I
103D CONGRESS
2D SESSION
H. R. 4711
To amend title 11 of the United States Code with respect to certain debts
in connection with divorce or separation; to establish a commission to
analyze bankruptcy issues; and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 30, 1994
Ms. SLAUGHTER introduced the following bill; which was referred to the
Committee on the Judiciary
A BILL
To amend title 11 of the United States Code with respect
to certain debts in connection with divorce or separation;
to establish a commission to analyze bankruptcy issues;
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE 
I—AMENDMENTS 
TO
TITLE 11 OF THE UNITED
STATES CODE
SEC 101. SHORT TITLE.
This title may be cited as the ‘‘Spousal Equity in
Bankruptcy Amendments of 1994’’.
SEC. 102. AMENDMENTS.
(a) RELIEF
FROM
AUTOMATIC
STAY.—Section
362(b)(2) of title 11, United States Code, is amended to
read as follows:
‘‘(2) under subsection (a) of this section—
‘‘(A) of the commencement or continuation
of an action or proceeding for—
‘‘(i) the establishment of paternity; or
‘‘(ii) the establishment or modification
of an order for alimony, maintenance, or
support; or
‘‘(B) of the collection of alimony, mainte-
nance, or support from property that is not
property of the estate;’’.
(b) PRIORITY OF CLAIMS.—(1) Section 507 of title
11, United States Code, is amended—
(A) in subsection (a)—
(i) in paragraph (8) by striking ‘‘(8)
Eighth’’ and inserting ‘‘(9) Ninth’’,
(ii) in paragraph (7) by striking ‘‘(7) Sev-
enth’’ and inserting ‘‘(8) Eighth’’, and
(iii) by inserting after paragraph (6) the
following:
‘‘(7) Seventh, allowed unsecured claims due to
a spouse, former spouse, or child of the debtor for
alimony to, maintenance for, or support of such
spouse or child, in connection with a separation
agreement, divorce decree, or other order of a court
of record, a determination made in accordance with
State or territorial law by a governmental unit, or
a property settlement agreement, but not to the ex-
tent that—
‘‘(A) such debt is assigned to another en-
tity, voluntarily, by operation of law, or other-
wise (other than debts assigned pursuant to
section 402(a)(26) of the Social Security Act,
or any such debt which has been assigned to
the Federal Government or to a State or any
political subdivision of such State); or
‘‘(B) such debt includes a liability des-
ignated as alimony, maintenance, or support,
unless such liability is actually in the nature of
alimony, maintenance or support;’’, and
(B) in subsection (d) by striking ‘‘or (6)’’ and
inserting ‘‘(6), or (7)’’.
(2) Title 11 of the United States Code is amended—
(A) 
in 
sections 
502(i), 
503(b)(1)(B)(i),
523(a)(1)(A), 
and 
1123(a)(1) 
by 
striking
‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,
(B) in section 724(b)(2) by striking ‘‘or
507(a)(6)’’ and inserting ‘‘507(a)(6), or 507(a)(7)’’,
(C) in section 726(b) by striking ‘‘or (7)’’ and
inserting ‘‘, (7), or (8)’’, and
(D) in section 1129(a)(9)—
(i) in subparagraph (B) by striking ‘‘or
507(a)(6)’’ and inserting ‘‘, 507(a)(6), or
507(a)(7)’’, and
(ii) in subparagraph (C) by striking
‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’.
(c) PROTECTION OF LIENS.—Section 522(f)(1) of
title 11, United States Code, is amended to read as fol-
lows:
‘‘(1) a judicial lien (other than a judicial lien
that secures a debt to a spouse, former spouse, or
child of the debtor, for alimony to, maintenance for,
or support of the spouse or child, in connection with
a separation agreement, divorce decree or other
order of a court of record, determination made in
accordance with State or territorial law by a govern-
mental unit, or property settlement agreement, to
the extent that the debt—
‘‘(A) is not assigned to another entity, vol-
untarily, by operation of law, or otherwise; and
‘‘(B) includes a liability designated as ali-
mony, maintenance, or support, unless such li-
ability is actually in the nature of alimony,
maintenance or support).’’.
