103
SEC. 149. COLLECTION OF CHILD SUPPORT.
(a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec-
tion 704 of title 11, United States Code, as amended by
section 102, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The trustee’’;
(2) in paragraph (9) by striking ‘‘and’’ at the
end;
(3) in paragraph (10) by striking the period
and inserting ‘‘; and’’; and
(4) by adding at the end the following:
‘‘(11) if, with respect to an individual debtor,
there is a claim for support of a child of the debtor
or a custodial parent of such child entitled to receive
priority under section 507(a)(1) of this title, provide
the applicable notification specified in subsection (b).
‘‘(b)(1) In any case described in subsection (a)(11),
the trustee shall—
‘‘(A)(i) notify in writing the holder of the claim
of the right of such holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act for the State in which the holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
104
‘‘(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim; and
‘‘(iii) at such time as the debtor is granted a
discharge under section 727 of this title, notify the
holder of such claim and the State child support
agency of the State in which such holder resides
of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor; and
‘‘(III) with respect to the debtor’s case, the
name of each creditor that holds a claim that
is not discharged under paragraph (2), (4), or
(14A) of section 523(a) of this title or that was
reaffirmed by the debtor under section 524(c)
of this title.
‘‘(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject
of the notice, such holder or such agency may request from
105
a creditor described in paragraph (1)(B)(iii)(III) the last
known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making such disclosure.’’.
(b) DUTIES OF TRUSTEE UNDER CHAPTER 13.—
Section 1302 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (4) by striking ‘‘and’’ at
the end;
(B) in paragraph (5) by striking the period
and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) if, with respect to an individual debtor,
there is a claim for support of a child of the debtor
or a custodial parent of such child entitled to receive
priority under section 507(a)(1) of this title, provide
the applicable notification specified in subsection
(d).’’; and
(2) by adding at the end the following:
‘‘(d)(1) In any case described in subsection (b)(6),
the trustee shall—
106
‘‘(A)(i) notify in writing the holder of the claim
of the right of such holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act for the State in which the holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
‘‘(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim; and
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim;
‘‘(iii) at such time as the debtor is granted a
discharge under section 1328 of this title, notify the
holder of the claim and the State child support
agency of the State in which such holder resides
of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor; and
‘‘(III) with respect to the debtor’s case, the
name of each creditor that holds a claim that
is not discharged under paragraph (2), (4), or
107
(14A) of section 523(a) of this title or that was
reaffirmed by the debtor under section 524(c)
of this title.
‘‘(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject
of the notice, such holder or such agency may request from
a creditor described in paragraph (1)(B)(iii) the last
known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making such disclosure.’’.
SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI-
PANT CONTRIBUTIONS AND OTHER PROP-
ERTY FROM THE ESTATE.
(a) IN GENERAL.—Section 541(b) of title 11, United
States Code, is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(4)(B)(ii);
(2) by striking the period at the end of para-
graph (5) and inserting ‘‘; or’’; and
(3) by inserting after paragraph (5) the fol-
lowing:
109
Federal law, without regard to when the original un-
lawful act occurred or to whether any services were
rendered;’’.
SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b)(2) of title 11, United States Code, is
amended—
(1) in subparagraph (A) by striking ‘‘or’’ at the
end;
(2) in subparagraph (B) by adding ‘‘or’’ at the
end; and
(3) by adding at the end the following:
‘‘(C) under subsection (a) of—
‘‘(i) the withholding of income for
payment of a domestic support obligation
pursuant to a judicial or administrative
order or statute for such obligation that
first becomes payable after the date on
which the petition is filed; or
‘‘(ii) the withholding of income for
payment of a domestic support obligation
owed directly to the spouse, former spouse
or child of the debtor or the parent of such
child, pursuant to a judicial or administra-
tive order or statute for such obligation
110
that becomes payable before the date on
which the petition is filed unless the court
finds, after notice and hearing, that such
withholding would render the plan infeasi-
ble;’’.
SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN
PROCEEDINGS AGAINST THE DEBTOR.
Section 362(b)(2) of title 11, United States Code, as
amended by section 153, is amended—
(1) in subparagraph (B) by striking ‘‘or’’ at the
end;
(2) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) the commencement or continuation of
a proceeding concerning a child custody or visi-
tation;
‘‘(E) the commencement or continuation of
a proceeding alleging domestic violence; or
‘‘(F) the commencement or continuation of
a proceeding seeking a dissolution of marriage,
except to the extent the proceeding concerns
property of the estate;’’.
111
SEC. 154. DISCLOSURES.
(a) DISCLOSURES.—Subchapter II of chapter 5 of
title 11, United States Code, as amended by section 106,
is amended by adding at the end the following:
‘‘§ 527. Disclosures
‘‘(a) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide the following no-
tices to the assisted person:
‘‘(1) the written notice required under section
342(b)(1) of this title; and
‘‘(2) to the extent not covered in the written no-
tice described in paragraph (1) of this section and
no later than three business days after the first date
on which a debt relief agency first offers to provide
any bankruptcy assistance services to an assisted
person, a clear and conspicuous written notice advis-
ing assisted persons of the following—
‘‘(A) all information the assisted person is
required to provide with a petition and there-
after during a case under this title must be
complete, accurate and truthful;
‘‘(B) all assets and all liabilities must be
completely and accurately disclosed in the docu-
ments filed to commence the case, and the re-
placement value of each asset as defined in sec-
tion 506 of this title must be stated in those
112
documents where requested after reasonable in-
quiry to establish such value;
‘‘(C) current monthly income, the amounts
specified in section 707(b)(2) and, in a chapter
13 case, disposable income (determined in ac-
cordance with section 707(b)(2)) must be stated
after reasonable inquiry; and
‘‘(D) that information an assisted person
provides during their case may be audited pur-
suant to this title and that failure to provide
such information may result in dismissal of the
proceeding under this title or other sanction in-
cluding, in some instances, criminal sanctions.
‘‘(b) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide each assisted per-
son at the same time as the notices required under sub-
section (a)(1) with the following statement, to the extent
applicable, or one substantially similar. The statement
shall be clear and conspicuous and shall be in a single
document separate from other documents or notices pro-
vided to the assisted person:
‘‘ ‘IMPORTANT INFORMATION ABOUT BANK-
RUPTCY ASSISTANCE SERVICES FROM AN AT-
TORNEY 
OR 
BANKRUPTCY 
PETITION 
PRE-
PARER.
113
‘‘ ‘If you decide to seek bankruptcy relief, you can
represent yourself, you can hire an attorney to represent
you, or you can get help in some localities from a bank-
ruptcy petition preparer who is not an attorney. THE
LAW REQUIRES AN ATTORNEY OR BANKRUPTCY
PETITION PREPARER TO GIVE YOU A WRITTEN
CONTRACT SPECIFYING WHAT THE ATTORNEY
OR BANKRUPTCY PETITION PREPARER WILL DO
FOR YOU AND HOW MUCH IT WILL COST. Ask to
see the contract before you hire anyone.
‘‘ ‘The following information helps you understand
what must be done in a routine bankruptcy case to help
you evaluate how much service you need. Although bank-
ruptcy can be complex, many cases are routine.
‘‘ ‘Before filing a bankruptcy case, either you or your
attorney should analyze your eligibility for different forms
of debt relief made available by the Bankruptcy Code and
which form of relief is most likely to be beneficial for you.
Be sure you understand the relief you can obtain and its
limitations. To file a bankruptcy case, documents called
a Petition, Schedules and Statement of Financial Affairs,
as well as in some cases a Statement of Intention need
to be prepared correctly and filed with the bankruptcy
court. You will have to pay a filing fee to the bankruptcy
court. Once your case starts, you will have to attend the
114
required first meeting of creditors where you may be ques-
tioned by a court official called a ‘‘trustee’’ and by credi-
tors.
‘‘ ‘If you choose to file a chapter 7 case, you may be
asked by a creditor to reaffirm a debt. You may want help
deciding whether to do so and a creditor is not permitted
to coerce you into reaffirming your debts.
‘‘ ‘If you choose to file a chapter 13 case in which
you repay your creditors what you can afford over three
to five years, you may also want help with preparing your
chapter 13 plan and with the confirmation hearing on your
plan which will be before a bankruptcy judge.
‘‘ ‘If you select another type of relief under the Bank-
ruptcy Code other than chapter 7 or chapter 13, you will
want to find out what needs to be done from someone fa-
miliar with that type of relief.
‘‘ ‘Your bankruptcy case may also involve litigation.
You are generally permitted to represent yourself in litiga-
tion in bankruptcy court, but only attorneys, not bank-
ruptcy petition preparers, can give you legal advice.’.
‘‘(c) Except to the extent the debt relief agency pro-
vides the required information itself after reasonably dili-
gent inquiry of the assisted person or others so as to ob-
tain such information reasonably accurately for inclusion
on the petition, schedules or statement of financial affairs,
115
a debt relief agency providing bankruptcy assistance to an
assisted person, to the extent permitted by nonbankruptcy
law, shall provide each assisted person at the time re-
quired for the notice required under subsection (a)(1) rea-
sonably sufficient information (which shall be provided in
a clear and conspicuous writing) to the assisted person
on how to provide all the information the assisted person
is required to provide under this title pursuant to section
521, including—
‘‘(1) how to value assets at replacement value,
determine current monthly income, the amounts
specified in section 707(b)(2)) and, in a chapter 13
case, how to determine disposable income in accord-
ance with section 707(b)(2) and related calculations;
‘‘(2) how to complete the list of creditors, in-
cluding how to determine what amount is owed and
what address for the creditor should be shown; and
‘‘(3) how to determine what property is exempt
and how to value exempt property at replacement
value as defined in section 506 of this title.
‘‘(d) A debt relief agency shall maintain a copy of
the notices required under subsection (a) of this section
for two years after the date on which the notice is given
the assisted person.’’.
116
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by section 106, is amended by inserting after the
item relating to section 526 the following:
‘‘527. Disclosures.’’.
SEC. 155. DEBTOR’S BILL OF RIGHTS.
Subchapter II of chapter 5 of title 11, United States
Code, as amended by sections 106 and 154, is amended
by adding at the end the following:
‘‘§ 528. Debtor’s bill of rights
‘‘(a) A debt relief agency shall—
‘‘(1) no later than five business days after the
first date on which a debt relief agency provides any
bankruptcy assistance services to an assisted person,
but prior to such assisted person’s petition under
this title being filed, execute a written contract with
the assisted person specifying clearly and conspicu-
ously the services the agency will provide the as-
sisted person and the basis on which fees or charges
will be made for such services and the terms of pay-
ment, and give the assisted person a copy of the
fully executed and completed contract in a form the
person can keep;
‘‘(2) disclose in any advertisement of bank-
ruptcy assistance services or of the benefits of bank-
ruptcy directed to the general public (whether in
117
general media, seminars or specific mailings, tele-
phonic or electronic messages or otherwise) that the
services or benefits are with respect to proceedings
under this title, clearly and conspicuously using the
following statement: ‘We are a debt relief agency.
We help people file Bankruptcy petitions to obtain
relief under the Bankruptcy Code.’ or a substantially
similar statement. An advertisement shall be of
bankruptcy assistance services if it describes or of-
fers bankruptcy assistance with a chapter 13 plan,
regardless of whether chapter 13 is specifically men-
tioned, including such statements as ‘federally super-
vised repayment plan’ or ‘Federal debt restructuring
help’ or other similar statements which would lead
a reasonable consumer to believe that help with
debts was being offered when in fact in most cases
the help available is bankruptcy assistance with a
chapter 13 plan; and
‘‘(3) if an advertisement directed to the general
public indicates that the debt relief agency provides
assistance with respect to credit defaults, mortgage
foreclosures, lease eviction proceedings, excessive
debt, debt collection pressure, or inability to pay any
consumer debt, disclose conspicuously in that adver-
tisement that the assistance is with respect to or
118
may involve proceedings under this title, using the
following statement: ‘We are a debt relief agency.
We help people file Bankruptcy petitions to obtain
relief under the Bankruptcy Code.’ or a substantially
similar statement.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by sections 106 and 154, is amended by inserting
after the item relating to section 527, the following:
‘‘528. Debtor’s bill of rights.’’.
TITLE II—DISCOURAGING
BANKRUPTCY ABUSE
SEC. 201. REENACTMENT OF CHAPTER 12.
(a) REENACTMENT.—Chapter 12 of title 11, United
States Code, as in effect on March 31, 1999, is hereby
reenacted.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on March 31, 1999.
SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY
HOLDERS.
Section 341 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) Notwithstanding subsections (a) and (b), the
court, on the request of a party in interest and after notice
and a hearing, for cause may order that the United States
trustee not convene a meeting of creditors or equity secu-
119
rity holders if the debtor has filed a plan as to which the
debtor solicited acceptances prior to the commencement
of the case.’’.
SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANK-
RUPTCY.
(a) IN GENERAL.—Section 522 of title 11, United
States Code, as amended by sections 113, 125, and 147
is amended—
(1) in subsection (b)—
(A) in paragraph (2)—
(i) by striking ‘‘(2)(A)’’ and inserting:
‘‘(3) Property listed in this paragraph is—
‘‘(A) subject to subsections (o) and (p),’’;
(ii) in subparagraph (B), by striking
‘‘and’’ at the end;
(iii) in subparagraph (C), by striking
the period at the end and inserting ‘‘;
and’’; and
(iv) by adding at the end the fol-
lowing:
‘‘(D) retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’;
120
(B) by striking paragraph (1) and insert-
ing:
‘‘(2) Property listed in this paragraph is property
that is specified under subsection (d), unless the State law
that is applicable to the debtor under paragraph (3)(A)
specifically does not so authorize.’’;
(C) in the matter preceding paragraph
(2)—
(i) by striking ‘‘(b)’’ and inserting
‘‘(b)(1)’’;
(ii) by striking ‘‘paragraph (2)’’ both
places it appears and inserting ‘‘paragraph
(3)’’;
(iii) by striking ‘‘paragraph (1)’’ each
place it appears and inserting ‘‘paragraph
(2)’’; and
(iv) by striking ‘‘Such property is—’’;
and
(D) by adding at the end of the subsection
the following:
‘‘(4) For purposes of paragraph (3)(D) and sub-
section (d)(12), the following shall apply:
‘‘(A) If the retirement funds are in a retirement
fund that has received a favorable determination
pursuant to section 7805 of the Internal Revenue
121
Code of 1986, and that determination is in effect as
of the date of the commencement of the case under
section 301, 302, or 303 of this title, those funds
shall be presumed to be exempt from the estate.
‘‘(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
pursuant to such section 7805, those funds are ex-
empt from the estate if the debtor demonstrates
that—
‘‘(i) no prior determination to the contrary
has been made by a court or the Internal Rev-
enue Service; and
‘‘(ii) the retirement fund is in substantial
compliance with the applicable requirements of
the Internal Revenue Code of 1986.
‘‘(C) A direct transfer of retirement funds from
one fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986, pur-
suant to section 401(a)(31) of the Internal Revenue
Code of 1986, or otherwise, shall not cease to qualify
for exemption under paragraph (3)(D) or subsection
(d)(12) by reason of that direct transfer.
‘‘(D)(i) Any distribution that qualifies as an eli-
gible rollover distribution within the meaning of sec-
122
tion 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
qualify for exemption under paragraph (3)(D) or
subsection (d)(12) by reason of that distribution.
