353
interests therein (including an interest 
therein or based on the value thereof), or op-
tion on any of the foregoing, including an 
option to purchase or sell any such security, 
certificate of deposit, mortgage loan, inter-
est, group or index, or option, and includ-
ing any repurchase or reverse repurchase 
transaction on any such security, certificate 
of deposit, mortgage loan, interest, group or 
index, or option; 
‘‘(ii) any option entered into on a na-
tional securities exchange relating to foreign 
currencies; 
‘‘(iii) the guarantee by or to any secu-
rities clearing agency of a settlement of 
cash, securities, certificates of deposit, mort-
gage loans or interests therein, group or 
index of securities, or mortgage loans or in-
terests therein (including any interest there-
in or based on the value thereof), or option 
on any of the foregoing, including an option 
to purchase or sell any such security, cer-
tificate of deposit, mortgage loan, interest, 
group or index, or option; 
‘‘(iv) any margin loan;
354
‘‘(v) any other agreement or trans-
action that is similar to an agreement or 
transaction referred to in this subpara-
graph; 
‘‘(vi) any combination of the agree-
ments or transactions referred to in this 
subparagraph; 
‘‘(vii) any option to enter into any 
agreement or transaction referred to in this 
subparagraph; 
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v), 
(vi), or (vii), together with all supplements 
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that 
is not a securities contract under this sub-
paragraph, except that such master agree-
ment shall be considered to be a securities 
contract under this subparagraph only with 
respect to each agreement or transaction 
under such master agreement that is re-
ferred to in clause (i), (ii), (iii), (iv), (v), 
(vi), or (vii); or
355
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in this subparagraph, including 
any guarantee or reimbursement obligation 
by or to a stockbroker, securities clearing 
agency, financial institution, or financial 
participant in connection with any agree-
ment or transaction referred to in this sub-
paragraph, but not to exceed the damages in 
connection with any such agreement or 
transaction, measured in accordance with 
section 562; and 
‘‘(B) does not include any purchase, sale, or 
repurchase obligation under a participation in a 
commercial mortgage loan;’’; and 
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and 
(B) by adding at the end the following: 
‘‘(F) any other agreement or transaction 
that is similar to an agreement or transaction 
referred to in this paragraph; 
‘‘(G) any combination of the agreements or 
transactions referred to in this paragraph;
356
‘‘(H) any option to enter into an agreement 
or transaction referred to in this paragraph; 
‘‘(I) a master agreement that provides for 
an agreement or transaction referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or 
(H), together with all supplements to such mas-
ter agreement, without regard to whether the 
master agreement provides for an agreement or 
transaction that is not a commodity contract 
under this paragraph, except that the master 
agreement shall be considered to be a commodity 
contract under this paragraph only with respect 
to each agreement or transaction under the mas-
ter agreement that is referred to in subparagraph 
(A), (B), (C), (D), (E), (F), (G), or (H); or 
‘‘(J) any security agreement or arrange-
ment or other credit enhancement related to any 
agreement or transaction referred to in this 
paragraph, including any guarantee or reim-
bursement obligation by or to a commodity 
broker or financial participant in connection 
with any agreement or transaction referred to in 
this paragraph, but not to exceed the damages in 
connection with any such agreement or trans-
357
action, measured in accordance with section 
562;’’. 
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINAN-
CIAL
PARTICIPANT, 
AND
FORWARD
CONTRACT
MER-
CHANT.—Section 101 of title 11, United States Code, is 
amended—
(1) by striking paragraph (22) and inserting the 
following: 
‘‘(22) ‘financial institution’ means—
‘‘(A) a Federal reserve bank, or an entity 
(domestic or foreign) that is a commercial or 
savings bank, industrial savings bank, savings 
and loan association, trust company, or receiver 
or conservator for such entity and, when any 
such Federal reserve bank, receiver, 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) an investment 
company registered under the Investment Com-
pany Act of 1940;’’; 
(2) by inserting after paragraph (22) the fol-
lowing: 
‘‘(22A) ‘financial participant’ means—
358
‘‘(A) an entity that, at the time it enters 
into a securities contract, commodity contract, 
swap agreement, repurchase agreement, or for-
ward contract, or at the time of the date of the 
filing of the petition, has one or more agreements 
or transactions described in paragraph (1), (2), 
(3), (4), (5), or (6) of section 561(a) with the 
debtor or any other entity (other than an affil-
iate) of a total gross dollar value of not less than 
$1,000,000,000 in notional or actual principal 
amount outstanding on any day during the pre-
vious 15-month period, or has gross mark-to-
market positions of not less than $100,000,000 
(aggregated across counterparties) in one or 
more such agreements or transactions with the 
debtor or any other entity (other than an affil-
iate) on any day during the previous 15-month 
period; or 
‘‘(B) a clearing organization (as defined in 
section 402 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991);’’; and 
(3) by striking paragraph (26) and inserting the 
following: 
‘‘(26) ‘forward contract merchant’ means a Fed-
eral reserve bank, or an entity the business of which
359
consists in whole or in part of entering into forward 
contracts as or with merchants in a commodity (as 
defined in section 761) or any similar good, article, 
service, right, or interest which is presently or in the 
future becomes the subject of dealing in the forward 
contract trade;’’. 
(c) DEFINITION
OF MASTER NETTING AGREEMENT 
AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec-
tion 101 of title 11, United States Code, is amended by in-
serting after paragraph (38) the following new paragraphs: 
‘‘(38A) ‘master netting agreement’—
‘‘(A) means an agreement providing for the 
exercise of rights, including rights of netting, 
setoff, liquidation, termination, acceleration, or 
close out, under or in connection with one or 
more contracts that are described in any one or 
more of paragraphs (1) through (5) of section 
561(a), or any security agreement or arrange-
ment or other credit enhancement related to one 
or more of the foregoing, including any guar-
antee or reimbursement obligation related to 1 or 
more of the foregoing; and 
‘‘(B) if the agreement contains provisions 
relating to agreements or transactions that are 
not contracts described in paragraphs (1)
360
through (5) of section 561(a), shall be deemed to 
be a master netting agreement only with respect 
to those agreements or transactions that are de-
scribed in any one or more of paragraphs (1) 
through (5) of section 561(a); 
‘‘(38B) ‘master netting agreement participant’ 
means an entity that, at any time before the date of 
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 sections 224, 303, 
311, 401, and 718, is amended—
(A) in paragraph (6), by inserting ‘‘, 
pledged to, under the control of,’’ after ‘‘held by’’; 
(B) in paragraph (7), by inserting ‘‘, 
pledged to, under the control of,’’ after ‘‘held by’’; 
(C) by striking paragraph (17) and insert-
ing the following: 
‘‘(17) under subsection (a), of the setoff by a 
swap participant or financial participant of a mu-
tual debt and claim under or in connection with one
361
or more swap agreements that constitutes the setoff of 
a claim against the debtor for any payment or other 
transfer of property due from the debtor under or in 
connection with any swap agreement against any 
payment due to the debtor from the swap participant 
or financial participant under or in connection with 
any swap agreement or against cash, securities, or 
other property held by, pledged to, under the control 
of, or due from such swap participant or financial 
participant to margin, guarantee, secure, or settle 
any swap agreement;’’; and 
(D) by inserting after paragraph (26) the 
following: 
‘‘(27) under subsection (a), of the setoff by a 
master netting agreement participant of a mutual 
debt and claim under or in connection with one or 
more master netting agreements or any contract or 
agreement subject to such agreements that constitutes 
the setoff of a claim against the debtor for any pay-
ment or other transfer of property due from the debtor 
under or in connection with such agreements or any 
contract or agreement subject to such agreements 
against any payment due to the debtor from such 
master netting agreement participant under or in 
connection with such agreements or any contract or
362
agreement subject to such agreements or against cash, 
securities, or other property held by, pledged to, under 
the control of, or due from such master netting agree-
ment participant to margin, guarantee, secure, or set-
tle such agreements or any contract or agreement sub-
ject to such agreements, to the extent that such partic-
ipant is eligible to exercise such offset rights under 
paragraph (6), (7), or (17) for each individual con-
tract covered by the master netting agreement in 
issue; and’’. 
(2) LIMITATION.—Section 362 of title 11, United 
States Code, as amended by sections 106, 305, 311, 
and 441, is amended by adding at the end the fol-
lowing: 
‘‘(o) The exercise of rights not subject to the stay aris-
ing under subsection (a) pursuant to paragraph (6), (7), 
(17), or (27) of subsection (b) shall not be stayed by any 
order of a court or administrative agency in any proceeding 
under this title.’’. 
(e) LIMITATION OF AVOIDANCE POWERS UNDER MAS-
TER NETTING AGREEMENT.—Section 546 of title 11, United 
States Code, is amended—
(1) in subsection (g) (as added by section 103 of 
Public Law 101–311)—
(A) by striking ‘‘under a swap agreement’’;
363
(B) by striking ‘‘in connection with a swap 
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and 
(C) by inserting ‘‘or financial participant’’ 
after ‘‘swap participant’’; and 
(2) by adding at the end the following: 
‘‘(j) 
Notwithstanding 
sections 
544, 
545, 
547, 
548(a)(1)(B), and 548(b) the trustee may not avoid a trans-
fer made by or to a master netting agreement participant 
under or in connection with any master netting agreement 
or any individual contract covered thereby that is made be-
fore the commencement of the case, except under section 
548(a)(1)(A) and except to the extent that the trustee could 
otherwise avoid such a transfer made under an individual 
contract covered by such master netting agreement.’’. 
(f) FRAUDULENT TRANSFERS OF MASTER NETTING 
AGREEMENTS.—Section 548(d)(2) of title 11, United States 
Code, is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (D), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph:
364
‘‘(E) a master netting agreement participant 
that receives a transfer in connection with a master 
netting agreement or any individual contract covered 
thereby takes for value to the extent of such transfer, 
except that, with respect to a transfer under any indi-
vidual contract covered thereby, to the extent that 
such master netting agreement participant otherwise 
did not take (or is otherwise not deemed to have 
taken) such transfer for value.’’. 
(g) TERMINATION OR ACCELERATION OF SECURITIES 
CONTRACTS.—Section 555 of title 11, United States Code, 
is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 555. Contractual right to liquidate, terminate, or 
accelerate a securities contract’’; 
and 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’. 
