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(3) in paragraph (6), by striking the period at
the end and inserting ‘‘; and’’; and
(4) by inserting after paragraph (6) the fol-
lowing:
‘‘(7) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as
soon as practicable after the entry of order for
relief but before the first meeting scheduled under
section 341(a) of title 11, at which time the
United States trustee shall—
‘‘(i) begin to investigate the debtor’s vi-
ability;
‘‘(ii) inquire about the debtor’s busi-
ness plan;
‘‘(iii) explain the debtor’s obligations
to file monthly operating reports and other
required reports;
‘‘(iv) attempt to develop an agreed
scheduling order; and
‘‘(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-
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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.’’.
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’’;
(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’’; and
(3) in paragraph (2), by striking ‘‘unless incon-
sistent with another provision of this title or with ap-
plicable Federal Rules of Bankruptcy Procedure,’’.
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SEC. 441. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is
amended—
(1) in subsection (j), as redesignated by section
305(1) of 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) against such
entity shall be limited to actual damages.’’; and
(2) by inserting after subsection (j) the following:
‘‘(k)(1) Except as provided in paragraph (2), the filing
of a petition under chapter 11 operates as a stay of the
acts described in subsection (a) only in an involuntary case
involving no collusion by the debtor with creditors and 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-
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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) Paragraph (1) does not apply to the filing of a
petition if the debtor proves by a preponderance of the evi-
dence that—
‘‘(A) the filing of that petition resulted from cir-
cumstances beyond the control of the debtor not fore-
seeable at the time the case then pending was filed;
and
‘‘(B) it is more likely than not that the court
will confirm a feasible plan, but not a liquidating
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), in sub-
section (c), and section 1104(a)(3), on request of a party
in interest, and after notice and a hearing, the court shall
convert a case under this chapter to a case under chapter
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7 or dismiss a case under this chapter, whichever is in the
best interest of creditors and the estate, if the movant estab-
lishes cause.
‘‘(2) The relief provided in paragraph (1) shall not be
granted if the debtor or another party in interest objects
and establishes by a preponderance of the evidence that—
‘‘(A) a plan with a reasonable possibility of
being confirmed will be filed within a reasonable pe-
riod of time; and
‘‘(B) if 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) which will be cured within a reason-
able 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 within 15 days
after commencement of the hearing, unless the movant ex-
pressly 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, cause includes—
‘‘(A) substantial or continuing loss to or diminu-
tion of the estate;
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‘‘(L) revocation of an order of confirmation
under section 1144;
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan;
‘‘(N) material default by the debtor with respect
to a confirmed plan;
‘‘(O) termination of a confirmed plan by reason
of the occurrence of a condition specified in the plan;
and
‘‘(P) failure of the debtor to pay any domestic
support obligation that first becomes payable after the
date 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 within 15 days
after commencement of the hearing, unless the movant ex-
pressly 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;
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(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
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 the enactment
of this Act, the Administrator of the Small Business Admin-
istration, in consultation with the Attorney General of the
United States, the Director of the Administrative Office of
United States Trustees, and the Director of the Administra-
tive 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
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in assisting small businesses to remain viable;
and
(2) submit to the President pro tempore of the
Senate and the Speaker of the House of Representa-
tives a report summarizing that study.
SEC. 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
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‘‘(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. TECHNICAL CORRECTION.
Section 365(b)(2)(D) of title 11, United States Code,
is amended by striking ‘‘penalty rate or provision’’ and in-
serting ‘‘penalty rate or penalty provision’’.
TITLE V—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI-
TION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States Code,
is amended by inserting ‘‘, notwithstanding section 301(b)’’
before the period at the end.
(b) CONFORMING AMENDMENT.—Section 301 of title
11, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;
(2) by striking the last sentence; and
(3) by adding at the end the following:
‘‘(b) The commencement of a voluntary case under a
chapter of this title constitutes an order for relief under such
chapter.’’.
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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,’’ after ‘‘557,’’.
TITLE 
VI—IMPROVED 
BANK-
RUPTCY 
STATISTICS 
AND
DATA
SEC. 601. AUDIT PROCEDURES.
(a) 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 subsection (f); and’’; and
(2) by adding at the end the following:
‘‘(f)(1)(A) The Attorney General shall establish proce-
dures 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.
‘‘(B) Those procedures shall—
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‘‘(i) establish a method of selecting appropriate
qualified persons to contract to perform those audits;
‘‘(ii) establish a method of randomly selecting
cases to be audited, except that not less than 1 out of
every 250 cases in each Federal judicial district shall
be selected for audit;
‘‘(iii) require audits for schedules of income and
expenses which reflect greater than average variances
from the statistical norm of the district in which the
schedules were filed if those variances occur by reason
of higher income or higher expenses than the statis-
tical norm of the district in which the schedules were
filed; and
‘‘(iv) include procedures for providing, not less
frequently than annually, public information con-
cerning the aggregate results of the audits referred to
in this subparagraph, including the percentage of
cases, by district, in which a material misstatement
of income or expenditures is reported.
‘‘(2) The United States trustee for each district may
contract with auditors to perform audits in cases designated
by the United States trustee according to the procedures es-
tablished under paragraph (1).
‘‘(3)(A) The report of each audit conducted under this
subsection shall be filed with the court and transmitted to
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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 where 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.
‘‘(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 under section
3057 of title 18; and
‘‘(ii) if advisable, take appropriate action, in-
cluding commencing an adversary proceeding to re-
voke the debtor’s discharge under section 727(d) of
title 11.’’.
(b) AMENDMENTS
TO SECTION 521 OF TITLE 11,
UNITED STATES CODE.—Paragraphs (3) and (4) of section
521(a) of title 11, United States Code, as amended by sec-
tion 315 of this Act, are each amended by inserting ‘‘or
an auditor appointed under section 586 of title 28’’ after
‘‘serving in the case’’ each place that term appears.
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(c) AMENDMENTS
TO SECTION 727 OF TITLE 11,
UNITED STATES CODE.—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—
‘‘(A) a material misstatement in an audit
performed under 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 any other papers,
things, or property belonging to the debtor that
are requested for an audit conducted under sec-
tion 586(f).’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall take effect 18 months after the date of enact-
ment of this Act.
SEC. 602. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT.—Chapter 6 of title 28, United States
Code, is amended by adding at the end the following:
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‘‘§ 159. Bankruptcy statistics
‘‘(a) The clerk of each district court shall compile sta-
tistics regarding individual debtors with primarily con-
sumer debts seeking relief under chapters 7, 11, and 13 of
title 11. Those statistics shall be in a form prescribed by
the Director of the Administrative Office of the United
States Courts (referred to in this section as the ‘Office’).
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a);
‘‘(2) make the statistics available to the public;
and
‘‘(3) not later than October 31, 1999, 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
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each category of assets and liabilities, as re-
ported in the schedules prescribed under section
2075 and filed by those debtors;
‘‘(B) the total current monthly income, pro-
jected monthly net income, and average income,
and average expenses of those debtors as reported
on the schedules and statements that each such
debtor files under sections 111, 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 in which the
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debtor was not represented by an attorney;
and
‘‘(III) of the cases under each of sub-
clauses (I) and (II), the number of cases in
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 for
failure to make payments under the plan;
and
‘‘(iii) the number of cases in which the
debtor filed another case during the 6-year
period preceding the date of 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 and 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. 603. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA.
(a) AMENDMENT.—Chapter 39 of title 28, United
States Code, is amended by inserting after section 589a the
following:
‘‘§ 589b. Bankruptcy data
‘‘(a) Within a reasonable period of time after the effec-
tive date of this section, the Attorney General of the United
States shall issue rules requiring uniform forms for (and
from time to time thereafter to appropriately modify and
approve)—
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‘‘(1) final reports by trustees in cases under
chapters 7, 12, and 13 of title 11; and
‘‘(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter
11 of title 11.
‘‘(b) 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 compilation
of data and maximum practicable access of the public, by—
‘‘(1) physical inspection at 1 or more central fil-
ing locations; and
‘‘(2) electronic access through the Internet or
other appropriate media.
‘‘(c)(1) The information required to be filed in the re-
ports referred to in subsection (b) shall be information that
is—
‘‘(A) in the best interests of debtors and creditors,
and in the public interest; and
‘‘(B) reasonable and adequate information to
evaluate the efficiency and practicality of the Federal
bankruptcy system.
‘‘(2) In issuing rules proposing the forms referred to
in subsection (a), the Attorney General shall strike the best
achievable practical balance between—
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‘‘(A) the reasonable needs of the public for infor-
mation about the operational results of the Federal
bankruptcy system; and
‘‘(B) economy, simplicity, and lack of undue
burden on persons with a duty to file reports.
‘‘(d)(1) Final reports proposed for adoption by trustees
under chapters 7, 12, and 13 of title 11 shall include with
respect to a case under such title, by appropriate category—
‘‘(A) information about the length of time the
case was pending;
‘‘(B) assets abandoned;
‘‘(C) assets exempted;
‘‘(D) receipts and disbursements of the estate;
‘‘(E) expenses of administration;
‘‘(F) claims asserted;
‘‘(G) claims allowed; and
‘‘(H) distributions to claimants and claims dis-
charged without payment.
‘‘(2) In cases under chapters 12 and 13 of title 11,
final reports proposed for adoption by trustees shall
include—
‘‘(A) the date of confirmation of the plan;
‘‘(B) each modification to the plan; and
‘‘(C) defaults by the debtor in performance under
the plan.
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‘‘(3) The information described in paragraphs (1) and
(2) shall be in addition to such other matters as are re-
quired by law for a final report or as the Attorney General,
in the discretion of the Attorney General, may propose for
a final report.
‘‘(e)(1) Periodic reports proposed for adoption by
trustees or debtors in possession under chapter 11 of title
11 shall include—
‘‘(A) information about the standard industry
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor;
‘‘(B) the length of time the case has been pend-
ing;
‘‘(C) the number of full-time employees—
‘‘(i) as of the date of the order for relief; and
‘‘(ii) at the end of each reporting period
since the case was filed;
‘‘(D) 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;
‘‘(E) 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;
‘‘(F) all professional fees approved by the court
in the case for the most recent period and cumula-
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tively since the date of the order for relief (separately
reported, for the professional fees incurred by or on
behalf of the debtor, between those that would have
been incurred absent a bankruptcy case and those
that would not have been so incurred); and
‘‘(G) 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.
‘‘(2) The information described in paragraph (1) shall
be in addition to such other matters as are required by law
for a periodic report or as the Attorney General, in the dis-
cretion of the Attorney General, may propose for a periodic
report.’’.
(b) TECHNICAL AMENDMENT.—The table of sections for
chapter 39 of title 28, United States Code, is amended by
adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY
OF BANKRUPTCY DATA.
It is the sense of Congress that—
(1) it should be the national policy of the United
States that all data held by bankruptcy clerks in elec-
tronic form, to the extent such data reflects only pub-
lic records (as defined in section 107 of title 11,
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United States Code), should be released in a usable
electronic form in bulk to the public subject to such
appropriate privacy concerns and safeguards as the
Judicial Conference of the United States may deter-
mine; and
(2) there should be established a bankruptcy data
system in which—
(A) a single set of data definitions and
forms are used to collect data nationwide; and
(B) data for any particular bankruptcy
case are aggregated in the same electronic record.
TITLE 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
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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—
‘‘(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—
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(1) in subparagraph (A), by striking ‘‘or’’ at the
end;
(2) in subparagraph (B), by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount
under any law (other than a bankruptcy law) has ex-
pired.’’.
SEC. 702. TREATMENT OF FUEL TAX CLAIMS.
Section 501 of title 11, United States Code, is amended
by adding at the end the following:
‘‘(e) A claim arising from the liability of a debtor for
fuel use tax assessed consistent with the requirements of sec-
tion 31705 of title 49 may be filed by the base jurisdiction
designated pursuant to the International Fuel Tax Agree-
ment 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—
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(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 ‘‘(2)(A) upon payment’’;
(3) by striking ‘‘(A) such governmental unit’’
and inserting ‘‘(i) such governmental unit’’;
(4) by striking ‘‘(B) such governmental unit’’
and inserting ‘‘(ii) such governmental unit’’;
(5) by striking ‘‘(2) upon payment’’ and insert-
ing ‘‘(B) upon payment’’;
(6) by striking ‘‘(3) upon payment’’ and insert-
ing ‘‘(C) upon payment’’;
(7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and
(8) by inserting before paragraph (2), as so des-
ignated, the following:
‘‘(b)(1)(A) The clerk 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.
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‘‘(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.’’.
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 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
shall be determined under applicable 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—
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(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’’;
(B) in clause (i)—
(i) by striking ‘‘for a taxable year end-
ing on or before the date of filing of the pe-
tition’’; and
(ii) by inserting before the semicolon at
the end, the following: ‘‘, plus any time dur-
ing which the stay of proceedings was in ef-
fect in a prior case under this title or dur-
ing which collection was precluded by the
existence of 1 or more confirmed plans
under this title, plus 90 days’’; 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-
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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:
‘‘(H) An otherwise applicable time period
specified in this paragraph shall be suspended
for—
‘‘(i) any period during which a gov-
ernmental unit is prohibited under applica-
ble nonbankruptcy law from collecting a tax
as a result of a request by the debtor for a
hearing and an appeal of any collection ac-
tion taken or proposed against the debtor;
plus
‘‘(ii) 90 days.’’.
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(9)(B) of title 11, United States Code,
is amended by striking ‘‘assessed’’ and inserting ‘‘in-
curred’’.
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SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 13.
Section 1328(a)(2) of title 11, United States Code, as
amended by sections 105, 213, and 314 of this Act, is
amended—
(1) by inserting ‘‘(1)(B), (1)(C),’’ after ‘‘para-
graph’’; and
(2) by inserting ‘‘and in section 507(a)(8)(C)’’
after ‘‘section 523(a)’’.
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 11.
Section 1141(d) of title 11, United States Code, is
amended by adding at the end the following:
‘‘(5) Notwithstanding paragraph (1), the confirmation
of a plan does not discharge a debtor that is a corporation
from any debt 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 inserting ‘‘, with respect to a tax liability for
a taxable period ending before the order for relief under this
title’’ before the semicolon at the end.
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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, over a period not exceeding six years
after the date of assessment of such claim,’’ and all
that follows through the end of the subparagraph, and
inserting ‘‘regular installment payments in cash—
‘‘(i) of a total value, as of the effective
date of the plan, equal to the allowed
amount of such claim;
‘‘(ii) with interest thereon calculated at
the rate provided in section 6621(a)(2) of
the Internal Revenue Code of 1986;
‘‘(iii) 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
‘‘(iv) 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
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(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 striking the semicolon at the end and inserting
‘‘, except in any case in which a purchaser is a purchaser
described in section 6323 of the Internal Revenue 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:
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‘‘(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
‘‘(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-
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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;’’.
(d) PAYMENT
OF TAXES
AND FEES
AS SECURED
CLAIMS.—Section 506 of title 11, United States Code, is
amended—
(1) in subsection (b), by inserting ‘‘or State stat-
ute’’ after ‘‘agreement’’; and
(2) in subsection (c), by inserting ‘‘, including
the payment of all ad valorem property taxes with re-
spect to the property’’ before the period at the end.
