IIA

105TH CONGRESS

1ST SESSION H. R. 764

IN THE SENATE OF THE UNITED STATES

NOVEMBER 13, 1997

Received; read twice and referred to the Committee on the Judiciary

AN ACT

To make technical corrections to title 11, 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,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Bankruptcy Amend3 ments of 1997’’.

4 SEC. 2. DEFINITIONS.

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

6 amended—

7 (1) by striking ‘‘In this title—’’ and inserting

8 ‘‘In this title:’’,

9 (2) in each paragraph by inserting ‘‘The term’’

10 after the paragraph designation,

11 (3) in paragraph (35)(B) by striking ‘‘para12 graphs (21B) and (33)(A)’’ and inserting ‘‘para13 graphs (23) and (35)’’,

14 (4) in paragraphs (35A) and (38) by striking ‘‘;

15 and’’ at the end and inserting a period,

16 (5) in paragraph (51B)—

17 (A) by inserting ‘‘who is not a family farm18 er’’ after ‘‘debtor’’ the first place it appears,

19 and

20 (B) by striking ‘‘$4,000,000’’ and insert21 ing ‘‘$15,000,000 as of the date of the filing of

22 the petition’’,

23 (6) by amending paragraph (54) to read as fol24 lows:

25 ‘‘(54) The term ‘transfer’ means—

26 ‘‘(A) creation of a lien;
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1 ‘‘(B) retention of title as a security inter2 est;

3 ‘‘(C) foreclosure of the debtor’s equity of

4 redemption; or

5 ‘‘(D) every mode, direct or indirect, abso6 lute or conditional, voluntary or involuntary, of

7 disposing of or parting with property or with an

8 interest in property;’’,

9 (7) in paragraphs (1) through (35), in para10 graphs (36) and (37), and in paragraphs (40)

11 through (55), including paragraph (54) as added by

12 this section, by striking the semicolon at the end and

13 inserting a period, and

14 (8) by redesignating paragraphs (4) through

15 (55), including paragraph (54) as added by this sec16 tion, in entirely numerical sequence.

17 SEC. 3. ADJUSTMENT OF DOLLAR AMOUNTS.

18 Section 104 of title 11, United States Code, is

19 amended by inserting ‘‘522(f)(3),’’ after ‘‘522(d),’’ each

20 place it appears.

21 SEC. 4. EXTENSION OF TIME.

22 Section 108(c)(2) of title 11, United States Code, is

23 amended by striking ‘‘922’’ and all that follows through

24 ‘‘or’’, and inserting ‘‘922, 1201, or’’.
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1 SEC. 5. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

2 FRAUDULENTLY PREPARE BANKRUPTCY PE3 TITIONS.

4 Section 110(j)(3) of title 11, United States Code, is

5 amended by striking ‘‘attorney’s’’ and inserting

6 ‘‘attorneys’ ’’.

7 SEC. 6. LIMITATION ON COMPENSATION OF PROFESSIONAL

8 PERSONS.

9 Section 328(a) of title 11, United States Code, is

10 amended by inserting ‘‘on a fixed or percentage fee basis,’’

11 after ‘‘hourly basis,’’.

12 SEC. 7. COMPENSATION TO OFFICERS.

13 Section 330(a) of title 11, United States Code, is

14 amended—

15 (1) in paragraph (1) by inserting ‘‘, or the

16 debtor’s attorney’’ after ‘‘1103’’, and

17 (2) in paragraph (3) by striking ‘‘(3)(A) In’’

18 and inserting ‘‘(3) In’’.

19 SEC. 8. SPECIAL TAX PROVISIONS.

20 Section 346(g)(1)(C) of title 11, United States Code,

21 is amended by striking ‘‘, except’’ and all that follows

22 through ‘‘1986’’.

23 SEC. 9. EFFECT OF CONVERSION.

24 Section 348(f)(2) of title 11, United States Code, is

25 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

26 first place it appears.
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1 SEC. 10. AUTOMATIC STAY.