(h) TERMINATION
OR ACCELERATION
OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11, 
United States Code, is amended—
(1) by amending the section heading to read as 
follows:
365
‘‘§ 556. Contractual right to liquidate, terminate, or 
accelerate a commodities contract or for-
ward contract’’; 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and 
(3) in the second sentence, by striking ‘‘As used’’ 
and all that follows through ‘‘right,’’ and inserting 
‘‘As used in this section, the term ‘contractual right’ 
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the 
Commodity Exchange Act), a multilateral clearing 
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities asso-
ciation, a securities clearing agency, a contract mar-
ket designated under the Commodity Exchange Act, a 
derivatives transaction execution facility registered 
under the Commodity Exchange Act, or a board of 
trade (as defined in the Commodity Exchange Act) or 
in a resolution of the governing board thereof and a 
right,’’. 
(i) TERMINATION OR ACCELERATION OF REPURCHASE 
AGREEMENTS.—Section 559 of title 11, United States Code, 
is amended—
366
(1) by amending the section heading to read as 
follows: 
‘‘§ 559. Contractual right to liquidate, terminate, or 
accelerate a repurchase agreement’’; 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and 
(3) in the third sentence, by striking ‘‘As used’’ 
and all that follows through ‘‘right,’’ and inserting 
‘‘As used in this section, the term ‘contractual right’ 
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the 
Commodity Exchange Act), a multilateral clearing 
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities asso-
ciation, a securities clearing agency, a contract mar-
ket designated under the Commodity Exchange Act, a 
derivatives transaction execution facility registered 
under the Commodity Exchange Act, or a board of 
trade (as defined in the Commodity Exchange Act) or 
in a resolution of the governing board thereof and a 
right,’’.
367
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF 
SWAP AGREEMENTS.—Section 560 of title 11, United States 
Code, is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 560. Contractual right to liquidate, terminate, or 
accelerate a swap agreement’’; 
(2) in the first sentence, by striking ‘‘termi-
nation of a swap agreement’’ and inserting ‘‘liquida-
tion, termination, or acceleration of one or more swap 
agreements’’; 
(3) by striking ‘‘in connection with any swap 
agreement’’ and inserting ‘‘in connection with the ter-
mination, liquidation, or acceleration of one or more 
swap agreements’’; and 
(4) in the second sentence, by striking ‘‘As used’’ 
and all that follows through ‘‘right,’’ and inserting 
‘‘As used in this section, the term ‘contractual right’ 
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the 
Commodity Exchange Act), a multilateral clearing 
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities asso-
ciation, a securities clearing agency, a contract mar-
368
ket designated under the Commodity Exchange Act, a 
derivatives transaction execution facility registered 
under the Commodity Exchange Act, or a board of 
trade (as defined in the Commodity Exchange Act) or 
in a resolution of the governing board thereof and a 
right,’’. 
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR 
OFFSET UNDER
A MASTER NETTING AGREEMENT
AND 
ACROSS CONTRACTS.—
(1) IN GENERAL.—Title 11, United States Code, 
is amended by inserting after section 560 the fol-
lowing: 
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting 
agreement and across contracts; pro-
ceedings under chapter 15
‘‘(a) 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, 
or acceleration of or to offset or net termination values, pay-
ment amounts, or other transfer obligations arising under 
or in connection with one or more (or the termination, liq-
uidation, or acceleration of one or more)—
‘‘(1) securities contracts, as defined in section 
741(7);
369
‘‘(2) commodity contracts, as defined in section 
761(4); 
‘‘(3) forward contracts; 
‘‘(4) repurchase agreements; 
‘‘(5) swap agreements; or 
‘‘(6) master netting agreements, 
shall not be stayed, avoided, or otherwise limited by oper-
ation of any provision of this title or by any order of a 
court or administrative agency in any proceeding under 
this title. 
‘‘(b)(1) A party may exercise a contractual right de-
scribed in subsection (a) to terminate, liquidate, or accel-
erate only to the extent that such party could exercise such 
a right under section 555, 556, 559, or 560 for each indi-
vidual contract covered by the master netting agreement in 
issue. 
‘‘(2) If a debtor is a commodity broker subject to sub-
chapter IV of chapter 7—
‘‘(A) a party may not net or offset an obligation 
to the debtor arising under, or in connection with, a 
commodity contract traded on or subject to the rules 
of a contract market designated under the Commodity 
Exchange Act or a derivatives transaction execution 
facility registered under the Commodity Exchange Act 
against any claim arising under, or in connection
370
with, other instruments, contracts, or agreements list-
ed in subsection (a) except to the extent that the party 
has positive net equity in the commodity accounts at 
the debtor, as calculated under such subchapter; 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 and trad-
ed on or subject to the rules of a contract market des-
ignated under the Commodity Exchange Act or a de-
rivatives transaction execution facility registered 
under the Commodity Exchange Act against any 
claim arising under, or in connection with, other in-
struments, contracts, or agreements listed in sub-
section (a). 
‘‘(3) No provision of subparagraph (A) or (B) of para-
graph (2) shall prohibit the offset of claims and obligations 
that arise under—
‘‘(A) a cross-margining agreement or similar ar-
rangement that has been approved by the Commodity 
Futures Trading Commission or submitted to the 
Commodity Futures Trading Commission under 
paragraph (1) or (2) of section 5c(c) of the Com-
modity Exchange Act and has not been abrogated or
371
rendered ineffective by the Commodity Futures Trad-
ing Commission; or 
‘‘(B) any other netting agreement between a 
clearing organization (as defined in section 761) and 
another entity that has been approved by the Com-
modity Futures Trading Commission. 
‘‘(c) As used in this section, the term ‘contractual 
right’ includes a right set forth in a rule or bylaw of a 
derivatives clearing organization (as defined in the Com-
modity Exchange Act), a multilateral clearing organization 
(as defined in the Federal Deposit Insurance Corporation 
Improvement Act of 1991), a national securities exchange, 
a national securities association, a securities clearing agen-
cy, a contract market designated under the Commodity Ex-
change Act, a derivatives transaction execution facility reg-
istered under the Commodity Exchange Act, or a board of 
trade (as defined in the Commodity Exchange Act) or in 
a resolution of the governing board thereof, and a right, 
whether or not evidenced in writing, arising under common 
law, under law merchant, or by reason of normal business 
practice. 
‘‘(d) 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 under chapter 15, so that
372
enforcement of contractual provisions of such contracts and 
agreements in accordance with their terms will not be 
stayed or otherwise limited by operation of any provision 
of this title or by order of a court in any case under this 
title, and to limit avoidance powers to the same extent as 
in a proceeding under chapter 7 or 11 of this title (such 
enforcement not to be limited based on the presence or ab-
sence of assets of the debtor in the United States).’’. 
(2) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, is 
amended by inserting after the item relating to sec-
tion 560 the following:
‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a mas-
ter netting agreement and across contracts; proceedings under 
chapter 15.’’.
(l) COMMODITY BROKER LIQUIDATIONS.—Title 11, 
United States Code, is amended by inserting after section 
766 the following:
‘‘§ 767. Commodity broker liquidation and forward 
contract merchants, commodity brokers, 
stockbrokers, financial institutions, fi-
nancial participants, securities clearing 
agencies, swap participants, repo partici-
pants, and master netting agreement par-
ticipants 
‘‘Notwithstanding any other provision of this title, the 
exercise of rights by a forward contract merchant, com-
373
modity broker, stockbroker, financial institution, financial 
participant, 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.’’. 
(m) STOCKBROKER LIQUIDATIONS.—Title 11, United 
States Code, is amended by inserting after section 752 the 
following: 
‘‘§ 753. Stockbroker liquidation and forward contract 
merchants, 
commodity 
brokers, 
stock-
brokers, financial institutions, financial 
participants, securities clearing agencies, 
swap participants, repo participants, and 
master netting agreement participants 
‘‘Notwithstanding any other provision of this title, the 
exercise of rights by a forward contract merchant, com-
modity broker, stockbroker, financial institution, financial 
participant, 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) SETOFF.—Section 553 of title 11, United States 
Code, is amended—
(1) in subsection (a)(2)(B)(ii), by inserting be-
fore the semicolon the following: ‘‘(except for a setoff
374
of a kind described in section 362(b)(6), 362(b)(7), 
362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561)’’; 
(2) in subsection (a)(3)(C), by inserting before 
the period the following: ‘‘(except for a setoff of a kind 
described in section 362(b)(6), 362(b)(7), 362(b)(17), 
362(b)(27), 555, 556, 559, 560, or 561)’’; and 
(3) 
in 
subsection 
(b)(1), 
by 
striking 
‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 362(b)(27), 
555, 556, 559, 560, 561,’’. 
(o) SECURITIES CONTRACTS, COMMODITY CONTRACTS, 
AND FORWARD CONTRACTS.—Title 11, United States Code, 
is amended—
(1) in section 362(b)(6), by striking ‘‘financial 
institutions,’’ each place such term appears and in-
serting ‘‘financial institution, financial participant,’’; 
(2) in sections 362(b)(7) and 546(f), by inserting 
‘‘or financial participant’’ after ‘‘repo participant’’ 
each place such term appears; 
(3) in section 546(e), by inserting ‘‘financial 
participant,’’ after ‘‘financial institution,’’; 
(4) in section 548(d)(2)(B), by inserting ‘‘finan-
cial participant,’’ after ‘‘financial institution,’’; 
(5) in section 548(d)(2)(C), by inserting ‘‘or fi-
nancial participant’’ after ‘‘repo participant’’;
375
(6) in section 548(d)(2)(D), by inserting ‘‘or fi-
nancial participant’’ after ‘‘swap participant’’; 
(7) in section 555—
(A) by inserting ‘‘financial participant,’’ 
after ‘‘financial institution,’’; and 
(B) by striking the second sentence and in-
serting the following: ‘‘As used in this section, 
the term ‘contractual right’ includes a right set 
forth in a rule or bylaw of a derivatives clearing 
organization (as defined in the Commodity Ex-
change Act), a multilateral clearing organization 
(as defined in the Federal Deposit Insurance 
Corporation Improvement Act of 1991), a na-
tional securities exchange, a national securities 
association, a securities clearing agency, a con-
tract market designated under the Commodity 
Exchange Act, a derivatives transaction execu-
tion facility registered under the Commodity Ex-
change Act, or a board of trade (as defined in the 
Commodity Exchange Act), or in a resolution of 
the governing board thereof, and a right, whether 
or not in writing, arising under common law, 
under law merchant, or by reason of normal 
business practice.’’;
376
(8) in section 556, by inserting ‘‘, financial par-
ticipant,’’ after ‘‘commodity broker’’; 
(9) in section 559, by inserting ‘‘or financial 
participant’’ after ‘‘repo participant’’ each place such 
term appears; and 
(10) in section 560, by inserting ‘‘or financial 
participant’’ after ‘‘swap participant’’. 
