287
(VIII), together with all supplements
to any such master agreement, with-
out regard to whether the master
agreement provides for an agreement
or transaction that is not a securities
contract under this clause, except that
the master agreement shall be consid-
ered to be a securities contract under
this clause only with respect to each
agreement or transaction under the
master agreement that is referred to
in subclause (I), (III), (IV), (V), (VI),
(VII), or (VIII); and
‘‘(X) means any security agree-
ment or arrangement or other credit
enhancement related to any agree-
ment or transaction referred to in this
clause.’’.
(c) DEFINITION OF COMMODITY CONTRACT.—Sec-
tion 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as fol-
lows:
‘‘(iii) COMMODITY
CONTRACT.—The
term ‘commodity contract’ means—
288
‘‘(I) with respect to a futures
commission merchant, a contract for
the purchase or sale of a commodity
for future delivery on, or subject to
the rules of, a contract market or
board of trade;
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign
future;
‘‘(III) with respect to a leverage
transaction 
merchant, 
a 
leverage
transaction;
‘‘(IV) with respect to a clearing
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the
rules of, a contract market or board
of trade that is cleared by such clear-
ing organization, or commodity option
traded on, or subject to the rules of,
a contract market or board of trade
that is cleared by such clearing orga-
nization;
‘‘(V) with respect to a commodity
options dealer, a commodity option;
289
‘‘(VI) any other agreement or
transaction that is similar to any
agreement or transaction referred to
in this clause;
‘‘(VII) any combination of the
agreements or transactions referred to
in this clause;
‘‘(VIII) any option to enter into
any agreement or transaction referred
to in this clause;
‘‘(IX) a master agreement that
provides for an agreement or trans-
action referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or
(VIII), together with all supplements
to any such master agreement, with-
out regard to whether the master
agreement provides for an agreement
or transaction that is not a com-
modity contract under this clause, ex-
cept that the master agreement shall
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement
290
that is referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or
(VIII); or
‘‘(X) any security agreement or
arrangement or other credit enhance-
ment related to any agreement or
transaction 
referred 
to 
in 
this
clause.’’.
(d) DEFINITION OF FORWARD CONTRACT.—Section
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:
‘‘(iv) 
FORWARD
CONTRACT.—The
term ‘forward contract’ means—
‘‘(I) a contract (other than a
commodity contract) for the purchase,
sale, or transfer of a commodity or
any similar good, article, service,
right, or interest which is presently or
in the future becomes the subject of
dealing in the forward contract trade,
or product or byproduct thereof, with
a maturity date more than 2 days
after the date the contract is entered
into, including, a repurchase trans-
action, reverse repurchase transaction,
291
consignment, 
lease, 
swap, 
hedge
transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment;
‘‘(II) any combination of agree-
ments or transactions referred to in
subclauses (I) and (III);
‘‘(III) any option to enter into
any agreement or transaction referred
to in subclause (I) or (II);
‘‘(IV) a master agreement that
provides for an agreement or trans-
action referred to in subclauses (I),
(II), or (III), together with all supple-
ments to any such master agreement,
without regard to whether the master
agreement provides for an agreement
or transaction that is not a forward
contract under this clause, except that
the master agreement shall be consid-
ered to be a forward contract under
this clause only with respect to each
agreement or transaction under the
292
master agreement that is referred to
in subclause (I), (II), or (III); or
‘‘(V) any security agreement or
arrangement or other credit enhance-
ment related to any agreement or
transaction referred to in subclause
(I), (II), (III), or (IV).’’.
(e) DEFINITION
OF REPURCHASE AGREEMENT.—
Section 11(e)(8)(D)(v) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read as
follows:
‘‘(v) REPURCHASE AGREEMENT.—The
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase
agreement)—
‘‘(I) means an agreement, includ-
ing related terms, which provides for
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in
the Securities Exchange Act of 1934),
mortgage loans, interests in mortgage-
related securities or mortgage loans,
eligible bankers’ acceptances, qualified
foreign government securities or secu-
293
rities that are direct obligations of, or
that are fully guaranteed by, the
United States or any agency of the
United States against the transfer of
funds by the transferee of such certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, loans, or inter-
ests with a simultaneous agreement
by such transferee to transfer to the
transferor thereof certificates of de-
posit, eligible bankers’ acceptances,
securities, loans, or interests as de-
scribed above, at a date certain not
later than 1 year after such transfers
or on demand, against the transfer of
funds, or any other similar agreement;
‘‘(II) does not include any repur-
chase obligation under a participation
in a commercial mortgage loan unless
the Corporation determines by regula-
tion, resolution, or order to include
any such participation within the
meaning of such term;
294
‘‘(III) means any combination of
agreements or transactions referred to
in subclauses (I) and (IV);
‘‘(IV) means any option to enter
into any agreement or transaction re-
ferred to in subclause (I) or (III);
‘‘(V) means a master agreement
that provides for an agreement or
transaction referred to in subclause
(I), (III), or (IV), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
repurchase 
agreement 
under 
this
clause, except that the master agree-
ment shall be considered to be a re-
purchase agreement under this sub-
clause only with respect to each agree-
ment or transaction under the master
agreement that is referred to in sub-
clause (I), (III), or (IV); and
‘‘(VI) means any security agree-
ment or arrangement or other credit
enhancement related to any agree-
295
ment or transaction referred to in
subclause (I), (III), (IV), or (V).
For purposes of this clause, the term
‘qualified foreign government security’
means a security that is a direct obligation
of, or that is fully guaranteed by, the cen-
tral government of a member of the Orga-
nization for Economic Cooperation and
Development (as determined by regulation
or order adopted by the appropriate Fed-
eral banking authority).’’.
(f) DEFINITION
OF SWAP AGREEMENT.—Section
11(e)(8)(D)(vi) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows:
‘‘(vi) SWAP AGREEMENT.—The term
‘swap agreement’ means—
‘‘(I) any agreement, including the
terms and conditions incorporated by
reference in any such agreement,
which is an interest rate swap, option,
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar,
cross-currency rate swap, and basis
swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other for-
296
eign exchange or precious metals
agreement; a currency swap, option,
future, or forward agreement; an eq-
uity index or equity swap, option, fu-
ture, or forward agreement; a debt
index or debt swap, option, future, or
forward agreement; a credit spread or
credit swap, option, future, or forward
agreement; a commodity index or
commodity swap, option, future, or
forward agreement; or a weather
swap, weather derivative, or weather
option;
‘‘(II) any agreement or trans-
action similar to any other agreement
or transaction referred to in this
clause that is presently, or in the fu-
ture becomes, regularly entered into
in the swap market (including terms
and conditions incorporated by ref-
erence in such agreement) and that is
a forward, swap, future, or option on
one or more rates, currencies, com-
modities, equity securities or other eq-
uity instruments, debt securities or
297
other debt instruments, or economic
indices or measures of economic risk
or value;
‘‘(III) any combination of agree-
ments or transactions referred to in
this clause;
‘‘(IV) any option to enter into
any agreement or transaction referred
to in this clause;
‘‘(V) a master agreement that
provides for an agreement or trans-
action referred to in subclause (I),
(II), (III), or (IV), together with all
supplements to any such master
agreement, without regard to whether
the master agreement contains an
agreement or transaction that is not a
swap agreement under this clause, ex-
cept that the master agreement shall
be considered to be a swap agreement
under this clause only with respect to
each agreement or transaction under
the master agreement that is referred
to in subclause (I), (II), (III), or (IV);
and
298
‘‘(VI) any security agreement or
arrangement or other credit enhance-
ment related to any agreements or
transactions referred to in subpara-
graph (I), (II), (III), (IV), or (V).
Such term is applicable for purposes of
this title only and shall not be construed or
applied so as to challenge or affect the
characterization, definition, or treatment of
any swap agreement under any other stat-
ute, regulation, or rule, including the Secu-
rities Act of 1933, the Securities Exchange
Act of 1934, the Public Utility Holding
Company Act of 1935, the Trust Indenture
Act of 1939, the Investment Company Act
of 1940, the Investment Advisers Act of
1940, the Securities Investor Protection
Act of 1970, the Commodity Exchange
Act, and the regulations promulgated by
the Securities and Exchange Commission
or the Commodity Futures Trading Com-
mission.’’.
(g) 
DEFINITION
OF
TRANSFER.—Section
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:
299
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ means every mode, direct or indirect,
absolute or conditional, voluntary or invol-
untary, of disposing of or parting with
property or with an interest in property,
including retention of title as a security in-
terest and foreclosure of the depository
institutions’s equity of redemption.’’.
(h) TREATMENT
OF QUALIFIED FINANCIAL CON-
TRACTS.—Section 11(e)(8) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(8)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘paragraph (10)’’ and in-
serting ‘‘paragraphs (9) and (10)’’;
(B) in clause (i), by striking ‘‘to cause the
termination or liquidation’’ and inserting ‘‘such
person has to cause the termination, liquida-
tion, or acceleration’’; and
(C) by striking clause (ii) and inserting the
following:
‘‘(ii) any right under any security
agreement or arrangement or other credit
enhancement related to one or more quali-
fied financial contracts described in clause
(i);’’; and
300
(2) in subparagraph (E), by striking clause (ii)
and inserting the following:
‘‘(ii) any right under any security
agreement or arrangement or other credit
enhancement related to one or more quali-
fied financial contracts described in clause
(i);’’.
