SEC. 240. DUTIES OF THE UNITED STATES TRUSTEE AND
BANKRUPTCY ADMINISTRATOR.
(a) DUTIES OF THE UNITED STATES TRUSTEE.—
Section 586(a) of title 28, United States Code, is amend-
ed—
(1) in paragraph (3)—
(A) in subparagraph (G) by striking ‘‘and’’
at the end;
(B) by redesignating subparagraph (H) as
subparagraph (I); and
(C) by inserting after subparagraph (G)
the following:
‘‘(H) in small business cases (as defined in
section 101 of title 11), performing the addi-
tional duties specified in title 11 pertaining to
such cases;’’,
(2) in paragraph (5) by striking ‘‘and’’ at the
end,
(3) by redesignating paragraph (6) as para-
graph (7), and
(4) by inserting after paragraph (5) the follow-
ing:
‘‘(6) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as
soon as practicable after the entry of order for
relief but before the first meeting scheduled
under section 341(a) of title 11 at which time
the United States trustee shall begin to inves-
tigate the debtor’s viability, inquire about the
debtor’s business plan, explain the debtor’s obli-
gations to file monthly operating reports and
other required reports, attempt to develop an
agreed scheduling order, and inform the debtor
of other obligations;
‘‘(B) when determined to be appropriate
and advisable, visit the appropriate business
premises of the debtor and ascertain the state
of the debtor’s books and records and verify
that the debtor has filed its tax returns; and
‘‘(C) review and monitor diligently the
debtor’s activities, to identify as promptly as
possible whether the debtor will be unable to
confirm a plan;
‘‘(D) in cases where the United States
trustee finds material grounds for any relief
under section 1112 of title 11 move the court
promptly for relief; and’’.
(b) DUTIES
OF
THE
BANKRUPTCY
ADMINIS-
TRATOR.—In a small business case (as defined in section
101 of title 11 of the United States Code), the bankruptcy
administrator shall perform the duties specified in section
586(a)(6) of title 28 of the United States Code.
SEC. 241. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is
amended—
(1) in the matter preceding paragraph (1) by
striking ‘‘, may’’;
(2) by amending paragraph (1) to read as fol-
lows:
‘‘(1) shall hold such status conferences as are
necessary to further the expeditious and economical
resolution of the case; and’’; and
(3) in paragraph (2) by striking ‘‘unless incon-
sistent with another provision of this title or with
applicable Federal Rules of Bankruptcy Procedure,’’
and inserting ‘‘may’’.
SEC. 242. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(i) The filing of a petition under chapter 11 of this
title does not operate as a stay of the acts described in
subsection (a) in a voluntary or collusive involuntary case
in which the debtor—
‘‘(1) is a debtor in a small business case pend-
ing at the time the petition is filed;
‘‘(2) was a debtor in a small business case
which was dismissed for any reason by an order that
became final in the 2-year period ending on the date
of the order for relief entered with respect to the pe-
tition;
‘‘(3) was a debtor in a small business case in
which a plan was confirmed in the 2-year period
ending on the date of the order for relief entered
with respect to the petition; or
‘‘(4) is an entity that has succeeded to substan-
tially all of the assets or business of a small business
debtor described in subparagraph (A), (B), or (C)
unless the debtor proves, by a preponderance of the
evidence, that the filing of such petition resulted
from circumstances beyond the control of the debtor
not foreseeable at the time the case then pending
was filed; and that it is more likely than not that
the court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable time.’’.
SEC. 243. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION.—Section 1112(b) of title 11, United States
Code, is amended to read as follows:
‘‘(b)(1) Except as provided in paragraph (2), in sub-
section (c), and in section 1104(a)(3) of this title, on re-
quest of a party in interest, and after notice and a hear-
ing, the court shall convert a case under this chapter to
a case under chapter 7 of this title or dismiss a case under
this chapter, whichever is in the best interest of creditors
and the estate, if the movant establishes cause.
‘‘(2) The relief provided in paragraph (1) shall not
be granted if the debtor or another party in interest ob-
jects and establishes, by a preponderance of the evidence
that—
‘‘(A) it is more likely than not that a plan will
be confirmed within a time as fixed by this title or
by order of the court entered pursuant to section
1121(e)(3), or within a reasonable time if no time
has been fixed; and
‘‘(B) if the reason is an act or omission of the
debtor that—
‘‘(i) there exists a reasonable justification
for the act or omission; and
‘‘(ii) the act or omission will be cured with-
in a reasonable time fixed by the court not to
exceed 30 days after the court decides the mo-
tion, unless the movant expressly consents to a
continuance for a specific period of time, or
compelling circumstances beyond the control of
the debtor justify an extension.
‘‘(3) For purposes of this subsection, cause in-
cludes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate;
‘‘(B) gross mismanagement of the estate;
‘‘(C) failure to maintain appropriate insurance;
‘‘(D) unauthorized use of cash collateral harm-
ful to one or more creditors;
‘‘(E) failure to comply with an order of the
court;
‘‘(F) failure timely to satisfy any filing or re-
porting requirement established by this title or by
any rule applicable to a case under this chapter;
‘‘(G) failure to attend the meeting of creditors
convened under section 341(a) of this title or an ex-
amination ordered under Federal Rules of Bank-
ruptcy Procedure 2004;
‘‘(H) failure timely to provide information or
attend meetings reasonably requested by the United
States trustee;
‘‘(I) failure timely to pay taxes due after the
date of the order for relief or to file tax returns due
after the order for relief;
‘‘(J) failure to file a disclosure statement, or to
file or confirm a plan, within the time fixed by this
title or by order of the court; and
‘‘(K) failure to pay any fees or charges required
under chapter 123 of title 28.
‘‘(4) The court shall commence the hearing on any
motion under this subsection not later than 30 days after
filing of the motion, and shall decide the motion within
15 days after commencement of the hearing, unless the
movant expressly consents to a continuance for a specific
period of time or compelling circumstances prevent the
court from meeting the time limits established by this
paragraph.’’.
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF
TRUSTEE.—Section 1104(a) of title 11, United States
Code, is amended—
(1) in paragraph (1) by striking ‘‘or’’ at the
end;
(2) in paragraph (2) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(3) if grounds exist to convert or dismiss the
case under section 1112 of this title, but the court
determines that the appointment of a trustee is in
the best interests of creditors and the estate.’’.
CHAPTER 2—SINGLE ASSET REAL ESTATE
SEC. 251. SINGLE ASSET REAL ESTATE DEFINED.
Section 101(51B) of title 11, United States Code is
amended to read as follows:
‘‘(51B) ‘single asset real estate’ means undevel-
oped real property or other real property constitut-
ing a single property or project, other than residen-
tial real property with fewer than 4 residential units,
on which is located a single development or project
which property or project generates substantially all
of the gross income of a debtor and on which no
substantial business is being conducted by a debtor,
or by a commonly controlled group of entities all of
which are concurrently debtors in a case under chap-
ter 11 of this title, other than the business of oper-
ating the real property and activities incidental
thereto;’’.