(p) CONFORMING AMENDMENTS.—Title 11, United 
States Code, is amended—
(1) in the table of sections for chapter 5—
(A) by amending the items relating to sec-
tions 555 and 556 to read as follows:
‘‘555. Contractual right to liquidate, terminate, or accelerate a securities contract. 
‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities con-
tract or forward contract.’’;
and 
(B) by amending the items relating to sec-
tions 559 and 560 to read as follows:
‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase agree-
ment. 
‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;
and 
(2) in the table of sections for chapter 7—
(A) by inserting after the item relating to 
section 766 the following:
‘‘767. Commodity broker liquidation and forward contract merchants, commodity 
brokers, stockbrokers, financial institutions, financial partici-
pants, securities clearing agencies, swap participants, repo par-
ticipants, and master netting agreement participants.’’;
and
377
(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, financial participants, 
securities clearing agencies, swap participants, repo partici-
pants, and master netting agreement participants.’’.
SEC. 908. RECORDKEEPING REQUIREMENTS. 
Section 11(e)(8) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)(8)) is amended by adding at the end 
the following new subparagraph: 
‘‘(H) RECORDKEEPING
REQUIREMENTS.—
The Corporation, in consultation with the appro-
priate Federal banking agencies, may prescribe 
regulations requiring more detailed record-
keeping by any insured depository institution 
with respect to qualified financial contracts (in-
cluding market valuations) only if such insured 
depository institution is in a troubled condition 
(as such term is defined by the Corporation pur-
suant to section 32).’’. 
SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECU-
TION REQUIREMENT. 
Section 13(e)(2) of the Federal Deposit Insurance Act 
(12 U.S.C. 1823(e)(2)) is amended to read as follows: 
‘‘(2) EXEMPTIONS
FROM
CONTEMPORANEOUS 
EXECUTION REQUIREMENT.—An agreement to provide 
for the lawful collateralization of—
378
‘‘(A) deposits of, or other credit extension 
by, a Federal, State, or local governmental enti-
ty, or of any depositor referred to in section 
11(a)(2), including an agreement to provide col-
lateral in lieu of a surety bond; 
‘‘(B) bankruptcy estate funds pursuant to 
section 345(b)(2) of title 11, United States Code; 
‘‘(C) extensions of credit, including any 
overdraft, from a Federal reserve bank or Federal 
home loan bank; or 
‘‘(D) one or more qualified financial con-
tracts, as defined in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph 
(1)(B) solely because such agreement was not executed 
contemporaneously with the acquisition of the collat-
eral or because of pledges, delivery, or substitution of 
the collateral made in accordance with such agree-
ment.’’. 
SEC. 910. DAMAGE MEASURE. 
(a) IN GENERAL.—Title 11, United States Code, is 
amended—
(1) by inserting after section 561, as added by 
section 907, the following:
379
‘‘§ 562. Timing of damage measurement in connection 
with swap agreements, securities con-
tracts, forward contracts, commodity con-
tracts, repurchase agreements, and mas-
ter netting agreements 
‘‘(a) If the trustee rejects a swap agreement, securities 
contract (as defined in section 741), forward contract, com-
modity contract (as defined in section 761), repurchase 
agreement, or master netting agreement pursuant to 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-
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 or dates of such liquidation, termi-
nation, or acceleration. 
‘‘(b) If there are not any commercially reasonable de-
terminants of value as of any date referred to in paragraph 
(1) or (2) of subsection (a), damages shall be measured as 
of the earliest subsequent date or dates on which there are 
commercially reasonable determinants of value. 
‘‘(c) For the purposes of subsection (b), if damages are 
not measured as of the date or dates of rejection, liquida-
tion, termination, or acceleration, and the forward contract
380
merchant, stockbroker, financial institution, securities 
clearing agency, repo participant, financial participant, 
master netting agreement participant, or swap participant 
or the trustee objects to the timing of the measurement of 
damages—
‘‘(1) the trustee, in the case of an objection by a 
forward contract merchant, stockbroker, financial in-
stitution, securities clearing agency, repo participant, 
financial participant, master netting agreement par-
ticipant, or swap participant; or 
‘‘(2) the forward contract merchant, stockbroker, 
financial institution, securities clearing agency, repo 
participant, financial participant, master netting 
agreement participant, or swap participant, in the 
case of an objection by the trustee, 
has the burden of proving that there were no commercially 
reasonable determinants of value as of such date or dates.’’; 
and 
(2) in the table of sections for chapter 5, by in-
serting after the item relating to section 561 (as 
added by section 907) the following new item:
‘‘562. Timing of 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
381
(2) by adding at the end the following: 
‘‘(2) A claim for damages calculated in accordance 
with section 562 shall be allowed under subsection (a), (b), 
or (c), or disallowed under subsection (d) or (e), as if such 
claim had arisen before the date of the filing of the peti-
tion.’’. 
SEC. 911. SIPC STAY. 
Section 5(b)(2) of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding 
at the end the following new subparagraph: 
‘‘(C) EXCEPTION FROM STAY.—
‘‘(i) Notwithstanding section 362 of 
title 11, United States Code, neither the fil-
ing of an application under subsection 
(a)(3) nor any order or decree obtained by 
SIPC from the court shall operate as a stay 
of any contractual rights of a creditor to 
liquidate, terminate, or accelerate a securi-
ties contract, commodity contract, forward 
contract, repurchase agreement, swap agree-
ment, or master netting agreement, as those 
terms are defined in sections 101, 741, and 
761 of title 11, United States Code, to offset 
or 
net 
termination 
values, 
payment 
amounts, or other transfer obligations aris-
382
ing under or in connection with one or 
more of such contracts or agreements, or to 
foreclose on any cash collateral pledged by 
the debtor, whether or not with respect to 
one or more of such contracts or agreements. 
‘‘(ii) Notwithstanding clause (i), such 
application, order, or decree may operate as 
a stay of the foreclosure on, or disposition 
of, securities collateral pledged by the debt-
or, whether or not with respect to one or 
more of such contracts or agreements, secu-
rities sold by the debtor under a repurchase 
agreement, or securities lent under a securi-
ties lending agreement. 
‘‘(iii) As used in this subparagraph, 
the term ‘contractual right’ includes a right 
set forth in a rule or bylaw of a national 
securities exchange, a national securities as-
sociation, or a securities clearing agency, a 
right set forth in a bylaw of a clearing or-
ganization or contract market or in a reso-
lution of the governing board thereof, and a 
right, whether or not in writing, arising 
under common law, under law merchant, or 
by reason of normal business practice.’’.
383
TITLE X—PROTECTION OF FAM-
ILY FARMERS AND FAMILY 
FISHERMEN 
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12. 
(a) REENACTMENT.—
(1) IN GENERAL.—Chapter 12 of title 11, United 
States Code, as reenacted by section 149 of division 
C of the Omnibus Consolidated and Emergency Sup-
plemental Appropriations Act, 1999 (Public Law 
105–277), is hereby reenacted, and as here reenacted 
is amended by this Act. 
(2) EFFECTIVE DATE.—Subsection (a) shall take 
effect on the date of the enactment of this Act. 
(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, as 
amended by section 226, is amended by inserting 
‘‘101(18),’’ after ‘‘101(3),’’ each place it appears.
384
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL 
UNITS. 
(a) CONTENTS OF PLAN.—Section 1222(a)(2) of title 
11, United States Code, as amended by section 213, 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;’’. 
(b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) of 
title 11, United States Code, as so designated by section 
719, is amended by striking ‘‘a State or local governmental 
unit’’ and inserting ‘‘any governmental unit’’. 
(c) EFFECTIVE
DATE; APPLICATION
OF
AMEND-
MENTS.—This section and the amendments made by this 
section shall take effect on the date of the enactment of this
385
Act and shall not apply with respect to cases commenced 
under title 11 of the United States Code before such date.
SEC. 1004. DEFINITION OF FAMILY FARMER. 
Section 101(18) of title 11, United States Code, is 
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘$1,500,000’’ and inserting 
‘‘$3,237,000’’; and 
(B) by striking ‘‘80’’ and inserting ‘‘50’’; 
and 
(2) in subparagraph (B)(ii)—
(A) by striking ‘‘$1,500,000’’ and inserting 
‘‘$3,237,000’’; and 
(B) by striking ‘‘80’’ and inserting ‘‘50’’.
SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY 
FARMER AND SPOUSE RECEIVE OVER 50 PER-
CENT OF INCOME FROM FARMING OPER-
ATION IN YEAR PRIOR TO BANKRUPTCY. 
Section 101(18)(A) of title 11, United States Code, is 
amended by striking ‘‘for the taxable year preceding the tax-
able year’’ and inserting the following: 
‘‘for—
‘‘(i) the taxable year preceding; or 
‘‘(ii) each of the 2d and 3d taxable 
years preceding;
386
the taxable year’’.
SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF 
DISPOSABLE INCOME. 
(a) CONFIRMATION OF PLAN.—Section 1225(b)(1) of 
title 11, United States Code, is amended—
(1) in subparagraph (A) by striking ‘‘or’’ at the 
end; 
(2) in subparagraph (B) by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(C) the value of the property to be distributed 
under the plan in the 3-year period, or such longer 
period as the court may approve under section 
1222(c), beginning on the date that the first distribu-
tion is due under the plan is not less than the debtor’s 
projected disposable income for such period.’’. 
