171
a statement, under penalty of perjury, of the income 
and expenditures of the debtor during the tax year of 
the debtor most recently concluded before such state-
ment is filed under this paragraph, and of the month-
ly income of the debtor, that shows how income, ex-
penditures, and monthly income are calculated. 
‘‘(g)(1) A statement referred to in subsection (f)(4) 
shall disclose—
‘‘(A) the amount and sources of the income of the 
debtor; 
‘‘(B) the identity of any person responsible with 
the debtor for the support of any dependent of the 
debtor; and 
‘‘(C) the identity of any person who contributed, 
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 subsections (e)(2)(A) 
and (f) shall be available to the United States trustee (or 
the bankruptcy administrator, if any), the trustee, and any 
party in interest for inspection and copying, subject to the 
requirements of section 315(c) of the Bankruptcy Abuse Pre-
vention and Consumer Protection Act of 2003. 
‘‘(h) If requested by the United States trustee or by 
the trustee, the debtor shall provide—
172
‘‘(1) 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; or 
‘‘(2) such other personal identifying information 
relating to the debtor that establishes the identity of 
the debtor.’’. 
(c)(1) Not later than 180 days after the date of the 
enactment of this Act, the Director of the Administrative 
Office of the United States Courts shall establish procedures 
for safeguarding the confidentiality of any tax information 
required to be provided under this section. 
(2) The procedures under paragraph (1) shall include 
restrictions on creditor access to tax information that is re-
quired to be provided under this section. 
(3) Not later than 540 days after the date of enactment 
of this Act, the Director of the Administrative Office of the 
United States Courts shall prepare and submit to the Presi-
dent pro tempore of the Senate and the Speaker of the House 
of Representatives a report that—
(A) assesses the effectiveness of the procedures es-
tablished under paragraph (1); and 
(B) if appropriate, includes proposed legislation 
to—
173
(i) further protect the confidentiality of tax 
information; and 
(ii) provide penalties for the improper use 
by any person of the tax information required to 
be provided under this section.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED-
ULES OR PROVIDE REQUIRED INFORMATION. 
Section 521 of title 11, United States Code, as amend-
ed by sections 106, 225, 305, and 315, is amended by add-
ing at the end the following: 
‘‘(i)(1) Subject to paragraphs (2) and (4) and notwith-
standing section 707(a), if an individual debtor in a vol-
untary case under chapter 7 or 13 fails to file all of the 
information required under subsection (a)(1) within 45 
days after the date of the filing of the petition, the case 
shall be automatically dismissed effective on the 46th day 
after the date of the filing of the petition. 
‘‘(2) Subject to paragraph (4) and with respect to a 
case described in paragraph (1), any party in interest may 
request the court to enter an order dismissing the case. If 
requested, the court shall enter an order of dismissal not 
later than 5 days after such request. 
‘‘(3) Subject to paragraph (4) and upon request of the 
debtor made within 45 days after the date of the filing of 
the petition described in paragraph (1), the court may
174
allow the debtor an additional period of not to exceed 45 
days to file the information required under subsection 
(a)(1) if the court finds justification for extending the pe-
riod for the filing. 
‘‘(4) Notwithstanding any other provision of this sub-
section, on the motion of the trustee filed before the expira-
tion of the applicable period of time specified in paragraph 
(1), (2), or (3), and after notice and a hearing, the court 
may decline to dismiss the case if the court finds that the 
debtor attempted in good faith to file all the information 
required by subsection (a)(1)(B)(iv) and that the best inter-
ests of creditors would be served by administration of the 
case.’’.
SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON 
CONFIRMATION OF THE PLAN. 
Section 1324 of title 11, United States Code, is amend-
ed—
(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 date of the meeting of creditors under section
175
341(a), unless the court determines that it would be in the 
best interests of the creditors and the estate to hold such 
hearing at an earlier date and there is no objection to such 
earlier date.’’. 
SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION 
IN CERTAIN CASES. 
Title 11, United States Code, is amended—
(1) by amending section 1322(d) to read as fol-
lows: 
‘‘(d)(1) If the current monthly income of the debtor 
and the debtor’s spouse combined, when multiplied by 12, 
is not less than—
‘‘(A) in the case of a debtor in a household of 1 
person, the median family income of the applicable 
State for 1 earner; 
‘‘(B) in the case of a debtor in a household of 2, 
3, or 4 individuals, the highest median family income 
of the applicable State for a family of the same num-
ber or fewer individuals; or 
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or fewer 
individuals, plus $525 per month for each individual 
in excess of 4,
176
the plan may not provide for payments over a period that 
is longer than 5 years. 
‘‘(2) If the current monthly income of the debtor and 
the debtor’s spouse combined, when multiplied by 12, is less 
than—
‘‘(A) in the case of a debtor in a household of 1 
person, the median family income of the applicable 
State for 1 earner; 
‘‘(B) in the case of a debtor in a household of 2, 
3, or 4 individuals, the highest median family income 
of the applicable State for a family of the same num-
ber or fewer individuals; or 
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or fewer 
individuals, plus $525 per month for each individual 
in excess of 4, 
the plan may not provide for payments over a period that 
is longer than 3 years, unless the court, for cause, approves 
a longer period, but the court may not approve a period 
that is longer than 5 years.’’; 
(2) in section 1325(b)(1)(B), by striking ‘‘three-
year period’’ and inserting ‘‘applicable commitment 
period’’; and
177
(3) in section 1325(b), as amended by section 
102, by adding at the end the following: 
‘‘(4) For purposes of this subsection, the ‘applicable 
commitment period’—
‘‘(A) subject to subparagraph (B), shall be—
‘‘(i) 3 years; or 
‘‘(ii) not less than 5 years, if the current 
monthly income of the debtor and the debtor’s 
spouse combined, when multiplied by 12, is not 
less than— 
‘‘(I) in the case of a debtor in a house-
hold of 1 person, the median family income 
of the applicable State for 1 earner; 
‘‘(II) in the case of a debtor in a 
household of 2, 3, or 4 individuals, the high-
est median family income of the applicable 
State for a family of the same number or 
fewer individuals; or 
‘‘(III) in the case of a debtor in a 
household exceeding 4 individuals, the high-
est median family income of the applicable 
State for a family of 4 or fewer individuals, 
plus $525 per month for each individual in 
excess of 4; and
178
‘‘(B) may be less than 3 or 5 years, whichever 
is applicable under subparagraph (A), but only if the 
plan provides for payment in full of all allowed unse-
cured claims over a shorter period.’’; and 
(4) in section 1329(c), by striking ‘‘three years’’ 
and inserting ‘‘the applicable commitment period 
under section 1325(b)(1)(B)’’. 
SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF 
RULE 9011 OF THE FEDERAL RULES OF BANK-
RUPTCY PROCEDURE. 
It is the sense of Congress that rule 9011 of the Federal 
Rules of Bankruptcy Procedure (11 U.S.C. App.) should be 
modified to include a requirement that all documents (in-
cluding schedules), signed and unsigned, submitted to the 
court or to a trustee by debtors who represent themselves 
and debtors who are represented by attorneys be submitted 
only after the debtors or the debtors’ attorneys have made 
reasonable inquiry to verify that the information contained 
in such documents is—
(1) well grounded in fact; and 
(2) warranted by existing law or a good faith ar-
gument for the extension, modification, or reversal of 
existing law.
179
SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL 
CASES. 
Section 362(e) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and 
(2) by adding at the end the following: 
‘‘(2) Notwithstanding paragraph (1), in a case under 
chapter 7, 11, or 13 in which the debtor is an individual, 
the stay under subsection (a) shall terminate on the date 
that is 60 days after a request is made by a party in inter-
est 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) such 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 for good 
cause, as described in findings made by the 
court.’’.
SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS. 
(a) PROPERTY OF THE ESTATE.—
(1) IN GENERAL.—Subchapter I of chapter 11 of 
title 11, United States Code, is amended by adding 
at the end the following:
180
‘‘§ 1115. Property of the estate 
‘‘(a) In a case in which the debtor is an individual, 
property of the estate includes, in addition to the property 
specified in section 541—
‘‘(1) all property of the kind specified in section 
541 that the debtor acquires after the commencement 
of the case but before the case is closed, dismissed, or 
converted to a case under chapter 7, 12, or 13, which-
ever occurs first; and 
‘‘(2) earnings from services performed by the 
debtor after the commencement of the case but before 
the case is closed, dismissed, or converted to a case 
under chapter 7, 12, or 13, whichever occurs first.’’. 
‘‘(b) Except as provided in section 1104 or a confirmed 
plan or order confirming a plan, the debtor shall remain 
in possession of all property of the estate.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter I of chapter 11 of title 11, United 
States Code, is amended by adding at the end the fol-
lowing:
‘‘1115. Property of the estate.’’.
(b) CONTENTS OF PLAN.—Section 1123(a) of title 11, 
United States Code, is amended—
(1) in paragraph (6), by striking ‘‘and’’ at the 
end;
181
(2) in paragraph (7), by striking the period and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(8) in a case in which the debtor is an indi-
vidual, provide for the payment to creditors under the 
plan of all or such portion of earnings from personal 
services performed by the debtor after the commence-
ment of the case or other future income of the debtor 
as is necessary for the execution of the plan.’’. 
(c) CONFIRMATION OF PLAN.—
(1) REQUIREMENTS
RELATING
TO
VALUE
OF 
PROPERTY.—Section 1129(a) of title 11, United 
States Code, as amended by section 213, is amended 
by adding at the end the following: 
‘‘(15) In a case in which the debtor is an indi-
vidual and in which the holder of an allowed unse-
cured claim objects to the confirmation of the plan—
‘‘(A) the value, as of the effective date of the 
plan, of the property to be distributed under the 
plan on account of such claim is not less than 
the amount of such claim; or 
‘‘(B) the value of the property to be distrib-
uted under the plan is not less than the projected 
disposable income of the debtor (as defined in 
section 1325(b)(2)) to be received during the 5-
182
year period beginning on the date that the first 
payment is due under the plan, or during the 
period for which the plan provides payments, 
whichever is longer.’’.
(2) REQUIREMENT RELATING TO INTERESTS IN 
PROPERTY.—Section 1129(b)(2)(B)(ii) of title 11, 
United States Code, is amended by inserting before 
the period at the end the following: ‘‘, except that in 
a case in which the debtor is an individual, the debtor 
may retain property included in the estate under sec-
tion 1115, subject to the requirements of subsection 
(a)(14) of this section’’.
(d) EFFECT OF CONFIRMATION.—Section 1141(d) of 
title 11, United States Code, is amended—
(1) in paragraph (2), by striking ‘‘The confirma-
tion of a plan does not discharge an individual debt-
or’’ and inserting ‘‘A discharge under this chapter 
does not discharge a debtor who is an individual’’; 
and 
(2) by adding at the end the following: 
‘‘(5) In a case in which the debtor is an individual—
‘‘(A) unless after notice and a hearing the court 
orders otherwise for cause, confirmation of the plan 
does not discharge any debt provided for in the plan
183
until the court grants a discharge on completion of all 
payments under the plan; 
‘‘(B) at any time after the confirmation of the 
plan, and after notice and a hearing, the court may 
grant a discharge to the debtor who has not completed 
payments under the plan if— 
‘‘(i) the value, as of the effective date of the 
plan, of property actually distributed under the 
plan on account of each allowed unsecured claim 
is not less than the amount that would have been 
paid on such claim if the estate of the debtor had 
been liquidated under chapter 7 on such date; 
and 
‘‘(ii) modification of the plan under section 
1127 is not practicable; and’’. 
(e) MODIFICATION OF PLAN.—Section 1127 of title 11, 
United States Code, is amended by adding at the end the 
following: 
‘‘(e) If the debtor is an individual, the plan may be 
modified at any time after confirmation of the plan but 
before the completion of payments under the plan, whether 
or not the plan has been substantially consummated, upon 
request of the debtor, the trustee, the United States trustee, 
or the holder of an allowed unsecured claim, to—
184
‘‘(1) increase or reduce the amount of payments 
on claims of a particular class provided for by the 
plan; 
‘‘(2) extend or reduce the time period for such 
payments; or 
‘‘(3) alter the amount of the distribution to a 
creditor whose claim is provided for by the plan to 
the extent necessary to take account of any payment 
of such claim made other than under the plan. 
‘‘(f)(1) Sections 1121 through 1128 and the require-
ments of section 1129 apply to any modification under sub-
section (a). 
‘‘(2) The plan, as modified, shall become the plan only 
after there has been disclosure under section 1125 as the 
court may direct, notice and a hearing, and such modifica-
tion is approved.’’.
SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION. 
(a) EXEMPTIONS.—Section 522 of title 11, United 
States Code, as amended by sections 224 and 308, is amend-
ed by adding at the end the following: 
‘‘(p)(1) Except as provided in paragraph (2) of this 
subsection and sections 544 and 548, as a result of electing 
under subsection (b)(3)(A) to exempt property under State 
or local law, a debtor may not exempt any amount of inter-
est that was acquired by the debtor during the 1215-day
185
period preceding the date of the filing of the petition that 
exceeds in the aggregate $125,000 in value in—
‘‘(A) real or personal property that the debtor or 
a dependent of the debtor uses as a residence; 
‘‘(B) a cooperative that owns property that the 
debtor or a dependent of the debtor uses as a resi-
dence; 
‘‘(C) a burial plot for the debtor or a dependent 
of the debtor; or 
‘‘(D) real or personal property that the debtor or 
dependent of the debtor claims as a homestead. 
‘‘(2)(A) The limitation under paragraph (1) shall not 
apply to an exemption claimed under subsection (b)(3)(A) 
by a family farmer for the principal residence of such farm-
er. 
‘‘(B) For purposes of paragraph (1), any amount of 
such interest does not include any interest transferred from 
a debtor’s previous principal residence (which was acquired 
prior to the beginning of such 1215-day period) into the 
debtor’s current principal residence, if the debtor’s previous 
and current residences are located in the same State. 
‘‘(q)(1) As a result of electing under subsection 
(b)(3)(A) to exempt property under State or local law, a 
debtor may not exempt any amount of an interest in prop-
erty described in subparagraphs (A), (B), (C), and (D) of
186
subsection (p)(1) which exceeds in the aggregate $125,000 
if—
‘‘(A) the court determines, after notice and a 
hearing, that the debtor has been convicted of a felony 
(as defined in section 3156 of title 18), which under 
the circumstances, demonstrates that the filing of the 
case was an abuse of the provisions of this title; or 
‘‘(B) the debtor owes a debt arising from—
‘‘(i) any violation of the Federal securities 
laws (as defined in section 3(a)(47) of the Secu-
rities Exchange Act of 1934), any State securi-
ties laws, or any regulation or order issued 
under Federal securities laws or State securities 
laws; 
‘‘(ii) fraud, deceit, or manipulation in a fi-
duciary capacity or in connection with the pur-
chase or sale of any security registered under sec-
tion 12 or 15(d) of the Securities Exchange Act 
of 1934 or under section 6 of the Securities Act 
of 1933; 
‘‘(iii) any civil remedy under section 1964 
of title 18; or 
‘‘(iv) any criminal act, intentional tort, or 
willful or reckless misconduct that caused serious
187
physical injury or death to another individual 
in the preceding 5 years. 
‘‘(2) Paragraph (1) shall not apply to the extent the 
amount of an interest in property described in subpara-
graphs (A), (B), (C), and (D) of subsection (p)(1) is reason-
ably necessary for the support of the debtor and any depend-
ent of the debtor.’’. 
(b) ADJUSTMENT OF DOLLAR AMOUNTS.—Paragraphs 
(1) and (2) of section 104(b) of title 11, United States Code, 
as amended by section 224, are amended by inserting 
‘‘522(p), 522(q),’’ after ‘‘522(n),’’.
SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI-
PANT CONTRIBUTIONS AND OTHER PROP-
ERTY FROM THE ESTATE. 
Section 541(b) of title 11, United States Code, as 
amended by section 225, is amended by adding after para-
graph (6), as added by section 225(a)(1)(C), the following: 
‘‘(7) any amount—
‘‘(A) withheld by an employer from the 
wages of employees for payment as contribu-
tions— 
‘‘(i) to—
‘‘(I) an employee benefit plan that 
is subject to title I of the Employee Re-
tirement Income Security Act of 1974
188
or under an employee benefit plan 
which is a governmental plan under 
section 414(d) of the Internal Revenue 
Code of 1986; 
‘‘(II) a deferred compensation 
plan under section 457 of the Internal 
Revenue Code of 1986; or 
‘‘(III) 
a 
tax-deferred 
annuity 
under section 403(b) of the Internal 
Revenue Code of 1986; 
except that such amount under this sub-
paragraph shall not constitute disposable 
income as defined in section 1325(b)(2); or 
‘‘(ii) to a health insurance plan regu-
lated by State law whether or not subject to 
such title; or 
‘‘(B) received by an employer from employ-
ees for payment as contributions— 
‘‘(i) to—
‘‘(I) an employee benefit plan that 
is subject to title I of the Employee Re-
tirement Income Security Act of 1974 
or under an employee benefit plan 
which is a governmental plan under
189
section 414(d) of the Internal Revenue 
Code of 1986; 
‘‘(II) a deferred compensation 
plan under section 457 of the Internal 
Revenue Code of 1986; or 
‘‘(III) 
a 
tax-deferred 
annuity 
under section 403(b) of the Internal 
Revenue Code of 1986; 
except that such amount under this sub-
paragraph shall not constitute disposable 
income, as defined in section 1325(b)(2); or 
‘‘(ii) to a health insurance plan regu-
lated by State law whether or not subject to 
such title;’’. 
SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLV-
ING BANKRUPTCY PROFESSIONALS. 
