 10 days after

18 the date of filing a petition, a bankruptcy

19 petition preparer shall file a’’ and inserting

20 ‘‘A’’;

21 (ii) by inserting ‘‘by the bankruptcy

22 petition preparer shall be filed together

23 with the petition,’’ after ‘‘perjury’’; and

24 (iii) by adding at the end the fol25 lowing: ‘‘If rules or guidelines setting a
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1 maximum fee for services have been pro2 mulgated or prescribed under paragraph

3 (1), the declaration under this paragraph

4 shall include a certification that the bank5 ruptcy petition preparer complied with the

6 notification requirement under paragraph

7 (1).’’;

8 (D) by striking paragraph (3), as redesig9 nated by subparagraph (A) of this paragraph,

10 and inserting the following:

11 ‘‘(3)(A) The court shall disallow and order the

12 immediate turnover to the bankruptcy trustee any

13 fee referred to in paragraph (2) found to be in ex14 cess of the value of any services—

15 ‘‘(i) rendered by the preparer during the

16 12-month period immediately preceding the

17 date of filing of the petition; or

18 ‘‘(ii) found to be in violation of any rule or

19 guideline promulgated or prescribed under

20 paragraph (1).

21 ‘‘(B) All fees charged by a bankruptcy petition

22 preparer may be forfeited in any case in which the

23 bankruptcy petition preparer fails to comply with

24 this subsection or subsection (b), (c), (d), (e), (f), or

25 (g).
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1 ‘‘(C) An individual may exempt any funds re2 covered under this paragraph under section

3 522(b).’’; and

4 (E) in paragraph (4), as redesignated by

5 subparagraph (A) of this paragraph, by striking

6 ‘‘or the United States trustee’’ and inserting

7 ‘‘the United States trustee, or the court, on the

8 initiative of the court,’’;

9 (9) in subsection (i)(1), by striking the matter

10 preceding subparagraph (A) and inserting the fol11 lowing:

12 ‘‘(i) If a bankruptcy petition preparer violates this

13 section or commits any act that the court finds to be

14 fraudulent, unfair, or deceptive, on motion of the debtor,

15 trustee, or United States trustee, and after the court holds

16 a hearing with respect to that violation or act, the court

17 shall order the bankruptcy petition preparer to pay to the

18 debtor—’’;

19 (10) in subsection (j)—

20 (A) in paragraph (2)—

21 (i) in subparagraph (A)(i)(I), by strik22 ing ‘‘a violation of which subjects a person

23 to criminal penalty’’;

24 (ii) in subparagraph (B)—
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1 (I) by striking ‘‘or has not paid

2 a penalty’’ and inserting ‘‘has not

3 paid a penalty’’; and

4 (II) by inserting ‘‘or failed to dis5 gorge all fees ordered by the court’’

6 after ‘‘a penalty imposed under this

7 section,’’;

8 (B) by redesignating paragraph (3) as

9 paragraph (4); and

10 (C) by inserting after paragraph (2) the

11 following:

12 ‘‘(3) The court, as part of its contempt power, may

13 enjoin a bankruptcy petition preparer that has failed to

14 comply with a previous order issued under this section.

15 The injunction under this paragraph may be issued upon

16 motion of the court, the trustee, or the United States

17 trustee.’’; and

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

19 ‘‘(l)(1) A bankruptcy petition preparer who fails to

20 comply with any provision of subsection (b), (c), (d), (e),

21 (f), (g), or (h) may be fined not more than $500 for each

22 such failure.

23 ‘‘(2) The court shall triple the amount of a fine as24 sessed under paragraph (1) in any case in which the court

25 finds that a bankruptcy petition preparer—
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1 ‘‘(A) advised the debtor to exclude assets or in2 come that should have been included on applicable

3 schedules;

4 ‘‘(B) advised the debtor to use a false Social

5 Security account number;

6 ‘‘(C) failed to inform the debtor that the debtor

7 was filing for relief under this title; or

8 ‘‘(D) prepared a document for filing in a man9 ner that failed to disclose the identity of the pre10 parer.

11 ‘‘(3) The debtor, the trustee, a creditor, or the United

12 States trustee may file a motion for an order imposing

13 a fine on the bankruptcy petition preparer for each viola14 tion of this section.

15 ‘‘(4) All fines imposed under this section shall be paid

16 to the United States trustee, who shall deposit an amount

17 equal to such fines in a special account of the United

18 States Trustee System Fund referred to in section

19 586(e)(2) of title 28. Amounts deposited under this para20 graph shall be available to fund the enforcement of this

21 section on a national basis.’’.

22 SEC. 222. SENSE OF CONGRESS.

23 It is the sense of Congress that States should develop

24 curricula relating to the subject of personal finance, de25 signed for use in elementary and secondary schools.
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1 SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED

2 STATES CODE.

3 (a) IN GENERAL.—Section 507(a) of title 11, United

4 States Code, as amended by section 212 of this Act, is

5 amended by inserting after paragraph (9) the following:

6 ‘‘(10) Tenth, allowed claims for death or per7 sonal injuries resulting from the operation of a

8 motor vehicle or vessel if such operation was unlaw9 ful because the debtor was intoxicated from using al10 cohol, a drug, or another substance.’’.

11 (b) VESSELS.—Section 523(a)(8) of title 11, United

12 States Code, is amended by inserting ‘‘or vessel’’ after

13 ‘‘vehicle’’.

14 SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANK15 RUPTCY.

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

17 States Code, as amended by section 215 of this Act, is

18 amended—

19 (1) in subsection (b)—

20 (A) in paragraph (2)—

21 (i) by striking ‘‘(2)(A) any property’’

22 and inserting:

23 ‘‘(3) Property listed in this paragraph is—

24 ‘‘(A) any property’’;

25 (ii) in subparagraph (A), by striking

26 ‘‘and’’ at the end;
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1 (iii) in subparagraph (B), by striking

2 the period at the end and inserting ‘‘;

3 and’’; and

4 (iv) by adding at the end the fol5 lowing:

6 ‘‘(C) retirement funds to the extent that those

7 funds are in a fund or account that is exempt from

8 taxation under section 401, 403, 408, 408A, 414,

9 457, or 501(a) of the Internal Revenue Code of

10 1986.’’;

11 (B) by striking paragraph (1) and insert12 ing:

13 ‘‘(2) Property listed in this paragraph is property

14 that is specified under subsection (d), unless the State law

15 that is applicable to the debtor under paragraph (3)(A)

16 specifically does not so authorize.’’;

17 (C) in the matter preceding paragraph

18 (2)—

19 (i) by striking ‘‘(b)’’ and inserting

20 ‘‘(b)(1)’’;

21 (ii) by striking ‘‘paragraph (2)’’ both

22 places it appears and inserting ‘‘paragraph

23 (3)’’;
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1 (iii) by striking ‘‘paragraph (1)’’ each

2 place it appears and inserting ‘‘paragraph

3 (2)’’; and

4 (iv) by striking ‘‘Such property is—’’;

5 and

6 (D) by adding at the end of the subsection

7 the following:

8 ‘‘(4) For purposes of paragraph (3)(C) and sub9 section (d)(12), the following shall apply:

10 ‘‘(A) If the retirement funds are in a retirement

11 fund that has received a favorable determination

12 pursuant to section 7805 of the Internal Revenue

13 Code of 1986, and that determination is in effect as

14 of the date of the commencement of the case under

15 section 301, 302, or 303 of this title, those funds

16 shall be presumed to be exempt from the estate.

17 ‘‘(B) If the retirement funds are in a retirement

18 fund that has not received a favorable determination

19 pursuant to such section 7805, those funds are ex20 empt from the estate if the debtor demonstrates

21 that—

22 ‘‘(i) no prior determination to the contrary

23 has been made by a court or the Internal Rev24 enue Service; and
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1 ‘‘(ii)(I) the retirement fund is in substan2 tial compliance with the applicable requirements

3 of the Internal Revenue Code of 1986; or

4 ‘‘(II) the retirement fund fails to be in

5 substantial compliance with the applicable re6 quirements of the Internal Revenue Code of

7 1986 and the debtor is not materially respon8 sible for that failure.

9 ‘‘(C) A direct transfer of retirement funds from

10 1 fund or account that is exempt from taxation

11 under section 401, 403, 408, 408A, 414, 457, or

12 501(a) of the Internal Revenue Code of 1986, pur13 suant to section 401(a)(31) of the Internal Revenue

14 Code of 1986, or otherwise, shall not cease to qualify

15 for exemption under paragraph (3)(C) or subsection

16 (d)(12) by reason of that direct transfer.

17 ‘‘(D)(i) Any distribution that qualifies as an eli18 gible rollover distribution within the meaning of sec19 tion 402(c) of the Internal Revenue Code of 1986 or

20 that is described in clause (ii) shall not cease to

21 qualify for exemption under paragraph (3)(C) or

22 subsection (d)(12) by reason of that distribution.

23 ‘‘(ii) A distribution described in this clause is

24 an amount that—
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1 ‘‘(I) has been distributed from a fund or

2 account that is exempt from taxation under sec3 tion 401, 403, 408, 408A, 414, 457, or 501(a)

4 of the Internal Revenue Code of 1986; and

5 ‘‘(II) to the extent allowed by law, is de6 posited in such a fund or account not later than

7 60 days after the distribution of that amount.’’;

8 and

9 (2) in subsection (d)—

10 (A) in the matter preceding paragraph (1),

11 by striking ‘‘subsection (b)(1)’’ and inserting

12 ‘‘subsection (b)(2)’’; and

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

14 ‘‘(12) Retirement funds to the extent that those

15 funds are in a fund or account that is exempt from tax16 ation under section 401, 403, 408, 408A, 414, 457, or

17 501(a) of the Internal Revenue Code of 1986.’’.

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

19 United States Code, as amended by section 214 of this

20 Act, is amended—

21 (1) in paragraph (18), by striking ‘‘or’’ at the

22 end;

23 (2) in paragraph (19), by striking the period

24 and inserting ‘‘; or’’;
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1 (3) by inserting after paragraph (19) the fol2 lowing:

3 ‘‘(20) under subsection (a), of withholding of

4 income from a debtor’s wages and collection of

5 amounts withheld, pursuant to the debtor’s agree6 ment authorizing that withholding and collection for

7 the benefit of a pension, profit-sharing, stock bonus,

8 or other plan established under section 401, 403,

9 408, 408A, 414, 457, or 501(a) of the Internal Rev10 enue Code of 1986 that is sponsored by the em11 ployer of the debtor, or an affiliate, successor, or

12 predecessor of such employer—

13 ‘‘(A) to the extent that the amounts with14 held and collected are used solely for payments

15 relating to a loan from a plan that satisfies the

16 requirements of section 408(b)(1) of the Em17 ployee Retirement Income Security Act of 1974

18 or is subject to section 72(p) of the Internal

19 Revenue Code of 1986; or

20 ‘‘(B) in the case of a loan from a thrift

21 savings plan described in subchapter III of title

22 5, that satisfies the requirements of section

23 8433(g) of such title;’’; and

24 (4) by adding at the end of the flush material

25 at the end of the subsection, the following: ‘‘Nothing
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1 in paragraph (20) may be construed to provide that

2 any loan made under a governmental plan under

3 section 414(d), or a contract or account under sec4 tion 403(b), of the Internal Revenue Code of 1986

5 constitutes a claim or a debt under this title.’’.

6 (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of

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

8 end the following:

9 ‘‘(18) owed to a pension, profit-sharing, stock

10 bonus, or other plan established under section 401,

11 403, 408, 408A, 414, 457, or 501(c) of the Internal

12 Revenue Code of 1986, pursuant to—

13 ‘‘(A) a loan permitted under section

14 408(b)(1) of the Employee Retirement Income

15 Security Act of 1974, or subject to section

16 72(p) of the Internal Revenue Code of 1986; or

17 ‘‘(B) a loan from the thrift savings plan

18 described in subchapter III of title 5, that satis19 fies the requirements of section 8433(g) of such

20 title.

21 Nothing in paragraph (19) may be construed to pro22 vide that any loan made under a governmental plan

23 under section 414(d), or a contract or account under

24 section 403(b), of the Internal Revenue Code of

25 1986 constitutes a claim or a debt under this title.’’
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1 (d) PLAN CONTENTS.—Section 1322 of title 11,

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

3 following:

4 ‘‘(f) A plan may not materially alter the terms of a

5 loan described in section 362(b)(20).’’.

6 SEC. 225. PROTECTION OF EDUCATION SAVINGS.

7 (a) EXCLUSIONS.—Section 541 of title 11, United

8 States Code, as amended by section 903, is amended—

9 (1) in subsection (b)—

10 (A) by redesignating paragraph (6) as

11 paragraph (8); and

12 (B) by inserting after paragraph (5) the

13 following:

14 ‘‘(6) funds placed in an education individual re15 tirement account (as defined in section 530(b)(1) of

16 the Internal Revenue Code of 1986) not later than

17 365 days before the date of filing of the petition,

18 but—

19 ‘‘(A) only if the designated beneficiary of

20 such account was a son, daughter, stepson,

21 stepdaughter, grandchild, or step-grandchild of

22 the debtor for the taxable year for which funds

23 were placed in such account;

24 ‘‘(B) only to the extent that such funds—
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1 ‘‘(i) are not pledged or promised to

2 any entity in connection with any extension

3 of credit; and

4 ‘‘(ii) are not excess contributions (as

5 described in section 4973(e) of the Internal

6 Revenue Code of 1986); and

7 ‘‘(C) in the case of funds placed in all such

8 accounts having the same designated bene9 ficiary not earlier than 720 days nor later than

10 365 days before such date, only so much of

11 such funds as does not exceed $5,000;

12 ‘‘(7) funds used to purchase a tuition credit or

13 certificate or contributed to an account in accord14 ance with section 529(b)(1)(A) of the Internal Rev15 enue Code of 1986 under a qualified State tuition

16 program (as defined in section 529(b)(1) of such

17 Code) not later than 365 days before the date of fil18 ing of the petition, but—

19 ‘‘(A) only if the designated beneficiary of

20 the amounts paid or contributed to such tuition

21 program was a son, daughter, stepson, step22 daughter, grandchild, or step-grandchild of the

23 debtor for the taxable year for which funds

24 were paid or contributed;
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1 ‘‘(B) with respect to the aggregate amount

2 paid or contributed to such program having the

3 same designated beneficiary, only so much of

4 such amount as does not exceed the total con5 tributions permitted under section 529(b)(7) of

6 such Code with respect to such beneficiary, as

7 adjusted beginning on the date of the filing of

8 the petition by the annual increase or decrease

9 (rounded to the nearest tenth of 1 percent) in

10 the education expenditure category of the Con11 sumer Price Index prepared by the Department

12 of Labor; and

13 ‘‘(C) in the case of funds paid or contrib14 uted to such program having the same des15 ignated beneficiary not earlier than 720 days

16 nor later than 365 days before such date, only

17 so much of such funds as does not exceed

18 $5,000; or’’; and

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

20 ‘‘(g) In determining whether any of the relationships

21 specified in paragraph (6)(A) or (7)(A) of subsection (b)

22 exists, a legally adopted child of an individual (and a child

23 who is a member of an individual’s household, if placed

24 with such individual by an authorized placement agency

25 for legal adoption by such individual), or a foster child
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1 of an individual (if such child has as the child’s principal

2 place of abode the home of the debtor and is a member

3 of the debtor’s household) shall be treated as a child of

4 such individual by blood.’’.

5 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

6 United States Code, as amended by sections 105(d),

7 304(c)(1), 305(2), 315(b), and 316 of this Act, is amend8 ed by adding at the end the following:

9 ‘‘(k) In addition to meeting the requirements under

10 subsection (a), a debtor shall file with the court a record

11 of any interest that a debtor has in an education individual

12 retirement account (as defined in section 530(b)(1) of the

13 Internal Revenue Code of 1986) or under a qualified State

14 tuition program (as defined in section 529(b)(1) of such

15 Code).’’.

16 TITLE III—DISCOURAGING

17 BANKRUPTCY ABUSE

18 SEC. 301. REINFORCEMENT OF THE FRESH START.

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

20 is amended—

21 (1) by striking ‘‘by a court’’ and inserting ‘‘on

22 a prisoner by any court’’,

23 (2) by striking ‘‘section 1915(b) or (f)’’ and in24 serting ‘‘subsection (b) or (f)(2) of section 1915’’,

25 and
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1 (3) by inserting ‘‘(or a similar non-Federal

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

3 SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

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

5 amended—

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

7 end;

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

9 the end and inserting a semicolon; and

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

11 ‘‘(3) if a single or joint case is filed by or

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

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

14 pending within the preceding 1-year period but was

15 dismissed, other than a case refiled under a chapter

16 other than chapter 7 after dismissal under section

17 707(b)—

18 ‘‘(A) the stay under subsection (a) with re19 spect to any action taken with respect to a debt

20 or property securing such debt or with respect

21 to any lease will terminate with respect to the

22 debtor on the 30th day after the filing of the

23 later case;

24 ‘‘(B) upon motion by a party in interest

25 for continuation of the automatic stay and upon
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1 notice and a hearing, the court may extend the

2 stay in particular cases as to any or all credi3 tors (subject to such conditions or limitations

4 as the court may then impose) after notice and

5 a hearing completed before the expiration of the

6 30-day period only if the party in interest dem7 onstrates that the filing of the later case is in

8 good faith as to the creditors to be stayed; and

9 ‘‘(C) for purposes of subparagraph (B), a

10 case is presumptively filed not in good faith

11 (but such presumption may be rebutted by clear

12 and convincing evidence to the contrary)—

13 ‘‘(i) as to all creditors, if—

14 ‘‘(I) more than 1 previous case

15 under any of chapter 7, 11, or 13 in

16 which the individual was a debtor was

17 pending within the preceding 1-year

18 period;

19 ‘‘(II) a previous case under any

20 of chapter 7, 11, or 13 in which the

21 individual was a debtor was dismissed

22 within such 1-year period, after the

23 debtor failed to—

24 ‘‘(aa) file or amend the peti25 tion or other documents as re-
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1 quired by this title or the court

2 without substantial excuse (but

3 mere inadvertence or negligence

4 shall not be a substantial excuse

5 unless the dismissal was caused

6 by the negligence of the debtor’s

7 attorney);

8 ‘‘(bb) provide adequate pro9 tection as ordered by the court;

10 or

11 ‘‘(cc) perform the terms of a

12 plan confirmed by the court; or

13 ‘‘(III) there has not been a sub14 stantial change in the financial or per15 sonal affairs of the debtor since the

16 dismissal of the next most previous

17 case under chapter 7, 11, or 13 or

18 any other reason to conclude that the

19 later case will be concluded—

20 ‘‘(aa) if a case under chap21 ter 7, with a discharge; or

22 ‘‘(bb) if a case under chap23 ter 11 or 13, with a confirmed

24 plan which will be fully per25 formed; and
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1 ‘‘(ii) as to any creditor that com2 menced an action under subsection (d) in

3 a previous case in which the individual was

4 a debtor if, as of the date of dismissal of

5 such case, that action was still pending or

6 had been resolved by terminating, condi7 tioning, or limiting the stay as to actions

8 of such creditor; and

9 ‘‘(4)(A)(i) if a single or joint case is filed by or

10 against an individual debtor under this title, and if

11 2 or more single or joint cases of the debtor were

12 pending within the previous year but were dismissed,

13 other than a case refiled under section 707(b), the

14 stay under subsection (a) shall not go into effect

15 upon the filing of the later case; and

16 ‘‘(ii) on request of a party in interest, the court

17 shall promptly enter an order confirming that no

18 stay is in effect;

19 ‘‘(B) if, within 30 days after the filing of the

20 later case, a party in interest requests the court may

21 order the stay to take effect in the case as to any

22 or all creditors (subject to such conditions or limita23 tions as the court may impose), after notice and

24 hearing, only if the party in interest demonstrates
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1 that the filing of the later case is in good faith as

2 to the creditors to be stayed;

3 ‘‘(C) a stay imposed under subparagraph (B)

4 shall be effective on the date of entry of the order

5 allowing the stay to go into effect; and

6 ‘‘(D) for purposes of subparagraph (B), a case

7 is presumptively not filed in good faith (but such

8 presumption may be rebutted by clear and con9 vincing evidence to the contrary)—

10 ‘‘(i) as to all creditors if—

11 ‘‘(I) 2 or more previous cases under

12 this title in which the individual was a

13 debtor were pending within the 1-year pe14 riod;

15 ‘‘(II) a previous case under this title

16 in which the individual was a debtor was

17 dismissed within the time period stated in

18 this paragraph after the debtor failed to

19 file or amend the petition or other docu20 ments as required by this title or the court

21 without substantial excuse (but mere inad22 vertence or negligence shall not be sub23 stantial excuse unless the dismissal was

24 caused by the negligence of the debtor’s at25 torney), failed to pay adequate protection
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1 as ordered by the court, or failed to per2 form the terms of a plan confirmed by the

3 court; or

4 ‘‘(III) there has not been a substan5 tial change in the financial or personal af6 fairs of the debtor since the dismissal of

7 the next most previous case under this

8 title, or any other reason to conclude that

9 the later case will not be concluded, if a

10 case under chapter 7, with a discharge,

11 and if a case under chapter 11 or 13, with

12 a confirmed plan that will be fully per13 formed; or

14 ‘‘(ii) as to any creditor that commenced an

15 action under subsection (d) in a previous case

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

17 the date of dismissal of such case, such action

18 was still pending or had been resolved by termi19 nating, conditioning, or limiting the stay as to

20 action of such creditor.’’.

21 SEC. 303. CURBING ABUSIVE FILINGS.

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

23 States Code, is amended—

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

25 end;
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1 (2) in paragraph (3), by striking the period at

2 the end and inserting ‘‘; or’’; and

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

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

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

6 whose claim is secured by an interest in such real

7 estate, if the court finds that the filing of the bank8 ruptcy petition was part of a scheme to delay,

9 hinder, and defraud creditors that involved either—

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

11 or other interest in, the real property without

12 the consent of the secured creditor or court ap13 proval; or

14 ‘‘(B) multiple bankruptcy filings affecting

15 the real property.

16 If recorded in compliance with applicable State laws gov17 erning notices of interests or liens in real property, an

18 order entered under this subsection shall be binding in any

19 other case under this title purporting to affect the real

20 property filed not later than 2 years after that recording,

21 except that a debtor in a subsequent case may move for

22 relief from such order based upon changed circumstances

23 or for good cause shown, after notice and a hearing.’’.
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1 (b) AUTOMATIC STAY.—Section 362(b) of title 11,

2 United States Code, as amended by section 224 of this

3 Act, is amended—

4 (1) in paragraph (19), by striking ‘‘or’’ at the

5 end;

6 (2) in paragraph (20), by striking the period at

7 the end; and

8 (3) by inserting after paragraph (20) the fol9 lowing:

10 ‘‘(21) under subsection (a), of any act to en11 force any lien against or security interest in real

12 property following the entry of an order under sec13 tion 362(d)(4) as to that property in any prior bank14 ruptcy case for a period of 2 years after entry of

15 such an order, except that the debtor, in a subse16 quent case, may move the court for relief from such

17 order based upon changed circumstances or for

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

19 or

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

22 property—

23 ‘‘(A) if the debtor is ineligible under sec24 tion 109(g) to be a debtor in a bankruptcy case;

25 or
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1 ‘‘(B) if the bankruptcy case was filed in

2 violation of a bankruptcy court order in a prior

3 bankruptcy case prohibiting the debtor from

4 being a debtor in another bankruptcy case.’’.

5 (c) MODIFICATION OF A RESTRICTION RELATING TO

6 WAIVERS.—Section 522(e) of title 11, United States

7 Code, is amended—

8 (1) in the first sentence, by striking ‘‘subsection

9 (b) of this section’’ and inserting ‘‘subsection (b),

10 other than under paragraph (3)(C) of that sub11 section’’; and

12 (2) in the second sentence—

13 (A) by inserting ‘‘(other than property de14 scribed in subsection (b)(3)(C))’’ after ‘‘prop15 erty’’ each place it appears; and

16 (B) by inserting ‘‘(other than a transfer of

17 property described in subsection (b)(3)(C))’’

18 after ‘‘transfer’’ each place it appears.

19 SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY

20 SECURITY.

21 Title 11, United States Code, is amended—

22 (1) in section 521(a), as so redesignated by sec23 tion 106(d) of this Act—

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

25 the end;
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1 (B) in paragraph (5), by striking the pe2 riod at the end and inserting ‘‘; and’’; and

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

4 ‘‘(6) in an individual case under chapter 7, not

5 retain possession of personal property as to which a

6 creditor has an allowed claim for the purchase price

7 secured in whole or in part by an interest in that

8 personal property unless, in the case of an individual

9 debtor, the debtor within 45 days after the first

10 meeting of creditors under section 341(a)—

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

12 creditor under section 524(c) with respect to

13 the claim secured by such property; or

14 ‘‘(B) redeems such property from the secu15 rity interest under section 722.’’; and

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

17 ‘‘(c) For purposes of subsection (a)(6), if the debtor

18 fails to so act within the 45-day period specified in sub19 section (a)(6), the personal property affected shall no

20 longer be property of the estate, and the creditor may take

21 whatever action as to such property as is permitted by

22 applicable nonbankruptcy law, unless the court determines

23 on the motion of the trustee, and after notice and a hear24 ing, that such property is of consequential value or benefit

25 to the estate.’’; and
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1 (2) in section 722, by inserting ‘‘in full at the

2 time of redemption’’ before the period at the end.

3 SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE

4 DEBTOR DOES NOT COMPLETE INTENDED

5 SURRENDER OF CONSUMER DEBT COLLAT6 ERAL.

7 Title 11, United States Code, is amended—

8 (1) in section 362—

9 (A) in subsection (c), by striking ‘‘(e), and

10 (f)’’ and inserting ‘‘(e), (f), and (h)’’; and

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

12 amended by section 227 of this Act, as sub13 section (j) and by inserting after subsection (g)

14 the following:

15 ‘‘(h)(1) Subject to paragraph (2), in an individual

16 case under chapter 7, 11, or 13 the stay provided by sub17 section (a) is terminated with respect to property of the

18 estate securing in whole or in part a claim, or subject to

19 an unexpired lease, if the debtor fails within the applicable

20 period of time set by section 521(a)(2) to—

21 ‘‘(A) file timely any statement of intention re22 quired under section 521(a)(2) with respect to that

23 property or to indicate therein that the debtor—

24 ‘‘(i) will either surrender the property or

25 retain the property; and
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1 ‘‘(ii) if retaining the property, will, as

2 applicable—

3 ‘‘(I) redeem the property under sec4 tion 722;

5 ‘‘(II) reaffirm the debt the property

6 secures under section 524(c); or

7 ‘‘(III) assume the unexpired lease

8 under section 365(p) if the trustee does

9 not do so; or

10 ‘‘(B) take timely the action specified in that

11 statement of intention, as the statement may be

12 amended before expiration of the period for taking

13 action, unless the statement of intention specifies re14 affirmation and the creditor refuses to reaffirm on

15 the original contract terms.

16 ‘‘(2) Paragraph (1) shall not apply if the court deter17 mines on the motion of the trustee, and after notice and

18 a hearing, that such property is of consequential value or

19 benefit to the estate.’’; and

20 (2) in section 521, as amended by section 304

21 of this Act—

22 (A) in subsection (a)(2), as redesignated

23 by section 106(d) of this Act—

24 (i) by striking ‘‘consumer’’;

25 (ii) in subparagraph (B)—
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1 (I) by striking ‘‘forty-five days

2 after the filing of a notice of intent

3 under this section’’ and inserting ‘‘30

4 days after the first date set for the

5 meeting of creditors under section

6 341(a)’’; and

7 (II) by striking ‘‘forty-five day

8 period’’ and inserting ‘‘30-day pe9 riod’’; and

10 (iii) in subparagraph (C), by inserting

11 ‘‘except as provided in section 362(h)’’ be12 fore the semicolon; and

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

14 ‘‘(d) If the debtor fails timely to take the action speci15 fied in subsection (a)(6), or in paragraph (1) or (2) of

16 section 362(h), with respect to property which a lessor or

17 bailor owns and has leased, rented, or bailed to the debtor

18 or as to which a creditor holds a security interest not oth19 erwise voidable under section 522(f), 544, 545, 547, 548,

20 or 549, nothing in this title shall prevent or limit the oper21 ation of a provision in the underlying lease or agreement

22 that has the effect of placing the debtor in default under

23 that lease or agreement by reason of the occurrence, pend24 ency, or existence of a proceeding under this title or the

25 insolvency of the debtor. Nothing in this subsection shall
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1 be deemed to justify limiting such a provision in any other

2 circumstance.’’.

3 SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT

4 IN CHAPTER 13.

5 (a) IN GENERAL.—Section 1325(a)(5)(B)(i) of title

6 11, United States Code, is amended to read as follows:

7 ‘‘(i) the plan provides that—

8 ‘‘(I) the holder of such claim retain

9 the lien securing such claim until the ear10 lier of—

11 ‘‘(aa) the payment of the under12 lying debt determined under nonbank13 ruptcy law; or

14 ‘‘(bb) discharge under section

15 1328; and

16 ‘‘(II) if the case under this chapter is

17 dismissed or converted without completion

18 of the plan, such lien shall also be retained

19 by such holder to the extent recognized by

20 applicable nonbankruptcy law; and’’.

21 (b) RESTORING THE FOUNDATION FOR SECURED

22 CREDIT.—Section 1325(a) of title 11, United States Code,

23 is amended by adding at the end the following flush sen24 tence:
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1 ‘‘For purposes of paragraph (5), section 506 shall not

2 apply to a claim described in that paragraph if the debt

3 that is the subject of the claim was incurred within the

4 5-year period preceding the filing of the petition and the

5 collateral for that debt consists of a motor vehicle (as de6 fined in section 30102 of title 49) acquired for the per7 sonal use of the debtor, or if collateral for that debt con8 sists of any other thing of value, if the debt was incurred

9 during the 6-month period preceding that filing.’’.

10 (c) DEFINITIONS.—Section 101 of title 11, United

11 States Code, as amended by section 211 of this Act, is

12 amended—

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

15 ‘‘(13A) ‘debtor’s principal residence’—

16 ‘‘(A) means a residential structure, includ17 ing incidental property, without regard to

18 whether that structure is attached to real prop19 erty; and

20 ‘‘(B) includes an individual condominium

21 or cooperative unit;’’; and

22 (2) by inserting after paragraph (27), the fol23 lowing:

24 ‘‘(27A) ‘incidental property’ means, with re25 spect to a debtor’s principal residence—
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1 ‘‘(A) property commonly conveyed with a

2 principal residence in the area where the real

3 estate is located;

4 ‘‘(B) all easements, rights, appurtenances,

5 fixtures, rents, royalties, mineral rights, oil or

6 gas rights or profits, water rights, escrow

7 funds, or insurance proceeds; and

8 ‘‘(C) all replacements or additions;’’.

9 SEC. 307. EXEMPTIONS.

10 Section 522(b)(3)(A) of title 11, United States Code,

11 as so designated by section 224 of this Act, is amended—

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

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

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

15 SEC. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EX16 EMPTION.

17 Section 522 of title 11, United States Code, as

18 amended by section 307 of this Act, is amended—

19 (1) in subsection (b)(3)(A), by inserting ‘‘sub20 ject to subsection (n),’’ before ‘‘any property’’; and

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

22 ‘‘(n) For purposes of subsection (b)(3)(A), and not23 withstanding subsection (a), the value of an interest in—

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

25 or a dependent of the debtor uses as a residence;
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1 ‘‘(2) a cooperative that owns property that the

2 debtor or a dependent of the debtor uses as a resi3 dence; or

4 ‘‘(3) a burial plot for the debtor or a dependent

5 of the debtor;

6 shall be reduced to the extent such value is attributable

7 to any portion of any property that the debtor disposed

8 of in the 730-day period ending on the date of the filing

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

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

11 portion that the debtor could not exempt, under subsection

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

13 disposed of.’’.

14 SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER

15 13 CASES.

16 (a) STOPPING ABUSIVE CONVERSIONS FROM CHAP17 TER 13.—Section 348(f)(1) of title 11, United States

18 Code, is amended—

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

20 the end;

21 (2) in subparagraph (B)—

22 (A) by striking ‘‘in the converted case,

23 with allowed secured claims’’ and inserting

24 ‘‘only in a case converted to chapter 11 or 12

25 but not in a case converted to chapter 7, with
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1 allowed secured claims in cases under chapters

2 11 and 12’’; and

3 (B) by striking the period and inserting ‘‘;

4 and’’; and

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

6 ‘‘(C) with respect to cases converted from chap7 ter 13—

8 ‘‘(i) the claim of any creditor holding secu9 rity as of the date of the petition shall continue

10 to be secured by that security unless the full

11 amount of such claim determined under appli12 cable nonbankruptcy law has been paid in full

13 as of the date of conversion, notwithstanding

14 any valuation or determination of the amount

15 of an allowed secured claim made for the pur16 poses of the chapter 13 proceeding; and

17 ‘‘(ii) unless a prebankruptcy default has

18 been fully cured under the plan at the time of

19 conversion, in any proceeding under this title or

20 otherwise, the default shall have the effect given

21 under applicable nonbankruptcy law.’’.

22 (b) GIVING DEBTORS THE ABILITY TO KEEP

23 LEASED PERSONAL PROPERTY BY ASSUMPTION.—Section

24 365 of title 11, United States Code, is amended by adding

25 at the end the following:
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1 ‘‘(p)(1) If a lease of personal property is rejected or

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

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

4 the stay under section 362(a) is automatically terminated.

5 ‘‘(2)(A) In the case of an individual under chapter

6 7, the debtor may notify the creditor in writing that the

7 debtor desires to assume the lease. Upon being so notified,

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

9 is willing to have the lease assumed by the debtor and

10 may condition such assumption on cure of any outstanding

11 default on terms set by the contract.

12 ‘‘(B) If within 30 days after notice is provided under

13 subparagraph (A), the debtor notifies the lessor in writing

14 that the lease is assumed, the liability under the lease will

15 be assumed by the debtor and not by the estate.

16 ‘‘(C) The stay under section 362 and the injunction

17 under section 524(a)(2) shall not be violated by notifica18 tion of the debtor and negotiation of cure under this sub19 section.

20 ‘‘(3) In a case under chapter 11 in which the debtor

21 is an individual and in a case under chapter 13, if the

22 debtor is the lessee with respect to personal property and

23 the lease is not assumed in the plan confirmed by the

24 court, the lease is deemed rejected as of the conclusion

25 of the hearing on confirmation. If the lease is rejected,
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1 the stay under section 362 and any stay under section

2 1301 is automatically terminated with respect to the prop3 erty subject to the lease.’’.

4 (c) ADEQUATE PROTECTION OF LESSORS AND PUR5 CHASE MONEY SECURED CREDITORS.—

6 (1) CONFIRMATION OF PLAN.—Section

7 1325(a)(5)(B) of title 11, United States Code, is

8 amended—

9 (A) in clause (i), by striking ‘‘and’’ at the

10 end;

11 (B) in clause (ii), by striking ‘‘or’’ at the

12 end and inserting ‘‘and’’; and

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

14 ‘‘(iii) if—

15 ‘‘(I) property to be distributed

16 pursuant to this subsection is in the

17 form of periodic payments, such pay18 ments shall be in equal monthly

19 amounts; and

20 ‘‘(II) the holder of the claim is

21 secured by personal property the

22 amount of such payments shall not be

23 less than an amount sufficient to pro24 vide to the holder of such claim ade-
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1 quate protection during the period of

2 the plan; or’’.

3 (2) PAYMENTS.—Section 1326(a) of title 11,

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

5 ‘‘(a)(1) Unless the court orders otherwise, the debtor

6 shall—

7 ‘‘(A) commence making the payments proposed

8 by a plan within 30 days after the plan is filed; or

9 ‘‘(B) if no plan is filed then as specified in the

10 proof of claim, within 30 days after the order for re11 lief or within 15 days after the plan is filed, which12 ever is earlier.

13 ‘‘(2) A payment made under this section shall be re14 tained by the trustee until confirmation, denial of con15 firmation, or paid by the trustee as adequate protection

16 payments in accordance with paragraph (3). If a plan is

17 confirmed, the trustee shall distribute any such payment

18 in accordance with the plan as soon as is practicable. If

19 a plan is not confirmed, the trustee shall return any such

20 payments not previously paid and not yet due and owing

21 to creditors pursuant to paragraph (3) to the debtor, after

22 deducting any unpaid claim allowed under section 503(b).

23 ‘‘(3)(A) As soon as is practicable, and not later than

24 40 days after the filing of the case, the trustee shall—
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1 ‘‘(i) pay from payments made under this section

2 the adequate protection payments proposed in the

3 plan; or

4 ‘‘(ii) if no plan is filed then, according to the

5 terms of the proof of claim.

6 ‘‘(B) The court may, upon notice and a hearing, mod7 ify, increase, or reduce the payments required under this

8 paragraph pending confirmation of a plan.’’.

9 SEC. 310. LIMITATION ON LUXURY GOODS.

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

11 is amended to read as follows:

12 ‘‘(C)(i) for purposes of subparagraph (A)—

13 ‘‘(I) consumer debts owed to a single cred14 itor and aggregating more than $250 for luxury

15 goods or services incurred by an individual

16 debtor on or within 90 days before the order for

17 relief under this title are presumed to be non18 dischargeable; and

19 ‘‘(II) cash advances aggregating more than

20 $750 that are extensions of consumer credit

21 under an open end credit plan obtained by an

22 individual debtor on or within 70 days before

23 the order for relief under this title, are pre24 sumed to be nondischargeable; and

25 ‘‘(ii) for purposes of this subparagraph—
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1 ‘‘(I) the term ‘extension of credit under an

2 open end credit plan’ means an extension of

3 credit under an open end credit plan, within the

4 meaning of the Consumer Credit Protection Act

5 (15 U.S.C. 1601 et seq.);

6 ‘‘(II) the term ‘open end credit plan’ has

7 the meaning given that term under section 103

8 of Consumer Credit Protection Act (15 U.S.C.

9 1602); and

10 ‘‘(III) the term ‘luxury goods or services’

11 does not include goods or services reasonably

12 necessary for the support or maintenance of the

13 debtor or a dependent of the debtor.’’.

14 SEC. 311. AUTOMATIC STAY.

15 Section 362(b) of title 11, United States Code, as

16 amended by section 303(b) of this Act, is amended—

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

18 end;

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

20 the end and inserting a semicolon; and

21 (3) by inserting after paragraph (22) the fol22 lowing:

23 ‘‘(23) under subsection (a)(3), of the continu24 ation of any eviction, unlawful detainer action, or

25 similar proceeding by a lessor against a debtor in-
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1 volving residential real property in which the debtor

2 resides as a tenant under a rental agreement;

3 ‘‘(24) under subsection (a)(3), of the com4 mencement of any eviction, unlawful detainer action,

5 or similar proceeding by a lessor against a debtor in6 volving residential real property in which the debtor

7 resides as a tenant under a rental agreement that

8 has terminated under the lease agreement or appli9 cable State law; or

10 ‘‘(25) under subsection (a)(3), of eviction ac11 tions based on endangerment to property or person

12 or the use of illegal drugs.’’.

13 SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY

14 DISCHARGES.

15 Title 11, United States Code, is amended—

16 (1) in section 727(a)(8), by striking ‘‘six’’ and

17 inserting ‘‘8’’; and

18 (2) in section 1328, by inserting after sub19 section (e) the following:

20 ‘‘(f) Notwithstanding subsections (a) and (b), the

21 court shall not grant a discharge of all debts provided for

22 by the plan or disallowed under section 502 if the debtor

23 has received a discharge in any case filed under this title

24 within 5 years before the order for relief under this chap25 ter.’’.
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1 SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND AN2 TIQUES.

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

4 amended by adding at the end the following:

5 ‘‘(4)(A) Subject to subparagraph (B), for pur6 poses of paragraph (1)(B), the term ‘household

7 goods’ means—

8 ‘‘(i) clothing;

9 ‘‘(ii) furniture;

10 ‘‘(iii) appliances;

11 ‘‘(iv) 1 radio;

12 ‘‘(v) 1 television;

13 ‘‘(vi) 1 VCR;

14 ‘‘(vii) linens;

15 ‘‘(viii) china;

16 ‘‘(ix) crockery;

17 ‘‘(x) kitchenware;

18 ‘‘(xi) educational materials and educational

19 equipment primarily for the use of minor de20 pendent children of the debtor, but only 1 per21 sonal computer only if used primarily for the

22 education or entertainment of such minor chil23 dren;

24 ‘‘(xii) medical equipment and supplies;
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1 ‘‘(xiii) furniture exclusively for the use of

2 minor children, or elderly or disabled depend3 ents of the debtor; and

4 ‘‘(xiv) personal effects (including wedding

5 rings and the toys and hobby equipment of

6 minor dependent children) of the debtor and the

7 dependents of the debtor.

8 ‘‘(B) The term ‘household goods’ does not

9 include—

10 ‘‘(i) works of art (unless by or of the debt11 or or the dependents of the debtor);

12 ‘‘(ii) electronic entertainment equipment

13 (except 1 television, 1 radio, and 1 VCR);

14 ‘‘(iii) items acquired as antiques;

15 ‘‘(iv) jewelry (except wedding rings); and

16 ‘‘(v) a computer (except as otherwise pro17 vided for in this section), motor vehicle (includ18 ing a tractor or lawn tractor), boat, or a motor19 ized recreational device, conveyance, vehicle,

20 watercraft, or aircraft.’’.

21 SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE

22 DEBTS.

23 (a) IN GENERAL.—Section 523(a) of title 11, United

24 States Code, is amended by inserting after paragraph (14)

25 the following:
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1 ‘‘(14A)(A) incurred to pay a debt that is non2 dischargeable by reason of section 727, 1141,

3 1228(a), 1228(b), or 1328(b), or any other provision

4 of this subsection, if the debtor incurred the debt to

5 pay such a nondischargeable debt with the intent to

6 discharge in bankruptcy the newly created debt; ex7 cept that

8 ‘‘(B) all debts incurred to pay nondischargeable

9 debts shall be presumed to be nondischargeable

10 debts if incurred within 70 days before the filing of

11 the petition (except that, in any case in which there

12 is an allowed claim under section 502 for child sup13 port or spousal support entitled to priority under

14 section 507(a)(1) and that was filed in a timely

15 manner, debts that would otherwise be presumed to

16 be nondischargeable debts by reason of this subpara17 graph shall be treated as dischargeable debts);’’.

18 (b) DISCHARGE UNDER CHAPTER 13.—Section

19 1328(a) of title 11, United States Code, is amended by

20 striking paragraphs (1) through (3) and inserting the fol21 lowing:

22 ‘‘(1) provided for under section 1322(b)(5);

23 ‘‘(2) of the kind specified in paragraph (2), (3),

24 (4), (7), or (8), of section 523(a);
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1 ‘‘(3) for restitution, or a criminal fine, included

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

3 or

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

5 civil action against the debtor as a result of willful

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

9 SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7

10 AND 13 CASES.

11 (a) NOTICE.—Section 342 of title 11, United States

12 Code, is amended—

13 (1) in subsection (c)—

14 (A) by inserting ‘‘(1)’’ after ‘‘(c)’’; and

15 (B) by striking ‘‘, but the failure of such

16 notice to contain such information shall not in17 validate the legal effect of such notice’’; and

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

19 ‘‘(d) At any time, a creditor, in a case of an individual

20 debtor under chapter 7 or 13, may file with the court and

21 serve on the debtor a notice of the address to be used to

22 notify the creditor in that case. Five days after receipt

23 of such notice, if the court or the debtor is required to

24 give the creditor notice, such notice shall be given at that

25 address.
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1 ‘‘(e) An entity may file with the court a notice stating

2 its address for notice in cases under chapters 7 and 13.

3 After 30 days following the filing of such notice, any notice

4 in any case filed under chapter 7 or 13 given by the court

5 shall be to that address unless specific notice is given

6 under subsection (d) with respect to a particular case.

7 ‘‘(f)(1) Notice given to a creditor other than as pro8 vided in this section shall not be effective notice until that

9 notice has been brought to the attention of the creditor.

10 If the creditor designates a person or department to be

11 responsible for receiving notices concerning bankruptcy

12 cases and establishes reasonable procedures so that bank13 ruptcy notices received by the creditor are to be delivered

14 to such department or person, notice shall not be consid15 ered to have been brought to the attention of the creditor

16 until received by such person or department.

17 ‘‘(2) No sanction under section 362(h) or any other

18 sanction that a court may impose on account of violations

19 of the stay under section 362(a) or failure to comply with

20 section 542 or 543 may be imposed on any action of the

21 creditor unless the action takes place after the creditor

22 has received notice of the commencement of the case effec23 tive under this section.’’.
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1 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

2 United States Code, as amended by section 305 of this

3 Act, is amended—

4 (1) in subsection (a), by striking paragraph (1)

5 and inserting the following:

6 ‘‘(1) file—

7 ‘‘(A) a list of creditors; and

8 ‘‘(B) unless the court orders otherwise—

9 ‘‘(i) a schedule of assets and liabil10 ities;

11 ‘‘(ii) a schedule of current income and

12 current expenditures;

13 ‘‘(iii) a statement of the debtor’s fi14 nancial affairs and, if applicable, a

15 certificate—

16 ‘‘(I) of an attorney whose name

17 is on the petition as the attorney for

18 the debtor or any bankruptcy petition

19 preparer signing the petition under

20 section 110(b)(1) indicating that such

21 attorney or bankruptcy petition pre22 parer delivered to the debtor any no23 tice required by section 342(b); or

24 ‘‘(II) if no attorney for the debt25 or is indicated and no bankruptcy pe-
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1 tition preparer signed the petition, of

2 the debtor that such notice was ob3 tained and read by the debtor;

4 ‘‘(iv) copies of all payment advices or

5 other evidence of payment, if any, received

6 by the debtor from any employer of the

7 debtor in the period 60 days before the fil8 ing of the petition;

9 ‘‘(v) a statement of the amount of

10 projected monthly net income, itemized to

11 show how the amount is calculated; and

12 ‘‘(vi) a statement disclosing any rea13 sonably anticipated increase in income or

14 expenditures over the 12-month period fol15 lowing the date of filing’’; and

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

17 ‘‘(e)(1) At any time, a creditor, in the case of an indi18 vidual under chapter 7 or 13, may file with the court no19 tice that the creditor requests the petition, schedules, and

20 a statement of affairs filed by the debtor in the case and

21 the court shall make those documents available to the

22 creditor who request those documents.

23 ‘‘(2)(A) At any time, a creditor in a case under chap24 ter 13 may file with the court notice that the creditor re25 quests the plan filed by the debtor in the case.
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1 ‘‘(B) The court shall make such plan available to the

2 creditor who request such plan—

3 ‘‘(i) at a reasonable cost; and

4 ‘‘(ii) not later than 5 days after such request.

5 ‘‘(f) An individual debtor in a case under chapter 7,

6 11, or 13 shall file with the court at the request of any

7 party in interest—

8 ‘‘(1) at the time filed with the taxing authority,

9 all tax returns required under applicable law, includ10 ing any schedules or attachments, with respect to

11 the period from the commencement of the case until

12 such time as the case is closed;

13 ‘‘(2) at the time filed with the taxing authority,

14 all tax returns required under applicable law, includ15 ing any schedules or attachments, that were not

16 filed with the taxing authority when the schedules

17 under subsection (a)(1) were filed with respect to

18 the period that is 3 years before the order of relief;

19 ‘‘(3) any amendments to any of the tax returns,

20 including schedules or attachments, described in

21 paragraph (1) or (2); and

22 ‘‘(4) in a case under chapter 13, a statement

23 subject to the penalties of perjury by the debtor of

24 the debtor’s income and expenditures in the pre-
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1 ceding tax year and monthly income, that shows how

2 the amounts are calculated—

3 ‘‘(A) beginning on the date that is the

4 later of 90 days after the close of the debtor’s

5 tax year or 1 year after the order for relief, un6 less a plan has been confirmed; and

7 ‘‘(B) thereafter, on or before the date that

8 is 45 days before each anniversary of the con9 firmation of the plan until the case is closed.

10 ‘‘(g)(1) A statement referred to in subsection (f)(4)

11 shall disclose—

12 ‘‘(A) the amount and sources of income of the

13 debtor;

14 ‘‘(B) the identity of any person responsible with

15 the debtor for the support of any dependent of the

16 debtor; and

17 ‘‘(C) the identity of any person who contrib18 uted, and the amount contributed, to the household

19 in which the debtor resides.

20 ‘‘(2) The tax returns, amendments, and statement of

21 income and expenditures described in paragraph (1) shall

22 be available to the United States trustee, any bankruptcy

23 administrator, any trustee, and any party in interest for

24 inspection and copying, subject to the requirements of

25 subsection (h).
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1 ‘‘(h)(1) Not later than 30 days after the date of en2 actment of the Bankruptcy Reform Act of 2000, the Di3 rector of the Administrative Office of the United States

4 Courts shall establish procedures for safeguarding the con5 fidentiality of any tax information required to be provided

6 under this section.

7 ‘‘(2) The procedures under paragraph (1) shall in8 clude restrictions on creditor access to tax information

9 that is required to be provided under this section.

10 ‘‘(3) Not later than 1 year after the date of enact11 ment of the Bankruptcy Reform Act of 2000, the Director

12 of the Administrative Office of the United States Courts

13 shall prepare and submit to Congress a report that—

14 ‘‘(A) assesses the effectiveness of the proce15 dures under paragraph (1); and

16 ‘‘(B) if appropriate, includes proposed legisla17 tion to—

18 ‘‘(i) further protect the confidentiality of

19 tax information; and

20 ‘‘(ii) provide penalties for the improper use

21 by any person of the tax information required

22 to be provided under this section.

23 ‘‘(i) If requested by the United States trustee or a

24 trustee serving in the case, the debtor shall provide—
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1 ‘‘(1) a document that establishes the identity of

2 the debtor, including a driver’s license, passport, or

3 other document that contains a photograph of the

4 debtor; and

5 ‘‘(2) such other personal identifying information

6 relating to the debtor that establishes the identity of

7 the debtor.’’.

8 SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED9 ULES OR PROVIDE REQUIRED INFORMATION.

10 Section 521 of title 11, United States Code, as

11 amended by section 315 of this Act, is amended by adding

12 at the end the following:

13 ‘‘(j)(1) Notwithstanding section 707(a), and subject

14 to paragraph (2), if an individual debtor in a voluntary

15 case under chapter 7 or 13 fails to file all of the informa16 tion required under subsection (a)(1) within 45 days after

17 the filing of the petition commencing the case, the case

18 shall be automatically dismissed effective on the 46th day

19 after the filing of the petition.

20 ‘‘(2) With respect to a case described in paragraph

21 (1), any party in interest may request the court to enter

22 an order dismissing the case. If requested, the court shall

23 enter an order of dismissal not later than 5 days after

24 such request.
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1 ‘‘(3) Upon request of the debtor made within 45 days

2 after the filing of the petition commencing a case de3 scribed in paragraph (1), the court may allow the debtor

4 an additional period of not to exceed 45 days to file the

5 information required under subsection (a)(1) if the court

6 finds justification for extending the period for the filing.’’.

7 SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON

8 CONFIRMATION OF THE PLAN.

9 (a) HEARING.—Section 1324 of title 11, United

10 States Code, is amended—

11 (1) by striking ‘‘After’’ and inserting the fol12 lowing:

13 ‘‘(a) Except as provided in subsection (b) and after’’;

14 and

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

16 ‘‘(b) The hearing on confirmation of the plan may

17 be held not later than 45 days after the meeting of credi18 tors under section 341(a).’’.

19 (b) FILING OF PLAN.—Section 1321 of title 11,

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

21 ‘‘§ 1321. Filing of plan

22 ‘‘Not later than 90 days after the order for relief

23 under this chapter, the debtor shall file a plan, except that

24 the court may extend such period if the need for an exten-
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1 sion is attributable to circumstances for which the debtor

2 should not justly be held accountable.’’.

3 SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION

4 IN CERTAIN CASES.

5 Section 1322(d) of title 11, United States Code, is

6 amended to read as follows:

7 ‘‘(d)(1) Except as provided in paragraph (2), the plan

8 may not provide for payments over a period that is longer

9 than 3 years.

10 ‘‘(2) The plan may provide for payments over a pe11 riod that is longer than 3 years if—

12 ‘‘(A) the plan is for a case that was converted

13 to a case under this chapter from a case under chap14 ter 7, or the plan is for a debtor who has been dis15 missed from chapter 7 by reason of section 707(b),

16 in which case the plan shall provide for payments

17 over a period of 5 years; or

18 ‘‘(B) the plan is for a case that is not described

19 in subparagraph (A), and the court, for cause, ap20 proves a period longer than 3 years, but not to ex21 ceed 5 years.’’.
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1 SEC. 319. SENSE OF THE CONGRESS REGARDING EXPAN2 SION OF RULE 9011 OF THE FEDERAL RULES

3 OF BANKRUPTCY PROCEDURE.

4 It is the sense of Congress that Rule 9011 of the Fed5 eral Rules of Bankruptcy Procedure (11 U.S.C. App.)

6 should be modified to include a requirement that all docu7 ments (including schedules), signed and unsigned, sub8 mitted to the court or to a trustee by debtors who rep9 resent themselves and debtors who are represented by an

10 attorney be submitted only after the debtor or the debtor’s

11 attorney has made reasonable inquiry to verify that the

12 information contained in such documents is—

13 (1) well grounded in fact; and

14 (2) warranted by existing law or a good-faith

15 argument for the extension, modification, or reversal

16 of existing law.

17 SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL

18 CASES.

19 Section 362(e) of title 11, United States Code, is

20 amended—

21 (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and

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

23 ‘‘(2) Notwithstanding paragraph (1), in the case of

24 an individual filing under chapter 7, 11, or 13, the stay

25 under subsection (a) shall terminate on the date that is
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1 60 days after a request is made by a party in interest

2 under subsection (d), unless—

3 ‘‘(A) a final decision is rendered by the court

4 during the 60-day period beginning on the date of

5 the request; or

6 ‘‘(B) that 60-day period is extended—

7 ‘‘(i) by agreement of all parties in interest;

8 or

9 ‘‘(ii) by the court for such specific period

10 of time as the court finds is required for good

11 cause, as described in findings made by the

12 court.’’.