‘‘(ii) A distribution described in this clause is
an amount that—
‘‘(I) has been distributed from a fund or
account that is exempt from taxation under sec-
tion 401, 403, 408, 408A, 414, 457, or 501(a)
of the Internal Revenue Code of 1986; and
‘‘(II) to the extent allowed by law, is de-
posited in such a fund or account not later than
60 days after the distribution of that amount.’’;
and
(2) in subsection (d)—
(A) in the matter preceding paragraph (1),
by striking ‘‘subsection (b)(1)’’ and inserting
‘‘subsection (b)(2)’’; and
(B) by adding at the end the following:
‘‘(12) Retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’.
123
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, as amended by sections 118, 132,
136, and 141 is amended—
(1) in paragraph (27), by striking ‘‘or’’ at the
end;
(2) in paragraph (28), by striking the period
and inserting ‘‘; or’’;
(3) by inserting after paragraph (28) the fol-
lowing:
‘‘(29) under subsection (a), of withholding of
income from a debtor’s wages and collection of
amounts withheld, pursuant to the debtor’s agree-
ment authorizing that withholding and collection for
the benefit of a pension, profit-sharing, stock bonus,
or other plan established under section 401, 403,
408, 408A, 414, 457, or 501(a) of the Internal Rev-
enue Code of 1986 that is sponsored by the em-
ployer of the debtor, or an affiliate, successor, or
predecessor of such employer—
‘‘(A) to the extent that the amounts with-
held and collected are used solely for payments
relating to a loan from a plan that satisfies the
requirements of section 408(b)(1) of the Em-
ployee Retirement Income Security Act of 1974
124
or is subject to section 72(p) of the Internal
Revenue Code of 1986; or
‘‘(B) in the case of a loan from a thrift
savings plan described in subchapter III of title
5, that satisfies the requirements of section
8433(g) of such title.’’; and
(4) by adding at the end of the flush material
following paragraph (29) the following: ‘‘Paragraph
(29) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under
a loan made during the 1-year period preceding the
filing of a petition. Nothing in paragraph (29) may
be construed to provide that any loan made under
a governmental plan under section 414(d), or a con-
tract or account under section 403(b), of the Inter-
nal Revenue Code of 1986 constitutes a claim or a
debt under this title.’’.
(c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of
title 11, United States Code, is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(17);
(2) by striking the period at the end of para-
graph (18) and inserting ‘‘; or’’; and
(3) by adding at the end the following:
125
‘‘(19) owed to a pension, profit-sharing, stock
bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(c) of the Internal
Revenue Code of 1986, pursuant to—
‘‘(A) a loan permitted under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974) or subject to section
72(p) of the Internal Revenue Code of 1986; or
‘‘(B) a loan from the thrift savings plan
described in subchapter III of title 5, that satis-
fies the requirements of section 8433(g) of such
title.
Paragraph (19) does not apply to any amount owed to
a plan referred to in that paragraph that is incurred under
a loan made during the 1-year period preceding the filing
of a petition. Nothing in paragraph (19) may be construed
to provide that any loan made under a governmental plan
under section 414(d), or a contract or account under sec-
tion 403(b), of the Internal Revenue Code of 1986 con-
stitutes a claim or a debt under this title.’’.
(d) PLAN CONTENTS.—Section 1322 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(f) A plan may not materially alter the terms of a
loan described in section 362(b)(29) of this title.’’.
126
SEC. 204. PROTECTION OF REFINANCE OF SECURITY IN-
TEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2)
of title 11, United States Code, are amended by striking
‘‘10’’ each place it appears and inserting ‘‘30’’.
SEC. 
205. 
EXECUTORY 
CONTRACTS 
AND 
UNEXPIRED
LEASES.
Section 365(d)(4) of title 11, United States Code, is
amended to read as follows:
‘‘(4)(A) Subject to subparagraph (B), in any case
under any chapter in this title, an unexpired lease of non-
residential real property under which the debtor is the les-
see shall be deemed rejected, and the trustee shall imme-
diately surrender such property to the lessor, if the trustee
does not assume or reject the unexpired lease by the ear-
lier of—
‘‘(i) the date that is 120 days after the date of
the order for relief; or
‘‘(ii) the date of the entry of an order con-
firming a plan.
‘‘(B)(i) The court may extend the period determined
under subparagraph (A) for 120 days upon motion of the
trustee or the lessor for cause.
‘‘(ii) If the court grants an extension under clause
(i), the court may grant a subsequent extension only upon
prior written consent of the lessor.’’.
127
SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS
COMMITTEES.
(a) APPOINTMENT.—Section 1102(a)(2) of title 11,
United States Code, is amended by inserting before the
first sentence the following: ‘‘On its own motion or on re-
quest of a party in interest, and after notice and hearing,
the court may order a change in the membership of a com-
mittee appointed under this subsection, if the court deter-
mines that the change is necessary to ensure adequate rep-
resentation of creditors or equity security holders. The
court may expand the membership of a committee to in-
clude a creditor that is small business if the court deter-
mines that such creditor holds claims of the kind rep-
resented by such committee that are, in the aggregate, dis-
proportionately large when compared to the annual gross
revenue of such creditor.’’.
(b) INFORMATION.—Section 1102(b) of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(3) A committee appointed under subsection (a)
shall provide access to information for creditors who hold
claims of the kind represented by such committee and who
are not appointed such committee, shall to be open for
comment from such creditors, and shall be subject to a
court order compelling additional reports or disclosure to
be made to such creditors.’’.
128
SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11,
UNITED STATES CODE.
Section 546 of title 11, United States Code, is
amended by inserting at the end thereof:
‘‘(i) Notwithstanding section 545 (2) and (3) of this
title, the trustee may not avoid a warehouseman’s lien for
storage, transportation or other costs incidental to the
storage and handling of goods, as provided by section 7–
209 of the Uniform Commercial Code.’’.
SEC. 208. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code,
is amended by striking ‘‘20’’ and inserting ‘‘45’’.
SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11,
UNITED STATES CODE.
Section 330(a) of title 11, United States Code, is
amended—
(1) in paragraph (3)—
(A) in subparagraph (A) after ‘‘awarded’’,
by inserting ‘‘to an examiner, chapter 11 trust-
ee, or professional person’’; and
(B) by redesignating subdivisions (A)
through (E) as clauses (i) through (iv), respec-
tively; and
(2) by adding at the the following:
‘‘(B) In determining the amount of reasonable
compensation to be awarded a trustee, the court
129
shall treat such compensation as a commission based
on the results achieved.’’.
SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.
Section 1125 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(g) Notwithstanding subsection (b), an acceptance
or rejection of the plan may be solicited from a holder
of a claim or interest if such solicitation complies with ap-
plicable nonbankruptcy law and if such holder was solic-
ited before the commencement of the case in a manner
complying with applicable nonbankruptcy law.’’.
SEC. 211. PREFERENCES.
Section 547(c) of title 11, United States Code, is
amended—
(1) by amending paragraph (2) to read as fol-
lows:
‘‘(2) to the extent that such transfer was in
payment of a debt incurred by the debtor in the or-
dinary course of business or financial affairs of the
debtor and the transferee, and such transfer was—
‘‘(A) made in the ordinary course of busi-
ness or financial affairs of the debtor and the
transferee; or
‘‘(B) made according to ordinary business
terms;’’;
130
(2) in paragraph (7) by striking ‘‘or’’ at the
end;
(3) in paragraph (8) by striking the period at
the end and inserting ‘‘; or’’; and
(4) by adding at the end the following:
‘‘(9) if, in a case filed by a debtor whose debts
are not primarily consumer debts, the aggregate
value of all property that constitutes or is affected
by such transfer is less than $5,000.’’.
SEC. 212. VENUE OF CERTAIN PROCEEDINGS.
Section 1409(b) of title 28, United States Code, is
amended by inserting ‘‘, or a nonconsumer debt against
a noninsider of less than $10,000,’’ after ‘‘$5,000’’.
SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.
Section 1121(d) of title 11, United States Code, is
amended—
(1) by striking ‘‘On’’ and inserting ‘‘(1) Subject
to paragraph (1), on’’; and
(2) by adding at the end the following:
‘‘(2)(A) Such 120-day period may not be extended
beyond a date that is 18 months after the date of the order
for relief under this chapter.
‘‘(B) Such 180-day period may not be extended be-
yond a date that is 20 months after the date of the order
for relief under this chapter.’’.
131
SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP IN-
TERESTS.
Section 523(a)(16) of title 11, United States Code,
is amended—
(1) by striking ‘‘dwelling’’ the first place it ap-
pears;
(2) by striking ‘‘ownership or’’ and inserting
‘‘ownership,’’;
(3) by striking ‘‘housing’’ the first place it ap-
pears; and
(4) by striking ‘‘but only’’ and all that follows
through ‘‘such period,’’, and inserting ‘‘or a lot in a
homeowners association, for as long as the debtor or
the trustee has a legal, equitable, or possessory own-
ership interest in such unit, such corporation, or
such lot,’’.
SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGA-
TIONS.
(a) EXECUTORY
CONTRACTS
AND
UNEXPIRED
LEASES.—Section 365 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (1)(A) by striking the
semicolon at the end and inserting the fol-
lowing:
132
‘‘other than a default that is a breach of a provision
relating to—
‘‘(i) the satisfaction of any provision (other
than a penalty rate or penalty provision) relat-
ing to a default arising from any failure to per-
form nonmonetary obligations under an unex-
pired lease of real property, if it is impossible
for the trustee to cure such default by per-
forming nonmonetary acts at and after the time
of assumption; or
‘‘(ii) the satisfaction of any provision
(other than a penalty rate or penalty provision)
relating to a default arising from any failure to
perform nonmonetary obligations under an ex-
ecutory contract (excluding executory contracts
that transfer a right or interest under a filed or
issued patent, copyright, trademark, trade
dress, or trade secret), if it is impossible for the
trustee to cure such default by performing non-
monetary acts at and after the time of assump-
tion and if the court determines, based on the
equities of the case, that this subparagraph
should not apply with respect to such default;’’;
and
133
(B) by amending paragraph (2)(D) to read
as follows:
‘‘(D) the satisfaction of any penalty rate or
penalty provision relating to a default arising from
a failure to perform nonmonetary obligations under
an executory contract (excluding executory contracts
that transfer a right or interest under a filed or
issued patent, copyright, trademark, trade dress, or
trade secret) or under an unexpired lease of real or
personal property.’’;
(2) in subsection (c)—
(A) in paragraph (2) by adding ‘‘or’’ at the
end;
(B) in paragraph (3) by striking ‘‘; or’’ at
the end and inserting a period; and
(C) by striking paragraph (4);
(3) in subsection (d)—
(A) by striking paragraphs (5) through
(9); and
(B) by redesignating paragraph (10) as
paragraph (5); and
(4) in subsection (f)(1) by striking ‘‘; except
that’’ and all that follows through the end of the
paragraph and inserting a period.
134
(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec-
tion 1124(2) of title 11, United States Code, is
amended—
(1) in subparagraph (A) by inserting ‘‘or of a
kind that section 365(b)(2) of this title expressly
does not require to be cured’’ before the semicolon
at the end;
(2) in subparagraph (C) by striking ‘‘and’’ at
the end;
(3) by redesignating subparagraph (D) as sub-
paragraph (E); and
(4) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) if such claim or such interest arises
from any failure to perform a nonmonetary ob-
ligation, compensates the holder of such claim
or such interest (other than the debtor or an in-
sider) for any actual pecuniary loss incurred by
such holder as a result of such failure; and’’.
SEC. 216. SHARING OF COMPENSATION.
Section 504 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(c) This section shall not apply with respect to shar-
ing, or agreeing to share, compensation with a bona fide
public service attorney referral program that operates in
135
accordance with non-Federal law regulating attorney re-
ferral services and with rules of professional responsibility
applicable to attorney acceptance of referrals.’’.
SEC. 217. PRIORITY FOR ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, is
amended—
(1) by deleting ‘‘and’’ at the end of paragraph
(5);
(2) by striking the period at the end of para-
graph (6) and inserting ‘‘; and’’; and
(3) by inserting the following after paragraph
(6):
‘‘(7) 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
relating to a failure to operate or penalty provisions,
for the period of one year 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).’’.
136
SEC. 
218. 
NONDISCHARGEABILITY 
OF 
CERTAIN 
EDU-
CATIONAL BENEFITS AND LOANS.
Section 523(a)(8) of title 11, United States Code, is
amended to read as follows:
‘‘(8) for—
‘‘(A) an educational benefit overpayment
or loan made, insured or guaranteed by a gov-
ernmental unit, or made under any program
funded in whole or in part by a governmental
unit or nonprofit institution, or for an obliga-
tion to repay funds received as an educational
benefit, scholarship or stipend; or
‘‘(B) any other education loan incurred by
an individual debtor that meets the definition of
‘Qualified 
Education 
Loan’ 
under 
section
221(e)(1) of the Internal Revenue Code,
unless excepting such debt from discharge under this
paragraph will impose an undue hardship on the
debtor and a debtor’s dependents;’’.
TITLE III—GENERAL BUSINESS
BANKRUPTCY PROVISIONS
SEC. 301. DEFINITION OF DISINTERESTED PERSON.
Section 101(14) of title 11, United States Code, is
amended to read as follows:
‘‘(14) ‘disinterested person’ means a person
that—
137
‘‘(A) is not a creditor, an equity security
holder, or an insider;
‘‘(B) is not and was not, within 2 years be-
fore the date of the filing of the petition, a di-
rector, officer, or employee of the debtor; and
‘‘(C) does not have an interest materially
adverse to the interest of the estate or of any
class of creditors or equity security holders, by
reason of any direct or indirect relationship to,
connection with, or interest in, the debtor, or
for any other reason;’’.
SEC. 302. MISCELLANEOUS IMPROVEMENTS.
(a) WHO MAY BE A DEBTOR.—Section 109 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(h)(1) Subject to paragraphs (2) and (3) and not-
withstanding any other provision of this section, an indi-
vidual may not be a debtor under this title unless that
individual has, during the 90-day period preceding the
date of filing of the petition of that individual, received
credit counseling, including, at a minimum, participation
in an individual or group briefing that outlined the oppor-
tunities for available credit counseling and assisted that
individual in performing an initial budget analysis,
through a credit counseling program (offered through an
138
approved credit counseling service described in section
111(a)).
‘‘(2)(A) Paragraph (1) shall not apply with respect
to a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
credit counseling services for that district are not reason-
ably able to provide adequate services to the additional
individuals who would otherwise seek credit counseling
from those programs by reason of the requirements of
paragraph (1).
‘‘(B) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
paragraph (A) shall review that determination not later
than one year after the date of that determination, and
not less frequently than every year thereafter.
‘‘(3)(A) Subject to subparagraph (B), the require-
ments of paragraph (1) shall not apply with respect to
a debtor who submits to the court a certification that—
‘‘(i) describes exigent circumstances that merit
a waiver of the requirements of paragraph (1);
‘‘(ii) states that the debtor requested credit
counseling services from an approved credit coun-
seling service, but was unable to obtain the services
referred to in paragraph (1) during the 5-day period
139
beginning on the date on which the debtor made
that request or that the exigent circumstances re-
quire filing before such 5-day period expires; and
‘‘(iii) is satisfactory to the court.
‘‘(B) With respect to a debtor, an exemption under
subparagraph (A) shall cease to apply to that debtor on
the date on which the debtor meets the requirements of
paragraph (1), but in no case may the exemption apply
to that debtor after the date that is 30 days after the debt-
or files a petition.’’.