(b) MODIFICATION OF PLAN.—Section 1229 of title 11, 
United States Code, is amended by adding at the end the 
following: 
‘‘(d) A plan may not be modified under this section—
‘‘(1) to increase the amount of any payment due 
before the plan as modified becomes the plan; 
‘‘(2) by anyone except the debtor, based on an in-
crease in the debtor’s disposable income, to increase 
the amount of payments to unsecured creditors re-
387
quired for a particular month so that the aggregate 
of such payments exceeds the debtor’s disposable in-
come for such month; or 
‘‘(3) in the last year of the plan by anyone ex-
cept the debtor, to require payments that would leave 
the debtor with insufficient funds to carry on the 
farming operation after the plan is completed.’’.
SEC. 1007. FAMILY FISHERMEN. 
(a) DEFINITIONS.—Section 101 of title 11, United 
States Code, is amended—
(1) by inserting after paragraph (7) the fol-
lowing: 
‘‘(7A) ‘commercial fishing operation’ means—
‘‘(A) the catching or harvesting of fish, 
shrimp, lobsters, urchins, seaweed, shellfish, or 
other aquatic species or products of such species; 
or 
‘‘(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 family fisherman to carry out a commer-
cial fishing operation;’’; and
388
(2) by inserting after paragraph (19) the fol-
lowing: 
‘‘(19A) ‘family fisherman’ means—
‘‘(A) an individual or individual and 
spouse engaged in a commercial fishing oper-
ation—
‘‘(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—
389
‘‘(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;
390
‘‘(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 1203, by inserting ‘‘or commercial 
fishing operation’’ after ‘‘farm’’; and 
(3) in section 1206, by striking ‘‘if the property 
is farmland or farm equipment’’ and inserting ‘‘if the 
property is farmland, farm equipment, or property 
used to carry out a commercial fishing operation (in-
cluding a commercial fishing vessel)’’. 
(d) CLERICAL AMENDMENT.—In the table of chapters 
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’’.
391
(e) APPLICABILITY.—Nothing in this section shall 
change, affect, or amend the Fishery Conservation and 
Management Act of 1976 (16 U.S.C. 1801, et seq.). 
TITLE XI—HEALTH CARE AND 
EMPLOYEE BENEFITS 
SEC. 1101. DEFINITIONS. 
(a) HEALTH CARE BUSINESS DEFINED.—Section 101 
of title 11, United States Code, as amended by section 306, 
is amended—
(1) by redesignating paragraph (27A) as para-
graph (27B); and 
(2) by inserting after paragraph (27) the fol-
lowing: 
‘‘(27A) ‘health care business’—
‘‘(A) means any public or private entity 
(without regard to whether that entity is orga-
nized for profit or not for profit) that is pri-
marily engaged in offering to the general public 
facilities and services for—
‘‘(i) the diagnosis or treatment of in-
jury, deformity, or disease; and 
‘‘(ii) surgical, drug treatment, psy-
chiatric, or obstetric care; and 
‘‘(B) includes—
‘‘(i) any—
392
‘‘(I) general or specialized hos-
pital; 
‘‘(II) ancillary ambulatory, emer-
gency, or surgical treatment facility; 
‘‘(III) hospice; 
‘‘(IV) home health agency; and 
‘‘(V) other health care institution 
that is similar to an entity referred to 
in subclause (I), (II), (III), or (IV); 
and 
‘‘(ii) any long-term care facility, in-
cluding any—
‘‘(I) skilled nursing facility; 
‘‘(II) intermediate care facility; 
‘‘(III) assisted living facility; 
‘‘(IV) home for the aged; 
‘‘(V) domiciliary care facility; 
and 
‘‘(VI) health care institution that 
is related to a facility referred to in 
subclause (I), (II), (III), (IV), or (V), 
if that institution is primarily engaged 
in offering room, board, laundry, or 
personal assistance with activities of
393
daily living and incidentals to activi-
ties of daily living;’’. 
(b) PATIENT AND PATIENT RECORDS DEFINED.—Sec-
tion 101 of title 11, United States Code, is amended by in-
serting after paragraph (40) the following: 
‘‘(40A) ‘patient’ means any individual who ob-
tains or receives services from a health care business; 
‘‘(40B) ‘patient records’ means any written doc-
ument relating to a patient or a record recorded in 
a magnetic, optical, or other form of electronic me-
dium;’’. 
(c) RULE OF CONSTRUCTION.—The amendments made 
by subsection (a) of this section shall not affect the interpre-
tation of section 109(b) of title 11, United States Code. 
SEC. 1102. DISPOSAL OF PATIENT RECORDS. 
(a) IN GENERAL.—Subchapter III of chapter 3 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘§ 351. Disposal of patient records 
‘‘If a health care business commences a case under 
chapter 7, 9, or 11, and the trustee does not have a sufficient 
amount of funds to pay for the storage of patient records 
in the manner required under applicable Federal or State 
law, the following requirements shall apply: 
‘‘(1) The trustee shall—
394
‘‘(A) promptly publish notice, in 1 or more 
appropriate newspapers, that if patient records 
are not claimed by the patient or an insurance 
provider (if applicable law permits the insurance 
provider to make that claim) by the date that is 
365 days after the date of that notification, the 
trustee will destroy the patient records; and 
‘‘(B) during the first 180 days of the 365-
day period described in subparagraph (A), 
promptly attempt to notify directly each patient 
that is the subject of the patient records and ap-
propriate insurance carrier concerning the pa-
tient records by mailing to the most recent 
known address of that patient, or a family mem-
ber or contact person for that patient, and to the 
appropriate insurance carrier an appropriate 
notice regarding the claiming or disposing of pa-
tient records. 
‘‘(2) If, after providing the notification under 
paragraph (1), patient records are not claimed dur-
ing the 365-day period described under that para-
graph, the trustee shall mail, by certified mail, at the 
end of such 365-day period a written request to each 
appropriate Federal agency to request permission 
from that agency to deposit the patient records with
395
that agency, except that no Federal agency is required 
to accept patient records under this paragraph. 
‘‘(3) If, following the 365-day period described in 
paragraph (2) and after providing the notification 
under paragraph (1), patient records are not claimed 
by a patient or insurance provider, or request is not 
granted by a Federal agency to deposit such records 
with that agency, the trustee shall destroy those 
records by—
‘‘(A) if the records are written, shredding or 
burning the records; or 
‘‘(B) if the records are magnetic, optical, or 
other electronic records, by otherwise destroying 
those records so that those records cannot be re-
trieved.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
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.’’.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF 
CLOSING A HEALTH CARE BUSINESS AND 
OTHER ADMINISTRATIVE EXPENSES. 
Section 503(b) of title 11, United States Code, as 
amended by section 445, is amended by adding at the end 
the following:
396
‘‘(8) the actual, necessary costs and expenses of 
closing a health care business incurred by a trustee or 
by a Federal agency (as defined in section 551(1) of 
title 5) or a department or agency of a State or polit-
ical 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; and’’.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA-
TIENT ADVOCATE. 
(a) OMBUDSMAN TO ACT AS PATIENT ADVOCATE.—
(1) APPOINTMENT
OF
OMBUDSMAN.—Title 11, 
United States Code, as amended by section 232, is 
amended by inserting after section 332 the following: 
‘‘§ 333. Appointment of patient care ombudsman 
‘‘(a)(1) If the debtor in a case under chapter 7, 9, or 
11 is a health care business, the court shall order, not later 
than 30 days after the commencement of the case, the ap-
pointment of an ombudsman to monitor the quality of pa-
tient care and to represent the interests of the patients of 
the health care business unless the court finds that the ap-
397
pointment of such ombudsman is not necessary for the pro-
tection of patients under the specific facts of the case. 
‘‘(2)(A) If the court orders the appointment of an om-
budsman under paragraph (1), the United States trustee 
shall appoint 1 disinterested person (other than the United 
States trustee) to serve as such ombudsman. 
‘‘(B) If the debtor is a health care business that pro-
vides long-term care, then the United States trustee may 
appoint the State Long-Term Care Ombudsman appointed 
under the Older Americans Act of 1965 for the State in 
which the case is pending to serve as the ombudsman re-
quired by paragraph (1). 
‘‘(C) If the United States trustee does not appoint a 
State Long-Term Care Ombudsman under subparagraph 
(B), the court shall notify the State Long-Term Care Om-
budsman appointed under the Older Americans Act of 1965 
for the State in which the case is pending, of the name and 
address of the person who is appointed under subparagraph 
(A). 
‘‘(b) An ombudsman appointed under subsection (a) 
shall—
‘‘(1) monitor the quality of patient care provided 
to patients of the debtor, to the extent necessary under 
the circumstances, including interviewing patients 
and physicians;
398
‘‘(2) not later than 60 days after the date of ap-
pointment, and not less frequently than at 60-day in-
tervals thereafter, report to the court after notice to 
the parties in interest, at a hearing or in writing, re-
garding the quality of patient care provided to pa-
tients of the debtor; and 
‘‘(3) if such ombudsman determines that the 
quality of patient care provided to patients of the 
debtor is declining significantly or is otherwise being 
materially compromised, file with the court a motion 
or a written report, with notice to the parties in in-
terest immediately upon making such determination. 
‘‘(c)(1) An ombudsman appointed under subsection (a) 
shall maintain any information obtained by such ombuds-
man under this section that relates to patients (including 
information relating to patient records) as confidential in-
formation. Such ombudsman may not review confidential 
patient records unless the court approves such review in ad-
vance and imposes restrictions on such ombudsman to pro-
tect the confidentiality of such records. 
‘‘(2) An ombudsman appointed under subsection 
(a)(2)(B) shall have access to patient records consistent 
with authority of such ombudsman under the Older Ameri-
cans Act of 1965 and under non-Federal laws governing 
the State Long-Term Care Ombudsman program.’’.
399
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter II of chapter 3 of title 11, United 
States Code, as amended by section 232, is amended 
by adding at the end the following:
‘‘333. Appointment of ombudsman.’’.