SEC. 252. PLAN CONFIRMATION.
Section 1129(b)(2)(A) of title 11, United States
Code, is amended—
(1) in clause (ii) by striking ‘‘or’’ at the end;
(2) in clause (iii) by striking the period at the
end; and
(3) by adding at the end the following:
‘‘(iv) in any case where—
‘‘(I) the provisions of this subpara-
graph are being invoked by a class of se-
cured claims;
‘‘(II) such class of secured claims has
not made the election provided for under
section 1111(b)(1)(a)(i) of this title;
‘‘(III) the plan proponent seeks to
confirm a plan over the rejection by the
class of unsecured claims that includes the
deficiency claim held by the class of se-
cured claims, and which deficiency claim
would not be paid in full under the plan;
and
‘‘(IV) the plan is for a debtor which
owns, leases, or otherwise holds single
asset real estate;
the court may find the plan to be fair and equi-
table only if, in addition to the fulfillment of all
other requirements of this subparagraph, any
new value that is contributed by or on behalf of
the plan proponent is contributed in cash on or
before the effective date of the plan and in a
manner where the only permissible accounting
treatment is for the new value to be accounted
for as equity capital that is not convertible for
or exchangeable into any other form of capital
including debt capital, and is required by the
plan to be applied on the effective date of the
plan to pay down in cash the allowed secured
claims of such class of secured claims in an
amount such that, after such payment, the
principal amount of debt secured by the single
asset real estate is no greater than 75% of the
value of the single asset real estate, and the
payment and other terms for the debt remain-
ing after the mandatory application of new
value as provided in this subparagraph satisfy
in all material particulars all relevant, then-pre-
vailing market terms in the locality for new
loans secured by liens on comparable real estate
regarding maturity date, amortization, interest
rate, fixed-charge coverage and loan docu-
mentation.’’.
SEC. 253. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is
amended—
(1) by inserting ‘‘or 30 days after the court de-
termines that the debtor is subject to this para-
graph, whichever is later’’ after ‘‘90-day period)’’;
and
(2) by amending subparagraph (B) to read as
follows:
‘‘(B) the debtor has commenced monthly
payments (which payments may, in the debtor’s
sole 
discretion, 
notwithstanding 
section
363(c)(2) of this title, be made from rents or
other income generated before or after the com-
mencement of the case by or from the property)
to each creditor whose claim is secured by such
real estate (other than a claim secured by a
judgment lien or by an unmatured statutory
lien), which payments are in an amount equal
to interest at the then-applicable nondefault
contract rate of interest on the value of the
creditor’s interest in the real estate.’’.
TITLE III—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 301. PETITION AND PROCEEDINGS RELATED TO PETI-
TION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States
Code, is amended by inserting ‘‘notwithstanding section
301(b)’’ before the period at the end.
(b) CONFORMING AMENDMENT.—Section 301 of title
11, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;
and
(2) by amending the last sentence to read as
follows:
‘‘(b) The commencement of a voluntary case
under a chapter of this title constitutes an order for
relief under such chapter.’’.
TITLE IV—BANKRUPTCY
ADMINISTRATION
Subtitle A—General Provisions
SEC. 401. ADEQUATE PREPARATION TIME FOR CREDITORS
BEFORE THE FIRST MEETING OF CREDITORS
IN INDIVIDUAL CASES.
Section 341(a) of title 11, United States Code, is
amended by inserting after the first sentence the follow-
ing: ‘‘If the debtor is an individual in a voluntary case
under chapter 7, 11, or 13, the first meeting of creditors
shall not be convened earlier than 60 days (or later than
90 days) after the date of the order for relief, unless the
court, after notice and hearing, determines unusual cir-
cumstances justify an earlier meeting.’’.
SEC. 402. CREDITOR REPRESENTATION AT FIRST MEETING
OF CREDITORS.
Section 341(c) of title 11, United States Code, is
amended by inserting after the first sentence the follow-
ing: ‘‘Notwithstanding any local court rule, provision of
a State constitution, any other State or Federal nonbank-
ruptcy law, or other requirement that representation at
the meeting of creditors under subsection (a) be by an at-
torney, a creditor holding a consumer debt or its rep-
resentatives (which representatives may include an entity
or an employee of an entity and may be a representative
for more than one creditor) shall be permitted to appear
at and participate in the meeting of creditors in a case
under chapter 7 or 13 either alone or in conjunction with
an attorney for the creditor. Nothing in this subsection
shall be construed to require any creditor to be rep-
resented by an attorney at any meeting of creditors.’’.
SEC. 403. FILING PROOFS OF CLAIM.
Section 501 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) In a case under chapter 7 or 13, a proof of claim
or interest is deemed filed under this section for any claim
or interest that appears in the schedules filed under sec-
tion 521(a)(1) of this title, except a claim or interest that
is scheduled as disputed, contingent, or unliquidated.’’.
SEC. 404. AUDIT PROCEDURES.
(a) AMENDMENT.—Section 586 of title 28, United
States Code, as amended by section 111, is amended—
(1) by amending subsection (a)(6) to read as
follows:
‘‘(6) make such reports as the Attorney General
directs, including the results of audits performed
under subsection (f).’’;
(2) by inserting at the end the following:
‘‘(f)(1) The Attorney General shall establish proce-
dures for the auditing of the accuracy and completeness
of petitions, schedules, and other information which the
debtor is required to provide under sections 521 and 1322,
and, if applicable, section 111, of title 11 in individual
cases filed under chapter 7 or 13 of such title. Such audits
shall be in accordance with generally accepted auditing
standards and performed by independent certified public
accountants or independent licensed public accountants.
Such procedures shall—
‘‘(A) establish a method of selecting appropriate
qualified persons to contract with the United States
trustee to perform such audits;
‘‘(B) establish a method of randomly selecting
cases to be audited according to generally accepted
audit standards, provided that no less than one out
of every fifty cases in each Federal judicial district
shall be selected for audit;
‘‘(C) require audits for schedules of income and
expenses which reflect higher than average variances
from the statistical norm of the district in which the
schedules were filed;
‘‘(D) establish procedures for reporting the re-
sults of such audits and any material misstatement
of income, expenditures or assets of a debtor to the
Attorney General, the United States Attorney and
the court, as appropriate, and for providing public
information no less than annually on the aggregate
results of such audits including the percentage of
cases, by district, in which a material misstatement
of income or expenditures is reported; and
‘‘(E) establish procedures for fully funding such
audits.
‘‘(2) The United States trustee for each district is
authorized to contract with auditors to perform audits in
cases designated by the United States trustee according
to the procedures established under paragraph (1) of this
subsection.
