To amend title 11 of the United States Code to with respect to certain debts in connection with divorce or separation; to establish a commission to analyze bankruptcy issues; and for other purposes.

TITLE I--AMENDMENTS TO TITLE 11 OF THE UNITED STATES CODE

SEC 101. SHORT TITLE.

    This title may be cited as the ``Spousal Equity in Bankruptcy 
Amendments of 1994''.

SEC. 102. AMENDMENTS.

    (a) Relief From Automatic Stay.--Section 362(b)(2) of title 11, 
United States Code, is amended to read as follows:
            ``(2) under subsection (a) of this section--
                    ``(A) of the commencement or continuation of an 
                action or proceeding for--
                            ``(i) the establishment of paternity; or
                            ``(ii) the establishment or modification of 
                        an order for alimony, maintenance, or support; 
                        or
                    ``(B) of the collection of alimony, maintenance, or 
                support from property that is not property of the 
                estate;''.
    (b) Priority of Claims.--(1) Section 507 of title 11, United States 
Code, is amended--
            (A) in subsection (a)--
                    (i) in paragraph (8) by striking ``(8) Eighth'' and 
                inserting ``(9) Ninth'',
                    (ii) in paragraph (7) by striking ``(7) Seventh'' 
                and inserting ``(8) Eighth'', and
                    (iii) by inserting after paragraph (6) the 
                following:
            ``(7) Seventh, allowed unsecured claims due to a spouse, 
        former spouse, or child of the debtor for alimony to, 
        maintenance for, or support of such spouse or child, in 
        connection with a separation agreement, divorce decree, or 
        other order of a court of record, a determination made in 
        accordance with State or territorial law by a governmental 
        unit, or a property settlement agreement, but not to the extent 
        that--
                    ``(A) such debt is assigned to another entity, 
                voluntarily, by operation of law, or otherwise (other 
                than debts assigned pursuant to section 402(a)(26) of 
                the Social Security Act, or any such debt which has 
                been assigned to the Federal Government or to a State 
                or any political subdivision of such State); or
                    ``(B) such debt includes a liability designated as 
                alimony, maintenance, or support, unless such liability 
                is actually in the nature of alimony, maintenance or 
                support;'', and
            (B) in subsection (d) by striking ``or (6)'' and inserting 
        ``(6), or (7)''.
    (2) Title 11 of the United States Code is amended--
            (A) in sections 502(i), 503(b)(1)(B)(i), 523(a)(1)(A), and 
        1123(a)(1) by striking ``507(a)(7)'' and inserting 
        ``507(a)(8)'',
            (B) in section 724(b)(2) by striking ``or 507(a)(6)'' and 
        inserting ``507(a)(6), or 507(a)(7)'',
            (C) in section 726(b) by striking ``or (7)'' and inserting 
        ``, (7), or (8)'', and
            (D) in section 1129(a)(9)--
                    (i) in subparagraph (B) by striking ``or 
                507(a)(6)'' and inserting ``, 507(a)(6), or 
                507(a)(7)'', and
                    (ii) in subparagraph (C) by striking ``507(a)(7)'' 
                and inserting ``507(a)(8)''.
    (c) Protection of Liens.--Section 522(f)(1) of title 11, United 
States Code, is amended to read as follows:
            ``(1) a judicial lien (other than a judicial lien that 
        secures a debt to a spouse, former spouse, or child of the 
        debtor, for alimony to, maintenance for, or support of the 
        spouse or child, in connection with a separation agreement, 
        divorce decree or other order of a court of record, 
        determination made in accordance with State or territorial law 
        by a governmental unit, or property settlement agreement, to 
        the extent that the debt--
                    ``(A) is not assigned to another entity, 
                voluntarily, by operation of law, or otherwise; and
                    ``(B) includes a liability designated as alimony, 
                maintenance, or support, unless such liability is 
                actually in the nature of alimony, maintenance or 
                support).''.
    (d) Exception to Discharge.--Section 523 of title 11, United States 
Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (11) by striking ``or'' at the 
                end,
                    (B) in paragraph (12) by inserting ``or'' after the 
                semicolon at the end, and
                    (C) by adding at the end the following:
            ``(13) assumed or incurred by the debtor in the course of a 
        divorce or separation or in connection with a separation 
        agreement, divorce decree or other order of a court of record, 
        a determination made in accordance with State or territorial 
        law by a governmental unit, or property settlement agreement, 
        unless--
                    ``(A) excepting such debt from discharge under this 
                paragraph would impose an undue hardship for the 
                debtor; and
                    ``(B) discharging such debt would result in a 
                benefit to the debtor that outweighs the detrimental 
                consequences to a spouse, former spouse, or child of 
                the debtor.'', and
            (2) in subsection (c)(1) by striking ``or (6)'' each place 
        it appears and inserting ``, or (13)''.
    (e) Protection Against Trustee Avoidance.--Section 547(c) of title 
11, United States Code, is amended--
                    (1) by striking ``or'' at the end of paragraph (6);
                    (2) by redesignating paragraph (7) as paragraph 
                (8); and
                    (3) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) to the extent that the transfer was a bona fide 
        payment of a debt to a spouse, former spouse, or child of the 
        debtor, for alimony to, maintenance for, or support of such 
        spouse or child, in connection with a separation agreement, 
        divorce decree or other order of a court of record, 
        determination made in accordance with State or territorial law 
        by a governmental unit, or property settlement agreement, but 
        not to the extent that such debt--
                    ``(A) is assigned to another entity, voluntarily, 
                by operation of law, or otherwise; or
                    ``(B) includes a liability designated as alimony, 
                maintenance, or support, unless such liability is 
                actually in the nature of alimony, maintenance or 
                support; or''.
    (f) Appearance Before Court.--A child support creditor or its 
representative shall be permitted to appear and intervene without 
charge and without meeting any special local court rule requirement for 
attorney appearances in any bankruptcy proceeding in any bankruptcy 
court or district court of the United States if the creditor or 
representative files with the court a statement describing in detail 
the child support debt, its status, and other characteristics.

