(b) LIMITATIONS ON AVOIDING POWERS.—Section
546(b) of title 11, United States Code, is amended to read
as follows:
‘‘(b)(1) The rights and powers of a trustee under sec-
tions 544, 545, and 549 of this title are subject to any gen-
erally applicable law that—
‘‘(A) permits perfection of an interest in prop-
erty to be effective against an entity that acquires
rights in such property before the date of perfection;
or
‘‘(B) provides for the maintenance or continu-
ation of perfection of an interest in property to be ef-
fective against an entity that acquires rights in such
property before the date on which action is taken to
effect such maintenance or continuation.
‘‘(2) If—
‘‘(A) a law described in paragraph (1) requires
seizure of such property or commencement of an ac-
tion to accomplish such perfection, or maintenance or
continuation of perfection of an interest in property;
and
‘‘(B) such property has not been seized or such
an action has not been commenced before the date of
the filing of the petition;
such interest in such property shall be perfected, or perfec-
tion of such interest shall be maintained or continued, by
giving notice within the time fixed by such law for such
seizure or such commencement.’’.
SEC. 205. REJECTION OF UNEXPIRED LEASES OF REAL
PROPERTY OR TIMESHARE INTERESTS.
(a) AMENDMENT TO SECTION 365.—Section 365(h) of
title 11, United States Code, is amended to read as follows:
‘‘(h)(1)(A) If the trustee rejects an unexpired lease of
real property under which the debtor is the lessor and—
‘‘(i) if the rejection by the trustee amounts to
such a breach as would entitle the lessee to treat such
lease as terminated by virtue of its terms, applicable
nonbankruptcy law, or any agreement made by the
lessee, then the lessee under such lease may treat such
lease as terminated by the rejection; or
‘‘(ii) if the term of such lease has commenced, the
lessee may retain its rights under such lease (includ-
ing rights such as those relating to the amount and
timing of payment of rent and other amounts payable
by the lessee and any right of use, possession, quiet
enjoyment, subletting, assignment, or hypothecation)
that are in or appurtenant to the real property for
the balance of the term of such lease and for any re-
newal or extension of such rights to the extent that
such 
rights 
are 
enforceable 
under 
applicable
nonbankruptcy law.
‘‘(B) If the lessee retains its rights under subparagraph
(A)(ii), the lessee may offset against the rent reserved under
such lease for the balance of the term after the date of the
rejection of such lease and for the term of any renewal or
extension of such lease, the value of any damage caused by
the nonperformance after the date of such rejection, of any
obligation of the debtor under such lease, but the lessee shall
not have any other right against the estate or the debtor
on account of any damage occurring after such date caused
by such nonperformance.
‘‘(C) The rejection of a lease of real property in a shop-
ping center with respect to which the lessee elects to retain
its rights under subparagraph (A)(ii) does not affect the
enforceability under applicable nonbankruptcy law of any
provision in the lease pertaining to radius, location, use,
exclusivity, or tenant mix or balance.
‘‘(D) In this paragraph, ‘lessee’ includes any successor,
assign, or mortgagee permitted under the terms of such
lease.
‘‘(2)(A) If the trustee rejects a timeshare interest under
a timeshare plan under which the debtor is the timeshare
interest seller and—
‘‘(i) if the rejection amounts to such a breach as
would entitle the timeshare interest purchaser to treat
the timeshare plan as terminated under its terms, ap-
plicable nonbankruptcy law, or any agreement made
by timeshare interest purchaser, the timeshare interest
purchaser under the timeshare plan may treat the
timeshare plan as terminated by such rejection; or
‘‘(ii) if the term of such timeshare interest has
commenced, then the timeshare interest purchaser
may retain its rights in such timeshare interest for
the balance of such term and for any term of renewal
or extension of such timeshare interest to the extent
that such rights are enforceable under applicable
nonbankruptcy law.
‘‘(B) If the timeshare interest purchaser retains its
rights under subparagraph (A), such timeshare interest
purchaser may offset against the moneys due for such
timeshare interest for the balance of the term after the date
of the rejection of such timeshare interest, and the term of
any renewal or extension of such timeshare interest, the
value of any damage caused by the nonperformance after
the date of such rejection, of any obligation of the debtor
under such timeshare plan, but the timeshare interest pur-
chaser shall not have any right against the estate or the
debtor on account of any damage occurring after such date
caused by such nonperformance.’’.