(b) CHAPTER 7 DISCHARGE.—Section 727(a) of title
11, United States Code, is amended—
(1) in paragraph (9), by striking ‘‘or’’ at the
end;
(2) in paragraph (10), by striking the period
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(11) after the filing of the petition, the debtor
failed to complete an instructional course concerning
personal financial management described in section
111 unless the debtor resides in a district for which
the United States trustee or bankruptcy adminis-
trator of the bankruptcy court of that district deter-
mines that the approved instructional courses are
not adequate to provide service to the additional in-
140
dividuals who would be required to compete the in-
structional course by reason of the requirements of
this section. Each United States trustee or bank-
ruptcy administrator that makes such a determina-
tion shall review that determination not later than 1
year after the date of that determination, and not
less frequently than every year thereafter.’’.
(c) CHAPTER 13 DISCHARGE.—Section 1328 of title
11, United States Code, as amended by section 137, is
amended by adding at the end the following:
‘‘(g) The court shall not grant a discharge under this
section to a debtor, unless after filing a petition the debtor
has completed an instructional course concerning personal
financial management described in section 111.
‘‘(h) Subsection (g) shall not apply with respect to
a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
instructional courses are not adequate to provide service
to the additional individuals who would be required to
complete the instructional course by reason of the require-
ments of this section.
‘‘(i) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
section (h) shall review that determination not later than
141
1 year after the date of that determination, and not less
frequently than every year thereafter.’’.
(d) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 604 and 120,
is amended by adding at the end the following:
‘‘(d) In addition to the requirements under subsection
(a), an individual debtor shall file with the court—
‘‘(1) a certificate from the credit counseling
service that provided the debtor services under sec-
tion 109(h); and
‘‘(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the credit
counseling service referred to in paragraph (1).’’.
(e) GENERAL PROVISIONS.—
(1) IN GENERAL.—Chapter 1 of title 11, United
States Code, is amended by adding at the end the
following:
‘‘§ 111. Credit counseling services; financial manage-
ment instructional courses
‘‘(a) The clerk of each district shall maintain a pub-
licly available list of credit counseling agencies and of pro-
grams described in section 109(h) and instructional
courses offered by such agencies currently approved by—
‘‘(1) the United States Trustee; or
142
‘‘(2) the bankruptcy administrator for the dis-
trict.
‘‘(b) The United States Trustee or bankruptcy ad-
ministrator shall only approve credit counseling agencies
which satisfy standards set in regulations promulgated by
the Federal Trade Commission and which are accredited
by the Council on Accreditation or an equivalent third
party nonprofit accrediting organization.
‘‘(c) The United States Trustee or bankruptcy ad-
ministrator shall only approve programs or courses under
subsection (a) if they satisfy standards set in regulations
promulgated by the Executive Office of the United States
Trustees. The Executive Office of the United States
Trustee is authorized to promulgate regulations setting
such standards.
‘‘(d) The Federal Trade Commission shall have au-
thority to promulgate regulations setting standards for
credit counseling agencies for the purposes of subsection
(b). Such standards shall establish minimum requirements
for such agencies with respect to providing qualified coun-
selors, safekeeping and payment of client funds, disclosure
to clients, adequate counseling with respect to client credit
problems, and such other matters as relate to the quality
and financial security of such programs. Nothing in this
provision shall limit the authority of the Federal Trade
143
Commission pursuant to the Federal Trade Commission
Act (15 U.S.C. 45 et seq.).
‘‘(e) The United States Trustee or bankruptcy ad-
ministrator may notify the clerk that a credit counseling
agency, or a program or course, is no longer approved,
in which case the clerk shall remove it from the list main-
tained under subsection (a).’’.
(2) REGULATIONS.—The Federal Trade Com-
mission and the Executive Office of United States
Trustees shall promulgate regulations pursuant to
the power delegated in this section within 180 days
of the date of the enactment of this Act.
(3) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 1 of title 11,
United States Code, is amended by adding at the
end the following:
‘‘111. Credit counseling services; financial management instructional courses.’’.
(e) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (13) the fol-
lowing:
‘‘(13A) ‘debtor’s principal residence’ means a
residential structure including incidental property
when the structure contains 1 to 4 units, whether or
not that structure is attached to real property, and
includes, without limitation, an individual condo-
144
minium or cooperative unit or mobile or manufac-
tured home or trailer;’’;
(2) by inserting after paragraph (27A), as
added by section 318 of this Act, the following:
‘‘(27B) ‘incidental property’ means property in-
cidental to such residence including, without limita-
tion, property commonly conveyed with a principal
residence where the real estate is located, window
treatments, carpets, appliances and equipment lo-
cated in the residence, and easements, appur-
tenances, fixtures, rents, royalties, mineral rights, oil
and gas rights, escrow funds and insurance pro-
ceeds;’’;
(3) in section 362(b), as amended by sections
117, 118, 132, 136, 141, 203, 818, and 1007—
(A) in paragraph (28) by striking ‘‘or’’ at
the end thereof;
(B) in paragraph (29) by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(C) by inserting after paragraph (29) the
following:
‘‘(30) under subsection (a), until a prepetition
default is cured fully in a case under chapter 13 of
this title by actual payment of all arrears as re-
quired by the plan, of the postponement, continu-
145
ation or other similar delay of a prepetition fore-
closure proceeding or sale in accordance with appli-
cable nonbankruptcy law, but nothing herein shall
imply that such postponement, continuation or other
similar delay is a violation of the stay under sub-
section (a).’’; and
(4) by amending section 1322(b)(2) to read as
follows:
‘‘(2) modify the rights of holders of secured
claims, other than a claim secured primarily by a se-
curity interest in property used as the debtor’s prin-
cipal residence at any time during 180 days prior to
the filing of the petition, or of holders of unsecured
claims, or leave unaffected the rights of holders of
any class of claims;’’.
(f) LIMITATION.—Section 362 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘(j) If one case commenced under chapter 7, 11, or
13 of this title is dismissed due to the creation of a debt
repayment plan administered by a credit counseling agen-
cy approved pursuant to section 111 of this title, then for
purposes of section 362(c)(3) of this title the subsequent
case commenced under any such chapter shall not be pre-
sumed to be filed not in good faith.’’.
146
(g) RETURN OF GOODS SHIPPED.—Section 546(g) of
title 11, United States Code, as added by section 222(a)
of Public Law 103–394, is amended to read as follows:
‘‘(h) Notwithstanding the rights and powers of a
trustee under sections 544(a), 545, 547, 549, and 553 of
this title, if the court determines on a motion by the trust-
ee made not later than 120 days after the date of the order
for relief in a case under chapter 11 of this title and after
notice and hearing, that a return is in the best interests
of the estate, the debtor, with the consent of the creditor,
and subject to the prior rights, if any, of third parties in
such goods, may return goods shipped to the debtor by
the creditor before the commencement of the case, and the
creditor may offset the purchase price of such goods
against any claim of the creditor against the debtor that
arose before the commencement of the case.’’.
SEC. 303. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United
States Trustees, and Family Farmer Bankruptcy Act of
1986 (28 U.S.C. 581 note) is amended—
(1) in subparagraph (A), in the matter fol-
lowing clause (ii), by striking ‘‘or October 1, 2002,
whichever occurs first’’; and
(2) in subparagraph (F)—
(A) in clause (i)—
147
(i) in subclause (II), by striking ‘‘or
October 1, 2002, whichever occurs first’’;
and
(ii) in the matter following subclause
(II), by striking ‘‘October 1, 2003, or’’;
and
(B) in clause (ii), in the matter following
subclause (II)—
(i) by striking ‘‘before October 1,
2003, or’’; and
(ii) by striking ‘‘, whichever occurs
first’’.
SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.
Section 1408 of title 28, United States Code, is
amended—
(1) by striking ‘‘Except’’ and inserting ‘‘(a) Ex-
cept’’; and
(2) by adding at the end the following:
‘‘(b) For the purposes of subsection (a), if the debtor
is a corporation, the domicile and residence of the debtor
are conclusively presumed to be where the debtor’s prin-
cipal place of business in the United States is located.’’.
SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.
(a) Section 365(c) of title 11, United States Code,
is amended to read as follows:
148
‘‘(c)(1) The trustee may not assume or assign an ex-
ecutory contract or unexpired lease of the debtor, whether
or not the contract or lease prohibits or restricts assign-
ment of rights or delegation of duties, if—
‘‘(A)(i) applicable law excuses a party to the
contract or lease from accepting performance from
or rendering performance to an assignee of the con-
tract or lease, whether or not the contract or lease
prohibits or restricts assignment of rights or delega-
tion of duties; and
‘‘(ii) the party does not consent to the assump-
tion or assignment; or
‘‘(B) the contract is a contract to make a loan,
or extend other debt financing or financial accom-
modations, to or for the benefit of the debtor, or to
issue a security of the debtor.
‘‘(2) Notwithstanding paragraph (1)(A) and applica-
ble nonbankruptcy law, in a case under chapter 11 of this
title, a trustee in a case in which a debtor is a corporation,
or a debtor in possession, may assume an executory con-
tract or unexpired lease of the debtor, whether or not the
contract or lease prohibits or restricts assignment of rights
or delegation of duties.
‘‘(3) The trustee may not assume or assign an unex-
pired lease of the debtor of nonresidential real property,
149
whether or not the contract or lease prohibits or restricts
assignment of rights or delegation of duties, if the lease
has been terminated under applicable nonbankruptcy law
before the order for relief.’’.
(b) Section 365(d) of title 11, United States Code,
is amended by striking paragraphs (5), (6), (7), (8), and
(9), and redesignating paragraph (10) as paragraph (5).
(c) Section 365(e) of title 11, United States Code,
is amended to read as follows:
‘‘(e)(1) Notwithstanding a provision in an executory
contract or unexpired lease, or in applicable law, an execu-
tory contract or unexpired lease of the debtor may not be
terminated or modified, and any right or obligation under
such contract or lease may not be terminated or modified,
at any time after the commencement of the case solely
because of a provision in such contract or lease that is
conditioned on—
‘‘(A) the insolvency or financial condition of the
debtor at any time before the closing of the case;
‘‘(B) the commencement of a case under this
title; or
‘‘(C) the appointment of or taking possession by
a trustee in a case under this title or a custodian be-
fore such commencement.
150
‘‘(2) Paragraph (1) does not apply to an executory
contract or unexpired lease of the debtor if the trustee
may not assume or assign, and the debtor in possession
may not assume, the contract or lease by reason of the
provisions of subsection (c) of this section.’’.
(d) Section 365(f)(1) of title 11, United States Code,
is amended by striking the semicolon and all that follows
through ‘‘event’’.
TITLE IV SMALL BUSINESS
BANKRUPTCY PROVISIONS
SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT
AND PLAN.
(a) Section 1125(a)(1) of title 11, United States
Code, is amended by inserting before the semicolon fol-
lowing:
‘‘and in determining whether a disclosure statement pro-
vides adequate information, the court shall consider the
complexity of the case, the benefit of additional informa-
tion to creditors and other parties in interest, and the cost
of providing additional information’’.
(b) Section 1125(f) of title 11, United States Code,
is amended to read as follows:
‘‘(f) Notwithstanding subsection (b)—
151
‘‘(1) the court may determine that the plan
itself provides adequate information and that a sepa-
rate disclosure statement is not necessary;
‘‘(2) the court may approve a disclosure state-
ment submitted on standard forms approved by the
court or adopted pursuant to section 2075 of title
28, United States Code; and
‘‘(3)(A) the court may conditionally approve a
disclosure statement subject to final approval after
notice and a hearing;
‘‘(B) acceptances and rejections of a plan may
be solicited based on a conditionally approved disclo-
sure statement if the debtor provides adequate infor-
mation to each holder of a claim or interest that is
solicited, but a conditionally approved disclosure
statement shall be mailed not less than 20 days be-
fore the date of the hearing on confirmation of the
plan; and
‘‘(C) the hearing on the disclosure statement may be
combined with the hearing on confirmation of a plan.’’.
SEC. 402. DEFINITIONS.
(a) DEFINITIONS. Section 101 of title 11, United
States Code, is amended by striking paragraph (51C) and
inserting the following:
152
‘‘(51C) ‘small business case’ means a case filed
under chapter 11 of this title in which the debtor is
a small business debtor; and
‘‘(51D) ‘small business debtor’ means (A) a
person (including affiliates of such person that are
also debtors under this title) that has aggregate non-
contingent, liquidated secured and unsecured debts
as of the date of the petition or the order for relief
in an amount not more than $4,000,000 (excluding
debts owed to one or more affiliates or insiders), ex-
cept that if a group of affiliated debtors has aggre-
gate noncontingent liquidated secured and unsecured
debts greater than $4,000,000 (excluding debt owed
to one or more affiliates or insiders), then no mem-
ber of such group is a small business debtor;’’.
(b) CONFORMING AMENDMENT.—Section 1102(a)(3)
of title 11, United States Code, is amended by inserting
‘‘debtor’’ after ‘‘small business’’ .
SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND
PLAN.
The Advisory Committee on Bankruptcy Rules of the
Judicial Conference of the United States shall, within a
reasonable period of time after the date of the enactment
of this Act, propose for adoption standard form disclosure
statements and plans of reorganization for small business
153
debtors (as defined in section 101 of title 11, United
States Code, as amended by this Act), designed to achieve
a practical balance between—
(1) the reasonable needs of the courts, the
United States trustee, creditors, and other parties in
interest for reasonably complete information; and
(2) economy and simplicity for debtors.
SEC. 404. UNIFORM NATIONAL REPORTING REQUIRE-
MENTS.
(a) REPORTING REQUIRED.—
(1) Title 11, United States Code, is amended by
inserting after section 307 the following:
‘‘§ 308. Debtor reporting requirements
‘‘A small business debtor shall file periodic financial
and other reports containing information including—
‘‘(1) the debtor’s profitability, that is, approxi-
mately how much money the debtor has been earn-
ing or losing during current and recent fiscal peri-
ods;
‘‘(2) reasonable approximations of the debtor’s
projected cash receipts and cash disbursements over
a reasonable period;
‘‘(3) comparisons of actual cash receipts and
disbursements with projections in prior reports; and
‘‘(4) whether the debtor is—
154
‘‘(A) in compliance in all material respects
with postpetition requirements imposed by this
title and the Federal Rules of Bankruptcy Pro-
cedure; and
‘‘(B) timely filing tax returns and paying
taxes and other administrative claims when due,
and, if not, what the failures are and how, at
what cost, and when the debtor intends to rem-
edy such failures; and
‘‘(5) such other matters as are in the best inter-
ests of the debtor and creditors, and in the public
interest in fair and efficient procedures under chap-
ter 11 of this title.’’.
(2) The table of sections of chapter 3 of title
11, United States Code, is amended by inserting
after the item relating to section 307 the following:
‘‘308. Debtor reporting requirements.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect 60 days after the date on
which rules are prescribed pursuant to section 2075, title
28, United States Code to establish forms to be used to
comply with section 308 of title 11, United States Code,
as added by subsection (a).
155
SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR
SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS.—The Advi-
sory Committee on Bankruptcy Rules of the Judicial Con-
ference of the United States shall propose for adoption
amended Federal Rules of Bankruptcy Procedure and Of-
ficial Bankruptcy Forms to be used by small business
debtors to file periodic financial and other reports con-
taining information, including information relating to—
(1) the debtor’s profitability;
(2) the debtor’s cash receipts and disburse-
ments; and
(3) whether the debtor is timely filing tax re-
turns and paying taxes and other administrative
claims when due.
(b) PURPOSE.—The rules and forms proposed under
subsection (a) shall be designed to achieve a practical bal-
ance between—
(1) the reasonable needs of the bankruptcy
court, the United States trustee, creditors, and other
parties in interest for reasonably complete informa-
tion;
(2) the small business debtor’s interest that re-
quired reports be easy and inexpensive to complete;
and
156
(3) the interest of all parties that the required
reports help the small business debtor to understand
its financial condition and plan its future.