(a) IN GENERAL.—Section 1334 of title 28, United 
States Code, is amended—
(1) in subsection (b), by striking ‘‘Notwith-
standing’’ and inserting ‘‘Except as provided in sub-
section (e)(2), and notwithstanding’’; and 
(2) by striking subsection (e) and inserting the 
following:
190
‘‘(e) The district court in which a case under title 11 
is commenced or is pending shall have exclusive jurisdic-
tion—
‘‘(1) of all the property, wherever located, of the 
debtor as of the commencement of such case, and of 
property of the estate; and 
‘‘(2) over all claims or causes of action that in-
volve construction of section 327 of title 11, United 
States Code, or rules relating to disclosure require-
ments under section 327.’’. 
(b) APPLICABILITY.—This section shall only apply to 
cases filed after the date of enactment of this Act. 
SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE 
INCREASE. 
(a) ACTIONS UNDER CHAPTER 7 OR 13 OF TITLE 11, 
UNITED STATES CODE.—Section 1930(a) of title 28, 
United States Code, is amended by striking paragraph (1) 
and inserting the following: 
‘‘(1) For a case commenced—
‘‘(A) under chapter 7 of title 11, $160; or 
‘‘(B) under chapter 13 of title 11, $150.’’. 
(b) UNITED STATES TRUSTEE SYSTEM FUND.—Sec-
tion 589a(b) of title 28, United States Code, is amended—
(1) by striking paragraph (1) and inserting the 
following:
192
‘‘(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 
accordance with non-Federal law regulating attorney refer-
ral services and with rules of professional responsibility ap-
plicable to attorney acceptance of referrals.’’. 
SEC. 327. FAIR VALUATION OF COLLATERAL. 
Section 506(a) of title 11, United States Code, is 
amended by—
(1) inserting ‘‘(1)’’ after ‘‘(a)’’; and 
(2) by adding at the end the following: 
‘‘(2) If the debtor is an individual in a case under 
chapter 7 or 13, such value with respect to personal prop-
erty securing an allowed claim shall be determined based 
on the replacement value of such property as of the date 
of the filing of the petition without deduction for costs of 
sale or marketing. With respect to property acquired for 
personal, family, or household purposes, replacement value 
shall mean the price a retail merchant would charge for 
property of that kind considering the age and condition of 
the property at the time value is determined.’’.
193
SEC. 328. 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 following: 
‘‘other than a default that is a breach of a provi-
sion relating to 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 un-
expired lease of real property, if it is impossible 
for the trustee to cure such default by performing 
nonmonetary acts at and after the time of as-
sumption, except that if such default arises from 
a failure to operate in accordance with a non-
residential real property lease, then such default 
shall be cured by performance at and after the 
time of assumption in accordance with such 
lease, and pecuniary losses resulting from such 
default shall be compensated in accordance with 
the provisions of this paragraph;’’; and
194
(B) in paragraph (2)(D), by striking ‘‘pen-
alty rate or provision’’ and inserting ‘‘penalty 
rate or penalty provision’’; 
(2) in subsection (c)—
(A) in paragraph (2), by inserting ‘‘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 para-
graph and inserting a period. 
(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Section 
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) expressly does not require 
to be cured’’ before the semicolon at the end; 
(2) in subparagraph (C), by striking ‘‘and’’ at 
the end;
195
(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 obli-
gation, other than a default arising from failure 
to operate a nonresidential real property lease 
subject to section 365(b)(1)(A), compensates the 
holder of such claim or such interest (other than 
the debtor or an insider) for any actual pecu-
niary loss incurred by such holder as a result of 
such failure; and’’.
SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND 
BENEFITS. 
Section 503(b)(1)(A) of title 11, United States Code, 
is amended to read as follows: 
‘‘(A) the actual, necessary costs and expenses of pre-
serving the estate including—
‘‘(i) wages, salaries, and commissions for 
services rendered after the commencement of the 
case; and 
‘‘(ii) wages and benefits awarded pursuant 
to a judicial proceeding or a proceeding of the 
National Labor Relations Board as back pay at-
196
tributable to any period of time occurring after 
commencement of the case under this title, as a 
result of a violation of Federal or State law by 
the debtor, without regard to the time of the oc-
currence of unlawful conduct on which such 
award is based or to whether any services were 
rendered, if the court determines that payment of 
wages and benefits by reason of the operation of 
this clause will not substantially increase the 
probability of layoff or termination of current 
employees, or of nonpayment of domestic support 
obligations, during the case under this title;’’.
SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF 
CERTAIN PROCEEDINGS. 
(a) CHAPTER 7.—Section 727(a) of title 11, United 
States Code, as amended by section 106, is amended—
(1) in paragraph (10), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (11) by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by inserting after paragraph (11) the fol-
lowing: 
‘‘(12) the court after notice and a hearing held 
not more than 10 days before the date of the entry of
197
the order granting the discharge finds that there is 
reasonable cause to believe that—
‘‘(A) section 522(q)(1) may be applicable to 
the debtor; and 
‘‘(B) there is pending any proceeding in 
which the debtor may be found guilty of a felony 
of the kind described in section 522(q)(1)(A) or 
liable for a debt of the kind described in section 
522(q)(1)(B).’’. 
(b) CHAPTER 11.—Section 1141(d) of title 11, United 
States Code, as amended by section 321, is amended by add-
ing at the end the following: 
‘‘(C) unless after notice and a hearing held not 
more than 10 days before the date of the entry of the 
order granting the discharge, the court finds that 
there is no reasonable cause to believe that—
‘‘(i) section 522(q)(1) may be applicable to 
the debtor; and 
‘‘(ii) there is pending any proceeding in 
which the debtor may be found guilty of a felony 
of the kind described in section 522(q)(1)(A) or 
liable for a debt of the kind described in section 
522(q)(1)(B).’’. 
(c) CHAPTER 12.—Section 1228 of title 11, United 
States Code, is amended—
198
(1) in subsection (a) by striking ‘‘As’’ and in-
serting ‘‘Subject to subsection (d), as’’, 
(2) in subsection (b) by striking ‘‘At’’ and insert-
ing ‘‘Subject to subsection (d), at’’, and 
(3) by adding at the end the following: 
‘‘(f) The court may not grant a discharge under this 
chapter unless the court after notice and a hearing held not 
more than 10 days before the date of the entry of the order 
granting the discharge finds that there is no reasonable 
cause to believe that—
‘‘(1) section 522(q)(1) may be applicable to the 
debtor; and 
‘‘(2) there is pending any proceeding in which 
the debtor may be found guilty of a felony of the kind 
described in section 522(q)(1)(A) or liable for a debt 
of the kind described in section 522(q)(1)(B).’’. 
(d) CHAPTER 13.—Section 1328 of title 11, United 
States Code, as amended by section 106, is amended—
(1) in subsection (a) by striking ‘‘As’’ and in-
serting ‘‘Subject to subsection (d), as’’, 
(2) in subsection (b) by striking ‘‘At’’ and insert-
ing ‘‘Subject to subsection (d), at’’, and 
(3) by adding at the end the following: 
‘‘(h) The court may not grant a discharge under this 
chapter unless the court after notice and a hearing held not
199
more than 10 days before the date of the entry of the order 
granting the discharge finds that there is no reasonable 
cause to believe that—
‘‘(1) section 522(q)(1) may be applicable to the 
debtor; and 
‘‘(2) there is pending any proceeding in which 
the debtor may be found guilty of a felony of the kind 
described in section 522(q)(1)(A) or liable for a debt 
of the kind described in section 522(q)(1)(B).’’.
TITLE IV—GENERAL AND SMALL 
BUSINESS BANKRUPTCY PRO-
VISIONS 
Subtitle A—General Business 
Bankruptcy Provisions 
SEC. 401. ADEQUATE PROTECTION FOR INVESTORS. 
(a) DEFINITION.—Section 101 of title 11, United 
States Code, is amended by inserting after paragraph (48) 
the following: 
‘‘(48A) ‘securities self regulatory organization’ 
means either a securities association registered with 
the Securities and Exchange Commission under sec-
tion 15A of the Securities Exchange Act of 1934 or 
a national securities exchange registered with the Se-
curities and Exchange Commission under section 6 of 
the Securities Exchange Act of 1934;’’.
200
(b) AUTOMATIC STAY.—Section 362(b) of title 11, 
United States Code, as amended by sections 224, 303, and 
311, is amended by inserting after paragraph (24) the fol-
lowing: 
‘‘(25) under subsection (a), of—
‘‘(A) the commencement or continuation of 
an investigation or action by a securities self 
regulatory organization to enforce such organiza-
tion’s regulatory power; 
‘‘(B) the enforcement of an order or deci-
sion, other than for monetary sanctions, obtained 
in an action by such securities self regulatory or-
ganization to enforce such organization’s regu-
latory power; or 
‘‘(C) any act taken by such securities self 
regulatory organization to delist, delete, or refuse 
to permit quotation of any stock that does not 
meet applicable regulatory requirements;’’. 
SEC. 402. 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
201
trustee not convene a meeting of creditors or equity security 
holders if the debtor has filed a plan as to which the debtor 
solicited acceptances prior to the commencement of the 
case.’’. 
SEC. 403. PROTECTION OF REFINANCE OF SECURITY INTER-
EST. 
Subparagraphs (A), (B), and (C) of section 547(e)(2) 
of title 11, United States Code, are each amended by strik-
ing ‘‘10’’ each place it appears and inserting ‘‘30’’. 
SEC. 
404. 
EXECUTORY 
CONTRACTS 
AND 
UNEXPIRED 
LEASES. 
(a) IN GENERAL.—Section 365(d)(4) of title 11, 
United States Code, is amended to read as follows: 
‘‘(4)(A) Subject to subparagraph (B), an unexpired 
lease of nonresidential real property under which the debtor 
is the lessee shall be deemed rejected, and the trustee shall 
immediately surrender that nonresidential real property to 
the lessor, if the trustee does not assume or reject the unex-
pired lease by the earlier 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 confirming 
a plan. 
‘‘(B)(i) The court may extend the period determined 
under subparagraph (A), prior to the expiration of the 120-
202
day period, for 90 days on the motion of the trustee or 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 in each instance.’’. 
(b) EXCEPTION.—Section 365(f)(1) of title 11, United 
States Code, is amended by striking ‘‘subsection’’ the first 
place it appears and inserting ‘‘subsections (b) and’’. 
SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS 
COMMITTEES. 
(a) APPOINTMENT.—Section 1102(a) of title 11, 
United States Code, is amended by adding at the end the 
following: 
‘‘(4) On request of a party in interest and after notice 
and a hearing, the court may order the United States trust-
ee to change the membership of a committee appointed 
under this subsection, if the court determines that the 
change is necessary to ensure adequate representation of 
creditors or equity security holders. The court may order 
the United States trustee to increase the number of members 
of a committee to include a creditor that is a small business 
concern (as described in section 3(a)(1) of the Small Busi-
ness Act), if the court determines that the creditor holds 
claims (of the kind represented by the committee) the aggre-
203
gate amount of which, in comparison to the annual gross 
revenue of that creditor, is disproportionately large.’’. 
(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—
‘‘(A) provide access to information for creditors 
who—
‘‘(i) hold claims of the kind represented by 
that committee; and 
‘‘(ii) are not appointed to the committee; 
‘‘(B) solicit and receive comments from the credi-
tors described in subparagraph (A); and 
‘‘(C) be subject to a court order that compels any 
additional report or disclosure to be made to the 
creditors described in subparagraph (A).’’.
SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, 
UNITED STATES CODE. 
Section 546 of title 11, United States Code, is amend-
ed—
(1) by redesignating the second subsection (g) (as 
added by section 222(a) of Public Law 103–394) as 
subsection (h); 
(2) in subsection (h), as so redesignated, by in-
serting ‘‘and subject to the prior rights of holders of
204
security interests in such goods or the proceeds of such 
goods’’ after ‘‘consent of a creditor’’; and 
(3) by adding at the end the following: 
‘‘(i)(1) Notwithstanding paragraphs (2) and (3) of sec-
tion 545, the trustee may not avoid a warehouseman’s lien 
for storage, transportation, or other costs incidental to the 
storage and handling of goods. 
‘‘(2) The prohibition under paragraph (1) shall be ap-
plied in a manner consistent with any State statute appli-
cable to such lien that is similar to section 7–209 of the 
Uniform Commercial Code, as in effect on the date of enact-
ment of the Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2003, or any successor to such section 7–
209.’’. 
SEC. 407. AMENDMENTS 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) by striking ‘‘(A) In’’ and inserting 
‘‘In’’; and 
(B) by inserting ‘‘to an examiner, trustee 
under chapter 11, or professional person’’ after 
‘‘awarded’’; and 
(2) by adding at the end the following:
205
‘‘(7) In determining the amount of reasonable com-
pensation to be awarded to a trustee, the court shall treat 
such compensation as a commission, based on section 326.’’. 
SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION. 
Section 1125 of title 11, United States Code, is amend-
ed 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 applica-
ble nonbankruptcy law and if such holder was solicited be-
fore the commencement of the case in a manner complying 
with applicable nonbankruptcy law.’’. 
SEC. 409. PREFERENCES. 
Section 547(c) of title 11, United States Code, is 
amended—
(1) by striking paragraph (2) and inserting the 
following: 
‘‘(2) to the extent that such transfer was in pay-
ment of a debt incurred by the debtor in the ordinary 
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
206
‘‘(B) made according to ordinary business 
terms;’’; 
(2) in paragraph (8), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) 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. 410. VENUE OF CERTAIN PROCEEDINGS. 
Section 1409(b) of title 28, United States Code, is 
amended by inserting ‘‘, or a debt (excluding a consumer 
debt) against a noninsider of less than $10,000,’’ after 
‘‘$5,000’’. 
SEC. 411. 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 (2), on’’; and 
(2) by adding at the end the following: 
‘‘(2)(A) The 120-day period specified in paragraph (1) 
may not be extended beyond a date that is 18 months after 
the date of the order for relief under this chapter.
207
‘‘(B) The 180-day period specified in paragraph (1) 
may not be extended beyond a date that is 20 months after 
the date of the order for relief under this chapter.’’. 
SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP INTER-
ESTS. 
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 owner-
ship interest in such unit, such corporation, or such 
lot,’’. 
SEC. 413. CREDITOR REPRESENTATION AT FIRST MEETING 
OF CREDITORS. 
Section 341(c) of title 11, United States Code, is 
amended by inserting at the end the following: ‘‘Notwith-
standing any local court rule, provision of a State constitu-
tion, any other Federal or State law that is not a bank-
208
ruptcy law, or other requirement that representation at the 
meeting of creditors under subsection (a) be by an attorney, 
a creditor holding a consumer 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 
1 creditor) shall be permitted to appear at and participate 
in the meeting of creditors in a case under chapter 7 or 
13, either alone or in conjunction with an attorney for the 
creditor. Nothing in this subsection shall be construed to 
require any creditor to be represented by an attorney at 
any meeting of creditors.’’. 
SEC. 414. 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—
‘‘(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 direc-
tor, 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,
209
connection with, or interest in, the debtor, or for 
any other reason;’’. 
SEC. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL 
PERSONS. 
Section 330(a)(3) of title 11, United States Code, is 
amended—
(1) in subparagraph (D), by striking ‘‘and’’ at 
the end; 
(2) by redesignating subparagraph (E) as sub-
paragraph (F); and 
(3) by inserting after subparagraph (D) the fol-
lowing: 
‘‘(E) with respect to a professional person, 
whether the person is board certified or otherwise has 
demonstrated skill and experience in the bankruptcy 
field; and’’. 
SEC. 416. APPOINTMENT OF ELECTED TRUSTEE. 
Section 1104(b) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 
(2) by adding at the end the following: 
‘‘(2)(A) If an eligible, disinterested trustee is elected 
at a meeting of creditors under paragraph (1), the United 
States trustee shall file a report certifying that election.
210
‘‘(B) Upon the filing of a report under subparagraph 
(A)— 
‘‘(i) the trustee elected under paragraph (1) shall 
be considered to have been selected and appointed for 
purposes of this section; and 
‘‘(ii) the service of any trustee appointed under 
subsection (d) shall terminate. 
‘‘(C) The court shall resolve any dispute arising out 
of an election described in subparagraph (A).’’. 
SEC. 417. UTILITY SERVICE. 
Section 366 of title 11, United States Code, is amend-
ed—
(1) in subsection (a), by striking ‘‘subsection (b)’’ 
and inserting ‘‘subsections (b) and (c)’’; and 
(2) by adding at the end the following: 
‘‘(c)(1)(A) For purposes of this subsection, the term 
‘assurance of payment’ means—
‘‘(i) a cash deposit; 
‘‘(ii) a letter of credit; 
‘‘(iii) a certificate of deposit; 
‘‘(iv) a surety bond; 
‘‘(v) a prepayment of utility consumption; or 
‘‘(vi) another form of security that is mutually 
agreed on between the utility and the debtor or the 
trustee.
211
‘‘(B) For purposes of this subsection an administrative 
expense priority shall not constitute an assurance of pay-
ment. 
‘‘(2) Subject to paragraphs (3) and (4), with respect 
to a case filed under chapter 11, a utility referred to in 
subsection (a) may alter, refuse, or discontinue utility serv-
ice, if during the 30-day period beginning on the date of 
the filing of the petition, the utility does not receive from 
the debtor or the trustee adequate assurance of payment for 
utility service that is satisfactory to the utility. 
‘‘(3)(A) On request of a party in interest and after 
notice and a hearing, the court may order modification of 
the amount of an assurance of payment under paragraph 
(2). 
‘‘(B) In making a determination under this paragraph 
whether an assurance of payment is adequate, the court 
may not consider—
‘‘(i) the absence of security before the date of the 
filing of the petition; 
‘‘(ii) the payment by the debtor of charges for 
utility service in a timely manner before the date of 
the filing of the petition; or 
‘‘(iii) the availability of an administrative ex-
pense priority.