(i) 
AVOIDANCE
OF
TRANSFERS.—Section
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section
5242 of the Revised Statutes of the United States (12
U.S.C. 91) or any other Federal or State law relating to
the avoidance of preferential or fraudulent transfers,’’ be-
fore ‘‘the Corporation’’.
SEC. 902. AUTHORITY OF THE CORPORATION WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS.
(a) IN GENERAL.—Section 11(e)(8) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is
amended—
(1) in subparagraph (E), by striking ‘‘other
than paragraph (12) of this subsection, subsection
(d)(9)’’ and inserting ‘‘other than subsections (d)(9)
and (e)(10)’’; and
301
(2) by adding at the end the following new sub-
paragraphs:
‘‘(F) CLARIFICATION.—No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
court or agency to limit or delay, in any man-
ner, the right or power of the Corporation to
transfer any qualified financial contract in ac-
cordance with paragraphs (9) and (10) of this
subsection or to disaffirm or repudiate any such
contract in accordance with subsection (e)(1) of
this section.
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.—
‘‘(i) IN
GENERAL.—Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway
clause shall be enforceable in a qualified fi-
nancial contract of an insured depository
institution in default.
‘‘(ii) WALKAWAY CLAUSE DEFINED.—
For purposes of this subparagraph, the
term ‘walkaway clause’ means a provision
302
in a qualified financial contract that, after
calculation of a value of a party’s position
or an amount due to or from 1 of the par-
ties in accordance with its terms upon ter-
mination, liquidation, or acceleration of the
qualified financial contract, either does not
create a payment obligation of a party or
extinguishes a payment obligation of a
party in whole or in part solely because of
such party’s status as a nondefaulting
party.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 11(e)(12)(A) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting
‘‘or the exercise of rights or powers by’’ after ‘‘the ap-
pointment of’’.
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF
QUALIFIED FINANCIAL CONTRACTS.
(a) TRANSFERS
OF QUALIFIED FINANCIAL CON-
TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9)
of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(9)) is amended to read as follows:
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
303
‘‘(A) IN GENERAL.—In making any trans-
fer of assets or liabilities of a depository institu-
tion in default which includes any qualified fi-
nancial contract, the conservator or receiver for
such depository institution shall either—
‘‘(i) transfer to one financial institu-
tion, other than a financial institution for
which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has
been appointed or which is otherwise the
subject of a bankruptcy or insolvency
proceeding—
‘‘(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the deposi-
tory institution in default;
‘‘(II) all claims of such person or
any affiliate of such person against
such depository institution under any
such contract (other than any claim
which, under the terms of any such
contract, is subordinated to the claims
of general unsecured creditors of such
institution);
304
‘‘(III) all claims of such deposi-
tory institution against such person or
any affiliate of such person under any
such contract; and
‘‘(IV) all property securing or
any other credit enhancement for any
contract described in subclause (I) or
any claim described in subclause (II)
or (III) under any such contract; or
‘‘(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other
credit enhancement referred to in clause (i)
(with respect to such person and any affil-
iate of such person).
‘‘(B) TRANSFER TO FOREIGN BANK, FOR-
EIGN FINANCIAL INSTITUTION, OR BRANCH OR
AGENCY OF A FOREIGN BANK OR FINANCIAL IN-
STITUTION.—In transferring any qualified fi-
nancial contract and related claims and prop-
erty under subparagraph (A)(i), the conservator
or receiver for the depository institution shall
not make such transfer to a foreign bank, fi-
nancial institution organized under the laws of
a foreign country, or a branch or agency of a
foreign bank or financial institution unless,
305
under the law applicable to such bank, financial
institution, branch or agency, to the qualified
financial contracts, and to any netting contract,
any security agreement or arrangement or other
credit enhancement related to one or more
qualified financial contracts, the contractual
rights of the parties to such qualified financial
contracts, netting contracts, security agree-
ments or arrangements, or other credit en-
hancements are enforceable substantially to the
same extent as permitted under this section.
‘‘(C) TRANSFER OF CONTRACTS SUBJECT
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
TION.—In the event that a conservator or re-
ceiver transfers any qualified financial contract
and related claims, property, and credit en-
hancements pursuant to subparagraph (A)(i)
and such contract is subject to the rules of a
clearing organization, the clearing organization
shall not be required to accept the transferee as
a member by virtue of the transfer.
‘‘(D) DEFINITION.—For purposes of this
paragraph, the term ‘financial institution’
means a broker or dealer, a depository institu-
tion, a futures commission merchant, or any
306
other institution, as determined by the Corpora-
tion by regulation to be a financial institution.’’.
(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT
COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is
amended in the material immediately following clause (ii)
by striking ‘‘the conservator’’ and all that follows through
the period and inserting the following: ‘‘the conservator
or receiver shall notify any person who is a party to any
such contract of such transfer by 5:00 p.m. (eastern time)
on the business day following the date of the appointment
of the receiver in the case of a receivership, or the business
day following such transfer in the case of a conservator-
ship.’’.
(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF
BRIDGE BANKS.—Section 11(e)(10) of the Federal De-
posit 
Insurance 
Act 
(12 
U.S.C. 
1821(e)(10)) 
is
amended—
(1) by redesignating subparagraph (B) as sub-
paragraph (D); and
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraphs:
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
307
‘‘(i) RECEIVERSHIP.—A person who is
a party to a qualified financial contract
with an insured depository institution may
not exercise any right that such person has
to terminate, liquidate, or net such con-
tract under paragraph (8)(A) of this sub-
section or section 403 or 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, solely by reason of
or incidental to the appointment of a re-
ceiver for the depository institution (or the
insolvency or financial condition of the de-
pository institution for which the receiver
has been appointed)—
‘‘(I) until 5:00 p.m. (eastern
time) on the business day following
the date of the appointment of the re-
ceiver; or
‘‘(II) after the person has re-
ceived notice that the contract has
been transferred pursuant to para-
graph (9)(A).
‘‘(ii) CONSERVATORSHIP.—A person
who is a party to a qualified financial con-
tract with an insured depository institution
308
may not exercise any right that such per-
son has to terminate, liquidate, or net such
contract under paragraph (8)(E) of this
subsection or sections 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason
of or incidental to the appointment of a
conservator for the depository institution
(or the insolvency or financial condition of
the depository institution for which the
conservator has been appointed).
‘‘(iii) NOTICE.—For purposes of this
paragraph, the Corporation as receiver or
conservator of an insured depository insti-
tution shall be deemed to have notified a
person who is a party to a qualified finan-
cial contract with such depository institu-
tion if the Corporation has taken steps
reasonably calculated to provide notice to
such person by the time specified in sub-
paragraph (A).
‘‘(C) TREATMENT
OF
BRIDGE
BANKS.—
The following institutions shall not be consid-
ered to be a financial institution for which a
conservator, receiver, trustee in bankruptcy, or
309
other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy
or insolvency proceeding for purposes of para-
graph (9):
‘‘(i) A bridge bank.
‘‘(ii) A depository institution orga-
nized by the Corporation, for which a con-
servator is appointed either—
‘‘(I) immediately upon the orga-
nization of the institution; or
‘‘(II) at the time of a purchase
and assumption transaction between
the depository institution and the Cor-
poration as receiver for a depository
institution in default.’’.
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR
REPUDIATION 
OF 
QUALIFIED 
FINANCIAL
CONTRACTS.
Section 11(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)) is amended—
(1) by redesignating paragraphs (11) through
(15) as paragraphs (12) through (16), respectively;
and
(2) by inserting after paragraph (10) the fol-
lowing new paragraph:
310
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION
OF
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising
the rights of disaffirmance or repudiation of a con-
servator or receiver with respect to any qualified fi-
nancial contract to which an insured depository in-
stitution is a party, the conservator or receiver for
such institution shall either—
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of
such person; and
‘‘(ii) the depository institution in de-
fault; or
‘‘(B) disaffirm or repudiate none of the
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or
any affiliate of such person).’’.
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER
AGREEMENTS.
Section 11(e)(8)(D)(vii) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to
read as follows:
‘‘(vii) 
TREATMENT
OF
MASTER
AGREEMENT
AS
ONE
AGREEMENT.—Any
master agreement for any contract or
311
agreement described in any preceding
clause of this subparagraph (or any master
agreement for such master agreement or
agreements), together with all supplements
to such master agreement, shall be treated
as a single agreement and a single quali-
fied financial contract. If a master agree-
ment contains provisions relating to agree-
ments or transactions that are not them-
selves qualified financial contracts, the
master agreement shall be deemed to be a
qualified financial contract only with re-
spect to those transactions that are them-
selves qualified financial contracts.’’.
SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION
IMPROVEMENT ACT OF 1991.
