II 

109TH CONGRESS 

2D SESSION H. R. 5585 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28, 2006 

Received 

AN ACT 

To improve the netting process for financial contracts, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Financial Netting Im3 provements Act of 2006’’. 

4 SEC. 2. TREATMENT OF CERTAIN AGREEMENTS BY CON5 SERVATORS OR RECEIVERS OF DEPOSITORY 

6 INSTITUTIONS. 

7 (a) DEFINITION OF SECURITIES CONTRACT.— 

8 (1) FDIC-INSURED DEPOSITORY INSTITU9 TIONS.—Section 11(e)(8)(D)(ii) of the Federal De10 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is 

11 amended— 

12 (A) in subclause (I)— 

13 (i) by striking ‘‘mortgage loan, or’’ 

14 and inserting ‘‘mortgage loan,’’; and 

15 (ii) by inserting before the semicolon 

16 ‘‘(whether or not such repurchase or re17 verse repurchase transaction is a ‘repur18 chase agreement’, as defined in clause 

19 (v))’’; 

20 (B) in subclause (IV)— 

21 (i) by inserting ‘‘(including by nova22 tion)’’ after ‘‘the guarantee’’; and 

23 (ii) by inserting before the semicolon 

24 ‘‘(whether or not such settlement is in con25 nection with any agreement or transaction 


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1 referred to in subclauses (I) through (XII) 

2 (other than subclause (II))’’; 

3 (C) in subclause (IX), by striking ‘‘or 

4 (VIII)’’ each place such term appears and in5 serting ‘‘(VIII), (IX), or (X)’’; 

6 (D) by redesignating subclauses (VI), 

7 (VII), (VIII), (IX), and (X) as subclauses 

8 (VIII), (IX), (X), (XI), and (XII), respectively; 

9 and 

10 (E) by inserting after subclause (V) the 

11 following new subparagraphs: 

12 ‘‘(VI) means any extension of 

13 credit for the clearance or settlement 

14 of securities transactions; 

15 ‘‘(VII) means any loan trans16 action coupled with a securities collar 

17 transaction, any prepaid securities 

18 forward transaction, or any total re19 turn swap transaction coupled with a 

20 securities sale transaction;’’. 

21 (2) INSURED CREDIT UNIONS.—Section 

22 207(c)(8)(D)(ii) of the Federal Credit Union Act 

23 (12 U.S.C. 1787(c)(8)(D)(ii)) is amended— 

24 (A) in subclause (I)— 


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1 (i) by striking ‘‘mortgage loan, or’’ 

2 and inserting ‘‘mortgage loan,’’; and 

3 (ii) by inserting before the semicolon 

4 ‘‘(whether or not such repurchase or re5 verse repurchase transaction is a ‘repur6 chase agreement’, as defined in clause 

7 (v))’’; 

8 (B) in subclause (IV)— 

9 (i) by inserting ‘‘(including by nova10 tion)’’ after ‘‘the guarantee’’; and 

11 (ii) by inserting before the semicolon 

12 ‘‘(whether or not such settlement is in con13 nection with any agreement or transaction 

14 referred to in subclauses (I) through (XII) 

15 (other than subclause (II))’’; 

16 (C) in subclause (IX), by striking ‘‘or 

17 (VIII)’’ each place such term appears and in18 serting ‘‘(VIII), (IX), or (X)’’; 

19 (D) by redesignating subclauses (VI), 

20 (VII), (VIII), (IX), and (X) as subclauses 

21 (VIII), (IX), (X), (XI), and (XII), respectively; 

22 and 

23 (E) by inserting after subclause (V) the 

24 following new subparagraphs: 


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1 ‘‘(VI) means any extension of 

2 credit for the clearance or settlement 

3 of securities transactions; 

4 ‘‘(VII) means any loan trans5 action coupled with a securities collar 

6 transaction, any prepaid securities 

7 forward transaction, or any total re8 turn swap transaction coupled with a 

9 securities sale transaction;’’. 