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

3 amended—

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

5 end,

6 (2) in paragraph (18) by striking the period at

7 the end and inserting ‘‘; or’’, and

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

9 ‘‘(19) under subsection (a) of this section, of

10 any transfer that is not avoidable under section 544

11 and not avoidable under section 549.’’.

12 SEC. 11. DEFAULTS BASED ON NONMONETARY OBLIGA13 TIONS.

14 (a) EXECUTORY CONTRACTS AND UNEXPIRED

15 LEASES.—Section 365 of title 11, United States Code, is

16 amended—

17 (1) in subsection (b)—

18 (A) in paragraph (1)(A) by striking the

19 semicolon at the end and inserting the follow20 ing:

21 ‘‘other than a default that is a breach of a provision

22 relating to—

23 ‘‘(i) the satisfaction of any provision (other

24 than a penalty rate or penalty provision) relat25 ing to a default arising from any failure to per26 form nonmonetary obligations under an
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1 unexpired lease of real property, if it is impos2 sible for the trustee to cure such default by per3 forming nonmonetary acts at and after the time

4 of assumption; or

5 ‘‘(ii) the satisfaction of any provision

6 (other than a penalty rate or penalty provision)

7 relating to a default arising from any failure to

8 perform nonmonetary obligations under an ex9 ecutory contract, if it is impossible for the

10 trustee to cure such default by performing non11 monetary acts at and after the time of assump12 tion and if the court determines, based on the

13 equities of the case, that this subparagraph

14 should not apply with respect to such default;’’,

15 and

16 (B) by amending paragraph (2)(D) to read

17 as follows:

18 ‘‘(D) the satisfaction of any penalty rate or

19 penalty provision relating to a default arising from

20 a failure to perform nonmonetary obligations under

21 an executory contract or under an unexpired lease of

22 real or personal property.’’,

23 (2) in subsection (c)—

24 (A) in paragraph (2) by adding ‘‘or’’ at the

25 end,
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1 (B) in paragraph (3) by striking ‘‘; or’’ at

2 the end and inserting a period, and

3 (C) by striking paragraph (4),

4 (3) in subsection (d)—

5 (A) by striking paragraphs (5) through

6 (9), and

7 (B) by redesignating paragraph (10) as

8 paragraph(5).

9 (4) in subsection (f)(1) by striking ‘‘; except

10 that’’ and all that follows through the end of the

11 paragraph and inserting a period.

12 (b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec13 tion 1124(2) of title 11, United States Code, is amend14 ed—

15 (1) in subparagraph (A) by inserting ‘‘or of a

16 kind that section 365(b)(1)(A) of this title expressly

17 does not require to be cured’’ before the semicolon

18 at the end,

19 (2) in subparagraph (C) by striking ‘‘and’’ at

20 the end,

21 (3) by redesignating subparagraph (D) as sub22 paragraph (E), and

23 (4) by inserting after subparagraph (C) the fol24 lowing:
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1 ‘‘(D) if such claim or such interest arises

2 from any failure to perform a nonmonetary ob3 ligation, compensates the holder of such claim

4 or such interest (other than the debtor or an in5 sider) for any actual pecuniary loss incurred by

6 such holder as a result of such failure; and’’.

7 SEC. 12. AMENDMENT TO TABLE OF SECTIONS.

8 The table of sections for chapter 5 of title 11, United

9 States Code, is amended by striking the item relating to

10 section 556 and inserting the following:

‘‘556. Contractual right to liquidate a commodities contract or forward contract.’’.

11 SEC. 13. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

12 Section 503(b)(4) of title 11, United States Code, is

13 amended by inserting ‘‘subparagraph (A), (B), (C), (D),

14 or (E) of ’’ before ‘‘paragraph (3)’’.

15 SEC. 14. PRIORITIES.

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

17 amended—

18 (1) in paragraph (3)(B) by striking the semi19 colon at the end and inserting a period, and

20 (2) in paragraph (7) by inserting ‘‘unsecured’’

21 after ‘‘allowed’’.