(a) DEFINITIONS.—Section 402 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4402) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A)(ii), by inserting
before the semicolon ‘‘, or is exempt from such
registration by order of the Securities and Ex-
change Commission’’; and
312
(B) in subparagraph (B), by inserting be-
fore the period ‘‘or that has been granted an
exemption under section 4(c)(1) of the Com-
modity Exchange Act’’;
(2) in paragraph (6)—
(A) by redesignating subparagraphs (B)
through (D) as subparagraphs (C) through (E),
respectively;
(B) by inserting after subparagraph (A)
the following new subparagraph:
‘‘(B) an uninsured national bank or an un-
insured State bank that is a member of the
Federal Reserve System, if the national bank or
State member bank is not eligible to make ap-
plication to become an insured bank under sec-
tion 5 of the Federal Deposit Insurance Act;’’;
and
(C) by amending subparagraph (C) (as re-
designated) to read as follows:
‘‘(C) a branch or agency of a foreign bank,
a foreign bank and any branch or agency of the
foreign bank, or the foreign bank that estab-
lished the branch or agency, as those terms are
defined in section 1(b) of the International
Banking Act of 1978;’’;
313
(3) in paragraph (11), by inserting before the
period ‘‘and any other clearing organization with
which such clearing organization has a netting con-
tract’’;
(4) by amending paragraph (14)(A)(i) to read
as follows:
‘‘(i) means a contract or agreement
between 2 or more financial institutions,
clearing organizations, or members that
provides for netting present or future pay-
ment obligations or payment entitlements
(including liquidation or closeout values re-
lating to such obligations or entitlements)
among the parties to the agreement; and’’;
and
(5) by adding at the end the following new
paragraph:
‘‘(15) PAYMENT.—The term ‘payment’ means a
payment of United States dollars, another currency,
or a composite currency, and a noncash delivery, in-
cluding a payment or delivery to liquidate an
unmatured obligation.’’.
(b) ENFORCEABILITY OF BILATERAL NETTING CON-
TRACTS.—Section 403 of the Federal Deposit Insurance
314
Corporation Improvement Act of 1991 (12 U.S.C. 4403)
is amended—
(1) by striking subsection (a) and inserting the
following:
‘‘(a) GENERAL RULE.—Notwithstanding any other
provision of State or Federal law (other than paragraphs
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal
Deposit Insurance Act or any order authorized under sec-
tion 5(b)(2) of the Securities Investor Protection Act of
1970), the covered contractual payment obligations and
the covered contractual payment entitlements between any
2 financial institutions shall be netted in accordance with,
and subject to the conditions of, the terms of any applica-
ble netting contract (except as provided in section
561(b)(2) of title 11, United States Code).’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or
more netting contracts between any 2 financial institu-
tions shall be enforceable in accordance with their terms
(except as provided in section 561(b)(2) of title 11, United
States Code), and shall not be stayed, avoided, or other-
wise limited by any State or Federal law (other than para-
315
graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the
Federal Deposit Insurance Act and section 5(b)(2) of the
Securities Investor Protection Act of 1970).’’.
(c) ENFORCEABILITY OF CLEARING ORGANIZATION
NETTING CONTRACTS.—Section 404 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4404) is amended—
(1) by striking subsection (a) and inserting the
following:
‘‘(a) GENERAL RULE.—Notwithstanding any other
provision of State or Federal law (other than paragraphs
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal
Deposit Insurance Act and any order authorized under
section 5(b)(2) of the Securities Investor Protection Act
of 1970), the covered contractual payment obligations and
the covered contractual payment entitlements of a member
of a clearing organization to and from all other members
of a clearing organization shall be netted in accordance
with and subject to the conditions of any applicable net-
ting contract (except as provided in section 561(b)(2) of
title 11, United States Code).’’; and
(2) by adding at the end the following new sub-
section:
‘‘(h) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
316
rangement or other credit enhancement related to one or
more netting contracts between any 2 members of a clear-
ing organization shall be enforceable in accordance with
their terms (except as provided in section 561(b)(2) of
title 11, United States Code), and shall not be stayed,
avoided, or otherwise limited by any State or Federal law
(other than paragraphs (8)(E), (8)(F), and (10)(B) of sec-
tion 11(e) of the Federal Deposit Insurance Act and sec-
tion 5(b)(2) of the Securities Investor Protection Act of
1970).’’.
(d) ENFORCEABILITY OF CONTRACTS WITH UNIN-
SURED NATIONAL BANKS
AND UNINSURED FEDERAL
BRANCHES AND AGENCIES.—The Federal Deposit Insur-
ance Corporation Improvement Act of 1991 (12 U.S.C.
4401 et seq.) is amended—
(1) by redesignating section 407 as section 408;
and
(2) by inserting after section 406 the following
new section:
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED
NATIONAL BANKS AND UNINSURED FEDERAL
BRANCHES AND AGENCIES.
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, paragraphs (8), (9), (10), and (11) of section
11(e) of the Federal Deposit Insurance Act shall apply
317
to an uninsured national bank or uninsured Federal
branch or Federal agency, except that for such purpose—
‘‘(1) any reference to the ‘Corporation as re-
ceiver’ or ‘the receiver or the Corporation’ shall refer
to the receiver of an uninsured national bank or un-
insured Federal branch or Federal agency appointed
by the Comptroller of the Currency;
‘‘(2) any reference to the ‘Corporation’ (other
than in section 11(e)(8)(D) of such Act), the ‘Cor-
poration, whether acting as such or as conservator
or receiver’, a ‘receiver’, or a ‘conservator’ shall refer
to the receiver or conservator of an uninsured na-
tional bank or uninsured Federal branch or Federal
agency appointed by the Comptroller of the Cur-
rency; and
‘‘(3) any reference to an ‘insured depository in-
stitution’ or ‘depository institution’ shall refer to an
uninsured national bank or an uninsured Federal
branch or Federal agency.
‘‘(b) LIABILITY.—The liability of a receiver or conser-
vator of an uninsured national bank or uninsured Federal
branch or agency shall be determined in the same manner
and subject to the same limitations that apply to receivers
and conservators of insured depository institutions under
section 11(e) of the Federal Deposit Insurance Act.
318
‘‘(c) REGULATORY AUTHORITY.—
‘‘(1) IN
GENERAL.—The Comptroller of the
Currency, in consultation with the Federal Deposit
Insurance Corporation, may promulgate regulations
to implement this section.
‘‘(2) SPECIFIC
REQUIREMENT.—In promul-
gating regulations to implement this section, the
Comptroller of the Currency shall ensure that the
regulations generally are consistent with the regula-
tions and policies of the Federal Deposit Insurance
Corporation adopted pursuant to the Federal De-
posit Insurance Act.
‘‘(d) DEFINITIONS.—For purposes of this section, the
terms ‘Federal branch’, ‘Federal agency’, and ‘foreign
bank’ have the same meanings as in section 1(b) of the
International Banking Act of 1978.’’.
SEC. 907. BANKRUPTCY CODE AMENDMENTS.