212
‘‘(4) Notwithstanding any other provision of law, with 
respect to a case subject to this subsection, a utility may 
recover or set off against a security deposit provided to the 
utility by the debtor before the date of the filing of the peti-
tion without notice or order of the court.’’. 
SEC. 418. BANKRUPTCY FEES. 
Section 1930 of title 28, United States Code, is amend-
ed—
(1) in subsection (a), by striking ‘‘Notwith-
standing section 1915 of this title, the’’ and inserting 
‘‘The’’; and 
(2) by adding at the end the following: 
‘‘(f)(1) Under the procedures prescribed by the Judicial 
Conference of the United States, the district court or the 
bankruptcy court may waive the filing fee in a case under 
chapter 7 of title 11 for an individual if the court deter-
mines that such individual has income less than 150 per-
cent of the income official poverty line (as defined by the 
Office of Management and Budget, and revised annually 
in accordance with section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981) applicable to a family of the 
size involved and is unable to pay that fee in installments. 
For purposes of this paragraph, the term ‘filing fee’ means 
the filing required by subsection (a), or any other fee pre-
scribed by the Judicial Conference under subsections (b)
213
and (c) that is payable to the clerk upon the commencement 
of a case under chapter 7. 
‘‘(2) The district court or the bankruptcy court may 
waive for such debtors other fees prescribed under sub-
sections (b) and (c). 
‘‘(3) This subsection does not restrict the district court 
or the bankruptcy court from waiving, in accordance with 
Judicial Conference policy, fees prescribed under this sec-
tion for other debtors and creditors.’’. 
SEC. 419. MORE COMPLETE INFORMATION REGARDING AS-
SETS OF THE ESTATE. 
(a) IN GENERAL.—
(1) DISCLOSURE.—The Judicial Conference of 
the United States, in accordance with section 2075 of 
title 28 of the United States Code and after consider-
ation of the views of the Director of the Executive Of-
fice for United States Trustees, shall propose amended 
Federal Rules of Bankruptcy Procedure and in ac-
cordance with rule 9009 of the Federal Rules of Bank-
ruptcy Procedure shall prescribe official bankruptcy 
forms directing debtors under chapter 11 of title 11 
of United States Code, to disclose the information de-
scribed in paragraph (2) by filing and serving peri-
odic financial and other reports designed to provide 
such information.
214
(2) INFORMATION.—The information referred to 
in paragraph (1) is the value, operations, and profit-
ability of any closely held corporation, partnership, 
or of any other entity in which the debtor holds a sub-
stantial or controlling interest. 
(b) PURPOSE.—The purpose of the rules and reports 
under subsection (a) shall be to assist parties in interest 
taking steps to ensure that the debtor’s interest in any enti-
ty referred to in subsection (a)(2) is used for the payment 
of allowed claims against debtor. 
Subtitle B—Small Business 
Bankruptcy Provisions 
SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT 
AND PLAN. 
Section 1125 of title 11, United States Code, is amend-
ed—
(1) in subsection (a)(1), by inserting before the 
semicolon ‘‘and in determining whether a disclosure 
statement provides adequate information, the court 
shall consider the complexity of the case, the benefit 
of additional information to creditors and other par-
ties in interest, and the cost of providing additional 
information’’; and 
(2) by striking subsection (f), and inserting the 
following:
215
‘‘(f) Notwithstanding subsection (b), in a small busi-
ness case—
‘‘(1) the court may determine that the plan itself 
provides adequate information and that a separate 
disclosure statement is not necessary; 
‘‘(2) the court may approve a disclosure state-
ment submitted on standard forms approved by the 
court or adopted under section 2075 of title 28; 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 disclosure 
statement if the debtor provides adequate information 
to each holder of a claim or interest that is solicited, 
but a conditionally approved disclosure statement 
shall be mailed not later than 25 days before 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. 432. DEFINITIONS. 
(a) DEFINITIONS.—Section 101 of title 11, United 
States Code, is amended by striking paragraph (51C) and 
inserting the following:
216
‘‘(51C) ‘small business case’ means a case filed 
under chapter 11 of this title in which the debtor is 
a small business debtor; 
‘‘(51D) ‘small business debtor’—
‘‘(A) subject to subparagraph (B), means a 
person engaged in commercial or business activi-
ties (including any affiliate of such person that 
is also a debtor under this title and excluding a 
person whose primary activity is the business of 
owning or operating real property or activities 
incidental thereto) that has aggregate noncontin-
gent liquidated secured and unsecured debts as of 
the date of the petition or the date of the order 
for relief in an amount not more than 
$2,000,000 (excluding debts owed to 1 or more 
affiliates or insiders) for a case in which the 
United States trustee has not appointed under 
section 1102(a)(1) a committee of unsecured 
creditors or where the court has determined that 
the committee of unsecured creditors is not suffi-
ciently active and representative to provide effec-
tive oversight of the debtor; and 
‘‘(B) does not include any member of a 
group of affiliated debtors that has aggregate 
noncontingent liquidated secured and unsecured
217
debts in an amount greater than $2,000,000 (ex-
cluding debt owed to 1 or more affiliates or in-
siders);’’. 
(b) CONFORMING AMENDMENT.—Section 1102(a)(3) of 
title 11, United States Code, is amended by inserting ‘‘debt-
or’’ after ‘‘small business’’. 
(c) ADJUSTMENT
OF DOLLAR AMOUNTS.—Section 
104(b) of title 11, United States Code, as amended by sec-
tion 226, is amended by inserting ‘‘101(51D),’’ after 
‘‘101(3),’’ each place it appears. 
SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND 
PLAN. 
Within a reasonable period of time after the date of 
enactment of this Act, the Judicial Conference of the United 
States shall prescribe in accordance with rule 9009 of the 
Federal Rules of Bankruptcy Procedure official standard 
form disclosure statements and plans of reorganization for 
small business 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.
218
SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS. 
(a) REPORTING REQUIRED.—
(1) IN GENERAL.—Chapter 3 of title 11, United 
States Code, is amended by inserting after section 307 
the following: 
‘‘§ 308. Debtor reporting requirements 
‘‘(a) For purposes of this section, the term ‘profit-
ability’ means, with respect to a debtor, the amount of 
money that the debtor has earned or lost during current 
and recent fiscal periods. 
‘‘(b) A small business debtor shall file periodic finan-
cial and other reports containing information including—
‘‘(1) the debtor’s profitability; 
‘‘(2) reasonable approximations of the debtor’s 
projected cash receipts and cash disbursements over a 
reasonable period; 
‘‘(3) comparisons of actual cash receipts and dis-
bursements with projections in prior reports; 
‘‘(4)(A) whether the debtor is—
‘‘(i) in compliance in all material respects 
with postpetition requirements imposed by this 
title and the Federal Rules of Bankruptcy Proce-
dure; and 
‘‘(ii) timely filing tax returns and other re-
quired government filings and paying taxes and 
other administrative expenses when due;
219
‘‘(B) if the debtor is not in compliance with the 
requirements referred to in subparagraph (A)(i) or 
filing tax returns and other required government fil-
ings and making the payments referred to in sub-
paragraph (A)(ii), what the failures are and how, at 
what cost, and when the debtor intends to remedy 
such failures; and 
‘‘(C) such other matters as are in the best inter-
ests of the debtor and creditors, and in the public in-
terest in fair and efficient procedures under chapter 
11 of this title.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 3 of title 11, United States Code, is 
amended by inserting after the item relating to sec-
tion 307 the following:
‘‘308. Debtor reporting requirements.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect 60 days after the date on which 
rules are prescribed under section 2075 of 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). 
SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR 
SMALL BUSINESS CASES. 
(a) PROPOSAL OF RULES AND FORMS.—The Judicial 
Conference of the United States shall propose in accordance
220
with section 2073 of title 28 of the United States Code 
amended Federal Rules of Bankruptcy Procedure, and shall 
prescribe in accordance with rule 9009 of the Federal Rules 
of Bankruptcy Procedure official bankruptcy forms, direct-
ing small business debtors to file periodic financial and 
other reports containing information, including informa-
tion relating to—
(1) the debtor’s profitability; 
(2) the debtor’s cash receipts and disbursements; 
and 
(3) whether the debtor is timely filing tax re-
turns and paying taxes and other administrative ex-
penses when due. 
(b) PURPOSE.—The rules and forms proposed under 
subsection (a) shall be designed to achieve a practical bal-
ance among—
(1) the reasonable needs of the bankruptcy court, 
the United States trustee, creditors, and other parties 
in interest for reasonably complete information; 
(2) a small business debtor’s interest that re-
quired reports be easy and inexpensive to complete; 
and 
(3) the interest of all parties that the required re-
ports help such debtor to understand such debtor’s fi-
nancial condition and plan the such debtor’s future.
221
SEC. 436. DUTIES IN SMALL BUSINESS CASES. 
(a) DUTIES IN CHAPTER 11 CASES.—Subchapter I of 
chapter 11 of title 11, United States Code, as amended by 
section 321, is amended by adding at the end the following: 
‘‘§ 1116. Duties of trustee or debtor in possession in 
small business cases 
‘‘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 not later than 7 days after the 
date of the order for relief—
‘‘(A) its most recent balance sheet, statement 
of operations, cash-flow statement, Federal in-
come tax return; or 
‘‘(B) a statement made under penalty of 
perjury that no balance sheet, statement of oper-
ations, or cash-flow statement has been prepared 
and no Federal tax return has been filed; 
‘‘(2) attend, through its senior management per-
sonnel and counsel, meetings scheduled by the court or 
the United States trustee, including initial debtor 
interviews, scheduling conferences, and meetings of 
creditors convened under section 341 unless the court, 
after notice and a hearing, waives that requirement
222
upon a finding of extraordinary and compelling cir-
cumstances; 
‘‘(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), maintain insur-
ance customary and appropriate to the industry; 
‘‘(6)(A) timely file tax returns and other re-
quired government filings; and 
‘‘(B) subject to section 363(c)(2), timely pay all 
taxes entitled to administrative expense priority ex-
cept those being contested by appropriate proceedings 
being diligently prosecuted; and 
‘‘(7) allow the United States trustee, or a des-
ignated representative of the United States trustee, to 
inspect the debtor’s business premises, books, and 
records at reasonable times, after reasonable prior 
written notice, unless notice is waived by the debtor.’’.
223
(b) CLERICAL AMENDMENT.—The table of sections for 
chapter 11 of title 11, United States Code, as amended by 
section 321, is amended by inserting after the item relating 
to section 1115 the following:
‘‘1116. Duties of trustee or debtor in possession in small business cases.’’.
SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES. 
Section 1121 of title 11, United States Code, is amend-
ed by striking subsection (e) and inserting the following: 
‘‘(e) In a small business case—
‘‘(1) only the debtor may file a plan until after 
180 days after the date of the order for relief, unless 
that period is—
‘‘(A) extended as provided by this sub-
section, after notice and a hearing; or 
‘‘(B) the court, for cause, orders otherwise; 
‘‘(2) the plan and a disclosure statement (if any) 
shall be filed not later than 300 days after the date 
of the order for relief; and 
‘‘(3) the time periods specified in paragraphs (1) 
and (2), and the time fixed in section 1129(e) within 
which the plan shall be confirmed, may be extended 
only if—
‘‘(A) the debtor, after providing notice to 
parties in interest (including the United States 
trustee), demonstrates by a preponderance of the 
evidence that it is more likely than not that the
224
court will confirm a plan within a reasonable 
period of time; 
‘‘(B) a new deadline is imposed at the time 
the extension is granted; and 
‘‘(C) the order extending time is signed be-
fore the existing deadline has expired.’’.
SEC. 438. PLAN CONFIRMATION DEADLINE. 
Section 1129 of title 11, United States Code, is amend-
ed by adding at the end the following: 
‘‘(e) In a small business case, the court shall confirm 
a plan that complies with the applicable provisions of this 
title and that is filed in accordance with section 1121(e) 
not later than 45 days after the plan is filed unless the 
time for confirmation is extended in accordance with sec-
tion 1121(e)(3).’’. 
SEC. 439. 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:
225
‘‘(H) in small business cases (as defined in 
section 101 of title 11), performing the addi-
tional duties specified in title 11 pertaining to 
such cases; and’’; 
(2) in paragraph (5), by striking ‘‘and’’ at the 
end; 
(3) in paragraph (6), by striking the period at 
the end and inserting a semicolon; and 
(4) by adding at the end the following: 
‘‘(7) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as 
soon as practicable after the date of the order for 
relief but before the first meeting scheduled under 
section 341(a) of title 11, at which time the 
United States trustee shall—
‘‘(i) begin to investigate the debtor’s vi-
ability; 
‘‘(ii) inquire about the debtor’s busi-
ness plan; 
‘‘(iii) explain the debtor’s obligations 
to file monthly operating reports and other 
required reports; 
‘‘(iv) attempt to develop an agreed 
scheduling order; and
226
‘‘(v) inform the debtor of other obliga-
tions; 
‘‘(B) if determined to be appropriate and 
advisable, visit the appropriate business premises 
of the debtor, ascertain the state of the debtor’s 
books and records, and verify that the debtor has 
filed its tax returns; and 
‘‘(C) review and monitor diligently the 
debtor’s activities, to identify as promptly as 
possible whether the debtor will be unable to con-
firm a plan; and 
‘‘(8) in any case 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 after making that finding to the 
court for relief.’’. 
SEC. 440. SCHEDULING CONFERENCES. 
Section 105(d) of title 11, United States Code, is 
amended—
(1) in the matter preceding paragraph (1), by 
striking ‘‘, may’’; and 
(2) by striking paragraph (1) and inserting the 
following:
227
‘‘(1) shall hold such status conferences as are 
necessary to further the expeditious and economical 
resolution of the case; and’’.
SEC. 441. SERIAL FILER PROVISIONS. 
Section 362 of title 11, United States Code, as amend-
ed by sections 106, 305, and 311, is amended—
(1) in subsection (k), as so redesignated by sec-
tion 305—
(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) applies 
to the debtor, the recovery under paragraph (1) of this sub-
section against such entity shall be limited to actual dam-
ages.’’; and 
(2) by adding at the end the following: 
‘‘(n)(1) Except as provided in paragraph (2), sub-
section (a) does not apply in a case in which the debtor—
‘‘(A) is a debtor in a small business case pending 
at the time the petition is filed; 
‘‘(B) was a debtor in a small business case that 
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 petition;
228
‘‘(C) was a debtor in a small business case in 
which a plan was confirmed in the 2-year period end-
ing on the date of the order for relief entered with re-
spect to the petition; or 
‘‘(D) is an entity that has acquired substantially 
all of the assets or business of a small business debtor 
described in subparagraph (A), (B), or (C), unless 
such entity establishes by a preponderance of the evi-
dence that such entity acquired substantially all of 
the assets or business of such small business debtor in 
good faith and not for the purpose of evading this 
paragraph. 
‘‘(2) Paragraph (1) does not apply—
‘‘(A) to an involuntary case involving no collu-
sion by the debtor with creditors; or 
‘‘(B) to the filing of a petition if—
‘‘(i) the debtor proves by a preponderance of 
the evidence that the filing of the petition re-
sulted from circumstances beyond the control of 
the debtor not foreseeable at the time the case 
then pending was filed; and 
‘‘(ii) it is more likely than not that the 
court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable period of 
time.’’.
229
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE. 
(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVER-
SION.—Section 1112 of title 11, United States Code, is 
amended by striking subsection (b) and inserting the fol-
lowing: 
‘‘(b)(1) Except as provided in paragraph (2) of this 
subsection, subsection (c) of this section, and section 
1104(a)(3), on request of a party in interest, and after no-
tice and a hearing, absent unusual circumstances specifi-
cally identified by the court that establish that the requested 
conversion or dismissal is not in the best interests of credi-
tors and the estate, the court shall convert a case under this 
chapter to a case under chapter 7 or dismiss a case under 
this chapter, whichever is in the best interests of creditors 
and the estate, if the movant establishes cause. 
‘‘(2) The relief provided in paragraph (1) shall not be 
granted absent unusual circumstances specifically identi-
fied by the court that establish that such relief is not in 
the best interests of creditors and the estate, if the debtor 
or another party in interest objects and establishes that—
‘‘(A) there is a reasonable likelihood that a plan 
will be confirmed within the timeframes established in 
sections 1121(e) and 1129(e) of this title, or if such 
sections do not apply, within a reasonable period of 
time; and
230
‘‘(B) the grounds for granting such relief include 
an act or omission of the debtor other than under 
paragraph (4)(A)—
‘‘(i) for which there exists a reasonable jus-
tification for the act or omission; and 
‘‘(ii) that will be cured within a reasonable 
period of time fixed by the court. 
‘‘(3) The court shall commence the hearing on a motion 
under this subsection not later than 30 days after filing 
of the motion, and shall decide the motion not later than 
15 days after commencement of such hearing, unless the 
movant expressly consents to a continuance for a specific 
period of time or compelling circumstances prevent the 
court from meeting the time limits established by this para-
graph. 