22 SEC. 15. EXEMPTIONS.

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

24 amended—
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1 (1) in subsection (f)(1)(A)(ii)(II)—

2 (A) by striking ‘‘includes a liability des3 ignated as’’ and inserting ‘‘is for a liability that

4 is designated as, and is actually in the nature

5 of,’’, and

6 (B) by striking ‘‘, unless’’ and all that fol7 lows through ‘‘support.’’, and

8 (2) in subsection (g)(2) by striking ‘‘subsection

9 (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.

10 SEC. 16. EXCEPTIONS TO DISCHARGE.

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

12 amended—

13 (1) in subsection (a)(3) by striking ‘‘or (6)’’

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

15 (2) as amended by section 304(e) of Public Law

16 103–394 (108 Stat. 4133), in paragraph (15) by

17 transferring such paragraph so as to insert it after

18 paragraph (14) of subsection (a),

19 (3) in paragraph (9) by inserting ‘‘, watercraft,

20 or aircraft’’ after ‘‘motor vehicle’’,

21 (4) in subsection (a)(15), as so redesignated by

22 operation of paragraph (2), by inserting ‘‘to a

23 spouse, former spouse, or child of the debtor and’’

24 after ‘‘(15)’’,

25 (5) in subsection (a)(17)—
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1 (A) by striking ‘‘by a court’’ and inserting

2 ‘‘on a prisoner by any court’’,

3 (B) by striking ‘‘section 1915 (b) or (f)’’

4 and inserting ‘‘subsection (b) or (f)(2) of sec5 tion 1915’’, and

6 (C) by inserting ‘‘(or a similar non-Federal

7 law)’’ after ‘‘title 28’’ each place it appears, and

8 (6) in subsection (e) by striking ‘‘a insured’’

9 and inserting ‘‘an insured’’.

10 SEC. 17. EFFECT OF DISCHARGE.

11 Section 524(a)(3) of title 11, United States Code, is

12 amended by striking ‘‘section 523’’ and all that follows

13 through ‘‘or that’’, and inserting ‘‘section 523,

14 1228(a)(1), or 1328(a)(1) of this title, or that’’.

15 SEC. 18. PROTECTION AGAINST DISCRIMINATORY TREAT16 MENT.

17 Section 525(c) of title 11, United States Code, is

18 amended—

19 (1) in paragraph (1) by inserting ‘‘student’’ be20 fore ‘‘grant’’ the second place it appears, and

21 (2) in paragraph (2) by striking ‘‘the program

22 operated under part B, D, or E of ’’ and inserting

23 ‘‘any program operated under’’.
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1 SEC. 19. PROPERTY OF THE ESTATE.

2 Section 541(b)(4)(B)(ii) of title 11, United States

3 Code is amended by inserting ‘‘365 or’’ before ‘‘542’’.

4 SEC. 20. LIMITATIONS ON AVOIDING POWERS.

5 Section 546 of title 11, United States Code, is

6 amended by redesignating the second subsection (g) as

7 subsection (h).

8 SEC. 21. PREFERENCES.

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

10 amended—

11 (1) in subsection (b) by striking ‘‘subsection

12 (c)’’ and inserting ‘‘subsections (c) and (h)’’, and

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

14 ‘‘(h) If the trustee avoids under subsection (b) a secu15 rity interest given between 90 days and 1 year before the

16 date of the filing of the petition, by the debtor to an entity

17 that is not an insider for the benefit of a creditor that

18 is an insider, then such security interest shall be consid19 ered to be avoided under this section only with respect

20 to the creditor that is an insider.’’.

21 SEC. 22. POSTPETITION TRANSACTIONS.

22 Section 549(c) of title 11, United States Code, is

23 amended—

24 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

25 of ’’,
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1 (2) by striking ‘‘such property’’ and inserting

2 ‘‘such real property’’, and

3 (3) by striking ‘‘the interest’’ and inserting

4 ‘‘such interest’’.

5 SEC. 23. SETOFF.

6 Section 553(b)(1) of title 11, United States Code, is

7 amended by striking ‘‘362(b)(14)’’ and inserting

8 ‘‘362(b)(17)’’.

9 SEC. 24. DISPOSITION OF PROPERTY OF THE ESTATE.

10 Section 726(b) of title 11, United States Code, is

11 amended by striking ‘‘1009,’’.

