176
voluntary case under chapter 7 or 13 fails to file all of 
the information required under subsection (a)(1) within 
45 days after the filing of the petition commencing the 
case, the case shall be automatically dismissed effective 
on the 46th day after the filing of the petition. 
‘‘(2) Subject to paragraph (4) and with respect to 
a case described in paragraph (1), any party in interest 
may request the court to enter an order dismissing the 
case. If requested, the court shall enter an order of dis-
missal not later than 5 days after such request. 
‘‘(3) Subject to paragraph (4) and upon request of 
the debtor made within 45 days after the filing of the peti-
tion commencing a case described in paragraph (1), the 
court may allow the debtor an additional period of not to 
exceed 45 days to file the information required under sub-
section (a)(1) if the court finds justification for extending 
the period for the filing. 
‘‘(4) Notwithstanding any other provision of this sub-
section, on the motion of the trustee filed before the expi-
ration of the applicable period of time specified in para-
graph (1), (2), or (3), and after notice and a hearing, the 
court may decline to dismiss the case if the court finds 
that the debtor attempted in good faith to file all the infor-
mation required by subsection (a)(1)(B)(iv) and that the
177
best interests of creditors would be served by administra-
tion of the case.’’.
SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON 
CONFIRMATION OF THE PLAN. 
Section 1324 of title 11, United States Code, is 
amended—
(1) by striking ‘‘After’’ and inserting the fol-
lowing: 
‘‘(a) Except as provided in subsection (b) and after’’; 
and 
(2) by adding at the end the following: 
‘‘(b) The hearing on confirmation of the plan may 
be held not earlier than 20 days and not later than 45 
days after the date of the meeting of creditors under sec-
tion 341(a), unless the court determines that it would be 
in the best interests of the creditors and the estate to hold 
such hearing at an earlier date and there is no objection 
to such earlier date.’’. 
SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION 
IN CERTAIN CASES. 
Title 11, United States Code, is amended—
(1) by amending section 1322(d) to read as fol-
lows:
178
‘‘(d)(1) If the current monthly income of the debtor 
and the debtor’s spouse combined, when multiplied by 12, 
is not less than—
‘‘(A) in the case of a debtor in a household of 
1 person, the median family income of the applicable 
State for 1 earner; 
‘‘(B) in the case of a debtor in a household of 
2, 3, or 4 individuals, the highest median family in-
come of the applicable State for a family of the same 
number or fewer individuals; or 
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or 
fewer individuals, plus $525 per month for each in-
dividual in excess of 4, 
the plan may not provide for payments over a period that 
is longer than 5 years. 
‘‘(2) If the current monthly income of the debtor and 
the debtor’s spouse combined, when multiplied by 12, is 
less than—
‘‘(A) in the case of a debtor in a household of 
1 person, the median family income of the applicable 
State for 1 earner last; 
‘‘(B) in the case of a debtor in a household of 
2, 3, or 4 individuals, the highest median family in-
179
come of the applicable State for a family of the same 
number or fewer individuals; or 
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or 
fewer individuals, plus $525 per month for each in-
dividual in excess of 4, 
the plan may not provide for payments over a period that 
is longer than 3 years, unless the court, for cause, ap-
proves a longer period, but the court may not approve a 
period that is longer than 5 years.’’; 
(2) in section 1325(b)(1)(B), by striking 
‘‘three-year period’’ and inserting ‘‘applicable com-
mitment period’’; and 
(3) in section 1325(b), as amended by section 
102, by adding at the end the following: 
‘‘(4) For purposes of this subsection, the ‘applicable 
commitment period’—
‘‘(A) subject to subparagraph (B), shall be—
‘‘(i) 3 years; or 
‘‘(ii) not less than 5 years, if the current 
monthly income of the debtor and the debtor’s 
spouse combined, when multiplied by 12, is not 
less than—
180
‘‘(I) in the case of a debtor in a 
household of 1 person, the median family 
income of the applicable State for 1 earn-
er; 
‘‘(II) in the case of a debtor in a 
household of 2, 3, or 4 individuals, the 
highest median family income of the appli-
cable State for a family of the same num-
ber or fewer individuals; or 
‘‘(III) in the case of a debtor in a 
household exceeding 4 individuals, the 
highest median family income of the appli-
cable State for a family of 4 or fewer indi-
viduals, plus $525 per month for each indi-
vidual in excess of 4; and 
‘‘(B) may be less than 3 or 5 years, whichever 
is applicable under subparagraph (A), but only if the 
plan provides for payment in full of all allowed unse-
cured claims over a shorter period.’’; and 
(4) in section 1329(c), by striking ‘‘three 
years’’ and inserting ‘‘the applicable commitment pe-
riod under section 1325(b)(1)(B)’’.
181
SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF 
RULE 9011 OF THE FEDERAL RULES OF BANK-
RUPTCY PROCEDURE. 
It is the sense of Congress that rule 9011 of the Fed-
eral Rules of Bankruptcy Procedure (11 U.S.C. App.) 
should be modified to include a requirement that all docu-
ments (including schedules), signed and unsigned, sub-
mitted to the court or to a trustee by debtors who rep-
resent themselves and debtors who are represented by at-
torneys be submitted only after the debtors or the debtors’ 
attorneys have made reasonable inquiry to verify that the 
information contained in such documents is—
(1) well grounded in fact; and 
(2) warranted by existing law or a good faith 
argument for the extension, modification, or reversal 
of existing law. 
SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL 
CASES. 
Section 362(e) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and 
(2) by adding at the end the following: 
‘‘(2) Notwithstanding paragraph (1), in a case under 
chapter 7, 11, or 13 in which the debtor is an individual, 
the stay under subsection (a) shall terminate on the date
182
that is 60 days after a request is made by a party in inter-
est under subsection (d), unless—
‘‘(A) a final decision is rendered by the court 
during the 60-day period beginning on the date of 
the request; or 
‘‘(B) that 60-day period is extended—
‘‘(i) by agreement of all parties in interest; 
or 
‘‘(ii) by the court for such specific period 
of time as the court finds is required for good 
cause, as described in findings made by the 
court.’’.
SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS. 
(a) PROPERTY OF THE ESTATE.—
(1) IN GENERAL.—Subchapter I of chapter 11 
of title 11, United States Code, is amended by add-
ing at the end the following: 
‘‘§ 1115. Property of the estate 
‘‘(a) In a case concerning a debtor who is an indi-
vidual, property of the estate includes, in addition to the 
property specified in section 541—
‘‘(1) all property of the kind specified in section 
541 that the debtor acquires after the commence-
ment of the case but before the case is closed, dis-
183
missed, or converted to a case under chapter 7, 12, 
or 13, whichever occurs first; and 
‘‘(2) earnings from services performed by the 
debtor after the commencement of the case but be-
fore the case is closed, dismissed, or converted to a 
case under chapter 7, 12, or 13, whichever occurs 
first.’’. 
‘‘(b) Except as provided in section 1104 or a con-
firmed plan or order confirming a plan, the debtor shall 
remain in possession of all property of the estate.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter I of chapter 11 of title 11, 
United States Code, is amended by adding at the 
end the following:
‘‘1115. Property of the estate.’’.
(b) CONTENTS OF PLAN.—Section 1123(a) of title 
11, United States Code, is amended—
(1) in paragraph (6), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (7), by striking the period and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(8) in a case in which the debtor is an indi-
vidual, provide for the payment to creditors under 
the plan of all or such portion of earnings from per-
sonal services performed by the debtor after the
184
commencement of the case or other future income of 
the debtor as is necessary for the execution of the 
plan.’’. 
(c) CONFIRMATION OF PLAN.—
(1) REQUIREMENTS RELATING TO VALUE OF 
PROPERTY.—Section 1129(a) of title 11, United 
States Code, as amended by section 213, is amended 
by adding at the end the following: 
‘‘(15) In a case in which the debtor is an indi-
vidual and in which the holder of an allowed unse-
cured claim objects to the confirmation of the plan—
‘‘(A) the value, as of the effective date of 
the plan, of the property to be distributed 
under the plan on account of such claim is not 
less than the amount of such claim; or 
‘‘(B) the value of the property to be dis-
tributed under the plan is not less than the pro-
jected disposable income of the debtor (as de-
fined in section 1325(b)(2)) to be received dur-
ing the 5-year period beginning on the date that 
the first payment is due under the plan, or dur-
ing the period for which the plan provides pay-
ments, whichever is longer.’’.
(2) REQUIREMENT RELATING TO INTERESTS IN 
PROPERTY.—Section 1129(b)(2)(B)(ii) of title 11,
185
United States Code, is amended by inserting before 
the period at the end the following: ‘‘, except that 
in a case in which the debtor is an individual, the 
debtor may retain property included in the estate 
under section 1115, subject to the requirements of 
subsection (a)(14) of this section.’’.
(d) EFFECT OF CONFIRMATION.—Section 1141(d) of 
title 11, United States Code, is amended—
(1) in paragraph (2), by striking ‘‘The con-
firmation of a plan does not discharge an individual 
debtor’’ and inserting ‘‘A discharge under this chap-
ter does not discharge a debtor who is an indi-
vidual’’; and 
(2) by adding at the end the following: 
‘‘(5) In a case in which the debtor is an individual—
‘‘(A) unless after notice and a hearing the court 
orders otherwise for cause, confirmation of the plan 
does not discharge any debt provided for in the plan 
until the court grants a discharge on completion of 
all payments under the plan; 
‘‘(B) at any time after the confirmation of the 
plan, and after notice and a hearing, the court may 
not grant a discharge to the debtor who has not 
completed payments under the plan unless—
186
‘‘(i) for each allowed unsecured claim, the 
value, as of the effective date of the plan, of 
property actually distributed under the plan on 
account of that claim is not less than the 
amount that would have been paid on such 
claim if the estate of the debtor had been liq-
uidated under chapter 7 of this title on such 
date; and 
‘‘(ii) modification of the plan under section 
1127 of this title is not practicable; and’’. 
(e) MODIFICATION OF PLAN.—Section 1127 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘(e) If the debtor is an individual, the plan may be 
modified at any time after confirmation of the plan but 
before the completion of payments under the plan, whether 
or not the plan has been substantially consummated, upon 
request of the debtor, the trustee, the United States trust-
ee, or the holder of an allowed unsecured claim, to—
‘‘(1) increase or reduce the amount of payments 
on claims of a particular class provided for by the 
plan; 
‘‘(2) extend or reduce the time period for such 
payments; or
187
‘‘(3) alter the amount of the distribution to a 
creditor whose claim is provided for by the plan to 
the extent necessary to take account of any payment 
of such claim made other than under the plan. 
‘‘(f)(1) Sections 1121 through 1128 of this title and 
the requirements of section 1129 of this title apply to any 
modification under subsection (a). 
‘‘(2) The plan, as modified, shall become the plan 
only after there has been disclosure under section 1125 
as the court may direct, notice and a hearing, and such 
modification is approved.’’.
SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION. 
(a) EXEMPTIONS.—Section 522 of title 11, United 
States Code, as amended by sections 224 and 308, is 
amended by adding at the end the following: 
‘‘(p)(1) Except as provided in paragraph (2) of this 
subsection and sections 544 and 548 of this title, as a 
result of electing under subsection (b)(3)(A) to exempt 
property under State or local law, a debtor may not ex-
empt any amount of interest that was acquired by the 
debtor during the 1215-day period preceding the filing of 
the petition which exceeds in the aggregate $125,000 in 
value in—
‘‘(A) real or personal property that the debtor 
or a dependent of the debtor uses as a residence;
188
‘‘(B) a cooperative that owns property that the 
debtor or a dependent of the debtor uses as a resi-
dence; 
‘‘(C) a burial plot for the debtor or a dependent 
of the debtor; or 
‘‘(D) real or personal property that the debtor 
or dependent of the debtor claims as a homestead. 
‘‘(2)(A) The limitation under paragraph (1) shall not 
apply to an exemption claimed under subsection (b)(3)(A) 
by a family farmer for the principal residence of that 
farmer. 
‘‘(B) For purposes of paragraph (1), any amount of 
such interest does not include any interest transferred 
from a debtor’s previous principal residence (which was 
acquired prior to the beginning of such 1215-day period) 
into the debtor’s current principal residence, if the 
debtor’s previous and current residences are located in the 
same State. 
‘‘(q)(1) As a result of electing under subsection 
(b)(3)(A) to exempt property under State or local law, a 
debtor may not exempt any amount of an interest in prop-
erty described in subparagraphs (A), (B), (C), and (D) 
of subsection (p)(1) which exceeds in the aggregate 
$125,000 if—
189
‘‘(A) the court determines, after notice and a 
hearing, that the debtor has been convicted of a fel-
ony (as defined in section 3156 of title 18), which 
under the circumstances, demonstrates that the fil-
ing of the case was an abuse of the provisions of this 
title; or 
‘‘(B) the debtor owes a debt arising from—
‘‘(i) any violation of the Federal securities 
laws (as defined in section 3(a)(47) of the Secu-
rities Exchange Act of 1934), any State securi-
ties laws, or any regulation or order issued 
under Federal securities laws or State securities 
laws; 
‘‘(ii) fraud, deceit, or manipulation in a fi-
duciary capacity or in connection with the pur-
chase or sale of any security registered under 
section 12 or 15(d) of the Securities Exchange 
Act of 1934 or under section 6 of the Securities 
Act of 1933; 
‘‘(iii) any civil remedy under section 1964 
of title 18, United States Code; or 
‘‘(iv) any criminal act, intentional tort, or 
willful or reckless misconduct that caused seri-
ous physical injury or death to another indi-
vidual in the preceding 5 years.
190
‘‘(2) Paragraph (1) shall not apply to the extent the 
amount of an interest in property described in subpara-
graphs (A), (B), (C), and (D) of subsection (p)(1) is rea-
sonably necessary for the support of the debtor and any 
dependent of the debtor.’’. 
(b) ADJUSTMENT
OF DOLLAR AMOUNTS.—Para-
graphs (1) and (2) of section 104(b) of title 11, United 
States Code, as amended by section 224, are amended by 
inserting ‘‘522(p), 522(q),’’ after ‘‘522(n),’’.
SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI-
PANT CONTRIBUTIONS AND OTHER PROP-
ERTY FROM THE ESTATE. 
Section 541(b) of title 11, United States Code, as 
amended by section 225, is amended by adding at the end 
the following: 
‘‘(7) any amount—
‘‘(A) withheld by an employer from the 
wages of employees for payment as contribu-
tions to— 
‘‘(i) an employee benefit plan subject 
to title I of the Employee Retirement In-
come Security Act of 1974 or under an 
employee benefit plan which is a govern-
mental plan under section 414(d) of the 
Internal Revenue Code of 1986, a deferred
191
compensation plan under section 457 of 
the Internal Revenue Code of 1986, or a 
tax-deferred annuity under section 403(b) 
of the Internal Revenue Code of 1986, ex-
cept that such amount under this clause 
shall not constitute disposable income, as 
defined in section 1325(b)(2) of this title; 
or 
‘‘(ii) a health insurance plan regulated 
by State law whether or not subject to 
such title; or 
‘‘(B) received by the employer from em-
ployees for payment as contributions to— 
‘‘(i) an employee benefit plan subject 
to title I of the Employee Retirement In-
come Security Act of 1974 or under an 
employee benefit plan which is a govern-
mental plan under section 414(d) of the 
Internal Revenue Code of 1986, a deferred 
compensation plan under section 457 of 
the Internal Revenue Code of 1986, or a 
tax-deferred annuity under section 403(b) 
of the Internal Revenue Code of 1986, ex-
cept that such amount under this clause 
shall not constitute disposable income, as
192
defined in section 1325(b)(2) of this title; 
or 
‘‘(ii) a health insurance plan regulated 
by State law whether or not subject to 
such title;’’. 
SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLV-
ING BANKRUPTCY PROFESSIONALS. 
(a) IN GENERAL.—Section 1334 of title 28, United 
States Code, is amended—
(1) 
in 
subsection 
(b), 
by 
striking 
‘‘Notwithstanding’’ and inserting ‘‘Except as pro-
vided in subsection (e)(2), and notwithstanding’’; 
and 
(2) by striking subsection (e) and inserting the 
following: 
‘‘(e) The district court in which a case under title 
11 is commenced or is pending shall have exclusive juris-
diction—
‘‘(1) of all the property, wherever located, of the 
debtor as of the date of commencement of such case, 
and of property of the estate; and 
‘‘(2) over all claims or causes of action that in-
volve construction of section 327 of title 11, United 
States Code, or rules relating to disclosure require-
ments under section 327.’’.
193
(b) APPLICABILITY.—This section shall only apply to 
cases filed after the date of enactment of this Act. 
SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE 
INCREASE. 
(a) ACTIONS UNDER CHAPTER 7 OR 13 OF TITLE 
11, UNITED STATES CODE.—Section 1930(a) of title 28, 
United States Code, is amended by striking paragraph (1) 
and inserting the following: 
‘‘(1) For a case commenced—
‘‘(A) under chapter 7 of title 11, $160; or 
‘‘(B) under chapter 13 of title 11, $150.’’. 
(b) UNITED STATES TRUSTEE SYSTEM FUND.—Sec-
tion 589a(b) of title 28, United States Code, is amended—
(1) by striking paragraph (1) and inserting the 
following: 
‘‘(1)(A) 40.63 percent of the fees collected 
under section 1930(a)(1)(A) of this title in cases 
commenced under chapter 7 of title 11; and 
‘‘(B) 70.00 percent of the fees collected under 
section 1930(a)(1)(B) of this title in cases com-
menced under chapter 13 of title 11;’’; 
(2) in paragraph (2), by striking ‘‘one-half’’ 
and inserting ‘‘three-fourths’’; and 
(3) in paragraph (4), by striking ‘‘one-half’’ 
and inserting ‘‘100 percent’’.
194
(c) COLLECTION AND DEPOSIT OF MISCELLANEOUS 
BANKRUPTCY FEES.—Section 406(b) of the Judiciary Ap-
propriations Act, 1990 (28 U.S.C. 1931 note) is amended 
by striking ‘‘pursuant to 28 U.S.C. section 1930(b) and 
33.87 per centum of the fees hereafter collected under 28 
U.S.C. section 1930(a)(1) and 25 percent of the fees here-
after collected under 28 U.S.C. section 1930(a)(3) shall 
be deposited as offsetting receipts to the fund established 
under 28 U.S.C. section 1931’’ and inserting ‘‘under sec-
tion 1930(b) of title 28, United States Code, and 31.25 
percent of the fees collected under section 1930(a)(1)(A) 
of that title, 30.00 percent of the fees collected under sec-
tion 1930(a)(1)(B) of that title, and 25 percent of the fees 
collected under section 1930(a)(3) of that title shall be 
deposited as offsetting receipts to the fund established 
under section 1931 of that title’’. 
SEC. 326. SHARING OF COMPENSATION. 
Section 504 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(c) This section shall not apply with respect to shar-
ing, or agreeing to share, compensation with a bona fide 
public service attorney referral program that operates in 
accordance with non-Federal law regulating attorney re-
ferral services and with rules of professional responsibility 
applicable to attorney acceptance of referrals.’’.
195
SEC. 327. FAIR VALUATION OF COLLATERAL. 
Section 506(a) of title 11, United States Code, is 
amended by—
(1) inserting ‘‘(1)’’ after ‘‘(a)’’; and 
(2) by adding at the end the following: 
‘‘(2) If the debtor is an individual in a case under 
chapter 7 or 13, such value with respect to personal prop-
erty securing an allowed claim shall be determined based 
on the replacement value of such property as of the date 
of filing the petition without deduction for costs of sale 
or marketing. With respect to property acquired for per-
sonal, family, or household purposes, replacement value 
shall mean the price a retail merchant would charge for 
property of that kind considering the age and condition 
of the property at the time value is determined.’’. 
SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGA-
TIONS. 
(a) EXECUTORY
CONTRACTS
AND
UNEXPIRED 
LEASES.—Section 365 of title 11, United States Code, is 
amended—
(1) in subsection (b)—
(A) in paragraph (1)(A), by striking the 
semicolon at the end and inserting the fol-
lowing: ‘‘other than a default that is a breach 
of a provision relating to the satisfaction of any 
provision (other than a penalty rate or penalty
196
provision) relating to a default arising from any 
failure to perform nonmonetary obligations 
under an unexpired lease of real property, if it 
is impossible for the trustee to cure such de-
fault by performing nonmonetary acts at and 
after the time of assumption, except that if 
such default arises from a failure to operate in 
accordance with a nonresidential real property 
lease, then such default shall be cured by per-
formance at and after the time of assumption 
in accordance with such lease, and pecuniary 
losses resulting from such default shall be com-
pensated in accordance with the provisions of 
this paragraph;’’; and 
(B) in paragraph (2)(D), by striking 
‘‘penalty rate or provision’’ and inserting 
‘‘penalty rate or penalty provision’’; 
(2) in subsection (c)—
(A) in paragraph (2), by inserting ‘‘or’’ at 
the end; 
(B) in paragraph (3), by striking ‘‘; or’’ at 
the end and inserting a period; and 
(C) by striking paragraph (4); 
(3) in subsection (d)—
197
(A) by striking paragraphs (5) through 
(9); and 
(B) by redesignating paragraph (10) as 
paragraph (5); and 
(4) in subsection (f)(1) by striking ‘‘; except 
that’’ and all that follows through the end of the 
paragraph and inserting a period. 