10 (b) DEFINITION OF FORWARD CONTRACT.— 

11 (1) FDIC-INSURED DEPOSITORY INSTITU12 TIONS.—Section 11(e)(8)(D)(iv)(I) of the Federal 

13 Deposit Insurance Act (12 U.S.C. 

14 1821(e)(8)(D)(iv)(I)) is amended by striking ‘‘trans15 action, reverse repurchase transaction’’ and inserting 

16 ‘‘or reverse repurchase transaction (whether or not 

17 such repurchase or reverse repurchase transaction is 

18 a ‘repurchase agreement’, as defined in clause (v))’’. 

19 (2) INSURED CREDIT UNIONS.—Section 

20 207(c)(8)(D)(iv)(I) of the Federal Credit Union Act 

21 (12 U.S.C. 1787(c)(8)(D)(iv)(I)) is amended by 

22 striking ‘‘transaction, reverse repurchase trans23 action’’ and inserting ‘‘or reverse repurchase trans24 action (whether or not such repurchase or reverse 


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1 repurchase transaction is a ‘repurchase agreement’, 

2 as defined in clause (v))’’. 

3 (c) DEFINITION OF SWAP AGREEMENT.— 

4 (1) FDIC-INSURED DEPOSITORY INSTITU5 TIONS.—Section 11(e)(8)(D)(vi) of the Federal De6 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is 

7 amended— 

8 (A) in subclause (I)— 

9 (i) by striking ‘‘or precious metals’’ 

10 and inserting ‘‘, precious metals, or other 

11 commodity’’; and 

12 (ii) by striking ‘‘or a weather swap, 

13 weather derivative, or weather option’’ and 

14 inserting ‘‘weather swap, option, future, or 

15 forward agreement; an emissions swap, op16 tion, future, or forward agreement; or an 

17 inflation swap, option, future, or forward 

18 agreement’’; 

19 (B) in subclause (II)— 

20 (i) by inserting ‘‘or other derivatives’’ 

21 after ‘‘dealings in the swap’’; and 

22 (ii) by striking ‘‘future, or option’’ 

23 and inserting ‘‘future, option, or spot 

24 transaction’’; and 


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1 (C) by striking ‘‘the Securities Act of 

2 1933, the Securities Exchange Act of 1934, the 

3 Public Utility Holding Company Act of 1935, 

4 the Trust Indenture Act of 1939, the Invest5 ment Company Act of 1940, the Investment 

6 Advisers Act of 1940, the Securities Investor 

7 Protection Act of 1970, the Commodity Ex8 change Act, the Gramm-Leach-Bliley Act, and 

9 the Legal Certainty for Bank Products Act of 

10 2000’’ and inserting ‘‘the Gramm-Leach-Bliley 

11 Act, the Legal Certainty for Bank Products Act 

12 of 2000, the securities laws (as such term is de13 fined in section 3(a)(47) of the Securities Ex14 change Act of 1934) and the Commodity Ex15 change Act’’. 

16 (2) INSURED CREDIT UNIONS.—Section 

17 207(c)(8)(D)(vi) of the Federal Credit Union Act 

18 (12 U.S.C. 1787(c)(8)(D)(vi)) is amended— 

19 (A) in subclause (I)— 

20 (i) by striking ‘‘or precious metals’’ 

21 and inserting ‘‘, precious metals, or other 

22 commodity’’; and 

23 (ii) by striking ‘‘or a weather swap, 

24 weather derivative, or weather option’’ and 

25 inserting ‘‘weather swap, option, future, or 


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1 forward agreement; an emissions swap, op2 tion, future, or forward agreement; or an 

3 inflation swap, option, future, or forward 

4 agreement’’; 

5 (B) in subclause (II)— 

6 (i) by inserting ‘‘or other derivatives’’ 

7 after ‘‘dealings in the swap’’; and 

8 (ii) by striking ‘‘future, or option’’ 

9 and inserting ‘‘future, option, or spot 

10 transaction’’; and 

11 (C) by striking ‘‘the Securities Act of 

12 1933, the Securities Exchange Act of 1934, the 

13 Public Utility Holding Company Act of 1935, 

14 the Trust Indenture Act of 1939, the Invest15 ment Company Act of 1940, the Investment 

16 Advisers Act of 1940, the Securities Investor 

17 Protection Act of 1970, the Commodity Ex18 change Act, the Gramm-Leach-Bliley Act, and 

19 the Legal Certainty for Bank Products Act of 

20 2000’’ and inserting ‘‘the Gramm-Leach-Bliley 

21 Act, the Legal Certainty for Bank Products Act 

22 of 2000, the securities laws (as such term is de23 fined in section 3(a)(47) of the Securities Ex24 change Act of 1934) and the Commodity Ex25 change Act’’. 