(b) 
COMPENSATION
OF
OMBUDSMAN.—Section 
330(a)(1) of title 11, United States Code, is amended—
(1) in the matter preceding subparagraph (A), 
by inserting ‘‘an ombudsman appointed under section 
333, 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 sections 102, 219, and 446, is 
amended by adding at the end the following: 
‘‘(12) use all reasonable and best efforts to trans-
fer patients from a health care business that is in the 
process of being closed to an appropriate health care 
business that—
‘‘(A) is in the vicinity of the health care 
business that is closing; 
‘‘(B) provides the patient with services that 
are substantially similar to those provided by the
400
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, as amended by section 446, 
is amended by striking ‘‘and (11)’’ and inserting ‘‘(11), and 
(12)’’. 
SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION 
NOT SUBJECT TO AUTOMATIC STAY. 
Section 362(b) of title 11, United States Code, is 
amended by inserting after paragraph (27), as amended by 
sections 224, 303, 311, 401, 718, and 907, the following: 
‘‘(28) 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 pursuant 
to title XI or XVIII of such Act).’’. 
TITLE XII—TECHNICAL 
AMENDMENTS 
SEC. 1201. DEFINITIONS. 
Section 101 of title 11, United States Code, as herein-
before amended by this Act, is amended—
401
(1) by striking ‘‘In this title—’’ and inserting 
‘‘In this title the following definitions shall apply:’’; 
(2) in each paragraph, by inserting ‘‘The term’’ 
after the paragraph designation; 
(3) in paragraph (35)(B), by striking ‘‘para-
graphs (21B) and (33)(A)’’ and inserting ‘‘para-
graphs (23) and (35)’’; 
(4) in each of paragraphs (35A), (38), and 
(54A), by striking ‘‘; and’’ at the end and inserting 
a period; 
(5) in paragraph (51B)—
(A) by inserting ‘‘who is not a family farm-
er’’ after ‘‘debtor’’ the first place it appears; and 
(B) by striking ‘‘thereto having aggregate’’ 
and all that follows through the end of the para-
graph and inserting a semicolon; 
(6) by striking paragraph (54) and inserting the 
following: 
‘‘(54) The term ‘transfer’ means—
‘‘(A) the creation of a lien; 
‘‘(B) the retention of title as a security in-
terest; 
‘‘(C) the foreclosure of a debtor’s equity of 
redemption; or
402
‘‘(D) each mode, direct or indirect, absolute 
or conditional, voluntary or involuntary, of dis-
posing of or parting with—
‘‘(i) property; or 
‘‘(ii) an interest in property;’’; 
(7) by indenting the left margin of paragraph 
(54A) 2 ems to the right; and 
(8) in each of paragraphs (1) through (35), in 
each of paragraphs (36), (37), (38A), (38B) and 
(39A), and in each of paragraphs (40) through (55), 
by striking the semicolon at the end and inserting a 
period. 
SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS. 
Section 104 of title 11, United States Code, is amended 
by inserting ‘‘522(f)(3),’’ after ‘‘522(d),’’ each place it ap-
pears. 
SEC. 1203. EXTENSION OF TIME. 
Section 108(c)(2) of title 11, United States Code, is 
amended by striking ‘‘922’’ and all that follows through 
‘‘or’’, and inserting ‘‘922, 1201, or’’. 
SEC. 1204. TECHNICAL AMENDMENTS. 
Title 11, United States Code, is amended—
(1) in section 109(b)(2), by striking ‘‘subsection 
(c) or (d) of’’; and
404
(1) by transferring paragraph (15), as added by 
section 304(e) of Public Law 103–394 (108 Stat. 
4133), so as to insert such paragraph after subsection 
(a)(14A); 
(2) in subsection (a)(9), by striking ‘‘motor vehi-
cle’’ and inserting ‘‘motor vehicle, vessel, or aircraft’’; 
and 
(3) in subsection (e), by striking ‘‘a insured’’ 
and inserting ‘‘an insured’’. 
SEC. 1210. EFFECT OF DISCHARGE. 
Section 524(a)(3) of title 11, United States Code, is 
amended by striking ‘‘section 523’’ and all that follows 
through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1), 
or 1328(a)(1), or that’’. 
SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREAT-
MENT. 
Section 525(c) of title 11, United States Code, is 
amended—
(1) in paragraph (1), by inserting ‘‘student’’ be-
fore ‘‘grant’’ the second place it appears; and 
(2) in paragraph (2), by striking ‘‘the program 
operated under part B, D, or E of’’ and inserting 
‘‘any program operated under’’.
405
SEC. 1212. PROPERTY OF THE ESTATE. 
Section 541(b)(4)(B)(ii) of title 11, United States 
Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’. 
SEC. 1213. PREFERENCES. 
(a) IN GENERAL.—Section 547 of title 11, United 
States Code, as amended by section 201, is amended—
(1) in subsection (b), by striking ‘‘subsection (c)’’ 
and inserting ‘‘subsections (c) and (i)’’; and 
(2) by adding at the end the following: 
‘‘(i) If the trustee avoids under subsection (b) a trans-
fer made between 90 days and 1 year before the date of 
the filing of the petition, by the debtor to an entity that 
is not an insider for the benefit of a creditor that is an 
insider, such transfer shall be considered to be avoided 
under this section only with respect to the creditor that is 
an insider.’’. 
(b) APPLICABILITY.—The amendments made by this 
section shall apply to any case that is pending or com-
menced on or after the date of enactment of this Act. 
SEC. 1214. POSTPETITION TRANSACTIONS. 
Section 549(c) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘an interest in’’ after ‘‘transfer 
of’’ each place it appears; 
(2) by striking ‘‘such property’’ and inserting 
‘‘such real property’’; and
406
(3) by striking ‘‘the interest’’ and inserting 
‘‘such interest’’. 
SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE. 
Section 726(b) of title 11, United States Code, is 
amended by striking ‘‘1009,’’. 
SEC. 1216. GENERAL PROVISIONS. 
Section 901(a) of title 11, United States Code, is 
amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’. 
SEC. 1217. ABANDONMENT OF RAILROAD LINE. 
Section 1170(e)(1) of title 11, United States Code, is 
amended by striking ‘‘section 11347’’ and inserting ‘‘section 
11326(a)’’. 
SEC. 1218. CONTENTS OF PLAN. 
Section 1172(c)(1) of title 11, United States Code, is 
amended by striking ‘‘section 11347’’ and inserting ‘‘section 
11326(a)’’. 
SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS. 
Section 1334(d) of title 28, United States Code, is 
amended—
(1) by striking ‘‘made under this subsection’’ and 
inserting ‘‘made under subsection (c)’’; and 
(2) by striking ‘‘This subsection’’ and inserting 
‘‘Subsection (c) and this subsection’’.
407
SEC. 1220. KNOWING DISREGARD OF BANKRUPTCY LAW OR 
RULE. 
Section 156(a) of title 18, United States Code, is 
amended—
(1) in the first undesignated paragraph—
(A) by inserting ‘‘(1) the term’’ before 
‘‘ ‘bankruptcy’’; and 
(B) by striking the period at the end and 
inserting ‘‘; and’’; and 
(2) in the second undesignated paragraph—
(A) by inserting ‘‘(2) the term’’ before ‘‘ ‘doc-
ument’’; and 
(B) by striking ‘‘this title’’ and inserting 
‘‘title 11’’. 
SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE 
CORPORATIONS. 
(a) SALE OF PROPERTY OF ESTATE.—Section 363(d) 
of title 11, United States Code, is amended by striking 
‘‘only’’ and all that follows through the end of the subsection 
and inserting ‘‘only—
‘‘(1) in accordance with applicable nonbank-
ruptcy law that governs the transfer of property by 
a corporation or trust that is not a moneyed, busi-
ness, or commercial corporation or trust; and
408
‘‘(2) to the extent not inconsistent with any relief 
granted under subsection (c), (d), (e), or (f) of section 
362.’’. 
(b) CONFIRMATION OF PLAN OF REORGANIZATION.—
Section 1129(a) of title 11, United States Code, as amended 
by sections 213 and 321, is amended by adding at the end 
the following: 
‘‘(16) All transfers of property of the plan shall 
be made in accordance with any applicable provisions 
of nonbankruptcy law that govern the transfer of 
property by a corporation or trust that is not a 
moneyed, business, or commercial corporation or 
trust.’’. 
(c) TRANSFER OF PROPERTY.—Section 541 of title 11, 
United States Code, as amended by section 225, is amended 
by adding at the end the following: 
‘‘(f) Notwithstanding any other provision of this title, 
property that is held by a debtor that is a corporation de-
scribed in section 501(c)(3) of the Internal Revenue Code 
of 1986 and exempt from tax under section 501(a) of such 
Code may be transferred to an entity that is not such a 
corporation, but only under the same conditions as would 
apply if the debtor had not filed a case under this title.’’. 
(d) APPLICABILITY.—The amendments made by this 
section shall apply to a case pending under title 11, United
409
States Code, on the date of enactment of this Act, or filed 
under that title on or after that date of enactment, except 
that the court shall not confirm a plan under chapter 11 
of title 11, United States Code, without considering whether 
this section would substantially affect the rights of a party 
in interest who first acquired rights with respect to the debt-
or after the date of the filing of the petition. The parties 
who may appear and be heard in a proceeding under this 
section include the attorney general of the State in which 
the debtor is incorporated, was formed, or does business. 
(e) RULE OF CONSTRUCTION.—Nothing in this section 
shall be construed to require the court in which a case under 
chapter 11 of title 11, United States Code, is pending to 
remand or refer any proceeding, issue, or controversy to any 
other court or to require the approval of any other court 
for the transfer of property. 
SEC. 1222. PROTECTION OF VALID PURCHASE MONEY SECU-
RITY INTERESTS. 
Section 547(c)(3)(B) of title 11, United States Code, 
is amended by striking ‘‘20’’ and inserting ‘‘30’’.
SEC. 1223. BANKRUPTCY JUDGESHIPS. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘Bankruptcy Judgeship Act of 2003’’. 
(b) TEMPORARY JUDGESHIPS.—
410
(1) APPOINTMENTS.—The following bankruptcy 
judges shall be appointed in the manner prescribed in 
section 152(a)(1) of title 28, United States Code, for 
the appointment of bankruptcy judges provided for in 
section 152(a)(2) of such title: 
(A) One additional bankruptcy judge for the 
eastern district of California. 
(B) Three additional bankruptcy judges for 
the central district of California. 
(C) Four additional bankruptcy judges for 
the district of Delaware. 
(D) Two additional bankruptcy judges for 
the southern district of Florida. 