13 SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

14 (a) PROPERTY OF THE ESTATE.—

15 (1) IN GENERAL.—Subchapter I of chapter 11

16 of title 11, United States Code, is amended by add17 ing at the end the following:

18 ‘‘§ 1115. Property of the estate

19 ‘‘In a case concerning an individual, property of the

20 estate includes, in addition to the property specified in sec21 tion 541—

22 ‘‘(1) all property of the kind specified in section

23 541 that the debtor acquires after the commence24 ment of the case but before the case is closed, dis-
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1 missed, or converted to a case under chapter 7, 12,

2 or 13, whichever occurs first; and

3 ‘‘(2) earnings from services performed by the

4 debtor after the commencement of the case but be5 fore the case is closed, dismissed, or converted to a

6 case under chapter 7, 12, or 13, whichever occurs

7 first.’’.

8 (2) CLERICAL AMENDMENT.—The table of sec9 tions for chapter 11 of title 11, United States Code,

10 is amended by adding at the end of the matter relat11 ing to subchapter I the following:

‘‘1115. Property of the estate.’’.

12 (b) CONTENTS OF PLAN.—Section 1123(a) of title

13 11, United States Code, is amended—

14 (1) in paragraph (6), by striking ‘‘and’’ at the

15 end;

16 (2) in paragraph (7), by striking the period and

17 inserting ‘‘; and’’; and

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

19 ‘‘(8) in a case concerning an individual, provide

20 for the payment to creditors through the plan of all

21 or such portion of earnings from personal services

22 performed by the debtor after the commencement of

23 the case or other future income of the debtor as is

24 necessary for the execution of the plan.’’.

25 (c) CONFIRMATION OF PLAN.—
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1 (1) REQUIREMENTS RELATING TO VALUE OF

2 PROPERTY.—Section 1129(a) of title 11, United

3 States Code, is amended by adding at the end the

4 following:

5 ‘‘(14) In a case concerning an individual in

6 which the holder of an allowed unsecured claim ob7 jects to the confirmation of the plan—

8 ‘‘(A) the value of the property to be dis9 tributed under the plan on account of such

10 claim is, as of the effective date of the plan, not

11 less than the amount of such claim; or

12 ‘‘(B) the value of the property to be dis13 tributed under the plan is not less than the

14 debtor’s projected disposable income (as that

15 term is defined in section 1325(b)(2)) to be re16 ceived during the 3-year period beginning on

17 the date that the first payment is due under the

18 plan, or during the term of the plan, whichever

19 is longer.’’.

20 (2) REQUIREMENT RELATING TO INTERESTS IN

21 PROPERTY.—Section 1129(b)(2)(B)(ii) of title 11,

22 United States Code, is amended by inserting before

23 the period at the end the following: ‘‘, except that

24 in a case concerning an individual, the debtor may

25 retain property included in the estate under section
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1 1115, subject to the requirements of subsection

2 (a)(14)’’.

3 (d) EFFECT OF CONFIRMATION—Section 1141(d) of

4 title 11, United States Code, is amended—

5 (1) in paragraph (2), by striking ‘‘The con6 firmation of a plan does not discharge an individual

7 debtor’’ and inserting ‘‘A discharge under this chap8 ter does not discharge a debtor’’; and

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

10 ‘‘(5) In a case concerning an individual—

11 ‘‘(A) except as otherwise ordered for cause

12 shown, the discharge is not effective until completion

13 of all payment under the plan; and

14 ‘‘(B) at any time after the confirmation of the

15 plan and after notice and a hearing, the court may

16 grant a discharge to a debtor that has not completed

17 payments under the plan only if—

18 ‘‘(i) for each allowed unsecured claim, the

19 value as of the effective date of the plan, of

20 property actually distributed under the plan on

21 account of that claim is not less than the

22 amount that would have been paid on such

23 claim if the estate of the debtor had been liq24 uidated under chapter 7 of this title on such

25 date; and
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1 ‘‘(ii) modification of the plan under 1127

2 of this title is not practicable.’’.

3 (e) MODIFICATION OF PLAN.—Section 1127 of title

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

5 the following:

6 ‘‘(e) In a case concerning an individual, the plan may

7 be modified at any time after confirmation of the plan but

8 before the completion of payments under the plan, whether

9 or not the plan has been substantially consummated, upon

10 request of the debtor, the trustee, the United States trust11 ee, or the holder of an allowed unsecured claim, to—

12 ‘‘(1) increase or reduce the amount of payments

13 on claims of a particular class provided for by the

14 plan;

15 ‘‘(2) extend or reduce the time period for such

16 payments; or

17 ‘‘(3) alter the amount of the distribution to a

18 creditor whose claim is provided for by the plan to

19 the extent necessary to take account of any payment

20 of such claim made other than under the plan.

21 ‘‘(f)(1) Sections 1121 through 1128 of this title and

22 the requirements of section 1129 of this title apply to any

23 modification under subsection (a).

24 ‘‘(2) The plan, as modified, shall become the plan

25 only after there has been disclosure under section 1125,
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1 as the court may direct, notice and a hearing, and such

2 modification is approved.’’.

3 SEC. 322. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI4 PANT CONTRIBUTIONS AND OTHER PROP5 ERTY FROM THE ESTATE.

6 (a) IN GENERAL.—Section 541(b) of title 11, United

7 States Code, as amended by section 903 of this Act, is

8 amended—

9 (1) by striking ‘‘or’’ at the end of paragraph

10 (5);

11 (2) by redesignating paragraph (6) as para12 graph (7); and

13 (3) by inserting after paragraph (5) the fol14 lowing:

15 ‘‘(6) any amount—

16 ‘‘(A) withheld by an employer from the

17 wages of employees for payment as contribu18 tions to—

19 ‘‘(i) an employee benefit plan subject

20 to title I of the Employee Retirement In21 come Security Act of 1974 (29 U.S.C.

22 1001 et seq.); or

23 ‘‘(ii) a health insurance plan regulated

24 by State law whether or not subject to

25 such title; or
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1 ‘‘(B) received by the employer from em2 ployees for payment as contributions to—

3 ‘‘(i) an employee benefit plan subject

4 to title I of the Employee Retirement In5 come Security Act of 1974 (29 U.S.C.

6 1001 et seq.); or

7 ‘‘(ii) a health insurance plan regulated

8 by State law whether or not subject to

9 such title;’’.

10 (b) APPLICATION OF AMENDMENT.—The amendment

11 made by this section shall not apply to cases commenced

12 under title 11, United States Code, before the expiration

13 of the 180-day period beginning on the date of the enact14 ment of this Act.

15 SEC. 323. CLARIFICATION OF POSTPETITION WAGES AND

16 BENEFITS.

17 Section 503(b)(1)(A) of title 11, United States Code,

18 is amended to read as follows:

19 ‘‘(A) the actual, necessary costs and expenses of

20 preserving the estate, including wages, salaries, or

21 commissions for services rendered after the com22 mencement of the case, and wages and benefits

23 awarded as back pay attributable to any period of

24 time after commencement of the case as a result of

25 the debtor’s violation of Federal or State law, with-
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1 out regard to when the original unlawful act oc2 curred or to whether any services were rendered;’’.

3 SEC. 324. LIMITATION.

4 (a) EXEMPTIONS.—Section 522 of title 11, United

5 States Code, as amended by sections 224 and 307 of this

6 Act, is amended—

7 (1) in subsection (b)(3)(A), by inserting ‘‘sub8 ject to subsection (n),’’ before ‘‘any property’’; and

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

10 ‘‘(n)(1) Except as provided in paragraph (2), as a

11 result of electing under subsection (b)(3)(A) to exempt

12 property under State or local law, a debtor may not ex13 empt any amount of interest that exceeds in the aggregate

14 $100,000 in value in—

15 ‘‘(A) real or personal property that the debtor

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

17 ‘‘(B) a cooperative that owns property that the

18 debtor or a dependent of the debtor uses as a resi19 dence; or

20 ‘‘(C) a burial plot for the debtor or a dependent

21 of the debtor.

22 ‘‘(2) The limitation under paragraph (1) shall not

23 apply to an exemption claimed under subsection (b)(3)(A)

24 by a family farmer for the principal residence of that

25 farmer.’’.
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1 (b) ADJUSTMENT OF DOLLAR AMOUNTS.—Section

2 104(b) of title 11, United States Code, is amended—

3 (1) in paragraph (1), by striking ‘‘522(d),’’ and

4 inserting ‘‘522 (d) or (n),’’; and

5 (2) in paragraph (3), by striking ‘‘522(d),’’ and

6 inserting ‘‘522 (d) or (n),’’.

7 SEC. 325. EXCLUSIVE JURISDICTION IN MATTERS INVOLV8 ING BANKRUPTCY PROFESSIONALS.

9 Section 1334 of title 28, United States Code, is

10 amended—

11 (1) in subsection (b) by striking ‘‘Notwith12 standing’’ and inserting ‘‘Except as provided in sub13 section (e)(2), and notwithstanding’’; and

14 (2) amending subsection (e) to read as follows:

15 ‘‘(e) The district court in which a case under title

16 11 is commenced or is pending shall have exclusive

17 jurisdiction—

18 ‘‘(1) of all the property, wherever located, of the

19 debtor as of the commencement of such case, and of

20 property of the estate; and

21 ‘‘(2) over all claims or causes of action that in22 volve construction of section 327 of title 11, United

23 States Code, or rules relating to disclosure require24 ments under section 327.’’.
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1 SEC. 326. UNITED STATES TRUSTEE PROGRAM FILING FEE

2 INCREASE.

3 (a) ACTIONS UNDER CHAPTER 7 OR 13 OF TITLE 11,

4 UNITED STATES CODE.—Section 1930(a) of title 28,

5 United States Code, is amended by striking paragraph (1)

6 and inserting the following:

7 ‘‘(1) For a case commenced—

8 ‘‘(A) under chapter 7 of title 11, $160; or

9 ‘‘(B) under chapter 13 of title 11, $150.’’.

10 (b) UNITED STATES TRUSTEE SYSTEM FUND.—Sec11 tion 589a(b) of title 28, United States Code, is amended—

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

13 following:

14 ‘‘(1)(A) 40.63 percent of the fees collected

15 under section 1930(a)(1)(A) of this title in cases

16 commenced under chapter 7 of title 11; and

17 ‘‘(B) 70.00 percent of the fees collected under

18 section 1930(a)(1)(B) of this title in cases com19 menced under chapter 13 of title 11;’’;

20 (2) in paragraph (2) by striking ‘‘one-half’’ and

21 inserting ‘‘three-fourths’’; and

22 (3) in paragraph (4) by striking ‘‘one-half’’ and

23 inserting ‘‘100 percent’’.

24 (c) COLLECTION AND DEPOSIT OF MISCELLANEOUS

25 BANKRUPTCY FEES.—Section 406(b) of the Judiciary Ap26 propriations Act, 1990 (28 U.S.C. 1931 note) is amended
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1 by striking ‘‘pursuant to 28 U.S.C. section 1930(b) and

2 30.76 per centum of the fees hereafter collected under 28

3 U.S.C. section 1930(a)(1) and 25 percent of the fees here4 after collected under 28 U.S.C. section 1930(a)(3) shall

5 be deposited as offsetting receipts to the fund established

6 under 28 U.S.C. section 1931’’ and inserting ‘‘under sec7 tion 1930(b) of title 28, United States Code, and 31.25

8 percent of the fees collected under section 1930(a)(1)(A)

9 of that title, 30.00 percent of the fees collected under sec10 tion 1930(a)(1)(B) of that title, and 25 percent of the fees

11 collected under section 1930(a)(3) of that title shall be

12 deposited as offsetting receipts to the fund established

13 under section 1931 of that title’’.

14 SEC. 327. COMPENSATION OF TRUSTEES IN CERTAIN CASES

15 UNDER CHAPTER 7 OF TITLE 11, UNITED

16 STATES CODE.

17 Section 326 of title 11, United States Code, is

18 amended by adding at the end the following:

19 ‘‘(e) In a case that has been converted under section

20 706, or after a case has been converted or dismissed under

21 section 707 or the debtor has been denied a discharge

22 under section 727—

23 ‘‘(1) the court may allow reasonable compensa24 tion under section 330 for the trustee’s services ren25 dered, payable after the trustee renders services; and
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1 ‘‘(2) any allowance made by a court under

2 paragraph (1) shall not be subject to the limitations

3 under subsection (a).’’.

4 SEC. 328. NONDISCHARGEABILITY OF DEBTS INCURRED

5 THROUGH THE COMMISSION OF VIOLENCE

6 AT CLINICS.

7 Section 523(a) of title 11, United States Code, as

8 amended by section 224 of this Act, is amended—

9 (1) in paragraph (18), by striking ‘‘or’’ at the

10 end;

11 (2) in paragraph (19)(B), by striking the period

12 and inserting ‘‘; or’’; and

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

14 ‘‘(20) that results from any judgment, order,

15 consent order, or decree entered in any Federal or

16 State court, or contained in any settlement agree17 ment entered into by the debtor, including any dam18 ages, fine, penalty, citation, or attorney fee or cost

19 owed by the debtor, arising from—

20 ‘‘(A) an actual or potential action under

21 section 248 of title 18;

22 ‘‘(B) an actual or potential action under

23 any Federal, State, or local law, the purpose of

24 which is to protect—
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1 ‘‘(i) access to a health care facility, in2 cluding a facility providing reproductive

3 health services, as defined in section

4 248(e) of title 18 (referred to in this para5 graph as a ‘health care facility’); or

6 ‘‘(ii) the provision of health services,

7 including reproductive health services (re8 ferred to in this paragraph as ‘health serv9 ices’);

10 ‘‘(C) an actual or potential action alleging

11 the violation of any Federal, State, or local

12 statutory or common law, including chapter 96

13 of title 18 and the Federal civil rights laws (in14 cluding sections 1977 through 1980 of the Re15 vised Statutes) that results from the debtor’s

16 actual, attempted, or alleged—

17 ‘‘(i) harassment of, intimidation of,

18 interference with, obstruction of, injury to,

19 threat to, or violence against any person—

20 ‘‘(I) because that person provides

21 or has provided health services;

22 ‘‘(II) because that person is or

23 has been obtaining health services; or

24 ‘‘(III) to deter that person, any

25 other person, or a class of persons
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1 from obtaining or providing health

2 services; or

3 ‘‘(ii) damage or destruction of prop4 erty of a health care facility; or

5 ‘‘(D) an actual or alleged violation of a

6 court order or injunction that protects access to

7 a health care facility or the provision of health

8 services.’’.

9 TITLE IV—GENERAL AND SMALL

10 BUSINESS BANKRUPTCY PRO11 VISIONS

12 Subtitle A—General Business

13 Bankruptcy Provisions

14 SEC. 401. ROLLING STOCK EQUIPMENT.

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

16 States Code, is amended to read as follows:

17 ‘‘§ 1168. Rolling stock equipment

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

19 interest in or of a lessor or conditional vendor of equip20 ment described in paragraph (2) to take possession of such

21 equipment in compliance with an equipment security

22 agreement, lease, or conditional sale contract, and to en23 force any of its other rights or remedies under such secu24 rity agreement, lease, or conditional sale contract, to sell,

25 lease, or otherwise retain or dispose of such equipment,
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1 is not limited or otherwise affected by any other provision

2 of this title or by any power of the court, except that the

3 right to take possession and enforce those other rights and

4 remedies shall be subject to section 362, if—

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

6 date of commencement of a case under this chapter,

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

8 perform all obligations of the debtor under such se9 curity agreement, lease, or conditional sale contract;

10 and

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

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

13 agreement, lease, or conditional sale contract that—

14 ‘‘(i) occurs before the date of commence15 ment of the case and is an event of default

16 therewith is cured before the expiration of such

17 60-day period;

18 ‘‘(ii) occurs or becomes an event of default

19 after the date of commencement of the case and

20 before the expiration of such 60-day period is

21 cured before the later of—

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

23 date of the default or event of the default;

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

2 period; and

3 ‘‘(iii) occurs on or after the expiration of

4 such 60-day period is cured in accordance with

5 the terms of such security agreement, lease, or

6 conditional sale contract, if cure is permitted

7 under that agreement, lease, or conditional sale

8 contract.

9 ‘‘(2) The equipment described in this paragraph—

10 ‘‘(A) is rolling stock equipment or accessories

11 used on rolling stock equipment, including super12 structures or racks, that is subject to a security in13 terest granted by, leased to, or conditionally sold to

14 a debtor; and

15 ‘‘(B) includes all records and documents relat16 ing to such equipment that are required, under the

17 terms of the security agreement, lease, or conditional

18 sale contract, to be surrendered or returned by the

19 debtor in connection with the surrender or return of

20 such equipment.

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

22 or conditional vendor acting in its own behalf or acting

23 as trustee or otherwise in behalf of another party.

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

25 conditional vendor whose right to take possession is pro-
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1 tected under subsection (a) may agree, subject to the

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

3 subsection (a)(1).

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

5 shall immediately surrender and return to a secured party,

6 lessor, or conditional vendor, described in subsection

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

8 time after the date of commencement of the case under

9 this chapter such secured party, lessor, or conditional ven10 dor is entitled under subsection (a)(1) to take possession

11 of such equipment and makes a written demand for such

12 possession of the trustee.

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

14 paragraph (1) to surrender and return equipment de15 scribed in subsection (a)(2), any lease of such equipment,

16 and any security agreement or conditional sale contract

17 relating to such equipment, if such security agreement or

18 conditional sale contract is an executory contract, shall be

19 deemed rejected.

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

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

22 section—

23 ‘‘(1) the term ‘lease’ includes any written agree24 ment with respect to which the lessor and the debt25 or, as lessee, have expressed in the agreement or in
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1 a substantially contemporaneous writing that the

2 agreement is to be treated as a lease for Federal in3 come tax purposes; and

4 ‘‘(2) the term ‘security interest’ means a pur5 chase-money equipment security interest.

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

7 after October 22, 1994, for purposes of this section, the

8 term ‘rolling stock equipment’ includes rolling stock equip9 ment that is substantially rebuilt and accessories used on

10 such equipment.’’.

11 (b) AIRCRAFT EQUIPMENT AND VESSELS.—Section

12 1110 of title 11, United States Code, is amended to read

13 as follows:

14 ‘‘§ 1110. Aircraft equipment and vessels

15 ‘‘(a)(1) Except as provided in paragraph (2) and sub16 ject to subsection (b), the right of a secured party with

17 a security interest in equipment described in paragraph

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

19 to take possession of such equipment in compliance with

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

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

22 such security agreement, lease, or conditional sale con23 tract, to sell, lease, or otherwise retain or dispose of such

24 equipment, is not limited or otherwise affected by any

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

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

3 be subject to section 362 if—

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

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

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

7 to perform all obligations of the debtor under such

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

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

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

12 agreement, lease, or conditional sale contract that

13 occurs—

14 ‘‘(i) before the date of the order is cured

15 before the expiration of such 60-day period;

16 ‘‘(ii) after the date of the order and before

17 the expiration of such 60-day period is cured

18 before the later of—

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

20 date of the default; or

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

22 period; and

23 ‘‘(iii) on or after the expiration of such 60-

24 day period is cured in compliance with the

25 terms of such security agreement, lease, or con-
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1 ditional sale contract, if a cure is permitted

2 under that agreement, lease, or contract.

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

4 ‘‘(A) is—

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

6 appliance, or spare part (as defined in section

7 40102 of title 49) that is subject to a security

8 interest granted by, leased to, or conditionally

9 sold to a debtor that, at the time such trans10 action is entered into, holds an air carrier oper11 ating certificate issued under chapter 447 of

12 title 49 for aircraft capable of carrying 10 or

13 more individuals or 6,000 pounds or more of

14 cargo; or

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

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

17 a security interest granted by, leased to, or con18 ditionally sold to a debtor that is a water car19 rier that, at the time such transaction is en20 tered into, holds a certificate of public conven21 ience and necessity or permit issued by the De22 partment of Transportation; and

23 ‘‘(B) includes all records and documents relat24 ing to such equipment that are required, under the

25 terms of the security agreement, lease, or conditional
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1 sale contract, to be surrendered or returned by the

2 debtor in connection with the surrender or return of

3 such equipment.

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

5 or conditional vendor acting in its own behalf or acting

6 as trustee or otherwise in behalf of another party.

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

8 conditional vendor whose right to take possession is pro9 tected under subsection (a) may agree, subject to the ap10 proval of the court, to extend the 60-day period specified

11 in subsection (a)(1).

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

13 shall immediately surrender and return to a secured party,

14 lessor, or conditional vendor, described in subsection

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

16 time after the date of the order for relief under this chap17 ter such secured party, lessor, or conditional vendor is en18 titled under subsection (a)(1) to take possession of such

19 equipment and makes a written demand for such posses20 sion to the trustee.

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

22 paragraph (1) to surrender and return equipment de23 scribed in subsection (a)(3), any lease of such equipment,

24 and any security agreement or conditional sale contract

25 relating to such equipment, if such security agreement or
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1 conditional sale contract is an executory contract, shall be

2 deemed rejected.

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

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

5 section—

6 ‘‘(1) the term ‘lease’ includes any written agree7 ment with respect to which the lessor and the debt8 or, as lessee, have expressed in the agreement or in

9 a substantially contemporaneous writing that the

10 agreement is to be treated as a lease for Federal in11 come tax purposes; and

12 ‘‘(2) the term ‘security interest’ means a pur13 chase-money equipment security interest.’’.

14 SEC. 402. ADEQUATE PROTECTION FOR INVESTORS.

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

16 States Code, as amended by section 306(c) of this Act,

17 is amended by inserting after paragraph (48) the fol18 lowing:

19 ‘‘(48A) ‘securities self regulatory organization’

20 means either a securities association registered with

21 the Securities and Exchange Commission under sec22 tion 15A of the Securities Exchange Act of 1934 (15

23 U.S.C. 78o–3) or a national securities exchange reg24 istered with the Securities and Exchange Commis-
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1 sion under section 6 of the Securities Exchange Act

2 of 1934 (15 U.S.C. 78f);’’.

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

4 United States Code, as amended by section 311 of this

5 Act, is amended—

6 (1) in paragraph (24), by striking ‘‘or’’ at the

7 end;

8 (2) in paragraph (25), by striking the period at

9 the end and inserting ‘‘; or’’; and

10 (3) by inserting after paragraph (25) the fol11 lowing:

12 ‘‘(26) under subsection (a), of—

13 ‘‘(A) the commencement or continuation of

14 an investigation or action by a securities self

15 regulatory organization to enforce such organi16 zation’s regulatory power;

17 ‘‘(B) the enforcement of an order or deci18 sion, other than for monetary sanctions, ob19 tained in an action by the securities self regu20 latory organization to enforce such organiza21 tion’s regulatory power; or

22 ‘‘(C) any act taken by the securities self

23 regulatory organization to delist, delete, or

24 refuse to permit quotation of any stock that
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1 does not meet applicable regulatory require2 ments.’’.

3 SEC. 403. MEETINGS OF CREDITORS AND EQUITY SECURITY

4 HOLDERS.

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

6 amended by adding at the end the following:

7 ‘‘(e) Notwithstanding subsections (a) and (b), the

8 court, on the request of a party in interest and after notice

9 and a hearing, for cause may order that the United States

10 trustee not convene a meeting of creditors or equity secu11 rity holders if the debtor has filed a plan as to which the

12 debtor solicited acceptances prior to the commencement

13 of the case.’’.

14 SEC. 404. PROTECTION OF REFINANCE OF SECURITY IN15 TEREST.

16 Subparagraphs (A), (B), and (C) of section 547(e)(2)

17 of title 11, United States Code, are each amended by strik18 ing ‘‘10’’ each place it appears and inserting ‘‘30’’.

19 SEC. 405. EXECUTORY CONTRACTS AND UNEXPIRED

20 LEASES.

21 Section 365(d)(4) of title 11, United States Code, is

22 amended to read as follows:

23 ‘‘(4)(A) Subject to subparagraph (B), in any case

24 under any chapter of this title, an unexpired lease of non25 residential real property under which the debtor is the les-
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1 see shall be deemed rejected and the trustee shall imme2 diately surrender that nonresidential real property to the

3 lessor if the trustee does not assume or reject the unex4 pired lease by the earlier of—

5 ‘‘(i) the date that is 120 days after the date of

6 the order for relief; or

7 ‘‘(ii) the date of the entry of an order con8 firming a plan.

9 ‘‘(B) The court may extend the period determined

10 under subparagraph (A) only upon a motion of the les11 sor.’’.

12 SEC. 406. CREDITORS AND EQUITY SECURITY HOLDERS

13 COMMITTEES.

14 (a) APPOINTMENT.—Section 1102(a)(2) of title 11,

15 United States Code, is amended by inserting before the

16 first sentence the following: ‘‘On its own motion or on re17 quest of a party in interest, and after notice and hearing,

18 the court may order a change in the membership of a com19 mittee appointed under this subsection, if the court deter20 mines that the change is necessary to ensure adequate rep21 resentation of creditors or equity security holders. The

22 court may increase the number of members of a committee

23 to include a creditor that is a small business concern (as

24 described in section 3(a)(1) of the Small Business Act (15

25 U.S.C. 632(a)(1))), if the court determines that the cred-
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1 itor holds claims (of the kind represented by the com2 mittee) the aggregate amount of which, in comparison to

3 the annual gross revenue of that creditor, is disproportion4 ately large.’’.

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

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

7 following:

8 ‘‘(3) A committee appointed under subsection (a)

9 shall—

10 ‘‘(A) provide access to information for creditors

11 who—

12 ‘‘(i) hold claims of the kind represented by

13 that committee; and

14 ‘‘(ii) are not appointed to the committee;

15 ‘‘(B) solicit and receive comments from the

16 creditors described in subparagraph (A); and

17 ‘‘(C) be subject to a court order that compels

18 any additional report or disclosure to be made to the

19 creditors described in subparagraph (A).’’.

20 SEC. 407. AMENDMENT TO SECTION 546 OF TITLE 11,

21 UNITED STATES CODE.

22 Section 546 of title 11, United States Code, is

23 amended—

24 (1) by redesignating the second subsection des25 ignated as subsection (g) (as added by section
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1 222(a) of Public Law 103–394) as subsection (i);

2 and

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

4 ‘‘(j)(1) Notwithstanding section 545 (2) and (3), the

5 trustee may not avoid a warehouseman’s lien for storage,

6 transportation or other costs incidental to the storage and

7 handling of goods.

8 ‘‘(2) The prohibition under paragraph (1) shall be ap9 plied in a manner consistent with any applicable State

10 statute that is similar to section 7–209 of the Uniform

11 Commercial Code.’’.

12 SEC. 408. LIMITATION.

13 Section 546(c)(1)(B) of title 11, United States Code,

14 is amended by striking ‘‘20’’ and inserting ‘‘45’’.

15 SEC. 409. AMENDMENT TO SECTION 330(a) OF TITLE 11,

16 UNITED STATES CODE.

17 Section 330(a)(3) of title 11, United States Code, is

18 amended—

19 (1) by striking ‘‘(A) the; and inserting ‘‘(i)

20 the’’;

21 (2) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’;

22 (3) by striking ‘‘(C)’’ and inserting ‘‘(iii)’’;

23 (4) by striking ‘‘(D)’’ and inserting ‘‘(iv)’’;

24 (5) by striking ‘‘(E)’’ and inserting ‘‘(v)’’;
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1 (6) in subparagraph (A), by inserting ‘‘to an

2 examiner, trustee under chapter 11, or professional

3 person’’ after ‘‘awarded’’; and

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

5 ‘‘(B) In determining the amount of reasonable com6 pensation to be awarded a trustee, the court shall treat

7 such compensation as a commission based on the results

8 achieved.’’.

9 SEC. 410. POSTPETITION DISCLOSURE AND SOLICITATION.

10 Section 1125 of title 11, United States Code, is

11 amended by adding at the end the following:

12 ‘‘(g) Notwithstanding subsection (b), an acceptance

13 or rejection of the plan may be solicited from a holder

14 of a claim or interest if such solicitation complies with ap15 plicable nonbankruptcy law and if such holder was solic16 ited before the commencement of the case in a manner

17 complying with applicable nonbankruptcy law.’’.

18 SEC. 411. PREFERENCES.

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

20 amended—

21 (1) by striking paragraph (2) and inserting the

22 following:

23 ‘‘(2) to the extent that such transfer was in

24 payment of a debt incurred by the debtor in the or-
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1 dinary course of business or financial affairs of the

2 debtor and the transferee, and such transfer was—

3 ‘‘(A) made in the ordinary course of busi4 ness or financial affairs of the debtor and the

5 transferee; or

6 ‘‘(B) made according to ordinary business

7 terms;’’;

8 (2) in paragraph (7) by striking ‘‘or’’ at the

9 end;

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

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

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

13 ‘‘(9) if, in a case filed by a debtor whose debts

14 are not primarily consumer debts, the aggregate

15 value of all property that constitutes or is affected

16 by such transfer is less than $5,000.’’.

17 SEC. 412. VENUE OF CERTAIN PROCEEDINGS.

18 Section 1409(b) of title 28, United States Code, is

19 amended by inserting ‘‘, or a nonconsumer debt against

20 a noninsider of less than $10,000,’’ after ‘‘$5,000’’.

21 SEC. 413. PERIOD FOR FILING PLAN UNDER CHAPTER 11.

22 Section 1121(d) of title 11, United States Code, is

23 amended—

24 (1) by striking ‘‘On’’ and inserting ‘‘(1) Subject

25 to paragraph (1), on’’; and
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1 (2) by adding at the end the following:

2 ‘‘(2)(A) The 120-day period specified in paragraph

3 (1) may not be extended beyond a date that is 18 months

4 after the date of the order for relief under this chapter.

5 ‘‘(B) The 180-day period specified in paragraph (1)

6 may not be extended beyond a date that is 20 months after

7 the date of the order for relief under this chapter.’’.

8 SEC. 414. FEES ARISING FROM CERTAIN OWNERSHIP IN9 TERESTS.

10 Section 523(a)(16) of title 11, United States Code,

11 is amended—

12 (1) by striking ‘‘dwelling’’ the first place it ap13 pears;

14 (2) by striking ‘‘ownership or’’ and inserting

15 ‘‘ownership,’’;

16 (3) by striking ‘‘housing’’ the first place it ap17 pears; and

18 (4) by striking ‘‘but only’’ and all that follows

19 through ‘‘but nothing in this paragraph’’ and insert20 ing ‘‘or a lot in a homeowners association, for as

21 long as the debtor or the trustee has a legal, equi22 table, or possessory ownership interest in such unit,

23 such corporation, or such lot, and until such time as

24 the debtor or trustee has surrendered any legal, eq25 uitable or possessory interest in such unit, such cor-
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1 poration, or such lot, but nothing in this para2 graph’’.

3 SEC. 415. CREDITOR REPRESENTATION AT FIRST MEETING

4 OF CREDITORS.

5 Section 341(c) of title 11, United States Code, is

6 amended by inserting after the first sentence the fol7 lowing: ‘‘Notwithstanding any local court rule, provision

8 of a State constitution, any other Federal or State law

9 that is not a bankruptcy law, or other requirement that

10 representation at the meeting of creditors under sub11 section (a) be by an attorney, a creditor holding a con12 sumer debt or any representative of the creditor (which

13 may include an entity or an employee of an entity and

14 may be a representative for more than 1 creditor) shall

15 be permitted to appear at and participate in the meeting

16 of creditors in a case under chapter 7 or 13, either alone

17 or in conjunction with an attorney for the creditor. Noth18 ing in this subsection shall be construed to require any

19 creditor to be represented by an attorney at any meeting

20 of creditors.’’.

21 SEC. 416. DEFINITION OF DISINTERESTED PERSON.

22 Section 101(14) of title 11, United States Code, is

23 amended to read as follows:

24 ‘‘(14) ‘disinterested person’ means a person

25 that—
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1 ‘‘(A) is not a creditor, an equity security

2 holder, or an insider;

3 ‘‘(B) is not and was not, within 2 years be4 fore the date of the filing of the petition, a di5 rector, officer, or employee of the debtor; and

6 ‘‘(C) does not have an interest materially

7 adverse to the interest of the estate or of any

8 class of creditors or equity security holders, by

9 reason of any direct or indirect relationship to,

10 connection with, or interest in, the debtor, or

11 for any other reason;’’.

12 SEC. 417. FACTORS FOR COMPENSATION OF PROFES13 SIONAL PERSONS.

14 Section 330(a)(3)(A) of title 11, United States Code,

15 as amended by section 409 of this Act, is amended—

16 (1) in clause (i), by striking ‘‘and’’ at the end;

17 (2) by redesignating clause (v) as clause (vi);

18 and

19 (3) by inserting after clause (iv) the following:

20 ‘‘(v) with respect to a professional person,

21 whether the person is board certified or otherwise

22 has demonstrated skill and experience in the bank23 ruptcy field;’’.
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1 SEC. 418. APPOINTMENT OF ELECTED TRUSTEE.

2 Section 1104(b) of title 11, United States Code, is

3 amended—

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

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

6 ‘‘(2)(A) If an eligible, disinterested trustee is elected

7 at a meeting of creditors under paragraph (1), the United

8 States trustee shall file a report certifying that election.

9 ‘‘(B) Upon the filing of a report under subparagraph

10 (A)—

11 ‘‘(i) the trustee elected under paragraph (1)

12 shall be considered to have been selected and ap13 pointed for purposes of this section; and

14 ‘‘(ii) the service of any trustee appointed under

15 subsection (d) shall terminate.

16 ‘‘(C) In the case of any dispute arising out of an elec17 tion described in subparagraph (A), the court shall resolve

18 the dispute.’’.

19 SEC. 419. UTILITY SERVICE.

20 Section 366 of title 11, United States Code, is

21 amended—

22 (1) in subsection (a), by striking ‘‘subsection

23 (b)’’ and inserting ‘‘subsections (b) and (c)’’; and

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

25 ‘‘(c)(1)(A) For purposes of this subsection, the term

26 ‘assurance of payment’ means—
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1 ‘‘(i) a cash deposit;

2 ‘‘(ii) a letter of credit;

3 ‘‘(iii) a certificate of deposit;

4 ‘‘(iv) a surety bond;

5 ‘‘(v) a prepayment of utility consumption; or

6 ‘‘(vi) another form of security that is mutually

7 agreed on between the utility and the debtor or the

8 trustee.

9 ‘‘(B) For purposes of this subsection an administra10 tive expense priority shall not constitute an assurance of

11 payment.

12 ‘‘(2) Subject to paragraphs (3) through (5), with re13 spect to a case filed under chapter 11, a utility referred

14 to in subsection (a) may alter, refuse, or discontinue util15 ity service, if during the 20-day period beginning on the

16 date of filing of the petition, the utility does not receive

17 from the debtor or the trustee adequate assurance of pay18 ment for utility service that is satisfactory to the utility.

19 ‘‘(3)(A) On request of a party in interest and after

20 notice and a hearing, the court may order modification

21 of the amount of an assurance of payment under para22 graph (2).

23 ‘‘(B) In making a determination under this para24 graph whether an assurance of payment is adequate, the

25 court may not consider—
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1 ‘‘(i) the absence of security before the date of

2 filing of the petition;

3 ‘‘(ii) the payment by the debtor of charges for

4 utility service in a timely manner before the date of

5 filing of the petition; or

6 ‘‘(iii) the availability of an administrative ex7 pense priority.

8 ‘‘(4) Notwithstanding any other provision of law, with

9 respect to a case subject to this subsection, a utility may

10 recover or set off against a security deposit provided to

11 the utility by the debtor before the date of filing of the

12 petition without notice or order of the court.’’.

13 SEC. 420. BANKRUPTCY FEES.

14 Section 1930 of title 28, United States Code, is

15 amended—

16 (1) in subsection (a), by striking ‘‘Notwith17 standing section 1915 of this title, the parties’’ and

18 inserting ‘‘Subject to subsection (f), the parties’’;

19 and

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

21 ‘‘(f)(1) The Judicial Conference of the United States

22 shall prescribe procedures for waiving fees under this sub23 section.

24 ‘‘(2) Under the procedures described in paragraph

25 (1), the district court or the bankruptcy court may waive
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1 a filing fee described in paragraph (3) for a case com2 menced under chapter 7 of title 11 if the court determines

3 that an individual debtor whose income is less than 125

4 percent of the income official poverty line (as defined by

5 the Office of Management and Budget, and revised annu6 ally in accordance with section 673(2) of the Omnibus

7 Budget Reconciliation Act of 1981) applicable to a family

8 of the size involved is unable to pay that fee in install9 ments.

10 ‘‘(3) A filing fee referred to in paragraph (2) is—

11 ‘‘(A) a filing fee under subsection (a)(1); or

12 ‘‘(B) any other fee prescribed by the Judicial

13 Conference of the United States under subsection

14 (b) that is payable to the clerk of the district court

15 or the clerk of the bankruptcy court upon the com16 mencement of a case under chapter 7 of title 11.

17 ‘‘(4) In addition to waiving a fee under paragraph

18 (2), the district court or the bankruptcy court may waive

19 any other fee prescribed under subsection (b) or (c) if the

20 court determines that the individual with an income at a

21 level described in paragraph (2) is unable to pay that fee

22 in installments.’’.

23 SEC. 421. MORE COMPLETE INFORMATION REGARDING AS24 SETS OF THE ESTATE.

25 (a) IN GENERAL.—
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1 (1) DISCLOSURE.—The Advisory Committee on

2 Bankruptcy Rules of the Judicial Conference of the

3 United States, after consideration of the views of the

4 Director of the Executive Office for the United

5 States Trustees, shall propose for adoption amended

6 Federal Rules of Bankruptcy Procedure and Official

7 Bankruptcy Forms directing debtors under chapter

8 11 of title 11, United States Code, to disclose the

9 information described in paragraph (2) by filing and

10 serving periodic financial and other reports designed

11 to provide such information.

12 (2) INFORMATION.—The information referred

13 to in paragraph (1) is the value, operations, and

14 profitability of any closely held corporation, partner15 ship, or of any other entity in which the debtor holds

16 a substantial or controlling interest.

17 (b) PURPOSE.—The purpose of the rules and reports

18 under subsection (a) shall be to assist parties in interest

19 taking steps to ensure that the debtor’s interest in any

20 entity referred to in subsection (a)(2) is used for the pay21 ment of allowed claims against debtor.
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1 Subtitle B—Small Business

2 Bankruptcy Provisions

3 SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT

4 AND PLAN.

5 Section 1125 of title 11, United States Code, is

6 amended by striking subsection (f) and inserting the fol7 lowing:

8 ‘‘(f) Notwithstanding subsection (b), in a small busi9 ness case—

10 ‘‘(1) in determining whether a disclosure state11 ment provides adequate information, the court shall

12 consider the complexity of the case, the benefit of

13 additional information to creditors and other parties

14 in interest, and the cost of providing additional in15 formation;

16 ‘‘(2) the court may determine that the plan

17 itself provides adequate information and that a sepa18 rate disclosure statement is not necessary;

19 ‘‘(3) the court may approve a disclosure state20 ment submitted on standard forms approved by the

21 court or adopted under section 2075 of title 28; and

22 ‘‘(4)(A) the court may conditionally approve a

23 disclosure statement subject to final approval after

24 notice and a hearing;
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1 ‘‘(B) acceptances and rejections of a plan may

2 be solicited based on a conditionally approved disclo3 sure statement if the debtor provides adequate infor4 mation to each holder of a claim or interest that is

5 solicited, but a conditionally approved disclosure

6 statement shall be mailed not later than 20 days be7 fore the date of the hearing on confirmation of the

8 plan; and

9 ‘‘(C) the hearing on the disclosure statement

10 may be combined with the hearing on confirmation

11 of a plan.’’.

12 SEC. 432. DEFINITIONS; EFFECT OF DISCHARGE.

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

14 States Code, as amended by section 402 of this Act, is

15 amended by striking paragraph (51C) and inserting the

16 following:

17 ‘‘(51C) ‘small business case’ means a case filed

18 under chapter 11 of this title in which the debtor is

19 a small business debtor;

20 ‘‘(51D) ‘small business debtor’—

21 ‘‘(A) subject to subparagraph (B), means a

22 person (including any affiliate of such person

23 that is also a debtor under this title and exclud24 ing a person whose primary activity is the busi25 ness of owning and operating real property and
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1 activities incidental thereto) that has aggregate

2 noncontingent, liquidated secured and unse3 cured debts as of the date of the petition or the

4 order for relief in an amount not more than

5 $3,000,000 (excluding debts owed to 1 or more

6 affiliates or insiders) for a case in which the

7 United States trustee has appointed under sec8 tion 1102(a)(1) a committee of unsecured credi9 tors that the court has determined is suffi10 ciently active and representative to provide ef11 fective oversight of the debtor; and

12 ‘‘(B) does not include any member of a

13 group of affiliated debtors that has aggregate

14 noncontingent liquidated secured and unsecured

15 debts in an amount greater than $4,000,000

16 (excluding debt owed to 1 or more affiliates or

17 insiders);’’.

18 (b) CONFORMING AMENDMENT.—Section 1102(a)(3)

19 of title 11, United States Code, is amended by inserting

20 ‘‘debtor’’ after ‘‘small business’’.

21 SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND

22 PLAN.

23 Within a reasonable period of time after the date of

24 the enactment of this Act, the Advisory Committee on

25 Bankruptcy Rules of the Judicial Conference of the
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1 United States shall propose for adoption standard form

2 disclosure statements and plans of reorganization for

3 small business debtors (as defined in section 101 of title

4 11, United States Code, as amended by this Act), designed

5 to achieve a practical balance between—

6 (1) the reasonable needs of the courts, the

7 United States trustee, creditors, and other parties in

8 interest for reasonably complete information; and

9 (2) economy and simplicity for debtors.

10 SEC. 434. UNIFORM NATIONAL REPORTING REQUIRE11 MENTS.

12 (a) REPORTING REQUIRED.—

13 (1) IN GENERAL.—Chapter 3 of title 11, United

14 States Code, is amended by inserting after section

15 307 the following:

16 ‘‘§ 308. Debtor reporting requirements

17 ‘‘(1) For purposes of this section, the term ‘profit18 ability’ means, with respect to a debtor, the amount of

19 money that the debtor has earned or lost during current

20 and recent fiscal periods.

21 ‘‘(2) A small business debtor shall file periodic finan22 cial and other reports containing information including—

23 ‘‘(A) the debtor’s profitability;
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1 ‘‘(B) reasonable approximations of the debtor’s

2 projected cash receipts and cash disbursements over

3 a reasonable period;

4 ‘‘(C) comparisons of actual cash receipts and

5 disbursements with projections in prior reports;

6 ‘‘(D)(i) whether the debtor is—

7 ‘‘(I) in compliance in all material respects

8 with postpetition requirements imposed by this

9 title and the Federal Rules of Bankruptcy Pro10 cedure; and

11 ‘‘(II) timely filing tax returns and other re12 quired government filings and paying taxes and

13 other administrative claims when due; and

14 ‘‘(ii) if the debtor is not in compliance with the

15 requirements referred to in clause (i)(I) or filing tax

16 returns and other required government filings and

17 making the payments referred to in clause (i)(II),

18 what the failures are and how, at what cost, and

19 when the debtor intends to remedy such failures;

20 and

21 ‘‘(iii) such other matters as are in the best in22 terests of the debtor and creditors, and in the public

23 interest in fair and efficient procedures under chap24 ter 11 of this title.’’.
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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for chapter 3 of title 11, United States Code,

3 is amended by inserting after the item relating to

4 section 307 the following:

‘‘308. Debtor reporting requirements.’’.

5 (b) EFFECTIVE DATE.—The amendments made by

6 subsection (a) shall take effect 60 days after the date on

7 which rules are prescribed under section 2075 of title 28,

8 United States Code, to establish forms to be used to com9 ply with section 308 of title 11, United States Code, as

10 added by subsection (a).

11 SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR

12 SMALL BUSINESS CASES.

13 (a) PROPOSAL OF RULES AND FORMS.—The Advi14 sory Committee on Bankruptcy Rules of the Judicial Con15 ference of the United States shall propose for adoption

16 amended Federal Rules of Bankruptcy Procedure and Of17 ficial Bankruptcy Forms to be used by small business

18 debtors to file periodic financial and other reports con19 taining information, including information relating to—

20 (1) the debtor’s profitability;

21 (2) the debtor’s cash receipts and disburse22 ments; and

23 (3) whether the debtor is timely filing tax re24 turns and paying taxes and other administrative

25 claims when due.
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1 (b) PURPOSE.—The rules and forms proposed under

2 subsection (a) shall be designed to achieve a practical bal3 ance among—

4 (1) the reasonable needs of the bankruptcy

5 court, the United States trustee, creditors, and other

6 parties in interest for reasonably complete informa7 tion;

8 (2) the small business debtor’s interest that re9 quired reports be easy and inexpensive to complete;

10 and

11 (3) the interest of all parties that the required

12 reports help the small business debtor to understand

13 the small business debtor’s financial condition and

14 plan the small business debtor’s future.

15 SEC. 436. DUTIES IN SMALL BUSINESS CASES.

16 (a) DUTIES IN CHAPTER 11 CASES.—Subchapter I

17 of title 11, United States Code, as amended by section

18 321 of this Act, is amended by adding at the end the fol19 lowing:

20 ‘‘§ 1116. Duties of trustee or debtor in possession in

21 small business cases

22 ‘‘In a small business case, a trustee or the debtor in

23 possession, in addition to the duties provided in this title

24 and as otherwise required by law, shall—
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1 ‘‘(1) append to the voluntary petition or, in an

2 involuntary case, file within 7 days after the date of

3 the order for relief—

4 ‘‘(A) its most recent balance sheet, state5 ment of operations, cash-flow statement, Fed6 eral income tax return; or

7 ‘‘(B) a statement made under penalty of

8 perjury that no balance sheet, statement of op9 erations, or cash-flow statement has been pre10 pared and no Federal tax return has been filed;

11 ‘‘(2) attend, through its senior management

12 personnel and counsel, meetings scheduled by the

13 court or the United States trustee, including initial

14 debtor interviews, scheduling conferences, and meet15 ings of creditors convened under section 341 unless

16 the court waives that requirement after notice and

17 hearing, upon a finding of extraordinary and com18 pelling circumstances;

19 ‘‘(3) timely file all schedules and statements of

20 financial affairs, unless the court, after notice and a

21 hearing, grants an extension, which shall not extend

22 such time period to a date later than 30 days after

23 the date of the order for relief, absent extraordinary

24 and compelling circumstances;
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1 ‘‘(4) file all postpetition financial and other re2 ports required by the Federal Rules of Bankruptcy

3 Procedure or by local rule of the district court;

4 ‘‘(5) subject to section 363(c)(2), maintain in5 surance customary and appropriate to the industry;

6 ‘‘(6)(A) timely file tax returns and other re7 quired government filings; and

8 ‘‘(B) subject to section 363(c)(2), timely pay all

9 administrative expense tax claims, except those

10 being contested by appropriate proceedings being

11 diligently prosecuted; and

12 ‘‘(7) allow the United States trustee, or a des13 ignated representative of the United States trustee,

14 to inspect the debtor’s business premises, books, and

15 records at reasonable times, after reasonable prior

16 written notice, unless notice is waived by the debt17 or.’’.

18 (b) CLERICAL AMENDMENT.—The table of sections

19 for chapter 11 of title 11, United States Code, is amended

20 by adding at the end of the matter relating to subchapter

21 I the following:

‘‘1116. Duties of trustee or debtor in possession in small business cases.’’.

22 SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

23 Section 1121 of title 11, United States Code, is

24 amended by striking subsection (e) and inserting the fol25 lowing:
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1 ‘‘(e) In a small business case—

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

3 180 days after the date of the order for relief, unless

4 that period is—

5 ‘‘(A) extended as provided by this sub6 section, after notice and hearing; or

7 ‘‘(B) the court, for cause, orders otherwise;

8 ‘‘(2) the plan, and any necessary disclosure

9 statement, shall be filed not later than 300 days

10 after the date of the order for relief; and

11 ‘‘(3) the time periods specified in paragraphs

12 (1) and (2), and the time fixed in section 1129(e),

13 within which the plan shall be confirmed, may be ex14 tended only if—

15 ‘‘(A) the debtor, after providing notice to

16 parties in interest (including the United States

17 trustee), demonstrates by a preponderance of

18 the evidence that it is more likely than not that

19 the court will confirm a plan within a reason20 able period of time;

21 ‘‘(B) a new deadline is imposed at the time

22 the extension is granted; and

23 ‘‘(C) the order extending time is signed be24 fore the existing deadline has expired.’’.
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1 SEC. 438. PLAN CONFIRMATION DEADLINE.

2 Section 1129 of title 11, United States Code, is

3 amended by adding at the end the following:

4 ‘‘(e) In a small business case, the plan shall be con5 firmed not later than 175 days after the date of the order

6 for relief, unless such 175-day period is extended as pro7 vided in section 1121(e)(3).’’.

8 SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.

9 Section 586(a) of title 28, United States Code, is

10 amended—

11 (1) in paragraph (3)—

12 (A) in subparagraph (G), by striking

13 ‘‘and’’ at the end;

14 (B) by redesignating subparagraph (H) as

15 subparagraph (I); and

16 (C) by inserting after subparagraph (G)

17 the following:

18 ‘‘(H) in small business cases (as defined in

19 section 101 of title 11), performing the addi20 tional duties specified in title 11 pertaining to

21 such cases;’’;

22 (2) in paragraph (5), by striking ‘‘and’’ at the

23 end;

24 (3) in paragraph (6), by striking the period at

25 the end and inserting ‘‘; and’’; and
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1 (4) by inserting after paragraph (6) the fol2 lowing:

3 ‘‘(7) in each of such small business cases—

4 ‘‘(A) conduct an initial debtor interview as

5 soon as practicable after the entry of order for

6 relief but before the first meeting scheduled

7 under section 341(a) of title 11, at which time

8 the United States trustee shall—

9 ‘‘(i) begin to investigate the debtor’s

10 viability;

11 ‘‘(ii) inquire about the debtor’s busi12 ness plan;

13 ‘‘(iii) explain the debtor’s obligations

14 to file monthly operating reports and other

15 required reports;

16 ‘‘(iv) attempt to develop an agreed

17 scheduling order; and

18 ‘‘(v) inform the debtor of other obliga19 tions;

20 ‘‘(B) if determined to be appropriate and

21 advisable, visit the appropriate business prem22 ises of the debtor and ascertain the state of the

23 debtor’s books and records and verify that the

24 debtor has filed its tax returns; and
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1 ‘‘(C) review and monitor diligently the

2 debtor’s activities, to identify as promptly as

3 possible whether the debtor will be unable to

4 confirm a plan; and

5 ‘‘(8) in any case in which the United States

6 trustee finds material grounds for any relief under

7 section 1112 of title 11, the United States trustee

8 shall apply promptly after making that finding to

9 the court for relief.’’.

10 SEC. 440. SCHEDULING CONFERENCES.

11 Section 105(d) of title 11, United States Code, is

12 amended—

13 (1) in the matter preceding paragraph (1), by

14 striking ‘‘, may’’;

15 (2) by striking paragraph (1) and inserting the

16 following:

17 ‘‘(1) shall hold such status conferences as are

18 necessary to further the expeditious and economical

19 resolution of the case; and’’; and

20 (3) in paragraph (2), by striking ‘‘unless incon21 sistent with another provision of this title or with

22 applicable Federal Rules of Bankruptcy Procedure,’’.

23 SEC. 441. SERIAL FILER PROVISIONS.

24 Section 362 of title 11, United States Code, is

25 amended—
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1 (1) in subsection (j), as redesignated by section

2 305(1) of this Act—

3 (A) by striking ‘‘An’’ and inserting ‘‘(1)

4 Except as provided in paragraph (2), an’’; and

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

6 ‘‘(2) If such violation is based on an action taken by

7 an entity in the good faith belief that subsection (h) ap8 plies to the debtor, the recovery under paragraph (1)

9 against such entity shall be limited to actual damages.’’;

10 and

11 (2) by inserting after subsection (j) the fol12 lowing:

13 ‘‘(k)(1) Except as provided in paragraph (2), the fil14 ing of a petition under chapter 11 operates as a stay of

15 the acts described in subsection (a) only in an involuntary

16 case involving no collusion by the debtor with creditors

17 and in which the debtor—

18 ‘‘(A) is a debtor in a small business case pend19 ing at the time the petition is filed;

20 ‘‘(B) was a debtor in a small business case that

21 was dismissed for any reason by an order that be22 came final in the 2-year period ending on the date

23 of the order for relief entered with respect to the pe24 tition;
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1 ‘‘(C) was a debtor in a small business case in

2 which a plan was confirmed in the 2-year period

3 ending on the date of the order for relief entered

4 with respect to the petition; or

5 ‘‘(D) is an entity that has succeeded to sub6 stantially all of the assets or business of a small

7 business debtor described in subparagraph (A), (B),

8 or (C).

9 ‘‘(2) Paragraph (1) does not apply to the filing of

10 a petition if the debtor proves by a preponderance of the

11 evidence that—

12 ‘‘(A) the filing of that petition resulted from

13 circumstances beyond the control of the debtor not

14 foreseeable at the time the case then pending was

15 filed; and

16 ‘‘(B) it is more likely than not that the court

17 will confirm a feasible plan, but not a liquidating

18 plan, within a reasonable period of time.’’.

19 SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON20 VERSION AND APPOINTMENT OF TRUSTEE.

21 (a) EXPANDED GROUNDS FOR DISMISSAL OR CON22 VERSION.—Section 1112 of title 11, United States Code,

23 is amended by striking subsection (b) and inserting the

24 following:
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1 ‘‘(b)(1) Except as provided in paragraph (2), in sub2 section (c), and section 1104(a)(3), on request of a party

3 in interest, and after notice and a hearing, the court shall

4 convert a case under this chapter to a case under chapter

5 7 or dismiss a case under this chapter, whichever is in

6 the best interest of creditors and the estate, if the movant

7 establishes cause.

8 ‘‘(2) The relief provided in paragraph (1) shall not

9 be granted if the debtor or another party in interest ob10 jects and establishes by a preponderance of the evidence

11 that—

12 ‘‘(A) a plan with a reasonable possibility of

13 being confirmed will be filed within a reasonable pe14 riod of time; and

15 ‘‘(B) if the grounds include an act or omission

16 of the debtor—

17 ‘‘(i) for which there exists a reasonable

18 justification for the act or omission; and

19 ‘‘(ii) which will be cured within a reason20 able period of time fixed by the court.

