Bankruptcy Law Technical Corrections Act of 1997

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Bankruptcy Law Technical Corrections 
Act of 1997''.

SEC. 2. DEFINITIONS.

    Section 101 of title 11, United States Code, is amended--
            (1) by striking ``In this title--'' and inserting ``In this 
        title:'',
            (2) in paragraph (51B) by inserting ``family farms or'' 
        after ``other than'',
            (3) in paragraph (35)(B) by striking ``paragraphs (21B) and 
        (33)(A)'' and inserting ``paragraphs (23) and (35)'',
            (4) in each paragraph by inserting ``The term'' after the 
        paragraph designation,
            (5) in paragraphs (35A) and (38) by striking ``; and'' at 
        the end and inserting a period,
            (6) in paragraph (54) by inserting ``, creation of a 
        lien,'' after ``security interest'',
            (7) in paragraphs (1) through (35), in paragraphs (36) and 
        (37), and in paragraphs (40) through (55), by striking the 
        semicolon at the end and insert a period, and
            (8) by redesignating paragraphs (4) through (55) in 
        numerical sequence.

SEC. 3. ADJUSTMENT OF DOLLAR AMOUNTS.

    Section 104 of title 11, United States Code, is amended by 
inserting ``522(f)(3),'' after ``522(d),'' each place it appears.

SEC. 4. EXTENSION OF TIME.

    Section 108(c)(2) of title 11, United States Code, is amended by 
striking ``922'' and all that follows through ``or'', and inserting 
``922, 1201, or''.

SEC. 5. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE 
              BANKRUPTCY PETITIONS.

    Section 110(j)(3) of title 11, United States Code, is amended by 
striking ``attorney's'' and inserting ``attorneys' ''.

SEC. 6. ELIGIBILITY TO SERVE AS TRUSTEE.

    Paragraphs (1) and (2) of section 321(a) of title 11, United States 
Code, are amended by striking ``7, 12,'' and inserting ``12''.

SEC. 7. EMPLOYMENT OF PROFESSIONAL PERSONS.

    (a) Authority of Trustee.--Section 327 of title 11, United States 
Code, is amended--
            (1) in subsection (b) by striking ``section 721,,'' and 
        inserting ``721,'',
            (2) in subsection (c) by striking ``chapter 7'' and all 
        that follows through ``or'' the first place it appears, and 
        inserting ``chapter 7, 12, or'', and
            (3) in subsection (d) by striking ``act as attorney or 
        accountant'' and inserting ``render professional services of 
        the kind described in subsection (a)''.
    (b) Limitation on Compensation.--Section 328(b) of title 11, United 
States Code, is amended--
            (1) by striking ``serve as an attorney or accountant'' and 
        inserting ``render professional services'',
            (2) by striking ``such attorney or accountant'' and 
        inserting ``a professional person who renders such services'',
            (3) by striking ``attorney or accountant'' and inserting 
        ``such professional person'', and
            (4) by striking ``an attorney or accountant'' and inserting 
        ``such a professional person''.

SEC. 6. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.

    Section 328(a) of title 11, United States Code, is amended in 
subsection (a) by inserting ``on a fixed or percentage fee basis,'' 
after ``hourly basis,''.

SEC. 7. COMPENSATION TO OFFICERS.

    Section 330(a) of title 11, United States Code, is amended--
            (1) in paragraph (1) by inserting ``, or the debtor's 
        attorney'' after ``1103'', and
            (2) in paragraph (3) by striking ``(3)(A) In'' and 
        inserting ``(3) In''.

SEC. 8. SPECIAL TAX PROVISIONS.

    Section 346(g)(1)(C) of title 11, United States Code, is amended by 
striking ``, except'' and all that follows through ``1986''.

SEC. 9. EFFECT OF CONVERSION.

    Section 348(f)(2) of title 11, United States Code, is amended by 
inserting ``of the estate'' after ``property'' the first place it 
appears.

SEC. 10. AUTOMATIC STAY.

    Section 362 of title 11, United States Code, is amended--
            (1) in subsection (b)(3) by inserting ``or is taken with 
        respect to a security interest that is created by a transfer to 
        which section 547(c)(3) of this title applies'' before the 
        semicolon at the end, and
            (2) in subsection (h) by striking ``individual'' and 
        inserting ``entity''.

SEC. 11. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

    Section 365 of title 11, United States Code, is amended--
            (1) in subsection (b)(2)--
                    (A) in subparagraph (C) by striking ``or'' at the 
                end, and
                    (B) by striking subparagraph (D) and inserting the 
                following:
            ``(D) the satisfaction of any penalty rate in any executory 
        contract or unexpired lease; or
            ``(E) the satisfaction of any provision relating to a 
        default arising from any failure by the debtor to perform 
        nonmonetary obligations under any executory contract or 
        unexpired lease other than an unexpired lease of personal 
        property.'',
            (2) in subsection (c)--
                    (A) in paragraph (2) by adding ``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) by striking paragraphs (5) through 
        (9), and
            (4) in subsection (f)(1) by striking ``; except that'' and 
        all that follows through the end of the paragraph and inserting 
        a period.