                 TITLE II--BANKRUPTCY REVIEW COMMISSION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``National Bankruptcy Review 
Commission Act''.

SEC. 202. ESTABLISHMENT.

    There is established the National Bankruptcy Review Commission 
(referred to as the ``Commission'').

SEC. 203. DUTIES OF THE COMMISSION.

    The duties of the Commission are--
            (1) to investigate and study issues and problems relating 
        to title 11, United States Code (commonly known as the 
        ``Bankruptcy Code'');
            (2) to evaluate the advisability of proposals and current 
        arrangements with respect to such issues and problems;
            (3) to prepare and submit to the Congress, the Chief 
        Justice, and the President a report in accordance with section 
        208;
            (4) to solicit divergent views of all parties concerned 
        with the operation of the bankruptcy system; and
            (5) to study the impact of the bankruptcy laws on the 
        family and particularly on the increase in the number of women 
        and children living in poverty after divorce.

SEC. 204. MEMBERSHIP.

    (a) Number and Appointment.--The Commission shall be composed of 10 
members appointed from among individuals who have experience and 
expertise in bankruptcy law as follows:
            (1) Four members appointed by the President, one of whom 
        shall be designated as chairman by the President.
            (2) One member shall be appointed by the President pro 
        tempore of the Senate.
            (3) One member shall be appointed by the Minority Leader of 
        the Senate.
            (4) One member shall be appointed by the Speaker of the 
        House of Representatives.
            (5) One member shall be appointed by the Minority Leader of 
        the House of Representatives.
            (6) Two members appointed by the Chief Justice.
    (b) Term.--Members of the Commission shall be appointed for the 
life of the Commission.
    (c) Quorum.--Six members of the Commission shall constitute a 
quorum, but a lesser number may conduct meetings.
    (d) Appointment Deadline.--The first appointments made under 
subsection (a) shall be made within 60 days after the date of enactment 
of this Act.
    (e) First Meeting.--The first meeting of the Commission shall be 
called by the chairman and shall be held within 90 days after the date 
of enactment of this Act.
    (f) Vacancy.--A vacancy on the Commission resulting from the death 
or resignation of a member shall not affect its powers and shall be 
filled in the same manner in which the original appointment was made.
    (g) Continuation of Membership.--If any member of the Commission 
who was appointed to the Commission as a member of Congress or as an 
officer or employee of a government leaves that office, or if any 
member of the Commission who was not appointed in such a capacity 
becomes an officer or employee of a government, the member may continue 
as a member of the Commission for not longer than the 90-day period 
beginning on the date the member leaves that office or becomes such an 
officer or employee, as the case may be.
    (h) Consultation Prior to Appointment.--Prior to the appointment of 
members of the Commission, the President, the President pro tempore of 
the Senate, the Speaker of the House of Representatives, and the Chief 
Justice shall consult with each other to ensure fair and equitable 
representation of various points of view in the Commission and its 
staff.

SEC. 205. COMPENSATION OF THE COMMISSION.

    (a) Pay.--
            (1) Nongovernment employees.--Each member of the Commission 
        who is not otherwise employed by the United States Government 
        shall be entitled to receive the daily equivalent of the annual 
        rate of basic pay payable for level IV of the Executive 
        Schedule under section 5315 of title 5, United States Code, for 
        each day (including travel time) during which he or she is 
        engaged in the actual performance of duties as a member of the 
        Commission.
            (2) Government employees.--A member of the Commission who 
        is an officer or employee of the United States Government shall 
        serve without additional compensation.
    (b) Travel.--Members of the Commission shall be reimbursed for 
travel, subsistence, and other necessary expenses incurred by them in 
the performance of their duties.