21 ‘‘(3) The court shall commence the hearing on any

22 motion under this subsection not later than 30 days after

23 filing of the motion, and shall decide the motion within

24 15 days after commencement of the hearing, unless the

25 movant expressly consents to a continuance for a specific
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1 period of time or compelling circumstances prevent the

2 court from meeting the time limits established by this

3 paragraph.

4 ‘‘(4) For purposes of this subsection, cause

5 includes—

6 ‘‘(A) substantial or continuing loss to or dimi7 nution of the estate;

8 ‘‘(B) gross mismanagement of the estate;

9 ‘‘(C) failure to maintain appropriate insurance

10 that poses a risk to the estate or to the public;

11 ‘‘(D) unauthorized use of cash collateral harm12 ful to 1 or more creditors;

13 ‘‘(E) failure to comply with an order of the

14 court;

15 ‘‘(F) repeated failure timely to satisfy any filing

16 or reporting requirement established by this title or

17 by any rule applicable to a case under this chapter;

18 ‘‘(G) failure to attend the meeting of creditors

19 convened under section 341(a) or an examination or20 dered under Rule 2004 of the Federal Rules of

21 Bankruptcy Procedure;

22 ‘‘(H) failure timely to provide information or

23 attend meetings reasonably requested by the United

24 States trustee;
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1 ‘‘(I) failure timely to pay taxes due after the

2 date of the order for relief or to file tax returns due

3 after the order for relief;

4 ‘‘(J) failure to file a disclosure statement, or to

5 file or confirm a plan, within the time fixed by this

6 title or by order of the court;

7 ‘‘(K) failure to pay any fees or charges required

8 under chapter 123 of title 28;

9 ‘‘(L) revocation of an order of confirmation

10 under section 1144;

11 ‘‘(M) inability to effectuate substantial con12 summation of a confirmed plan;

13 ‘‘(N) material default by the debtor with re14 spect to a confirmed plan;

15 ‘‘(O) termination of a confirmed plan by reason

16 of the occurrence of a condition specified in the plan;

17 and

18 ‘‘(P) failure of the debtor to pay any domestic

19 support obligation that first becomes payable after

20 the date on which the petition is filed.

21 ‘‘(5) The court shall commence the hearing on any

22 motion under this subsection not later than 30 days after

23 filing of the motion, and shall decide the motion within

24 15 days after commencement of the hearing, unless the

25 movant expressly consents to a continuance for a specific
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1 period of time or compelling circumstances prevent the

2 court from meeting the time limits established by this

3 paragraph.’’.

4 (b) ADDITIONAL GROUNDS FOR APPOINTMENT OF

5 TRUSTEE.—Section 1104(a) of title 11, United States

6 Code, is amended—

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

8 end;

9 (2) in paragraph (2), by striking the period at

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

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

12 ‘‘(3) if grounds exist to convert or dismiss the

13 case under section 1112, but the court determines

14 that the appointment of a trustee or an examiner is

15 in the best interests of creditors and the estate.’’.

16 SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED

17 STATES CODE, WITH RESPECT TO SMALL

18 BUSINESSES.

19 Not later than 2 years after the date of the enact20 ment of this Act, the Administrator of the Small Business

21 Administration, in consultation with the Attorney General

22 of the United States, the Director of the Administrative

23 Office of United States Trustees, and the Director of the

24 Administrative Office of the United States Courts, shall—

25 (1) conduct a study to determine—
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1 (A) the internal and external factors that

2 cause small businesses, especially sole propri3 etorships, to become debtors in cases under title

4 11, United States Code, and that cause certain

5 small businesses to successfully complete cases

6 under chapter 11 of such title; and

7 (B) how Federal laws relating to bank8 ruptcy may be made more effective and efficient

9 in assisting small businesses to remain viable;

10 and

11 (2) submit to the President pro tempore of the

12 Senate and the Speaker of the House of Representa13 tives a report summarizing that study.

14 SEC. 444. PAYMENT OF INTEREST.

15 Section 362(d)(3) of title 11, United States Code, is

16 amended—

17 (1) by inserting ‘‘or 30 days after the court de18 termines that the debtor is subject to this para19 graph, whichever is later’’ after ‘‘90-day period)’’;

20 and

21 (2) by striking subparagraph (B) and inserting

22 the following:

23 ‘‘(B) the debtor has commenced monthly

24 payments that—
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1 ‘‘(i) may, in the debtor’s sole discre2 tion, notwithstanding section 363(c)(2), be

3 made from rents or other income generated

4 before or after the commencement of the

5 case by or from the property to each cred6 itor whose claim is secured by such real es7 tate (other than a claim secured by a judg8 ment lien or by an unmatured statutory

9 lien); and

10 ‘‘(ii) are in an amount equal to inter11 est at the then applicable nondefault con12 tract rate of interest on the value of the

13 creditor’s interest in the real estate; or’’.

14 SEC. 445. TECHNICAL CORRECTION.

15 Section 365(b)(2)(D) of title 11, United States Code,

16 is amended by striking ‘‘penalty rate or provision’’ and

17 inserting ‘‘penalty rate or penalty provision’’.

18 TITLE V—MUNICIPAL

19 BANKRUPTCY PROVISIONS

20 SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI21 TION.

22 (a) TECHNICAL AMENDMENT RELATING TO MUNICI23 PALITIES.—Section 921(d) of title 11, United States

24 Code, is amended by inserting ‘‘, notwithstanding section

25 301(b)’’ before the period at the end.
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1 (b) CONFORMING AMENDMENT.—Section 301 of title

2 11, United States Code, is amended—

3 (1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;

4 (2) by striking the last sentence; and

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

6 ‘‘(b) The commencement of a voluntary case under

7 a chapter of this title constitutes an order for relief under

8 such chapter.’’.

9 SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP10 TER 9.

11 Section 901(a) of title 11, United States Code, is

12 amended—

13 (1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and

14 (2) by inserting ‘‘559, 560,’’ after ‘‘557,’’.

15 TITLE VI—IMPROVED BANK16 RUPTCY STATISTICS AND

17 DATA

18 SEC. 601. AUDIT PROCEDURES.

19 (a) AMENDMENTS.—Section 586 of title 28, United

20 States Code, is amended—

21 (1) in subsection (a), by striking paragraph (6)

22 and inserting the following:

23 ‘‘(6) make such reports as the Attorney General

24 directs, including the results of audits performed

25 under subsection (f); and’’; and
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1 (2) by adding at the end the following:

2 ‘‘(f)(1)(A) The Attorney General shall establish pro3 cedures to determine the accuracy, veracity, and complete4 ness of petitions, schedules, and other information which

5 the debtor is required to provide under sections 521 and

6 1322 of title 11, and, if applicable, section 111 of title

7 11, in individual cases filed under chapter 7 or 13 of such

8 title.

9 ‘‘(B) Those procedures shall—

10 ‘‘(i) establish a method of selecting appropriate

11 qualified persons to contract to perform those au12 dits;

13 ‘‘(ii) establish a method of randomly selecting

14 cases to be audited, except that not less than 1 out

15 of every 250 cases in each Federal judicial district

16 shall be selected for audit;

17 ‘‘(iii) require audits for schedules of income and

18 expenses which reflect greater than average

19 variances from the statistical norm of the district in

20 which the schedules were filed if those variances

21 occur by reason of higher income or higher expenses

22 than the statistical norm of the district in which the

23 schedules were filed; and

24 ‘‘(iv) include procedures for providing, not less

25 frequently than annually, public information con-
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1 cerning the aggregate results of the audits referred

2 to in this subparagraph, including the percentage of

3 cases, by district, in which a material misstatement

4 of income or expenditures is reported.

5 ‘‘(2) The United States trustee for each district may

6 contract with auditors to perform audits in cases des7 ignated by the United States trustee according to the pro8 cedures established under paragraph (1).

9 ‘‘(3)(A) The report of each audit conducted under

10 this subsection shall be filed with the court and trans11 mitted to the United States trustee. Each report shall

12 clearly and conspicuously specify any material

13 misstatement of income or expenditures or of assets iden14 tified by the person performing the audit. In any case

15 where a material misstatement of income or expenditures

16 or of assets has been reported, the clerk of the bankruptcy

17 court shall give notice of the misstatement to the creditors

18 in the case.

19 ‘‘(B) If a material misstatement of income or expend20 itures or of assets is reported, the United States trustee

21 shall—

22 ‘‘(i) report the material misstatement, if appro23 priate, to the United States Attorney under section

24 3057 of title 18; and
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1 ‘‘(ii) if advisable, take appropriate action, in2 cluding commencing an adversary proceeding to re3 voke the debtor’s discharge under section 727(d) of

4 title 11.’’.

5 (b) AMENDMENTS TO SECTION 521 OF TITLE 11,

6 UNITED STATES CODE.—Paragraphs (3) and (4) of sec7 tion 521(a) of title 11, United States Code, as amended

8 by section 315 of this Act, are each amended by inserting

9 ‘‘or an auditor appointed under section 586 of title 28’’

10 after ‘‘serving in the case’’ each place that term appears.

11 (c) AMENDMENTS TO SECTION 727 OF TITLE 11,

12 UNITED STATES CODE.—Section 727(d) of title 11,

13 United States Code, is amended—

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

15 end;

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

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

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

19 ‘‘(4) the debtor has failed to explain

20 satisfactorily—

21 ‘‘(A) a material misstatement in an audit

22 performed under section 586(f) of title 28; or

23 ‘‘(B) a failure to make available for inspec24 tion all necessary accounts, papers, documents,

25 financial records, files, and any other papers,
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1 things, or property belonging to the debtor that

2 are requested for an audit conducted under sec3 tion 586(f).’’.

4 (d) EFFECTIVE DATE.—The amendments made by

5 this section shall take effect 18 months after the date of

6 enactment of this Act.

7 SEC. 602. IMPROVED BANKRUPTCY STATISTICS.

8 (a) AMENDMENT.—Chapter 6 of title 28, United

9 States Code, is amended by adding at the end the fol10 lowing:

11 ‘‘§ 159. Bankruptcy statistics

12 ‘‘(a) The clerk of each district court shall compile sta13 tistics regarding individual debtors with primarily con14 sumer debts seeking relief under chapters 7, 11, and 13

15 of title 11. Those statistics shall be in a form prescribed

16 by the Director of the Administrative Office of the United

17 States Courts (referred to in this section as the ‘Office’).

18 ‘‘(b) The Director shall—

19 ‘‘(1) compile the statistics referred to in sub20 section (a);

21 ‘‘(2) make the statistics available to the public;

22 and

23 ‘‘(3) not later than October 31, 1999, and an24 nually thereafter, prepare, and submit to Congress a

25 report concerning the information collected under
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1 subsection (a) that contains an analysis of the infor2 mation.

3 ‘‘(c) The compilation required under subsection (b)

4 shall—

5 ‘‘(1) be itemized, by chapter, with respect to

6 title 11;

7 ‘‘(2) be presented in the aggregate and for each

8 district; and

9 ‘‘(3) include information concerning—

10 ‘‘(A) the total assets and total liabilities of

11 the debtors described in subsection (a), and in

12 each category of assets and liabilities, as re13 ported in the schedules prescribed under section

14 2075 and filed by those debtors;

15 ‘‘(B) the total current monthly income,

16 projected monthly net income, and average in17 come, and average expenses of those debtors as

18 reported on the schedules and statements that

19 each such debtor files under sections 111, 521,

20 and 1322 of title 11;

21 ‘‘(C) the aggregate amount of debt dis22 charged in the reporting period, determined as

23 the difference between the total amount of debt

24 and obligations of a debtor reported on the

25 schedules and the amount of such debt reported
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1 in categories which are predominantly non2 dischargeable;

3 ‘‘(D) the average period of time between

4 the filing of the petition and the closing of the

5 case;

6 ‘‘(E) for the reporting period—

7 ‘‘(i) the number of cases in which a

8 reaffirmation was filed; and

9 ‘‘(ii)(I) the total number of reaffirma10 tions filed;

11 ‘‘(II) of those cases in which a reaffir12 mation was filed, the number in which the

13 debtor was not represented by an attorney;

14 and

15 ‘‘(III) of the cases under each of sub16 clauses (I) and (II), the number of cases in

17 which the reaffirmation was approved by

18 the court;

19 ‘‘(F) with respect to cases filed under

20 chapter 13 of title 11, for the reporting

21 period—

22 ‘‘(i)(I) the number of cases in which a

23 final order was entered determining the

24 value of property securing a claim in an
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1 amount less than the amount of the claim;

2 and

3 ‘‘(II) the number of final orders deter4 mining the value of property securing a

5 claim issued;

6 ‘‘(ii) the number of cases dismissed

7 for failure to make payments under the

8 plan; and

9 ‘‘(iii) the number of cases in which

10 the debtor filed another case during the 6-

11 year period preceding the date of filing;

12 ‘‘(G) the number of cases in which credi13 tors were fined for misconduct and any amount

14 of punitive damages awarded by the court for

15 creditor misconduct; and

16 ‘‘(H) the number of cases in which sanc17 tions under Rule 9011 of the Federal Rules of

18 Bankruptcy Procedure were imposed against

19 debtor’s counsel and damages awarded under

20 such rule.’’.

21 (b) CLERICAL AMENDMENT.—The table of sections

22 for chapter 6 of title 28, United States Code, is amended

23 by adding at the end the following:

‘‘159. Bankruptcy statistics.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect 18 months after the date of

3 enactment of this Act.

4 SEC. 603. UNIFORM RULES FOR THE COLLECTION OF BANK5 RUPTCY DATA.

6 (a) AMENDMENT.—Chapter 39 of title 28, United

7 States Code, is amended by inserting after section 589a

8 the following:

9 ‘‘§ 589b. Bankruptcy data

10 ‘‘(a) Within a reasonable period of time after the ef11 fective date of this section, the Attorney General of the

12 United States shall issue rules requiring uniform forms

13 for (and from time to time thereafter to appropriately

14 modify and approve)—

15 ‘‘(1) final reports by trustees in cases under

16 chapters 7, 12, and 13 of title 11; and

17 ‘‘(2) periodic reports by debtors in possession or

18 trustees, as the case may be, in cases under chapter

19 11 of title 11.

20 ‘‘(b) Each report referred to in subsection (a) shall

21 be designed (and the requirements as to place and manner

22 of filing shall be established) so as to facilitate compilation

23 of data and maximum practicable access of the public,

24 by—
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1 ‘‘(1) physical inspection at 1 or more central fil2 ing locations; and

3 ‘‘(2) electronic access through the Internet or

4 other appropriate media.

5 ‘‘(c)(1) The information required to be filed in the

6 reports referred to in subsection (b) shall be information

7 that is—

8 ‘‘(A) in the best interests of debtors and credi9 tors, and in the public interest; and

10 ‘‘(B) reasonable and adequate information to

11 evaluate the efficiency and practicality of the Fed12 eral bankruptcy system.

13 ‘‘(2) In issuing rules proposing the forms referred to

14 in subsection (a), the Attorney General shall strike the

15 best achievable practical balance between—

16 ‘‘(A) the reasonable needs of the public for in17 formation about the operational results of the Fed18 eral bankruptcy system; and

19 ‘‘(B) economy, simplicity, and lack of undue

20 burden on persons with a duty to file reports.

21 ‘‘(d)(1) Final reports proposed for adoption by trust22 ees under chapters 7, 12, and 13 of title 11 shall include

23 with respect to a case under such title, by appropriate

24 category—
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1 ‘‘(A) information about the length of time the

2 case was pending;

3 ‘‘(B) assets abandoned;

4 ‘‘(C) assets exempted;

5 ‘‘(D) receipts and disbursements of the estate;

6 ‘‘(E) expenses of administration;

7 ‘‘(F) claims asserted;

8 ‘‘(G) claims allowed; and

9 ‘‘(H) distributions to claimants and claims dis10 charged without payment.

11 ‘‘(2) In cases under chapters 12 and 13 of title 11,

12 final reports proposed for adoption by trustees shall

13 include—

14 ‘‘(A) the date of confirmation of the plan;

15 ‘‘(B) each modification to the plan; and

16 ‘‘(C) defaults by the debtor in performance

17 under the plan.

18 ‘‘(3) The information described in paragraphs (1)

19 and (2) shall be in addition to such other matters as are

20 required by law for a final report or as the Attorney Gen21 eral, in the discretion of the Attorney General, may pro22 pose for a final report.

23 ‘‘(e)(1) Periodic reports proposed for adoption by

24 trustees or debtors in possession under chapter 11 of title

25 11 shall include—
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1 ‘‘(A) information about the standard industry

2 classification, published by the Department of Com3 merce, for the businesses conducted by the debtor;

4 ‘‘(B) the length of time the case has been pend5 ing;

6 ‘‘(C) the number of full-time employees—

7 ‘‘(i) as of the date of the order for relief;

8 and

9 ‘‘(ii) at the end of each reporting period

10 since the case was filed;

11 ‘‘(D) cash receipts, cash disbursements, and

12 profitability of the debtor for the most recent period

13 and cumulatively since the date of the order for re14 lief;

15 ‘‘(E) compliance with title 11, whether or not

16 tax returns and tax payments since the date of the

17 order for relief have been timely filed and made;

18 ‘‘(F) all professional fees approved by the court

19 in the case for the most recent period and cumula20 tively since the date of the order for relief (sepa21 rately reported, for the professional fees incurred by

22 or on behalf of the debtor, between those that would

23 have been incurred absent a bankruptcy case and

24 those that would not have been so incurred); and
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1 ‘‘(G) plans of reorganization filed and con2 firmed and, with respect thereto, by class, the recov3 eries of the holders, expressed in aggregate dollar

4 values and, in the case of claims, as a percentage of

5 total claims of the class allowed.

6 ‘‘(2) The information described in paragraph (1)

7 shall be in addition to such other matters as are required

8 by law for a periodic report or as the Attorney General,

9 in the discretion of the Attorney General, may propose for

10 a periodic report.’’.

11 (b) TECHNICAL AMENDMENT.—The table of sections

12 for chapter 39 of title 28, United States Code, is amended

13 by adding at the end the following:

‘‘589b. Bankruptcy data.’’.

14 SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY

15 OF BANKRUPTCY DATA.

16 It is the sense of Congress that—

17 (1) it should be the national policy of the

18 United States that all data held by bankruptcy

19 clerks in electronic form, to the extent such data re20 flects only public records (as defined in section 107

21 of title 11, United States Code), should be released

22 in a usable electronic form in bulk to the public sub23 ject to such appropriate privacy concerns and safe24 guards as the Judicial Conference of the United

25 States may determine; and
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1 (2) there should be established a bankruptcy

2 data system in which—

3 (A) a single set of data definitions and

4 forms are used to collect data nationwide; and

5 (B) data for any particular bankruptcy

6 case are aggregated in the same electronic

7 record.

8 TITLE VII—BANKRUPTCY TAX

9 PROVISIONS

10 SEC. 701. TREATMENT OF CERTAIN LIENS.

11 (a) TREATMENT OF CERTAIN LIENS.—Section 724

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

13 (1) in subsection (b), in the matter preceding

14 paragraph (1), by inserting ‘‘(other than to the ex15 tent that there is a properly perfected unavoidable

16 tax lien arising in connection with an ad valorem tax

17 on real or personal property of the estate)’’ after

18 ‘‘under this title’’;

19 (2) in subsection (b)(2), by inserting ‘‘(except

20 that such expenses, other than claims for wages, sal21 aries, or commissions which arise after the filing of

22 a petition, shall be limited to expenses incurred

23 under chapter 7 of this title and shall not include ex24 penses incurred under chapter 11 of this title)’’ after

25 ‘‘507(a)(1)’’; and
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1 (3) by adding at the end the following:

2 ‘‘(e) Before subordinating a tax lien on real or per3 sonal property of the estate, the trustee shall—

4 ‘‘(1) exhaust the unencumbered assets of the

5 estate; and

6 ‘‘(2) in a manner consistent with section

7 506(c), recover from property securing an allowed

8 secured claim the reasonable, necessary costs and

9 expenses of preserving or disposing of that property.

10 ‘‘(f) Notwithstanding the exclusion of ad valorem tax

11 liens under this section and subject to the requirements

12 of subsection (e), the following may be paid from property

13 of the estate which secures a tax lien, or the proceeds of

14 such property:

15 ‘‘(1) Claims for wages, salaries, and commis16 sions that are entitled to priority under section

17 507(a)(4).

18 ‘‘(2) Claims for contributions to an employee

19 benefit plan entitled to priority under section

20 507(a)(5).’’.

21 (b) DETERMINATION OF TAX LIABILITY.—Section

22 505(a)(2) of title 11, United States Code, is amended—

23 (1) in subparagraph (A), by striking ‘‘or’’ at

24 the end;
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1 (2) in subparagraph (B), by striking the period

2 at the end and inserting ‘‘; or’’; and

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

4 ‘‘(C) the amount or legality of any amount aris5 ing in connection with an ad valorem tax on real or

6 personal property of the estate, if the applicable pe7 riod for contesting or redetermining that amount

8 under any law (other than a bankruptcy law) has ex9 pired.’’.

10 SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

11 Section 501 of title 11, United States Code, is

12 amended by adding at the end the following:

13 ‘‘(e) A claim arising from the liability of a debtor for

14 fuel use tax assessed consistent with the requirements of

15 section 31705 of title 49 may be filed by the base jurisdic16 tion designated pursuant to the International Fuel Tax

17 Agreement and, if so filed, shall be allowed as a single

18 claim.’’.

19 SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF

20 TAXES.

21 Section 505(b) of title 11, United States Code, is

22 amended—

23 (1) in the first sentence, by inserting ‘‘at the

24 address and in the manner designated in paragraph

25 (1)’’ after ‘‘determination of such tax’’;
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1 (2) by striking ‘‘(1) upon payment’’ and insert2 ing ‘‘(2)(A) upon payment’’;

3 (3) by striking ‘‘(A) such governmental unit’’

4 and inserting ‘‘(i) such governmental unit’’;

5 (4) by striking ‘‘(B) such governmental unit’’

6 and inserting ‘‘(ii) such governmental unit’’;

7 (5) by striking ‘‘(2) upon payment’’ and insert8 ing ‘‘(B) upon payment’’;

9 (6) by striking ‘‘(3) upon payment’’ and insert10 ing ‘‘(C) upon payment’’;

11 (7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and

12 (8) by inserting before paragraph (2), as so

13 designated, the following:

14 ‘‘(b)(1)(A) The clerk of each district shall maintain

15 a listing under which a Federal, State, or local govern16 mental unit responsible for the collection of taxes within

17 the district may—

18 ‘‘(i) designate an address for service of requests

19 under this subsection; and

20 ‘‘(ii) describe where further information con21 cerning additional requirements for filing such re22 quests may be found.

23 ‘‘(B) If a governmental unit referred to in subpara24 graph (A) does not designate an address and provide that

25 address to the clerk under that subparagraph, any request
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1 made under this subsection may be served at the address

2 for the filing of a tax return or protest with the appro3 priate taxing authority of that governmental unit.’’.

4 SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

5 (a) IN GENERAL.—Subchapter I of chapter 5 of title

6 11, United States Code, is amended by adding at the end

7 the following:

8 ‘‘§ 511. Rate of interest on tax claims

9 ‘‘(a) If any provision of this title requires the pay10 ment of interest on a tax claim or the payment of interest

11 to enable a creditor to receive the present value of the

12 allowed amount of a tax claim, the rate of interest shall

13 be the rate shall be determined under applicable nonbank14 ruptcy law.

15 ‘‘(b) In the case of taxes paid under a confirmed plan

16 under this title, the rate of interest shall be determined

17 as of the calendar month in which the plan is confirmed.’’.

18 (b) CLERICAL AMENDMENT.—The table of sections

19 for chapter 5 of title 11, United States Code, is amended

20 by inserting after the item relating to section 510 the fol21 lowing:

‘‘511. Rate of interest on tax claims.’’.

22 SEC. 705. PRIORITY OF TAX CLAIMS.

23 Section 507(a)(8) of title 11, United States Code, is

24 amended—

25 (1) in subparagraph (A)—
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1 (A) in the matter preceding clause (i), by

2 inserting ‘‘for a taxable year ending on or be3 fore the date of filing of the petition’’ after

4 ‘‘gross receipts’’;

5 (B) in clause (i)—

6 (i) by striking ‘‘for a taxable year

7 ending on or before the date of filing of

8 the petition’’; and

9 (ii) by inserting before the semicolon

10 at the end, the following: ‘‘, plus any time

11 during which the stay of proceedings was

12 in effect in a prior case under this title or

13 during which collection was precluded by

14 the existence of 1 or more confirmed plans

15 under this title, plus 90 days’’; and

16 (C) by striking clause (ii) and inserting the

17 following:

18 ‘‘(ii) assessed within 240 days before

19 the date of the filing of the petition, exclu20 sive of—

21 ‘‘(I) any time during which an

22 offer in compromise with respect to

23 that tax was pending or in effect dur24 ing that 240-day period, plus 30 days;

25 and
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1 ‘‘(II) any time during which a

2 stay of proceedings against collections

3 was in effect in a prior case under

4 this title during that 240-day period;

5 plus 90 days.’’; and

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

7 ‘‘(H) An otherwise applicable time period

8 specified in this paragraph shall be suspended

9 for—

10 ‘‘(i) any period during which a gov11 ernmental unit is prohibited under applica12 ble nonbankruptcy law from collecting a

13 tax as a result of a request by the debtor

14 for a hearing and an appeal of any collec15 tion action taken or proposed against the

16 debtor; plus

17 ‘‘(ii) 90 days.’’.

18 SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

19 Section 507(a)(9)(B) of title 11, United States Code,

20 is amended by striking ‘‘assessed’’ and inserting ‘‘in21 curred’’.
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1 SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP2 TER 13.

3 Section 1328(a)(2) of title 11, United States Code,

4 as amended by sections 105, 213, and 314 of this Act,

5 is amended—

6 (1) by inserting ‘‘(1)(B), (1)(C),’’ after ‘‘para7 graph’’; and

8 (2) by inserting ‘‘and in section 507(a)(8)(C)’’

9 after ‘‘section 523(a)’’.

10 SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP11 TER 11.

12 Section 1141(d) of title 11, United States Code, is

13 amended by adding at the end the following:

14 ‘‘(5) Notwithstanding paragraph (1), the confirma15 tion of a plan does not discharge a debtor that is a cor16 poration from any debt for a tax or customs duty with

17 respect to which the debtor—

18 ‘‘(A) made a fraudulent return; or

19 ‘‘(B) willfully attempted in any manner to

20 evade or defeat that tax or duty.’’.

21 SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO

22 PREPETITION TAXES.

23 Section 362(a)(8) of title 11, United States Code, is

24 amended by inserting ‘‘, with respect to a tax liability for

25 a taxable period ending before the order for relief under

26 this title’’ before the semicolon at the end.
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1 SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11

2 CASES.

3 Section 1129(a)(9) of title 11, United States Code,

4 is amended—

5 (1) in subparagraph (B), by striking ‘‘and’’ at

6 the end;

7 (2) in subparagraph (C), by striking ‘‘deferred

8 cash payments, over a period not exceeding six years

9 after the date of assessment of such claim,’’ and all

10 that follows through the end of the subparagraph,

11 and inserting ‘‘regular installment payments in

12 cash—

13 ‘‘(i) of a total value, as of the effective

14 date of the plan, equal to the allowed

15 amount of such claim;

16 ‘‘(ii) with interest thereon calculated

17 at the rate provided in section 6621(a)(2)

18 of the Internal Revenue Code of 1986;

19 ‘‘(iii) over a period ending not later

20 than 5 years after the date of the entry of

21 the order for relief under section 301, 302,

22 or 303; and

23 ‘‘(iv) in a manner not less favorable

24 than the most favored nonpriority unse25 cured claim provided for in the plan (other

26 than cash payments made to a class of
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1 creditors under section 1122(b)); and’’;

2 and

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

4 ‘‘(D) with respect to a secured claim which

5 would otherwise meet the description of an un6 secured claim of a governmental unit under sec7 tion 507(a)(8), but for the secured status of

8 that claim, the holder of that claim will receive

9 on account of that claim, cash payments, in the

10 same manner and over the same period, as pre11 scribed in subparagraph (C).’’.

12 SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB13 ITED.

14 Section 545(2) of title 11, United States Code, is

15 amended by striking the semicolon at the end and insert16 ing ‘‘, except in any case in which a purchaser is a pur17 chaser described in section 6323 of the Internal Revenue

18 Code of 1986, or in any other similar provision of State

19 or local law;’’.

20 SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSI21 NESS.

22 (a) PAYMENT OF TAXES REQUIRED.—Section 960 of

23 title 28, United States Code, is amended—

24 (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and

25 (2) by adding at the end the following:
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1 ‘‘(b) A tax under subsection (a) shall be paid on or

2 before the due date of the tax under applicable nonbank3 ruptcy law, unless—

4 ‘‘(1) the tax is a property tax secured by a lien

5 against property that is abandoned within a reason6 able period of time after the lien attaches by the

7 trustee of a bankruptcy estate under section 554 of

8 title 11; or

9 ‘‘(2) payment of the tax is excused under a spe10 cific provision of title 11.

11 ‘‘(c) In a case pending under chapter 7 of title 11,

12 payment of a tax may be deferred until final distribution

13 is made under section 726 of title 11, if—

14 ‘‘(1) the tax was not incurred by a trustee duly

15 appointed under chapter 7 of title 11; or

16 ‘‘(2) before the due date of the tax, an order of

17 the court makes a finding of probable insufficiency

18 of funds of the estate to pay in full the administra19 tive expenses allowed under section 503(b) of title

20 11 that have the same priority in distribution under

21 section 726(b) of title 11 as the priority of that

22 tax.’’.

23 (b) PAYMENT OF AD VALOREM TAXES REQUIRED.—

24 Section 503(b)(1)(B)(i) of title 11, United States Code,

25 is amended by inserting ‘‘whether secured or unsecured,
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1 including property taxes for which liability is in rem, in

2 personam, or both,’’ before ‘‘except’’.

3 (c) REQUEST FOR PAYMENT OF ADMINISTRATIVE

4 EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of

5 title 11, United States Code, is amended—

6 (1) in subparagraph (B), by striking ‘‘and’’ at

7 the end;

8 (2) in subparagraph (C), by adding ‘‘and’’ at

9 the end; and

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

11 ‘‘(D) notwithstanding the requirements of sub12 section (a), a governmental unit shall not be re13 quired to file a request for the payment of an ex14 pense described in subparagraph (B) or (C), as a

15 condition of its being an allowed administrative ex16 pense;’’.

17 (d) PAYMENT OF TAXES AND FEES AS SECURED

18 CLAIMS.—Section 506 of title 11, United States Code, is

19 amended—

20 (1) in subsection (b), by inserting ‘‘or State

21 statute’’ after ‘‘agreement’’; and

22 (2) in subsection (c), by inserting ‘‘, including

23 the payment of all ad valorem property taxes with

24 respect to the property’’ before the period at the

25 end.
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1 SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

2 Section 726(a)(1) of title 11, United States Code, is

3 amended by striking ‘‘before the date on which the trustee

4 commences distribution under this section;’’ and inserting

5 the following: ‘‘on or before the earlier of—

6 ‘‘(A) the date that is 10 days after the

7 mailing to creditors of the summary of the

8 trustee’s final report; or

9 ‘‘(B) the date on which the trustee com10 mences final distribution under this section;’’.

11 SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU12 THORITIES.

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

14 amended—

15 (1) in paragraph (1)(B)—

16 (A) in the matter preceding clause (i), by

17 inserting ‘‘or equivalent report or notice,’’ after

18 ‘‘a return,’’;

19 (B) in clause (i)—

20 (i) by inserting ‘‘or given’’ after

21 ‘‘filed’’; and

22 (ii) by striking ‘‘or’’ at the end; and

23 (C) in clause (ii)—

24 (i) by inserting ‘‘or given’’ after

25 ‘‘filed’’; and
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1 (ii) by inserting ‘‘, report, or notice’’

2 after ‘‘return’’; and

3 (2) by adding at the end the following flush

4 sentences:

5 ‘‘For purposes of this subsection, the term ‘return’ means

6 a return that satisfies the requirements of applicable non7 bankruptcy law (including applicable filing requirements).

8 Such term includes a return prepared pursuant to section

9 6020(a) of the Internal Revenue Code of 1986, or similar

10 State or local law, or a written stipulation to a judgment

11 or a final order entered by a nonbankruptcy tribunal, but

12 does not include a return made pursuant to section

13 6020(b) of the Internal Revenue Code of 1986, or a simi14 lar State or local law.’’.

15 SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN16 PAID TAXES.

17 The second sentence of section 505(b) of title 11,

18 United States Code, as amended by section 703 of this

19 Act, is amended by inserting ‘‘the estate,’’ after ‘‘mis20 representation,’’.

21 SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CON22 FIRM CHAPTER 13 PLANS.

23 (a) FILING OF PREPETITION TAX RETURNS RE24 QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of
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1 title 11, United States Code, as amended by section 213

2 of this Act, is amended—

3 (1) in paragraph (6), by striking ‘‘and’’ at the

4 end;

5 (2) in paragraph (7), by striking the period at

6 the end and inserting ‘‘; and’’; and

7 (3) by inserting after paragraph (7) the fol8 lowing:

9 ‘‘(8) if the debtor has filed all applicable Fed10 eral, State, and local tax returns as required by sec11 tion 1308.’’.

12 (b) ADDITIONAL TIME PERMITTED FOR FILING TAX

13 RETURNS.—

14 (1) IN GENERAL.—Chapter 13 of title 11,

15 United States Code, is amended by adding at the

16 end the following:

17 ‘‘§ 1308. Filing of prepetition tax returns

18 ‘‘(a) Not later than the day before the date on which

19 the meeting of the creditors is first scheduled to be held

20 under section 341(a), the debtor shall file with appropriate

21 tax authorities all tax returns for all taxable periods end22 ing during the 4-year period ending on the date of the

23 filing of the petition.

24 ‘‘(b)(1) Subject to paragraph (2), if the tax returns

25 required by subsection (a) have not been filed by the date
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1 on which the meeting of creditors is first scheduled to be

2 held under section 341(a), the trustee may hold open that

3 meeting for a reasonable period of time to allow the debtor

4 an additional period of time to file any unfiled returns,

5 but such additional period of time shall not extend

6 beyond—

7 ‘‘(A) for any return that is past due as of the

8 date of the filing of the petition, the date that is 120

9 days after the date of that meeting; or

10 ‘‘(B) for any return that is not past due as of

11 the date of the filing of the petition, the later of—

12 ‘‘(i) the date that is 120 days after the

13 date of that meeting; or

14 ‘‘(ii) the date on which the return is due

15 under the last automatic extension of time for

16 filing that return to which the debtor is enti17 tled, and for which request is timely made, in

18 accordance with applicable nonbankruptcy law.

19 ‘‘(2) Upon notice and hearing, and order entered be20 fore the tolling of any applicable filing period determined

21 under this subsection, if the debtor demonstrates by clear

22 and convincing evidence that the failure to file a return

23 as required under this subsection is attributable to cir24 cumstances beyond the control of the debtor, the court
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1 may extend the filing period established by the trustee

2 under this subsection for—

3 ‘‘(A) a period of not more than 30 days for re4 turns described in paragraph (1); and

5 ‘‘(B) a period not to extend after the applicable

6 extended due date for a return described in para7 graph (2).

8 ‘‘(c) For purposes of this section, the term ‘return’

9 includes a return prepared pursuant to section 6020 (a)

10 or (b) of the Internal Revenue Code of 1986, or a similar

11 State or local law, or a written stipulation to a judgment

12 or a final order entered by a nonbankruptcy tribunal.’’.

13 (2) CONFORMING AMENDMENT.—The table of

14 sections for chapter 13 of title 11, United States

15 Code, is amended by inserting after the item relating

16 to section 1307 the following:

‘‘1308. Filing of prepetition tax returns.’’.

17 (c) DISMISSAL OR CONVERSION ON FAILURE TO

18 COMPLY.—Section 1307 of title 11, United States Code,

19 is amended—

20 (1) by redesignating subsections (e) and (f) as

21 subsections (f) and (g), respectively; and

22 (2) by inserting after subsection (d), the fol23 lowing:

24 ‘‘(e) Upon the failure of the debtor to file a tax return

25 under section 1308, on request of a party in interest or
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1 the United States trustee and after notice and a hearing,

2 the court shall dismiss a case or convert a case under this

3 chapter to a case under chapter 7 of this title, whichever

4 is in the best interest of the creditors and the estate.’’.

5 (d) TIMELY FILED CLAIMS.—Section 502(b)(9) of

6 title 11, United States Code, is amended by inserting be7 fore the period at the end the following ‘‘, and except that

8 in a case under chapter 13, a claim of a governmental

9 unit for a tax with respect to a return filed under section

10 1308 shall be timely if the claim is filed on or before the

11 date that is 60 days after the date on which such return

12 was filed as required’’.

13 (e) RULES FOR OBJECTIONS TO CLAIMS AND TO

14 CONFIRMATION.—It is the sense of Congress that the Ad15 visory Committee on Bankruptcy Rules of the Judicial

16 Conference should, as soon as practicable after the date

17 of enactment of this Act, propose for adoption amended

18 Federal Rules of Bankruptcy Procedure which provide

19 that—

20 (1) notwithstanding the provisions of Rule

21 3015(f), in cases under chapter 13 of title 11,

22 United States Code, an objection to the confirmation

23 of a plan filed by a governmental unit on or before

24 the date that is 60 days after the date on which the

25 debtor files all tax returns required under sections
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1 1308 and 1325(a)(7) of title 11, United States

2 Code, shall be treated for all purposes as if such ob3 jection had been timely filed before such confirma4 tion; and

5 (2) in addition to the provisions of Rule 3007,

6 in a case under chapter 13 of title 11, United States

7 Code, no objection to a tax with respect to which a

8 return is required to be filed under section 1308 of

9 title 11, United States Code, shall be filed until such

10 return has been filed as required.

11 SEC. 717. STANDARDS FOR TAX DISCLOSURE.

12 Section 1125(a)(1) of title 11, United States Code,

13 is amended—

14 (1) by inserting ‘‘including a discussion of the

15 potential material Federal tax consequences of the

16 plan to the debtor, any successor to the debtor, and

17 a hypothetical investor typical of the holders of

18 claims or interests in the case,’’ after ‘‘records’’; and

19 (2) by striking ‘‘a hypothetical reasonable inves20 tor typical of holders of claims or interests’’ and in21 serting ‘‘such a hypothetical investor’’.

22 SEC. 718. SETOFF OF TAX REFUNDS.

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

24 amended by section 402 of this Act, is amended—
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1 (1) in paragraph (25), by striking ‘‘or’’ at the

2 end;

3 (2) in paragraph (26), by striking the period at

4 the end and inserting ‘‘; or’’; and

5 (3) by inserting after paragraph (26) the fol6 lowing:

7 ‘‘(27) under subsection (a), of the setoff under

8 applicable nonbankruptcy law of an income tax re9 fund, by a governmental unit, with respect to a tax10 able period that ended before the order for relief

11 against an income tax liability for a taxable period

12 that also ended before the order for relief, except

13 that in any case in which the setoff of an income tax

14 refund is not permitted under applicable nonbank15 ruptcy law because of a pending action to determine

16 the amount or legality of a tax liability, the govern17 mental unit may hold the refund pending the resolu18 tion of the action, unless the court, upon motion of

19 the trustee and after notice and hearing, grants the

20 taxing authority adequate protection (within the

21 meaning of section 361) for the secured claim of

22 that authority in the setoff under section 506(a).’’.
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1 SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREAT2 MENT OF STATE AND LOCAL TAXES.

3 (a) IN GENERAL.—Section 346 of title 11, United

4 States Code, is amended to read as follows:

5 ‘‘SEC. 346. SPECIAL PROVISIONS RELATED TO THE TREAT6 MENT OF STATE AND LOCAL TAXES.

7 ‘‘(a) Whenever the Internal Revenue Code of 1986

8 provides that a separate taxable estate or entity is created

9 in a case concerning a debtor under this title, and the in10 come, gain, loss, deductions, and credits of such estate

11 shall be taxed to or claimed by the estate, a separate tax12 able estate is also created for purposes of any State and

13 local law imposing a tax on or measured by income and

14 such income, gain, loss, deductions, and credits shall be

15 taxed to or claimed by the estate and may not be taxed

16 to or claimed by the debtor. The preceding sentence shall

17 not apply if the case is dismissed. The trustee shall make

18 tax returns of income required under any such State or

19 local law.

20 ‘‘(b) Whenever the Internal Revenue Code of 1986

21 provides that no separate taxable estate shall be created

22 in a case concerning a debtor under this title, and the in23 come, gain, loss, deductions, and credits of an estate shall

24 be taxed to or claimed by the debtor, such income, gain,

25 loss, deductions, and credits shall be taxed to or claimed

26 by the debtor under a State or local law imposing a tax
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1 on or measured by income and may not be taxed to or

2 claimed by the estate. The trustee shall make such tax

3 returns of income of corporations and of partnerships as

4 are required under any State or local law, but with respect

5 to partnerships, shall make said returns only to the extent

6 such returns are also required to be made under such

7 Code. The estate shall be liable for any tax imposed on

8 such corporation or partnership, but not for any tax im9 posed on partners or members.

10 ‘‘(c) With respect to a partnership or any entity treat11 ed as a partnership under a State or local law imposing

12 a tax on or measured by income that is a debtor in a case

13 under this title, any gain or loss resulting from a distribu14 tion of property from such partnership, or any distributive

15 share of any income, gain, loss, deduction, or credit of a

16 partner or member that is distributed, or considered dis17 tributed, from such partnership, after the commencement

18 of the case, is gain, loss, income, deduction, or credit, as

19 the case may be, of the partner or member, and if such

20 partner or member is a debtor in a case under this title,

21 shall be subject to tax in accordance with subsection (a)

22 or (b).

23 ‘‘(d) For purposes of any State or local law imposing

24 a tax on or measured by income, the taxable period of

25 a debtor in a case under this title shall terminate only
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1 if and to the extent that the taxable period of such debtor

2 terminates under the Internal Revenue Code of 1986.

3 ‘‘(e) The estate in any case described in subsection

4 (a) shall use the same accounting method as the debtor

5 used immediately before the commencement of the case,

6 if such method of accounting complies with applicable non7 bankruptcy tax law.

8 ‘‘(f) For purposes of any State or local law imposing

9 a tax on or measured by income, a transfer of property

10 from the debtor to the estate or from the estate to the

11 debtor shall not be treated as a disposition for purposes

12 of any provision assigning tax consequences to a disposi13 tion, except to the extent that such transfer is treated as

14 a disposition under the Internal Revenue Code of 1986.

15 ‘‘(g) Whenever a tax is imposed pursuant to a State

16 or local law imposing a tax on or measured by income pur17 suant to subsection (a) or (b), such tax shall be imposed

18 at rates generally applicable to the same types of entities

19 under such State or local law.

20 ‘‘(h) The trustee shall withhold from any payment of

21 claims for wages, salaries, commissions, dividends, inter22 est, or other payments, or collect, any amount required

23 to be withheld or collected under applicable State or local

24 tax law, and shall pay such withheld or collected amount

25 to the appropriate governmental unit at the time and in
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1 the manner required by such tax law, and with the same

2 priority as the claim from which such amount was with3 held or collected was paid.

4 ‘‘(i)(1) To the extent that any State or local law im5 posing a tax on or measured by income provides for the

6 carryover of any tax attribute from one taxable period to

7 a subsequent taxable period, the estate shall succeed to

8 such tax attribute in any case in which such estate is sub9 ject to tax under subsection (a).

10 ‘‘(2) After such a case is closed or dismissed, the

11 debtor shall succeed to any tax attribute to which the es12 tate succeeded under paragraph (1) to the extent con13 sistent with the Internal Revenue Code of 1986.

14 ‘‘(3) The estate may carry back any loss or tax at15 tribute to a taxable period of the debtor that ended before

16 the order for relief under this title to the extent that—

17 ‘‘(A) applicable State or local tax law provides

18 for a carryback in the case of the debtor; and

19 ‘‘(B) the same or a similar tax attribute may be

20 carried back by the estate to such a taxable period

21 of the debtor under the Internal Revenue Code of

22 1986.

23 ‘‘(j)(1) For purposes of any State or local law impos24 ing a tax on or measured by income, income is not realized

25 by the estate, the debtor, or a successor to the debtor by
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1 reason of discharge of indebtedness in a case under this

2 title, except to the extent, if any, that such income is sub3 ject to tax under the Internal Revenue Code of 1986.

4 ‘‘(2) Whenever the Internal Revenue Code of 1986

5 provides that the amount excluded from gross income in

6 respect of the discharge of indebtedness in a case under

7 this title shall be applied to reduce the tax attributes of

8 the debtor or the estate, a similar reduction shall be made

9 under any State or local law imposing a tax on or meas10 ured by income to the extent such State or local law recog11 nizes such attributes. Such State or local law may also

12 provide for the reduction of other attributes to the extent

13 that the full amount of income from the discharge of in14 debtedness has not been applied.

15 ‘‘(k)(1) Except as provided in this section and section

16 505, the time and manner of filing tax returns and the

17 items of income, gain, loss, deduction, and credit of any

18 taxpayer shall be determined under applicable nonbank19 ruptcy law.

20 ‘‘(2) For Federal tax purposes, the provisions of this

21 section are subject to the Internal Revenue Code of 1986

22 and other applicable Federal nonbankruptcy law.’’.

23 (b) CONFORMING AMENDMENTS.—

24 (1) Section 728 of title 11, United States Code,

25 is repealed.
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1 (2) Section 1146 of title 11, United States

2 Code, is amended by striking subsections (a) and (b)

3 and by redesignating subsections (c) and (d) as sub4 sections (a) and (b), respectively.

5 (3) Section 1231 of title 11, United States

6 Code, is amended by striking subsections (a) and (b)

7 and by redesignating subsections (c) and (d) as sub8 sections (a) and (b), respectively.

9 SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX

10 RETURNS.

11 Section 521 of title 11, United States Code, as

12 amended by this Act, is amended by adding at the end

13 the following:

14 ‘‘(k)(1) Notwithstanding any other provision of this

15 title, if the debtor fails to file a tax return that becomes

16 due after the commencement of the case or to properly

17 obtain an extension of the due date for filing such return,

18 the taxing authority may request that the court enter an

19 order converting or dismissing the case.

20 ‘‘(2) If the debtor does not file the required return

21 or obtain the extension referred to in paragraph (1) within

22 90 days after a request is filed by the taxing authority

23 under that paragraph, the court shall convert or dismiss

24 the case, whichever is in the best interests of creditors and

25 the estate.’’.
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1 TITLE VIII—ANCILLARY AND

2 OTHER CROSS-BORDER CASES

3 SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11,

4 UNITED STATES CODE.

5 (a) IN GENERAL.—Title 11, United States Code, is

6 amended by inserting after chapter 13 the following:

7 ‘‘CHAPTER 15—ANCILLARY AND OTHER

8 CROSS-BORDER CASES

‘‘Sec.

‘‘1501. Purpose and scope of application.

‘‘SUBCHAPTER I—GENERAL PROVISIONS

‘‘1502. Definitions.

‘‘1503. International obligations of the United States.

‘‘1504. Commencement of ancillary case.

‘‘1505. Authorization to act in a foreign country.

‘‘1506. Public policy exception.

‘‘1507. Additional assistance.

‘‘1508. Interpretation.

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND

CREDITORS TO THE COURT

‘‘1509. Right of direct access.

‘‘1510. Limited jurisdiction.

‘‘1511. Commencement of case under section 301 or 303.

‘‘1512. Participation of a foreign representative in a case under this title.

‘‘1513. Access of foreign creditors to a case under this title.

‘‘1514. Notification to foreign creditors concerning a case under this title.

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING

AND RELIEF

‘‘1515. Application for recognition of a foreign proceeding.

‘‘1516. Presumptions concerning recognition.

‘‘1517. Order recognizing a foreign proceeding.

‘‘1518. Subsequent information.

‘‘1519. Relief that may be granted upon petition for recognition of a foreign

proceeding.

‘‘1520. Effects of recognition of a foreign main proceeding.

‘‘1521. Relief that may be granted upon recognition of a foreign proceeding.

‘‘1522. Protection of creditors and other interested persons.

‘‘1523. Actions to avoid acts detrimental to creditors.

‘‘1524. Intervention by a foreign representative.
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‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND

FOREIGN REPRESENTATIVES

‘‘1525. Cooperation and direct communication between the court and foreign

courts or foreign representatives.

‘‘1526. Cooperation and direct communication between the trustee and foreign

courts or foreign representatives.

‘‘1527. Forms of cooperation.

‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

‘‘1528. Commencement of a case under this title after recognition of a foreign

main proceeding.

‘‘1529. Coordination of a case under this title and a foreign proceeding.

‘‘1530. Coordination of more than 1 foreign proceeding.

‘‘1531. Presumption of insolvency based on recognition of a foreign main proceeding.

‘‘1532. Rule of payment in concurrent proceedings.

1 ‘‘§ 1501. Purpose and scope of application

2 ‘‘(a) The purpose of this chapter is to incorporate the

3 Model Law on Cross-Border Insolvency so as to provide

4 effective mechanisms for dealing with cases of cross-bor5 der insolvency with the objectives of—

6 ‘‘(1) cooperation between—

7 ‘‘(A) United States courts, United States

8 Trustees, trustees, examiners, debtors, and

9 debtors in possession; and

10 ‘‘(B) the courts and other competent au11 thorities of foreign countries involved in cross12 border insolvency cases;

13 ‘‘(2) greater legal certainty for trade and in14 vestment;

15 ‘‘(3) fair and efficient administration of cross16 border insolvencies that protects the interests of all
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1 creditors, and other interested entities, including the

2 debtor;

3 ‘‘(4) protection and maximization of the value

4 of the debtor’s assets; and

5 ‘‘(5) facilitation of the rescue of financially

6 troubled businesses, thereby protecting investment

7 and preserving employment.

8 ‘‘(b) This chapter applies if—

9 ‘‘(1) assistance is sought in the United States

10 by a foreign court or a foreign representative in con11 nection with a foreign proceeding;

12 ‘‘(2) assistance is sought in a foreign country in

13 connection with a case under this title;

14 ‘‘(3) a foreign proceeding and a case under this

15 title with respect to the same debtor are taking place

16 concurrently; or

17 ‘‘(4) creditors or other interested persons in a

18 foreign country have an interest in requesting the

19 commencement of, or participating in, a case or pro20 ceeding under this title.

21 ‘‘(c) This chapter does not apply to—

22 ‘‘(1) a proceeding concerning an entity identi23 fied by exclusion in subsection 109(b);

24 ‘‘(2) an individual, or to an individual and such

25 individual’s spouse, who have debts within the limits
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1 specified in section 109(e) and who are citizens of

2 the United States or aliens lawfully admitted for

3 permanent residence in the United States; or

4 ‘‘(3) an entity subject to a proceeding under the

5 Securities Investor Protection Act of 1970 (84 Stat.

6 1636 et seq.), a stockbroker subject to subchapter

7 III of chapter 7 of this title, or a commodity broker

8 subject to subchapter IV of chapter 7 of this title.

9 ‘‘SUBCHAPTER I—GENERAL PROVISIONS

10 ‘‘§ 1502. Definitions

11 ‘‘For the purposes of this chapter, the term—

12 ‘‘(1) ‘debtor’ means an entity that is the subject

13 of a foreign proceeding;

14 ‘‘(2) ‘establishment’ means any place of oper15 ations where the debtor carries out a nontransitory

16 economic activity;

17 ‘‘(3) ‘foreign court’ means a judicial or other

18 authority competent to control or supervise a foreign

19 proceeding;

20 ‘‘(4) ‘foreign main proceeding’ means a foreign

21 proceeding taking place in the country where the

22 debtor has the center of its main interests;

23 ‘‘(5) ‘foreign nonmain proceeding’ means a for24 eign proceeding, other than a foreign main pro-
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1 ceeding, taking place in a country where the debtor

2 has an establishment;

3 ‘‘(6) ‘trustee’ includes a trustee, a debtor in

4 possession in a case under any chapter of this title,

5 or a debtor under chapter 9 of this title; and

6 ‘‘(7) ‘within the territorial jurisdiction of the

7 United States’ when used with reference to property

8 of a debtor refers to tangible property located within

9 the territory of the United States and intangible

10 property deemed under applicable nonbankruptcy

11 law to be located within that territory, including any

12 property subject to attachment or garnishment that

13 may properly be seized or garnished by an action in

14 a Federal or State court in the United States.

15 ‘‘§ 1503. International obligations of the United States

16 ‘‘To the extent that this chapter conflicts with an ob17 ligation of the United States arising out of any treaty or

18 other form of agreement to which it is a party with 1 or

19 more other countries, the requirements of the treaty or

20 agreement prevail.

21 ‘‘§ 1504. Commencement of ancillary case

22 ‘‘A case under this chapter is commenced by the filing

23 of a petition for recognition of a foreign proceeding under

24 section 1515.
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1 ‘‘§ 1505. Authorization to act in a foreign country

2 ‘‘A trustee or another entity, including an examiner,

3 may be authorized by the court to act in a foreign country

4 on behalf of an estate created under section 541. An entity

5 authorized to act under this section may act in any way

6 permitted by the applicable foreign law.

7 ‘‘§ 1506. Public policy exception

8 ‘‘Nothing in this chapter prevents the court from re9 fusing to take an action governed by this chapter if the

10 action would be manifestly contrary to the public policy

11 of the United States.

12 ‘‘§ 1507. Additional assistance

13 ‘‘(a) Subject to the specific limitations under other

14 provisions of this chapter, the court, upon recognition of

15 a foreign proceeding, may provide additional assistance to

16 a foreign representative under this title or under other

17 laws of the United States.