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1 SEC. 3. CLARIFYING AMENDMENTS RELATING TO DEFINI2 TION OF PERSON. 

3 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS

4 DEFINITION OF PERSON.—Section 11(e)(8)(D) of the 

5 Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)) 

6 is amended by adding at the end the following: 

7 ‘‘(ix) PERSON.—The term ‘person’ includes 

8 any governmental entity in addition to any enti9 ty included in the definition of such term in 

10 section 1 of title 1, United States Code.’’. 

11 (b) INSURED CREDIT UNIONS DEFINITION OF PER12 SON.—Section 207(c)(8)(D) of the Federal Credit Union 

13 Act (12 U.S.C. 1787(c)(8)(D)) is amended by adding at 

14 the end the following: 

15 ‘‘(ix) PERSON.—The term ‘person’ in16 cludes any governmental entity in addition 

17 to any entity included in the definition of 

18 such term in section 1 of title 1, United 

19 States Code.’’. 

20 SEC. 4. FEDERAL DEPOSIT INSURANCE CORPORATION IM21 PROVEMENT ACT OF 1991. 

22 (a) ENFORCEABILITY OF BILATERAL NETTING CON23 TRACTS.—Section 403 of the Federal Deposit Insurance 

24 Corporation Improvement Act of 1991 (12 U.S.C. 4403) 

25 is amended— 


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1 (1) in each of subsections (a) and (f), by strik2 ing ‘‘paragraphs (8)(E), (8)(F), and (10)(B) of’’ 

3 each place such term appears; and 

4 (2) in subsection (a), by inserting ‘‘terminated, 

5 liquidated, accelerated, and’’ after ‘‘institutions shall 

6 be’’. 

7 (b) ENFORCEABILITY OF CLEARING ORGANIZATION

8 NETTING CONTRACTS.—Section 404 of the Federal De9 posit Insurance Corporation Improvement Act of 1991 (12 

10 U.S.C. 4404) is amended— 

11 (1) in each of subsections (a) and (h), by strik12 ing ‘‘paragraphs (8)(E), (8)(F), and (10)(B) of’’ 

13 each place such term appears; and 

14 (2) in subsection (a), by inserting ‘‘terminated, 

15 liquidated, accelerated, and’’ after ‘‘organization 

16 shall be’’. 

17 SEC. 5. CONFORMING AMENDMENTS. 

18 (a) CLARIFYING DEFINITIONS.—Title 11, United 

19 States Code, is amended— 

20 (1) in section 101— 

21 (A) in paragraph (22)(A)— 

22 (i) by striking ‘‘(domestic or foreign)’’ 

23 after ‘‘an entity’’; and 


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1 (ii) by inserting ‘‘(whether or not a 

2 ‘customer’, as defined in section 741)’’ 

3 after ‘‘custodian for a customer’’; 

4 (B) in paragraph (22A)— 

5 (i) by striking ‘‘on any day during the 

6 previous 15-month period’’ each place it 

7 appears and inserting ‘‘at such time or on 

8 any day during the 15-month period pre9 ceding the date of the filing of the peti10 tion’’; and 

11 (ii) by inserting ‘‘(aggregated across 

12 counterparties)’’ after ‘‘principal amount 

13 outstanding’’; 

14 (C) in paragraph (25)(A)— 

15 (i) by inserting ‘‘, as defined in sec16 tion 761’’ after ‘‘commodity contract’’; and 

17 (ii) by striking ‘‘repurchase trans18 action, reverse repurchase transaction,’’ 

19 and inserting ‘‘repurchase or reverse re20 purchase transaction (whether or not such 

21 repurchase or reverse repurchase trans22 action is a ‘repurchase agreement’, as de23 fined in this section)’’; 

24 (D) in paragraph (53B)(A)— 

25 (i) in clause (i)— 


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1 (I) in subclause (II), by striking 