(E) One additional bankruptcy judge for 
the southern district of Georgia. 
(F) Three additional bankruptcy judges for 
the district of Maryland.
(G) One additional bankruptcy judge for 
the eastern district of Michigan. 
(H) One additional bankruptcy judge for 
the southern district of Mississippi. 
(I) One additional bankruptcy judge for the 
district of New Jersey. 
(J) One additional bankruptcy judge for the 
eastern district of New York.
411
(K) One additional bankruptcy judge for 
the northern district of New York. 
(L) One additional bankruptcy judge for the 
southern district of New York. 
(M) One additional bankruptcy judge for 
the eastern district of North Carolina. 
(N) One additional bankruptcy judge for 
the eastern district of Pennsylvania. 
(O) One additional bankruptcy judge for 
the middle district of Pennsylvania. 
(P) One additional bankruptcy judge for the 
district of Puerto Rico. 
(Q) One additional bankruptcy judge for 
the western district of Tennessee. 
(R) One additional bankruptcy judge for 
the eastern district of Virginia. 
(S) One additional bankruptcy judge for the 
district of South Carolina. 
(T) One additional bankruptcy judge for the 
district of Nevada. 
(2) VACANCIES.—
(A) DISTRICTS
WITH
SINGLE
APPOINT-
MENTS.—Except as provided in subparagraphs 
(B), (C), (D), and (E), the first vacancy occur-
ring in the office of bankruptcy judge in each of
412
the judicial districts set forth in paragraph 
(1)—
(i) occurring 5 years or more after the 
appointment date of the bankruptcy judge 
appointed under paragraph (1) to such of-
fice; and 
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge; 
shall not be filled. 
(B) CENTRAL DISTRICT OF CALIFORNIA.—
The 1st, 2d, and 3d vacancies in the office of 
bankruptcy judge in the central district of Cali-
fornia—
(i) occurring 5 years or more after the 
respective 1st, 2d, and 3d appointment 
dates of the bankruptcy judges appointed 
under paragraph (1)(B); and 
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge; 
shall not be filled. 
(C) DISTRICT OF DELAWARE.—The 1st, 2d, 
3d, and 4th vacancies in the office of bankruptcy 
judge in the district of Delaware—
413
(i) occurring 5 years or more after the 
respective 1st, 2d, 3d, and 4th appointment 
dates of the bankruptcy judges appointed 
under paragraph (1)(F); and 
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge; 
shall not be filled. 
(D) SOUTHERN
DISTRICT
OF
FLORIDA.—
The 1st and 2d vacancies in the office of bank-
ruptcy judge in the southern district of Flor-
ida—
(i) occurring 5 years or more after the 
respective 1st and 2d appointment dates of 
the bankruptcy judges appointed under 
paragraph (1)(D); and 
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge; 
shall not be filled. 
(E) DISTRICT OF MARYLAND.—The 1st, 2d, 
and 3d vacancies in the office of bankruptcy 
judge in the district of Maryland—
(i) occurring 5 years or more after the 
respective 1st, 2d, and 3d appointment
415
(d) TECHNICAL AMENDMENTS.—Section 152(a) of title 
28, United States Code, is amended—
(1) in paragraph (1), by striking the first sen-
tence and inserting the following: ‘‘Each bankruptcy 
judge to be appointed for a judicial district, as pro-
vided in paragraph (2), shall be appointed by the 
court of appeals of the United States for the circuit 
in which such district is located.’’; and 
(2) in paragraph (2)—
(A) in the item relating to the middle dis-
trict of Georgia, by striking ‘‘2’’ and inserting 
‘‘3’’; and 
(B) in the collective item relating to the 
middle and southern districts of Georgia, by 
striking ‘‘Middle and Southern . . . . . . 1’’.
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
SEC. 1224. COMPENSATING TRUSTEES. 
Section 1326 of title 11, United States Code, is amend-
ed—
(1) in subsection (b)—
(A) in paragraph (1), by striking ‘‘and’’; 
(B) in paragraph (2), by striking the period 
at the end and inserting ‘‘; and’’; and
416
(C) by adding at the end the following: 
‘‘(3) if a chapter 7 trustee has been allowed com-
pensation due to the conversion or dismissal of the 
debtor’s prior case pursuant to section 707(b), and 
some portion of that compensation remains unpaid in 
a case converted to this chapter or in the case dis-
missed under section 707(b) and refiled under this 
chapter, the amount of any such unpaid compensa-
tion, which shall be paid monthly—
‘‘(A) by prorating such amount over the re-
maining duration of the plan; and 
‘‘(B) by monthly payments not to exceed the 
greater of—
‘‘(i) $25; or 
‘‘(ii) the amount payable to unsecured 
nonpriority creditors, as provided by the 
plan, multiplied by 5 percent, and the re-
sult divided by the number of months in the 
plan.’’; and 
(2) by adding at the end the following: 
‘‘(d) Notwithstanding any other provision of this 
title—
‘‘(1) compensation referred to in subsection 
(b)(3) is payable and may be collected by the trustee
417
under that paragraph, even if such amount has been 
discharged in a prior case under this title; and 
‘‘(2) such compensation is payable in a case 
under this chapter only to the extent permitted by 
subsection (b)(3).’’. 
SEC. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, 
UNITED STATES CODE. 
Section 362(b)(18) of title 11, United States Code, is 
amended to read as follows: 
‘‘(18) under subsection (a) of the creation or per-
fection of a statutory lien for an ad valorem property 
tax, or a special tax or special assessment on real 
property whether or not ad valorem, imposed by a 
governmental unit, if such tax or assessment comes 
due after the date of the filing of the petition;’’. 
SEC. 1226. JUDICIAL EDUCATION. 
The Director of the Federal Judicial Center, in con-
sultation with the Director of the Executive Office for 
United States Trustees, shall develop materials and conduct 
such training as may be useful to courts in implementing 
this Act and the amendments made by this Act, including 
the requirements relating to the means test under section 
707(b), and reaffirmation agreements under section 524, of 
title 11 of the United States Code, as amended by this Act.
418
SEC. 1227. RECLAMATION. 
(a) RIGHTS AND POWERS OF THE TRUSTEE.—Section 
546(c) of title 11, United States Code, is amended to read 
as follows: 
‘‘(c)(1) Except as provided in subsection (d) of this sec-
tion and in section 507(c), and subject to the prior rights 
of a holder of a security interest in such goods or the pro-
ceeds thereof, the rights and powers of the trustee under sec-
tions 544(a), 545, 547, and 549 are subject to the right of 
a seller of goods that has sold goods to the debtor, in the 
ordinary course of such seller’s business, to reclaim such 
goods if the debtor has received such goods while insolvent, 
within 45 days before the date of the commencement of a 
case under this title, but such seller may not reclaim such 
goods unless such seller demands in writing reclamation of 
such goods—
‘‘(A) not later than 45 days after the date of re-
ceipt of such goods by the debtor; or 
‘‘(B) not later than 20 days after the date of 
commencement of the case, if the 45-day period ex-
pires after the commencement of the case. 
‘‘(2) If a seller of goods fails to provide notice in the 
manner described in paragraph (1), the seller still may as-
sert the rights contained in section 503(b)(9).’’.
419
(b) ADMINISTRATIVE EXPENSES.—Section 503(b) of 
title 11, United States Code, as amended by sections 445 
and 1103, is amended by adding at the end the following: 
‘‘(9) the value of any goods received by the debtor 
within 20 days before the date of commencement of a 
case under this title in which the goods have been sold 
to the debtor in the ordinary course of such debtor’s 
business.’’. 
SEC. 1228. PROVIDING REQUESTED TAX DOCUMENTS TO 
THE COURT. 
(a) CHAPTER 7 CASES.—The court shall not grant a 
discharge in the case of an individual who is a debtor in 
a case under chapter 7 of title 11, United States Code, un-
less requested tax documents have been provided to the 
court. 
(b) CHAPTER 11 AND CHAPTER 13 CASES.—The court 
shall not confirm a plan of reorganization in the case of 
an individual under chapter 11 or 13 of title 11, United 
States Code, unless requested tax documents have been filed 
with the court. 
(c) DOCUMENT RETENTION.—The court shall destroy 
documents submitted in support of a bankruptcy claim not 
sooner than 3 years after the date of the conclusion of a 
case filed by an individual under chapter 7, 11, or 13 of 
title 11, United States Code. In the event of a pending audit
420
or enforcement action, the court may extend the time for 
destruction of such requested tax documents. 
SEC. 1229. ENCOURAGING CREDITWORTHINESS. 
(a) SENSE OF THE CONGRESS.—It is the sense of the 
Congress that—
(1) certain lenders may sometimes offer credit to 
consumers indiscriminately, without taking steps to 
ensure that consumers are capable of repaying the re-
sulting debt, and in a manner which may encourage 
certain consumers to accumulate additional debt; and 
(2) resulting consumer debt may increasingly be 
a major contributing factor to consumer insolvency. 
(b) STUDY REQUIRED.—The Board of Governors of the 
Federal Reserve System (hereafter in this section referred 
to as the ‘‘Board’’) shall conduct a study of—
(1) consumer credit industry practices of solic-
iting and extending credit—
(A) indiscriminately; 
(B) without taking steps to ensure that con-
sumers are capable of repaying the resulting 
debt; and 
(C) in a manner that encourages consumers 
to accumulate additional debt; and 
(2) the effects of such practices on consumer debt 
and insolvency.
421
(c) REPORT AND REGULATIONS.—Not later than 12 
months after the date of enactment of this Act, the Board—
(1) shall make public a report on its findings 
with respect to the indiscriminate solicitation and ex-
tension of credit by the credit industry; 
(2) may issue regulations that would require ad-
ditional disclosures to consumers; and 
(3) may take any other actions, consistent with 
its existing statutory authority, that the Board finds 
necessary to ensure responsible industrywide practices 
and to prevent resulting consumer debt and insol-
vency. 
SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMP-
TION. 