(b) TECHNICAL AMENDMENT.—Section 553(b)(1) of
title 11, United States Code, is amended by striking
‘‘365(h)(2)’’ and inserting ‘‘365(h)’’.
SEC. 206. CONTENTS OF PLAN.
Section 1123(b) of title 11, United States Code, is
amended—
(1) in paragraph (4) by striking ‘‘and’’ at the
end,
(2) by redesignating paragraph (5) as para-
graph (6), and
(3) by inserting after paragraph (4) the follow-
ing:
‘‘(5) modify the rights of holders of secured
claims, other than a claim secured only by a security
interest in real property that is the debtor’s principal
residence, or of holders of unsecured claims, or leave
unaffected the rights of holder of any class of claims;
and’’.
SEC. 207. PRIORITY FOR INDEPENDENT SALES REPRESENT-
ATIVES.
Section 507(a)(3) of title 11, United States Code, is
amended to read as follows:
‘‘(3) Third, allowed unsecured claims, but only
to the extent of $4,000 for each individual or corpora-
tion, as the case may be, earned within 90 days before
the date of the filing of the petition or the date of the
cessation of the debtor’s business, whichever occurs
first, for—
‘‘(A) wages, salaries, or commissions, in-
cluding vacation, severance, and sick leave pay
earned by an individual; or
‘‘(B) sales commissions earned by an indi-
vidual or by a corporation with only 1 employee,
acting as an independent contractor in the sale
of goods or services for the debtor in the ordinary
course of the debtor’s business if, and only if,
during the 12 months preceding that date, at
least 75 percent of the amount that the individ-
ual or corporation earned by acting as an inde-
pendent contractor in the sale of goods or serv-
ices was earned from the debtor;’’.
SEC. 208. EXCLUSION FROM THE ESTATE OF INTERESTS IN
LIQUID 
AND 
GASEOUS 
HYDROCARBONS
TRANSFERRED BY THE DEBTOR PURSUANT
TO PRODUCTION PAYMENT AGREEMENTS.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (42)
the following:
‘‘(42A) ‘production payment’ means a payment
(in cash or in kind) that is—
‘‘(A) contingent on the production of a liq-
uid or gaseous hydrocarbon from particular real
property; and
‘‘(B) attributable to part of a specified vol-
ume, or part of a specified value, of the liquid
or gaseous hydrocarbon produced from such
property, and determined without regard to pro-
duction costs;’’.
(b) PROPERTY OF THE ESTATE.—Section 541(b)(4) of
title 11, United States Code, is amended—
(1) in subparagraph (A) by striking ‘‘(A)’’ and
inserting ‘‘(A)(i)’’,
(2) in subparagraph (B)—
(A) by striking ‘‘(B)’’ and inserting ‘‘(ii),
(B) by striking ‘‘such interest’’ and insert-
ing ‘‘the interest referred to in clause (i)’’, and
(C) by striking the period at the end and
inserting ‘‘; or’’, and
(3) by adding at the end the following:
‘‘(B)(i) the debtor has transferred or has
agreed to transfer such interest pursuant to a
written agreement to make production payments
to a person that does not participate in the pro-
duction of the liquid or gaseous hydrocarbon
with respect to which such payments are made;
and
‘‘(ii) but for the operation of this para-
graph, the estate could include the interest re-
ferred to in clause (i) only by virtue of section
365 of this title;’’.
SEC. 209. SELLER’S RIGHT TO RECLAIM GOODS.
Section 546(c)(1) of title 11, United States Code, is
amended by striking ‘‘ten’’ and inserting ‘‘20’’.
SEC. 210. INVESTMENT OF MONEY OF THE ESTATE.
Section 345(b) of title 11, United States Code, is
amended—
(1) in paragraph (2) by striking the period at
the end and inserting a semicolon, and
(2) by adding ‘‘unless the court for cause orders
otherwise.’’ at the end of such subsection.
SEC. 211. ELECTION OF TRUSTEE UNDER CHAPTER 11.
(a) ELECTION AUTHORIZED.—Section 1104 of title 11
of the United States Code is amended—
(1) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively, and
(2) by inserting after subsection (a) the follow-
ing:
‘‘(b) Except as provided in section 1163 of this title,
on the request of a party in interest made not later than
30 days after the court orders the appointment of a trustee
under subsection (a), the United States trustee shall convene
a meeting of creditors for the purpose of electing one disin-
terested person to serve as trustee in the case. The election
of a trustee shall be conducted in the manner provided in
subsections (a), (b), and (c) of section 702 of this title.’’.