2 ‘‘or precious metals’’ and inserting ‘‘, 

3 precious metals, or other commodity’’; 

4 (II) in subclause (VII), by strik5 ing ‘‘or’’ at the end; 

6 (III) in subclause (VIII), by 

7 striking ‘‘weather derivative, or weath8 er option’’ and inserting ‘‘option, fu9 ture, or forward agreement’’; and 

10 (IV) by adding at the end the fol11 lowing: 

12 ‘‘(IX) an emissions swap, option, 

13 future, or forward agreement; or 

14 ‘‘(X) an inflation swap, option, 

15 future, or forward agreement;’’; and 

16 (ii) in clause (ii)— 

17 (I) in subclause (I), by inserting 

18 ‘‘or other derivatives’’ after ‘‘dealings 

19 in the swap’’; and 

20 (II) in subclause (II), by striking 

21 ‘‘future, or option’’ and inserting ‘‘fu22 ture, option, or spot transaction’’; and 

23 (E) in paragraph (53B)(B), by striking 

24 ‘‘the Securities Act of 1933, the Securities Ex25 change Act of 1934, the Public Utility Holding 


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1 Company Act of 1935, the Trust Indenture Act 

2 of 1939, the Investment Company Act of 1940, 

3 the Investment Advisers Act of 1940, the Secu4 rities Investor Protection Act of 1970, the Com5 modity Exchange Act, the Gramm-Leach-Bliley 

6 Act, and the Legal Certainty for Bank Products 

7 Act of 2000’’ and inserting ‘‘the Gramm-Leach8 Bliley Act, the Legal Certainty for Bank Prod9 ucts Act of 2000, the securities laws (as such 

10 term is defined in section 3(a)(47) of the Secu11 rities Exchange Act of 1934) and the Com12 modity Exchange Act’’; 

13 (2) in section 362(b)— 

14 (A) by striking paragraphs (6) and (7) and 

15 inserting the following: 

16 ‘‘(6) under subsection (a) of this section, of the 

17 exercise by a commodity broker, forward contract 

18 merchant, stockbroker, financial institution, finan19 cial participant, or securities clearing agency of any 

20 contractual right (as defined in section 555 or 556) 

21 under any security agreement or arrangement or 

22 other credit enhancement forming a part of or re23 lated to any commodity contract, forward contract 

24 or securities contract, or of any contractual right (as 

25 defined in section 555 or 556) to offset or net out 


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1 any termination value, payment amount, or other 

2 transfer obligation arising under or in connection 

3 with 1 or more such contracts, including any master 

4 agreement for such contracts; 

5 ‘‘(7) under subsection (a) of this section, of the 

6 exercise by a repo participant or financial partici7 pant of any contractual right (as defined in section 

8 559) under any security agreement or arrangement 

9 or other credit enhancement forming a part of or re10 lated to any repurchase agreement, or of any con11 tractual right (as defined in section 559) to offset or 

12 net out any termination value, payment amount, or 

13 other transfer obligation arising under or in connec14 tion with 1 or more such agreements, including any 

15 master agreement for such agreements;’’; 

16 (B) by striking paragraph (17) and insert17 ing the following: 

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

19 the exercise by a swap participant or financial par20 ticipant of any contractual right (as defined in sec21 tion 560) under any security agreement or arrange22 ment or other credit enhancement forming a part of 

23 or related to any swap agreement, or of any contrac24 tual right (as defined in section 560) to offset or net 

25 out any termination value, payment amount, or 


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1 other transfer obligation arising under or in connec2 tion with 1 or more such agreements, including any 

3 master agreement for such agreements;’’; and 

4 (C) by striking paragraph (27) and insert5 ing the following: 

6 ‘‘(27) under subsection (a) of this section, of 

7 the exercise by a master netting agreement partici8 pant of any contractual right (as defined in section 

9 555, 556, 559, or 560) under any security agree10 ment or arrangement or other credit enhancement 