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SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ‘‘before the date on which the trustee
commences distribution under this section;’’ and inserting
the following: ‘‘on or before the earlier of—
‘‘(A) the date that is 10 days after the mail-
ing to creditors of the summary of the trustee’s
final report; or
‘‘(B) the date on which the trustee com-
mences final distribution under this section;’’.
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES.
Section 523(a) of title 11, United States Code, is
amended—
(1) in paragraph (1)(B)—
(A) in the matter preceding clause (i), by
inserting ‘‘or equivalent report or notice,’’ after
‘‘a return,’’;
(B) in clause (i)—
(i) by inserting ‘‘or given’’ after
‘‘filed’’; and
(ii) by striking ‘‘or’’ at the end; and
(C) in clause (ii)—
(i) by inserting ‘‘or given’’ after
‘‘filed’’; and
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(ii) by inserting ‘‘, report, or notice’’
after ‘‘return’’; and
(2) by adding at the end the following flush sen-
tences:
‘‘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.’’.
SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES.
The second sentence of section 505(b) of title 11, United
States Code, as amended by section 703 of this Act, is
amended by inserting ‘‘the estate,’’ after ‘‘misrepresenta-
tion,’’.
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,
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United States Code, as amended by section 213 of this Act,
is amended—
(1) in paragraph (6), by striking ‘‘and’’ at the
end;
(2) in paragraph (7), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by inserting after paragraph (7) the fol-
lowing:
‘‘(8) if 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.—Chapter 13 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 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), the debtor shall file with appropriate
tax authorities all tax returns for all taxable periods ending
during the 4-year period ending 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
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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 clear and con-
vincing evidence that the failure to file a return as required
under this subsection is attributable to circumstances be-
yond the control of the debtor, the court may extend the
filing period established by the trustee under this subsection
for—
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‘‘(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 section 6020 (a) or
(b) 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 for chapter 13 of title 11, United States Code,
is amended by inserting after the item relating to sec-
tion 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
(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-
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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
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
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
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(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’’.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as
amended by section 402 of this Act, is amended—
(1) in paragraph (25), by striking ‘‘or’’ at the
end;
(2) in paragraph (26), by striking the period at
the end and inserting ‘‘; or’’; and
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(3) by inserting after paragraph (26) the fol-
lowing:
‘‘(27) 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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‘‘SEC. 346. SPECIAL PROVISIONS RELATED TO THE TREAT-
MENT 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 by striking subsections (a) and (b) and by
redesignating subsections (c) and (d) as subsections
(a) and (b), respectively.
(3) Section 1231 of title 11, United States Code,
is amended by striking subsections (a) and (b) and by
redesignating subsections (c) and (d) as subsections
(a) and (b), respectively.
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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 of a foreign proceeding.
‘‘1516. Presumptions concerning recognition.
‘‘1517. Order recognizing a foreign proceeding.
‘‘1518. Subsequent information.
‘‘1519. Relief that may be granted upon petition for recognition of a foreign pro-
ceeding.
‘‘1520. Effects of recognition of a foreign main proceeding.
‘‘1521. Relief that may be granted upon recognition of a foreign proceeding.
‘‘1522. Protection of creditors and other interested persons.
‘‘1523. Actions to avoid acts detrimental to creditors.
‘‘1524. Intervention by a foreign representative.
‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND
FOREIGN REPRESENTATIVES
‘‘1525. Cooperation and direct communication between the court and foreign
courts or foreign representatives.
‘‘1526. Cooperation and direct communication between the trustee and foreign
courts or foreign representatives.
‘‘1527. Forms of cooperation.
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS
‘‘1528. Commencement of a case under this title after recognition of a foreign
main proceeding.
‘‘1529. Coordination of a case under this title and a foreign proceeding.
‘‘1530. Coordination of more than 1 foreign proceeding.
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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 debt-
ors 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 if—
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‘‘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;
‘‘(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; and
‘‘(7) ‘within the territorial jurisdiction of the
United States’ when used with reference to property
of a debtor refers to tangible property located within
the territory of the United States and intangible
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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 1 or
more other countries, the requirements of the treaty or
agreement prevail.
‘‘§ 1504. Commencement of ancillary case
‘‘A case under this chapter is commenced by the filing
of a petition for recognition of a foreign proceeding under
section 1515.
‘‘§ 1505. Authorization to act in a foreign country
‘‘A trustee or another entity, including an examiner,
may be authorized by the court to act in a foreign country
on behalf of an estate created under section 541. An entity
authorized to act under this section may act in any way
permitted by the applicable foreign law.
‘‘§ 1506. Public policy exception
‘‘Nothing in this chapter prevents the court from refus-
ing to take an action governed by this chapter if the action
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would be manifestly contrary to the public policy of the
United States.
‘‘§ 1507. Additional assistance
‘‘(a) Subject to the specific limitations under other
provisions of this chapter, the court, upon recognition of
a foreign proceeding, may provide additional assistance to
a foreign representative under this title or under other laws
of the United States.
‘‘(b) In determining whether to provide additional as-
sistance under this title or under other laws of the United
States, the court shall consider whether such additional as-
sistance, consistent with the principles of comity, will rea-
sonably assure—
‘‘(1) just treatment of all holders of claims
against or interests in the debtor’s property;
‘‘(2) protection of claim holders in the United
States against prejudice and inconvenience in the
processing of claims in such foreign proceeding;
‘‘(3) prevention of preferential or fraudulent dis-
positions of property of the debtor;
‘‘(4) distribution of proceeds of the debtor’s prop-
erty substantially in accordance with the order pre-
scribed by this title; and
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‘‘(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 is entitled to commence
a case under section 1504 by filing a petition for recogni-
tion under section 1515, and upon recognition, to apply
directly to other Federal and State courts for appropriate
relief in those courts.
‘‘(b) Upon recognition, and subject to section 1510, a
foreign representative shall have the capacity to sue and
be sued, and shall be subject to the laws of the United States
of general applicability.
‘‘(c) Subject to section 1510, a foreign representative
is subject to laws of general application.
‘‘(d) Recognition under this chapter is prerequisite to
the granting of comity or cooperation to a foreign represent-
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ative in any Federal or State court in the United States.
Any request for comity or cooperation by a foreign rep-
resentative in any court shall be accompanied by a sworn
statement setting forth whether recognition under section
1515 has been sought and the status of any such petition.
‘‘(e) Upon denial of recognition under this chapter, the
court may issue appropriate orders necessary to prevent an
attempt to obtain comity or cooperation from courts in the
United States without such recognition.
‘‘§ 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 statement describing the peti-
tion for recognition and its current status. The court where
the petition for recognition has been filed must be advised
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of the foreign representative’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 that proceeding is entitled to participate
as a party in interest in a case regarding the debtor under
this title.
‘‘§ 1513. Access of foreign creditors to a case under
this title
‘‘(a) Foreign creditors have the same rights regarding
the commencement of, and participation in, a case under
this title as domestic creditors.
‘‘(b)(1) Subsection (a) does not change or codify law
in effect on the date of enactment of this chapter as to the
priority of claims under section 507 or 726, except that the
claim of a foreign creditor under section 507 or 726 shall
not be given a lower priority than that of general unsecured
claims without priority solely because the holder of such
claim is a foreign creditor.
‘‘(2)(A) Subsection (a) and paragraph (1) do not
change or codify law in effect on the date of enactment of
this chapter as to the allowability of foreign revenue claims
or other foreign public law claims in a proceeding under
this title.
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‘‘(B) Allowance and priority as to a foreign tax claim
or other foreign public law claim shall be governed by any
applicable tax treaty of the United States, under the condi-
tions and circumstances specified therein.
‘‘§ 1514. Notification to foreign creditors concerning a
case under this title
‘‘(a) Whenever in a case under this title notice is to
be given to creditors generally or to any class or category
of creditors, such notice shall also be given to the known
creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States.
The court may order that appropriate steps be taken with
a view to notifying any creditor whose address is not yet
known.
‘‘(b) Such notification to creditors with foreign ad-
dresses described in subsection (a) shall be given individ-
ually, unless the court considers that, under the cir-
cumstances, some other form of notification would be more
appropriate. No letters rogatory or other similar 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;
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‘‘(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 pursu-
ant to 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.
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN
PROCEEDING AND RELIEF
‘‘§ 1515. Application for recognition of a foreign pro-
ceeding
‘‘(a) A foreign representative applies to the court for
recognition of the foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
‘‘(b) A petition for recognition shall be accompanied
by—
‘‘(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
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‘‘(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) must be translated into English. The
court may require a translation into English of additional
documents.
‘‘§ 1516. Presumptions concerning recognition
‘‘(a) If the decision or certificate referred to in section
1515(b) indicates that the foreign proceeding is a foreign
proceeding 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.
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‘‘§ 1517. Order recognizing a foreign proceeding
‘‘(a) Subject to section 1506, after notice and a hearing
an order recognizing a foreign proceeding shall be entered
if—
‘‘(1) the foreign proceeding is a foreign main
proceeding or foreign nonmain proceeding within the
meaning of section 1502;
‘‘(2) the foreign representative applying for rec-
ognition is a person or body as defined in section
101; and
‘‘(3) the petition meets the requirements of sec-
tion 1515.
‘‘(b) The foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is taking
place in the country where the debtor has the center
of its main interests; or
‘‘(2) as a foreign nonmain proceeding if the 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 shall constitute
recognition under this chapter.
‘‘(d) The provisions of this subchapter do not prevent
modification or termination of recognition if it is shown
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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 granting of recognition. The
case under this chapter may be closed in the manner pre-
scribed for a case under section 350.
‘‘§ 1518. Subsequent information
‘‘After the petition for recognition of the foreign pro-
ceeding is filed, 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 petition for
recognition of a foreign proceeding
‘‘(a) Beginning on the date on which a petition for
recognition is filed and ending on the date on which the
petition is decided upon, 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 credi-
tors, grant relief of a provisional nature, including—
‘‘(1) staying execution against the debtor’s assets;
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‘‘(2) entrusting the administration or realization
of all or part of the debtor’s assets located in the
United States to the foreign representative or another
person authorized by the court, including an exam-
iner, in order to protect and preserve the value of as-
sets that, by their nature or because of other cir-
cumstances, are perishable, susceptible to devaluation,
or otherwise in jeopardy; and
‘‘(3) any relief referred to in paragraph (3), (4),
or (7) of section 1521(a).
‘‘(b) Unless extended under section 1521(a)(6), the re-
lief granted under this section terminates when the petition
for recognition is decided upon.
‘‘(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.
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‘‘§ 1520. Effects of recognition of a foreign main pro-
ceeding
‘‘(a) Upon recognition of a foreign proceeding that is
a foreign main proceeding—
‘‘(1) section 362 applies with respect to the debt-
or and that property of the debtor that is within the
territorial jurisdiction of the United States;
‘‘(2) a transfer, an encumbrance, or any other
disposition of an interest of the debtor in property
within the territorial jurisdiction of the United States
is restrained as and to the extent that is provided for
property of an estate under sections 363, 549, and
552; and
‘‘(3) unless the court orders otherwise, the foreign
representative may operate the debtor’s business and
may exercise the powers of a trustee under section
549, subject to sections 363 and 552.
‘‘(b) The scope, and the modification or termination,
of the stay and restraints referred to in subsection (a) are
subject to the exceptions and limitations provided in sub-
sections (b), (c), and (d) of section 362, subsections (b) and
(c) of section 363, and sections 552, 555 through 557, 559,
and 560.
‘‘(c) Subsection (a) does not affect the right to com-
mence individual actions or proceedings in a foreign coun-
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try to the extent necessary to preserve a claim against the
debtor.
‘‘(d) Subsection (a) does not affect the right of a foreign
representative or an entity to file a petition commencing
a case under this title or the right of any party to file
claims or take other proper actions in such a case.
‘‘§ 1521. Relief that may be granted upon recognition
of a foreign proceeding
‘‘(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 individual actions or individual proceedings con-
cerning the debtor’s assets, rights, obligations or li-
abilities to the extent the actions or proceedings have
not been stayed under section 1520(a);
‘‘(2) staying execution against the debtor’s assets
to the extent the execution 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
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extent that right has not been suspended under section
1520(a);
‘‘(4) providing for the examination of witnesses,
the taking of evidence or the delivery of information
concerning the debtor’s assets, affairs, rights, obliga-
tions or liabilities;
‘‘(5) entrusting the administration or realization
of all or part of the debtor’s assets within the terri-
torial jurisdiction of the United States to the foreign
representative or another person, including an exam-
iner, authorized by the court;
‘‘(6) extending relief granted under section
1519(a); and
‘‘(7) granting any additional relief that may be
available to a trustee, except for relief available under
sections 522, 544, 545, 547, 548, 550, and 724(a).
‘‘(b) Upon recognition of a foreign proceeding, whether
main or nonmain, the court may, at the request of the for-
eign representative, entrust the distribution of all or part
of the debtor’s assets located in the United States to the for-
eign representative or another person, including an exam-
iner, authorized by the court, if the court is satisfied that
the interests of creditors in the United States are suffi-
ciently protected.
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‘‘(c) In granting relief under this section to a rep-
resentative of a foreign nonmain proceeding, the court must
be satisfied that the relief relates to assets that, under the
law of the United States, should be administered in the for-
eign nonmain proceeding or concerns information required
in that proceeding.
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations appli-
cable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a).
‘‘§ 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)(2), to conditions that the court considers
to be 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-
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tion 1519 or 1521, or at its own motion, modify or termi-
nate the relief referred to in subsection (b).
‘‘(d) Section 1104(d) shall apply to the appointment
of an examiner under this chapter. Any examiner shall
comply with the qualification requirements imposed on a
trustee by section 322.
‘‘§ 1523. Actions to avoid acts detrimental to creditors
‘‘(a) Upon recognition of a foreign proceeding, the for-
eign representative has standing in a case concerning the
debtor pending under another chapter of this title to initiate
actions under sections 522, 544, 545, 547, 548, 550, and
724(a).
‘‘(b) In any case in which 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 for-
eign nonmain proceeding.
‘‘§ 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), and 1334(e) of title 28, to the
extent that such other assets are not subject to the jurisdic-
tion and control of a foreign proceeding that has been recog-
nized under this chapter.
‘‘§ 1529. Coordination of a case under this title and a
foreign proceeding
‘‘In any case in which a foreign proceeding and a case
under another chapter of this title are taking place concur-
rently regarding the same debtor, the court shall seek co-
operation and coordination under sections 1525, 1526, and
1527, and the following 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 sections 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 sections 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 law 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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‘‘§ 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. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11,
UNITED STATES CODE.
(a) APPLICABILITY OF CHAPTERS.—Section 103 of
title 11, United States Code, is amended—
(1) in subsection (a), by inserting before the pe-
riod the following: ‘‘, and this chapter, sections 307,
304, 555 through 557, 559, and 560 apply in a case
under chapter 15’’; and
(2) by adding at the end the following:
‘‘(j) Chapter 15 applies only in a case under such
chapter, except that—
‘‘(1) sections 1513 and 1514 apply in all cases
under this title; and
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‘‘(2) section 1505 applies to trustees and to any
other entity (including an examiner) authorized by
the court under chapter 7, 11, or 12, to debtors in
possession under chapter 11 or 12, and to debtors
under chapter 9 who are authorized to act under sec-
tion 1505.’’.