(b) CONFORMING AMENDMENT.—Section 1106(b) of
title 11, United States Code, is amended by striking
‘‘1104(c)’’ and inserting ‘‘1104(d)’’.
SEC. 212. RIGHTS OF PARTNERSHIP TRUSTEE AGAINST
GENERAL PARTNERS.
Section 723(a) of title 11, United States Code, is
amended by striking ‘‘for the full amount of the deficiency’’
and inserting ‘‘to the extent that under applicable
nonbankruptcy law such general partner is personally lia-
ble for the debts of the partnership’’.
SEC. 213. EXCLUSION FROM THE ESTATE OF CERTAIN AC-
COUNTS AND CHATTEL PAPER.
Section 541 of title 11, United States Code, as amend-
ed by section 208, is amended—
(1) in subsection (b) by inserting after para-
graph (4) the following:
‘‘(5) any interest of the debtor in any account or
chattel paper to the extent that—
‘‘(A) such interest was actually sold under
applicable nonbankruptcy law by the debtor be-
fore the date of commencement of the case, but
without taking into consideration whether the
purchaser filed a financing statement before such
date; and
‘‘(B) but for the operation of this para-
graph, the estate could include such interest only
by virtue of section 542 of this title; or’’, and
(2) by adding at the end the following:
‘‘(e) In this section—
‘‘(1) ‘account’ means any right to payment for
goods sold or leased or for services rendered that is
not evidence by an instrument or chattel paper,
whether or not it has been earned by performance,
and includes all rights to payment earned or un-
earned under a charter or other contract involving the
use or hire of a vessel and all rights incident to such
charter or such contract; and
‘‘(2) ‘chattel paper’ means—
‘‘(A) a writing or writings that evidence
both a monetary obligation and a security inter-
est in or lease of specific goods (excluding a
charter or other contract involving the use or
hire of a vessel); or
‘‘(B) if a transaction described in subpara-
graph (A) is evidenced both by such a security
agreement or a lease and by an instrument or a
series of instruments, the group of these writings
taken together.’’.
SEC. 214. IMPAIRMENT OF CLAIMS AND INTERESTS.
(a) OBJECTION TO CLAIMS FILED UNTIMELY.—Sec-
tion 502(b) of title 11, United States Code, is amended—
(1) in paragraph (7) by striking ‘‘or’’ at the end,
(2) in paragraph (8) by striking the period at
the end and inserting ‘‘; or’’, and
(3) by adding at the end the following:
‘‘(9) proof of such claim is not timely filed, ex-
cept to the extent tardily filed as permitted under
paragraph (2) or (3) of section 726(a).’’.
tered into a security agreement before the commencement
of the case and if the security interest created by such secu-
rity agreement extends to property of the debtor acquired
before the commencement of the case and to rents of such
property, then such security interest extends to such rents
acquired by the estate after the commencement of the case
to the extent provided in such security agreement, except
to any extent that the court, after notice and a hearing and
based on the equities of the case, orders otherwise.’’.
(b) USE SALE, OR LEASE OF PROPERTY.—Section
363(a) of title 11, United States Code, is amended by insert-
ing: ‘‘and the net fees, charges, accounts or other payments
for the use or occupancy of rooms and other public facilities
in hotels, motels, or other lodging properties’’ after ‘‘prop-
erty’’.
SEC. 216. AMENDMENT TO DEFINITION OF SWAP AGREE-
MENT.
Subparagraph (A) of the first paragraph (55) of sec-
tion 101 of title 11, United States Code, is amended by in-
serting ‘‘spot foreign exchange agreement,’’ after ‘‘forward
foreign exchange agreement,’’.
SEC. 217. LIMITATION ON AVOIDING POWERS.
Section 546(a) of title 11, United States Code, is
amended—
(1) by striking ‘‘earlier’’ and inserting ‘‘later’’, and
(2) by amending paragraphs (1) and (2) to read as
follows:
‘‘(1) 2 years after the entry of the order for relief;
or
‘‘(2) 1 year after the appointment or election of
the first trustee under section 702, 1104, 1163, 1202,
or 1302 of this title if such appointment or such elec-
tion occurs before the expiration of the period speci-
fied in subparagraph (1).’’.