11 forming a part of or related to any master netting 

12 agreement, or of any contractual right (as defined in 

13 section 555, 556, 559, or 560) to offset or net out 

14 any termination value, payment amount, or other 

15 transfer obligation arising under or in connection 

16 with 1 or more such master netting agreements to 

17 the extent that such participant is eligible to exercise 

18 such rights under paragraph (6), (7), or (17) for 

19 each individual contract covered by the master net20 ting agreement in issue; and’’; and 

21 (3) in section 741(7)(A)— 

22 (A) in clause (i)— 

23 (i) by striking ‘‘mortgage loan or’’ 

24 and inserting ‘‘mortgage loan,’’; and 


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1 (ii) by inserting before the semicolon 

2 ‘‘(whether or not such repurchase or re3 verse repurchase transaction is a ‘repur4 chase agreement’, as defined in section 

5 101)’’; 

6 (B) in clause (iii)— 

7 (i) by inserting ‘‘(including by nova8 tion)’’ after ‘‘the guarantee’’; and 

9 (ii) by inserting before the semicolon 

10 ‘‘(whether or not such settlement is in con11 nection with any agreement or transaction 

12 referred to in clauses (i) through (xi))’’; 

13 (C) in clause (viii), by striking ‘‘or (vii)’’ 

14 each place it appears and inserting ‘‘(vii), (viii), 

15 or (ix)’’; 

16 (D) by redesignating clauses (v) through 

17 (ix) as clauses (vii) through (xi), respectively; 

18 and 

19 (E) by inserting after clause (iv) the fol20 lowing: 

21 ‘‘(v) any extension of credit for 

22 the clearance or settlement of securi23 ties transactions; 

24 ‘‘(vi) any loan transaction cou25 pled with a securities collar transVerDate Aug 31 2005 17:11 Oct 01, 2006 Jkt 049196 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H5585.RDS H5585

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1 action, any prepaid forward securities 

2 transaction, or any total return swap 

3 transaction coupled with a securities 

4 sale transaction;’’. 

5 (b) LIMITATION OF AVOIDANCE POWERS UNDER

6 MASTER NETTING AGREEMENT.—Section 546 of title 11, 

7 United States Code, is amended— 

8 (1) in subsection (e)— 

9 (A) by inserting ‘‘(or for the benefit of)’’ 

10 before ‘‘a commodity broker’’; and 

11 (B) by inserting ‘‘or that is a transfer 

12 made by or to (or for the benefit of) a com13 modity broker, forward contract merchant, 

14 stockbroker, financial institution, financial par15 ticipant, or securities clearing agency, in con16 nection with a securities contract, as defined in 

17 section 741(7), commodity contract, as defined 

18 in section 761(4), or forward contract,’’ after 

19 ‘‘securities clearing agency,’’; 

20 (2) in subsection (f)— 

21 (A) by striking ‘‘that is a margin payment, 

22 as defined in section 741 or 761 of this title, 

23 or settlement payment, as defined in section 

24 741 of this title,’’; and 


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1 (B) by inserting ‘‘(or for the benefit of)’’ 

2 before ‘‘a repo participant’’; 

3 (3) in subsection (g), by inserting ‘‘(or for the 

4 benefit of)’’ before ‘‘a swap participant’’; and 

5 (4) in subsection (j), by inserting ‘‘(or for the 

6 benefit of)’’ after ‘‘made by or to’’. 

7 (c) SIPC STAY.—Section 5(b)(2)(C)(iii) of the Secu8 rities Investor Protection Act of 1970 (15 U.S.C. 

9 78eee(b)(2)(C)(iii)) is amended— 

10 (1) by inserting ‘‘a derivatives clearing organi11 zation (as defined in the Commodity Exchange Act), 

12 a multilateral clearing organization (as defined in 

13 the Federal Deposit Insurance Corporation Improve14 ment Act of 1991),’’ after ‘‘rule or bylaw of’’; and 

15 (2) by striking ‘‘or a securities clearance agen16 cy, a right set forth in a bylaw of a clearing organi17 zation or contract market’’ and inserting ‘‘a securi18 ties clearing agency, a contract market designated 

19 under the Commodity Exchange Act, a derivatives 

20 transaction execution facility registered under the 

21 Commodity Exchange Act, or a board of trade (as 

22 defined in the Commodity Exchange Act),’’. 