‘‘(3) According to procedures established under para-
graph (1), upon request of a duly appointed auditor, the
debtor shall cause the accounts, papers, documents, finan-
cial records, files and all other papers, things or property
belonging to the debtor as the auditor requests and which
are reasonably necessary to facilitate an audit to be made
available for inspection and copying.
‘‘(4) The report of each such audit shall be filed with
the court, the Attorney General, and the United States
Attorney, as required under procedures established by the
Attorney General under paragraph (1). If a material
misstatement of income or expenditures or of assets is re-
ported, a statement specifying such misstatement shall be
filed with the court and the United States trustee shall
give notice thereof to the creditors in the case and, in an
appropriate case, in the opinion of the United States trust-
ee, requires investigation with respect to possible criminal
violations, the United States Attorney for the district.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
the enactment of this Act.
SEC. 405. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7
AND 13 CASES.
Section 342 of title 11, United States Code, is
amended—
(1) in subsection (c)—
(A) by striking ‘‘, but the failure of such
notice to contain such information shall not in-
validate the legal effect of such notice’’; and
(B) by adding the following at the end:
‘‘If the credit agreement between the debtor and the credi-
tor or the last communication before the filing of the peti-
tion in a voluntary case from the creditor to a debtor who
is an individual states an account number of the debtor
which is the current account number of the debtor with
respect to any debt held by the creditor against the debtor,
the debtor shall include such account number in any notice
to the creditor required to be given under this title. If the
creditor has specified to the debtor an address at which
the creditor wishes to receive correspondence regarding
the debtor’s account, any notice to the creditor required
to be given by the debtor under this title shall be given
at such address. For the purposes of this section, ‘notice’
shall include, but shall not be limited to, any correspond-
ence from the debtor to the creditor after the commence-
ment of the case, any statement of the debtor’s intention
under section 521(a)(2) of this title, notice of the com-
mencement of any proceeding in the case to which the
creditor is a party, and any notice of the hearing under
section 1324.’’;
(2) by adding at the end of section 342 the fol-
lowing:
‘‘(d) At any time, a creditor in a case of an individual
debtor under chapter 7 or 13 may file with the court and
serve on the debtor a notice of the address to be used to
notify the creditor in that case. Five days after receipt
of such notice, if the court or the debtor is required to
give the creditor notice, such notice shall be given at that
address.
‘‘(e) An entity may file with the court a notice stating
its address for notice in cases under chapters 7 and 13.
After 30 days following the filing of such notice, any notice
in any case filed under chapter 7 or 13 given by the court
shall be to that address unless specific notice is given
under subsection (d) with respect to a particular case.
‘‘(f) Notice given to a creditor other than as provided
in this section shall not be effective notice until it has been
brought to the attention of the creditor. If the creditor
has designated a person or department to be responsible
for receiving notices concerning bankruptcy cases and has
established reasonable procedures so that bankruptcy no-
tices received by the creditor will be delivered to such de-
partment or person, notice will not be brought to the at-
tention of the creditor until received by such person or
department. No sanction under section 362(h) of this title
or any other sanction which a court may impose on ac-
count of violations of the stay under section 362(a) of this
title or failure to comply with section 542 or 543 of this
title may be imposed on any action of the creditor unless
the action takes place after the creditor has received notice
of the commencement of the case effective under this sec-
tion.’’.
SEC. 406. TIMELY FILING AND CONFIRMATION OF PLANS IN
CHAPTER 13.
Title 11, United States Code, is amended—
(1) by inserting in section 1321 after ‘‘plan’’
the following: ‘‘on or before 30 days after the filing
of the petition unless the court, after notice and
hearing, orders otherwise.’’; and
(2) in section 1324 by adding at the end the
following:
‘‘Such hearing shall be held within 45 days of the filing
of the plan, unless the court, after notice and hearing, or-
ders otherwise.’’.
SEC. 407. DEBTOR TO PROVIDE TAX RETURNS AND OTHER
INFORMATION.
Section 521 of title 11, United States Code, is
amended—
(1) by inserting ‘‘(a)’’ before ‘‘The’’;
(2) by amending paragraph (1) to read as fol-
lows:
‘‘(1) file—
‘‘(A) a list of creditors, and
‘‘(B) unless the court orders otherwise—
pursuant to section 110(b)(1) of this
title, indicating that such attorney or
bankruptcy petition preparer delivered
to the debtor any notice required by
section 342(b)(1) of this title; or
‘‘(II) if no attorney for the debt-
or is indicated and no bankruptcy pe-
tition preparer signed the petition of
the debtor, that such notice was ob-
tained and read by the debtor.’’; and
(3) by adding at the end the following:
‘‘(b) At any time, a creditor in a case of an individual
debtor under chapter 7 or 13 may file with the court and
serve on the debtor notice that the creditor requests the
petition, schedules, and statement of affairs filed by the
debtor in the case. At any time, a creditor in a case under
chapter 13 may file with the court and serve on the debtor
notice that the creditor requests the plan filed by the debt-
or in the case. Within 10 days of the first such request
in a case under this subsection for the petition, schedules,
and statement of affairs and the first such request for the
plan under this subsection, the debtor shall serve on that
creditor a conformed copy of the requested documents or
plan and any amendments thereto as of that date, and
shall thereafter promptly serve on that creditor at the time
filed with the court—
‘‘(1) any requested document or plan which is
not filed with the court at the time requested; and
‘‘(2) any amendment to any requested docu-
ment or plan.
‘‘(c)(1) An individual debtor in a case under chapter
7 or 13 shall provide to the United States trustee—
‘‘(A) copies of all Federal tax returns (including
any schedules and attachments) filed by the debtor
for the 3 most recent tax years preceding the order
for relief;
‘‘(B) at the time the debtor files them with the
Commissioner of Internal Revenue, all Federal tax
returns (including any schedules and attachments)
for the debtor’s tax years ending while such case is
pending; and
‘‘(C) at the time the debtor files them with the
Commissioner of Internal Revenue, all amendments
to the tax returns (including schedules and attach-
ments) described in subparagraphs (A) and (B).
‘‘(2)(A) The United States trustee shall make such
Federal tax returns (including schedules, attachments,
and amendments) available to any party in interest for
inspection and copying not later than 10 days after receiv-
ing a request by such party.
‘‘(B) If the United States trustee does not comply
with subparagraph (A), on the motion of such party, the
court shall issue an order compelling the United States
trustee to comply with subparagraph (A).