18 ‘‘(b) In determining whether to provide additional as19 sistance under this title or under other laws of the United

20 States, the court shall consider whether such additional

21 assistance, consistent with the principles of comity, will

22 reasonably assure—

23 ‘‘(1) just treatment of all holders of claims

24 against or interests in the debtor’s property;
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1 ‘‘(2) protection of claim holders in the United

2 States against prejudice and inconvenience in the

3 processing of claims in such foreign proceeding;

4 ‘‘(3) prevention of preferential or fraudulent

5 dispositions of property of the debtor;

6 ‘‘(4) distribution of proceeds of the debtor’s

7 property substantially in accordance with the order

8 prescribed by this title; and

9 ‘‘(5) if appropriate, the provision of an oppor10 tunity for a fresh start for the individual that such

11 foreign proceeding concerns.

12 ‘‘§ 1508. Interpretation

13 ‘‘In interpreting this chapter, the court shall consider

14 its international origin, and the need to promote an appli15 cation of this chapter that is consistent with the applica16 tion of similar statutes adopted by foreign jurisdictions.

17 ‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP18 RESENTATIVES AND CREDITORS TO THE

19 COURT

20 ‘‘§ 1509. Right of direct access

21 ‘‘(a) A foreign representative is entitled to commence

22 a case under section 1504 by filing a petition for recogni23 tion under section 1515, and upon recognition, to apply

24 directly to other Federal and State courts for appropriate

25 relief in those courts.
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1 ‘‘(b) Upon recognition, and subject to section 1510,

2 a foreign representative shall have the capacity to sue and

3 be sued, and shall be subject to the laws of the United

4 States of general applicability.

5 ‘‘(c) Subject to section 1510, a foreign representative

6 is subject to laws of general application.

7 ‘‘(d) Recognition under this chapter is prerequisite to

8 the granting of comity or cooperation to a foreign rep9 resentative in any Federal or State court in the United

10 States. Any request for comity or cooperation by a foreign

11 representative in any court shall be accompanied by a

12 sworn statement setting forth whether recognition under

13 section 1515 has been sought and the status of any such

14 petition.

15 ‘‘(e) Upon denial of recognition under this chapter,

16 the court may issue appropriate orders necessary to pre17 vent an attempt to obtain comity or cooperation from

18 courts in the United States without such recognition.

19 ‘‘§ 1510. Limited jurisdiction

20 ‘‘The sole fact that a foreign representative files a

21 petition under section 1515 does not subject the foreign

22 representative to the jurisdiction of any court in the

23 United States for any other purpose.
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1 ‘‘§ 1511. Commencement of case under section 301 or

2 303

3 ‘‘(a) Upon recognition, a foreign representative may

4 commence—

5 ‘‘(1) an involuntary case under section 303; or

6 ‘‘(2) a voluntary case under section 301 or 302,

7 if the foreign proceeding is a foreign main pro8 ceeding.

9 ‘‘(b) The petition commencing a case under sub10 section (a) must be accompanied by a statement describ11 ing the petition for recognition and its current status. The

12 court where the petition for recognition has been filed

13 must be advised of the foreign representative’s intent to

14 commence a case under subsection (a) prior to such com15 mencement.

16 ‘‘§ 1512. Participation of a foreign representative in a

17 case under this title

18 ‘‘Upon recognition of a foreign proceeding, the for19 eign representative in that proceeding is entitled to par20 ticipate as a party in interest in a case regarding the debt21 or under this title.

22 ‘‘§ 1513. Access of foreign creditors to a case under

23 this title

24 ‘‘(a) Foreign creditors have the same rights regarding

25 the commencement of, and participation in, a case under

26 this title as domestic creditors.
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1 ‘‘(b)(1) Subsection (a) does not change or codify law

2 in effect on the date of enactment of this chapter as to

3 the priority of claims under section 507 or 726, except

4 that the claim of a foreign creditor under section 507 or

5 726 shall not be given a lower priority than that of general

6 unsecured claims without priority solely because the holder

7 of such claim is a foreign creditor.

8 ‘‘(2)(A) Subsection (a) and paragraph (1) do not

9 change or codify law in effect on the date of enactment

10 of this chapter as to the allowability of foreign revenue

11 claims or other foreign public law claims in a proceeding

12 under this title.

13 ‘‘(B) Allowance and priority as to a foreign tax claim

14 or other foreign public law claim shall be governed by any

15 applicable tax treaty of the United States, under the con16 ditions and circumstances specified therein.

17 ‘‘§ 1514. Notification to foreign creditors concerning a

18 case under this title

19 ‘‘(a) Whenever in a case under this title notice is to

20 be given to creditors generally or to any class or category

21 of creditors, such notice shall also be given to the known

22 creditors generally, or to creditors in the notified class or

23 category, that do not have addresses in the United States.

24 The court may order that appropriate steps be taken with
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1 a view to notifying any creditor whose address is not yet

2 known.

3 ‘‘(b) Such notification to creditors with foreign ad4 dresses described in subsection (a) shall be given individ5 ually, unless the court considers that, under the cir6 cumstances, some other form of notification would be

7 more appropriate. No letters rogatory or other similar for8 mality is required.

9 ‘‘(c) When a notification of commencement of a case

10 is to be given to foreign creditors, the notification shall—

11 ‘‘(1) indicate the time period for filing proofs of

12 claim and specify the place for their filing;

13 ‘‘(2) indicate whether secured creditors need to

14 file their proofs of claim; and

15 ‘‘(3) contain any other information required to

16 be included in such a notification to creditors pursu17 ant to this title and the orders of the court.

18 ‘‘(d) Any rule of procedure or order of the court as

19 to notice or the filing of a claim shall provide such addi20 tional time to creditors with foreign addresses as is rea21 sonable under the circumstances.
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1 ‘‘SUBCHAPTER III—RECOGNITION OF A

2 FOREIGN PROCEEDING AND RELIEF

3 ‘‘§ 1515. Application for recognition of a foreign pro4 ceeding

5 ‘‘(a) A foreign representative applies to the court for

6 recognition of the foreign proceeding in which the foreign

7 representative has been appointed by filing a petition for

8 recognition.

9 ‘‘(b) A petition for recognition shall be accompanied

10 by—

11 ‘‘(1) a certified copy of the decision com12 mencing the foreign proceeding and appointing the

13 foreign representative;

14 ‘‘(2) a certificate from the foreign court affirm15 ing the existence of the foreign proceeding and of

16 the appointment of the foreign representative; or

17 ‘‘(3) in the absence of evidence referred to in

18 paragraphs (1) and (2), any other evidence accept19 able to the court of the existence of the foreign pro20 ceeding and of the appointment of the foreign rep21 resentative.

22 ‘‘(c) A petition for recognition shall also be accom23 panied by a statement identifying all foreign proceedings

24 with respect to the debtor that are known to the foreign

25 representative.
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1 ‘‘(d) The documents referred to in paragraphs (1)

2 and (2) of subsection (b) must be translated into English.

3 The court may require a translation into English of addi4 tional documents.

5 ‘‘§ 1516. Presumptions concerning recognition

6 ‘‘(a) If the decision or certificate referred to in section

7 1515(b) indicates that the foreign proceeding is a foreign

8 proceeding as defined in section 101 and that the person

9 or body is a foreign representative as defined in section

10 101, the court is entitled to so presume.

11 ‘‘(b) The court is entitled to presume that documents

12 submitted in support of the petition for recognition are

13 authentic, whether or not they have been legalized.

14 ‘‘(c) In the absence of evidence to the contrary, the

15 debtor’s registered office, or habitual residence in the case

16 of an individual, is presumed to be the center of the debt17 or’s main interests.

18 ‘‘§ 1517. Order recognizing a foreign proceeding

19 ‘‘(a) Subject to section 1506, after notice and a hear20 ing an order recognizing a foreign proceeding shall be en21 tered if—

22 ‘‘(1) the foreign proceeding is a foreign main

23 proceeding or foreign nonmain proceeding within the

24 meaning of section 1502;
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1 ‘‘(2) the foreign representative applying for rec2 ognition is a person or body as defined in section

3 101; and

4 ‘‘(3) the petition meets the requirements of sec5 tion 1515.

6 ‘‘(b) The foreign proceeding shall be recognized—

7 ‘‘(1) as a foreign main proceeding if it is taking

8 place in the country where the debtor has the center

9 of its main interests; or

10 ‘‘(2) as a foreign nonmain proceeding if the

11 debtor has an establishment within the meaning of

12 section 1502 in the foreign country where the pro13 ceeding is pending.

14 ‘‘(c) A petition for recognition of a foreign proceeding

15 shall be decided upon at the earliest possible time. Entry

16 of an order recognizing a foreign proceeding shall con17 stitute recognition under this chapter.

18 ‘‘(d) The provisions of this subchapter do not prevent

19 modification or termination of recognition if it is shown

20 that the grounds for granting it were fully or partially

21 lacking or have ceased to exist, but in considering such

22 action the court shall give due weight to possible prejudice

23 to parties that have relied upon the granting of recogni24 tion. The case under this chapter may be closed in the

25 manner prescribed for a case under section 350.
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1 ‘‘§ 1518. Subsequent information

2 ‘‘After the petition for recognition of the foreign pro3 ceeding is filed, the foreign representative shall file with

4 the court promptly a notice of change of status

5 concerning—

6 ‘‘(1) any substantial change in the status of the

7 foreign proceeding or the status of the foreign rep8 resentative’s appointment; and

9 ‘‘(2) any other foreign proceeding regarding the

10 debtor that becomes known to the foreign represent11 ative.

12 ‘‘§ 1519. Relief that may be granted upon petition for

13 recognition of a foreign proceeding

14 ‘‘(a) Beginning on the date on which a petition for

15 recognition is filed and ending on the date on which the

16 petition is decided upon, the court may, at the request of

17 the foreign representative, where relief is urgently needed

18 to protect the assets of the debtor or the interests of the

19 creditors, grant relief of a provisional nature, including—

20 ‘‘(1) staying execution against the debtor’s as21 sets;

22 ‘‘(2) entrusting the administration or realiza23 tion of all or part of the debtor’s assets located in

24 the United States to the foreign representative or

25 another person authorized by the court, including an

26 examiner, in order to protect and preserve the value
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1 of assets that, by their nature or because of other

2 circumstances, are perishable, susceptible to devalu3 ation, or otherwise in jeopardy; and

4 ‘‘(3) any relief referred to in paragraph (3),

5 (4), or (7) of section 1521(a).

6 ‘‘(b) Unless extended under section 1521(a)(6), the

7 relief granted under this section terminates when the peti8 tion for recognition is decided upon.

9 ‘‘(c) It is a ground for denial of relief under this sec10 tion that such relief would interfere with the administra11 tion of a foreign main proceeding.

12 ‘‘(d) The court may not enjoin a police or regulatory

13 act of a governmental unit, including a criminal action or

14 proceeding, under this section.

15 ‘‘(e) The standards, procedures, and limitations ap16 plicable to an injunction shall apply to relief under this

17 section.

18 ‘‘§ 1520. Effects of recognition of a foreign main pro19 ceeding

20 ‘‘(a) Upon recognition of a foreign proceeding that

21 is a foreign main proceeding—

22 ‘‘(1) section 362 applies with respect to the

23 debtor and that property of the debtor that is within

24 the territorial jurisdiction of the United States;
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1 ‘‘(2) a transfer, an encumbrance, or any other

2 disposition of an interest of the debtor in property

3 within the territorial jurisdiction of the United

4 States is restrained as and to the extent that is pro5 vided for property of an estate under sections 363,

6 549, and 552; and

7 ‘‘(3) unless the court orders otherwise, the for8 eign representative may operate the debtor’s busi9 ness and may exercise the powers of a trustee under

10 section 549, subject to sections 363 and 552.

11 ‘‘(b) The scope, and the modification or termination,

12 of the stay and restraints referred to in subsection (a) are

13 subject to the exceptions and limitations provided in sub14 sections (b), (c), and (d) of section 362, subsections (b)

15 and (c) of section 363, and sections 552, 555 through 557,

16 559, and 560.

17 ‘‘(c) Subsection (a) does not affect the right to com18 mence individual actions or proceedings in a foreign coun19 try to the extent necessary to preserve a claim against the

20 debtor.

21 ‘‘(d) Subsection (a) does not affect the right of a for22 eign representative or an entity to file a petition com23 mencing a case under this title or the right of any party

24 to file claims or take other proper actions in such a case.
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1 ‘‘§ 1521. Relief that may be granted upon recognition

2 of a foreign proceeding

3 ‘‘(a) Upon recognition of a foreign proceeding, wheth4 er main or nonmain, where necessary to effectuate the

5 purpose of this chapter and to protect the assets of the

6 debtor or the interests of the creditors, the court may, at

7 the request of the foreign representative, grant any appro8 priate relief, including—

9 ‘‘(1) staying the commencement or continuation

10 of individual actions or individual proceedings con11 cerning the debtor’s assets, rights, obligations or li12 abilities to the extent the actions or proceedings

13 have not been stayed under section 1520(a);

14 ‘‘(2) staying execution against the debtor’s as15 sets to the extent the execution has not been stayed

16 under section 1520(a);

17 ‘‘(3) suspending the right to transfer, encumber

18 or otherwise dispose of any assets of the debtor to

19 the extent that right has not been suspended under

20 section 1520(a);

21 ‘‘(4) providing for the examination of witnesses,

22 the taking of evidence or the delivery of information

23 concerning the debtor’s assets, affairs, rights, obliga24 tions or liabilities;

25 ‘‘(5) entrusting the administration or realiza26 tion of all or part of the debtor’s assets within the
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1 territorial jurisdiction of the United States to the

2 foreign representative or another person, including

3 an examiner, authorized by the court;

4 ‘‘(6) extending relief granted under section

5 1519(a); and

6 ‘‘(7) granting any additional relief that may be

7 available to a trustee, except for relief available

8 under sections 522, 544, 545, 547, 548, 550, and

9 724(a).

10 ‘‘(b) Upon recognition of a foreign proceeding, wheth11 er main or nonmain, the court may, at the request of the

12 foreign representative, entrust the distribution of all or

13 part of the debtor’s assets located in the United States

14 to the foreign representative or another person, including

15 an examiner, authorized by the court, if the court is satis16 fied that the interests of creditors in the United States

17 are sufficiently protected.

18 ‘‘(c) In granting relief under this section to a rep19 resentative of a foreign nonmain proceeding, the court

20 must be satisfied that the relief relates to assets that,

21 under the law of the United States, should be adminis22 tered in the foreign nonmain proceeding or concerns infor23 mation required in that proceeding.
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1 ‘‘(d) The court may not enjoin a police or regulatory

2 act of a governmental unit, including a criminal action or

3 proceeding, under this section.

4 ‘‘(e) The standards, procedures, and limitations ap5 plicable to an injunction shall apply to relief under para6 graphs (1), (2), (3), and (6) of subsection (a).

7 ‘‘§ 1522. Protection of creditors and other interested

8 persons

9 ‘‘(a) The court may grant relief under section 1519

10 or 1521, or may modify or terminate relief under sub11 section (c), only if the interests of the creditors and other

12 interested entities, including the debtor, are sufficiently

13 protected.

14 ‘‘(b) The court may subject relief granted under sec15 tion 1519 or 1521, or the operation of the debtor’s busi16 ness under section 1520(a)(2), to conditions that the court

17 considers to be appropriate, including the giving of secu18 rity or the filing of a bond.

19 ‘‘(c) The court may, at the request of the foreign rep20 resentative or an entity affected by relief granted under

21 section 1519 or 1521, or at its own motion, modify or

22 terminate the relief referred to in subsection (b).

23 ‘‘(d) Section 1104(d) shall apply to the appointment

24 of an examiner under this chapter. Any examiner shall
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1 comply with the qualification requirements imposed on a

2 trustee by section 322.

3 ‘‘§ 1523. Actions to avoid acts detrimental to creditors

4 ‘‘(a) Upon recognition of a foreign proceeding, the

5 foreign representative has standing in a case concerning

6 the debtor pending under another chapter of this title to

7 initiate actions under sections 522, 544, 545, 547, 548,

8 550, and 724(a).

9 ‘‘(b) In any case in which the foreign proceeding is

10 a foreign nonmain proceeding, the court must be satisfied

11 that an action under subsection (a) relates to assets that,

12 under United States law, should be administered in the

13 foreign nonmain proceeding.

14 ‘‘§ 1524. Intervention by a foreign representative

15 ‘‘Upon recognition of a foreign proceeding, the for16 eign representative may intervene in any proceedings in

17 a State or Federal court in the United States in which

18 the debtor is a party.
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1 ‘‘SUBCHAPTER IV—COOPERATION WITH FOR2 EIGN COURTS AND FOREIGN REPRESENTA3 TIVES

4 ‘‘§ 1525. Cooperation and direct communication be5 tween the court and foreign courts or for6 eign representatives

7 ‘‘(a) Consistent with section 1501, the court shall co8 operate to the maximum extent possible with foreign

9 courts or foreign representatives, either directly or

10 through the trustee.

11 ‘‘(b) The court is entitled to communicate directly

12 with, or to request information or assistance directly from,

13 foreign courts or foreign representatives, subject to the

14 rights of parties in interest to notice and participation.

15 ‘‘§ 1526. Cooperation and direct communication be16 tween the trustee and foreign courts or

17 foreign representatives

18 ‘‘(a) Consistent with section 1501, the trustee or

19 other person, including an examiner, authorized by the

20 court, shall, subject to the supervision of the court, cooper21 ate to the maximum extent possible with foreign courts

22 or foreign representatives.

23 ‘‘(b) The trustee or other person, including an exam24 iner, authorized by the court is entitled, subject to the su-
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1 pervision of the court, to communicate directly with for2 eign courts or foreign representatives.

3 ‘‘§ 1527. Forms of cooperation

4 ‘‘Cooperation referred to in sections 1525 and 1526

5 may be implemented by any appropriate means,

6 including—

7 ‘‘(1) appointment of a person or body, including

8 an examiner, to act at the direction of the court;

9 ‘‘(2) communication of information by any

10 means considered appropriate by the court;

11 ‘‘(3) coordination of the administration and su12 pervision of the debtor’s assets and affairs;

13 ‘‘(4) approval or implementation of agreements

14 concerning the coordination of proceedings; and

15 ‘‘(5) coordination of concurrent proceedings re16 garding the same debtor.

17 ‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

18 ‘‘§ 1528. Commencement of a case under this title

19 after recognition of a foreign main pro20 ceeding

21 ‘‘After recognition of a foreign main proceeding, a

22 case under another chapter of this title may be commenced

23 only if the debtor has assets in the United States. The

24 effects of such case shall be restricted to the assets of the

25 debtor that are within the territorial jurisdiction of the
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1 United States and, to the extent necessary to implement

2 cooperation and coordination under sections 1525, 1526,

3 and 1527, to other assets of the debtor that are within

4 the jurisdiction of the court under sections 541(a), and

5 1334(e) of title 28, to the extent that such other assets

6 are not subject to the jurisdiction and control of a foreign

7 proceeding that has been recognized under this chapter.

8 ‘‘§ 1529. Coordination of a case under this title and a

9 foreign proceeding

10 ‘‘In any case in which a foreign proceeding and a case

11 under another chapter of this title are taking place concur12 rently regarding the same debtor, the court shall seek co13 operation and coordination under sections 1525, 1526,

14 and 1527, and the following shall apply:

15 ‘‘(1) If the case in the United States is taking

16 place at the time the petition for recognition of the

17 foreign proceeding is filed—

18 ‘‘(A) any relief granted under sections

19 1519 or 1521 must be consistent with the relief

20 granted in the case in the United States; and

21 ‘‘(B) even if the foreign proceeding is rec22 ognized as a foreign main proceeding, section

23 1520 does not apply.

24 ‘‘(2) If a case in the United States under this

25 title commences after recognition, or after the filing
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1 of the petition for recognition, of the foreign

2 proceeding—

3 ‘‘(A) any relief in effect under sections

4 1519 or 1521 shall be reviewed by the court

5 and shall be modified or terminated if incon6 sistent with the case in the United States; and

7 ‘‘(B) if the foreign proceeding is a foreign

8 main proceeding, the stay and suspension re9 ferred to in section 1520(a) shall be modified or

10 terminated if inconsistent with the relief grant11 ed in the case in the United States.

12 ‘‘(3) In granting, extending, or modifying relief

13 granted to a representative of a foreign nonmain

14 proceeding, the court must be satisfied that the re15 lief relates to assets that, under the law of the

16 United States, should be administered in the foreign

17 nonmain proceeding or concerns information re18 quired in that proceeding.

19 ‘‘(4) In achieving cooperation and coordination

20 under sections 1528 and 1529, the court may grant

21 any of the relief authorized under section 305.

22 ‘‘§ 1530. Coordination of more than 1 foreign pro23 ceeding

24 ‘‘In matters referred to in section 1501, with respect

25 to more than 1 foreign proceeding regarding the debtor,
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1 the court shall seek cooperation and coordination under

2 sections 1525, 1526, and 1527, and the following shall

3 apply:

4 ‘‘(1) Any relief granted under section 1519 or

5 1521 to a representative of a foreign nonmain pro6 ceeding after recognition of a foreign main pro7 ceeding must be consistent with the foreign main

8 proceeding.

9 ‘‘(2) If a foreign main proceeding is recognized

10 after recognition, or after the filing of a petition for

11 recognition, of a foreign nonmain proceeding, any

12 relief in effect under section 1519 or 1521 shall be

13 reviewed by the court and shall be modified or termi14 nated if inconsistent with the foreign main pro15 ceeding.

16 ‘‘(3) If, after recognition of a foreign nonmain

17 proceeding, another foreign nonmain proceeding is

18 recognized, the court shall grant, modify, or termi19 nate relief for the purpose of facilitating coordina20 tion of the proceedings.

21 ‘‘§ 1531. Presumption of insolvency based on recogni22 tion of a foreign main proceeding

23 ‘‘In the absence of evidence to the contrary, recogni24 tion of a foreign main proceeding is for the purpose of

25 commencing a proceeding under section 303, proof that
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1 the debtor is generally not paying its debts as such debts

2 become due.

3 ‘‘§ 1532. Rule of payment in concurrent proceedings

4 ‘‘Without prejudice to secured claims or rights in

5 rem, a creditor who has received payment with respect to

6 its claim in a foreign proceeding pursuant to a law relating

7 to insolvency may not receive a payment for the same

8 claim in a case under any other chapter of this title re9 garding the debtor, so long as the payment to other credi10 tors of the same class is proportionately less than the pay11 ment the creditor has already received.’’.

12 (b) CLERICAL AMENDMENT.—The table of chapters

13 for title 11, United States Code, is amended by inserting

14 after the item relating to chapter 13 the following:

‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’.

15 SEC. 802. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11,

16 UNITED STATES CODE.

17 (a) APPLICABILITY OF CHAPTERS.—Section 103 of

18 title 11, United States Code, is amended—

19 (1) in subsection (a), by inserting before the pe20 riod the following: ‘‘, and this chapter, sections 307,

21 304, 555 through 557, 559, and 560 apply in a case

22 under chapter 15’’; and

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

24 ‘‘(j) Chapter 15 applies only in a case under such

25 chapter, except that—
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1 ‘‘(1) sections 1513 and 1514 apply in all cases

2 under this title; and

3 ‘‘(2) section 1505 applies to trustees and to any

4 other entity (including an examiner) authorized by

5 the court under chapter 7, 11, or 12, to debtors in

6 possession under chapter 11 or 12, and to debtors

7 under chapter 9 who are authorized to act under

8 section 1505.’’.

9 (b) DEFINITIONS.—Paragraphs (23) and (24) of sec10 tion 101 of title 11, United States Code, are amended to

11 read as follows:

12 ‘‘(23) ‘foreign proceeding’ means a collective ju13 dicial or administrative proceeding in a foreign coun14 try, including an interim proceeding, pursuant to a

15 law relating to insolvency in which proceeding the

16 assets and affairs of the debtor are subject to con17 trol or supervision by a foreign court, for the pur18 pose of reorganization or liquidation;

19 ‘‘(24) ‘foreign representative’ means a person

20 or body, including a person or body appointed on an

21 interim basis, authorized in a foreign proceeding to

22 administer the reorganization or the liquidation of

23 the debtor’s assets or affairs or to act as a rep24 resentative of the foreign proceeding;’’.
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1 (c) AMENDMENTS TO TITLE 28, UNITED STATES

2 CODE.—

3 (1) PROCEDURES.—Section 157(b)(2) of title

4 28, United States Code, is amended—

5 (A) in subparagraph (N), by striking

6 ‘‘and’’ at the end;

7 (B) in subparagraph (O), by striking the

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

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

10 ‘‘(P) recognition of foreign proceedings and

11 other matters under chapter 15 of title 11.’’.

12 (2) BANKRUPTCY CASES AND PROCEEDINGS.—

13 Section 1334(c)(1) of title 28, United States Code,

14 is amended by striking ‘‘Nothing in’’ and inserting

15 ‘‘Except with respect to a case under chapter 15 of

16 title 11, nothing in’’.

17 (3) DUTIES OF TRUSTEES.—Section 586(a)(3)

18 of title 28, United States Code, is amended by in19 serting ‘‘15,’’ after ‘‘chapter’’.

20 SEC. 803. CLAIMS RELATING TO INSURANCE DEPOSITS IN

21 CASES ANCILLARY TO FOREIGN PRO22 CEEDINGS.

23 Section 304 of title 11, United States Code, is

24 amended to read as follows:
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1 ‘‘§ 304. Cases ancillary to foreign proceedings

2 ‘‘(a) For purposes of this section—

3 ‘‘(1) the term ‘domestic insurance company’

4 means a domestic insurance company, as such term

5 is used in section 109(b)(2);

6 ‘‘(2) the term ‘foreign insurance company’

7 means a foreign insurance company, as such term is

8 used in section 109(b)(3);

9 ‘‘(3) the term ‘United States claimant’ means a

10 beneficiary of any deposit referred to in subsection

11 (b) or any multibeneficiary trust referred to in sub12 section (b);

13 ‘‘(4) the term ‘United States creditor’ means,

14 with respect to a foreign insurance company—

15 ‘‘(i) a United States claimant; or

16 ‘‘(ii) any business entity that operates in

17 the United States and that is a creditor; and

18 ‘‘(5) the term ‘United States policyholder’

19 means a holder of an insurance policy issued in the

20 United States.

21 ‘‘(b) The court may not grant relief under chapter

22 15 of this title with respect to any deposit, escrow, trust

23 fund, or other security required or permitted under any

24 applicable State insurance law or regulation for the benefit

25 of claim holders in the United States.’’.
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1 TITLE IX—FINANCIAL

2 CONTRACT PROVISIONS

3 SEC. 901. BANKRUPTCY CODE AMENDMENTS.

4 (a) DEFINITIONS OF FORWARD CONTRACT, REPUR5 CHASE AGREEMENT, SECURITIES CLEARING AGENCY,

6 SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU7 RITIES CONTRACT.—Title 11, United States Code, is

8 amended—

9 (1) in section 101—

10 (A) in paragraph (25)—

11 (i) by striking ‘‘means a contract’’

12 and inserting ‘‘means—

13 ‘‘(A) a contract’’;

14 (ii) by striking ‘‘, or any combination

15 thereof or option thereon;’’ and inserting

16 ‘‘, or any other similar agreement;’’; and

17 (iii) by adding at the end the fol18 lowing:

19 ‘‘(B) a combination of agreements or

20 transactions referred to in subparagraphs (A)

21 and (C);

22 ‘‘(C) an option to enter into an agreement

23 or transaction referred to in subparagraph (A)

24 or (B);
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1 ‘‘(D) a master netting agreement that pro2 vides for an agreement or transaction referred

3 to in subparagraph (A), (B), or (C), together

4 with all supplements to such master netting

5 agreement, without regard to whether such

6 master netting agreement provides for an

7 agreement or transaction that is not a forward

8 contract under this paragraph, except that such

9 master netting agreement shall be considered to

10 be a forward contract under this paragraph

11 only with respect to each agreement or trans12 action under such master netting agreement

13 that is referred to in subparagraph (A), (B) or

14 (C); or

15 ‘‘(E) a security agreement or arrangement,

16 or other credit enhancement, directly pertaining

17 to a contract, option, agreement, or transaction

18 referred to in subparagraph (A), (B), (C), or

19 (D), but not to exceed the actual value of such

20 contract, option, agreement, or transaction on

21 the date of the filing of the petition;’’;

22 (B) by striking paragraph (47) and insert23 ing the following:

24 ‘‘(47) ‘repurchase agreement’ and ‘reverse re25 purchase agreement’—
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1 ‘‘(A) mean—

2 ‘‘(i) an agreement, including related

3 terms, which provides for the transfer of—

4 ‘‘(I) a certificate of deposit,

5 mortgage related security (as defined

6 in section 3 of the Securities Ex7 change Act of 1934), mortgage loan,

8 interest in a mortgage related security

9 or mortgage loan, eligible bankers’ ac10 ceptance, or qualified foreign govern11 ment security (defined for purposes of

12 this paragraph to mean a security

13 that is a direct obligation of, or that

14 is fully guaranteed by, the central

15 government of a member of the Orga16 nization for Economic Cooperation

17 and Development); or

18 ‘‘(II) a security that is a direct

19 obligation of, or that is fully guaran20 teed by, the United States or an agen21 cy of the United States against the

22 transfer of funds by the transferee of

23 such certificate of deposit, eligible

24 bankers’ acceptance, security, loan, or

25 interest;
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1 with a simultaneous agreement by such

2 transferee to transfer to the transferor

3 thereof a certificate of deposit, eligible

4 bankers’ acceptance, security, loan, or in5 terest of the kind described in subclause

6 (I) or (II), at a date certain that is not

7 later than 1 year after the date of the

8 transferor’s transfer or on demand, against

9 the transfer of funds;

10 ‘‘(ii) a combination of agreements or

11 transactions referred to in clauses (i) and

12 (iii);

13 ‘‘(iii) an option to enter into an agree14 ment or transaction referred to in clause

15 (i) or (ii); or

16 ‘‘(iv) a master netting agreement that

17 provides for an agreement or transaction

18 referred to in clause (i), (ii), or (iii), to19 gether with all supplements to such master

20 netting agreement, without regard to

21 whether such master netting agreement

22 provides for an agreement or transaction

23 that is not a repurchase agreement under

24 this subparagraph, except that such master

25 netting agreement shall be considered to be
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1 a repurchase agreement under this sub2 paragraph only with respect to each agree3 ment or transaction under such master

4 netting agreement that is referred to in

5 clause (i), (ii), or (iii); or

6 ‘‘(v) a security agreement or arrange7 ment, or other credit enhancement, directly

8 pertaining to a contract referred to in

9 clause (i), (ii), (iii), or (iv), but not to ex10 ceed the actual value of such contract on

11 the date of the filing of the petition; and

12 ‘‘(B) do not include a repurchase obliga13 tion under a participation in a commercial

14 mortgage loan;’’;

15 (C) in paragraph (48) by inserting ‘‘, or

16 exempt from such registration under such sec17 tion pursuant to an order of the Securities and

18 Exchange Commission’’ after ‘‘1934’’; and

19 (D) by striking paragraph (53B) and in20 serting the following:

21 ‘‘(53B) ‘swap agreement’—

22 ‘‘(A) means—

23 ‘‘(i) an agreement, including the

24 terms and conditions incorporated by ref25 erence in such agreement, that is—
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1 ‘‘(I) an interest rate swap, op2 tion, future, or forward agreement, in3 cluding a rate floor, rate cap, rate col4 lar, cross-currency rate swap, and

5 basis swap;

6 ‘‘(II) a spot, same day-tomorrow,

7 tomorrow-next, forward, or other for8 eign exchange or precious metals

9 agreement;

10 ‘‘(III) a currency swap, option,

11 future, or forward agreement;

12 ‘‘(IV) an equity index or an eq13 uity swap, option, future, or forward

14 agreement;

15 ‘‘(V) a debt index or a debt swap,

16 option, future, or forward agreement;

17 ‘‘(VI) a credit spread or a credit

18 swap, option, future, or forward

19 agreement; or

20 ‘‘(VII) a commodity index or a

21 commodity swap, option, future, or

22 forward agreement;

23 ‘‘(ii) an agreement or transaction that

24 is similar to an agreement or transaction

25 referred to in clause (i) that—
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1 ‘‘(I) is currently, or in the future

2 becomes, regularly entered into in the

3 swap market (including terms and

4 conditions incorporated by reference

5 therein); and

6 ‘‘(II) is a forward, swap, future,

7 or option on a rate, currency, com8 modity, equity security, or other eq9 uity instrument, on a debt security or

10 other debt instrument, or on an eco11 nomic index or measure of economic

12 risk or value;

13 ‘‘(iii) a combination of agreements or

14 transactions referred to in clauses (i) and

15 (ii);

16 ‘‘(iv) an option to enter into an agree17 ment or transaction referred to in this sub18 paragraph;

19 ‘‘(v) a master netting agreement that

20 provides for an agreement or transaction

21 referred to in clause (i), (ii), (iii), or (iv),

22 together with all supplements to such mas23 ter netting agreement and without regard

24 to whether such master netting agreement

25 contains an agreement or transaction de-
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1 scribed in any such clause, but only with

2 respect to each agreement or transaction

3 referred to in any such clause that is under

4 such master netting agreement; except that

5 ‘‘(B) the definition under subparagraph

6 (A) is applicable for purposes of this title only,

7 and shall not be construed or applied so as to

8 challenge or affect the characterization, defini9 tion, or treatment of any swap agreement under

10 any other statute, regulation, or rule, including

11 the Securities Act of 1933, the Securities Ex12 change Act of 1934, the Public Utility Holding

13 Company Act of 1935, the Trust Indenture Act

14 of 1939, the Investment Company Act of 1940,

15 the Investment Advisers Act of 1940, the Secu16 rities Investor Protection Act of 1970, the Com17 modity Exchange Act, and the regulations pre18 scribed by the Securities and Exchange Com19 mission or the Commodity Futures Trading

20 Commission.’’;

21 (2) in section 741, by striking paragraph (7)

22 and inserting the following:

23 ‘‘(7) ‘securities contract’—

24 ‘‘(A) means—
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1 ‘‘(i) a contract for the purchase, sale,

2 or loan of a security, a mortgage loan or

3 an interest in a mortgage loan, a group or

4 index of securities, or mortgage loans or

5 interests therein (including an interest

6 therein or based on the value thereof), or

7 option on any of the foregoing, including

8 an option to purchase or sell any of the

9 foregoing;

10 ‘‘(ii) an option entered into on a na11 tional securities exchange relating to for12 eign currencies;

13 ‘‘(iii) the guarantee by or to a securi14 ties clearing agency of a settlement of

15 cash, securities, mortgage loans or inter16 ests therein, group or index of securities,

17 or mortgage loans or interests therein (in18 cluding any interest therein or based on

19 the value thereof), or option on any of the

20 foregoing, including an option to purchase

21 or sell any of the foregoing;

22 ‘‘(iv) a margin loan;

23 ‘‘(v) any other agreement or trans24 action that is similar to an agreement or
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1 transaction referred to in this subpara2 graph;

3 ‘‘(vi) a combination of the agreements

4 or transactions referred to in this subpara5 graph;

6 ‘‘(vii) an option to enter into an

7 agreement or transaction referred to in

8 this subparagraph;

9 ‘‘(viii) a master netting agreement

10 that provides for an agreement or trans11 action referred to in clause (i), (ii), (iii),

12 (iv), (v), (vi), or (vii), together with all

13 supplements to such master netting agree14 ment, without regard to whether such mas15 ter netting agreement provides for an

16 agreement or transaction that is not a se17 curities contract under this subparagraph,

18 except that such master netting agreement

19 shall be considered to be a securities con20 tract under this subparagraph only with

21 respect to each agreement or transaction

22 under such master netting agreement that

23 is referred to in clause (i), (ii), (iii), (iv),

24 (v), (vi), or (vii); or
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1 ‘‘(ix) a security agreement or arrange2 ment, or other credit enhancement, directly

3 pertaining to a contract referred to in this

4 subparagraph, but not to exceed the actual

5 value of such contract on the date of the

6 filing of the petition; and

7 ‘‘(B) does not include a purchase, sale, or

8 repurchase obligation under a participation in a

9 commercial mortgage loan;’’; and

10 (3) in section 761(4)—

11 (A) by striking ‘‘or’’ at the end of subpara12 graph (D); and

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

14 ‘‘(F) any other agreement or transaction

15 that is similar to an agreement or transaction

16 referred to in this paragraph;

17 ‘‘(G) a combination of the agreements or

18 transactions referred to in this paragraph;

19 ‘‘(H) an option to enter into an agreement

20 or transaction referred to in this paragraph;

21 ‘‘(I) a master netting agreement that pro22 vides for an agreement or transaction referred

23 to in subparagraph (A), (B), (C), (D), (E), (F),

24 (G), or (H), together with all supplements to

25 such master netting agreement, without regard
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1 to whether such master netting agreement pro2 vides for an agreement or transaction that is

3 not a commodity contract under this paragraph,

4 except that such master netting agreement shall

5 be considered to be a commodity contract under

6 this paragraph only with respect to each agree7 ment or transaction under such master netting

8 agreement that is referred to in subparagraph

9 (A), (B), (C), (D), (E), (F), (G), or (H); or

10 ‘‘(J) a security agreement or arrangement,

11 or other credit enhancement, directly pertaining

12 to a contract referred to in this paragraph, but

13 not to exceed the actual value of such contract

14 on the date of the filing of the petition.’’.

15 (b) DEFINITIONS OF FINANCIAL INSTITUTION, FI16 NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER17 CHANT.—Section 101 of title 11, United States Code, as

18 amended by section 802(b) of this Act, is amended—

19 (1) by striking paragraph (22) and inserting

20 the following:

21 ‘‘(22) ‘financial institution’ means—

22 ‘‘(A)(i) a Federal reserve bank, or an enti23 ty that is a commercial or savings bank, indus24 trial savings bank, savings and loan association,
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1 trust company, or receiver or conservator for

2 such entity; and

3 ‘‘(ii) if such Federal reserve bank, receiver,

4 or conservator or entity is acting as agent or

5 custodian for a customer in connection with a

6 securities contract, as defined in section 741,

7 such customer; or

8 ‘‘(B) in connection with a securities con9 tract, as defined in section 741 of this title, an

10 investment company registered under the In11 vestment Company Act of 1940;’’;

12 (2) by inserting after paragraph (22) the fol13 lowing:

14 ‘‘(22A) ‘financial participant’ means an entity

15 that is a party to a securities contract, commodity

16 contract or forward contract, or on the date of the

17 filing of the petition, has a commodity contract (as

18 defined in section 761) with the debtor or any other

19 entity (other than an affiliate) of a total gross dollar

20 value of not less than $1,000,000,000 in notional or

21 actual principal amount outstanding on any day dur22 ing the previous 15-month period, or has gross

23 mark-to-market positions of not less than

24 $100,000,000 (aggregated across counterparties) in

25 any such agreement or transaction with the debtor
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1 or any other entity (other than an affiliate) on any

2 day during the previous 15-month period;’’; and

3 (3) by striking paragraph (26) and inserting

4 the following:

5 ‘‘(26) ‘forward contract merchant’ means a

6 Federal reserve bank, or an entity, the business of

7 which consists in whole or in part of entering into

8 forward contracts as or with merchants or in a com9 modity, as defined or in section 761, or any similar

10 good, article, service, right, or interest that is pres11 ently or in the future becomes the subject of dealing

12 or in the forward contract trade;’’.

13 (c) DEFINITION OF MASTER NETTING AGREEMENT

14 AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec15 tion 101 of title 11, United States Code, as amended by

16 subsection (b) of this section, is amended by inserting

17 after paragraph (38) the following new paragraphs:

18 ‘‘(38A) the term ‘master netting agreement’—

19 ‘‘(A) means an agreement providing for

20 the exercise of rights, including rights of net21 ting, setoff, liquidation, termination, accelera22 tion, or closeout, under or in connection with 1

23 or more contracts that are described in any 1

24 or more of paragraphs (1) through (5) of sec25 tion 561(a), or any security agreement or ar-
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1 rangement or other credit enhancement related

2 to 1 or more of the foregoing; except that

3 ‘‘(B) if a master netting agreement con4 tains provisions relating to agreements or trans5 actions that are not contracts described in para6 graphs (1) through (5) of section 561(a), the

7 master netting agreement shall be deemed to be

8 a master netting agreement only with respect to

9 those agreements or transactions that are de10 scribed in any 1 or more of the paragraphs (1)

11 through (5) of section 561(a);

12 ‘‘(38B) the term ‘master netting agreement

13 participant’ means an entity that, at any time before

14 the filing of the petition, is a party to an out15 standing master netting agreement with the debt16 or;’’.

17 (d) SWAP AGREEMENTS, SECURITIES CONTRACTS,

18 COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR19 CHASE AGREEMENTS, AND MASTER NETTING AGREE20 MENTS UNDER THE AUTOMATIC STAY.—

21 (1) IN GENERAL.—Section 362(b) of title 11,

22 United States Code, as amended by section 718 of

23 this Act, is amended—
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1 (A) in paragraph (6), by inserting ‘‘,

2 pledged to, and under the control of,’’ after

3 ‘‘held by’’;

4 (B) in paragraph (7), by inserting ‘‘,

5 pledged to, and under the control of,’’ after

6 ‘‘held by’’;

7 (C) by striking paragraph (17) and insert8 ing the following:

9 ‘‘(17) under subsection (a), of the setoff by a

10 swap participant of a mutual debt and claim under

11 or in connection with a swap agreement that con12 stitutes the setoff of a claim against the debtor for

13 a payment or transfer due from the debtor under or

14 in connection with a swap agreement against a pay15 ment due to the debtor from the swap participant

16 under or in connection with a swap agreement or

17 against cash, securities, or other property held by,

18 pledged to, and under the control of, or due from

19 such swap participant to guarantee, secure, or settle

20 a swap agreement;’’;

21 (D) in paragraph (26), by striking ‘‘or’’ at

22 the end;

23 (E) in paragraph (27), by striking the pe24 riod at the end and inserting ‘‘; or’’; and
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1 (F) by inserting after paragraph (27) the

2 following:

3 ‘‘(28) under subsection (a), of the setoff by a

4 master netting agreement participant of a mutual

5 debt and claim under or in connection with 1 or

6 more master netting agreements or any contract or

7 agreement subject to such agreements that con8 stitutes the setoff of a claim against the debtor for

9 any payment or other transfer of property due from

10 the debtor under or in connection with such agree11 ments or any contract or agreement subject to such

12 agreements against any payment due to the debtor

13 from such master netting agreement participant

14 under or in connection with such agreements or any

15 contract or agreement subject to such agreements or

16 against cash, securities, or other property held by,

17 pledged or and under the control of, or due from

18 such master netting agreement participant to mar19 gin, guarantee, secure, or settle such agreements or

20 any contract or agreement subject to such agree21 ments, to the extent such participant is eligible to

22 exercise such offset rights under paragraph (6), (7),

23 or (17) for each individual contract covered by the

24 master netting agreement in issue.’’.
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1 (2) LIMITATION.—Section 362 of title 11,

2 United States Code, as amended by section 441(2)

3 of this Act, is amended by adding at the end the fol4 lowing:

5 ‘‘(l) LIMITATION.—The exercise of rights not subject

6 to the stay arising under subsection (a) pursuant to para7 graph (6), (7), or (17) of subsection (b) shall not be stayed

8 by an order of a court or administrative agency in any

9 proceeding under this title.’’.

10 (e) LIMITATION OF AVOIDANCE POWERS UNDER

11 MASTER NETTING AGREEMENT.—Section 546 of title 11,

12 United States Code, is amended—

13 (1) in subsection (g) (as added by section 103

14 of Public Law 101–311 (104 Stat. 267 et seq.))—

15 (A) by striking ‘‘under a swap agreement’’;

16 and

17 (B) by striking ‘‘in connection with a swap

18 agreement’’ and inserting ‘‘under or in connec19 tion with any swap agreement’’; and

20 (2) by inserting before subsection (i) (as redes21 ignated by section 407 of this Act) the following new

22 subsection:

23 ‘‘(h) Notwithstanding sections 544, 545, 547,

24 548(a)(2)(B), and 548(b), the trustee may not avoid a

25 transfer made by or to a master netting agreement partici-
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1 pant under or in connection with any master netting

2 agreement or any individual contract covered thereby that

3 is made before the commencement of the case, and except

4 to the extent that the trustee could otherwise avoid such

5 a transfer made under an individual contract covered by

6 such master netting agreement (except under section

7 548(a)(1)(A)).’’.

8 (f) FRAUDULENT TRANSFERS OF MASTER NETTING

9 AGREEMENTS.—Section 548(d)(2) of title 11, United

10 States Code, is amended—

11 (1) in subparagraph (C), by striking ‘‘and’’;

12 (2) in subparagraph (D), by striking the period

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

14 (3) by adding at the end the following new sub15 paragraph:

16 ‘‘(E) a master netting agreement partici17 pant that receives a transfer in connection with

18 a master netting agreement or any individual

19 contract covered thereby takes for value to the

20 extent of such transfer, except, with respect to

21 a transfer under any individual contract covered

22 thereby, to the extent that such master netting

23 agreement participant otherwise did not take

24 (or is otherwise not deemed to have taken) such

25 transfer for value.’’.
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1 (g) TERMINATION OR ACCELERATION OF SECURITIES

2 CONTRACTS.—Section 555 of title 11, United States Code,

3 is amended—

4 (1) by striking the section heading and insert5 ing the following:

6 ‘‘§ 555. Contractual right to liquidate, terminate, or

7 accelerate a securities contract’’;

8 and

9 (2) in the first sentence, by striking ‘‘liquida10 tion’’ and inserting ‘‘liquidation, termination, or ac11 celeration’’.

12 (h) TERMINATION OR ACCELERATION OF COMMOD13 ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,

14 United States Code, is amended—

15 (1) by striking the section heading and insert16 ing the following:

17 ‘‘§ 556. Contractual right to liquidate, terminate, or

18 accelerate a commodities contract or for19 ward contract’’;

20 and

21 (2) in the first sentence, by striking ‘‘liquida22 tion’’ and inserting ‘‘liquidation, termination, or ac23 celeration’’.
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1 (i) TERMINATION OR ACCELERATION OF REPUR2 CHASE AGREEMENTS.—Section 559 of title 11, United

3 States Code, is amended—

4 (1) by striking the section heading and insert5 ing the following:

6 ‘‘§ 559. Contractual right to liquidate, terminate, or

7 accelerate a repurchase agreement’’;

8 and

9 (2) in the first sentence, by striking ‘‘liquida10 tion’’ and inserting ‘‘liquidation, termination, or ac11 celeration’’.

12 (j) LIQUIDATION, TERMINATION, OR ACCELERATION

13 OF SWAP AGREEMENTS.—Section 560 of title 11, United

14 States Code, is amended—

15 (1) by striking the section heading and insert16 ing following:

17 ‘‘§ 560. Contractual right to liquidate, terminate, or

18 accelerate a swap agreement’’;

19 (2) in the first sentence, by striking ‘‘termi20 nation of a swap agreement’’ and inserting ‘‘liquida21 tion, termination, or acceleration of a swap agree22 ment’’; and

23 (3) by striking ‘‘in connection with any swap

24 agreement’’ and inserting ‘‘in connection with the
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1 termination, liquidation, or acceleration of a swap

2 agreement’’.

3 (k) LIQUIDATION, TERMINATION, ACCELERATION, OR

4 OFFSET UNDER A MASTER NETTING AGREEMENT AND

5 ACROSS CONTRACTS.—Title 11, United States Code, is

6 amended by inserting after section 560 the following:

7 ‘‘§ 561. Contractual right to terminate, liquidate, ac8 celerate, or offset under a master netting

9 agreement and across contracts

10 ‘‘(a) Subject to subsection (b), the exercise of any

11 contractual right, because of a condition of the kind speci12 fied in section 365(e)(1), to cause the termination, liquida13 tion, or acceleration of or to offset or net termination val14 ues, payment amounts or other transfer obligations arising

15 under or in connection with 1 or more (or the termination,

16 liquidation, or acceleration of 1 or more)—

17 ‘‘(1) securities contracts, as defined in section

18 741(7);

19 ‘‘(2) commodity contracts, as defined in section

20 761(4);

21 ‘‘(3) forward contracts;

22 ‘‘(4) repurchase agreements;

23 ‘‘(5) swap agreements; or

24 ‘‘(6) master netting agreements,
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1 shall not be stayed, avoided, or otherwise limited by oper2 ation of any provision of this title or by any order of a

3 court or administrative agency in any proceeding under

4 this title.

5 ‘‘(b)(1) A party may exercise a contractual right de6 scribed in subsection (a) to terminate, liquidate, or accel7 erate only to the extent that such party could exercise such

8 a right under section 555, 556, 559, or 560 for each indi9 vidual contract covered by the master netting agreement

10 in issue.

11 ‘‘(2) If a debtor is a commodity broker subject to sub12 chapter IV of chapter 7—

13 ‘‘(A) a party may not net or offset an obligation

14 to the debtor arising under, or in connection with,

15 a commodity contract against any claim arising

16 under, or in connection with, other instruments, con17 tracts, or agreements listed in subsection (a), except

18 to the extent that the party has positive net equity

19 in the commodity accounts at the debtor, as cal20 culated under such subchapter IV; and

21 ‘‘(B) another commodity broker may not net or

22 offset an obligation to the debtor arising under, or

23 in connection with, a commodity contract entered

24 into or held on behalf of a customer of the debtor

25 against any claim arising under, or in connection
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1 with, other instruments, contracts, or agreements re2 ferred to in subsection (a).

3 ‘‘(c) As used in this section, the term ‘contractual

4 right’ includes a right set forth in a rule or bylaw of a

5 national securities exchange, a national securities associa6 tion, or a securities clearing agency, a right set forth in

7 a bylaw of a clearing organization or contract market or

8 in a resolution of the governing board thereof, and a right,

9 whether or not evidenced in writing, arising under com10 mon law, under law merchant, or by reason of normal

11 business practice.’’.

12 (l) ANCILLARY PROCEEDINGS.—Section 304 of title

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

14 the following:

15 ‘‘(d) Any provisions of this title relating to securities

16 contracts, commodity contracts, forward contracts, repur17 chase agreements, swap agreements, or master netting

18 agreements shall apply in a case ancillary to a foreign pro19 ceeding under this section or any other section of this title,

20 so that enforcement of contractual provisions of such con21 tracts and agreements in accordance with their terms—

22 ‘‘(1) shall not be stayed or otherwise limited

23 by—

24 ‘‘(A) operation of any provision of this

25 title; or
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1 ‘‘(B) order of a court in any case under

2 this title;

3 ‘‘(2) shall limit avoidance powers to the same

4 extent as in a proceeding under chapter 7 or 11; and

5 ‘‘(3) shall not be limited based on the presence

6 or absence of assets of the debtor in the United

7 States.’’.

8 (m) COMMODITY BROKER LIQUIDATIONS.—Title 11,

9 United States Code, is amended by inserting after section

10 766 the following:

11 ‘‘§ 767. Commodity broker liquidation and forward

12 contract merchants, commodity brokers,

13 stockbrokers, financial institutions, secu14 rities clearing agencies, swap partici15 pants, repo participants, and master net16 ting agreement participants

17 ‘‘Notwithstanding any other provision of this title,

18 the exercise of rights by a forward contract merchant,

19 commodity broker, stockbroker, financial institution, secu20 rities clearing agency, swap participant, repo participant,

21 or master netting agreement participant under this title

22 shall not affect the priority of any unsecured claim it may

23 have after the exercise of such rights.’’.
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1 (n) STOCKBROKER LIQUIDATIONS.—Title 11, United

2 States Code, is amended by inserting after section 752 the

3 following:

4 ‘‘§ 753. Stockbroker liquidation and forward contract

5 merchants, commodity brokers, stock6 brokers, financial institutions, securities

7 clearing agencies, swap participants,

8 repo participants, and master netting

9 agreement participants

10 ‘‘Notwithstanding any other provision of this title,

11 the exercise of rights by a forward contract merchant,

12 commodity broker, stockbroker, financial institution, secu13 rities clearing agency, swap participant, repo participant,

14 financial participant, or master netting agreement partici15 pant under this title shall not affect the priority of any

16 unsecured claim it may have after the exercise of such

17 rights.’’.

18 (o) SETOFF.—Section 553 of title 11, United States

19 Code, is amended—

20 (1) in subsection (a)(3)(C), by inserting ‘‘(ex21 cept for a setoff of a kind described in section

22 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(28), 555,

23 556, 559, or 560)’’ before the period; and
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1 (2) in subsection (b)(1), by striking

2 ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17),

3 362(b)(28), 555, 556, 559, 560,’’.

4 (p) SECURITIES CONTRACTS, COMMODITY CON5 TRACTS, AND FORWARD CONTRACTS.—Title 11, United

6 States Code, is amended—

7 (1) in section 362(b)(6), by striking ‘‘financial

8 institutions,’’ each place such term appears and in9 serting ‘‘financial institution, financial participant’’;

10 (2) in section 546(e), by inserting ‘‘financial

11 participant’’ after ‘‘financial institution,’’;

12 (3) in section 548(d)(2)(B), by inserting ‘‘fi13 nancial participant’’ after ‘‘financial institution,’’;

14 (4) in section 555—

15 (A) by inserting ‘‘financial participant’’

16 after ‘‘financial institution,’’; and

17 (B) by inserting before the period ‘‘, a

18 right set forth in a bylaw of a clearing organi19 zation or contract market or in a resolution of

20 the governing board thereof, and a right,

21 whether or not in writing, arising under com22 mon law, under law merchant, or by reason of

23 normal business practice’’; and

24 (5) in section 556, by inserting ‘‘, financial par25 ticipant’’ after ‘‘commodity broker’’.
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1 (q) CONFORMING AMENDMENTS.—Title 11, United

2 States Code, is amended—

3 (1) in the table of sections for chapter 5—

4 (A) by striking the items relating to sec5 tions 555 and 556 and inserting the following:

‘‘555. Contractual right to liquidate, terminate, or accelerate a securities contract.

‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract.’’;

6 (B) by striking the items relating to sec7 tions 559 and 560 and inserting the following:

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase

agreement.

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;

8 and

9 (C) by adding after the item relating to

10 section 560 the following:

‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a

master netting agreement and across contracts.’’;

11 and

12 (2) in the table of sections for chapter 7—

13 (A) by inserting after the item relating to

14 section 766 the following:

‘‘767. Commodity broker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities

clearing agencies, swap participants, repo participants, and

master netting agreement participants.’’;

15 and

16 (B) by inserting after the item relating to

17 section 752 the following:
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‘‘753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing

agencies, swap participants, repo participants, and master netting agreement participants.’’.

