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‘‘(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 Advisory
Committee on Bankruptcy Rules of the Judicial Conference
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of the United States shall propose for adoption amended
Federal Rules of Bankruptcy Procedure and Official Bank-
ruptcy Forms to be used by small business debtors to file
periodic financial and other reports containing informa-
tion, including information 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
claims 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) the 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 the small business debtor to understand the
small business debtor’s financial condition and plan
the small business debtor’s future.
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SEC. 436. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES IN CHAPTER 11 CASES.—Subchapter I of
title 11, United States Code, as amended by this Act, 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
waives that requirement after notice and hearing,
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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
administrative expense tax claims, except 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.’’.
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(b) CLERICAL AMENDMENT.—The table of sections for
chapter 11 of title 11, United States Code, is amended by
adding at the end of the matter relating to subchapter I
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 hearing; or
‘‘(B) the court, for cause, orders otherwise;
‘‘(2) the plan, and any necessary disclosure
statement, 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
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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)(1) In a small business case, the plan shall be con-
firmed not later than 45 days after the date that a plan
is filed with the court as provided in section 1121(e).
‘‘(2) The 45-day period referred to in paragraph (1)
may be extended only if—
‘‘(A) the debtor, after notice and hearing,
demonstrates that it is more likely than not that
the court will confirm a plan within a reason-
able period of time;
‘‘(B) a new deadline is imposed at the time
at which the extension is granted; and
‘‘(C) the order extending time is signed be-
fore the existing deadline has expired.’’.
SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.
Section 586(a) of title 28, United States Code, is
amended—
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(1) in paragraph (3)—
(A) in subparagraph (G), by striking ‘‘and’’
at the end;
(B) by redesignating subparagraph (H) as
subparagraph (I); and
(C) by inserting after subparagraph (G) the
following:
‘‘(H) in small business cases (as defined in
section 101 of title 11), performing the addi-
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 entry of order for
relief but before the first meeting scheduled under
section 341(a) of title 11, at which time the
United States trustee shall—
‘‘(i) begin to investigate the debtor’s vi-
ability;
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‘‘(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
‘‘(v) inform the debtor of other obliga-
tions;
‘‘(B) if determined to be appropriate and
advisable, visit the appropriate business premises
of the debtor and ascertain the state of the debt-
or’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.’’.
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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:
‘‘(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 this Act is amended—
(1) in subsection (k), as redesignated by this
Act—
(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:
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‘‘(l)(1) Except as provided in paragraph (2) of this
subsection, the provisions of subsection (a) do 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;
‘‘(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 succeeded to substan-
tially all of the assets or business of a small business
debtor described in subparagraph (A), (B), or (C).
‘‘(2) This subsection 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 that petition re-
sulted from circumstances beyond the control of
the debtor not foreseeable at the time the case
then pending was filed; and
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‘‘(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.’’.
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, 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 interest of creditors
and the estate, if the movant establishes cause.
‘‘(2) The relief provided in paragraph (1) shall not be
granted 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 es-
tablished in sections 1121(e) and 1129(e) of this
title, as amended, or in cases in which these sec-
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tions do not apply, within a reasonable period of
time; and
‘‘(B) the grounds include an act or omission of
the debtor—
‘‘(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 any mo-
tion 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 the hearing, unless the mov-
ant 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 paragraph.
‘‘(4) For purposes of this subsection, the term ‘cause’
includes—
‘‘(A) substantial or continuing loss to or diminu-
tion of the estate;
‘‘(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 harmful
to 1 or more creditors;
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‘‘(E) failure to comply with an order of the
court;
‘‘(F) repeated failure timely to satisfy any filing
or reporting requirement established by this title or
by any rule applicable to a case under this chapter;
‘‘(G) failure to attend the meeting of creditors
convened under section 341(a) or an examination or-
dered under rule 2004 of the Federal Rules of Bank-
ruptcy Procedure;
‘‘(H) failure timely to provide information or at-
tend meetings reasonably requested by the United
States trustee or the bankruptcy administrator;
‘‘(I) failure timely to pay taxes due after the
date of the order for relief or to file tax returns due
after the order for relief;
‘‘(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;
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan;
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‘‘(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 on which the petition is filed.
‘‘(5) The court shall commence the hearing on any mo-
tion 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 the hearing, unless the mov-
ant 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 paragraph.’’.
(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
(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
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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 Administrative Office of United States Trust-
ees, 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
(2) submit to the President pro tempore of the
Senate and the Speaker of the House of Representa-
tives a report summarizing that study.
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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-
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—
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(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 penalty provisions, 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 a nondebtor, 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);’’.
TITLE V—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI-
TION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States Code,
is amended by inserting ‘‘notwithstanding section 301(b)’’
before the period at the end.
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(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 each district shall collect statistics
regarding individual debtors with primarily consumer
debts seeking relief under chapters 7, 11, and 13 of title
11. Those statistics shall be on a standardized form pre-
scribed by the Director of the Administrative Office of the
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United States Courts (referred to in this section as the ‘Di-
rector’).
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a);
‘‘(2) make the statistics available to the public;
and
‘‘(3) not later than October 31, 2002, and annu-
ally thereafter, prepare, and submit to Congress a re-
port concerning the information collected under sub-
section (a) that contains an analysis of the informa-
tion.
‘‘(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-
ported in the schedules prescribed pursuant to
section 2075 of this title and filed by those debt-
ors;
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‘‘(B) the current monthly income, average
income, and average expenses of those debtors as
reported 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 the reporting period, determined as
the difference between the total amount of debt
and obligations of a debtor reported on the sched-
ules and the amount of such debt reported in cat-
egories which are predominantly nondischarge-
able;
‘‘(D) the average period of time between the
filing of the petition and the closing of the case;
‘‘(E) for the reporting period—
‘‘(i) the number of cases in which a re-
affirmation was filed; and
‘‘(ii)(I) the total number of reaffirma-
tions filed;
‘‘(II) of those cases in which a reaffir-
mation was filed, the number of cases in
which the debtor was not represented by an
attorney; and
‘‘(III) of those cases in which a reaffir-
mation was filed, the number of cases in
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which the reaffirmation was approved by
the court;
‘‘(F) with respect to cases filed under chap-
ter 13 of title 11, for the reporting period—
‘‘(i)(I) the number of cases in which a
final order was entered determining the
value of property securing a claim in an
amount less than the amount of the claim;
and
‘‘(II) the number of final orders deter-
mining the value of property securing a
claim issued;
‘‘(ii) the number of cases dismissed, the
number of cases dismissed for failure to
make payments under the plan, the number
of cases refiled after dismissal, and the
number of cases in which the plan was com-
pleted, separately itemized with respect to
the number of modifications made before
completion of the plan, if any; and
‘‘(iii) the number of cases in which the
debtor filed another case during the 6-year
period preceding the filing;
‘‘(G) the number of cases in which creditors
were fined for misconduct and any amount of
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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 counsel 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:
‘‘§ 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
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‘‘(2) periodic reports by debtors in possession or
trustees, as the case may be, 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—
‘‘(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
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‘‘(3) appropriate privacy concerns and safe-
guards.
‘‘(d) FINAL REPORTS.—Final reports proposed for
adoption by trustees under chapters 7, 12, and 13 of title
11 shall, in addition to such other matters as are required
by law or as the Attorney General in the discretion of the
Attorney General, shall propose, include with respect to a
case under such title—
‘‘(1) information about the length of time the
case was pending;
‘‘(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,
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.
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‘‘(e) PERIODIC REPORTS.—Periodic reports proposed
for adoption by trustees or debtors in possession under
chapter 11 of title 11 shall, in addition to such other mat-
ters as are required by law or as the Attorney General, in
the discretion of the Attorney General, shall propose,
include—
‘‘(1) information about the standard industry
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor;
‘‘(2) length of time the case has been pending;
‘‘(3) number of full-time employees as 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-
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
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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 at
the beginning of 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 which the
debtor is required to provide under sections 521 and
1322 of title 11, and, if applicable, section 111 of title
11, in individual cases filed under chapter 7 or 13 of
such title. Such audits shall be in accordance with
generally accepted auditing standards and performed
by independent certified public accountants or inde-
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pendent licensed public accountants, provided that the
Attorney General and the Judicial Conference, as ap-
propriate, may develop alternative auditing stand-
ards not later than 2 years after the date of enact-
ment 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 for schedules of income
and expenses which reflect greater than average
variances from the statistical norm of the district
in which the schedules were filed 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
(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
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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 Reform Act
of 2001; and’’; 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 Reform Act of 2001.
‘‘(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
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 bankruptcy court shall give notice of the
misstatement to the creditors in the case.
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‘‘(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 this Act, is amended in each of paragraphs
(3) and (4) by inserting ‘‘or an auditor appointed 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—
(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
satisfactorily—
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‘‘(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,
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—
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(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 which arise after the filing of a
petition, shall be limited to expenses incurred under
chapter 7 of this title and shall not include expenses
incurred under chapter 11 of this title)’’ 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—
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‘‘(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 that 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—
(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
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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 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—
(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’’;
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(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 of each district shall maintain a
listing 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.
‘‘(B) If a governmental unit referred to in subpara-
graph (A) does not designate an address and provide that
address to the clerk under that subparagraph, 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 that governmental unit.’’.