(a) DEFINITIONS OF FORWARD CONTRACT, REPUR-
CHASE AGREEMENT, SECURITIES CLEARING AGENCY,
SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU-
RITIES CONTRACT.—Title 11, United States Code, is
amended—
(1) in section 101—
(A) in paragraph (25)—
319
(i) by striking ‘‘means a contract’’
and inserting ‘‘means—
‘‘(A) a contract’’;
(ii) by striking ‘‘, or any combination
thereof or option thereon;’’ and inserting
‘‘, or any other similar agreement;’’; and
(iii) by adding at the end the fol-
lowing:
‘‘(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
‘‘(C) any option to enter into an agreement
or transaction referred to in subparagraph (A)
or (B);
‘‘(D) a master agreement that provides for
an agreement or transaction referred to in sub-
paragraph (A), (B), or (C), together with all
supplements to any such master agreement,
without regard to whether such master agree-
ment provides for an agreement or transaction
that is not a forward contract under this para-
graph, except that such master agreement shall
be considered to be a forward contract under
this paragraph only with respect to each agree-
ment or transaction under such master agree-
320
ment that is referred to in subparagraph (A),
(B), or (C); or
‘‘(E) any security agreement or arrange-
ment, or other credit enhancement related to
any agreement or transaction referred to in
subparagraph (A), (B), (C), or (D), but not to
exceed the actual value of such contract on the
date of the filing of the petition;’’;
(B) in paragraph (46), by striking ‘‘on any
day during the period beginning 90 days before
the date of’’ and inserting ‘‘at any time before’’;
(C) by amending paragraph (47) to read
as follows:
‘‘(47) ‘repurchase agreement’ (which definition
also applies to a reverse repurchase agreement)—
‘‘(A) means—
‘‘(i) an agreement, including related
terms, which provides for the transfer of
one or more certificates of deposit, mort-
gage related securities (as defined in sec-
tion 3 of the Securities Exchange Act of
1934), mortgage loans, interests in mort-
gage related securities or mortgage loans,
eligible bankers’ acceptances, qualified for-
eign government securities (defined as a
321
security that is a direct obligation of, or
that is fully guaranteed by, the central
government of a member of the Organiza-
tion for Economic Cooperation and Devel-
opment), or securities that are direct obli-
gations of, or that are fully guaranteed by,
the United States or any agency of the
United States against the transfer of funds
by the transferee of such certificates of de-
posit, eligible bankers’ acceptances, securi-
ties, loans, or interests, with a simulta-
neous agreement by such transferee to
transfer to the transferor thereof certifi-
cates of deposit, eligible bankers’ accept-
ance, securities, loans, or interests of the
kind described in this clause, at a date cer-
tain not later than 1 year after such trans-
fer or on demand, against the transfer of
funds;
‘‘(ii) any combination of agreements
or transactions referred to in clauses (i)
and (iii);
‘‘(iii) an option to enter into an agree-
ment or transaction referred to in clause
(i) or (ii);
322
‘‘(iv) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), or (iii), together
with all supplements to any such master
agreement, without regard to whether such
master agreement provides for an agree-
ment or transaction that is not a repur-
chase agreement under this paragraph, ex-
cept that such master agreement shall be
considered to be a repurchase agreement
under this paragraph only with respect to
each agreement or transaction under the
master agreement that is referred to in
clause (i), (ii), or (iii); or
‘‘(v) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in clause (i), (ii), (iii), or (iv), but
not to exceed the actual value of such con-
tract on the date of the filing of the peti-
tion; and
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial
mortgage loan;’’;
323
(D) in paragraph (48), by inserting ‘‘, or
exempt from such registration under such sec-
tion pursuant to an order of the Securities and
Exchange Commission,’’ after ‘‘1934’’; and
(E) by amending paragraph (53B) to read
as follows:
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
‘‘(i) any agreement, including the
terms and conditions incorporated by ref-
erence in such agreement, which is an in-
terest rate swap, option, future, or forward
agreement, including—
‘‘(I) a rate floor, rate cap, rate
collar, cross-currency rate swap, and
basis swap;
‘‘(II) a spot, same day-tomorrow,
tomorrow-next, forward, or other for-
eign exchange or precious metals
agreement;
‘‘(III) a currency swap, option,
future, or forward agreement;
‘‘(IV) an equity index or an eq-
uity swap, option, future, or forward
agreement;
324
‘‘(V) a debt index or a debt swap,
option, future, or forward agreement;
‘‘(VI) a credit spread or a credit
swap, option, future, or forward
agreement;
‘‘(VII) a commodity index or a
commodity swap, option, future, or
forward agreement; or
‘‘(VIII) a weather swap, weather
derivative, or weather option;
‘‘(ii) any agreement or transaction
similar to any other agreement or trans-
action referred to in this paragraph that—
‘‘(I) is presently, or in the future
becomes, regularly entered into in the
swap market (including terms and
conditions incorporated by reference
therein); and
‘‘(II) is a forward, swap, future,
or option on one or more rates, cur-
rencies, commodities, equity securities,
or other equity instruments, debt se-
curities or other debt instruments, or
economic indices or measures of eco-
nomic risk or value;
325
‘‘(iii) any combination of agreements
or transactions referred to in this subpara-
graph;
‘‘(iv) any option to enter into an
agreement or transaction referred to in
this subparagraph;
‘‘(v) a master agreement that provides
for an agreement or transaction referred to
in clause (i), (ii), (iii), or (iv), together
with all supplements to any such master
agreement, and without regard to whether
the master agreement contains an agree-
ment or transaction that is not a swap
agreement under this paragraph, except
that the master agreement shall be consid-
ered to be a swap agreement under this
paragraph only with respect to each agree-
ment or transaction under the master
agreement that is referred to in clause (i),
(ii), (iii), or (iv); or
‘‘(vi) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreements or transactions re-
ferred to in clause (i) through (v), but not
to exceed the actual value of such contract
326
on the date of the filing of the petition;
and
‘‘(B) is applicable for purposes of this title
only, and shall not be construed or applied so
as to challenge or affect the characterization,
definition, or treatment of any swap agreement
under any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Securi-
ties Exchange Act of 1934, the Public Utility
Holding Company Act of 1935, the Trust In-
denture Act of 1939, the Investment Company
Act of 1940, the Investment Advisers Act of
1940, the Securities Investor Protection Act of
1970, the Commodity Exchange Act, and the
regulations prescribed by the Securities and Ex-
change Commission or the Commodity Futures
Trading Commission.’’;
(2) in section 741(7), by striking paragraph (7)
and inserting the following:
‘‘(7) ‘securities contract’—
‘‘(A) means—
‘‘(i) a contract for the purchase, sale,
or loan of a security, a certificate of de-
posit, a mortgage loan or any interest in a
mortgage loan, a group or index of securi-
327
ties, certificates of deposit, or mortgage
loans or interests therein (including an in-
terest therein or based on the value there-
of), or option on any of the foregoing, in-
cluding an option to purchase or sell any
such security, certificate of deposit, loan,
interest, group or index, or option;
‘‘(ii) any option entered into on a na-
tional securities exchange relating to for-
eign currencies;
‘‘(iii) the guarantee by or to any secu-
rities clearing agency of a settlement of
cash, securities, certificates of deposit,
mortgage loans or interests therein, group
or index of securities, or mortgage loans or
interests therein (including any interest
therein or based on the value thereof), or
option on any of the foregoing, including
an option to purchase or sell any such se-
curity, certificate of deposit, loan, interest,
group or index, or option;
‘‘(iv) any margin loan;
‘‘(v) any other agreement or trans-
action that is similar to an agreement or
328
transaction referred to in this subpara-
graph;
‘‘(vi) any combination of the agree-
ments or transactions referred to in this
subparagraph;
‘‘(vii) any option to enter into any
agreement or transaction referred to in
this subparagraph;
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii), together with all supplements
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that
is not a securities contract under this sub-
paragraph, except that such master agree-
ment shall be considered to be a securities
contract under this subparagraph only with
respect to each agreement or transaction
under such master agreement that is re-
ferred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii); or
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement,
329
related to any agreement or transaction re-
ferred to in this subparagraph, but not to
exceed the actual value of such contract on
the date of the filing of the petition; and
‘‘(B) does not include any purchase, sale,
or repurchase obligation under a participation
in a commercial mortgage loan.’’; and
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and
(B) by adding at the end the following:
‘‘(F) any other agreement or transaction
that is similar to an agreement or transaction
referred to in this paragraph;
‘‘(G) any combination of the agreements or
transactions referred to in this paragraph;
‘‘(H) any option to enter into an agree-
ment or transaction referred to in this para-
graph;
‘‘(I) a master agreement that provides for
an agreement or transaction referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or
(H), together with all supplements to such mas-
ter agreement, without regard to whether the
master agreement provides for an agreement or
330
transaction that is not a commodity contract
under this paragraph, except that the master
agreement shall be considered to be a com-
modity contract under this paragraph only with
respect to each agreement or transaction under
the master agreement that is referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or
(H); or
‘‘(J) any security agreement or arrange-
ment or other credit enhancement related to
any agreement or transaction referred to in this
paragraph, but not to exceed the actual value of
such contract on the date of the filing of the pe-
tition;’’.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FI-
NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER-
CHANT.—Section 101 of title 11, United States Code, is
amended—
(1) by striking paragraph (22) and inserting
the following:
‘‘(22) ‘financial institution’ means—
‘‘(A) a Federal reserve bank, or an entity
(domestic or foreign) that is a commercial or
savings bank, industrial savings bank, savings
and loan association, trust company, or receiver
331
or conservator for such entity and, when any
such Federal reserve bank, receiver, conservator
or entity is acting as agent or custodian for a
customer in connection with a securities con-
tract, as defined in section 741, such customer;
or
‘‘(B) in connection with a securities con-
tract, as defined in section 741, an investment
company registered under the Investment Com-
pany Act of 1940;’’;
(2) by inserting after paragraph (22) the fol-
lowing:
‘‘(22A) ‘financial participant’ means an entity
that, at the time it enters into a securities contract,
commodity contract, or forward contract, or at the
time of the filing of the petition, has one or more
agreements or transactions described in paragraph
(1), (2), (3), (4), (5), or (6) of section 561(a) with
the debtor or any other entity (other than an affil-
iate) of a total gross dollar value of not less than
$1,000,000,000 in notional or actual principal
amount outstanding on any day during the previous
15-month period, or has gross mark-to-market posi-
tions of not less than $100,000,000 (aggregated
across counterparties) in one or more such agree-
332
ments or transactions with the debtor or any other
entity (other than an affiliate) on any day during
the previous 15-month period;’’; and
(3) by striking paragraph (26) and inserting
the following:
‘‘(26) ‘forward contract merchant’ means a
Federal reserve bank, or an entity, the business of
which consists in whole or in part of entering into
forward contracts as or with merchants or in a com-
modity, as defined or in section 761 or any similar
good, article, service, right, or interest which is pres-
ently or in the future becomes the subject of dealing
in the forward contract trade;’’.