SEC. 406. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES
IN CHAPTER 11 CASES.—Title 11,
United States Code, is amended by inserting after section
1114 the following:
‘‘§ 1115. Duties of trustee or debtor in possession in
small business cases
‘‘(a) In a small business case, a trustee or the debtor
in possession, in addition to the duties provided in this
title and as otherwise required by law, shall—
‘‘(1) append to the voluntary petition or, in an
involuntary case, file within 3 days after the date of
the order for relief—
‘‘(A) its most recent balance sheet, state-
ment of operations, cash-flow statement, Fed-
eral income tax return; or
‘‘(B) a statement made under penalty of
perjury that no balance sheet, statement of op-
erations, or cash-flow statement has been pre-
pared and no Federal tax return has been filed;
‘‘(2) attend, through its responsible individual,
meetings scheduled by the court or the United
States trustee, including initial debtor interviews
157
and meetings of creditors convened under section
341 of this title;
‘‘(3) timely file all schedules and statements of
financial affairs, unless the court, after notice and a
hearing, grants an extension, which shall not extend
such time period to a date later than 30 days after
the date of the order for relief, absent extraordinary
and compelling circumstances;
‘‘(4) file all postpetition financial and other re-
ports required by the Federal Rules of Bankruptcy
Procedure or by local rule of the district court;
‘‘(5) subject to section 363(c)(2) of this title,
maintain insurance customary and appropriate to
the industry;
‘‘(6)(A) timely file tax returns;
‘‘(B) subject to section 363(c)(2) of this title,
timely pay all administrative expense tax claims, ex-
cept those being contested by appropriate pro-
ceedings being diligently prosecuted; and
‘‘(C) subject to section 363(c)(2) of this title,
establish one or more separate deposit accounts not
later than 10 business days after the date of order
for relief (or as soon thereafter as possible if all
banks contacted decline the business) and deposit
therein, not later than 1 business day after receipt
158
thereof or a responsible time set by the court, all
taxes payable for periods beginning after the date
the case is commenced that are collected or withheld
by the debtor for governmental units unless the
court waives this requirement after notice and hear-
ing; and
‘‘(7) allow the United States trustee, or its des-
ignated representative, to inspect the debtor’s busi-
ness premises, books, and records at reasonable
times, after reasonable prior written notice, unless
notice is waived by the debtor.’’.
(b) TECHNICAL AMENDMENT.—The table of sections
of chapter 11, United States Code, is amended by insert-
ing after the item relating to section 1114 the following:
‘‘1115. Duties of trustee or debtor in possession in small business cases.’’.
SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121(e) of title 11, United States Code, is
amended to read as follows:
‘‘(e) In a small business case—
‘‘(1) only the debtor may file a plan until after
90 days after the date of the order for relief, unless
a trustee has been appointed under this chapter, or
unless the court, on request of a party in interest
and after notice and hearing, shortens such time;
‘‘(2) the debtor shall file a plan, and any nec-
essary disclosure statement, not later than 90 days
159
after the date of the order for relief, unless the
United States Trustee has appointed under section
1102(a)(1) of this title a committee of unsecured
creditors that the court has determined, before the
90 days has expired, is sufficiently active and rep-
resentative to provide effective oversight of the debt-
or; and
‘‘(3) the time periods specified in paragraphs
(1) and (2) of this subsection and the time fixed in
section 1129(e) of this title for confirmation of a
plan, may be extended only as follows:
‘‘(A) On request of a party in interest
made within the respective periods, and after
notice and hearing, the court may for cause
grant one or more extensions, cumulatively not
to exceed 60 days, if the movant establishes—
‘‘(i) that no cause exists to dismiss or
convert the case or appoint a trustee or ex-
aminer under subparagraphs (A) (I) of
section 1112(b) of this title; and
‘‘(ii) that there is a reasonable possi-
bility the court will confirm a plan within
a reasonable time;
‘‘(B) On request of a party in interest
made within the respective periods, and after
160
notice and hearing, the court may for cause
grant one or more extensions in excess of those
authorized under subparagraph (A) of this
paragraph, if the movant establishes:
‘‘(i) that no cause exists to dismiss or
convert the case or appoint a trustee or ex-
aminer under subparagraphs (A) (I) of
section 1112(b)(3) of this title; and
‘‘(ii) that it is more likely than not
that the court will confirm a plan within a
reasonable time; and
‘‘(C) a new deadline shall be imposed
whenever an extension is granted.’’.
SEC. 408. PLAN CONFIRMATION DEADLINE.
Section 1129 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) In a small business case, the debtor shall confirm
a plan not later than 150 days after the date of the order
for relief unless—
‘‘(1) the United States Trustee has appointed,
under section 1102(a)(1) of this title, a committee
of unsecured creditors that the court has deter-
mined, before the 150 days has expired, is suffi-
ciently active and representative to provide effective
oversight of the debtor; or
161
‘‘(2) such 150-day period is extended as pro-
vided in section 1121(e)(3) of this title.’’.
SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.
Section 105(d) of title 11, United States Code, is
amended—
(1) in paragraph (2)(B)(vi) by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(2) by adding at the end the following:
‘‘(3) in a small business case, not extend the
time periods specified in sections 1121(e) and
1129(e) of this title except as provided in section
1121(e)(3) of this title.’’.
SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.
Section 586(a) of title 28, United States Code, is
amended—
(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-
162
tional duties specified in title 11 pertaining to
such cases’’;
(2) in paragraph (5) by striking ‘‘and at the
end’’;
(3) in paragraph (6) by striking the period at
the end and inserting ‘‘; and’’; and
(4) by inserting after paragraph (7) the fol-
lowing:
‘‘(7) 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
163
‘‘(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; and
‘‘(8) in cases in which the United States trustee
finds material grounds for any relief under section
1112 of title 11, the United States trustee shall
apply promptly to the court for relief.’’.
SEC. 411. 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. 412. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, as
amended by section 302, is amended—
164
(1) in subsection (i) as so redesignated by sec-
tion 122—
(A) by striking ‘‘An’’ and inserting ‘‘(1)
Except as provided in paragraph (2), an’’; and
(B) by adding at the end the following:
‘‘(2) If such violation is based on an action taken by
an entity in the good-faith belief that subsection (h) ap-
plies to the debtor, then recovery under paragraph (1)
against such entity shall be limited to actual damages.’’;
and
(2) by inserting after subsection (j), as added
by section 302, the following:
‘‘(k)(1) Except as provided in paragraph (2) of this
subsection, the provisions of subsection (a) of thissection
shall not apply in a case in which the debtor—
‘‘(A) is a debtor in a case under this title pend-
ing at the time the petition is filed;
‘‘(B) was a debtor in a case under this title
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;
‘‘(C) was a debtor in a case under this title in
which a chapter 11, 12, or 13 plan was confirmed
165
in the 2-year period ending on the date of the order
for relief entered with respect to the petition; or
‘‘(D) is an entity that has succeeded to sub-
stantially all of the assets or business of a debtor de-
scribed in subparagraph (A), (B), or (C).
‘‘(2) This subsection shall not apply—
‘‘(A) to a case initiated by an involuntary peti-
tion filed by a creditor that is not an insider or affil-
iate of the debtor; or
‘‘(B) after such time as the debtor, after notice
and a hearing, demonstrates by a preponderance of
the evidence, that the filing of such petition resulted
from circumstances beyond the control of the debtor
and not foreseeable at the time the earlier case was
filed; and that it is more likely than not that the
court will confirm a plan, other than a liquidating
plan, within a reasonable time.’’.
SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE
OR EXAMINER.
(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 paragraphs (2) and (4)
of this subsection, and in subsection (c) of this section,
166
on request of a party in interest, and after notice and a
hearing, 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, or appoint a trustee or examiner under
section 1104(e) of this title, whichever is in the best inter-
est of creditors and the estate, if the movant establishes
cause.
‘‘(2) The court may decline to grant the relief speci-
fied in paragraph (1) of this subsection if the debtor or
another party in interest objects and establishes by a pre-
ponderance 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 cause 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
167
compelling circumstances beyond the control of
the debtor justify an extension.
‘‘(3) For purposes of this subsection, cause
includes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate;
‘‘(B) gross mismanagement of the estate;
‘‘(C) failure to maintain insurance that poses a
material risk to the estate or the public;
‘‘(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;
‘‘(H) failure timely to provide information or
attend meetings reasonably requested by the United
States trustee or bankruptcy administrator;
‘‘(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;
168
‘‘(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;
‘‘(K) failure to pay any fees or charges required
under chapter 123 of title 28, United States Code;
‘‘(L) revocation of an order of confirmation
under section 1144 of this title;
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan;
‘‘(N) material default by the debtor with re-
spect to a confirmed plan; and
‘‘(O) termination of a plan by reason of the oc-
currence of a condition specified in the plan.
‘‘(4) The court may grant relief under this subsection
for cause as defined in subparagraphs C, F, G, H, or K
of paragraph 3 of this subsection only upon motion of the
United States trustee or bankruptcy administrator or
upon the courts own motion.
‘‘(5) 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
169
court from meeting the time limits established by this
paragraph.’’.
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF
TRUSTEE
OR EXAMINER.—Section 1104 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(e) If grounds exist to convert or dismiss the case
under section 1112 of this title, the court may instead ap-
point a trustee or examiner, if it determines that such ap-
pointment is in the best interests of creditors and the es-
tate.’’.
SEC. 414. STUDY OF OPERATION OF TITLE 11, UNITED
STATES CODE, WITH RESPECT TO SMALL
BUSINESSES.
Not later than 2 years after the date of the enact-
ment of this Act, the Administrator of the Small Business
Administration, in consultation with the Attorney General,
the Director of the Administrative Office of United States
Trustees, and the Director of the Administrative Office
of the United States Courts, shall—
(1) conduct a study to determine—
(A) the internal and external factors that
cause small businesses, especially sole propri-
etorships, to become debtors in cases under title
11, United States Code, and that cause certain
170
small businesses to successfully complete cases
under chapter 11 of such title; and
(B) how Federal laws relating to bank-
ruptcy may be made more effective and efficient
in assisting small businesses to remain viable;
and
(2) submit to the President pro tempore of the
Senate and the Speaker of the House of Representa-
tives a report summarizing that study.
SEC. 415. 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
171
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; or’’.
TITLE V—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 501. 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.’’.
172
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP-
TER 9.
Section 901(a) of title 11, United States Code, is
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and
(2) by inserting ‘‘559, 560, 561, 562’’ after
‘‘557,’’.
TITLE VI—STREAMLINING THE
BANKRUPTCY SYSTEM
SEC. 601. 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 fol-
lowing: ‘‘Notwithstanding any local court rule, provision
of a State constitution, any other Federal or State law
that is not a bankruptcy law, or other requirement that
representation at the meeting of creditors under sub-
section (a) be by an attorney, a creditor holding a con-
sumer debt or any representative of the creditor (which
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 and activities related thereto in a case under
chapter 7 or 13, either alone or in conjunction with an
attorney for the creditor. Nothing in this subsection shall
173
be construed to require any creditor to be represented by
an attorney at any meeting of creditors.’’.
SEC. 602. AUDIT PROCEDURES.
(a) AMENDMENTS.—Section 586 of title 28, United
States Code, is amended—
(1) in subsection (a) by amending striking
paragraph (6) to read as follows:
‘‘(6) make such reports as the Attorney General
directs, including the results of audits performed
under subsection (f); and’’; and
(2) by adding at the end the following:
‘‘(f)(1)(A) The Attorney General shall establish pro-
cedures to determine the accuracy, veracity, and complete-
ness of petitions, schedules, and other information which
the debtor is required to provide under sections 521 and
1322 of title 11, 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 ac-
cepted auditing standards and performed by independent
certified public accountants or independent licensed public
accountants.
‘‘(B) Those procedures shall—
‘‘(i) establish a method of selecting appropriate
qualified persons to contract to perform those au-
dits;
174
‘‘(ii) establish a method of randomly selecting
cases to be audited, except that not less than 1 out
of every 250 cases in each Federal judicial district
shall be selected for audit;
‘‘(iii) require audits for schedules of income and
expenses 
which 
reflect 
greater 
than 
average
variances from the statistical norm of the district in
which the schedules were filed; and
‘‘(iv) establish procedures for providing, not less
frequently than annually, public information con-
cerning the aggregate results of such audits includ-
ing the percentage of cases, by district, in which a
material misstatement of income or expenditures is
reported.
‘‘(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).
‘‘(3)(A) The report of each audit conducted under
this subsection shall be filed with the court and trans-
mitted to the United States trustee. Each report shall
clearly 
and 
conspicuously 
specify 
any 
material
misstatement of income or expenditures or of assets iden-
tified by the person performing the audit. In any case
where a material misstatement of income or expenditures
175
or of assets has been reported, the clerk of the bankruptcy
court shall give notice of the misstatement to the creditors
in the case.
‘‘(B) If a material misstatement of income or expend-
itures or of assets is reported, the United States trustee
shall—
‘‘(i) report the material misstatement, if appro-
priate, to the United States Attorney pursuant to
section 3057 of title 18, United States Code; and
‘‘(ii) if advisable, take appropriate action, in-
cluding but not limited to commencing an adversary
proceeding to revoke the debtor’s discharge pursuant
to section 727(d) of title 11, United States Code.’’.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11,
U.S.C.—Section 521(a) of title 11, United States Code,
as amended by section 603, is amended in paragraphs (3)
and (4) by adding ‘‘or an auditor appointed pursuant to
section 586 of title 28, United States Code’’ after ‘‘serving
in the case’’.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11,
U.S.C.—Section 727(d) of title 11, United States Code,
is amended—
(1) by deleting ‘‘or’’ at the end of paragraph
(2);
176
(2) by substituting ‘‘; or’’ for the period at the
end of paragraph (3); and
(3) by adding the following at the end the fol-
lowing:
‘‘(4) 
the 
debtor 
has 
failed 
to 
explain
satisfactorily—
‘‘(A) a material misstatement in an audit
performed pursuant to section 586(f) of title
28, United States Code; or
‘‘(B) a failure to make available for inspec-
tion all necessary accounts, papers, documents,
financial records, files, and all other papers,
things, or property belonging to the debtor that
are requested for an audit conducted pursuant
to section 586(f) of title 28, United States
Code.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
the enactment of this Act.
SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7
AND 13 CASES.
(a) NOTICE.—Section 342 of title 11, United States
Code, is amended—
(1) in subsection (c)—
177
(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 cred-
itor 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 of this title.’’;
(2) by adding at the end the following:
178
‘‘(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. After 5 days following re-
ceipt of such notice, any notice the court or the debtor
is required to give the creditor shall be given at that ad-
dress.
‘‘(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
179
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.’’.
(b) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 604, 120, and
302, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The debtor
shall—’’;
(2) by striking paragraph (1) and inserting the
following:
‘‘(1) file—
‘‘(A) a list of creditors; and
‘‘(B) unless the court orders otherwise—
‘‘(i) a schedule of assets and liabil-
ities;
‘‘(ii) a schedule of current monthly in-
come and current expenditures prepared in
accordance with section 707(b)(2);
‘‘(iii) a statement of the debtor’s fi-
nancial affairs and, if applicable, a
certificate—
‘‘(I) of an attorney whose name
is on the petition as the attorney for
181
(3) by adding at the end the following:
‘‘(e)(1) At any time, a creditor, in the case of an indi-
vidual under chapter 7 or 13, may file with the court no-
tice that the creditor requests the petition, schedules, and
a statement of affairs filed by the debtor in the case and
the court shall make those documents available to the
creditor who requests those documents at a reasonable
cost within 5 business days after such request.
