Calendar No. 205

105TH CONGRESS

1ST SESSION S. 1149

A BILL

To amend title 11, United States Code, to provide

purposes.for increased education funding, and for other

OCTOBER 9, 1997

Reported with an amendment
II

Calendar No. 205

105TH CONGRESS

1ST SESSION S. 1149

To amend title 11, United States Code, to provide for increased education

funding, and for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 4, 1997

Mr. GRASSLEY (for himself, Mr. DURBIN, Mr. COVERDELL, Mr. SHELBY, and

Mr. KYL) introduced the following bill; which was read twice and referred

to the Committee on the Judiciary

OCTOBER 9, 1997

Reported by Mr. HATCH, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend title 11, United States Code, to provide for

increased education funding, 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.

4 This Act may be cited as the ‘‘Investment in Edu5 cation Act of 1997’’.
2

S 1149 RS

1 SEC. 2. TREATMENT OF CERTAIN LIENS.

2 (a) TREATMENT OF CERTAIN LIENS.—Section 724

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

4 (1) in subsection (b), in the matter preceding

5 paragraph (1), by inserting ‘‘(other than to the ex6 tent that there is properly perfected unavoidable tax

7 lien arising in connection with an ad valorem tax on

8 real or personal property of the estate)’’ after

9 ‘‘under this title’’;

10 (2) in subsection (b)(2), after ‘‘507(a)(1)’’ and

11 before the comma following thereafter insert ‘‘(ex12 cept that such expenses, other than claims for

13 wages, salaries or commissions which arise after the

14 filing of a petition, shall be limited to expenses in15 curred under Chapter 7 of this title and shall not in16 clude expenses incurred under Chapter 11 of this

17 title)’’; and

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

19 ‘‘(e) Before subordinating a tax lien on real or per20 sonal property of the estate which has arisen by virtue

21 of state law, the trustee shall—

22 ‘‘(1) exhaust the unencumbered assets of the

23 estate; and

24 ‘‘(2) in a manner consistent with section 506(c)

25 of this title, recover from property securing an al26 lowed secured claim the reasonable, necessary costs
3

S 1149 RS

1 and expenses of preserving or disposing of that prop2 erty.

3 ‘‘(f) Notwithstanding the exclusion of ad valorem tax

4 liens set forth in this Section, claims for wages, salaries

5 and commissions entitled to priority under Section

6 507(a)(3) or claims for contributions to an employee bene7 fit plan entitled to priority under 507(a)(4) may be paid

8 from property of the estate which secures a tax lien, or

9 the proceeds of such property subject to the requirements

10 of Subsection 724(e).’’.

11 (b) DETERMINATION OF TAX LIABILITY.—Section

12 505(a)(2) of title 11, United States Code, is amended—

13 (1) by striking ‘‘or’’ at the end of subparagraph

14 (A);

15 (2) by striking the period at the end of sub16 paragraph (B) and inserting ‘‘; or’’; and

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

18 ‘‘(C) the amount or legality of any amount

19 arising in connection with an ad valorem tax

20 real or personal property of the estate if the ap21 plicable period for contesting or redetermining

22 that amount under any law (other than a bank23 ruptcy law) has expired.’’.
4

S 1149 RS

1 SEC. 3. ENFORCEMENT OF CHILD AND SPOUSAL SUPPORT.

2 Section 522(c)(1) of title 11, United States Code, is

3 amended by inserting ‘‘provided that, notwithstanding any

4 federal or state law relating to the enforcement of liens

5 or judgements on exempted property, exempt property

6 shall be liable for debts of a kind specified in Section

7 523(a)(5) of this title,’’ at the end of the subsection.

8 SECTION 1. SHORT TITLE.

9 This Act may be cited as the ‘‘Investment in Education

10 Act of 1997’’.

11 SEC. 2. TREATMENT OF CERTAIN LIENS.

12 (a) TREATMENT OF CERTAIN LIENS.—Section 724 of

13 title 11, United States Code, is amended—

14 (1) in subsection (b), in the matter preceding

15 paragraph (1), by inserting ‘‘(other than to the extent

16 that there is a properly perfected unavoidable tax lien

17 arising in connection with an ad valorem tax on real

18 or personal property of the estate)’’ after ‘‘under this

19 title’’;

20 (2) in subsection (b)(2), after ‘‘507(a)(1)’’, insert

21 ‘‘(except that such expenses, other than claims for

22 wages, salaries, or commissions which arise after the

23 filing of a petition, shall be limited to expenses in24 curred under chapter 7 of this title and shall not in25 clude expenses incurred under chapter 11 of this

26 title)’’; and
5

S 1149 RS

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 es5 tate; and

6 ‘‘(2) in a manner consistent with section 506(c)

7 of this title, recover from property securing an al8 lowed secured claim the reasonable, necessary costs

9 and expenses of preserving or disposing of that prop10 erty.

11 ‘‘(f) Notwithstanding the exclusion of ad valorem tax

12 liens set forth in this section and subject to the requirements

13 of subsection (e)—

14 ‘‘(1) claims for wages, salaries, and commissions

15 that are entitled to priority under section 507(a)(3)

16 of this title; or

17 ‘‘(2) claims for contributions to an employee ben18 efit plan entitled to priority under section 507(a)(4)

19 of this title,

20 may be paid from property of the estate which secures a

21 tax lien, or the proceeds of such property.’’.

22 (b) DETERMINATION OF TAX LIABILITY.—Section

23 505(a)(2) of title 11, United States Code, is amended—

24 (1) in subparagraph (A), by striking ‘‘or’’ at the

25 end;
6

S 1149 RS

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. 3. ENFORCEMENT OF CHILD AND SPOUSAL SUPPORT.

11 Section 522(c)(1) of title 11, United States Code, is

12 amended by inserting ‘‘, except that, notwithstanding any

13 other Federal law or State law relating to exempted prop14 erty, exempt property shall be liable for debts of a kind spec15 ified in section 523(a) (1) or (5) of this title’’ before the

16 semicolon at the end of the paragraph.