(d) EXCEPTION TO DISCHARGE.—Section 523 of title
11, United States Code, is amended—
(1) in subsection (a)—
(A) in paragraph (11) by striking ‘‘or’’ at
the end,
(B) in paragraph (12) by inserting ‘‘or’’
after the semicolon at the end, and
(C) by adding at the end the following:
‘‘(13) assumed or incurred by the debtor in the
course of a divorce or separation or in connection
with a separation agreement, divorce decree or other
order of a court of record, a determination made in
accordance with State or territorial law by a govern-
mental unit, or property settlement agreement, un-
less—
‘‘(A) excepting such debt from discharge
under this paragraph would impose an undue
hardship for the debtor; and
‘‘(B) discharging such debt would result in
a benefit to the debtor that outweighs the det-
rimental consequences to a spouse, former
spouse, or child of the debtor.’’, and
(2) in subsection (c)(1) by striking ‘‘or (6)’’
each place it appears and inserting ‘‘, or (13)’’.
(e) PROTECTION AGAINST TRUSTEE AVOIDANCE.—
Section 547(c) of title 11, United States Code, is amend-
ed—
(1) by striking ‘‘or’’ at the end of para-
graph (6);
(2) by redesignating paragraph (7) as
paragraph (8); and
(3) by inserting after paragraph (6) the
following new paragraph:
‘‘(7) to the extent that the transfer was a bona
fide payment of a debt to a spouse, former spouse,
or child of the debtor, for alimony to, maintenance
for, or support of such spouse or child, in connection
with a separation agreement, divorce decree or other
order of a court of record, determination made in
accordance with State or territorial law by a govern-
mental unit, or property settlement agreement, but
not to the extent that such debt—
‘‘(A) is assigned to another entity, volun-
tarily, by operation of law, or otherwise; or
‘‘(B) includes a liability designated as ali-
mony, maintenance, or support, unless such li-
ability is actually in the nature of alimony,
maintenance or support; or’’.
(f) APPEARANCE BEFORE COURT.—A child support
creditor or its representative shall be permitted to appear
and intervene without charge and without meeting any
special local court rule requirement for attorney appear-
ances in any bankruptcy proceeding in any bankruptcy
court or district court of the United States if the creditor
or representative files with the court a statement describ-
ing in detail the child support debt, its status, and other
characteristics.
TITLE II—BANKRUPTCY REVIEW
COMMISSION
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘National Bankruptcy
Review Commission Act’’.
SEC. 202. ESTABLISHMENT.
There is established the National Bankruptcy Review
Commission (referred to as the ‘‘Commission’’).
SEC. 203. DUTIES OF THE COMMISSION.
The duties of the Commission are—
(1) to investigate and study issues and prob-
lems relating to title 11, United States Code (com-
monly known as the ‘‘Bankruptcy Code’’);
(2) to evaluate the advisability of proposals and
current arrangements with respect to such issues
and problems;
(3) to prepare and submit to the Congress, the
Chief Justice, and the President a report in accord-
ance with section 208;
(4) to solicit divergent views of all parties con-
cerned with the operation of the bankruptcy system;
and
(5) to study the impact of the bankruptcy laws
on the family and particularly on the increase in the
number of women and children living in poverty
after divorce.
SEC. 204. MEMBERSHIP.
(a) NUMBER AND APPOINTMENT.—The Commission
shall be composed of 10 members appointed from among
individuals who have experience and expertise in bank-
ruptcy law as follows:
(1) Four members appointed by the President,
one of whom shall be designated as chairman by the
President.
(2) One member shall be appointed by the
President pro tempore of the Senate.
(3) One member shall be appointed by the Mi-
nority Leader of the Senate.
(4) One member shall be appointed by the
Speaker of the House of Representatives.
(5) One member shall be appointed by the Mi-
nority Leader of the House of Representatives.
(6) Two members appointed by the Chief Jus-
tice.
(b) TERM.—Members of the Commission shall be ap-
pointed for the life of the Commission.
(c) QUORUM.—Six members of the Commission shall
constitute a quorum, but a lesser number may conduct
meetings.
(d) APPOINTMENT DEADLINE.—The first appoint-
ments made under subsection (a) shall be made within 60
days after the date of enactment of this Act.
(e) FIRST MEETING.—The first meeting of the Com-
mission shall be called by the chairman and shall be held
within 90 days after the date of enactment of this Act.
(f) VACANCY.—A vacancy on the Commission result-
ing from the death or resignation of a member shall not
affect its powers and shall be filled in the same manner
in which the original appointment was made.
(g) CONTINUATION OF MEMBERSHIP.—If any mem-
ber of the Commission who was appointed to the Commis-
sion as a member of Congress or as an officer or employee
of a government leaves that office, or if any member of
the Commission who was not appointed in such a capacity
becomes an officer or employee of a government, the mem-
ber may continue as a member of the Commission for not
longer than the 90-day period beginning on the date the
member leaves that office or becomes such an officer or
employee, as the case may be.