SEC. 12. AMENDMENT TO TABLE OF SECTIONS.

    The table of sections for chapter 5 by amending the item relating 
to section 556 to read as follows:

``556. Contractual right to liquidate a commodities contract or forward 
                            contract.''.

SEC. 13. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

    Section 503(b)(4) of title 11, United States Code, is amended by 
inserting ``subparagraph (A), (B), (C), (D), or (E) of'' before 
``paragraph (3)''.

SEC. 14. PRIORITIES.

    Section 507(a) of title 11, United States Code, is amended--
            (1) in paragraph (3)(B) by striking the semicolon at the 
        end and inserting a period, and
            (2) in paragraph (7) by inserting ``unsecured'' after 
        ``allowed''.

SEC. 15. EXEMPTIONS.

    Section 522 of title 11, United States Code, is amended--
            (1) in subsection (f)(1)(A)(ii)(II)--
                    (A) by striking ``includes a liability designated 
                as'' and inserting ``is for a liability that is 
                designated as, and is actually in the nature of,'', and
                    (B) by striking ``support.'' and inserting 
                ``support'', and
            (2) in subsection (g)(2) by striking ``subsection (f)(2)'' 
        and inserting ``subsection (f)(1)(B)''.

SEC. 16. EXCEPTIONS TO DISCHARGE.

    Section 523 of title 11, United States Code, is amended--
            (1) in subsection (a)(3) by striking ``or (6)'' each place 
        it appears and inserting ``(6), or (15)'',
            (2) as amended by section 304(e) of Public Law 103-394 (108 
        Stat. 4133), in paragraph (15)--
                    (A) by inserting ``or'' after the semicolon at the 
                end, and
                    (B) by transferring such paragraph so as to insert 
                it after paragraph (14) of subsection (a),
            (3) in subsection (a)(15), as so redesignated by paragraph 
        (2), by inserting ``to a spouse, former spouse, or child of the 
        debtor and'' after ``(15)'',
            (4) in subsection (a)(17)--
                    (A) by striking ``by a court'' and inserting ``on a 
                prisoner by a Federal court'', and
                    (B) by striking ``section 1915 (b) or (f)'' and 
                inserting ``subsection (b) or (f)(2) of section 1915'', 
                and
            (5) in subsection (e) by striking ``a insured'' and 
        inserting ``an insured''.

SEC. 17. EFFECT OF DISCHARGE.

    Section 524(a)(3) of title 11, United States Code, is amended by 
striking ``section 523'' and all that follows through ``or that'', and 
inserting ``section 523, 1228(a)(1), or 1328(a)(1) of this title, or 
that''.

SEC. 18. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

    Section 525(c) of title 11, United States Code, is amended--
            (1) in paragraph (1) by inserting ``student'' before 
        ``grant'' the second place it appears, and
            (2) in paragraph (2) by striking ``the program operated 
        under part B, D, or E of'' and inserting ``any program operated 
        under''.

SEC. 19. PROPERTY OF THE ESTATE.

    Section 541(b)(4)(B)(ii) of title 11, United States Code (as added 
by section 208(b) of the Bankruptcy Reform Act of 1994), is amended by 
inserting ``365 or'' before ``542''.

SEC. 20. LIMITATIONS ON AVOIDING POWERS.

    Section 546 of title 11, United States Code, is amended by 
redesignating the second subsection (g) as subsection (h).

SEC. 21. LIABILITY OF TRANSFEREE OF AVOIDED TRANSFER.

    (a) In General.--Section 550(c) of title 11, United States Code, is 
amended--
            (1) in paragraph (1) by striking ``avoided under section 
        547(b)'' and inserting ``avoidable under section 547'', and
            (2) in the matter following paragraph (2), by striking 
        ``recover under subsection (a) from a transferee that is not an 
        insider'' and inserting ``avoid under section 547 such 
        transfer, to the extent that such transfer was made for the 
        benefit of a transferee that was not an insider at the time of 
        such transfer, or recover under subsection (a) from a 
        transferee that was not an insider at the time of such 
        transfer''.
    (b) Conforming Amendment.--Section 547(b) of title 11, United 
States Code, is amended by inserting ``or in section 550(c) of this 
title'' after ``subsection (c) of this section''.

SEC. 22. SETOFF.

    Section 553(b)(1) of title 11, United States Code, is amended by 
striking ``362(b)(14)'' and inserting ``362(b)(17)''.

SEC. 23. DISPOSITION OF PROPERTY OF THE ESTATE.