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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
chapter 5 of title 11, United States Code, is amended by
inserting after the item relating to section 510 the following:
‘‘511. Rate of interest on tax claims.’’.
SEC. 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 filing of the petition’’ after ‘‘gross re-
ceipts’’;
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(B) in clause (i), by striking ‘‘for a taxable
year ending on or before the date of 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
(2) by adding at the end the following:
‘‘An otherwise applicable time period specified in this
paragraph shall be suspended for (i) any period dur-
ing which a governmental unit is prohibited under
applicable 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 pro-
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posed against the debtor, plus 90 days; plus (ii) any
time during which the stay of proceedings was in ef-
fect 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 of this Act, is amended by striking
‘‘paragraph’’ and inserting ‘‘section 507(a)(8)(C) or in
paragraph (1)(B), (1)(C),’’.
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 11.
Section 1141(d) of title 11, United States Code, as
amended by this Act, 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 described in subparagraph (A) or (B) of sec-
tion 523(a)(2) that is owed to a domestic governmental unit
or owed to a person as the result of an action filed under
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subchapter III of chapter 37 of title 31, United States Code,
or any similar State statute, or for a tax or customs duty
with respect to which the debtor—
‘‘(A) made a fraudulent return; or
‘‘(B) willfully attempted in any manner to evade
or defeat that tax or 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 an individual
debtor’s tax liability for a taxable period ending before 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—
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‘‘(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 entry 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 in 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:
‘‘(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
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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—
‘‘(1) the tax is a property tax secured by a lien
against property that is abandoned within a reason-
able period of time after the lien attaches by the trust-
ee of a bankruptcy estate under section 554 of 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
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‘‘(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’’.
(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;’’.
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(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-
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.’’.
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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 this Act, is amended by inserting ‘‘the estate,’’
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 this Act, is amended
by adding at the end the following:
‘‘(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.—
(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
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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
‘‘(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) Upon notice and hearing, and order entered before
the tolling of any applicable filing period determined under
this subsection, if the debtor demonstrates by a preponder-
ance of the evidence that the failure to file a return as re-
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quired under this subsection is attributable to circumstances
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.’’.
(2) CONFORMING AMENDMENT.—The table of sec-
tions at the beginning of chapter 13 of title 11,
United States Code, is amended by inserting after the
item relating to section 1307 the following:
‘‘1308. Filing of prepetition tax returns.’’.
(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
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(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’’.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CON-
FIRMATION.—It is the sense of Congress that the Advisory
Committee on Bankruptcy Rules of the Judicial Conference
of the United States should, as soon as practicable after the
date of enactment of this Act, propose for adoption amended
Federal Rules of Bankruptcy Procedure which provide
that—
(1) notwithstanding the provisions of Rule
3015(f), in cases under chapter 13 of title 11, United
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States Code, 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, no objection to a tax with respect 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—
(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’’.
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SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, is
amended by inserting after paragraph (25), as added by
this Act, 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 order for relief
against an income tax liability for a taxable period
that also ended before the order for relief, except that
in any case in which the setoff of an income tax re-
fund is not permitted under applicable nonbank-
ruptcy law because of a pending action to determine
the amount or legality of a tax liability, the govern-
mental unit may hold the refund pending the resolu-
tion of the action, unless the court, upon motion of
the trustee and after notice and hearing, grants the
taxing authority adequate protection (within the
meaning of section 361) for the secured claim of that
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.—Section 346 of title 11, United
States Code, is amended to read as follows:
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‘‘§ 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
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 said returns only to the extent such returns are also
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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).
‘‘(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.
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‘‘(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
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
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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 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.
‘‘(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
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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.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 728 of title 11, United States Code,
is repealed.
(2) Section 1146 of title 11, United States Code,
is amended—
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d)
as subsections (a) and (b), respectively.
(3) Section 1231 of title 11, United States Code,
is amended—
(A) by striking subsections (a) and (b); and
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(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 this Act, is amended by adding at the end the fol-
lowing:
‘‘(k)(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-
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:
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‘‘CHAPTER 15—ANCILLARY AND OTHER
CROSS-BORDER CASES
‘‘Sec.
‘‘1501. Purpose and scope of application.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘1502. Definitions.
‘‘1503. International obligations of the United States.
‘‘1504. Commencement of ancillary case.
‘‘1505. Authorization to act in a foreign country.
‘‘1506. Public policy exception.
‘‘1507. Additional assistance.
‘‘1508. Interpretation.
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND
CREDITORS TO THE COURT
‘‘1509. Right of direct access.
‘‘1510. Limited jurisdiction.
‘‘1511. Commencement of case under section 301 or 303.
‘‘1512. Participation of a foreign representative in a case under this title.
‘‘1513. Access of foreign creditors to a case under this title.
‘‘1514. Notification to foreign creditors concerning a case under this title.
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING AND
RELIEF
‘‘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.
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‘‘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) United States courts, United States
trustees, trustees, examiners, debtors, and debtors
in possession; and
‘‘(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—
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‘‘(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 taking place
concurrently; or
‘‘(4) creditors or other interested persons in a
foreign country have an interest in requesting the
commencement of, or participating in, a case or pro-
ceeding under this title.
‘‘(c) This chapter does not apply to—
‘‘(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
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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—
‘‘(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 taking place in the country where the debt-
or has the center of its main interests;
‘‘(5) ‘foreign nonmain proceeding’ means a for-
eign proceeding, other than a foreign main pro-
ceeding, taking place in a country where the debtor
has an establishment;
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‘‘(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
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.
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‘‘§ 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
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;
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‘‘(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.
‘‘§ 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—
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‘‘§ 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
‘‘(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.
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‘‘§ 1513. Access of foreign creditors to a case under
this title
‘‘(a) Foreign creditors have the same rights regarding
the commencement of, and participation in, a case under
this title as domestic creditors.
‘‘(b)(1) Subsection (a) does not change or codify
present law as to the priority of claims under section 507
or 726 of this title, except that the claim of a foreign cred-
itor under those sections shall not be given a lower priority
than that of general unsecured claims without priority sole-
ly because the holder of such claim is a foreign creditor.
‘‘(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.
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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, the notification shall—
‘‘(1) indicate the time period for filing proofs of
claim and specify the place for their filing;
‘‘(2) indicate whether secured creditors need to
file their proofs of claim; and
‘‘(3) contain any other information required to
be included in such a notification to creditors under
this title and the orders of the court.
‘‘(d) Any rule of procedure or order of the court as
to notice or the filing of a claim shall provide such addi-
tional time to creditors with foreign addresses as is reason-
able under the circumstances.
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‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN
PROCEEDING AND RELIEF
‘‘§ 1515. Application for recognition
‘‘(a) A foreign representative applies to the court for
recognition of the foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
‘‘(b) A petition for recognition shall be accompanied
by—
‘‘(1) a certified copy of the decision commencing
the foreign proceeding and appointing the foreign
representative;
‘‘(2) a certificate from the foreign court affirm-
ing the existence of the foreign proceeding and of the
appointment of the foreign representative; or
‘‘(3) in the absence of evidence referred to in
paragraphs (1) and (2), any other evidence acceptable
to the court of the existence of the 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
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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 (as defined in section 101) and that the person
or body is a foreign representative (as defined in section
101), the court is entitled to so presume.
‘‘(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
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) the foreign proceeding for which recognition
is sought is a foreign main proceeding or foreign
nonmain proceeding within the meaning of section
1502;
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‘‘(2) the foreign representative applying for rec-
ognition is a person or body as defined in section
101; and
‘‘(3) the petition meets the requirements of sec-
tion 1515.
‘‘(b) The foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is taking
place in the country where the debtor has the center
of its main interests; or
‘‘(2) as a foreign nonmain proceeding if the 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
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.
The case under this chapter may be closed in the manner
prescribed under section 350.
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‘‘§ 1518. Subsequent information
‘‘From the time of filing the petition for recognition
of the foreign proceeding, the foreign representative shall file
with the court promptly a notice of change of status
concerning—
‘‘(1) any substantial change in the status of the
foreign proceeding or the status of the foreign rep-
resentative’s appointment; and
‘‘(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign 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
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,
including—
‘‘(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-
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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.
‘‘(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(l)
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—
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‘‘(1) sections 361 and 362 apply with respect to
the debtor and that property of the debtor that is
within the territorial jurisdiction of the United
States;
‘‘(2) sections 363, 549, and 552 of this title
apply to a transfer of an interest of the debtor in
property that is within the territorial jurisdiction of
the United States to the same extent that the 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
‘‘(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.
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‘‘§ 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);
‘‘(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
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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-
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.
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‘‘(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(l)
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
(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) of this title, to conditions it considers
appropriate, including the giving of security or the filing
of a bond.
‘‘(c) The court may, at the request of the foreign rep-
resentative or an entity affected by relief granted under 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
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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 the foreign proceeding is a foreign nonmain
proceeding, the court must be satisfied that an action under
subsection (a) relates to assets that, under United States
law, should be administered in the foreign nonmain pro-
ceeding.
‘‘§ 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.