SEC. 206. STAFF OF COMMISSION; EXPERTS AND CONSULTANTS.

    (a) Staff.--
            (1) Appointment.--The chairman of the Commission may, 
        without regard to the civil service laws and regulations, 
        appoint, and terminate an executive director and such other 
        personnel as are necessary to enable the Commission to perform 
        its duties. The employment of an executive director shall be 
        subject to confirmation by the Commission.
            (2) Compensation.--The chairman of the Commission may fix 
        the compensation of the executive director and other personnel 
        without regard to the provisions of chapter 51 and subchapter 
        II of chapter 53 of title 5, United States Code, relating to 
        classification of positions and General Schedule pay rates, 
        except that the rate of pay for the executive director and 
        other personnel may not exceed the rate payable for level V of 
        the Executive Schedule under section 5316 of that title.
    (b) Experts and Consultants.--The Commission may procure temporary 
and intermittent services of experts and consultants under section 
3109(b) of title 5, United States Code.

SEC. 207. POWERS OF THE COMMISSION.

    (a) Hearings and Meetings.--The Commission or, on authorization of 
the Commission, a member of the Commission, may hold such hearings, sit 
and act at such time and places, take such testimony, and receive such 
evidence, as the Commission considers appropriate. The Commission or a 
member of the Commission may administer oaths or affirmations to 
witnesses appearing before it.
    (b) Official Data.--The Commission may secure directly from any 
Federal department, agency, or court information necessary to enable it 
to carry out this title. Upon request of the chairman of the 
Commission, the head of a Federal department or agency or chief judge 
of a Federal court shall furnish such information, consistent with law, 
to the Commission.
    (c) Facilities and Support Services.--The Administrator of General 
Services shall provide to the Commission on a reimbursable basis such 
facilities and support services as the Commission may request. Upon 
request of the Commission, the head of a Federal department or agency 
may make any of the facilities or services of the agency available to 
the Commission to assist the Commission in carrying out its duties 
under this title.
    (d) Expenditures and Contracts.--The Commission or, on 
authorization of the Commission, a member of the Commission may make 
expenditures and enter into contracts for the procurement of such 
supplies, services, and property as the Commission or member considers 
appropriate for the purposes of carrying out the duties of the 
Commission. Such expenditures and contracts may be made only to such 
extent or in such amounts as are provided in appropriation Acts.
    (e) Mails.--The Commission may use the United States mails in the 
same manner and under the same conditions as other Federal departments 
and agencies of the United States.
    (f) Gifts.--The Commission may accept, use, and dispose of gifts or 
donations of services or property.

SEC. 208. REPORT.

    The Commission shall submit to the Congress, the Chief Justice, and 
the President a report not later than 2 years after the date of its 
first meeting. The report shall contain a detailed statement of the 
findings and conclusions of the Commission, together with its 
recommendations for such legislative or administrative action as it 
considers appropriate.

SEC. 209. TERMINATION.

    The Commission shall cease to exist on the date that is 30 days 
after the date on which it submits its report under section 208.

SEC. 410. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $1,500,000 to carry out this 
title.
                                 
HR 4711 IH----2

Summary: TABLE OF CONTENTS: 
     Title I:  Amendments to Title 11 of the United States 
          Code 
     Title II:  Bankruptcy Review Commission 
Title I:  Amendments to Title 11 of the United States Code
 - Spousal Equity in Bankruptcy Amendments of 1994 - Amends Federal bankruptcy law to provide that filing a petition in bankruptcy does not operate as an automatic stay from actions for:  (1) paternity; or (2) alimony, maintenance, or support (including actions for collection from property that is not property of the estate). 
Includes unsecured claims for alimony, maintenance, or support among priority claims and expenses (thus lifting them from their current status of general, unsecured debts). 
Prohibits a debtor from avoiding a judicial lien that secures a debt for alimony, maintenance, or support. 
States that a bankrupt debtor is not discharged from any debt incurred in connection with a divorce or separation agreement. 
Prohibits a bankruptcy trustee from avoiding a transfer that is a bona fide debt for alimony, maintenance, or support. 
Permits a child support creditor to appear before the court in any Federal bankruptcy proceeding without charge and without meeting local requirements for attorney appearances if the creditor or representative files a detailed child support debt statement. 
Title II:  Bankruptcy Review Commission
 - National Bankruptcy Review Commission Act - Establishes the National Bankruptcy Review Commission to study and report to the Congress, the Chief Justice, and the President on bankruptcy issues and the impact of the bankruptcy laws upon women and children living in poverty after divorce.  Authorizes appropriations.