1 SEC. 902. DAMAGE MEASURE.

2 (a) IN GENERAL.—Title 11, United States Code, is

3 amended—

4 (1) by inserting after section 561 the following:

5 ‘‘§ 562. Damage measure in connection with swap

6 agreements, securities contracts, forward

7 contracts, commodity contracts, repur8 chase agreements, or master netting

9 agreements

10 ‘‘If the trustee rejects a swap agreement, securities

11 contract (as defined in section 741), forward contract,

12 commodity contract (as defined in section 761) repurchase

13 agreement, or master netting agreement under section

14 365(a), or if a forward contract merchant, stockbroker,

15 financial institution, securities clearing agency, repo par16 ticipant, financial participant, master netting agreement

17 participant, or swap participant liquidates, terminates, or

18 accelerates such contract or agreement, damages shall be

19 measured as of the earlier of—

20 ‘‘(1) the date of such rejection; or

21 ‘‘(2) the date of such liquidation, termination,

22 or acceleration.’’; and
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1 (2) in the table of sections for chapter 5 by in2 serting after the item relating to section 561 the fol3 lowing:

‘‘562. Damage measure in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase

agreements, or master netting agreements.’’.

4 (b) CLAIMS ARISING FROM REJECTION.—Section

5 502(g) of title 11, United States Code, is amended—

6 (1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and

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

8 ‘‘(2) A claim for damages calculated in accordance

9 with section 561 shall be allowed under subsection (a), (b),

10 or (c) of this section, or disallowed under subsection (d)

11 or (e) of this section, as if such claim had arisen before

12 the date of the filing of the petition.’’.

13 SEC. 903. ASSET-BACKED SECURITIZATIONS.

14 Section 541 of title 11, United States Code, is

15 amended—

16 (1) in subsection (b), by striking ‘‘or’’ at the

17 end of paragraph (4);

18 (2) by redesignating paragraph (5) of sub19 section (b) as paragraph (6);

20 (3) by inserting after paragraph (4) of sub21 section (b) the following new paragraph:

22 ‘‘(5) any eligible asset (or proceeds thereof), to

23 the extent that such eligible asset was transferred by

24 the debtor, before the date of commencement of the
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1 case, to an eligible entity in connection with an

2 asset-backed securitization, except to the extent that

3 such asset (or proceeds or value thereof) may be re4 covered by the trustee under section 550 by virtue

5 of avoidance under section 548(a); or’’; and

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

7 ‘‘(e) For purposes of this section, the following defini8 tions shall apply:

9 ‘‘(1) The term ‘asset-backed securitization’

10 means a transaction in which eligible assets trans11 ferred to an eligible entity are used as the source of

12 payment on securities, the most senior of which are

13 rated investment grade by 1 or more nationally rec14 ognized securities rating organizations, issued by an

15 issuer.

16 ‘‘(2) The term ‘eligible asset’ means—

17 ‘‘(A) financial assets (including interests

18 therein and proceeds thereof), either fixed or re19 volving, including residential and commercial

20 mortgage loans, consumer receivables, trade re21 ceivables, and lease receivables, that, by their

22 terms, convert into cash within a finite time pe23 riod, plus any rights or other assets designed to

24 assure the servicing or timely distribution of

25 proceeds to security holders;
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1 ‘‘(B) cash; and

2 ‘‘(C) securities.

3 ‘‘(3) The term ‘eligible entity’ means—

4 ‘‘(A) an issuer; or

5 ‘‘(B) a trust, corporation, partnership, or

6 other entity engaged exclusively in the business

7 of acquiring and transferring eligible assets di8 rectly or indirectly to an issuer and taking ac9 tions ancillary thereto.

10 ‘‘(4) The term ‘issuer’ means a trust, corpora11 tion, partnership, or other entity engaged exclusively

12 in the business of acquiring and holding eligible as13 sets, issuing securities backed by eligible assets, and

14 taking actions ancillary thereto.

15 ‘‘(5) The term ‘transferred’ means the debtor,

16 under a written agreement, represented and war17 ranted that eligible assets were sold, contributed, or

18 otherwise conveyed with the intention of removing

19 them from the estate of the debtor pursuant to sub20 section (b)(5), irrespective, without limitation of—

21 ‘‘(A) whether the debtor directly or indi22 rectly obtained or held an interest in the issuer

23 or in any securities issued by the issuer;

24 ‘‘(B) whether the debtor had an obligation

25 to repurchase or to service or supervise the
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1 servicing of all or any portion of such eligible

2 assets; or

3 ‘‘(C) the characterization of such sale, con4 tribution, or other conveyance for tax, account5 ing, regulatory reporting, or other purposes.’’.

6 SEC. 904. EFFECTIVE DATE; APPLICATION OF AMEND7 MENTS.

8 (a) EFFECTIVE DATE.—This title shall take effect on

9 the date of enactment of this Act.

10 (b) APPLICATION OF AMENDMENTS.—The amend11 ments made by this title shall apply with respect to cases

12 commenced or appointments made under any Federal or

13 State law after the date of enactment of this Act, but shall

14 not apply with respect to cases commenced or appoint15 ments made under any Federal or State law before the

16 date of enactment of this Act.

17 TITLE X—PROTECTION OF FAM18 ILY FARMERS AND FAMILY

19 FISHERMEN

20 SEC. 1001. REENACTMENT OF CHAPTER 12.

21 (a) REENACTMENT.—

22 (1) IN GENERAL.—Chapter 12 of title 11,

23 United States Code, as reenacted by section 149 of

24 division C of the Omnibus Consolidated and Emer25 gency Supplemental Appropriations Act, 1999 (Pub-
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1 lic Law 105–277), and amended by this Act, is reen2 acted.

3 (2) EFFECTIVE DATE.—Subsection (a) shall

4 take effect on October 1, 1999.

5 (b) CONFORMING AMENDMENT.—Section 302 of the

6 Bankruptcy, Judges, United States Trustees, and Family

7 Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is

8 amended by striking subsection (f).

9 SEC. 1002. DEBT LIMIT INCREASE.

10 Section 104(b) of title 11, United States Code, is

11 amended by adding at the end the following:

12 ‘‘(4) The dollar amount in section 101(18) shall be

13 adjusted at the same times and in the same manner as

14 the dollar amounts in paragraph (1) of this subsection,

15 beginning with the adjustment to be made on April 1,

16 2001.’’.

17 SEC. 1003. ELIMINATION OF REQUIREMENT THAT FAMILY

18 FARMER AND SPOUSE RECEIVE OVER 50 PER19 CENT OF INCOME FROM FARMING OPER20 ATION IN YEAR PRIOR TO BANKRUPTCY.

21 Section 101(18)(A) of title 11, United States Code,

22 is amended by striking ‘‘the taxable year preceding the

23 taxable year’’ and inserting ‘‘at least 1 of the 3 calendar

24 years preceding the year’’.
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1 SEC. 1004. CERTAIN CLAIMS OWED TO GOVERNMENTAL

2 UNITS.

3 (a) CONTENTS OF PLAN.—Section 1222(a)(2) of title

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

5 ‘‘(2) provide for the full payment, in deferred

6 cash payments, of all claims entitled to priority

7 under section 507, unless—

8 ‘‘(A) the claim is a claim owed to a govern9 mental unit that arises as a result of the sale,

10 transfer, exchange, or other disposition of any

11 farm asset used in the debtor’s farming oper12 ation, in which case the claim shall be treated

13 as an unsecured claim that is not entitled to

14 priority under section 507, but the debt shall be

15 treated in such manner only if the debtor re16 ceives a discharge; or

17 ‘‘(B) the holder of a particular claim

18 agrees to a different treatment of that claim;

19 and’’.

20 (b) SPECIAL NOTICE PROVISIONS.—Section 1231(b)

21 of title 11, United States Code, is amended by striking

22 ‘‘a State or local governmental unit’’ and inserting ‘‘any

23 governmental unit’’.
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1 SEC. 1005. PROHIBITION OF RETROACTIVE ASSESSMENT OF

2 DISPOSABLE INCOME.

3 (a) IN GENERAL.—Section 1225(b) of title 11,

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

5 following:

6 ‘‘(3) If the plan provides for specific amounts

7 of property to be distributed on account of allowed

8 unsecured claims as required by paragraph (1)(B),

9 those amounts equal or exceed the debtor’s projected

10 disposable income for that period, and the plan

11 meets the requirements for confirmation other than

12 those of this subsection, the plan shall be con13 firmed.’’.

14 (b) MODIFICATION.—Section 1229 of title 11, United

15 States Code, is amended by adding at the end the fol16 lowing:

17 ‘‘(d)(1) A modification of the plan under this section

18 may not increase the amount of payments that were due

19 prior to the date of the order modifying the plan.

20 ‘‘(2) A modification of the plan under this section to

21 increase payments based on an increase in the debtor’s

22 disposable income may not require payments to unsecured

23 creditors in any particular month greater than the debt24 or’s disposable income for that month unless the debtor

25 proposes such a modification.
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1 ‘‘(3) A modification of the plan in the last year of

2 the plan shall not require payments that would leave the

3 debtor with insufficient funds to carry on the farming op4 eration after the plan is completed unless the debtor pro5 poses such a modification.’’.

6 SEC. 1006. FAMILY FISHERMEN.

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

8 States Code, is amended—

9 (1) by inserting after paragraph (7) the fol10 lowing:

11 ‘‘(7A) ‘commercial fishing operation’ includes—

12 ‘‘(A) the catching or harvesting of fish,

13 shrimp, lobsters, urchins, seaweed, shellfish, or

14 other aquatic species or products; and

15 ‘‘(B) for purposes of section 109 and chap16 ter 12, aquaculture activities consisting of rais17 ing for market any species or product described

18 in subparagraph (A);’’;

19 ‘‘(7B) ‘commercial fishing vessel’ means a ves20 sel used by a fisherman to carry out a commercial

21 fishing operation;’’;

22 (2) by inserting after paragraph (19) the fol23 lowing:

24 ‘‘(19A) ‘family fisherman’ means—
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1 ‘‘(A) an individual or individual and spouse

2 engaged in a commercial fishing operation (in3 cluding aquiculture for purposes of chapter

4 12)—

5 ‘‘(i) whose aggregate debts do not ex6 ceed $1,500,000 and not less than 80 per7 cent of whose aggregate noncontingent, liq8 uidated debts (excluding a debt for the

9 principal residence of such individual or

10 such individual and spouse, unless such

11 debt arises out of a commercial fishing op12 eration), on the date the case is filed, arise

13 out of a commercial fishing operation

14 owned or operated by such individual or

15 such individual and spouse; and

16 ‘‘(ii) who receive from such commer17 cial fishing operation more than 50 percent

18 of such individual’s or such individual’s

19 and spouse’s gross income for the taxable

20 year preceding the taxable year in which

21 the case concerning such individual or such

22 individual and spouse was filed; or

23 ‘‘(B) a corporation or partnership—
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1 ‘‘(i) in which more than 50 percent of

2 the outstanding stock or equity is held

3 by—

4 ‘‘(I) 1 family that conducts the

5 commercial fishing operation; or

6 ‘‘(II) 1 family and the relatives

7 of the members of such family, and

8 such family or such relatives conduct

9 the commercial fishing operation; and

10 ‘‘(ii)(I) more than 80 percent of the

11 value of its assets consists of assets related

12 to the commercial fishing operation;

13 ‘‘(II) its aggregate debts do not ex14 ceed $1,500,000 and not less than 80 per15 cent of its aggregate noncontingent, liq16 uidated debts (excluding a debt for 1

17 dwelling which is owned by such corpora18 tion or partnership and which a share19 holder or partner maintains as a principal

20 residence, unless such debt arises out of a

21 commercial fishing operation), on the date

22 the case is filed, arise out of a commercial

23 fishing operation owned or operated by

24 such corporation or such partnership; and
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1 ‘‘(III) if such corporation issues stock,

2 such stock is not publicly traded;’’; and

3 (3) by inserting after paragraph (19A) the fol4 lowing:

5 ‘‘(19B) ‘family fisherman with regular annual

6 income’ means a family fisherman whose annual in7 come is sufficiently stable and regular to enable such

8 family fisherman to make payments under a plan

9 under chapter 12 of this title;’’.

10 (b) WHO MAY BE A DEBTOR.—Section 109(f) of title

11 11, United States Code, is amended by inserting ‘‘or fam12 ily fisherman’’ after ‘‘family farmer’’.

13 (c) CHAPTER 12.—Chapter 12 of title 11, United

14 States Code, is amended—

15 (1) in the chapter heading, by inserting ‘‘OR

16 FISHERMAN’’ after ‘‘FAMILY FARMER’’;

17 (2) in section 1201, by adding at the end the

18 following:

19 ‘‘(e)(1) Notwithstanding any other provision of law,

20 for purposes of this subsection, a guarantor of a claim of

21 a creditor under this section shall be treated in the same

22 manner as a creditor with respect to the operation of a

23 stay under this section.

24 ‘‘(2) For purposes of a claim that arises from the

25 ownership or operation of a commercial fishing operation,
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1 a co-maker of a loan made by a creditor under this section

2 shall be treated in the same manner as a creditor with

3 respect to the operation of a stay under this section.’’;

4 (3) in section 1203, by inserting ‘‘or commer5 cial fishing operation’’ after ‘‘farm’’;

6 (4) in section 1206, by striking ‘‘if the property

7 is farmland or farm equipment’’ and inserting ‘‘if

8 the property is farmland, farm equipment, or prop9 erty of a commercial fishing operation (including a

10 commercial fishing vessel)’’; and

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

12 ‘‘§ 1232. Additional provisions relating to family fish13 ermen

14 ‘‘(a)(1) Notwithstanding any other provision of law,

15 except as provided in subsection (c), with respect to any

16 commercial fishing vessel of a family fisherman, the debts

17 of that family fisherman shall be treated in the manner

18 prescribed in paragraph (2).

19 ‘‘(2)(A) For purposes of this chapter, a claim for a

20 lien described in subsection (b) for a commercial fishing

21 vessel of a family fisherman that could, but for this sub22 section, be subject to a lien under otherwise applicable

23 maritime law, shall be treated as an unsecured claim.
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1 ‘‘(B) Subparagraph (A) applies to a claim for a lien

2 resulting from a debt of a family fisherman incurred on

3 or after the date of enactment of this chapter.

4 ‘‘(b) A lien described in this subsection is—

5 ‘‘(1) a maritime lien under subchapter III of

6 chapter 313 of title 46, United States Code, without

7 regard to whether that lien is recorded under section

8 31343 of title 46, United States Code; or

9 ‘‘(2) a lien under applicable State law (or the

10 law of a political subdivision thereof).

11 ‘‘(c) Subsection (a) shall not apply to—

12 ‘‘(1) a claim made by a member of a crew or

13 a seaman including a claim made for—

14 ‘‘(A) wages, maintenance, or cure; or

15 ‘‘(B) personal injury; or

16 ‘‘(2) a preferred ship mortgage that has been

17 perfected under subchapter II of chapter 313 of title

18 46, United States Code.

19 ‘‘(d) For purposes of this chapter, a mortgage de20 scribed in subsection (c)(2) shall be treated as a secured

21 claim.’’.

22 (d) CLERICAL AMENDMENTS.—

23 (1) TABLE OF CHAPTERS.—In the table of

24 chapters for title 11, United States Code, the item
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1 relating to chapter 12, is amended to read as fol2 lows:

‘‘12. Adjustments of Debts of a Family Farmer or Family

Fisherman with Regular Annual Income ..... 1201’’.

3 (2) TABLE OF SECTIONS.—The table of sections

4 for chapter 12 of title 11, United States Code, is

5 amended by adding at the end the following new

6 item:

‘‘1232. Additional provisions relating to family fishermen.’’.

7 TITLE XI—HEALTH CARE AND

8 EMPLOYEE BENEFITS

9 SEC. 1101. DEFINITIONS.

10 (a) HEALTH CARE BUSINESS DEFINED.—Section

11 101 of title 11, United States Code, as amended by section

12 1003(a) of this Act, is amended—

13 (1) by redesignating paragraph (27A) as para14 graph (27B); and

15 (2) inserting after paragraph (27) the following:

16 ‘‘(27A) ‘health care business’—

17 ‘‘(A) means any public or private entity

18 (without regard to whether that entity is orga19 nized for profit or not for profit) that is pri20 marily engaged in offering to the general public

21 facilities and services for—

22 ‘‘(i) the diagnosis or treatment of in23 jury, deformity, or disease; and
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1 ‘‘(ii) surgical, drug treatment, psy2 chiatric or obstetric care; and

3 ‘‘(B) includes—

4 ‘‘(i) any—

5 ‘‘(I) general or specialized hos6 pital;

7 ‘‘(II) ancillary ambulatory, emer8 gency, or surgical treatment facility;

9 ‘‘(III) hospice;

10 ‘‘(IV) home health agency; and

11 ‘‘(V) other health care institution

12 that is similar to an entity referred to

13 in subclause (I), (II), (III), or (IV);

14 and

15 ‘‘(ii) any long-term care facility, in16 cluding any—

17 ‘‘(I) skilled nursing facility;

18 ‘‘(II) intermediate care facility;

19 ‘‘(III) assisted living facility;

20 ‘‘(IV) home for the aged;

21 ‘‘(V) domiciliary care facility; and

22 ‘‘(VI) health care institution that

23 is related to a facility referred to in

24 subclause (I), (II), (III), (IV), or (V),

25 if that institution is primarily engaged
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1 in offering room, board, laundry, or

2 personal assistance with activities of

3 daily living and incidentals to activi4 ties of daily living;’’.

5 (b) PATIENT DEFINED.—Section 101 of title 11,

6 United States Code, as amended by subsection (a) of this

7 section, is amended by inserting after paragraph (40) the

8 following:

9 ‘‘(40A) ‘patient’ means any person who obtains

10 or receives services from a health care business;’’.

11 (c) PATIENT RECORDS DEFINED.—Section 101 of

12 title 11, United States Code, as amended by subsection

13 (b) of this section, is amended by inserting after para14 graph (40A) the following:

15 ‘‘(40B) ‘patient records’ means any written doc16 ument relating to a patient or a record recorded in

17 a magnetic, optical, or other form of electronic me18 dium;’’.

19 (d) RULE OF CONSTRUCTION.—The amendments

20 made by subsection (a) of this section shall not affect the

21 interpretation of section 109(b) of title 11, United States

22 Code.
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1 SEC. 1102. DISPOSAL OF PATIENT RECORDS.

2 (a) IN GENERAL.—Subchapter III of chapter 3 of

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

4 end the following:

5 ‘‘§ 351. Disposal of patient records

6 ‘‘If a health care business commences a case under

7 chapter 7, 9, or 11, and the trustee does not have a suffi8 cient amount of funds to pay for the storage of patient

9 records in the manner required under applicable Federal

10 or State law, the following requirements shall apply:

11 ‘‘(1) The trustee shall—

12 ‘‘(A) publish notice, in 1 or more appro13 priate newspapers, that if patient records are

14 not claimed by the patient or an insurance pro15 vider (if applicable law permits the insurance

16 provider to make that claim) by the date that

17 is 90 days after the date of that notification,

18 the trustee will destroy the patient records; and

19 ‘‘(B) during the 90-day period described in

20 subparagraph (A), attempt to notify directly

21 each patient that is the subject of the patient

22 records and appropriate insurance carrier con23 cerning the patient records by mailing to the

24 last known address of that patient and appro25 priate insurance carrier an appropriate notice
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1 regarding the claiming or disposing of patient

2 records.

3 ‘‘(2) If after providing the notification under

4 paragraph (1), patient records are not claimed dur5 ing the 90-day period described under that para6 graph, the trustee shall mail, by certified mail, at

7 the end of such 90-day period a written request to

8 each appropriate Federal agency to request permis9 sion from that agency to deposit the patient records

10 with that agency.

11 ‘‘(3) If, following the period in paragraph (2)

12 and after providing the notification under paragraph

13 (1), patient records are not claimed during the 90-

14 day period described in paragraph (1)(A) or in any

15 case in which a notice is mailed under paragraph

16 (1)(B), during the 90-day period beginning on the

17 date on which the notice is mailed, by a patient or

18 insurance provider in accordance with that para19 graph, the trustee shall destroy those records by—

20 ‘‘(A) if the records are written, shredding

21 or burning the records; or

22 ‘‘(B) if the records are magnetic, optical,

23 or other electronic records, by otherwise de24 stroying those records so that those records

25 cannot be retrieved.’’.
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1 (b) CLERICAL AMENDMENT.—The chapter analysis

2 for chapter 3 of title 11, United States Code, is amended

3 by inserting after the item relating to section 350 the fol4 lowing:

‘‘351. Disposal of patient records.’’.

5 SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS

6 OF CLOSING A HEALTH CARE BUSINESS.

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

8 amended—

9 (1) in paragraph (5), by striking ‘‘and’’ at the

10 end;

11 (2) in paragraph (6), by striking the period at

12 the end and inserting ‘‘; and’’; and

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

14 ‘‘(7) the actual, necessary costs and expenses of

15 closing a health care business incurred by a trustee

16 or by a Federal agency (as that term is defined in

17 section 551(1) of title 5) or a department or agency

18 of a State or political subdivision thereof, including

19 any cost or expense incurred—

20 ‘‘(A) in disposing of patient records in ac21 cordance with section 351; or

22 ‘‘(B) in connection with transferring pa23 tients from the health care business that is in

24 the process of being closed to another health

25 care business.’’.
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1 SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA2 TIENT ADVOCATE.

3 (a) IN GENERAL.—

4 (1) APPOINTMENT OF OMBUDSMAN.—Sub5 chapter II of chapter 3 of title 11, United States

6 Code, is amended by inserting after section 331 the

7 following:

8 ‘‘§ 332. Appointment of ombudsman

9 ‘‘(a) Not later than 30 days after a case is com10 menced by a health care business under chapter 7, 9, or

11 11, the court shall appoint an ombudsman with appro12 priate expertise in monitoring the quality of patient care

13 to represent the interests of the patients of the health care

14 business. The court may appoint as an ombudsman a per15 son who is serving as a State Long-Term Care Ombuds16 man appointed under title III or VII of the Older Ameri17 cans Act of 1965 (42 U.S.C. 3021 et seq. and 3058 et

18 seq.).

19 ‘‘(b) An ombudsman appointed under subsection (a)

20 shall—

21 ‘‘(1) monitor the quality of patient care, to the

22 extent necessary under the circumstances, including

23 interviewing patients and physicians;

24 ‘‘(2) not later than 60 days after the date of

25 appointment, and not less frequently than every 60

26 days thereafter, report to the court, at a hearing or
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1 in writing, regarding the quality of patient care at

2 the health care business involved; and

3 ‘‘(3) if the ombudsman determines that the

4 quality of patient care is declining significantly or is

5 otherwise being materially compromised, notify the

6 court by motion or written report, with notice to ap7 propriate parties in interest, immediately upon mak8 ing that determination.

9 ‘‘(c) An ombudsman shall maintain any information

10 obtained by the ombudsman under this section that relates

11 to patients (including information relating to patient

12 records) as confidential information.’’.

13 (2) CLERICAL AMENDMENT.—The chapter anal14 ysis for chapter 3 of title 11, United States Code,

15 is amended by inserting after the item relating to

16 section 331 the following:

‘‘332. Appointment of ombudsman.’’.

17 (b) COMPENSATION OF OMBUDSMAN.—Section

18 330(a)(1) of title 11, United States Code, is amended—

19 (1) in the matter proceeding subparagraph (A),

20 by inserting ‘‘an ombudsman appointed under sec21 tion 331, or’’ before ‘‘a professional person’’; and

22 (2) in subparagraph (A), by inserting ‘‘ombuds23 man,’’ before ‘‘professional person’’.
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1 SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO

2 TRANSFER PATIENTS.

3 (a) IN GENERAL.—Section 704(a) of title 11, United

4 States Code, as amended by section 219 of this Act, is

5 amended—

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

7 end;

8 (2) in paragraph (10), by striking the period

9 and inserting ‘‘; and’’; and

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

11 ‘‘(11) use all reasonable and best efforts to

12 transfer patients from a health care business that is

13 in the process of being closed to an appropriate

14 health care business that—

15 ‘‘(A) is in the vicinity of the health care

16 business that is closing;

17 ‘‘(B) provides the patient with services

18 that are substantially similar to those provided

19 by the health care business that is in the proc20 ess of being closed; and

21 ‘‘(C) maintains a reasonable quality of

22 care.’’.

23 (b) CONFORMING AMENDMENT.—Section 1106(a)(1)

24 of title 11, United States Code, is amended by striking

25 ‘‘704(2), 704(5), 704(7), 704(8), and 704(9)’’ and insert26 ing ‘‘704(a) (2), (5), (7), (8), (9), and (11)’’.
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1 SEC. 1106. ESTABLISHMENT OF POLICY AND PROTOCOLS

2 RELATING TO BANKRUPTCIES OF HEALTH

3 CARE BUSINESSES.

4 Not later than 30 days after the date of enactment

5 of this Act, the Attorney General of the United States,

6 in consultation with the Secretary of Health and Human

7 Services and the National Association of Attorneys Gen8 eral, shall establish a policy and protocols for coordinating

9 a response to bankruptcies of health care businesses (as

10 that term is defined in section 101 of title 11, United

11 States Code), including assessing the appropriate time

12 frame for disposal of patient records under section 1102

13 of this Act.

14 SEC. 1107. EXCLUSION FROM PROGRAM PARTICIPATION

15 NOT SUBJECT TO AUTOMATIC STAY.

16 Section 362(b) of title 11, United States Code, as

17 amended by section 901(d) of this Act, is amended—

18 (1) in paragraph (27), by striking ‘‘or’’ at the

19 end;

20 (2) in paragraph (28), by striking the period at

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

22 (3) by inserting after paragraph (28) the fol23 lowing:

24 ‘‘(29) under subsection (a), of the exclusion by

25 the Secretary of Health and Human Services of the

26 debtor from participation in the medicare program
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1 or any other Federal health care program (as de2 fined in section 1128B(f) of the Social Security Act

3 (42 U.S.C. 1320a–7b(f)) pursuant to title XI of

4 such Act (42 U.S.C. 1301 et seq.) or title XVIII of

5 such Act (42 U.S.C. 1395 et seq.).’’.

6 TITLE XII—TECHNICAL

7 AMENDMENTS

8 SEC. 1201. DEFINITIONS.

9 Section 101 of title 11, United States Code, as

10 amended by section 1003 of this Act, is amended—

11 (1) by striking ‘‘In this title—’’ and inserting

12 ‘‘In this title:’’;

13 (2) in each paragraph, by inserting ‘‘The term’’

14 after the paragraph designation;

15 (3) in paragraph (35)(B), by striking ‘‘para16 graphs (21B) and (33)(A)’’ and inserting ‘‘para17 graphs (23) and (35)’’;

18 (4) in each of paragraphs (35A) and (38), by

19 striking ‘‘; and’’ at the end and inserting a period;

20 (5) in paragraph (51B)—

21 (A) by inserting ‘‘who is not a family farm22 er’’ after ‘‘debtor’’ the first place it appears;

23 and
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1 (B) by striking ‘‘thereto having aggregate’’

2 and all that follows through the end of the

3 paragraph;

4 (6) by striking paragraph (54) and inserting

5 the following:

6 ‘‘(54) The term ‘transfer’ means—

7 ‘‘(A) the creation of a lien;

8 ‘‘(B) the retention of title as a security in9 terest;

10 ‘‘(C) the foreclosure of a debtor’s equity of

11 redemption; or

12 ‘‘(D) each mode, direct or indirect, abso13 lute or conditional, voluntary or involuntary, of

14 disposing of or parting with—

15 ‘‘(i) property; or

16 ‘‘(ii) an interest in property;’’;

17 (7) in each of paragraphs (1) through (35), in

18 each of paragraphs (36) and (37), and in each of

19 paragraphs (40) through (55) (including paragraph

20 (54), as amended by paragraph (6) of this section),

21 by striking the semicolon at the end and inserting a

22 period; and

23 (8) by redesignating paragraphs (4) through

24 (55), including paragraph (54), as amended by para-
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1 graph (6) of this section, in entirely numerical se2 quence.

3 SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

4 Section 104 of title 11, United States Code, is

5 amended by inserting ‘‘522(f)(3),’’ after ‘‘522(d),’’ each

6 place it appears.

7 SEC. 1203. EXTENSION OF TIME.

8 Section 108(c)(2) of title 11, United States Code, is

9 amended by striking ‘‘922’’ and all that follows through

10 ‘‘or’’, and inserting ‘‘922, 1201, or’’.

11 SEC. 1204. TECHNICAL AMENDMENTS.

12 Title 11, United States Code, is amended—

13 (1) in section 109(b)(2), by striking ‘‘subsection

14 (c) or (d) of’’; and

15 (2) in section 552(b)(1), by striking ‘‘product’’

16 each place it appears and inserting ‘‘products’’.

17 SEC. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

18 FRAUDULENTLY PREPARE BANKRUPTCY PE19 TITIONS.

20 Section 110(j)(3) of title 11, United States Code, is

21 amended by striking ‘‘attorney’s’’ and inserting ‘‘attor22 neys’ ’’.
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1 SEC. 1206. LIMITATION ON COMPENSATION OF PROFES2 SIONAL PERSONS.

3 Section 328(a) of title 11, United States Code, is

4 amended by inserting ‘‘on a fixed or percentage fee basis,’’

5 after ‘‘hourly basis,’’.

6 SEC. 1207. EFFECT OF CONVERSION.

7 Section 348(f)(2) of title 11, United States Code, is

8 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

9 first place it appears.

10 SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

11 Section 503(b)(4) of title 11, United States Code, is

12 amended by inserting ‘‘subparagraph (A), (B), (C), (D),

13 or (E) of’’ before ‘‘paragraph (3)’’.

14 SEC. 1209. EXCEPTIONS TO DISCHARGE.

15 Section 523 of title 11, United States Code, as

16 amended by section 714 of this Act, is amended—

17 (1) as amended by section 304(e) of Public Law

18 103–394 (108 Stat. 4133), in paragraph (15), by

19 transferring such paragraph so as to insert such

20 paragraph after paragraph (14) of subsection (a);

21 (2) in subsection (a)(9), by striking ‘‘motor ve22 hicle or vessel’’ and inserting ‘‘motor vehicle, vessel,

23 or aircraft’’; and

24 (3) in subsection (e), by striking ‘‘a insured’’

25 and inserting ‘‘an insured’’.
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1 SEC. 1210. EFFECT OF DISCHARGE.

2 Section 524(a)(3) of title 11, United States Code, is

3 amended by striking ‘‘section 523’’ and all that follows

4 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

5 or 1328(a)(1), or that’’.

6 SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREAT7 MENT.

8 Section 525(c) of title 11, United States Code, is

9 amended—

10 (1) in paragraph (1), by inserting ‘‘student’’ be11 fore ‘‘grant’’ the second place it appears; and

12 (2) in paragraph (2), by striking ‘‘the program

13 operated under part B, D, or E of’’ and inserting

14 ‘‘any program operated under’’.

15 SEC. 1212. PROPERTY OF THE ESTATE.

16 Section 541(b)(4)(B)(ii) of title 11, United States

17 Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.

18 SEC. 1213. PREFERENCES.

19 (a) IN GENERAL.—Section 547 of title 11, United

20 States Code, as amended by section 201(b) of this Act,

21 is amended—

22 (1) in subsection (b), by striking ‘‘subsection

23 (c)’’ and inserting ‘‘subsections (c) and (i)’’; and

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

25 ‘‘(i) If the trustee avoids under subsection (b) a secu26 rity interest given between 90 days and 1 year before the
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1 date of the filing of the petition, by the debtor to an entity

2 that is not an insider for the benefit of a creditor that

3 is an insider, such security interest shall be considered to

4 be avoided under this section only with respect to the cred5 itor that is an insider.’’.

6 (b) APPLICABILITY.—The amendments made by this

7 section shall apply to any case that pending or commenced

8 on or after the date of enactment of this Act.

9 SEC. 1214. POSTPETITION TRANSACTIONS.

10 Section 549(c) of title 11, United States Code, is

11 amended—

12 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

13 of’’;

14 (2) by striking ‘‘such property’’ and inserting

15 ‘‘such real property’’; and

16 (3) by striking ‘‘the interest’’ and inserting

17 ‘‘such interest’’.

18 SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.

19 Section 726(b) of title 11, United States Code, is

20 amended by striking ‘‘1009,’’.

21 SEC. 1216. GENERAL PROVISIONS.

22 Section 901(a) of title 11, United States Code, as

23 amended by section 502 of this Act, is amended by insert24 ing ‘‘1123(d),’’ after ‘‘1123(b),’’.
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1 SEC. 1217. ABANDONMENT OF RAILROAD LINE.

2 Section 1170(e)(1) of title 11, United States Code,

3 is amended by striking ‘‘section 11347’’ and inserting

4 ‘‘section 11326(a)’’.

5 SEC. 1218. CONTENTS OF PLAN.

6 Section 1172(c)(1) of title 11, United States Code,

7 is amended by striking ‘‘section 11347’’ and inserting

8 ‘‘section 11326(a)’’.

9 SEC. 1219. DISCHARGE UNDER CHAPTER 12.

10 Subsections (a) and (c) of section 1228 of title 11,

11 United States Code, are amended by striking

12 ‘‘1222(b)(10)’’ each place it appears and inserting

13 ‘‘1222(b)(9)’’.

14 SEC. 1220. BANKRUPTCY CASES AND PROCEEDINGS.

15 Section 1334(d) of title 28, United States Code, is

16 amended—

17 (1) by striking ‘‘made under this subsection’’

18 and inserting ‘‘made under subsection (c)’’; and

19 (2) by striking ‘‘This subsection’’ and inserting

20 ‘‘Subsection (c) and this subsection’’.

21 SEC. 1221. KNOWING DISREGARD OF BANKRUPTCY LAW OR

22 RULE.

23 Section 156(a) of title 18, United States Code, is

24 amended—

25 (1) in the first undesignated paragraph—
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1 (A) by inserting ‘‘(1) the term’’ before

2 ‘‘ ‘bankruptcy’’; and

3 (B) by striking the period at the end and

4 inserting ‘‘; and’’; and

5 (2) in the second undesignated paragraph—

6 (A) by inserting ‘‘(2) the term’’ before

7 ‘‘ ‘document’’; and

8 (B) by striking ‘‘this title’’ and inserting

9 ‘‘title 11’’.

10 SEC. 1222. TRANSFERS MADE BY NONPROFIT CHARITABLE

11 CORPORATIONS.

12 (a) SALE OF PROPERTY OF ESTATE.—Section 363(d)

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

14 ‘‘only’’ and all that follows through the end of the sub15 section and inserting ‘‘only—

16 ‘‘(1) in accordance with applicable nonbank17 ruptcy law that governs the transfer of property by

18 a corporation or trust that is not a moneyed, busi19 ness, or commercial corporation or trust; and

20 ‘‘(2) to the extent not inconsistent with any re21 lief granted under subsection (c), (d), (e), or (f) of

22 section 362.’’.

23 (b) CONFIRMATION OF PLAN FOR REORGANIZA24 TION.—Section 1129(a) of title 11, United States Code,
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1 as amended by section 212 of this Act, is amended by add2 ing at the end the following:

3 ‘‘(15) All transfers of property of the plan shall

4 be made in accordance with any applicable provi5 sions of nonbankruptcy law that govern the transfer

6 of property by a corporation or trust that is not a

7 moneyed, business, or commercial corporation or

8 trust.’’.

9 (c) TRANSFER OF PROPERTY.—Section 541 of title

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

11 the following:

12 ‘‘(f) Notwithstanding any other provision of this title,

13 property that is held by a debtor that is a corporation de14 scribed in section 501(c)(3) of the Internal Revenue Code

15 of 1986 and exempt from tax under section 501(a) of such

16 Code may be transferred to an entity that is not such a

17 corporation, but only under the same conditions as would

18 apply if the debtor had not filed a case under this title.’’.

19 (d) APPLICABILITY.—The amendments made by this

20 section shall apply to a case pending under title 11, United

21 States Code, on the date of enactment of this Act, except

22 that the court shall not confirm a plan under chapter 11

23 of this title without considering whether this section would

24 substantially affect the rights of a party in interest who

25 first acquired rights with respect to the debtor after the
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1 date of the petition. The parties who may appear and be

2 heard in a proceeding under this section include the attor3 ney general of the State in which the debtor is incor4 porated, was formed, or does business.

5 (e) RULE OF CONSTRUCTION.—Nothing in this sec6 tion shall be construed to require the court in which a

7 case under chapter 11 is pending to remand or refer any

8 proceeding, issue, or controversy to any other court or to

9 require the approval of any other court for the transfer

10 of property.

11 SEC. 1223. PROTECTION OF VALID PURCHASE MONEY SE12 CURITY INTERESTS.

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

14 is amended by striking ‘‘20’’ and inserting ‘‘30’’.

15 SEC. 1224. EXTENSIONS.

16 Section 302(d)(3) of the Bankruptcy, Judges, United

17 States Trustees, and Family Farmer Bankruptcy Act of

18 1986 (28 U.S.C. 581 note) is amended—

19 (1) in subparagraph (A), in the matter fol20 lowing clause (ii), by striking ‘‘or October 1, 2002,

21 whichever occurs first’’; and

22 (2) in subparagraph (F)—

23 (A) in clause (i)—
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1 (i) in subclause (II), by striking ‘‘or

2 October 1, 2002, whichever occurs first’’;

3 and

4 (ii) in the matter following subclause

5 (II), by striking ‘‘October 1, 2003, or’’;

6 and

7 (B) in clause (ii), in the matter following

8 subclause (II)—

9 (i) by striking ‘‘before October 1,

10 2003, or’’; and

11 (ii) by striking ‘‘, whichever occurs

12 first’’.

13 SEC. 1225. BANKRUPTCY JUDGESHIPS.

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

15 ‘‘Bankruptcy Judgeship Act of 2000’’.

16 (b) TEMPORARY JUDGESHIPS.—

17 (1) APPOINTMENTS.—The following judgeship

18 positions shall be filled in the manner prescribed in

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

20 the appointment of bankruptcy judges provided for

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

22 (A) One additional bankruptcy judgeship

23 for the eastern district of California.

24 (B) Four additional bankruptcy judgeships

25 for the central district of California.
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1 (C) One additional bankruptcy judgeship

2 for the southern district of Florida.

3 (D) Two additional bankruptcy judgeships

4 for the district of Maryland.

5 (E) One additional bankruptcy judgeship

6 for the eastern district of Michigan.

7 (F) One additional bankruptcy judgeship

8 for the southern district of Mississippi.

9 (G) One additional bankruptcy judgeship

10 for the district of New Jersey.

11 (H) One additional bankruptcy judgeship

12 for the eastern district of New York.

13 (I) One additional bankruptcy judgeship

14 for the northern district of New York.

15 (J) One additional bankruptcy judgeship

16 for the southern district of New York.

17 (K) One additional bankruptcy judgeship

18 for the eastern district of Pennsylvania.

19 (L) One additional bankruptcy judgeship

20 for the middle district of Pennsylvania.

21 (M) One additional bankruptcy judgeship

22 for the western district of Tennessee.

23 (N) One additional bankruptcy judgeship

24 for the eastern district of Virginia.
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1 (2) VACANCIES.—The first vacancy occurring in

2 the office of a bankruptcy judge in each of the judi3 cial districts set forth in paragraph (1) that—

4 (A) results from the death, retirement, res5 ignation, or removal of a bankruptcy judge; and

6 (B) occurs 5 years or more after the ap7 pointment date of a bankruptcy judge ap8 pointed under paragraph (1);

9 shall not be filled.

10 (c) EXTENSIONS.—

11 (1) IN GENERAL.—The temporary bankruptcy

12 judgeship positions authorized for the northern dis13 trict of Alabama, the district of Delaware, the dis14 trict of Puerto Rico, the district of South Carolina,

15 and the eastern district of Tennessee under section

16 3(a) (1), (3), (7), (8), and (9) of the Bankruptcy

17 Judgeship Act of 1992 (28 U.S.C. 152 note) are ex18 tended until the first vacancy occurring in the office

19 of a bankruptcy judge in the applicable district re20 sulting from the death, retirement, resignation, or

21 removal of a bankruptcy judge and occurring—

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

23 1993, with respect to the northern district of

24 Alabama;
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1 (B) 10 years or more after October 28,

2 1993, with respect to the district of Delaware;

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

4 1994, with respect to the district of Puerto

5 Rico;

6 (D) 8 years or more after June 27, 1994,

7 with respect to the district of South Carolina;

8 and

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

10 1993, with respect to the eastern district of

11 Tennessee.

12 (2) APPLICABILITY OF OTHER PROVISIONS.—

13 All other provisions of section 3 of the Bankruptcy

14 Judgeship Act of 1992 remain applicable to such

15 temporary judgeship positions.

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

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

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

19 be appointed for a judicial district as provided in para20 graph (2) shall be appointed by the United States court

21 of appeals for the circuit in which such district is lo22 cated.’’.

23 SEC. 1226. FAMILY FISHERMEN.

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

25 States Code, is amended—
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1 (1) by inserting after paragraph (7) the fol2 lowing:

3 ‘‘(7A) ‘commercial fishing operation’ includes—

4 ‘‘(A) the catching or harvesting of fish,

5 shrimp, lobsters, urchins, seaweed, shellfish, or

6 other aquatic species or products;

7 ‘‘(B) for purposes of section 109 and chap8 ter 12, aquaculture activities consisting of rais9 ing for market any species or product described

10 in subparagraph (A); and

11 ‘‘(C) the transporting by vessel of a pas12 senger for hire (as defined in section 2101 of

13 title 46) who is engaged in recreational fishing;

14 ‘‘(7B) ‘commercial fishing vessel’ means a ves15 sel used by a fisherman to carry out a commercial

16 fishing operation;’’;

17 (2) by inserting after paragraph (19) the fol18 lowing:

19 ‘‘(19A) ‘family fisherman’ means—

20 ‘‘(A) an individual or individual and spouse

21 engaged in a commercial fishing operation (in22 cluding aquaculture for purposes of chapter

23 12)—

24 ‘‘(i) whose aggregate debts do not ex25 ceed $1,500,000 and not less than 80 per-
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1 cent of whose aggregate noncontingent, liq2 uidated debts (excluding a debt for the

3 principal residence of such individual or

4 such individual and spouse, unless such

5 debt arises out of a commercial fishing op6 eration), on the date the case is filed, arise

7 out of a commercial fishing operation

8 owned or operated by such individual or

9 such individual and spouse; and

10 ‘‘(ii) who receive from such commer11 cial fishing operation more than 50 percent

12 of such individual’s or such individual’s

13 and spouse’s gross income for the taxable

14 year preceding the taxable year in which

15 the case concerning such individual or such

16 individual and spouse was filed; or

17 ‘‘(B) a corporation or partnership—

18 ‘‘(i) in which more than 50 percent of

19 the outstanding stock or equity is held

20 by—

21 ‘‘(I) 1 family that conducts the

22 commercial fishing operation; or

23 ‘‘(II) 1 family and the relatives

24 of the members of such family, and
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1 such family or such relatives conduct

2 the commercial fishing operation; and

3 ‘‘(ii)(I) more than 80 percent of the

4 value of its assets consists of assets related

5 to the commercial fishing operation;

6 ‘‘(II) its aggregate debts do not ex7 ceed $1,500,000 and not less than 80 per8 cent of its aggregate noncontingent, liq9 uidated debts (excluding a debt for 1

10 dwelling which is owned by such corpora11 tion or partnership and which a share12 holder or partner maintains as a principal

13 residence, unless such debt arises out of a

14 commercial fishing operation), on the date

15 the case is filed, arise out of a commercial

16 fishing operation owned or operated by

17 such corporation or such partnership; and

18 ‘‘(III) if such corporation issues stock,

19 such stock is not publicly traded;’’; and

20 (3) by inserting after paragraph (19A) the fol21 lowing:

22 ‘‘(19B) ‘family fisherman with regular annual

23 income’ means a family fisherman whose annual in24 come is sufficiently stable and regular to enable such
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1 family fisherman to make payments under a plan

2 under chapter 12 of this title;’’.

3 (b) WHO MAY BE A DEBTOR.—Section 109(f) of title

4 11, United States Code, is amended by inserting ‘‘or fam5 ily fisherman’’ after ‘‘family farmer’’.

6 (c) CHAPTER 12.—Chapter 12 of title 11, United

7 States Code, is amended—

8 (1) in the chapter heading, by inserting ‘‘OR

9 FISHERMAN’’ after ‘‘FAMILY FARMER’’;

10 (2) in section 1201, by adding at the end the

11 following:

12 ‘‘(e)(1) Notwithstanding any other provision of law,

13 for purposes of this subsection, a guarantor of a claim of

14 a creditor under this section shall be treated in the same

15 manner as a creditor with respect to the operation of a

16 stay under this section.

17 ‘‘(2) For purposes of a claim that arises from the

18 ownership or operation of a commercial fishing operation,

19 a co-maker of a loan made by a creditor under this section

20 shall be treated in the same manner as a creditor with

21 respect to the operation of a stay under this section.’’;

22 (3) in section 1203, by inserting ‘‘or commer23 cial fishing operation’’ after ‘‘farm’’;

24 (4) in section 1206, by striking ‘‘if the property

25 is farmland or farm equipment’’ and inserting ‘‘if
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1 the property is farmland, farm equipment, or prop2 erty of a commercial fishing operation (including a

3 commercial fishing vessel)’’; and

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

5 ‘‘§ 1232. Additional provisions relating to family fish6 ermen

7 ‘‘(a)(1) Notwithstanding any other provision of law,

8 except as provided in subsection (c), with respect to any

9 commercial fishing vessel of a family fisherman, the debts

10 of that family fisherman shall be treated in the manner

11 prescribed in paragraph (2).

12 ‘‘(2)(A) For purposes of this chapter, a claim for a

13 lien described in subsection (b) for a commercial fishing

14 vessel of a family fisherman that could, but for this sub15 section, be subject to a lien under otherwise applicable

16 maritime law, shall be treated as an unsecured claim.

17 ‘‘(B) Subparagraph (A) applies to a claim for a lien

18 resulting from a debt of a family fisherman incurred on

19 or after the date of enactment of this chapter.

20 ‘‘(b) A lien described in this subsection is—

21 ‘‘(1) a maritime lien under subchapter III of

22 chapter 313 of title 46 without regard to whether

23 that lien is recorded under section 31343 of title 46;

24 or
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1 ‘‘(2) a lien under applicable State law (or the

2 law of a political subdivision thereof).

3 ‘‘(c) Subsection (a) shall not apply to—

4 ‘‘(1) a claim made by a member of a crew or

5 a seaman including a claim made for—

6 ‘‘(A) wages, maintenance, or cure; or

7 ‘‘(B) personal injury; or

8 ‘‘(2) a preferred ship mortgage that has been

9 perfected under subchapter II of chapter 313 of title

10 46.

11 ‘‘(d) For purposes of this chapter, a mortgage de12 scribed in subsection (c)(2) shall be treated as a secured

13 claim.’’.

14 (d) CLERICAL AMENDMENTS.—

15 (1) TABLE OF CHAPTERS.—In the table of

16 chapters for title 11, United States Code, the item

17 relating to chapter 12, is amended to read as fol18 lows:

‘‘12. Adjustments of Debts of a Family Farmer or Family

Fisherman with Regular Annual Income ..... 1201’’.

19 (2) TABLE OF SECTIONS.—The table of sections

20 for chapter 12 of title 11, United States Code, is

21 amended by adding at the end the following new

22 item:

‘‘1232. Additional provisions relating to family fishermen.’’.
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1 (e) MAGNUSON-STEVENS FISHERY CONSERVATION

2 AND MANAGEMENT ACT.—Nothing in this title is intended

3 to change, affect, or amend the Magnuson-Stevens Fishery

4 Conservation and Management Act (16 U.S.C. 1801 et

5 seq.).

6 SEC. 1227. COMPENSATING TRUSTEES.

7 Title 11, United States Code, is amended—

8 (1) in section 104(b)(1) in the matter preceding

9 subparagraph (A) by—

10 (A) striking ‘‘and 523(a)(2)(C)’’; and

11 (B) inserting ‘‘523(a)(2)(C), and

12 1326(b)(3)’’ before ‘‘immediately’’;

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

14 following:

15 ‘‘(e) Notwithstanding any other provision of this sec16 tion, if a trustee in a chapter 7 case commences a motion

17 to dismiss or convert under section 707(b) and such mo18 tion is granted, the court shall allow reasonable compensa19 tion under section 330(a) of this title for the services and

20 expenses of the trustee and the trustee’s counsel in pre21 paring and presenting such motion and any related ap22 peals.’’; and

23 (3) in section 1326(b)—

24 (A) in paragraph (1), by striking ‘‘and’’;
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1 (B) in paragraph (2), by striking the pe2 riod at the end and inserting ‘‘; and’’; and

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

4 ‘‘(3) if a chapter 7 trustee has been allowed

5 compensation under section 326(e) in a case con6 verted to this chapter or in a case dismissed under

7 section 707(b) in which the debtor in this case was

8 a debtor—

9 ‘‘(A) the amount of such unpaid compensa10 tion which shall be paid monthly by prorating

11 such amount over the remaining duration of the

12 plan, but a monthly payment shall not exceed

13 the greater of—

14 ‘‘(i) $25; or

15 ‘‘(ii) the amount payable to unsecured

16 nonpriority creditors as provided by the

17 plan multiplied by 5 percent, and the re18 sult divided by the number of months in

19 the plan; and

20 ‘‘(B) notwithstanding any other provision

21 of this title—

22 ‘‘(i) such compensation is payable and

23 may be collected by the trustee under this

24 paragraph even if such amount has been
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1 discharged in a prior proceeding under this

2 title; and

3 ‘‘(ii) such compensation is payable in

4 a case under this chapter only to the ex5 tent permitted by this paragraph.’’.

6 SEC. 1228. AMENDMENT TO SECTION 362 OF TITLE 11,

7 UNITED STATES CODE.

8 Section 362(b)(18) of title 11, United States Code,

9 is amended to read as follows:

10 ‘‘(18) under subsection (a) of the creation or

11 perfection of a statutory lien for an ad valorem

12 property tax, or a special tax or special assessment

13 on real property whether or not ad valorem, imposed

14 by a governmental unit, if such tax or assessment

15 comes due after the filing of the petition.’’.

16 SEC. 1229. PROVISION OF ELECTRONIC FTC PAMPHLET

17 WITH ELECTRONIC CREDIT CARD APPLICA18 TIONS AND SOLICITATIONS.

19 Section 127(c) of the Truth in Lending Act (15

20 U.S.C. 1637(c)) is amended—

21 (1) by redesignating paragraph (5) as para22 graph (6); and

23 (2) by inserting after paragraph (4) the fol24 lowing:
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1 ‘‘(5) INCLUSION OF FEDERAL TRADE COMMIS2 SION PAMPHLET.—

3 ‘‘(A) IN GENERAL.—Any application to

4 open a credit card account for any person under

5 an open end consumer credit plan, or a solicita6 tion or an advertisement to open such an ac7 count without requiring an application, that is

8 electronically transmitted to or accessed by a

9 consumer shall be accompanied by an electronic

10 version (or an electronic link thereto) of the

11 pamphlet published by the Federal Trade Com12 mission relating to choosing and using credit

13 cards.

14 ‘‘(B) COSTS.—The card issuer with respect

15 to an account described in subparagraph (A)

16 shall be responsible for all costs associated with

17 compliance with that subparagraph.’’.

18 SEC. 1230. NO BANKRUPTCY FOR INSOLVENT POLITICAL

19 COMMITTEES.

20 Section 105 of title 11, United States Code, is

21 amended by inserting at the end the following:

22 ‘‘(e) A political committee subject to the jurisdiction

23 of the Federal Election Commission under Federal elec24 tion laws may not file for bankruptcy under this title.’’.
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1 SEC. 1231. FEDERAL ELECTION LAW FINES AND PENALTIES

2 AS NONDISCHARGEABLE DEBT.

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

4 amended by inserting after paragraph (14A) the following:

5 ‘‘(14B) fines or penalties imposed under Fed6 eral election law;’’.

7 SEC. 1232. PROHIBITION ON CERTAIN RETROACTIVE FI8 NANCE CHARGES.

9 Section 127 of the Truth in Lending Act (15 U.S.C.

10 1637) is amended by adding at the end the following:

11 ‘‘(h) PROHIBITION ON RETROACTIVE FINANCE

12 CHARGES.—

13 ‘‘(1) IN GENERAL.—In the case of any credit

14 card account under an open end credit plan, if the

15 creditor provides a grace period applicable to any

16 new extension of credit under the account, no fi17 nance charge may be imposed subsequent to the

18 grace period with regard to any amount that was

19 paid on or before the end of that grace period.

20 ‘‘(2) DEFINITION.—For purposes of this sub21 section, the term ‘grace period’ means a period dur22 ing which the extension of credit may be repaid, in

23 whole or in part, without incurring a finance charge

24 for the extension of credit.’’.
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1 SEC. 1233. SENSE OF SENATE CONCERNING CREDIT WOR2 THINESS.

3 The Board of Governors of the Federal Reserve Sys4 tem shall report to the Senate Committee on Banking,

5 Housing, and Urban Affairs and the House of Representa6 tives Committee on Banking and Financial Services within

7 6 months of enactment of this Act as to whether and how

8 the location of the residence of an applicant for a credit

9 card is considered by financial institutions in deciding

10 whether an applicant should be granted such credit card.

11 SEC. 1234. JUDICIAL EDUCATION.

12 The Director of the Administrative Office of the

13 United States Courts, in consultation with the Director

14 of the Executive Office for United States Trustees, shall

15 develop materials and conduct such training as may be

16 useful to courts in implementing this Act, including the

17 requirements relating to the 707(b) means test and re18 affirmations.