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‘‘SUBCHAPTER IV—COOPERATION WITH FOR-
EIGN COURTS AND FOREIGN REPRESENTA-
TIVES
‘‘§ 1525. Cooperation and direct communication be-
tween the court and foreign courts or for-
eign representatives
‘‘(a) Consistent with section 1501, the court shall co-
operate to the maximum extent possible with foreign courts
or foreign representatives, either directly or through the
trustee.
‘‘(b) The court is entitled to communicate directly
with, or to request information or assistance directly from,
foreign courts or foreign representatives, subject to the rights
of parties in interest to notice and participation.
‘‘§ 1526. Cooperation and direct communication be-
tween the trustee and foreign courts or
foreign representatives
‘‘(a) Consistent with section 1501, the trustee or other
person, including an examiner, authorized by the court,
shall, subject to the supervision of the court, cooperate to
the maximum extent possible with foreign courts or foreign
representatives.
‘‘(b) The trustee or other person, including an exam-
iner, authorized by the court is entitled, subject to the super-
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vision of the court, to communicate directly with foreign
courts or foreign representatives.
‘‘§ 1527. Forms of cooperation
‘‘Cooperation referred to in sections 1525 and 1526
may 
be 
implemented 
by 
any 
appropriate 
means,
including—
‘‘(1) appointment of a person or body, including
an examiner, to act at the direction of the court;
‘‘(2) communication of information by any
means considered appropriate by the court;
‘‘(3) coordination of the administration and su-
pervision of the debtor’s assets and affairs;
‘‘(4) approval or implementation of agreements
concerning the coordination of proceedings; and
‘‘(5) coordination of concurrent proceedings re-
garding the same debtor.
‘‘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
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
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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 taking place concurrently regarding
the same debtor, the court shall seek cooperation and coordi-
nation under sections 1525, 1526, and 1527, and the fol-
lowing shall apply:
‘‘(1) If the case in the United States is taking
place at the time the petition for recognition of the
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
‘‘(B) even if the foreign proceeding is recog-
nized as a foreign main proceeding, section 1520
does not apply.
‘‘(2) If a case in the United States under this
title commences after recognition, or after the filing of
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the 
petition 
for 
recognition, 
of 
the 
foreign
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 the foreign proceeding is a foreign
main proceeding, the stay and suspension re-
ferred to in section 1520(a) shall be modified or
terminated if inconsistent with the relief 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.
‘‘(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
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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.
‘‘§ 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.
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‘‘§ 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,
362(l), 555 through 557, and 559 through 562 apply
in a case under chapter 15’’; and
(2) by adding at the end the following:
‘‘(j) Chapter 15 applies only in a case under such
chapter, except that—
‘‘(1) sections 1505, 1513, and 1514 apply in all
cases under this title; and
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‘‘(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 the foreign proceeding;’’.
(c) AMENDMENTS
TO TITLE 28, UNITED STATES
CODE.—
(1) PROCEDURES.—Section 157(b)(2) of title 28,
United States Code, is amended—
(A) in subparagraph (N), by striking ‘‘and’’
at the end;
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(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:
‘‘§ 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 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
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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.—
(1) Section 109(b)(3) of title 11, United States
Code, is amended to read as follows:
‘‘(3)(A) a foreign insurance company, engaged
in such business in the United States; or
‘‘(B) a foreign bank, savings bank, cooperative
bank, savings and loan association, building and loan
association, or credit union, that has a branch or
agency (as defined in section 1(b) of the International
Banking Act of 1978 (12 U.S.C. 3101) in the United
States.’’.
(2) Section 303(k) of title 11, United States
Code, is repealed.
(3)(A) Section 304 of title 11, United States
Code, is repealed.
(B) The table of sections at the beginning of
chapter 3 of title 11, United States Code, is amended
by striking the item relating to section 304.
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(C) Section 306 of title 11, United States Code,
is amended by striking ‘‘, 304,’’ each place it appears.
(4) Section 305(a)(2) of title 11, United States
Code, is amended to read as follows:
‘‘(2)(A) a petition under section 1515 of this title
for recognition of a foreign proceeding has been grant-
ed; and
‘‘(B) the purposes of chapter 15 of this title
would be best served by such dismissal or suspen-
sion.’’.
(5) Section 508 of title 11, United States Code,
is amended—
(A) by striking subsection (a); and
(B) in subsection (b), by striking ‘‘(b)’’.
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)(i) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by in-
serting ‘‘, resolution, or order’’ after ‘‘any similar agree-
ment that the Corporation determines by regulation’’.
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(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-
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
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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
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;
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‘‘(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
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
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enhancement 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.’’.
(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—
‘‘(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
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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
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
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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
‘‘(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—
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‘‘(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,
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),
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(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
‘‘(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 guar-
antee 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:
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‘‘(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
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-
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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;
‘‘(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
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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
(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
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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-
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-
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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
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;
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‘‘(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
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
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(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
title only and shall not be construed or ap-
plied so as to challenge or affect the charac-
terization, definition, or treatment of any
swap agreement under any other statute,
regulation, or rule, including the Securities
Act of 1933, the Securities Exchange 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 Se-
curities 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,
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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
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:
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‘‘(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 (12 U.S.C.
91) or any other Federal or State law relating to the avoid-
ance of preferential or fraudulent transfers,’’ before ‘‘the
Corporation’’.
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
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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-
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
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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’’.
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
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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
proceeding—
‘‘(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
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
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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
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.’’.
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(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.’’.
(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
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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
‘‘(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 sections 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-
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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
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—
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‘‘(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—
(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—
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‘‘(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 including at the end of section 11(e) the
following new paragraph:
‘‘(17) SAVINGS CLAUSE.—The meaning of terms
used in this subsection (e) are applicable for purposes
of this subsection (e) only, and shall not be construed
or applied so as to challenge or affect the character-
ization, 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 law (as that
term is defined in section 3(a)(47) of the Securities
Exchange Act of 1934), and the Commodity Exchange
Act.’’.
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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-
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.’’.
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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)—
(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-
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cation to become an insured bank under section
5 of the Federal Deposit Insurance Act;’’; and
(C) by amending subparagraph (C) (as 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:
‘‘(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 closeout values re-
lating to such obligations or entitlements)
among the parties to the agreement; and’’;
and
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(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
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
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(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—
(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
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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
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—
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(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
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
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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
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
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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 the
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 their regula-
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tions generally are consistent with the regulations
and policies of the Federal Deposit Insurance Cor-
poration adopted pursuant to the Federal Deposit In-
surance 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 CODE 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)—
(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:
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‘‘(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
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
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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
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
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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;
‘‘(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
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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
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; and
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial
mortgage loan;’’;
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(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,
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;
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‘‘(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—
‘‘(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-
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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;
‘‘(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-
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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
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-
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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
interests therein (including an interest
therein or based on the value thereof), or op-
tion on any of the foregoing, including an
option to purchase or sell any such security,
certificate of deposit, mortgage loan, inter-
est, group or index, or option, and includ-
ing any repurchase or reverse repurchase
transaction on any such security, certificate
of deposit, mortgage loan, interest, group or
index, or option;
‘‘(ii) any option entered into on a na-
tional securities exchange relating to foreign
currencies;
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‘‘(iii) the guarantee by or to any secu-
rities clearing agency of a settlement of
cash, securities, certificates of deposit, mort-
gage loans or interests therein, group or
index of securities, or mortgage loans or in-
terests therein (including any interest there-
in or based on the value thereof), or option
on any of the foregoing, including an option
to purchase or sell any such security, cer-
tificate of deposit, mortgage loan, interest,
group or index, or option;
‘‘(iv) any margin loan;
‘‘(v) any other agreement or trans-
action that is similar to an agreement or
transaction referred to in this subpara-
graph;
‘‘(vi) any combination of the agree-
ments or transactions referred to in this
subparagraph;
‘‘(vii) any option to enter into any
agreement or transaction referred to in this
subparagraph;
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v),
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(vi), or (vii), together with all supplements
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that
is not a securities contract under this sub-
paragraph, except that such master agree-
ment shall be considered to be a securities
contract under this subparagraph only with
respect to each agreement or transaction
under such master agreement that is re-
ferred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii); or
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in this subparagraph including
any guarantee or reimbursement obligation
by or to a stockbroker, securities clearing
agency, financial institution, or financial
participant in connection with any agree-
ment or transaction referred to in this sub-
paragraph, but not to exceed the damages in
connection with any such agreement or
transaction, measured in accordance with
section 562; and
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‘‘(B) does not include any purchase, sale, or
repurchase obligation under a participation in a
commercial mortgage loan.’’; and
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and
(B) by adding at the end the following:
‘‘(F) any other agreement or transaction
that is similar to an agreement or transaction
referred to in this paragraph;
‘‘(G) any combination of the agreements or
transactions referred to in this paragraph;
‘‘(H) any option to enter into an agreement
or transaction referred to in this paragraph;
‘‘(I) a master agreement that provides for
an agreement or transaction referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or
(H), together with all supplements to such mas-
ter agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a commodity contract
under this paragraph, except that the master
agreement shall be considered to be a commodity
contract under this paragraph only with respect
to each agreement or transaction under the mas-
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ter agreement that is referred to in subparagraph
(A), (B), (C), (D), (E), (F), (G), or (H); or
‘‘(J) any security agreement or arrange-
ment or other credit enhancement related to any
agreement or transaction referred to in this
paragraph including any guarantee or reim-
bursement obligation by or to a commodity
broker or financial participant in connection
with any agreement or transaction referred to in
this paragraph, but not to exceed the damages in
connection with any such agreement or trans-
action, measured in accordance with section
562;’’.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINAN-
CIAL
PARTICIPANT, 
AND
FORWARD
CONTRACT
MER-
CHANT.—Section 101 of title 11, United States Code, is
amended—
(1) by striking paragraph (22) and inserting the
following:
‘‘(22) ‘financial institution’ means—
‘‘(A) a Federal reserve bank, or an entity
(domestic or foreign) that is a commercial or
savings bank, industrial savings bank, savings
and loan association, trust company, or receiver
or conservator for such entity and, when any
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such Federal reserve bank, receiver, conservator
or entity is acting as agent or custodian for a
customer in connection with a securities con-
tract, as defined in section 741, such customer;
or
‘‘(B) in connection with a securities con-
tract, as defined in section 741, an investment
company registered under the Investment Com-
pany Act of 1940;’’;
(2) by inserting after paragraph (22) the fol-
lowing:
‘‘(22A) ‘financial participant’ means—
‘‘(A) an entity that, at the time it enters
into a securities contract, commodity contract,
swap agreement, repurchase agreement, or for-
ward contract, or at the time of the filing of the
petition, has one or more agreements or trans-
actions described in paragraph (1), (2), (3), (4),
(5), or (6) of section 561(a) with the debtor or
any other entity (other than an affiliate) of a
total gross dollar value of not less than
$1,000,000,000 in notional or actual principal
amount outstanding on any day during the pre-
vious 15-month period, or has gross mark-to-
market positions of not less than $100,000,000
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(aggregated across counterparties) in one or
more such agreements or transactions with the
debtor or any other entity (other than an affil-
iate) on any day during the previous 15-month
period; or
‘‘(B) a clearing organization (as that term
is defined in section 402 of the Federal Deposit
Insurance Corporation Improvement Act of
1991);’’; and
(3) by striking paragraph (26) and inserting the
following:
‘‘(26) ‘forward contract merchant’ means a Fed-
eral reserve bank, or an entity the business of which
consists in whole or in part of entering into forward
contracts as or with merchants in a commodity, as
defined in section 761 or any similar good, article,
service, right, or interest which is presently or in the
future becomes the subject of dealing in the forward
contract trade;’’.