Section 541(b) of title 11, United States Code, as 
amended by sections 225 and 323, is amended by adding 
after paragraph (7), as added by section 323, the following: 
‘‘(8) subject to subchapter III of chapter 5, any 
interest of the debtor in property where the debtor 
pledged or sold tangible personal property (other than 
securities or written or printed evidences of indebted-
ness or title) as collateral for a loan or advance of 
money given by a person licensed under law to make 
such loans or advances, where—
422
‘‘(A) the tangible personal property is in the 
possession of the pledgee or transferee; 
‘‘(B) the debtor has no obligation to repay 
the money, redeem the collateral, or buy back the 
property at a stipulated price; and 
‘‘(C) neither the debtor nor the trustee have 
exercised any right to redeem provided under the 
contract or State law, in a timely manner as 
provided under State law and section 108(b); 
or’’. 
SEC. 1231. TRUSTEES. 
(a) SUSPENSION AND TERMINATION OF PANEL TRUST-
EES AND STANDING TRUSTEES.—Section 586(d) of title 28, 
United States Code, is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 
(2) by adding at the end the following: 
‘‘(2) A trustee whose appointment under subsection 
(a)(1) or under subsection (b) is terminated or who ceases 
to be assigned to cases filed under title 11, United States 
Code, may obtain judicial review of the final agency deci-
sion by commencing an action in the district court of the 
United States for the district for which the panel to which 
the trustee is appointed under subsection (a)(1), or in the 
district court of the United States for the district in which 
the trustee is appointed under subsection (b) resides, after
423
first exhausting all available administrative remedies, 
which if the trustee so elects, shall also include an adminis-
trative hearing on the record. Unless the trustee elects to 
have an administrative hearing on the record, the trustee 
shall be deemed to have exhausted all administrative rem-
edies for purposes of this paragraph if the agency fails to 
make a final agency decision within 90 days after the trust-
ee requests administrative remedies. The Attorney General 
shall prescribe procedures to implement this paragraph. The 
decision of the agency shall be affirmed by the district court 
unless it is unreasonable and without cause based on the 
administrative record before the agency.’’. 
(b) EXPENSES
OF STANDING TRUSTEES.—Section 
586(e) of title 28, United States Code, is amended by add-
ing at the end the following: 
‘‘(3) After first exhausting all available administrative 
remedies, an individual appointed under subsection (b) 
may obtain judicial review of final agency action to deny 
a claim of actual, necessary expenses under this subsection 
by commencing an action in the district court of the United 
States for the district where the individual resides. The deci-
sion of the agency shall be affirmed by the district court 
unless it is unreasonable and without cause based upon the 
administrative record before the agency.
424
‘‘(4) The Attorney General shall prescribe procedures 
to implement this subsection.’’. 
SEC. 1232. BANKRUPTCY FORMS. 
Section 2075 of title 28, United States Code, is amend-
ed by adding at the end the following: 
‘‘The bankruptcy rules promulgated under this section 
shall prescribe a form for the statement required under sec-
tion 707(b)(2)(C) of title 11 and may provide general rules 
on the content of such statement.’’.
SEC. 1233. DIRECT APPEALS OF BANKRUPTCY MATTERS TO 
COURTS OF APPEALS. 
(a) APPEALS.—Section 158 of title 28, United States 
Code, is amended—
(1) in subsection (c)(1), by striking ‘‘Subject to 
subsection (b),’’ and inserting ‘‘Subject to subsections 
(b) and (d)(2),’’; and 
(2) in subsection (d)—
(A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 
(B) by adding at the end the following: 
‘‘(2)(A) The appropriate court of appeals shall have 
jurisdiction of appeals described in the first sentence of sub-
section (a) if the bankruptcy court, the district court, or 
the bankruptcy appellate panel involved, acting on its own 
motion or on the request of a party to the judgment, order,
425
or decree described in such first sentence, or all the appel-
lants and appellees (if any) acting jointly, certify that—
‘‘(i) the judgment, order, or decree involves a 
question of law as to which there is no controlling de-
cision of the court of appeals for the circuit or of the 
Supreme Court of the United States, or involves a 
matter of public importance; 
‘‘(ii) the judgment, order, or decree involves a 
question of law requiring resolution of conflicting de-
cisions; or 
‘‘(iii) an immediate appeal from the judgment, 
order, or decree may materially advance the progress 
of the case or proceeding in which the appeal is taken; 
and if the court of appeals authorizes the direct appeal of 
the judgment, order, or decree. 
‘‘(B) If the bankruptcy court, the district court, or the 
bankruptcy appellate panel—
‘‘(i) on its own motion or on the request of a 
party, determines that a circumstance specified in 
clause (i), (ii), or (iii) of subparagraph (A) exists; or 
‘‘(ii) receives a request made by a majority of the 
appellants and a majority of appellees (if any) to 
make the certification described in subparagraph (A);
426
then the bankruptcy court, the district court, or the bank-
ruptcy appellate panel shall make the certification described 
in subparagraph (A). 
‘‘(C) The parties may supplement the certification 
with a short statement of the basis for the certification. 
‘‘(D) An appeal under this paragraph does not stay 
any proceeding of the bankruptcy court, the district court, 
or the bankruptcy appellate panel from which the appeal 
is taken, unless the respective bankruptcy court, district 
court, or bankruptcy appellate panel, or the court of appeals 
in which the appeal in pending, issues a stay of such pro-
ceeding pending the appeal. 
‘‘(E) Any request under subparagraph (B) for certifi-
cation shall be made not later than 60 days after the entry 
of the judgment, order, or decree.’’. 
(b) PROCEDURAL RULES.—
(1) TEMPORARY APPLICATION.—A provision of 
this subsection shall apply to appeals under section 
158(d)(2) of title 28, United States Code, until a rule 
of practice and procedure relating to such provision 
and such appeals is promulgated or amended under 
chapter 131 of such title. 
(2) CERTIFICATION.—A district court, a bank-
ruptcy court, or a bankruptcy appellate panel may 
make a certification under section 158(d)(2) of title
427
28, United States Code, only with respect to matters 
pending in the respective bankruptcy court, district 
court, or bankruptcy appellate panel. 
(3) PROCEDURE.—Subject to any other provision 
of this subsection, an appeal authorized by the court 
of appeals under section 158(d)(2)(A) of title 28, 
United States Code, shall be taken in the manner pre-
scribed in subdivisions (a)(1), (b), (c), and (d) of rule 
5 of the Federal Rules of Appellate Procedure. For 
purposes of subdivision (a)(1) of rule 5—
(A) a reference in such subdivision to a dis-
trict court shall be deemed to include a reference 
to a bankruptcy court and a bankruptcy appel-
late panel, as appropriate; and 
(B) a reference in such subdivision to the 
parties requesting permission to appeal to be 
served with the petition shall be deemed to in-
clude a reference to the parties to the judgment, 
order, or decree from which the appeal is taken. 
(4) FILING OF PETITION WITH ATTACHMENT.—A 
petition requesting permission to appeal, that is based 
on a certification made under subparagraph (A) or 
(B) of section 158(d)(2) shall—
(A) be filed with the circuit clerk not later 
than 10 days after the certification is entered on
428
the docket of the bankruptcy court, the district 
court, or the bankruptcy appellate panel from 
which the appeal is taken; and 
(B) have attached a copy of such certifi-
cation. 
(5) REFERENCES IN RULE 5.—For purposes of 
rule 5 of the Federal Rules of Appellate Procedure—
(A) a reference in such rule to a district 
court shall be deemed to include a reference to a 
bankruptcy court and to a bankruptcy appellate 
panel; and 
(B) a reference in such rule to a district 
clerk shall be deemed to include a reference to a 
clerk of a bankruptcy court and to a clerk of a 
bankruptcy appellate panel. 
(6) APPLICATION OF RULES.—The Federal Rules 
of Appellate Procedure shall apply in the courts of 
appeals with respect to appeals authorized under sec-
tion 158(d)(2)(A), to the extent relevant and as if 
such appeals were taken from final judgments, orders, 
or decrees of the district courts or bankruptcy appel-
late panels exercising appellate jurisdiction under 
subsection (a) or (b) of section 158 of title 28, United 
States Code.
429
SEC. 1234. INVOLUNTARY CASES. 
(a) AMENDMENTS.—Section 303 of title 11, United 
States Code, is amended—
(1) in subsection (b)(1), by—
(A) inserting ‘‘as to liability or amount’’ 
after ‘‘bona fide dispute’’; and 
(B) striking ‘‘if such claims’’ and inserting 
‘‘if such noncontingent, undisputed claims’’; and 
(2) in subsection (h)(1), by inserting ‘‘as to li-
ability or amount’’ before the semicolon at the end. 
(b) EFFECTIVE
DATE; APPLICATION
OF
AMEND-
MENTS.—This section and the amendments made by this 
section shall take effect on the date of the enactment of this 
Act and shall not apply with respect to cases commenced 
under title 11 of the United States Code before such date. 
SEC. 1235. FEDERAL ELECTION LAW FINES AND PENALTIES 
AS NONDISCHARGEABLE DEBT. 
Section 523(a) of title 11, United States Code, as 
amended by section 314, is amended by inserting after 
paragraph (14A) the following: 
‘‘(14B) incurred to pay fines or penalties im-
posed under Federal election law;’’.
430
TITLE XIII—CONSUMER CREDIT 
DISCLOSURE 
SEC. 1301. ENHANCED DISCLOSURES UNDER AN OPEN END 
CREDIT PLAN. 
(a) 
MINIMUM
PAYMENT
DISCLOSURES.—Section 
127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) 
is amended by adding at the end the following: 
‘‘(11)(A) In the case of an open end credit plan 
that requires a minimum monthly payment of not 
more than 4 percent of the balance on which finance 
charges are accruing, the following statement, located 
on the front of the billing statement, disclosed clearly 
and conspicuously: ‘Minimum Payment Warning: 
Making only the minimum payment will increase the 
interest you pay and the time it takes to repay your 
balance. For example, making only the typical 2% 
minimum monthly payment on a balance of $1,000 
at an interest rate of 17% would take 88 months to 
repay the balance in full. For an estimate of the time 
it would take to repay your balance, making only 
minimum payments, call this toll-free number: 
llllll.’ (the blank space to be filled in by the 
creditor). 