‘‘(2) At any time, a creditor in a case under chapter
13 may file with the court notice that the creditor requests
the plan filed by the debtor in the case, and the court
shall make such plan available to the creditor who requests
such plan at a reasonable cost and not later than 5 days
after such request.
‘‘(f) An individual debtor in a case under chapter 7
or 13 shall file with the court—
‘‘(1) at the time filed with the taxing authority,
all tax returns, including any schedules or attach-
ments, with respect to the period from the com-
mencement of the case until such time as the case
is closed;
‘‘(2) at the time filed with the taxing authority,
all tax returns, including any schedules or attach-
ments, that were not filed with the taxing authority
when the schedules under subsection (a)(1) were
182
filed with respect to the period that is 3 years before
the order for relief;
‘‘(3) any amendments to any of the tax returns,
including schedules or attachments, described in
paragraph (1) or (2); and
‘‘(4) in a case under chapter 13, a statement
subject to the penalties of perjury by the debtor of
the debtor’s current monthly income and expendi-
tures in the preceding tax year and current monthly
income less expenditures for the month preceding
the statement prepared in accordance with section
707(b)(2) that shows how the amounts are
calculated—
‘‘(A) beginning on the date that is the
later of 90 days after the close of the debtor’s
tax year or 1 year after the order for relief, un-
less a plan has been confirmed; and
‘‘(B) thereafter, on or before the date that
is 45 days before each anniversary of the con-
firmation of the plan until the case is closed.
‘‘(g)(1) A statement referred to in subsection (f)(4)
shall disclose—
‘‘(A) the amount and sources of income of the
debtor;
183
‘‘(B) the identity of any persons responsible
with the debtor for the support of any dependents of
the debtor; and
‘‘(C) the identity of any persons who contrib-
uted, and the amount contributed, to the household
in which the debtor resides.
‘‘(2) The tax returns, amendments, and statement of
income and expenditures described in paragraph (1) shall
be available to the United States trustee, any bankruptcy
administrator, any trustee, and any party in interest for
inspection and copying, subject to the requirements of
subsection (h).
‘‘(h)(1) Not later than 30 days after the date of the
enactment of the Consumer Bankruptcy Reform Act of
1999, the Director of the Administrative Office of the
United States Courts shall establish procedures for safe-
guarding the confidentiality of any tax information re-
quired to be provided under this section.
‘‘(2) The procedures under paragraph (1) shall in-
clude reasonable restrictions on creditor access to tax in-
formation that is required to be provided under this sec-
tion to verify creditor identity and to restrict use of the
information except with respect to the case.
‘‘(3) Not later than 1 year after the date of the enact-
ment of the Consumer Bankruptcy Reform Act of 1999,
184
the Director of the Administrative Office of the United
States Courts shall prepare, and submit to Congress a re-
port that—
‘‘(A) assesses the effectiveness of the proce-
dures under paragraph (1) to provide timely and
sufficient information to creditors concerning the
case; and
‘‘(B) 
if 
appropriate, 
includes 
proposed
legislation—
‘‘(i) to further protect the confidentiality of
tax information or to make it better available to
creditors; and
‘‘(ii) to provide penalties for the improper
use by any person of the tax information re-
quired to be provided under this section.
‘‘(i) If requested by the United States trustee or a
trustee serving in the case, the debtor provide a document
that establishes the identity of the debtor, including a
driver’s license, passport, or other document that contains
a photograph of the debtor and such other personal identi-
fying information relating to the debtor that establishes
the identity of the debtor.’’.
(c) Section 1324 of title 11, United States Code, is
amended—
(1) by inserting ‘‘(a)’’ before ‘‘After’’; and
185
(2) by inserting at the end thereof—
‘‘(c) Whenever a party in interest is given notice of
a hearing on the confirmation or modification of a plan
under this chapter, such notice shall include the informa-
tion provided by the debtor on the most recent statement
filed with the court pursuant to section 521(a)(1)(B)(ii)
or (f)(4) of this title.’’.
SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED-
ULES OR PROVIDE REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as
amended by section 603 is amended by inserting after sub-
section (a) the following:
‘‘(b)(1) Notwithstanding section 707(a) of this title,
and subject to paragraph (2), if an individual debtor in
a voluntary case under chapter 7 or 13 fails to file all
of the information required under subsection (a)(1) within
45 days after the filing of the petition commencing the
case, the case shall be automatically dismissed effective
on the 46th day after the filing of the petition.
‘‘(2) With respect to a case described in paragraph
(1), any party in interest may request the court to enter
an order dismissing the case. The court shall, if so re-
quested, enter an order of dismissal not later than 5 days
after such request.
186
‘‘(3) Upon request of the debtor made within 45 days
after the filing of the petition commencing a case de-
scribed in paragraph (1), the court may allow the debtor
an additional period not to exceed 45 days to file the infor-
mation required under subsection (a)(1) if the court finds
justification for extending the period for the filing.’’.
SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON
CONFIRMATION OF THE PLAN.
(a) HEARING.—Section 1324 of title 11, United
States Code, is amended—
(1) by striking ‘‘After’’ and inserting the fol-
lowing:
‘‘(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 meeting of creditors under section 341(a)
of this title.’’.
SEC. 606. 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:
190
should be modified to include a requirement that all docu-
ments (including schedules), signed and unsigned, sub-
mitted to the court or to a trustee by debtors who rep-
resent themselves and debtors who are represented by an
attorney be submitted only after the debtor or the debtor’s
attorney has made reasonable inquiry to verify that the
information 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. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN
CHAPTER 11 BANKRUPTCY CASES.
(a) AMENDMENTS.—Section 1930(a)(6) of title 28,
United States Code, is amended—
(1) in the first sentence by striking ‘‘until the
case is converted or dismissed, whichever occurs
first’’; and
(2) in the second sentence—
(A) by striking ‘‘The’’ and inserting ‘‘Until
the plan is confirmed or the case is converted
(whichever occurs first) the’’; and
(B) by striking ‘‘less than $300,000;’’ and
inserting ‘‘less than $300,000. Until the case is
converted, dismissed, or closed (whichever oc-
191
curs first and without regard to confirmation of
the plan) the fee shall be’’.
(b) DELAYED EFFECTIVE DATE.—The amendments
made by subsection (a) shall take effect on October 1,
1999.
SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX-
TENDED TO DEPENDENT STUDENTS.
Not later than 1 year after the date of the enactment
of this Act, the Comptroller General of the United States
shall—
(1) conduct a study regarding the impact that
the extension of credit to individuals who are—
(A) claimed as dependents for purposes of
the Internal Revenue Code of 1986; and
(B) enrolled in post-secondary educational
institutions,
has on the rate of cases filed under title 11, United
States Code; and
(2) submit to the Speaker of the House of Rep-
resentatives and the President pro tempore of the
Senate a report summarizing such study.
SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL
CASES.
Section 362(e) of title 11, United States Code, is
amended—
192
(1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and
(2) by adding at the end the following:
‘‘(2) Notwithstanding paragraph (1), in the case of
an individual filing under chapter 7, 11, or 13, the stay
under subsection (a) shall terminate on the date that is
60 days after a request is made by a party in interest
under subsection (d), unless—
‘‘(A) a final decision is rendered by the court
during the 60-day period beginning on the date of
the request; or
‘‘(B) that 60-day period is extended—
‘‘(i) by agreement of all parties in interest;
or
‘‘(ii) by the court for such specific period
of time as the court finds is required by for
good cause as described in findings made by the
court.’’.
SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAP-
TER 13.
Section 348(f)(1) of title 11, United States Code, is
amended—
(1) in subparagraph (A), by striking ‘‘and’’ at
the end;
(2) in subparagraph (B)—
193
(A) by striking ‘‘in the converted case,
with allowed secured claims’’ and inserting
‘‘only in a case converted to chapter 11 or 12
but not in a case converted to chapter 7, with
allowed secured claims in cases under chapters
11 and 12’’; and
(B) by striking the period and inserting ‘‘;
and’’; and
(3) by adding at the end the following:
‘‘(C) with respect to cases converted from chap-
ter 13—
‘‘(i) the claim of any creditor holding secu-
rity as of the date of the petition shall continue
to be secured by that security unless the full
amount of such claim determined under appli-
cable nonbankruptcy law has been paid in full
as of the date of conversion, notwithstanding
any valuation or determination of the amount
of an allowed secured claim made for the pur-
poses of the chapter 13 proceeding; and
‘‘(ii) unless a prebankruptcy default has
been fully cured pursuant to the plan at the
time of conversion, in any proceeding under this
title or otherwise, the default shall have the ef-
194
fect given under applicable nonbankruptcy
law.’’.
SEC. 612. BANKRUPTCY APPEALS.
(a) APPEALS.—Title 28, United States Code, is
amended by inserting after section 1292 the following:
‘‘§ 1293. Bankruptcy appeals
‘‘(a) The courts of appeals (other than the United
States Court of Appeals for the Federal Circuit) shall have
jurisdiction of appeals from the following:
‘‘(1) Final orders and judgments entered by
bankruptcy courts and district courts in cases under
title 11, in proceedings arising under title 11, and
in proceedings arising in or related to a case under
title 11, including final orders in proceedings regard-
ing the automatic stay of section 362 of title 11,
United States Code.
‘‘(2) Interlocutory orders entered by bankruptcy
courts and district courts granting, continuing,
modifying, refusing or dissolving injunctions, or re-
fusing to dissolve or modify injunctions in cases
under title 11, in proceedings arising under title 11,
and in proceedings arising in or related to a case
under title 11, other than interlocutory orders in
proceedings regarding the automatic stay of section
362 of title 11, United States Code.
195
‘‘(3) Interlocutory orders of bankruptcy courts
and district courts entered under section 1104(a) or
1121(d) of title 11, or the refusal to enter an order
under such section.
‘‘(4) 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 the court of appeals that would have jurisdic-
tion of an appeal of a final order entered in such
case or such proceeding permits, in its discretion,
appeal to be taken from such interlocutory order.
‘‘(5) Final decisions, judgments, orders, and de-
crees entered by a bankruptcy appellate panel under
subsection (b) of this section.
‘‘(b)(1) The judicial council of a circuit may establish
a bankruptcy appellate panel composed of bankruptcy
judges in the circuit who are appointed by the judicial
council, which panel shall exercise the jurisdiction to re-
view orders and judgments of bankruptcy courts described
in paragraphs (1) through (5) of subsection (a) of this
section unless—
‘‘(A) the appellant elects at the time of filing
the appeal; or
196
‘‘(B) any other party elects, not later than 10
days after service of the notice of the appeal,
to have such jurisdiction exercised by the court of appeals.
‘‘(2) An appeal to be heard by a bankruptcy appellate
panel under paragraph (1) shall be heard by three mem-
bers of the bankruptcy appellate panel, provided that a
member of such panel may not hear an appeal originating
in the district for which such member is appointed or des-
ignated under section 152 of this title.
‘‘(3) If authorized by the Judicial Conference of the
United States, the judicial councils of two or more circuits
may establish a joint bankruptcy appellate panel.’’.
(b) PROCEDURAL RULES.—Until rules of practice
and procedure are promulgated or amended pursuant to
the Rules Enabling Act (28 U.S.C. 2071–77) to govern
appeals to a bankruptcy appellate panel or to a court of
appeals exercising jurisdiction pursuant to section 1293
of title 28, as added by this Act, the following shall apply:
(1) A notice of appeal with respect to an appeal
from an order or judgment of a bankruptcy court to
a court of appeals or a bankruptcy appellate panel
must be filed within the time provided in Rule 8002
of the Federal Rules of Bankruptcy Procedure.
(2) An appeal to a bankruptcy appellate panel
shall be taken in the manner provided in Part VIII
197
of the Federal Rules of Bankruptcy Procedure and
local court rules.
(3) An appeal from an order or judgment of a
bankruptcy court directly to a court of appeals shall
be governed by the rules of practice and procedure
that apply to a civil appeal from a judgment of a
district court exercising original jurisdiction, as if
the bankruptcy court were a district court, except as
provided in paragraph (1) regarding the time to ap-
peal or by local court rules.
(4) An appeal to a court of appeals from a deci-
sion, judgment, order, or decree entered by a bank-
ruptcy appellate panel exercising appellate jurisdic-
tion shall be taken in the manner provided by Rule
6(b) of the Federal Rules of Appellate Procedure.
(c) REPEALER.—(1) Section 158 of title 28, United
States Code, is repealed.
(2) The table of sections of chapter 6 of title 28,
United States Code, is amended by striking the item relat-
ing to section 158.
SEC. 613. GAO STUDY.
(a) STUDY.—Not later than 270 days after the date
of the enactment of this Act, the Comptroller General of
the United States shall conduct a study of the feasibility,
effectiveness, and cost of requiring trustees appointed
198
under title 11, United States Code, or the bankruptcy
courts, to provide to the Office of Child Support Enforce-
ment promptly after the commencement of cases by indi-
vidual debtors under such title, the names and social secu-
rity numbers of such debtors for the purposes of allowing
such Office to determine whether such debtors have out-
standing obligations for child support (as determined on
the basis of information in the Federal Case Registry or
other national database).
(b) REPORT.—Not later than 300 days after the date
of the enactment of this Act, the Comptroller General shall
submit to the Speaker of the House of Representatives
and the President pro tempore of the Senate, a report con-
taining the results of the study required by subsection (a).
SEC. 614. COMPENSATING TRUSTEES.
Title 11, United States Code, is amended—
(1) in section 104(b)(1) in the material pre-
ceding subparagraph (A)—
(A) by striking ‘‘and’’; and
(B) by inserting ‘‘, 1326(b)(3)’’ before
‘‘immediately’’;
(2) in section 326, by inserting at the end the
following:
‘‘(e) Notwithstanding any other provision of this sec-
tion, the court shall allow reasonable compensation under
199
section 330(a) of this title for the services and expenses
of the trustee in taking the actions described in para-
graphs (1) and (2) if—
‘‘(1) a trustee in a chapter 7 case commences
a motion to dismiss or convert under section 707(b)
and such motion is granted; or
‘‘(2) the trustee demonstrates by a preponder-
ance of the evidence that the case was converted or
dismissed because of the trustee’s actions.’’; and
(3) in section 1326(b)—
(A) in paragraph (1), by striking ‘‘and’’;
(B) in paragraph (2), by striking the pe-
riod at the end thereof and inserting ‘‘; and’’;
and
(C) by adding at the end the following:
‘‘(3)(A) the amount of the compensation de-
scribed in subclauses (I) and (II) which is unpaid at
the time of each such payment, prorated over the re-
maining duration of the plan—
‘‘(i) and which has been allowed in a
case—
‘‘(I) converted to this chapter; or
‘‘(II) dismissed from chapter 7 in
which the debtor in this case was a debtor,
whether dismissed voluntarily by the debt-
200
or or on motion of the trustee under sec-
tion 707(b);
‘‘(ii) but only to the extent such compensa-
tion has been allowed to a chapter 7 trustee
under section 326(e);
‘‘(B) the compensation payable to the chapter 7
trustee in the case under this chapter shall not ex-
ceed the greater of the trustee fee allowed pursuant
to section 330 of this title plus—
‘‘(i) $25 per month; or
‘‘(ii) the amount payable to unsecured non-
priority creditors as provided by the plan multi-
plied by 5 percent, and the result divided by the
number of months in the plan; and
‘‘(C) notwithstanding any other provision of
this title, any such compensation awarded to a chap-
ter 7 trustee in a converted or dismissed case shall
be payable and may be collected in a case under this
chapter—
‘‘(i) even if such amount has been dis-
charged in a prior proceeding under this title;
and
‘‘(ii) only to the extent permitted by this
section.’’.