(c) DEFINITION
OF MASTER NETTING AGREEMENT
AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec-
tion 101 of title 11, United States Code, is amended by in-
serting after paragraph (38) the following new paragraphs:
‘‘(38A) ‘master netting agreement’—
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‘‘(A) means an agreement providing for the
exercise of rights, including rights of netting,
setoff, liquidation, termination, acceleration, or
closeout, under or in connection with one or
more contracts that are described in any one or
more of paragraphs (1) through (5) of section
561(a), or any security agreement or arrange-
ment or other credit enhancement related to one
or more of the foregoing, including any guar-
antee or reimbursement obligation related to 1 or
more of the foregoing; and
‘‘(B) if the agreement contains provisions
relating to agreements or transactions that are
not contracts described in paragraphs (1)
through (5) of section 561(a), shall be deemed to
be a master netting agreement only with respect
to those agreements or transactions that are de-
scribed in any one or more of paragraphs (1)
through (5) of section 561(a);
‘‘(38B) ‘master netting agreement participant’
means an entity that, at any time before the filing of
the petition, is a party to an outstanding master net-
ting agreement with the debtor;’’.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS,
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
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CHASE AGREEMENTS, AND MASTER NETTING AGREEMENTS
UNDER THE AUTOMATIC-STAY.—
(1) IN
GENERAL.—Section 362(b) of title 11,
United States Code, as amended by this Act, is
amended—
(A) 
in 
paragraph 
(6), 
by 
inserting
‘‘, pledged to and under the control of,’’ after
‘‘held by’’;
(B) 
in 
paragraph 
(7), 
by 
inserting
‘‘, pledged to and under the control of,’’ after
‘‘held by’’;
(C) by striking paragraph (17) and insert-
ing the following:
‘‘(17) under subsection (a), of the setoff by a
swap participant or financial participant of a mu-
tual debt and claim under or in connection with one
or more swap agreements that constitutes the setoff of
a claim against the debtor for any payment or other
transfer of property due from the debtor under or in
connection with any swap agreement against any
payment due to the debtor from the swap participant
or financial participant under or in connection with
any swap agreement or against cash, securities, or
other property held by, pledged to and under the con-
trol of, or due from such swap participant or finan-
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cial participant to margin, guarantee, secure, or settle
any swap agreement;’’; and
(D) by inserting after paragraph (26), as
added by this Act, the following new paragraph:
‘‘(27) under subsection (a), of the setoff by a
master netting agreement participant of a mutual
debt and claim under or in connection with one or
more master netting agreements or any contract or
agreement subject to such agreements that constitutes
the setoff of a claim against the debtor for any pay-
ment or other transfer of property due from the debtor
under or in connection with such agreements or any
contract or agreement subject to such agreements
against any payment due to the debtor from such
master netting agreement participant under or in
connection with such agreements or any contract or
agreement subject to such agreements or against cash,
securities, or other property held by, pledged to and
under the control of, or due from such master netting
agreement participant to margin, guarantee, secure,
or settle such agreements or any contract or agree-
ment subject to such agreements, to the extent that
such participant is eligible to exercise such offset
rights under paragraph (6), (7), or (17) for each indi-
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vidual contract covered by the master netting agree-
ment in issue; or’’.
(2) LIMITATION.—Section 362 of title 11, United
States Code, as amended by this Act, is amended by
adding at the end the following:
‘‘(m) LIMITATION.—The exercise of rights not subject
to the stay arising under subsection (a) pursuant to para-
graph (6), (7), (17), or (27) of subsection (b) shall not be
stayed by any order of a court or administrative agency
in any proceeding under this title.’’.
(e) LIMITATION OF AVOIDANCE POWERS UNDER MAS-
TER NETTING AGREEMENT.—Section 546 of title 11, United
States Code, as amended by this Act, is amended—
(1) in subsection (g) (as added by section 103 of
Public Law 101–311)—
(A) by striking ‘‘under a swap agreement’’;
(B) by striking ‘‘in connection with a swap
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and
(C) by inserting ‘‘or financial participant’’
after ‘‘swap participant’’ each place that term
appears; and
(2) by adding at the end the following:
‘‘(k) 
Notwithstanding 
sections 
544, 
545, 
547,
548(a)(1)(B), and 548(b) the trustee may not avoid a trans-
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fer made by or to a master netting agreement participant
under or in connection with any master netting agreement
or any individual contract covered thereby that is made be-
fore the commencement of the case, except under section
548(a)(1)(A) and except to the extent that the trustee could
otherwise avoid such a transfer made under an individual
contract covered by such master netting agreement.’’.
(f) FRAUDULENT TRANSFERS OF MASTER NETTING
AGREEMENTS.—Section 548(d)(2) of title 11, United States
Code, is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at
the end;
(2) in subparagraph (D), by striking the period
and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(E) a master netting agreement participant
that receives a transfer in connection with a master
netting agreement or any individual contract covered
thereby takes for value to the extent of such transfer,
except that, with respect to a transfer under any indi-
vidual contract covered thereby, to the extent that
such master netting agreement participant otherwise
did not take (or is otherwise not deemed to have
taken) such transfer for value.’’.
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(g) TERMINATION OR ACCELERATION OF SECURITIES
CONTRACTS.—Section 555 of title 11, United States Code,
is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 555. Contractual right to liquidate, terminate, or
accelerate a securities contract’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(h) TERMINATION
OR ACCELERATION
OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,
United States Code, is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 556. Contractual right to liquidate, terminate, or
accelerate a commodities contract or for-
ward contract’’;
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and
(3) in the second sentence, by striking ‘‘As used’’
and all that follows through ‘‘right,’’ and inserting
‘‘As used in this section, the term ‘contractual right’
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includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities asso-
ciation, a securities clearing agency, a contract mar-
ket designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered
under the Commodity Exchange Act, or a board of
trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a
right,’’.