19 SEC. 1235. UNITED STATES TRUSTEE PROGRAM FILING FEE

20 INCREASE.

21 (a) RIGHTS AND POWERS OF THE TRUSTEE.—Sec22 tion 546(c) of title 11, United States Code, is amended

23 to read as follows:

24 ‘‘(c)(1) Except as provided in subsection (d) of

25 this section, and except as provided in subsection (c)

26 of section 507, the rights and powers of the trustee
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1 under sections 544(a), 545, 547, and 549 are sub2 ject to the right of a seller of goods that has sold

3 goods to the debtor, in the ordinary course of the

4 business of the seller, to reclaim such goods if the

5 debtor has received such goods within 45 days prior

6 to the commencement of a case under this title, but

7 such seller may not reclaim any such goods unless

8 the seller demands in writing the reclamation of

9 such goods—

10 ‘‘(A) before 45 days after the date of re11 ceipt of such goods by the debtor; or

12 ‘‘(B) if such 45-day period expires after

13 the commencement of the case, before 20 days

14 after the date of commencement of the case.

15 ‘‘(2) Notwithstanding the failure of the seller to

16 provide notice in a manner consistent with this sub17 section, the seller shall be entitled to assert the

18 rights established in section 503(b)(7) of this title.’’.

19 (b) ADMINISTRATIVE EXPENSES.—Section 503(b) of

20 title 11, United States Code, is amended—

21 (1) in paragraph (5), by striking ‘‘and’’ at the

22 end;

23 (2) in paragraph (6), by striking the period at

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

25 (3) by adding at the end the following:
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1 ‘‘(7) the invoice price of any goods received by

2 the debtor within 20 days of the date of filing of a

3 case under this title where the goods have been sold

4 to the debtor in the ordinary course of such seller’s

5 business.’’.

6 SEC. 1236. PROVIDING REQUESTED TAX DOCUMENTS TO

7 THE COURT.

8 In the case of an individual under chapter 7, the

9 court shall not grant a discharge unless requested tax doc10 uments have been provided to the court. In the case of

11 an individual under chapter 11 or 13, the court shall not

12 confirm a plan of reorganization unless requested tax doc13 uments have been filed with the court.

14 SEC. 1237. DEFINITION OF FAMILY FARMER.

15 Section 101(18) of title 11, United States Code, is

16 amended—

17 (1) in subparagraph (A) by—

18 (A) striking ‘‘$1,500,000’’ and inserting

19 ‘‘$3,000,000’’; and

20 (B) striking ‘‘80’’ and inserting ‘‘50’’; and

21 (2) in subparagraph (B)(ii) by striking

22 ‘‘$1,500,000’’ and inserting ‘‘$3,000,000’’.

23 SEC. 1238. ENCOURAGING CREDITWORTHINESS.

24 (a) SENSE OF THE CONGRESS.—It is the sense of the

25 Congress that—
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1 (1) certain lenders may sometimes offer credit

2 to consumers indiscriminately, without taking steps

3 to ensure that consumers are capable of repaying

4 the resulting debt, and in a manner which may en5 courage certain consumers to accumulate additional

6 debt; and

7 (2) resulting consumer debt may increasingly be

8 a major contributing factor to consumer insolvency.

9 (b) STUDY REQUIRED.—The Board of Governors of

10 the Federal Reserve System (hereafter in this section re11 ferred to as the ‘‘Board’’) shall conduct a study of—

12 (1) consumer credit industry practices of solic13 iting and extending credit—

14 (A) indiscriminately;

15 (B) without taking steps to ensure that

16 consumers are capable of repaying the resulting

17 debt; and

18 (C) in a manner that encourages con19 sumers to accumulate additional debt; and

20 (2) the effects of such practices on consumer

21 debt and insolvency.

22 (c) REPORT AND REGULATIONS.—Not later than 12

23 months after the date of enactment of this Act, the

24 Board—
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1 (1) shall make public a report on its findings

2 with respect to the indiscriminate solicitation and

3 extension of credit by the credit industry;

4 (2) may issue regulations that would require

5 additional disclosures to consumers; and

6 (3) may take any other actions, consistent with

7 its existing statutory authority, that the Board finds

8 necessary to ensure responsible industrywide prac9 tices and to prevent resulting consumer debt and in10 solvency.

11 SEC. 1239. PROPERTY NO LONGER SUBJECT TO REDEMP12 TION.

13 Section 541(b) of title 11 of the United States Code

14 is amended by adding at the end the following:

15 ‘‘(6) any interest of the debtor in property

16 where the debtor pledged or sold tangible personal

17 property (other than securities or written or printed

18 evidences of indebtedness or title) as collateral for a

19 loan or advance of money, where—

20 ‘‘(A) the tangible personal property is in

21 the possession of the pledgee or transferee;

22 ‘‘(B) the debtor has no obligation to repay

23 the money, redeem the collateral, or buy back

24 the property at a stipulated price; and
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1 ‘‘(C) neither the debtor nor the trustee

2 have exercised any right to redeem provided

3 under the contract or State law, in a timely

4 manner as provided under State law and sec5 tion 108(b) of this title.’’.

6 SEC. 1240. AVAILABILITY OF TOLL-FREE ACCESS TO INFOR7 MATION.

8 Section 127(b)(11) of the Truth in Lending Act (15

9 U.S.C. 1637(b)), as added by this Act, is amended by add10 ing at the end the following:

11 ‘‘(K) A creditor that maintains a toll-free tele12 phone number for the purpose of providing cus13 tomers with the actual number of months that it will

14 take to repay an outstanding balance shall include

15 the following statement on each billing statement:

16 ‘Making only the minimum payment will increase

17 the interest you pay and the time it takes to repay

18 your balance. For more information, call this toll19 free number: llll.’. ’’.
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1 TITLE XIII—GENERAL EFFEC2 TIVE DATE; APPLICATION OF

3 AMENDMENTS

4 SEC. 1301. EFFECTIVE DATE; APPLICATION OF AMEND5 MENTS.

6 (a) EFFECTIVE DATE.—Except as provided otherwise

7 in this Act, this Act and the amendments made by this

8 Act shall take effect 180 days after the date of enactment

9 of this Act.

10 (b) APPLICATION OF AMENDMENTS.—The amend11 ments made by this Act shall not apply with respect to

12 cases commenced under title 11, United States Code, be13 fore the effective date of this Act.

14 TITLE XIV—FINANCIAL INSTITU15 TIONS INSOLVENCY IM16 PROVEMENT

17 SEC. 1401. SHORT TITLE.

18 This title may be cited as the ‘‘Financial Institutions

19 Insolvency Improvement Act of 2000’’.

20 SEC. 1402. TREATMENT OF CERTAIN AGREEMENTS BY CON21 SERVATORS OR RECEIVERS OF INSURED DE22 POSITORY INSTITUTIONS.

23 (a) DEFINITION OF QUALIFIED FINANCIAL CON24 TRACT.—Section 11(e)(8)(D)(i) of the Federal Deposit In25 surance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by
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1 inserting ‘‘, resolution, or order’’ after ‘‘any similar agree2 ment that the Corporation determines by regulation’’.

3 (b) DEFINITION OF SECURITIES CONTRACT.—Sec4 tion 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act

5 (12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as fol6 lows:

7 ‘‘(ii) SECURITIES CONTRACT.—The

8 term ‘securities contract’—

9 ‘‘(I) means a contract for the

10 purchase, sale, or loan of a security, a

11 certificate of deposit, a mortgage loan,

12 or any interest in a mortgage loan, a

13 group or index of securities, certifi14 cates of deposit, or mortgage loans or

15 interests therein (including any inter16 est therein or based on the value

17 thereof) or any option on any of the

18 foregoing, including any option to

19 purchase or sell any such security,

20 certificate of deposit, loan, interest,

21 group or index, or option;

22 ‘‘(II) does not include any pur23 chase, sale, or repurchase obligation

24 under a participation in a commercial

25 mortgage loan unless the Corporation
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1 determines by regulation, resolution,

2 or order to include any such agree3 ment within the meaning of such

4 term;

5 ‘‘(III) means any option entered

6 into on a national securities exchange

7 relating to foreign currencies;

8 ‘‘(IV) means the guarantee by or

9 to any securities clearing agency of

10 any settlement of cash, securities, cer11 tificates of deposit, mortgage loans or

12 interests therein, group or index of se13 curities, certificates of deposit, or

14 mortgage loans or interests therein

15 (including any interest therein or

16 based on the value thereof) or option

17 on any of the foregoing, including any

18 option to purchase or sell any such se19 curity, certificate of deposit, loan, in20 terest, group or index or option;

21 ‘‘(V) means any margin loan;

22 ‘‘(VI) means any other agree23 ment or transaction that is similar to

24 any agreement or transaction referred
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1 to in this clause (other than subclause

2 (II));

3 ‘‘(VII) means any combination of

4 the agreements or transactions re5 ferred to in this clause (other than

6 subclause (II));

7 ‘‘(VIII) means any option to

8 enter into any agreement or trans9 action referred to in this clause (other

10 than subclause (II));

11 ‘‘(IX) means a master agreement

12 that provides for an agreement or

13 transaction referred to in subclause

14 (I), (III), (IV), (V), (VI), (VII), or

15 (VIII), together with all supplements

16 to any such master agreement, with17 out regard to whether the master

18 agreement provides for an agreement

19 or transaction that is not a securities

20 contract under this clause, except that

21 the master agreement shall be consid22 ered to be a securities contract under

23 this clause only with respect to each

24 agreement or transaction under the

25 master agreement that is referred to
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1 in subclause (I), (III), (IV), (V), (VI),

2 (VII), or (VIII); and

3 ‘‘(X) means any security agree4 ment or arrangement or other credit

5 enhancement related to any agree6 ment or transaction referred to in this

7 clause (other than subclause (II)).’’.

8 (c) DEFINITION OF COMMODITY CONTRACT.—Sec9 tion 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act

10 (12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as fol11 lows:

12 ‘‘(iii) COMMODITY CONTRACT.—The

13 term ‘commodity contract’ means—

14 ‘‘(I) with respect to a futures

15 commission merchant, a contract for

16 the purchase or sale of a commodity

17 for future delivery on, or subject to

18 the rules of, a contract market or

19 board of trade;

20 ‘‘(II) with respect to a foreign fu21 tures commission merchant, a foreign

22 future;

23 ‘‘(III) with respect to a leverage

24 transaction merchant, a leverage

25 transaction;
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1 ‘‘(IV) with respect to a clearing

2 organization, a contract for the pur3 chase or sale of a commodity for fu4 ture delivery on, or subject to the

5 rules of, a contract market or board

6 of trade that is cleared by such clear7 ing organization, or commodity option

8 traded on, or subject to the rules of,

9 a contract market or board of trade

10 that is cleared by such clearing orga11 nization;

12 ‘‘(V) with respect to a commodity

13 options dealer, a commodity option;

14 ‘‘(VI) any other agreement or

15 transaction that is similar to any

16 agreement or transaction referred to

17 in this clause;

18 ‘‘(VII) any combination of the

19 agreements or transactions referred to

20 in this clause;

21 ‘‘(VIII) any option to enter into

22 any agreement or transaction referred

23 to in this clause;

24 ‘‘(IX) a master agreement that

25 provides for an agreement or trans-
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1 action referred to in subclause (I),

2 (II), (III), (IV), (V), (VI), (VII), or

3 (VIII), together with all supplements

4 to any such master agreement, with5 out regard to whether the master

6 agreement provides for an agreement

7 or transaction that is not a com8 modity contract under this clause, ex9 cept that the master agreement shall

10 be considered to be a commodity con11 tract under this clause only with re12 spect to each agreement or trans13 action under the master agreement

14 that is referred to in subclause (I),

15 (II), (III), (IV), (V), (VI), (VII), or

16 (VIII); or

17 ‘‘(X) a security agreement or ar18 rangement or other credit enhance19 ment related to any agreement or

20 transaction referred to in this

21 clause.’’.

22 (d) DEFINITION OF FORWARD CONTRACT.—Section

23 11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12

24 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:
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1 ‘‘(iv) FORWARD CONTRACT.—The

2 term ‘forward contract’ means—

3 ‘‘(I) a contract (other than a

4 commodity contract) for the purchase,

5 sale, or transfer of a commodity or

6 any similar good, article, service,

7 right, or interest which is presently or

8 in the future becomes the subject of

9 dealing in the forward contract trade,

10 or product or byproduct thereof, with

11 a maturity date that is more than 2

12 days after the date on which the con13 tract is entered into, including a re14 purchase agreement, reverse repur15 chase agreement, consignment, lease,

16 swap, hedge transaction, deposit, loan,

17 option, allocated transaction,

18 unallocated transaction, or any other

19 similar agreement;

20 ‘‘(II) any combination of agree21 ments or transactions referred to in

22 subclauses (I) and (III);

23 ‘‘(III) any option to enter into

24 any agreement or transaction referred

25 to in subclause (I) or (II);
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1 ‘‘(IV) a master agreement that

2 provides for an agreement or trans3 action referred to in subclauses (I),

4 (II), or (III), together with all supple5 ments to any such master agreement,

6 without regard to whether the master

7 agreement provides for an agreement

8 or transaction that is not a forward

9 contract under this clause, except that

10 the master agreement shall be consid11 ered to be a forward contract under

12 this clause only with respect to each

13 agreement or transaction under the

14 master agreement that is referred to

15 in subclause (I), (II), or (III); or

16 ‘‘(V) a security agreement or ar17 rangement or other credit enhance18 ment related to any agreement or

19 transaction referred to in subclause

20 (I), (II), (III), or (IV).’’.

21 (e) DEFINITION OF REPURCHASE AGREEMENT AND

22 REVERSE REPURCHASE AGREEMENT.—Section

23 11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12

24 U.S.C. 1821(e)(8)(D)(v)) is amended to read as follows:
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1 ‘‘(v) REPURCHASE AGREEMENT; RE2 VERSE REPURCHASE AGREEMENT.—The

3 terms ‘repurchase agreement’ and ‘reverse

4 repurchase agreement’—

5 ‘‘(I) mean an agreement, includ6 ing related terms, which provides for

7 the transfer of 1 or more certificates

8 of deposit, mortgage-related securities

9 (as such term is defined in the Securi10 ties Exchange Act of 1934), mortgage

11 loans, interests in mortgage-related

12 securities or mortgage loans, eligible

13 bankers’ acceptances, qualified foreign

14 government securities or securities

15 that are direct obligations of, or that

16 are fully guaranteed by, the United

17 States or any agency of the United

18 States against the transfer of funds

19 by the transferee of such certificates

20 of deposit, eligible bankers’ accept21 ances, securities, loans, or interests

22 with a simultaneous agreement by

23 such transferee to transfer to the

24 transferor thereof certificates of de25 posit, eligible bankers’ acceptances,
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1 securities, loans, or interests as de2 scribed in this subclause, at a date

3 certain that is not later than 1 year

4 after the date of such transfers or on

5 demand, against the transfer of funds,

6 or any other similar agreement;

7 ‘‘(II) does not include any repur8 chase obligation under a participation

9 in a commercial mortgage loan unless

10 the Corporation determines by regula11 tion, resolution, or order to include

12 any such participation within the

13 meaning of such term;

14 ‘‘(III) means any combination of

15 agreements or transactions referred to

16 in subclauses (I) and (IV);

17 ‘‘(IV) means any option to enter

18 into any agreement or transaction re19 ferred to in subclause (I) or (III);

20 ‘‘(V) means a master agreement

21 that provides for an agreement or

22 transaction referred to in subclause

23 (I), (III), or (IV), together with all

24 supplements to any such master

25 agreement, without regard to whether
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1 the master agreement provides for an

2 agreement or transaction that is not a

3 repurchase agreement under this

4 clause, except that the master agree5 ment shall be considered to be a re6 purchase agreement under this sub7 clause only with respect to each agree8 ment or transaction under the master

9 agreement that is referred to in sub10 clause (I), (III), or (IV); and

11 ‘‘(VI) means a security agree12 ment or arrangement or other credit

13 enhancement related to any agree14 ment or transaction referred to in

15 subclause (I), (III), (IV), or (V).

16 For purposes of this clause, the term

17 ‘qualified foreign government security’

18 means a security that is a direct obligation

19 of, or that is fully guaranteed by, the cen20 tral government of a member of the Orga21 nization for Economic Cooperation and

22 Development (as determined by regulation

23 or order adopted by the appropriate Fed24 eral banking authority).’’.
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1 (f) DEFINITION OF SWAP AGREEMENT.—The Fed2 eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi))

3 is amended to read as follows:

4 ‘‘(vi) SWAP AGREEMENT.—The term

5 ‘swap agreement’—

6 ‘‘(I) means any agreement, in7 cluding the terms and conditions in8 corporated by reference in any such

9 agreement, that is—

10 ‘‘(aa) an interest rate swap,

11 option, future, or forward agree12 ment, including a rate floor, rate

13 cap, rate collar, cross-currency

14 rate swap, and basis swap;

15 ‘‘(bb) a spot, same day-to16 morrow, tomorrow-next, forward,

17 or other foreign exchange or pre18 cious metals agreement;

19 ‘‘(cc) a currency swap, op20 tion, future, or forward agree21 ment;

22 ‘‘(dd) an equity index or eq23 uity swap, option, future, or for24 ward agreement;
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1 ‘‘(ee) a debt index or debt

2 swap, option, future, or forward

3 agreement;

4 ‘‘(ff) a credit spread or cred5 it swap, option, future, or for6 ward agreement; or

7 ‘‘(gg) a commodity index or

8 commodity swap, option, future,

9 or forward agreement;

10 ‘‘(II) means any agreement or

11 transaction that is similar to any

12 other agreement or transaction re13 ferred to in this clause, that is pres14 ently, or in the future becomes, regu15 larly entered into in the swap market

16 (including terms and conditions incor17 porated by reference in such agree18 ment), and that is a forward, swap,

19 future, or option on 1 or more rates,

20 currencies, commodities, equity securi21 ties or other equity instruments, debt

22 securities or other debt instruments,

23 or economic indices or measures of

24 economic risk or value;
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1 ‘‘(III) means any combination of

2 agreements or transactions referred to

3 in this clause;

4 ‘‘(IV) means any option to enter

5 into any agreement or transaction re6 ferred to in this clause;

7 ‘‘(V) means a master agreement

8 that provides for an agreement or

9 transaction referred to in subclause

10 (I), (II), (III), or (IV), together with

11 all supplements to any such master

12 agreement, without regard to whether

13 the master agreement contains an

14 agreement or transaction that is not a

15 swap agreement under this clause, ex16 cept that the master agreement shall

17 be considered to be a swap agreement

18 under this clause only with respect to

19 each agreement or transaction under

20 the master agreement that is referred

21 to in subclause (I), (II), (III), or (IV);

22 ‘‘(VI) means any security agree23 ment or arrangement or other credit

24 enhancement related to any agree25 ments or transactions referred to in
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1 subparagraph (I), (II), (III), or (IV);

2 and

3 ‘‘(VII) is applicable for purposes

4 of this Act only, and shall not be con5 strued or applied so as to challenge or

6 affect the characterization, definition,

7 or treatment of any swap agreement

8 under any other statute, regulation, or

9 rule, including the Securities Act of

10 1933, the Securities Exchange Act of

11 1934, the Public Utility Holding Com12 pany Act of 1935, the Trust Inden13 ture Act of 1939, the Investment

14 Company Act of 1940, the Investment

15 Advisers Act of 1940, the Securities

16 Investor Protection Act of 1970, the

17 Commodity Exchange Act, and the

18 regulations promulgated by the Secu19 rities and Exchange Commission or

20 the Commodity Futures Trading

21 Commission.’’.

22 (g) DEFINITION OF TRANSFER.—Section

23 11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12

24 U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:
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1 ‘‘(viii) TRANSFER.—The term ‘trans2 fer’ means every mode, direct or indirect,

3 absolute or conditional, voluntary or invol4 untary, of disposing of or parting with

5 property or with an interest in property,

6 including retention of title as a security in7 terest and foreclosure of the depository

8 institutions’s equity of redemption.’’.

9 (h) TREATMENT OF QUALIFIED FINANCIAL CON10 TRACTS.—Section 11(e)(8) of the Federal Deposit Insur11 ance Act (12 U.S.C. 1821(e)(8)) is amended—

12 (1) in subparagraph (A), by striking ‘‘para13 graph (10)’’ and inserting ‘‘paragraphs (9) and

14 (10)’’;

15 (2) in subparagraph (A)(i), by striking ‘‘to

16 cause the termination or liquidation’’ and inserting

17 ‘‘such person has to cause the termination, liquida18 tion, or acceleration’’;

19 (3) by striking clause (ii) of subparagraph (A)

20 and inserting the following:

21 ‘‘(ii) any right under any security

22 agreement or arrangement or other credit

23 enhancement related to 1 or more qualified

24 financial contracts described in clause (i);

25 or’’; and
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1 (4) by striking clause (ii) of subparagraph (E)

2 and inserting the following:

3 ‘‘(ii) any right under any security

4 agreement or arrangement or other credit

5 enhancement related to 1 or more qualified

6 financial contracts described in clause (i);

7 or’’.

8 (i) AVOIDANCE OF TRANSFERS.—Section

9 11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12

10 U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section

11 5242 of the Revised Statutes (12 U.S.C. 91), or any other

12 Federal or State law relating to the avoidance of pref13 erential or fraudulent transfers,’’ before ‘‘the Corpora14 tion’’.

15 SEC. 1403. AUTHORITY OF THE CORPORATION WITH RE16 SPECT TO FAILED AND FAILING INSTITU17 TIONS.

18 (a) IN GENERAL.—Section 11(e)(8) of the Federal

19 Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is

20 amended—

21 (1) in subparagraph (E), by striking ‘‘other

22 than paragraph (12) of this subsection, subsection

23 (d)(9)’’ and inserting ‘‘other than subsections (d)(9)

24 and (e)(10)’’; and

25 (2) by adding at the end the following:
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1 ‘‘(F) CLARIFICATION.—No provision of law

2 shall be construed as limiting the right or

3 power of the Corporation, or authorizing any

4 court or agency to limit or delay, in any man5 ner, the right or power of the Corporation to

6 transfer any qualified financial contract in ac7 cordance with paragraphs (9) and (10) or to

8 disaffirm or repudiate any such contract in ac9 cordance with subsection (e)(1).

10 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC11 TIVE.—

12 ‘‘(i) IN GENERAL.—Notwithstanding

13 the provisions of subparagraphs (A) and

14 (E), and sections 403 and 404 of the Fed15 eral Deposit Insurance Corporation Im16 provement Act of 1991, no walkaway

17 clause shall be enforceable in a qualified fi18 nancial contract of an insured depository

19 institution in default.

20 ‘‘(ii) WALKAWAY CLAUSE DEFINED.—

21 For purposes of this subparagraph, the

22 term ‘walkaway clause’ means a provision

23 in a qualified financial contract that, after

24 calculation of a value of a party’s position

25 or an amount due to or from 1 of the par-
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1 ties in accordance with its terms upon ter2 mination, liquidation, or acceleration of the

3 qualified financial contract, either does not

4 create a payment obligation of a party or

5 extinguishes a payment obligation of a

6 party in whole or in part solely because of

7 such party’s status as a nondefaulting

8 party.’’.

9 (b) TECHNICAL AND CONFORMING AMENDMENT.—

10 Section 11(e)(12)(A) of the Federal Deposit Insurance

11 Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting

12 ‘‘or the exercise of rights or powers by’’ after ‘‘the ap13 pointment of’’.

14 SEC. 1404. AMENDMENTS RELATING TO TRANSFERS OF

15 QUALIFIED FINANCIAL CONTRACTS.

16 (a) TRANSFERS OF QUALIFIED FINANCIAL CON17 TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9)

18 of the Federal Deposit Insurance Act (12 U.S.C.

19 1821(e)(9)) is amended to read as follows:

20 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON21 TRACTS.—

22 ‘‘(A) IN GENERAL.—In making any trans23 fer of assets or liabilities of a depository institu24 tion in default which includes any qualified fi-
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1 nancial contract, the conservator or receiver for

2 such depository institution shall either—

3 ‘‘(i) transfer to 1 financial institution,

4 other than a financial institution for which

5 a conservator, receiver, trustee in bank6 ruptcy, or other legal custodian has been

7 appointed or which is otherwise the subject

8 of a bankruptcy or insolvency proceeding—

9 ‘‘(I) all qualified financial con10 tracts between any person or any af11 filiate of such person and the deposi12 tory institution in default;

13 ‘‘(II) all claims of such person or

14 any affiliate of such person against

15 such depository institution under any

16 such contract (other than any claim

17 which, under the terms of any such

18 contract, is subordinated to the claims

19 of general unsecured creditors of such

20 institution);

21 ‘‘(III) all claims of such deposi22 tory institution against such person or

23 any affiliate of such person under any

24 such contract; and
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1 ‘‘(IV) all property securing or

2 any other credit enhancement for any

3 contract described in subclause (I) or

4 any claim described in subclause (II)

5 or (III) under any such contract; or

6 ‘‘(ii) transfer none of the qualified fi7 nancial contracts, claims, property, or

8 other credit enhancement referred to in

9 clause (i) (with respect to such person and

10 any affiliate of such person).

11 ‘‘(B) TRANSFER TO FOREIGN BANK, FOR12 EIGN FINANCIAL INSTITUTION, OR BRANCH OR

13 AGENCY OF A FOREIGN BANK OR FINANCIAL IN14 STITUTION.—In transferring any qualified fi15 nancial contract and related claims and prop16 erty pursuant to subparagraph (A)(i), the con17 servator or receiver for the depository institu18 tion shall not make such transfer to a foreign

19 bank, financial institution organized under the

20 laws of a foreign country, or a branch or agency

21 of a foreign bank or financial institution unless,

22 under the law applicable to such bank, financial

23 institution, branch, or agency, to the qualified

24 financial contract, and to any netting contract,

25 any security agreement or arrangement or other
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1 credit enhancement related to 1 or more quali2 fied financial contracts the contractual rights of

3 the parties to such qualified financial contracts,

4 netting contracts, security agreements, or ar5 rangements, or other credit enhancements are

6 enforceable substantially to the same extent as

7 permitted under this section.

8 ‘‘(C) TRANSFER OF CONTRACT SUBJECT

9 TO THE RULES OF A CLEARING ORGANIZA10 TION.—If a conservator or receiver transfers

11 any qualified financial contract and related

12 claims, property, and credit enhancements pur13 suant to subparagraph (A)(i) and such contract

14 is subject to the rules of a clearing organiza15 tion, the clearing organization shall not be re16 quired to accept the transferee as a member by

17 virtue of the transfer.

18 ‘‘(D) DEFINITION.—For purposes of this

19 paragraph, the term ‘financial institution’

20 means a broker or dealer, a depository institu21 tion, a futures commission merchant, or any

22 other institution that the Corporation deter23 mines, by regulation, to be a financial institu24 tion.’’.
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1 (b) NOTICE TO QUALIFIED FINANCIAL CONTRACT

2 COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal

3 Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is

4 amended by striking the flush material immediately fol5 lowing clause (ii) and inserting the following:

6 ‘‘the conservator or receiver shall notify any

7 person who is a party to any such contract of

8 such transfer by 5:00 p.m. (eastern time) on

9 the business day following the date of the ap10 pointment of the receiver in the case of a re11 ceivership, or the business day following such

12 transfer in the case of a conservatorship.’’.

13 (c) RIGHTS AGAINST RECEIVER AND TREATMENT OF

14 BRIDGE BANKS.—Section 11(e)(10) of the Federal De15 posit Insurance Act (12 U.S.C. 1821(e)(10)) is

16 amended—

17 (1) by redesignating subparagraph (B) as sub18 paragraph (D); and

19 (2) by inserting after subparagraph (A) the fol20 lowing:

21 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE22 ABLE.—

23 ‘‘(i) RECEIVERSHIP.—A person who is

24 a party to a qualified financial contract

25 with an insured depository institution may
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1 not exercise any right such person has to

2 terminate, liquidate, or net such contract

3 under paragraph (8)(A) or section 403 or

4 404 of the Federal Deposit Insurance Cor5 poration Improvement Act of 1991, solely

6 by reason of or incidental to the appoint7 ment of a receiver for the depository insti8 tution (or the insolvency or financial condi9 tion of the depository institution for which

10 the receiver has been appointed)—

11 ‘‘(I) until 5:00 p.m. (eastern

12 time) on the business day following

13 the date of the appointment of the re14 ceiver; or

15 ‘‘(II) after the person has re16 ceived notice that the contract has

17 been transferred pursuant to para18 graph (9)(A).

19 ‘‘(ii) CONSERVATORSHIP.—A person

20 who is a party to a qualified financial con21 tract with an insured depository institution

22 may not exercise any right such person has

23 to terminate, liquidate, or net such con24 tract under paragraph (8)(E) or section

25 403 or 404 of the Federal Deposit Insur-
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1 ance Corporation Improvement Act of

2 1991, solely by reason of or incidental to

3 the appointment of a conservator for the

4 depository institution (or the insolvency or

5 financial condition of the depository insti6 tution for which the conservator has been

7 appointed).

8 ‘‘(iii) NOTICE.—For purposes of this

9 paragraph, the Corporation as receiver or

10 conservator of an insured depository insti11 tution shall be deemed to have notified a

12 person who is a party to a qualified finan13 cial contract with such depository institu14 tion if the Corporation has taken steps

15 reasonably calculated to provide notice to

16 such person by the time specified in sub17 paragraph (A).

18 ‘‘(C) TREATMENT OF BRIDGE BANKS.—A

19 financial institution for which a conservator, re20 ceiver, trustee in bankruptcy, or other legal cus21 todian has been appointed or that is otherwise

22 the subject of a bankruptcy or insolvency pro23 ceeding for purposes of subsection (e)(9) does

24 not include—

25 ‘‘(i) a bridge bank; or
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1 ‘‘(ii) a depository institution organized

2 by the Corporation, for which a conser3 vator is appointed either—

4 ‘‘(I) immediately upon the orga5 nization of the institution; or

6 ‘‘(II) at the time of a purchase

7 and assumption transaction between

8 such institution and the Corporation

9 as receiver for a depository institution

10 in default.’’.

11 SEC. 1405. AMENDMENTS RELATING TO DISAFFIRMANCE

12 OR REPUDIATION OF QUALIFIED FINANCIAL

13 CONTRACTS.

14 Section 11(e) of the Federal Deposit Insurance Act

15 (12 U.S.C. 1821(e)) is amended—

16 (1) by redesignating paragraphs (11) through

17 (15) as paragraphs (12) through (16), respectively;

18 (2) in paragraph (8)(C)(i), by striking ‘‘(11)’’

19 and inserting ‘‘(12)’’;

20 (3) in paragraph (8)(E), by striking ‘‘(12)’’ and

21 inserting ‘‘(13)’’; and

22 (4) by inserting after paragraph (10) the fol23 lowing:

24 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

25 QUALIFIED FINANCIAL CONTRACTS.—In exercising
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1 the right to disaffirm or repudiate with respect to

2 any qualified financial contract to which an insured

3 depository institution is a party, the conservator or

4 receiver for such institution shall either—

5 ‘‘(A) disaffirm or repudiate all qualified fi6 nancial contracts between—

7 ‘‘(i) any person or any affiliate of

8 such person; and

9 ‘‘(ii) the depository institution in de10 fault; or

11 ‘‘(B) disaffirm or repudiate none of the

12 qualified financial contracts referred to in sub13 paragraph (A) (with respect to such person or

14 any affiliate of such person).’’.

15 SEC. 1406. CLARIFYING AMENDMENT RELATING TO MAS16 TER AGREEMENTS.

17 Section 11(e)(8)(D)(vii) of the Federal Deposit In18 surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to

19 read as follows:

20 ‘‘(vii) TREATMENT OF MASTER

21 AGREEMENT AS 1 AGREEMENT.—Any mas22 ter agreement for any contract or agree23 ment described in any preceding clause of

24 this subparagraph (or any master agree25 ment for such master agreement or agree-
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1 ments), together with all supplements to

2 such master agreement, shall be treated as

3 a single agreement and a single qualified

4 financial contract. If a master agreement

5 contains provisions relating to agreements

6 or transactions that are not themselves

7 qualified financial contracts, the master

8 agreement shall be deemed to be a quali9 fied financial contract only with respect to

10 those transactions that are themselves

11 qualified financial contracts.’’.

12 SEC. 1407. FEDERAL DEPOSIT INSURANCE CORPORATION

13 IMPROVEMENT ACT OF 1991.

14 (a) DEFINITIONS.—Section 402 of the Federal De15 posit Insurance Corporation Improvement Act of 1991 (12

16 U.S.C. 4402) is amended—

17 (1) in paragraph (6)—

18 (A) by redesignating subparagraphs (B)

19 through (D) as subparagraphs (C) through (E),

20 respectively;

21 (B) by inserting after subparagraph (A)

22 the following:

23 ‘‘(B) an uninsured national bank or an un24 insured State bank that is a member of the

25 Federal Reserve System, if the national bank or
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1 State member bank is not eligible to make ap2 plication to become an insured bank under sec3 tion 5 of the Federal Deposit Insurance Act;’’;

4 and

5 (C) by striking subparagraph (C) (as re6 designated) and inserting the following:

7 ‘‘(C) a branch or agency of a foreign bank,

8 a foreign bank and any branch or agency of the

9 foreign bank, or the foreign bank that estab10 lished the branch or agency, as those terms are

11 defined in section 1(b) of the International

12 Banking Act of 1978;’’;

13 (2) in paragraph (11), by inserting before the

14 period ‘‘and any other clearing organization with

15 which such clearing organization has a netting con16 tract’’;

17 (3) in paragraph (14)(A), by striking clause (i)

18 and inserting the following:

19 ‘‘(i) means a contract or agreement

20 between 2 or more financial institutions,

21 clearing organizations, or members that

22 provides for netting present or future pay23 ment obligations or payment entitlements

24 (including liquidation or closeout values re25 lating to such obligations or entitlements)
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1 among the parties to the agreement; and’’;

2 and

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

4 ‘‘(15) PAYMENT.—The term ‘payment’ means a

5 payment of United States dollars, another currency,

6 or a composite currency, and a noncash delivery, in7 cluding a payment or delivery to liquidate an

8 unmatured obligation.’’.

9 (b) ENFORCEABILITY OF BILATERAL NETTING CON10 TRACTS.—Section 403 of the Federal Deposit Insurance

11 Corporation Improvement Act of 1991 (12 U.S.C. 4403)

12 is amended—

13 (1) by striking subsection (a) and inserting the

14 following:

15 ‘‘(a) GENERAL RULE.—Notwithstanding any other

16 provision of Federal or State law (other than paragraphs

17 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

18 Deposit Insurance Act or any order authorized under sec19 tion 5(b)(2) of the Securities Investor Protection Act of

20 1970, the covered contractual payment obligations and the

21 covered contractual payment entitlements between any 2

22 financial institutions shall be netted in accordance with,

23 and subject to the conditions of, the terms of any applica24 ble netting contract (except as provided in section

25 561(b)(2) of title 11, United States Code).’’; and
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1 (2) by adding at the end the following:

2 ‘‘(f) ENFORCEABILITY OF SECURITY AGREE3 MENTS.—The provisions of any security agreement or ar4 rangement or other credit enhancement related to 1 or

5 more netting contracts between any 2 financial institu6 tions shall be enforceable in accordance with their terms

7 (except as provided in section 561(b)(2) of title 11, United

8 States Code) and shall not be stayed, avoided, or otherwise

9 limited by any State or Federal law (other than para10 graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the

11 Federal Deposit Insurance Act and section 5(b)(2) of the

12 Securities Investor Protection Act of 1970).’’.

13 (c) ENFORCEABILITY OF CLEARING ORGANIZATION

14 NETTING CONTRACTS.—Section 404 of the Federal De15 posit Insurance Corporation Improvement Act of 1991 (12

16 U.S.C. 4404) is amended—

17 (1) by striking subsection (a) and inserting the

18 following:

19 ‘‘(a) GENERAL RULE.—Notwithstanding any other

20 provision of Federal or State law (other than paragraphs

21 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal

22 Deposit Insurance Act or any order authorized under sec23 tion 5(b)(2) of the Securities Investor Protection Act of

24 1970) the covered contractual payment obligations and the

25 covered contractual payment entitlements of a member of
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1 a clearing organization to and from all other members of

2 the clearing organization shall be netted in accordance

3 with, and subject to the conditions of, the terms of any

4 applicable netting contract (except as provided in section

5 561(b)(2) of title 11, United States Code).’’; and

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

7 ‘‘(h) ENFORCEABILITY OF SECURITY AGREE8 MENTS.—The provisions of any security agreement or ar9 rangement or other credit enhancement related to 1 or

10 more netting contracts between any 2 members of a clear11 ing organization shall be enforceable in accordance with

12 their terms (except as provided in section 561(b)(2) of

13 title 11, United States Code) and shall not be stayed,

14 avoided, or otherwise limited by any State or Federal law

15 (other than paragraphs (8)(E), (8)(F), and (10)(B) of sec16 tion 11(e) of the Federal Deposit Insurance Act and sec17 tion 5(b)(2) of the Securities Investor Protection Act of

18 1970).’’.

19 (d) ENFORCEABILITY OF CONTRACTS WITH UNIN20 SURED NATIONAL BANKS AND UNINSURED FEDERAL

21 BRANCHES AND AGENCIES.—The Federal Deposit Insur22 ance Corporation Improvement Act of 1991 (12 U.S.C.

23 4401 et seq.) is amended by adding at the end the fol24 lowing:
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1 ‘‘SEC. 408. TREATMENT OF CONTRACTS WITH UNINSURED

2 NATIONAL BANKS AND UNINSURED FEDERAL

3 BRANCHES AND AGENCIES.

4 ‘‘(a) IN GENERAL.—Notwithstanding any other pro5 vision of law, paragraphs (8), (9), (10), and (11) of section

6 11(e) of the Federal Deposit Insurance Act shall apply

7 to an uninsured national bank or uninsured Federal

8 branch or Federal agency, except that for such purpose—

9 ‘‘(1) any reference to the ‘Corporation as re10 ceiver’ or ‘the receiver or the Corporation’ shall refer

11 to the receiver of an uninsured national bank or un12 insured Federal branch or Federal agency appointed

13 by the Comptroller of the Currency;

14 ‘‘(2) any reference to the ‘Corporation’ (other

15 than in section 11(e)(8)(D) of that Act), the ‘Cor16 poration, whether acting as such or as conservator

17 or receiver’, a ‘receiver’, or a ‘conservator’ shall refer

18 to the receiver or conservator of an uninsured na19 tional bank or uninsured Federal branch or Federal

20 agency appointed by the Comptroller of the Cur21 rency; and

22 ‘‘(3) any reference to an ‘insured depository in23 stitution’ or ‘depository institution’ shall refer to an

24 uninsured national bank or an uninsured Federal

25 branch or Federal agency.
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1 ‘‘(b) LIABILITY.—The liability of a receiver or conser2 vator of an uninsured national bank or uninsured Federal

3 branch or agency shall be determined in the same manner

4 and subject to the same limitations that apply to receivers

5 and conservators of insured depository institutions under

6 section 11(e) of the Federal Deposit Insurance Act.

7 ‘‘(c) REGULATORY AUTHORITY.—

8 ‘‘(1) IN GENERAL.—The Comptroller of the

9 Currency, in consultation with the Federal Deposit

10 Insurance Corporation, may promulgate regulations

11 to implement this section.

12 ‘‘(2) SPECIFIC REQUIREMENT.—In promul13 gating regulations to implement this section, the

14 Comptroller of the Currency shall ensure that the

15 regulations generally are consistent with the regula16 tions and policies of the Federal Deposit Insurance

17 Corporation adopted pursuant to the Federal De18 posit Insurance Act.

19 ‘‘(d) DEFINITIONS.—For purposes of this section, the

20 terms ‘Federal branch’, ‘Federal agency’, and ‘foreign

21 bank’ have the same meanings as in section 1(b) of the

22 International Banking Act of 1978.’’.
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1 SEC. 1408. RECORDKEEPING REQUIREMENTS.

2 Section 11(e)(8) of the Federal Deposit Insurance

3 Act (12 U.S.C. 1821(e)(8)) is amended by adding at the

4 end the following:

5 ‘‘(H) RECORDKEEPING REQUIREMENTS.—

6 The Corporation, in consultation with the ap7 propriate Federal banking agencies, may pre8 scribe regulations requiring more detailed rec9 ordkeeping with respect to qualified financial

10 contracts (including market valuations) by in11 sured depository institutions.’’.

12 SEC. 1409. EXEMPTIONS FROM CONTEMPORANEOUS EXE13 CUTION REQUIREMENT.

14 Section 13(e)(2) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1823(e)(2)) is amended to read as follows:

16 ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS

17 EXECUTION REQUIREMENT.—

18 ‘‘(A) IN GENERAL.—An agreement de19 scribed in subparagraph (B) shall not be

20 deemed to be invalid pursuant to paragraph

21 (1)(B) solely on the basis—

22 ‘‘(i) that the agreement was not exe23 cuted contemporaneously with the acquisi24 tion of the collateral; or
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1 ‘‘(ii) of any pledge, delivery, or substi2 tution of the collateral made in accordance

3 with the agreement.

4 ‘‘(B) AGREEMENT DESCRIBED.—An agree5 ment is described in this subparagraph if it is

6 an agreement to provide for the lawful

7 collateralization of—

8 ‘‘(i) deposits of, or other credit exten9 sion by, a Federal, State, or local govern10 mental entity, or of any depositor referred

11 to in section 11(a)(2), including an agree12 ment to provide collateral in lieu of a sur13 ety bond;

14 ‘‘(ii) securities deposited under section

15 345(b)(2) of title 11, United States Code;

16 ‘‘(iii) extensions of credit, including

17 an overdraft, from a Federal reserve bank

18 or Federal home loan bank; or

19 ‘‘(iv) 1 or more qualified financial

20 contracts (as defined in section

21 11(e)(8)(D)).’’.

22 SEC. 1410. SIPC STAY.

23 Section 5(b)(2) of the Securities Investor Protection

24 Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding

25 at the end the following:
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1 ‘‘(C) EXCEPTION FROM STAY.—

2 ‘‘(i) IN GENERAL.—Notwithstanding

3 section 362 of title 11, United States

4 Code, neither the filing of an application

5 under subsection (a)(3) of this section nor

6 any order or decree obtained by SIPC from

7 the court shall operate as a stay of any

8 contractual right of a creditor to liquidate,

9 terminate, or accelerate a securities con10 tract, commodity contract, forward con11 tract, repurchase agreement, swap agree12 ment, or master netting agreement, each

13 as defined in title 11, United States Code,

14 to offset or net termination values, pay15 ment amounts, or other transfer obliga16 tions arising under or in connection with 1

17 or more of such contracts or agreements,

18 or to foreclose on any cash collateral

19 pledged by the debtor, whether or not with

20 respect to 1 or more of such contracts or

21 agreements.

22 ‘‘(ii) STAYS ON FORECLOSURE.—Not23 withstanding clause (i), an application,

24 order, or decree described therein may op25 erate as a stay of the foreclosure on securi-
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1 ties collateral pledged by the debtor,

2 whether or not with respect to 1 or more

3 of such contracts or agreements, securities

4 sold by the debtor under a repurchase

5 agreement or securities lent under a secu6 rities lending agreement.

7 ‘‘(iii) DEFINITION.—As used in this

8 section, the term ‘contractual right’

9 includes—

10 ‘‘(I) a right set forth in a rule or

11 bylaw of a national securities ex12 change, a national securities associa13 tion, or a securities clearing agency;

14 ‘‘(II) a right set forth in a bylaw

15 of a clearing organization or contract

16 market or in a resolution of the gov17 erning board thereof; and

18 ‘‘(III) a right, whether or not in

19 writing, arising under common law,

20 under law merchant, or by reason of

21 normal business practice.’’.

22 SEC. 1411. FEDERAL RESERVE COLLATERAL REQUIRE23 MENTS.

24 Section 16 of the Federal Reserve Act (12 U.S.C.

25 412) is amended in the third sentence of the second undes-
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1 ignated paragraph, by striking ‘‘acceptances acquired

2 under section 13 of this Act’’ and inserting ‘‘acceptances

3 acquired under section 10A, 10B, 13, or 13A’’.

4 SEC. 1412. EFFECTIVE DATE; APPLICATION OF AMEND5 MENTS.

6 (a) SEVERABILITY.—If any provision of this title or

7 any amendment made by this title, or the application of

8 any such provision or amendment to any person or cir9 cumstance, is held to be unconstitutional, the remaining

10 provisions of and amendments made by this title and the

11 application of such other provisions and amendments to

12 any person or circumstance shall not be affected thereby.

13 (b) EFFECTIVE DATE.—This title and the amend14 ments made by this title shall take effect on the date of

15 enactment of this Act.

16 (c) APPLICATION OF AMENDMENTS.—The amend17 ments made by this title shall apply with respect to cases

18 commenced or appointments made under any Federal or

19 State law after the date of enactment of this Act, but shall

20 not apply with respect to cases commenced or appoint21 ments made under any Federal or State law before the

22 date of enactment of this Act.
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1 TITLE XV—METHAMPHETAMINE

2 AND OTHER CONTROLLED

3 SUBSTANCES

4 SEC. 1501. SHORT TITLE.

5 This title may be cited as the ‘‘Methamphetamine

6 Anti-Proliferation Act of 2000’’.

7 Subtitle A—Methamphetamine

8 Production, Trafficking, and Abuse

9 CHAPTER 1—CRIMINAL PENALTIES

10 SEC. 1511. ENHANCED PUNISHMENT OF AMPHETAMINE

11 LABORATORY OPERATORS.

12 (a) AMENDMENT TO FEDERAL SENTENCING GUIDE13 LINES.—Pursuant to its authority under section 994(p)

14 of title 28, United States Code, the United States Sen15 tencing Commission shall amend the Federal sentencing

16 guidelines in accordance with this section with respect to

17 any offense relating to the manufacture, importation, ex18 portation, or trafficking in amphetamine (including an at19 tempt or conspiracy to do any of the foregoing) in violation

20 of—

21 (1) the Controlled Substances Act (21 U.S.C.

22 801 et seq.);

23 (2) the Controlled Substances Import and Ex24 port Act (21 U.S.C. 951 et seq.); or
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1 (3) the Maritime Drug Law Enforcement Act

2 (46 U.S.C. App. 1901 et seq.).

3 (b) GENERAL REQUIREMENT.—In carrying out this

4 section, the United States Sentencing Commission shall,

5 with respect to each offense described in subsection (a)

6 relating to amphetamine—

7 (1) review and amend its guidelines to provide

8 for increased penalties such that those penalties are

9 comparable to the base offense level for meth10 amphetamine; and

11 (2) take any other action the Commission con12 siders necessary to carry out this subsection.

13 (c) ADDITIONAL REQUIREMENTS.—In carrying out

14 this section, the United States Sentencing Commission

15 shall ensure that the sentencing guidelines for offenders

16 convicted of offenses described in subsection (a) reflect the

17 heinous nature of such offenses, the need for aggressive

18 law enforcement action to fight such offenses, and the ex19 treme dangers associated with unlawful activity involving

20 amphetamines, including—

21 (1) the rapidly growing incidence of amphet22 amine abuse and the threat to public safety that

23 such abuse poses;

24 (2) the high risk of amphetamine addiction;
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1 (3) the increased risk of violence associated

2 with amphetamine trafficking and abuse; and

3 (4) the recent increase in the illegal importation

4 of amphetamine and precursor chemicals.

5 (d) EMERGENCY AUTHORITY TO SENTENCING COM6 MISSION.—The United States Sentencing Commission

7 shall promulgate amendments pursuant to this section as

8 soon as practicable after the date of the enactment of this

9 Act in accordance with the procedure set forth in section

10 21(a) of the Sentencing Act of 1987 (Public Law 100–

11 182), as though the authority under that Act had not ex12 pired.

13 SEC. 1512. ENHANCED PUNISHMENT OF AMPHETAMINE OR

14 METHAMPHETAMINE LABORATORY OPERA15 TORS.

16 (a) FEDERAL SENTENCING GUIDELINES.—

17 (1) IN GENERAL.—Pursuant to its authority

18 under section 994(p) of title 28, United States Code,

19 the United States Sentencing Commission shall

20 amend the Federal sentencing guidelines in accord21 ance with paragraph (2) with respect to any offense

22 relating to the manufacture, attempt to manufac23 ture, or conspiracy to manufacture amphetamine or

24 methamphetamine in violation of—
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1 (A) the Controlled Substances Act (21

2 U.S.C. 801 et seq.);

3 (B) the Controlled Substances Import and

4 Export Act (21 U.S.C. 951 et seq.); or

5 (C) the Maritime Drug Law Enforcement

6 Act (46 U.S.C. App. 1901 et seq.).

7 (2) REQUIREMENTS.—In carrying out this

8 paragraph, the United States Sentencing Commis9 sion shall—

10 (A) if the offense created a substantial risk

11 of harm to human life (other than a life de12 scribed in subparagraph (B)) or the environ13 ment, increase the base offense level for the

14 offense—

15 (i) by not less than 3 offense levels

16 above the applicable level in effect on the

17 date of the enactment of this Act; or

18 (ii) if the resulting base offense level

19 after an increase under clause (i) would be

20 less than level 27, to not less than level 27;

21 or

22 (B) if the offense created a substantial risk

23 of harm to the life of a minor or incompetent,

24 increase the base offense level for the offense—
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1 (i) by not less than 6 offense levels

2 above the applicable level in effect on the

3 date of the enactment of this Act; or

4 (ii) if the resulting base offense level

5 after an increase under clause (i) would be

6 less than level 30, to not less than level 30.

7 (3) EMERGENCY AUTHORITY TO SENTENCING

8 COMMISSION.—The United States Sentencing Com9 mission shall promulgate amendments pursuant to

10 this subsection as soon as practicable after the date

11 of enactment of this Act in accordance with the pro12 cedure set forth in section 21(a) of the Sentencing

13 Act of 1987 (Public Law 100–182), as though the

14 authority under that Act had not expired.

15 (b) EFFECTIVE DATE.—The amendments made pur16 suant to this section shall apply with respect to any of17 fense occurring on or after the date that is 60 days after

18 the date of enactment of this Act.
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1 SEC. 1513. MANDATORY RESTITUTION FOR VIOLATIONS OF

2 CONTROLLED SUBSTANCES ACT AND CON3 TROLLED SUBSTANCES IMPORT AND EXPORT

4 ACT RELATING TO AMPHETAMINE AND

5 METHAMPHETAMINE.

6 (a) MANDATORY RESTITUTION.—Section 413(q) of

7 the Controlled Substances Act (21 U.S.C. 853(q)) is

8 amended—

9 (1) in the matter preceding paragraph (1), by

10 striking ‘‘may’’ and inserting ‘‘shall’’;

11 (2) by inserting ‘‘amphetamine or’’ before

12 ‘‘methamphetamine’’ each place it appears;

13 (3) in paragraph (2)—

14 (A) by inserting ‘‘, the State or local gov15 ernment concerned, or both the United States

16 and the State or local government concerned’’

17 after ‘‘United States’’ the first place it appears;

18 and

19 (B) by inserting ‘‘or the State or local gov20 ernment concerned, as the case may be,’’ after

21 ‘‘United States’’ the second place it appears;

22 and

23 (4) in paragraph (3), by striking ‘‘section 3663

24 of title 18, United States Code’’ and inserting ‘‘sec25 tion 3663A of title 18, United States Code’’.
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1 (b) DEPOSIT OF AMOUNTS IN DEPARTMENT OF JUS2 TICE ASSETS FORFEITURE FUND.—Section 524(c)(4) of

3 title 28, United States Code, is amended—

4 (1) by striking ‘‘and’’ at the end of subpara5 graph (B);

6 (2) by striking the period at the end of sub7 paragraph (C) and inserting ‘‘; and’’; and

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

9 ‘‘(D) all amounts collected—

10 ‘‘(i) by the United States pursuant to a re11 imbursement order under paragraph (2) of sec12 tion 413(q) of the Controlled Substances Act

13 (21 U.S.C. 853(q)); and

14 ‘‘(ii) pursuant to a restitution order under

15 paragraph (1) or (3) of section 413(q) of the

16 Controlled Substances Act for injuries to the

17 United States.’’.

18 (c) CLARIFICATION OF CERTAIN ORDERS OF RES19 TITUTION.—Section 3663(c)(2)(B) of title 18, United

20 States Code, is amended by inserting ‘‘which may be’’

21 after ‘‘the fine’’.

22 (d) EXPANSION OF APPLICABILITY OF MANDATORY

23 RESTITUTION.—Section 3663A(c)(1)(A)(ii) of title 18,

24 United States Code, is amended by inserting ‘‘or under
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1 section 416(a) of the Controlled Substances Act (21

2 U.S.C. 856(a)),’’ after ‘‘under this title,’’.

3 (e) TREATMENT OF ILLICIT SUBSTANCE MANUFAC4 TURING OPERATIONS AS CRIMES AGAINST PROPERTY.—

5 Section 416 of the Controlled Substances Act (21 U.S.C.

6 856) is amended by adding at the end the following new

7 subsection:

8 ‘‘(c) A violation of subsection (a) shall be considered

9 an offense against property for purposes of section

10 3663A(c)(1)(A)(ii) of title 18, United States Code.’’.

11 SEC. 1514. METHAMPHETAMINE PARAPHERNALIA.

12 Section 422(d) of the Controlled Substances Act (21

13 U.S.C. 863(d)) is amended in the matter preceding para14 graph (1) by inserting ‘‘methamphetamine,’’ after

15 ‘‘PCP,’’.

16 CHAPTER 2—ENHANCED LAW

17 ENFORCEMENT

18 SEC. 1521. ENVIRONMENTAL HAZARDS ASSOCIATED WITH

19 ILLEGAL MANUFACTURE OF AMPHETAMINE

20 AND METHAMPHETAMINE.

21 (a) USE OF AMOUNTS OR DEPARTMENT OF JUSTICE

22 ASSETS FORFEITURE FUND.—Section 524(c)(1)(E) of

23 title 28, United States Code, is amended—

24 (1) by inserting ‘‘(i) for’’ before ‘‘disburse25 ments’’;
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1 (2) by inserting ‘‘and’’ after the semicolon; and

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

3 ‘‘(ii) for payment for—

4 ‘‘(I) costs incurred by or on behalf of the

5 Department of Justice in connection with the

6 removal, for purposes of Federal forfeiture and

7 disposition, of any hazardous substance or pol8 lutant or contaminant associated with the ille9 gal manufacture of amphetamine or meth10 amphetamine; and

11 ‘‘(II) costs incurred by or on behalf of a

12 State or local government in connection with

13 such removal in any case in which such State

14 or local government has assisted in a Federal

15 prosecution relating to amphetamine or meth16 amphetamine, to the extent such costs exceed

17 equitable sharing payments made to such State

18 or local government in such case;’’.