(b) DEFINITIONS.—Paragraphs (23) and (24) of sec-
tion 101 of title 11, United States Code, are amended to
read as follows:
‘‘(23) ‘foreign proceeding’ means a collective ju-
dicial or administrative proceeding in a foreign coun-
try, including an interim proceeding, pursuant to a
law relating to insolvency in which proceeding the as-
sets and affairs of the debtor are subject to control or
supervision by a foreign court, for the purpose of reor-
ganization 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.—
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(1) PROCEDURES.—Section 157(b)(2) of title 28,
United States Code, is amended—
(A) in subparagraph (N), by striking ‘‘and’’
at the end;
(B) in subparagraph (O), by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(P) recognition of foreign proceedings and other
matters under chapter 15 of title 11.’’.
(2) BANKRUPTCY
CASES
AND
PROCEEDINGS.—
Section 1334(c)(1) 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 inserting
‘‘15,’’ after ‘‘chapter’’.
SEC. 803. CLAIMS RELATING TO INSURANCE DEPOSITS IN
CASES 
ANCILLARY 
TO 
FOREIGN 
PRO-
CEEDINGS.
Section 304 of title 11, United States Code, is amended
to read as follows:
‘‘§ 304. Cases ancillary to foreign proceedings
‘‘(a) For purposes of this section—
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‘‘(1) the term ‘domestic insurance company’
means a domestic insurance company, as such term
is used in section 109(b)(2);
‘‘(2) the term ‘foreign insurance company’ means
a foreign insurance company, as such term is used in
section 109(b)(3);
‘‘(3) the term ‘United States claimant’ means a
beneficiary of any deposit referred to in subsection (b)
or any multibeneficiary trust referred to in subsection
(b);
‘‘(4) the term ‘United States creditor’ means,
with respect to a foreign insurance company—
‘‘(i) a United States claimant; or
‘‘(ii) any business entity that operates in
the United States and that is a creditor; and
‘‘(5) the term ‘United States policyholder’ means
a holder of an insurance policy issued in the United
States.
‘‘(b) The court may not grant relief under chapter 15
of this title with respect to any deposit, escrow, trust fund,
or other security required or permitted under any applica-
ble State insurance law or regulation for the benefit of
claim holders in the United States.’’.
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TITLE IX—FINANCIAL CONTRACT
PROVISIONS
SEC. 901. 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:
‘‘(B) a combination of agreements or trans-
actions referred to in subparagraphs (A) and
(C);
‘‘(C) an option to enter into an agreement
or transaction referred to in subparagraph (A)
or (B);
‘‘(D) a master netting agreement that pro-
vides for an agreement or transaction referred to
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in subparagraph (A), (B), or (C), together with
all supplements to such master netting agree-
ment, without regard to whether such master net-
ting agreement provides for an agreement or
transaction that is not a forward contract under
this paragraph, except that such master netting
agreement shall be considered to be a forward
contract under this paragraph only with respect
to each agreement or transaction under such
master netting agreement that is referred to in
subparagraph (A), (B) or (C); or
‘‘(E) a security agreement or arrangement,
or other credit enhancement, directly pertaining
to a contract, option, agreement, or transaction
referred to in subparagraph (A), (B), (C), or
(D), but not to exceed the actual value of such
contract, option, agreement, or transaction on
the date of the filing of the petition;’’;
(B) by striking paragraph (47) and insert-
ing the following:
‘‘(47) ‘repurchase agreement’ and ‘reverse repur-
chase agreement’—
‘‘(A) mean—
‘‘(i) an agreement, including related
terms, which provides for the transfer of—
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‘‘(I) a certificate of deposit, mort-
gage related security (as defined in sec-
tion 3 of the Securities Exchange Act
of 1934), mortgage loan, interest in a
mortgage related security or mortgage
loan, eligible bankers’ acceptance, or
qualified foreign government security
(defined for purposes of this paragraph
to mean a security that is a direct ob-
ligation of, or that is fully guaranteed
by, the central government of a mem-
ber of the Organization for Economic
Cooperation and Development); or
‘‘(II) a security that is a direct
obligation of, or that is fully guaran-
teed by, the United States or an agency
of the United States against the trans-
fer of funds by the transferee of such
certificate of deposit, eligible bankers’
acceptance, security, loan, or interest;
with a simultaneous agreement by such
transferee to transfer to the transferor there-
of a certificate of deposit, eligible bankers’
acceptance, security, loan, or interest of the
kind described in subclause (I) or (II), at a
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date certain that is not later than 1 year
after the date of the transferor’s transfer or
on demand, against the transfer of funds;
‘‘(ii) a 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); or
‘‘(iv) a master netting agreement that
provides for an agreement or transaction re-
ferred to in clause (i), (ii), or (iii), together
with all supplements to such master netting
agreement, without regard to whether such
master netting agreement provides for an
agreement or transaction that is not a re-
purchase agreement under this subpara-
graph, except that such master netting
agreement shall be considered to be a repur-
chase agreement under this subparagraph
only with respect to each agreement or
transaction under such master netting
agreement that is referred to in clause (i),
(ii), or (iii); or
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‘‘(v) a security agreement or arrange-
ment, or other credit enhancement, directly
pertaining to a contract referred to in
clause (i), (ii), (iii), or (iv), but not to ex-
ceed the actual value of such contract on the
date of the filing of the petition; and
‘‘(B) do not include a repurchase obligation
under a participation in a commercial mortgage
loan;’’;
(C) in paragraph (48) by inserting ‘‘, or ex-
empt from such registration under such section
pursuant to an order of the Securities and Ex-
change Commission’’ after ‘‘1934’’; and
(D) by striking paragraph (53B) and in-
serting the following:
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
‘‘(i) an agreement, including the terms
and conditions incorporated by reference in
such agreement, that 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;
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‘‘(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 an eq-
uity swap, option, future, or forward
agreement;
‘‘(V) a debt index or a debt swap,
option, future, or forward agreement;
‘‘(VI) a credit spread or a credit
swap, option, future, or forward agree-
ment; or
‘‘(VII) a commodity index or a
commodity swap, option, future, or
forward agreement;
‘‘(ii) an agreement or transaction that
is similar to an agreement or transaction
referred to in clause (i) that—
‘‘(I) is currently, or in the future
becomes, regularly entered into in the
swap market (including terms and
conditions incorporated by reference
therein); and
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‘‘(II) is a forward, swap, future,
or option on a rate, currency, com-
modity, equity security, or other equity
instrument, on a debt security or other
debt instrument, or on an economic
index or measure of economic risk or
value;
‘‘(iii) a combination of agreements or
transactions referred to in clauses (i) and
(ii);
‘‘(iv) an option to enter into an agree-
ment or transaction referred to in this sub-
paragraph;
‘‘(v) a master netting agreement that
provides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), or (iv), to-
gether with all supplements to such master
netting agreement and without regard to
whether such master netting agreement con-
tains an agreement or transaction described
in any such clause, but only with respect to
each agreement or transaction referred to in
any such clause that is under such master
netting agreement; except that
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‘‘(B) the definition under subparagraph (A)
is applicable for purposes of this title only, and
shall not be construed or applied so as to chal-
lenge or affect the characterization, 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 Com-
pany Act of 1935, the Trust Indenture Act of
1939, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Securities
Investor Protection Act of 1970, the Commodity
Exchange Act, and the regulations prescribed by
the Securities and Exchange Commission or the
Commodity Futures Trading Commission.’’;
(2) in section 741, 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 mortgage loan or an
interest in a mortgage loan, a group or
index of securities, or mortgage loans or in-
terests therein (including an interest therein
or based on the value thereof), or option on
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any of the foregoing, including an option to
purchase or sell any of the foregoing;
‘‘(ii) an option entered into on a na-
tional securities exchange relating to foreign
currencies;
‘‘(iii) the guarantee by or to a securi-
ties clearing agency of a settlement of cash,
securities, mortgage loans or interests there-
in, group or index of securities, or mortgage
loans or interests therein (including any in-
terest therein or based on the value thereof),
or option on any of the foregoing, including
an option to purchase or sell any of the
foregoing;
‘‘(iv) a margin loan;
‘‘(v) any other agreement or trans-
action that is similar to an agreement or
transaction referred to in this subpara-
graph;
‘‘(vi) a combination of the agreements
or transactions referred to in this subpara-
graph;
‘‘(vii) an option to enter into an agree-
ment or transaction referred to in this sub-
paragraph;
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‘‘(viii) a master netting agreement that
provides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii), together with all supplements
to such master netting agreement, without
regard to whether such master netting
agreement provides for an agreement or
transaction that is not a securities contract
under this subparagraph, except that such
master netting agreement shall be consid-
ered to be a securities contract under this
subparagraph only with respect to each
agreement or transaction under such master
netting agreement that is referred to in
clause (i), (ii), (iii), (iv), (v), (vi), or (vii);
or
‘‘(ix) a security agreement or arrange-
ment, or other credit enhancement, directly
pertaining to a contract referred to in this
subparagraph, but not to exceed the actual
value of such contract on the date of the fil-
ing of the petition; and
‘‘(B) does not include a purchase, sale, or
repurchase obligation under a participation in a
commercial mortgage loan;’’; and
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(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) a combination of the agreements or
transactions referred to in this paragraph;
‘‘(H) an option to enter into an agreement
or transaction referred to in this paragraph;
‘‘(I) a master netting agreement that pro-
vides for an agreement or transaction referred to
in subparagraph (A), (B), (C), (D), (E), (F),
(G), or (H), together with all supplements to
such master netting agreement, without regard to
whether such master netting agreement provides
for an agreement or transaction that is not a
commodity contract under this paragraph, ex-
cept that such master netting agreement shall be
considered to be a commodity contract under this
paragraph only with respect to each agreement
or transaction under such master netting agree-
ment that is referred to in subparagraph (A),
(B), (C), (D), (E), (F), (G), or (H); or
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‘‘(J) a security agreement or arrangement,
or other credit enhancement, directly pertaining
to a contract referred to in this paragraph, but
not to exceed the actual value of such contract on
the date of the filing of the petition.’’.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINAN-
CIAL
PARTICIPANT, 
AND
FORWARD
CONTRACT
MER-
CHANT.—Section 101 of title 11, United States Code, as
amended by section 802(b) of this Act, is amended—
(1) by striking paragraph (22) and inserting the
following:
‘‘(22) ‘financial institution’ means—
‘‘(A)(i) a Federal reserve bank, or an entity
that is a commercial or savings bank, industrial
savings bank, savings and loan association, trust
company, or receiver or conservator for such en-
tity; and
‘‘(ii) if such Federal reserve bank, receiver,
or conservator or entity is acting as agent or
custodian for a customer in connection with a
securities contract, as defined in section 741,
such customer; or
‘‘(B) in connection with a securities con-
tract, as defined in section 741 of this title, an
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investment company registered under the Invest-
ment Company Act of 1940;’’;
(2) by inserting after paragraph (22) the fol-
lowing:
‘‘(22A) ‘financial participant’ means an entity
that is a party to a securities contract, commodity
contract or forward contract, or on the date of the fil-
ing of the petition, has a commodity contract (as de-
fined in section 761) with the debtor or any other en-
tity (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 previous 15-month period, or has gross
mark-to-market 
positions 
of 
not 
less 
than
$100,000,000 (aggregated across counterparties) in
any such agreement or transaction with the debtor or
any other entity (other than an affiliate) on any day
during the previous 15-month period;’’; 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 or in a commodity, as
defined or in section 761, or any similar good, article,
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service, right, or interest that is presently or in the
future becomes the subject of dealing or 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, as amended by
subsection (b) of this section, is amended by inserting after
paragraph (38) the following new paragraphs:
‘‘(38A) the term ‘master netting agreement’—
‘‘(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 1 or more
contracts that are described in any 1 or more of
paragraphs (1) through (5) of section 561(a), or
any security agreement or arrangement or other
credit enhancement related to 1 or more of the
foregoing; except that
‘‘(B) if a master netting agreement contains
provisions relating to agreements or transactions
that are not contracts described in paragraphs
(1) through (5) of section 561(a), the master net-
ting agreement shall be deemed to be a master
netting agreement only with respect to those
agreements or transactions that are described in
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any 1 or more of the paragraphs (1) through (5)
of section 561(a);
‘‘(38B) the term ‘master netting agreement par-
ticipant’ means an entity that, at any time before the
filing of the petition, is a party to an outstanding
master netting agreement with the debtor;’’.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS,
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
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 section 718 of 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 of a mutual debt and claim under
or in connection with a swap agreement that con-
stitutes the setoff of a claim against the debtor for a
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payment or transfer due from the debtor under or in
connection with a swap agreement against a payment
due to the debtor from the swap participant under or
in connection with a swap agreement or against cash,
securities, or other property held by, pledged to, and
under the control of, or due from such swap partici-
pant to guarantee, secure, or settle a swap agree-
ment;’’;
(D) in paragraph (26), by striking ‘‘or’’ at
the end;
(E) in paragraph (27), by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(F) by inserting after paragraph (27) the
following:
‘‘(28) under subsection (a), of the setoff by a
master netting agreement participant of a mutual
debt and claim under or in connection with 1 or more
master netting agreements or any contract or agree-
ment subject to such 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 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
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connection with such agreements or any contract or
agreement subject to such agreements or against cash,
securities, or other property held by, pledged or 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 such
participant is eligible to exercise such offset rights
under paragraph (6), (7), or (17) for each individual
contract covered by the master netting agreement in
issue.’’.
(2) LIMITATION.—Section 362 of title 11, United
States Code, as amended by section 441(2) of this Act,
is amended by adding at the end the following:
‘‘(l) LIMITATION.—The exercise of rights not subject to
the stay arising under subsection (a) pursuant to para-
graph (6), (7), or (17) of subsection (b) shall not be stayed
by an 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, is amended—
(1) in subsection (g) (as added by section 103 of
Public Law 101–311 (104 Stat. 267 et seq.))—
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(A) by striking ‘‘under a swap agreement’’;
and
(B) by striking ‘‘in connection with a swap
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and
(2) by inserting before subsection (i) (as redesig-
nated by section 407 of this Act) the following new
subsection:
‘‘(h) 
Notwithstanding 
sections 
544, 
545, 
547,
548(a)(2)(B), and 548(b), the trustee may not avoid a
transfer made by or to a master netting agreement partici-
pant under or in connection with any master netting agree-
ment or any individual contract covered thereby that is
made before the commencement of the case, 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 
(except 
under 
section
548(a)(1)(A)).’’.
(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’’;
(2) in subparagraph (D), by striking the period
at the end and inserting ‘‘; and’’; and
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(3) by adding at the end the following new sub-
paragraph:
‘‘(E) a master netting agreement partici-
pant that receives a transfer in connection with
a master netting agreement or any individual
contract covered thereby takes for value to the ex-
tent of such transfer, except, with respect to a
transfer under any individual 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.’’.
(g) TERMINATION OR ACCELERATION OF SECURITIES
CONTRACTS.—Section 555 of title 11, United States Code,
is amended—
(1) by striking the section heading and inserting
the following:
‘‘§ 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’’.