(i) TERMINATION OR ACCELERATION OF REPURCHASE
AGREEMENTS.—Section 559 of title 11, United States Code,
is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 559. Contractual right to liquidate, terminate, or
accelerate a repurchase agreement’’;
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and
(3) in the third sentence, by striking ‘‘As used’’
and all that follows through ‘‘right,’’ and inserting
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‘‘As used in this section, the term ‘contractual right’
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities asso-
ciation, a securities clearing agency, a contract mar-
ket designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered
under the Commodity Exchange Act, or a board of
trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a
right,’’.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF
SWAP AGREEMENTS.—Section 560 of title 11, United States
Code, is amended—
(1) by amending the section heading to read as
follows:
‘‘§ 560. Contractual right to liquidate, terminate, or
accelerate a swap agreement’’;
(2) in the first sentence, by striking ‘‘termi-
nation of a swap agreement’’ and inserting ‘‘liquida-
tion, termination, or acceleration of one or more swap
agreements’’;
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(3) by striking ‘‘in connection with any swap
agreement’’ and inserting ‘‘in connection with the ter-
mination, liquidation, or acceleration of one or more
swap agreements’’; and
(4) in the second sentence, by striking ‘‘As used’’
and all that follows through ‘‘right,’’ and inserting
‘‘As used in this section, the term ‘contractual right’
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities asso-
ciation, a securities clearing agency, a contract mar-
ket designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered
under the Commodity Exchange Act, or a board of
trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a
right,’’.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR
OFFSET UNDER
A MASTER NETTING AGREEMENT
AND
ACROSS CONTRACTS.—
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(1) IN GENERAL.—Title 11, United States Code,
is amended by inserting after section 560 the fol-
lowing:
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting
agreement and across contracts; pro-
ceedings under chapter 15
‘‘(a) IN GENERAL.—Subject to subsection (b), the exer-
cise of any contractual right, because of a condition of the
kind specified in section 365(e)(1), to cause the termination,
liquidation, or acceleration of or to offset or net termination
values, payment amounts, or other transfer obligations aris-
ing under or in connection with one or more (or the termi-
nation, liquidation, or acceleration of one or more)—
‘‘(1) securities contracts, as defined in section
741(7);
‘‘(2) commodity contracts, as defined in section
761(4);
‘‘(3) forward contracts;
‘‘(4) repurchase agreements;
‘‘(5) swap agreements; or
‘‘(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by oper-
ation of any provision of this title or by any order of a
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court or administrative agency in any proceeding under
this title.
‘‘(b) EXCEPTION.—
‘‘(1) IN GENERAL.—A party may exercise a con-
tractual right described in subsection (a) to termi-
nate, liquidate, or accelerate only to the extent that
such party could exercise such a right under section
555, 556, 559, or 560 for each individual contract
covered by the master netting agreement in issue.
‘‘(2) COMMODITY
BROKERS.—If a debtor is a
commodity broker subject to subchapter IV of chapter
7—
‘‘(A) a party may not net or offset an obli-
gation to the debtor arising under, or in connec-
tion with, a commodity contract traded on or
subject to the rules of a contract market des-
ignated under the Commodity Exchange Act or
a derivatives transaction execution facility reg-
istered under the Commodity Exchange Act
against any claim arising under, or in connec-
tion with, other instruments, contracts, or agree-
ments listed in subsection (a) except to the extent
that the party has positive net equity in the
commodity accounts at the debtor, as calculated
under that subchapter IV; and
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‘‘(B) another commodity broker may not net
or offset an obligation to the debtor arising
under, or in connection with, a commodity con-
tract entered into or held on behalf of a customer
of the debtor and traded on or subject to the rules
of a contract market designated under the Com-
modity Exchange Act or a derivatives trans-
action execution facility registered under the
Commodity Exchange Act against any claim
arising under, or in connection with, other in-
struments, contracts, or agreements listed in sub-
section (a).
‘‘(3) CONSTRUCTION.—No provision of subpara-
graph (A) or (B) of paragraph (2) shall prohibit the
offset of claims and obligations that arise under—
‘‘(A) a cross-margining agreement or simi-
lar arrangement that has been approved by the
Commodity Futures Trading Commission or
submitted to the Commodity Futures Trading
Commission under paragraph (1) or (2) of sec-
tion 5c(c) of the Commodity Exchange Act and
has not been abrogated or rendered ineffective by
the Commodity Futures Trading Commission; or
‘‘(B) any other netting agreement between a
clearing organization, as defined in section 761,
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and another entity that has been approved by the
Commodity Futures Trading Commission.
‘‘(c) DEFINITION.—As used in this section, the term
‘contractual right’ includes a right set forth in a rule or
bylaw of a derivatives clearing organization (as defined in
the Commodity Exchange Act), a multilateral clearing or-
ganization (as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991), a national securi-
ties exchange, a national securities association, a securities
clearing agency, a contract market designated under the
Commodity Exchange Act, a derivatives transaction execu-
tion facility registered under the Commodity Exchange Act,
or a board of trade (as defined in the Commodity Exchange
Act) or in a resolution of the governing board thereof, and
a right, whether or not evidenced in writing, arising under
common law, under law merchant, or by reason of normal
business practice.
‘‘(d) CASES ANCILLARY TO FOREIGN PROCEEDINGS.—
Any provisions of this title relating to securities contracts,
commodity contracts, forward contracts, repurchase agree-
ments, swap agreements, or master netting agreements shall
apply in a case under chapter 15 of this title, so that en-
forcement of contractual provisions of such contracts and
agreements in accordance with their terms will not be
stayed or otherwise limited by operation of any provision
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of this title or by order of a court in any case under this
title, and to limit avoidance powers to the same extent as
in a proceeding under chapter 7 or 11 of this title (such
enforcement not to be limited based on the presence or ab-
sence of assets of the debtor in the United States).’’.
(2) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, is
amended by inserting after the item relating to sec-
tion 560 the following:
‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a mas-
ter netting agreement and across contracts; proceedings under
chapter 15.’’.
(l) COMMODITY BROKER LIQUIDATIONS.—Title 11,
United States Code, is amended by inserting after section
766 the following:
‘‘§ 767. Commodity broker liquidation and forward
contract merchants, commodity brokers,
stockbrokers, financial institutions, fi-
nancial participants, securities clearing
agencies, swap participants, repo partici-
pants, and master netting agreement par-
ticipants
‘‘Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, com-
modity broker, stockbroker, financial institution, financial
participant, securities clearing agency, swap participant,
repo participant, or master netting agreement participant
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under this title shall not affect the priority of any unsecured
claim it may have after the exercise of such rights.’’.
(m) STOCKBROKER LIQUIDATIONS.—Title 11, United
States Code, is amended by inserting after section 752 the
following:
‘‘§ 753. Stockbroker liquidation and forward contract
merchants, 
commodity 
brokers, 
stock-
brokers, financial institutions, financial
participants, securities clearing agencies,
swap participants, repo participants, and
master netting agreement participants
‘‘Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, com-
modity broker, stockbroker, financial institution, securities
clearing agency, swap participant, repo participant, finan-
cial participant, or master netting agreement participant
under this title shall not affect the priority of any unsecured
claim it may have after the exercise of such rights.’’.
(n) SETOFF.—Section 553 of title 11, United States
Code, is amended—
(1) in subsection (a)(2)(B)(ii), by inserting be-
fore the semicolon the following: ‘‘(except for a setoff
of a kind described in section 362(b)(6), 362(b)(7),
362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561)’’;
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(2) in subsection (a)(3)(C), by inserting before
the period the following: ‘‘(except for a setoff of a kind
described in section 362(b)(6), 362(b)(7), 362(b)(17),
362(b)(27), 555, 556, 559, 560, or 561 of this title)’’;
and
(3) 
in 
subsection 
(b)(1), 
by 
striking
‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 362(b)(27),
555, 556, 559, 560, 561’’.
(o) SECURITIES CONTRACTS, COMMODITY CONTRACTS,
AND FORWARD CONTRACTS.—Title 11, United States Code,
is amended—
(1) in section 362(b)(6), by striking ‘‘financial
institutions,’’ each place such term appears and in-
serting ‘‘financial institution, financial participant,’’;
(2) in sections 362(b)(7) and 546(f), by inserting
‘‘or financial participant’’ after ‘‘repo participant’’
each place that term appears;
(3) in section 546(e), by inserting ‘‘financial
participant,’’ after ‘‘financial institution,’’;
(4) in section 548(d)(2)(B), by inserting ‘‘finan-
cial participant,’’ after ‘‘financial institution,’’;
(5) in section 548(d)(2)(C), by inserting ‘‘or fi-
nancial participant’’ after ‘‘repo participant’’;
(6) in section 548(d)(2)(D), by inserting ‘‘or fi-
nancial participant’’ after ‘‘swap participant’’;
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(7) in section 555—
(A) by inserting ‘‘financial participant,’’
after ‘‘financial institution,’’; and
(B) by striking the second sentence and in-
serting the following: ‘‘As used in this section,
the term ‘contractual right’ includes a right set
forth in a rule or bylaw of a derivatives clearing
organization (as defined in the Commodity Ex-
change Act), a multilateral clearing organization
(as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities
association, a securities clearing agency, a con-
tract market designated under the Commodity
Exchange Act, a derivatives transaction execu-
tion facility registered under the Commodity Ex-
change Act, or a board of trade (as defined in the
Commodity Exchange Act), or in a resolution of
the governing board thereof, and a right, whether
or not in writing, arising under common law,
under law merchant, or by reason of normal
business practice’’;
(8) in section 556, by inserting ‘‘, financial par-
ticipant,’’ after ‘‘commodity broker’’;
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(9) in section 559, by inserting ‘‘or financial
participant’’ after ‘‘repo participant’’ each place that
term appears; and
(10) in section 560, by inserting ‘‘or financial
participant’’ after ‘‘swap participant’’.
(p) CONFORMING AMENDMENTS.—Title 11, United
States Code, is amended—
(1) in the table of sections for chapter 5—
(A) by amending the items relating to sec-
tions 555 and 556 to read as follows:
‘‘555. Contractual right to liquidate, terminate, or accelerate a securities contract.
‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities con-
tract or forward contract.’’;
and
(B) by amending the items relating to sec-
tions 559 and 560 to read as follows:
‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase agree-
ment.
‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;
and
(2) in the table of sections for chapter 7—
(A) by inserting after the item relating to
section 766 the following:
‘‘767. Commodity broker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, financial partici-
pants, securities clearing agencies, swap participants, repo par-
ticipants, and master netting agreement participants.’’;
and
(B) by inserting after the item relating to
section 752 the following:
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‘‘753. Stockbroker liquidation and forward contract merchants, commodity bro-
kers, stockbrokers, financial institutions, financial participants,
securities clearing agencies, swap participants, repo partici-
pants, and master netting agreement participants.’’.
SEC. 907A. SECURITIES BROKER/COMMODITY BROKER LIQ-
UIDATION.
The Securities and Exchange Commission and the
Commodity Futures Trading Commission may consult with
each other with respect to whether, under what cir-
cumstances, and the extent to which security futures prod-
ucts will be treated as commodity contracts or securities
in a liquidation of a person that is both a securities broker
and a commodity broker, and with respect to the treatment
in such a liquidation of accounts in which both commodity
contracts and securities are carried.
SEC. 908. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)) is amended by adding at the end
the following new subparagraph:
‘‘(H) RECORDKEEPING
REQUIREMENTS.—
The Corporation, in consultation with the appro-
priate Federal banking agencies, may by regula-
tion require more detailed recordkeeping by any
insured depository institution with respect to
qualified financial contracts (including market
valuations) only if such insured depository insti-
tution is in a troubled condition (as such term
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is defined by the Corporation pursuant to 12
U.S.C. 1831i).’’;
SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECU-
TION REQUIREMENT.
Section 13(e)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1823(e)(2)) is amended to read as follows:
‘‘(2) EXEMPTIONS
FROM
CONTEMPORANEOUS
EXECUTION REQUIREMENT.—An agreement to provide
for the lawful collateralization of—
‘‘(A) deposits of, or other credit extension
by, a Federal, State, or local governmental enti-
ty, or of any depositor referred to in section
11(a)(2), including an agreement to provide col-
lateral in lieu of a surety bond;
‘‘(B) bankruptcy estate funds pursuant to
section 345(b)(2) of title 11, United States Code;
‘‘(C) extensions of credit, including any
overdraft, from a Federal reserve bank or Federal
home loan bank; or
‘‘(D) one or more qualified financial con-
tracts, as defined in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph
(1)(B) solely because such agreement was not executed
contemporaneously with the acquisition of the collat-
eral or because of pledges, delivery, or substitution of
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(2) in the table of sections for chapter 5, by in-
serting after the item relating to section 561 (as
added by this Act) the following:
‘‘562. Damage measure in connection with swap agreements, securities contracts,
forward contracts, commodity contracts, repurchase agreements,
or master netting agreements.’’.
(b) CLAIMS
ARISING
FROM
REJECTION.—Section
502(g) of title 11, United States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and
(2) by adding at the end the following:
‘‘(2) A claim for damages calculated in accordance
with section 562 of this title shall be allowed under sub-
section (a), (b), or (c), or disallowed under subsection (d)
or (e), as if such claim had arisen before the date of the
filing of the petition.’’.
SEC. 911. SIPC STAY.
Section 5(b)(2) of the Securities Investor Protection
Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding
at the end the following new subparagraph:
‘‘(C) EXCEPTION FROM STAY.—
‘‘(i) Notwithstanding section 362 of
title 11, United States Code, neither the fil-
ing of an application under subsection
(a)(3) nor any order or decree obtained by
SIPC from the court shall operate as a stay
of any contractual rights of a creditor to
liquidate, terminate, or accelerate a securi-
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ties contract, commodity contract, forward
contract, repurchase agreement, swap agree-
ment, or master netting agreement, as those
terms are defined in sections 101, 741, and
761 of title 11, United States Code, to offset
or 
net 
termination 
values, 
payment
amounts, or other transfer obligations aris-
ing under or in connection with one or
more of such contracts or agreements, or to
foreclose on any cash collateral pledged by
the debtor, whether or not with respect to
one or more of such contracts or agreements.
‘‘(ii) Notwithstanding clause (i), such
application, order, or decree may operate as
a stay of the foreclosure on, or disposition
of, securities collateral pledged by the debt-
or, whether or not with respect to one or
more of such contracts or agreements, secu-
rities sold by the debtor under a repurchase
agreement, or securities lent under a securi-
ties lending agreement.
‘‘(iii) As used in this subparagraph,
the term ‘contractual right’ includes a right
set forth in a rule or bylaw of a national
securities exchange, a national securities as-
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sociation, or a securities clearing agency, a
right set forth in a bylaw of a clearing or-
ganization or contract market or in a reso-
lution of the governing board thereof, and a
right, whether or not in writing, arising
under common law, under law merchant, or
by reason of normal business practice.’’.
SEC. 912. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is
amended—
(1) in subsection (b), by inserting after para-
graph (7), as added by this Act, the following:
‘‘(8) any eligible asset (or proceeds thereof), to
the extent that such eligible asset was transferred by
the debtor, before the date of commencement of the
case, to an eligible entity in connection with an asset-
backed securitization, except to the extent such asset
(or proceeds or value thereof) may be recovered by the
trustee under section 550 by virtue of avoidance
under section 548(a);’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) For purposes of this section—
‘‘(1) the term ‘asset-backed securitization’ means
a transaction in which eligible assets transferred to
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an eligible entity are used as the source of payment
on securities, including, without limitation, all secu-
rities issued by governmental units, at least one class
or tranche of which was rated investment grade by
one or more nationally recognized securities rating
organizations, when the securities were initially
issued by an issuer;
‘‘(2) the term ‘eligible asset’ means—
‘‘(A) financial assets (including interests
therein and proceeds thereof), either fixed or re-
volving, whether or not the same are in existence
as of the date of the transfer, including residen-
tial and commercial mortgage loans, consumer
receivables, trade receivables, assets of govern-
mental units, including payment obligations re-
lating to taxes, receipts, fines, tickets, and other
sources of revenue, and lease receivables, that, by
their terms, convert into cash within a finite
time period, plus any residual interest in prop-
erty subject to receivables included in such finan-
cial assets plus any rights or other assets de-
signed to assure the servicing or timely distribu-
tion of proceeds to security holders;
‘‘(B) cash; and
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‘‘(C) securities, including without limita-
tion, all securities issued by governmental units;
‘‘(3) the term ‘eligible entity’ means—
‘‘(A) an issuer; or
‘‘(B) a trust, corporation, partnership, gov-
ernmental unit, limited liability company (in-
cluding a single member limited liability com-
pany), or other entity engaged exclusively in the
business of acquiring and transferring eligible
assets directly or indirectly to an issuer and tak-
ing actions ancillary thereto;
‘‘(4) the term ‘issuer’ means a trust, corporation,
partnership, governmental unit, limited liability com-
pany (including a single member limited liability
company), or other entity engaged exclusively in the
business of acquiring and holding eligible assets,
issuing securities backed by eligible assets, and taking
actions ancillary thereto; and
‘‘(5) the term ‘transferred’ means the debtor,
under a written agreement, represented and war-
ranted that eligible assets were sold, contributed, or
otherwise conveyed with the intention of removing
them from the estate of the debtor pursuant to sub-
section (b)(8) (whether or not reference is made to this
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title or any section hereof), irrespective and without
limitation of—
‘‘(A) whether the debtor directly or indi-
rectly obtained or held an interest in the issuer
or in any securities issued by the issuer;
‘‘(B) whether the debtor had an obligation
to repurchase or to service or supervise the serv-
icing of all or any portion of such eligible assets;
or
‘‘(C) the characterization of such sale, con-
tribution, or other conveyance for tax, account-
ing, regulatory reporting, or other purposes.’’.
SEC. 913. EFFECTIVE DATE; APPLICATION OF AMEND-
MENTS.
(a) EFFECTIVE DATE.—This title shall take effect on
the date of enactment of this Act.
(b) APPLICATION OF AMENDMENTS.—The amendments
made by this title shall apply with respect to cases com-
menced or appointments made under any Federal or State
law on or after the date of enactment of this Act, but shall
not apply with respect to cases commenced or appointments
made under any Federal or State law before the date of
enactment of this Act.
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SEC. 914. SAVINGS CLAUSE.
The meaning of terms used in this title are applicable
for purposes of this title only, and shall not be construed
or applied 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 Securities Exchange Act of 1934),
and the Commodity Exchange Act.
TITLE X—PROTECTION OF FAM-
ILY FARMERS AND FAMILY
FISHERMEN
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.
(a) REENACTMENT.—
(1) IN GENERAL.—Chapter 12 of title 11, United
States Code, as reenacted by section 149 of division
C of the Omnibus Consolidated and Emergency Sup-
plemental Appropriations Act, 1999 (Public Law
105–277, 112 Stat. 2681-610), and amended by this
Act, is reenacted.
(2) EFFECTIVE DATE.—Subsection (a) shall be
deemed to have taken effect on July 1, 2000.
(b) CONFORMING AMENDMENT.—Section 302 of the
Bankruptcy, Judges, United States Trustees, and Family
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Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is
amended by striking subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
(a) IN GENERAL.—Section 104(b) of title 11, United
States Code, is amended by adding at the end the following:
‘‘(4) The dollar amount in section 101(18) shall be ad-
justed at the same times and in the same manner as the
dollar amounts in paragraph (1) of this subsection.’’.