19 (b) GRANTS UNDER DRUG CONTROL AND SYSTEM

20 IMPROVEMENT GRANT PROGRAM.—Section 501(b)(3) of

21 the Omnibus Crime Control and Safe Streets Act of 1968

22 is amended by inserting before the semicolon the following:

23 ‘‘and to remove any hazardous substance or pollutant or

24 contaminant associated with the illegal manufacture of

25 amphetamine or methamphetamine’’.
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1 (c) AMOUNTS SUPPLEMENT AND NOT SUPPLANT.—

2 (1) ASSETS FORFEITURE FUND.—Any amounts

3 made available from the Department of Justice As4 sets Forfeiture Fund in a fiscal year by reason of

5 the amendment made by subsection (a) shall supple6 ment, and not supplant, any other amounts made

7 available to the Department of Justice in such fiscal

8 year from other sources for payment of costs de9 scribed in section 524(c)(1)(E)(ii) of title 28, United

10 States Code, as so amended.

11 (2) GRANT PROGRAM.—Any amounts made

12 available in a fiscal year under the grant program

13 under section 501(b)(3) of the Omnibus Crime Con14 trol and Safe Streets Act of 1968 for the removal

15 of hazardous substances or pollutants or contami16 nants associated with the illegal manufacture of am17 phetamine or methamphetamine by reason of the

18 amendment made by subsection (b) shall supple19 ment, and not supplant, any other amounts made

20 available in such fiscal year from other sources for

21 such removal.
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1 SEC. 1522. REDUCTION IN RETAIL SALES TRANSACTION

2 THRESHOLD FOR NON-SAFE HARBOR PROD3 UCTS CONTAINING PSEUDOEPHEDRINE OR

4 PHENLYPROPANOLAMINE.

5 (a) REDUCTION IN TRANSACTION THRESHOLD.—

6 Section 102(39)(A)(iv)(II) of the Controlled Substances

7 Act (21 U.S.C. 802(39)(A)(iv)(II) is amended—

8 (1) by striking ‘‘24 grams’’ both places it ap9 pears and inserting ‘‘9 grams’’; and

10 (2) by inserting before the semicolon at the end

11 the following: ‘‘and sold in package sizes of not more

12 than 3 grams of pseudoephedrine base or 3 grams

13 of phenylpropanolamine base’’.

14 (b) EFFECTIVE DATE.—The amendments made by

15 subsection (a) shall take effect one year after the date of

16 the enactment of this Act.

17 SEC. 1523. TRAINING FOR DRUG ENFORCEMENT ADMINIS18 TRATION AND STATE AND LOCAL LAW EN19 FORCEMENT PERSONNEL RELATING TO

20 CLANDESTINE LABORATORIES.

21 (a) IN GENERAL.—

22 (1) REQUIREMENT.—The Administrator of the

23 Drug Enforcement Administration shall carry out

24 the programs described in subsection (b) with re25 spect to the law enforcement personnel of States and

26 localities determined by the Administrator to have
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1 significant levels of methamphetamine-related or am2 phetamine-related crime or projected by the Admin3 istrator to have the potential for such levels of crime

4 in the future.

5 (2) DURATION.—The duration of any program

6 under that subsection may not exceed 3 years.

7 (b) COVERED PROGRAMS.—The programs described

8 in this subsection are as follows:

9 (1) ADVANCED MOBILE CLANDESTINE LABORA10 TORY TRAINING TEAMS.—A program of advanced

11 mobile clandestine laboratory training teams, which

12 shall provide information and training to State and

13 local law enforcement personnel in techniques uti14 lized in conducting undercover investigations and

15 conspiracy cases, and other information designed to

16 assist in the investigation of the illegal manufac17 turing and trafficking of amphetamine and meth18 amphetamine.

19 (2) BASIC CLANDESTINE LABORATORY CERTIFI20 CATION TRAINING.—A program of basic clandestine

21 laboratory certification training, which shall provide

22 information and training—

23 (A) to Drug Enforcement Administration

24 personnel and State and local law enforcement

25 personnel for purposes of enabling such per-
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1 sonnel to meet any certification requirements

2 under law with respect to the handling of

3 wastes created by illegal amphetamine and

4 methamphetamine laboratories; and

5 (B) to State and local law enforcement

6 personnel for purposes of enabling such per7 sonnel to provide the information and training

8 covered by subparagraph (A) to other State and

9 local law enforcement personnel.

10 (3) CLANDESTINE LABORATORY RECERTIFI11 CATION AND AWARENESS TRAINING.—A program of

12 clandestine laboratory recertification and awareness

13 training, which shall provide information and train14 ing to State and local law enforcement personnel for

15 purposes of enabling such personnel to provide recer16 tification and awareness training relating to clandes17 tine laboratories to additional State and local law

18 enforcement personnel.

19 (c) AUTHORIZATION OF APPROPRIATIONS.—There

20 are authorized to be appropriated for each of fiscal years

21 2000, 2001, and 2002 amounts as follows:

22 (1) $1,500,000 to carry out the program de23 scribed in subsection (b)(1).

24 (2) $3,000,000 to carry out the program de25 scribed in subsection (b)(2).
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1 (3) $1,000,000 to carry out the program de2 scribed in subsection (b)(3).

3 SEC. 1524. COMBATING METHAMPHETAMINE AND AMPHET4 AMINE IN HIGH INTENSITY DRUG TRAF5 FICKING AREAS.

6 (a) IN GENERAL.—

7 (1) IN GENERAL.—The Director of National

8 Drug Control Policy shall use amounts available

9 under this section to combat the trafficking of meth10 amphetamine and amphetamine in areas designated

11 by the Director as high intensity drug trafficking

12 areas.

13 (2) ACTIVITIES.—In meeting the requirement

14 in paragraph (1), the Director shall provide funds

15 for—

16 (A) employing additional Federal law en17 forcement personnel, or facilitating the employ18 ment of additional State and local law enforce19 ment personnel, including agents, investigators,

20 prosecutors, laboratory technicians, chemists,

21 investigative assistants, and drug-prevention

22 specialists; and

23 (B) such other activities as the Director

24 considers appropriate.
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

2 authorized to be appropriated to carry out this section—

3 (1) $15,000,000 for fiscal year 2000; and

4 (2) such sums as may be necessary for each of

5 fiscal years 2001 through 2004.

6 (c) APPORTIONMENT OF FUNDS.—

7 (1) FACTORS IN APPORTIONMENT.—The Direc8 tor shall apportion amounts appropriated for a fiscal

9 year pursuant to the authorization of appropriations

10 in subsection (b) for activities under subsection (a)

11 among and within areas designated by the Director

12 as high intensity drug trafficking areas based on the

13 following factors:

14 (A) The number of methamphetamine

15 manufacturing facilities and amphetamine man16 ufacturing facilities discovered by Federal,

17 State, or local law enforcement officials in the

18 previous fiscal year.

19 (B) The number of methamphetamine

20 prosecutions and amphetamine prosecutions in

21 Federal, State, or local courts in the previous

22 fiscal year.

23 (C) The number of methamphetamine ar24 rests and amphetamine arrests by Federal,
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1 State, or local law enforcement officials in the

2 previous fiscal year.

3 (D) The amounts of methamphetamine,

4 amphetamine, or listed chemicals (as that term

5 is defined in section 102(33) of the Controlled

6 Substances Act (21 U.S.C. 802(33)) seized by

7 Federal, State, or local law enforcement offi8 cials in the previous fiscal year.

9 (E) Intelligence and predictive data from

10 the Drug Enforcement Administration and the

11 Department of Health and Human Services

12 showing patterns and trends in abuse, traf13 ficking, and transportation in methamphet14 amine, amphetamine, and listed chemicals (as

15 that term is so defined).

16 (2) CERTIFICATION.—Before the Director ap17 portions any funds under this subsection to a high

18 intensity drug trafficking area, the Director shall

19 certify that the law enforcement entities responsible

20 for clandestine methamphetamine and amphetamine

21 laboratory seizures in that area are providing labora22 tory seizure data to the national clandestine labora23 tory database at the El Paso Intelligence Center.

24 (d) LIMITATION ON ADMINISTRATIVE COSTS.—Not

25 more than 5 percent of the amount appropriated in a fiscal
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1 year pursuant to the authorization of appropriations for

2 that fiscal year in subsection (b) may be available in that

3 fiscal year for administrative costs associated with activi4 ties under subsection (a).

5 SEC. 1525. COMBATING AMPHETAMINE AND METHAMPHET6 AMINE MANUFACTURING AND TRAFFICKING.

7 (a) ACTIVITIES.—In order to combat the illegal man8 ufacturing and trafficking in amphetamine and meth9 amphetamine, the Administrator of the Drug Enforcement

10 Administration may—

11 (1) assist State and local law enforcement in

12 small and mid-sized communities in all phases of in13 vestigations related to such manufacturing and traf14 ficking, including assistance with foreign-language

15 interpretation;

16 (2) staff additional regional enforcement and

17 mobile enforcement teams related to such manufac18 turing and trafficking;

19 (3) establish additional resident offices and

20 posts of duty to assist State and local law enforce21 ment in rural areas in combating such manufac22 turing and trafficking;

23 (4) provide the Special Operations Division of

24 the Administration with additional agents and staff

25 to collect, evaluate, interpret, and disseminate crit-
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1 ical intelligence targeting the command and control

2 operations of major amphetamine and methamphet3 amine manufacturing and trafficking organizations;

4 (5) enhance the investigative and related func5 tions of the Chemical Control Program of the Ad6 ministration to implement more fully the provisions

7 of the Comprehensive Methamphetamine Control Act

8 of 1996 (Public Law 104–237);

9 (6) design an effective means of requiring an

10 accurate accounting of the import and export of list

11 I chemicals, and coordinate investigations relating to

12 the diversion of such chemicals;

13 (7) develop a computer infrastructure sufficient

14 to receive, process, analyze, and redistribute time15 sensitive enforcement information from suspicious

16 order reporting to field offices of the Administration

17 and other law enforcement and regulatory agencies,

18 including the continuing development of the Sus19 picious Order Reporting and Tracking System

20 (SORTS) and the Chemical Transaction Database

21 (CTRANS) of the Administration;

22 (8) establish an education, training, and com23 munication process in order to alert the industry to

24 current trends and emerging patterns in the illegal
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1 manufacturing of amphetamine and methamphet2 amine; and

3 (9) carry out such other activities as the Ad4 ministrator considers appropriate.

5 (b) ADDITIONAL POSITIONS AND PERSONNEL.—

6 (1) IN GENERAL.—In carrying out activities

7 under subsection (a), the Administrator may estab8 lish in the Administration not more than 50 full9 time positions, including not more than 31 special10 agent positions, and may appoint personnel to such

11 positions.

12 (2) PARTICULAR POSITIONS.—In carrying out

13 activities under paragraphs (5) through (8) of sub14 section (a), the Administrator may establish in the

15 Administration not more than 15 full-time positions,

16 including not more than 10 diversion investigator

17 positions, and may appoint personnel to such posi18 tions. Any positions established under this para19 graph are in addition to any positions established

20 under paragraph (1).

21 (c) AUTHORIZATION OF APPROPRIATIONS.—There

22 are authorized to be appropriated for the Drug Enforce23 ment Administration for each fiscal year after fiscal year

24 1999, $9,500,000 for purposes of carrying out the activi25 ties authorized by subsection (a) and employing personnel
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1 in positions established under subsection (b), of which

2 $3,000,000 shall be available for activities under para3 graphs (5) through (8) of subsection (a) and employing

4 personnel in positions established under subsection (b)(2).

5 CHAPTER 3—ABUSE PREVENTION AND

6 TREATMENT

7 SEC. 1531. EXPANSION OF METHAMPHETAMINE RESEARCH.

8 Section 464N of the Public Health Service Act (42

9 U.S.C. 285o–2) is amended by adding at the end the fol10 lowing:

11 ‘‘(c) METHAMPHETAMINE RESEARCH.—

12 ‘‘(1) GRANTS OR COOPERATIVE AGREE13 MENTS.—The Director of the Institute may make

14 grants or enter into cooperative agreements to ex15 pand the current and on-going interdisciplinary re16 search and clinical trials with treatment centers of

17 the National Drug Abuse Treatment Clinical Trials

18 Network relating to methamphetamine abuse and

19 addiction and other biomedical, behavioral, and so20 cial issues related to methamphetamine abuse and

21 addiction.

22 ‘‘(2) USE OF FUNDS.—Amounts made available

23 under a grant or cooperative agreement under para24 graph (1) for methamphetamine abuse and addiction
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1 may be used for research and clinical trials relating

2 to—

3 ‘‘(A) the effects of methamphetamine

4 abuse on the human body, including the brain;

5 ‘‘(B) the addictive nature of methamphet6 amine and how such effects differ with respect

7 to different individuals;

8 ‘‘(C) the connection between methamphet9 amine abuse and mental health;

10 ‘‘(D) the identification and evaluation of

11 the most effective methods of prevention of

12 methamphetamine abuse and addiction;

13 ‘‘(E) the identification and development of

14 the most effective methods of treatment of

15 methamphetamine addiction, including pharma16 cological treatments;

17 ‘‘(F) risk factors for methamphetamine

18 abuse;

19 ‘‘(G) effects of methamphetamine abuse

20 and addiction on pregnant women and their

21 fetuses; and

22 ‘‘(H) cultural, social, behavioral, neuro23 logical and psychological reasons that individ24 uals abuse methamphetamine, or refrain from

25 abusing methamphetamine.
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1 ‘‘(3) RESEARCH RESULTS.—The Director shall

2 promptly disseminate research results under this

3 subsection to Federal, State and local entities in4 volved in combating methamphetamine abuse and

5 addiction.

6 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

7 ‘‘(A) AUTHORIZATION OF APPROPRIA8 TIONS.—There is authorized to be appropriated

9 to carry out paragraph (1), such sums as may

10 be necessary for each fiscal year.

11 ‘‘(B) SUPPLEMENT NOT SUPPLANT.—

12 Amounts appropriated pursuant to the author13 ization of appropriations in subparagraph (A)

14 for a fiscal year shall supplement and not sup15 plant any other amounts appropriated in such

16 fiscal year for research on methamphetamine

17 abuse and addiction.’’.

18 SEC. 1532. METHAMPHETAMINE AND AMPHETAMINE

19 TREATMENT INITIATIVE BY CENTER FOR

20 SUBSTANCE ABUSE TREATMENT.

21 Subpart 1 of part B of title V of the Public Health

22 Service Act (42 U.S.C. 290bb et seq.) is amended by add23 ing at the end the following new section:

24 ‘‘METHAMPHETAMINE AND AMPHETAMINE TREATMENT

25 INITIATIVE

26 ‘‘SEC. 514. (a) GRANTS.—
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1 ‘‘(1) AUTHORITY TO MAKE GRANTS.—The Di2 rector of the Center for Substance Abuse Treatment

3 may make grants to States and Indian tribes recog4 nized by the United States that have a high rate, or

5 have had a rapid increase, in methamphetamine or

6 amphetamine abuse or addiction in order to permit

7 such States and Indian tribes to expand activities in

8 connection with the treatment of methamphetamine

9 or amphetamine abuser or addiction in the specific

10 geographical areas of such States or Indian tribes,

11 as the case may be, where there is such a rate or

12 has been such an increase.

13 ‘‘(2) RECIPIENTS.—Any grants under para14 graph (1) shall be directed to the substance abuse

15 directors of the States, and of the appropriate tribal

16 government authorities of the Indian tribes, selected

17 by the Director to receive such grants.

18 ‘‘(3) NATURE OF ACTIVITIES.—Any activities

19 under a grant under paragraph (1) shall be based on

20 reliable scientific evidence of their efficacy in the

21 treatment of methamphetamine or amphetamine

22 abuse or addiction.

23 ‘‘(b) GEOGRAPHIC DISTRIBUTION.—The Director

24 shall ensure that grants under subsection (a) are distrib25 uted equitably among the various regions of the country
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1 and among rural, urban, and suburban areas that are af2 fected by methamphetamine or amphetamine abuse or ad3 diction.

4 ‘‘(c) ADDITIONAL ACTIVITIES.—The Director shall—

5 ‘‘(1) evaluate the activities supported by grants

6 under subsection (a);

7 ‘‘(2) disseminate widely such significant infor8 mation derived from the evaluation as the Director

9 considers appropriate to assist States, Indian tribes,

10 and private providers of treatment services for meth11 amphetamine or amphetamine abuser or addiction in

12 the treatment of methamphetamine or amphetamine

13 abuse or addiction; and

14 ‘‘(3) provide States, Indian tribes, and such

15 providers with technical assistance in connection

16 with the provision of such treatment.

17 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—

18 ‘‘(1) IN GENERAL.—There are authorized to be

19 appropriated to carry out this section $10,000,000

20 for fiscal year 2000 and such sums as may be nec21 essary for each of fiscal years 2001 and 2002.

22 ‘‘(2) USE OF CERTAIN FUNDS.—Of the funds

23 appropriated to carry out this section in any fiscal

24 year, the lesser of 5 percent of such funds or
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1 $1,000,000 shall be available to the Director for

2 purposes of carrying out subsection (c).’’.

3 SEC. 1533. EXPANSION OF METHAMPHETAMINE ABUSE

4 PREVENTION EFFORTS.

5 (a) EXPANSION OF EFFORTS.—Section 515 of the

6 Public Health Service Act (42 U.S.C. 290bb–21) is

7 amended by adding at the end the following:

8 ‘‘(e)(1) The Administrator may make grants to and

9 enter into contracts and cooperative agreements with pub10 lic and nonprofit private entities to enable such entities—

11 ‘‘(A) to carry out school-based programs con12 cerning the dangers of abuse of and addiction to

13 methamphetamine and other illicit drugs, using

14 methods that are effective and science-based, includ15 ing initiatives that give students the responsibility to

16 create their own anti-drug abuse education programs

17 for their schools; and

18 ‘‘(B) to carry out community-based abuse and

19 addiction prevention programs relating to meth20 amphetamine and other illicit drugs that are effec21 tive and science-based.

22 ‘‘(2) Amounts made available under a grant, contract

23 or cooperative agreement under paragraph (1) shall be

24 used for planning, establishing, or administering preven-
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1 tion programs relating to methamphetamine and other il2 licit drugs in accordance with paragraph (3).

3 ‘‘(3)(A) Amounts provided under this subsection may

4 be used—

5 ‘‘(i) to carry out school-based programs that

6 are focused on those districts with high or increasing

7 rates of methamphetamine abuse and addiction and

8 targeted at populations which are most at risk to

9 start abuse of methamphetamine and other illicit

10 drugs;

11 ‘‘(ii) to carry out community-based prevention

12 programs that are focused on those populations

13 within the community that are most at-risk for

14 abuse of and addiction to methamphetamine and

15 other illicit drugs;

16 ‘‘(iii) to assist local government entities to con17 duct appropriate prevention activities relating to

18 methamphetamine and other illicit drugs;

19 ‘‘(iv) to train and educate State and local law

20 enforcement officials, prevention and education offi21 cials, members of community anti-drug coalitions

22 and parents on the signs of abuse of and addiction

23 to methamphetamine and other illicit drugs, and the

24 options for treatment and prevention;
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1 ‘‘(v) for planning, administration, and edu2 cational activities related to the prevention of abuse

3 of and addiction to methamphetamine and other il4 licit drugs;

5 ‘‘(vi) for the monitoring and evaluation of pre6 vention activities relating to methamphetamine and

7 other illicit drugs, and reporting and disseminating

8 resulting information to the public; and

9 ‘‘(vii) for targeted pilot programs with evalua10 tion components to encourage innovation and experi11 mentation with new methodologies.

12 ‘‘(B) The Administrator shall give priority in making

13 grants under this subsection to rural and urban areas that

14 are experiencing a high rate or rapid increases in meth15 amphetamine abuse and addiction.

16 ‘‘(4)(A) Not less than $500,000 of the amount avail17 able in each fiscal year to carry out this subsection shall

18 be made available to the Administrator, acting in consulta19 tion with other Federal agencies, to support and conduct

20 periodic analyses and evaluations of effective prevention

21 programs for abuse of and addiction to methamphetamine

22 and other illicit drugs and the development of appropriate

23 strategies for disseminating information about and imple24 menting these programs.
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1 ‘‘(B) The Administrator shall submit to the commit2 tees of Congress referred to in subparagraph (C) an an3 nual report with the results of the analyses and evaluation

4 under subparagraph (A).

5 ‘‘(C) The committees of Congress referred to in this

6 subparagraph are the following:

7 ‘‘(i) The Committees on Health, Education,

8 Labor, and Pensions, the Judiciary, and Appropria9 tions of the Senate.

10 ‘‘(ii) The Committees on Commerce, the Judici11 ary, and Appropriations of the House of Representa12 tives.’’.

13 (b) AUTHORIZATION OF APPROPRIATIONS FOR EX14 PANSION OF ABUSE PREVENTION EFFORTS AND PRACTI15 TIONER REGISTRATION REQUIREMENTS.—There is au16 thorized to be appropriated to carry out section 515(e) of

17 the Public Health Service Act (as added by subsection (a))

18 and section 303(g)(2) of the Controlled Substances Act

19 (as added by section 18(a) of this Act), $15,000,000 for

20 fiscal year 2000, and such sums as may be necessary for

21 each succeeding fiscal year.

22 SEC. 1534. STUDY OF METHAMPHETAMINE TREATMENT.

23 (a) STUDY.—

24 (1) REQUIREMENT.—The Secretary of Health

25 and Human Services shall, in consultation with the
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1 Institute of Medicine of the National Academy of

2 Sciences, conduct a study on the development of

3 medications for the treatment of addiction to am4 phetamine and methamphetamine.

5 (2) REPORT.—Not later than nine months after

6 the date of the enactment of this Act, the Secretary

7 shall submit to the Committees on the Judiciary of

8 the Senate and House of Representatives a report on

9 the results of the study conducted under paragraph

10 (1).

11 (b) AUTHORIZATION OF APPROPRIATIONS.—There

12 are hereby authorized to be appropriated for the Depart13 ment of Health and Human Services for fiscal year 2000

14 such sums as may be necessary to meet the requirements

15 of subsection (a).

16 CHAPTER 4—REPORTS

17 SEC. 1541. REPORTS ON CONSUMPTION OF METHAMPHET18 AMINE AND OTHER ILLICIT DRUGS IN RURAL

19 AREAS, METROPOLITAN AREAS, AND CON20 SOLIDATED METROPOLITAN AREAS.

21 The Secretary of Health and Human Services shall

22 include in each National Household Survey on Drug

23 Abuse appropriate prevalence data and information on the

24 consumption of methamphetamine and other illicit drugs
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1 in rural areas, metropolitan areas, and consolidated met2 ropolitan areas.

3 SEC. 1542. REPORT ON DIVERSION OF ORDINARY OVER4 THE-COUNTER PSEUDOEPHEDRINE AND

5 PHENYLPROPANOLAMINE PRODUCTS.

6 (a) STUDY.—The Attorney General shall conduct a

7 study of the use of ordinary over-the-counter

8 pseudoephedrine and phenylpropanolamine products in the

9 clandestine production of illicit drugs. Sources of data for

10 the study shall include the following:

11 (1) Information from Federal, State, and local

12 clandestine laboratory seizures and related investiga13 tions identifying the source, type, or brand of drug

14 products being utilized and how they were obtained

15 for the illicit production of methamphetamine and

16 amphetamine.

17 (2) Information submitted voluntarily from the

18 pharmaceutical and retail industries involved in the

19 manufacture, distribution, and sale of drug products

20 containing ephedrine, pseudoephedrine, and phenyl21 propanolamine, including information on changes in

22 the pattern, volume, or both, of sales of ordinary

23 over-the-counter pseudoephedrine and phenyl24 propanolamine products.

25 (b) REPORT.—
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1 (1) REQUIREMENT.—Not later than April 1,

2 2001, the Attorney General shall submit to Congress

3 a report on the study conducted under subsection

4 (a).

5 (2) ELEMENTS.—The report shall include—

6 (A) the findings of the Attorney General as

7 a result of the study; and

8 (B) such recommendations on the need to

9 establish additional measures to prevent diver10 sion of ordinary over-the-counter

11 pseudoephedrine and phenylpropanolamine

12 (such as a threshold on ordinary over-the13 counter pseudoephedrine and phenylpropanola14 mine products) as the Attorney General con15 siders appropriate.

16 (3) MATTERS CONSIDERED.—In preparing the

17 report, the Attorney General shall consider the com18 ments and recommendations of State and local law

19 enforcement and regulatory officials and of rep20 resentatives of the industry described in subsection

21 (a)(2).
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1 Subtitle B—Controlled Substances

2 Generally

3 CHAPTER 1—CRIMINAL MATTERS

4 SEC. 1551. ENHANCED PUNISHMENT FOR TRAFFICKING IN

5 LIST I CHEMICALS.

6 (a) AMENDMENTS TO FEDERAL SENTENCING GUIDE7 LINES.—Pursuant to its authority under section 994(p)

8 of title 28, United States, the United States Sentencing

9 Commission shall amend the Federal sentencing guidelines

10 in accordance with this section with respect to any viola11 tion of paragraph (1) or (2) of section 401(d) of the Con12 trolled Substances Act (21 U.S.C. 841(d)) involving a list

13 I chemical and any violation of paragraph (1) or (3) of

14 section 1010(d) of the Controlled Substance Import and

15 Export Act (21 U.S.C. 960(d)) involving a list I chemical.

16 (b) EPHEDRINE, PHENYLPROPANOLAMINE, AND

17 PSEUDOEPHEDRINE.—

18 (1) IN GENERAL.—In carrying this section, the

19 United States Sentencing Commission shall, with re20 spect to each offense described in subsection (a) in21 volving ephedrine, phenylpropanolamine, or

22 pseudoephedrine (including their salts, optical iso23 mers, and salts of optical isomers), review and

24 amend its guidelines to provide for increased pen25 alties such that those penalties corresponded to the
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1 quantity of controlled substance that could reason2 ably have been manufactured using the quantity of

3 ephedrine, phenylpropanolamine, or pseudoephedrine

4 possessed or distributed.

5 (2) CONVERSION RATIOS.—For the purposes of

6 the amendments made by this subsection, the quan7 tity of controlled substance that could reasonably

8 have been manufactured shall be determined by

9 using a table of manufacturing conversion ratios for

10 ephedrine, phenylpropanolamine, and

11 pseudoephedrine, which table shall be established by

12 the Sentencing Commission based on scientific, law

13 enforcement, and other data the Sentencing Com14 mission considers appropriate.

15 (c) OTHER LIST I CHEMICALS.—In carrying this sec16 tion, the United States Sentencing Commission shall, with

17 respect to each offense described in subsection (a) involv18 ing any list I chemical other than ephedrine, phenyl19 propanolamine, or pseudoephedrine, review and amend its

20 guidelines to provide for increased penalties such that

21 those penalties reflect the dangerous nature of such of22 fenses, the need for aggressive law enforcement action to

23 fight such offenses, and the extreme dangers associated

24 with unlawful activity involving methamphetamine and

25 amphetamine, including—
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1 (1) the rapidly growing incidence of controlled

2 substance manufacturing;

3 (2) the extreme danger inherent in manufac4 turing controlled substances;

5 (3) the threat to public safety posed by manu6 facturing controlled substances; and

7 (4) the recent increase in the importation, pos8 session, and distribution of list I chemicals for the

9 purpose of manufacturing controlled substances.

10 (d) EMERGENCY AUTHORITY TO SENTENCING COM11 MISSION.—The United States Sentencing Commission

12 shall promulgate amendments pursuant to this section as

13 soon as practicable after the date of the enactment of this

14 Act in accordance with the procedure set forth in section

15 21(a) of the Sentencing Act of 1987 (Public Law 100–

16 182), as though the authority under that Act had not ex17 pired.

18 SEC. 1552. MAIL ORDER REQUIREMENTS.

19 Section 310(b)(3) of the Controlled Substances Act

20 (21 U.S.C. 830(b)(3)) is amended—

21 (1) by redesignating subparagraphs (A) and

22 (B) as subparagraphs (B) and (C), respectively;

23 (2) by inserting before subparagraph (B), as so

24 redesignated, the following new subparagraph (A):

25 ‘‘(A) As used in this paragraph:
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1 ‘‘(i) The term ‘drug product’ means

2 an active ingredient in dosage form that

3 has been approved or otherwise may be

4 lawfully marketed under the Food, Drug,

5 and Cosmetic Act for distribution in the

6 United States.

7 ‘‘(ii) The term ‘valid prescription’

8 means a prescription which is issued for a

9 legitimate medical purpose by an individual

10 practitioner licensed by law to administer

11 and prescribe the drugs concerned and act12 ing in the usual course of the practitioner’s

13 professional practice.’’;

14 (3) in subparagraph (B), as so redesignated, by

15 inserting ‘‘or who engages in an export transaction’’

16 after ‘‘nonregulated person’’; and

17 (4) adding at the end the following:

18 ‘‘(D) Except as provided in subparagraph

19 (E), the following distributions to a nonregu20 lated person, and the following export trans21 actions, shall not be subject to the reporting re22 quirement in subparagraph (B):

23 ‘‘(i) Distributions of sample packages

24 of drug products when such packages con25 tain not more than 2 solid dosage units or
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1 the equivalent of 2 dosage units in liquid

2 form, not to exceed 10 milliliters of liquid

3 per package, and not more than one pack4 age is distributed to an individual or resi5 dential address in any 30-day period.

6 ‘‘(ii) Distributions of drug products by

7 retail distributors that may not include

8 face-to-face transactions to the extent that

9 such distributions are consistent with the

10 activities authorized for a retail distributor

11 as specified in section 102(46).

12 ‘‘(iii) Distributions of drug products

13 to a resident of a long term care facility

14 (as that term is defined in regulations pre15 scribed by the Attorney General) or dis16 tributions of drug products to a long term

17 care facility for dispensing to or for use by

18 a resident of that facility.

19 ‘‘(iv) Distributions of drug products

20 pursuant to a valid prescription.

21 ‘‘(v) Exports which have been re22 ported to the Attorney General pursuant to

23 section 1004 or 1018 or which are subject

24 to a waiver granted under section

25 1018(e)(2).
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1 ‘‘(vi) Any quantity, method, or type of

2 distribution or any quantity, method, or

3 type of distribution of a specific listed

4 chemical (including specific formulations or

5 drug products) or of a group of listed

6 chemicals (including specific formulations

7 or drug products) which the Attorney Gen8 eral has excluded by regulation from such

9 reporting requirement on the basis that

10 such reporting is not necessary for the en11 forcement of this title or title III.

12 ‘‘(E) The Attorney General may revoke

13 any or all of the exemptions listed in subpara14 graph (D) for an individual regulated person if

15 he finds that drug products distributed by the

16 regulated person are being used in violation of

17 this title or title III. The regulated person shall

18 be notified of the revocation, which will be ef19 fective upon receipt by the person of such no20 tice, as provided in section 1018(c)(1), and

21 shall have the right to an expedited hearing as

22 provided in section 1018(c)(2).’’.
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1 SEC. 1553. INCREASED PENALTIES FOR DISTRIBUTING

2 DRUGS TO MINORS.

3 Section 418 of the Controlled Substances Act (21

4 U.S.C. 859) is amended—

5 (1) in subsection (a), by striking ‘‘one year’’

6 and inserting ‘‘3 years’’; and

7 (2) in subsection (b), by striking ‘‘one year’’

8 and inserting ‘‘5 years’’.

9 SEC. 1554. INCREASED PENALTY FOR DRUG TRAFFICKING

10 IN OR NEAR A SCHOOL OR OTHER PRO11 TECTED LOCATION.

12 Section 419 of the Controlled Substances Act (21

13 U.S.C. 860) is amended—

14 (1) in subsection (a), by striking ‘‘one year’’

15 and inserting ‘‘3 years’’; and

16 (2) in subsection (b), by striking ‘‘three years’’

17 each place that term appears and inserting ‘‘5

18 years’’.

19 SEC. 1555. ADVERTISEMENTS FOR DRUG PARAPHERNALIA

20 AND SCHEDULE I CONTROLLED SUBSTANCES.

21 (a) DRUG PARAPHERNALIA.—Subsection (a)(1) of

22 section 422 of the Controlled Substances Act (21 U.S.C.

23 863) is amended by inserting ‘‘, directly or indirectly ad24 vertise for sale,’’ after ‘‘sell’’.
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1 (b) DIRECTLY OR INDIRECTLY ADVERTISE FOR SALE

2 DEFINED.—Such section 422 is further amended by add3 ing at the end the following new subsection:

4 ‘‘(g) In this section, the term ‘directly or indirectly

5 advertise for sale’ means the use of any communication

6 facility (as that term is defined in section 403(b)) to post,

7 publicize, transmit, publish, link to, broadcast, or other8 wise advertise any matter (including a telephone number

9 or electronic or mail address) with the intent to facilitate

10 or promote a transaction in.’’.

11 (c) SCHEDULE I CONTROLLED SUBSTANCES.—Sec12 tion 403(c) of such Act (21 U.S.C. 843(c)) is amended—

13 (1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and

14 (2) in paragraph (1), as so designated—

15 (A) in the first sentence, by inserting be16 fore the period the following: ‘‘, or to directly

17 or indirectly advertise for sale (as that term is

18 defined in section 422(g)) any Schedule I con19 trolled substance’’; and

20 (B) in the second sentence, by striking

21 ‘‘term ‘advertisement’ ’’ and inserting ‘‘term

22 ‘written advertisement’ ’’.
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1 SEC. 1556. THEFT AND TRANSPORTATION OF ANHYDROUS

2 AMMONIA FOR PURPOSES OF ILLICIT PRO3 DUCTION OF CONTROLLED SUBSTANCES.

4 (a) IN GENERAL.—Part D of the Controlled Sub5 stances Act (21 U.S.C. 841 et seq.) is amended by adding

6 at the end the following:

7 ‘‘ANHYDROUS AMMONIA

8 ‘‘SEC. 423. (a) It is unlawful for any person—

9 ‘‘(1) to steal anhydrous ammonia, or

10 ‘‘(2) to transport stolen anhydrous ammonia

11 across State lines,

12 knowing, intending, or having reasonable cause to believe

13 that such anhydrous ammonia will be used to manufacture

14 a controlled substance in violation of this part.

15 ‘‘(b) Any person who violates subsection (a) shall be

16 imprisoned or fined, or both, in accordance with section

17 403(d) as if such violation were a violation of a provision

18 of section 403.’’.

19 (b) CLERICAL AMENDMENT.—The table of contents

20 for that Act is amended by inserting after the item relat21 ing to section 421 the following new items:

‘‘Sec. 422. Drug paraphernalia.

‘‘Sec. 423. Anhydrous ammonia.’’.

22 (c) ASSISTANCE FOR CERTAIN RESEARCH.—

23 (1) AGREEMENT.—The Administrator of the

24 Drug Enforcement Administration shall seek to

25 enter into an agreement with Iowa State University
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1 in order to permit the University to continue and ex2 pand its current research into the development of

3 inert agents that, when added to anhydrous ammo4 nia, eliminate the usefulness of anhydrous ammonia

5 as an ingredient in the production of methamphet6 amine.

7 (2) REIMBURSABLE PROVISION OF FUNDS.—

8 The agreement under paragraph (1) may provide for

9 the provision to Iowa State University, on a reim10 bursable basis, of $500,000 for purposes the activi11 ties specified in that paragraph.

12 (3) AUTHORIZATION OF APPROPRIATIONS.—

13 There is hereby authorized to be appropriated for

14 the Drug Enforcement Administration for fiscal year

15 2000, $500,000 for purposes of carrying out the

16 agreement under this subsection.

17 SEC. 1557. CRIMINAL PROHIBITION ON DISTRIBUTION OF

18 CERTAIN INFORMATION RELATING TO THE

19 MANUFACTURE OF CONTROLLED SUB20 STANCES.

21 (a) IN GENERAL.—Part I of title 18, United States

22 Code, is amended by inserting after chapter 21 the fol23 lowing new chapter:
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1 ‘‘CHAPTER 22—CONTROLLED

2 SUBSTANCES

‘‘Sec.

‘‘421. Distribution of information relating to manufacture of controlled substances.

3 ‘‘§ 421. Distribution of information relating to manu4 facture of controlled substances

5 ‘‘(a) PROHIBITION ON DISTRIBUTION OF INFORMA6 TION RELATING TO MANUFACTURE OF CONTROLLED

7 SUBSTANCES.—

8 ‘‘(1) CONTROLLED SUBSTANCE DEFINED.—In

9 this subsection, the term ‘controlled substance’ has

10 the meaning given that term in section 102(6) of the

11 Controlled Substances Act (21 U.S.C. 802(6)).

12 ‘‘(2) PROHIBITION.—It shall be unlawful for

13 any person—

14 ‘‘(A) to teach or demonstrate the manufac15 ture of a controlled substance, or to distribute

16 by any means information pertaining to, in

17 whole or in part, the manufacture of a con18 trolled substance, with the intent that the

19 teaching, demonstration, or information be used

20 for, or in furtherance of, an activity that con21 stitutes a Federal crime; or

22 ‘‘(B) to teach or demonstrate to any per23 son the manufacture of a controlled substance,

24 or to distribute to any person, by any means,
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1 information pertaining to, in whole or in part,

2 the manufacture of a controlled substance,

3 knowing that such person intends to use the

4 teaching, demonstration, or information for, or

5 in furtherance of, an activity that constitutes a

6 Federal crime.

7 ‘‘(b) PENALTY.—Any person who violates subsection

8 (a) shall be fined under this title, imprisoned not more

9 than 10 years, or both.’’.

10 (b) CLERICAL AMENDMENT.—The table of chapters

11 at the beginning of part I of title 18, United States Code,

12 is amended by inserting after the item relating to chapter

13 21 the following new item:

‘‘22. Controlled Substances ............................................................ 421’’.

14 CHAPTER 2—OTHER MATTERS

15 SEC. 1561. WAIVER AUTHORITY FOR PHYSICIANS WHO DIS16 PENSE OR PRESCRIBE CERTAIN NARCOTIC

17 DRUGS FOR MAINTENANCE TREATMENT OR

18 DETOXIFICATION TREATMENT.

19 (a) REQUIREMENTS.—Section 303(g) of the Con20 trolled Substances Act (21 U.S.C. 823(g)) is amended—

21 (1) in paragraph (2), by striking ‘‘(A) security’’

22 and inserting ‘‘(i) security’’, and by striking ‘‘(B)

23 the maintenance’’ and inserting ‘‘(ii) the mainte24 nance’’;
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1 (2) by redesignating paragraphs (1) through

2 (3) as subparagraphs (A) through (C), respectively;

3 (3) by inserting ‘‘(1)’’ after ‘‘(g)’’;

4 (4) by striking ‘‘Practitioners who dispense’’

5 and inserting ‘‘Except as provided in paragraph (2),

6 practitioners who dispense and prescribe’’; and

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

8 ‘‘(2)(A) Subject to subparagraphs (D), the require9 ments of paragraph (1) are waived in the case of the dis10 pensing or prescribing, by a physician, of narcotic drugs

11 in schedule III, IV, or V, or combinations of such drugs,

12 if the physician meets the conditions specified in subpara13 graph (B) and the narcotic drugs or combinations of such

14 drugs meet the conditions specified in subparagraph (C).

15 ‘‘(B)(i) For purposes of subparagraph (A), the condi16 tions specified in this subparagraph with respect to a phy17 sician are that, before dispensing or prescribing narcotic

18 drugs in schedule III, IV, or V, or combinations of such

19 drugs, to patients for maintenance or detoxification treat20 ment, the physician submit to the Secretary and the Attor21 ney General a notification of the intent of the physician

22 to begin dispensing or prescribing the drugs or combina23 tions for such purpose, and that the notification to the

24 Secretary also contain the following certifications by the

25 physician:
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1 ‘‘(I) The physician—

2 ‘‘(aa) is a physician licensed under State

3 law; and

4 ‘‘(bb) has training or experience and the

5 ability to treat and manage opiate-dependent

6 patients.

7 ‘‘(II) With respect to patients to whom the phy8 sician will provide such drugs or combinations of

9 drugs, the physician has the capacity to refer the pa10 tients for appropriate counseling and other appro11 priate ancillary services.

12 ‘‘(III) In any case in which the physician is not

13 in a group practice, the total number of such pa14 tients of the physician at any one time will not ex15 ceed the applicable number. For purposes of this

16 subclause, the applicable number is 20, except that

17 the Secretary may by regulation change such total

18 number.

19 ‘‘(IV) In any case in which the physician is in

20 a group practice, the total number of such patients

21 of the group practice at any one time will not exceed

22 the applicable number. For purposes of this sub23 clause, the applicable number is 20, except that the

24 Secretary may by regulation change such total num25 ber, and the Secretary for such purposes may by
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1 regulation establish different categories on the basis

2 of the number of physicians in a group practice and

3 establish for the various categories different numer4 ical limitations on the number of such patients that

5 the group practice may have.

6 ‘‘(ii)(I) The Secretary may, in consultation with the

7 Administrator of the Drug Enforcement Administration,

8 the Administrator of the Substance Abuse and Mental

9 Health Services Administration, the Director of the Center

10 for Substance Abuse Treatment, the Director of the Na11 tional Institute on Drug Abuse, and the Commissioner of

12 Food and Drugs, issue regulations through notice and

13 comment rulemaking or practice guidelines to implement

14 this paragraph. The regulations or practice guidelines

15 shall address the following:

16 ‘‘(aa) Approval of additional credentialing bod17 ies and the responsibilities of credentialing bodies.

18 ‘‘(bb) Additional exemptions from the require19 ments of this paragraph and any regulations under

20 this paragraph.

21 ‘‘(II) Nothing in the regulations or practice guide22 lines under this clause may authorize any Federal official

23 or employee to exercise supervision or control over the

24 practice of medicine or the manner in which medical serv25 ices are provided.
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1 ‘‘(III)(aa) The Secretary shall issue a Treatment Im2 provement Protocol containing best practice guidelines for

3 the treatment and maintenance of opiate-dependent pa4 tients. The Secretary shall develop the protocol in con5 sultation with the Director of the National Institute on

6 Drug Abuse, the Director of the Center for Substance

7 Abuse Treatment, the Administrator of the Drug Enforce8 ment Administration, the Commissioner of Food and

9 Drugs, the Administrator of the Substance Abuse and

10 Mental Health Services Administration, and other sub11 stance abuse disorder professionals. The protocol shall be

12 guided by science.

13 ‘‘(bb) The protocol shall be issued not later than 120

14 days after the date of the enactment of the Methamphet15 amine Anti-Proliferation Act of 2000.

16 ‘‘(IV) For purposes of the regulations or practice

17 guidelines under subclause (I), a physician shall have

18 training or experience under clause (i)(I)(bb) if the physi19 cian meets one or more of the following conditions:

20 ‘‘(aa) The physician is certified in addiction

21 treatment by the American Society of Addiction

22 Medicine, the American Board of Medical Special23 ties, the American Osteopathic Academy of Addic24 tion Medicine, or any other certified body accredited

25 by the Secretary.
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1 ‘‘(bb) The physician has been a clinical investi2 gator in a clinical trial conducted for purposes of se3 curing approval under section 505 of the Federal

4 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or

5 section 351 of the Public Health Service Act (42

6 U.S.C. 262) of a narcotic drug in schedule III, IV,

7 or V for the treatment of addiction, if such approval

8 was granted.

9 ‘‘(cc) The physician has completed training

10 (through classroom situations, seminars, professional

11 society meetings, electronic communications, or oth12 erwise) provided by the American Society of Addic13 tion Medicine, the American Academy of Addiction

14 Psychiatry, the American Osteopathic Academy of

15 Addiction Medicine, the American Medical Associa16 tion, the American Osteopathic Association, the

17 American Psychiatric Association, or any other orga18 nization that the Secretary determines appropriate

19 for purposes of this item. The curricula may include

20 training in patient need for counseling regarding

21 HIV, Hepatitis C, and other infectious diseases, sub22 stance abuse counseling, random drug testing, med23 ical evaluation, annual assessment, prenatal care, di24 agnosis of addiction, rehabilitation services, con25 fidentiality, and other appropriate topics.
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1 ‘‘(dd) The physician has training or experience

2 in the treatment and management of opiate-depend3 ent, which training or experience shall meet such cri4 teria as the Secretary may prescribe. Any such cri5 teria shall be effective for a period of three years

6 after the effective date of such criteria, but the Sec7 retary may extend the effective period of such cri8 teria by additional periods of three years for each

9 extension if the Secretary determines that such ex10 tension is appropriate for purposes of this item. Any

11 such extension shall go into effect only if the Sec12 retary publishes a notice of such extension in the

13 Federal Register during the 30-day period ending on

14 the date of the end of the three-year effective period

15 of such criteria to which such extension will apply.

16 ‘‘(ee) The physician is certified in addiction

17 treatment by a State medical licensing board, or an

18 entity accredited by such board, unless the Secretary

19 determines (after an opportunity for a hearing) that

20 the training provided by such board or entity was in21 adequate for the treatment and management of opi22 ate-dependent patients.

23 ‘‘(C) For purposes of subparagraph (A), the condi24 tions specified in this subparagraph with respect to nar-
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1 cotic drugs in schedule III, IV, or V, or combinations of

2 such drugs, are as follows:

3 ‘‘(i) The drugs or combinations of drugs have,

4 under the Federal Food, Drug and Cosmetic Act or

5 section 351 of the Public Health Service Act, been

6 approved for use in maintenance or detoxification

7 treatment.

8 ‘‘(ii) The drugs or combinations of drugs have

9 not been the subject of an adverse determination.

10 For purposes of this clause, an adverse determina11 tion is a determination published in the Federal

12 Register and made by the Secretary, after consulta13 tion with the Attorney General, that experience since

14 the approval of the drug or combinations of drugs

15 has shown that the use of the drugs or combinations

16 of drugs for maintenance or detoxification treatment

17 requires additional standards respecting the quali18 fications of physicians to provide such treatment, or

19 requires standards respecting the quantities of the

20 drugs that may be provided for unsupervised use.

21 ‘‘(D)(i) A waiver under subparagraph (A) with re22 spect to a physician is not in effect unless (in addition

23 to conditions under subparagraphs (B) and (C)) the fol24 lowing conditions are met:
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1 ‘‘(I) The notification under subparagraph (B) is

2 in writing and states the name of the physician.

3 ‘‘(II) The notification identifies the registration

4 issued for the physician pursuant to subsection (f).

5 ‘‘(III) If the physician is a member of a group

6 practice, the notification states the names of the

7 other physicians in the practice and identifies the

8 registrations issued for the other physicians pursu9 ant to subsection (f).

10 ‘‘(IV) A period of 45 days has elapsed after the

11 date on which the notification was submitted, and

12 during such period the physician does not receive

13 from the Secretary a written notice that one or more

14 of the conditions specified in subparagraph (B), sub15 paragraph (C), or this subparagraph, have not been

16 met.

17 ‘‘(ii) The Secretary shall provide to the Attorney Gen18 eral such information contained in notifications under sub19 paragraph (B) as the Attorney General may request.

20 ‘‘(E) If in violation of subparagraph (A) a physician

21 dispenses or prescribes narcotic drugs in schedule III, IV,

22 or V, or combinations of such drugs, for maintenance

23 treatment or detoxification treatment, the Attorney Gen24 eral may, for purposes of section 304(a)(4), consider the

25 physician to have committed an act that renders the reg-
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1 istration of the physician pursuant to subsection (f) to be

2 inconsistent with the public interest.

3 ‘‘(F)(i) Upon determining that a physician meets the

4 conditions specified in subparagraph (B), the Secretary

5 shall notify the physician and the Attorney General.

6 ‘‘(ii) Upon receiving notice with respect to a physician

7 under clause (i), the Attorney General shall assign the

8 physician an identification number under this paragraph

9 for inclusion with the physician’s current registration to

10 prescribe narcotics. An identification number assigned a

11 physician under this clause shall be appropriate to pre12 serve the confidentiality of a patient prescribed narcotic

13 drugs covered by this paragraph by the physician.

14 ‘‘(iii) If the Secretary fails to make a determination

15 described in clause (i) by the end of the 45-day period

16 beginning on the date of the receipt by the Secretary of

17 a notification from a physician under subparagraph (B),

18 the Attorney General shall assign the physician an identi19 fication number described in clause (ii) at the end of such

20 period.

21 ‘‘(G) In this paragraph:

22 ‘‘(i) The term ‘group practice’ has the meaning

23 given such term in section 1877(h)(4) of the Social

24 Security Act.
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1 ‘‘(ii) The term ‘physician’ has the meaning

2 given such term in section 1861(r) of the Social Se3 curity Act.

4 ‘‘(H)(i) This paragraph takes effect on the date of

5 the enactment of the Methamphetamine Anti-Proliferation

6 Act of 2000, and remains in effect thereafter except as

7 provided in clause (iii) (relating to a decision by the Sec8 retary or the Attorney General that this paragraph should

9 not remain in effect).

10 ‘‘(ii) For the purposes relating to clause (iii), the Sec11 retary and the Attorney General shall, during the 3-year

12 period beginning on the date of the enactment of the

13 Methamphetamine Anti-Proliferation Act of 2000, make

14 determinations in accordance with the following:

15 ‘‘(I)(aa) The Secretary shall—

16 ‘‘(aaa) make a determination of whether

17 treatments provided under waivers under sub18 paragraph (A) have been effective forms of

19 maintenance treatment and detoxification treat20 ment in clinical settings;

21 ‘‘(bbb) make a determination regarding

22 whether such waivers have significantly in23 creased (relative to the beginning of such pe24 riod) the availability of maintenance treatment

25 and detoxification treatment; and
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1 ‘‘(ccc) make a determination regarding

2 whether such waivers have adverse con3 sequences for the public health.

4 ‘‘(bb) In making determinations under this sub5 clause, the Secretary—

6 ‘‘(aaa) may collect data from the practi7 tioners for whom waivers under subparagraph

8 (A) are in effect;

9 ‘‘(bbb) shall issue appropriate guidelines or

10 regulations (in accordance with procedures for

11 substantive rules under section 553 of title 5,

12 United States Code) specifying the scope of the

13 data that will be required to be provided under

14 this subclause and the means through which the

15 data will be collected; and

16 ‘‘(ccc) shall, with respect to collecting such

17 data, comply with applicable provisions of chap18 ter 6 of title 5, United States Code (relating to

19 a regulatory flexibility analysis), and of chapter

20 8 of such title (relating to congressional review

21 of agency rulemaking).

22 ‘‘(II) The Attorney General shall—

23 ‘‘(aa) make a determination of the extent

24 to which there have been violations of the nu25 merical limitations established under subpara-
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1 graph (B) for the number of individuals to

2 whom a practitioner may provide treatment;

3 and

4 ‘‘(bb) make a determination regarding

5 whether waivers under subparagraph (A) have

6 increased (relative to the beginning of such pe7 riod) the extent to which narcotic drugs in

8 schedule III, IV, or V, or combinations of such

9 drugs, are being dispensed or prescribed, or

10 possessed, in violation of this Act.

11 ‘‘(iii) If, before the expiration of the period specified

12 in clause (ii), the Secretary or the Attorney General pub13 lishes in the Federal Register a decision, made on the

14 basis of determinations under such clause, that this para15 graph should not remain in effect, this paragraph ceases

16 to be in effect 60 days after the date on which the decision

17 is so published. The Secretary shall, in making any such

18 decision, consult with the Attorney General, and shall, in

19 publishing the decision in the Federal Register, include

20 any comments received from the Attorney General for in21 clusion in the publication. The Attorney General shall, in

22 making any such decision, consult with the Secretary, and

23 shall, in publishing the decision in the Federal Register,

24 include any comments received from the Secretary for in25 clusion in the publication.
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1 ‘‘(I) During the 3-year period beginning on the date

2 of the enactment of the Methamphetamine Anti-Prolifera3 tion Act of 2000, a State may not preclude a practitioner

4 from dispensing or prescribing narcotic drugs in schedule

5 III, IV, or V, or combinations of such drugs, to patients

6 for maintenance or detoxification treatment in accordance

7 with this paragraph, or the other amendments made by

8 section 22 of that Act, unless, before the expiration of that

9 3-year period, the State enacts a law prohibiting a practi10 tioner from dispensing or prescribing such drugs or com11 bination of drugs.’’.

12 (b) CONFORMING AMENDMENTS.—Section 304 of the

13 Controlled Substances Act (21 U.S.C. 824) is amended—

14 (1) in subsection (a), in the matter following

15 paragraph (5), by striking ‘‘section 303(g)’’ each

16 place the term appears and inserting ‘‘section

17 303(g)(1)’’; and

18 (2) in subsection (d), by striking ‘‘section

19 303(g)’’ and inserting ‘‘section 303(g)(1)’’.

20 (c) AUTHORIZATION OF APPROPRIATIONS.—There is

21 hereby authorized to be appropriated for purposes of ac22 tivities under section 303(g)(2) of the Controlled Sub23 stances Act, as added by subsection (a), amounts as fol24 lows:

25 (1) For fiscal year 2000, $3,000,000.
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1 (2) For each fiscal year after fiscal year 2000,

2 such sums as may be necessary for such fiscal year.

3 Subtitle C—Cocaine Powder

4 SEC. 1571. SHORT TITLE.

5 This subtitle may be cited as the ‘‘Powder Cocaine

6 Sentencing Act of 2000’’.

7 SEC. 1572. SENTENCING FOR VIOLATIONS INVOLVING CO8 CAINE POWDER.

9 (a) AMENDMENT OF CONTROLLED SUBSTANCES

10 ACT.—

11 (1) LARGE QUANTITIES.—Section

12 401(b)(1)(A)(ii) of the Controlled Substances Act

13 (21 U.S.C. 841(b)(1)(A)(ii)) is amended by striking

14 ‘‘5 kilograms’’ and inserting ‘‘500 grams’’.

15 (2) SMALL QUANTITIES.—Section

16 401(b)(1)(B)(ii) of the Controlled Substances Act

17 (21 U.S.C. 841(b)(1)(B)(ii)) is amended by striking

18 ‘‘500 grams’’ and inserting ‘‘50 grams’’.