    Section 726(b) of title 11, United States Code, is amended by 
striking ``1009,''.

SEC. 24. GENERAL PROVISIONS.

    Section 901(a) of title 11, United States Code, is amended by 
inserting ``1123(d),'' after ``1123(b),''.

SEC. 25. 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 new paragraph:
    ``(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. Upon the filing of a 
report under the preceding sentence--
            ``(i) the trustee elected under paragraph (1) shall be 
        considered to have been selected and appointed for purposes of 
        this section, and
            ``(ii) the service of any trustee appointed under 
        subsection (d) shall terminate.
    ``(B) In the case of any dispute arising out of an election under 
subparagraph (A), the court shall resolve the dispute.''.

SEC. 26. ABANDONMENT OF RAILROAD LINE.

    Section 1170(e)(1) of title 11, United States Code, is amended by 
striking ``section 11347'' and inserting ``section 11326(a)''.

SEC. 27. CONTENTS OF PLAN.

    Section 1172(c)(1) of title 11, United States Code, is amended by 
striking ``section 11347'' and inserting ``section 11326(a)''.

SEC. 28. PAYMENTS.

    Section 1226(b)(2) of title 11, United States Code, is amended--
            (1) by striking ``1202(c) of this title'' and inserting 
        ``586(b) of title 28'', and
            (2) by striking ``1202(d) of this title'' and inserting 
        ``586(e)(1)(B) of title 28''.

SEC. 29. DISCHARGE.

    Subsections (a) and (c) of section 1228 of title 11, United States 
Code, are amended by striking ``1222(b)(10)'' each place it appears and 
inserting ``1222(b)(9)''.

SEC. 30. CONTENTS OF PLAN.

    Section 1322 of title 11, United States Code, is amended--
            (1) in subsection (b) by striking ``(c)'' and inserting 
        ``(d)'', and
            (2) in subsection (e) by striking the comma after 
        ``default'' the second place it appears.

SEC. 31. DISCHARGE.

    Section 1328(a) of title 11, United States Code, is amended by 
striking all after ``except any debt--'' and inserting the following:
            ``(1) provided for under section 1322(b)(5) of this title;
            ``(2) of the kind specified in paragraph (5), (8), or (9) 
        of section 523(a) of this title; or
            ``(3) for restitution, or a criminal fine, included in a 
        sentence on the debtor's conviction of a crime.''.

SEC. 32. BANKRUPTCY CASES AND PROCEEDINGS.

    Section 1334(d) of title 28, United States Code, is amended--
            (1) by striking ``made under this subsection'' and 
        inserting ``made under subsection (c)'', and
            (2) by striking ``This subsection'' and inserting 
        ``Subsection (c) and this subsection''.

SEC. 33. BANKRUPTCY REVIEW COMMISSION.

    Section 604 of the Bankruptcy Reform Act of 1994 (108 Stat. 4147) 
is amended--
            (1) by striking subsection (g), and
            (2) by redesignating subsection (h) as subsection (g).

SEC. 34. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.

    Section 156(a) of title 18, United States Code, is amended--
            (1) in the first undesignated paragraph--
                    (A) by inserting ``(1) the term'' before `` 
                `bankruptcy'', and
                    (B) by striking the period at the end and inserting 
                ``; and'', and
            (2) in the second undesignated paragraph--
                    (A) by inserting ``(2) the term'' before `` 
                `document'', and
                    (B) by striking ``this title'' and inserting 
                ``title 11''.

SEC. 35. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect on the date of 
the enactment of this Act.
    (b) Application of Amendments.--The amendments made by this Act 
shall apply only with respect to cases commenced under title 11 of the 
United States Code on or after the date of the enactment of this Act.

Summary: Bankruptcy Law Technical Corrections Act of 1997 - Amends Federal bankruptcy law regarding:  (1) definitions affecting family farms and creation of a lien; (2) periodic adjustments of dollar amounts; (3) extensions of time; (4) removal of Chapter 7 (liquidation) cases from the eligibility guidelines governing service as a trustee; (5) compensation for professional persons and the debtor's attorney; (6) the non-applicability of an automatic stay to the creation of a security interest by transfer that is non-avoidable by the trustee; and (7) assumption by the bankruptcy trustee of certain executory contracts with specified defaults, and of unexpired leases of aircraft facilities. 
Revises guidelines governing:  (1) debtor avoidance of certain judicial liens; (2) exceptions to a discharge from debt and the effect of such discharge; (3) the liability of a transferee of an avoided transfer; (4) appointment of an elected trustee or examiner; and (5) payment for standing trustees pursuant to the judicial code. 
Amends the Bankruptcy Reform Act of 1994 to repeal the authorization for a 90-day continuation of membership on the National Bankruptcy Review Commission of certain Commission members who leave government office or, if they were not government officers or employees, become such.