(b) EFFECTIVE DATE.—The first adjustment required
by section 104(b)(4) of title 11, United States Code, as
added by subsection (a) of this section, shall occur on the
later of—
(1) April 1, 2001; or
(2) 60 days after the date of enactment of this
Act.
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL
UNITS.
(a) CONTENTS OF PLAN.—Section 1222(a)(2) of title
11, United States Code, is amended to read as follows:
‘‘(2) provide for the full payment, in deferred
cash payments, of all claims entitled to priority
under section 507, unless—
‘‘(A) the claim is a claim owed to a govern-
mental unit that arises as a result of the sale,
transfer, exchange, or other disposition of any
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farm asset used in the debtor’s farming oper-
ation, in which case the claim shall be treated as
an unsecured claim that is not entitled to pri-
ority under section 507, but the debt shall be
treated in such manner only if the debtor re-
ceives a discharge; or
‘‘(B) the holder of a particular claim agrees
to a different treatment of that claim;’’.
(b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) of
title 11, United States Code, as so designated by this Act,
is amended by striking ‘‘a State or local governmental
unit’’ and inserting ‘‘any governmental unit’’.
SEC. 1004. DEFINITION OF FAMILY FARMER.
Section 101(18) of title 11, United States Code, is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘$1,500,000’’ and inserting
‘‘$3,000,000’’; and
(B) by striking ‘‘80’’ and inserting ‘‘50’’;
and
(2) in subparagraph (B)(ii)—
(A) by striking ‘‘$1,500,000’’ and inserting
‘‘$3,000,000’’; and
(B) by striking ‘‘80’’ and inserting ‘‘50’’.
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SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY
FARMER AND SPOUSE RECEIVE OVER 50 PER-
CENT OF INCOME FROM FARMING OPER-
ATION IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is
amended by striking ‘‘the taxable year preceding the taxable
year’’ and inserting ‘‘at least 1 of the 3 calendar years pre-
ceding the year’’.
SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF
DISPOSABLE INCOME.
(a) IN GENERAL.—Section 1225(b) of title 11, United
States Code, is amended by adding at the end the following:
‘‘(3) If the plan provides for specific amounts of
property to be distributed on account of allowed unse-
cured claims as required by paragraph (1)(B), those
amounts equal or exceed the debtor’s projected dispos-
able income for that period, and the plan meets the
requirements for confirmation other than those of this
subsection, the plan shall be confirmed.’’.
(b) MODIFICATION.—Section 1229 of title 11, United
States Code, is amended by adding at the end the following:
‘‘(d)(1) A modification of the plan under this section
may not increase the amount of payments that were due
prior to the date of the order modifying the plan.
‘‘(2) A modification of the plan under this section to
increase payments based on an increase in the debtor’s dis-
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posable income may not require payments to unsecured
creditors in any particular month greater than the debtor’s
disposable income for that month, unless the debtor proposes
such a modification.
‘‘(3) A modification of the plan in the last year of the
plan shall not require payments that would leave the debtor
with insufficient funds to carry on the farming operation
after the plan is completed, unless the debtor proposes such
a modification.’’.
SEC. 1007. FAMILY FISHERMEN.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (7) the fol-
lowing:
‘‘(7A) ‘commercial fishing operation’ includes—
‘‘(A) the catching or harvesting of fish,
shrimp, lobsters, urchins, seaweed, shellfish, or
other aquatic species or products;
‘‘(B) for purposes of section 109 and chap-
ter 12, aquaculture activities consisting of rais-
ing for market any species or product described
in subparagraph (A); and
‘‘(C) the transporting by vessel of a pas-
senger for hire (as defined in section 2101 of title
46) who is engaged in recreational fishing;
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‘‘(7B) ‘commercial fishing vessel’ means a vessel
used by a fisherman to carry out a commercial fish-
ing operation;’’;
(2) by inserting after paragraph (19) the fol-
lowing:
‘‘(19A) ‘family fisherman’ means—
‘‘(A) an individual or individual and
spouse engaged in a commercial fishing oper-
ation (including aquaculture for purposes of
chapter 12)—
‘‘(i) whose aggregate debts do not ex-
ceed $1,500,000 and not less than 80 per-
cent of whose aggregate noncontingent, liq-
uidated debts (excluding a debt for the prin-
cipal residence of such individual or such
individual and spouse, unless such debt
arises out of a commercial fishing oper-
ation), on the date the case is filed, arise
out of a commercial fishing operation
owned or operated by such individual or
such individual and spouse; and
‘‘(ii) who receive from such commercial
fishing operation more than 50 percent of
such individual’s or such individual’s and
spouse’s gross income for the taxable year
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preceding the taxable year in which the case
concerning such individual or such indi-
vidual and spouse was filed; or
‘‘(B) a corporation or partnership—
‘‘(i) in which more than 50 percent of
the outstanding stock or equity is held by—
‘‘(I) 1 family that conducts the
commercial fishing operation; or
‘‘(II) 1 family and the relatives of
the members of such family, and such
family or such relatives conduct the
commercial fishing operation; and
‘‘(ii)(I) more than 80 percent of the
value of its assets consists of assets related
to the commercial fishing operation;
‘‘(II) its aggregate debts do not exceed
$1,500,000 and not less than 80 percent of
its 
aggregate 
noncontingent, 
liquidated
debts (excluding a debt for 1 dwelling which
is owned by such corporation or partner-
ship and which a shareholder or partner
maintains as a principal residence, unless
such debt arises out of a commercial fishing
operation), on the date the case is filed,
arise out of a commercial fishing operation
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owned or operated by such corporation or
such partnership; and
‘‘(III) if such corporation issues stock,
such stock is not publicly traded;’’; and
(3) by inserting after paragraph (19A) the fol-
lowing:
‘‘(19B) ‘family fisherman with regular annual
income’ means a family fisherman whose annual in-
come is sufficiently stable and regular to enable such
family fisherman to make payments under a plan
under chapter 12 of this title;’’.
(b) WHO MAY BE A DEBTOR.—Section 109(f) of title
11, United States Code, is amended by inserting ‘‘or family
fisherman’’ after ‘‘family farmer’’.
(c) CHAPTER 12.—Chapter 12 of title 11, United
States Code, is amended—
(1) in the chapter heading, by inserting ‘‘OR
FISHERMAN’’ after ‘‘FAMILY FARMER’’;
(2) in section 1201, by adding at the end the fol-
lowing:
‘‘(e)(1) Notwithstanding any other provision of law,
for purposes of this subsection, a guarantor of a claim of
a creditor under this section shall be treated in the same
manner as a creditor with respect to the operation of a stay
under this section.
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‘‘(2) For purposes of a claim that arises from the own-
ership or operation of a commercial fishing operation, a
co-maker of a loan made by a creditor under this section
shall be treated in the same manner as a creditor with re-
spect to the operation of a stay under this section.’’;
(3) in section 1203, by inserting ‘‘or commercial
fishing operation’’ after ‘‘farm’’;
(4) in section 1206, by striking ‘‘if the property
is farmland or farm equipment’’ and inserting ‘‘if the
property is farmland, farm equipment, or property of
a commercial fishing operation (including a commer-
cial fishing vessel)’’; and
(5) by adding at the end the following:
‘‘§ 1232. Additional provisions relating to family fish-
ermen
‘‘(a)(1) Notwithstanding any other provision of law,
except as provided in subsection (c), with respect to any
commercial fishing vessel of a family fisherman, the debts
of that family fisherman shall be treated in the manner pre-
scribed in paragraph (2).
‘‘(2)(A) For purposes of this chapter, a claim for a
lien described in subsection (b) for a commercial fishing ves-
sel of a family fisherman that could, but for this subsection,
be subject to a lien under otherwise applicable maritime
law, shall be treated as an unsecured claim.
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‘‘(B) Subparagraph (A) applies to a claim for a lien
resulting from a debt of a family fisherman incurred on
or after the date of enactment of this chapter.
‘‘(b) A lien described in this subsection is—
‘‘(1) a maritime lien under subchapter III of
chapter 313 of title 46 without regard to whether that
lien is recorded under section 31343 of title 46; or
‘‘(2) a lien under applicable State law (or the
law of a political subdivision thereof).
‘‘(c) Subsection (a) shall not apply to—
‘‘(1) a claim made by a member of a crew or a
seaman including a claim made for—
‘‘(A) wages, maintenance, or cure; or
‘‘(B) personal injury; or
‘‘(2) a preferred ship mortgage that has been per-
fected under subchapter II of chapter 313 of title 46.
‘‘(d) For purposes of this chapter, a mortgage described
in subsection (c)(2) shall be treated as a secured claim.’’.
(d) CLERICAL AMENDMENTS.—
(1) TABLE OF CHAPTERS.—In the table of chap-
ters for title 11, United States Code, the item relating
to chapter 12, is amended to read as follows:
‘‘12. Adjustments of Debts of a Family Farmer or Family
Fisherman with Regular Annual Income ...... 1201’’.
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(2) TABLE OF SECTIONS.—The table of sections
for chapter 12 of title 11, United States Code, is
amended by adding at the end the following new item:
‘‘1232. Additional provisions relating to family fishermen.’’.