201
TITLE VII—BANKRUPTCY DATA
SEC. 701. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT.—Chapter 6 of part I of title 28,
United States Code, is amended by adding at the end the
following:
‘‘§ 159. Bankruptcy statistics
‘‘(a) The clerk of each district shall compile statistics
regarding individual debtors with primarily consumer
debts seeking relief under chapters 7, 11, and 13 of title
11. Those statistics shall be in a form prescribed by the
Director of the Administrative Office of the United States
Courts (referred to in this section as the ‘Office’).
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a);
‘‘(2) make the statistics available to the public;
and
‘‘(3) not later than October 31, 2000, and an-
nually thereafter, prepare, and submit to Congress a
report concerning the information collected under
subsection (a) that contains an analysis of the infor-
mation.
‘‘(c) The compilation required under subsection (b)
shall—
202
‘‘(1) be itemized, by chapter, with respect to
title 11, United States Code;
‘‘(2) be presented in the aggregate and for each
district; and
‘‘(3) include information concerning—
‘‘(A) the total assets and total liabilities of
the debtors described in subsection (a), and in
each category of assets and liabilities, as re-
ported in the schedules prescribed pursuant to
section 2075 of this title and filed by those
debtors;
‘‘(B) the current monthly income, and av-
erage income and average expenses of those
debtors as reported on the schedules and state-
ments that each such debtor files under sections
521 and 1322 of title 11, United States Code;
‘‘(C) the aggregate amount of debt dis-
charged 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 predominantly non-
dischargeable;
203
‘‘(D) the average period of time between
the filing of the petition and the closing of the
case;
‘‘(E) for the reporting period—
‘‘(i) the number of cases in which a
reaffirmation was filed; and
‘‘(ii)(I) the total number of reaffirma-
tions filed;
‘‘(II) of those cases in which a reaffir-
mation was filed, the number in which the
debtor was not represented by an attorney;
and
‘‘(III) of those cases, the number of
cases in which the reaffirmation was ap-
proved by the court;
‘‘(F) with respect to cases filed under
chapter 13 of title 11, for the reporting
period—
‘‘(i)(I) the number of cases in which a
final order was entered determining the
value of property securing a claim in an
amount less than the amount of the claim;
and
204
‘‘(II) the number of final orders deter-
mining the value of property securing a
claim issued;
‘‘(ii) the number of cases dismissed,
the number of cases dismissed for failure
to make payments under the plan, the
number of cases refiled after dismissal,
and the number of cases in which the plan
was completed, separately itemized with re-
spect to the number of modifications made
before completion of the plan, if any; and
‘‘(iii) the number of cases in which
the debtor filed another case within the 6
years previous to the filing;
‘‘(G) the number of cases in which credi-
tors were fined for misconduct and any amount
of punitive damages awarded by the court for
creditor misconduct; and
‘‘(H) the number of cases in which sanc-
tions under rule 9011 of the Federal Rules of
Bankruptcy Procedure were imposed against
debtor’s counsel and damages awarded under
such Rule.’’.
205
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 6 of title 28, United States
Code, is amended by adding at the end the following:
‘‘159. Bankruptcy statistics.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
the enactment of this Act.
SEC. 702. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA.
(a) AMENDMENT.—Title 28, United States Code, is
amended by inserting after section 589a the following:
‘‘§ 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)—
‘‘(1) final reports by trustees in cases under
chapters 7, 12, and 13 of title 11, United States
Code; and
‘‘(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter
11 of title 11, United States Code.
‘‘(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
206
the public, both by physical inspection at one or more cen-
tral filing locations, and by electronic access through the
Internet 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 evaluate the efficiency and practi-
cality of the Federal bankruptcy system. In issuing rules
proposing the forms referred to in subsection (a), the At-
torney General shall strike the best achievable practical
balance between—
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; and
‘‘(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;
207
‘‘(2) assets abandoned;
‘‘(3) assets exempted;
‘‘(4) receipts and disbursements of the estate;
‘‘(5) expenses of administration;
‘‘(6) claims asserted;
‘‘(7) claims allowed; and
‘‘(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-
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;
208
‘‘(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 for the professional fees incurred
by or on behalf of the debtor, between those that
would have been incurred absent a bankruptcy case
and those not); and
‘‘(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. 703. SENSE OF THE CONGRESS REGARDING AVAIL-
ABILITY OF BANKRUPTCY DATA.
It is the sense of the Congress that—
209
(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,
United States Code), should be released in a usable
electronic form in bulk to the public subject to such
appropriate privacy concerns and safeguards as the
Judicial Conference of the United States may deter-
mine; 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) data for any particular bankruptcy
case are aggregated in the same electronic
record.
TITLE VIII—BANKRUPTCY TAX
PROVISIONS
SEC. 801. 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
210
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
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
211
‘‘(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
under any law (other than a bankruptcy law) has ex-
pired.’’.
SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.
(a) 
EFFECTIVE
NOTICE
TO
GOVERNMENTAL
UNITS.—Section 342 of title 11, United States Code, as
amended by section 603, is amended by adding at the end
the following:
‘‘(g) If a debtor lists a governmental unit as a cred-
itor in a list or schedule, any notice required to be given
212
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 identify (with information such
as a taxpayer identification number, loan, account or con-
tract number, or real estate parcel number, where applica-
ble), and describe the underlying basis for the govern-
mental unit’s claim. If the debtor’s liability to a govern-
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 of 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
213
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
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 identification
numbers, or similar identifying information) to per-
mit the governmental unit or subdivision thereof, en-
titled 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 to-
gether with the notice, the property in respect of
which the claim or regulatory obligation may have
214
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 section
603 and subsection (a), is amended by adding at the end
the following:
‘‘(i) A notice that does not comply with subsections
(d) and (e) shall not be effective unless the debtor dem-
onstrates, by clear and convincing evidence, that timely
notice was given in a manner reasonably calculated to sat-
isfy the requirements of this section was given, and that—
‘‘(1) 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
‘‘(2) 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.’’.
SEC. 803. 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-
215
ond sentence thereof and inserting ‘‘If the request is made
substantially in the manner designated by the govern-
mental unit and unless’’.
SEC. 804. RATE OF INTEREST ON TAX CLAIMS.
(a) AMENDMENT.—Chapter 5 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 511. Rate of interest on tax claims
‘‘If any provision of this title requires the payment
of interest on a tax claim or requires the payment of inter-
est to enable a creditor to receive the present value of the
allowed amount of a tax claim, the rate of interest shall
be as follows:
‘‘(1) In the case of ad valorem tax claims,
whether secured or unsecured, other unsecured tax
claims where interest is required to be paid under
section 726(a)(5) of this title, secured tax claims,
and administrative tax claims paid under section
503(b)(1) of this title, the rate shall be determined
under applicable nonbankruptcy law.
‘‘(2) In the case of all other tax claims, the
minimum rate of interest shall be the Federal short-
term rate rounded to the nearest full percent, deter-
mined under section 1274(d) of the Internal Rev-
enue Code of 1986, plus 3 percentage points.
216
‘‘(A) In the case of claims for Federal in-
come taxes, such rate shall be subject to any
adjustment that may be required under section
6621(d) of the Internal Revenue Code of 1986.
‘‘(B) In the case of taxes paid under a con-
firmed plan or reorganization, such rate shall
be determined as of the calendar month in
which the plan is confirmed.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions of chapter 5 of title 11, United States Code, is
amended by inserting after the item relating to section
510 the following:
‘‘511. Rate of interest on tax claims.’’.
SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERI-
ODS.
Section 507(a)(8)(A) of title 11, United States Code,
as so redesignated, 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:
‘‘(ii) assessed within 240 days before
the date of the filing of the petition, exclu-
sive of—
217
‘‘(I) any time plus 30 days dur-
ing which an offer in compromise with
respect of such tax, was pending or in
effect during such 240-day period;
‘‘(II) any time plus 30 days dur-
ing which an installment agreement
with respect of such tax was pending
or in effect during such 240-day pe-
riod, up to 1 year; and
‘‘(III) any time plus 6 months
during which a stay of proceedings
against collections was in effect in a
prior case under this title during such
240-day period.’’.
SEC. 806. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code,
is amended by striking ‘‘assessed’’ and inserting ‘‘in-
curred’’.
SEC. 807. 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’’.
SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, is
amended by adding at the end the following:
218
‘‘(6) 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. 809. STAY OF TAX PROCEEDINGS.
(a) 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) 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;
(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 without regard to whether
such determination was made prepetition or
postpetition.’’.
219
SEC. 810. 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; and
(2) in subparagraph (C)—
(A) by striking ‘‘deferred cash payments,
over a period not exceeding six years after the
date of assessment of such claim,’’ and insert-
ing ‘‘regular installment payments in cash, but
in no case with a balloon provision, and no
more than three months apart, beginning no
later than the effective date of the plan and
ending on the earlier of five years after the pe-
tition date or the last date payments are to be
made under the plan to unsecured creditors,’’;
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
such claim will receive on account of such claim
cash payments of not less than is required in
220
subparagraph (C) and over a period no greater
than is required in such subparagraph.’’.
SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED.
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. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSI-
NESS.
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of
title 28, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and
(2) by adding at the end the following:
‘‘(b) Such taxes shall be paid when due in the conduct
of such business unless—
‘‘(1) the tax is a property tax secured by a lien
against property that is abandoned within a reason-
able time after the lien attaches, by the trustee of
a bankruptcy estate, pursuant to section 554 of title
11, United States Code; or
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11, United States Code.
221
‘‘(c) In a case pending under chapter 7 of title 11,
payment of a tax may be deferred until final distribution
is made under section 726 of title 11, United States Code,
if—
‘‘(1) the tax was not incurred by a trustee duly
appointed under chapter 7 of title 11, United States
Code; or
‘‘(2) before the due date of the tax, the court
has made a finding of probable insufficiency of
funds of the estate to pay in full the administrative
expenses allowed under section 503(b) of title 11
that have the same priority in distribution under
section 726(b) of title 11 as such tax.’’.
(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-
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 sub-
section (a) of this section, a governmental unit shall
222
not be required to file a request for the payment of
a claim described in subparagraph (B) or (C);’’.
(d) PAYMENT OF TAXES AND FEES AS SECURED
CLAIMS.—Section 506 of title 11, United States Code, is
amended—
(1) in subsection (b) by inserting ‘‘or State
statute’’ after ‘‘agreement’’; and
(2) in subsection (c) by inserting ‘‘, including
the payment of all ad valorem property taxes in re-
spect of the property’’ before the period at the end.
SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ‘‘before the date on which the trustee
commences distribution under this section’’ and inserting
‘‘on or before the earlier of 10 days after the mailing to
creditors of the summary of the trustee’s final report or
the date on which the trustee commences final distribution
under this section’’.
SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES.
Section 523(a)(1)(B) of title 11, United States Code,
is amended—
(1) by inserting ‘‘or equivalent report or no-
tice,’’ after ‘‘a return,’’;
(2) in clause (i)—
223
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by striking ‘‘or’’ at the end;
(3) in clause (ii)—
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by inserting ‘‘, report, or notice’’ after
‘‘return’’; and
(4) by adding at the end the following:
‘‘(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 Rev-
enue Code of 1986, or similar State
or local law; and
224
‘‘(II) must have been filed in a
manner permitted by applicable non-
bankruptcy law; or’’.
SEC. 815. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES.
Section 505(b) of title 11, United States Code, is
amended in the second sentence by inserting ‘‘the estate,’’
after ‘‘misrepresentation,’’.
SEC. 816. 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, as amended by section 140,
is amended—
(1) in paragraph (6) by striking ‘‘and’’ at the
end;
(2) in paragraph (7) by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(8) 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
225
Code, as amended by section 135, 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 3-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,
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;
‘‘(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,
226
and for which request has been timely made, accord-
ing to applicable nonbankruptcy law; and
‘‘(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
‘‘(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 only, a return in-
cludes a return prepared pursuant to section 6020 (a) or
(b) of the Internal Revenue Code of 1986 or similar State
or local law, or a written stipulation to a judgment entered
by a nonbankruptcy tribunal.’’.
(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.’’.
227
(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 fol-
lowing:
‘‘(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 the Congress that the
Advisory Committee on Bankruptcy Rules of the Judicial
228
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
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, United
States Code; 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 such section 1308 shall be
filed until such return has been filed as required.
SEC. 817. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a) of title 11, United States Code, is
amended in paragraph (1)—
(1) by inserting after ‘‘records,’’ the following:
‘‘including a full discussion of the potential material
Federal, State, and local tax consequences of the
plan to the debtor, any successor to the debtor, and
a hypothetical investor domiciled in the State in
which the debtor resides or has its principal place of
229
business typical of the holders of claims or interests
in the case,’’;
(2) by inserting ‘‘such’’ after ‘‘enable’’; and
(3) by striking ‘‘reasonable’’ where it appears
after ‘‘hypothetical’’ and by striking ‘‘typical of hold-
ers of claims or interests’’ after ‘‘investor’’.
SEC. 818. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as
amended by sections 118, 132, 136, and 203, is
amended—
(1) in paragraph (29) by striking ‘‘or’’;
(2) in paragraph (30) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by inserting after paragraph (30) the fol-
lowing:
‘‘(31) 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; or
230
‘‘(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 IX—ANCILLARY AND
OTHER CROSS-BORDER CASES
SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11,
UNITED STATES CODE.
(a) IN GENERAL.—Title 11, United States Code, is
amended by inserting after chapter 13 the following:
‘‘CHAPTER 15—ANCILLARY AND OTHER
CROSS-BORDER CASES
‘‘Sec.
‘‘1501. Purpose and scope of application.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘1502. Definitions.
‘‘1503. International obligations of the United States.
‘‘1504. Commencement of ancillary case.
‘‘1505. Authorization to act in a foreign country.
‘‘1506. Public policy exception.
‘‘1507. Additional assistance.
‘‘1508. Interpretation.
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND
CREDITORS TO THE COURT
‘‘1509. Right of direct access.
‘‘1510. Limited jurisdiction.
‘‘1511. Commencement of case under section 301 or 303.
‘‘1512. Participation of a foreign representative in a case under this title.
‘‘1513. Access of foreign creditors to a case under this title.
‘‘1514. Notification to foreign creditors concerning a case under this title.
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING
AND RELIEF
231
‘‘1515. Application for recognition of a foreign proceeding.
‘‘1516. Presumptions concerning recognition.
‘‘1517. Order recognizing a foreign proceeding.
‘‘1518. Subsequent information.
‘‘1519. Relief that may be granted upon petition for recognition of a foreign
proceeding.
‘‘1520. Effects of recognition of a foreign main proceeding.
‘‘1521. Relief that may be granted upon recognition of a foreign proceeding.
‘‘1522. Protection of creditors and other interested persons.
‘‘1523. Actions to avoid acts detrimental to creditors.
‘‘1524. Intervention by a foreign representative.
‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND
FOREIGN REPRESENTATIVES
‘‘1525. Cooperation and direct communication between the court and foreign
courts or foreign representatives.
‘‘1526. Cooperation and direct communication between the trustee and foreign
courts or foreign representatives.
‘‘1527. Forms of cooperation.
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS
‘‘1528. Commencement of a case under this title after recognition of a foreign
main proceeding.
‘‘1529. Coordination of a case under this title and a foreign proceeding.
‘‘1530. Coordination of more than 1 foreign proceeding.
‘‘1531. Presumption of insolvency based on recognition of a foreign main pro-
ceeding.
‘‘1532. Rule of payment in concurrent proceedings.
