IB 
Union Calendar No. 131 
116TH CONGRESS 
1ST SESSION H. R. 3311 
[Report No. 116–171] 
To amend chapter 11 of title 11, United States Code, to address 
reorganization of small businesses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 18, 2019 
Mr. CLINE (for himself, Mr. CICILLINE, Mr. COLLINS of Georgia, and Mr. 
COHEN) introduced the following bill; which was referred to the Com-
mittee on the Judiciary 
JULY 23, 2019 
Committed to the Committee of the Whole House on the State of the Union 
and ordered to be printed 
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A BILL 
To amend chapter 11 of title 11, United States Code, to 
address reorganization of small businesses, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business Reor-
ganization Act of 2019’’. 
SEC. 2. REORGANIZATION OF SMALL BUSINESS DEBTORS. 
(a) IN GENERAL.—Chapter 11 of title 11, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘SUBCHAPTER V—SMALL BUSINESS DEBTOR 
REORGANIZATION 
‘‘§ 1181. Inapplicability of other sections 
‘‘(a) IN GENERAL.—Sections 105(d), 1101(1), 1104, 
1105, 1106, 1107, 1108, 1115, 1116, 1121, 1123(a)(8), 
1123(c), 1127, 1129(a)(15), 1129(b), 1129(c), 1129(e), 
and 1141(d)(5) of this title do not apply in a case under 
this subchapter. 
‘‘(b) COURT AUTHORITY.—Unless the court for cause 
orders otherwise, paragraphs (1), (2), and (4) of section 
1102(a) and sections 1102(b), 1103, and 1125 of this title 
do not apply in a case under this subchapter. 
‘‘(c) SPECIAL RULE FOR DISCHARGE.—If a plan is 
confirmed under section 1191(b) of this title, section 
1141(d) of this title shall not apply, except as provided 
in section 1192 of this title. 
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‘‘§ 1182. Definitions 
‘‘In this subchapter: 
‘‘(1) DEBTOR.—The term ‘debtor’ means a 
small business debtor. 
‘‘(2) DEBTOR IN POSSESSION.—The term ‘debt-
or in possession’ means the debtor, unless removed 
as debtor in possession under section 1185(a) of this 
title. 
‘‘§ 1183. Trustee 
‘‘(a) IN GENERAL.—If the United States trustee has 
appointed an individual under section 586(b) of title 28 
to serve as standing trustee in cases under this sub-
chapter, and if such individual qualifies as a trustee under 
section 322 of this title, then that individual shall serve 
as trustee in any case under this subchapter. Otherwise, 
the United States trustee shall appoint 1 disinterested 
person to serve as trustee in the case or the United States 
trustee may serve as trustee in the case, as necessary. 
‘‘(b) DUTIES.—The trustee shall— 
‘‘(1) perform the duties specified in paragraphs 
(2), (5), (6), (7), and (9) of section 704(a) of this 
title; 
‘‘(2) perform the duties specified in paragraphs 
(3), (4), and (7) of section 1106(a) of this title, if 
the court, for cause and on request of a party in in-
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terest, the trustee, or the United States trustee, so 
orders; 
‘‘(3) appear and be heard at the status con-
ference under section 1188 of this title and any 
hearing that concerns— 
‘‘(A) the value of property subject to a 
lien; 
‘‘(B) confirmation of a plan filed under 
this subchapter; 
‘‘(C) modification of the plan after con-
firmation; or 
‘‘(D) the sale of property of the estate; 
‘‘(4) ensure that the debtor commences making 
timely payments required by a plan confirmed under 
this subchapter; 
‘‘(5) if the debtor ceases to be a debtor in pos-
session, perform the duties specified in section 
704(a)(8) and paragraphs (1), (2), and (6) of sec-
tion 1106(a) of this title, including operating the 
business of the debtor; 
‘‘(6) if there is a claim for a domestic support 
obligation with respect to the debtor, perform the 
duties specified in section 704(c) of this title; and 
‘‘(7) facilitate the development of a consensual 
plan of reorganization. 
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‘‘(c) TERMINATION OF TRUSTEE SERVICE.— 
‘‘(1) IN GENERAL.—If the plan of the debtor is 
confirmed under section 1191(a) of this title, the 
service of the trustee in the case shall terminate 
when the plan has been substantially consummated, 
except that the United States trustee may reappoint 
a trustee as needed for performance of duties under 
subsection (b)(3)(C) of this section and section 
1185(a) of this title. 