(e) Applicability.—
Nothing in this section shall change, affect, or
amend the Fishery Conservation and Management
Act of 1976 (16 U.S.C. 1801, et seq.).
TITLE XI—HEALTH CARE AND
EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) HEALTH CARE BUSINESS DEFINED.—Section 101
of title 11, United States Code, is amended—
(1) by redesignating paragraph (27A), as added
by this Act, as paragraph (27B); and
(2) by inserting after paragraph (27) the fol-
lowing:
‘‘(27A) ‘health care business’—
‘‘(A) means any public or private entity
(without regard to whether that entity is orga-
nized for profit or not for profit) that is pri-
marily engaged in offering to the general public
facilities and services for—
‘‘(i) the diagnosis or treatment of in-
jury, deformity, or disease; and
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‘‘(ii) surgical, drug treatment, psy-
chiatric, or obstetric care; and
‘‘(B) includes—
‘‘(i) any—
‘‘(I) general or specialized hos-
pital;
‘‘(II) ancillary ambulatory, emer-
gency, or surgical treatment facility;
‘‘(III) hospice;
‘‘(IV) home health agency; and
‘‘(V) other health care institution
that is similar to an entity referred to
in subclause (I), (II), (III), or (IV);
and
‘‘(ii) any long-term care facility, in-
cluding any—
‘‘(I) skilled nursing facility;
‘‘(II) intermediate care facility;
‘‘(III) assisted living facility;
‘‘(IV) home for the aged;
‘‘(V) domiciliary care facility;
and
‘‘(VI) health care institution that
is related to a facility referred to in
subclause (I), (II), (III), (IV), or (V),
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if that institution is primarily engaged
in offering room, board, laundry, or
personal assistance with activities of
daily living and incidentals to activi-
ties of daily living;’’.
(b) PATIENT AND PATIENT RECORDS DEFINED.—Sec-
tion 101 of title 11, United States Code, is amended by in-
serting after paragraph (40) the following:
‘‘(40A) ‘patient’ means any person who obtains
or receives services from a health care business;
‘‘(40B) ‘patient records’ means any written doc-
ument relating to a patient or a record recorded in
a magnetic, optical, or other form of electronic me-
dium;’’.
(c) RULE OF CONSTRUCTION.—The amendments made
by subsection (a) of this section shall not affect the interpre-
tation of section 109(b) of title 11, United States Code.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) IN GENERAL.—Subchapter III of chapter 3 of title
11, United States Code, is amended by adding at the end
the following:
‘‘§ 351. Disposal of patient records
‘‘If a health care business commences a case under
chapter 7, 9, or 11, and the trustee does not have a sufficient
amount of funds to pay for the storage of patient records
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in the manner required under applicable Federal or State
law, the following requirements shall apply:
‘‘(1) The trustee shall—
‘‘(A) promptly publish notice, in 1 or more
appropriate newspapers, that if patient records
are not claimed by the patient or an insurance
provider (if applicable law permits the insurance
provider to make that claim) by the date that is
365 days after the date of that notification, the
trustee will destroy the patient records; and
‘‘(B) during the first 180 days of the 365-
day period described in subparagraph (A),
promptly attempt to notify directly each patient
that is the subject of the patient records and ap-
propriate insurance carrier concerning the pa-
tient records by mailing to the last known ad-
dress of that patient, or a family member or con-
tact person for that patient, and to the appro-
priate insurance carrier an appropriate notice
regarding the claiming or disposing of patient
records.
‘‘(2) If, after providing the notification under
paragraph (1), patient records are not claimed dur-
ing the 365-day period described under that para-
graph, the trustee shall mail, by certified mail, at the
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end of such 365-day period a written request to each
appropriate Federal agency to request permission
from that agency to deposit the patient records with
that agency, except that no Federal agency is required
to accept patient records under this paragraph.
‘‘(3) If, following the 365-day period described in
paragraph (2) and after providing the notification
under paragraph (1), patient records are not claimed
by a patient or insurance provider, or request is not
granted by a Federal agency to deposit such records
with that agency, the trustee shall destroy those
records by—
‘‘(A) if the records are written, shredding or
burning the records; or
‘‘(B) if the records are magnetic, optical, or
other electronic records, by otherwise destroying
those records so that those records cannot be re-
trieved.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
chapter 3 of title 11, United States Code, is amended by
inserting after the item relating to section 350 the following:
‘‘351. Disposal of patient records.’’.
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SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF
CLOSING A HEALTH CARE BUSINESS AND
OTHER ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, as
amended by this Act, is amended by adding at the end the
following:
‘‘(8) the actual, necessary costs and expenses of
closing a health care business incurred by a trustee or
by a Federal agency (as that term is defined in sec-
tion 551(1) of title 5) or a department or agency of
a State or political subdivision thereof, including any
cost or expense incurred—
‘‘(A) in disposing of patient records in ac-
cordance with section 351; or
‘‘(B) in connection with transferring pa-
tients from the health care business that is in the
process of being closed to another health care
business;
‘‘(9) 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 related
to a failure to operate or penalty provisions, for the
period of 2 years following the later of the rejection
date or date of actual turnover of the premises, with-
out reduction or setoff for any reason whatsoever ex-
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cept for sums actually received or to be received from
a nondebtor, 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); and’’.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA-
TIENT ADVOCATE.
(a) IN GENERAL.—
(1) APPOINTMENT OF OMBUDSMAN.—Subchapter
II of chapter 3 of title 11, United States Code, is
amended by inserting after section 331 the following:
‘‘§ 332. Appointment of ombudsman
‘‘(a) IN GENERAL.—
‘‘(1) AUTHORITY TO APPOINT.—Not later than
30 days after a case is commenced by a health care
business under chapter 7, 9, or 11, the court shall
order the appointment of an ombudsman to monitor
the quality of patient care to represent the interests
of the patients of the health care business, unless the
court finds that the appointment of the ombudsman
is not necessary for the protection of patients under
the specific facts of the case.
‘‘(2) QUALIFICATIONS.—If the court orders the
appointment of an ombudsman, the United States
trustee shall appoint 1 disinterested person, other
than the United States trustee, to serve as an ombuds-
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man. If the health care business is a long-term care
facility, the trustee may appoint a person who is
serving as a State Long-Term Care Ombudsman ap-
pointed under title III or VII of the Older Americans
Act of 1965 (42 U.S.C. 3021 et seq., 3058 et seq.).
In the event that the trustee does not appoint the State
Long-Term Care Ombudsman to monitor the quality of pa-
tient care in a long-term care facility, the court shall notify
the individual who serves as the State Long-Term Care Om-
budsman of the name and address of the individual who
is appointed.
‘‘(b) DUTIES.—An ombudsman appointed under sub-
section (a) shall—
‘‘(1) monitor the quality of patient care, to the
extent necessary under the circumstances, including
interviewing patients and physicians;
‘‘(2) not later than 60 days after the date of ap-
pointment, and not less frequently than every 60 days
thereafter, report to the court, at a hearing or in
writing, regarding the quality of patient care at the
health care business involved; and
‘‘(3) if the ombudsman determines that the qual-
ity of patient care is declining significantly or is oth-
erwise being materially compromised, notify the court
by motion or written report, with notice to appro-
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priate parties in interest, immediately upon making
that determination.
‘‘(c) CONFIDENTIALITY.—An ombudsman shall main-
tain any information obtained by the ombudsman under
this section that relates to patients (including information
relating to patient records) as confidential information. The
ombudsman may not review confidential patient records,
unless the court provides prior approval, with restrictions
on the ombudsman to protect the confidentiality of patient
records. If the individual appointed as ombudsman is a
person who is also serving as a State Long-Term Care Om-
budsman appointed under title III or title VII of the Older
Americans Act of 1965 (42 U.S.C. 3021 et seq., 3058 et
seq.), that person shall have access to patient records, con-
sistent with authority spelled out in the Older Americans
Act and State laws governing the State Long-Term Care
Ombudsman program.’’.
(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 331 the following:
‘‘332. Appointment of ombudsman.’’.
(b) 
COMPENSATION
OF
OMBUDSMAN.—Section
330(a)(1) of title 11, United States Code, is amended—
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(1) in the matter preceeding subparagraph (A),
by inserting ‘‘an ombudsman appointed under section
331, or’’ before ‘‘a professional person’’; and
(2) in subparagraph (A), by inserting ‘‘ombuds-
man,’’ before ‘‘professional person’’.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO
TRANSFER PATIENTS.
(a) IN GENERAL.—Section 704(a) of title 11, United
States Code, as amended by this Act, is amended by adding
at the end the following:
‘‘(11) use all reasonable and best efforts to trans-
fer patients from a health care business that is in the
process of being closed to an appropriate health care
business that—
‘‘(A) is in the vicinity of the health care
business that is closing;
‘‘(B) provides the patient with services that
are substantially similar to those provided by the
health care business that is in the process of
being closed; and
‘‘(C) maintains a reasonable quality of
care.’’.
(b) CONFORMING AMENDMENT.—Section 1106(a)(1) of
title 11, United States Code, is amended by striking ‘‘sec-
tions 704(2), 704(5), 704(7), 704(8), and 704(9)’’ and in-