‘‘§ 1501. Purpose and scope of application
‘‘(a) The purpose of this chapter is to incorporate the
Model Law on Cross-Border Insolvency so as to provide
effective mechanisms for dealing with cases of cross-bor-
der insolvency with the objectives of—
‘‘(1) cooperation between—
‘‘(A) United States courts, United States
trustees, trustees, examiners, debtors, and debt-
ors in possession; and
‘‘(B) the courts and other competent au-
thorities of foreign countries involved in cross-
border insolvency cases;
232
‘‘(2) greater legal certainty for trade and in-
vestment;
‘‘(3) fair and efficient administration of cross-
border insolvencies that protects the interests of all
creditors, and other interested entities, including the
debtor;
‘‘(4) protection and maximization of the value
of the debtor’s assets; and
‘‘(5) facilitation of the rescue of financially
troubled businesses, thereby protecting investment
and preserving employment.
‘‘(b) This chapter applies where—
‘‘(1) assistance is sought in the United States
by a foreign court or a foreign representative in con-
nection with a foreign proceeding;
‘‘(2) assistance is sought in a foreign country in
connection with a case under this title;
‘‘(3) a foreign proceeding and a case under this
title with respect to the same debtor are taking place
concurrently; or
‘‘(4) creditors or other interested persons in a
foreign country have an interest in requesting the
commencement of, or participating in, a case or pro-
ceeding under this title.
‘‘(c) This chapter does not apply to—
233
‘‘(1) a proceeding concerning an entity, other
than a foreign insurance company, identified by ex-
clusion in subsection 109(b);
‘‘(2) an individual, or to an individual and such
individual’s spouse, who have debts within the limits
specified in section 109(e) and who are citizens of
the United States or aliens lawfully admitted for
permanent residence in the United States; or
‘‘(3) an entity subject to a proceeding under the
Securities Investor Protection Act, a stockbroker
subject to subchapter III of chapter 7 of this title,
or a commodity broker subject to subchapter IV of
chapter 7 of this title.
‘‘(d) The court may not grant relief under this chap-
ter with respect to any deposit, escrow, trust fund, or
other security required or permitted under any applicable
State insurance law or regulation for the benefit of claim
holders in the United States.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘§ 1502. Definitions
‘‘For the purposes of this chapter, the term—
‘‘(1) ‘debtor’ means an entity that is the subject
of a foreign proceeding;
234
‘‘(2) ‘establishment’ means any place of oper-
ations where the debtor carries out a nontransitory
economic activity;
‘‘(3) ‘foreign court’ means a judicial or other
authority competent to control or supervise a foreign
proceeding;
‘‘(4) ‘foreign main proceeding’ means a foreign
proceeding taking place in the country where the
debtor has the center of its main interests;
‘‘(5) ‘foreign nonmain proceeding’ means a for-
eign proceeding, other than a foreign main pro-
ceeding, taking place in a country where the debtor
has an establishment;
‘‘(6) ‘trustee’ includes a trustee, a debtor in
possession in a case under any chapter of this title,
or a debtor under chapter 9 of this title; and
‘‘(7) ‘within the territorial jurisdiction of the
United States’ when used with reference to property
of a debtor refers to tangible property located within
the territory of the United States and intangible
property deemed under applicable nonbankruptcy
law to be located within that territory, including any
property subject to attachment or garnishment that
may properly be seized or garnished by an action in
a Federal or State court in the United States.
235
‘‘§ 1503. International obligations of the United States
‘‘To the extent that this chapter conflicts with an ob-
ligation of the United States arising out of any treaty or
other form of agreement to which it is a party with one
or more other countries, the requirements of the treaty
or agreement prevail.
‘‘§ 1504. Commencement of ancillary case
‘‘A case under this chapter is commenced by the filing
of a petition for recognition of a foreign proceeding under
section 1515.
‘‘§ 1505. Authorization to act in a foreign country
‘‘A trustee or another entity (including an examiner)
may be authorized by the court to act in a foreign country
on behalf of an estate created under section 541. An entity
authorized to act under this section may act in any way
permitted by the applicable foreign law.
‘‘§ 1506. Public policy exception
‘‘Nothing in this chapter prevents the court from re-
fusing to take an action governed by this chapter if the
action would be manifestly contrary to the public policy
of the United States.
‘‘§ 1507. Additional assistance
‘‘(a) Subject to the specific limitations stated else-
where in this chapter the court, upon recognition of a for-
eign proceeding, the court may provide additional assist-
236
ance to a foreign representative under this title or under
other laws of the United States.
‘‘(b) In determining whether to provide additional as-
sistance under this title or under other laws of the United
States, the court shall consider whether such additional
assistance, consistent with the principles of comity, will
reasonably assure—
‘‘(1) just treatment of all holders of claims
against or interests in the debtor’s property;
‘‘(2) protection of claim holders in the United
States against prejudice and inconvenience in the
processing of claims in such foreign proceeding;
‘‘(3) prevention of preferential or fraudulent
dispositions of property of the debtor;
‘‘(4) distribution of proceeds of the debtor’s
property substantially in accordance with the order
prescribed by this title; and
‘‘(5) if appropriate, the provision of an oppor-
tunity for a fresh start for the individual that such
foreign proceeding concerns.
‘‘§ 1508. Interpretation
‘‘In interpreting this chapter, the court shall consider
its international origin, and the need to promote an appli-
cation of this chapter that is consistent with the applica-
tion of similar statutes adopted by foreign jurisdictions.
237
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP-
RESENTATIVES AND CREDITORS TO THE
COURT
‘‘§ 1509. Right of direct access
‘‘(a) A foreign representative may commence a case
under section 1504 of this title by filing with the court
a petition for recognition of a foreign proceeding under
section 1515 of this title.
‘‘(b) If the court grants recognition under section
1515 of this title, and subject to any limitations that the
court may impose consistent with the policy of this
chapter—
‘‘(1) the foreign representative has the capacity
to sue and be sued in a court in the United States;
‘‘(2) the foreign representative may apply di-
rectly to a court in the United States for appropriate
relief in that court; and
‘‘(3) a court in the United States shall grant
comity or cooperation to the foreign representative.
‘‘(c) A request for comity or cooperation by a foreign
representative in a court in the United States shall be ac-
companied by a certified copy of an order granting rec-
ognition under section 1517 of this title.
‘‘(d) If the court denies recognition under this chap-
ter, the court may issue any appropriate order necessary
238
to prevent the foreign representative from obtaining com-
ity or cooperation from courts in the United States.
‘‘(e) Whether or not the court grants recognition, and
subject to sections 306 and 1510 of this title, a foreign
representative is subject to applicable nonbankruptcy law.
‘‘(f) Notwithstanding any other provision of this sec-
tion, the failure of a foreign representative to commence
a case or to obtain recognition under this chapter does
not affect any right the foreign representative may have
to sue in a court in the United State to collect or recover
a claim which is the property of the debtor.’’.
‘‘§ 1510. Limited jurisdiction
‘‘The sole fact that a foreign representative files a
petition under section 1515 does not subject the foreign
representative to the jurisdiction of any court in the
United States for any other purpose.
‘‘§ 1511. Commencement of case under section 301 or
303
‘‘(a) Upon recognition, a foreign representative may
commence—
‘‘(1) an involuntary case under section 303; or
‘‘(2) a voluntary case under section 301 or 302,
if the foreign proceeding is a foreign main pro-
ceeding.
239
‘‘(b) The petition commencing a case under sub-
section (a) must be accompanied by certified copy of an
order granting recognition. The court where the petition
for recognition has been filed must be advised of the for-
eign representative’s intent to commence a case under sub-
section (a) prior to such commencement.
‘‘§ 1512. Participation of a foreign representative in a
case under this title
‘‘Upon recognition of a foreign proceeding, the for-
eign representative in that proceeding is entitled to par-
ticipate as a party in interest in a case regarding the debt-
or under this title.
‘‘§ 1513. Access of foreign creditors to a case under
this title
‘‘(a) Foreign creditors have the same rights regarding
the commencement of, and participation in, a case under
this title as domestic creditors.
‘‘(b)(1) Subsection (a) does not change or codify
present law as to the priority of claims under section 507
or 726 of this title, except that the claim of a foreign cred-
itor under those sections shall not be given a lower priority
than that of general unsecured claims without priority
solely because the holder of such claim is a foreign cred-
itor.
240
‘‘(2)(A) Subsection (a) and paragraph (1) do not
change or codify present law as to the allowability of for-
eign revenue claims or other foreign public law claims in
a proceeding under this title.
‘‘(B) Allowance and priority as to a foreign tax claim
or other foreign public law claim shall be governed by any
applicable tax treaty of the United States, under the con-
ditions and circumstances specified therein.
‘‘§ 1514. Notification to foreign creditors concerning a
case under this title
‘‘(a) Whenever in a case under this title notice is to
be given to creditors generally or to any class or category
of creditors, such notice shall also be given to the known
creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States.
The court may order that appropriate steps be taken with
a view to notifying any creditor whose address is not yet
known.
‘‘(b) Such notification to creditors with foreign ad-
dresses described in subsection (a) shall be given individ-
ually, unless the court considers that, under the cir-
cumstances, some other form of notification would be
more appropriate. No letters rogatory or other similar for-
mality is required.
241
‘‘(c) When a notification of commencement of a case
is to be given to foreign creditors, the notification shall—
‘‘(1) indicate the time period for filing proofs of
claim and specify the place for their filing;
‘‘(2) indicate whether secured creditors need to
file their proofs of claim; and
‘‘(3) contain any other information required to
be included in such a notification to creditors under
this title and the orders of the court.
‘‘(d) Any rule of procedure or order of the court as
to notice or the filing of a claim shall provide such addi-
tional time to creditors with foreign addresses as is rea-
sonable under the circumstances.
‘‘SUBCHAPTER III—RECOGNITION OF A
FOREIGN PROCEEDING AND RELIEF
‘‘§ 1515. Application for recognition of a foreign pro-
ceeding
‘‘(a) A foreign representative applies to the court for
recognition of the foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
‘‘(b) A petition for recognition shall be accompanied
by—
242
‘‘(1) a certified copy of the decision com-
mencing the foreign proceeding and appointing the
foreign representative;
‘‘(2) a certificate from the foreign court affirm-
ing the existence of the foreign proceeding and of
the appointment of the foreign representative; or
‘‘(3) in the absence of evidence referred to in
paragraphs (1) and (2), any other evidence accept-
able to the court of the existence of the foreign pro-
ceeding and of the appointment of the foreign rep-
resentative.
‘‘(c) A petition for recognition shall also be accom-
panied by a statement identifying all foreign proceedings
with respect to the debtor that are known to the foreign
representative.
‘‘(d) The documents referred to in paragraphs (1)
and (2) of subsection (b) must be translated into English.
The court may require a translation into English of addi-
tional documents.
‘‘§ 1516. Presumptions concerning recognition
‘‘(a) If the decision or certificate referred to in section
1515(b) indicates that the foreign proceeding is a foreign
proceeding as defined in section 101 and that the person
or body is a foreign representative as defined in section
101, the court is entitled to so presume.
243
‘‘(b) The court is entitled to presume that documents
submitted in support of the petition for recognition are
authentic, whether or not they have been legalized.
‘‘(c) In the absence of evidence to the contrary, the
debtor’s registered office, or habitual residence in the case
of an individual, is presumed to be the center of the debt-
or’s main interests.
‘‘§ 1517. Order recognizing a foreign proceeding
‘‘(a) Subject to section 1506, after notice and a hear-
ing an order recognizing a foreign proceeding shall be en-
tered if—
‘‘(1) the foreign proceeding is a foreign main
proceeding or foreign nonmain proceeding within the
meaning of section 1502;
‘‘(2) the foreign representative applying for rec-
ognition is a person or body as defined in section
101; and
‘‘(3) the petition meets the requirements of sec-
tion 1515.
‘‘(b) The foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is taking
place in the country where the debtor has the center
of its main interests; or
‘‘(2) as a foreign nonmain proceeding if the
debtor has an establishment within the meaning of
244
section 1502 in the foreign country where the pro-
ceeding is pending.
‘‘(c) A petition for recognition of a foreign proceeding
shall be decided upon at the earliest possible time. Entry
of an order recognizing a foreign proceeding constitutes
recognition under this chapter.
‘‘(d) The provisions of this subchapter do not prevent
modification or termination of recognition if it is shown
that the grounds for granting it were fully or partially
lacking or have ceased to exist, but in considering such
action the court shall give due weight to possible prejudice
to parties that have relied upon the granting of recogni-
tion. The case under this chapter may be closed in the
manner prescribed under section 350.
‘‘§ 1518. Subsequent information
‘‘From the time of filing the petition for recognition
of the foreign proceeding, the foreign representative shall
file with the court promptly a notice of change of status
concerning—
‘‘(1) any substantial change in the status of the
foreign proceeding or the status of the foreign rep-
resentative’s appointment; and
‘‘(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign represent-
ative.
245
‘‘§ 1519. Relief that may be granted upon petition for
recognition of a foreign proceeding
‘‘(a) From the time of filing a petition for recognition
until the court rules on the petition, the court may, at
the request of the foreign representative, where relief is
urgently needed to protect the assets of the debtor or the
interests of the creditors, grant relief of a provisional na-
ture, including—
‘‘(1) staying execution against the debtor’s as-
sets;
‘‘(2) entrusting the administration or realiza-
tion of all or part of the debtor’s assets located in
the United States to the foreign representative or
another person authorized by the court, including an
examiner, in order to protect and preserve the value
of assets that, by their nature or because of other
circumstances, are perishable, susceptible to devalu-
ation or otherwise in jeopardy; and
‘‘(3) any relief referred to in paragraph (3),
(4), or (7) of section 1521(a).
‘‘(b) Unless extended under section 1521(a)(6), the
relief granted under this section terminates when the peti-
tion for recognition is decided upon.
‘‘(c) It is a ground for denial of relief under this sec-
tion that such relief would interfere with the administra-
tion of a foreign main proceeding.
246
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under this
section.
‘‘§ 1520. Effects of recognition of a foreign main pro-
ceeding
‘‘(a) Upon recognition of a foreign proceeding that
is a foreign main proceeding—
‘‘(1) sections 361 and 362 with respect to the
debtor and that property of the debtor that is within
the territorial jurisdiction of the United States;
‘‘(2) sections 363, 549, and 552 of this title
apply to a transfer of an interest of the debtor in
property that is within the territorial jurisdiction of
the United States to the same extent that the sec-
tions would apply to property of an estate;
‘‘(3) unless the court orders otherwise, the for-
eign representative may operate the debtor’s busi-
ness and may exercise the rights and powers of a
trustee under and to the extent provided by sections
363 and 552; and
247
‘‘(4) section 552 applies to property of the debt-
or that is within the territorial jurisdiction of the
United States.’’.
‘‘(b) Subsection (a) does not affect the right to com-
mence an individual action or proceeding in a foreign
country to the extent necessary to preserve a claim against
the debtor.
‘‘(c) Subsection (a) does not affect the right of a for-
eign representative or an entity to file a petition com-
mencing a case under this title or the right of any party
to file claims or take other proper actions in such a case.