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(h) TERMINATION
OR ACCELERATION
OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,
United States Code, is amended—
(1) by striking the section heading and inserting
the following:
‘‘§ 556. Contractual right to liquidate, terminate, or
accelerate a commodities contract or for-
ward contract’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(i) TERMINATION OR ACCELERATION OF REPURCHASE
AGREEMENTS.—Section 559 of title 11, United States Code,
is amended—
(1) by striking the section heading and inserting
the following:
‘‘§ 559. Contractual right to liquidate, terminate, or
accelerate a repurchase agreement’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
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(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF
SWAP AGREEMENTS.—Section 560 of title 11, United States
Code, is amended—
(1) by striking the section heading and inserting
following:
‘‘§ 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 a swap agree-
ment’’; and
(3) by striking ‘‘in connection with any swap
agreement’’ and inserting ‘‘in connection with the ter-
mination, liquidation, or acceleration of a swap
agreement’’.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR
OFFSET UNDER
A MASTER NETTING AGREEMENT
AND
ACROSS CONTRACTS.—Title 11, United States Code, is
amended by inserting after section 560 the following:
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting
agreement and across contracts
‘‘(a) Subject to subsection (b), the exercise of any con-
tractual right, because of a condition of the kind specified
in section 365(e)(1), to cause the termination, liquidation,
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‘‘(A) a party may not net or offset an obligation
to the debtor arising under, or in connection with, a
commodity contract against any claim arising under,
or in connection with, other instruments, contracts, or
agreements listed in subsection (a), except to the ex-
tent that the party has positive net equity in the com-
modity accounts at the debtor, as calculated under
such subchapter IV; and
‘‘(B) another commodity broker may not net or
offset an obligation to the debtor arising under, or in
connection with, a commodity contract entered into
or held on behalf of a customer of the debtor against
any claim arising under, or in connection with, other
instruments, contracts, or agreements referred to in
subsection (a).
‘‘(c) As used in this section, the term ‘contractual
right’ includes a right set forth in a rule or bylaw of a
national securities exchange, a national securities associa-
tion, or a securities clearing agency, a right set forth in
a bylaw of a clearing organization or contract market 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.’’.
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(l) ANCILLARY PROCEEDINGS.—Section 304 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(d) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repur-
chase agreements, swap agreements, or master netting
agreements shall apply in a case ancillary to a foreign pro-
ceeding under this section or any other section of this title,
so that enforcement of contractual provisions of such con-
tracts and agreements in accordance with their terms—
‘‘(1) shall not be stayed or otherwise limited
by—
‘‘(A) operation of any provision of this title;
or
‘‘(B) order of a court in any case under this
title;
‘‘(2) shall limit avoidance powers to the same ex-
tent as in a proceeding under chapter 7 or 11; and
‘‘(3) shall not be limited based on the presence
or absence of assets of the debtor in the United
States.’’.
(m) COMMODITY BROKER LIQUIDATIONS.—Title 11,
United States Code, is amended by inserting after section
766 the following:
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‘‘§ 767. Commodity broker liquidation and forward
contract merchants, commodity brokers,
stockbrokers, financial institutions, secu-
rities clearing agencies, swap partici-
pants, repo participants, and master net-
ting 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, 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) 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, securities
clearing agencies, swap participants, repo
participants, and master netting agree-
ment 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-
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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.’’.
(o) SETOFF.—Section 553 of title 11, United States
Code, is amended—
(1) in subsection (a)(3)(C), by inserting ‘‘(except
for a setoff of a kind described in section 362(b)(6),
362(b)(7), 362(b)(17), 362(b)(28), 555, 556, 559, or
560)’’ before the period; and
(2) 
in 
subsection 
(b)(1), 
by 
striking
‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 362(b)(28),
555, 556, 559, 560,’’.
(p) 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 section 546(e), by inserting ‘‘financial
participant’’ after ‘‘financial institution,’’;
(3) in section 548(d)(2)(B), by inserting ‘‘finan-
cial participant’’ after ‘‘financial institution,’’;
(4) in section 555—
(A) by inserting ‘‘financial participant’’
after ‘‘financial institution,’’; and
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(B) by inserting before the period ‘‘, a right
set forth in a bylaw of a clearing organization
or contract market or in a resolution of the gov-
erning board thereof, and a right, whether or not
in writing, arising under common law, under
law merchant, or by reason of normal business
practice’’; and
(5) in section 556, by inserting ‘‘, financial par-
ticipant’’ after ‘‘commodity broker’’.
(q) CONFORMING AMENDMENTS.—Title 11, United
States Code, is amended—
(1) in the table of sections for chapter 5—
(A) by striking the items relating to sections
555 and 556 and inserting the following:
‘‘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.’’;
(B) by striking the items relating to sections
559 and 560 and inserting the following:
‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase agree-
ment.
‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;
and
(C) by adding 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.’’;
and
(2) in the table of sections for chapter 7—
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(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, securities clearing
agencies, swap participants, repo participants, and master net-
ting agreement participants.’’;
and
(B) by inserting after the item relating to
section 752 the following:
‘‘753. Stockbroker liquidation and forward contract merchants, commodity bro-
kers, stockbrokers, financial institutions, securities clearing agen-
cies, swap participants, repo participants, and master netting
agreement participants.’’.
SEC. 902. DAMAGE MEASURE.
(a) IN GENERAL.—Title 11, United States Code, is
amended—
(1) by inserting after section 561 the following:
‘‘§ 562. Damage measure in connection with swap
agreements, securities contracts, forward
contracts, commodity contracts, repur-
chase 
agreements, 
or 
master 
netting
agreements
‘‘If the trustee rejects a swap agreement, securities con-
tract (as defined in section 741), forward contract, com-
modity contract (as defined in section 761) repurchase
agreement, or master netting agreement under section
365(a), or if a forward contract merchant, stockbroker, fi-
nancial institution, securities clearing agency, repo partici-
pant, financial participant, master netting agreement par-
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ticipant, or swap participant liquidates, terminates, or ac-
celerates such contract or agreement, damages shall be
measured as of the earlier of—
‘‘(1) the date of such rejection; or
‘‘(2) the date of such liquidation, termination, or
acceleration.’’; and
(2) in the table of sections for chapter 5 by in-
serting after the item relating to section 561 the fol-
lowing:
‘‘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 561 shall be allowed under subsection (a), (b),
or (c) of this section, or disallowed under subsection (d) or
(e) of this section, as if such claim had arisen before the
date of the filing of the petition.’’.
SEC. 903. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is
amended—
(1) in subsection (b), by striking ‘‘or’’ at the end
of paragraph (4);
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(2) by redesignating paragraph (5) of subsection
(b) as paragraph (6);
(3) by inserting after paragraph (4) of sub-
section (b) the following new paragraph:
‘‘(5) 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 that such
asset (or proceeds or value thereof) may be recovered
by the trustee under section 550 by virtue of avoid-
ance under section 548(a); or’’; and
(4) by adding at the end the following:
‘‘(e) For purposes of this section, the following defini-
tions shall apply:
‘‘(1) The term ‘asset-backed securitization’ means
a transaction in which eligible assets transferred to
an eligible entity are used as the source of payment
on securities, the most senior of which are rated in-
vestment grade by 1 or more nationally recognized se-
curities rating organizations, issued by an issuer.
‘‘(2) The term ‘eligible asset’ means—
‘‘(A) financial assets (including interests
therein and proceeds thereof), either fixed or re-
volving, including residential and commercial
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mortgage loans, consumer receivables, trade re-
ceivables, and lease receivables, that, by their
terms, convert into cash within a finite time pe-
riod, plus any rights or other assets designed to
assure the servicing or timely distribution of
proceeds to security holders;
‘‘(B) cash; and
‘‘(C) securities.
‘‘(3) The term ‘eligible entity’ means—
‘‘(A) an issuer; or
‘‘(B) a trust, corporation, partnership, or
other entity engaged exclusively in the business
of acquiring and transferring eligible assets di-
rectly or indirectly to an issuer and taking ac-
tions ancillary thereto.
‘‘(4) The term ‘issuer’ means a trust, corpora-
tion, partnership, or other entity engaged exclusively
in the business of acquiring and holding eligible as-
sets, issuing securities backed by eligible assets, and
taking actions ancillary thereto.
‘‘(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
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them from the estate of the debtor pursuant to sub-
section (b)(5), irrespective, 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. 904. 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 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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TITLE X—PROTECTION OF FAM-
ILY FARMERS AND FAMILY
FISHERMEN
SEC. 1001. 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), and amended by this Act, is reenacted.
(2) EFFECTIVE DATE.—Subsection (a) shall take
effect on October 1, 1999.
(b) CONFORMING AMENDMENT.—Section 302 of the
Bankruptcy, Judges, United States Trustees, and Family
Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is
amended by striking subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
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, begin-
ning with the adjustment to be made on April 1, 2001.’’.
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SEC. 1003. 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. 1004. 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
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; and’’.
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(b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) of
title 11, United States Code, is amended by striking ‘‘a
State or local governmental unit’’ and inserting ‘‘any gov-
ernmental unit’’.
SEC. 1005. 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-
posable income may not require payments to unsecured
creditors in any particular month greater than the debtor’s
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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. 1006. 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; and
‘‘(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);’’;
‘‘(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:
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‘‘(19A) ‘family fisherman’ means—
‘‘(A) an individual or individual and
spouse engaged in a commercial fishing oper-
ation (including aquiculture 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
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—
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‘‘(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
owned or operated by such corporation or
such partnership; and
‘‘(III) if such corporation issues stock,
such stock is not publicly traded;’’; and
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(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.
‘‘(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
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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.
‘‘(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.
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‘‘(b) A lien described in this subsection is—
‘‘(1) a maritime lien under subchapter III of
chapter 313 of title 46, United States Code, without
regard to whether that lien is recorded under section
31343 of title 46, United States Code; 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,
United States Code.
‘‘(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’’.
(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.’’.
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TITLE XI—HEALTH CARE AND
EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) HEALTH CARE BUSINESS DEFINED.—Section 101
of title 11, United States Code, as amended by section
1003(a) of this Act, is amended—
(1) by redesignating paragraph (27A) as para-
graph (27B); and
(2) inserting after paragraph (27) the following:
‘‘(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
‘‘(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;
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‘‘(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),
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 DEFINED.—Section 101 of title 11,
United States Code, as amended by subsection (a) of this
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section, is amended by inserting after paragraph (40) the
following:
‘‘(40A) ‘patient’ means any person who obtains
or receives services from a health care business;’’.
(c) PATIENT RECORDS DEFINED.—Section 101 of title
11, United States Code, as amended by subsection (b) of
this section, is amended by inserting after paragraph (40A)
the following:
‘‘(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;’’.
(d) 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
in the manner required under applicable Federal or State
law, the following requirements shall apply:
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‘‘(1) The trustee shall—
‘‘(A) publish notice, in 1 or more appro-
priate newspapers, that if patient records are
not claimed by the patient or an insurance pro-
vider (if applicable law permits the insurance
provider to make that claim) by the date that is
90 days after the date of that notification, the
trustee will destroy the patient records; and
‘‘(B) during the 90-day period described in
subparagraph (A), attempt to notify directly
each patient that is the subject of the patient
records and appropriate insurance carrier con-
cerning the patient records by mailing to the last
known address of that patient and appropriate
insurance carrier an appropriate notice regard-
ing the claiming or disposing of patient records.
‘‘(2) If after providing the notification under
paragraph (1), patient records are not claimed dur-
ing the 90-day period described under that para-
graph, the trustee shall mail, by certified mail, at the
end of such 90-day period a written request to each
appropriate Federal agency to request permission
from that agency to deposit the patient records with
that agency.
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‘‘(3) If, following the period in paragraph (2)
and after providing the notification under paragraph
(1), patient records are not claimed during the 90-
day period described in paragraph (1)(A) or in any
case in which a notice is mailed under paragraph
(1)(B), during the 90-day period beginning on the
date on which the notice is mailed, by a patient or
insurance provider in accordance with that para-
graph, 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 chapter analysis 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.’’.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF
CLOSING A HEALTH CARE BUSINESS.
Section 503(b) of title 11, United States Code, is
amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
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(2) in paragraph (6), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(7) 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.’’.
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) Not later than 30 days after a case is commenced
by a health care business under chapter 7, 9, or 11, the
court shall appoint an ombudsman with appropriate exper-
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tise in monitoring the quality of patient care to represent
the interests of the patients of the health care business. The
court may appoint as an ombudsman a person who is serv-
ing as a State Long-Term Care Ombudsman appointed
under title III or VII of the Older Americans Act of 1965
(42 U.S.C. 3021 et seq. and 3058 et seq.).
‘‘(b) An ombudsman appointed under subsection (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-
priate parties in interest, immediately upon making
that determination.
‘‘(c) An ombudsman shall maintain any information
obtained by the ombudsman under this section that relates
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to patients (including information relating to patient
records) as confidential information.’’.
(2) CLERICAL AMENDMENT.—The chapter anal-
ysis 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—
(1) in the matter proceeding 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 section 219 of this Act, is
amended—
(1) in paragraph (9), by striking ‘‘and’’ at the
end;
(2) in paragraph (10), by striking the period
and inserting ‘‘; and’’; and
(3) 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
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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
‘‘704(2), 704(5), 704(7), 704(8), and 704(9)’’ and inserting
‘‘704(a) (2), (5), (7), (8), (9), and (11)’’.
SEC. 1106. ESTABLISHMENT OF POLICY AND PROTOCOLS
RELATING TO BANKRUPTCIES OF HEALTH
CARE BUSINESSES.
Not later than 30 days after the date of enactment of
this Act, the Attorney General of the United States, in con-
sultation with the Secretary of Health and Human Services
and the National Association of Attorneys General, shall
establish a policy and protocols for coordinating a response
to bankruptcies of health care businesses (as that term is
defined in section 101 of title 11, United States Code), in-
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cluding assessing the appropriate time frame for disposal
of patient records under section 1102 of this Act.
SEC. 1107. EXCLUSION FROM PROGRAM PARTICIPATION
NOT SUBJECT TO AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as
amended by section 901(d) of this Act, is amended—
(1) in paragraph (27), by striking ‘‘or’’ at the
end;
(2) in paragraph (28), by striking the period at
the end and inserting ‘‘; or’’; and
(3) by inserting after paragraph (28) the fol-
lowing:
‘‘(29) under subsection (a), of the exclusion by
the Secretary of Health and Human Services of the
debtor from participation in the medicare program or
any other Federal health care program (as defined in
section 1128B(f) of the Social Security Act (42 U.S.C.
1320a–7b(f)) pursuant to title XI of such Act (42
U.S.C. 1301 et seq.) or title XVIII of such Act (42
U.S.C. 1395 et seq.).’’.
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TITLE 
XII—AMENDMENTS 
TO
FAIR LABOR STANDARDS ACT
OF 1938
SEC. 1201. MINIMUM WAGE.
Section 6(a)(1) of the Fair Labor Standards Act of
1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
‘‘(1) except as otherwise provided in this section,
not less than—
‘‘(A) $5.15 an hour beginning September 1,
1997,
‘‘(B) $5.50 an hour during the year begin-
ning March 1, 2000,
‘‘(C) $5.85 an hour during the year begin-
ning March 1, 2001, and
‘‘(D) $6.15 an hour during the year begin-
ning March 1, 2002.’’.
SEC. 1202. REGULAR RATE FOR OVERTIME PURPOSES.