(c) DEFINITION OF MASTER NETTING AGREEMENT
AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec-
tion 101 of title 11, United States Code, is amended by
inserting after paragraph (38) the following new para-
graphs:
‘‘(38A) ‘master netting agreement’—
‘‘(A) means an agreement providing for
the exercise of rights, including rights of net-
ting, setoff, liquidation, termination, accelera-
tion, or closeout, under or in connection with
one or more contracts that are described in any
one or more of paragraphs (1) through (5) of
333
section 561(a), or any security agreement or ar-
rangement or other credit enhancement related
to one or more of the foregoing; and
‘‘(B) if the agreement contains provisions
relating to agreements or transactions that are
not contracts described in paragraphs (1)
through (5) of section 561(a), shall be deemed
to be a master netting agreement only with re-
spect to those agreements or transactions that
are described in any one or more of paragraphs
(1) through (5) of section 561(a);
‘‘(38B) ‘master netting agreement participant’
means an entity that, at any time before the filing
of the petition, is a party to an outstanding master
netting agreement with the debtor;’’.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS,
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
CHASE AGREEMENTS, AND MASTER NETTING AGREE-
MENTS UNDER THE AUTOMATIC-STAY.—
(1) IN GENERAL.—Section 362(b) of title 11,
United States Code, as amended by this Act, is
amended—
(A) in paragraph (6), by inserting ‘‘,
pledged to, and under the control of,’’ after
‘‘held by’’;
334
(B) in paragraph (7), by inserting ‘‘,
pledged to, and under the control of,’’ after
‘‘held by’’;
(C) by striking paragraph (17) and insert-
ing the following:
‘‘(17) under subsection (a), of the setoff by a
swap participant of a mutual debt and claim under
or in connection with one or more swap agreements
that constitutes the setoff of a claim against the
debtor for any payment or other transfer of property
due from the debtor under or in connection with any
swap agreement against any payment due to the
debtor from the swap participant under or in con-
nection with any swap agreement or against cash,
securities, or other property held by, pledged to, and
under the control of, or due from such swap partici-
pant to margin, guarantee, secure, or settle any
swap agreement;’’; and
(D) by inserting after paragraph (27), as
added by this Act, the following new paragraph:
‘‘(28) under subsection (a), of the setoff by a
master netting agreement participant of a mutual
debt and claim under or in connection with one or
more master netting agreements or any contract or
agreement subject to such agreements that con-
335
stitutes the setoff of a claim against the debtor for
any payment or other transfer of property due from
the debtor under or in connection with such agree-
ments or any contract or agreement subject to such
agreements against any payment due to the debtor
from such master netting agreement participant
under or in connection with such agreements or any
contract or agreement subject to such agreements or
against cash, securities, or other property held by,
pledged to, and under the control of, or due from
such master netting agreement participant to mar-
gin, guarantee, secure, or settle such agreements or
any contract or agreement subject to such agree-
ments, to the extent that such participant is eligible
to exercise such offset rights under paragraph (6),
(7), or (17) for each individual contract covered by
the master netting agreement in issue; or’’.
(2) LIMITATION.—Section 362 of title 11,
United States Code, as amended by this Act, is
amended by adding at the end the following:
‘‘(l) LIMITATION.—The exercise of rights not subject
to the stay arising under subsection (a) pursuant to para-
graph (6), (7), (17), or (28) of subsection (b) shall not
be stayed by any order of a court or administrative agency
in any proceeding under this title.’’.
336
(e) LIMITATION
OF AVOIDANCE POWERS UNDER
MASTER NETTING AGREEMENT.—Section 546 of title 11,
United States Code, as amended by this Act, is
amended—
(1) in subsection (g) (as added by section 103
of Public Law 101–311)—
(A) by striking ‘‘under a swap agreement’’;
and
(B) by striking ‘‘in connection with a swap
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and
(2) by adding at the end the following:
‘‘(k) Notwithstanding sections 544, 545, 547,
548(a)(1)(B), and 548(b) the trustee may not avoid a
transfer made by or to a master netting agreement partici-
pant under or in connection with any master netting
agreement or any individual contract covered thereby that
is made before the commencement of the case, except
under section 548(a)(1)(A) and except to the extent that
the trustee could otherwise avoid such a transfer made
under an individual contract covered by such master net-
ting agreement.’’.
(f) FRAUDULENT TRANSFERS OF MASTER NETTING
AGREEMENTS.—Section 548(d)(2) of title 11, United
States Code, is amended—
337
(1) in subparagraph (C), by striking ‘‘and’’ at
the end;
(2) in subparagraph (D), by striking the period
and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(E) a master netting agreement participant
that receives a transfer in connection with a master
netting agreement or any individual contract covered
thereby takes for value to the extent of such trans-
fer, except that, with respect to a transfer under any
individual contract covered thereby, to the extent
that such master netting agreement participant oth-
erwise did not take (or is otherwise not deemed to
have taken) such transfer for value.’’.
(g) TERMINATION OR ACCELERATION OF SECURITIES
CONTRACTS.—Section 555 of title 11, United States Code,
is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 555. Contractual right to liquidate, terminate, or
accelerate a securities contract’’;
and
338
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(h) TERMINATION OR ACCELERATION OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,
United States Code, is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 556. Contractual right to liquidate, terminate, or
accelerate a commodities contract or for-
ward contract’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(i) TERMINATION
OR ACCELERATION
OF REPUR-
CHASE AGREEMENTS.—Section 559 of title 11, United
States Code, is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 559. Contractual right to liquidate, terminate, or
accelerate a repurchase agreement’’;
and
339
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION
OF SWAP AGREEMENTS.—Section 560 of title 11, United
States Code, is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 560. Contractual right to liquidate, terminate, or
accelerate a swap agreement’’;
(2) in the first sentence, by striking ‘‘termi-
nation of a swap agreement’’ and inserting ‘‘liquida-
tion, termination, or acceleration of one or more
swap agreements’’; and
(3) by striking ‘‘in connection with any swap
agreement’’ and inserting ‘‘in connection with the
termination, liquidation, or acceleration of one or
more swap agreements’’.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR
OFFSET UNDER A MASTER NETTING AGREEMENT AND
ACROSS CONTRACTS.—
(1) IN
GENERAL.—Title 11, United States
Code, is amended by inserting after section 560 the
following:
340
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting
agreement and across contracts
‘‘(a) IN GENERAL.—Subject to subsection (b), the ex-
ercise of any contractual right, because of a condition of
the kind specified in section 365(e)(1), to cause the termi-
nation, liquidation, or acceleration of or to offset or net
termination values, payment amounts, or other transfer
obligations arising under or in connection with one or
more (or the termination, liquidation, or acceleration of
one or more)—
‘‘(1) securities contracts, as defined in section
741(7);
‘‘(2) commodity contracts, as defined in section
761(4);
‘‘(3) forward contracts;
‘‘(4) repurchase agreements;
‘‘(5) swap agreements; or
‘‘(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by oper-
ation of any provision of this title or by any order of a
court or administrative agency in any proceeding under
this title.
‘‘(b) EXCEPTION.—
‘‘(1) IN
GENERAL.—A party may exercise a
contractual right described in subsection (a) to ter-
341
minate, liquidate, or accelerate only to the extent
that such party could exercise such a right under
section 555, 556, 559, or 560 for each individual
contract covered by the master netting agreement in
issue.
‘‘(2) COMMODITY BROKERS.—If a debtor is a
commodity broker subject to subchapter IV of chap-
ter 7—
‘‘(A) a party may not net or offset an obli-
gation to the debtor arising under, or in con-
nection with, a commodity contract against any
claim arising under, or in connection with,
other instruments, contracts, or agreements
listed in subsection (a) except to the extent that
the party has positive net equity in the com-
modity accounts at the debtor, as calculated
under that subchapter IV; and
‘‘(B) another commodity broker may not
net or offset an obligation to the debtor arising
under, or in connection with, a commodity con-
tract entered into or held on behalf of a cus-
tomer of the debtor against any claim arising
under, or in connection with, other instruments,
contracts, or agreements listed in subsection
(a).
342
‘‘(3) CONSTRUCTION.—No provision of sub-
paragraph (A) or (B) of paragraph (2) shall prohibit
the offset of claims and obligations that arise
under—
‘‘(A) a cross-margining agreement that has
been approved by the Commodity Futures
Trading Commission or submitted to the Com-
modity Futures Trading Commission under sec-
tion 5(a)(12)(A) of the Commodity Exchange
Act and has been approved; or
‘‘(B) any other netting agreement between
a clearing organization, as defined in section
761, and another entity that has been approved
by the Commodity Futures Trading Commis-
sion.
‘‘(c) DEFINITION.—As used in this section, the term
‘contractual right’ includes a right set forth in a rule or
bylaw of a national securities exchange, a national securi-
ties association, or a securities clearing agency, a right
set forth in a bylaw of a clearing organization or contract
market or in a resolution of the governing board thereof,
and a right, whether or not evidenced in writing, arising
under common law, under law merchant, or by reason of
normal business practice.
343
‘‘(d) 
CASES
ANCILLARY
TO
FOREIGN
PRO-
CEEDINGS.—Any provisions of this title relating to securi-
ties contracts, commodity contracts, forward contracts, re-
purchase agreements, swap agreements, or master netting
agreements shall apply in a case under chapter 15 of this
title, so that enforcement of contractual provisions of such
contracts and agreements in accordance with their terms
will not be stayed or otherwise limited by operation of any
provision of this title or by order of a court in any case
under this title, and to limit avoidance powers to the same
extent as in a proceeding under chapter 7 or 11 of this
title (such enforcement not to be limited based on the
presence or absence of assets of the debtor in the United
States).’’.
(2) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, is
amended by inserting after the item relating to section
560 the following:
‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a
master netting agreement and across contracts.’’.