23 (d) SAVINGS CLAUSE.—Title IX of the Bankruptcy 

24 Abuse Prevention and Consumer Protection Act of 2005 


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1 (Public Law 109–8, 119 Stat. 146) is amended by adding 

2 at the end the following: 

3 ‘‘SEC. 912. SAVINGS CLAUSE. 

4 ‘‘The meanings of terms used in this title are applica5 ble for the purposes of this title only, and shall not be 

6 construed or applied so as to challenge or affect the char7 acterization, definition, or treatment of any similar terms 

8 under any other statute, regulation, or rule, including the 

9 Gramm-Leach-Bliley Act, the Legal Certainty for Bank 

10 Products Act of 2000, the securities laws (as such term 

11 is defined in section 3(a)(47) of the Securities Exchange 

12 Act of 1934), and the Commodity Exchange Act.’’. 

13 SEC. 6. WALKAWAY CLAUSES. 

14 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS.— 

15 Section 11(e)(8)(G) of the Federal Deposit Insurance Act 

16 (12 U.S.C. 1821(e)(8)(G)) is amended by striking clause 

17 (ii) and inserting the following new clauses: 

18 ‘‘(ii) LIMITED SUSPENSION OF CER19 TAIN OBLIGATIONS.—In the case of a 

20 qualified financial contract referred to in 

21 clause (i), any payment or delivery obliga22 tions otherwise due from a party pursuant 

23 to the qualified financial contract shall be 

24 suspended from the time the receiver is ap25 pointed until the earlier of— 


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1 ‘‘(I) the time such party receives 

2 notice that such contract has been 

3 transferred pursuant to subparagraph 

4 (A); or 

5 ‘‘(II) 5:00 p.m. (eastern time) on 

6 the business day following the date of 

7 the appointment of the receiver. 

8 ‘‘(iii) WALKAWAY CLAUSE DE9 FINED.—For purposes of this subpara10 graph, the term ‘walkaway clause’ means 

11 any provision in a qualified financial con12 tract that suspends, conditions, or extin13 guishes a payment obligation of a party, in 

14 whole or in part, or does not create a pay15 ment obligation of a party that would oth16 erwise exist, solely because of such party’s 

17 status as a nondefaulting party in connec18 tion with the insolvency of an insured de19 pository institution that is a party to the 

20 contract or the appointment of or the exer21 cise of rights or powers by a conservator or 

22 receiver of such depository institution, and 

23 not as a result of a party’s exercise of any 

24 right to offset, setoff, or net obligations 

25 that exist under the contract, any other 


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1 contract between those parties, or applica2 ble law.’’. 

3 (b) INSURED CREDIT UNIONS.—Section 

4 207(c)(8)(G) of the Federal Credit Union Act 12 U.S.C. 

5 1787(c)(8)(G)) is amended by striking clause (ii) and in6 serting the following new clauses: 

7 ‘‘(ii) LIMITED SUSPENSION OF CER8 TAIN OBLIGATIONS.—In the case of a 

9 qualified financial contract referred to in 

10 clause (i), any payment or delivery obliga11 tions otherwise due from a party pursuant 

12 to the qualified financial contract shall be 

13 suspended from the time the liquidating 

14 agent is appointed until the earlier of— 

15 ‘‘(I) the time such party receives 

16 notice that such contract has been 

17 transferred pursuant to subparagraph 

18 (A); or 

19 ‘‘(II) 5:00 p.m. (eastern time) on 

20 the business day following the date of 

21 the appointment of the liquidating 

22 agent. 

23 ‘‘(iii) WALKAWAY CLAUSE DE24 FINED.—For purposes of this subpara25 graph, the term ‘walkaway clause’ means 


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1 any provision in a qualified financial con2 tract that suspends, conditions, or extin3 guishes a payment obligation of a party, in 

4 whole or in part, or does not create a pay5 ment obligation of a party that would oth6 erwise exist, solely because of such party’s 

7 status as a nondefaulting party in connec8 tion with the insolvency of an insured cred9 it union or the appointment of or the exer10 cise of rights or powers by a conservator or 

11 liquidating agent of such credit union, and 

12 not as a result of a party’s exercise of any 

13 right to offset, setoff, or net obligations 

14 that exist under the contract, any other 

15 contract between those parties, or applica16 ble law.’’. 