Section 7(e) of the Fair Labor Standards Act of 1938
(29 U.S.C. 207(e)) is amended—
(1) by inserting before the semicolon at the end
of paragraph (3) the following: ‘‘; or (d) the payments
are made to reward an employee or group of employ-
ees for meeting or exceeding the productivity, quality,
efficiency, or sales goals as specified in a gainsharing,
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incentive bonus, commission, or performance contin-
gent bonus plan’’; and
(2) by inserting after and below paragraph (7)
the following:
‘‘A plan described in paragraph (3)(d) shall be in writing
and made available to employees, provide that the amount
of the payments to be made under the plan be based upon
a formula that is stated in the plan, and be established and
maintained in good faith for the purpose of distributing
to employees additional remuneration over and above the
wages and salaries that are not dependent upon the exist-
ence of such plan or payments made pursuant to such
plan.’’.
TITLE XIII—TAX RELIEF
SEC. 1300. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms of
an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
Subtitle A—Small Business Tax
Relief
SEC. 1301. INCREASE IN EXPENSING LIMITATION TO $30,000.
(a) IN GENERAL.—Paragraph (1) of section 179(b)
(relating to limitations) is amended to read as follows:
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‘‘(1) DOLLAR LIMITATION.—The aggregate cost
which may be taken into account under subsection (a)
for any taxable year shall not exceed $30,000.’’
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2000.
SEC. 1302. REPEAL OF TEMPORARY UNEMPLOYMENT TAX.
Section 3301 (relating to rate of unemployment tax)
is amended—
(1) by striking ‘‘2007’’ in paragraph (1) and in-
serting ‘‘2000’’; and
(2) by striking ‘‘2008’’ in paragraph (2) and in-
serting ‘‘2001’’.
SEC. 1303. FULL DEDUCTION OF HEALTH INSURANCE
COSTS FOR SELF-EMPLOYED INDIVIDUALS.
(a) IN GENERAL.—Section 162(l)(1) (relating to al-
lowance of deduction) is amended to read as follows:
‘‘(1) ALLOWANCE OF DEDUCTION.—In the case of
an individual who is an employee within the mean-
ing of section 401(c)(1), there shall be allowed as a
deduction under this section an amount equal to the
amount paid during the taxable year for insurance
which constitutes medical care for the taxpayer and
the taxpayer’s spouse and dependents.’’
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(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1999.
SEC. 1304. PERMANENT EXTENSION OF WORK OPPOR-
TUNITY TAX CREDIT.
(a) IN GENERAL.—Section 51(c) (defining wages) is
amended by striking paragraph (4).
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to individuals who begin work for the
employer after June 30, 1999.
SEC. 1305. SMALL BUSINESSES ALLOWED INCREASED DE-
DUCTION FOR MEAL AND ENTERTAINMENT
EXPENSES.
(a) IN GENERAL.—Subsection (n) of section 274 (relat-
ing to only 50 percent of meal and entertainment expenses
allowed as deduction) is amended by adding at the end the
following:
‘‘(4) SPECIAL RULE FOR SMALL BUSINESSES.—
‘‘(A) IN GENERAL.—In the case of any tax-
payer which is a small business, paragraph (1)
shall be applied by substituting ‘the applicable
percentage’ for ‘50 percent’. For purposes of the
preceding sentence, the term ‘applicable percent-
age’ means 55 percent in the case of taxable
years beginning in 2001, increased (but not
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above 80 percent) by 5 percentage points for each
succeeding calendar year after 2001 with respect
to taxable years beginning in each such calendar
year.
‘‘(B) SMALL
BUSINESS.—For purposes of
this paragraph, the term ‘small business’ means,
with respect to expenses paid or incurred during
any taxable year—
‘‘(i) any C corporation which meets the
requirements of section 55(e)(1) for such
year, and
‘‘(ii) any S corporation, partnership,
or sole proprietorship which would meet
such requirements if it were a C corpora-
tion.’’
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to taxable years beginning after De-
cember 31, 2000.
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Subtitle B—Deduction for Health
and Long-Term Care Insurance
SEC. 1311. DEDUCTION FOR HEALTH AND LONG-TERM CARE
INSURANCE COSTS OF INDIVIDUALS NOT
PARTICIPATING 
IN 
EMPLOYER-SUBSIDIZED
HEALTH PLANS.
(a) IN GENERAL.—Part VII of subchapter B of chapter
1 is amended by redesignating section 222 as section 223
and by inserting after section 221 the following new section:
‘‘SEC. 222. HEALTH AND LONG-TERM CARE INSURANCE
COSTS.
‘‘(a) IN GENERAL.—In the case of an individual, there
shall be allowed as a deduction an amount equal to the ap-
plicable percentage of the amount paid during the taxable
year for insurance which constitutes medical care for the
taxpayer and the taxpayer’s spouse and dependents.
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of sub-
section (a), the applicable percentage shall be determined
in accordance with the following table:
‘‘For taxable years beginning
The applicable
in calendar year—
percentage is—
2002, 2003, and 2004 ....................................................................
2005 ................................................................................................
2006 ................................................................................................
2007 and thereafter ........................................................................
100.
‘‘(c) LIMITATION BASED ON OTHER COVERAGE.—
‘‘(1) COVERAGE
UNDER
CERTAIN
SUBSIDIZED
EMPLOYER PLANS.—
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‘‘(A) IN GENERAL.—Subsection (a) shall not
apply to any taxpayer for any calendar month
for which the taxpayer participates in any
health plan maintained by any employer of the
taxpayer or of the spouse of the taxpayer if 50
percent or more of the cost of coverage under
such plan (determined under section 4980B and
without regard to payments made with respect to
any coverage described in subsection (e)) is paid
or incurred by the employer.
‘‘(B) EMPLOYER CONTRIBUTIONS TO CAFE-
TERIA
PLANS, FLEXIBLE
SPENDING
ARRANGE-
MENTS, AND MEDICAL SAVINGS ACCOUNTS.—Em-
ployer contributions to a cafeteria plan, a flexi-
ble spending or similar arrangement, or a med-
ical savings account which are excluded from
gross income under section 106 shall be treated
for purposes of subparagraph (A) as paid by the
employer.
‘‘(C) AGGREGATION
OF
PLANS
OF
EM-
PLOYER.—A health plan which is not otherwise
described in subparagraph (A) shall be treated as
described in such subparagraph if such plan
would be so described if all health plans of per-
sons treated as a single employer under sub-
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section (b), (c), (m), or (o) of section 414 were
treated as one health plan.
‘‘(D) SEPARATE APPLICATION TO HEALTH
INSURANCE AND LONG-TERM CARE INSURANCE.—
Subparagraphs (A) and (C) shall be applied sep-
arately with respect to—
‘‘(i) plans which include primarily
coverage for qualified long-term care serv-
ices or are qualified long-term care insur-
ance contracts, and
‘‘(ii) plans which do not include such
coverage and are not such contracts.
‘‘(2) COVERAGE UNDER CERTAIN FEDERAL PRO-
GRAMS.—
‘‘(A) IN GENERAL.—Subsection (a) shall not
apply to any amount paid for any coverage for
an individual for any calendar month if, as of
the first day of such month, the individual is
covered under any medical care program de-
scribed in—
‘‘(i) title XVIII, XIX, or XXI of the So-
cial Security Act,
‘‘(ii) chapter 55 of title 10, United
States Code,
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‘‘(iii) chapter 17 of title 38, United
States Code,
‘‘(iv) chapter 89 of title 5, United
States Code, or
‘‘(v) the Indian Health Care Improve-
ment Act.
‘‘(B) EXCEPTIONS.—
‘‘(i) QUALIFIED
LONG-TERM
CARE.—
Subparagraph (A) shall not apply to
amounts paid for coverage under a qualified
long-term care insurance contract.
‘‘(ii) CONTINUATION
COVERAGE
OF
FEHBP.—Subparagraph (A)(iv) shall not
apply to coverage which is comparable to
continuation coverage under section 4980B.
‘‘(d) LONG-TERM CARE DEDUCTION LIMITED
TO
QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.—
In the case of a qualified long-term care insurance contract,
only eligible long-term care premiums (as defined in section
213(d)(10)) may be taken into account under subsection (a).
‘‘(e) DEDUCTION NOT AVAILABLE FOR PAYMENT OF
ANCILLARY COVERAGE PREMIUMS.—Any amount paid as
a premium for insurance which provides for—
‘‘(1) coverage for accidents, disability, dental
care, vision care, or a specified illness, or
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‘‘(2) making payments of a fixed amount per
day (or other period) by reason of being hospitalized,
shall not be taken into account under subsection (a).
‘‘(f ) SPECIAL RULES.—
‘‘(1) COORDINATION
WITH
DEDUCTION
FOR
HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDI-
VIDUALS.—The amount taken into account by the tax-
payer in computing the deduction under section
162(l) shall not be taken into account under this sec-
tion.
‘‘(2) COORDINATION
WITH
MEDICAL
EXPENSE
DEDUCTION.—The amount taken into account by the
taxpayer in computing the deduction under this sec-
tion shall not be taken into account under section
213.
‘‘(g) REGULATIONS.—The Secretary shall prescribe
such regulations as may be appropriate to carry out this
section, including regulations requiring employers to report
to their employees and the Secretary such information as
the Secretary determines to be appropriate.’’.
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a) of
section 62 is amended by inserting after paragraph (17)
the following new item:
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‘‘(18) HEALTH
AND
LONG-TERM
CARE
INSUR-
ANCE
COSTS.—The deduction allowed by section
222.’’.
(c) CLERICAL AMENDMENT.—The table of sections for
part VII of subchapter B of chapter 1 is amended by strik-
ing the last item and inserting the following new items:
‘‘Sec. 222. Health and long-term care insurance costs.
‘‘Sec. 223. Cross reference.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2000.
Subtitle C—Pension Tax Relief
PART I—EXPANDING COVERAGE
SEC. 1321. INCREASE IN BENEFIT AND CONTRIBUTION LIM-
ITS.
(a) DEFINED BENEFIT PLANS.—
(1) DOLLAR LIMIT.—
(A) Subparagraph (A) of section 415(b)(1)
(relating to limitation for defined benefit plans)
is amended by striking ‘‘$90,000’’ and inserting
‘‘$160,000’’.
(B) Subparagraphs (C) and (D) of section
415(b)(2) 
are 
each 
amended 
by 
striking
‘‘$90,000’’ each place it appears in the headings
and the text and inserting ‘‘$160,000’’.
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(C) Paragraph (7) of section 415(b) (relat-
ing to benefits under certain collectively bar-
gained plans) is amended by striking ‘‘the great-
er of $68,212 or one-half the amount otherwise
applicable for such year under paragraph (1)(A)
for ‘$90,000’ ’’ and inserting ‘‘one-half the
amount otherwise applicable for such year under
paragraph (1)(A) for ‘$160,000’ ’’.
(2) LIMIT REDUCED WHEN BENEFIT BEGINS BE-
FORE AGE 62.—Subparagraph (C) of section 415(b)(2)
is amended by striking ‘‘the social security retirement
age’’ each place it appears in the heading and text
and inserting ‘‘age 62’’.
(3) LIMIT
INCREASED
WHEN
BENEFIT
BEGINS
AFTER
AGE
65.—Subparagraph 
(D) 
of 
section
415(b)(2) is amended by striking ‘‘the social security
retirement age’’ each place it appears in the heading
and text and inserting ‘‘age 65’’.
(4) COST-OF-LIVING ADJUSTMENTS.—Subsection
(d) of section 415 (related to cost-of-living adjust-
ments) is amended—
(A) by striking ‘‘$90,000’’ in paragraph
(1)(A) and inserting ‘‘$160,000’’, and
(B) in paragraph (3)(A)—
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(i) by striking ‘‘$90,000’’ in the head-
ing and inserting ‘‘$160,000’’, and
(ii) by striking ‘‘October 1, 1986’’ and
inserting ‘‘July 1, 2000’’.
(5) 
CONFORMING
AMENDMENT.—Section
415(b)(2) is amended by striking subparagraph (F).
(b) DEFINED CONTRIBUTION PLANS.—
(1) DOLLAR LIMIT.—Subparagraph (A) of sec-
tion 415(c)(1) (relating to limitation for defined con-
tribution plans) is amended by striking ‘‘$30,000’’
and inserting ‘‘$40,000’’.
(2) COST-OF-LIVING ADJUSTMENTS.—Subsection
(d) of section 415 (related to cost-of-living adjust-
ments) is amended—
(A) by striking ‘‘$30,000’’ in paragraph
(1)(C) and inserting ‘‘$40,000’’, and
(B) in paragraph (3)(D)—
(i) by striking ‘‘$30,000’’ in the head-
ing and inserting ‘‘$40,000’’, and
(ii) by striking ‘‘October 1, 1993’’ and
inserting ‘‘July 1, 2000’’.
(c) QUALIFIED TRUSTS.—
(1) COMPENSATION LIMIT.—Sections 401(a)(17),
404(l), 408(k), and 505(b)(7) are each amended by
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striking ‘‘$150,000’’ each place it appears and insert-
ing ‘‘$200,000’’.
(2) BASE PERIOD AND ROUNDING OF COST-OF-
LIVING ADJUSTMENT.—Subparagraph (B) of section
401(a)(17) is amended—
(A) by striking ‘‘October 1, 1993’’ and in-
serting ‘‘July 1, 2000’’, and
(B) by striking ‘‘$10,000’’ both places it ap-
pears and inserting ‘‘$5,000’’.
(d) ELECTIVE DEFERRALS.—
(1) IN
GENERAL.—Paragraph (1) of section
402(g) (relating to limitation on exclusion for elective
deferrals) is amended to read as follows:
‘‘(1) IN GENERAL.—
‘‘(A) LIMITATION.—Notwithstanding sub-
sections (e)(3) and (h)(1)(B), the elective defer-
rals of any individual for any taxable year shall
be included in such individual’s gross income to
the extent the amount of such deferrals for the
taxable year exceeds the applicable dollar
amount.
‘‘(B) APPLICABLE
DOLLAR
AMOUNT.—For
purposes of subparagraph (A), the applicable
dollar amount shall be the amount determined in
accordance with the following table:
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‘‘For taxable years beginning
The applicable
in calendar year:
dollar amount:
2001 ................................................................................................
$11,000
2002 ................................................................................................
$12,000
2003 ................................................................................................
$13,000
2004 ................................................................................................
$14,000
2005 or thereafter ..........................................................................
$15,000.’’.
(2) COST-OF-LIVING
ADJUSTMENT.—Paragraph
(5) of section 402(g) is amended to read as follows:
‘‘(5) COST-OF-LIVING ADJUSTMENT.—In the case
of taxable years beginning after December 31, 2005,
the Secretary shall adjust the $15,000 amount under
paragraph (1)(B) at the same time and in the same
manner as under section 415(d), except that the base
period shall be the calendar quarter beginning July 1,
2004, and any increase under this paragraph which
is not a multiple of $500 shall be rounded to the next
lowest multiple of $500.’’.
(3) CONFORMING AMENDMENTS.—
(A) Section 402(g) (relating to limitation
on exclusion for elective deferrals), as amended
by paragraphs (1) and (2), is further amended
by striking paragraph (4) and redesignating
paragraphs (5), (6), (7), (8), and (9) as para-
graphs (4), (5), (6), (7), and (8), respectively.
(B) Paragraph (2) of section 457(c) is
amended by striking ‘‘402(g)(8)(A)(iii)’’ and in-
serting ‘‘402(g)(7)(A)(iii)’’.