(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec-
tion 1124(2) of title 11, United States Code, is amend-
ed—
(1) in subparagraph (A), by inserting ‘‘or of a 
kind that section 365(b)(2) of this title expressly 
does not require to be cured’’ before the semicolon 
at the end; 
(2) in subparagraph (C), by striking ‘‘and’’ at 
the end; 
(3) by redesignating subparagraph (D) as sub-
paragraph (E); and 
(4) by inserting after subparagraph (C) the fol-
lowing: 
‘‘(D) if such claim or such interest arises 
from any failure to perform a nonmonetary ob-
ligation, other than a default arising from fail-
ure to operate a nonresidential real property 
lease subject to section 365(b)(1)(A), com-
198
pensates the holder of such claim or such inter-
est (other than the debtor or an insider) for any 
actual pecuniary loss incurred by such holder as 
a result of such failure; and’’.
SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND 
BENEFITS. 
Section 503(b)(1)(A) of title 11, United States Code, 
is amended to read as follows: 
‘‘(A) the actual, necessary costs and expenses of pre-
serving the estate including—
‘‘(i) wages, salaries, or commissions for services 
rendered after the commencement of the case; and 
‘‘(ii) wages and benefits awarded pursuant to a 
judicial proceeding or a proceeding of the National 
Labor Relations Board as back pay attributable to 
any period of time occurring after commencement of 
the case under this title, as a result of a violation 
of Federal or State law by the debtor, without re-
gard to the time of the occurrence of unlawful con-
duct on which such award is based or to whether 
any services were rendered, if the court determines 
that payment of wages and benefits by reason of the 
operation of this clause will not substantially in-
crease the probability of layoff or termination of cur-
199
rent employees, or of nonpayment of domestic sup-
port obligations, during the case under this title;’’.
SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF 
CERTAIN PROCEEDINGS. 
(a) CHAPTER 7.—Section 727(a) of title 11, United 
States Code, as amended by section 106, is amended—
(1) in paragraph (10), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (11) by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by inserting after paragraph (11) the fol-
lowing: 
‘‘(12) the court after notice and a hearing held 
not more than 10 days before the date of entry of 
the order granting the discharge finds that there is 
reasonable cause to believe that—
‘‘(A) section 522(q)(1) may be applicable 
to the debtor; and 
‘‘(B) there is pending any proceeding in 
which the debtor may be found guilty of a fel-
ony 
of 
the 
kind 
described 
in 
section 
522(q)(1)(A) or liable for a debt of the kind de-
scribed in section 522(q)(1)(B); or’’.
200
(b) CHAPTER 11.—Section 1141(d) of title 11, 
United States Code, as amended by section 321, is amend-
ed by adding at the end the following: 
‘‘(C) unless after notice and a hearing held 
not more than 10 days before the date of entry 
of the order granting the discharge, the court 
finds that there is no reasonable cause to be-
lieve that—
‘‘(i) section 522(q)(1) may be applica-
ble to the debtor; and 
‘‘(ii) there is pending any proceeding 
in which the debtor may be found guilty of 
a felony of the kind described in section 
522(q)(1)(A) or liable for a debt of the 
kind described in section 522(q)(1)(B).’’. 
(c) CHAPTER 12.—Section 1228 of title 11, United 
States Code, is amended—
(1) in subsection (a) by striking ‘‘As’’ and in-
serting ‘‘Subject to subsection (d), as’’, 
(2) in subsection (b) by striking ‘‘At’’ and in-
serting ‘‘Subject to subsection (d), at’’, and 
(3) by adding at the end the following: 
‘‘(f) The court may not grant a discharge under this 
chapter unless the court after notice and a hearing held 
not more than 10 days before the date of entry of the
201
order granting the discharge finds that there is no reason-
able cause to believe that—
‘‘(1) section 522(q)(1) may be applicable to the 
debtor; and 
‘‘(2) there is pending any proceeding in which 
the debtor may be found guilty of a felony of the 
kind described in section 522(q)(1)(A) or liable for 
a 
debt 
of 
the 
kind 
described 
in 
section 
522(q)(1)(B).’’. 
(d) CHAPTER 13.—Section 1328 of title 11, United 
States Code, as amended by section 106, is amended—
(1) in subsection (a) by striking ‘‘As’’ and in-
serting ‘‘Subject to subsection (d), as’’, 
(2) in subsection (b) by striking ‘‘At’’ and in-
serting ‘‘Subject to subsection (d), at’’, and 
(3) by adding at the end the following: 
‘‘(h) The court may not grant a discharge under this 
chapter unless the court after notice and a hearing held 
not more than 10 days before the date of entry of the 
order granting the discharge finds that there is no reason-
able cause to believe that—
‘‘(1) section 522(q)(1) may be applicable to the 
debtor; and 
‘‘(2) there is pending any proceeding in which 
the debtor may be found guilty of a felony of the
203
‘‘(A) the commencement or continuation of 
an investigation or action by a securities self 
regulatory organization to enforce such organi-
zation’s regulatory power; 
‘‘(B) the enforcement of an order or deci-
sion, other than for monetary sanctions, ob-
tained in an action by the securities self regu-
latory organization to enforce such organiza-
tion’s regulatory power; or 
‘‘(C) any act taken by the securities self 
regulatory organization to delist, delete, or 
refuse to permit quotation of any stock that 
does not meet applicable regulatory require-
ments;’’. 
SEC. 402. MEETINGS OF CREDITORS AND EQUITY SECURITY 
HOLDERS. 
Section 341 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(e) Notwithstanding subsections (a) and (b), the 
court, on the request of a party in interest and after notice 
and a hearing, for cause may order that the United States 
trustee not convene a meeting of creditors or equity secu-
rity holders if the debtor has filed a plan as to which the 
debtor solicited acceptances prior to the commencement 
of the case.’’.
204
SEC. 403. PROTECTION OF REFINANCE OF SECURITY IN-
TEREST. 
Subparagraphs (A), (B), and (C) of section 547(e)(2) 
of title 11, United States Code, are each amended by strik-
ing ‘‘10’’ each place it appears and inserting ‘‘30’’. 
SEC. 
404. 
EXECUTORY 
CONTRACTS 
AND 
UNEXPIRED 
LEASES. 
(a) IN GENERAL.—Section 365(d)(4) of title 11, 
United States Code, is amended to read as follows: 
‘‘(4)(A) Subject to subparagraph (B), an unexpired 
lease of nonresidential real property under which the debt-
or is the lessee shall be deemed rejected, and the trustee 
shall immediately surrender that nonresidential real prop-
erty to the lessor, if the trustee does not assume or reject 
the unexpired lease by the earlier of—
‘‘(i) the date that is 120 days after the date of 
the order for relief; or 
‘‘(ii) the date of the entry of an order con-
firming a plan. 
‘‘(B)(i) The court may extend the period determined 
under subparagraph (A), prior to the expiration of the 
120-day period, for 90 days on the motion of the trustee 
or lessor for cause. 
‘‘(ii) If the court grants an extension under clause 
(i), the court may grant a subsequent extension only upon 
prior written consent of the lessor in each instance.’’.
205
(b) EXCEPTION.—Section 365(f)(1) of title 11, 
United States Code, is amended by striking ‘‘subsection’’ 
the first place it appears and inserting ‘‘subsections (b) 
and’’. 
SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS 
COMMITTEES. 
(a) APPOINTMENT.—Section 1102(a) of title 11, 
United States Code, is amended by adding at the end the 
following: 
‘‘(4) On request of a party in interest and after notice 
and a hearing, the court may order the United States 
trustee to change the membership of a committee ap-
pointed under this subsection, if the court determines that 
the change is necessary to ensure adequate representation 
of creditors or equity security holders. The court may 
order the United States trustee to increase the number 
of members of a committee to include a creditor that is 
a small business concern (as described in section 3(a)(1) 
of the Small Business Act , if the court determines that 
the creditor holds claims (of the kind represented by the 
committee) the aggregate amount of which, in comparison 
to the annual gross revenue of that creditor, is dispropor-
tionately large.’’.
206
(b) INFORMATION.—Section 1102(b) of title 11, 
United States Code, is amended by adding at the end the 
following: 
‘‘(3) A committee appointed under subsection (a) 
shall—
‘‘(A) provide access to information for creditors 
who—
‘‘(i) hold claims of the kind represented by 
that committee; and 
‘‘(ii) are not appointed to the committee; 
‘‘(B) solicit and receive comments from the 
creditors described in subparagraph (A); and 
‘‘(C) be subject to a court order that compels 
any additional report or disclosure to be made to the 
creditors described in subparagraph (A).’’.
SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, 
UNITED STATES CODE. 
Section 546 of title 11, United States Code, is 
amended—
(1) by redesignating the second subsection (g) 
(as added by section 222(a) of Public Law 103–394) 
as subsection (i); 
(2) in subsection (i), as so redesignated, by in-
serting ‘‘and subject to the prior rights of holders of
207
security interests in such goods or the proceeds of 
such goods’’ after ‘‘consent of a creditor’’; and 
(3) by adding at the end the following: 
‘‘(j)(1) Notwithstanding paragraphs (2) and (3) of 
section 545, the trustee may not avoid a warehouseman’s 
lien for storage, transportation, or other costs incidental 
to the storage and handling of goods. 
‘‘(2) The prohibition under paragraph (1) shall be ap-
plied in a manner consistent with any State statute appli-
cable to such lien that is similar to section 7–209 of the 
Uniform Commercial Code, as in effect on the date of en-
actment of the Bankruptcy Abuse Prevention and Con-
sumer Protection Act of 2002, or any successor to such 
section 7–209.’’. 
SEC. 407. AMENDMENTS TO SECTION 330(a) OF TITLE 11, 
UNITED STATES CODE. 
Section 330(a) of title 11, United States Code, is 
amended—
(1) in paragraph (3)—
(A) by striking ‘‘(A) In’’ and inserting 
‘‘In’’; and 
(B) by inserting ‘‘to an examiner, trustee 
under chapter 11, or professional person’’ after 
‘‘awarded’’; and 
(2) by adding at the end the following:
208
‘‘(7) In determining the amount of reasonable com-
pensation to be awarded to a trustee, the court shall treat 
such compensation as a commission, based on section 326 
of this title.’’. 
SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION. 
Section 1125 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(g) Notwithstanding subsection (b), an acceptance 
or rejection of the plan may be solicited from a holder 
of a claim or interest if such solicitation complies with ap-
plicable nonbankruptcy law and if such holder was solic-
ited before the commencement of the case in a manner 
complying with applicable nonbankruptcy law.’’. 
SEC. 409. PREFERENCES. 
Section 547(c) of title 11, United States Code, is 
amended—
(1) by striking paragraph (2) and inserting the 
following: 
‘‘(2) to the extent that such transfer was in 
payment of a debt incurred by the debtor in the or-
dinary course of business or financial affairs of the 
debtor and the transferee, and such transfer was—
‘‘(A) made in the ordinary course of busi-
ness or financial affairs of the debtor and the 
transferee; or
209
‘‘(B) made according to ordinary business 
terms;’’; 
(2) in paragraph (8), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(9) if, in a case filed by a debtor whose debts 
are not primarily consumer debts, the aggregate 
value of all property that constitutes or is affected 
by such transfer is less than $5,000.’’. 
SEC. 410. VENUE OF CERTAIN PROCEEDINGS. 
Section 1409(b) of title 28, United States Code, is 
amended by inserting ‘‘, or a nonconsumer debt against 
a noninsider of less than $10,000,’’ after ‘‘$5,000’’. 
SEC. 411. PERIOD FOR FILING PLAN UNDER CHAPTER 11. 
Section 1121(d) of title 11, United States Code, is 
amended—
(1) by striking ‘‘On’’ and inserting ‘‘(1) Subject 
to paragraph (2), on’’; and 
(2) by adding at the end the following: 
‘‘(2)(A) The 120-day period specified in paragraph 
(1) may not be extended beyond a date that is 18 months 
after the date of the order for relief under this chapter. 
‘‘(B) The 180-day period specified in paragraph (1) 
may not be extended beyond a date that is 20 months after 
the date of the order for relief under this chapter.’’.
210
SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP IN-
TERESTS. 
Section 523(a)(16) of title 11, United States Code, 
is amended—
(1) by striking ‘‘dwelling’’ the first place it ap-
pears; 
(2) by striking ‘‘ownership or’’ and inserting 
‘‘ownership,’’; 
(3) by striking ‘‘housing’’ the first place it ap-
pears; and 
(4) by striking ‘‘but only’’ and all that follows 
through ‘‘such period,’’ and inserting ‘‘or a lot in a 
homeowners association, for as long as the debtor or 
the trustee has a legal, equitable, or possessory own-
ership interest in such unit, such corporation, or 
such lot,’’. 
SEC. 413. CREDITOR REPRESENTATION AT FIRST MEETING 
OF CREDITORS. 
Section 341(c) of title 11, United States Code, is 
amended by inserting at the end the following: 
‘‘Notwithstanding any local court rule, provision of a State 
constitution, any other Federal or State law that is not 
a bankruptcy law, or other requirement that representa-
tion at the meeting of creditors under subsection (a) be 
by an attorney, a creditor holding a consumer debt or any 
representative of the creditor (which may include an entity
211
or an employee of an entity and may be a representative 
for more than 1 creditor) shall be permitted to appear at 
and participate in the meeting of creditors in a case under 
chapter 7 or 13, either alone or in conjunction with an 
attorney for the creditor. Nothing in this subsection shall 
be construed to require any creditor to be represented by 
an attorney at any meeting of creditors.’’. 
SEC. 414. DEFINITION OF DISINTERESTED PERSON. 
Section 101(14) of title 11, United States Code, is 
amended to read as follows: 
‘‘(14) ‘disinterested person’ means a person 
that—
‘‘(A) is not a creditor, an equity security 
holder, or an insider; 
‘‘(B) is not and was not, within 2 years be-
fore the date of the filing of the petition, a di-
rector, officer, or employee of the debtor; and 
‘‘(C) does not have an interest materially 
adverse to the interest of the estate or of any 
class of creditors or equity security holders, by 
reason of any direct or indirect relationship to, 
connection with, or interest in, the debtor, or 
for any other reason;’’.
212
SEC. 415. FACTORS FOR COMPENSATION OF PROFES-
SIONAL PERSONS. 
Section 330(a)(3) of title 11, United States Code, is 
amended—
(1) in subparagraph (D), by striking ‘‘and’’ at 
the end; 
(2) by redesignating subparagraph (E) as sub-
paragraph (F); and 
(3) by inserting after subparagraph (D) the fol-
lowing: 
‘‘(E) with respect to a professional person, 
whether the person is board certified or otherwise 
has demonstrated skill and experience in the bank-
ruptcy field; and’’. 
SEC. 416. APPOINTMENT OF ELECTED TRUSTEE. 
Section 1104(b) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 
(2) by adding at the end the following: 
‘‘(2)(A) If an eligible, disinterested trustee is elected 
at a meeting of creditors under paragraph (1), the United 
States trustee shall file a report certifying that election. 
‘‘(B) Upon the filing of a report under subparagraph 
(A)—
213
‘‘(i) the trustee elected under paragraph (1) 
shall be considered to have been selected and ap-
pointed for purposes of this section; and 
‘‘(ii) the service of any trustee appointed under 
subsection (d) shall terminate. 
‘‘(C) The court shall resolve any dispute arising out 
of an election described in subparagraph (A).’’. 
SEC. 417. UTILITY SERVICE. 
Section 366 of title 11, United States Code, is 
amended—
(1) in subsection (a), by striking ‘‘subsection 
(b)’’ and inserting ‘‘subsections (b) and (c)’’; and 
(2) by adding at the end the following: 
‘‘(c)(1)(A) For purposes of this subsection, the term 
‘assurance of payment’ means—
‘‘(i) a cash deposit; 
‘‘(ii) a letter of credit; 
‘‘(iii) a certificate of deposit; 
‘‘(iv) a surety bond; 
‘‘(v) a prepayment of utility consumption; or 
‘‘(vi) another form of security that is mutually 
agreed on between the utility and the debtor or the 
trustee.
214
‘‘(B) For purposes of this subsection an administra-
tive expense priority shall not constitute an assurance of 
payment. 
‘‘(2) Subject to paragraphs (3) and (4), with respect 
to a case filed under chapter 11, a utility referred to in 
subsection (a) may alter, refuse, or discontinue utility 
service, if during the 30-day period beginning on the date 
of filing of the petition, the utility does not receive from 
the debtor or the trustee adequate assurance of payment 
for utility service that is satisfactory to the utility. 
‘‘(3)(A) On request of a party in interest and after 
notice and a hearing, the court may order modification 
of the amount of an assurance of payment under para-
graph (2). 
‘‘(B) In making a determination under this para-
graph whether an assurance of payment is adequate, the 
court may not consider—
‘‘(i) the absence of security before the date of 
filing of the petition; 
‘‘(ii) the payment by the debtor of charges for 
utility service in a timely manner before the date of 
filing of the petition; or 
‘‘(iii) the availability of an administrative ex-
pense priority.
215
‘‘(4) Notwithstanding any other provision of law, with 
respect to a case subject to this subsection, a utility may 
recover or set off against a security deposit provided to 
the utility by the debtor before the date of filing of the 
petition without notice or order of the court.’’. 
SEC. 418. BANKRUPTCY FEES. 
Section 1930 of title 28, United States Code, is 
amended—
(1) 
in 
subsection 
(a), 
by 
striking 
‘‘Notwithstanding section 1915 of this title, the’’ 
and inserting ‘‘The’’; and 
(2) by adding at the end the following: 
‘‘(f)(1) Under the procedures prescribed by the Judi-
cial Conference of the United States, the district court or 
the bankruptcy court may waive the filing fee in a case 
under chapter 7 of title 11 for an individual if the court 
determines that such individual has income less than 150 
percent of the income official poverty line (as defined by 
the Office of Management and Budget, and revised annu-
ally in accordance with section 673(2) of the Omnibus 
Budget Reconciliation Act of 1981) applicable to a family 
of the size involved and is unable to pay that fee in install-
ments. For purposes of this paragraph, the term ‘filing 
fee’ means the filing required by subsection (a), or any 
other fee prescribed by the Judicial Conference under sub-
216
sections (b) and (c) that is payable to the clerk upon the 
commencement of a case under chapter 7. 
‘‘(2) The district court or the bankruptcy court may 
waive for such debtors other fees prescribed under sub-
sections (b) and (c). 
‘‘(3) This subsection does not restrict the district 
court or the bankruptcy court from waiving, in accordance 
with Judicial Conference policy, fees prescribed under this 
section for other debtors and creditors.’’. 
SEC. 419. MORE COMPLETE INFORMATION REGARDING AS-
SETS OF THE ESTATE. 
(a) IN GENERAL.—
(1) DISCLOSURE.—The Advisory Committee on 
Bankruptcy Rules of the Judicial Conference of the 
United States, after consideration of the views of the 
Director of the Executive Office for United States 
Trustees, shall propose for adoption amended Fed-
eral Rules of Bankruptcy Procedure and Official 
Bankruptcy Forms directing debtors under chapter 
11 of title 11, United States Code, to disclose the 
information described in paragraph (2) by filing and 
serving periodic financial and other reports designed 
to provide such information. 
(2) INFORMATION.—The information referred 
to in paragraph (1) is the value, operations, and
217
profitability of any closely held corporation, partner-
ship, or of any other entity in which the debtor holds 
a substantial or controlling interest. 
(b) PURPOSE.—The purpose of the rules and reports 
under subsection (a) shall be to assist parties in interest 
taking steps to ensure that the debtor’s interest in any 
entity referred to in subsection (a)(2) is used for the pay-
ment of allowed claims against debtor. 
Subtitle B—Small Business 
Bankruptcy Provisions 
SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT 
AND PLAN. 
Section 1125 of title 11, United States Code, is 
amended—
(1) in subsection (a)(1), by inserting before the 
semicolon ‘‘and in determining whether a disclosure 
statement provides adequate information, the court 
shall consider the complexity of the case, the benefit 
of additional information to creditors and other par-
ties in interest, and the cost of providing additional 
information’’; and 
(2) by striking subsection (f), and inserting the 
following: 
‘‘(f) Notwithstanding subsection (b), in a small busi-
ness case—
218
‘‘(1) the court may determine that the plan 
itself provides adequate information and that a sepa-
rate disclosure statement is not necessary; 
‘‘(2) the court may approve a disclosure state-
ment submitted on standard forms approved by the 
court or adopted under section 2075 of title 28; and 
‘‘(3)(A) the court may conditionally approve a 
disclosure statement subject to final approval after 
notice and a hearing; 
‘‘(B) acceptances and rejections of a plan may 
be solicited based on a conditionally approved disclo-
sure statement if the debtor provides adequate infor-
mation to each holder of a claim or interest that is 
solicited, but a conditionally approved disclosure 
statement shall be mailed not later than 20 days be-
fore the date of the hearing on confirmation of the 
plan; and 
‘‘(C) the hearing on the disclosure statement 
may be combined with the hearing on confirmation 
of a plan.’’.
SEC. 432. DEFINITIONS. 