SEC. 218. SMALL BUSINESSES.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (51)
the following:
‘‘(51C) ‘small business’ means a person engaged
in commercial or business activities (but does not in-
clude a person whose primary activity is the business
of owning or operating real property and activities
incidental thereto) whose aggregate noncontingent liq-
uidated secured and unsecured debts as of the date of
the petition do not exceed $2,000,000;’’.
(b) CREDITORS’ COMMITTEES.—Section 1102(a) of
title 11, United States Code, is amended—
(1) in paragraph (1) by striking ‘‘As’’ and in-
serting ‘‘Except as provided in paragraph (3), as’’;
and
(2) by adding at the end the following:
‘‘(3) On request of a party in interest in a case in
which the debtor is a small business and for cause, the court
may order that a committee of creditors not be appointed.’’.
(c) CONVERSION OR DISMISSAL.—Section 1112(b) of
title 11, United States Code, is amended by inserting ‘‘or
bankruptcy administrator’’ after ‘‘United States trustee’’.
(d) WHO MAY FILE A PLAN.—Section 1121 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(e) In a case in which the debtor elects to be consid-
ered a small business—
‘‘(1) only the debtor may file a plan until after
100 days after the date of the order for relief under
this chapter;
‘‘(2) all plans shall be filed within 160 days
after the date of the order for relief; and
‘‘(3) on request of a party in interest made with-
in the respective periods specified in paragraphs (1)
and (2) and after notice and a hearing, the court
may—
‘‘(A) reduce the 100-day period or the 160-
day period specified in paragraph (1) or (2) for
cause; and
‘‘(B) increase the 100-day period specified
in paragraph (1) if the debtor shows that the
need for an increase is caused by circumstances
for which the debtor should not be held account-
able.’’.
(e) POSTPETITION DISCLOSURE.—Section 1125 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(f) Notwithstanding subsection (b), in a case in which
the debtor is a small business—
‘‘(1) the court may conditionally approve a dis-
closure statement subject to final approval after notice
and a hearing;
‘‘(2) acceptances and rejections of a plan may be
solicited based on a conditionally approved disclosure
statement so long as the debtor provides adequate in-
formation to each holder of a claim or interest that
is solicited, but a conditionally approved disclosure
statement shall be mailed at least 10 days prior to the
date of the hearing on confirmation of the plan; and
‘‘(3) a hearing on the disclosure statement may
be combined with a hearing on confirmation of a
plan.’’.
SEC. 219. SINGLE ASSET REAL ESTATE.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (51)
the following:
‘‘(51B) ‘single asset real estate’ means real prop-
erty constituting a single property or project, other
than residential real property with fewer than 4 resi-
dential units, which generates substantially all of the
gross income of a debtor and on which no substantial
business is being conducted by a debtor other than the
business of operating the real property and activities
incidental thereto having aggregate secured debts in
an amount no more than $2,000,000;’’.
(b) AUTOMATIC STAY.—Section 362 of title 11, United
States Code, is amended—
(1) in subsection (d)—
(A) in paragraph (1) by striking ‘‘or’’ at
the end,
(B) in paragraph (2) by striking the period
at the end and inserting ‘‘; or’’, and
(C) by adding at the end the following:
‘‘(3) with respect to a stay of an act against sin-
gle asset real estate under subsection (a), by a creditor
whose claim is secured by an interest in such real es-
tate, unless, not later than the date that is 90 days
after the entry of the order for relief (or such later
date as the court may determine for cause by order
entered within that 90-day period)—
‘‘(A) the debtor has filed a plan of reorga-
nization that has a reasonable possibility of
being confirmed within a reasonable time; or
‘‘(B) the debtor has commenced monthly
payments to each creditor whose claim is secured
by such real estate (other than a claim secured
by a judgment lien), which payments are in an
amount equal to interest at a current fair mar-
ket rate on the value of the creditor’s interest in
the real estate.’’, and
(2) by adding at the end the following:
‘‘(i)(1) An order under this section with respect to sin-
gle asset real estate shall not issue before the date that is
30 days after the date of entry of the order for relief, but
thereafter shall issue promptly after such a request.
‘‘(2) A hearing shall not be required for the granting
of relief under this section with respect to single asset real
estate unless the debtor files an objection to the request and
shows the court extraordinary circumstances requiring such
a hearing.’’.
SEC. 220. LEASES OF PERSONAL PROPERTY.
(a) ASSUMPTION.—Section 365(b)(1) of title 11, Unit-
ed States Code is amended—