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(C) Clause (iii) of section 501(c)(18)(D) is
amended by striking ‘‘(other than paragraph (4)
thereof)’’.
(e) DEFERRED COMPENSATION PLANS OF STATE AND
LOCAL
GOVERNMENTS
AND
TAX-EXEMPT
ORGANIZA-
TIONS.—
(1) IN GENERAL.—Section 457 (relating to de-
ferred compensation plans of State and local govern-
ments and tax-exempt organizations) is amended—
(A) in subsections (b)(2)(A) and (c)(1) by
striking ‘‘$7,500’’ each place it appears and in-
serting ‘‘the applicable dollar amount’’, and
(B) in subsection (b)(3)(A) by striking
‘‘$15,000’’ and inserting ‘‘twice the dollar
amount in effect under subsection (b)(2)(A)’’.
(2) APPLICABLE DOLLAR AMOUNT; COST-OF-LIV-
ING ADJUSTMENT.—Paragraph (15) of section 457(e)
is amended to read as follows:
‘‘(15) APPLICABLE DOLLAR AMOUNT.—
‘‘(A) IN GENERAL.—The applicable dollar
amount shall be the amount determined in ac-
cordance with the following table:
‘‘For taxable years beginning
The applicable
in calendar year:
dollar amount:
2001 ................................................................................................
$11,000
2002 ................................................................................................
$12,000
2003 ................................................................................................
$13,000
2004 ................................................................................................
$14,000
2005 or thereafter ..........................................................................
$15,000.
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‘‘(B) COST-OF-LIVING
ADJUSTMENTS.—In
the case of taxable years beginning after Decem-
ber 31, 2005, the Secretary shall adjust the
$15,000 amount specified in the table in sub-
paragraph (A) at the same time and in the same
manner as under section 415(d), except that the
base period shall be the calendar quarter begin-
ning July 1, 2004, and any increase under this
paragraph which is not a multiple of $500 shall
be rounded to the next lowest multiple of $500.’’.
(f ) SIMPLE RETIREMENT ACCOUNTS.—
(1) 
LIMITATION.—Clause 
(ii) 
of 
section
408(p)(2)(A) (relating to general rule for qualified
salary reduction arrangement) is amended by striking
‘‘$6,000’’ and inserting ‘‘the applicable dollar
amount’’.
(2) APPLICABLE
DOLLAR
AMOUNT.—Subpara-
graph (E) of 408(p)(2) is amended to read as follows:
‘‘(E) APPLICABLE DOLLAR AMOUNT; COST-
OF-LIVING ADJUSTMENT.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A)(ii), the applicable dollar
amount shall be the amount determined in
accordance with the following table:
‘‘For taxable years beginning
The applicable
in calendar year:
dollar amount:
2001 ................................................................................................
$7,000
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‘‘For taxable years beginning
The applicable
in calendar year:
dollar amount:
2002 ................................................................................................
$8,000
2003 ................................................................................................
$9,000
2004 or thereafter ..........................................................................
$10,000.
‘‘(ii) COST-OF-LIVING
ADJUSTMENT.—
In the case of a year beginning after Decem-
ber 31, 2004, the Secretary shall adjust the
$10,000 amount under clause (i) at the
same time and in the same manner as
under section 415(d), except that the base
period taken into account shall be the cal-
endar quarter beginning July 1, 2003, and
any increase under this subparagraph
which is not a multiple of $500 shall be
rounded to the next lower multiple of
$500.’’.
(3) CONFORMING AMENDMENTS.—
(A) Clause (I) of section 401(k)(11)(B)(i) is
amended by striking ‘‘$6,000’’ and inserting ‘‘the
amount in effect under section 408(p)(2)(A)(ii)’’.
(B) Section 401(k)(11) is amended by strik-
ing subparagraph (E).
(g) ROUNDING RULE RELATING TO DEFINED BENEFIT
PLANS AND DEFINED CONTRIBUTION PLANS.—Paragraph
(4) of section 415(d) is amended to read as follows:
‘‘(4) ROUNDING.—
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‘‘(A) 
$160,000 
AMOUNT.—Any 
increase
under subparagraph (A) of paragraph (1) which
is not a multiple of $5,000 shall be rounded to
the next lowest multiple of $5,000.
‘‘(B) 
$40,000 
AMOUNT.—Any 
increase
under subparagraph (C) of paragraph (1) which
is not a multiple of $1,000 shall be rounded to
the next lowest multiple of $1,000.’’.
(h) EFFECTIVE DATE.—The amendments made by this
section shall apply to years beginning after December 31,
2000.
SEC. 1322. PLAN LOANS FOR SUBCHAPTER S OWNERS,
PARTNERS, AND SOLE PROPRIETORS.
(a) AMENDMENT TO 1986 CODE.—Subparagraph (B)
of section 4975(f )(6) (relating to exemptions not to apply
to certain transactions) is amended by adding at the end
the following new clause:
‘‘(iii) LOAN EXCEPTION.—For purposes
of subparagraph (A)(i), the term ‘owner-em-
ployee’ shall only include a person described
in subclause (II) or (III) of clause (i).’’.
(b) AMENDMENT TO ERISA.—Section 408(d)(2) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1108(d)(2)) is amended by adding at the end the
following new subparagraph:
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‘‘(C) For purposes of paragraph (1)(A), the term
‘owner-employee’ shall only include a person described in
clause (ii) or (iii) of subparagraph (A).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to loans made after December 31, 2000.
SEC. 1323. MODIFICATION OF TOP-HEAVY RULES.
(a) SIMPLIFICATION
OF DEFINITION
OF KEY EM-
PLOYEE.—
(1) IN GENERAL.—Section 416(i)(1)(A) (defining
key employee) is amended—
(A) by striking ‘‘or any of the 4 preceding
plan years’’ in the matter preceding clause (i),
(B) by striking clause (i) and inserting the
following:
‘‘(i) an officer of the employer having
an annual compensation greater than
$150,000,’’,
(C) by striking clause (ii) and redesig-
nating clauses (iii) and (iv) as clauses (ii) and
(iii), respectively, and
(D) by striking the second sentence in the
matter following clause (iii), as redesignated by
subparagraph (C).
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(2) 
CONFORMING
AMENDMENT.—Section
416(i)(1)(B)(iii) is amended by striking ‘‘and sub-
paragraph (A)(ii)’’.
(b) MATCHING CONTRIBUTIONS TAKEN INTO ACCOUNT
FOR MINIMUM CONTRIBUTION REQUIREMENTS.—Section
416(c)(2)(A) (relating to defined contribution plans) is
amended by adding at the end the following: ‘‘Employer
matching 
contributions 
(as 
defined 
in 
section
401(m)(4)(A)) shall be taken into account for purposes of
this subparagraph.’’.
(c) DISTRIBUTIONS DURING LAST YEAR BEFORE DE-
TERMINATION DATE TAKEN INTO ACCOUNT.—
(1) IN
GENERAL.—Paragraph (3) of section
416(g) is amended to read as follows:
‘‘(3) DISTRIBUTIONS DURING LAST YEAR BEFORE
DETERMINATION DATE TAKEN INTO ACCOUNT.—
‘‘(A) 
IN
GENERAL.—For 
purposes 
of
determining—
‘‘(i) the present value of the cumulative
accrued benefit for any employee, or
‘‘(ii) the amount of the account of any
employee,
such present value or amount shall be increased
by the aggregate distributions made with respect
to such employee under the plan during the 1-
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year period ending on the determination date.
The preceding sentence shall also apply to dis-
tributions under a terminated plan which if it
had not been terminated would have been re-
quired to be included in an aggregation group.
‘‘(B) 5-YEAR PERIOD IN CASE OF IN-SERV-
ICE DISTRIBUTION.—In the case of any distribu-
tion made for a reason other than separation
from service, death, or disability, subparagraph
(A) shall be applied by substituting ‘5-year pe-
riod’ for ‘1-year period’.’’.
(2) BENEFITS NOT TAKEN INTO ACCOUNT.—Sub-
paragraph (E) of section 416(g)(4) is amended—
(A) by striking ‘‘LAST
YEARS’’ in the
heading and inserting ‘‘LAST YEAR BEFORE DE-
TERMINATION DATE’’, and
(B) by striking ‘‘5-year period’’ and insert-
ing ‘‘1-year period’’.
(d) DEFINITION OF TOP-HEAVY PLANS.—Paragraph
(4) of section 416(g) (relating to other special rules for top-
heavy plans) is amended by adding at the end the following
new subparagraph:
‘‘(H) CASH OR DEFERRED ARRANGEMENTS
USING ALTERNATIVE METHODS OF MEETING NON-
DISCRIMINATION
REQUIREMENTS.—The 
term
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‘top-heavy plan’ shall not include a plan which
consists solely of—
‘‘(i) a cash or deferred arrangement
which meets the requirements of section
401(k)(12), and
‘‘(ii) matching contributions with re-
spect to which the requirements of section
401(m)(11) are met.
If, but for this subparagraph, a plan would be
treated as a top-heavy plan because it is a mem-
ber of an aggregation group which is a top-heavy
group, contributions under the plan may be
taken into account in determining whether any
other plan in the group meets the requirements
of subsection (c)(2).’’.
(e) FROZEN PLAN EXEMPT FROM MINIMUM BENEFIT
REQUIREMENT.—Subparagraph (C) of section 416(c)(1)
(relating to defined benefit plans) is amended—
(A) by striking ‘‘clause (ii)’’ in clause (i)
and inserting ‘‘clause (ii) or (iii)’’, and
(B) by adding at the end the following:
‘‘(iii) 
EXCEPTION
FOR
FROZEN
PLAN.—For purposes of determining an em-
ployee’s years of service with the employer,
any service with the employer shall be dis-
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regarded to the extent that such service oc-
curs during a plan year when the plan ben-
efits (within the meaning of section 410(b))
no employee or former employee.’’.
(f ) ELIMINATION OF FAMILY ATTRIBUTION.—Section
416(i)(1)(B) (defining 5-percent owner) is amended by add-
ing at the end the following new clause:
‘‘(iv) 
FAMILY
ATTRIBUTION
DIS-
REGARDED.—Solely for purposes of apply-
ing this paragraph (and not for purposes of
any provision of this title which incor-
porates by reference the definition of a key
employee or 5-percent owner under this
paragraph), section 318 shall be applied
without regard to subsection (a)(1) thereof
in determining whether any person is a 5-
percent owner.’’.
(g) EFFECTIVE DATE.—The amendments made by this
section shall apply to years beginning after December 31,
2000.
SEC. 1324. ELECTIVE DEFERRALS NOT TAKEN INTO AC-
COUNT FOR PURPOSES OF DEDUCTION LIM-
ITS.
(a) IN GENERAL.—Section 404 (relating to deduction
for contributions of an employer to an employees’ trust or
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annuity plan and compensation under a deferred payment
plan) is amended by adding at the end the following new
subsection:
‘‘(n) ELECTIVE DEFERRALS NOT TAKEN INTO AC-
COUNT FOR PURPOSES OF DEDUCTION LIMITS.—Elective
deferrals (as defined in section 402(g)(3)) shall not be sub-
ject to any limitation contained in paragraph (3), (7), or
(9) of subsection (a), and such elective deferrals shall not
be taken into account in applying any such limitation to
any other contributions.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to years beginning after December 31,
2000.
SEC. 1325. REPEAL OF COORDINATION REQUIREMENTS FOR
DEFERRED COMPENSATION PLANS OF STATE
AND LOCAL GOVERNMENTS AND TAX-EXEMPT
ORGANIZATIONS.
(a) IN GENERAL.—Subsection (c) of section 457 (relat-
ing to deferred compensation plans of State and local gov-
ernments and tax-exempt organizations), as amended by
section 1321, is amended to read as follows:
‘‘(c) LIMITATION.—The maximum amount of the com-
pensation of any one individual which may be deferred
under subsection (a) during any taxable year shall not ex-
ceed the amount in effect under subsection (b)(2)(A) (as
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modified by any adjustment provided under subsection
(b)(3)).’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to years beginning after December
31, 2000.
SEC. 1326. ELIMINATION OF USER FEE FOR REQUESTS TO
IRS REGARDING PENSION PLANS.
(a) ELIMINATION OF CERTAIN USER FEES.—The Sec-
retary of the Treasury or the Secretary’s delegate shall not
require payment of user fees under the program established
under section 7527 of the Internal Revenue Code of 1986
for requests to the Internal Revenue Service for determina-
tion letters with respect to the qualified status of a pension
benefit plan maintained solely by one or more eligible em-
ployers or any trust which is part of the plan. The pre-
ceding sentence shall not apply to any request—
(1) made after the 5th plan year the pension
benefit plan is in existence, or
(2) made by the sponsor of any prototype or
similar plan which the sponsor intends to market to
participating employers.
(b) PENSION BENEFIT PLAN.—For purposes of this
section, the term ‘‘pension benefit plan’’ means a pension,
profit-sharing, stock bonus, annuity, or employee stock own-
ership plan.
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(c) ELIGIBLE EMPLOYER.—For purposes of this sec-
tion, the term ‘‘eligible employer’’ has the same meaning
given such term in section 408(p)(2)(C)(i)(I) of the Internal
Revenue Code of 1986. The determination of whether an em-
ployer is an eligible employer under this section shall be
made as of the date of the request described in subsection
(a).
(d) EFFECTIVE DATE.—The provisions of this section
shall apply with respect to requests made after December
31, 2000.
SEC. 1327. DEDUCTION LIMITS.
(a) IN GENERAL.—Section 404(a) (relating to general
rule) is amended by adding at the end the following:
‘‘(12) DEFINITION OF COMPENSATION.—For pur-
poses of paragraphs (3), (7), (8), and (9), the term
‘compensation’ shall include amounts treated as par-
ticipant’s compensation under subparagraph (C) or
(D) of section 415(c)(3).’’.
(b) CONFORMING AMENDMENT.—Subparagraph (B) of
section 404(a)(3) is amended by striking the last sentence
thereof.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to years beginning after December 31,
2000.
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SEC. 1328. OPTION TO TREAT ELECTIVE DEFERRALS AS
AFTER-TAX CONTRIBUTIONS.
(a) IN GENERAL.—Subpart A of part I of subchapter
D of chapter 1 (relating to deferred compensation, etc.) is
amended by inserting after section 402 the following new
section:
‘‘SEC. 402A. OPTIONAL TREATMENT OF ELECTIVE DEFER-
RALS AS PLUS CONTRIBUTIONS.
‘‘(a) GENERAL RULE.—If an applicable retirement
plan includes a qualified plus contribution program—
‘‘(1) any designated plus contribution made by
an employee pursuant to the program shall be treated
as an elective deferral for purposes of this chapter, ex-
cept that such contribution shall not be excludable
from gross income, and
‘‘(2) such plan (and any arrangement which is
part of such plan) shall not be treated as failing to
meet any requirement of this chapter solely by reason
of including such program.
‘‘(b) QUALIFIED PLUS CONTRIBUTION PROGRAM.—
For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified plus con-
tribution program’ means a program under which an
employee may elect to make designated plus contribu-
tions in lieu of all or a portion of elective deferrals
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the employee is otherwise eligible to make under the
applicable retirement plan.
‘‘(2) SEPARATE ACCOUNTING REQUIRED.—A pro-
gram shall not be treated as a qualified plus contribu-
tion program unless the applicable retirement plan—
‘‘(A) establishes separate accounts (‘des-
ignated plus accounts’) for the designated plus
contributions of each employee and any earnings
properly allocable to the contributions, and
‘‘(B) maintains separate recordkeeping with
respect to each account.