‘‘(2) SERVICE
OF
NOTICE
OF
SUBSTANTIAL 
CONSUMMATION.—Not later than 14 days after the 
plan of the debtor is substantially consummated, the 
debtor shall file with the court and serve on the 
trustee, the United States trustee, and all parties in 
interest notice of such substantial consummation. 
‘‘§ 1184. Rights and powers of a debtor in possession 
‘‘Subject to such limitations or conditions as the 
court may prescribe, a debtor in possession shall have all 
the rights, other than the right to compensation under sec-
tion 330 of this title, and powers, and shall perform all 
functions and duties, except the duties specified in para-
graphs (2), (3), and (4) of section 1106(a) of this title, 
of a trustee serving in a case under this chapter, including 
operating the business of the debtor. 
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‘‘§ 1185. Removal of debtor in possession 
‘‘(a) IN GENERAL.—On request of a party in interest, 
and after notice and a hearing, the court shall order that 
the debtor shall not be a debtor in possession for cause, 
including fraud, dishonesty, incompetence, or gross mis-
management of the affairs of the debtor, either before or 
after the date of commencement of the case, or for failure 
to perform the obligations of the debtor under a plan con-
firmed under this subchapter. 
‘‘(b) REINSTATEMENT.—On request of a party in in-
terest, and after notice and a hearing, the court may rein-
state the debtor in possession. 
‘‘§ 1186. Property of the estate 
‘‘(a) INCLUSIONS.—If a plan is confirmed under sec-
tion 1191(b) of this title, property of the estate includes, 
in addition to the property specified in section 541 of this 
title— 
‘‘(1) all property of the kind specified in that 
section that the debtor acquires after the date of 
commencement of the case but before the case is 
closed, dismissed, or converted to a case under chap-
ter 7, 12, or 13 of this title, whichever occurs first; 
and 
‘‘(2) earnings from services performed by the 
debtor after the date of commencement of the case 
but before the case is closed, dismissed, or converted 
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to a case under chapter 7, 12, or 13 of this title, 
whichever occurs first. 
‘‘(b) DEBTOR REMAINING IN POSSESSION.—Except 
as provided in section 1185 of this title, a plan confirmed 
under this subchapter, or an order confirming a plan 
under this subchapter, the debtor shall remain in posses-
sion of all property of the estate. 
‘‘§ 1187. Duties and reporting requirements of debt-
ors 
‘‘(a) FILING REQUIREMENTS.—Upon electing to be 
a debtor under this subchapter, the debtor shall file the 
documents required by subparagraphs (A) and (B) of sec-
tion 1116(1) of this title. 
‘‘(b) OTHER APPLICABLE PROVISIONS.—A debtor, in 
addition to the duties provided in this title and as other-
wise required by law, shall comply with the requirements 
of section 308 and paragraphs (2), (3), (4), (5), (6), and 
(7) of section 1116 of this title. 
‘‘(c) SEPARATE DISCLOSURE STATEMENT EXEMP-
TION.—If the court orders under section 1181(b) of this 
title that section 1125 of this title applies, section 1125(f) 
of this title shall apply. 
‘‘§ 1188. Status conference 
‘‘(a) IN GENERAL.—Except as provided in subsection 
(b), not later than 60 days after the entry of the order 
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for relief under this chapter, the court shall hold a status 
conference to further the expeditious and economical reso-
lution of a case under this subchapter. 
‘‘(b) EXCEPTION.—The court may extend the period 
of time for holding a status conference under subsection 
(a) if the need for an extension is attributable to cir-
cumstances for which the debtor should not justly be held 
accountable. 
‘‘(c) REPORT.—Not later than 14 days before the 
date of the status conference under subsection (a), the 
debtor shall file with the court and serve on the trustee 
and all parties in interest a report that details the efforts 
the debtor has undertaken and will undertake to attain 
a consensual plan of reorganization. 
‘‘§ 1189. Filing of the plan 
‘‘(a) WHO MAY FILE A PLAN.—Only the debtor may 
file a plan under this subchapter. 
‘‘(b) DEADLINE.—The debtor shall file a plan not 
later than 90 days after the order for relief under this 
chapter, except that the court may extend the period if 
the need for the extension is attributable to circumstances 
for which the debtor should not justly be held accountable. 
‘‘§ 1190. Contents of plan 
‘‘A plan filed under this subchapter— 
‘‘(1) shall include— 
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‘‘(A) a brief history of the business oper-
ations of the debtor; 
‘‘(B) a liquidation analysis; and 
‘‘(C) projections with respect to the ability 
of the debtor to make payments under the pro-
posed plan of reorganization; 
‘‘(2) shall provide for the submission of all or 
such portion of the future earnings or other future 
income of the debtor to the supervision and control 
of the trustee as is necessary for the execution of the 
plan; and 
‘‘(3) notwithstanding section 1123(b)(5) of this 
title, may modify the rights of the holder of a claim 
secured only by a security interest in real property 
that is the principal residence of the debtor if the 
new value received in connection with the granting 
of the security interest was— 
‘‘(A) not used primarily to acquire the real 
property; and 
‘‘(B) used primarily in connection with the 
small business of the debtor. 
‘‘§ 1191. Confirmation of plan 
‘‘(a) TERMS.—The court shall confirm a plan under 
this subchapter only if all of the requirements of section 
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1129(a), other than paragraph (15) of that section, of this 
title are met. 
‘‘(b) EXCEPTION.—Notwithstanding section 510(a) 
of this title, if all of the applicable requirements of section 
1129(a) of this title, other than paragraphs (8), (10), and 
(15) of that section, are met with respect to a plan, the 
court, on request of the debtor, shall confirm the plan not-
withstanding the requirements of such paragraphs if the 
plan does not discriminate unfairly, and is fair and equi-
table, with respect to each class of claims or interests that 
is impaired under, and has not accepted, the plan. 
‘‘(c) RULE OF CONSTRUCTION.—For purposes of this 
section, the condition that a plan be fair and equitable 
with respect to each class of claims or interests includes 
the following requirements: 
‘‘(1) With respect to a class of secured claims, 
the 
plan 
meets 
the 
requirements 
of 
section 
1129(b)(2)(A) of this title. 
‘‘(2) As of the effective date of the plan— 
‘‘(A) the plan provides that all of the pro-
jected disposable income of the debtor to be re-
ceived in the 3-year period, or such longer pe-
riod not to exceed 5 years as the court may fix, 
beginning on the date that the first payment is 
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due under the plan will be applied to make pay-
ments under the plan; or 
‘‘(B) the value of the property to be dis-
tributed under the plan in the 3-year period, or 
such longer period not to exceed 5 years as the 
court may fix, beginning on the date on which 
the first distribution is due under the plan is 
not less than the projected disposable income of 
the debtor. 
‘‘(3)(A)(i) The debtor will be able to make all 
payments under the plan; or 
‘‘(ii) there is a reasonable likelihood that the 
debtor will be able to make all payments under the 
plan; and 
‘‘(B) the plan provides appropriate remedies, 
which may include the liquidation of nonexempt as-
sets, to protect the holders of claims or interests in 
the event that the payments are not made. 
‘‘(d) DISPOSABLE INCOME.—For purposes of this 
section, the term ‘disposable income’ means the income 
that is received by the debtor and that is not reasonably 
necessary to be expended— 
‘‘(1) for— 
‘‘(A) the maintenance or support of the 
debtor or a dependent of the debtor; or 
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‘‘(B) a domestic support obligation that 
first becomes payable after the date of the filing 
of the petition; or 
‘‘(2) for the payment of expenditures necessary 
for the continuation, preservation, or operation of 
the business of the debtor. 
‘‘(e) 
SPECIAL
RULE.—Notwithstanding 
section 
1129(a)(9)(A) of this title, a plan that provides for the 
payment through the plan of a claim of a kind specified 
in paragraph (2) or (3) of section 507(a) of this title may 
be confirmed under subsection (b) of this section. 
‘‘§ 1192. Discharge 
‘‘If the plan of the debtor is confirmed under section 
1191(b) of this title, as soon as practicable after comple-
tion by the debtor of all payments due within the first 
3 years of the plan, or such longer period not to exceed 
5 years as the court may fix, unless the court approves 
a written waiver of discharge executed by the debtor after 
the order for relief under this chapter, the court shall 
grant the debtor a discharge of all debts provided in sec-
tion 1141(d)(1)(A) of this title, and all other debts allowed 
under section 503 of this title and provided for in the plan, 
except any debt— 
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‘‘(1) on which the last payment is due after the 
first 3 years of the plan, or such other time not to 
exceed 5 years fixed by the court; or 
‘‘(2) of the kind specified in section 523(a) of 
this title. 
‘‘§ 1193. Modification of plan 
‘‘(a) MODIFICATION BEFORE CONFIRMATION.—The 
debtor may modify a plan at any time before confirmation, 
but may not modify the plan so that the plan as modified 
fails to meet the requirements of sections 1122 and 1123 
of this title, with the exception of subsection (a)(8) of such 
section 1123. After the modification is filed with the court, 
the plan as modified becomes the plan. 
‘‘(b) MODIFICATION AFTER CONFIRMATION.—If a 
plan has been confirmed under section 1191(a) of this 
title, the debtor may modify the plan at any time after 
confirmation of the plan and before substantial con-
summation of the plan, but may not modify the plan so 
that the plan as modified fails to meet the requirements 
of sections 1122 and 1123 of this title, with the exception 
of subsection (a)(8) of such section 1123. The plan, as 
modified under this subsection, becomes the plan only if 
circumstances warrant the modification and the court, 
after notice and a hearing, confirms the plan as modified 
under section 1191(a) of this title. 
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‘‘(c) CERTAIN OTHER MODIFICATIONS.—If a plan 
has been confirmed under section 1191(b) of this title, the 
debtor may modify the plan at any time within 3 years, 
or such longer time not to exceed 5 years, as fixed by the 
court, but may not modify the plan so that the plan as 
modified fails to meet the requirements of section 1191(b) 
of this title. The plan as modified under this subsection 
becomes the plan only if circumstances warrant such 
modification and the court, after notice and a hearing, 
confirms such plan, as modified, under section 1191(b) of 
this title. 
‘‘(d) HOLDERS OF A CLAIM OR INTEREST.—If a plan 
has been confirmed under section 1191(a) of this title, any 
holder of a claim or interest that has accepted or rejected 
the plan is deemed to have accepted or rejected, as the 
case may be, the plan as modified, unless, within the time 
fixed by the court, such holder changes the previous ac-
ceptance or rejection of the holder. 
‘‘§ 1194. Payments 
‘‘(a) RETENTION
AND DISTRIBUTION
BY TRUST-
EE.—Payments and funds received by the trustee shall be 
retained by the trustee until confirmation or denial of con-
firmation of a plan. If a plan is confirmed, the trustee 
shall distribute any such payment in accordance with the 
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plan. If a plan is not confirmed, the trustee shall return 
any such payments to the debtor after deducting— 
‘‘(1) any unpaid claim allowed under section 
503(b) of this title; 
‘‘(2) any payment made for the purpose of pro-
viding adequate protection of an interest in property 
due to the holder of a secured claim; and 
‘‘(3) any fee owing to the trustee. 
‘‘(b) OTHER PLANS.—If a plan is confirmed under 
section 1191(b) of this title, except as otherwise provided 
in the plan or in the order confirming the plan, the trustee 
shall make payments to creditors under the plan. 
‘‘(c) PAYMENTS PRIOR TO CONFIRMATION.—Prior to 
confirmation of a plan, the court, after notice and a hear-
ing, may authorize the trustee to make payments to the 
holder of a secured claim for the purpose of providing ade-
quate protection of an interest in property. 
‘‘§ 1195. Transactions with professionals 
‘‘Notwithstanding section 327(a) of this title, a per-
son is not disqualified for employment under section 327 
of this title, by a debtor solely because that person holds 
a claim of less than $10,000 that arose prior to com-
mencement of the case.’’. 
(b) CLERICAL AMENDMENT.—The table of sub-
chapters at the beginning of chapter 11 of title 11, United 
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States Code, is amended by adding at the end the fol-
lowing: 
‘‘SUBCHAPTER V—SMALL BUSINESS DEBTOR REORGANIZATION 
‘‘1181. Inapplicability of other sections. 
‘‘1182. Definitions. 
‘‘1183. Trustee. 
‘‘1184. Rights and powers of a debtor in possession. 
‘‘1185. Removal of debtor in possession. 
‘‘1186. Property of the estate. 
‘‘1187. Duties and reporting requirements of debtors. 
‘‘1188. Status conference. 
‘‘1189. Filing of the plan. 
‘‘1190. Contents of plan. 
‘‘1191. Confirmation of plan. 
‘‘1192. Discharge. 
‘‘1193. Modification of plan. 
‘‘1194. Payments. 
‘‘1195. Transactions with professionals.’’. 
SEC. 3. PREFERENCES; VENUE OF CERTAIN PROCEEDINGS. 
(a) PREFERENCES.—Section 547(b) of title 11, 
United States Code, is amended by inserting ‘‘, based on 
reasonable due diligence in the circumstances of the case 
and taking into account a party’s known or reasonably 
knowable affirmative defenses under subsection (c),’’ after 
‘‘may’’. 
(b) VENUE
OF CERTAIN PROCEEDINGS.—Section 
1409(b) of title 28, United States Code, is amended by 
striking ‘‘$10,000’’ and inserting ‘‘$25,000’’. 
SEC. 4. CONFORMING AMENDMENTS. 
(a) TITLE 11.—Title 11, United States Code, is 
amended— 
(1) in section 101— 
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(A) in subsection (a), by inserting ‘‘, other 
than a case under subchapter V of chapter 11,’’ 
after ‘‘7 or 11’’; and 
(B) in subsection (b), by inserting ‘‘sub-
chapter V of chapter 11 or’’ after ‘‘In a case 
under’’; 
(5) in section 347— 
(A) in subsection (a)— 
(i) by inserting ‘‘1194,’’ after ‘‘726,’’; 
and 
(ii) by inserting ‘‘subchapter V of 
chapter 11,’’ after ‘‘chapter 7,’’; and 
(B) in subsection (b), by inserting ‘‘1194,’’ 
after ‘‘1173,’’; 
(6) in section 363(c)(1), by inserting ‘‘1183, 
1184,’’ after ‘‘1108,’’; 
(7) in section 364(a), by inserting ‘‘1183, 
1184,’’ after ‘‘1108,’’; 
(8) in section 523(a), in the matter preceding 
paragraph (1), by inserting ‘‘1192,’’ after ‘‘1141,’’; 
(9) in section 524— 
(A) in subsection (a)— 
(i) in paragraph (1), by inserting 
‘‘1192,’’ after ‘‘1141,’’; and 
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(ii) in paragraph (3), by inserting 
‘‘1192,’’ after ‘‘523,’’; 
(B) in subsection (c)(1), by inserting 
‘‘1192,’’ after ‘‘1141,’’; and 
(C) in subsection (d), by inserting ‘‘1192,’’ 
after ‘‘1141,’’; 
(10) in section 557(d)(3), by inserting ‘‘1183,’’ 
after ‘‘1104,’’; 
(11) in section 1102(a), by striking paragraph 
(3) and inserting the following: 
‘‘(3) Unless the court for cause orders other-
wise, a committee of creditors may not be appointed 
in a small business case or a case under subchapter 
V of this chapter.’’; and 
(12) in section 1146(a), by inserting ‘‘or 1191’’ 
after ‘‘1129’’. 
(b) TITLE 28.—Title 28 United States Code, is 
amended— 
(1) in section 586— 
(A) in subsection (a)(3), by inserting ‘‘(in-
cluding subchapter V of chapter 11)’’ after ‘‘7, 
11’’; 
(B) in subsection (b), by inserting ‘‘sub-
chapter V of chapter 11 or’’ after ‘‘cases 
under’’; 
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(C) in subsection (d)(1), by inserting ‘‘sub-
chapter V of chapter 11 or’’ after ‘‘cases 
under’’ each place that term appears; and 
(D) in subsection (e)— 
(i) in paragraph (1), by inserting 
‘‘subchapter V of chapter 11 or’’ after 
‘‘cases under’’; 
(ii) in paragraph (2), by inserting 
‘‘subchapter V of chapter 11 or’’ after 
‘‘cases under’’ each place that term ap-
pears; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(5) In the event that the services of the trustee in 
a case under subchapter V of chapter 11 of title 11 are 
terminated by dismissal or conversion of the case, or upon 
substantial consummation of a plan under section 
1183(c)(1) of that title, the court shall award compensa-
tion to the trustee consistent with services performed by 
the trustee and the limits on the compensation of the 
trustee established pursuant to paragraph (1) of this sub-
section.’’; 
(2) in section 589b— 
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(A) in subsection (a)(1), by inserting ‘‘sub-
chapter V of chapter 11 and’’ after ‘‘cases 
under’’; and 
(B) in subsection (d)— 
(i) in the matter preceding paragraph 
(1), by inserting ‘‘subchapter V of chapter 
11 and’’ after ‘‘trustees under’’; and 
(ii) in the undesignated matter fol-
lowing paragraph (8), by inserting ‘‘sub-
chapter V of chapter 11 and’’ after ‘‘cases 
under’’; and 
(3) in section 1930(a)(6)(A), by inserting ‘‘, 
other than under subchapter V,’’ after ‘‘chapter 11 
of title 11’’. 
SEC. 5. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
take effect 180 days after the date of enactment of this 
Act. 
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Union Calendar No. 131 
116TH CONGRESS 
1ST SESSION 
H. R. 3311 
[Report No. 116–171] 
A BILL 
To amend chapter 11 of title 11, United States 
Code, to address reorganization of small busi-
nesses, and for other purposes. 
JULY 23, 2019 
Committed to the Committee of the Whole House on the 
State of the Union and ordered to be printed 
VerDate Sep 11 2014 
01:13 Jul 24, 2019
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