‘‘(4) For purposes of this subsection, the term ‘cause’ 
includes—
‘‘(A) substantial or continuing loss to or diminu-
tion of the estate and the absence of a reasonable like-
lihood of rehabilitation; 
‘‘(B) gross mismanagement of the estate; 
‘‘(C) failure to maintain appropriate insurance 
that poses a risk to the estate or to the public; 
‘‘(D) unauthorized use of cash collateral substan-
tially harmful to 1 or more creditors;
231
‘‘(E) failure to comply with an order of the 
court; 
‘‘(F) unexcused failure to satisfy timely any fil-
ing or reporting requirement established by this title 
or by any rule applicable to a case under this chap-
ter; 
‘‘(G) failure to attend the meeting of creditors 
convened under section 341(a) or an examination or-
dered under rule 2004 of the Federal Rules of Bank-
ruptcy Procedure without good cause shown by the 
debtor; 
‘‘(H) failure timely to provide information or at-
tend meetings reasonably requested by the United 
States trustee (or the bankruptcy administrator, if 
any); 
‘‘(I) failure timely to pay taxes owed after the 
date of the order for relief or to file tax returns due 
after the date of the order for relief; 
‘‘(J) failure to file a disclosure statement, or to 
file or confirm a plan, within the time fixed by this 
title or by order of the court; 
‘‘(K) failure to pay any fees or charges required 
under chapter 123 of title 28; 
‘‘(L) revocation of an order of confirmation 
under section 1144;
232
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan; 
‘‘(N) material default by the debtor with respect 
to a confirmed plan; 
‘‘(O) termination of a confirmed plan by reason 
of the occurrence of a condition specified in the plan; 
and 
‘‘(P) failure of the debtor to pay any domestic 
support obligation that first becomes payable after the 
date of the filing of the petition. 
‘‘(5) The court shall commence the hearing on a motion 
under this subsection not later than 30 days after filing 
of the motion, and shall decide the motion not later than 
15 days after commencement of such hearing, unless the 
movant expressly consents to a continuance for a specific 
period of time or compelling circumstances prevent the 
court from meeting the time limits established by this para-
graph.’’. 
(b) ADDITIONAL GROUNDS
FOR APPOINTMENT
OF 
TRUSTEE.—Section 1104(a) of title 11, United States Code, 
is amended—
(1) in paragraph (1), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (2), by striking the period at 
the end and inserting ‘‘; or’’; and
233
(3) by adding at the end the following: 
‘‘(3) if grounds exist to convert or dismiss the 
case under section 1112, but the court determines that 
the appointment of a trustee or an examiner is in the 
best interests of creditors and the estate.’’. 
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED 
STATES CODE, WITH RESPECT TO SMALL 
BUSINESSES. 
Not later than 2 years after the date of enactment of 
this Act, the Administrator of the Small Business Adminis-
tration, in consultation with the Attorney General, the Di-
rector of the Executive Office for 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 proprietor-
ships, to become debtors in cases under title 11, 
United States Code, and that cause certain 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
234
(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. 444. 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 paragraph, 
whichever is later’’ after ‘‘90-day period)’’; and 
(2) by striking subparagraph (B) and inserting 
the following: 
‘‘(B) the debtor has commenced monthly 
payments that—
‘‘(i) may, in the debtor’s sole discre-
tion, notwithstanding section 363(c)(2), be 
made from rents or other income generated 
before or after the commencement of the case 
by or from the property to each creditor 
whose claim is secured by such real estate 
(other than a claim secured by a judgment 
lien or by an unmatured statutory lien); 
and 
‘‘(ii) are in an amount equal to inter-
est at the then applicable nondefault con-
235
tract rate of interest on the value of the 
creditor’s interest in the real estate; or’’. 
SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES. 
Section 503(b) of title 11, United States Code, is 
amended—
(1) in paragraph (5), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (6), by striking the period at 
the end and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(7) with respect to a nonresidential real prop-
erty lease previously assumed under section 365, and 
subsequently rejected, a sum equal to all monetary ob-
ligations due, excluding those arising from or relating 
to a failure to operate or a penalty provision, for the 
period of 2 years following the later of the rejection 
date or the 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 an entity other than the debtor, and the claim 
for remaining sums due for the balance of the term 
of the lease shall be a claim under section 502(b)(6);’’.
236
SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A 
PLAN ADMINISTRATOR OF AN EMPLOYEE 
BENEFIT PLAN. 
(a) IN GENERAL.—Section 521(a) of title 11, United 
States Code, as amended by sections 106 and 304, is amend-
ed—
(1) in paragraph (5), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (6), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding after paragraph (6) the following: 
‘‘(7) unless a trustee is serving in the case, con-
tinue to perform the obligations required of the ad-
ministrator (as defined in section 3 of the Employee 
Retirement Income Security Act of 1974) of an em-
ployee benefit plan if at the time of the commence-
ment of the case the debtor (or any entity designated 
by the debtor) served as such administrator.’’. 
(b) DUTIES OF TRUSTEES.—Section 704(a) of title 11, 
United States Code, as amended by sections 102 and 219, 
is amended—
(1) in paragraph (10), by striking ‘‘and’’ at the 
end; and 
(2) by adding at the end the following: 
‘‘(11) if, at the time of the commencement of the 
case, the debtor (or any entity designated by the debt-
237
or) served as the administrator (as defined in section 
3 of the Employee Retirement Income Security Act of 
1974) of an employee benefit plan, continue to per-
form the obligations required of the administrator; 
and’’. 
(c) CONFORMING AMENDMENT.—Section 1106(a)(1) of 
title 11, United States Code, is amended to read as follows: 
‘‘(1) perform the duties of the trustee, as speci-
fied in paragraphs (2), (5), (7), (8), (9), (10), and 
(11) of section 704;’’.
SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EM-
PLOYEES. 
Section 1114(d) of title 11, United States Code, is 
amended—
(1) by striking ‘‘appoint’’ and inserting ‘‘order 
the appointment of’’, and 
(2) by adding at the end the following: ‘‘The 
United States trustee shall appoint any such com-
mittee.’’. 
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,
238
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 striking the last sentence and inserting 
the following: 
‘‘(b) The commencement of a voluntary case under a 
chapter of this title constitutes an order for relief under such 
chapter.’’. 
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 
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—BANKRUPTCY DATA 
SEC. 601. IMPROVED BANKRUPTCY STATISTICS. 
(a) IN GENERAL.—Chapter 6 of title 28, United States 
Code, is amended by adding at the end the following: 
‘‘§ 159. Bankruptcy statistics 
‘‘(a) The clerk of the district court, or the clerk of the 
bankruptcy court if one is certified pursuant to section 
156(b) of this title, shall collect statistics regarding debtors
239
who are individuals with primarily consumer debts seeking 
relief under chapters 7, 11, and 13 of title 11. Those statis-
tics shall be in a standardized format prescribed by the Di-
rector of the Administrative Office of the United States 
Courts (referred to in this section as the ‘Director’). 
‘‘(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 July 1, 2006, and annually 
thereafter, prepare, and submit to Congress a report 
concerning the information collected under subsection 
(a) that contains an analysis of the information. 
‘‘(c) The compilation required under subsection (b) 
shall—
‘‘(1) be itemized, by chapter, with respect to title 
11; 
‘‘(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-
240
ported in the schedules prescribed pursuant to 
section 2075 of this title and filed by debtors; 
‘‘(B) the current monthly income, average 
income, and average expenses of debtors as re-
ported on the schedules and statements that each 
such debtor files under sections 521 and 1322 of 
title 11; 
‘‘(C) the aggregate amount of debt dis-
charged in cases filed during the reporting pe-
riod, 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 predomi-
nantly nondischargeable; 
‘‘(D) the average period of time between the 
date of the filing of the petition and the closing 
of the case for cases closed during the reporting 
period; 
‘‘(E) for cases closed during the reporting 
period—
‘‘(i) the number of cases in which a re-
affirmation agreement was filed; and 
‘‘(ii)(I) the total number of reaffirma-
tion agreements filed;
241
‘‘(II) of those cases in which a reaffir-
mation agreement was filed, the number of 
cases in which the debtor was not rep-
resented by an attorney; and 
‘‘(III) of those cases in which a reaffir-
mation agreement was filed, the number of 
cases in which the reaffirmation agreement 
was approved by the court;
‘‘(F) with respect to cases filed under chap-
ter 
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 
‘‘(II) the number of final orders en-
tered determining the value of property se-
curing a claim; 
‘‘(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 com-
pleted, separately itemized with respect to
242
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 during the 6-year 
period preceding the filing; 
‘‘(G) the number of cases in which creditors 
were fined for misconduct and any amount of 
punitive damages awarded by the court for cred-
itor 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 attorney or damages awarded under 
such Rule.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
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 enact-
ment of this Act. 
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA. 
(a) AMENDMENT.—Chapter 39 of title 28, United 
States Code, is amended by adding at the end the following:
243
‘‘§ 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; and 
‘‘(2) periodic reports by debtors in possession or 
trustees in cases under chapter 11 of title 11. 
‘‘(b) REPORTS.—Each report referred to in subsection 
(a) shall be designed (and the requirements as to place and 
manner of filing shall be established) so as to facilitate com-
pilation of data and maximum possible access of the public, 
both by physical inspection at one or more central 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 Attor-
ney General shall strike the best achievable practical bal-
ance between—
244
‘‘(1) the reasonable needs of the public for infor-
mation about the operational results of the Federal 
bankruptcy system; 
‘‘(2) economy, simplicity, and lack of undue bur-
den on persons with a duty to file reports; and 
‘‘(3) appropriate privacy concerns and safe-
guards. 
‘‘(d) FINAL REPORTS.—The uniform forms for final 
reports required under subsection (a) for use 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 Attor-
ney General in the discretion of the Attorney General shall 
propose, include with respect to a case under such title—
‘‘(1) information about the length of time the 
case was pending; 
‘‘(2) assets abandoned; 
‘‘(3) assets exempted; 
‘‘(4) receipts and disbursements of the estate; 
‘‘(5) expenses of administration, including for 
use under section 707(b), actual costs of admin-
istering cases under chapter 13 of title 11; 
‘‘(6) claims asserted; 
‘‘(7) claims allowed; and 
‘‘(8) distributions to claimants and claims dis-
charged without payment,
245
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.—The uniform forms for 
periodic reports required under subsection (a) for use by 
trustees or debtors in possession under chapter 11 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—
‘‘(1) information about the industry classifica-
tion, published by the Department of Commerce, for 
the businesses conducted by the debtor; 
‘‘(2) length of time the case has been pending; 
‘‘(3) number of full-time employees as of the date 
of the order for relief and at the end of each reporting 
period since the case was filed; 
‘‘(4) cash receipts, cash disbursements and prof-
itability of the debtor for the most recent period and 
cumulatively since the date of the order for relief; 
‘‘(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-
246
tively since the date of the order for relief (separately 
reported, 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) CLERICAL AMENDMENT.—The table of sections for 
chapter 39 of title 28, United States Code, is amended by 
adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 603. AUDIT PROCEDURES. 
(a) IN GENERAL.—
(1) ESTABLISHMENT OF PROCEDURES.—The At-
torney General (in judicial districts served by United 
States trustees) and the Judicial Conference of the 
United States (in judicial districts served by bank-
ruptcy administrators) shall establish procedures to 
determine the accuracy, veracity, and completeness of 
petitions, schedules, and other information that the 
debtor is required to provide under sections 521 and 
1322 of title 11, United States Code, and, if applica-
ble, section 111 of such title, in cases filed under
247
chapter 7 or 13 of such title in which the debtor is 
an individual. Such audits shall be in accordance 
with generally accepted auditing standards and per-
formed by independent certified public accountants or 
independent licensed public accountants, provided 
that the Attorney General and the Judicial Con-
ference, as appropriate, may develop alternative au-
diting standards not later than 2 years after the date 
of enactment of this Act. 
(2) PROCEDURES.—Those procedures required by 
paragraph (1) shall—
(A) establish a method of selecting appro-
priate qualified persons to contract to perform 
those audits; 
(B) establish a method of randomly select-
ing 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; 
(C) require audits of schedules of income 
and expenses that reflect greater than average 
variances from the statistical norm of the district 
in which the schedules were filed if those 
variances occur by reason of higher income or 
higher expenses than the statistical norm of the 
district in which the schedules were filed; and
248
(D) establish procedures for providing, not 
less frequently than annually, public information 
concerning the aggregate results of such audits 
including the percentage of cases, by district, in 
which a material misstatement of income or ex-
penditures is reported. 
(b) AMENDMENTS.—Section 586 of title 28, United 
States Code, is amended—
(1) in subsection (a), by striking paragraph (6) 
and inserting the following: 
‘‘(6) make such reports as the Attorney General 
directs, including the results of audits performed 
under section 603(a) of the Bankruptcy Abuse Preven-
tion and Consumer Protection Act of 2003;’’; and 
(2) by adding at the end the following: 
‘‘(f)(1) The United States trustee for each district is 
authorized to contract with auditors to perform audits in 
cases designated by the United States trustee, in accordance 
with the procedures established under section 603(a) of the 
Bankruptcy Abuse Prevention and Consumer Protection 
Act of 2003. 
‘‘(2)(A) The report of each audit referred to in para-
graph (1) shall be filed with the court and transmitted to 
the United States trustee. Each report shall clearly and con-
spicuously specify any material misstatement of income or
249
expenditures or of assets identified by the person performing 
the audit. In any case in which a material misstatement 
of income or expenditures or of assets has been reported, 
the clerk of the district court (or the clerk of the bankruptcy 
court if one is certified under section 156(b) of this title) 
shall give notice of the misstatement to the creditors in the 
case. 
‘‘(B) If a material misstatement of income or expendi-
tures 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 sec-
tion 3057 of title 18; 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.’’. 
(c) AMENDMENTS
TO SECTION 521 OF TITLE 11, 
U.S.C.—Section 521(a) of title 11, United States Code, as 
so designated by section 106, is amended in each of para-
graphs (3) and (4) by inserting ‘‘or an auditor serving 
under section 586(f) of title 28’’ after ‘‘serving in the case’’. 
(d) AMENDMENTS
TO SECTION 727 OF TITLE 11, 
U.S.C.—Section 727(d) of title 11, United States Code, is 
amended—
250
(1) in paragraph (2), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(4) the debtor has failed to explain satisfac-
torily—
‘‘(A) a material misstatement in an audit 
referred to in section 586(f) of title 28; 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 referred to in section 
586(f) of title 28.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect 18 months after the date of enact-
ment of this Act. 
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY 
OF BANKRUPTCY DATA. 
It is the sense of Congress that—
(1) the national policy of the United States 
should be that all data held by bankruptcy clerks in 
electronic form, to the extent such data reflects only 
public records (as defined in section 107 of title 11,
251
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 Con-
gress and the Judicial Conference of the United States 
may determine; 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 VII—BANKRUPTCY TAX 
PROVISIONS 
SEC. 701. 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 extent 
that there is a properly perfected unavoidable tax lien 
arising in connection with an ad valorem tax on real 
or personal property of the estate)’’ after ‘‘under this 
title’’; 
(2) in subsection (b)(2), by inserting ‘‘(except 
that such expenses, other than claims for wages, sala-
ries, or commissions that arise after the date of the
252
filing of the petition, shall be limited to expenses in-
curred under chapter 7 of this title and shall not in-
clude expenses incurred under chapter 11 of this 
title)’’ after ‘‘507(a)(1)’’; 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 es-
tate; and 
‘‘(2) in a manner consistent with section 506(c), 
recover from property securing an allowed secured 
claim the reasonable, necessary costs and expenses of 
preserving or disposing of such property. 
‘‘(f) Notwithstanding the exclusion of ad valorem tax 
liens under this section and subject to the requirements of 
subsection (e), the following may be paid from property of 
the estate which secures a tax lien, or the proceeds of such 
property: 
‘‘(1) Claims for wages, salaries, and commissions 
that are entitled to priority under section 507(a)(4). 
‘‘(2) Claims for contributions to an employee 
benefit plan entitled to priority under section 
507(a)(5).’’. 
(b) DETERMINATION
OF
TAX
LIABILITY.—Section 
505(a)(2) of title 11, United States Code, is amended—
253
(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. 702. TREATMENT OF FUEL TAX CLAIMS. 
Section 501 of title 11, United States Code, is amended 
by adding at the end the following: 
‘‘(e) A claim arising from the liability of a debtor for 
fuel use tax assessed consistent with the requirements of sec-
tion 31705 of title 49 may be filed by the base jurisdiction 
designated pursuant to the International Fuel Tax Agree-
ment (as defined in section 31701 of title 49) and, if so 
filed, shall be allowed as a single claim.’’. 
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF 
TAXES. 
Section 505(b) of title 11, United States Code, is 
amended—
254
(1) in the first sentence, by inserting ‘‘at the ad-
dress and in the manner designated in paragraph 
(1)’’ after ‘‘determination of such tax’’; 
(2) by striking ‘‘(1) upon payment’’ and insert-
ing ‘‘(A) upon payment’’; 
(3) by striking ‘‘(A) such governmental unit’’ 
and inserting ‘‘(i) such governmental unit’’; 
(4) by striking ‘‘(B) such governmental unit’’ 
and inserting ‘‘(ii) such governmental unit’’; 
(5) by striking ‘‘(2) upon payment’’ and insert-
ing ‘‘(B) upon payment’’; 
(6) by striking ‘‘(3) upon payment’’ and insert-
ing ‘‘(C) upon payment’’; 
(7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and 
(8) by inserting before paragraph (2), as so des-
ignated, the following: 
‘‘(b)(1)(A) The clerk shall maintain a list under which 
a Federal, State, or local governmental unit responsible for 
the collection of taxes within the district may—
‘‘(i) designate an address for service of requests 
under this subsection; and 
‘‘(ii) describe where further information con-
cerning additional requirements for filing such re-
quests may be found.
255
‘‘(B) If such governmental unit does not designate an 
address and provide such address to the clerk under sub-
paragraph (A), any request made under this subsection 
may be served at the address for the filing of a tax return 
or protest with the appropriate taxing authority of such 
governmental unit.’’. 
SEC. 704. RATE OF INTEREST ON TAX CLAIMS. 
(a) IN GENERAL.—Subchapter I of chapter 5 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘§ 511. Rate of interest on tax claims 
‘‘(a) If any provision of this title requires the payment 
of interest on a tax claim or on an administrative expense 
tax, or the payment of interest to enable a creditor to receive 
the present value of the allowed amount of a tax claim, the 
rate of interest shall be the rate determined under applica-
ble nonbankruptcy law. 
‘‘(b) In the case of taxes paid under a confirmed plan 
under this title, the rate of interest shall be determined as 
of the calendar month in which the plan is confirmed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
subchapter I of chapter 5 of title 11, United States Code, 
is amended by adding at the end the following:
‘‘511. Rate of interest on tax claims.’’.
256
SEC. 705. PRIORITY OF TAX CLAIMS. 
Section 507(a)(8) of title 11, United States Code, is 
amended—
(1) in subparagraph (A)—
(A) in the matter preceding clause (i), by 
inserting ‘‘for a taxable year ending on or before 
the date of the filing of the petition’’ after ‘‘gross 
receipts’’; 
(B) in clause (i), by striking ‘‘for a taxable 
year ending on or before the date of the filing of 
the petition’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) assessed within 240 days before 
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time during which an 
offer in compromise with respect to 
that tax was pending or in effect dur-
ing that 240-day period, plus 30 days; 
and 
‘‘(II) any time during which a 
stay of proceedings against collections 
was in effect in a prior case under this 
title during that 240-day period, plus 
90 days.’’; and
257
(2) by adding at the end the following: 
‘‘An otherwise applicable time period specified in this 
paragraph shall be suspended for any period during 
which a governmental unit is prohibited under appli-
cable nonbankruptcy law from collecting a tax as a 
result of a request by the debtor for a hearing and an 
appeal of any collection action taken or proposed 
against the debtor, plus 90 days; plus any time dur-
ing which the stay of proceedings was in effect in a 
prior case under this title or during which collection 
was precluded by the existence of 1 or more confirmed 
plans under this title, plus 90 days.’’. 
SEC. 706. 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. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 13. 
Section 1328(a)(2) of title 11, United States Code, as 
amended by section 314, is amended by striking ‘‘para-
graph’’ and inserting ‘‘section 507(a)(8)(C) or in para-
graph (1)(B), (1)(C),’’.
258
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 11. 
Section 1141(d) of title 11, United States Code, as 
amended by sections 321 and 330, is amended by adding 
at the end the following: 
‘‘(6) Notwithstanding paragraph (1), the confirmation 
of a plan does not discharge a debtor that is a corporation 
from any debt—
‘‘(A) of a kind specified in paragraph (2)(A) or 
(2)(B) of section 523(a) that is owed to a domestic 
governmental unit, or owed to a person as the result 
of an action filed under subchapter III of chapter 37 
of title 31 or any similar State statute; or 
‘‘(B) for a tax or customs duty with respect to 
which the debtor—
‘‘(i) made a fraudulent return; or 
‘‘(ii) willfully attempted in any manner to 
evade or to defeat such tax or such customs 
duty.’’. 
SEC. 
709. 
STAY 
OF 
TAX 
PROCEEDINGS 
LIMITED 
TO 
PREPETITION TAXES. 
Section 362(a)(8) of title 11, United States Code, is 
amended by striking ‘‘the debtor’’ and inserting ‘‘a cor-
porate debtor’s tax liability for a taxable period the bank-
ruptcy court may determine or concerning the tax liability
259
of a debtor who is an individual for a taxable period ending 
before the date of the order for relief under this title’’. 
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 
CASES. 
Section 1129(a)(9) of title 11, United States Code, is 
amended—
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by striking ‘‘deferred 
cash payments,’’ and all that follows through the end 
of the subparagraph, and inserting ‘‘regular install-
ment payments in cash—
‘‘(i) of a total value, as of the effective 
date of the plan, equal to the allowed 
amount of such claim; 
‘‘(ii) over a period ending not later 
than 5 years after the date of the order for 
relief under section 301, 302, or 303; and 
‘‘(iii) in a manner not less favorable 
than the most favored nonpriority unse-
cured claim provided for by the plan (other 
than cash payments made to a class of 
creditors under section 1122(b)); and’’; and 
(3) by adding at the end the following:
260
‘‘(D) with respect to a secured claim which 
would otherwise meet the description of an unse-
cured claim of a governmental unit under sec-
tion 507(a)(8), but for the secured status of that 
claim, the holder of that claim will receive on ac-
count of that claim, cash payments, in the same 
manner and over the same period, as prescribed 
in subparagraph (C).’’. 
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED. 
Section 545(2) of title 11, United States Code, is 
amended by inserting before the semicolon at the end the 
following: ‘‘, except in any case in which a purchaser is 
a purchaser described in section 6323 of the Internal Rev-
enue Code of 1986, or in any other similar provision of 
State or local law’’. 
SEC. 712. 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) A tax under subsection (a) shall be paid on or 
before the due date of the tax under applicable nonbank-
ruptcy law, unless—
261
‘‘(1) the tax is a property tax secured by a lien 
against property that is abandoned under section 554 
of title 11, within a reasonable period of time after 
the lien attaches, by the trustee in a case under title 
11; or 
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11. 
‘‘(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, if—
‘‘(1) the tax was not incurred by a trustee duly 
appointed under chapter 7 of title 11; or 
‘‘(2) before the due date of the tax, an order of 
the court makes 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 the priority of that tax.’’. 
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B)(i) of title 11, United States Code, is 
amended by inserting ‘‘whether secured or unsecured, in-
cluding property taxes for which liability is in rem, in per-
sonam, or both,’’ before ‘‘except’’.
262
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EX-
PENSE TAXES ELIMINATED.—Section 503(b)(1) of title 11, 
United States Code, is amended— 
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by adding ‘‘and’’ at the 
end; and 
(3) by adding at the end the following: 
‘‘(D) notwithstanding the requirements of sub-
section (a), a governmental unit shall not be required 
to file a request for the payment of an expense de-
scribed in subparagraph (B) or (C), as a condition of 
its being an allowed administrative expense;’’. 
(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 stat-
ute’’ after ‘‘agreement’’; and 
(2) in subsection (c), by inserting ‘‘, including 
the payment of all ad valorem property taxes with re-
spect to the property’’ before the period at the end. 
SEC. 713. 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
263
commences distribution under this section;’’ and inserting 
the following: ‘‘on or before the earlier of—
‘‘(A) the date that is 10 days after the mail-
ing to creditors of the summary of the trustee’s 
final report; or 
‘‘(B) the date on which the trustee com-
mences final distribution under this section;’’. 
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES. 
Section 523(a) of title 11, United States Code, as 
amended by sections 215 and 224, is amended—
(1) in paragraph (1)(B)—
(A) in the matter preceding clause (i), by 
inserting ‘‘or equivalent report or notice,’’ after 
‘‘a return,’’; 
(B) in clause (i), by inserting ‘‘or given’’ 
after ‘‘filed’’; and 
(C) in clause (ii)—
(i) by inserting ‘‘or given’’ after 
‘‘filed’’; and 
(ii) by inserting ‘‘, report, or notice’’ 
after ‘‘return’’; and 
(2) by adding at the end the following: 
‘‘For purposes of this subsection, the term ‘return’ means 
a return that satisfies the requirements of applicable non-
264
bankruptcy law (including applicable filing requirements). 
Such term includes a return prepared pursuant to section 
6020(a) of the Internal Revenue Code of 1986, or similar 
State or local law, or a written stipulation to a judgment 
or a final order entered by a nonbankruptcy tribunal, but 
does not include a return made pursuant to section 6020(b) 
of the Internal Revenue Code of 1986, or a similar State 
or local law.’’. 
SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES. 
Section 505(b)(2) of title 11, United States Code, as 
amended by section 703, is amended by inserting ‘‘the es-
tate,’’ after ‘‘misrepresentation,’’. 
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CON-
FIRM CHAPTER 13 PLANS. 
(a) FILING OF PREPETITION TAX RETURNS REQUIRED 
FOR PLAN CONFIRMATION.—Section 1325(a) of title 11, 
United States Code, as amended by sections 102, 213, and 
306, is amended by inserting after paragraph (8) the fol-
lowing: 
‘‘(9) the debtor has filed all applicable Federal, 
State, and local tax returns as required by section 
1308.’’. 
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX 
RETURNS.—
265
(1) IN GENERAL.—Subchapter I of chapter 13 of 
title 11, United States Code, is amended by adding 
at the end the following: 
‘‘§ 1308. Filing of prepetition tax returns 
‘‘(a) Not later than the day before the date on which 
the meeting of the creditors is first scheduled to be held 
under section 341(a), if the debtor was required to file a 
tax return under applicable nonbankruptcy law, the debtor 
shall file with appropriate tax authorities all tax returns 
for all taxable periods ending during the 4-year period end-
ing on the date of the filing of the petition. 
‘‘(b)(1) Subject to paragraph (2), if the tax returns re-
quired by subsection (a) have not been filed by the date on 
which the meeting of creditors is first scheduled to be held 
under section 341(a), the trustee may hold open that meet-
ing for a reasonable period of time to allow the debtor an 
additional period of time to file any unfiled returns, but 
such additional period of time shall not extend beyond—
‘‘(A) for any return that is past due as of the 
date of the filing of the petition, the date that is 120 
days after the date of that meeting; or 
‘‘(B) for any return that is not past due as of 
the date of the filing of the petition, the later of—
‘‘(i) the date that is 120 days after the date 
of that meeting; or
266
‘‘(ii) the date on which the return is due 
under the last automatic extension of time for 
filing that return to which the debtor is entitled, 
and for which request is timely made, in accord-
ance with applicable nonbankruptcy law. 
‘‘(2) After notice and a hearing, and order entered be-
fore the tolling of any applicable filing period determined 
under this subsection, if the debtor demonstrates by a pre-
ponderance of the evidence that the failure to file a return 
as required under this subsection is attributable to cir-
cumstances beyond the control of the debtor, the court may 
extend the filing period established by the trustee under this 
subsection for—
‘‘(A) a period of not more than 30 days for re-
turns described in paragraph (1); and 
‘‘(B) a period not to extend after the applicable 
extended due date for a return described in paragraph 
(2). 
‘‘(c) For purposes of this section, the term ‘return’ in-
cludes a return prepared pursuant to subsection (a) or (b) 
of section 6020 of the Internal Revenue Code of 1986, or 
a similar State or local law, or a written stipulation to 
a judgment or a final order entered by a nonbankruptcy 
tribunal.’’.
267
(2) CONFORMING AMENDMENT.—The table of sec-
tions for subchapter I of chapter 13 of title 11, United 
States Code, is amended by adding at the end the fol-
lowing:
‘‘1308. Filing of prepetition tax returns.’’.
(c) DISMISSAL OR CONVERSION ON FAILURE TO COM-
PLY.—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 a tax return 
under section 1308, 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 chap-
ter to a case under chapter 7 of this title, whichever is in 
the best interest of the creditors and the estate.’’. 
(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of title 
11, United States Code, is amended by inserting before the 
period at the end the following: ‘‘, and except that in a 
case under chapter 13, a claim of a governmental unit for 
a tax with respect to a return filed under section 1308 shall 
be timely if the claim is filed on or before the date that 
is 60 days after the date on which such return was filed 
as required’’.
268
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CON-
FIRMATION.—It is the sense of Congress that the Judicial 
Conference of the United States should, as soon as prac-
ticable after the date of enactment of this Act, propose 
amended Federal Rules of Bankruptcy Procedure that pro-
vide—
(1) notwithstanding the provisions of Rule 
3015(f), in cases under chapter 13 of title 11, United 
States Code, that an objection to the confirmation of 
a plan filed by a governmental unit on or before the 
date that is 60 days after the date on which the debtor 
files all tax returns required under sections 1308 and 
1325(a)(7) of title 11, United States Code, shall be 
treated for all purposes as if such objection had been 
timely filed before such confirmation; and 
(2) in addition to the provisions of Rule 3007, 
in a case under chapter 13 of title 11, United States 
Code, that no objection to a claim for a tax with re-
spect to which a return is required to be filed under 
section 1308 of title 11, United States Code, shall be 
filed until such return has been filed as required. 
SEC. 717. STANDARDS FOR TAX DISCLOSURE. 
Section 1125(a)(1) of title 11, United States Code, is 
amended—
269
(1) by inserting ‘‘including a discussion of the 
potential material Federal tax consequences of the 
plan to the debtor, any successor to the debtor, and 
a hypothetical investor typical of the holders of claims 
or interests in the case,’’ after ‘‘records,’’; and 
(2) by striking ‘‘a hypothetical reasonable inves-
tor typical of holders of claims or interests’’ and in-
serting ‘‘such a hypothetical investor’’. 
SEC. 718. SETOFF OF TAX REFUNDS. 
Section 362(b) of title 11, United States Code, as 
amended by sections 224, 303, 311, and 401, is amended 
by inserting after paragraph (25) the following: 
‘‘(26) under subsection (a), of the setoff under 
applicable nonbankruptcy law of an income tax re-
fund, by a governmental unit, with respect to a tax-
able period that ended before the date of the order for 
relief against an income tax liability for a taxable pe-
riod that also ended before the date of the order for 
relief, except that in any case in which the setoff of 
an income tax refund is not permitted under applica-
ble nonbankruptcy law because of a pending action to 
determine the amount or legality of a tax liability, 
the governmental unit may hold the refund pending 
the resolution of the action, unless the court, on the 
motion of the trustee and after notice and a hearing,
270
grants the taxing authority adequate protection 
(within the meaning of section 361) for the secured 
claim of such authority in the setoff under section 
506(a);’’. 
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREAT-
MENT OF STATE AND LOCAL TAXES. 
(a) IN GENERAL.—
(1) SPECIAL PROVISIONS.—Section 346 of title 
11, United States Code, is amended to read as follows: 
‘‘§ 346. Special provisions related to the treatment of 
State and local taxes 
‘‘(a) Whenever the Internal Revenue Code of 1986 pro-
vides that a separate taxable estate or entity is created in 
a case concerning a debtor under this title, and the income, 
gain, loss, deductions, and credits of such estate shall be 
taxed to or claimed by the estate, a separate taxable estate 
is also created for purposes of any State and local law im-
posing a tax on or measured by income and such income, 
gain, loss, deductions, and credits shall be taxed to or 
claimed by the estate and may not be taxed to or claimed 
by the debtor. The preceding sentence shall not apply if the 
case is dismissed. The trustee shall make tax returns of in-
come required under any such State or local law. 
‘‘(b) Whenever the Internal Revenue Code of 1986 pro-
vides that no separate taxable estate shall be created in a
271
case concerning a debtor under this title, and the income, 
gain, loss, deductions, and credits of an estate shall be taxed 
to or claimed by the debtor, such income, gain, loss, deduc-
tions, and credits shall be taxed to or claimed by the debtor 
under a State or local law imposing a tax on or measured 
by income and may not be taxed to or claimed by the estate. 
The trustee shall make such tax returns of income of cor-
porations and of partnerships as are required under any 
State or local law, but with respect to partnerships, shall 
make such returns only to the extent such returns are also 
required to be made under such Code. The estate shall be 
liable for any tax imposed on such corporation or partner-
ship, but not for any tax imposed on partners or members. 
‘‘(c) With respect to a partnership or any entity treat-
ed as a partnership under a State or local law imposing 
a tax on or measured by income that is a debtor in a case 
under this title, any gain or loss resulting from a distribu-
tion of property from such partnership, or any distributive 
share of any income, gain, loss, deduction, or credit of a 
partner or member that is distributed, or considered distrib-
uted, from such partnership, after the commencement of the 
case, is gain, loss, income, deduction, or credit, as the case 
may be, of the partner or member, and if such partner or 
member is a debtor in a case under this title, shall be subject 
to tax in accordance with subsection (a) or (b).
272
‘‘(d) For purposes of any State or local law imposing 
a tax on or measured by income, the taxable period of a 
debtor in a case under this title shall terminate only if and 
to the extent that the taxable period of such debtor termi-
nates under the Internal Revenue Code of 1986. 
‘‘(e) The estate in any case described in subsection (a) 
shall use the same accounting method as the debtor used 
immediately before the commencement of the case, if such 
method of accounting complies with applicable nonbank-
ruptcy tax law. 
‘‘(f) For purposes of any State or local law imposing 
a tax on or measured by income, a transfer of property 
from the debtor to the estate or from the estate to the debtor 
shall not be treated as a disposition for purposes of any 
provision assigning tax consequences to a disposition, ex-
cept to the extent that such transfer is treated as a disposi-
tion under the Internal Revenue Code of 1986. 
‘‘(g) Whenever a tax is imposed pursuant to a State 
or local law imposing a tax on or measured by income pur-
suant to subsection (a) or (b), such tax shall be imposed 
at rates generally applicable to the same types of entities 
under such State or local law. 
‘‘(h) The trustee shall withhold from any payment of 
claims for wages, salaries, commissions, dividends, interest, 
or other payments, or collect, any amount required to be
273
withheld or collected under applicable State or local tax 
law, and shall pay such withheld or collected amount to 
the appropriate governmental unit at the time and in the 
manner required by such tax law, and with the same pri-
ority as the claim from which such amount was withheld 
or collected was paid. 
‘‘(i)(1) To the extent that any State or local law im-
posing a tax on or measured by income provides for the 
carryover of any tax attribute from one taxable period to 
a subsequent taxable period, the estate shall succeed to such 
tax attribute in any case in which such estate is subject 
to tax under subsection (a). 
‘‘(2) After such a case is closed or dismissed, the debtor 
shall succeed to any tax attribute to which the estate suc-
ceeded under paragraph (1) to the extent consistent with 
the Internal Revenue Code of 1986. 
‘‘(3) The estate may carry back any loss or tax at-
tribute to a taxable period of the debtor that ended before 
the date of the order for relief under this title to the extent 
that— 
‘‘(A) applicable State or local tax law provides 
for a carryback in the case of the debtor; and 
‘‘(B) the same or a similar tax attribute may be 
carried back by the estate to such a taxable period of 
the debtor under the Internal Revenue Code of 1986.
274
‘‘(j)(1) For purposes of any State or local law impos-
ing a tax on or measured by income, income is not realized 
by the estate, the debtor, or a successor to the debtor by rea-
son of discharge of indebtedness in a case under this title, 
except to the extent, if any, that such income is subject to 
tax under the Internal Revenue Code of 1986. 
‘‘(2) Whenever the Internal Revenue Code of 1986 pro-
vides that the amount excluded from gross income in respect 
of the discharge of indebtedness in a case under this title 
shall be applied to reduce the tax attributes of the debtor 
or the estate, a similar reduction shall be made under any 
State or local law imposing a tax on or measured by income 
to the extent such State or local law recognizes such at-
tributes. Such State or local law may also provide for the 
reduction of other attributes to the extent that the full 
amount of income from the discharge of indebtedness has 
not been applied. 
‘‘(k)(1) Except as provided in this section and section 
505, the time and manner of filing tax returns and the 
items of income, gain, loss, deduction, and credit of any 
taxpayer shall be determined under applicable nonbank-
ruptcy law. 
‘‘(2) For Federal tax purposes, the provisions of this 
section are subject to the Internal Revenue Code of 1986 
and other applicable Federal nonbankruptcy law.’’.
275
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 3 of title 11, United States Code, is 
amended by striking the item relating to section 346 
and inserting the following:
‘‘346. Special provisions related to the treatment of State and local taxes.’’.
(b) CONFORMING
AMENDMENTS.—Title 11 of the 
United States Code is amended—
(1) by striking section 728; 
(2) in the table of sections for chapter 7 by strik-
ing the item relating to section 728; 
(3) in section 1146—
(A) by striking subsections (a) and (b); and 
(B) by redesignating subsections (c) and (d) 
as subsections (a) and (b), respectively; and 
(4) in section 1231—
(A) by striking subsections (a) and (b); and 
(B) by redesignating subsections (c) and (d) 
as subsections (a) and (b), respectively. 
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RE-
TURNS. 
Section 521 of title 11, United States Code, as amend-
ed by sections 106, 225, 305, 315, and 316, is amended by 
adding at the end the following: 
‘‘(j)(1) Notwithstanding any other provision of this 
title, if the debtor fails to file a tax return that becomes 
due after the commencement of the case or to properly ob-
276
tain an extension of the due date for filing such return, 
the taxing authority may request that the court enter an 
order converting or dismissing the case. 
‘‘(2) If the debtor does not file the required return or 
obtain the extension referred to in paragraph (1) within 
90 days after a request is filed by the taxing authority 
under that paragraph, the court shall convert or dismiss 
the case, whichever is in the best interests of creditors and 
the estate.’’. 
TITLE VIII—ANCILLARY AND 
OTHER CROSS-BORDER CASES 
SEC. 801. 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.
277
‘‘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 
‘‘1515. Application for recognition. 
‘‘1516. Presumptions concerning recognition. 
‘‘1517. Order granting recognition. 
‘‘1518. Subsequent information. 
‘‘1519. Relief that may be granted upon filing petition for recognition. 
‘‘1520. Effects of recognition of a foreign main proceeding. 
‘‘1521. Relief that may be granted upon recognition. 
‘‘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 ef-
fective mechanisms for dealing with cases of cross-border in-
solvency with the objectives of—
‘‘(1) cooperation between—
‘‘(A) courts of the United States, United 
States trustees, trustees, examiners, debtors, and 
debtors in possession; and
278
‘‘(B) the courts and other competent au-
thorities of foreign countries involved in cross-
border insolvency cases; 
‘‘(2) greater legal certainty for trade and invest-
ment; 
‘‘(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 trou-
bled 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 connec-
tion 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 pending con-
currently; or 
‘‘(4) creditors or other interested persons in a 
foreign country have an interest in requesting the
279
commencement of, or participating in, a case or pro-
ceeding under this title. 
‘‘(c) This chapter does not apply to—
‘‘(1) a proceeding concerning an entity, other 
than a foreign insurance company, identified by ex-
clusion in section 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 perma-
nent residence in the United States; or 
‘‘(3) an entity subject to a proceeding under the 
Securities Investor Protection Act of 1970, a stock-
broker 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 chapter 
with respect to any deposit, escrow, trust fund, or other se-
curity required or permitted under any applicable State in-
surance 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—
280
‘‘(1) ‘debtor’ means an entity that is the subject 
of a foreign proceeding; 
‘‘(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 au-
thority competent to control or supervise a foreign 
proceeding; 
‘‘(4) ‘foreign main proceeding’ means a foreign 
proceeding pending 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, pending in a country where the debtor has 
an establishment; 
‘‘(6) ‘trustee’ includes a trustee, a debtor in pos-
session in a case under any chapter of this title, or 
a debtor under chapter 9 of this title; 
‘‘(7) ‘recognition’ means the entry of an order 
granting recognition of a foreign main proceeding or 
foreign nonmain proceeding under this chapter; and 
‘‘(8) ‘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
281
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. 
‘‘§ 1503. International obligations of the United States 
‘‘To the extent that this chapter conflicts with an obli-
gation 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 refus-
ing to take an action governed by this chapter if the action
282
would be manifestly contrary to the public policy of the 
United States. 
‘‘§ 1507. Additional assistance 
‘‘(a) Subject to the specific limitations stated elsewhere 
in this chapter the court, if recognition is granted, may 
provide additional assistance 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 as-
sistance, consistent with the principles of comity, will rea-
sonably 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 dis-
positions of property of the debtor; 
‘‘(4) distribution of proceeds of the debtor’s prop-
erty substantially in accordance with the order pre-
scribed 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.
283
‘‘§ 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 application 
of similar statutes adopted by foreign jurisdictions. 
‘‘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 by filing directly with the court a peti-
tion for recognition of a foreign proceeding under section 
1515. 
‘‘(b) If the court grants recognition under section 1515, 
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 other than 
the court which granted recognition shall be accompanied
284
by a certified copy of an order granting recognition under 
section 1517. 
‘‘(d) If the court denies recognition under this chapter, 
the court may issue any appropriate order necessary to pre-
vent the foreign representative from obtaining comity or co-
operation from courts in the United States. 
‘‘(e) Whether or not the court grants recognition, and 
subject to sections 306 and 1510, 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 States 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 peti-
tion under section 1515 does not subject the foreign rep-
resentative 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
285
‘‘(2) a voluntary case under section 301 or 302, 
if the foreign proceeding is a foreign main proceeding. 
‘‘(b) The petition commencing a case under subsection 
(a) must be accompanied by a certified copy of an order 
granting recognition. The court where the petition for rec-
ognition has been filed must be advised of the foreign rep-
resentative’s intent to commence a case under subsection (a) 
prior to such commencement. 
‘‘§ 1512. Participation of a foreign representative in a 
case under this title 
‘‘Upon recognition of a foreign proceeding, the foreign 
representative in the recognized proceeding is entitled to 
participate as a party in interest in a case regarding the 
debtor 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, except that the claim of a foreign creditor 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 creditor.
286
‘‘(2)(A) Subsection (a) and paragraph (1) do not 
change or codify present law as to the allowability of foreign 
revenue claims or other foreign public law claims in a pro-
ceeding 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 condi-
tions 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 letter or other formality is required. 
‘‘(c) When a notification of commencement of a case 
is to be given to foreign creditors, such notification shall—
287
‘‘(1) indicate the time period for filing proofs of 
claim and specify the place for filing such proofs of 
claim; 
‘‘(2) indicate whether secured creditors need to 
file proofs of claim; and 
‘‘(3) contain any other information required to 
be included in such 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 proof of claim shall provide such 
additional 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 
‘‘(a) A foreign representative applies to the court for 
recognition of a foreign proceeding in which the foreign rep-
resentative has been appointed by filing a petition for rec-
ognition. 
‘‘(b) A petition for recognition shall be accompanied 
by—
‘‘(1) a certified copy of the decision commencing 
such foreign proceeding and appointing the foreign 
representative;
288
‘‘(2) a certificate from the foreign court affirm-
ing the existence of such 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 acceptable 
to the court of the existence of such foreign proceeding 
and of the appointment of the foreign representative. 
‘‘(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 rep-
resentative. 
‘‘(d) The documents referred to in paragraphs (1) and 
(2) of subsection (b) shall be translated into English. The 
court may require a translation into English of additional 
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 and that the person or body is a foreign rep-
resentative, the court is entitled to so presume. 
‘‘(b) The court is entitled to presume that documents 
submitted in support of the petition for recognition are au-
thentic, 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
289
of an individual, is presumed to be the center of the debtor’s 
main interests. 
‘‘§ 1517. Order granting recognition 
‘‘(a) Subject to section 1506, after notice and a hear-
ing, an order recognizing a foreign proceeding shall be en-
tered if—
‘‘(1) such foreign proceeding for which recogni-
tion is sought 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; and 
‘‘(3) the petition meets the requirements of sec-
tion 1515. 
‘‘(b) Such foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is pend-
ing in the country where the debtor has the center of 
its main interests; or 
‘‘(2) as a foreign nonmain proceeding if the debt-
or has an establishment within the meaning of section 
1502 in the foreign country where the proceeding is 
pending. 
‘‘(c) A petition for recognition of a foreign proceeding 
shall be decided upon at the earliest possible time. Entry
290
of an order recognizing a foreign proceeding constitutes rec-
ognition 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 lack-
ing or have ceased to exist, but in considering such action 
the court shall give due weight to possible prejudice to par-
ties that have relied upon the order granting recognition. 
A case under this chapter may be closed in the manner pre-
scribed under section 350. 
‘‘§ 1518. Subsequent information 
‘‘From the time of filing the petition for recognition 
of a foreign proceeding, the foreign representative shall file 
with the court promptly a notice of change of status con-
cerning—
‘‘(1) any substantial change in the status of such 
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 representa-
tive. 
‘‘§ 1519. Relief that may be granted upon filing peti-
tion for recognition 
‘‘(a) From the time of filing a petition for recognition 
until the court rules on the petition, the court may, at the
291
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 nature, includ-
ing—
‘‘(1) staying execution against the debtor’s assets; 
‘‘(2) entrusting the administration or realization 
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 exam-
iner, in order to protect and preserve the value of as-
sets that, by their nature or because of other cir-
cumstances, are perishable, susceptible to devaluation 
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 re-
lief granted under this section terminates when the petition 
for recognition is granted. 
‘‘(c) It is a ground for denial of relief under this sec-
tion that such relief would interfere with the administration 
of a foreign main 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.
292
‘‘(e) The standards, procedures, and limitations appli-
cable to an injunction shall apply to relief under this sec-
tion. 
‘‘(f) The exercise of rights not subject to the stay aris-
ing under section 362(a) pursuant to paragraph (6), (7), 
(17), or (27) of section 362(b) or pursuant to section 362(n) 
shall not be stayed by any order of a court or administra-
tive agency in any proceeding under this chapter. 
‘‘§ 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 apply with respect to 
the debtor and the property of the debtor that is with-
in the territorial jurisdiction of the United States; 
‘‘(2) sections 363, 549, and 552 apply to a trans-
fer of an interest of the debtor in property that is 
within the territorial jurisdiction of the United States 
to the same extent that the sections would apply to 
property of an estate; 
‘‘(3) unless the court orders otherwise, the foreign 
representative may operate the debtor’s business and 
may exercise the rights and powers of a trustee under 
and to the extent provided by sections 363 and 552; 
and
293
‘‘(4) section 552 applies to property of the debtor 
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 foreign 
representative or an entity to file a petition commencing 
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 
‘‘(a) Upon recognition of a foreign proceeding, whether 
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 appropriate 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);
294
‘‘(2) staying execution against the debtor’s assets 
to the extent it has not been stayed under section 
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 realization 
of all or part of the debtor’s assets within the terri-
torial jurisdiction of the United States to the foreign 
representative or another person, including an exam-
iner, 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, whether 
main or nonmain, the court may, at the request of the for-
eign representative, entrust the distribution of all or part 
of the debtor’s assets located in the United States to the for-
295
eign representative or another person, including an exam-
iner, authorized by the court, provided that the court is sat-
isfied 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 administered in the for-
eign nonmain proceeding or concerns information 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 appli-
cable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a). 
‘‘(f) The exercise of rights not subject to the stay aris-
ing under section 362(a) pursuant to paragraph (6), (7), 
(17), or (27) of section 362(b) or pursuant to section 362(n) 
shall not be stayed by any order of a court or administra-
tive agency in any proceeding under this chapter. 
‘‘§ 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 subsection
296
(c), only if the interests of the creditors and other interested 
entities, including the debtor, are sufficiently protected. 
‘‘(b) The court may subject relief granted under section 
1519 or 1521, or the operation of the debtor’s business under 
section 1520(a)(3), 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 sec-
tion 1519 or 1521, or at its own motion, modify or termi-
nate 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 for-
eign 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, 553, 
and 724(a). 
‘‘(b) When a 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 pro-
ceeding.
297
‘‘§ 1524. Intervention by a foreign representative 
‘‘Upon recognition of a foreign proceeding, the foreign 
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 a foreign court 
or a foreign representative, either directly or through the 
trustee. 
‘‘(b) The court is entitled to communicate directly 
with, or to request information or assistance directly from, 
a foreign court or a foreign representative, subject to the 
rights of a party 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, cooperate to
298
the maximum extent possible with a foreign court or a for-
eign representative. 
‘‘(b) The trustee or other person, including an exam-
iner, authorized by the court is entitled, subject to the super-
vision of the court, to communicate directly with a foreign 
court or a foreign representative. 
‘‘§ 1527. Forms of cooperation 
‘‘Cooperation referred to in sections 1525 and 1526 
may be implemented by any appropriate means, includ-
ing—
‘‘(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. 
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 
‘‘§ 1528. Commencement of a case under this title after 
recognition of a foreign main proceeding 
‘‘After recognition of a foreign main proceeding, a case 
under another chapter of this title may be commenced only
299
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 
‘‘If a foreign proceeding and a case under another 
chapter of this title are pending concurrently regarding the 
same debtor, the court shall seek cooperation and coordina-
tion under sections 1525, 1526, and 1527, and the following 
shall apply: 
‘‘(1) If the case in the United States pending at 
the time the petition for recognition of such foreign 
proceeding is filed—
‘‘(A) any relief granted under section 1519 
or 1521 must be consistent with the relief grant-
ed in the case in the United States; and
300
‘‘(B) section 1520 does not apply even if 
such foreign proceeding is recognized as a foreign 
main proceeding. 
‘‘(2) If a case in the United States under this 
title commences after recognition, or after the date of 
the filing of the petition for recognition, of such for-
eign proceeding—
‘‘(A) any relief in effect under section 1519 
or 1521 shall be reviewed by the court and shall 
be modified or terminated if inconsistent with 
the case in the United States; and 
‘‘(B) if such 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 granted 
in the case in the United States. 
‘‘(3) In granting, extending, or modifying relief 
granted to a representative of a foreign nonmain pro-
ceeding, the court must be satisfied that the relief re-
lates to assets that, under the laws of the United 
States, should be administered in the foreign nonmain 
proceeding or concerns information required in that 
proceeding.
301
‘‘(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 proceeding 
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 re-
lief in effect under section 1519 or 1521 shall be re-
viewed by the court and shall be modified or termi-
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 terminate 
relief for the purpose of facilitating coordination of 
the proceedings.
302
‘‘§ 1531. Presumption of insolvency based on recogni-
tion of a foreign main proceeding 
‘‘In the absence of evidence to the contrary, recognition 
of a foreign main proceeding is, for the purpose of com-
mencing 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 regarding 
the debtor, so long as the payment to other creditors of the 
same class is proportionately less than the payment the 
creditor has already received.’’. 
(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. 802. 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,
303
362(n), 555 through 557, and 559 through 562 apply 
in a case under chapter 15’’; and 
(2) by adding at the end the following: 
‘‘(k) 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.—Section 101 of title 11, United 
States Code, is amended by striking paragraphs (23) and 
(24) and inserting the following: 
‘‘(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 sub-
ject 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 in-
terim basis, authorized in a foreign proceeding to ad-
minister the reorganization or the liquidation of the 
debtor’s assets or affairs or to act as a representative 
of such foreign proceeding;’’.
304
(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.’’. 
(2) BANKRUPTCY
CASES
AND
PROCEEDINGS.—
Section 1334(c) of title 28, United States Code, is 
amended by striking ‘‘Nothing in’’ and inserting ‘‘Ex-
cept with respect to a case under chapter 15 of title 
11, nothing in’’. 
(3) DUTIES OF TRUSTEES.—Section 586(a)(3) of 
title 28, United States Code, is amended by striking 
‘‘or 13’’ and inserting ‘‘13, or 15’’. 
(4) VENUE OF CASES ANCILLARY TO FOREIGN 
PROCEEDINGS.—Section 1410 of title 28, United 
States Code, is amended to read as follows:
305
‘‘§ 1410. Venue of cases ancillary to foreign pro-
ceedings 
‘‘A case under chapter 15 of title 11 may be com-
menced in the district court of the United States for the 
district—
‘‘(1) in which the debtor has its principal place 
of business or principal assets in the United States; 
‘‘(2) if the debtor does not have a place of busi-
ness or assets in the United States, in which there is 
pending against the debtor an action or proceeding in 
a Federal or State court; or 
‘‘(3) in a case other than those specified in para-
graph (1) or (2), in which venue will be consistent 
with the interests of justice and the convenience of the 
parties, having regard to the relief sought by the for-
eign representative.’’. 
(d) OTHER SECTIONS OF TITLE 11.—Title 11 of the 
United States Code is amended—
(1) in section 109(b), by striking paragraph (3) 
and inserting the following: 
‘‘(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, that has a branch or
306
agency (as defined in section 1(b) of the International 
Banking Act of 1978 in the United States.’’; 
(2) in section 303, by striking subsection (k); 
(3) by striking section 304; 
(4) in the table of sections for chapter 3 by strik-
ing the item relating to section 304; 
(5) in section 306 by striking ‘‘, 304,’’ each place 
it appears; 
(6) in section 305(a) by striking paragraph (2) 
and inserting the following: 
‘‘(2)(A) a petition under section 1515 for rec-
ognition 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.’’; and 
(7) in section 508—
(A) by striking subsection (a); and 
(B) in subsection (b), by striking ‘‘(b)’’.
307
TITLE IX—FINANCIAL CONTRACT 
PROVISIONS 
SEC. 901. 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) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(8)(D)) is amended— 
(1) by striking ‘‘subsection—’’ and inserting 
‘‘subsection, the following definitions shall apply:’’; 
and 
(2) in clause (i), by inserting ‘‘, resolution, or 
order’’ after ‘‘any similar agreement that the Cor-
poration determines by regulation’’. 
(b) DEFINITION OF SECURITIES CONTRACT.—Section 
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 follows: 
‘‘(ii) 
SECURITIES
CONTRACT.—The 
term ‘securities contract’—
‘‘(I) means a contract for the pur-
chase, sale, or loan of a security, a cer-
tificate of deposit, a mortgage loan, or 
any interest in a mortgage loan, a 
group or index of securities, certificates 
of deposit, or mortgage loans or inter-
308
ests therein (including any interest 
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 de-
posit, mortgage loan, interest, group or 
index, or option, and including any re-
purchase or reverse repurchase trans-
action on any such security, certificate 
of deposit, mortgage 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 agreement 
within the meaning of such term; 
‘‘(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
309
interests therein, group or index of se-
curities, certificates of deposit, or mort-
gage loans or interests therein (includ-
ing 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 security, cer-
tificate of deposit, mortgage loan, in-
terest, group or index, or option; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agreement 
or transaction that is similar to any 
agreement or transaction referred to in 
this clause; 
‘‘(VII) means any combination of 
the agreements or transactions referred 
to in this clause; 
‘‘(VIII) means any option to enter 
into any agreement or transaction re-
ferred 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
310
such master agreement, without regard 
to whether the master agreement pro-
vides for an agreement or transaction 
that is not a securities contract under 
this clause, except that the master 
agreement shall be considered to be a 
securities contract under this clause 
only with respect to each agreement or 
transaction under the master agree-
ment 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 agreement 
or transaction referred to in this 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause.’’. 
(c) DEFINITION OF COMMODITY CONTRACT.—Section 
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 follows: 
‘‘(iii) 
COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means—
311
‘‘(I) with respect to a futures com-
mission merchant, a contract for the 
purchase or sale of a commodity for fu-
ture 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 trans-
action; 
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for future 
delivery on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing organi-
zation, or commodity option traded on, 
or subject to the rules of, a contract 
market or board of trade that is 
cleared by such clearing organization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any
312
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, without regard 
to whether the master agreement pro-
vides for an agreement or transaction 
that is not a commodity contract 
under this clause, except that the mas-
ter agreement shall be considered to be 
a commodity contract under this clause 
only with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subclause 
(I), (II), (III), (IV), (V), (VI), (VII), or 
(VIII); or
313
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
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 com-
modity 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 fu-
ture becomes the subject of 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, 
a repurchase transaction, reverse re-
purchase 
transaction, 
consignment,
314
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 
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
315
‘‘(V) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause (I), 
(II), (III), or (IV), including any 
guarantee or reimbursement obligation 
in connection with any agreement or 
transaction referred to in any such 
subclause.’’. 
(e) DEFINITION OF REPURCHASE AGREEMENT.—Sec-
tion 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) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certificates 
of deposit, mortgage-related securities 
(as such term is defined in the Securi-
ties Exchange Act of 1934), mortgage 
loans, interests in mortgage-related se-
curities or mortgage loans, eligible 
bankers’ acceptances, qualified foreign
316
government securities or securities that 
are direct obligations of, or that are 
fully guaranteed by, the United States 
or any agency of the United States 
against the transfer of funds by the 
transferee of such certificates of de-
posit, eligible bankers’ acceptances, se-
curities, mortgage loans, or interests 
with a simultaneous agreement by such 
transferee to transfer to the transferor 
thereof certificates of deposit, eligible 
bankers’ acceptances, securities, mort-
gage loans, or interests as described 
above, at a date certain not later than 
1 year after such transfers or on de-
mand, against the transfer of funds, or 
any other similar agreement; 
‘‘(II) does not include any repur-
chase obligation under a participation 
in a commercial mortgage loan unless 
the Corporation determines by regula-
tion, resolution, or order to include 
any such participation within the 
meaning of such term;
317
‘‘(III) means any combination of 
agreements or transactions referred to 
in subclauses (I) and (IV); 
‘‘(IV) means any option to enter 
into any agreement or transaction re-
ferred to in subclause (I) or (III); 
‘‘(V) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause (I), 
(III), or (IV), 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 repurchase 
agreement under this clause, except 
that the master agreement shall be con-
sidered to be a repurchase agreement 
under this subclause only with respect 
to each agreement or transaction under 
the master agreement that is referred to 
in subclause (I), (III), or (IV); and 
‘‘(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agreement 
or transaction referred to in subclause
318
(I), (III), (IV), or (V), including any 
guarantee or reimbursement obligation 
in connection with any agreement or 
transaction referred to in any such 
subclause. 
For purposes of this clause, the term ‘quali-
fied foreign government security’ means a 
security that is a direct obligation of, or 
that is fully guaranteed by, the central gov-
ernment of a member of the Organization 
for Economic Cooperation and Development 
(as determined by regulation or order 
adopted by the appropriate Federal banking 
authority).’’. 
(f) DEFINITION
OF
SWAP
AGREEMENT.—Section 
11(e)(8)(D)(vi) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows: 
‘‘(vi) SWAP
AGREEMENT.—The term 
‘swap agreement’ means—
‘‘(I) any agreement, including the 
terms and conditions incorporated by 
reference in any such agreement, which 
is an interest rate swap, option, future, 
or forward agreement, including a rate 
floor, rate cap, rate collar, cross-cur-
319
rency rate swap, and basis swap; a 
spot, same day-tomorrow, tomorrow-
next, forward, or other foreign ex-
change or precious metals agreement; a 
currency swap, option, future, or for-
ward agreement; an equity index or eq-
uity swap, option, future, or forward 
agreement; a debt index or debt swap, 
option, future, or forward agreement; a 
total return, credit spread or credit 
swap, option, future, or forward agree-
ment; a commodity index or com-
modity swap, option, future, or for-
ward agreement; or a weather swap, 
weather derivative, or weather option; 
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to in 
this clause and that is of a type that 
has been, is presently, or in the future 
becomes, the subject of recurrent deal-
ings in the swap markets (including 
terms and conditions incorporated by 
reference in such agreement) and that 
is a forward, swap, future, or option
320
on one or more rates, currencies, com-
modities, equity securities or other eq-
uity instruments, debt securities or 
other debt instruments, quantitative 
measures associated with an occur-
rence, extent of an occurrence, or con-
tingency associated with a financial, 
commercial, or economic consequence, 
or economic or financial indices or 
measures of economic or financial risk 
or value; 
‘‘(III) any combination of agree-
ments or transactions referred to in 
this clause; 
‘‘(IV) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(V) a master agreement that pro-
vides for an agreement or transaction 
referred to in subclause (I), (II), (III), 
or (IV), together with all supplements 
to any such master agreement, without 
regard to whether the master agreement 
contains an agreement or transaction 
that is not a swap agreement under
321
this clause, except that the master 
agreement shall be considered to be a 
swap agreement under this clause only 
with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subclause 
(I), (II), (III), or (IV); and 
‘‘(VI) any security agreement or 
arrangement or other credit enhance-
ment related to any agreements or 
transactions referred to in subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
Such term is applicable for purposes of this 
subsection only and shall not be construed 
or applied so as to challenge or affect the 
characterization, definition, or treatment of 
any swap agreement under any other stat-
ute, regulation, or rule, including the Secu-
rities Act of 1933, the Securities Exchange 
Act of 1934, the Public Utility Holding 
Company Act of 1935, the Trust Indenture
322
Act of 1939, the Investment Company Act of 
1940, the Investment Advisers Act of 1940, 
the Securities Investor Protection Act of 
1970, the Commodity Exchange Act, the 
Gramm-Leach-Bliley Act, and the Legal 
Certainty for Bank Products Act of 2000.’’. 
(g) 
DEFINITION
OF
TRANSFER.—Section 
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows: 
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ means every mode, direct or indirect, 
absolute or conditional, voluntary or invol-
untary, of disposing of or parting with 
property or with an interest in property, 
including retention of title as a security in-
terest and foreclosure of the depository insti-
tution’s equity of redemption.’’. 
(h) TREATMENT
OF
QUALIFIED
FINANCIAL
CON-
TRACTS.—Section 11(e)(8) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(e)(8)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘paragraph (10)’’ and in-
serting ‘‘paragraphs (9) and (10)’’; 
(B) in clause (i), by striking ‘‘to cause the 
termination or liquidation’’ and inserting ‘‘such
323
person has to cause the termination, liquidation, 
or acceleration’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to one or more quali-
fied financial contracts described in clause 
(i);’’; and 
(2) in subparagraph (E), by striking clause (ii) 
and inserting the following: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to one or more quali-
fied financial contracts described in clause 
(i);’’. 
(i) 
AVOIDANCE
OF
TRANSFERS.—Section 
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section 
5242 of the Revised Statutes of the United States or any 
other Federal or State law relating to the avoidance of pref-
erential or fraudulent transfers,’’ before ‘‘the Corporation’’.
324
SEC. 902. AUTHORITY OF THE CORPORATION WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS. 
(a) IN GENERAL.—Section 11(e)(8) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)) is amended—
(1) in subparagraph (E), by striking ‘‘other than 
paragraph (12) of this subsection, subsection (d)(9)’’ 
and inserting ‘‘other than subsections (d)(9) and 
(e)(10)’’; and 
(2) by adding at the end the following new sub-
paragraphs: 
‘‘(F) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or power 
of the Corporation, or authorizing any court or 
agency to limit or delay, in any manner, the 
right or power of the Corporation to transfer any 
qualified financial contract in accordance with 
paragraphs (9) and (10) of this subsection or to 
disaffirm or repudiate any such contract in ac-
cordance with subsection (e)(1) of this section. 
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.—
‘‘(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraphs (A) and 
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
325
provement Act of 1991, no walkaway clause 
shall be enforceable in a qualified financial 
contract of an insured depository institu-
tion in default. 
‘‘(ii) WALKAWAY CLAUSE DEFINED.—
For purposes of this subparagraph, the term 
‘walkaway clause’ means a provision in a 
qualified financial contract that, after cal-
culation of a value of a party’s position or 
an amount due to or from 1 of the parties 
in accordance with its terms upon termi-
nation, liquidation, or acceleration of the 
qualified financial contract, either does not 
create a payment obligation of a party or 
extinguishes a payment obligation of a 
party in whole or in part solely because of 
such party’s status as a nondefaulting 
party.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.—Sec-
tion 11(e)(12)(A) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(12)(A)) is amended by inserting ‘‘or the ex-
ercise of rights or powers by’’ after ‘‘the appointment of’’.
326
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF 
QUALIFIED FINANCIAL CONTRACTS. 
(a) TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS 
TO FINANCIAL INSTITUTIONS.—Section 11(e)(9) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1821(e)(9)) is 
amended to read as follows: 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
‘‘(A) IN GENERAL.—In making any transfer 
of assets or liabilities of a depository institution 
in default which includes any qualified financial 
contract, the conservator or receiver for such de-
pository institution shall either—
‘‘(i) transfer to one financial institu-
tion, other than a financial institution for 
which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has 
been appointed or which is otherwise the 
subject of a bankruptcy or insolvency pro-
ceeding—
‘‘(I) all qualified financial con-
tracts between any person or any affil-
iate of such person and the depository 
institution in default; 
‘‘(II) all claims of such person or 
any affiliate of such person against
327
such depository institution under any 
such contract (other than any claim 
which, under the terms of any such 
contract, is subordinated to the claims 
of general unsecured creditors of such 
institution); 
‘‘(III) all claims of such deposi-
tory institution against such person or 
any affiliate of such person under any 
such contract; and 
‘‘(IV) all property securing or any 
other credit enhancement for any con-
tract described in subclause (I) or any 
claim described in subclause (II) or 
(III) under any such contract; or 
‘‘(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other 
credit enhancement referred to in clause (i) 
(with respect to such person and any affil-
iate of such person).
‘‘(B) TRANSFER TO FOREIGN BANK, FOR-
EIGN
FINANCIAL
INSTITUTION, OR
BRANCH
OR 
AGENCY OF A FOREIGN BANK OR FINANCIAL IN-
STITUTION.—In transferring any qualified fi-
nancial contracts and related claims and prop-
328
erty under subparagraph (A)(i), the conservator 
or receiver for the depository institution shall 
not make such transfer to a foreign bank, finan-
cial institution organized under the laws of a 
foreign country, or a branch or agency of a for-
eign bank or financial institution unless, under 
the law applicable to such bank, financial insti-
tution, branch or agency, to the qualified finan-
cial contracts, and to any netting contract, any 
security agreement or arrangement or other cred-
it enhancement related to one or more qualified 
financial contracts, the contractual rights of the 
parties to such qualified financial contracts, net-
ting contracts, security agreements or arrange-
ments, or other credit enhancements are enforce-
able substantially to the same extent as per-
mitted under this section. 
‘‘(C) TRANSFER OF CONTRACTS SUBJECT TO 
THE RULES OF A CLEARING ORGANIZATION.—In 
the event that a conservator or receiver transfers 
any qualified financial contract and related 
claims, property, and credit enhancements pur-
suant to subparagraph (A)(i) and such contract 
is cleared by or subject to the rules of a clearing 
organization, the clearing organization shall not
329
be required to accept the transferee as a member 
by virtue of the transfer. 
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph, the term ‘financial institution’ 
means a broker or dealer, a depository institu-
tion, a futures commission merchant, or any 
other institution, as determined by the Corpora-
tion by regulation to be a financial institution, 
and the term ‘clearing organization’ has the 
same meaning as in section 402 of the Federal 
Deposit Insurance Corporation Improvement Act 
of 1991.’’. 
(b) NOTICE
TO QUALIFIED FINANCIAL CONTRACT 
COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is 
amended in the material immediately following clause (ii) 
by striking ‘‘the conservator’’ and all that follows through 
the period and inserting the following: ‘‘the conservator or 
receiver shall notify any person who is a party to any such 
contract of such transfer by 5:00 p.m. (eastern time) on the 
business day following the date of the appointment of the 
receiver in the case of a receivership, or the business day 
following such transfer in the case of a conservatorship.’’.
330
(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF 
BRIDGE BANKS.—Section 11(e)(10) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(e)(10)) is amended—
(1) by redesignating subparagraph (B) as sub-
paragraph (D); and 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraphs: 
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
‘‘(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with an insured depository institution may 
not exercise any right that such person has 
to terminate, liquidate, or net such contract 
under paragraph (8)(A) of this subsection 
or section 403 or 404 of the Federal Deposit 
Insurance Corporation Improvement Act of 
1991, solely by reason of or incidental to the 
appointment of a receiver for the depository 
institution (or the insolvency or financial 
condition of the depository institution for 
which the receiver has been appointed)—
‘‘(I) until 5:00 p.m. (eastern time) 
on the business day following the date 
of the appointment of the receiver; or
331
‘‘(II) after the person has received 
notice that the contract has been trans-
ferred pursuant to paragraph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A person 
who is a party to a qualified financial con-
tract with an insured depository institution 
may not exercise any right that such person 
has to terminate, liquidate, or net such con-
tract under paragraph (8)(E) of this sub-
section or section 403 or 404 of the Federal 
Deposit Insurance Corporation Improve-
ment Act of 1991, solely by reason of or in-
cidental to the appointment of a conservator 
for the depository institution (or the insol-
vency or financial condition of the deposi-
tory institution for which the conservator 
has been appointed). 
‘‘(iii) NOTICE.—For purposes of this 
paragraph, 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 rea-
sonably calculated to provide notice to such
332
person by the time specified in subpara-
graph (A). 
‘‘(C) TREATMENT OF BRIDGE BANKS.—The 
following institutions shall not be considered to 
be a financial institution for which a conser-
vator, receiver, trustee in bankruptcy, or other 
legal custodian has been appointed or which is 
otherwise the subject of a bankruptcy or insol-
vency proceeding for purposes of paragraph (9): 
‘‘(i) A bridge bank. 
‘‘(ii) A depository institution orga-
nized by the Corporation, for which a con-
servator is appointed either—
‘‘(I) immediately upon the organi-
zation of the institution; or 
‘‘(II) at the time of a purchase 
and assumption transaction between 
the depository institution and the Cor-
poration as receiver for a depository 
institution in default.’’. 
SEC. 904. 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 amended—
333
(1) by redesignating paragraphs (11) through 
(15) as paragraphs (12) through (16), respectively; 
(2) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED FINANCIAL CONTRACTS.—In exercising the 
rights of disaffirmance or repudiation of a conser-
vator or receiver with respect to any qualified finan-
cial contract to which an insured depository institu-
tion is a party, the conservator or receiver for such 
institution shall either—
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of such 
person; and 
‘‘(ii) the depository institution in de-
fault; or 
‘‘(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person).’’; and 
(3) by adding at the end the following new para-
graph: 
‘‘(17) SAVINGS CLAUSE.—The meanings of terms 
used in this subsection are applicable for purposes of
334
this subsection only, and shall not be construed or ap-
plied so as to challenge or affect the characterization, 
definition, or treatment of any similar terms under 
any other statute, regulation, or rule, including the 
Gramm-Leach-Bliley Act, the Legal Certainty for 
Bank Products Act of 2000, the securities laws (as 
that term is defined in section 3(a)(47) of the Securi-
ties Exchange Act of 1934), and the Commodity Ex-
change Act.’’. 
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER 
AGREEMENTS. 
Section 11(e)(8)(D)(vii) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read 
as follows: 
‘‘(vii) TREATMENT OF MASTER AGREE-
MENT
AS
ONE
AGREEMENT.—Any master 
agreement for any contract or agreement de-
scribed in any preceding clause of this sub-
paragraph (or any master agreement for 
such master agreement or agreements), to-
gether with all supplements to such master 
agreement, shall be treated as a single 
agreement and a single qualified financial 
contract. If a master agreement contains 
provisions relating to agreements or trans-
335
actions that are not themselves qualified fi-
nancial contracts, the master agreement 
shall be deemed to be a qualified financial 
contract only with respect to those trans-
actions that are themselves qualified finan-
cial contracts.’’.
SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION IM-
PROVEMENT ACT OF 1991. 
(a) DEFINITIONS.—Section 402 of the Federal Deposit 
Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
4402) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A)(ii), by inserting 
before the semicolon ‘‘, or is exempt from such 
registration by order of the Securities and Ex-
change Commission’’; and 
(B) in subparagraph (B), by inserting be-
fore the period ‘‘, that has been granted an ex-
emption under section 4(c)(1) of the Commodity 
Exchange Act, or that is a multilateral clearing 
organization (as defined in section 408 of this 
Act)’’; 
(2) in paragraph (6)—
336
(A) by redesignating subparagraphs (B) 
through (D) as subparagraphs (C) through (E), 
respectively; 
(B) by inserting after subparagraph (A) the 
following new subparagraph: 
‘‘(B) an uninsured national bank or an un-
insured State bank that is a member of the Fed-
eral Reserve System, if the national bank or 
State member bank is not eligible to make appli-
cation to become an insured bank under section 
5 of the Federal Deposit Insurance Act;’’; and 
(C) by amending subparagraph (C), so re-
designated, to read as follows: 
‘‘(C) a branch or agency of a foreign bank, 
a foreign bank and any branch or agency of the 
foreign bank, or the foreign bank that established 
the branch or agency, as those terms are defined 
in section 1(b) of the International Banking Act 
of 1978;’’; 
(3) in paragraph (11), by inserting before the pe-
riod ‘‘and any other clearing organization with which 
such clearing organization has a netting contract’’; 
(4) by amending paragraph (14)(A)(i) to read as 
follows:
337
‘‘(i) means a contract or agreement be-
tween 2 or more financial institutions, 
clearing organizations, or members that 
provides for netting present or future pay-
ment obligations or payment entitlements 
(including liquidation or close out values 
relating to such obligations or entitlements) 
among the parties to the agreement; and’’; 
and 
(5) by adding at the end the following new para-
graph: 
‘‘(15) PAYMENT.—The term ‘payment’ means a 
payment of United States dollars, another currency, 
or a composite currency, and a noncash delivery, in-
cluding a payment or delivery to liquidate an 
unmatured obligation.’’. 
(b) ENFORCEABILITY OF BILATERAL NETTING CON-
TRACTS.—Section 403 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4403) is 
amended—
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) GENERAL RULE.—Notwithstanding any other 
provision of State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal
338
Deposit Insurance Act or any order authorized under sec-
tion 5(b)(2) of the Securities Investor Protection Act of 
1970), the covered contractual payment obligations and the 
covered contractual payment entitlements between any 2 fi-
nancial institutions shall be netted in accordance with, and 
subject to the conditions of, the terms of any applicable net-
ting contract (except as provided in section 561(b)(2) of 
title 11, United States Code).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) ENFORCEABILITY OF SECURITY AGREEMENTS.—
The provisions of any security agreement or arrangement 
or other credit enhancement related to one or more netting 
contracts between any 2 financial institutions shall be en-
forceable in accordance with their terms (except as provided 
in section 561(b)(2) of title 11, United States Code), and 
shall not be stayed, avoided, or otherwise limited by any 
State or Federal law (other than paragraphs (8)(E), (8)(F), 
and (10)(B) of section 11(e) of the Federal Deposit Insur-
ance Act and section 5(b)(2) of the Securities Investor Pro-
tection Act of 1970).’’. 
(c) ENFORCEABILITY
OF CLEARING ORGANIZATION 
NETTING CONTRACTS.—Section 404 of the Federal Deposit 
Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
4404) is amended—
339
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) GENERAL RULE.—Notwithstanding any other 
provision of State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 
Deposit Insurance Act and any order authorized under sec-
tion 5(b)(2) of the Securities Investor Protection Act of 
1970), the covered contractual payment obligations and the 
covered contractual payment entitlements of a member of 
a clearing organization to and from all other members of 
a clearing organization shall be netted in accordance with 
and subject to the conditions of any applicable netting con-
tract (except as provided in section 561(b)(2) of title 11, 
United States Code).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(h) ENFORCEABILITY OF SECURITY AGREEMENTS.—
The provisions of any security agreement or arrangement 
or other credit enhancement related to one or more netting 
contracts between any 2 members of a clearing organization 
shall be enforceable in accordance with their terms (except 
as provided in section 561(b)(2) of title 11, United States 
Code), and shall not be stayed, avoided, or otherwise limited 
by any State or Federal law (other than paragraphs (8)(E), 
(8)(F), and (10)(B) of section 11(e) of the Federal Deposit
340
Insurance Act and section 5(b)(2) of the Securities Investor 
Protection Act of 1970).’’. 
(d) ENFORCEABILITY
OF CONTRACTS WITH UNIN-
SURED
NATIONAL
BANKS, 
UNINSURED
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNINSURED STATE 
MEMBER BANKS, AND EDGE ACT CORPORATIONS.—The 
Federal Deposit Insurance Corporation Improvement Act 
of 1991 (12 U.S.C. 4401 et seq.) is amended—
(1) by redesignating section 407 as section 407A; 
and 
(2) by inserting after section 406 the following 
new section: 
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED 
NATIONAL 
BANKS, 
UNINSURED 
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNIN-
SURED STATE MEMBER BANKS, AND EDGE 
ACT CORPORATIONS. 
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, paragraphs (8), (9), (10), and (11) of section 
11(e) of the Federal Deposit Insurance Act shall apply to 
an uninsured national bank or uninsured Federal branch 
or Federal agency, a corporation chartered under section 
25A of the Federal Reserve Act, or an uninsured State mem-
ber bank which operates, or operates as, a multilateral
341
clearing organization pursuant to section 409 of this Act, 
except that for such purpose—
‘‘(1) any reference to the ‘Corporation as re-
ceiver’ or ‘the receiver or the Corporation’ shall refer 
to the receiver appointed by the Comptroller of the 
Currency in the case of an uninsured national bank 
or uninsured Federal branch or agency, or to the re-
ceiver appointed by the Board of Governors of the 
Federal Reserve System in the case of a corporation 
chartered under section 25A of the Federal Reserve 
Act or an uninsured State member bank; 
‘‘(2) any reference to the ‘Corporation’ (other 
than in section 11(e)(8)(D) of such Act), the ‘Corpora-
tion, whether acting as such or as conservator or re-
ceiver’, a ‘receiver’, or a ‘conservator’ shall refer to the 
receiver or conservator appointed by the Comptroller 
of the Currency in the case of an uninsured national 
bank or uninsured Federal branch or agency, or to 
the receiver or conservator appointed by the Board of 
Governors of the Federal Reserve System in the case 
of a corporation chartered under section 25A of the 
Federal Reserve Act or an uninsured State member 
bank; and 
‘‘(3) any reference to an ‘insured depository in-
stitution’ or ‘depository institution’ shall refer to an
342
uninsured national bank, an uninsured Federal 
branch or Federal agency, a corporation chartered 
under section 25A of the Federal Reserve Act, or an 
uninsured State member bank which operates, or op-
erates as, a multilateral clearing organization pursu-
ant to section 409 of this Act. 
‘‘(b) LIABILITY.—The liability of a receiver or conser-
vator of an uninsured national bank, uninsured Federal 
branch or agency, a corporation chartered under section 
25A of the Federal Reserve Act, or an uninsured State mem-
ber bank which operates, or operates as, a multilateral 
clearing organization pursuant to section 409 of this Act, 
shall be determined in the same manner and subject to the 
same limitations that apply to receivers and conservators 
of insured depository institutions under section 11(e) of the 
Federal Deposit Insurance Act. 
‘‘(c) REGULATORY AUTHORITY.—
‘‘(1) IN GENERAL.—The Comptroller of the Cur-
rency in the case of an uninsured national bank or 
uninsured Federal branch or agency and the Board of 
Governors of the Federal Reserve System in the case 
of a corporation chartered under section 25A of the 
Federal Reserve Act, or an uninsured State member 
bank that operates, or operates as, a multilateral 
clearing organization pursuant to section 409 of this
343
Act, in consultation with the Federal Deposit Insur-
ance Corporation, may each promulgate regulations 
solely to implement this section. 
‘‘(2) SPECIFIC REQUIREMENT.—In promulgating 
regulations, limited solely to implementing para-
graphs (8), (9), (10), and (11) of section 11(e) of the 
Federal Deposit Insurance Act, the Comptroller of the 
Currency and the Board of Governors of the Federal 
Reserve System each shall ensure that the regulations 
generally are consistent with the regulations and poli-
cies of the Federal Deposit Insurance Corporation 
adopted pursuant to the Federal Deposit Insurance 
Act. 
‘‘(d) DEFINITIONS.—For purposes of this section, the 
terms ‘Federal branch’, ‘Federal agency’, and ‘foreign bank’ 
have the same meanings as in section 1(b) of the Inter-
national Banking Act of 1978.’’. 
SEC. 907. BANKRUPTCY LAW AMENDMENTS. 
(a) DEFINITIONS OF FORWARD CONTRACT, REPUR-
CHASE AGREEMENT, SECURITIES CLEARING AGENCY, SWAP 
AGREEMENT, COMMODITY CONTRACT, AND SECURITIES 
CONTRACT.—Title 11, United States Code, is amended—
(1) in section 101—
(A) in paragraph (25)—
344
(i) by striking ‘‘means a contract’’ and 
inserting ‘‘means—
‘‘(A) a contract’’; 
(ii) by striking ‘‘, or any combination 
thereof or option thereon;’’ and inserting ‘‘, 
or any other similar agreement;’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(B) any combination of agreements or 
transactions referred to in subparagraphs (A) 
and (C); 
‘‘(C) any option to enter into an agreement 
or transaction referred to in subparagraph (A) 
or (B); 
‘‘(D) a master agreement that provides for 
an agreement or transaction referred to in sub-
paragraph (A), (B), or (C), together with all 
supplements to any such master agreement, with-
out regard to whether such master agreement 
provides for an agreement or transaction that is 
not a forward contract under this paragraph, ex-
cept that such master agreement shall be consid-
ered to be a forward contract under this para-
graph only with respect to each agreement or
345
transaction under such master agreement that is 
referred to in subparagraph (A), (B), or (C); or 
‘‘(E) any security agreement or arrange-
ment, or other credit enhancement related to any 
agreement or transaction referred to in subpara-
graph (A), (B), (C), or (D), including any guar-
antee or reimbursement obligation by or to a for-
ward contract merchant or financial participant 
in connection with any agreement or transaction 
referred to in any such subparagraph, but not to 
exceed the damages in connection with any such 
agreement or transaction, measured in accord-
ance with section 562;’’; 
(B) in paragraph (46), by striking ‘‘on any 
day during the period beginning 90 days before 
the date of’’ and inserting ‘‘at any time before’’; 
(C) by amending paragraph (47) to read as 
follows: 
‘‘(47) ‘repurchase agreement’ (which definition 
also applies to a reverse repurchase agreement)—
‘‘(A) means—
‘‘(i) an agreement, including related 
terms, which provides for the transfer of one 
or more certificates of deposit, mortgage re-
lated securities (as defined in section 3 of
346
the Securities Exchange Act of 1934), mort-
gage loans, interests in mortgage related se-
curities or mortgage loans, eligible bankers’ 
acceptances, qualified foreign government 
securities (defined as a security that is a di-
rect obligation of, or that is fully guaran-
teed by, the central government of a member 
of the Organization for Economic Coopera-
tion and Development), or securities that 
are direct obligations of, or that are fully 
guaranteed by, the United States or any 
agency of the United States against the 
transfer of funds by the transferee of such 
certificates of deposit, eligible bankers’ ac-
ceptances, securities, mortgage loans, or in-
terests, with a simultaneous agreement by 
such transferee to transfer to the transferor 
thereof certificates of deposit, eligible bank-
ers’ acceptance, securities, mortgage loans, 
or interests of the kind described in this 
clause, at a date certain not later than 1 
year after such transfer or on demand, 
against the transfer of funds;
347
‘‘(ii) any combination of agreements or 
transactions referred to in clauses (i) and 
(iii); 
‘‘(iii) an option to enter into an agree-
ment or transaction referred to in clause (i) 
or (ii); 
‘‘(iv) a master agreement that provides 
for an agreement or transaction referred to 
in clause (i), (ii), or (iii), together with all 
supplements to any such master agreement, 
without regard to whether such master 
agreement provides for an agreement or 
transaction that is not a repurchase agree-
ment under this paragraph, except that 
such master agreement shall be considered 
to be a repurchase agreement under this 
paragraph only with respect to each agree-
ment or transaction under the master agree-
ment that is referred to in clause (i), (ii), 
or (iii); or 
‘‘(v) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in clause (i), (ii), (iii), or (iv), in-
cluding any guarantee or reimbursement
348
obligation by or to a repo participant or fi-
nancial participant in connection with any 
agreement or transaction referred to in any 
such clause, but not to exceed the damages 
in connection with any such agreement or 
transaction, measured in accordance with 
section 562 of this title; and 
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial 
mortgage loan;’’; 
(D) in paragraph (48), by inserting ‘‘, or 
exempt from such registration under such section 
pursuant to an order of the Securities and Ex-
change Commission,’’ after ‘‘1934’’; and 
(E) by amending paragraph (53B) to read 
as follows: 
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
‘‘(i) any agreement, including the 
terms and conditions incorporated by ref-
erence in such agreement, which is—
‘‘(I) an interest rate swap, option, 
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar,
349
cross-currency rate swap, and basis 
swap; 
‘‘(II) a spot, same day-tomorrow, 
tomorrow-next, forward, or other for-
eign exchange or precious metals agree-
ment; 
‘‘(III) a currency swap, option, 
future, or forward agreement; 
‘‘(IV) an equity index or equity 
swap, option, future, or forward agree-
ment;
‘‘(V) a debt index or debt swap, 
option, future, or forward agreement; 
‘‘(VI) a total return, credit spread 
or credit swap, option, future, or for-
ward agreement; 
‘‘(VII) a commodity index or a 
commodity swap, option, future, or 
forward agreement; or 
‘‘(VIII) a weather swap, weather 
derivative, or weather option; 
‘‘(ii) any agreement or transaction 
that is similar to any other agreement or 
transaction referred to in this paragraph 
and that—
350
‘‘(I) is of a type that has been, is 
presently, or in the future becomes, the 
subject of recurrent dealings in the 
swap markets (including terms and 
conditions incorporated by reference 
therein); and 
‘‘(II) is a forward, swap, future, 
or option on one or more rates, cur-
rencies, commodities, equity securities, 
or other equity instruments, debt secu-
rities or other debt instruments, quan-
titative measures associated with an 
occurrence, extent of an occurrence, or 
contingency associated with a finan-
cial, commercial, or economic con-
sequence, or economic or financial in-
dices or measures of economic or finan-
cial risk or value; 
‘‘(iii) any combination of agreements 
or transactions referred to in this subpara-
graph; 
‘‘(iv) any option to enter into an 
agreement or transaction referred to in this 
subparagraph;
351
‘‘(v) a master agreement that provides 
for an agreement or transaction referred to 
in clause (i), (ii), (iii), or (iv), together 
with all supplements to any such master 
agreement, and without regard to whether 
the master agreement contains an agree-
ment or transaction that is not a swap 
agreement under this paragraph, except 
that the master agreement shall be consid-
ered to be a swap agreement under this 
paragraph only with respect to each agree-
ment or transaction under the master agree-
ment that is referred to in clause (i), (ii), 
(iii), or (iv); or 
‘‘(vi) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreements or transactions re-
ferred to in clause (i) through (v), including 
any guarantee or reimbursement obligation 
by or to a swap participant or financial 
participant in connection with any agree-
ment or transaction referred to in any such 
clause, but not to exceed the damages in 
connection with any such agreement or
352
transaction, measured in accordance with 
section 562; and 
‘‘(B) is applicable for purposes of this title 
only, and shall not be construed or applied so as 
to challenge or affect the characterization, defini-
tion, or treatment of any swap agreement under 
any other statute, regulation, or rule, including 
the Securities Act of 1933, the Securities Ex-
change Act of 1934, the Public Utility Holding 
Company Act of 1935, the Trust Indenture Act 
of 1939, the Investment Company Act of 1940, 
the Investment Advisers Act of 1940, the Securi-
ties Investor Protection Act of 1970, the Com-
modity Exchange Act, the Gramm-Leach-Bliley 
Act, and the Legal Certainty for Bank Products 
Act of 2000;’’; 
(2) in section 741(7), by striking paragraph (7) 
and inserting the following: 
‘‘(7) ‘securities contract’—
‘‘(A) means—
‘‘(i) a contract for the purchase, sale, 
or loan of a security, a certificate of deposit, 
a mortgage loan or any interest in a mort-
gage loan, a group or index of securities, 
certificates of deposit, or mortgage loans or