‘‘(c) DEFINITIONS AND RULES RELATING TO DES-
IGNATED PLUS CONTRIBUTIONS.—For purposes of this
section—
‘‘(1) DESIGNATED
PLUS
CONTRIBUTION.—The
term ‘designated plus contribution’ means any elec-
tive deferral which—
‘‘(A) is excludable from gross income of an
employee without regard to this section, and
‘‘(B) the employee designates (at such time
and in such manner as the Secretary may pre-
scribe) as not being so excludable.
‘‘(2) DESIGNATION LIMITS.—The amount of elec-
tive deferrals which an employee may designate under
paragraph (1) shall not exceed the excess (if any) of—
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‘‘(A) the maximum amount of elective defer-
rals excludable from gross income of the employee
for the taxable year (without regard to this sec-
tion), over
‘‘(B) the aggregate amount of elective defer-
rals of the employee for the taxable year which
the employee does not designate under paragraph
(1).
‘‘(3) ROLLOVER CONTRIBUTIONS.—
‘‘(A) IN GENERAL.—A rollover contribution
of any payment or distribution from a des-
ignated plus account which is otherwise allow-
able under this chapter may be made only if the
contribution is to—
‘‘(i) another designated plus account of
the individual from whose account the pay-
ment or distribution was made, or
‘‘(ii) a Roth IRA of such individual.
‘‘(B) COORDINATION
WITH
LIMIT.—Any
rollover contribution to a designated plus ac-
count under subparagraph (A) shall not be taken
into account for purposes of paragraph (1).
‘‘(d) DISTRIBUTION RULES.—For purposes of this
title—
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‘‘(1) EXCLUSION.—Any qualified distribution
from a designated plus account shall not be includible
in gross income.
‘‘(2) QUALIFIED
DISTRIBUTION.—For purposes
of this subsection—
‘‘(A) IN GENERAL.—The term ‘qualified dis-
tribution’ has the meaning given such term by
section 408A(d)(2)(A) (without regard to clause
(iv) thereof).
‘‘(B) DISTRIBUTIONS
WITHIN
NONEXCLU-
SION PERIOD.—A payment or distribution from
a designated plus account shall not be treated as
a qualified distribution if such payment or dis-
tribution is made within the 5-taxable-year pe-
riod beginning with the earlier of—
‘‘(i) the first taxable year for which the
individual made a designated plus con-
tribution to any designated plus account es-
tablished for such individual under the
same applicable retirement plan, or
‘‘(ii) if a rollover contribution was
made to such designated plus account from
a designated plus account previously estab-
lished for such individual under another
applicable retirement plan, the first taxable
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year for which the individual made a des-
ignated plus contribution to such previously
established account.
‘‘(C) DISTRIBUTIONS
OF
EXCESS
DEFER-
RALS AND EARNINGS.—The term ‘qualified dis-
tribution’ shall not include any distribution of
any excess deferral under section 402(g)(2) and
any income on the excess deferral.
‘‘(3) AGGREGATION RULES.—Section 72 shall be
applied separately with respect to distributions and
payments from a designated plus account and other
distributions and payments from the plan.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) APPLICABLE RETIREMENT PLAN.—The term
‘applicable retirement plan’ means—
‘‘(A) an employees’ trust described in sec-
tion 401(a) which is exempt from tax under sec-
tion 501(a), and
‘‘(B) a plan under which amounts are con-
tributed by an individual’s employer for an an-
nuity contract described in section 403(b).
‘‘(2) ELECTIVE DEFERRAL.—The term ‘elective
deferral’ means any elective deferral described in sub-
paragraph (A) or (C) of section 402(g)(3).’’.
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(b) EXCESS DEFERRALS.—Section 402(g) (relating to
limitation on exclusion for elective deferrals) is amended—
(1) by adding at the end of paragraph (1) the
following new sentence: ‘‘The preceding sentence shall
not apply to so much of such excess as does not exceed
the designated plus contributions of the individual for
the taxable year.’’, and
(2) by inserting ‘‘(or would be included but for
the last sentence thereof)’’ after ‘‘paragraph (1)’’ in
paragraph (2)(A).
(c) 
ROLLOVERS.—Subparagraph 
(B) 
of 
section
402(c)(8) is amended by adding at the end the following:
‘‘If any portion of an eligible rollover distribu-
tion is attributable to payments or distributions
from a designated plus account (as defined in
section 402A), an eligible retirement plan with
respect to such portion shall include only another
designated plus account and a Roth IRA.’’.
(d) REPORTING REQUIREMENTS.—
(1) W–2 INFORMATION.—Section 6051(a)(8) is
amended by inserting ‘‘, including the amount of des-
ignated plus contributions (as defined in section
402A)’’ before the comma at the end.
(2) INFORMATION.—Section 6047 is amended by
redesignating subsection (f ) as subsection (g) and by
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inserting after subsection (e) the following new sub-
section:
‘‘(f ) DESIGNATED PLUS CONTRIBUTIONS.—The Sec-
retary shall require the plan administrator of each applica-
ble retirement plan (as defined in section 402A) to make
such returns and reports regarding designated plus con-
tributions (as so defined) to the Secretary, participants and
beneficiaries of the plan, and such other persons as the Sec-
retary may prescribe.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 408A(e) is amended by adding after
the first sentence the following new sentence: ‘‘Such
term includes a rollover contribution described in sec-
tion 402A(c)(3)(A).’’.
(2) The table of sections for subpart A of part I
of subchapter D of chapter 1 is amended by inserting
after the item relating to section 402 the following
new item:
‘‘Sec. 402A. Optional treatment of elective deferrals as plus contributions.’’.
(f ) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2000.
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PART II—ENHANCING FAIRNESS FOR WOMEN
SEC. 1331. CATCHUP CONTRIBUTIONS FOR INDIVIDUALS
AGE 50 OR OVER.
(a) IN GENERAL.—Section 414 (relating to definitions
and special rules) is amended by adding at the end the fol-
lowing new subsection:
‘‘(v) CATCHUP CONTRIBUTIONS FOR INDIVIDUALS AGE
50 OR OVER.—
‘‘(1) IN GENERAL.—An applicable employer plan
shall not be treated as failing to meet any require-
ment of this title solely because the plan permits an
eligible participant to make additional elective defer-
rals in any plan year.
‘‘(2) LIMITATION
ON
AMOUNT
OF
ADDITIONAL
DEFERRALS.—
‘‘(A) IN GENERAL.—A plan shall not permit
additional elective deferrals under paragraph (1)
for any year in an amount greater than the less-
er of—
‘‘(i) the applicable percentage of the
applicable dollar amount for such elective
deferrals for such year, or
‘‘(ii) the excess (if any) of—
‘‘(I) the participant’s compensa-
tion for the year, over
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‘‘(II) any other elective deferrals
of the participant for such year which
are made without regard to this sub-
section.
‘‘(B) APPLICABLE PERCENTAGE.—For pur-
poses of this paragraph, the applicable percent-
age shall be determined in accordance with the
following table:
‘‘For taxable years
The applicable
beginning in:
percentage is:
2001 ................................................................................................
10 percent
2002 ................................................................................................
20 percent
2003 ................................................................................................
30 percent
2004 ................................................................................................
40 percent
2005 and thereafter ........................................................................
50 percent.
‘‘(3) TREATMENT
OF
CONTRIBUTIONS.—In the
case of any contribution to a plan under paragraph
(1)—
‘‘(A) such contribution shall not, with re-
spect to the year in which the contribution is
made—
‘‘(i) be subject to any otherwise appli-
cable limitation contained in section 402(g),
402(h), 403(b), 404(a), 404(h), 408, 415, or
457, or
‘‘(ii) be taken into account in applying
such limitations to other contributions or
benefits under such plan or any other such
plan, and
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‘‘(B) such plan shall not be treated as fail-
ing to meet the requirements of section 401(a)(4),
401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),
401(m), 
403(b)(12), 
408(k), 
408(p), 
408B,
410(b), or 416 by reason of the making of (or the
right to make) such contribution.
‘‘(4) ELIGIBLE PARTICIPANT.—For purposes of
this subsection, the term ‘eligible participant’ means,
with respect to any plan year, a participant in a
plan—
‘‘(A) who has attained the age of 50 before
the close of the plan year, and
‘‘(B) with respect to whom no other elective
deferrals may (without regard to this subsection)
be made to the plan for the plan year by reason
of the application of any limitation or other re-
striction described in paragraph (3) or contained
in the terms of the plan.
‘‘(5) OTHER
DEFINITIONS
AND
RULES.—For
purposes of this subsection—
‘‘(A) APPLICABLE
DOLLAR
AMOUNT.—The
term ‘applicable dollar amount’ means, with re-
spect to any year, the amount in effect under
section 
402(g)(1)(B), 
408(p)(2)(E)(i), 
or
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457(e)(15)(A), whichever is applicable to an ap-
plicable employer plan, for such year.
‘‘(B) APPLICABLE
EMPLOYER
PLAN.—The
term ‘applicable employer plan’ means—
‘‘(i) an employees’ trust described in
section 401(a) which is exempt from tax
under section 501(a),
‘‘(ii) a plan under which amounts are
contributed by an individual’s employer for
an annuity contract described in section
403(b),
‘‘(iii) an eligible deferred compensation
plan under section 457 of an eligible em-
ployer as defined in section 457(e)(1)(A),
and
‘‘(iv) an arrangement meeting the re-
quirements of section 408 (k) or (p).
‘‘(C) ELECTIVE DEFERRAL.—The term ‘elec-
tive deferral’ has the meaning given such term
by subsection (u)(2)(C).
‘‘(D) EXCEPTION FOR SECTION 457 PLANS.—
This subsection shall not apply to an applicable
employer 
plan 
described 
in 
subparagraph
(B)(iii) for any year to which section 457(b)(3)
applies.’’.
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(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to contributions in taxable years begin-
ning after December 31, 2000.
SEC. 1332. EQUITABLE TREATMENT FOR CONTRIBUTIONS
OF EMPLOYEES TO DEFINED CONTRIBUTION
PLANS.
(a) EQUITABLE TREATMENT.—
(1) IN GENERAL.—Subparagraph (B) of section
415(c)(1) (relating to limitation for defined contribu-
tion plans) is amended by striking ‘‘25 percent’’ and
inserting ‘‘100 percent’’.
(2) APPLICATION
TO
SECTION
403(b).—Section
403(b) is amended—
(A) by striking ‘‘the exclusion allowance for
such taxable year’’ in paragraph (1) and insert-
ing ‘‘the applicable limit under section 415’’,
(B) by striking paragraph (2), and
(C) by inserting ‘‘or any amount received
by a former employee after the 5th taxable year
following the taxable year in which such em-
ployee was terminated’’ before the period at the
end of the second sentence of paragraph (3).
(3) CONFORMING AMENDMENTS.—
(A) Subsection (f ) of section 72 is amended
by striking ‘‘section 403(b)(2)(D)(iii))’’ and in-
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serting ‘‘section 403(b)(2)(D)(iii), as in effect be-
fore the enactment of the Taxpayer Refund and
Relief Act of 1999)’’.
(B) Section 404(a)(10)(B) is amended by
striking ‘‘, the exclusion allowance under section
403(b)(2),’’.
(C) Section 415(a)(2) is amended by strik-
ing ‘‘, and the amount of the contribution for
such portion shall reduce the exclusion allowance
as provided in section 403(b)(2)’’.
(D) Section 415(c)(3) is amended by adding
at the end the following new subparagraph:
‘‘(E) ANNUITY CONTRACTS.—In the case of
an annuity contract described in section 403(b),
the term ‘participant’s compensation’ means the
participant’s 
includible 
compensation 
deter-
mined under section 403(b)(3).’’.
(E) Section 415(c) is amended by striking
paragraph (4).
(F) Section 415(c)(7) is amended to read as
follows:
‘‘(7) CERTAIN
CONTRIBUTIONS
BY
CHURCH
PLANS NOT TREATED AS EXCEEDING LIMIT.—
‘‘(A) IN
GENERAL.—Notwithstanding any
other provision of this subsection, at the election
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of a participant who is an employee of a church
or a convention or association of churches, in-
cluding an organization described in section
414(e)(3)(B)(ii), contributions and other addi-
tions for an annuity contract or retirement in-
come account described in section 403(b) with re-
spect to such participant, when expressed as an
annual addition to such participant’s account,
shall be treated as not exceeding the limitation
of paragraph (1) if such annual addition is not
in excess of $10,000.
‘‘(B) $40,000 AGGREGATE
LIMITATION.—
The total amount of additions with respect to
any participant which may be taken into ac-
count for purposes of this subparagraph for all
years may not exceed $40,000.
‘‘(C) ANNUAL ADDITION.—For purposes of
this paragraph, the term ‘annual addition’ has
the meaning given such term by paragraph (2).’’.
(G) Subparagraph (B) of section 402(g)(7)
(as redesignated by section 1201) is amended by
inserting before the period at the end the fol-
lowing: ‘‘(as in effect before the enactment of the
Taxpayer Refund and Relief Act of 1999)’’.
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(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to years beginning after
December 31, 2000.
(b) SPECIAL RULES FOR SECTIONS 403(b) AND 408.—
(1) IN GENERAL.—Subsection (k) of section 415
is amended by adding at the end the following new
paragraph:
‘‘(4) SPECIAL RULES FOR SECTIONS 403(b) AND
408.—For purposes of this section, any annuity con-
tract described in section 403(b) for the benefit of a
participant shall be treated as a defined contribution
plan maintained by each employer with respect to
which the participant has the control required under
subsection (b) or (c) of section 414 (as modified by
subsection (h)). For purposes of this section, any con-
tribution by an employer to a simplified employee
pension plan for an individual for a taxable year
shall be treated as an employer contribution to a de-
fined contribution plan for such individual for such
year.’’.
(2) EFFECTIVE DATE.—
(A) IN
GENERAL.—The amendment made
by paragraph (1) shall apply to limitation years
beginning after December 31, 1999.
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(B) EXCLUSION ALLOWANCE.—Effective for
limitation years beginning in 2000, in the case
of any annuity contract described in section
403(b) of the Internal Revenue Code of 1986, the
amount of the contribution disqualified by rea-
son of section 415(g) of such Code shall reduce
the exclusion allowance as provided in section
403(b)(2) of such Code.
(3) MODIFICATION OF 403(b) EXCLUSION ALLOW-
ANCE TO CONFORM TO 415 MODIFICATION.—The Sec-
retary of the Treasury shall modify the regulations re-
garding the exclusion allowance under section
403(b)(2) of the Internal Revenue Code of 1986 to
render void the requirement that contributions to a
defined benefit pension plan be treated as previously
excluded amounts for purposes of the exclusion allow-
ance. For taxable years beginning after December 31,
1999, such regulations shall be applied as if such re-
quirement were void.
(c) DEFERRED COMPENSATION PLANS OF STATE AND
LOCAL
GOVERNMENTS
AND
TAX-EXEMPT
ORGANIZA-
TIONS.—
(1) IN GENERAL.—Subparagraph (B) of section
457(b)(2) (relating to salary limitation on eligible de-
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ferred compensation plans) is amended by striking
‘‘331⁄3 percent’’ and inserting ‘‘100 percent’’.
