the Internal Revenue Code of 1986, as added by this 
section, shall apply to taxable years beginning on or 
after the date of enactment of this Act, with respect 
to elections under section 163(j)(7)(B) of such Code 
made before, on, or after such date. 
TITLE III—PROTECTING WORK-
ERS WHEN COMPANIES GO 
BANKRUPT 
SEC. 301. INCREASED PRIORITY FOR WAGES. 
Section 507(a) of title 11, United States Code, is 
amended— 
(1) in paragraph (4)— 
(A) by redesignating subparagraphs (A) 
and (B) as clauses (i) and (ii), respectively; 
(B) in the matter preceding clause (i), as 
so redesignated, by inserting ‘‘(A)’’ before 
‘‘Fourth’’; 
(C) in subparagraph (A), as so designated, 
in the matter preceding clause (i), as so redes-
ignated— 
(i) by striking ‘‘$10,000’’ and insert-
ing ‘‘$20,000’’; 
(ii) by striking ‘‘within 180 days’’; 
and 
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(iii) by striking ‘‘or the date of the 
cessation of the debtor’s business, which-
ever occurs first’’; and 
(D) by adding at the end the following: 
‘‘(B) Severance pay described in subparagraph 
(A)(i) shall be deemed earned in full upon the layoff 
or termination of employment of the individual to 
whom the severance pay is owed.’’; and 
(2) in paragraph (5)— 
(A) in subparagraph (A)— 
(i) by striking ‘‘within 180 days’’; and 
(ii) by striking ‘‘or the date of the 
cessation of the debtor’s business, which-
ever occurs first’’; and 
(B) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) for each such plan, to the extent of 
the number of employees covered by each such 
plan multiplied by $20,000.’’. 
SEC. 302. PRIORITY FOR SEVERANCE PAY AND CONTRIBU-
TIONS TO EMPLOYEE WELFARE BENEFIT 
PLANS. 
Section 503(b) of title 11, United States Code, is 
amended— 
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(1) in paragraph (8)(B), by striking ‘‘and’’ at 
the end; 
(2) in paragraph (9), by striking the period and 
inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(10) severance pay owed to employees of the 
debtor (other than to an insider of the debtor or a 
senior executive officer of the debtor), under a plan, 
program, or policy generally applicable to employees 
of the debtor (but not under an individual contract 
of employment), or owed pursuant to a collective 
bargaining agreement, for layoff or termination on 
or after the date of the filing of the petition, which 
pay shall be deemed earned in full upon such layoff 
or termination of employment; and 
‘‘(11) any contribution due on or after the date 
of the filing of the petition under an employee wel-
fare benefit plan, as defined in section 3 of the Stop 
Wall Street Looting Act.’’. 
SEC. 303. PRIORITY FOR VIOLATIONS OF FEDERAL AND 
STATE LAWS. 
(a) ALLOWANCE OF ADMINISTRATIVE EXPENSES IN 
BANKRUPTCY CASES.—Section 503(b)(1)(A)(ii) of title 
11, United States Code, is amended by inserting after 
‘‘(ii)’’ the following: ‘‘any back pay, civil penalty, or dam-
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ages for a violation of any Federal or State labor and em-
ployment law, including the Worker Adjustment and Re-
training Notification Act (29 U.S.C. 2101 et seq.) and any 
comparable State law, and’’. 
(b) ADMINISTRATION AND ENFORCEMENT OF WORK-
ER ADJUSTMENT AND RETRAINING NOTIFICATION RE-
QUIREMENTS.—Section 5(a)(1) of the Worker Adjustment 
and Retraining Notification Act (29 U.S.C. 2104(a)(1)) 
is amended, in the matter following subparagraph (B)— 
(1) by inserting ‘‘which for purposes of this 
sentence shall consist of the days, in the notification 
period, that are or that follow the date of the pro-
hibited closing or layoff under this Act,’’ after ‘‘pe-
riod of the violation,’’; and 
(2) by inserting ‘‘calendar’’ after ‘‘60’’. 
SEC. 304. LIMITATION ON EXECUTIVE COMPENSATION EN-
HANCEMENTS. 
Section 503(c) of title 11, United States Code, is 
amended— 
(1) in the matter preceding paragraph (1), by 
inserting ‘‘and subject to section 363(b)(3),’’ after 
‘‘Notwithstanding subsection (b),’’; 
(2) in paragraph (1), in the matter preceding 
subparagraph (A)— 
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(A) by inserting ‘‘, a senior executive offi-
cer of the debtor, or any of the 20 next most 
highly compensated employees of the debtor, de-
partment or division managers of the debtor, or 
consultants providing services to the debtor (re-
gardless of whether the executive officer, em-
ployee, manager, or consultant is an insider)’’ 
after ‘‘insider of the debtor’’; 
(B) by inserting ‘‘or for the payment of 
performance or incentive compensation, a bonus 
of any kind, or any other financial return de-
signed to replace or enhance incentive, stock, or 
other compensation in effect before the date of 
the commencement of the case,’’ after ‘‘remain 
with the debtor’s business,’’; and 
(C) by inserting ‘‘clear and convincing’’ be-
fore ‘‘evidence in the record’’; 
(3) in paragraph (2), in the matter preceding 
subparagraph (A), by inserting ‘‘, a senior executive 
officer of the debtor, or any of the 20 next most 
highly compensated employees of the debtor, depart-
ment or division managers of the debtor, or consult-
ants providing services to the debtor (regardless of 
whether the executive officer, employee, manager, or 
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consultant is an insider)’’ after ‘‘an insider of the 
debtor’’; and 
(4) by striking paragraph (3) and inserting the 
following: 
‘‘(3) any other transfer or obligation to or for 
the benefit of an insider of the debtor, a senior exec-
utive officer of the debtor, or any of the 20 next 
most highly compensated employees of the debtor, 
department or division managers of the debtor, or 
consultants providing services to the debtor (regard-
less of whether the executive officer, employee, man-
ager, or consultant is an insider), absent a finding 
by the court, based upon clear and convincing evi-
dence in the record, and without deference to a re-
quest by the debtor for such payment, that— 
‘‘(A) because of the essential and particu-
larized nature of the services provided by the 
insider, executive officer, employee, manager, or 
consultant, the transfer or obligation is essen-
tial to— 
‘‘(i) the survival of the business of the 
debtor; or 
‘‘(ii) in a case in which some or all of 
the assets of the debtor are liquidated, the 
orderly liquidation of the assets; 
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