‘‘(B) In the case of an open end credit plan that 
requires a minimum monthly payment of more than
431
4 percent of the balance on which finance charges are 
accruing, the following statement, in a prominent lo-
cation on the front of the billing statement, disclosed 
clearly and conspicuously: ‘Minimum Payment 
Warning: Making only the required minimum pay-
ment will increase the interest you pay and the time 
it takes to repay your balance. Making a typical 5% 
minimum monthly payment on a balance of $300 at 
an interest rate of 17% would take 24 months to 
repay the balance in full. For an estimate of the time 
it would take to repay your balance, making only 
minimum monthly payments, call this toll-free num-
ber: llllll.’ (the blank space to be filled in 
by the creditor). 
‘‘(C) Notwithstanding subparagraphs (A) and 
(B), in the case of a creditor with respect to which 
compliance with this title is enforced by the Federal 
Trade Commission, the following statement, in a 
prominent location on the front of the billing state-
ment, disclosed clearly and conspicuously: ‘Minimum 
Payment Warning: Making only the required min-
imum payment will increase the interest you pay and 
the time it takes to repay your balance. For example, 
making only the typical 5% minimum monthly pay-
ment on a balance of $300 at an interest rate of 17%
432
would take 24 months to repay the balance in full. 
For an estimate of the time it would take to repay 
your balance, making only minimum monthly pay-
ments, call the Federal Trade Commission at this toll-
free number: llllll.’ (the blank space to be 
filled in by the creditor). A creditor who is subject to 
this subparagraph shall not be subject to subpara-
graph (A) or (B). 
‘‘(D) Notwithstanding subparagraph (A), (B), or 
(C), in complying with any such subparagraph, a 
creditor may substitute an example based on an in-
terest rate that is greater than 17 percent. Any cred-
itor that is subject to subparagraph (B) may elect to 
provide the disclosure required under subparagraph 
(A) in lieu of the disclosure required under subpara-
graph (B). 
‘‘(E) The Board shall, by rule, periodically recal-
culate, as necessary, the interest rate and repayment 
period under subparagraphs (A), (B), and (C). 
‘‘(F)(i) The toll-free telephone number disclosed 
by a creditor or the Federal Trade Commission under 
subparagraph (A), (B), or (G), as appropriate, may 
be a toll-free telephone number established and main-
tained by the creditor or the Federal Trade Commis-
sion, as appropriate, or may be a toll-free telephone
433
number established and maintained by a third party 
for use by the creditor or multiple creditors or the 
Federal Trade Commission, as appropriate. The toll-
free telephone number may connect consumers to an 
automated device through which consumers may ob-
tain information described in subparagraph (A), (B), 
or (C), by inputting information using a touch-tone 
telephone or similar device, if consumers whose tele-
phones are not equipped to use such automated device 
are provided the opportunity to be connected to an in-
dividual from whom the information described in sub-
paragraph (A), (B), or (C), as applicable, may be ob-
tained. A person that receives a request for informa-
tion described in subparagraph (A), (B), or (C) from 
an obligor through the toll-free telephone number dis-
closed under subparagraph (A), (B), or (C), as appli-
cable, shall disclose in response to such request only 
the information set forth in the table promulgated by 
the Board under subparagraph (H)(i). 
‘‘(ii)(I) The Board shall establish and maintain 
for a period not to exceed 24 months following the ef-
fective date of the Bankruptcy Abuse Prevention and 
Consumer Protection Act of 2003, a toll-free telephone 
number, or provide a toll-free telephone number estab-
lished and maintained by a third party, for use by
434
creditors that are depository institutions (as defined 
in section 3 of the Federal Deposit Insurance Act), in-
cluding a Federal credit union or State credit union 
(as defined in section 101 of the Federal Credit Union 
Act), with total assets not exceeding $250,000,000. 
The toll-free telephone number may connect consumers 
to an automated device through which consumers may 
obtain information described in subparagraph (A) or 
(B), as applicable, by inputting information using a 
touch-tone telephone or similar device, if consumers 
whose telephones are not equipped to use such auto-
mated device are provided the opportunity to be con-
nected to an individual from whom the information 
described in subparagraph (A) or (B), as applicable, 
may be obtained. A person that receives a request for 
information described in subparagraph (A) or (B) 
from an obligor through the toll-free telephone number 
disclosed under subparagraph (A) or (B), as applica-
ble, shall disclose in response to such request only the 
information set forth in the table promulgated by the 
Board under subparagraph (H)(i). The dollar amount 
contained in this subclause shall be adjusted accord-
ing to an indexing mechanism established by the 
Board.
435
‘‘(II) Not later than 6 months prior to the expi-
ration of the 24-month period referenced in subclause 
(I), the Board shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the 
House of Representatives a report on the program de-
scribed in subclause (I). 
‘‘(G) The Federal Trade Commission shall estab-
lish and maintain a toll-free number for the purpose 
of providing to consumers the information required to 
be disclosed under subparagraph (C). 
‘‘(H) The Board shall— 
‘‘(i) establish a detailed table illustrating 
the approximate number of months that it would 
take to repay an outstanding balance if a con-
sumer pays only the required minimum monthly 
payments and if no other advances are made, 
which table shall clearly present standardized in-
formation to be used to disclose the information 
required to be disclosed under subparagraph (A), 
(B), or (C), as applicable; 
‘‘(ii) establish the table required under 
clause (i) by assuming—
‘‘(I) a significant number of different 
annual percentage rates;
436
‘‘(II) a significant number of different 
account balances; 
‘‘(III) a significant number of different 
minimum payment amounts; and 
‘‘(IV) that only minimum monthly 
payments are made and no additional ex-
tensions of credit are obtained; and 
‘‘(iii) promulgate regulations that provide 
instructional guidance regarding the manner in 
which the information contained in the table es-
tablished under clause (i) should be used in re-
sponding to the request of an obligor for any in-
formation required to be disclosed under sub-
paragraph (A), (B), or (C). 
‘‘(I) The disclosure requirements of this para-
graph do not apply to any charge card account, the 
primary purpose of which is to require payment of 
charges in full each month. 
‘‘(J) A creditor that maintains a toll-free tele-
phone number for the purpose of providing customers 
with the actual number of months that it will take to 
repay the customer’s outstanding balance is not sub-
ject to the requirements of subparagraph (A) or (B). 
‘‘(K) A creditor that maintains a toll-free tele-
phone number for the purpose of providing customers
437
with the actual number of months that it will take to 
repay an outstanding balance shall include the fol-
lowing statement on each billing statement: ‘Making 
only the minimum payment will increase the interest 
you pay and the time it takes to repay your balance. 
For more information, call this toll-free number: 
llll.’ (the blank space to be filled in by the 
creditor).’’. 
(b) REGULATORY IMPLEMENTATION.—
(1) IN GENERAL.—The Board of Governors of the 
Federal Reserve System (hereafter in this title re-
ferred to as the ‘‘Board’’) shall promulgate regula-
tions implementing the requirements of section 
127(b)(11) of the Truth in Lending Act, as added by 
subsection (a) of this section. 
(2) EFFECTIVE DATE.—Section 127(b)(11) of the 
Truth in Lending Act, as added by subsection (a) of 
this section, and the regulations issued under para-
graph (1) of this subsection shall not take effect until 
the later of—
(A) 18 months after the date of enactment 
of this Act; or 
(B) 12 months after the publication of such 
final regulations by the Board. 
(c) STUDY OF FINANCIAL DISCLOSURES.—
438
(1) IN GENERAL.—The Board may conduct a 
study to determine the types of information available 
to potential borrowers from consumer credit lending 
institutions regarding factors qualifying potential 
borrowers for credit, repayment requirements, and the 
consequences of default. 
(2) FACTORS
FOR
CONSIDERATION.—In con-
ducting a study under paragraph (1), the Board 
should, in consultation with the other Federal bank-
ing agencies (as defined in section 3 of the Federal 
Deposit Insurance Act), the National Credit Union 
Administration, and the Federal Trade Commission, 
consider the extent to which—
(A) consumers, in establishing new credit 
arrangements, are aware of their existing pay-
ment obligations, the need to consider those obli-
gations in deciding to take on new credit, and 
how taking on excessive credit can result in fi-
nancial difficulty; 
(B) minimum periodic payment features of-
fered in connection with open end credit plans 
impact consumer default rates; 
(C) consumers make only the required min-
imum payment under open end credit plans;
439
(D) consumers are aware that making only 
required minimum payments will increase the 
cost and repayment period of an open end credit 
obligation; and 
(E) the availability of low minimum pay-
ment options is a cause of consumers experi-
encing financial difficulty. 
(3) REPORT
TO
CONGRESS.—Findings of the 
Board in connection with any study conducted under 
this subsection shall be submitted to Congress. Such 
report shall also include recommendations for legisla-
tive initiatives, if any, of the Board, based on its 
findings. 
SEC. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTEN-
SIONS SECURED BY A DWELLING. 
(a) OPEN END CREDIT EXTENSIONS.—
(1) CREDIT APPLICATIONS.—Section 127A(a)(13) 
of the Truth in Lending Act (15 U.S.C. 1637a(a)(13)) 
is amended—
(A) by striking ‘‘CONSULTATION OF TAX AD-
VISER.—A statement that the’’ and inserting the 
following: ‘‘TAX
DEDUCTIBILITY.—A statement 
that—
‘‘(A) the’’; and
440
(B) by striking the period at the end and 
inserting the following: ‘‘; and 
‘‘(B) in any case in which the extension of 
credit exceeds the fair market value (as defined 
under the Internal Revenue Code of 1986) of the 
dwelling, the interest on the portion of the credit 
extension that is greater than the fair market 
value of the dwelling is not tax deductible for 
Federal income tax purposes.’’. 
(2) CREDIT ADVERTISEMENTS.—Section 147(b) 
of the Truth in Lending Act (15 U.S.C. 1665b(b)) is 
amended—
(A) by striking ‘‘If any’’ and inserting the 
following: 
‘‘(1) IN GENERAL.—If any’’; and 
(B) by adding at the end the following: 
‘‘(2) CREDIT
IN
EXCESS
OF
FAIR
MARKET 
VALUE.—Each advertisement described in subsection 
(a) that relates to an extension of credit that may ex-
ceed the fair market value of the dwelling, and which 
advertisement is disseminated in paper form to the 
public or through the Internet, as opposed to by radio 
or television, shall include a clear and conspicuous 
statement that—