(l) COMMODITY BROKER LIQUIDATIONS.—Title 11,
United States Code, is amended by inserting after section
766 the following:
344
‘‘§ 767. Commodity broker liquidation and forward
contract merchants, commodity brokers,
stockbrokers, financial institutions, fi-
nancial participants, securities clearing
agencies, swap participants, repo partici-
pants, and master netting agreement par-
ticipants
‘‘Notwithstanding any other provision of this title,
the exercise of rights by a forward contract merchant,
commodity broker, stockbroker, financial institution, fi-
nancial participant, securities clearing agency, swap par-
ticipant, repo participant, or master netting agreement
participant under this title shall not affect the priority of
any unsecured claim it may have after the exercise of such
rights.’’.
(m) 
STOCKBROKER
LIQUIDATIONS.—Title 
11,
United States Code, is amended by inserting after section
752 the following:
‘‘§ 753. Stockbroker liquidation and forward contract
merchants, commodity brokers, stock-
brokers, financial institutions, securities
clearing 
agencies, 
swap 
participants,
repo participants, and master netting
agreement participants
‘‘Notwithstanding any other provision of this title,
the exercise of rights by a forward contract merchant,
345
commodity broker, stockbroker, financial institution, secu-
rities clearing agency, swap participant, repo participant,
financial participant, or master netting agreement partici-
pant under this title shall not affect the priority of any
unsecured claim it may have after the exercise of such
rights.’’.
(n) SETOFF.—Section 553 of title 11, United States
Code, is amended—
(1) in subsection (a)(3)(C), by inserting before
the period the following: ‘‘(except for a setoff of a
kind described in section 362(b)(6), 362(b)(7),
362(b)(17), 362(b)(28), 555, 556, 559, 560, or 561
of this title)’’; and
(2) 
in 
subsection 
(b)(1), 
by 
striking
‘‘362(b)(14),’’ 
and 
inserting 
‘‘362(b)(17),
362(b)(28), 555, 556, 559, 560, 561’’.
(o) SECURITIES
CONTRACTS, COMMODITY
CON-
TRACTS, AND FORWARD CONTRACTS.—Title 11, United
States Code, is amended—
(1) in section 362(b)(6), by striking ‘‘financial
institutions,’’ each place such term appears and in-
serting ‘‘financial institution, financial participant,’’;
(2) in section 546(e), by inserting ‘‘financial
participant,’’ after ‘‘financial institution,’’;
346
(3) in section 548(d)(2)(B), by inserting ‘‘fi-
nancial participant,’’ after ‘‘financial institution,’’;
(4) in section 555—
(A) by inserting ‘‘financial participant,’’
after ‘‘financial institution,’’; and
(B) by inserting before the period at the
end ‘‘, a right set forth in a bylaw of a clearing
organization or contract market or in a resolu-
tion of the governing board thereof, and a right,
whether or not in writing, arising under com-
mon law, under law merchant, or by reason of
normal business practice’’; and
(5) in section 556, by inserting ‘‘, financial par-
ticipant,’’ after ‘‘commodity broker’’.
(p) CONFORMING AMENDMENTS.—Title 11, United
States Code, is amended—
(1) in the table of sections for chapter 5—
(A) by amending the items relating to sec-
tions 555 and 556 to read as follows:
‘‘555. Contractual right to liquidate, terminate, or accelerate a securities con-
tract.
‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities con-
tract or forward contract.’’;
and
(B) by amending the items relating to sec-
tions 559 and 560 to read as follows:
‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase
agreement.
347
‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agree-
ment.’’;
and
(2) in the table of sections for chapter 7—
(A) by inserting after the item relating to
section 766 the following:
‘‘767. Commodity broker liquidation and forward contract merchants, com-
modity brokers, stockbrokers, financial institutions, securities
clearing agencies, swap participants, repo participants, and
master netting agreement participants.’’;
and
(B) by inserting after the item relating to
section 752 the following:
‘‘753. Stockbroker liquidation and forward contract merchants, commodity bro-
kers, stockbrokers, financial institutions, securities clearing
agencies, swap participants, repo participants, and master net-
ting agreement participants.’’.
SEC. 908. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(8)) is amended by adding at the
end the following new subparagraph:
‘‘(H) RECORDKEEPING REQUIREMENTS.—
The Corporation, in consultation with the ap-
propriate Federal banking agencies, may pre-
scribe regulations requiring more detailed rec-
ordkeeping with respect to qualified financial
contracts (including market valuations) by in-
sured depository institutions.’’.
348
SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECU-
TION REQUIREMENT.
Section 13(e)(2) of the Federal Deposit Insurance
Act (12 U.S.C. 1823(e)(2)) is amended to read as follows:
‘‘(2) EXEMPTIONS
FROM
CONTEMPORANEOUS
EXECUTION REQUIREMENT.—An agreement to pro-
vide for the lawful collateralization of—
‘‘(A) deposits of, or other credit extension
by, a Federal, State, or local governmental enti-
ty, or of any depositor referred to in section
11(a)(2), including an agreement to provide col-
lateral in lieu of a surety bond;
‘‘(B) bankruptcy estate funds pursuant to
section 345(b)(2) of title 11, United States
Code;
‘‘(C) extensions of credit, including any
overdraft, from a Federal reserve bank or Fed-
eral home loan bank; or
‘‘(D) one or more qualified financial con-
tracts, as defined in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph
(1)(B) solely because such agreement was not exe-
cuted contemporaneously with the acquisition of the
collateral or because of pledges, delivery, or substi-
tution of the collateral made in accordance with such
agreement.’’.
349
SEC. 910. DAMAGE MEASURE.
(a) IN GENERAL.—Title 11, United States Code, is
amended—
(1) by inserting after section 561, as added by
this Act, the following:
‘‘§ 562. Damage measure in connection with swap
agreements, securities contracts, forward
contracts, commodity contracts, repur-
chase agreements, or master netting
agreements
‘‘If the trustee rejects a swap agreement, securities
contract (as defined in section 741), forward contract,
commodity contract (as defined in section 761), repur-
chase agreement, or master netting agreement pursuant
to section 365(a), or if a forward contract merchant,
stockbroker, financial institution, securities clearing agen-
cy, repo participant, financial participant, master netting
agreement participant, or swap participant liquidates, ter-
minates, or accelerates such contract or agreement, dam-
ages shall be measured as of the earlier of—
‘‘(1) the date of such rejection; or
‘‘(2) the date of such liquidation, termination,
or acceleration.’’; and
(2) in the table of sections for chapter 5, by in-
serting after the item relating to section 561 (as
added by this Act) the following:
350
‘‘562. Damage measure in connection with swap agreements, securities con-
tracts, forward contracts, commodity contracts, repurchase
agreements, or master netting agreements.’’.
(b) CLAIMS ARISING FROM REJECTION.—Section
502(g) of title 11, United States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and
(2) by adding at the end the following:
‘‘(2) A claim for damages calculated in accordance
with section 562 of this title shall be allowed under sub-
section (a), (b), or (c), or disallowed under subsection (d)
or (e), as if such claim had arisen before the date of the
filing of the petition.’’.
SEC. 911. SIPC STAY.
Section 5(b)(2) of the Securities Investor Protection
Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding
at the end the following new subparagraph:
‘‘(C) EXCEPTION FROM STAY.—
‘‘(i) Notwithstanding section 362 of
title 11, United States Code, neither the
filing of an application under subsection
(a)(3) nor any order or decree obtained by
SIPC from the court shall operate as a
stay of any contractual rights of a creditor
to liquidate, terminate, or accelerate a se-
curities contract, commodity contract, for-
ward contract, repurchase agreement, swap
agreement, or master netting agreement,
351
as those terms are defined in sections 101
and 741 of title 11, United States Code, to
offset or net termination values, payment
amounts, or other transfer obligations aris-
ing under or in connection with one or
more of such contracts or agreements, or
to foreclose on any cash collateral pledged
by the debtor, whether or not with respect
to one or more of such contracts or agree-
ments.
‘‘(ii) Notwithstanding clause (i), such
application, order, or decree may operate
as a stay of the foreclosure on, or disposi-
tion of, securities collateral pledged by the
debtor, whether or not with respect to one
or more of such contracts or agreements,
securities sold by the debtor under a repur-
chase agreement, or securities lent under a
securities lending agreement.
‘‘(iii) As used in this subparagraph,
the term ‘contractual right’ includes a
right set forth in a rule or bylaw of a na-
tional securities exchange, a national secu-
rities association, or a securities clearing
agency, a right set forth in a bylaw of a
352
clearing organization or contract market or
in a resolution of the governing board
thereof, and a right, whether or not in
writing, arising under common law, under
law merchant, or by reason of normal busi-
ness practice.’’.