(a) DEFINITIONS.—Section 101 of title 11, United 
States Code, is amended by striking paragraph (51C) and 
inserting the following:
219
‘‘(51C) ‘small business case’ means a case filed 
under chapter 11 of this title in which the debtor is 
a small business debtor; 
‘‘(51D) ‘small business debtor’—
‘‘(A) subject to subparagraph (B), means a 
person engaged in commercial or business ac-
tivities (including any affiliate of such person 
that is also a debtor under this title and exclud-
ing a person whose primary activity is the busi-
ness of owning or operating real property or ac-
tivities incidental thereto) that has aggregate 
noncontingent, liquidated secured and unse-
cured debts as of the date of the petition or the 
order for relief in an amount not more than 
$2,000,000 (excluding debts owed to 1 or more 
affiliates or insiders) for a case in which the 
United States trustee has not appointed under 
section 1102(a)(1) a committee of unsecured 
creditors or where the court has determined 
that the committee of unsecured creditors is not 
sufficiently active and representative to provide 
effective oversight of the debtor; and 
‘‘(B) does not include any member of a 
group of affiliated debtors that has aggregate 
noncontingent liquidated secured and unsecured
220
debts in an amount greater than $2,000,000 
(excluding debt owed to 1 or more affiliates or 
insiders);’’. 
(b) CONFORMING AMENDMENT.—Section 1102(a)(3) 
of title 11, United States Code, is amended by inserting 
‘‘debtor’’ after ‘‘small business’’. 
(c) ADJUSTMENT OF DOLLAR AMOUNTS.—Section 
104(b) of title 11, United States Code, as amended by 
section 226, is amended by inserting ‘‘101(51D),’’ after 
‘‘101(3),’’ each place it appears. 
SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND 
PLAN. 
Within a reasonable period of time after the date of 
enactment of this Act, the Advisory Committee on Bank-
ruptcy Rules of the Judicial Conference of the United 
States shall propose for adoption standard form disclosure 
statements and plans of reorganization for small business 
debtors (as defined in section 101 of title 11, United 
States Code, as amended by this Act), designed to achieve 
a practical balance between—
(1) the reasonable needs of the courts, the 
United States trustee, creditors, and other parties in 
interest for reasonably complete information; and 
(2) economy and simplicity for debtors.
221
SEC. 434. UNIFORM NATIONAL REPORTING REQUIRE-
MENTS. 
(a) REPORTING REQUIRED.—
(1) IN GENERAL.—Chapter 3 of title 11, United 
States Code, is amended by inserting after section 
307 the following: 
‘‘§ 308. Debtor reporting requirements 
‘‘(a) For purposes of this section, the term 
‘profitability’ means, with respect to a debtor, the amount 
of money that the debtor has earned or lost during current 
and recent fiscal periods. 
‘‘(b) A small business debtor shall file periodic finan-
cial and other reports containing information including—
‘‘(1) the debtor’s profitability; 
‘‘(2) reasonable approximations of the debtor’s 
projected cash receipts and cash disbursements over 
a reasonable period; 
‘‘(3) comparisons of actual cash receipts and 
disbursements with projections in prior reports; 
‘‘(4)(A) whether the debtor is—
‘‘(i) in compliance in all material respects 
with postpetition requirements imposed by this 
title and the Federal Rules of Bankruptcy Pro-
cedure; and
222
‘‘(ii) timely filing tax returns and other re-
quired government filings and paying taxes and 
other administrative expenses when due; 
‘‘(B) if the debtor is not in compliance with the 
requirements referred to in subparagraph (A)(i) or 
filing tax returns and other required government fil-
ings and making the payments referred to in sub-
paragraph (A)(ii), what the failures are and how, at 
what cost, and when the debtor intends to remedy 
such failures; and 
‘‘(C) such other matters as are in the best in-
terests of the debtor and creditors, and in the public 
interest in fair and efficient procedures under chap-
ter 11 of this title.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 3 of title 11, United States Code, 
is amended by inserting after the item relating to 
section 307 the following:
‘‘308. Debtor reporting requirements.’’.
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect 60 days after the date on 
which rules are prescribed under section 2075 of title 28, 
United States Code, to establish forms to be used to com-
ply with section 308 of title 11, United States Code, as 
added by subsection (a).
223
SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR 
SMALL BUSINESS CASES. 
(a) PROPOSAL OF RULES AND FORMS.—The Advi-
sory Committee on Bankruptcy Rules of the Judicial Con-
ference of the United States shall propose for adoption 
amended Federal Rules of Bankruptcy Procedure and Of-
ficial Bankruptcy Forms to be used by small business 
debtors to file periodic financial and other reports con-
taining information, including information relating to—
(1) the debtor’s profitability; 
(2) the debtor’s cash receipts and disburse-
ments; and 
(3) whether the debtor is timely filing tax re-
turns and paying taxes and other administrative ex-
penses when due. 
(b) PURPOSE.—The rules and forms proposed under 
subsection (a) shall be designed to achieve a practical bal-
ance among—
(1) the reasonable needs of the bankruptcy 
court, the United States trustee, creditors, and other 
parties in interest for reasonably complete informa-
tion; 
(2) the small business debtor’s interest that re-
quired reports be easy and inexpensive to complete; 
and
224
(3) the interest of all parties that the required 
reports help the small business debtor to understand 
the small business debtor’s financial condition and 
plan the small business debtor’s future. 
SEC. 436. DUTIES IN SMALL BUSINESS CASES. 
(a) DUTIES IN CHAPTER 11 CASES.—Subchapter I 
of chapter 11 of title 11, United States Code, as amended 
by section 321, is amended by adding at the end the fol-
lowing: 
‘‘§ 1116. Duties of trustee or debtor in possession in 
small business cases 
‘‘In a small business case, a trustee or the debtor in 
possession, in addition to the duties provided in this title 
and as otherwise required by law, shall—
‘‘(1) append to the voluntary petition or, in an 
involuntary case, file not later than 7 days after the 
date of the order for relief—
‘‘(A) its most recent balance sheet, state-
ment of operations, cash-flow statement, Fed-
eral income tax return; or 
‘‘(B) a statement made under penalty of 
perjury that no balance sheet, statement of op-
erations, or cash-flow statement has been pre-
pared and no Federal tax return has been filed;
225
‘‘(2) attend, through its senior management 
personnel and counsel, meetings scheduled by the 
court or the United States trustee, including initial 
debtor interviews, scheduling conferences, and meet-
ings of creditors convened under section 341 unless 
the court waives that requirement after notice and 
a hearing, upon a finding of extraordinary and com-
pelling circumstances; 
‘‘(3) timely file all schedules and statements of 
financial affairs, unless the court, after notice and a 
hearing, grants an extension, which shall not extend 
such time period to a date later than 30 days after 
the date of the order for relief, absent extraordinary 
and compelling circumstances; 
‘‘(4) file all postpetition financial and other re-
ports required by the Federal Rules of Bankruptcy 
Procedure or by local rule of the district court; 
‘‘(5) subject to section 363(c)(2), maintain in-
surance customary and appropriate to the industry; 
‘‘(6)(A) timely file tax returns and other re-
quired government filings; and 
‘‘(B) subject to section 363(c)(2), timely pay all 
taxes entitled to administrative expense priority ex-
cept those being contested by appropriate pro-
ceedings being diligently prosecuted; and
226
‘‘(7) allow the United States trustee, or a des-
ignated representative of the United States trustee, 
to inspect the debtor’s business premises, books, and 
records at reasonable times, after reasonable prior 
written notice, unless notice is waived by the debt-
or.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 11 of title 11, United States Code, as amended 
by section 321, is amended by inserting after the item re-
lating to section 1115 the following:
‘‘1116. Duties of trustee or debtor in possession in small business cases.’’.
SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES. 
Section 1121 of title 11, United States Code, is 
amended by striking subsection (e) and inserting the fol-
lowing: 
‘‘(e) In a small business case—
‘‘(1) only the debtor may file a plan until after 
180 days after the date of the order for relief, unless 
that period is—
‘‘(A) extended as provided by this sub-
section, after notice and a hearing; or 
‘‘(B) the court, for cause, orders otherwise; 
‘‘(2) the plan, and any necessary disclosure 
statement, shall be filed not later than 300 days 
after the date of the order for relief; and
227
‘‘(3) the time periods specified in paragraphs 
(1) and (2), and the time fixed in section 1129(e) 
within which the plan shall be confirmed, may be ex-
tended only if—
‘‘(A) the debtor, after providing notice to 
parties in interest (including the United States 
trustee), demonstrates by a preponderance of 
the evidence that it is more likely than not that 
the court will confirm a plan within a reason-
able period of time; 
‘‘(B) a new deadline is imposed at the time 
the extension is granted; and 
‘‘(C) the order extending time is signed be-
fore the existing deadline has expired.’’.
SEC. 438. PLAN CONFIRMATION DEADLINE. 
Section 1129 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(e) In a small business case, the court shall confirm 
a plan that complies with the applicable provisions of this 
title and that is filed in accordance with section 1121(e) 
not later than 45 days after such plan is filed unless the 
time for confirmation is extended in accordance with sec-
tion 1121(e)(3).’’.
228
SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE. 
Section 586(a) of title 28, United States Code, is 
amended—
(1) in paragraph (3)—
(A) in subparagraph (G), by striking 
‘‘and’’ at the end; 
(B) by redesignating subparagraph (H) as 
subparagraph (I); and 
(C) by inserting after subparagraph (G) 
the following: 
‘‘(H) in small business cases (as defined in 
section 101 of title 11), performing the addi-
tional duties specified in title 11 pertaining to 
such cases; and’’; 
(2) in paragraph (5), by striking ‘‘and’’ at the 
end; 
(3) in paragraph (6), by striking the period at 
the end and inserting a semicolon; and 
(4) by adding at the end the following: 
‘‘(7) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as 
soon as practicable after the entry of order for 
relief but before the first meeting scheduled 
under section 341(a) of title 11, at which time 
the United States trustee shall—
229
‘‘(i) begin to investigate the debtor’s 
viability; 
‘‘(ii) inquire about the debtor’s busi-
ness plan; 
‘‘(iii) explain the debtor’s obligations 
to file monthly operating reports and other 
required reports; 
‘‘(iv) attempt to develop an agreed 
scheduling order; and 
‘‘(v) inform the debtor of other obliga-
tions; 
‘‘(B) if determined to be appropriate and 
advisable, visit the appropriate business prem-
ises of the debtor and ascertain the state of the 
debtor’s books and records and verify that the 
debtor has filed its tax returns; and 
‘‘(C) review and monitor diligently the 
debtor’s activities, to identify as promptly as 
possible whether the debtor will be unable to 
confirm a plan; and 
‘‘(8) in any case in which the United States 
trustee finds material grounds for any relief under 
section 1112 of title 11, the United States trustee 
shall apply promptly after making that finding to 
the court for relief.’’.
230
SEC. 440. SCHEDULING CONFERENCES. 
Section 105(d) of title 11, United States Code, is 
amended—
(1) in the matter preceding paragraph (1), by 
striking ‘‘, may’’; and 
(2) by striking paragraph (1) and inserting the 
following: 
‘‘(1) shall hold such status conferences as are 
necessary to further the expeditious and economical 
resolution of the case; and’’.
SEC. 441. SERIAL FILER PROVISIONS. 
Section 362 of title 11, United States Code, as 
amended by sections 106, 305, and 311, is amended—
(1) in subsection (k), as so redesignated by sec-
tion 305—
(A) by striking ‘‘An’’ and inserting ‘‘(1) 
Except as provided in paragraph (2), an’’; and 
(B) by adding at the end the following: 
‘‘(2) If such violation is based on an action taken by 
an entity in the good faith belief that subsection (h) ap-
plies to the debtor, the recovery under paragraph (1) of 
this subsection against such entity shall be limited to ac-
tual damages.’’; and 
(2) by adding at the end the following: 
‘‘(n)(1) Except as provided in paragraph (2), sub-
section (a) does not apply in a case in which the debtor—
231
‘‘(A) is a debtor in a small business case pend-
ing at the time the petition is filed; 
‘‘(B) was a debtor in a small business case that 
was dismissed for any reason by an order that be-
came final in the 2-year period ending on the date 
of the order for relief entered with respect to the pe-
tition; 
‘‘(C) was a debtor in a small business case in 
which a plan was confirmed in the 2-year period 
ending on the date of the order for relief entered 
with respect to the petition; or 
‘‘(D) is an entity that has acquired substan-
tially all of the assets or business of a small business 
debtor described in subparagraph (A), (B), or (C), 
unless such entity establishes by a preponderance of 
the evidence that such entity acquired substantially 
all of the assets or business of such small business 
debtor in good faith and not for the purpose of evad-
ing this paragraph. 
‘‘(2) Paragraph (1) does not apply—
‘‘(A) to an involuntary case involving no collu-
sion by the debtor with creditors; or 
‘‘(B) to the filing of a petition if—
‘‘(i) the debtor proves by a preponderance 
of the evidence that the filing of that petition
232
resulted from circumstances beyond the control 
of the debtor not foreseeable at the time the 
case then pending was filed; and 
‘‘(ii) it is more likely than not that the 
court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable period of 
time.’’.
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE. 
(a) EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION.—Section 1112 of title 11, United States Code, 
is amended by striking subsection (b) and inserting the 
following: 
‘‘(b)(1) Except as provided in paragraph (2) of this 
subsection, subsection (c) of this section, and section 
1104(a)(3), on request of a party in interest, and after 
notice and a hearing, absent unusual circumstances spe-
cifically identified by the court that establish that the re-
quested conversion or dismissal is not in the best interests 
of creditors and the estate, the court shall convert a case 
under this chapter to a case under chapter 7 or dismiss 
a case under this chapter, whichever is in the best inter-
ests of creditors and the estate, if the movant establishes 
cause.
233
‘‘(2) The relief provided in paragraph (1) shall not 
be granted absent unusual circumstances specifically iden-
tified by the court that establish that such relief is not 
in the best interests of creditors and the estate, if the 
debtor or another party in interest objects and establishes 
that—
‘‘(A) there is a reasonable likelihood that a plan 
will be confirmed within the timeframes established 
in sections 1121(e) and 1129(e) of this title, or if 
such sections do not apply, within a reasonable pe-
riod of time; and 
‘‘(B) the grounds for granting such relief in-
clude an act or omission of the debtor other than 
under paragraph (4)(A)—
‘‘(i) for which there exists a reasonable 
justification for the act or omission; and 
‘‘(ii) that will be cured within a reasonable 
period of time fixed by the court. 
‘‘(3) The court shall commence the hearing on a mo-
tion under this subsection not later than 30 days after 
filing of the motion, and shall decide the motion not later 
than 15 days after commencement of such hearing, unless 
the movant expressly consents to a continuance for a spe-
cific period of time or compelling circumstances prevent
234
the court from meeting the time limits established by this 
paragraph. 
‘‘(4) For purposes of this subsection, the term ‘cause’ 
includes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate and the absence of a reasonable 
likelihood of rehabilitation; 
‘‘(B) gross mismanagement of the estate; 
‘‘(C) failure to maintain appropriate insurance 
that poses a risk to the estate or to the public; 
‘‘(D) unauthorized use of cash collateral sub-
stantially harmful to 1 or more creditors; 
‘‘(E) failure to comply with an order of the 
court; 
‘‘(F) unexcused failure to satisfy timely any fil-
ing or reporting requirement established by this title 
or by any rule applicable to a case under this chap-
ter; 
‘‘(G) failure to attend the meeting of creditors 
convened under section 341(a) or an examination or-
dered under rule 2004 of the Federal Rules of 
Bankruptcy Procedure without good cause shown by 
the debtor;
235
‘‘(H) failure timely to provide information or 
attend meetings reasonably requested by the United 
States trustee or the bankruptcy administrator; 
‘‘(I) failure timely to pay taxes owed after the 
date of the order for relief or to file tax returns due 
after the order for relief; 
‘‘(J) failure to file a disclosure statement, or to 
file or confirm a plan, within the time fixed by this 
title or by order of the court; 
‘‘(K) failure to pay any fees or charges required 
under chapter 123 of title 28; 
‘‘(L) revocation of an order of confirmation 
under section 1144; 
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan; 
‘‘(N) material default by the debtor with re-
spect to a confirmed plan; 
‘‘(O) termination of a confirmed plan by reason 
of the occurrence of a condition specified in the plan; 
and 
‘‘(P) failure of the debtor to pay any domestic 
support obligation that first becomes payable after 
the date on which the petition is filed. 
‘‘(5) The court shall commence the hearing on a 
motion under this subsection not later than 30 days after
236
filing of the motion, and shall decide the motion not later 
than 15 days after commencement of such hearing, unless 
the movant expressly consents to a continuance for a spe-
cific period of time or compelling circumstances prevent 
the court from meeting the time limits established by this 
paragraph.’’. 
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF 
TRUSTEE.—Section 1104(a) of title 11, United States 
Code, is amended—
(1) in paragraph (1), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (2), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(3) if grounds exist to convert or dismiss the 
case under section 1112, but the court determines 
that the appointment of a trustee or an examiner is 
in the best interests of creditors and the estate.’’. 
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED 
STATES CODE, WITH RESPECT TO SMALL 
BUSINESSES. 
Not later than 2 years after the date of enactment 
of this Act, the Administrator of the Small Business Ad-
ministration, in consultation with the Attorney General, 
the Director of the Executive Office for United States
237
Trustees, and the Director of the Administrative Office 
of the United States Courts, shall—
(1) conduct a study to determine—
(A) the internal and external factors that 
cause small businesses, especially sole propri-
etorships, to become debtors in cases under title 
11, United States Code, and that cause certain 
small businesses to successfully complete cases 
under chapter 11 of such title; and 
(B) how Federal laws relating to bank-
ruptcy may be made more effective and efficient 
in assisting small businesses to remain viable; 
and 
(2) submit to the President pro tempore of the 
Senate and the Speaker of the House of Representa-
tives a report summarizing that study. 
SEC. 444. PAYMENT OF INTEREST. 
Section 362(d)(3) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘or 30 days after the court de-
termines that the debtor is subject to this para-
graph, whichever is later’’ after ‘‘90-day period)’’; 
and 
(2) by striking subparagraph (B) and inserting 
the following:
238
‘‘(B) the debtor has commenced monthly 
payments that—
‘‘(i) may, in the debtor’s sole discre-
tion, notwithstanding section 363(c)(2), be 
made from rents or other income generated 
before or after the commencement of the 
case by or from the property to each cred-
itor whose claim is secured by such real es-
tate (other than a claim secured by a judg-
ment lien or by an unmatured statutory 
lien); and 
‘‘(ii) are in an amount equal to inter-
est at the then applicable nondefault con-
tract rate of interest on the value of the 
creditor’s interest in the real estate; or’’. 
SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES. 
Section 503(b) of title 11, United States Code, is 
amended—
(1) in paragraph (5), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (6), by striking the period at 
the end and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(7) with respect to a nonresidential real prop-
erty lease previously assumed under section 365,
239
and subsequently rejected, a sum equal to all mone-
tary obligations due, excluding those arising from or 
relating to a failure to operate or a penalty provi-
sion, for the period of 2 years following the later of 
the rejection date or the date of actual turnover of 
the premises, without reduction or setoff for any 
reason whatsoever except for sums actually received 
or to be received from a nondebtor, and the claim 
for remaining sums due for the balance of the term 
of the lease shall be a claim under section 
502(b)(6);’’.
SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A 
PLAN ADMINISTRATOR OF AN EMPLOYEE 
BENEFIT PLAN. 
(a) IN GENERAL.—Section 521(a) of title 11, United 
States Code, as amended by section 106, is amended—
(1) in paragraph (4), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (5), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) unless a trustee is serving in the case, if 
at the time of filing the debtor served as the admin-
istrator (as defined in section 3 of the Employee Re-
tirement Income Security Act of 1974 of an em-
240
ployee benefit plan, continue to perform the obliga-
tions required of the administrator.’’. 
(b) DUTIES OF TRUSTEES.—Section 704(a) of title 
11, United States Code, as amended by sections 102 and 
219, is amended—
(1) in paragraph (9), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (10), by striking the period at 
the end; and 
(3) by adding at the end the following: 
‘‘(11) if, at the time of the commencement of 
the case, the debtor served as the administrator (as 
defined in section 3 of the Employee Retirement In-
come Security Act of 1974) of an employee benefit 
plan, continue to perform the obligations required of 
the administrator; and’’. 
(c) CONFORMING AMENDMENT.—Section 1106(a)(1) 
of title 11, United States Code, is amended to read as 
follows: 
‘‘(1) perform the duties of the trustee, as speci-
fied in paragraphs (2), (5), (7), (8), (9), (10), and 
(11) of section 704;’’.
241
SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EM-
PLOYEES. 
Section 1114(d) of title 11, United States Code, is 
amended—
(1) by striking ‘‘appoint’’ and inserting ‘‘order 
the appointment of’’, and 
(2) by adding at the end the following: ‘‘The 
United States trustee shall appoint any such com-
mittee.’’. 
TITLE V—MUNICIPAL 
BANKRUPTCY PROVISIONS 
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI-
TION. 
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States 
Code, is amended by inserting ‘‘notwithstanding section 
301(b)’’ before the period at the end. 
(b) CONFORMING AMENDMENT.—Section 301 of title 
11, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’; 
and 
(2) by striking the last sentence and inserting 
the following: 
‘‘(b) The commencement of a voluntary case under 
a chapter of this title constitutes an order for relief under 
such chapter.’’.
242
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP-
TER 9. 
Section 901(a) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and 
(2) by inserting ‘‘559, 560, 561, 562’’ after 
‘‘557,’’. 
TITLE VI—BANKRUPTCY DATA 
SEC. 601. IMPROVED BANKRUPTCY STATISTICS. 
(a) IN GENERAL.—Chapter 6 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 159. Bankruptcy statistics 
‘‘(a) The clerk of the district court, or the clerk of 
the bankruptcy court if one is certified pursuant to section 
156(b) of this title, shall collect statistics regarding debt-
ors who are individuals with primarily consumer debts 
seeking relief under chapters 7, 11, and 13 of title 11. 
Those statistics shall be in a standardized format pre-
scribed by the Director of the Administrative Office of the 
United States Courts (referred to in this section as the 
‘Director’). 
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a);
243
‘‘(2) make the statistics available to the public; 
and 
‘‘(3) not later than June 1, 2005, and annually 
thereafter, prepare, and submit to Congress a report 
concerning the information collected under sub-
section (a) that contains an analysis of the informa-
tion. 
‘‘(c) The compilation required under subsection (b) 
shall—
‘‘(1) be itemized, by chapter, with respect to 
title 11; 
‘‘(2) be presented in the aggregate and for each 
district; and 
‘‘(3) include information concerning—
‘‘(A) the total assets and total liabilities of 
the debtors described in subsection (a), and in 
each category of assets and liabilities, as re-
ported in the schedules prescribed pursuant to 
section 2075 of this title and filed by those 
debtors; 
‘‘(B) the current monthly income, average 
income, and average expenses of those debtors 
as reported on the schedules and statements 
that each such debtor files under sections 521 
and 1322 of title 11;
244
‘‘(C) the aggregate amount of debt dis-
charged in cases filed during the reporting pe-
riod, determined as the difference between the 
total amount of debt and obligations of a debtor 
reported on the schedules and the amount of 
such debt reported in categories which are pre-
dominantly nondischargeable; 
‘‘(D) the average period of time between 
the filing of the petition and the closing of the 
case for cases closed during the reporting pe-
riod; 
‘‘(E) for cases closed during the reporting 
period—
‘‘(i) the number of cases in which a 
reaffirmation was filed; and 
‘‘(ii)(I) the total number of reaffirma-
tions filed; 
‘‘(II) of those cases in which a reaffir-
mation was filed, the number of cases in 
which the debtor was not represented by 
an attorney; and 
‘‘(III) of those cases in which a reaf-
firmation was filed, the number of cases in 
which the reaffirmation was approved by 
the court;
245
‘‘(F) with respect to cases filed under 
chapter 13 of title 11, for the reporting pe-
riod—
‘‘(i)(I) the number of cases in which a 
final order was entered determining the 
value of property securing a claim in an 
amount less than the amount of the claim; 
and 
‘‘(II) the number of final orders en-
tered determining the value of property se-
curing a claim; 
‘‘(ii) the number of cases dismissed, 
the number of cases dismissed for failure 
to make payments under the plan, the 
number of cases refiled after dismissal, 
and the number of cases in which the plan 
was completed, separately itemized with re-
spect to the number of modifications made 
before completion of the plan, if any; and 
‘‘(iii) the number of cases in which 
the debtor filed another case during the 6-
year period preceding the filing; 
‘‘(G) the number of cases in which credi-
tors were fined for misconduct and any amount
246
of punitive damages awarded by the court for 
creditor misconduct; and 
‘‘(H) the number of cases in which sanc-
tions under rule 9011 of the Federal Rules of 
Bankruptcy Procedure were imposed against 
debtor’s attorney or damages awarded under 
such Rule.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 6 of title 28, United States Code, is amended 
by adding at the end the following:
‘‘159. Bankruptcy statistics.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 18 months after the date of 
enactment of this Act. 
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA. 
(a) AMENDMENT.—Chapter 39 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 589b. Bankruptcy data 
‘‘(a) RULES.—The Attorney General shall, within a 
reasonable time after the effective date of this section, 
issue rules requiring uniform forms for (and from time 
to time thereafter to appropriately modify and approve)—
‘‘(1) final reports by trustees in cases under 
chapters 7, 12, and 13 of title 11; and
247
‘‘(2) periodic reports by debtors in possession or 
trustees in cases under chapter 11 of title 11. 
‘‘(b) REPORTS.—Each report referred to in sub-
section (a) shall be designed (and the requirements as to 
place and manner of filing shall be established) so as to 
facilitate compilation of data and maximum possible ac-
cess of the public, both by physical inspection at one or 
more central filing locations, and by electronic access 
through the Internet or other appropriate media. 
‘‘(c) REQUIRED INFORMATION.—The information re-
quired to be filed in the reports referred to in subsection 
(b) shall be that which is in the best interests of debtors 
and creditors, and in the public interest in reasonable and 
adequate information to evaluate the efficiency and practi-
cality of the Federal bankruptcy system. In issuing rules 
proposing the forms referred to in subsection (a), the At-
torney General shall strike the best achievable practical 
balance between—
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; 
‘‘(2) economy, simplicity, and lack of undue 
burden on persons with a duty to file reports; and 
‘‘(3) appropriate privacy concerns and safe-
guards.
248
‘‘(d) FINAL REPORTS.—The uniform forms for final 
reports required under subsection (a) for use by trustees 
under chapters 7, 12, and 13 of title 11 shall, in addition 
to such other matters as are required by law or as the 
Attorney General in the discretion of the Attorney General 
shall propose, include with respect to a case under such 
title—
‘‘(1) information about the length of time the 
case was pending; 
‘‘(2) assets abandoned; 
‘‘(3) assets exempted; 
‘‘(4) receipts and disbursements of the estate; 
‘‘(5) expenses of administration, including for 
use under section 707(b), actual costs of admin-
istering cases under chapter 13 of title 11; 
‘‘(6) claims asserted; 
‘‘(7) claims allowed; and 
‘‘(8) distributions to claimants and claims dis-
charged without payment, 
in each case by appropriate category and, in cases under 
chapters 12 and 13 of title 11, date of confirmation of 
the plan, each modification thereto, and defaults by the 
debtor in performance under the plan. 
‘‘(e) PERIODIC REPORTS.—The uniform forms for 
periodic reports required under subsection (a) for use by
249
trustees or debtors in possession under chapter 11 of title 
11 shall, in addition to such other matters as are required 
by law or as the Attorney General in the discretion of the 
Attorney General shall propose, include—
‘‘(1) information about the standard industry 
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor; 
‘‘(2) length of time the case has been pending; 
‘‘(3) number of full-time employees as of the 
date of the order for relief and at the end of each 
reporting period since the case was filed; 
‘‘(4) cash receipts, cash disbursements and 
profitability of the debtor for the most recent period 
and cumulatively since the date of the order for re-
lief; 
‘‘(5) compliance with title 11, whether or not 
tax returns and tax payments since the date of the 
order for relief have been timely filed and made; 
‘‘(6) all professional fees approved by the court 
in the case for the most recent period and cumula-
tively since the date of the order for relief 
(separately reported, for the professional fees in-
curred by or on behalf of the debtor, between those 
that would have been incurred absent a bankruptcy 
case and those not); and
250
‘‘(7) plans of reorganization filed and confirmed 
and, with respect thereto, by class, the recoveries of 
the holders, expressed in aggregate dollar values 
and, in the case of claims, as a percentage of total 
claims of the class allowed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 39 of title 28, United States Code, is amended 
by adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 603. AUDIT PROCEDURES. 
(a) IN GENERAL.—
(1) ESTABLISHMENT
OF
PROCEDURES.—The 
Attorney General (in judicial districts served by 
United States trustees) and the Judicial Conference 
of the United States (in judicial districts served by 
bankruptcy administrators) shall establish proce-
dures to determine the accuracy, veracity, and com-
pleteness of petitions, schedules, and other informa-
tion which the debtor is required to provide under 
sections 521 and 1322 of title 11, United States 
Code, and, if applicable, section 111 of such title, in 
cases filed under chapter 7 or 13 of such title in 
which the debtor is an individual. Such audits shall 
be in accordance with generally accepted auditing 
standards and performed by independent certified 
public accountants or independent licensed public ac-
251
countants, provided that the Attorney General and 
the Judicial Conference, as appropriate, may develop 
alternative auditing standards not later than 2 years 
after the date of enactment of this Act. 
(2) PROCEDURES.—Those procedures required 
by paragraph (1) shall—
(A) establish a method of selecting appro-
priate qualified persons to contract to perform 
those audits; 
(B) establish a method of randomly select-
ing cases to be audited, except that not less 
than 1 out of every 250 cases in each Federal 
judicial district shall be selected for audit; 
(C) require audits for schedules of income 
and expenses which reflect greater than average 
variances from the statistical norm of the dis-
trict in which the schedules were filed if those 
variances occur by reason of higher income or 
higher expenses than the statistical norm of the 
district in which the schedules were filed; and 
(D) establish procedures for providing, not 
less frequently than annually, public informa-
tion concerning the aggregate results of such 
audits including the percentage of cases, by dis-
252
trict, in which a material misstatement of in-
come or expenditures is reported. 
(b) AMENDMENTS.—Section 586 of title 28, United 
States Code, is amended—
(1) in subsection (a), by striking paragraph (6) 
and inserting the following: 
‘‘(6) make such reports as the Attorney General 
directs, including the results of audits performed 
under section 603(a) of the Bankruptcy Abuse Pre-
vention and Consumer Protection Act of 2002;’’; and 
(2) by adding at the end the following: 
‘‘(f)(1) The United States trustee for each district is 
authorized to contract with auditors to perform audits in 
cases designated by the United States trustee, in accord-
ance with the procedures established under section 603(a) 
of the Bankruptcy Abuse Prevention and Consumer Pro-
tection Act of 2002. 
‘‘(2)(A) The report of each audit referred to in para-
graph (1) shall be filed with the court and transmitted 
to the United States trustee. Each report shall clearly and 
conspicuously specify any material misstatement of income 
or expenditures or of assets identified by the person per-
forming the audit. In any case in which a material 
misstatement of income or expenditures or of assets has 
been reported, the clerk of the district court (or the clerk
253
of the bankruptcy court if one is certified under section 
156(b) of this title) shall give notice of the misstatement 
to the creditors in the case. 
‘‘(B) If a material misstatement of income or expend-
itures or of assets is reported, the United States trustee 
shall—
‘‘(i) report the material misstatement, if appro-
priate, to the United States Attorney pursuant to 
section 3057 of title 18; and 
‘‘(ii) if advisable, take appropriate action, in-
cluding but not limited to commencing an adversary 
proceeding to revoke the debtor’s discharge pursuant 
to section 727(d) of title 11.’’. 
(c) AMENDMENTS TO SECTION 521 OF TITLE 11, 
U.S.C.—Section 521(a) of title 11, United States Code, 
as so designated by section 106, is amended in each of 
paragraphs (3) and (4) by inserting ‘‘or an auditor ap-
pointed under section 586(f) of title 28’’ after ‘‘serving 
in the case’’. 
(d) AMENDMENTS TO SECTION 727 OF TITLE 11, 
U.S.C.—Section 727(d) of title 11, United States Code, 
is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the 
end;
254
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(4) the debtor has failed to explain satisfac-
torily—
‘‘(A) a material misstatement in an audit 
referred to in section 586(f) of title 28; or 
‘‘(B) a failure to make available for inspec-
tion all necessary accounts, papers, documents, 
financial records, files, and all other papers, 
things, or property belonging to the debtor that 
are requested for an audit referred to in section 
586(f) of title 28.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 18 months after the date of 
enactment of this Act. 
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY 
OF BANKRUPTCY DATA. 
It is the sense of Congress that—
(1) the national policy of the United States 
should be that all data held by bankruptcy clerks in 
electronic form, to the extent such data reflects only 
public records (as defined in section 107 of title 11, 
United States Code), should be released in a usable 
electronic form in bulk to the public, subject to such
255
appropriate privacy concerns and safeguards as Con-
gress and the Judicial Conference of the United 
States may determine; and 
(2) there should be established a bankruptcy 
data system in which—
(A) a single set of data definitions and 
forms are used to collect data nationwide; and 
(B) data for any particular bankruptcy 
case are aggregated in the same electronic 
record. 
TITLE VII—BANKRUPTCY TAX 
PROVISIONS 
SEC. 701. TREATMENT OF CERTAIN LIENS. 
(a) TREATMENT OF CERTAIN LIENS.—Section 724 
of title 11, United States Code, is amended—
(1) in subsection (b), in the matter preceding 
paragraph (1), by inserting ‘‘(other than to the ex-
tent that there is a properly perfected unavoidable 
tax lien arising in connection with an ad valorem tax 
on real or personal property of the estate)’’ after 
‘‘under this title’’; 
(2) in subsection (b)(2), by inserting ‘‘(except 
that such expenses, other than claims for wages, sal-
aries, or commissions which arise after the filing of 
a petition, shall be limited to expenses incurred
256
under chapter 7 of this title and shall not include ex-
penses incurred under chapter 11 of this title)’’ after 
‘‘507(a)(1)’’; and 
(3) by adding at the end the following: 
‘‘(e) Before subordinating a tax lien on real or per-
sonal property of the estate, the trustee shall—
‘‘(1) exhaust the unencumbered assets of the 
estate; and 
‘‘(2) in a manner consistent with section 
506(c), recover from property securing an allowed 
secured claim the reasonable, necessary costs and 
expenses of preserving or disposing of that property. 
‘‘(f) Notwithstanding the exclusion of ad valorem tax 
liens under this section and subject to the requirements 
of subsection (e), the following may be paid from property 
of the estate which secures a tax lien, or the proceeds of 
such property: 
‘‘(1) Claims for wages, salaries, and commis-
sions that are entitled to priority under section 
507(a)(4). 
‘‘(2) Claims for contributions to an employee 
benefit plan entitled to priority under section 
507(a)(5).’’. 
(b) DETERMINATION OF TAX LIABILITY.—Section 
505(a)(2) of title 11, United States Code, is amended—
257
(1) in subparagraph (A), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or 
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount 
under any law (other than a bankruptcy law) has ex-
pired.’’. 
SEC. 702. TREATMENT OF FUEL TAX CLAIMS. 
Section 501 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(e) A claim arising from the liability of a debtor for 
fuel use tax assessed consistent with the requirements of 
section 31705 of title 49 may be filed by the base jurisdic-
tion designated pursuant to the International Fuel Tax 
Agreement (as defined in section 31701 of title 49) and, 
if so filed, shall be allowed as a single claim.’’. 
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF 
TAXES. 
Section 505(b) of title 11, United States Code, is 
amended—
258
(1) in the first sentence, by inserting ‘‘at the 
address and in the manner designated in paragraph 
(1)’’ after ‘‘determination of such tax’’; 
(2) by striking ‘‘(1) upon payment’’ and insert-
ing ‘‘(A) upon payment’’; 
(3) by striking ‘‘(A) such governmental unit’’ 
and inserting ‘‘(i) such governmental unit’’; 
(4) by striking ‘‘(B) such governmental unit’’ 
and inserting ‘‘(ii) such governmental unit’’; 
(5) by striking ‘‘(2) upon payment’’ and insert-
ing ‘‘(B) upon payment’’; 
(6) by striking ‘‘(3) upon payment’’ and insert-
ing ‘‘(C) upon payment’’; 
(7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and 
(8) by inserting before paragraph (2), as so 
designated, the following: 
‘‘(b)(1)(A) The clerk shall maintain a listing under 
which a Federal, State, or local governmental unit respon-
sible for the collection of taxes within the district may—
‘‘(i) designate an address for service of requests 
under this subsection; and 
‘‘(ii) describe where further information con-
cerning additional requirements for filing such re-
quests may be found.
259
‘‘(B) If a governmental unit referred to in subpara-
graph (A) does not designate an address and provide that 
address to the clerk under that subparagraph, any request 
made under this subsection may be served at the address 
for the filing of a tax return or protest with the appro-
priate taxing authority of that governmental unit.’’. 
SEC. 704. RATE OF INTEREST ON TAX CLAIMS. 
(a) IN GENERAL.—Subchapter I of chapter 5 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘§ 511. Rate of interest on tax claims 
‘‘(a) If any provision of this title requires the pay-
ment of interest on a tax claim or on an administrative 
expense tax, or the payment of interest to enable a creditor 
to receive the present value of the allowed amount of a 
tax claim, the rate of interest shall be the rate determined 
under applicable nonbankruptcy law. 
‘‘(b) In the case of taxes paid under a confirmed plan 
under this title, the rate of interest shall be determined 
as of the calendar month in which the plan is confirmed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter 1 of chapter 5 of title 11, United States 
Code, is amended by adding at the end the following:
‘‘511. Rate of interest on tax claims.’’.
260
SEC. 705. PRIORITY OF TAX CLAIMS. 
Section 507(a)(8) of title 11, United States Code, is 
amended—
(1) in subparagraph (A)—
(A) in the matter preceding clause (i), by 
inserting ‘‘for a taxable year ending on or be-
fore the date of the filing of the petition’’ after 
‘‘gross receipts’’; 
(B) in clause (i), by striking ‘‘for a taxable 
year ending on or before the date of the filing 
of the petition’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) assessed within 240 days before 
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time during which an 
offer in compromise with respect to 
that tax was pending or in effect dur-
ing that 240-day period, plus 30 days; 
and 
‘‘(II) any time during which a 
stay of proceedings against collections 
was in effect in a prior case under 
this title during that 240-day period, 
plus 90 days.’’; and
261
(2) by adding at the end the following: 
‘‘An otherwise applicable time period specified in 
this paragraph shall be suspended for any period 
during which a governmental unit is prohibited 
under applicable nonbankruptcy law from collecting 
a tax as a result of a request by the debtor for a 
hearing and an appeal of any collection action taken 
or proposed against the debtor, plus 90 days; plus 
any time during which the stay of proceedings was 
in effect in a prior case under this title or during 
which collection was precluded by the existence of 1 
or more confirmed plans under this title, plus 90 
days.’’. 
SEC. 706. PRIORITY PROPERTY TAXES INCURRED. 
Section 507(a)(8)(B) of title 11, United States Code, 
is amended by striking ‘‘assessed’’ and inserting 
‘‘incurred’’. 
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 13. 
Section 1328(a)(2) of title 11, United States Code, 
as amended by section 314, is amended by striking 
‘‘paragraph’’ and inserting ‘‘section 507(a)(8)(C) or in 
paragraph (1)(B), (1)(C),’’.
262
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 11. 
Section 1141(d) of title 11, United States Code, as 
amended by section 321, is amended by adding at the end 
the following: 
‘‘(6) Notwithstanding paragraph (1), the confirma-
tion of a plan does not discharge a debtor that is a cor-
poration from any debt—
‘‘(A) of a kind specified in paragraph (2)(A) or 
(2)(B) of section 523(a) that is owed to a domestic 
governmental unit, or owed to a person as the result 
of an action filed under subchapter III of chapter 37 
of title 31 or any similar State statute; or 
‘‘(B) for a tax or customs duty with respect to 
which the debtor—
‘‘(i) made a fraudulent return; or 
‘‘(ii) willfully attempted in any manner to 
evade or to defeat such tax or such customs 
duty.’’. 
SEC. 
709. 
STAY 
OF 
TAX 
PROCEEDINGS 
LIMITED 
TO 
PREPETITION TAXES. 
Section 362(a)(8) of title 11, United States Code, is 
amended by striking ‘‘the debtor’’ and inserting ‘‘a cor-
porate debtor’s tax liability for a taxable period the bank-
ruptcy court may determine or concerning the tax liability
263
of a debtor who is an individual for a taxable period end-
ing before the order for relief under this title’’. 
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 
CASES. 
Section 1129(a)(9) of title 11, United States Code, 
is amended—
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by striking ‘‘deferred 
cash payments,’’ and all that follows through the 
end of the subparagraph, and inserting ‘‘regular in-
stallment payments in cash—
‘‘(i) of a total value, as of the effective 
date of the plan, equal to the allowed 
amount of such claim; 
‘‘(ii) over a period ending not later 
than 5 years after the date of the entry of 
the order for relief under section 301, 302, 
or 303; and 
‘‘(iii) in a manner not less favorable 
than the most favored nonpriority unse-
cured claim provided for by the plan (other 
than cash payments made to a class of 
creditors under section 1122(b)); and’’; 
and
264
(3) by adding at the end the following: 
‘‘(D) with respect to a secured claim which 
would otherwise meet the description of an un-
secured claim of a governmental unit under sec-
tion 507(a)(8), but for the secured status of 
that claim, the holder of that claim will receive 
on account of that claim, cash payments, in the 
same manner and over the same period, as pre-
scribed in subparagraph (C).’’. 
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED. 
Section 545(2) of title 11, United States Code, is 
amended by inserting before the semicolon at the end the 
following: ‘‘, except in any case in which a purchaser is 
a purchaser described in section 6323 of the Internal Rev-
enue Code of 1986, or in any other similar provision of 
State or local law’’. 
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSI-
NESS. 
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of 
title 28, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and 
(2) by adding at the end the following:
265
‘‘(b) A tax under subsection (a) shall be paid on or 
before the due date of the tax under applicable nonbank-
ruptcy law, unless—
‘‘(1) the tax is a property tax secured by a lien 
against property that is abandoned within a reason-
able period of time after the lien attaches by the 
trustee of a bankruptcy estate under section 554 of 
title 11; or 
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11. 
‘‘(c) In a case pending under chapter 7 of title 11, 
payment of a tax may be deferred until final distribution 
is made under section 726 of title 11, if—
‘‘(1) the tax was not incurred by a trustee duly 
appointed under chapter 7 of title 11; or 
‘‘(2) before the due date of the tax, an order of 
the court makes a finding of probable insufficiency 
of funds of the estate to pay in full the administra-
tive expenses allowed under section 503(b) of title 
11 that have the same priority in distribution under 
section 726(b) of title 11 as the priority of that 
tax.’’. 
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B)(i) of title 11, United States Code, 
is amended by inserting ‘‘whether secured or unsecured,
266
including property taxes for which liability is in rem, in 
personam, or both,’’ before ‘‘except’’. 
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE 
EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of 
title 11, United States Code, is amended— 
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by adding ‘‘and’’ at 
the end; and 
(3) by adding at the end the following: 
‘‘(D) notwithstanding the requirements of sub-
section (a), a governmental unit shall not be re-
quired to file a request for the payment of an ex-
pense described in subparagraph (B) or (C), as a 
condition of its being an allowed administrative ex-
pense;’’. 
(d) PAYMENT OF TAXES AND FEES AS SECURED 
CLAIMS.—Section 506 of title 11, United States Code, is 
amended—
(1) in subsection (b), by inserting ‘‘or State 
statute’’ after ‘‘agreement’’; and 
(2) in subsection (c), by inserting ‘‘, including 
the payment of all ad valorem property taxes with 
respect to the property’’ before the period at the 
end.
267
SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS. 
Section 726(a)(1) of title 11, United States Code, is 
amended by striking ‘‘before the date on which the trustee 
commences distribution under this section;’’ and inserting 
the following: ‘‘on or before the earlier of—
‘‘(A) the date that is 10 days after the 
mailing to creditors of the summary of the 
trustee’s final report; or 
‘‘(B) the date on which the trustee com-
mences final distribution under this section;’’. 
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES. 
Section 523(a) of title 11, United States Code, as 
amended by sections 215 and 224, is amended—
(1) in paragraph (1)(B)—
(A) in the matter preceding clause (i), by 
inserting ‘‘or equivalent report or notice,’’ after 
‘‘a return,’’; 
(B) in clause (i), by inserting ‘‘or given’’ 
after ‘‘filed’’; and 
(C) in clause (ii)—
(i) by inserting ‘‘or given’’ after 
‘‘filed’’; and 
(ii) by inserting ‘‘, report, or notice’’ 
after ‘‘return’’; and 
(2) by adding at the end the following:
268
‘‘For purposes of this subsection, the term ‘return’ means 
a return that satisfies the requirements of applicable non-
bankruptcy law (including applicable filing requirements). 
Such term includes a return prepared pursuant to section 
6020(a) of the Internal Revenue Code of 1986, or similar 
State or local law, or a written stipulation to a judgment 
or a final order entered by a nonbankruptcy tribunal, but 
does not include a return made pursuant to section 
6020(b) of the Internal Revenue Code of 1986, or a simi-
lar State or local law.’’. 
SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES. 
Section 505(b)(2) of title 11, United States Code, as 
amended by section 703, is amended by inserting ‘‘the es-
tate,’’ after ‘‘misrepresentation,’’. 
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CON-
FIRM CHAPTER 13 PLANS. 
(a) FILING
OF PREPETITION TAX RETURNS RE-
QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of 
title 11, United States Code, as amended by sections 102, 
213, and 306, is amended by inserting after paragraph 
(8) the following: 
‘‘(9) the debtor has filed all applicable Federal, 
State, and local tax returns as required by section 
1308.’’.
269
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX 
RETURNS.—
(1) IN GENERAL.—Subchapter I of chapter 13 
of title 11, United States Code, is amended by add-
ing at the end the following: 
‘‘§ 1308. Filing of prepetition tax returns 
‘‘(a) Not later than the day before the date on which 
the meeting of the creditors is first scheduled to be held 
under section 341(a), if the debtor was required to file 
a tax return under applicable nonbankruptcy law, the 
debtor shall file with appropriate tax authorities all tax 
returns for all taxable periods ending during the 4-year 
period ending on the date of the filing of the petition. 
‘‘(b)(1) Subject to paragraph (2), if the tax returns 
required by subsection (a) have not been filed by the date 
on which the meeting of creditors is first scheduled to be 
held under section 341(a), the trustee may hold open that 
meeting for a reasonable period of time to allow the debtor 
an additional period of time to file any unfiled returns, 
but such additional period of time shall not extend be-
yond—
‘‘(A) for any return that is past due as of the 
date of the filing of the petition, the date that is 120 
days after the date of that meeting; or
270
‘‘(B) for any return that is not past due as of 
the date of the filing of the petition, the later of—
‘‘(i) the date that is 120 days after the 
date of that meeting; or 
‘‘(ii) the date on which the return is due 
under the last automatic extension of time for 
filing that return to which the debtor is enti-
tled, and for which request is timely made, in 
accordance with applicable nonbankruptcy law. 
‘‘(2) After notice and a hearing, and order entered 
before the tolling of any applicable filing period deter-
mined under this subsection, if the debtor demonstrates 
by a preponderance of the evidence that the failure to file 
a return as required under this subsection is attributable 
to circumstances beyond the control of the debtor, the 
court may extend the filing period established by the trust-
ee under this subsection for—
‘‘(A) a period of not more than 30 days for re-
turns described in paragraph (1); and 
‘‘(B) a period not to extend after the applicable 
extended due date for a return described in para-
graph (2). 
‘‘(c) For purposes of this section, the term ‘return’ 
includes a return prepared pursuant to subsection (a) or 
(b) of section 6020 of the Internal Revenue Code of 1986,
271
or a similar State or local law, or a written stipulation 
to a judgment or a final order entered by a nonbankruptcy 
tribunal.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for subchapter I of chapter 13 of title 11, 
United States Code, is amended by adding at the 
end the following:
‘‘1308. Filing of prepetition tax returns.’’.
(c) DISMISSAL
OR CONVERSION
ON FAILURE TO 
COMPLY.—Section 1307 of title 11, United States Code, 
is amended—
(1) by redesignating subsections (e) and (f) as 
subsections (f) and (g), respectively; and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) Upon the failure of the debtor to file a tax return 
under section 1308, on request of a party in interest or 
the United States trustee and after notice and a hearing, 
the court shall dismiss a case or convert a case under this 
chapter to a case under chapter 7 of this title, whichever 
is in the best interest of the creditors and the estate.’’. 
(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of 
title 11, United States Code, is amended by inserting be-
fore the period at the end the following: ‘‘, and except that 
in a case under chapter 13, a claim of a governmental 
unit for a tax with respect to a return filed under section
272
1308 shall be timely if the claim is filed on or before the 
date that is 60 days after the date on which such return 
was filed as required’’. 
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO 
CONFIRMATION.—It is the sense of Congress that the Ad-
visory Committee on Bankruptcy Rules of the Judicial 
Conference of the United States should, as soon as prac-
ticable after the date of enactment of this Act, propose 
for adoption amended Federal Rules of Bankruptcy Proce-
dure which provide that—
(1) notwithstanding the provisions of Rule 
3015(f), in cases under chapter 13 of title 11, 
United States Code, an objection to the confirmation 
of a plan filed by a governmental unit on or before 
the date that is 60 days after the date on which the 
debtor files all tax returns required under sections 
1308 and 1325(a)(7) of title 11, United States 
Code, shall be treated for all purposes as if such ob-
jection had been timely filed before such confirma-
tion; and 
(2) in addition to the provisions of Rule 3007, 
in a case under chapter 13 of title 11, United States 
Code, no objection to a claim for a tax with respect 
to which a return is required to be filed under sec-
273
tion 1308 of title 11, United States Code, shall be 
filed until such return has been filed as required. 
SEC. 717. STANDARDS FOR TAX DISCLOSURE. 
Section 1125(a)(1) of title 11, United States Code, 
is amended—
(1) by inserting ‘‘including a discussion of the 
potential material Federal tax consequences of the 
plan to the debtor, any successor to the debtor, and 
a hypothetical investor typical of the holders of 
claims or interests in the case,’’ after ‘‘records’’; and 
(2) by striking ‘‘a hypothetical reasonable inves-
tor typical of holders of claims or interests’’ and in-
serting ‘‘such a hypothetical investor’’. 
SEC. 718. SETOFF OF TAX REFUNDS. 
Section 362(b) of title 11, United States Code, as 
amended by sections 224, 303, 311, and 401, is amended 
by inserting after paragraph (25) the following: 
‘‘(26) under subsection (a), of the setoff under 
applicable nonbankruptcy law of an income tax re-
fund, by a governmental unit, with respect to a tax-
able period that ended before the order for relief 
against an income tax liability for a taxable period 
that also ended before the order for relief, except 
that in any case in which the setoff of an income tax 
refund is not permitted under applicable nonbank-
274
ruptcy law because of a pending action to determine 
the amount or legality of a tax liability, the govern-
mental unit may hold the refund pending the resolu-
tion of the action, unless the court, on the motion 
of the trustee and after notice and a hearing, grants 
the taxing authority adequate protection (within the 
meaning of section 361) for the secured claim of 
that authority in the setoff under section 506(a);’’. 
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREAT-
MENT OF STATE AND LOCAL TAXES. 
(a) IN GENERAL.—
(1) SPECIAL PROVISIONS.—Section 346 of title 
11, United States Code, is amended to read as fol-
lows: 
‘‘§ 346. Special provisions related to the treatment of 
State and local taxes 
‘‘(a) Whenever the Internal Revenue Code of 1986 
provides that a separate taxable estate or entity is created 
in a case concerning a debtor under this title, and the in-
come, gain, loss, deductions, and credits of such estate 
shall be taxed to or claimed by the estate, a separate tax-
able estate is also created for purposes of any State and 
local law imposing a tax on or measured by income and 
such income, gain, loss, deductions, and credits shall be 
taxed to or claimed by the estate and may not be taxed
275
to or claimed by the debtor. The preceding sentence shall 
not apply if the case is dismissed. The trustee shall make 
tax returns of income required under any such State or 
local law. 
‘‘(b) Whenever the Internal Revenue Code of 1986 
provides that no separate taxable estate shall be created 
in a case concerning a debtor under this title, and the in-
come, gain, loss, deductions, and credits of an estate shall 
be taxed to or claimed by the debtor, such income, gain, 
loss, deductions, and credits shall be taxed to or claimed 
by the debtor under a State or local law imposing a tax 
on or measured by income and may not be taxed to or 
claimed by the estate. The trustee shall make such tax 
returns of income of corporations and of partnerships as 
are required under any State or local law, but with respect 
to partnerships, shall make said returns only to the extent 
such returns are also required to be made under such 
Code. The estate shall be liable for any tax imposed on 
such corporation or partnership, but not for any tax im-
posed on partners or members. 
‘‘(c) With respect to a partnership or any entity treat-
ed as a partnership under a State or local law imposing 
a tax on or measured by income that is a debtor in a case 
under this title, any gain or loss resulting from a distribu-
tion of property from such partnership, or any distributive
276
share of any income, gain, loss, deduction, or credit of a 
partner or member that is distributed, or considered dis-
tributed, from such partnership, after the commencement 
of the case, is gain, loss, income, deduction, or credit, as 
the case may be, of the partner or member, and if such 
partner or member is a debtor in a case under this title, 
shall be subject to tax in accordance with subsection (a) 
or (b). 
‘‘(d) For purposes of any State or local law imposing 
a tax on or measured by income, the taxable period of 
a debtor in a case under this title shall terminate only 
if and to the extent that the taxable period of such debtor 
terminates under the Internal Revenue Code of 1986. 
‘‘(e) The estate in any case described in subsection 
(a) shall use the same accounting method as the debtor 
used immediately before the commencement of the case, 
if such method of accounting complies with applicable non-
bankruptcy tax law. 
‘‘(f) For purposes of any State or local law imposing 
a tax on or measured by income, a transfer of property 
from the debtor to the estate or from the estate to the 
debtor shall not be treated as a disposition for purposes 
of any provision assigning tax consequences to a disposi-
tion, except to the extent that such transfer is treated as 
a disposition under the Internal Revenue Code of 1986.
277
‘‘(g) Whenever a tax is imposed pursuant to a State 
or local law imposing a tax on or measured by income pur-
suant to subsection (a) or (b), such tax shall be imposed 
at rates generally applicable to the same types of entities 
under such State or local law. 
‘‘(h) The trustee shall withhold from any payment of 
claims for wages, salaries, commissions, dividends, inter-
est, or other payments, or collect, any amount required 
to be withheld or collected under applicable State or local 
tax law, and shall pay such withheld or collected amount 
to the appropriate governmental unit at the time and in 
the manner required by such tax law, and with the same 
priority as the claim from which such amount was with-
held or collected was paid. 
‘‘(i)(1) To the extent that any State or local law im-
posing a tax on or measured by income provides for the 
carryover of any tax attribute from one taxable period to 
a subsequent taxable period, the estate shall succeed to 
such tax attribute in any case in which such estate is sub-
ject to tax under subsection (a). 
‘‘(2) After such a case is closed or dismissed, the 
debtor shall succeed to any tax attribute to which the es-
tate succeeded under paragraph (1) to the extent con-
sistent with the Internal Revenue Code of 1986.
278
‘‘(3) The estate may carry back any loss or tax at-
tribute to a taxable period of the debtor that ended before 
the order for relief under this title to the extent that— 
‘‘(A) applicable State or local tax law provides 
for a carryback in the case of the debtor; and 
‘‘(B) the same or a similar tax attribute may be 
carried back by the estate to such a taxable period 
of the debtor under the Internal Revenue Code of 
1986. 
‘‘(j)(1) For purposes of any State or local law impos-
ing a tax on or measured by income, income is not realized 
by the estate, the debtor, or a successor to the debtor by 
reason of discharge of indebtedness in a case under this 
title, except to the extent, if any, that such income is sub-
ject to tax under the Internal Revenue Code of 1986. 
‘‘(2) Whenever the Internal Revenue Code of 1986 
provides that the amount excluded from gross income in 
respect of the discharge of indebtedness in a case under 
this title shall be applied to reduce the tax attributes of 
the debtor or the estate, a similar reduction shall be made 
under any State or local law imposing a tax on or meas-
ured by income to the extent such State or local law recog-
nizes such attributes. Such State or local law may also 
provide for the reduction of other attributes to the extent
279
that the full amount of income from the discharge of in-
debtedness has not been applied. 
‘‘(k)(1) Except as provided in this section and section 
505, the time and manner of filing tax returns and the 
items of income, gain, loss, deduction, and credit of any 
taxpayer shall be determined under applicable nonbank-
ruptcy law. 
‘‘(2) For Federal tax purposes, the provisions of this 
section are subject to the Internal Revenue Code of 1986 
and other applicable Federal nonbankruptcy law.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 3 of title 11, United States Code, 
is amended by striking the item relating to section 
346 and inserting the following:
‘‘346. Special provisions related to the treatment of State and local taxes.’’.
(b) CONFORMING AMENDMENTS.—Title 11 of the 
United States Code is amended—
(1) by striking section 728; 
(2) in the table of sections for chapter 7 by 
striking the item relating to section 728; 
(3) in section 1146—
(A) by striking subsections (a) and (b); 
and 
(B) by redesignating subsections (c) and 
(d) as subsections (a) and (b), respectively; and 
(4) in section 1231—
280
(A) by striking subsections (a) and (b); 
and 
(B) by redesignating subsections (c) and 
(d) as subsections (a) and (b), respectively. 
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX 
RETURNS. 
Section 521 of title 11, United States Code, as 
amended by sections 106, 225, 305, 315, and 316, is 
amended by adding at the end the following: 
‘‘(k)(1) Notwithstanding any other provision of this 
title, if the debtor fails to file a tax return that becomes 
due after the commencement of the case or to properly 
obtain an extension of the due date for filing such return, 
the taxing authority may request that the court enter an 
order converting or dismissing the case. 
‘‘(2) If the debtor does not file the required return 
or obtain the extension referred to in paragraph (1) within 
90 days after a request is filed by the taxing authority 
under that paragraph, the court shall convert or dismiss 
the case, whichever is in the best interests of creditors and 
the estate.’’.
281
TITLE VIII—ANCILLARY AND 
OTHER CROSS-BORDER CASES 
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, 
UNITED STATES CODE. 
(a) IN GENERAL.—Title 11, United States Code, is 
amended by inserting after chapter 13 the following: 
‘‘CHAPTER 15—ANCILLARY AND OTHER 
CROSS-BORDER CASES
‘‘Sec. 
‘‘1501. Purpose and scope of application. 
‘‘SUBCHAPTER I—GENERAL PROVISIONS 
‘‘1502. Definitions. 
‘‘1503. International obligations of the United States. 
‘‘1504. Commencement of ancillary case. 
‘‘1505. Authorization to act in a foreign country. 
‘‘1506. Public policy exception. 
‘‘1507. Additional assistance. 
‘‘1508. Interpretation. 
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND 
CREDITORS TO THE COURT 
‘‘1509. Right of direct access. 
‘‘1510. Limited jurisdiction. 
‘‘1511. Commencement of case under section 301 or 303. 
‘‘1512. Participation of a foreign representative in a case under this title. 
‘‘1513. Access of foreign creditors to a case under this title. 
‘‘1514. Notification to foreign creditors concerning a case under this title. 
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING 
AND RELIEF 
‘‘1515. Application for recognition. 
‘‘1516. Presumptions concerning recognition. 
‘‘1517. Order granting recognition. 
‘‘1518. Subsequent information. 
‘‘1519. Relief that may be granted upon filing petition for recognition. 
‘‘1520. Effects of recognition of a foreign main proceeding. 
‘‘1521. Relief that may be granted upon recognition. 
‘‘1522. Protection of creditors and other interested persons. 
‘‘1523. Actions to avoid acts detrimental to creditors. 
‘‘1524. Intervention by a foreign representative. 
‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND 
FOREIGN REPRESENTATIVES
282
‘‘1525. Cooperation and direct communication between the court and foreign 
courts or foreign representatives. 
‘‘1526. Cooperation and direct communication between the trustee and foreign 
courts or foreign representatives. 
‘‘1527. Forms of cooperation. 
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 
‘‘1528. Commencement of a case under this title after recognition of a foreign 
main proceeding. 
‘‘1529. Coordination of a case under this title and a foreign proceeding. 
‘‘1530. Coordination of more than 1 foreign proceeding. 
‘‘1531. Presumption of insolvency based on recognition of a foreign main pro-
ceeding. 
‘‘1532. Rule of payment in concurrent proceedings.
‘‘§ 1501. Purpose and scope of application 
‘‘(a) The purpose of this chapter is to incorporate the 
Model Law on Cross-Border Insolvency so as to provide 
effective mechanisms for dealing with cases of cross-bor-
der insolvency with the objectives of—
‘‘(1) cooperation between—
‘‘(A) courts of the United States, United 
States trustees, trustees, examiners, debtors, 
and debtors in possession; and 
‘‘(B) the courts and other competent au-
thorities of foreign countries involved in cross-
border insolvency cases; 
‘‘(2) greater legal certainty for trade and in-
vestment; 
‘‘(3) fair and efficient administration of cross-
border insolvencies that protects the interests of all 
creditors, and other interested entities, including the 
debtor;
283
‘‘(4) protection and maximization of the value 
of the debtor’s assets; and 
‘‘(5) facilitation of the rescue of financially 
troubled businesses, thereby protecting investment 
and preserving employment. 
‘‘(b) This chapter applies where—
‘‘(1) assistance is sought in the United States 
by a foreign court or a foreign representative in con-
nection with a foreign proceeding; 
‘‘(2) assistance is sought in a foreign country in 
connection with a case under this title; 
‘‘(3) a foreign proceeding and a case under this 
title with respect to the same debtor are taking place 
concurrently; or 
‘‘(4) creditors or other interested persons in a 
foreign country have an interest in requesting the 
commencement of, or participating in, a case or pro-
ceeding under this title. 
‘‘(c) This chapter does not apply to—
‘‘(1) a proceeding concerning an entity, other 
than a foreign insurance company, identified by ex-
clusion in section 109(b); 
‘‘(2) an individual, or to an individual and such 
individual’s spouse, who have debts within the limits 
specified in section 109(e) and who are citizens of
284
the United States or aliens lawfully admitted for 
permanent residence in the United States; or 
‘‘(3) an entity subject to a proceeding under the 
Securities Investor Protection Act of 1970, a stock-
broker subject to subchapter III of chapter 7 of this 
title, or a commodity broker subject to subchapter 
IV of chapter 7 of this title. 
‘‘(d) The court may not grant relief under this chap-
ter with respect to any deposit, escrow, trust fund, or 
other security required or permitted under any applicable 
State insurance law or regulation for the benefit of claim 
holders in the United States. 
‘‘SUBCHAPTER I—GENERAL PROVISIONS 
‘‘§ 1502. Definitions 
‘‘For the purposes of this chapter, the term—
‘‘(1) ‘debtor’ means an entity that is the subject 
of a foreign proceeding; 
‘‘(2) ‘establishment’ means any place of oper-
ations where the debtor carries out a nontransitory 
economic activity; 
‘‘(3) ‘foreign court’ means a judicial or other 
authority competent to control or supervise a foreign 
proceeding;
285
‘‘(4) ‘foreign main proceeding’ means a foreign 
proceeding taking place in the country where the 
debtor has the center of its main interests; 
‘‘(5) ‘foreign nonmain proceeding’ means a for-
eign proceeding, other than a foreign main pro-
ceeding, taking place in a country where the debtor 
has an establishment; 
‘‘(6) ‘trustee’ includes a trustee, a debtor in 
possession in a case under any chapter of this title, 
or a debtor under chapter 9 of this title; 
‘‘(7) ‘recognition’ means the entry of an order 
granting recognition of a foreign main proceeding or 
foreign nonmain proceeding under this chapter; and 
‘‘(8) ‘within the territorial jurisdiction of the 
United States’, when used with reference to property 
of a debtor, refers to tangible property located with-
in the territory of the United States and intangible 
property deemed under applicable nonbankruptcy 
law to be located within that territory, including any 
property subject to attachment or garnishment that 
may properly be seized or garnished by an action in 
a Federal or State court in the United States. 
‘‘§ 1503. International obligations of the United States 
‘‘To the extent that this chapter conflicts with an ob-
ligation of the United States arising out of any treaty or
286
other form of agreement to which it is a party with one 
or more other countries, the requirements of the treaty 
or agreement prevail. 
‘‘§ 1504. Commencement of ancillary case 
‘‘A case under this chapter is commenced by the filing 
of a petition for recognition of a foreign proceeding under 
section 1515. 
‘‘§ 1505. Authorization to act in a foreign country 
‘‘A trustee or another entity (including an examiner) 
may be authorized by the court to act in a foreign country 
on behalf of an estate created under section 541. An entity 
authorized to act under this section may act in any way 
permitted by the applicable foreign law. 
‘‘§ 1506. Public policy exception 
‘‘Nothing in this chapter prevents the court from re-
fusing to take an action governed by this chapter if the 
action would be manifestly contrary to the public policy 
of the United States. 
‘‘§ 1507. Additional assistance 
‘‘(a) Subject to the specific limitations stated else-
where in this chapter the court, if recognition is granted, 
may provide additional assistance to a foreign representa-
tive under this title or under other laws of the United 
States.
287
‘‘(b) In determining whether to provide additional as-
sistance under this title or under other laws of the United 
States, the court shall consider whether such additional 
assistance, consistent with the principles of comity, will 
reasonably assure—
‘‘(1) just treatment of all holders of claims 
against or interests in the debtor’s property; 
‘‘(2) protection of claim holders in the United 
States against prejudice and inconvenience in the 
processing of claims in such foreign proceeding; 
‘‘(3) prevention of preferential or fraudulent 
dispositions of property of the debtor; 
‘‘(4) distribution of proceeds of the debtor’s 
property substantially in accordance with the order 
prescribed by this title; and 
‘‘(5) if appropriate, the provision of an oppor-
tunity for a fresh start for the individual that such 
foreign proceeding concerns. 
‘‘§ 1508. Interpretation 
‘‘In interpreting this chapter, the court shall consider 
its international origin, and the need to promote an appli-
cation of this chapter that is consistent with the applica-
tion of similar statutes adopted by foreign jurisdictions.
288
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP-
RESENTATIVES AND CREDITORS TO THE 
COURT 
‘‘§ 1509. Right of direct access 
‘‘(a) A foreign representative may commence a case 
under section 1504 by filing directly with the court a peti-
tion for recognition of a foreign proceeding under section 
1515. 
‘‘(b) If the court grants recognition under section 
1515, and subject to any limitations that the court may 
impose consistent with the policy of this chapter—
‘‘(1) the foreign representative has the capacity 
to sue and be sued in a court in the United States; 
‘‘(2) the foreign representative may apply di-
rectly to a court in the United States for appropriate 
relief in that court; and 
‘‘(3) a court in the United States shall grant 
comity or cooperation to the foreign representative. 
‘‘(c) A request for comity or cooperation by a foreign 
representative in a court in the United States other than 
the court which granted recognition shall be accompanied 
by a certified copy of an order granting recognition under 
section 1517. 
‘‘(d) If the court denies recognition under this chap-
ter, the court may issue any appropriate order necessary
290
‘‘(b) The petition commencing a case under sub-
section (a) must be accompanied by a certified copy of 
an order granting recognition. The court where the peti-
tion for recognition has been filed must be advised of the 
foreign representative’s intent to commence a case under 
subsection (a) prior to such commencement. 
‘‘§ 1512. Participation of a foreign representative in a 
case under this title 
‘‘Upon recognition of a foreign proceeding, the for-
eign representative in the recognized proceeding is entitled 
to participate as a party in interest in a case regarding 
the debtor under this title. 
‘‘§ 1513. Access of foreign creditors to a case under 
this title 
‘‘(a) Foreign creditors have the same rights regarding 
the commencement of, and participation in, a case under 
this title as domestic creditors. 
‘‘(b)(1) Subsection (a) does not change or codify 
present law as to the priority of claims under section 507 
or 726 of this title, except that the claim of a foreign cred-
itor under those sections shall not be given a lower priority 
than that of general unsecured claims without priority 
solely because the holder of such claim is a foreign cred-
itor.
291
‘‘(2)(A) Subsection (a) and paragraph (1) do not 
change or codify present law as to the allowability of for-
eign revenue claims or other foreign public law claims in 
a proceeding under this title. 
‘‘(B) Allowance and priority as to a foreign tax claim 
or other foreign public law claim shall be governed by any 
applicable tax treaty of the United States, under the con-
ditions and circumstances specified therein. 
‘‘§ 1514. Notification to foreign creditors concerning a 
case under this title 
‘‘(a) Whenever in a case under this title notice is to 
be given to creditors generally or to any class or category 
of creditors, such notice shall also be given to the known 
creditors generally, or to creditors in the notified class or 
category, that do not have addresses in the United States. 
The court may order that appropriate steps be taken with 
a view to notifying any creditor whose address is not yet 
known. 
‘‘(b) Such notification to creditors with foreign ad-
dresses described in subsection (a) shall be given individ-
ually, unless the court considers that, under the cir-
cumstances, some other form of notification would be 
more appropriate. No letter or other formality is required. 
‘‘(c) When a notification of commencement of a case 
is to be given to foreign creditors, the notification shall—
292
‘‘(1) indicate the time period for filing proofs of 
claim and specify the place for their filing; 
‘‘(2) indicate whether secured creditors need to 
file their proofs of claim; and 
‘‘(3) contain any other information required to 
be included in such a notification to creditors under 
this title and the orders of the court. 
‘‘(d) Any rule of procedure or order of the court as 
to notice or the filing of a claim shall provide such addi-
tional time to creditors with foreign addresses as is rea-
sonable under the circumstances. 
‘‘SUBCHAPTER III—RECOGNITION OF A 
FOREIGN PROCEEDING AND RELIEF 
‘‘§ 1515. Application for recognition 
‘‘(a) A foreign representative applies to the court for 
recognition of the foreign proceeding in which the foreign 
representative has been appointed by filing a petition for 
recognition. 
‘‘(b) A petition for recognition shall be accompanied 
by—
‘‘(1) a certified copy of the decision com-
mencing the foreign proceeding and appointing the 
foreign representative;
293
‘‘(2) a certificate from the foreign court affirm-
ing the existence of the foreign proceeding and of 
the appointment of the foreign representative; or 
‘‘(3) in the absence of evidence referred to in 
paragraphs (1) and (2), any other evidence accept-
able to the court of the existence of the foreign pro-
ceeding and of the appointment of the foreign rep-
resentative. 
‘‘(c) A petition for recognition shall also be accom-
panied by a statement identifying all foreign proceedings 
with respect to the debtor that are known to the foreign 
representative. 
‘‘(d) The documents referred to in paragraphs (1) 
and (2) of subsection (b) shall be translated into English. 
The court may require a translation into English of addi-
tional documents. 
‘‘§ 1516. Presumptions concerning recognition 
‘‘(a) If the decision or certificate referred to in section 
1515(b) indicates that the foreign proceeding is a foreign 
proceeding and that the person or body is a foreign rep-
resentative, the court is entitled to so presume. 
‘‘(b) The court is entitled to presume that documents 
submitted in support of the petition for recognition are 
authentic, whether or not they have been legalized.
294
‘‘(c) In the absence of evidence to the contrary, the 
debtor’s registered office, or habitual residence in the case 
of an individual, is presumed to be the center of the debt-
or’s main interests. 
‘‘§ 1517. Order granting recognition 
‘‘(a) Subject to section 1506, after notice and a hear-
ing, an order recognizing a foreign proceeding shall be en-
tered if—
‘‘(1) the foreign proceeding for which recogni-
tion is sought is a foreign main proceeding or for-
eign nonmain proceeding within the meaning of sec-
tion 1502; 
‘‘(2) the foreign representative applying for rec-
ognition is a person or body; and 
‘‘(3) the petition meets the requirements of sec-
tion 1515. 
‘‘(b) The foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is taking 
place in the country where the debtor has the center 
of its main interests; or 
‘‘(2) as a foreign nonmain proceeding if the 
debtor has an establishment within the meaning of 
section 1502 in the foreign country where the pro-
ceeding is pending.
295
‘‘(c) A petition for recognition of a foreign proceeding 
shall be decided upon at the earliest possible time. Entry 
of an order recognizing a foreign proceeding constitutes 
recognition under this chapter. 
‘‘(d) The provisions of this subchapter do not prevent 
modification or termination of recognition if it is shown 
that the grounds for granting it were fully or partially 
lacking or have ceased to exist, but in considering such 
action the court shall give due weight to possible prejudice 
to parties that have relied upon the order granting rec-
ognition. The case under this chapter may be closed in 
the manner prescribed under section 350. 
‘‘§ 1518. Subsequent information 
‘‘From the time of filing the petition for recognition 
of the foreign proceeding, the foreign representative shall 
file with the court promptly a notice of change of status 
concerning—
‘‘(1) any substantial change in the status of the 
foreign proceeding or the status of the foreign rep-
resentative’s appointment; and 
‘‘(2) any other foreign proceeding regarding the 
debtor that becomes known to the foreign represent-
ative.
296
‘‘§ 1519. Relief that may be granted upon filing peti-
tion for recognition 
‘‘(a) From the time of filing a petition for recognition 
until the court rules on the petition, the court may, at 
the request of the foreign representative, where relief is 
urgently needed to protect the assets of the debtor or the 
interests of the creditors, grant relief of a provisional na-
ture, including—
‘‘(1) staying execution against the debtor’s as-
sets; 
‘‘(2) entrusting the administration or realiza-
tion of all or part of the debtor’s assets located in 
the United States to the foreign representative or 
another person authorized by the court, including an 
examiner, in order to protect and preserve the value 
of assets that, by their nature or because of other 
circumstances, are perishable, susceptible to devalu-
ation or otherwise in jeopardy; and 
‘‘(3) any relief referred to in paragraph (3), 
(4), or (7) of section 1521(a). 
‘‘(b) Unless extended under section 1521(a)(6), the 
relief granted under this section terminates when the peti-
tion for recognition is granted. 
‘‘(c) It is a ground for denial of relief under this sec-
tion that such relief would interfere with the administra-
tion of a foreign main proceeding.
297
‘‘(d) The court may not enjoin a police or regulatory 
act of a governmental unit, including a criminal action or 
proceeding, under this section. 
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under this 
section. 
‘‘(f) The exercise of rights not subject to the stay 
arising under section 362(a) pursuant to paragraph (6), 
(7), (17), or (27) of section 362(b) or pursuant to section 
362(n) shall not be stayed by any order of a court or ad-
ministrative agency in any proceeding under this chapter. 
‘‘§ 1520. Effects of recognition of a foreign main pro-
ceeding 
‘‘(a) Upon recognition of a foreign proceeding that 
is a foreign main proceeding—
‘‘(1) sections 361 and 362 apply with respect to 
the debtor and that property of the debtor that is 
within the territorial jurisdiction of the United 
States; 
‘‘(2) sections 363, 549, and 552 of this title 
apply to a transfer of an interest of the debtor in 
property that is within the territorial jurisdiction of 
the United States to the same extent that the sec-
tions would apply to property of an estate;
298
‘‘(3) unless the court orders otherwise, the for-
eign representative may operate the debtor’s busi-
ness and may exercise the rights and powers of a 
trustee under and to the extent provided by sections 
363 and 552; and 
‘‘(4) section 552 applies to property of the debt-
or that is within the territorial jurisdiction of the 
United States. 
‘‘(b) Subsection (a) does not affect the right to com-
mence an individual action or proceeding in a foreign 
country to the extent necessary to preserve a claim against 
the debtor. 
‘‘(c) Subsection (a) does not affect the right of a for-
eign representative or an entity to file a petition com-
mencing a case under this title or the right of any party 
to file claims or take other proper actions in such a case. 
‘‘§ 1521. Relief that may be granted upon recognition 
‘‘(a) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, where necessary to effectuate the 
purpose of this chapter and to protect the assets of the 
debtor or the interests of the creditors, the court may, at 
the request of the foreign representative, grant any appro-
priate relief, including—
‘‘(1) staying the commencement or continuation 
of an individual action or proceeding concerning the
299
debtor’s assets, rights, obligations or liabilities to the 
extent they have not been stayed under section 
1520(a); 
‘‘(2) staying execution against the debtor’s as-
sets to the extent it has not been stayed under sec-
tion 1520(a); 
‘‘(3) suspending the right to transfer, encumber 
or otherwise dispose of any assets of the debtor to 
the extent this right has not been suspended under 
section 1520(a); 
‘‘(4) providing for the examination of witnesses, 
the taking of evidence or the delivery of information 
concerning the debtor’s assets, affairs, rights, obliga-
tions or liabilities; 
‘‘(5) entrusting the administration or realiza-
tion of all or part of the debtor’s assets within the 
territorial jurisdiction of the United States to the 
foreign representative or another person, including 
an examiner, authorized by the court; 
‘‘(6) extending relief granted under section 
1519(a); and 
‘‘(7) granting any additional relief that may be 
available to a trustee, except for relief available 
under sections 522, 544, 545, 547, 548, 550, and 
724(a).
300
‘‘(b) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, the court may, at the request of the 
foreign representative, entrust the distribution of all or 
part of the debtor’s assets located in the United States 
to the foreign representative or another person, including 
an examiner, authorized by the court, provided that the 
court is satisfied that the interests of creditors in the 
United States are sufficiently protected. 
‘‘(c) In granting relief under this section to a rep-
resentative of a foreign nonmain proceeding, the court 
must be satisfied that the relief relates to assets that, 
under the law of the United States, should be adminis-
tered in the foreign nonmain proceeding or concerns infor-
mation required in that proceeding. 
‘‘(d) The court may not enjoin a police or regulatory 
act of a governmental unit, including a criminal action or 
proceeding, under this section. 
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a). 
‘‘(f) The exercise of rights not subject to the stay 
arising under section 362(a) pursuant to paragraph (6), 
(7), (17), or (27) of section 362(b) or pursuant to section 
362(n) shall not be stayed by any order of a court or ad-
ministrative agency in any proceeding under this chapter.
301
‘‘§ 1522. Protection of creditors and other interested 
persons 
‘‘(a) The court may grant relief under section 1519 
or 1521, or may modify or terminate relief under sub-
section (c), only if the interests of the creditors and other 
interested entities, including the debtor, are sufficiently 
protected. 
‘‘(b) The court may subject relief granted under sec-
tion 1519 or 1521, or the operation of the debtor’s busi-
ness under section 1520(a)(3) of this title, to conditions 
it considers appropriate, including the giving of security 
or the filing of a bond. 
‘‘(c) The court may, at the request of the foreign rep-
resentative or an entity affected by relief granted under 
section 1519 or 1521, or at its own motion, modify or 
terminate such relief. 
‘‘(d) Section 1104(d) shall apply to the appointment 
of an examiner under this chapter. Any examiner shall 
comply with the qualification requirements imposed on a 
trustee by section 322. 
‘‘§ 1523. Actions to avoid acts detrimental to creditors 
‘‘(a) Upon recognition of a foreign proceeding, the 
foreign representative has standing in a case concerning 
the debtor pending under another chapter of this title to 
initiate actions under sections 522, 544, 545, 547, 548, 
550, 553, and 724(a).
302
‘‘(b) When the foreign proceeding is a foreign 
nonmain proceeding, the court must be satisfied that an 
action under subsection (a) relates to assets that, under 
United States law, should be administered in the foreign 
nonmain proceeding. 
‘‘§ 1524. Intervention by a foreign representative 
‘‘Upon recognition of a foreign proceeding, the for-
eign representative may intervene in any proceedings in 
a State or Federal court in the United States in which 
the debtor is a party. 
‘‘SUBCHAPTER IV—COOPERATION WITH FOR-
EIGN COURTS AND FOREIGN REPRESENTA-
TIVES 
‘‘§ 1525. Cooperation and direct communication be-
tween the court and foreign courts or for-
eign representatives 
‘‘(a) Consistent with section 1501, the court shall co-
operate to the maximum extent possible with foreign 
courts or foreign representatives, either directly or 
through the trustee. 
‘‘(b) The court is entitled to communicate directly 
with, or to request information or assistance directly from, 
foreign courts or foreign representatives, subject to the 
rights of parties in interest to notice and participation.
303
‘‘§ 1526. Cooperation and direct communication be-
tween the trustee and foreign courts or 
foreign representatives 
‘‘(a) Consistent with section 1501, the trustee or 
other person, including an examiner, authorized by the 
court, shall, subject to the supervision of the court, cooper-
ate to the maximum extent possible with foreign courts 
or foreign representatives. 
‘‘(b) The trustee or other person, including an exam-
iner, authorized by the court is entitled, subject to the su-
pervision of the court, to communicate directly with for-
eign courts or foreign representatives. 
‘‘§ 1527. Forms of cooperation 
‘‘Cooperation referred to in sections 1525 and 1526 
may be implemented by any appropriate means, includ-
ing—
‘‘(1) appointment of a person or body, including 
an examiner, to act at the direction of the court; 
‘‘(2) communication of information by any 
means considered appropriate by the court; 
‘‘(3) coordination of the administration and su-
pervision of the debtor’s assets and affairs; 
‘‘(4) approval or implementation of agreements 
concerning the coordination of proceedings; and 
‘‘(5) coordination of concurrent proceedings re-
garding the same debtor.
304
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 
‘‘§ 1528. Commencement of a case under this title 
after recognition of a foreign main pro-
ceeding 
‘‘After recognition of a foreign main proceeding, a 
case under another chapter of this title may be commenced 
only if the debtor has assets in the United States. The 
effects of such case shall be restricted to the assets of the 
debtor that are within the territorial jurisdiction of the 
United States and, to the extent necessary to implement 
cooperation and coordination under sections 1525, 1526, 
and 1527, to other assets of the debtor that are within 
the jurisdiction of the court under sections 541(a) of this 
title, and 1334(e) of title 28, to the extent that such other 
assets are not subject to the jurisdiction and control of 
a foreign proceeding that has been recognized under this 
chapter. 
‘‘§ 1529. Coordination of a case under this title and a 
foreign proceeding 
‘‘If a foreign proceeding and a case under another 
chapter of this title are taking place concurrently regard-
ing the same debtor, the court shall seek cooperation and 
coordination under sections 1525, 1526, and 1527, and 
the following shall apply:
305
‘‘(1) If the case in the United States is taking 
place at the time the petition for recognition of the 
foreign proceeding is filed—
‘‘(A) any relief granted under section 1519 
or 1521 must be consistent with the relief 
granted in the case in the United States; and 
‘‘(B) even if the foreign proceeding is rec-
ognized as a foreign main proceeding, section 
1520 does not apply. 
‘‘(2) If a case in the United States under this 
title commences after recognition, or after the filing 
of the petition for recognition, of the foreign pro-
ceeding—
‘‘(A) any relief in effect under section 
1519 or 1521 shall be reviewed by the court 
and shall be modified or terminated if incon-
sistent with the case in the United States; and 
‘‘(B) if the foreign proceeding is a foreign 
main proceeding, the stay and suspension re-
ferred to in section 1520(a) shall be modified or 
terminated if inconsistent with the relief grant-
ed in the case in the United States. 
‘‘(3) In granting, extending, or modifying relief 
granted to a representative of a foreign nonmain 
proceeding, the court must be satisfied that the re-
306
lief relates to assets that, under the laws of the 
United States, should be administered in the foreign 
nonmain proceeding or concerns information re-
quired in that proceeding. 
‘‘(4) In achieving cooperation and coordination 
under sections 1528 and 1529, the court may grant 
any of the relief authorized under section 305. 
‘‘§ 1530. Coordination of more than 1 foreign pro-
ceeding 
‘‘In matters referred to in section 1501, with respect 
to more than 1 foreign proceeding regarding the debtor, 
the court shall seek cooperation and coordination under 
sections 1525, 1526, and 1527, and the following shall 
apply: 
‘‘(1) Any relief granted under section 1519 or 
1521 to a representative of a foreign nonmain pro-
ceeding after recognition of a foreign main pro-
ceeding must be consistent with the foreign main 
proceeding. 
‘‘(2) If a foreign main proceeding is recognized 
after recognition, or after the filing of a petition for 
recognition, of a foreign nonmain proceeding, any 
relief in effect under section 1519 or 1521 shall be 
reviewed by the court and shall be modified or termi-
307
nated if inconsistent with the foreign main pro-
ceeding. 
‘‘(3) If, after recognition of a foreign nonmain 
proceeding, another foreign nonmain proceeding is 
recognized, the court shall grant, modify, or termi-
nate relief for the purpose of facilitating coordina-
tion of the proceedings. 
‘‘§ 1531. Presumption of insolvency based on recogni-
tion of a foreign main proceeding 
‘‘In the absence of evidence to the contrary, recogni-
tion of a foreign main proceeding is, for the purpose of 
commencing a proceeding under section 303, proof that 
the debtor is generally not paying its debts as such debts 
become due. 
‘‘§ 1532. Rule of payment in concurrent proceedings 
‘‘Without prejudice to secured claims or rights in 
rem, a creditor who has received payment with respect to 
its claim in a foreign proceeding pursuant to a law relating 
to insolvency may not receive a payment for the same 
claim in a case under any other chapter of this title re-
garding the debtor, so long as the payment to other credi-
tors of the same class is proportionately less than the pay-
ment the creditor has already received.’’.
308
(b) CLERICAL AMENDMENT.—The table of chapters 
for title 11, United States Code, is amended by inserting 
after the item relating to chapter 13 the following:
‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’.
SEC. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, 
UNITED STATES CODE. 
(a) APPLICABILITY OF CHAPTERS.—Section 103 of 
title 11, United States Code, is amended—
(1) in subsection (a), by inserting before the pe-
riod the following: ‘‘, and this chapter, sections 307, 
362(n), 555 through 557, and 559 through 562 
apply in a case under chapter 15’’; and 
(2) by adding at the end the following: 
‘‘(k) Chapter 15 applies only in a case under such 
chapter, except that—
‘‘(1) sections 1505, 1513, and 1514 apply in all 
cases under this title; and 
‘‘(2) section 1509 applies whether or not a case 
under this title is pending.’’. 
(b) DEFINITIONS.—Section 101 of title 11, United 
States Code, is amended by striking paragraphs (23) and 
(24) and inserting the following: 
‘‘(23) ‘foreign proceeding’ means a collective ju-
dicial or administrative proceeding in a foreign coun-
try, including an interim proceeding, under a law re-
lating to insolvency or adjustment of debt in which
309
proceeding the assets and affairs of the debtor are 
subject to control or supervision by a foreign court, 
for the purpose of reorganization or liquidation; 
‘‘(24) ‘foreign representative’ means a person 
or body, including a person or body appointed on an 
interim basis, authorized in a foreign proceeding to 
administer the reorganization or the liquidation of 
the debtor’s assets or affairs or to act as a rep-
resentative of the foreign proceeding;’’. 
(c) AMENDMENTS TO TITLE 28, UNITED STATES 
CODE.—
(1) PROCEDURES.—Section 157(b)(2) of title 
28, United States Code, is amended—
(A) in subparagraph (N), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (O), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(P) recognition of foreign proceedings and 
other matters under chapter 15 of title 11.’’. 
(2) BANKRUPTCY CASES AND PROCEEDINGS.—
Section 1334(c) of title 28, United States Code, is 
amended by striking ‘‘Nothing in’’ and inserting 
‘‘Except with respect to a case under chapter 15 of 
title 11, nothing in’’.
310
(3) DUTIES OF TRUSTEES.—Section 586(a)(3) 
of title 28, United States Code, is amended by strik-
ing ‘‘or 13’’ and inserting ‘‘13, or 15’’. 
(4) VENUE OF CASES ANCILLARY TO FOREIGN 
PROCEEDINGS.—Section 1410 of title 28, United 
States Code, is amended to read as follows: 
‘‘§ 1410. Venue of cases ancillary to foreign pro-
ceedings 
‘‘A case under chapter 15 of title 11 may be com-
menced in the district court of the United States for the 
district—
‘‘(1) in which the debtor has its principal place 
of business or principal assets in the United States; 
‘‘(2) if the debtor does not have a place of busi-
ness or assets in the United States, in which there 
is pending against the debtor an action or pro-
ceeding in a Federal or State court; or 
‘‘(3) in a case other than those specified in 
paragraph (1) or (2), in which venue will be con-
sistent with the interests of justice and the conven-
ience of the parties, having regard to the relief 
sought by the foreign representative.’’. 
(d) OTHER SECTIONS OF TITLE 11.—Title 11 of the 
United States Code is amended—
311
(1) in section 109(b), by striking paragraph (3) 
and inserting the following: 
‘‘(3)(A) a foreign insurance company, engaged 
in such business in the United States; or 
‘‘(B) a foreign bank, savings bank, cooperative 
bank, savings and loan association, building and 
loan association, or credit union, that has a branch 
or agency (as defined in section 1(b) of the Inter-
national Banking Act of 1978 in the United 
States.’’; 
(2) in section 303, by striking subsection (k); 
(3) by striking section 304; 
(4) in the table of sections for chapter 3 by 
striking the item relating to section 304; 
(5) in section 306 by striking ‘‘, 304,’’ each 
place it appears; 
(6) in section 305(a) by striking paragraph (2) 
and inserting the following: 
‘‘(2)(A) a petition under section 1515 of this 
title for recognition of a foreign proceeding has been 
granted; and 
‘‘(B) the purposes of chapter 15 of this title 
would be best served by such dismissal or suspen-
sion.’’; and 
(7) in section 508—
312
(A) by striking subsection (a); and 
(B) in subsection (b), by striking ‘‘(b)’’.
TITLE IX—FINANCIAL 
CONTRACT PROVISIONS 
SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CON-
SERVATORS OR RECEIVERS OF INSURED DE-
POSITORY INSTITUTIONS. 
(a) DEFINITION
OF QUALIFIED FINANCIAL CON-
TRACT.—Section 11(e)(8)(D) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)) is amended— 
(1) by striking ‘‘subsection—’’ and inserting 
‘‘subsection, the following definitions shall apply:’’; 
and 
(2) in clause (i), by inserting ‘‘, resolution, or 
order’’ after ‘‘any similar agreement that the Cor-
poration determines by regulation’’. 
(b) DEFINITION OF SECURITIES CONTRACT.—Sec-
tion 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as fol-
lows: 
‘‘(ii) SECURITIES
CONTRACT.—The 
term ‘securities contract’—
‘‘(I) means a contract for the 
purchase, sale, or loan of a security, a 
certificate of deposit, a mortgage loan,
313
or any interest in a mortgage loan, a 
group or index of securities, certifi-
cates of deposit, or mortgage loans or 
interests therein (including any inter-
est therein or based on the value 
thereof) or any option on any of the 
foregoing, including any option to 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option, 
and including any repurchase or re-
verse repurchase transaction on any 
such security, certificate of deposit, 
mortgage loan, interest, group or 
index, or option; 
‘‘(II) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Corporation 
determines by regulation, resolution, 
or order to include any such agree-
ment within the meaning of such 
term;
314
‘‘(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
‘‘(IV) means the guarantee by or 
to any securities clearing agency of 
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or 
interests therein, group or index of se-
curities, certificates of deposit, or 
mortgage loans or interests therein 
(including any interest therein or 
based on the value thereof) or option 
on any of the foregoing, including any 
option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or op-
tion; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agree-
ment or transaction that is similar to 
any agreement or transaction referred 
to in this clause; 
‘‘(VII) means any combination of 
the agreements or transactions re-
ferred to in this clause;
315
‘‘(VIII) means any option to 
enter into any agreement or trans-
action referred to in this clause; 
‘‘(IX) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a securities 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a securities contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (III), (IV), (V), (VI), 
(VII), or (VIII); and
‘‘(X) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in this 
clause, including any guarantee or re-
316
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause.’’. 
(c) DEFINITION OF COMMODITY CONTRACT.—Sec-
tion 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as fol-
lows: 
‘‘(iii) COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means—
‘‘(I) with respect to a futures 
commission merchant, a contract for 
the purchase or sale of a commodity 
for future delivery on, or subject to 
the rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
‘‘(III) with respect to a leverage 
transaction 
merchant, 
a 
leverage 
transaction; 
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the
317
rules of, a contract market or board 
of trade that is cleared by such clear-
ing organization, or commodity option 
traded on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing orga-
nization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to 
in this clause; 
‘‘(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
‘‘(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
318
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a com-
modity contract under this clause, ex-
cept that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause.’’. 
(d) DEFINITION OF FORWARD CONTRACT.—Section 
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows: 
‘‘(iv) 
FORWARD
CONTRACT.—The 
term ‘forward contract’ means—
319
‘‘(I) a contract (other than a 
commodity contract) for the purchase, 
sale, or transfer of a commodity or 
any similar good, article, service, 
right, or interest which is presently or 
in the future becomes the subject of 
dealing in the forward contract trade, 
or product or byproduct thereof, with 
a maturity date more than 2 days 
after the date the contract is entered 
into, including, a repurchase trans-
action, reverse repurchase transaction, 
consignment, 
lease, 
swap, 
hedge 
transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment; 
‘‘(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
‘‘(III) any option to enter into 
any agreement or transaction referred 
to in subclause (I) or (II); 
‘‘(IV) a master agreement that 
provides for an agreement or trans-
320
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a forward contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), or (III); or 
‘‘(V) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause 
(I), (II), (III), or (IV), including any 
guarantee or reimbursement obliga-
tion in connection with any agreement 
or transaction referred to in any such 
subclause.’’. 
(e) DEFINITION
OF REPURCHASE AGREEMENT.—
Section 11(e)(8)(D)(v) of the Federal Deposit Insurance
321
Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read as 
follows: 
‘‘(v) REPURCHASE AGREEMENT.—The 
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase 
agreement)—
‘‘(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in 
the Securities Exchange Act of 1934), 
mortgage loans, interests in mortgage-
related securities or mortgage loans, 
eligible bankers’ acceptances, qualified 
foreign government securities or secu-
rities that are direct obligations of, or 
that are fully guaranteed by, the 
United States or any agency of the 
United States against the transfer of 
funds by the transferee of such certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, mortgage loans, 
or interests with a simultaneous 
agreement by such transferee to
322
transfer to the transferor thereof cer-
tificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, or interests as described above, 
at a date certain not later than 1 year 
after such transfers or on demand, 
against the transfer of funds, or any 
other similar agreement; 
‘‘(II) does not include any repur-
chase obligation under a participation 
in a commercial mortgage loan unless 
the Corporation determines by regula-
tion, resolution, or order to include 
any such participation within the 
meaning of such term;
‘‘(III) means any combination of 
agreements or transactions referred to 
in subclauses (I) and (IV); 
‘‘(IV) means any option to enter 
into any agreement or transaction re-
ferred to in subclause (I) or (III); 
‘‘(V) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), or (IV), together with all
323
supplements to any such master 
agreement, without regard to whether 
the master agreement provides for an 
agreement or transaction that is not a 
repurchase 
agreement 
under 
this 
clause, except that the master agree-
ment shall be considered to be a re-
purchase agreement under this sub-
clause only with respect to each agree-
ment or transaction under the master 
agreement that is referred to in sub-
clause (I), (III), or (IV); and 
‘‘(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in 
subclause (I), (III), (IV), or (V), in-
cluding any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in any such subclause. 
For purposes of this clause, the term 
‘qualified foreign government security’ 
means a security that is a direct obligation 
of, or that is fully guaranteed by, the cen-
324
tral government of a member of the Orga-
nization for Economic Cooperation and 
Development (as determined by regulation 
or order adopted by the appropriate Fed-
eral banking authority).’’. 
(f) DEFINITION
OF SWAP AGREEMENT.—Section 
11(e)(8)(D)(vi) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows: 
‘‘(vi) SWAP AGREEMENT.—The term 
‘swap agreement’ means—
‘‘(I) any agreement, including the 
terms and conditions incorporated by 
reference in any such agreement, 
which is an interest rate swap, option, 
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar, 
cross-currency rate swap, and basis 
swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other for-
eign exchange or precious metals 
agreement; a currency swap, option, 
future, or forward agreement; an eq-
uity index or equity swap, option, fu-
ture, or forward agreement; a debt 
index or debt swap, option, future, or
325
forward agreement; a total return, 
credit spread or credit swap, option, 
future, or forward agreement; a com-
modity index or commodity swap, op-
tion, future, or forward agreement; or 
a weather swap, weather derivative, or 
weather option; 
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to 
in this clause and that is of a type 
that has been, is presently, or in the 
future becomes, the subject of recur-
rent dealings in the swap markets 
(including terms and conditions incor-
porated by reference in such agree-
ment) and that is a forward, swap, fu-
ture, or option on one or more rates, 
currencies, commodities, equity securi-
ties or other equity instruments, debt 
securities or other debt instruments, 
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic
326
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
‘‘(III) any combination of agree-
ments or transactions referred to in 
this clause; 
‘‘(IV) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(V) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), or (IV), together with all 
supplements to any such master 
agreement, without regard to whether 
the master agreement contains an 
agreement or transaction that is not a 
swap agreement under this clause, ex-
cept that the master agreement shall 
be considered to be a swap agreement 
under this clause only with respect to 
each agreement or transaction under 
the master agreement that is referred 
to in subclause (I), (II), (III), or (IV); 
and
327
‘‘(VI) any security agreement or 
arrangement or other credit enhance-
ment related to any agreements or 
transactions referred to in subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
Such term is applicable for purposes of 
this subsection only and shall not be con-
strued or applied so as to challenge or af-
fect the characterization, definition, or 
treatment of any swap agreement under 
any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Se-
curities Exchange Act of 1934, the Public 
Utility Holding Company Act of 1935, the 
Trust Indenture Act of 1939, the Invest-
ment Company Act of 1940, the Invest-
ment Advisers Act of 1940, the Securities 
Investor Protection Act of 1970, the Com-
modity Exchange Act, the Gramm-Leach-
Bliley Act, and the Legal Certainty for 
Bank Products Act of 2000.’’.
328
(g) 
DEFINITION
OF
TRANSFER.—Section 
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows: 
‘‘(viii) 
TRANSFER.—The 
term 
‘transfer’ means every mode, direct or indi-
rect, absolute or conditional, voluntary or 
involuntary, of disposing of or parting with 
property or with an interest in property, 
including retention of title as a security in-
terest and foreclosure of the depository in-
stitution’s equity of redemption.’’. 
(h) TREATMENT
OF QUALIFIED FINANCIAL CON-
TRACTS.—Section 11(e)(8) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(8)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘paragraph (10)’’ and in-
serting ‘‘paragraphs (9) and (10)’’; 
(B) in clause (i), by striking ‘‘to cause the 
termination or liquidation’’ and inserting ‘‘such 
person has to cause the termination, liquida-
tion, or acceleration’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit
329
enhancement related to one or more quali-
fied financial contracts described in clause 
(i);’’; and 
(2) in subparagraph (E), by striking clause (ii) 
and inserting the following: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to one or more quali-
fied financial contracts described in clause 
(i);’’. 
(i) 
AVOIDANCE
OF
TRANSFERS.—Section 
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section 
5242 of the Revised Statutes of the United States or any 
other Federal or State law relating to the avoidance of 
preferential or fraudulent transfers,’’ before ‘‘the Corpora-
tion’’. 
SEC. 902. AUTHORITY OF THE CORPORATION WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS. 
(a) IN GENERAL.—Section 11(e)(8) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amend-
ed—
(1) in subparagraph (E), by striking ‘‘other 
than paragraph (12) of this subsection, subsection
330
(d)(9)’’ and inserting ‘‘other than subsections (d)(9) 
and (e)(10)’’; and 
(2) by adding at the end the following new sub-
paragraphs: 
‘‘(F) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or 
power of the Corporation, or authorizing any 
court or agency to limit or delay, in any man-
ner, the right or power of the Corporation to 
transfer any qualified financial contract in ac-
cordance with paragraphs (9) and (10) of this 
subsection or to disaffirm or repudiate any such 
contract in accordance with subsection (e)(1) of 
this section. 
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.—
‘‘(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraphs (A) and 
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway 
clause shall be enforceable in a qualified fi-
nancial contract of an insured depository 
institution in default.
331
‘‘(ii) WALKAWAY CLAUSE DEFINED.—
For purposes of this subparagraph, the 
term ‘walkaway clause’ means a provision 
in a qualified financial contract that, after 
calculation of a value of a party’s position 
or an amount due to or from 1 of the par-
ties in accordance with its terms upon ter-
mination, liquidation, or acceleration of the 
qualified financial contract, either does not 
create a payment obligation of a party or 
extinguishes a payment obligation of a 
party in whole or in part solely because of 
such party’s status as a nondefaulting 
party.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 11(e)(12)(A) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting 
‘‘or the exercise of rights or powers by’’ after ‘‘the ap-
pointment of’’. 
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF 
QUALIFIED FINANCIAL CONTRACTS. 
(a) TRANSFERS
OF QUALIFIED FINANCIAL CON-
TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9) 
of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(9)) is amended to read as follows:
332
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
‘‘(A) IN GENERAL.—In making any trans-
fer of assets or liabilities of a depository institu-
tion in default which includes any qualified fi-
nancial contract, the conservator or receiver for 
such depository institution shall either—
‘‘(i) transfer to one financial institu-
tion, other than a financial institution for 
which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has 
been appointed or which is otherwise the 
subject of a bankruptcy or insolvency pro-
ceeding—
‘‘(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the deposi-
tory institution in default; 
‘‘(II) all claims of such person or 
any affiliate of such person against 
such depository institution under any 
such contract (other than any claim 
which, under the terms of any such 
contract, is subordinated to the claims
333
of general unsecured creditors of such 
institution); 
‘‘(III) all claims of such deposi-
tory institution against such person or 
any affiliate of such person under any 
such contract; and 
‘‘(IV) all property securing or 
any other credit enhancement for any 
contract described in subclause (I) or 
any claim described in subclause (II) 
or (III) under any such contract; or 
‘‘(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other 
credit enhancement referred to in clause (i) 
(with respect to such person and any affil-
iate of such person).
‘‘(B) TRANSFER TO FOREIGN BANK, FOR-
EIGN FINANCIAL INSTITUTION, OR BRANCH OR 
AGENCY OF A FOREIGN BANK OR FINANCIAL IN-
STITUTION.—In transferring any qualified fi-
nancial contracts and related claims and prop-
erty under subparagraph (A)(i), the conservator 
or receiver for the depository institution shall 
not make such transfer to a foreign bank, fi-
nancial institution organized under the laws of
334
a foreign country, or a branch or agency of a 
foreign bank or financial institution unless, 
under the law applicable to such bank, financial 
institution, branch or agency, to the qualified 
financial contracts, and to any netting contract, 
any security agreement or arrangement or other 
credit enhancement related to one or more 
qualified financial contracts, the contractual 
rights of the parties to such qualified financial 
contracts, netting contracts, security agree-
ments or arrangements, or other credit en-
hancements are enforceable substantially to the 
same extent as permitted under this section. 
‘‘(C) TRANSFER OF CONTRACTS SUBJECT 
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
TION.—In the event that a conservator or re-
ceiver transfers any qualified financial contract 
and related claims, property, and credit en-
hancements pursuant to subparagraph (A)(i) 
and such contract is cleared by or subject to the 
rules of a clearing organization, the clearing or-
ganization shall not be required to accept the 
transferee as a member by virtue of the trans-
fer.
335
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph, the term ‘financial institution’ 
means a broker or dealer, a depository institu-
tion, a futures commission merchant, or any 
other institution, as determined by the Corpora-
tion by regulation to be a financial institution, 
and the term ‘clearing organization’ has the 
same meaning as in section 402 of the Federal 
Deposit Insurance Corporation Improvement 
Act of 1991.’’. 
(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT 
COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is 
amended in the material immediately following clause (ii) 
by striking ‘‘the conservator’’ and all that follows through 
the period and inserting the following: ‘‘the conservator 
or receiver shall notify any person who is a party to any 
such contract of such transfer by 5:00 p.m. (eastern time) 
on the business day following the date of the appointment 
of the receiver in the case of a receivership, or the business 
day following such transfer in the case of a conservator-
ship.’’. 
(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF 
BRIDGE BANKS.—Section 11(e)(10) of the Federal De-
336
posit Insurance Act (12 U.S.C. 1821(e)(10)) is amend-
ed—
(1) by redesignating subparagraph (B) as sub-
paragraph (D); and 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraphs: 
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
‘‘(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with an insured depository institution may 
not exercise any right that such person has 
to terminate, liquidate, or net such con-
tract under paragraph (8)(A) of this sub-
section or section 403 or 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, solely by reason of 
or incidental to the appointment of a re-
ceiver for the depository institution (or the 
insolvency or financial condition of the de-
pository institution for which the receiver 
has been appointed)—
‘‘(I) until 5:00 p.m. (eastern 
time) on the business day following
337
the date of the appointment of the re-
ceiver; or 
‘‘(II) after the person has re-
ceived notice that the contract has 
been transferred pursuant to para-
graph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A person 
who is a party to a qualified financial con-
tract with an insured depository institution 
may not exercise any right that such per-
son has to terminate, liquidate, or net such 
contract under paragraph (8)(E) of this 
subsection or section 403 or 404 of the 
Federal Deposit Insurance Corporation 
Improvement Act of 1991, solely by reason 
of or incidental to the appointment of a 
conservator for the depository institution 
(or the insolvency or financial condition of 
the depository institution for which the 
conservator has been appointed). 
‘‘(iii) NOTICE.—For purposes of this 
paragraph, the Corporation as receiver or 
conservator of an insured depository insti-
tution shall be deemed to have notified a 
person who is a party to a qualified finan-
338
cial contract with such depository institu-
tion if the Corporation has taken steps 
reasonably calculated to provide notice to 
such person by the time specified in sub-
paragraph (A). 
‘‘(C) TREATMENT
OF
BRIDGE
BANKS.—
The following institutions shall not be consid-
ered to be a financial institution for which a 
conservator, receiver, trustee in bankruptcy, or 
other legal custodian has been appointed or 
which is otherwise the subject of a bankruptcy 
or insolvency proceeding for purposes of para-
graph (9): 
‘‘(i) A bridge bank. 
‘‘(ii) A depository institution orga-
nized by the Corporation, for which a con-
servator is appointed either—
‘‘(I) immediately upon the orga-
nization of the institution; or 
‘‘(II) at the time of a purchase 
and assumption transaction between 
the depository institution and the Cor-
poration as receiver for a depository 
institution in default.’’.
339
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR 
REPUDIATION 
OF 
QUALIFIED 
FINANCIAL 
CONTRACTS. 
Section 11(e) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)) is amended—
(1) by redesignating paragraphs (11) through 
(15) as paragraphs (12) through (16), respectively; 
(2) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising 
the rights of disaffirmance or repudiation of a con-
servator or receiver with respect to any qualified fi-
nancial contract to which an insured depository in-
stitution is a party, the conservator or receiver for 
such institution shall either—
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of 
such person; and 
‘‘(ii) the depository institution in de-
fault; or 
‘‘(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person).’’; and
340
(3) by adding at the end the following new 
paragraph: 
‘‘(17) SAVINGS
CLAUSE.—The meanings of 
terms used in this subsection are applicable for pur-
poses of this subsection only, and shall not be con-
strued or applied so as to challenge or affect the 
characterization, definition, or treatment of any 
similar terms under any other statute, regulation, or 
rule, including the Gramm-Leach-Bliley Act, the 
Legal Certainty for Bank Products Act of 2000, the 
securities laws (as that term is defined in section 
3(a)(47) of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act.’’. 
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER 
AGREEMENTS. 
Section 11(e)(8)(D)(vii) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to 
read as follows: 
‘‘(vii) 
TREATMENT
OF
MASTER 
AGREEMENT
AS
ONE
AGREEMENT.—Any 
master agreement for any contract or 
agreement described in any preceding 
clause of this subparagraph (or any master 
agreement for such master agreement or 
agreements), together with all supplements
341
to such master agreement, shall be treated 
as a single agreement and a single quali-
fied financial contract. If a master agree-
ment contains provisions relating to agree-
ments or transactions that are not them-
selves qualified financial contracts, the 
master agreement shall be deemed to be a 
qualified financial contract only with re-
spect to those transactions that are them-
selves qualified financial contracts.’’.
SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION 
IMPROVEMENT ACT OF 1991. 
(a) DEFINITIONS.—Section 402 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12 
U.S.C. 4402) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A)(ii), by inserting 
before the semicolon ‘‘, or is exempt from such 
registration by order of the Securities and Ex-
change Commission’’; and 
(B) in subparagraph (B), by inserting be-
fore the period ‘‘, that has been granted an ex-
emption under section 4(c)(1) of the Com-
modity Exchange Act, or that is a multilateral
342
clearing organization (as defined in section 408 
of this Act)’’; 
(2) in paragraph (6)—
(A) by redesignating subparagraphs (B) 
through (D) as subparagraphs (C) through (E), 
respectively; 
(B) by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) an uninsured national bank or an un-
insured State bank that is a member of the 
Federal Reserve System, if the national bank or 
State member bank is not eligible to make ap-
plication to become an insured bank under sec-
tion 5 of the Federal Deposit Insurance Act;’’; 
and 
(C) by amending subparagraph (C), so re-
designated, to read as follows: 
‘‘(C) a branch or agency of a foreign bank, 
a foreign bank and any branch or agency of the 
foreign bank, or the foreign bank that estab-
lished the branch or agency, as those terms are 
defined in section 1(b) of the International 
Banking Act of 1978;’’; 
(3) in paragraph (11), by inserting before the 
period ‘‘and any other clearing organization with
343
which such clearing organization has a netting con-
tract’’; 
(4) by amending paragraph (14)(A)(i) to read 
as follows: 
‘‘(i) means a contract or agreement 
between 2 or more financial institutions, 
clearing organizations, or members that 
provides for netting present or future pay-
ment obligations or payment entitlements 
(including liquidation or close out values 
relating to such obligations or entitle-
ments) among the parties to the agree-
ment; and’’; and 
(5) by adding at the end the following new 
paragraph: 
‘‘(15) PAYMENT.—The term ‘payment’ means a 
payment of United States dollars, another currency, 
or a composite currency, and a noncash delivery, in-
cluding a payment or delivery to liquidate an 
unmatured obligation.’’. 
(b) ENFORCEABILITY OF BILATERAL NETTING CON-
TRACTS.—Section 403 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4403) 
is amended—
344
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) GENERAL RULE.—Notwithstanding any other 
provision of State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 
Deposit Insurance Act or any order authorized under sec-
tion 5(b)(2) of the Securities Investor Protection Act of 
1970), the covered contractual payment obligations and 
the covered contractual payment entitlements between any 
2 financial institutions shall be netted in accordance with, 
and subject to the conditions of, the terms of any applica-
ble netting contract (except as provided in section 
561(b)(2) of title 11, United States Code).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or 
more netting contracts between any 2 financial institu-
tions shall be enforceable in accordance with their terms 
(except as provided in section 561(b)(2) of title 11, United 
States Code), and shall not be stayed, avoided, or other-
wise limited by any State or Federal law (other than para-
graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the
345
Federal Deposit Insurance Act and section 5(b)(2) of the 
Securities Investor Protection Act of 1970).’’. 
(c) ENFORCEABILITY OF CLEARING ORGANIZATION 
NETTING CONTRACTS.—Section 404 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12 
U.S.C. 4404) is amended—
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) GENERAL RULE.—Notwithstanding any other 
provision of State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 
Deposit Insurance Act and any order authorized under 
section 5(b)(2) of the Securities Investor Protection Act 
of 1970), the covered contractual payment obligations and 
the covered contractual payment entitlements of a member 
of a clearing organization to and from all other members 
of a clearing organization shall be netted in accordance 
with and subject to the conditions of any applicable net-
ting contract (except as provided in section 561(b)(2) of 
title 11, United States Code).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(h) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or
346
more netting contracts between any 2 members of a clear-
ing organization shall be enforceable in accordance with 
their terms (except as provided in section 561(b)(2) of 
title 11, United States Code), and shall not be stayed, 
avoided, or otherwise limited by any State or Federal law 
(other than paragraphs (8)(E), (8)(F), and (10)(B) of sec-
tion 11(e) of the Federal Deposit Insurance Act and sec-
tion 5(b)(2) of the Securities Investor Protection Act of 
1970).’’. 
(d) ENFORCEABILITY OF CONTRACTS WITH UNIN-
SURED
NATIONAL
BANKS, 
UNINSURED
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNINSURED STATE 
MEMBER BANKS, AND EDGE ACT CORPORATIONS.—The 
Federal Deposit Insurance Corporation Improvement Act 
of 1991 (12 U.S.C. 4401 et seq.) is amended—
(1) by redesignating section 407 as section 
407A; and 
(2) by inserting after section 406 the following 
new section:
347
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED 
NATIONAL 
BANKS, 
UNINSURED 
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNIN-
SURED STATE MEMBER BANKS, AND EDGE 
ACT CORPORATIONS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, paragraphs (8), (9), (10), and (11) of section 
11(e) of the Federal Deposit Insurance Act shall apply 
to an uninsured national bank or uninsured Federal 
branch or Federal agency, a corporation chartered under 
section 25A of the Federal Reserve Act, or an uninsured 
State member bank which operates, or operates as, a mul-
tilateral clearing organization pursuant to section 409 of 
this Act, except that for such purpose—
‘‘(1) any reference to the ‘Corporation as re-
ceiver’ or ‘the receiver or the Corporation’ shall refer 
to the receiver appointed by the Comptroller of the 
Currency in the case of an uninsured national bank 
or uninsured Federal branch or agency, or to the re-
ceiver appointed by the Board of Governors of the 
Federal Reserve System in the case of a corporation 
chartered under section 25A of the Federal Reserve 
Act or an uninsured State member bank; 
‘‘(2) any reference to the ‘Corporation’ (other 
than in section 11(e)(8)(D) of such Act), the 
‘Corporation, whether acting as such or as conser-
348
vator or receiver’, a ‘receiver’, or a ‘conservator’ 
shall refer to the receiver or conservator appointed 
by the Comptroller of the Currency in the case of an 
uninsured national bank or uninsured Federal 
branch or agency, or to the receiver or conservator 
appointed by the Board of Governors of the Federal 
Reserve System in the case of a corporation char-
tered under section 25A of the Federal Reserve Act 
or an uninsured State member bank; and 
‘‘(3) any reference to an ‘insured depository in-
stitution’ or ‘depository institution’ shall refer to an 
uninsured national bank, an uninsured Federal 
branch or Federal agency, a corporation chartered 
under section 25A of the Federal Reserve Act, or an 
uninsured State member bank which operates, or op-
erates as, a multilateral clearing organization pursu-
ant to section 409 of this Act. 
‘‘(b) LIABILITY.—The liability of a receiver or conser-
vator of an uninsured national bank, uninsured Federal 
branch or agency, a corporation chartered under section 
25A of the Federal Reserve Act, or an uninsured State 
member bank which operates, or operates as, a multilat-
eral clearing organization pursuant to section 409 of this 
Act, shall be determined in the same manner and subject 
to the same limitations that apply to receivers and con-
349
servators of insured depository institutions under section 
11(e) of the Federal Deposit Insurance Act. 
‘‘(c) REGULATORY AUTHORITY.—
‘‘(1) IN
GENERAL.—The Comptroller of the 
Currency in the case of an uninsured national bank 
or uninsured Federal branch or agency and the 
Board of Governors of the Federal Reserve System 
in the case of a corporation chartered under section 
25A of the Federal Reserve Act, or an uninsured 
State member bank that operates, or operates as, a 
multilateral clearing organization pursuant to sec-
tion 409 of this Act, in consultation with the Fed-
eral Deposit Insurance Corporation, may each pro-
mulgate regulations solely to implement this section. 
‘‘(2) SPECIFIC
REQUIREMENT.—In promul-
gating regulations, limited solely to implementing 
paragraphs (8), (9), (10), and (11) of section 11(e) 
of the Federal Deposit Insurance Act, the Comp-
troller of the Currency and the Board of Governors 
of the Federal Reserve System each shall ensure 
that the regulations generally are consistent with the 
regulations and policies of the Federal Deposit In-
surance Corporation adopted pursuant to the Fed-
eral Deposit Insurance Act.
350
‘‘(d) DEFINITIONS.—For purposes of this section, the 
terms ‘Federal branch’, ‘Federal agency’, and ‘foreign 
bank’ have the same meanings as in section 1(b) of the 
International Banking Act of 1978.’’. 
SEC. 907. BANKRUPTCY LAW AMENDMENTS. 
(a) 
DEFINITIONS
OF
FORWARD
CONTRACT, 
REPURCHASE
AGREEMENT, 
SECURITIES
CLEARING 
AGENCY, SWAP AGREEMENT, COMMODITY CONTRACT, 
AND SECURITIES CONTRACT.—Title 11, United States 
Code, is amended—
(1) in section 101—
(A) in paragraph (25)—
(i) by striking ‘‘means a contract’’ 
and inserting ‘‘means—
‘‘(A) a contract’’; 
(ii) by striking ‘‘, or any combination 
thereof or option thereon;’’ and inserting 
‘‘, or any other similar agreement;’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(B) any combination of agreements or 
transactions referred to in subparagraphs (A) 
and (C);
351
‘‘(C) any option to enter into an agreement 
or transaction referred to in subparagraph (A) 
or (B); 
‘‘(D) a master agreement that provides for 
an agreement or transaction referred to in sub-
paragraph (A), (B), or (C), together with all 
supplements to any such master agreement, 
without regard to whether such master agree-
ment provides for an agreement or transaction 
that is not a forward contract under this para-
graph, except that such master agreement shall 
be considered to be a forward contract under 
this paragraph only with respect to each agree-
ment or transaction under such master agree-
ment that is referred to in subparagraph (A), 
(B), or (C); or 
‘‘(E) any security agreement or arrange-
ment, or other credit enhancement related to 
any agreement or transaction referred to in 
subparagraph (A), (B), (C), or (D), including 
any guarantee or reimbursement obligation by 
or to a forward contract merchant or financial 
participant in connection with any agreement or 
transaction referred to in any such subpara-
graph, but not to exceed the damages in con-
352
nection with any such agreement or transaction, 
measured in accordance with section 562 of this 
title;’’; 
(B) in paragraph (46), by striking ‘‘on any 
day during the period beginning 90 days before 
the date of’’ and inserting ‘‘at any time before’’; 
(C) by amending paragraph (47) to read 
as follows: 
‘‘(47) ‘repurchase agreement’ (which definition 
also applies to a reverse repurchase agreement)—
‘‘(A) means—
‘‘(i) an agreement, including related 
terms, which provides for the transfer of 
one or more certificates of deposit, mort-
gage related securities (as defined in sec-
tion 3 of the Securities Exchange Act of 
1934), mortgage loans, interests in mort-
gage related securities or mortgage loans, 
eligible bankers’ acceptances, qualified for-
eign government securities (defined as a 
security that is a direct obligation of, or 
that is fully guaranteed by, the central 
government of a member of the Organiza-
tion for Economic Cooperation and Devel-
opment), or securities that are direct obli-
353
gations of, or that are fully guaranteed by, 
the United States or any agency of the 
United States against the transfer of funds 
by the transferee of such certificates of de-
posit, eligible bankers’ acceptances, securi-
ties, mortgage loans, or interests, with a 
simultaneous agreement by such transferee 
to transfer to the transferor thereof certifi-
cates of deposit, eligible bankers’ accept-
ance, securities, mortgage loans, or inter-
ests of the kind described in this clause, at 
a date certain not later than 1 year after 
such transfer or on demand, against the 
transfer of funds; 
‘‘(ii) any combination of agreements 
or transactions referred to in clauses (i) 
and (iii); 
‘‘(iii) an option to enter into an agree-
ment or transaction referred to in clause 
(i) or (ii); 
‘‘(iv) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), or (iii), together 
with all supplements to any such master 
agreement, without regard to whether such
354
master agreement provides for an agree-
ment or transaction that is not a repur-
chase agreement under this paragraph, ex-
cept that such master agreement shall be 
considered to be a repurchase agreement 
under this paragraph only with respect to 
each agreement or transaction under the 
master agreement that is referred to in 
clause (i), (ii), or (iii); or 
‘‘(v) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in clause (i), (ii), (iii), or (iv), in-
cluding any guarantee or reimbursement 
obligation by or to a repo participant or fi-
nancial participant in connection with any 
agreement or transaction referred to in 
any such clause, but not to exceed the 
damages in connection with any such 
agreement or transaction, measured in ac-
cordance with section 562 of this title; and 
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial 
mortgage loan;’’;
355
(D) in paragraph (48), by inserting ‘‘, or 
exempt from such registration under such sec-
tion pursuant to an order of the Securities and 
Exchange Commission,’’ after ‘‘1934’’; and 
(E) by amending paragraph (53B) to read 
as follows: 
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
‘‘(i) any agreement, including the 
terms and conditions incorporated by ref-
erence in such agreement, which is—
‘‘(I) an interest rate swap, op-
tion, future, or forward agreement, in-
cluding a rate floor, rate cap, rate col-
lar, cross-currency rate swap, and 
basis swap; 
‘‘(II) a spot, same day-tomorrow, 
tomorrow-next, forward, or other for-
eign exchange or precious metals 
agreement; 
‘‘(III) a currency swap, option, 
future, or forward agreement; 
‘‘(IV) an equity index or equity 
swap, option, future, or forward 
agreement;
356
‘‘(V) a debt index or debt swap, 
option, future, or forward agreement; 
‘‘(VI) a total return, credit 
spread or credit swap, option, future, 
or forward agreement; 
‘‘(VII) a commodity index or a 
commodity swap, option, future, or 
forward agreement; or 
‘‘(VIII) a weather swap, weather 
derivative, or weather option; 
‘‘(ii) any agreement or transaction 
that is similar to any other agreement or 
transaction referred to in this paragraph 
and that—
‘‘(I) is of a type that has been, is 
presently, or in the future becomes, 
the subject of recurrent dealings in 
the swap markets (including terms 
and conditions incorporated by ref-
erence therein); and 
‘‘(II) is a forward, swap, future, 
or option on one or more rates, cur-
rencies, commodities, equity securities, 
or other equity instruments, debt se-
curities or other debt instruments,
357
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic 
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
‘‘(iii) any combination of agreements 
or transactions referred to in this subpara-
graph; 
‘‘(iv) any option to enter into an 
agreement or transaction referred to in 
this subparagraph; 
‘‘(v) a master agreement that provides 
for an agreement or transaction referred to 
in clause (i), (ii), (iii), or (iv), together 
with all supplements to any such master 
agreement, and without regard to whether 
the master agreement contains an agree-
ment or transaction that is not a swap 
agreement under this paragraph, except 
that the master agreement shall be consid-
ered to be a swap agreement under this 
paragraph only with respect to each agree-
ment or transaction under the master
358
agreement that is referred to in clause (i), 
(ii), (iii), or (iv); or 
‘‘(vi) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreements or transactions re-
ferred to in clause (i) through (v), includ-
ing any guarantee or reimbursement obli-
gation by or to a swap participant or fi-
nancial participant in connection with any 
agreement or transaction referred to in 
any such clause, but not to exceed the 
damages in connection with any such 
agreement or transaction, measured in ac-
cordance with section 562 of this title; and 
‘‘(B) is applicable for purposes of this title 
only, and shall not be construed or applied so 
as to challenge or affect the characterization, 
definition, or treatment of any swap agreement 
under any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Securi-
ties Exchange Act of 1934, the Public Utility 
Holding Company Act of 1935, the Trust In-
denture Act of 1939, the Investment Company 
Act of 1940, the Investment Advisers Act of 
1940, the Securities Investor Protection Act of
359
1970, the Commodity Exchange Act, the 
Gramm-Leach-Bliley Act, and the Legal Cer-
tainty for Bank Products Act of 2000;’’; 
(2) in section 741(7), by striking paragraph (7) 
and inserting the following: 
‘‘(7) ‘securities contract’—
‘‘(A) means—
‘‘(i) a contract for the purchase, sale, 
or loan of a security, a certificate of de-
posit, a mortgage loan or any interest in a 
mortgage loan, a group or index of securi-
ties, certificates of deposit, or mortgage 
loans or interests therein (including an in-
terest therein or based on the value there-
of), or option on any of the foregoing, in-
cluding an option to purchase or sell any 
such security, certificate of deposit, mort-
gage loan, interest, group or index, or op-
tion, and including any repurchase or re-
verse 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 for-
eign currencies;
360
‘‘(iii) the guarantee by or to any secu-
rities clearing agency of a settlement of 
cash, securities, certificates of deposit, 
mortgage loans or interests therein, group 
or index of securities, or mortgage loans or 
interests therein (including any interest 
therein or based on the value thereof), or 
option on any of the foregoing, including 
an option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or option; 
‘‘(iv) any margin loan; 
‘‘(v) any other agreement or trans-
action that is similar to an agreement or 
transaction referred to in this subpara-
graph; 
‘‘(vi) any combination of the agree-
ments or transactions referred to in this 
subparagraph; 
‘‘(vii) any option to enter into any 
agreement or transaction referred to in 
this subparagraph; 
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v),
361
(vi), or (vii), together with all supplements 
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that 
is not a securities contract under this sub-
paragraph, except that such master agree-
ment shall be considered to be a securities 
contract under this subparagraph only with 
respect to each agreement or transaction 
under such master agreement that is re-
ferred to in clause (i), (ii), (iii), (iv), (v), 
(vi), or (vii); or 
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in this subparagraph, including 
any guarantee or reimbursement obligation 
by or to a stockbroker, securities clearing 
agency, financial institution, or financial 
participant in connection with any agree-
ment or transaction referred to in this sub-
paragraph, but not to exceed the damages 
in connection with any such agreement or 
transaction, measured in accordance with 
section 562 of this title; and
362
‘‘(B) does not include any purchase, sale, 
or repurchase obligation under a participation 
in a commercial mortgage loan;’’; and 
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and 
(B) by adding at the end the following: 
‘‘(F) any other agreement or transaction 
that is similar to an agreement or transaction 
referred to in this paragraph; 
‘‘(G) any combination of the agreements or 
transactions referred to in this paragraph; 
‘‘(H) any option to enter into an agree-
ment or transaction referred to in this para-
graph; 
‘‘(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 com-
modity contract under this paragraph only with