‘‘§ 1521. Relief that may be granted upon recognition
of a foreign proceeding
‘‘(a) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, where necessary to effectuate the
purpose of this chapter and to protect the assets of the
debtor or the interests of the creditors, the court may, at
the request of the foreign representative, grant any appro-
priate relief, including—
‘‘(1) staying the commencement or continuation
of an individual action or proceeding concerning the
debtor’s assets, rights, obligations or liabilities to the
extent they have not been stayed under section
1520(a);
248
‘‘(2) staying execution against the debtor’s as-
sets to the extent it has not been stayed under sec-
tion 1520(a);
‘‘(3) suspending the right to transfer, encumber
or otherwise dispose of any assets of the debtor to
the extent this right has not been suspended under
section 1520(a);
‘‘(4) providing for the examination of witnesses,
the taking of evidence or the delivery of information
concerning the debtor’s assets, affairs, rights, obliga-
tions or liabilities;
‘‘(5) entrusting the administration or realiza-
tion of all or part of the debtor’s assets within the
territorial jurisdiction of the United States to the
foreign representative or another person, including
an examiner, authorized by the court;
‘‘(6) extending relief granted under section
1519(a); and
‘‘(7) granting any additional relief that may be
available to a trustee, except for relief available
under sections 522, 544, 545, 547, 548, 550, and
724(a).
‘‘(b) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, the court may, at the request of the
foreign representative, entrust the distribution of all or
249
part of the debtor’s assets located in the United States
to the foreign representative or another person, including
an examiner, authorized by the court, provided that the
court is satisfied that the interests of creditors in the
United States are sufficiently protected.
‘‘(c) In granting relief under this section to a rep-
resentative of a foreign nonmain proceeding, the court
must be satisfied that the relief relates to assets that,
under the law of the United States, should be adminis-
tered in the foreign nonmain proceeding or concerns infor-
mation required in that proceeding.
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a).
‘‘§ 1522. Protection of creditors and other interested
persons
‘‘(a) The court may grant relief under section 1519
or 1521, or may modify or terminate relief under sub-
section (c), only if the interests of the creditors and other
interested entities, including the debtor, are sufficiently
protected.
250
‘‘(b) The court may subject relief granted under sec-
tion 1519 or 1521, or the operation of the debtor’s busi-
ness under section 1520(a)(3) of this title, to conditions
it considers appropriate, including the giving of security
or the filing of a bond.
‘‘(c) The court may, at the request of the foreign rep-
resentative or an entity affected by relief granted under
section 1519 or 1521, or at its own motion, modify or
terminate such relief.
‘‘(d) Section 1104(d) shall apply to the appointment
of an examiner under this chapter. Any examiner shall
comply with the qualification requirements imposed on a
trustee by section 322.
‘‘§ 1523. Actions to avoid acts detrimental to creditors
‘‘(a) Upon recognition of a foreign proceeding, the
foreign representative has standing in a case concerning
the debtor pending under another chapter of this title to
initiate actions under sections 522, 544, 545, 547, 548,
550, and 724(a).
‘‘(b) When the foreign proceeding is a foreign
nonmain proceeding, the court must be satisfied that an
action under subsection (a) relates to assets that, under
United States law, should be administered in the foreign
nonmain proceeding.
251
‘‘§ 1524. Intervention by a foreign representative
‘‘Upon recognition of a foreign proceeding, the for-
eign representative may intervene in any proceedings in
a State or Federal court in the United States in which
the debtor is a party.
‘‘SUBCHAPTER IV—COOPERATION WITH FOR-
EIGN COURTS AND FOREIGN REPRESENTA-
TIVES
‘‘§ 1525. Cooperation and direct communication be-
tween the court and foreign courts or for-
eign representatives
‘‘(a) Consistent with section 1501, the court shall co-
operate to the maximum extent possible with foreign
courts or foreign representatives, either directly or
through the trustee.
‘‘(b) The court is entitled to communicate directly
with, or to request information or assistance directly from,
foreign courts or foreign representatives, subject to the
rights of parties in interest to notice and participation.
‘‘§ 1526. Cooperation and direct communication be-
tween the trustee and foreign courts or
foreign representatives
‘‘(a) Consistent with section 1501, the trustee or
other person, including an examiner, authorized by the
court, shall, subject to the supervision of the court, cooper-
252
ate to the maximum extent possible with foreign courts
or foreign representatives.
‘‘(b) The trustee or other person, including an exam-
iner, authorized by the court is entitled, subject to the su-
pervision of the court, to communicate directly with for-
eign courts or foreign representatives.
‘‘§ 1527. Forms of cooperation
‘‘Cooperation referred to in sections 1525 and 1526
may be implemented by any appropriate means,
including—
‘‘(1) appointment of a person or body, including
an examiner, to act at the direction of the court;
‘‘(2) communication of information by any
means considered appropriate by the court;
‘‘(3) coordination of the administration and su-
pervision of the debtor’s assets and affairs;
‘‘(4) approval or implementation of agreements
concerning the coordination of proceedings; and
‘‘(5) coordination of concurrent proceedings re-
garding the same debtor.
253
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS
‘‘§ 1528. Commencement of a case under this title
after recognition of a foreign main pro-
ceeding
‘‘After recognition of a foreign main proceeding, a
case under another chapter of this title may be commenced
only if the debtor has assets in the United States. The
effects of such case shall be restricted to the assets of the
debtor that are within the territorial jurisdiction of the
United States and, to the extent necessary to implement
cooperation and coordination under sections 1525, 1526,
and 1527, to other assets of the debtor that are within
the jurisdiction of the court under sections 541(a) of this
title, and 1334(e) of title 28, to the extent that such other
assets are not subject to the jurisdiction and control of
a foreign proceeding that has been recognized under this
chapter.
‘‘§ 1529. Coordination of a case under this title and a
foreign proceeding
‘‘Where a foreign proceeding and a case under an-
other chapter of this title are taking place concurrently
regarding the same debtor, the court shall seek coopera-
tion and coordination under sections 1525, 1526, and
1527, and the following shall apply:
254
‘‘(1) When the case in the United States is tak-
ing place at the time the petition for recognition of
the foreign proceeding is filed—
‘‘(A) any relief granted under sections
1519 or 1521 must be consistent with the relief
granted in the case in the United States; and
‘‘(B) even if the foreign proceeding is rec-
ognized as a foreign main proceeding, section
1520 does not apply.
‘‘(2) When a case in the United States under
this title commences after recognition, or after the
filing of the petition for recognition, of the foreign
proceeding—
‘‘(A) any relief in effect under sections
1519 or 1521 shall be reviewed by the court
and shall be modified or terminated if incon-
sistent with the case in the United States; and
‘‘(B) if the foreign proceeding is a foreign
main proceeding, the stay and suspension re-
ferred to in section 1520(a) shall be modified or
terminated if inconsistent with the relief grant-
ed in the case in the United States.
‘‘(3) In granting, extending, or modifying relief
granted to a representative of a foreign nonmain
proceeding, the court must be satisfied that the re-
255
lief relates to assets that, under the law of the
United States, should be administered in the foreign
nonmain proceeding or concerns information re-
quired in that proceeding.
‘‘(4) In achieving cooperation and coordination
under sections 1528 and 1529, the court may grant
any of the relief authorized under section 305.
‘‘§ 1530. Coordination of more than 1 foreign pro-
ceeding
‘‘In matters referred to in section 1501, with respect
to more than 1 foreign proceeding regarding the debtor,
the court shall seek cooperation and coordination under
sections 1525, 1526, and 1527, and the following shall
apply:
‘‘(1) Any relief granted under section 1519 or
1521 to a representative of a foreign nonmain pro-
ceeding after recognition of a foreign main pro-
ceeding must be consistent with the foreign main
proceeding.
‘‘(2) If a foreign main proceeding is recognized
after recognition, or after the filing of a petition for
recognition, of a foreign nonmain proceeding, any
relief in effect under section 1519 or 1521 shall be
reviewed by the court and shall be modified or termi-
256
nated if inconsistent with the foreign main pro-
ceeding.
‘‘(3) If, after recognition of a foreign nonmain
proceeding, another foreign nonmain proceeding is
recognized, the court shall grant, modify, or termi-
nate relief for the purpose of facilitating coordina-
tion of the proceedings.
‘‘§ 1531. Presumption of insolvency based on recogni-
tion of a foreign main proceeding
‘‘In the absence of evidence to the contrary, recogni-
tion of a foreign main proceeding is for the purpose of
commencing a proceeding under section 303, proof that
the debtor is generally not paying its debts as such debts
become due.
‘‘§ 1532. Rule of payment in concurrent proceedings
‘‘Without prejudice to secured claims or rights in
rem, a creditor who has received payment with respect to
its claim in a foreign proceeding pursuant to a law relating
to insolvency may not receive a payment for the same
claim in a case under any other chapter of this title re-
garding the debtor, so long as the payment to other credi-
tors of the same class is proportionately less than the pay-
ment the creditor has already received.’’.
257
(b) CLERICAL AMENDMENT.—The table of chapters
for title 11, United States Code, is amended by inserting
after the item relating to chapter 13 the following:
‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’.
SEC. 902. OTHER AMENDMENTS TO TITLES 11 AND 28,
UNITED STATES CODE.
(a) APPLICABILITY OF CHAPTERS.—Section 103 of
title 11, United States Code, is amended—
(1) in subsection (a), by inserting before the pe-
riod the following: ‘‘, and this chapter, sections 307,
304, 555 through 557, 559, and 560 apply in a case
under chapter 15’’; and
(2) by adding at the end the following:
‘‘(j) Chapter 15 applies only in a case under such
chapter, except that—
‘‘(1) sections 1505, 1513, and 1514 apply in all
cases under this title; and
‘‘(2) section 1509 applies whether or not a case
under this title is pending.’’.
(b) DEFINITIONS.—Paragraphs (23) and (24) of title
11, United States Code, are amended to read as follows:
‘‘(23) ‘foreign proceeding’ means a collective ju-
dicial or administrative proceeding in a foreign coun-
try, including an interim proceeding, under a law re-
lating to insolvency or adjustment of debt in which
proceeding the assets and affairs of the debtor are
258
subject to control or supervision by a foreign court,
for the purpose of reorganization or liquidation;
‘‘(24) ‘foreign representative’ means a person
or body, including a person or body appointed on an
interim basis, authorized in a foreign proceeding to
administer the reorganization or the liquidation of
the debtor’s assets or affairs or to act as a rep-
resentative of the foreign proceeding;’’.
(c) AMENDMENTS TO TITLE 28, UNITED STATES
CODE.—
(1) PROCEDURES.—Section 157(b)(2) of title
28, United States Code, is amended—
(A) in subparagraph (N), by striking
‘‘and’’ at the end;
(B) in subparagraph (O), by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(P) recognition of foreign proceedings and
other matters under chapter 15 of title 11, United
States Code.’’.
(2) BANKRUPTCY CASES AND PROCEEDINGS.—
Section 1334(c) of title 28, United States Code, is
amended by striking ‘‘Nothing in’’ and inserting
‘‘Except with respect to a case under chapter 15 of
title 11, nothing in’’.
259
(3) DUTIES OF TRUSTEES.—Section 586(a)(3)
of title 28, United States Code, is amended by strik-
ing ‘‘or 13’’ and inserting ‘‘13, or 15,’’ after ‘‘chap-
ter’’.
(d) OTHER SECTIONS OF TITLE 11.—(1) Section
109(b)(3) of title 11, United States Code, is amended to
read as follows:
‘‘(3)(A) a foreign insurance company, engaged
in such business in the United States; or
‘‘(B) a foreign bank, savings bank, cooperative
bank, savings and loan association, building and
loan association, or credit union, which has a branch
or agency (as defined in section 3101 of title 12,
United States Code) in the United States.’’.
(2) Section 303(k) of title 11, United States Code,
is repealed.
(3)(A) Section 304 of title 11, United States Code,
is repealed.
(B) The table of sections of chapter 3 of title 11,
United States Code, is amended by striking the item relat-
ing to section 304.
(C) Section 306 of title 11, United States Code, is
amended by striking ‘‘, 304,’’ each place it appears.
(4) Section 305(a)(2) of title 11, United States
Code, is amended to read:
260
‘‘(2)(A) a petition under section 1515 of this
title for recognition of a foreign proceeding has been
granted; and
‘‘(B) the purposes of chapter 15 of this title
would be best served by such dismissal or suspen-
sion.’’.
(5) Section 508 of title 11, United States Code,
is amended by striking subsection (a) and by strik-
ing out the letter ‘‘(b)’’ at the beginning of the sec-
ond paragraph.
TITLE X—FINANCIAL CONTRACT
PROVISIONS
SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CON-
SERVATORS OR RECEIVERS OF INSURED DE-
POSITORY INSTITUTIONS.
(a) DEFINITION
OF QUALIFIED FINANCIAL CON-
TRACT.—Section 11(e)(8)(D)(i) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by
inserting ‘‘, resolution or order’’ after ‘‘any similar agree-
ment that the Corporation determines by regulation’’.
(b) DEFINITION OF SECURITIES CONTRACT.—Sec-
tion 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as fol-
lows:
261
‘‘(ii) SECURITIES
CONTRACT.—The
term ‘securities contract’—
‘‘(I) means a contract for the
purchase, sale, or loan of a security, a
certificate of deposit, a mortgage loan,
or any interest in a mortgage loan, a
group or index of securities, certifi-
cates of deposit, or mortgage loans or
interests therein (including any inter-
est therein or based on the value
thereof) or any option on any of the
foregoing, including any option to
purchase or sell any such security,
certificate of deposit, loan, interest,
group or index, or option;
‘‘(II) does not include any pur-
chase, sale, or repurchase obligation
under a participation in a commercial
mortgage loan unless the Corporation
determines by regulation, resolution,
or order to include any such agree-
ment within the meaning of such
term;
262
‘‘(III) means any option entered
into on a national securities exchange
relating to foreign currencies;
‘‘(IV) means the guarantee by or
to any securities clearing agency of
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or
interests therein, group or index of se-
curities, certificates of deposit, or
mortgage loans or interests therein
(including any interest therein or
based on the value thereof) or option
on any of the foregoing, including any
option to purchase or sell any such se-
curity, certificate of deposit, loan, in-
terest, group or index or option;
‘‘(V) means any margin loan;
‘‘(VI) means any other agree-
ment or transaction that is similar to
any agreement or transaction referred
to in this clause;
‘‘(VII) means any combination of
the agreements or transactions re-
ferred to in this clause;
263
‘‘(VIII) means any option to
enter into any agreement or trans-
action referred to in this clause;
‘‘(IX) means a master agreement
that provides for an agreement or
transaction referred to in subclause
(I), (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 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.’’.
264
(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—
‘‘(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
265
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;
‘‘(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-
266
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
that is referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or
(VIII); or
‘‘(X) a security agreement or ar-
rangement 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
267
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, but not limited to, a
repurchase agreement, reverse repur-
chase agreement, consignment, lease,
swap, hedge transaction, deposit, loan,
option, 
allocated 
transaction,
unallocated transaction, or any other
similar agreement;
‘‘(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
268
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
master agreement that is referred to
in subclause (I), (II), or (III); or
‘‘(V) a security agreement or ar-
rangement 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) mean 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
284
to terminate, liquidate, or net such con-
tract under paragraph (8)(E) or sections
403 or 404 of the Federal Deposit Insur-
ance 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 insti-
tution for which the conservator has been
appointed).
‘‘(iii) NOTICE.—For purposes of this
subsection, 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) of this subsection.
‘‘(C) TREATMENT
OF
BRIDGE
BANKS.—
The following institutions shall not be consid-
ered a financial institution for which a conser-
vator, receiver, trustee in bankruptcy, or other
legal custodian has been appointed or which is
285
otherwise the subject of a bankruptcy or insol-
vency proceeding for purposes of subsection
(e)(9)—
‘‘(i) a bridge bank; or
‘‘(ii) a depository institution organized
by the Corporation, for which a conser-
vator is appointed either—
‘‘(I) immediately upon the orga-
nization of the institution; or
‘‘(II) at the time of a purchase
and assumption transaction between
such institution and the Corporation
as receiver for a depository institution
in default.’’.
SEC. 1004. 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 further 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: