(2)(B)(i), except such legal actions as are expressly al-
lowed by the injunction, the confirmation order, or the
plan of reorganization.
‘‘(2)(A) Subject to subsection (h), if the requirements
of subparagraph (B) are met at the time an injunction
described in paragraph (1) is entered, then after entry of
such injunction, any proceeding that involves the validity,
application, construction, or modification of such injunc-
tion, or of this subsection with respect to such injunction,
may be commenced only in the district court in which such
injunction was entered, and such court shall have exclusive
jurisdiction over any such proceeding without regard to
the amount in controversy.
‘‘(B) The requirements of this subparagraph are
that—
‘‘(i) the injunction is to be implemented in con-
nection with a trust that, pursuant to the plan of re-
organization—
‘‘(I) is to assume the liabilities of a debtor
which at the time of entry of the order for relief
has been named as a defendant in personal in-
jury, wrongful death, or property-damage ac-
tions seeking recovery for damages allegedly
caused by the presence of, or exposure to, as-
bestos or asbestos-containing products;
‘‘(II) is to be funded in whole or in part
by the securities of 1 or more debtors involved
in such plan and by the obligation of such debt-
or or debtors to make future payments, includ-
ing dividends;
‘‘(III) is to own, or by the exercise of
rights granted under such plan would be enti-
tled to own if specified contingencies occur, a
majority of the voting shares of—
‘‘(aa) each such debtor;
‘‘(bb) the parent corporation of each
such debtor; or
‘‘(cc) a subsidiary of each such debtor
that is also a debtor; and
‘‘(IV) is to use its assets or income to pay
claims and demands; and
‘‘(ii) subject to subsection (h), the court deter-
mines that—
‘‘(I) the debtor is likely to be subject to
substantial future demands for payment arising
out of the same or similar conduct or events
that gave rise to the claims that are addressed
by the injunction;
‘‘(II) the actual amounts, numbers, and
timing of such future demands cannot be deter-
mined;
‘‘(III) pursuit of such demands outside the
procedures prescribed by such plan is likely to
threaten the plan’s purpose to deal equitably
with claims and future demands;
‘‘(IV) as part of the process of seeking
confirmation of such plan—
‘‘(aa) the terms of the injunction pro-
posed to be issued under paragraph (1)(A),
including any provisions barring actions
against third parties pursuant to para-
graph (4)(A), are set out in such plan and
in any disclosure statement supporting the
plan; and
‘‘(bb) a separate class or classes of
the claimants whose claims are to be ad-
dressed by a trust described in clause (i) is
established and votes, by at least 75 per-
cent of those voting, in favor of the plan;
and
‘‘(V) subject to subsection (h), pursuant to
court orders or otherwise, the trust will operate
through mechanisms such as structured, peri-
odic, or supplemental payments, pro rata dis-
tributions, matrices, or periodic review of esti-
mates of the numbers and values of present
claims and future demands, or other com-
parable mechanisms, that provide reasonable
assurance that the trust will value, and be in a
financial position to pay, present claims and fu-
ture demands that involve similar claims in sub-
stantially the same manner.
‘‘(3)(A) If the requirements of paragraph (2)(B) are
met and the order confirming the plan of reorganization
was issued or affirmed by the district court that has juris-
diction over the reorganization case, then after the time
for appeal of the order that issues or affirms the plan—
‘‘(i) the injunction shall be valid and enforce-
able and may not be revoked or modified by any
court except through appeal in accordance with
paragraph (6);
‘‘(ii) no entity that pursuant to such plan or
thereafter becomes a direct or indirect transferee of,
or successor to any assets of, a debtor or trust that
is the subject of the injunction shall be liable with
respect to any claim or demand made against such
entity by reason of its becoming such a transferee or
successor; and
‘‘(iii) no entity that pursuant to such plan or
thereafter makes a loan to such a debtor or trust or
to such a successor or transferee shall, by reason of
making the loan, be liable with respect to any claim
or demand made against such entity, nor shall any
pledge of assets made in connection with such a loan
be upset or impaired for that reason;
‘‘(B) Subparagraph (A) shall not be construed to—
‘‘(i) imply that an entity described in subpara-
graph (A) (ii) or (iii) would, if this paragraph were
not applicable, necessarily be liable to any entity by
reason of any of the acts described in subparagraph
(A);
‘‘(ii) relieve any such entity of the duty to com-
ply with, or of liability under, any Federal or State
law regarding the making of a fraudulent convey-
ance in a transaction described in subparagraph (A)
(ii) or (iii); or
‘‘(iii) relieve a debtor of the debtor’s obligation
to comply with the terms of the plan of reorganiza-
tion, or affect the power of the court to exercise its
authority under sections 1141 and 1142 to compel
the debtor to do so.
‘‘(4)(A)(i) Subject to subparagraph (B), an injunc-
tion described in paragraph (1) shall be valid and enforce-
able against all entities that it addresses.
‘‘(ii) Notwithstanding the provisions of section
524(e), such an injunction may bar any action directed
against a third party who is identifiable from the terms
of such injunction (by name or as part of an identifiable
group) and is alleged to be directly or indirectly liable for
the conduct of, claims against, or demands on the debtor
to the extent such alleged liability of such third party
arises by reason of—
‘‘(I) the third party’s ownership of a financial
interest in the debtor, a past or present affiliate of
the debtor, or a predecessor in interest of the debtor;
‘‘(II) the third party’s involvement in the man-
agement of the debtor or a predecessor in interest
of the debtor, or service as an officer, director or
employee of the debtor or a related party;
‘‘(III) the third party’s provision of insurance
to the debtor or a related party; or
‘‘(IV) the third party’s involvement in a trans-
action changing the corporate structure, or in a loan
or other financial transaction affecting the financial
condition, of the debtor or a related party, including
but not limited to—
‘‘(aa) involvement in providing financing
(debt or equity), or advice to an entity involved
in such a transaction; or
‘‘(bb) acquiring or selling a financial inter-
est in an entity as part of such a transaction.
‘‘(iii) As used in this subparagraph, the term ‘related
party’ means—
‘‘(I) a past or present affiliate of the debtor;
‘‘(II) a predecessor in interest of the debtor; or
‘‘(III) any entity that owned a financial interest
in—
‘‘(aa) the debtor;
‘‘(bb) a past or present affiliate of the
debtor; or
‘‘(cc) a predecessor in interest of the debt-
or.
‘‘(B) Subject to subsection (h), if, under a plan of
reorganization, a kind of demand described in such plan
is to be paid in whole or in part by a trust described in
paragraph (2)(B)(i) in connection with which an injunc-
tion described in paragraph (1) is to be implemented, then
such injunction shall be valid and enforceable with respect
to a demand of such kind made, after such plan is con-
firmed, against the debtor or debtors involved, or against
a third party described in subparagraph (A)(ii), if—
‘‘(B) as part of the proceedings leading to
issuance of such injunction and confirmation of
such plan, the court had appointed a legal rep-
resentative for the purpose of protecting the
rights of persons that might subsequently assert
demands described in subsection (g)(4)(B) with
respect to such plan; and
‘‘(C) such legal representative did not ob-
ject to confirmation of such plan or issuance of
such injunction; and
‘‘(2) for purposes of paragraph (1), if a trust
described in subsection (g)(2)(B)(i) is subject to a
court order on the date of the enactment of this Act
staying such trust from settling or paying further
claims—
‘‘(A) 
the 
requirements 
of 
subsection
(g)(2)(B)(ii)(V) shall not apply with respect to
such trust until such stay is lifted or dissolved;
and
‘‘(B) if such trust meets such requirements
on the date such stay is lifted or dissolved, such
trust shall be considered to have met such re-
quirements continuously from the date of the
enactment of this Act.’’.
(b) RULE
OF CONSTRUCTION.—Nothing in sub-
section (a), or in the amendments made by subsection (a),
shall be construed to modify, impair, or supersede any
other authority the court has to issue injunctions in con-
nection with an order confirming a plan of reorganization.
SEC. 112. AUTHORITY OF BANKRUPTCY JUDGES TO CON-
DUCT JURY TRIALS IN CIVIL PROCEEDINGS.
Section 157 of title 28, United States Code, is
amended by adding at the end the following:
‘‘(e) If the right to a jury trial applies in a proceeding
that may be heard under this section by a bankruptcy
judge, the bankruptcy judge may conduct the jury trial
if specially designated to exercise such jurisdiction by the
district court and with the express consent of all the par-
ties.’’.
SEC. 113. SOVEREIGN IMMUNITY.
Section 106 of title 11, United States Code, is
amended to read as follows:
‘‘§ 106. Waiver of sovereign immunity
‘‘(a) Notwithstanding an assertion of sovereign im-
munity, sovereign immunity is abrogated as to a govern-
mental unit to the extent set forth in this section with
respect to the following:
‘‘(1) Sections 105, 106, 107, 108, 303, 346,
362, 363, 364, 365, 366, 502, 503, 505, 506, 510,
522, 523, 524, 525, 542, 543, 544, 545, 546, 547,
548, 549, 550, 551, 552, 553, 722, 724, 726, 728,
744, 749, 764, 901, 922, 926, 928, 929, 944, 1107,
1141, 1142, 1143, 1146, 1201, 1203, 1205, 1206,
1227, 1231, 1301, 1303, 1305, and 1327 of this
title.
‘‘(2) The court may hear and determine any
issue arising with respect to the application of such
sections to governmental units.
‘‘(3) The court may issue against a govern-
mental unit an order, process, or judgment under
such sections or the Federal Rules of Bankruptcy
Procedure, including an order or judgment awarding
a money recovery, but not including an award of pu-
nitive damages. Such order or judgment for costs or
fees under this title or the Federal Rules of Bank-
ruptcy Procedure against any governmental unit
shall be consistent with the provisions and limita-
tions of section 2412(d)(2)(A) of title 28.
‘‘(4) The enforcement of any such order, proc-
ess, or judgment against any governmental unit shall
be consistent with appropriate nonbankruptcy law
applicable to such governmental unit and, in the
case of a money judgment against the United States,
shall be paid as if it is a judgment rendered by a
district court of the United States.
‘‘(5) Nothing in this section shall create any
substantive claim for relief or cause of action not
otherwise existing under this title, the Federal Rules
of Bankruptcy Procedure, or nonbankruptcy law.
‘‘(b) A governmental unit that has filed a proof of
claim in the case is deemed to have waived sovereign im-
munity with respect to a claim against such governmental
unit that is property of the estate and that arose out of
the same transaction or occurrence out of which the claim
of such governmental unit arose.
‘‘(c) Notwithstanding any assertion of sovereign im-
munity by a governmental unit, there shall be offset
against a claim or interest of a governmental unit any
claim against such governmental unit that is property of
the estate.’’.
SEC. 114. SERVICE OF PROCESS IN BANKRUPTCY PROCEED-
INGS ON AN INSURED DEPOSITORY INSTITU-
TION.
Rule 7004 of the Federal Rules of Bankruptcy Proce-
dure is amended—
(1) in subdivision (b) by striking ‘‘In addition’’
and inserting ‘‘Except as provided in subdivision (h),
in addition’’, and
(2) by adding at the end the following:
‘‘(h) SERVICE OF PROCESS ON AN INSURED DEPOSI-
TORY INSTITUTION.—Service on an insured depository in-
stitution (as defined in section 3 of the Federal Deposit
Insurance Act) in a contested matter or adversary pro-
ceeding shall be made by certified mail addressed to an
officer of the institution unless—
‘‘(1) the institution has appeared by its attor-
ney, in which case the attorney shall be served by
first class mail;
‘‘(2) the court orders otherwise after service
upon the institution by certified mail of notice of an
application to permit service on the institution by
first class mail sent to an officer of the institution
designated by the institution; or
‘‘(3) the institution has waived in writing its
entitlement to service by certified mail by designat-
ing an officer to receive service.’’.
SEC. 115. MEETINGS OF CREDITORS AND EQUITY SECURITY
HOLDERS.
Section 341 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(d) Prior to the conclusion of the meeting of credi-
tors or equity security holders, the trustee shall orally ex-
amine the debtor to ensure that the debtor in a case under
chapter 7 of this title is aware of—
‘‘(1) the potential consequences of seeking a
discharge in bankruptcy, including the effects on
credit history;
‘‘(2) the debtor’s ability to file a petition under
a different chapter of this title;
‘‘(3) the effect of receiving a discharge of debts
under this title; and
‘‘(4) the effect of reaffirming a debt, including
the debtor’s knowledge of the provisions of section
524(d) of this title.’’.
SEC. 116. TAX ASSESSMENT.
Section 362(b)(9) of title 11, United States Code, is
amended to read as follows:
‘‘(9) under subsection (a), of—
‘‘(A) an audit by a governmental unit to
determine tax liability;
‘‘(B) the issuance to the debtor by a gov-
ernmental unit of a notice of tax deficiency;
‘‘(C) a demand for tax returns; or
‘‘(D) the making of an assessment for any
tax and issuance of a notice and demand for
payment of such an assessment (but any tax
lien that would otherwise attach to property of
the estate by reason of such an assessment
shall not take effect unless such tax is a debt
of the debtor that will not be discharged in the
case and such property or its proceeds are
transferred out of the estate to, or otherwise
revested in, the debtor).’’.
SEC. 117. ADDITIONAL TRUSTEE COMPENSATION.
Section 330(b) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’, and
(2) by adding at the end thereof the following:
‘‘(2) The Judicial Conference of the United States—
‘‘(A) shall prescribe additional fees of the same
kind as prescribed under section 1914(b) of title 28;
and
‘‘(B) may prescribe notice of appearance fees
and fees charged against distributions in cases under
this title;
to pay $15 to trustees serving in cases after such trustees’
services are rendered. Beginning 1 year after the date of
the enactment of the Bankruptcy Reform Act of 1994,
such $15 shall be paid in addition to the amount paid
under paragraph (1).’’.
TITLE II—COMMERCIAL
BANKRUPTCY ISSUES
SEC. 201. AIRCRAFT EQUIPMENT AND VESSELS; ROLLING
STOCK EQUIPMENT.
(a) AMENDMENT OF SECTION 1110.—Section 1110
of title 11, United States Code, is amended to read as
follows:
‘‘§ 1110. Aircraft equipment and vessels
‘‘(a)(1) The right of a secured party with a security
interest in equipment described in paragraph (2) or of a
lessor or conditional vendor of such equipment to take pos-
session of such equipment in compliance with a security
agreement, lease, or conditional sale contract is not af-
fected by section 362, 363, or 1129 or by any power of
the court to enjoin the taking of possession unless—
‘‘(A) before the date that is 60 days after the
date of the order for relief under this chapter, the
trustee, subject to the court’s approval, agrees to
perform all obligations of the debtor that become
due on or after the date of the order under such se-
curity agreement, lease, or conditional sale contract;
and
‘‘(B) any default, other than a default of a kind
specified in section 365(b)(2), under such security
agreement, lease, or conditional sale contract—
‘‘(i) that occurs before the date of the
order is cured before the expiration of such 60-
day period; and
‘‘(ii) that occurs after the date of the order
is cured before the later of—
‘‘(I) the date that is 30 days after the
date of the default; or
‘‘(II) the expiration of such 60-day
period.
‘‘(2) Equipment is described in this paragraph if it
is—
‘‘(A) an aircraft, aircraft engine, propeller, ap-
pliance, or spare part (as defined in section 40102
of title 49) that is subject to a security interest
granted by, leased to, or conditionally sold to a debt-
or that is a citizen of the United States (as defined
in 40102 of title 49) holding an air carrier operating
certificate issued by the Secretary of Transportation
pursuant to chapter 447 of title 49 for aircraft capa-
ble of carrying 10 or more individuals or 6,000
pounds or more of cargo; or
‘‘(B) a documented vessel (as defined in section
30101(1) of title 46) that is subject to a security in-
terest granted by, leased to, or conditionally sold to
a debtor that is a water carrier that holds a certifi-
cate of public convenience and necessity or permit is-
sued by the Interstate Commerce Commission.
‘‘(3) Paragraph (1) applies to a secured party, lessor,
or conditional vendor acting in its own behalf or acting
as trustee or otherwise in behalf of another party.
‘‘(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is pro-
tected under subsection (a) may agree, subject to the
court’s approval, to extend the 60-day period specified in
subsection (a)(1).
‘‘(c) With respect to equipment first placed in service
on or prior to the date of enactment of this subsection,
for purposes of this section—
‘‘(1) the term ‘lease’ includes any written agree-
ment with respect to which the lessor and the debt-
or, as lessee, have expressed in the agreement or in
a substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal in-
come tax purposes; and
‘‘(2) the term ‘security interest’ means a pur-
chase-money equipment security interest.’’.
(b) AMENDMENT OF SECTION 1168.—Section 1168
of title 11, United States Code, is amended to read as
follows:
‘‘§ 1168. Rolling stock equipment
‘‘(a)(1) The right of a secured party with a security
interest in or of a lessor or conditional vendor of equip-
ment described in paragraph (2) to take possession of such
equipment in compliance with an equipment security
agreement, lease, or conditional sale contract is not af-
fected by section 362, 363, or 1129 or by any power of
the court to enjoin the taking of possession, unless—
‘‘(A) before the date that is 60 days after the
date of commencement of a case under this chapter,
the trustee, subject to the court’s approval, agrees to
perform all obligations of the debtor that become
due on or after the date of commencement of the
case under such security agreement, lease, or condi-
tional sale contract; and
‘‘(B) any default, other than a default of a kind
described in section 365(b)(2), under such security
agreement, lease, or conditional sale contract—
‘‘(i) that occurs before the date of com-
mencement of the case and is an event of de-
fault therewith is cured before the expiration of
such 60-day period; and
‘‘(ii) that occurs or becomes an event of
default after the date of commencement of the
case is cured before the later of—
‘‘(I) the date that is 30 days after the
date of the default or event of default; or
‘‘(II) the expiration of such 60-day
period.
‘‘(2) Equipment is described in this paragraph if it
is rolling stock equipment or accessories used on such
equipment, including superstructures and racks, that is
subject to a security interest granted by, leased to, or con-
ditionally sold to the debtor.
‘‘(3) Paragraph (1) applies to a secured party, lessor,
or conditional vendor acting in its own behalf or acting
as trustee or otherwise in behalf of another party.
‘‘(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is pro-
tected under subsection (a) may agree, subject to the
court’s approval, to extend the 60-day period specified in
subsection (a)(1).
‘‘(c) With respect to equipment first placed in service
on or prior to the date of enactment of this subsection,
for purposes of this section—
‘‘(1) the term ‘lease’ includes any written agree-
ment with respect to which the lessor and the debt-
or, as lessee, have expressed in the agreement or in
a substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal in-
come tax purposes; and
‘‘(2) the term ‘security interest’ means a pur-
chase-money equipment security interest.
‘‘(d) With respect to equipment first placed in service
after the date of enactment of this subsection, for pur-
poses of this section, the term ‘rolling stock equipment’
includes rolling stock equipment that is substantially re-
built and accessories used on such equipment.’’.
SEC. 202. LIMITATION ON LIABILITY OF NON-INSIDER
TRANSFEREE FOR AVOIDED TRANSFER.
Section 550 of title 11, United States Code, is
amended—
(1) by redesignating subsections (c), (d), and
(e) as subsections (d), (e), and (f), respectively, and
(2) by inserting after subsection (b) the follow-
ing:
‘‘(c) If a transfer made between 90 days and one year
before the filing of the petition—
‘‘(1) is avoided under section 547(b) of this
title; and
‘‘(2) was made for the benefit of a creditor that
at the time of such transfer was an insider;
the trustee may not recover under subsection (a) from a
transferee that is not an insider.’’.
such property before the date on which action is
taken to effect such maintenance or continuation.
‘‘(2) If—
‘‘(A) a law described in paragraph (1) requires
seizure of such property or commencement of an ac-
tion to accomplish such perfection, or maintenance
or continuation of perfection of an interest in prop-
erty; and
‘‘(B) such property has not been seized or such
an action has not been commenced before the date
of the filing of the petition;
such interest in such property shall be perfected, or perfec-
tion of such interest shall be maintained or continued, by
giving notice within the time fixed by such law for such
seizure or such commencement.’’.
SEC. 205. REJECTION OF UNEXPIRED LEASES OF REAL
PROPERTY OR TIMESHARE INTERESTS.
(a) AMENDMENT TO SECTION 365.—Section 365(h)
of title 11, United States Code, is amended to read as
follows:
‘‘(h)(1)(A) If the trustee rejects an unexpired lease
of real property under which the debtor is the lessor and—
‘‘(i) if the rejection by the trustee amounts to
such a breach as would entitle the lessee to treat
such lease as terminated by virtue of its terms, ap-
plicable nonbankruptcy law, or any agreement made
by the lessee, then the lessee under such lease may
treat such lease as terminated by the rejection; or
‘‘(ii) if the term of such lease has commenced,
the lessee may retain its rights under such lease (in-
cluding rights such as those relating to the amount
and timing of payment of rent and other amounts
payable by the lessee and any right of use, posses-
sion, quiet enjoyment, subletting, assignment, or
hypothecation) that are in or appurtenant to the real
property for the balance of the term of such lease
and for any renewal or extension of such rights to
the extent that such rights are enforceable under ap-
plicable nonbankruptcy law.
‘‘(B) If the lessee retains its rights under subpara-
graph (A)(ii), the lessee may offset against the rent re-
served under such lease for the balance of the term after
the date of the rejection of such lease and for the term
of any renewal or extension of such lease, the value of any
damage caused by the nonperformance after the date of
such rejection, of any obligation of the debtor under such
lease, but the lessee shall not have any other right against
the estate or the debtor on account of any damage occur-
ring after such date caused by such nonperformance.
‘‘(C) The rejection of a lease of real property in a
shopping center with respect to which the lessee elects to
retain its rights under subparagraph (A)(ii) does not af-
fect the enforceability under applicable nonbankruptcy law
of any provision in the lease pertaining to radius, location,
use, exclusivity, or tenant mix or balance.
‘‘(D) In this paragraph, ‘lessee’ includes any succes-
sor, assign, or mortgagee permitted under the terms of
such lease.
‘‘(2)(A) If the trustee rejects a timeshare interest
under a timeshare plan under which the debtor is the
timeshare interest seller and—
‘‘(i) if the rejection amounts to such a breach
as would entitle the timeshare interest purchaser to
treat the timeshare plan as terminated under its
terms, applicable nonbankruptcy law, or any agree-
ment made by timeshare interest purchaser, the
timeshare interest purchaser under the timeshare
plan may treat the timeshare plan as terminated by
such rejection; or
‘‘(ii) if the term of such timeshare interest has
commenced, then the timeshare interest purchaser
may retain its rights in such timeshare interest for
the balance of such term and for any term of re-
newal or extension of such timeshare interest to the
extent that such rights are enforceable under appli-
cable nonbankruptcy law.
‘‘(B) If the timeshare interest purchaser retains its
rights under subparagraph (A), such timeshare interest
purchaser may offset against the moneys due for such
timeshare interest for the balance of the term after the
date of the rejection of such timeshare interest, and the
term of any renewal or extension of such timeshare inter-
est, the value of any damage caused by the nonperform-
ance after the date of such rejection, of any obligation of
the debtor under such timeshare plan, but the timeshare
interest purchaser shall not have any right against the es-
tate or the debtor on account of any damage occurring
after such date caused by such nonperformance.’’.
(b) TECHNICAL AMENDMENT.—Section 553(b)(1) of
title 11, United States Code, is amended by striking
‘‘365(h)(2)’’ and inserting ‘‘365(h)’’.
SEC. 206. CONTENTS OF PLAN.
Section 1123(b) of title 11, United States Code, is
amended—
(1) in paragraph (4) by striking ‘‘and’’ at the
end,
(2) by redesignating paragraph (5) as para-
graph (6), and
(3) by inserting after paragraph (4) the follow-
ing:
‘‘(5) modify the rights of holders of secured
claims, other than a claim secured only by a security
interest in real property that is the debtor’s prin-
cipal residence, or of holders of unsecured claims, or
leave unaffected the rights of holders of any class of
claims; and’’.
SEC. 207. PRIORITY FOR INDEPENDENT SALES REPRESENT-
ATIVES.
Section 507(a)(3) of title 11, United States Code, is
amended to read as follows:
‘‘(3) Third, allowed unsecured claims, but only
to the extent of $4,000 for each individual or cor-
poration, as the case may be, earned within 90 days
before the date of the filing of the petition or the
date of the cessation of the debtor’s business, which-
ever occurs first, for—
‘‘(A) wages, salaries, or commissions, in-
cluding vacation, severance, and sick leave pay
earned by an individual; or
‘‘(B) sales commissions earned by an indi-
vidual or by a corporation with only 1 employee,
acting as an independent contractor in the sale
of goods or services for the debtor in the ordi-
nary course of the debtor’s business if, and only
if, during the 12 months preceding that date, at
least 75 percent of the amount that the individ-
ual or corporation earned by acting as an inde-
pendent contractor in the sale of goods or serv-
ices was earned from the debtor;’’.
SEC. 208. EXCLUSION FROM THE ESTATE OF INTERESTS IN
LIQUID 
AND 
GASEOUS 
HYDROCARBONS
TRANSFERRED BY THE DEBTOR PURSUANT
TO PRODUCTION PAYMENT AGREEMENTS.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (42) the fol-
lowing:
‘‘(42A) ‘production payment’ means a term
overriding royalty satisfiable in cash or in kind—
‘‘(A) contingent on the production of a liq-
uid or gaseous hydrocarbon from particular real
property; and
‘‘(B) from a specified volume, or a speci-
fied value, from the liquid or gaseous hydro-
carbon produced from such property, and deter-
mined without regard to production costs;’’, and
(2) by inserting after the first paragraph (56)
the following:
‘‘(56A) ‘term overriding royalty’ means an in-
terest in liquid or gaseous hydrocarbons in place or
to be produced from particular real property that
entitles the owner thereof to a share of production,
or the value thereof, for a term limited by time,
quantity, or value realized;’’.
(b) PROPERTY OF THE ESTATE.—Section 541(b)(4)
of title 11, United States Code, is amended—
(1) in subparagraph (A) by striking ‘‘(A)’’ and
inserting ‘‘(A)(i)’’,
(2) in subparagraph (B)—
(A) by striking ‘‘(B)’’ and inserting ‘‘(ii),
(B) by striking ‘‘such interest’’ and insert-
ing ‘‘the interest referred to in clause (i)’’, and
(C) by striking the period at the end and
inserting ‘‘; or’’, and
(3) by adding at the end the following:
‘‘(B)(i) the debtor has transferred such in-
terest pursuant to a written conveyance of a
production payment to an entity that does not
participate in the operation of the property
from which such production payment is trans-
ferred; and
‘‘(ii) but for the operation of this para-
graph, the estate could include the interest re-
ferred to in clause (i) only by virtue of section
542 of this title;’’.
SEC. 209. SELLER’S RIGHT TO RECLAIM GOODS.
Section 546(c)(1) of title 11, United States Code, is
amended to read as follows:
‘‘(1) such a seller may not reclaim any such
goods unless such seller demands in writing reclama-
tion of such goods—
‘‘(A) before 10 days after receipt of such
goods by the debtor; or
‘‘(B) if such 10-day period expires after
the commencement of the case, before 20 days
after receipt of such goods by the debtor; and’’.
SEC. 210. INVESTMENT OF MONEY OF THE ESTATE.
Section 345(b) of title 11, United States Code, is
amended—
(1) in paragraph (2) by striking the period at
the end and inserting a semicolon, and
(2) by adding at the end the following:
‘‘unless the court for cause orders otherwise.’’.
SEC. 211. ELECTION OF TRUSTEE UNDER CHAPTER 11.
(a) ELECTION AUTHORIZED.—Section 1104 of title
11 of the United States Code is amended—
(1) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively, and
(2) by inserting after subsection (a) the follow-
ing:
‘‘(b) Except as provided in section 1163 of this title,
on the request of a party in interest made not later than
30 days after the court orders the appointment of a trust-
ee under subsection (a), the United States trustee shall
convene a meeting of creditors for the purpose of electing
one disinterested person to serve as trustee in the case.
The election of a trustee shall be conducted in the manner
provided in subsections (a), (b), and (c) of section 702
of this title.’’.
(b) CONFORMING AMENDMENT.—Section 1106(b) of
title 11, United States Code, is amended by striking
‘‘1104(c)’’ and inserting ‘‘1104(d)’’.
SEC. 212. RIGHTS OF PARTNERSHIP TRUSTEE AGAINST
GENERAL PARTNERS.
Section 723(a) of title 11, United States Code, is
amended by striking ‘‘for the full amount of the defi-
ciency’’ and inserting ‘‘to the extent that under applicable
nonbankruptcy law such general partner is personally lia-
ble for such deficiency’’.
SEC. 213. IMPAIRMENT OF CLAIMS AND INTERESTS.
(a) OBJECTION TO CLAIMS FILED UNTIMELY.—Sec-
tion 502(b) of title 11, United States Code, is amended—
(1) in paragraph (7) by striking ‘‘or’’ at the
end,
(2) in paragraph (8) by striking the period at
the end and inserting ‘‘; or’’, and
(3) by adding at the end the following:
‘‘(9) proof of such claim is not timely filed, ex-
cept to the extent tardily filed as permitted under
paragraph (1), (2), or (3) of section 726(a) of this
title or under the Federal Rules of Bankruptcy Pro-
cedure, except that a claim of a governmental unit
shall be timely filed if it is filed before 180 days
after the date of the order for relief or such later
time as the Federal Rules of Bankruptcy Procedure
may provide.’’.
(b) TARDILY FILED PRIORITY CLAIMS.—Section
726(a)(1) of title 11, United States Code, is amended by
adding before the semicolon the following: ‘‘, proof of
which is timely filed under section 501 of this title or tar-
dily filed before the date on which the trustee commences
distribution under this section’’.
(c) FILING OF REQUEST FOR ADMINISTRATIVE EX-
PENSES.—Section 503(a) of title 11, United States Code,
is amended—
(1) by inserting ‘‘timely’’ after ‘‘may’’, and
(2) by inserting ‘‘, or may tardily file such re-
quest if permitted by the court for cause’’ before the
period at the end.
(d) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec-
tion 1124 of title 11, United States Code, is amended—
(1) in paragraph (1) by inserting ‘‘or’’ at the
end,
(2) in paragraph (2) by striking ‘‘; or’’ at the
end and inserting a period, and
(3) by striking paragraph (3).
SEC. 214. PROTECTION OF SECURITY INTEREST IN POST-
PETITION RENTS AND LODGING PAYMENTS.
(a) POSTPETITION EFFECT
OF SECURITY INTER-
EST.—Section 552(b) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’,
(2) by striking ‘‘rents,’’ each place it appears,
and
(3) by adding at the end the following:
‘‘(2) Except as provided in sections 363, 506(c), 522,
544, 545, 547, and 548 of this title, and notwithstanding
section 546(b) of this title, if the debtor and an entity
entered into a security agreement before the commence-
ment of the case and if the security interest created by
such security agreement extends to property of the debtor
acquired before the commencement of the case and to
amounts paid as rents of such property or the fees,
charges, accounts, or other payments for the use or occu-
pancy of rooms and other public facilities in hotels, motels,
or other lodging properties, then such security interest ex-
tends to such rents and such fees, charges, accounts, or
other payments acquired by the estate after the com-
mencement of the case to the extent provided in such secu-
rity agreement, except to any extent that the court, after
notice and a hearing and based on the equities of the case,
orders otherwise.’’.
(b) USE SALE, OR LEASE OF PROPERTY.—Section
363(a) of title 11, United States Code, is amended by in-
serting: ‘‘and the fees, charges, accounts or other pay-
ments for the use or occupancy of rooms and other public
facilities in hotels, motels, or other lodging properties’’
after ‘‘property’’.
SEC. 215. AMENDMENT TO DEFINITION OF SWAP AGREE-
MENT.
Subparagraph (A) of the first paragraph (55) of sec-
tion 101 of title 11, United States Code, is amended by
inserting ‘‘spot foreign exchange agreement,’’ after ‘‘for-
ward foreign exchange agreement,’’.
SEC. 216. LIMITATION ON AVOIDING POWERS.
Section 546(a)(1) of title 11, United States Code, is
amended to read as follows:
‘‘(1) the later of—
‘‘(A) 2 years after the entry of the order
for relief; or
‘‘(B) 1 year after the appointment or elec-
tion of the first trustee under section 702,
1104, 1163, 1202, or 1302 of this title if such
appointment or such election occurs before the
expiration of the period specified in subpara-
graph (A); or’’.
SEC. 217. SMALL BUSINESSES.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (51)
the following:
‘‘(51C) ‘small business’ means a person en-
gaged in commercial or business activities (but does
not include a person whose primary activity is the
business of owning or operating real property and
activities 
incidental 
thereto) 
whose 
aggregate
noncontingent liquidated secured and unsecured
debts as of the date of the petition do not exceed
$2,000,000;’’.
(b) CREDITORS’ COMMITTEES.—Section 1102(a) of
title 11, United States Code, is amended—
(1) in paragraph (1) by striking ‘‘As’’ and in-
serting ‘‘Except as provided in paragraph (3), as’’;
and
(2) by adding at the end the following:
‘‘(3) On request of a party in interest in a case in
which the debtor is a small business and for cause, the
court may order that a committee of creditors not be ap-
pointed.’’.
(c) CONVERSION OR DISMISSAL.—Section 1112(b) of
title 11, United States Code, is amended by inserting ‘‘or
bankruptcy administrator’’ after ‘‘United States trustee’’.
(d) WHO MAY FILE A PLAN.—Section 1121 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(e) In a case in which the debtor is a small business
and elects to be considered a small business—
‘‘(1) only the debtor may file a plan until after
100 days after the date of the order for relief under
this chapter;
‘‘(2) all plans shall be filed within 160 days
after the date of the order for relief; and
‘‘(3) on request of a party in interest made
within the respective periods specified in paragraphs
(1) and (2) and after notice and a hearing, the court
may—
‘‘(A) reduce the 100-day period or the
160-day period specified in paragraph (1) or
(2) for cause; and
‘‘(B) increase the 100-day period specified
in paragraph (1) if the debtor shows that the
need for an increase is caused by circumstances
for which the debtor should not be held ac-
countable.’’.
(e) POSTPETITION DISCLOSURE.—Section 1125 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(f) Notwithstanding subsection (b), in a case in
which the debtor has elected under section 1121(e) to be
considered a small business—
‘‘(1) the court may conditionally approve a dis-
closure statement subject to final approval after no-
tice and a hearing;
‘‘(2) acceptances and rejections of a plan may
be solicited based on a conditionally approved disclo-
sure statement as long as the debtor provides ade-
quate information to each holder of a claim or inter-
est that is solicited, but a conditionally approved dis-
closure statement shall be mailed at least 10 days
prior to the date of the hearing on confirmation of
the plan; and
‘‘(3) a hearing on the disclosure statement may
be combined with a hearing on confirmation of a
plan.’’.
SEC. 218. SINGLE ASSET REAL ESTATE.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (51)
the following:
‘‘(51B) ‘single asset real estate’ means real
property constituting a single property or project,
other than residential real property with fewer than
4 residential units, which generates substantially all
of the gross income of a debtor and on which no
substantial business is being conducted by a debtor
other than the business of operating the real prop-
erty and activities incidental thereto having aggre-
gate noncontingent, liquidated secured debts in an
amount no more than $4,000,000;’’.
(b) AUTOMATIC STAY.—Section 362(d) 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
(3) by adding at the end the following:
‘‘(3) with respect to a stay of an act against
single asset real estate under subsection (a), by a
creditor whose claim is secured by an interest in
such real estate, unless, not later than the date that
is 90 days after the entry of the order for relief (or
such later date as the court may determine for cause
by order entered within that 90-day period)—
‘‘(A) the debtor has filed a plan of reorga-
nization that has a reasonable possibility of
being confirmed within a reasonable time; or
‘‘(B) the debtor has commenced monthly
payments to each creditor whose claim is se-
cured by such real estate (other than a claim
secured by a judgment lien or by an unmatured
statutory lien), which payments are in an
amount equal to interest at a current fair mar-
ket rate on the value of the creditor’s interest
in the real estate.’’.
SEC. 219. LEASES OF PERSONAL PROPERTY.
(a) ASSUMPTION.—Section 365(b)(2) of title 11,
United States Code is amended—
(1) in subparagraph (B) by striking ‘‘or’’ at the
end,
(2) in subparagraph (C) by striking the period
and inserting ‘‘; or’’,
(3) by adding at the end the following:
‘‘(D) the satisfaction of any penalty rate or pro-
vision relating to a default arising from any failure
by the debtor to perform nonmonetary obligations
under the executory contract or unexpired lease.’’.
(b) PERFORMANCE.—Section 365(d) of title 11,
United States Code is amended by adding at the end the
following:
‘‘(10) The trustee shall timely perform all of
the obligations of the debtor, except those specified
in section 365(b)(2), first arising from or after 60
days after the order for relief in a case under chap-
ter 11 of this title under an unexpired lease of per-
sonal property (other than personal property leased
to an individual primarily for personal, family, or
household purposes), until such lease is assumed or
rejected notwithstanding section 503(b)(1) of this
title, unless the court, after notice and a hearing and
based on the equities of the case, orders otherwise
with respect to the obligations or timely performance
thereof. This subsection shall not be deemed to af-
fect the trustee’s obligations under the provisions of
subsection (b) or (f). Acceptance of any such per-
formance does not constitute waiver or relinquish-
ment of the lessor’s rights under such lease or under
this title.’’.
(c) LIMITATION.—Section 363(e) of title 11, United
States Code is amended by adding at the end the follow-
ing:
‘‘This subsection also applies to property that is subject
to any unexpired lease of personal property (to the exclu-
sion of such property being subject to an order to grant
relief from the stay under section 362).’’.
SEC. 220. EXEMPTION FOR SMALL BUSINESS INVESTMENT
COMPANIES.
Section 109(b)(2) of title 11, United States Code, is
amended by inserting after ‘‘homestead association,’’ the
following: ‘‘a small business investment company licensed
by the Small Business Administration under subsection
(c) or (d) of section 301 of the Small Business Investment
Act of 1958,’’.
SEC. 221. PAYMENT OF TAXES WITH BORROWED FUNDS.
Section 523(a) of title 11, United States Code is
amended—
(1) in paragraph (13) by striking the period at
the end and inserting a semicolon, and
(2) by adding at the end the following:
‘‘(14) incurred to pay a tax to the United
States that would be nondischargeable pursuant to
paragraph (1);’’.
SEC. 222. RETURN OF GOODS.
(a) LIMITATION
ON AVOIDING POWERS.—Section
546 of title 11, United States Code, is amended by adding
at the end the following:
‘‘(g) Notwithstanding the rights and powers of a
trustee under sections 544(a), 545, 547, 549, and 553,
if the court determines on a motion by the trustee made
not later than 120 days after the date of the order for
relief in a case under chapter 11 of this title and after
notice and a hearing, that a return is in the best interests
of the estate, the debtor, with the consent of a creditor,
may return goods shipped to the debtor by the creditor
before the commencement of the case, and the creditor
may offset the purchase price of such goods against any
claim of the creditor against the debtor that arose before
the commencement of the case.’’.
(b) SETOFF.—Section 553(b)(1) is amended by in-
serting ‘‘546(h),’’ after ‘‘365(h),’’.
SEC. 223. PROCEEDS OF MONEY ORDER AGREEMENTS.
Section 541(b) of title 11, United States Code is
amended—
(1) in paragraph (3) by striking ‘‘or’’ at the
end and inserting a semicolon,
(2) in paragraph (4) by striking the period at
the end and inserting ‘‘; or’’, and
(3) by inserting after paragraph (4) the follow-
ing:
‘‘(5) any interest in cash or cash equivalents
that constitute proceeds of a sale by the debtor of
a money order that is made—
‘‘(A) on or after the date that is 14 days
prior to the date on which the petition is filed;
and
‘‘(B) under an agreement with a money
order issuer that prohibits the commingling of
such proceeds with property of the debtor (not-
withstanding that, contrary to the agreement,
the proceeds may have been commingled with
property of the debtor),
unless the money order issuer had not taken action,
prior to the filing of the petition, to require compli-
ance with the prohibition.’’.
SEC. 224. TRUSTEE DUTIES; PROFESSIONAL FEES.
(a) TRUSTEE’S DUTIES.—Section 586(a)(3)(A) of
title 28, United States Code, is amended to read as fol-
lows:
‘‘(A)(i) reviewing, in accordance with pro-
cedural guidelines adopted by the Executive Of-
fice of the United States Trustee (which guide-
lines shall be applied uniformly by the United
States trustee except when circumstances war-
rant different treatment), applications filed for
compensation and reimbursement under section
330 of title 11; and
‘‘(ii) filing with the court comments with
respect to such application and, if the United
States Trustee considers it to be appropriate,
objections to such application.’’.
(b) PROFESSIONAL FEES.—Section 330(a) of title
11, United States Code, is amended to read as follows:
‘‘(a)(1) After notice to the parties in interest and the
United States trustee and a hearing, and subject to sec-
tions 326, 328, and 329, the court may award to a trustee,
an examiner, a professional person employed under section
327 or 1103—
‘‘(A) reasonable compensation for actual, nec-
essary services rendered by the trustee, examiner,
professional person, or attorney and by any para-
professional person employed by any such person;
and
‘‘(B) reimbursement for actual, necessary ex-
penses.
‘‘(2) The court may, on its own motion or on the mo-
tion of the United States Trustee, the United States
Trustee for the District or Region, the trustee for the es-
tate, or any other party in interest, award compensation
that is less than the amount of compensation that is re-
quested.
‘‘(3)(A) In determining the amount of reasonable
compensation to be awarded, the court shall consider the
nature, the extent, and the value of such services, taking
into account all relevant factors, including—
‘‘(A) the time spent on such services;
‘‘(B) the rates charged for such services;
‘‘(C) whether the services were necessary to the
administration of, or beneficial at the time at which
the service was rendered toward the completion of,
a case under this title;
‘‘(D) whether the services were performed with-
in a reasonable amount of time commensurate with
the complexity, importance, and nature of the prob-
lem, issue, or task addressed; and
‘‘(E) whether the compensation is reasonable
based on the customary compensation charged by
comparably skilled practitioners in cases other than
cases under this title.
‘‘(4)(A) Except as provided in subparagraph (B), the
court shall not allow compensation for—
‘‘(i) unnecessary duplication of services; or
‘‘(ii) services that were not—
‘‘(I) reasonably likely to benefit the debt-
or’s estate; or
‘‘(II) necessary to the administration of
the case.
‘‘(B) In a chapter 12 or chapter 13 case in which
the debtor is an individual, the court may allow reasonable
compensation to the debtor’s attorney for representing the
interests of the debtor in connection with the bankruptcy
case based on a consideration of the benefit and necessity
of such services to the debtor and the other factors set
forth in this section.
‘‘(5) The court shall reduce the amount of compensa-
tion awarded under this section by the amount of any in-
terim compensation awarded under section 331, and, if the
amount of such interim compensation exceeds the amount
of compensation awarded under this section, may order
the return of the excess to the estate.
‘‘(6) Any compensation awarded for the preparation
of a fee application shall be based on the level and skill
reasonably required to prepare the application.’’.
SEC. 225. NOTICES TO CREDITORS.
Section 342 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(c) If notice is required to be given by the debtor
to a creditor under this title, any rule, any applicable law,
or any order of the court, such notice shall contain the
name, address, and taxpayer identification number of the
debtor, but the failure of such notice to contain such infor-
mation shall not invalidate the legal effect of such notice.’’.
TITLE III—CONSUMER
BANKRUPTCY ISSUES
SEC. 301. PERIOD FOR CURING DEFAULT RELATING TO
PRINCIPAL RESIDENCE.
Section 1322 of title 11, United States Code, is
amended—
(1) by redesignating subsection (c) as sub-
section (d), and
(2) by inserting after subsection (b) the follow-
ing:
‘‘(c) Notwithstanding subsection (b)(2) and applica-
ble nonbankruptcy law—
‘‘(1) a default with respect to, or that gave rise
to, a lien on the debtor’s principal residence may be
cured under paragraph (3) or (5) of subsection (b)
until such residence is sold at a foreclosure sale that
is 
conducted 
in 
accordance 
with 
applicable
nonbankruptcy law; and
‘‘(2) in a case in which the last payment on the
original payment schedule for a claim secured only
by a security interest in real property that is the
debtor’s principal residence is due before the date on
which the final payment under the plan is due, the
plan may provide for the payment of the claim as
modified pursuant to section 1325(a)(5) of this
title.’’.
SEC. 302. NONDISCHARGEABILITY OF FINE UNDER CHAP-
TER 13.
Section 1328(a)(3) of title 11, United States Code,
is amended by inserting ‘‘, or a criminal fine,’’ after ‘‘res-
titution’’.
SEC. 303. IMPAIRMENT OF EXEMPTIONS.
Section 522(f) of title 11, United States Code, is
amended—
(1) in paragraph (2)—
(A) by redesignating subparagraphs (A),
(B), and (C) as clauses (i), (ii), and (iii), re-
spectively, and
(B) by striking ‘‘(2)’’ and inserting ‘‘(B),
(2) by redesignating paragraph (1) as subpara-
graph (A),
(3) by inserting ‘‘(1)’’ before ‘‘Notwithstand-
ing’’, and
(4) by adding at the end the following:
‘‘(2)(A) For the purposes of this subsection, a lien
shall be considered to impair an exemption to the extent
that the sum of—
‘‘(i) the lien,
‘‘(ii) all other liens on the property; and
‘‘(iii) the amount of the exemption that the
debtor could claim if there were no liens on the
property;
exceeds the value that the debtor’s interest in the property
would have in the absence of any liens.
‘‘(B) In the case of a property subject to more than
1 lien, a lien that has been avoided shall not be considered
in making the calculation under subparagraph (A) with
respect to other liens.
‘‘(C) This paragraph shall not apply with respect to
a judgment arising out of a mortgage foreclosure.’’.
SEC. 304. PROTECTION OF CHILD SUPPORT AND ALIMONY.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (12)
the following:
‘‘(12A) ‘debt for child support’ means a debt of
a kind specified in section 523(a)(5) of this title for
maintenance or support of a child of the debtor;’’.
(b) RELIEF
FROM
AUTOMATIC
STAY.—Section
362(b)(2) of title 11, United States Code, is amended to
read as follows:
‘‘(2) under subsection (a) of this section—
‘‘(A) of the commencement or continuation
of an action or proceeding for—
‘‘(i) the establishment of paternity; or
‘‘(ii) the establishment or modification
of an order for alimony, maintenance, or
support; or
‘‘(B) of the collection of alimony, mainte-
nance, or support from property that is not
property of the estate;’’.
(c) PRIORITY OF CLAIMS.—Section 507(a) of title 11,
United States Code, is amended—
(1) in paragraph (8) by striking ‘‘(8) Eighth’’
and inserting ‘‘(9) Ninth’’,
(2) in paragraph (7) by striking ‘‘(7) Seventh’’
and inserting ‘‘(8) Eighth’’, and
(3) by inserting after paragraph (6) the follow-
ing:
‘‘(7) Seventh, allowed claims for debts to a
spouse, former spouse, or child of the debtor, for ali-
mony to, maintenance for, or support of such spouse
or child, in connection with a separation agreement,
divorce decree or other order of a court of record,
determination made in accordance with State or ter-
ritorial law by a governmental unit, or property set-
tlement agreement, but not to the extent that such
debt—
‘‘(A) is assigned to another entity, volun-
tarily, by operation of law, or otherwise; or
‘‘(B) includes a liability designated as ali-
mony, maintenance, or support, unless such li-
ability is actually in the nature of alimony,
maintenance or support.’’.
(d) PROTECTION OF LIENS.—Section 522(f)(1)(A) of
title 11, United States Code, as amended by section 303,
is amended by inserting after ‘‘lien’’ the following:
‘‘, other than a judicial lien that secures a debt—
‘‘(i) to a spouse, former spouse, or child of
the debtor, for alimony to, maintenance for, or
support of such spouse or child, in connection
with a separation agreement, divorce decree or
other order of a court of record, determination
made in accordance with State or territorial law
by a governmental unit, or property settlement
agreement; and
‘‘(ii) to the extent that such debt—
‘‘(I) is not assigned to another entity,
voluntarily, by operation of law, or other-
wise; and
‘‘(II) includes a liability designated as
alimony, maintenance, or support, unless
such liability is actually in the nature of al-
imony, maintenance or support.’’.
(e) EXCEPTION TO DISCHARGE.—Section 523 of title
11, United States Code, as amended by section 221, is
amended by adding at the end the following:
‘‘(15) not of the kind described in paragraph
(5) that is incurred by the debtor in the course of
a divorce or separation or in connection with a sepa-
ration agreement, divorce decree or other order of a
court of record, a determination made in accordance
with State or territorial law by a governmental unit
unless—
‘‘(A) the debtor does not have the ability
to pay such debt from income or property of the
debtor not reasonably necessary to be expended
for the maintenance or support of the debtor or
a dependent of the debtor and, if the debtor is
engaged in a business, for the payment of ex-
penditures necessary for the continuation, pres-
ervation, and operation of such business; or
‘‘(B) discharging such debt would result in
a benefit to the debtor that outweighs the det-
rimental consequences to a spouse, former
spouse, or child of the debtor;’’, and
(2) in subsection (c)(1) by striking ‘‘or (6)’’
each place it appears and inserting ‘‘(6), or (15)’’.
(f) PROTECTION AGAINST TRUSTEE AVOIDANCE.—
Section 547(c) of title 11, United States Code, is
amended—
(1) in paragraph (6) by striking ‘‘or’’ at the
end,
(2) by redesignating paragraph (7) as para-
graph (8), and
(3) by inserting after paragraph (6) the follow-
ing:
‘‘(7) to the extent such transfer was a bona fide
payment of a debt to a spouse, former spouse, or
child of the debtor, for alimony to, maintenance for,
or support of such spouse or child, in connection
with a separation agreement, divorce decree or other
order of a court of record, determination made in
accordance with State or territorial law by a govern-
mental unit, or property settlement agreement, but
not to the extent that such debt—
‘‘(A) is assigned to another entity, volun-
tarily, by operation of law, or otherwise; or
‘‘(B) includes a liability designated as ali-
mony, maintenance, or support, unless such li-
ability is actually in the nature of alimony,
maintenance or support; or’’.
(g) APPEARANCE BEFORE COURT.—Child support
creditors or their representatives shall be permitted to ap-
pear and intervene without charge, and without meeting
any special local court rule requirement for attorney ap-
pearances, in any bankruptcy case or proceeding in any
bankruptcy court or district court of the United States
if such creditors or representatives file a form in such
court that contains information detailing the child support
debt, its status, and other characteristics.
(h) CONFORMING AMENDMENTS—Title 11 of the
United States Code is amended—
(1) in section 502(i) by striking ‘‘507(a)(7)’’
and inserting ‘‘507(a)(8)’’,
(2) in section 503(b)(1)(B)(i) by striking
‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,