(2) EFFECTIVE DATE.—The amendment made by
this subsection shall apply to years beginning after
December 31, 2000.
SEC. 1333. FASTER VESTING OF CERTAIN EMPLOYER
MATCHING CONTRIBUTIONS.
(a) AMENDMENTS TO 1986 CODE.—Section 411(a) (re-
lating to minimum vesting standards) is amended—
(1) in paragraph (2), by striking ‘‘A plan’’ and
inserting ‘‘Except as provided in paragraph (12), a
plan’’, and
(2) by adding at the end the following:
‘‘(12) FASTER
VESTING
FOR
MATCHING
CON-
TRIBUTIONS.—In the case of matching contributions
(as defined in section 401(m)(4)(A)), paragraph (2)
shall be applied—
‘‘(A) by substituting ‘3 years’ for ‘5 years’
in subparagraph (A), and
‘‘(B) by substituting the following table for
the table contained in subparagraph (B):
The nonforfeitable
‘‘Years of service:
percentage is:
2 ......................................................................................................
3 ......................................................................................................
4 ......................................................................................................
5 ......................................................................................................
6 ......................................................................................................
100.’’.
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(b) AMENDMENTS TO ERISA.—Section 203(a) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1053(a)) is amended—
(1) in paragraph (2), by striking ‘‘A plan’’ and
inserting ‘‘Except as provided in paragraph (4), a
plan’’, and
(2) by adding at the end the following:
‘‘(4) FASTER VESTING FOR MATCHING CONTRIBU-
TIONS.—In the case of matching contributions (as de-
fined in section 401(m)(4)(A) of the Internal Revenue
Code of 1986), paragraph (2) shall be applied—
‘‘(A) by substituting ‘3 years’ for ‘5 years’
in subparagraph (A), and
‘‘(B) by substituting the following table for
the table contained in subparagraph (B):
The nonforfeitable
‘‘Years of service:
percentage is:
2 ......................................................................................................
3 ......................................................................................................
4 ......................................................................................................
5 ......................................................................................................
6 ......................................................................................................
100.’’.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to contributions for plan years beginning after
December 31, 2000.
(2) COLLECTIVE BARGAINING AGREEMENTS.—In
the case of a plan maintained pursuant to one or
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more collective bargaining agreements between em-
ployee representatives and one or more employers
ratified by the date of the enactment of this Act, the
amendments made by this section shall not apply to
contributions on behalf of employees covered by any
such agreement for plan years beginning before the
earlier of—
(A) the later of—
(i) the date on which the last of such
collective bargaining agreements terminates
(determined without regard to any exten-
sion thereof on or after such date of the en-
actment), or
(ii) January 1, 2001, or
(B) January 1, 2005.
(3) SERVICE REQUIRED.—With respect to any
plan, the amendments made by this section shall not
apply to any employee before the date that such em-
ployee has 1 hour of service under such plan in any
plan year to which the amendments made by this sec-
tion apply.
SEC. 1334. SIMPLIFY AND UPDATE THE MINIMUM DISTRIBU-
TION RULES.
(a) SIMPLIFICATION AND FINALIZATION OF MINIMUM
DISTRIBUTION REQUIREMENTS.—
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(1) IN GENERAL.—The Secretary of the Treasury
shall—
(A) simplify and finalize the regulations re-
lating to minimum distribution requirements
under sections 401(a)(9), 408(a)(6) and (b)(3),
403(b)(10), and 457(d)(2) of the Internal Rev-
enue Code of 1986, and
(B) modify such regulations to—
(i) reflect current life expectancy, and
(ii) revise the required distribution
methods so that, under reasonable assump-
tions, the amount of the required minimum
distribution does not decrease over a par-
ticipant’s life expectancy.
(2) FRESH
START.—Notwithstanding subpara-
graph (D) of section 401(a)(9) of such Code, during
the first year that regulations are in effect under this
subsection, required distributions for future years
may be redetermined to reflect changes under such
regulations. Such redetermination shall include the
opportunity to choose a new designated beneficiary
and to elect a new method of calculating life expect-
ancy.
(3) EFFECTIVE DATE FOR REGULATIONS.—Regu-
lations referred to in paragraph (1) shall be effective
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for years beginning after December 31, 2000, and
shall apply in such years without regard to whether
an individual had previously begun receiving min-
imum distributions.
(b) REPEAL OF RULE WHERE DISTRIBUTIONS HAD
BEGUN BEFORE DEATH OCCURS.—
(1) IN GENERAL.—Subparagraph (B) of section
401(a)(9) is amended by striking clause (i) and redes-
ignating clauses (ii), (iii), and (iv) as clauses (i),
(ii), and (iii), respectively.
(2) CONFORMING CHANGES.—
(A) Clause (i) of section 401(a)(9)(B) (as so
redesignated) is amended—
(i) by striking ‘‘FOR OTHER CASES’’ in
the heading, and
(ii) by striking ‘‘the distribution of the
employee’s interest has begun in accordance
with subparagraph (A)(ii)’’ and inserting
‘‘his entire interest has been distributed to
him,’’.
(B) Clause (ii) of section 401(a)(9)(B) (as
so redesignated) is amended by striking ‘‘clause
(ii)’’ and inserting ‘‘clause (i)’’.
(C) Clause (iii) of section 401(a)(9)(B) (as
so redesignated) is amended—
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(i) by striking ‘‘clause (iii)(I)’’ and in-
serting ‘‘clause (ii)(I)’’,
(ii) by striking ‘‘clause (iii)(III)’’ in
subclause 
(I) 
and 
inserting 
‘‘clause
(ii)(III)’’,
(iii) by striking ‘‘the date on which the
employee would have attained the age
701⁄2,’’ in subclause (I) and inserting ‘‘April
1 of the calendar year following the cal-
endar year in which the spouse attains
701⁄2,’’, and
(iv) by striking ‘‘the distributions to
such spouse begin,’’ in subclause (II) and
inserting ‘‘his entire interest has been dis-
tributed to him,’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to years beginning after
December 31, 2000.
(c) REDUCTION IN EXCISE TAX.—
(1) IN GENERAL.—Subsection (a) of section 4974
is amended by striking ‘‘50 percent’’ and inserting
‘‘10 percent’’.
(2) EFFECTIVE DATE.—The amendment made by
this subsection shall apply to years beginning after
December 31, 2000.
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SEC. 1335. CLARIFICATION OF TAX TREATMENT OF DIVI-
SION OF SECTION 457 PLAN BENEFITS UPON
DIVORCE.
(a) IN GENERAL.—Section 414(p)(11) (relating to ap-
plication of rules to governmental and church plans) is
amended—
(1) by inserting ‘‘or an eligible deferred com-
pensation plan (within the meaning of section
457(b))’’ after ‘‘subsection (e))’’, and
(2) in the heading, by striking ‘‘GOVERNMENTAL
AND CHURCH PLANS’’ and inserting ‘‘CERTAIN OTHER
PLANS’’.
(b) WAIVER
OF CERTAIN DISTRIBUTION REQUIRE-
MENTS.—Paragraph (10) of section 414(p) is amended by
striking ‘‘and section 409(d)’’ and inserting ‘‘section
409(d), and section 457(d)’’.
(c) TAX TREATMENT OF PAYMENTS FROM A SECTION
457 PLAN.—Subsection (p) of section 414 is amended by
redesignating paragraph (12) as paragraph (13) and in-
serting after paragraph (11) the following new paragraph:
‘‘(12) TAX TREATMENT OF PAYMENTS FROM A
SECTION
457
PLAN.—If a distribution or payment
from an eligible deferred compensation plan described
in section 457(b) is made pursuant to a qualified do-
mestic relations order, rules similar to the rules of
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section 402(e)(1)(A) shall apply to such distribution
or payment.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to transfers, distributions, and pay-
ments made after December 31, 2000.
SEC. 1336. MODIFICATION OF SAFE HARBOR RELIEF FOR
HARDSHIP WITHDRAWALS FROM CASH OR DE-
FERRED ARRANGEMENTS.
(a) IN GENERAL.—The Secretary of the Treasury shall
revise the regulations relating to hardship distributions
under section 401(k)(2)(B)(i)(IV) of the Internal Revenue
Code of 1986 to provide that the period an employee is pro-
hibited from making elective and employee contributions in
order for a distribution to be deemed necessary to satisfy
financial need shall be equal to 6 months.
(b) EFFECTIVE DATE.—The revised regulations under
subsection (a) shall apply to years beginning after Decem-
ber 31, 2000.
PART III—INCREASING PORTABILITY FOR
PARTICIPANTS
SEC. 1341. ROLLOVERS ALLOWED AMONG VARIOUS TYPES
OF PLANS.
(a) ROLLOVERS FROM AND TO SECTION 457 PLANS.—
(1) ROLLOVERS FROM SECTION 457 PLANS.—
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(A) IN GENERAL.—Section 457(e) (relating
to other definitions and special rules) is amend-
ed by adding at the end the following:
‘‘(16) ROLLOVER AMOUNTS.—
‘‘(A) GENERAL RULE.—In the case of an el-
igible deferred compensation plan established
and maintained by an employer described in
subsection (e)(1)(A), if—
‘‘(i) any portion of the balance to the
credit of an employee in such plan is paid
to such employee in an eligible rollover dis-
tribution (within the meaning of section
402(c)(4) without regard to subparagraph
(C) thereof),
‘‘(ii) the employee transfers any por-
tion of the property such employee receives
in such distribution to an eligible retire-
ment plan described in section 402(c)(8)(B),
and
‘‘(iii) in the case of a distribution of
property other than money, the amount so
transferred consists of the property distrib-
uted,
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then such distribution (to the extent so trans-
ferred) shall not be includible in gross income for
the taxable year in which paid.
‘‘(B) CERTAIN RULES MADE APPLICABLE.—
The rules of paragraphs (2) through (7) (other
than paragraph (4)(C)) and (9) of section 402(c)
and section 402(f ) shall apply for purposes of
subparagraph (A).
‘‘(C) REPORTING.—Rollovers under this
paragraph shall be reported to the Secretary in
the same manner as rollovers from qualified re-
tirement plans (as defined in section 4974(c)).’’.
(B) DEFERRAL LIMIT DETERMINED WITH-
OUT REGARD TO ROLLOVER AMOUNTS.—Section
457(b)(2) (defining eligible deferred compensa-
tion plan) is amended by inserting ‘‘(other than
rollover amounts)’’ after ‘‘taxable year’’.
(C) DIRECT ROLLOVER.—Paragraph (1) of
section 457(d) is amended by striking ‘‘and’’ at
the end of subparagraph (A), by striking the pe-
riod at the end of subparagraph (B) and insert-
ing ‘‘, and’’, and by inserting after subpara-
graph (B) the following:
‘‘(C) in the case of a plan maintained by
an employer described in subsection (e)(1)(A),
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the plan meets requirements similar to the re-
quirements of section 401(a)(31).
Any amount transferred in a direct trustee-to-trustee
transfer in accordance with section 401(a)(31) shall
not be includible in gross income for the taxable year
of transfer.’’.
(D) WITHHOLDING.—
(i) Paragraph (12) of section 3401(a)
is amended by adding at the end the fol-
lowing:
‘‘(E) under or to an eligible deferred com-
pensation plan which, at the time of such pay-
ment, is a plan described in section 457(b)
maintained by an employer described in section
457(e)(1)(A); or’’.
(ii) Paragraph (3) of section 3405(c) is
amended to read as follows:
‘‘(3) ELIGIBLE ROLLOVER DISTRIBUTION.—For
purposes of this subsection, the term ‘eligible rollover
distribution’ has the meaning given such term by sec-
tion 402(f )(2)(A).’’.
(iii) LIABILITY FOR WITHHOLDING.—
Subparagraph (B) of section 3405(d)(2) is
amended by striking ‘‘or’’ at the end of
clause (ii), by striking the period at the end
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of clause (iii) and inserting ‘‘, or’’, and by
adding at the end the following:
‘‘(iv) section 457(b).’’.
(2) ROLLOVERS TO SECTION 457 PLANS.—
(A) IN
GENERAL.—Section 402(c)(8)(B)
(defining eligible retirement plan) is amended by
striking ‘‘and’’ at the end of clause (iii), by
striking the period at the end of clause (iv) and
inserting ‘‘, and’’, and by inserting after clause
(iv) the following new clause:
‘‘(v) an eligible deferred compensation
plan described in section 457(b) of an em-
ployer described in section 457(e)(1)(A).’’.
(B) 
SEPARATE
ACCOUNTING.—Section
402(c) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(11) SEPARATE ACCOUNTING.—Unless a plan
described in clause (v) of paragraph (8)(B) agrees to
separately account for amounts rolled into such plan
from eligible retirement plans not described in such
clause, the plan described in such clause may not ac-
cept transfers or rollovers from such retirement
plans.’’.
(C) 10
PERCENT
ADDITIONAL
TAX.—Sub-
section (t) of section 72 (relating to 10-percent
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additional tax on early distributions from quali-
fied retirement plans) is amended by adding at
the end the following new paragraph:
‘‘(9) SPECIAL RULE FOR ROLLOVERS TO SECTION
457 PLANS.—For purposes of this subsection, a dis-
tribution from an eligible deferred compensation plan
(as defined in section 457(b)) of an employer de-
scribed in section 457(e)(1)(A) shall be treated as a
distribution from a qualified retirement plan de-
scribed in 4974(c)(1) to the extent that such distribu-
tion is attributable to an amount transferred to an el-
igible deferred compensation plan from a qualified re-
tirement plan (as defined in section 4974(c)).’’.
(b) ALLOWANCE OF ROLLOVERS FROM AND TO 403 (b)
PLANS.—
(1) ROLLOVERS FROM SECTION 403 (b) PLANS.—
Section 
403(b)(8)(A)(ii) 
(relating 
to 
rollover
amounts) is amended by striking ‘‘such distribution’’
and all that follows and inserting ‘‘such distribution
to an eligible retirement plan described in section
402(c)(8)(B), and’’.
(2) ROLLOVERS TO SECTION 403 (b) PLANS.—Sec-
tion 402(c)(8)(B) (defining eligible retirement plan),
as amended by subsection (a), is amended by striking
‘‘and’’ at the end of clause (iv), by striking the period
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at the end of clause (v) and inserting ‘‘, and’’, and
by inserting after clause (v) the following new clause:
‘‘(vi) an annuity contract described in
section 403(b).’’.
(c) EXPANDED EXPLANATION
TO RECIPIENTS
OF
ROLLOVER
DISTRIBUTIONS.—Paragraph (1) of section
402(f ) (relating to written explanation to recipients of dis-
tributions eligible for rollover treatment) is amended by
striking ‘‘and’’ at the end of subparagraph (C), by striking
the period at the end of subparagraph (D) and inserting
‘‘, and’’, and by adding at the end the following new sub-
paragraph:
‘‘(E) of the provisions under which distribu-
tions from the eligible retirement plan receiving
the distribution may be subject to restrictions
and tax consequences which are different from
those applicable to distributions from the plan
making such distribution.’’.
(d) SPOUSAL ROLLOVERS.—Section 402(c)(9) (relat-
ing to rollover where spouse receives distribution after death
of employee) is amended by striking ‘‘; except that’’ and
all that follows up to the end period.
(e) CONFORMING AMENDMENTS.—