SEC. 912. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is
amended—
(1) in subsection (b), by inserting after para-
graph (7), as added by this Act, the following:
‘‘(8) any eligible asset (or proceeds thereof), to
the extent that such eligible asset was transferred by
the debtor, before the date of commencement of the
case, to an eligible entity in connection with an
asset-backed securitization, except to the extent such
asset (or proceeds or value thereof) may be recov-
ered by the trustee under section 550 by virtue of
avoidance under section 548(a);’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) For purposes of this section—
‘‘(1) the term ‘asset-backed securitization’
means a transaction in which eligible assets trans-
ferred to an eligible entity are used as the source of
353
payment on securities, including, without limitation,
all securities issued by governmental units, at least
one class or tranche of which was rated investment
grade by one or more nationally recognized securities
rating organizations, when the securities were ini-
tially issued by an issuer;
‘‘(2) the term ‘eligible asset’ means—
‘‘(A) financial assets (including interests
therein and proceeds thereof), either fixed or re-
volving, whether or not the same are in exist-
ence as of the date of the transfer, including
residential and commercial mortgage loans, con-
sumer receivables, trade receivables, assets of
governmental units, including payment obliga-
tions relating to taxes, receipts, fines, tickets,
and other sources of revenue, and lease receiv-
ables, that, by their terms, convert into cash
within a finite time period, plus any residual in-
terest in property subject to receivables in-
cluded in such financial assets plus any rights
or other assets designed to assure the servicing
or timely distribution of proceeds to security
holders;
‘‘(B) cash; and
354
‘‘(C) securities, including without limita-
tion, all securities issued by governmental units;
‘‘(3) the term ‘eligible entity’ means—
‘‘(A) an issuer; or
‘‘(B) a trust, corporation, partnership, gov-
ernmental unit, limited liability company (in-
cluding a single member limited liability com-
pany), or other entity engaged exclusively in the
business of acquiring and transferring eligible
assets directly or indirectly to an issuer and
taking actions ancillary thereto;
‘‘(4) the term ‘issuer’ means a trust, corpora-
tion, partnership, or other entity engaged exclusively
in the business of acquiring and holding eligible as-
sets, issuing securities backed by eligible assets, and
taking actions ancillary thereto; and
‘‘(5) the term ‘transferred’ means the debtor,
under a written agreement, represented and war-
ranted that eligible assets were sold, contributed, or
otherwise conveyed with the intention of removing
them from the estate of the debtor pursuant to sub-
section (b)(8) (whether or not reference is made to
this title or any section hereof), irrespective and
without limitation of—
355
‘‘(A) whether the debtor directly or indi-
rectly obtained or held an interest in the issuer
or in any securities issued by the issuer;
‘‘(B) whether the debtor had an obligation
to repurchase or to service or supervise the
servicing of all or any portion of such eligible
assets; or
‘‘(C) the characterization of such sale, con-
tribution, or other conveyance for tax, account-
ing, regulatory reporting, or other purposes.’’.
SEC. 913. EFFECTIVE DATE; APPLICATION OF AMEND-
MENTS.
(a) EFFECTIVE DATE.—This title shall take effect on
the date of enactment of this Act.
(b) APPLICATION OF AMENDMENTS.—The amend-
ments made by this title shall apply with respect to cases
commenced or appointments made under any Federal or
State law after the date of enactment of this Act, but shall
not apply with respect to cases commenced or appoint-
ments made under any Federal or State law before the
date of enactment of this Act.
TITLE X—PROTECTION OF
FAMILY FARMERS
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.
(a) REENACTMENT.—
356
(1) IN
GENERAL.—Chapter 12 of title 11,
United States Code, as reenacted by section 149 of
division C of the Omnibus Consolidated and Emer-
gency Supplemental Appropriations Act, 1999 (Pub-
lic Law 105–277), and amended by this Act, is reen-
acted.
(2) EFFECTIVE
DATE.—Subsection (a) shall
take effect on July 1, 2000.
(b) CONFORMING AMENDMENT.—Section 302 of the
Bankruptcy, Judges, United States Trustees, and Family
Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is
amended by striking subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, is
amended by adding at the end the following:
‘‘(4) The dollar amount in section 101(18) shall be
adjusted at the same times and in the same manner as
the dollar amounts in paragraph (1) of this subsection,
beginning with the adjustment to be made on April 1,
2001.’’.
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL
UNITS.
(a) CONTENTS OF PLAN.—Section 1222(a)(2) of title
11, United States Code, is amended to read as follows:
357
‘‘(2) provide for the full payment, in deferred
cash payments, of all claims entitled to priority
under section 507, unless—
‘‘(A) the claim is a claim owed to a govern-
mental unit that arises as a result of the sale,
transfer, exchange, or other disposition of any
farm asset used in the debtor’s farming oper-
ation, in which case the claim shall be treated
as an unsecured claim that is not entitled to
priority under section 507, but the debt shall be
treated in such manner only if the debtor re-
ceives a discharge; or
‘‘(B) the holder of a particular claim
agrees to a different treatment of that claim;’’.
(b) SPECIAL NOTICE PROVISIONS.—Section 1231(b)
of title 11, United States Code, as so designated by this
Act, is amended by striking ‘‘a State or local governmental
unit’’ and inserting ‘‘any governmental unit’’.
TITLE XI—HEALTH CARE AND
EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) HEALTH CARE BUSINESS DEFINED.—Section
101 of title 11, United States Code, is amended—
(1) by redesignating paragraph (27A), as added
by this Act, as paragraph (27B); and
358
(2) by inserting after paragraph (27) the fol-
lowing:
‘‘(27A) ‘health care business’—
‘‘(A) means any public or private entity
(without regard to whether that entity is orga-
nized for profit or not for profit) that is pri-
marily engaged in offering to the general public
facilities and services for—
‘‘(i) the diagnosis or treatment of in-
jury, deformity, or disease; and
‘‘(ii) surgical, drug treatment, psy-
chiatric, or obstetric care; and
‘‘(B) includes—
‘‘(i) any—
‘‘(I) general or specialized hos-
pital;
‘‘(II) ancillary ambulatory, emer-
gency, or surgical treatment facility;
‘‘(III) hospice;
‘‘(IV) home health agency; and
‘‘(V) other health care institution
that is similar to an entity referred to
in subclause (I), (II), (III), or (IV);
and
359
‘‘(ii) any long-term care facility, in-
cluding any—
‘‘(I) skilled nursing facility;
‘‘(II) intermediate care facility;
‘‘(III) assisted living facility;
‘‘(IV) home for the aged;
‘‘(V) domiciliary care facility; and
‘‘(VI) health care institution that
is related to a facility referred to in
subclause (I), (II), (III), (IV), or (V),
if that institution is primarily engaged
in offering room, board, laundry, or
personal assistance with activities of
daily living and incidentals to activi-
ties of daily living;’’.
(b) PATIENT AND PATIENT RECORDS DEFINED.—
Section 101 of title 11, United States Code, is amended
by inserting after paragraph (40) the following:
‘‘(40A) ‘patient’ means any person who obtains
or receives services from a health care business;
‘‘(40B) ‘patient records’ means any written doc-
ument relating to a patient or a record recorded in
a magnetic, optical, or other form of electronic me-
dium;’’.
360
(c) RULE
OF CONSTRUCTION.—The amendments
made by subsection (a) of this section shall not affect the
interpretation of section 109(b) of title 11, United States
Code.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) IN GENERAL.—Subchapter III of chapter 3 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘§ 351. Disposal of patient records
‘‘If a health care business commences a case under
chapter 7, 9, or 11, and the trustee does not have a suffi-
cient amount of funds to pay for the storage of patient
records in the manner required under applicable Federal
or State law, the following requirements shall apply:
‘‘(1) The trustee shall—
‘‘(A) promptly publish notice, in 1 or more
appropriate newspapers, that if patient records
are not claimed by the patient or an insurance
provider (if applicable law permits the insur-
ance provider to make that claim) by the date
that is 365 days after the date of that notifica-
tion, the trustee will destroy the patient
records; and
‘‘(B) during the first 180 days of the 365-
day period described in subparagraph (A),
361
promptly attempt to notify directly each patient
that is the subject of the patient records and
appropriate insurance carrier concerning the
patient records by mailing to the last known ad-
dress of that patient, or a family member or
contact person for that patient, and to the ap-
propriate insurance carrier an appropriate no-
tice regarding the claiming or disposing of pa-
tient records.
‘‘(2) If, after providing the notification under
paragraph (1), patient records are not claimed dur-
ing the 365-day period described under that para-
graph, the trustee shall mail, by certified mail, at
the end of such 365-day period a written request to
each appropriate Federal agency to request permis-
sion from that agency to deposit the patient records
with that agency, except that no Federal agency is
required to accept patient records under this para-
graph.
‘‘(3) If, following the 365-day period described
in paragraph (2) and after providing the notification
under paragraph (1), patient records are not claimed
by a patient or insurance provider, or request is not
granted by a Federal agency to deposit such records
362
with that agency, the trustee shall destroy those
records by—
‘‘(A) if the records are written, shredding
or burning the records; or
‘‘(B) if the records are magnetic, optical,
or other electronic records, by otherwise de-
stroying those records so that those records
cannot be retrieved.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 3 of title 11, United States Code, is amended
by inserting after the item relating to section 350 the fol-
lowing:
‘‘351. Disposal of patient records.’’.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS
OF CLOSING A HEALTH CARE BUSINESS AND
OTHER ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, as
amended by this Act, is amended by adding at the end
the following:
‘‘(8) the actual, necessary costs and expenses of
closing a health care business incurred by a trustee
or by a Federal agency (as that term is defined in
section 551(1) of title 5) or a department or agency
of a State or political subdivision thereof, including
any cost or expense incurred—
363
‘‘(A) in disposing of patient records in ac-
cordance with section 351; or
‘‘(B) in connection with transferring pa-
tients from the health care business that is in
the process of being closed to another health
care business;
‘‘(9) with respect to a nonresidential real prop-
erty lease previously assumed under section 365,
and subsequently rejected, a sum equal to all mone-
tary obligations due, excluding those arising from or
related to a failure to operate or penalty provisions,
for the period of 2 years following the later of the
rejection date or date of actual turnover of the
premises, without reduction or setoff for any reason
whatsoever except for sums actually received or to be
received from a nondebtor, and the claim for remain-
ing sums due for the balance of the term of the lease
shall be a claim under section 502(b)(6); and’’.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA-
TIENT ADVOCATE.