(h) CONSULTATION PRIOR TO APPOINTMENT.—Prior
to the appointment of members of the Commission, the
President, the President pro tempore of the Senate, the
Speaker of the House of Representatives, and the Chief
Justice shall consult with each other to ensure fair and
equitable representation of various points of view in the
Commission and its staff.
SEC. 205. COMPENSATION OF THE COMMISSION.
(a) PAY.—
(1) 
NONGOVERNMENT
EMPLOYEES.—Each
member of the Commission who is not otherwise em-
ployed by the United States Government shall be en-
titled to receive the daily equivalent of the annual
rate of basic pay payable for level IV of the Execu-
tive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time)
during which he or she is engaged in the actual per-
formance of duties as a member of the Commission.
(2) GOVERNMENT EMPLOYEES.—A member of
the Commission who is an officer or employee of the
United States Government shall serve without addi-
tional compensation.
(b) TRAVEL.—Members of the Commission shall be
reimbursed for travel, subsistence, and other necessary ex-
penses incurred by them in the performance of their du-
ties.
SEC. 206. STAFF OF COMMISSION; EXPERTS AND CONSULT-
ANTS.
(a) STAFF.—
(1) APPOINTMENT.—The chairman of the Com-
mission may, without regard to the civil service laws
and regulations, appoint, and terminate an executive
director and such other personnel as are necessary
to enable the Commission to perform its duties. The
employment of an executive director shall be subject
to confirmation by the Commission.
(2) COMPENSATION.—The chairman of the
Commission may fix the compensation of the execu-
tive director and other personnel without regard to
the provisions of chapter 51 and subchapter II of
chapter 53 of title 5, United States Code, relating
to classification of positions and General Schedule
pay rates, except that the rate of pay for the execu-
tive director and other personnel may not exceed the
rate payable for level V of the Executive Schedule
under section 5316 of that title.
(b) EXPERTS AND CONSULTANTS.—The Commission
may procure temporary and intermittent services of ex-
perts and consultants under section 3109(b) of title 5,
United States Code.
SEC. 207. POWERS OF THE COMMISSION.
(a) HEARINGS AND MEETINGS.—The Commission or,
on authorization of the Commission, a member of the
Commission, may hold such hearings, sit and act at such
time and places, take such testimony, and receive such evi-
dence, as the Commission considers appropriate. The
Commission or a member of the Commission may admin-
ister oaths or affirmations to witnesses appearing before
it.
(b) OFFICIAL DATA.—The Commission may secure
directly from any Federal department, agency, or court
information necessary to enable it to carry out this title.
Upon request of the chairman of the Commission, the
head of a Federal department or agency or chief judge
of a Federal court shall furnish such information, consist-
ent with law, to the Commission.
(c) FACILITIES AND SUPPORT SERVICES.—The Ad-
ministrator of General Services shall provide to the Com-
mission on a reimbursable basis such facilities and support
services as the Commission may request. Upon request of
the Commission, the head of a Federal department or
agency may make any of the facilities or services of the
agency available to the Commission to assist the Commis-
sion in carrying out its duties under this title.
(d) EXPENDITURES AND CONTRACTS.—The Commis-
sion or, on authorization of the Commission, a member
of the Commission may make expenditures and enter into
contracts for the procurement of such supplies, services,
and property as the Commission or member considers ap-
propriate for the purposes of carrying out the duties of
the Commission. Such expenditures and contracts may be
made only to such extent or in such amounts as are pro-
vided in appropriation Acts.
(e) MAILS.—The Commission may use the United
States mails in the same manner and under the same con-
ditions as other Federal departments and agencies of the
United States.
(f) GIFTS.—The Commission may accept, use, and
dispose of gifts or donations of services or property.
SEC. 208. REPORT.
The Commission shall submit to the Congress, the
Chief Justice, and the President a report not later than
2 years after the date of its first meeting. The report shall
contain a detailed statement of the findings and conclu-
sions of the Commission, together with its recommenda-
tions for such legislative or administrative action as it con-
siders appropriate.
SEC. 209. TERMINATION.
The Commission shall cease to exist on the date that
is 30 days after the date on which it submits its report
under section 208.
SEC. 410. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated $1,500,000 to
carry out this title.
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HR 4711 IH——2