‘‘(d) A debtor in a case under chapter 13 shall file,
from a time which is the later of 90 days after the close
of the debtor’s tax year or 1 year after the order for relief
unless a plan has then been confirmed, and thereafter on
or before 45 days before each anniversary of the confirma-
tion of the plan until the case is closed, a statement sub-
ject to the penalties of perjury by the debtor of the debt-
or’s income and expenditures in the preceding tax year
and monthly net income, showing how calculated. Such
statement shall disclose the amount and sources of income
of the debtor, the identity of any persons responsible with
the debtor for the support of any dependents of the debtor,
and any persons who contributed and the amount contrib-
uted to the household in which the debtor resides. Such
tax returns, amendments and statement of income and ex-
penditures shall be available to the United States trustee,
any bankruptcy administrator, any trustee and any party
in interest for inspection and copying.’’.
SEC. 408. DISMISSAL FOR FAILURE TO FILE SCHEDULES
TIMELY OR PROVIDE REQUIRED INFORMA-
TION.
Section 521 of title 11, United States Code, as
amended by section 407, is amended by adding at the end
the following:
‘‘(e) Notwithstanding section 707(a) of this title, if
an individual debtor in a voluntary case under chapter 7
or 13 fails to provide all of the information required under
subsections (a)(1) and (c)(1)(A) within 45 days after the
filing of the petition, the case shall be automatically dis-
missed effective on the 46th day after the filing of the
petition without the need for any order of court, but any
party in interest may request the court to enter an order
dismissing the case and the court shall, if so requested,
enter an order of dismissal within 5 days of such request.
Upon request of the debtor made within 45 days after the
filing of the petition, the court may allow the debtor up
to an additional 15 days to provide the information re-
quired under subsections (a)(1) and (c)(1)(A) if the court
finds compelling justification for doing so.
‘‘(f) If an individual debtor in a case under chapter
7 or 13 fails to perform any of the duties imposed by sub-
sections (b), (c)(1)(B), (c)(1)(C), and (d), any party in
interest may request that the court order the debtor to
comply. Within 10 days of such request the court shall
order that the debtor do so within a period of time set
by the court no longer than 30 days. If the debtor does
not comply with that order within the period of time set
by the court, the court shall, on request of any party in
interest certifying that the debtor has not so complied,
enter an order dismissing the case within 5 days of such
request.’’.
SEC. 409. ADEQUATE TIME TO PREPARE FOR HEARING ON
CONFIRMATION OF THE PLAN.
Section 1324 of title 11, United States Code, is
amended—
(1) by striking ‘‘After’’ and inserting the follow-
ing:
‘‘(a) Except as provided in subsection (b) and after’’;
and
(2) by adding at the end the following:
‘‘(b) The hearing on confirmation of the plan may
be held not earlier than 20 days, and not later than 45
days, after the first meeting of creditors under section
341(a) of this title.’’.
SEC. 410. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION
IN CERTAIN CASES.
Title 11, United States Code, is amended—
(1) by amending section 1322(d) to read as fol-
lows:
‘‘(d) If the total current monthly income of the debtor
and in a joint case, the debtor and the debtor’s spouse
combined, is 75 percent of the national median family in-
come for a family of equal size or, in the case of a house-
hold of one person, 75 percent of the national median
household income for one earner, or more, the plan may
not provide for payments over a period that is longer than
5 years, unless the court, for cause, approves a longer pe-
riod, but the court may not approve a period that exceeds
7 years. If the total current monthly income of the debtor
or in a joint case, the debtor and the debtor’s spouse com-
bined, is less than 75 percent of the national median fam-
ily income for a family of equal size, or in the case of
a household of one person less than 75 percent of the na-
tional median household income for one earner, the plan
may not provide for payments over a period that is longer
than 3 years, unless the court, for cause, approves a longer
period, but the court may not approve a period that is
longer than 5 years.’’;
(2) in section 1329—
(A) by striking in subsection (c) ‘‘three
years’’ and inserting ‘‘the applicable commit-
ment period under section 1325(b)(1)(B)(ii)’’
and by striking ‘‘five years’’ and inserting
‘‘maximum duration period’’; and
(B) by inserting at the end of subsection
(c) the following:
‘‘The maximum duration period shall be 5 years if the
total current monthly income of the debtor, and in a joint
case, the debtor and the debtor’s spouse combined, is 75
percent of the national median family income for a family
of equal size or, in the case of a household of 1 person,
75 percent of the national median household income for
1 earner, or more as of the date of the modification and
shall be 3 years if the total current monthly income is less
than 75 percent of the national median family income for
a family of equal size or, in the case of a household of
1 person, less than 75 percent of the national median
household income for 1 earner as of the date of the modi-
fication.’’.
SEC. 411. SENSE OF THE CONGRESS REGARDING EXPAN-
SION OF RULE 9011 OF THE FEDERAL RULES
OF BANKRUPTCY PROCEDURE.
It is the sense of the Congress that rule 9011 of the
Federal Rules of Bankruptcy Procedure (11 U.S.C. App)
should be modified to include a requirement that all docu-
ments (including schedules), signed and unsigned, submit-
ted to the court or to a trustee by debtors who represent
themselves and debtors who are represented by an attor-
ney be submitted only after the debtor or the debtor’s at-
torney has made reasonable inquiry to verify that the in-
formation contained in such documents is well grounded
in fact, and is warranted by existing law or a good faith
argument for the extension, modification, or reversal of
existing law.
SEC. 412. JURISDICTION OF COURTS OF APPEALS.
(a) JURISDICTION.—Title 28 of the United States
Code is amended—
(1) by striking section 158;
(2) by inserting after section 1292 the follow-
ing:
‘‘§ 1293. Bankruptcy appeals
‘‘The courts of appeals (other the United States
Court of Appeals for the Federal Circuit) shall have juris-
diction of appeals from the following:
‘‘(1) Final orders and judgments of bankruptcy
courts entered under—
‘‘(A) section 157(b) of this title in core
proceedings arising under title 11, or arising in
or related to a case under title 11; or
‘‘(B) section 157(c)(2) of this title in pro-
ceedings referred to such courts.
‘‘(2) Final orders and judgments of district
courts entered under section 157 of this title in—
‘‘(A) core proceedings arising under title
11, or arising in or related to a case under title
11; or
‘‘(B) proceedings that are not core pro-
ceedings, but that are otherwise related to a
case under title 11.
‘‘(3) Orders, process, and judgments of bank-
ruptcy courts or district courts entered under section
105 of title 11, or the refusal to enter an order,
process, or judgment under such section.
‘‘(4) Orders of bankruptcy courts or district
courts entered under section 1104(a) or 1121(d) of
title 11, or the refusal to enter an order under such
section.
‘‘(5) An interlocutory order of a bankruptcy
court or district court entered in a case under title
11, in a proceeding arising under title 11, or in a
proceeding arising in or related to a case under title
11, if—
‘‘(A) such court is of the opinion that—
‘‘(i) such order involves a controlling
question of law as to which there is sub-
stantial ground for difference of opinion;
and
100
‘‘(ii) an immediate appeal from such
order may materially advance the ultimate
termination of such case or such proceed-
ing; or
‘‘(B) the court of appeals that would have
jurisdiction of an appeal of a final order entered
in such case or such proceeding permits, in its
discretion, appeal to be taken from such inter-
locutory order.’’; and
(3) in—
(A) the table of sections for chapter 6 by
striking the item relating to section 158; and
(B) the table of sections for chapter 83 by
inserting after the item relating to section 1292
the following:
‘‘1293. Bankruptcy appeals.’’.
(b) CONFORMING AMENDMENTS.—Section 305(c) of
title 11, the United States Code, is amended by striking
‘‘158(d), 1291, or 1292’’ and inserting ‘‘1291, 1292, or
1293’’; and
(2) Title 28 of the United States Code is amended—
(A) in subsections (b)(1) and (c)(2) of section
157 by striking ‘‘section 158’’ and inserting ‘‘section
1293’’;
101
(B) in section 1334(d) by striking ‘‘158(d),
1291, or 1292’’ and inserting ‘‘1291, 1292, or
1293’’; and
(C) in section 1452(b) by striking ‘‘158(d),
1291, or 1292’’ and inserting ‘‘1291, 1292, or
1293’’.
Subtitle B—Data Provisions
SEC. 441. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT.—Title 28, United States Code, is
amended by adding after section 158 the following new
section:
‘‘§ 159. Bankruptcy statistics
‘‘The Director of the Executive Office for United
States Trustees shall compile statistics regarding individ-
ual debtors with primarily consumer debts seeking relief
under chapters 7, 11, and 13 of title 11, United States
Code. Such statistics shall be in a form prescribed by the
Administrative Office of the United States Courts. The
Office shall compile such statistics, and make them public,
and report annually to the Congress on the information
collected, and on its analysis thereof, no later than Octo-
ber 31 of each year. Such compilation shall be itemized
by chapter of title 11 of the United States Code, shall
be presented in the aggregate and for each district, and
shall include the following:
102
‘‘(1) Total assets and total liabilities of such
debtors, and in each category of assets and liabil-
ities, as reported in the schedules prescribed pursu-
ant to section 2075 of this title and filed by such
debtors.
‘‘(2) The current total monthly income, pro-
jected monthly net income, and average income and
average expenses of such debtors as reported on the
schedules and statements the debtor has filed under
sections 111, 521, and 1322 of title 11.
‘‘(3) The aggregate amount of debt discharged
in the reporting period, determined as the difference
between the total amount of debt and obligations of
a debtor reported on the schedules and the amount
of such debt reported in categories which are pre-
dominantly nondischargeable.
‘‘(4) The average time between the filing of the
petition and the closing of the case.
‘‘(5) The number of cases in the reporting pe-
riod in which a reaffirmation was filed and the total
number of reaffirmations filed in that period, and of
those cases in which a reaffirmation was filed, the
number in which the debtor was not represented by
an attorney, and of those the number of cases in
which the reaffirmation was approved by the court.
103
‘‘(6) With respect to cases filed under chapter
13 of title 11—
‘‘(A) the number of cases in which a final
order was entered determining the value of
property securing a claim less than the claim,
and the total number of such orders in the re-
porting period; and
‘‘(B) the number of cases dismissed for
failure to make payments under the plan.
‘‘(7) The number of cases in which the debtor
filed another case within the 6 years previous to the
filing.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect 18 months after the date
of the enactment of this Act.
SEC. 442. BANKRUPTCY DATA.
(a) AMENDMENT.—Title 28 of the United States
Code is amended by inserting after section 589a the fol-
lowing:
‘‘§ 589b. Bankruptcy data
‘‘(a) RULES.—The Attorney General shall, within a
reasonable time after the effective date of this section,
issue rules requiring uniform forms for (and from time
to time thereafter to appropriately modify and approve)—
104
‘‘(1) final reports by trustees in cases under
chapters 7, 12, and 13 of title 11; and
‘‘(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter
11 of title 11.
‘‘(b) REPORTS.—All reports referred to in subsection
(a) shall be designed (and the requirements as to place
and manner of filing shall be established) so as to facili-
tate compilation of data and maximum possible access of
the public, both by physical inspection at 1 or more central
filing locations, and by electronic access through the Inter-
net or other appropriate media.
‘‘(c) REQUIRED INFORMATION.—The information re-
quired to be filed in the reports referred to in subsection
(b) shall be that which is in the best interests of debtors
and creditors, and in the public interest in reasonable and
adequate information to judge the efficiency and practical-
ity of the Federal bankruptcy system. In issuing rules pro-
posing the forms referred to in subsection (a), the Attor-
ney General shall strike the best achievable practical bal-
ance between—
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; and
105
‘‘(2) economy, simplicity, and lack of undue
burden on persons with a duty to file reports.
‘‘(d) FINAL REPORTS.—Final reports proposed for
adoption by trustees under chapters 7, 12, and 13 of title
11 shall, in addition to such other matters as are required
by law or as the Attorney General in the discretion of the
Attorney General, shall propose, include with respect to
a case under such title—
‘‘(1) information about the length of time the
case was pending;
‘‘(2) assets abandoned;
‘‘(3) assets exempted;
‘‘(4) receipts and disbursements of the estate;
‘‘(5) expenses of administration;
‘‘(6) claims asserted;
‘‘(7) claims allowed;
‘‘(8) distributions to claimants and claims dis-
charged without payment;
in each case by appropriate category and, in cases under
chapters 12 and 13 of title 11, date of confirmation of
the plan, each modification thereto, and defaults by the
debtor in performance under the plan.
‘‘(e) PERIODIC REPORTS.—Periodic reports proposed
for adoption by trustees or debtors in possession under
chapter 11 of title 11 shall, in addition to such other mat-
106
ters as are required by law or as the Attorney General,
in the discretion of the Attorney General, shall propose,
include—
‘‘(1) information about the standard industry
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor;
‘‘(2) length of time the case has been pending;
‘‘(3) number of full-time employees as at the
date of the order for relief and at end of each re-
porting period since the case was filed;
‘‘(4) cash receipts, cash disbursements and
profitability of the debtor for the most recent period
and cumulatively since the date of the order for re-
lief;
‘‘(5) compliance with title 11, whether or not
tax returns and tax payments since the date of the
order for relief have been timely filed and made;
‘‘(6) all professional fees approved by the court
in the case for the most recent period and cumula-
tively since the date of the order for relief (sepa-
rately reported, in the case of the professional fees
incurred by or on behalf of the debtor, between those
that would have been incurred absent a bankruptcy
proceeding and those not); and
107
‘‘(7) plans of reorganization filed and confirmed
and, with respect thereto, by class, the recoveries of
the holders, expressed in aggregate dollar values
and, in the case of claims, as a percentage of total
claims of the class allowed.’’.
(b) TECHNICAL AMENDMENT.—The table of sections
of chapter 39 of title 28, United States Code, is amended
by adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 443. SENSE OF THE CONGRESS REGARDING AVAIL-
ABILITY OF BANKRUPTCY DATA.
It is the sense of the Congress that—
(1) the national policy of the United States
should be that all data held by bankruptcy clerks in
electronic form, to the extent such data reflects only
public records (as defined in section 107 of title 11
of the United States Code), should be released in
electronic form to the public on demand; and
(2) there should be established a bankruptcy
data system in which—
(A) a single set of data definitions and
forms are used to collect data nationwide; and
(B) all data for any particular bankruptcy
case are aggregated in the same electronic
record.
108
TITLE V—TAX PROVISIONS
SEC. 501. TREATMENT OF CERTAIN LIENS.
(a) TREATMENT OF CERTAIN LIENS.—Section 724
of title 11, United States Code, is amended—
(1) in subsection (b), in the matter preceding
paragraph (1), by inserting ‘‘(other than to the ex-
tent that there is a properly perfected unavoidable
tax lien arising in connection with an ad valorem tax
on real or personal property of the estate)’’ after
‘‘under this title’’;
(2) in subsection (b)(2), after ‘‘507(a)(1)’’, in-
sert ‘‘(except that such expenses, other than claims
for wages, salaries, or commissions which arise after
the filing of a petition, shall be limited to expenses
incurred under chapter 7 of this title and shall not
include expenses incurred under chapter 11 of this
title)’’; and
(3) by adding at the end the following:
‘‘(e) Before subordinating a tax lien on real or per-
sonal property of the estate, the trustee shall—
‘‘(1) exhaust the unencumbered assets of the
estate; and
‘‘(2) in a manner consistent with section 506(c)
of this title, recover from property securing an al-
lowed secured claim the reasonable, necessary costs
109
and expenses of preserving or disposing of that prop-
erty.
‘‘(f) Notwithstanding the exclusion of ad valorem tax
liens set forth in this section and subject to the require-
ments of subsection (e)—
‘‘(1) claims for wages, salaries, and commis-
sions that are entitled to priority under section
507(a)(3) of this title; or
‘‘(2) claims for contributions to an employee
benefit plan entitled to priority under section
507(a)(4) of this title,
may be paid from property of the estate which secures
a tax lien, or the proceeds of such property.’’.
(b) DETERMINATION OF TAX LIABILITY.—Section
505(a)(2) of title 11, United States Code, is amended—
(1) in subparagraph (A), by striking ‘‘or’’ at
the end;
(2) in subparagraph (B), by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount
110
under any law (other than a bankruptcy law) has ex-
pired.’’.
SEC. 502. ENFORCEMENT OF CHILD AND SPOUSAL SUP-
PORT.
Section 522(c)(1) of title 11, United States Code, is
amended by inserting ‘‘, except that, notwithstanding any
other Federal law or State law relating to exempted prop-
erty, exempt property shall be liable for debts of a kind
specified in section 523(a) (1) or (5) of this title’’ before
the semicolon at the end of the paragraph.
SEC. 503. EFFECTIVE NOTICE TO GOVERNMENT.
(a) 
EFFECTIVE
NOTICE
TO
GOVERNMENTAL
UNITS.—Section 342 of title 11, United States Code, as
amended by section 405, is amended by adding at the end
the following:
‘‘(g) If a debtor lists a governmental unit as a credi-
tor in a list or schedule, any notice required to be given
by the debtor under this title, any rule, any applicable law,
or any order of the court, shall identify the department,
agency, or instrumentality through which the debtor is in-
debted. The debtor shall also identify (with information
such as a taxpayer identification number, loan, account
or contract number, or real estate parcel number, where
applicable) and describe the underlying basis for the gov-
ernmental unit s claim. If the debtor s liability to a govern-
111
mental unit arises from a debt or obligation owed or in-
curred by another individual, entity, or organization, or
under a different name, the debtor shall identify such indi-
vidual, entity, organization or name.
‘‘(h) The clerk shall keep and update quarterly, in
the form and manner as the Director of the Administra-
tive Office for the United States Courts prescribes, and
make available to debtors, a register in which a govern-
mental unit may designate a safe harbor mailing address
for service of notice in cases pending in the district. A
governmental unit may file a statement with the clerk des-
ignating a safe harbor address to which notices are to be
sent, unless such governmental unit files a notice of
change of address.’’.
(b) ADOPTION OF RULES PROVIDING NOTICE.—The
Advisory Committee on Bankruptcy Rules of the Judicial
Conference shall, within a reasonable period of time after
the date of the enactment of this Act, propose for adoption
enhanced rules for providing notice to State, Federal, and
local government units that have regulatory authority over
the debtor or which may be creditors in the debtor’s case.
Such rules shall be reasonably calculated to ensure that
notice will reach the representatives of the governmental
unit, or subdivision thereof, who will be the proper persons
112
authorized to act upon the notice. At a minimum, the rules
should require that the debtor—
‘‘(1) identify in the schedules and the notice,
the subdivision, agency, or entity in respect of which
such notice should be received;
‘‘(2) provide sufficient information (such as
case captions, permit numbers, taxpayer identifica-
tion numbers, or similar identifying information) to
permit the governmental unit or subdivision thereof,
entitled to receive such notice, to identify the debtor
or the person or entity on behalf of which the debtor
is providing notice where the debtor may be a suc-
cessor in interest or may not be the same as the per-
son or entity which incurred the debt or obligation;
and
‘‘(3) identify, in appropriate schedules, served
together with the notice, the property in respect of
which the claim or regulatory obligation may have
arisen, if any, the nature of such claim or regulatory
obligation and the purpose for which notice is being
given.’’.
(c) EFFECT OF FAILURE OF NOTICE.—Section 342
of title 11, United States Code, as amended by subsection
(a) and section 405, is amended by adding at the end the
following:
113
‘‘(i)(1) A notice that does not comply with sub-
sections (d) and (e) shall have no effect unless the debtor
demonstrates, by clear and convincing evidence, that time-
ly notice was given in a manner reasonably calculated to
satisfy the requirements of this section was given, and
that—
‘‘(A) either the notice was timely sent to the
safe harbor address provided in the register main-
tained by the clerk of the district in which the case
was pending for such purposes; or
‘‘(B) no safe harbor address was provided in
such list for the governmental unit and that an offi-
cer of the governmental unit who is responsible for
the matter or claim had actual knowledge of the case
in sufficient time to act.
‘‘(2) No sanction under section 362(h) of this title
or any other sanction which a court may impose on ac-
count of violations of the stay under section 362(a) of this
title or failure to comply with section 542 or 543 of this
title may be imposed unless the action takes place after
notice of the commencement of the case as required by
this section has been received.’’.
114
SEC. 504. NOTICE OF REQUEST FOR A DETERMINATION OF
TAXES.
Section 505(b) of title 11, United States Code, is
amended by striking ‘‘Unless’’ at the beginning of the sec-
ond sentence thereof and inserting ‘‘If the request is made
in the manner designated by the governmental unit and
unless’’.
SEC. 505. RATE OF INTEREST ON TAX CLAIMS.
Chapter 5 of title 11, United States Code, is amended
by adding at the end the following:
‘‘§ 511. Rate of interest on tax claims
‘‘If the holder of a claim for taxes arising before the
date of the order for relief is entitled to receive interest
on such claim, the rate of interest to be applied shall be
the rate provided in section 6621(a)(2) of the Internal
Revenue Code of 1986.’’.
SEC. 506. TOLLING OF PRIORITY OF TAX CLAIM TIME
PERIODS.
Section 507(a)(8)(A) of title 11, United States Code,
is amended—
(1) in clause (i) by inserting after ‘‘petition’’
and before the semicolon ‘‘, plus any time, plus 6
months, during which the stay of proceedings was in
effect in a prior case under this title’’; and
(2) amend clause (ii) to read as follows:
115
‘‘(ii) assessed within 240 days before the
date of the filing of the petition, exclusive of—
‘‘(I) any time plus 30 days during
which an offer in compromise or install-
ment agreement with respect of such tax,
was pending or in effect during such 240-
day period, and
‘‘(II) any time plus 6 months during
which a stay of proceedings against collec-
tions was in effect in a prior case under
this title during such 240-day period.’’.
SEC. 507. ASSESSMENT DEFINED.
Section 101 of title 11, United States Code, is
amended by inserting after paragraph (2) the following:
‘‘(3) ‘assessment’—
‘‘(A) for purposes of State and local taxes,
means that action which is sufficiently final so
that thereafter a taxing authority may com-
mence an action to collect the tax, and
‘‘(B) for Federal tax purposes has the
meaning given such term in the Internal Reve-
nue Code of 1986;
and ‘assessed’ and ‘assessable’ shall be interpreted
in light of the definition of assessment in this para-
graph;’’.
116
SEC. 508. CHAPTER 13 DISCHARGE OF FRAUDULENT AND
OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code,
is amended by inserting ‘‘(1),’’ after ‘‘paragraph’’ and be-
fore ‘‘(5)’’.
SEC. 509. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, is
amended by adding at the end the following:
‘‘(4) Notwithstanding the provisions of paragraph
(1), the confirmation of a plan does not discharge a debtor
which is a corporation from any debt for a tax or customs
duty with respect to which the debtor made a fraudulent
return or willfully attempted in any manner to evade or
defeat such tax.’’.
SEC. 510. THE STAY OF TAX PROCEEDINGS.
(a) 
THE
SECTION
362 
STAY
LIMITED
TO
PREPETITION TAXES.—Section 362(a)(8) of title 11,
United States Code, is amended by striking the period at
the end and inserting ‘‘, in respect of a tax liability for
a taxable period ending before the order for relief.’’.
(b) THE APPEAL OF TAX COURT DECISIONS PER-
MITTED.—Section 362(b)(9) of title 11, United States
Code, is amended—
(1) in subparagraph (C) by striking ‘‘or’’ at the
end,
117
(2) in subparagraph (D) by striking the period
at the end and inserting ‘‘; or’’, and
(3) by adding at the end the following:
‘‘(E) the appeal of a decision by a court or
administrative tribunal which determines a tax
liability of the debtor.’’.
SEC. 511. PERIODIC PAYMENT OF TAXES IN CHAPTER 11
CASES.
Section 1129(a)(9) of title 11, United States Code,
is amended—
(1) in subparagraph (B) by striking ‘‘and’’ at
the end,
(2) in subparagraph (C)—
(A) by inserting ‘‘in at least quarterly in-
stallments designed to pay at least 15 percent
of the claim in each of the first 5 years of the
plan and no more than 20 percent of the claim
in the final year of the plan,’’ after ‘‘pay-
ments,’’ and before ‘‘over’’, and
(B) by striking the period at the end and
inserting ‘‘; and’’, and
(3) by adding at the end the following:
‘‘(D) with respect to a secured claim which
would be described in section 507(a)(8) of this
title, but for its secured status, the holder of
118
such claim will receive on account of such claim
cash payments in the same manner and over
the same period as is required in subparagraph
(C) of this subsection.’’.
SEC. 512. THE AVOIDANCE OF STATUTORY TAX LIENS PRO-
HIBITED.
Section 545(2) of title 11, United States Code, is
amended by striking the semicolon at the end and insert-
ing ‘‘, except where such purchaser is a purchaser de-
scribed in section 6323 of the Internal Revenue Code of
1986 or similar provision of State or local law;’’.
SEC. 513. COURSE OF BUSINESS PAYMENT OF TAXES.
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of
title 28, United States Code, is amended by striking the
period at the end and inserting after ‘‘corporation’’ the
following:
‘‘, and shall pay the same when due in the course of such
business, unless the tax is a property tax secured by a
lien against property of the estate which is abandoned by
the trustee of a bankruptcy estate, pursuant to section
554 of title 11, United States Code, within a reasonable
time after the lien attaches.’’.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B) of title 11, United States Code, is
amended in clause (i) by inserting after ‘‘estate,’’ and be-
119
fore ‘‘except’’ the following: ‘‘whether secured or unse-
cured, including property taxes for which liability is in rem
only, in personam or both,’’.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE
EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(D) notwithstanding the requirements of
subsection (a) of this section, a governmental
unit shall not be required to file a request for
the payment of a claim described in subpara-
graph (B) or (C);’’.
SEC. 514. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ‘‘the trustee commences distribution
under this section;’’ and inserting ‘‘the court approves the
final report and accounting of the trustee;’’.
SEC. 515. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES.
Section 523(a)(1)(B) of title 11, United States Code,
is amended—
(1) in clause (ii) by striking ‘‘or’’ at the end,
and
(2) by adding at the end the following:
120
‘‘(iii) for purposes of this subsection,
a return—
‘‘(I) must satisfy the require-
ments of applicable nonbankruptcy
law, and includes a return prepared
pursuant to section 6020(a) of the In-
ternal Revenue Code of 1986, or simi-
lar State or local law, or a written
stipulation to a judgment entered by a
nonbankruptcy tribunal, but does not
include a return made pursuant to
section 6020(b) of the Internal Reve-
nue Code of 1986, or similar State or
local law, and
‘‘(II) must have been filed in a
manner permitted by applicable non-
bankruptcy law; or’’.
SEC. 516. THE DISCHARGE OF THE ESTATE’S LIABILITY FOR
UNPAID TAXES.
Section 505(b) of title 11, United States Code, is
amended in the second sentence by inserting ‘‘the estate,’’
after ‘‘misrepresentation,’’.
121
SEC. 517. REQUIREMENT TO FILE TAX RETURNS TO CON-
FIRM CHAPTER 13 PLANS.
(a) FILING
OF PREPETITION TAX RETURNS RE-
QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of
title 11, United States Code, is amended—
(1) in subparagraph (5)(C) by striking ‘‘and’’
at the end,
(2) in paragraph (6) by striking the period at
the end and inserting ‘‘; and’’, and
(3) by adding at the end the following:
‘‘(7) if the debtor has filed all Federal, State,
and local tax returns as required by section 1308 of
this title.’’.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX
RETURNS.—(1) Chapter 13 of title 11, United States
Code, is amended by adding at the end the following:
‘‘§ 1308. Filing of prepetition tax returns
‘‘(a) On or before the day prior to the day on which
the first meeting of the creditors is convened under section
341(a) of this title, the debtor shall have filed with appro-
priate tax authorities all tax returns for all taxable periods
ending in the 6-year period ending on the date of filing
of the petition.
‘‘(b) If the tax returns required by subsection (a)
have not been filed by the date on which the first meeting
of creditors is convened under section 341(a) of this title,
122
the trustee may continue such meeting for a reasonable
period of time, to allow the debtor additional time to file
any unfiled returns, but such additional time shall be no
more than—
‘‘(1) for returns that are past due as of the
date of the filing of the petition, 120 days from such
date, and
‘‘(2) for returns which are not past due as of
the date of the filing of the petition, the later of 120
days from such date or the due date for such re-
turns under the last automatic extension of time for
filing such returns to which the debtor is entitled,
and for which request has been timely made, accord-
ing to applicable nonbankruptcy law,
‘‘(3) upon notice and hearing, and order en-
tered before the lapse of any deadline fixed accord-
ing to this subsection, where the debtor dem-
onstrates, by clear and convincing evidence, that the
failure to file the returns as required is because of
circumstances beyond the control of the debtor, the
court may extend the deadlines set by the trustee as
provided in this subsection for—
‘‘(A) a period of no more than 30 days for
returns described in paragraph (1) of this sub-
section, and
123
‘‘(B) for no more than the period of time
ending on the applicable extended due date for
the returns described in paragraph (2).
‘‘(c) For purposes of this section, a return—
‘‘(1) must satisfy the requirements of applicable
nonbankruptcy law, and includes a return prepared
pursuant to section 6020(a) of the Internal Revenue
Code of 1986, or similar State or local law, or a
written stipulation to a judgment entered by a non-
bankruptcy tribunal, but does not include a return
made pursuant to section 6020(b) of the Internal
Revenue Code of 1986, or similar State or local law,
and
‘‘(2) must have been filed in a manner per-
mitted by applicable nonbankruptcy law.’’.
(2) The table of sections of chapter 13 of title 11,
United States Code, is amended by inserting after the
item relating to section 1307 the following:
‘‘1308. Filing of prepetition tax returns.’’.
(c) DISMISSAL
OR CONVERSION
ON FAILURE TO
COMPLY.—Section 1307 of title 11, United States Code,
is amended—
(1) by redesignating subsections (e) and (f) as
subsections (f) and (g), respectively, and
(2) by inserting after subsection (d) the follow-
ing:
124
‘‘(e) Upon the failure of the debtor to file tax returns
under section 1308 of this title, on request of a party in
interest or the United States trustee and after notice and
a hearing, the court shall dismiss a case or convert a case
under this chapter to a case under chapter 7 of this title,
whichever is in the best interests of creditors and the es-
tate.’’.
(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of
title 11, United States Code, is amended by striking the
period at the end and inserting ‘‘, and except that in a
case under Chapter 13 of this title, a claim of a govern-
mental unit for a tax in respect of a return filed under
section 1308 of this title shall be timely if it is filed on
or before 60 days after such return or returns were filed
as required.’’.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO
CONFIRMATION.—It is the sense of Congress that the Ad-
visory Committee on Bankruptcy Rules of the Judicial
Conference should, within a reasonable period of time
after the date of the enactment of this Act, propose for
adoption amended Federal Rules of Bankruptcy Proce-
dure which provide that—
(1) notwithstanding the provisions of Rule
3015(f), in cases under chapter 13 of title 11,
United States Code, a governmental unit may object
125
to the confirmation of a plan on or before 60 days
after the debtor files all tax returns required under
sections 1308 and 1325(a)(7) of title 11, and
(2) in addition to the provisions of Rule 3007,
in a case under chapter 13 of title 11, United States
Code, no objection to a tax in respect of a return re-
quired to be filed under section 1308 shall be filed
until such return has been filed as required.
SEC. 518. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a) of title 11, United States Code, is
amended in paragraph (1)—
(1) by inserting after ‘‘records,’’ and before
‘‘that’’ the following: ‘‘including a full discussion of
the potential material Federal and State tax con-
sequences of the plan to the debtor, any successor
to the debtor, and a hypothetical investor typical of
the holders of claims or interests in the case,’’,
(2) by inserting ‘‘such’’ after ‘‘enable’’ and be-
fore ‘‘a’’, and
(3) by striking ‘‘reasonable’’ where it appears
after ‘‘hypothetical’’ and before ‘‘investor’’ and by
striking ‘‘typical of the holders of claims or inter-
ests’’ after ‘‘investor’’ and before ‘‘of’’.
126
SEC. 519. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as
amended by section 130, is amended—
(1) in paragraph (18) by striking ‘‘or’’,
(2) in paragraph (19) by striking the period at
the end and inserting ‘‘; or’’, and
(3) by inserting after paragraph (19) the fol-
lowing:
‘‘(20) under subsection (a) of the setoff of an
income tax refund, by a governmental unit, in re-
spect of a taxable period which ended before the
order for relief against an income tax liability for a
taxable period which also ended before the order for
relief, unless—
‘‘(A) prior to such setoff, an action to de-
termine the amount or legality of such tax li-
ability under section 505(a) was commenced;
‘‘(B) where the setoff of an income tax re-
fund is not permitted because of a pending ac-
tion to determine the amount or legality of a
tax liability, the governmental unit may hold
the refund pending the resolution of the ac-
tion.’’.
TITLE VI—MISCELLANEOUS
SEC. 601. TECHNICAL AMENDMENTS.
Title 11 of the United States Code is amended—
127
(1) in section 109(b)(2) by striking ‘‘subsection
(c) or (d) of’’;
(2) in section 541(b)(4) by adding ‘‘or’’ at the
end; and
(3) in section 552(b)(1) by striking ‘‘product’’
each place it appears and inserting ‘‘products’’.
SEC. 602. APPLICATION OF AMENDMENTS.
The amendments made by this Act shall apply only
with respect to cases commenced under title 11 of the
United States Code after the date of the enactment of this
Act.
Æ