(a) IN GENERAL.—
(1) 
APPOINTMENT
OF
OMBUDSMAN.—Sub-
chapter II of chapter 3 of title 11, United States
Code, is amended by inserting after section 331 the
following:
364
‘‘§ 332. Appointment of ombudsman
‘‘(a) IN GENERAL.—
‘‘(1) AUTHORITY TO APPOINT.—Not later than
30 days after a case is commenced by a health care
business under chapter 7, 9, or 11, the court shall
order the appointment of an ombudsman to monitor
the quality of patient care to represent the interests
of the patients of the health care business, unless
the court finds that the appointment of the ombuds-
man is not necessary for the protection of patients
under the specific facts of the case.
‘‘(2) QUALIFICATIONS.—If the court orders the
appointment of an ombudsman, the United States
trustee shall appoint 1 disinterested person, other
than the United States trustee, to serve as an om-
budsman, including a person who is serving as a
State Long-Term Care Ombudsman appointed under
title III or VII of the Older Americans Act of 1965
(42 U.S.C. 3021 et seq., 3058 et seq.).
‘‘(b) DUTIES.—An ombudsman appointed under sub-
section (a) shall—
‘‘(1) monitor the quality of patient care, to the
extent necessary under the circumstances, including
interviewing patients and physicians;
‘‘(2) not later than 60 days after the date of
appointment, and not less frequently than every 60
365
days thereafter, report to the court, at a hearing or
in writing, regarding the quality of patient care at
the health care business involved; and
‘‘(3) if the ombudsman determines that the
quality of patient care is declining significantly or is
otherwise being materially compromised, notify the
court by motion or written report, with notice to ap-
propriate parties in interest, immediately upon mak-
ing that determination.
‘‘(c) CONFIDENTIALITY.—An ombudsman shall main-
tain any information obtained by the ombudsman under
this section that relates to patients (including information
relating to patient records) as confidential information.
The ombudsman may not review confidential patient
records, unless the court provides prior approval, with re-
strictions on the ombudsman to protect the confidentiality
of patient records.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 3 of title 11, United States Code,
is amended by inserting after the item relating to
section 331 the following:
‘‘332. Appointment of ombudsman.’’.
(b) 
COMPENSATION
OF
OMBUDSMAN.—Section
330(a)(1) of title 11, United States Code, is amended—
366
(1) in the matter proceeding subparagraph (A),
by inserting ‘‘an ombudsman appointed under sec-
tion 331, or’’ before ‘‘a professional person’’; and
(2) in subparagraph (A), by inserting ‘‘ombuds-
man,’’ before ‘‘professional person’’.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO
TRANSFER PATIENTS.
(a) IN GENERAL.—Section 704(a) of title 11, United
States Code, as amended by this Act, is amended by add-
ing at the end the following:
‘‘(11) use all reasonable and best efforts to
transfer patients from a health care business that is
in the process of being closed to an appropriate
health care business that—
‘‘(A) is in the vicinity of the health care
business that is closing;
‘‘(B) provides the patient with services
that are substantially similar to those provided
by the health care business that is in the proc-
ess of being closed; and
‘‘(C) maintains a reasonable quality of
care.’’.
(b) CONFORMING AMENDMENT.—Section 1106(a)(1)
of title 11, United States Code, is amended by striking
‘‘sections 704(2), 704(5), 704(7), 704(8), and 704(9)’’
367
and inserting ‘‘paragraphs (2), (5), (7), (8), (9), and (11)
of section 704(a)’’.
SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION
NOT SUBJECT TO AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, is
amended by inserting after paragraph (28), as added by
this Act, the following:
‘‘(29) under subsection (a), of the exclusion by
the Secretary of Health and Human Services of the
debtor from participation in the medicare program
or any other Federal health care program (as de-
fined in section 1128B(f) of the Social Security Act
(42 U.S.C. 1320a–7b(f)) pursuant to title XI of
such Act (42 U.S.C. 1301 et seq.) or title XVIII of
such Act (42 U.S.C. 1395 et seq.).’’.
TITLE XII—TECHNICAL
AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as
amended by this Act, is amended—
(1) by striking ‘‘In this title—’’ and inserting
‘‘In this title the following definitions shall apply:’’;
(2) in each paragraph, by inserting ‘‘The term’’
after the paragraph designation;
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(3) in paragraph (35)(B), by striking ‘‘para-
graphs (21B) and (33)(A)’’ and inserting ‘‘para-
graphs (23) and (35)’’;
(4) in each of paragraphs (35A) and (38), by
striking ‘‘; and’’ at the end and inserting a period;
(5) in paragraph (51B)—
(A) by inserting ‘‘who is not a family farm-
er’’ after ‘‘debtor’’ the first place it appears;
and
(B) by striking ‘‘thereto having aggregate’’
and all that follows through the end of the
paragraph;
(6) by striking paragraph (54) and inserting
the following:
‘‘(54) The term ‘transfer’ means—
‘‘(A) the creation of a lien;
‘‘(B) the retention of title as a security in-
terest;
‘‘(C) the foreclosure of a debtor’s equity of
redemption; or
‘‘(D) each mode, direct or indirect, abso-
lute or conditional, voluntary or involuntary, of
disposing of or parting with—
‘‘(i) property; or
‘‘(ii) an interest in property.’’; and
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(7) in each of paragraphs (1) through (35), in
each of paragraphs (36) and (37), and in each of
paragraphs (40) through (55), by striking the semi-
colon at the end and inserting a period.
SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, as
amended by section 322 of this Act, is amended by insert-
ing ‘‘522(f)(3),’’ after ‘‘522(d),’’ each place it appears.
SEC. 1203. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is
amended by striking ‘‘922’’ and all that follows through
‘‘or’’, and inserting ‘‘922, 1201, or’’.
SEC. 1204. TECHNICAL AMENDMENTS.
Title 11, United States Code, is amended—
(1) in section 109(b)(2), by striking ‘‘subsection
(c) or (d) of’’; and
(2) in section 552(b)(1), by striking ‘‘product’’
each place it appears and inserting ‘‘products’’.
SEC. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR
FRAUDULENTLY PREPARE BANKRUPTCY PE-
TITIONS.
Section 110(j)(4) of title 11, United States Code, as
so designated by this Act, is amended by striking ‘‘attor-
ney’s’’ and inserting ‘‘attorneys’ ’’.
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SEC. 1206. LIMITATION ON COMPENSATION OF PROFES-
SIONAL PERSONS.
Section 328(a) of title 11, United States Code, is
amended by inserting ‘‘on a fixed or percentage fee basis,’’
after ‘‘hourly basis,’’.
SEC. 1207. EFFECT OF CONVERSION.
Section 348(f)(2) of title 11, United States Code, is
amended by inserting ‘‘of the estate’’ after ‘‘property’’ the
first place it appears.
SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.
Section 503(b)(4) of title 11, United States Code, is
amended by inserting ‘‘subparagraph (A), (B), (C), (D),
or (E) of’’ before ‘‘paragraph (3)’’.
SEC. 1209. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as
amended by this Act, is amended—
(1) by transferring paragraph (15), as added by
section 304(e) of Public Law 103–394 (108 Stat.
4133), so as to insert such paragraph after sub-
section (a)(14);
(2) in subsection (a)(9), by striking ‘‘motor ve-
hicle’’ and inserting ‘‘motor vehicle, vessel, or air-
craft’’; and
(3) in subsection (e), by striking ‘‘a insured’’
and inserting ‘‘an insured’’.
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SEC. 1210. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is
amended by striking ‘‘section 523’’ and all that follows
through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),
or 1328(a)(1), or that’’.
SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREAT-
MENT.
Section 525(c) of title 11, United States Code, is
amended—
(1) in paragraph (1), by inserting ‘‘student’’ be-
fore ‘‘grant’’ the second place it appears; and
(2) in paragraph (2), by striking ‘‘the program
operated under part B, D, or E of’’ and inserting
‘‘any program operated under’’.
SEC. 1212. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States
Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.
SEC. 1213. PREFERENCES.
(a) IN GENERAL.—Section 547 of title 11, United
States Code, as amended by this Act, is amended—
(1) in subsection (b), by striking ‘‘subsection
(c)’’ and inserting ‘‘subsections (c) and (i)’’; and
(2) by adding at the end the following:
‘‘(i) If the trustee avoids under subsection (b) a
transfer made between 90 days and 1 year before the date
of the filing of the petition, by the debtor to an entity