19 (b) AMENDMENT OF CONTROLLED SUBSTANCES IM20 PORT AND EXPORT ACT.—

21 (1) LARGE QUANTITIES.—Section

22 1010(b)(1)(B) of the Controlled Substances Import

23 and Export Act (21 U.S.C. 960(b)(1)(B)) is amend24 ed by striking ‘‘5 kilograms’’ and inserting ‘‘500

25 grams’’.
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1 (2) SMALL QUANTITIES.—Section

2 1010(b)(2)(B) of the Controlled Substances Import

3 and Export Act (21 U.S.C. 960(b)(2)(B)) is amend4 ed by striking ‘‘500 grams’’ and inserting ‘‘50

5 grams’’.

6 (c) AMENDMENT OF SENTENCING GUIDELINES.—

7 Pursuant to section 994 of title 28, United States Code,

8 the United States Sentencing Commission shall amend the

9 Federal sentencing guidelines to reflect the amendments

10 made by this section.

11 Subtitle D—Education Matters

12 SEC. 1581. SAFE SCHOOLS.

13 (a) AMENDMENTS.—Part F of title XIV of the Ele14 mentary and Secondary Education Act of 1965 (20 U.S.C.

15 8921 et seq.) is amended as follows:

16 (1) SHORT TITLE.—Section 14601(a) is amend17 ed by replacing ‘‘Gun-Free’’ with ‘‘Safe’’, and

18 ‘‘1994’’ with ‘‘1999’’.

19 (2) REQUIREMENTS.—Section 14601(b)(1) is

20 amended by inserting after ‘‘determined’’ the fol21 lowing: ‘‘to be in possession of felonious quantities

22 of an illegal drug, on school property under the ju23 risdiction of, or in a vehicle operated by an employee

24 or agent of, a local educational agency in that State,

25 or’’.
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1 (3) DEFINITIONS.—Section 14601(b)(4) is

2 amended by replacing ‘‘Definition’’ with ‘‘Defini3 tions’’ in the catchline, by replacing ‘‘section’’ in the

4 matter under the catchline with ‘‘part’’, by redesig5 nating the matter under the catchline after the

6 comma as subparagraph (A), by replacing the period

7 with a semicolon, and by adding new subparagraphs

8 (B), (C), and (D) as follows:

9 ‘‘(B) the term ‘illegal drug’ means a con10 trolled substance, as defined in section 102(6)

11 of the Controlled Substances Act (21 U.S.C.

12 802(6)), the possession of which is unlawful

13 under the Act (21 U.S.C. 801 et seq.) or under

14 the Controlled Substances Import and Export

15 Act (21 U.S.C. 951 et seq.), but does not mean

16 a controlled substance used pursuant to a valid

17 prescription or as authorized by law; and

18 ‘‘(C) the term ‘illegal drug paraphernalia’

19 means drug paraphernalia, as defined in section

20 422(d) of the Controlled Substances Act (21

21 U.S.C. 863(d)), except that the first sentence of

22 that section shall be applied by inserting ‘or

23 under the Controlled Substances Import and

24 Export Act (21 U.S.C. 951 et seq.)’, before the

25 period.
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1 ‘‘(D) the term ‘felonious quantities of an

2 illegal drug’ means any quantity of an illegal

3 drug—

4 ‘‘(i) possession of which quantity

5 would, under Federal, State, or local law,

6 either constitute a felony or indicate an in7 tent to distribute; or

8 ‘‘(ii) that is possessed with an intent

9 to distribute.’’.

10 (4) REPORT TO STATE.—Section

11 14601(d)(2)(C) is amended by inserting ‘‘illegal

12 drugs or’’ before ‘‘weapons’’.

13 (5) REPEALER.—Section 14601 is amend14 ed by striking subsection (f).

15 (6) POLICY REGARDING CRIMINAL JUSTICE

16 SYSTEM REFERRAL.—Section 14602(a) is

17 amended by replacing ‘‘served by’’ with ‘‘under

18 the jurisdiction of’’, and by inserting after

19 ‘‘who’’ the following: ‘‘is in possession of an ille20 gal drug, or illegal drug paraphernalia, on

21 school property under the jurisdiction of, or in

22 a vehicle operated by an employee or agent of,

23 such agency, or who’’.

24 (7) DATA AND POLICY DISSEMINATION

25 UNDER IDEA.—Section 14603 is amended by
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1 inserting ‘‘current’’ before ‘‘policy’’, by striking

2 ‘‘in effect on October 20, 1994’’, by striking all

3 the matter after ‘‘schools’’ and inserting a pe4 riod thereafter, and by inserting before ‘‘engag5 ing’’ the following: ‘‘possessing illegal drugs, or

6 illegal drug paraphernalia, on school property,

7 or in vehicles operated by employees or agents

8 of, schools or local educational agencies, or’’.

9 (b) COMPLIANCE DATE; REPORTING.—(1) States

10 shall have 2 years from the date of the enactment of this

11 Act to comply with the requirements established in the

12 amendments made by subsection (a).

13 (2) Not later than 3 years after the date of the enact14 ment of this Act, the Secretary of Education shall submit

15 to Congress a report on any State that is not in compli16 ance with the requirements of this section.

17 (3) Not later than 2 years after the date of the enact18 ment of this Act, the Secretary of Education shall submit

19 to Congress a report analyzing the strengths and weak20 nesses of approaches regarding the disciplining of children

21 with disabilities.

22 SEC. 1582. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.

23 Subpart 1 of part A of title I of the Elementary and

24 Secondary Education Act of 1965 (20 U.S.C. 6311 et
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1 seq.) is amended by inserting after section 1115A of such

2 Act (20 U.S.C. 6316) the following:

3 ‘‘SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL

4 CHOICE.

5 ‘‘(a) IN GENERAL.—Notwithstanding any other pro6 vision of law, if a student is eligible to be served under

7 section 1115(b), or attends a school eligible for a

8 schoolwide program under section 1114, and becomes a

9 victim of a violent criminal offense, including drug-related

10 violence, while in or on the grounds of a public elementary

11 school or secondary school that the student attends and

12 that receives assistance under this part, then the local edu13 cational agency may use funds provided under this part

14 or under any other Federal education program to pay the

15 supplementary costs for such student to attend another

16 school. The agency may use the funds to pay for the sup17 plementary costs of such student to attend any other pub18 lic or private elementary school or secondary school, in19 cluding a religious school, in the same State as the school

20 where the criminal offense occurred, that is selected by

21 the student’s parent. The State educational agency shall

22 determine what actions constitute a violent criminal of23 fense for purposes of this section.

24 ‘‘(b) SUPPLEMENTARY COSTS.—The supplementary

25 costs referred to in subsection (a) shall not exceed—
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1 ‘‘(1) in the case of a student for whom funds

2 under this section are used to enable the student to

3 attend a public elementary school or secondary

4 school served by a local educational agency that also

5 serves the school where the violent criminal offense

6 occurred, the costs of supplementary educational

7 services and activities described in section 1114(b)

8 or 1115(c) that are provided to the student;

9 ‘‘(2) in the case of a student for whom funds

10 under this section are used to enable the student to

11 attend a public elementary school or secondary

12 school served by a local educational agency that does

13 not serve the school where the violent criminal of14 fense occurred but is located in the same State—

15 ‘‘(A) the costs of supplementary edu16 cational services and activities described in sec17 tion 1114(b) or 1115(c) that are provided to

18 the student; and

19 ‘‘(B) the reasonable costs of transportation

20 for the student to attend the school selected by

21 the student’s parent; and

22 ‘‘(3) in the case of a student for whom funds

23 under this section are used to enable the student to

24 attend a private elementary school or secondary

25 school, including a religious school, the costs of tui-
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1 tion, required fees, and the reasonable costs of such

2 transportation.

3 ‘‘(c) CONSTRUCTION.—Nothing in this Act or any

4 other Federal law shall be construed to prevent a parent

5 assisted under this section from selecting the public or pri6 vate, including religious, elementary school or secondary

7 school that a child of the parent will attend within the

8 State.

9 ‘‘(d) CONSIDERATION OF ASSISTANCE.—Subject to

10 subsection (h), assistance made available under this sec11 tion that is used to pay the costs for a student to attend

12 a private or religious school shall not be considered to be

13 Federal aid to the school, and the Federal Government

14 shall have no authority to influence or regulate the oper15 ations of a private or religious school as a result of assist16 ance received under this section.

17 ‘‘(e) CONTINUING ELIGIBILITY.—A student assisted

18 under this section shall remain eligible to continue receiv19 ing assistance under this section for at least 3 academic

20 years without regard to whether the student is eligible for

21 assistance under section 1114 or 1115(b).

22 ‘‘(f) TUITION CHARGES.—Assistance under this sec23 tion may not be used to pay tuition or required fees at

24 a private elementary school or secondary school in an

25 amount that is greater than the tuition and required fees
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1 paid by students not assisted under this section at such

2 school.

3 ‘‘(g) SPECIAL RULE.—Any school receiving assist4 ance provided under this section shall comply with title

5 VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et

6 seq.) and not discriminate on the basis race, color, or na7 tional origin.

8 ‘‘(h) ASSISTANCE; TAXES AND OTHER FEDERAL

9 PROGRAMS.—

10 ‘‘(1) ASSISTANCE TO FAMILIES, NOT

11 SCHOOLS.—Assistance provided under this section

12 shall be considered to be aid to families, not schools.

13 Use of such assistance at a school shall not be con14 strued to be Federal financial aid or assistance to

15 that school.

16 ‘‘(2) TAXES AND DETERMINATIONS OF ELIGI17 BILITY FOR OTHER FEDERAL PROGRAMS.—Assist18 ance provided under this section to a student shall

19 not be considered to be income of the student or the

20 parent of such student for Federal, State, or local

21 tax purposes or for determining eligibility for any

22 other Federal program.

23 ‘‘(i) PART B OF THE INDIVIDUALS WITH DISABIL24 ITIES EDUCATION ACT.—Nothing in this section shall be

25 construed to affect the requirements of part B of the Indi-
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1 viduals with Disabilities Education Act (20 U.S.C. 1411

2 et seq.).

3 ‘‘(j) MAXIMUM AMOUNT.—Notwithstanding any

4 other provision of this section, the amount of assistance

5 provided under this part for a student shall not exceed

6 the per pupil expenditure for elementary or secondary edu7 cation, as appropriate, by the local educational agency

8 that serves the school where the criminal offense occurred

9 for the fiscal year preceding the fiscal year for which the

10 determination is made.’’.

11 SEC. 1583. TRANSFER OF REVENUES.

12 (a) IN GENERAL.—Notwithstanding any other provi13 sion of Federal law, a State, a State educational agency,

14 or a local educational agency may transfer any non-Fed15 eral public funds associated with the education of a stu16 dent who is a victim of a violent criminal offense while

17 in or on the grounds of a public elementary school or sec18 ondary school served by a local educational agency to an19 other local educational agency or to a private elementary

20 school or secondary school, including a religious school.

21 (b) DEFINITIONS.—For the purpose of subsection

22 (a), the terms ‘‘elementary school’’, ‘‘secondary school’’,

23 ‘‘local educational agency’’, and ‘‘State educational agen24 cy’’ have the meanings given such terms in section 14101
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1 of the Elementary and Secondary Education Act of 1965

2 (20 U.S.C. 8801).

3 Subtitle E—Miscellaneous

4 SEC. 1591. NOTICE; CLARIFICATION.

5 (a) NOTICE OF ISSUANCE.—Section 3103a of title

6 18, United States Code, is amended by adding at the end

7 the following new sentence: ‘‘With respect to any issuance

8 under this section or any other provision of law (including

9 section 3117 and any rule), any notice required, or that

10 may be required, to be given may be delayed pursuant to

11 the standards, terms, and conditions set forth in section

12 2705, unless otherwise expressly provided by statute.’’.

13 (b) CLARIFICATION.—(1) Section 2(e) of Public Law

14 95–78 (91 Stat. 320) is amended by adding at the end

15 the following:

16 ‘‘Subdivision (d) of such rule, as in effect on this date,

17 is amended by inserting ‘tangible’ before ‘property’ each

18 place it occurs.’’.

19 (2) The amendment made by paragraph (1) shall

20 take effect on the date of the enactment of this Act.

21 SEC. 1592. DOMESTIC TERRORISM ASSESSMENT AND RE22 COVERY.

23 (a) IN GENERAL.—The Federal Bureau of Investiga24 tion shall prepare a study assessing—
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1 (1) the threat posed by the Fuerzas Armadas

2 de Liberacion Nacional Puertorriquena (FALN) and

3 Los Macheteros terrorist organizations to the United

4 States and its territories as of July 31, 1999; and

5 (2) what effect the President’s offer of clemency

6 to 16 FALN and Los Macheteros members on Au7 gust 11, 1999, and the subsequent release of 11 of

8 those members, will have on the threat posed by

9 those terrorist organizations to the United States

10 and its territories.

11 (b) ISSUES EXAMINED.—In conducting and pre12 paring the study under subsection (a), the Federal Bureau

13 of Investigation shall address—

14 (1) the threat posed by the FALN and Los

15 Macheteros organizations to law enforcement offi16 cers, prosecutors, defense attorneys, witnesses, and

17 judges involved in the prosecution of members of the

18 FALN and Los Macheteros, both in the United

19 States and its territories;

20 (2) the roles played by each the 16 members of21 fered clemency by the President on August 11,

22 1999, in the FALN and Los Macheteros organiza23 tions;

24 (3) the extent to which the FALN and Los

25 Macheteros organizations are associated with other
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1 known terrorist organizations or countries suspected

2 of sponsoring terrorism;

3 (4) the threat posed to the national security in4 terests of the United States by the FALN and Los

5 Macheteros organizations;

6 (5) whether the offer of clemency to, or release

7 of, any of the 16 FALN or Los Macheteros members

8 would violate, or be inconsistent with, the United

9 States’ obligations under international treaties and

10 agreements governing terrorist activity; and

11 (6) the effect on law enforcement’s ability to

12 solve open cases and apprehend fugitives resulting

13 from the offer of clemency to the 16 FALN and Los

14 Macheteros members, without first requiring each of

15 them to provide the government all truthful informa16 tion and evidence he or she has concerning open in17 vestigations and fugitives associated with the FALN

18 and Los Macheteros organizations.

19 (c) REPORT.—Not later than 30 days after the date

20 of the enactment of this Act, the Federal Bureau of Inves21 tigation shall submit to Congress a report on the study

22 conducted under subsection (a).
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1 SEC. 1593. ANTIDRUG MESSAGES ON FEDERAL GOVERN2 MENT INTERNET WEBSITES.

3 Not later than 90 days after the date of the enact4 ment of this Act, the head of each department, agency,

5 and establishment of the Federal Government shall, in

6 consultation with the Director of the Office of National

7 Drug Control Policy, place antidrug messages on appro8 priate Internet websites controlled by such department,

9 agency, or establishment which messages shall, where ap10 propriate, contain an electronic hyperlink to the Internet

11 website, if any, of the Office.

12 SEC. 1594. STATE SCHOOLS.

13 (a) AMENDMENTS.—Part F of title XIV of the Ele14 mentary and Secondary Education Act of 1965 (20 U.S.C.

15 8921 et seq.) is amended as follows:

16 (1) SHORT TITLE.—Section 14601(a) is amend17 ed by replacing ‘‘Gun-Free’’ with ‘‘Safe’’, and

18 ‘‘1994’’ with ‘‘1999’’.

19 (2) REQUIREMENTS.—Section 14601(b)(1) is

20 amended by inserting after ‘‘determined’’ the fol21 lowing: ‘‘to be in possession of felonious quantities

22 of an illegal drug, on school property under the ju23 risdiction of, or in a vehicle operated by an employee

24 or agent of, a local educational agency in that State,

25 or’’.
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1 (3) DEFINITIONS.—Section 14601(b)(4) is

2 amended by replacing ‘‘Definition’’ with ‘‘Defini3 tions’’ in the catchline, by replacing ‘‘section’’ in the

4 matter under the catchline with ‘‘part’’, by redesig5 nating the matter under the catchline after the

6 comma as subparagraph (A), by replacing the period

7 with a semicolon, and by adding new subparagraphs

8 (B), (C), and (D) as follows:

9 ‘‘(B) The term ‘illegal drug’ means a con10 trolled substance, as defined in section 102(6)

11 of the Controlled Substances Act (21 U.S.C.

12 802(6)), the possession of which is unlawful

13 under the Act (21 U.S.C. 801 et seq.) or under

14 the Controlled Substances Import and Export

15 Act (21 U.S.C. 951 et seq.), but does not mean

16 a controlled substance used pursuant to a valid

17 prescription or as authorized by law.

18 ‘‘(C) The term ‘illegal drug paraphernalia’

19 means drug paraphernalia, as defined in section

20 422(d) of the Controlled Substances Act (21

21 U.S.C. 863(d)), except that the first sentence of

22 that section shall be applied by inserting ‘or

23 under the Controlled Substances Import and

24 Export Act (21 U.S.C. 951 et seq.)’, before the

25 period.
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1 ‘‘(D) The term ‘felonious quantities of an

2 illegal drug’ means any quantity of an illegal

3 drug—

4 ‘‘(i) possession of which quantity

5 would, under Federal, State, or local law,

6 either constitute a felony or indicate an in7 tent to distribute; or

8 ‘‘(ii) that is possessed with an intent

9 to distribute.’’.

10 (4) REPORT TO STATE.—Section

11 14601(d)(2)(C) is amended by inserting ‘‘illegal

12 drugs or’’ before ‘‘weapons’’.

13 (5) REPEALER.—Section 14601 is amended by

14 striking subsection (f).

15 (6) POLICY REGARDING CRIMINAL JUSTICE SYS16 TEM REFERRAL.—Section 14602(a) is amended by

17 replacing ‘‘served by’’ with ‘‘under the jurisdiction

18 of’’, and by inserting after ‘‘who’’ the following: ‘‘is

19 in possession of an illegal drug, or illegal drug para20 phernalia, on school property under the jurisdiction

21 of, or in a vehicle operated by an employee or agent

22 of, such agency, or who’’.

23 (7) DATA AND POLICY DISSEMINATION UNDER

24 IDEA.—Section 14603 is amended by inserting ‘‘cur25 rent’’ before ‘‘policy’’, by striking ‘‘in effect on Octo-
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1 ber 20, 1994’’, by striking all the matter after

2 ‘‘schools’’ and inserting a period thereafter, and by

3 inserting before ‘‘engaging’’ the following: ‘‘pos4 sessing illegal drugs, or illegal drug paraphernalia,

5 on school property, or in vehicles operated by em6 ployees or agents of, schools or local educational

7 agencies, or’’.

8 (b) COMPLIANCE DATE; REPORTING.—(1) States

9 shall have 2 years from the date of enactment of this Act

10 to comply with the requirements established in the amend11 ments made by subsection (a).

12 (2) Not later than 3 years after the date of enactment

13 of this Act, the Secretary of Education shall submit to

14 Congress a report on any State that is not in compliance

15 with the requirements of this part.

16 (3) Not later than 2 years after the date of enactment

17 of this Act, the Secretary of Education shall submit to

18 Congress a report analyzing the strengths and weaknesses

19 of approaches regarding the disciplining of children with

20 disabilities.

21 SEC. 1595. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.

22 Subpart 1 of part A of title I of the Elementary and

23 Secondary Education Act of 1965 (20 U.S.C. 6311 et

24 seq.) is amended by inserting after section 1115A of such

25 Act (20 U.S.C. 6316) the following:
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1 ‘‘SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL

2 CHOICE.

3 ‘‘(a) IN GENERAL.—Notwithstanding any other pro4 vision of law, if a student is eligible to be served under

5 section 1115(b), or attends a school eligible for a

6 schoolwide program under section 1114, and becomes a

7 victim of a violent criminal offense, including drug-related

8 violence, while in or on the grounds of a public elementary

9 school or secondary school that the student attends and

10 that receives assistance under this part, then the local edu11 cational agency may use funds provided under this part

12 or under any other Federal education program to pay the

13 supplementary costs for such student to attend another

14 school. The agency may use the funds to pay for the sup15 plementary costs of such student to attend any other pub16 lic or private elementary school or secondary school, in17 cluding a religious school, in the same State as the school

18 where the criminal offense occurred, that is selected by

19 the student’s parent. The State educational agency shall

20 determine what actions constitute a violent criminal of21 fense for purposes of this section.

22 ‘‘(b) SUPPLEMENTARY COSTS.—The supplementary

23 costs referred to in subsection (a) shall not exceed—

24 ‘‘(1) in the case of a student for whom funds

25 under this section are used to enable the student to

26 attend a public elementary school or secondary
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1 school served by a local educational agency that also

2 serves the school where the violent criminal offense

3 occurred, the costs of supplementary educational

4 services and activities described in section 1114(b)

5 or 1115(c) that are provided to the student;

6 ‘‘(2) in the case of a student for whom funds

7 under this section are used to enable the student to

8 attend a public elementary school or secondary

9 school served by a local educational agency that does

10 not serve the school where the violent criminal of11 fense occurred but is located in the same State—

12 ‘‘(A) the costs of supplementary edu13 cational services and activities described in sec14 tion 1114(b) or 1115(c) that are provided to

15 the student; and

16 ‘‘(B) the reasonable costs of transportation

17 for the student to attend the school selected by

18 the student’s parent; and

19 ‘‘(3) in the case of a student for whom funds

20 under this section are used to enable the student to

21 attend a private elementary school or secondary

22 school, including a religious school, the costs of tui23 tion, required fees, and the reasonable costs of such

24 transportation.
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1 ‘‘(c) CONSTRUCTION.—Nothing in this Act or any

2 other Federal law shall be construed to prevent a parent

3 assisted under this section from selecting the public or pri4 vate, including religious, elementary school or secondary

5 school that a child of the parent will attend within the

6 State.

7 ‘‘(d) CONSIDERATION OF ASSISTANCE.—Subject to

8 subsection (h), assistance made available under this sec9 tion that is used to pay the costs for a student to attend

10 a private or religious school shall not be considered to be

11 Federal aid to the school, and the Federal Government

12 shall have no authority to influence or regulate the oper13 ations of a private or religious school as a result of assist14 ance received under this section.

15 ‘‘(e) CONTINUING ELIGIBILITY.—A student assisted

16 under this section shall remain eligible to continue receiv17 ing assistance under this section for at least 3 academic

18 years without regard to whether the student is eligible for

19 assistance under section 1114 or 1115(b).

20 ‘‘(f) TUITION CHARGES.—Assistance under this sec21 tion may not be used to pay tuition or required fees at

22 a private elementary school or secondary school in an

23 amount that is greater than the tuition and required fees

24 paid by students not assisted under this section at such

25 school.
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1 ‘‘(g) SPECIAL RULE.—Any school receiving assist2 ance provided under this section shall comply with title

3 VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et

4 seq.) and not discriminate on the basis of race, color, or

5 national origin.

6 ‘‘(h) ASSISTANCE; TAXES AND OTHER FEDERAL

7 PROGRAMS.—

8 ‘‘(1) ASSISTANCE TO FAMILIES, NOT

9 SCHOOLS.—Assistance provided under this section

10 shall be considered to be aid to families, not schools.

11 Use of such assistance at a school shall not be con12 strued to be Federal financial aid or assistance to

13 that school.

14 ‘‘(2) TAXES AND DETERMINATIONS OF ELIGI15 BILITY FOR OTHER FEDERAL PROGRAMS.—Assist16 ance provided under this section to a student shall

17 not be considered to be income of the student or the

18 parent of such student for Federal, State, or local

19 tax purposes or for determining eligibility for any

20 other Federal program.

21 ‘‘(i) PART B OF THE INDIVIDUALS WITH DISABIL22 ITIES EDUCATION ACT.—Nothing in this section shall be

23 construed to affect the requirements of part B of the Indi24 viduals with Disabilities Education Act (20 U.S.C. 1411

25 et seq.).
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1 ‘‘(j) MAXIMUM AMOUNT.—Notwithstanding any

2 other provision of this section, the amount of assistance

3 provided under this part for a student shall not exceed

4 the per pupil expenditure for elementary or secondary edu5 cation, as appropriate, by the local educational agency

6 that serves the school where the criminal offense occurred

7 for the fiscal year preceding the fiscal year for which the

8 determination is made.’’.

9 SEC. 1596. TRANSFER OF REVENUES.

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of Federal law, a State, a State educational agency,

12 or a local educational agency may transfer any non-Fed13 eral public funds associated with the education of a stu14 dent who is a victim of a violent criminal offense while

15 in or on the grounds of a public elementary school or sec16 ondary school served by a local educational agency to an17 other local educational agency or to a private elementary

18 school or secondary school, including a religious school.

19 (b) DEFINITIONS.—For the purpose of subsection

20 (a), the terms ‘‘elementary school’’, ‘‘secondary school’’,

21 ‘‘local educational agency’’, and ‘‘State educational agen22 cy’’ have the meanings given such terms in section 14101

23 of the Elementary and Secondary Education Act of 1965

24 (20 U.S.C. 8801).
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1 SEC. 1597. INCREASED PENALTIES FOR DISTRIBUTING

2 DRUGS TO MINORS.

3 Section 418 of the Controlled Substances Act (21

4 U.S.C. 859) is amended—

5 (1) in subsection (a), by strking ‘‘one year’’ and

6 inserting ‘‘3 years’’; and

7 (2) in subsection (b), by striking ‘‘one year’’

8 and inserting ‘‘5 years’’.

9 SEC. 1598. INCREASED PENALTY FOR DRUG TRAFFICKING

10 IN OR NEAR A SCHOOL OR OTHER PRO11 TECTED LOCATION.

12 Section 419 of the Controlled Substances Act (21

13 U.S.C. 860) is amended—

14 (1) in subsection (a), by striking ‘‘one year’’

15 and inserting ‘‘3 years’’; and

16 (2) in subsection (b), by striking ‘‘three years’’

17 each place that term appears and inserting ‘‘5

18 years’’.

19 SEC. 1599. SEVERABILITY.

20 Any provision of this title held to be invalid or unen21 forceable by its terms, or as applied to any person or cir22 cumstance, shall be construed as to give the maximum ef23 fect permitted by law, unless such provision is held to be

24 utterly invalid or unenforceable, in which event such provi25 sion shall be severed from this title and shall not affect

26 the applicability of the remainder of this title, or of such
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1 provision, to other persons not similarly situated or to

2 other, dissimilar circumstances.

3 TITLE XVI—PROTECTION FROM

4 THE IMPACT OF BANK5 RUPTCY OF CERTAIN ELEC6 TRIC UTILITIES

7 SEC. 1601. SHORT TITLE.

8 This title may be cited as the ‘‘Emergency Imported

9 Electric Power Price Reduction Act of 2000’’.

10 SEC. 1602. FINDINGS AND PURPOSES.

11 (a) FINDINGS.—Congress finds that—

12 (1) the protection of the public health and wel13 fare, the preservation of national security, and the

14 regulation of interstate and foreign commerce re15 quire that electric power imported into the United

16 States be priced fairly and competitively;

17 (2) the importation of electric power into the

18 United States is a matter vested with the public in19 terest that—

20 (A) involves an essential and extensively

21 regulated infrastructure industry; and

22 (B) affects consumers, the cost of goods

23 manufactured and services rendered, and the

24 economic well-being and livelihood of individuals

25 and society;
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1 (3) it is essential that imported electric power

2 be priced—

3 (A) in a manner that is competitive with

4 domestic electric power and thereby contribute

5 to robust and sound national and regional

6 economies; and

7 (B) not at a rate that is so high as to re8 sult in the imminent bankruptcy of electric util9 ities in a State; and

10 (4) the purchase of imported electric power by

11 the Vermont Joint Owners under the Firm Power

12 and Energy Contract with Hydro-Quebec dated De13 cember 4, 1987—

14 (A) is not consistent with the findings stat15 ed in paragraphs (1), (2), and (3); and

16 (B) threatens the economic well-being of

17 the States and regions in which the imported

18 electric power is provided contrary to the public

19 policy of the United States as set forth in the

20 findings stated in paragraphs (1), (2), and (3).

21 (b) PURPOSES.—The purposes of this title are—

22 (1) to facilitate the public policy of the United

23 States as set forth in the findings stated in para24 graphs (1), (2), and (3) of subsection (a);
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1 (2) to remove a serious threat to the economic

2 well-being of the States and regions in which im3 ported electric power is provided under the contract

4 referred to in section 1802(a)(4); and

5 (3) to facilitate revisions to the price elements

6 of the contract referred to in section 1802(a)(4) by

7 declaring and making unlawful, effective 180 days

8 after the date of enactment of this Act, the contract

9 as it exists on the date of enactment of this Act.

10 SEC. 1603. UNLAWFUL CONTRACT AND AMENDED CON11 TRACT.

12 (a) IN GENERAL.—Effective on the date that is 180

13 days after the date of enactment of this Act, the contract

14 referred to in section 1802(a)(4), as the contract exists

15 on the date of enactment of this Act, shall be void.

16 (b) AMENDMENT OF CONTRACT.—This title does not

17 preclude the parties to the contract referred to in section

18 1802(a)(4) from amending the contract or entering into

19 a new contract after the date of enactment of this Act

20 in a manner that is consistent with the findings and pur21 poses of this title.

22 SEC. 1604. EXCLUSIVE ENFORCEMENT.

23 (a) IN GENERAL.—Only the Attorney General of a

24 State in which electric power is provided under the con25 tract referred to in section 1802(a)(4), as the contract
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1 may be amended after the date of enactment of this Act,

2 may bring a civil action in United States district court

3 for an order that—

4 (1) declares the amended contract not con5 sistent with the findings and purposes of this title

6 and is therefore void;

7 (2) enjoins performance of the amended con8 tract; and

9 (3) relieves the electric utilities that are party

10 to the amended contract of any liability under the

11 contract.

12 (b) TIMING.—A civil action under subsection (a) shall

13 be brought not later than 1 year after the date of the

14 amended contract or new contract.

15 TITLE XVII—CONSUMER CREDIT

16 DISCLOSURE

17 SEC. 1701. ENHANCED DISCLOSURES UNDER AN OPEN END

18 CREDIT PLAN.

19 (a) MINIMUM PAYMENT DISCLOSURES.—Section

20 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b))

21 is amended by adding at the end the following:

22 ‘‘(11)(A) In the case of an open end credit plan

23 that requires a minimum monthly payment of not

24 more than 4 percent of the balance on which finance

25 charges are accruing, the following statement, lo-
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1 cated on the front of the billing statement, disclosed

2 clearly and conspicuously, in typeface no smaller

3 than the largest typeface used to make other clear

4 and conspicuous disclosures required under this sub5 section: ‘Minimum Payment Warning: Making only

6 the minimum payment will increase the interest you

7 pay and the time it takes to repay your balance. For

8 example, making only the typical 2% minimum

9 monthly payment on a balance of $1,000 at an in10 terest rate of 17% would take 88 months to repay

11 the balance in full. For an estimate of the time it

12 would take to repay your balance, making only min13 imum payments, call this toll-free number:

14 llllll.’.

15 ‘‘(B) In the case of an open end credit plan

16 that requires a minimum monthly payment of more

17 than 4 percent of the balance on which finance

18 charges are accruing, the following statement, in a

19 prominent location on the front of the billing state20 ment, disclosed clearly and conspicuously, in type21 face no smaller than the largest typeface used to

22 make other clear and conspicuous disclosures re23 quired under this subsection: ‘Minimum Payment

24 Warning: Making only the required minimum pay25 ment will increase the interest you pay and the time
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1 it takes to repay your balance. Making a typical 5%

2 minimum monthly payment on a balance of $300 at

3 an interest rate of 17% would take 24 months to

4 repay the balance in full. For an estimate of the

5 time it would take to repay your balance, making

6 only minimum monthly payments, call this toll-free

7 number: llllll.’.

8 ‘‘(C) Notwithstanding subparagraphs (A) and

9 (B), in the case of a creditor with respect to which

10 compliance with this title is enforced by the Federal

11 Trade Commission, the following statement, in a

12 prominent location on the front of the billing state13 ment, disclosed clearly and conspicuously, in type14 face no smaller than the largest typeface used to

15 make other clear and conspicuous disclosures under

16 this subsection: ‘Minimum Payment Warning: Mak17 ing only the required minimum payment will in18 crease the interest you pay and the time it takes to

19 repay your balance. For example, making only the

20 typical 5% minimum monthly payment on a balance

21 of $300 at an interest rate of 17% would take 24

22 months to repay the balance in full. For an estimate

23 of the time it would take to repay your balance,

24 making only minimum monthly payments, call the

25 Federal Trade Commission at this toll-free number:
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1 llllll.’ A creditor who is subject to this

2 subparagraph shall not be subject to subparagraph

3 (A) or (B).

4 ‘‘(D) Notwithstanding subparagraph (A), (B),

5 or (C), in complying with any such subparagraph, a

6 creditor may substitute an example based on an in7 terest rate that is greater than 17 percent. Any

8 creditor who is subject to subparagraph (B) may

9 elect to provide the disclosure required under sub10 paragraph (A) in lieu of the disclosure required

11 under subparagraph (B).

12 ‘‘(E) The Board shall, by rule, periodically re13 calculate, as necessary, the interest rate and repay14 ment period under subparagraphs (A), (B), and (C).

15 ‘‘(F) The toll-free telephone number disclosed

16 by a creditor or the Federal Trade Commission

17 under subparagraph (A), (B), or (G), as appro18 priate, may be a toll-free telephone number estab19 lished and maintained by the creditor or the Federal

20 Trade Commission, as appropriate, or may be a toll21 free telephone number established and maintained

22 by a third party for use by the creditor or multiple

23 creditors or the Federal Trade Commission, as ap24 propriate. The toll-free telephone number may con25 nect consumers to an automated device through
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1 which consumers may obtain information described

2 in subparagraph (A), (B), or (C), by inputting infor3 mation using a touch-tone telephone or similar de4 vice, if consumers whose telephones are not equipped

5 to use such automated device are provided the op6 portunity to be connected to an individual from

7 whom the information described in subparagraph

8 (A), (B), or (C), as applicable, may be obtained. A

9 person that receives a request for information de10 scribed in subparagraph (A), (B), or (C) from an ob11 ligor through the toll-free telephone number dis12 closed under subparagraph (A), (B), or (C), as ap13 plicable, shall disclose in response to such request

14 only the information set forth in the table promul15 gated by the Board under subparagraph (H)(i).

16 ‘‘(G) The Federal Trade Commission shall es17 tablish and maintain a toll-free number for the pur18 pose of providing to consumers the information re19 quired to be disclosed under subparagraph (C).

20 ‘‘(H) The Board shall—

21 ‘‘(i) establish a detailed table illustrating

22 the approximate number of months that it

23 would take to repay an outstanding balance if

24 the consumer pays only the required minimum

25 monthly payments and if no other advances are
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1 made, which table shall clearly present stand2 ardized information to be used to disclose the

3 information required to be disclosed under sub4 paragraph (A), (B), or (C), as applicable;

5 ‘‘(ii) establish the table required under

6 clause (i) by assuming—

7 ‘‘(I) a significant number of different

8 annual percentage rates;

9 ‘‘(II) a significant number of different

10 account balances;

11 ‘‘(III) a significant number of dif12 ferent minimum payment amounts; and

13 ‘‘(IV) that only minimum monthly

14 payments are made and no additional ex15 tensions of credit are obtained; and

16 ‘‘(iii) promulgate regulations that provide

17 instructional guidance regarding the manner in

18 which the information contained in the table es19 tablished under clause (i) should be used in re20 sponding to the request of an obligor for any

21 information required to be disclosed under sub22 paragraph (A), (B), or (C).

23 ‘‘(I) The disclosure requirements of this para24 graph do not apply to any charge card account, the
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1 primary purpose of which is to require payment of

2 charges in full each month.

3 ‘‘(J) A creditor that maintains a toll-free tele4 phone number for the purpose of providing cus5 tomers with the actual number of months that it will

6 take to repay the consumer’s outstanding balance is

7 not subject to the requirements of subparagraphs

8 (A) and (B).’’.

9 (b) REGULATORY IMPLEMENTATION.—The Board of

10 Governors of the Federal Reserve System (hereafter in

11 this Act referred to as the ‘‘Board’’) shall promulgate reg12 ulations implementing the requirements of section

13 127(b)(11) of the Truth in Lending Act, as added by sub14 section (a) of this section. Section 127(b)(11) of the Truth

15 in Lending Act, as added by subsection (a) of this section,

16 and the regulations issued under this subsection shall not

17 take effect until the later of 18 months after the date of

18 enactment of this Act or 12 months after the publication

19 of such regulations by the Board.

20 (c) STUDY OF FINANCIAL DISCLOSURES.—

21 (1) IN GENERAL.—The Board may conduct a

22 study to determine whether consumers have ade23 quate information about borrowing activities that

24 may result in financial problems.
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1 (2) FACTORS FOR CONSIDERATION.—In con2 ducting a study under paragraph (1), the Board

3 should, in consultation with the other Federal bank4 ing agencies (as defined in section 3 of the Federal

5 Deposit Insurance Act), the National Credit Union

6 Administration, and the Federal Trade Commission,

7 consider the extent to which—

8 (A) consumers, in establishing new credit

9 arrangements, are aware of their existing pay10 ment obligations, the need to consider those ob11 ligations in deciding to take on new credit, and

12 how taking on excessive credit can result in fi13 nancial difficulty;

14 (B) minimum periodic payment features

15 offered in connection with open end credit plans

16 impact consumer default rates;

17 (C) consumers make only the minimum

18 payment under open end credit plans;

19 (D) consumers are aware that making only

20 minimum payments will increase the cost and

21 repayment period of an open end credit obliga22 tion; and

23 (E) the availability of low minimum pay24 ment options is a cause of consumers experi25 encing financial difficulty.
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1 (3) REPORT TO CONGRESS.—Findings of the

2 Board in connection with any study conducted under

3 this subsection shall be submitted to Congress. Such

4 report shall also include recommendations for legis5 lative initiatives, if any, of the Board, based on its

6 findings.

7 SEC. 1702. ENHANCED DISCLOSURE FOR CREDIT EXTEN8 SIONS SECURED BY A DWELLING.

9 (a) OPEN END CREDIT EXTENSIONS.—

10 (1) CREDIT APPLICATIONS.—Section

11 127A(a)(13) of the Truth in Lending Act (15

12 U.S.C. 1637a(a)(13)) is amended—

13 (A) by striking ‘‘CONSULTATION OF TAX

14 ADVISOR.—A statement that the’’ and inserting

15 the following: ‘‘TAX DEDUCTIBILITY.—A state16 ment that—

17 ‘‘(A) the’’; and

18 (B) by striking the period at the end and

19 inserting the following: ‘‘; and

20 ‘‘(B) in any case in which the extension of

21 credit exceeds the fair market value (as defined

22 under the Federal Internal Revenue Code) of

23 the dwelling, the interest on the portion of the

24 credit extension that is greater than the fair
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1 market value of the dwelling is not tax deduct2 ible for Federal income tax purposes.’’.

3 (2) CREDIT ADVERTISEMENTS.—Section 147(b)

4 of the Truth in Lending Act (15 U.S.C. 1665b(b))

5 is amended—

6 (A) by striking ‘‘If any’’ and inserting the

7 following:

8 ‘‘(1) IN GENERAL.—If any’’; and

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

10 ‘‘(2) CREDIT IN EXCESS OF FAIR MARKET

11 VALUE.—Each advertisement described in subsection

12 (a) that relates to an extension of credit that may

13 exceed the fair market value of the dwelling, and

14 which advertisement is disseminated in paper form

15 to the public or through the Internet, as opposed to

16 by radio or television, shall include a clear and con17 spicuous statement that—

18 ‘‘(A) the interest on the portion of the

19 credit extension that is greater than the fair

20 market value of the dwelling is not tax deduct21 ible for Federal income tax purposes; and

22 ‘‘(B) the consumer should consult a tax

23 advisor for further information regarding the

24 deductibility of interest and charges.’’.

25 (b) NON-OPEN END CREDIT EXTENSIONS.—
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1 (1) CREDIT APPLICATIONS.—Section 128 of the

2 Truth in Lending Act (15 U.S.C. 1638) is

3 amended—

4 (A) in subsection (a), by adding at the end

5 the following:

6 ‘‘(15) In the case of a consumer credit trans7 action that is secured by the principal dwelling of

8 the consumer, in which the extension of credit may

9 exceed the fair market value of the dwelling, a clear

10 and conspicuous statement that—

11 ‘‘(A) the interest on the portion of the

12 credit extension that is greater than the fair

13 market value of the dwelling is not tax deduct14 ible for Federal income tax purposes; and

15 ‘‘(B) the consumer should consult a tax

16 advisor for further information regarding the

17 deductibility of interest and charges.’’; and

18 (B) in subsection (b), by adding at the end

19 the following:

20 ‘‘(3) In the case of a credit transaction described in

21 paragraph (15) of subsection (a), disclosures required by

22 that paragraph shall be made to the consumer at the time

23 of application for such extension of credit.’’.
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1 (2) CREDIT ADVERTISEMENTS.—Section 144 of

2 the Truth in Lending Act (15 U.S.C. 1664) is

3 amended by adding at the end the following:

4 ‘‘(e) Each advertisement to which this section applies

5 that relates to a consumer credit transaction that is se6 cured by the principal dwelling of a consumer in which

7 the extension of credit may exceed the fair market value

8 of the dwelling, and which advertisement is disseminated

9 in paper form to the public or through the Internet, as

10 opposed to by radio or television, shall clearly and con11 spicuously state that—

12 ‘‘(1) the interest on the portion of the credit ex13 tension that is greater than the fair market value of

14 the dwelling is not tax deductible for Federal income

15 tax purposes; and

16 ‘‘(2) the consumer should consult a tax advisor

17 for further information regarding the deductibility of

18 interest and charges.’’.

19 (c) REGULATORY IMPLEMENTATION.—The Board of

20 Governors of the Federal Reserve System (hereafter in

21 this title referred to as the ‘‘Board’’) shall promulgate reg22 ulations implementing the requirements of subsections (a)

23 and (b) of this section. Such regulations shall not take

24 effect until the later of 12 months after the date of enact-
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1 ment of this Act or 12 months after the publication of

2 such regulations by the Board.

3 SEC. 1703. DISCLOSURES RELATED TO ‘‘INTRODUCTORY

4 RATES’’.

5 (a) INTRODUCTORY RATE DISCLOSURES.—Section

6 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c))

7 is amended by adding at the end the following:

8 ‘‘(6) ADDITIONAL NOTICE CONCERNING ‘INTRO9 DUCTORY RATES’.—

10 ‘‘(A) IN GENERAL.—Except as provided in

11 subparagraph (B), an application or solicitation

12 to open a credit card account and all pro13 motional materials accompanying such applica14 tion or solicitation, for which a disclosure is re15 quired under paragraph (1), and that offers a

16 temporary annual percentage rate of interest,

17 shall—

18 ‘‘(i) use the term ‘introductory’ in im19 mediate proximity to each listing of the

20 temporary annual percentage rate applica21 ble to such account, which term shall ap22 pear clearly and conspicuously;

23 ‘‘(ii) if the annual percentage rate of

24 interest that will apply after the end of the

25 temporary rate period will be a fixed rate,
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1 state the following in a clear and con2 spicuous manner in a prominent location

3 closely proximate to the first listing of the

4 temporary annual percentage rate (other

5 than a listing of the temporary annual per6 centage rate in the tabular format de7 scribed in section 122(c)) or, if the first

8 listing is not the most prominent listing,

9 then closely proximate to the most promi10 nent listing of the temporary annual per11 centage rate, in each document and in no

12 smaller type size than the smaller of the

13 type size in which the proximate temporary

14 annual percentage rate appears or a 12-

15 point type size, the time period in which

16 the introductory period will end and the

17 annual percentage rate that will apply

18 after the end of the introductory period;

19 and

20 ‘‘(iii) if the annual percentage rate

21 that will apply after the end of the tem22 porary rate period will vary in accordance

23 with an index, state the following in a clear

24 and conspicuous manner in a prominent lo25 cation closely proximate to the first listing
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1 of the temporary annual percentage rate

2 (other than a listing in the tabular format

3 prescribed by section 122(c)) or, if the

4 first listing is not the most prominent list5 ing, then closely proximate to the most

6 prominent listing of the temporary annual

7 percentage rate, in each document and in

8 no smaller type size than the smaller of the

9 type size in which the proximate temporary

10 annual percentage rate appears or a 12-

11 point type size, the time period in which

12 the introductory period will end and the

13 rate that will apply after that, based on an

14 annual percentage rate that was in effect

15 within 60 days before the date of mailing

16 the application or solicitation.

17 ‘‘(B) EXCEPTION.—Clauses (ii) and (iii) of

18 subparagraph (A) do not apply with respect to

19 any listing of a temporary annual percentage

20 rate on an envelope or other enclosure in which

21 an application or solicitation to open a credit

22 card account is mailed.

23 ‘‘(C) CONDITIONS FOR INTRODUCTORY

24 RATES.—An application or solicitation to open

25 a credit card account for which a disclosure is
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1 required under paragraph (1), and that offers a

2 temporary annual percentage rate of interest

3 shall, if that rate of interest is revocable under

4 any circumstance or upon any event, clearly

5 and conspicuously disclose, in a prominent man6 ner on or with such application or solicitation—

7 ‘‘(i) a general description of the cir8 cumstances that may result in the revoca9 tion of the temporary annual percentage

10 rate; and

11 ‘‘(ii) if the annual percentage rate

12 that will apply upon the revocation of the

13 temporary annual percentage rate—

14 ‘‘(I) will be a fixed rate, the an15 nual percentage rate that will apply

16 upon the revocation of the temporary

17 annual percentage rate; or

18 ‘‘(II) will vary in accordance with

19 an index, the rate that will apply after

20 the temporary rate, based on an an21 nual percentage rate that was in ef22 fect within 60 days before the date of

23 mailing the application or solicitation.

24 ‘‘(D) DEFINITIONS.—In this paragraph—
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1 ‘‘(i) the terms ‘temporary annual per2 centage rate of interest’ and ‘temporary

3 annual percentage rate’ mean any rate of

4 interest applicable to a credit card account

5 for an introductory period of less than 1

6 year, if that rate is less than an annual

7 percentage rate that was in effect within

8 60 days before the date of mailing the ap9 plication or solicitation; and

10 ‘‘(ii) the term ‘introductory period’

11 means the maximum time period for which

12 the temporary annual percentage rate may

13 be applicable.

14 ‘‘(E) RELATION TO OTHER DISCLOSURE

15 REQUIREMENTS.—Nothing in this paragraph

16 may be construed to supersede subsection (a) of

17 section 122, or any disclosure required by para18 graph (1) or any other provision of this sub19 section.’’.

20 (b) REGULATORY IMPLEMENTATION.—The Board of

21 Governors of the Federal Reserve System (hereafter in

22 this title referred to as the (‘‘Board’’) shall promulgate

23 regulations implementing the requirements of section 127

24 of the Truth in Lending Act, as amended by subsection

25 (a) of this section. Any provision set forth in subsection
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1 (a) and such regulations shall not take effect until the

2 later of 12 months after the date of enactment of this Act

3 or 12 months after the publication of such regulations by

4 the Board.

5 SEC. 1704. INTERNET-BASED CREDIT CARD SOLICITATIONS.

6 (a) INTERNET-BASED APPLICATIONS AND SOLICITA7 TIONS.—Section 127(c) of the Truth in Lending Act (15

8 U.S.C. 1637(c)) is amended by adding at the end the fol9 lowing:

10 ‘‘(7) INTERNET-BASED APPLICATIONS AND SO11 LICITATIONS.—

12 ‘‘(A) IN GENERAL.—In any solicitation to

13 open a credit card account for any person under

14 an open end consumer credit plan using the

15 Internet or other interactive computer service,

16 the person making the solicitation shall clearly

17 and conspicuously disclose—

18 ‘‘(i) the information described in sub19 paragraphs (A) and (B) of paragraph (1);

20 and

21 ‘‘(ii) the disclosures described in para22 graph (6).

23 ‘‘(B) FORM OF DISCLOSURE.—The disclo24 sures required by subparagraph (A) shall be—
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1 ‘‘(i) readily accessible to consumers in

2 close proximity to the solicitation to open

3 a credit card account; and

4 ‘‘(ii) updated regularly to reflect the

5 current policies, terms, and fee amounts

6 applicable to the credit card account.

7 ‘‘(C) DEFINITIONS.—For purposes of this

8 paragraph—

9 ‘‘(i) the term ‘Internet’ means the

10 international computer network of both

11 Federal and non-Federal interoperable

12 packet switched data networks; and

13 ‘‘(ii) the term ‘interactive computer

14 service’ means any information service,

15 system, or access software provider that

16 provides or enables computer access by

17 multiple users to a computer server, in18 cluding specifically a service or system that

19 provides access to the Internet and such

20 systems operated or services offered by li21 braries or educational institutions.’’.

22 (b) REGULATORY IMPLEMENTATION.—The Board of

23 Governors of the Federal Reserve System (hereafter in

24 this title referred to as the (‘‘Board’’) shall promulgate

25 regulations implementing the requirements of section 127
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1 of the Truth in Lending Act, as amended by subsection

2 (a) of this section. Any provision set forth in subsection

3 (a) and such regulations shall not take effect until the

4 later of 12 months after the date of enactment of this Act

5 or 12 months after the publication of such regulations by

6 the Board.

7 SEC. 1705. DISCLOSURES RELATED TO LATE PAYMENT

8 DEADLINES AND PENALTIES.

9 (a) DISCLOSURES RELATED TO LATE PAYMENT

10 DEADLINES AND PENALTIES.—Section 127(b) of the

11 Truth in Lending Act (15 U.S.C. 1637(b)) is amended

12 by adding at the end the following:

13 ‘‘(12) If a late payment fee is to be imposed

14 due to the failure of the obligor to make payment on

15 or before a required payment due date the following

16 shall be stated clearly and conspicuously on the bill17 ing statement:

18 ‘‘(A) The date on which that payment is

19 due or, if different, the earliest date on which

20 a late payment fee may be charged.

21 ‘‘(B) The amount of the late payment fee

22 to be imposed if payment is made after such

23 date.’’.

24 (b) REGULATORY IMPLEMENTATION.—The Board of

25 Governors of the Federal Reserve System (hereafter in
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1 this title referred to as the (‘‘Board’’) shall promulgate

2 regulations implementing the requirements of section 127

3 of the Truth in Lending Act, as amended by subsection

4 (a) of this section. Any provision set forth in subsection

5 (a) and such regulations shall not take effect until the

6 later of 12 months after the date of enactment of this Act

7 or 12 months after the publication of such regulations by

8 the Board.

9 SEC. 1706. PROHIBITION ON CERTAIN ACTIONS FOR FAIL10 URE TO INCUR FINANCE CHARGES.

11 (a) PROHIBITION ON CERTAIN ACTIONS FOR FAIL12 URE TO INCUR FINANCE CHARGES.—Section 127 of the

13 Truth in Lending Act (15 U.S.C. 1637) is amended by

14 adding at the end the following:

15 ‘‘(h) PROHIBITION ON CERTAIN ACTIONS FOR FAIL16 URE TO INCUR FINANCE CHARGES.—A creditor of an ac17 count under an open end consumer credit plan may not

18 terminate an account prior to its expiration date solely be19 cause the consumer has not incurred finance charges on

20 the account. Nothing in this subsection shall prohibit a

21 creditor from terminating an account for inactivity in 3

22 or more consecutive months.’’.

23 (b) REGULATORY IMPLEMENTATION.—The Board of

24 Governors of the Federal Reserve System (hereafter in

25 this title referred to as the (‘‘Board’’) shall promulgate
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1 regulations implementing the requirements of section 127

2 of the Truth in Lending Act, as amended by subsection

3 (a) of this section. Any provision set forth in subsection

4 (a) and such regulations shall not take effect until the

5 later of 12 months after the date of enactment of this Act

6 or 12 months after the publication of such regulations by

7 the Board.

8 SEC. 1707. DUAL USE DEBIT CARD.

9 (a) REPORT.—The Board may conduct a study of,

10 and present to Congress a report containing its analysis

11 of, consumer protections under existing law to limit the

12 liability of consumers for unauthorized use of a debit card

13 or similar access device. Such report, if submitted, shall

14 include recommendations for legislative initiatives, if any,

15 of the Board, based on its findings.

16 (b) CONSIDERATIONS.—In preparing a report under

17 subsection (a), the Board may include—

18 (1) the extent to which section 909 of the Elec19 tronic Fund Transfer Act (15 U.S.C. 1693g), as in

20 effect at the time of the report, and the imple21 menting regulations promulgated by the Board to

22 carry out that section provide adequate unauthorized

23 use liability protection for consumers;

24 (2) the extent to which any voluntary industry

25 rules have enhanced or may enhance the level of pro-
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1 tection afforded consumers in connection with such

2 unauthorized use liability; and

3 (3) whether amendments to the Electronic

4 Fund Transfer Act (15 U.S.C. 1693 et seq.), or re5 visions to regulations promulgated by the Board to

6 carry out that Act, are necessary to further address

7 adequate protection for consumers concerning unau8 thorized use liability.

9 SEC. 1708. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX10 TENDED TO DEPENDENT STUDENTS.

11 (a) STUDY.—

12 (1) IN GENERAL.—The Comptroller General of

13 the United States shall conduct a study regarding

14 the impact that the extension of credit described in

15 paragraph (2) has on the rate of bankruptcy cases

16 filed under title 11, United States Code.

17 (2) EXTENSION OF CREDIT.—The extension of

18 credit referred to in paragraph (1) is the extension

19 of credit to individuals who are—

20 (A) claimed as dependents for purposes of

21 the Internal Revenue Code of 1986; and

22 (B) enrolled in postsecondary educational

23 institutions.

24 (b) REPORT.—Not later than 1 year after the date

25 of enactment of this Act, the Comptroller General of the
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1 United States shall submit to the Senate and the House

2 of Representatives a report summarizing the results of the

3 study conducted under subsection (a).
Calendar No. 807

106TH CONGRESS

2D SESSION S. 3046

A BILL

To amend title 11 of the United States Code, and

for other purposes.

SEPTEMBER 15, 2000

Read the second time and placed on the calendar