17 SEC. 7. COMPENSATION OF CHAPTER 7 TRUSTEES; CHAP18 TER 7 FILING FEES. 

19 (a) AMENDMENTS TO TITLE 11 OF THE UNITED

20 STATES CODE.— 

21 (1) COMPENSATION OF CHAPTER 7 TRUST22 EES.—Section 330(b)(1) of title 11, United States 

23 Code, is amended— 

24 (A) by striking ‘‘$45’’ and inserting 

25 ‘‘$100’’, and 


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1 (B) by inserting before the period at the 

2 end the following: 

3 ‘‘, except that such amount shall be adjusted by the 

4 amount (if any) of such filing fee waived under the 2d 

5 sentence of section 1930(f)(1) of title 28’’. 

6 (2) RELATED AMENDMENTS.—Section 330(b) 

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

8 (A) by striking ‘‘(1)’’, and 

9 (B) by striking paragraph (2). 

10 (b) AMENDMENTS TO TITLE 28 OF THE UNITED

11 STATES CODE.— 

12 (1) CHAPTER 7 FILING FEE.—Section 1930 of 

13 title 28 of the United States Code, as amended by 

14 section 10101 of Public Law 109-171, is amended— 

15 (A) in subsection (a)(1)(A) by striking 

16 ‘‘$245’’ and inserting ‘‘$300’’, and 

17 (B) in subsection (f)(1) by inserting after 

18 the 1st sentence the following: 

19 ‘‘Under the procedures prescribed by the Judicial Con20 ference of the United States, the district court or the 

21 bankruptcy court shall waive $40 of the filing fee required 

22 by subsection (a) in a case under chapter 7 of title 11 

23 for an individual if the court determines that such indi24 vidual has income not less than 150 percent, and not more 

25 than 175 percent, of the income official poverty line (as 


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1 defined by the Office of Management and Budget, and re2 vised annually in accordance with section 673(2) of the 

3 Omnibus Budget Reconciliation Act of 1981) applicable 

4 to a family of the size involved.’’. 

5 (2) UNITED STATES TRUSTEE FUND.—Section 

6 589a(b)(1)(A) of title 28, United States Code, is 

7 amended by striking ‘‘40.46 percent of the fees col8 lected under section 1930(a)(1)(A)’’ and inserting 

9 ‘‘29.67 percent of the sum of the amount of fees col10 lected under section 1930(a)(1)(A) and the amount 

11 of fees waived under the 2d sentence of section 

12 1930(f)(1)’’. 

13 (c) RELATED AMENDMENT REGARDING COLLEC14 TIONS AND DEPOSITS OF MISCELLANEOUS BANKRUPTCY

15 FEES.—Section 406(b) of the Judiciary Appropriations 

16 Act, 1990 (28 U.S.C. 1931 note) is amended by striking 

17 ‘‘28.87 percent of the fees collected under section 

18 1930(a)(1)(A) of that title’’ and inserting ‘‘21.17 percent 

19 of the sum of the amount of fees collected under section 

20 1930(a)(1)(A) of that title and the amount of fees waived 

21 under the 2d sentence of section 1930(f)(1)) of that title’’. 

22 (d) CONFORMING AMENDMENT.—Section 10101(a) 

23 of Public Law 109–171 is amended by striking paragraph 

24 (2). 


rwilkins on PROD1PC63 with BILLS
25 

HR 5585 RDS 

1 (e) EFFECTIVE DATE; APPLICATION OF AMEND2 MENTS.—The amendments made by this section shall take 

3 effect 120 days after the date of the enactment of this 

4 Act and shall not apply with respect to cases commenced 

5 under title 11 of the United States Code before the date 

6 such amendments take effect. 

7 SEC. 8. SCOPE OF APPLICATION. 

8 Subject to section 7(e), the amendments made by this 

9 Act shall not apply to any cases commenced under title 

10 11, United States Code, or appointments made under any 

11 Federal or State law, before the date of the enactment 

12 of this Act. 

Passed the House of Representatives September 27, 

2006. 

Attest: KAREN L. HAAS, 

Clerk. 


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