12 SEC. 25. GENERAL PROVISIONS.

13 Section 901(a) of title 11, United States Code, is

14 amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.

15 SEC. 26. APPOINTMENT OF ELECTED TRUSTEE.

16 Section 1104(b) of title 11, United States Code, is

17 amended—

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

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

20 paragraph:

21 ‘‘(2)(A) If an eligible, disinterested trustee is elected

22 at a meeting of creditors under paragraph (1), the United

23 States trustee shall file a report certifying that election.

24 Upon the filing of a report under the preceding sentence—
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1 ‘‘(i) the trustee elected under paragraph (1)

2 shall be considered to have been selected and ap3 pointed for purposes of this section, and

4 ‘‘(ii) the service of any trustee appointed under

5 subsection (d) shall terminate.

6 ‘‘(B) In the case of any dispute arising out of an elec7 tion under subparagraph (A), the court shall resolve the

8 dispute.’’.

9 SEC. 27. ABANDONMENT OF RAILROAD LINE.

10 Section 1170(e)(1) of title 11, United States Code,

11 is amended by striking ‘‘section 11347’’ and inserting

12 ‘‘section 11326(a)’’.

13 SEC. 28. CONTENTS OF PLAN.

14 Section 1172(c)(1) of title 11, United States Code,

15 is amended by striking ‘‘section 11347’’ and inserting

16 ‘‘section 11326(a)’’.

17 SEC. 29. DISCHARGE.

18 Subsections (a) and (c) of section 1228 of title 11,

19 United States Code, are amended by striking

20 ‘‘1222(b)(10)’’ each place it appears and inserting

21 ‘‘1222(b)(9)’’.

22 SEC. 30. CONTENTS OF PLAN.

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

24 amended—
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1 (1) in subsection (b) by striking ‘‘(c)’’ and in2 serting ‘‘(d)’’, and

3 (2) in subsection (e) by striking ‘‘default, shall’’

4 and inserting ‘‘default shall’’.

5 SEC. 31. DISCHARGE.

6 Paragraphs (1), (2), and (3) of section 1328(a) of

7 title 11, United States Code, are amended to read as fol8 lows:

9 ‘‘(1) provided for under section 1322(b)(5) of

10 this title;

11 ‘‘(2) of the kind specified in paragraph (5), (8),

12 or (9) of section 523(a) of this title; or

13 ‘‘(3) for restitution, or a criminal fine, included

14 in a sentence on the debtor’s conviction of a crime.’’.

15 SEC. 32. BANKRUPTCY CASES AND PROCEEDINGS.

16 Section 1334(d) of title 28, United States Code, is

17 amended—

18 (1) by striking ‘‘made under this subsection’’

19 and inserting ‘‘made under subsection (c)’’, and

20 (2) by striking ‘‘This subsection’’ and inserting

21 ‘‘Subsection (c) and this subsection’’.

22 SEC. 33. KNOWING DISREGARD OF BANKRUPTCY LAW OR

23 RULE.

24 Section 156(a) of title 18, United States Code, is

25 amended—
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1 (1) in the first undesignated paragraph—

2 (A) by inserting ‘‘(1) the term’’ before

3 ‘‘ ‘bankruptcy’’, and

4 (B) by striking the period at the end and

5 inserting ‘‘; and’’, and

6 (2) in the second undesignated paragraph—

7 (A) by inserting ‘‘(2) the term’’ before

8 ‘‘ ‘document’’, and

9 (B) by striking ‘‘this title’’ and inserting

10 ‘‘title 11’’.

11 SEC. 34. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

12 (a) EFFECTIVE DATE.—Except as provided in sub13 section (b), this Act and the amendments made by this

14 Act shall take effect on the date of the enactment of this

15 Act.

16 (b) APPLICATION OF AMENDMENTS.—The amend17 ments made by this Act shall apply only with respect to

18 cases commenced under title 11 of the United States Code

19 on or after the date of the enactment of this Act.

Passed the House of Representatives November 12,

1997.

Attest: ROBIN H. CARLE,

Clerk.