SLAP Act
Bill: S.5097 | Sponsor: Sen. Manchin, Joe, III (D-WV)
Policy area: Finance and Financial Sector

Summary:
Stop Looting American Pensions Act of 2022 or the SLAP Act
This bill revises certain bankruptcy requirements, including by providing additional protections for employee pay and pensions in the event of a bankruptcy.
Specifically, the bill

To provide protections for pensions in bankruptcy proceedings, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Looting American Pensions Act 
of 2022'' or the ``SLAP Act''.

SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974 AND THE INTERNAL REVENUE CODE OF 1986.

    (a) Minimum Funding Standard.--
            (1) Amendment to the employee retirement income security 
        act of 1974.--Section 302(a) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1082(a)) is amended by adding 
        at the end the following:
            ``(3) Cases under title 11.--A plan shall continue to be 
        required to satisfy the minimum funding standard under 
        paragraph (1) if a case under title 11, United States Code, is 
        commenced with respect to the employer unless the Secretary of 
        the Treasury has waived the requirements of this subsection 
        with respect to the plan under subsection (c).''.
            (2) Amendment to the internal revenue code of 1986.--
        Section 412(a) of the Internal Revenue Code of 1986 is amended 
        by adding at the end the following:
            ``(3) Cases under title 11.--A plan shall continue to be 
        required to satisfy the minimum funding standard under 
        paragraph (1) if a case under title 11, United States Code, is 
        commenced with respect to the employer unless the Secretary has 
        waived the requirements of this subsection with respect to the 
        plan under subsection (c).''.
    (b) Obligation To Contribute.--Section 4212 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1392) is amended by 
adding at the end the following:
    ``(d) Cases Under Title 11.--A person shall be subject to an 
obligation to contribute under this part notwithstanding the 
commencement of a case under title 11, United States Code, with respect 
to that person.''.
    (c) Obligation To Pay Withdrawal Liability.--Section 4220(c) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1399(c)) is 
amended by adding at the end the following:
            ``(9) An employer shall be subject to an obligation to make 
        payments of withdrawal liability under this section 
        notwithstanding the commencement of a case under title 11, 
        United States Code, with respect to the employer.''.

SEC. 3. ADMINISTRATIVE EXPENSES AND PRIORITIES IN BANKRUPTCY 
              PROCEEDINGS.

    (a) Allowance of Administrative Expenses.--
            (1) In general.--Section 503(b) of title 11, United States 
        Code, is amended--
                    (A) in paragraph (8)(B), by striking ``and'';
                    (B) in paragraph (9), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(10) unpaid minimum required contributions, as defined in 
        section 302(c)(4)(C)(iii)(I) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1082(c)(4)(C)(iii)(I)) and 
        section 4971(c)(4) of the Internal Revenue Code of 1986; and
            ``(11) withdrawal liability determined under part 1 of 
        subtitle E of title IV of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1381 et seq.), including any 
        accelerated payment of such withdrawal liability under section 
        4219(c)(5) of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1399(c)(5)).''.
            (2) Conforming amendment relating to priorities.--Section 
        507(a)(5) of title 11, United States Code, is amended, in the 
        matter preceding subparagraph (A), by inserting after 
        ``contributions to an employee benefit plan'' the following: 
        ``, other than for unpaid minimum required contributions, as 
        defined in section 302(c)(4)(C)(iii)(I) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 
        1082(c)(4)(C)(iii)(I)) and section 4971(c)(4) of the Internal 
        Revenue Code of 1986''.
    (b) Increased Wage Priority.--Section 507(a) of title 11, United 
States Code, is amended--
            (1) in paragraph (4), in the matter preceding subparagraph 
        (A)--
                    (A) by striking ``$10,000'' and inserting 
                ``$20,000'';
                    (B) by striking ``within 180 days''; and
                    (C) by striking ``or the date of the cessation of 
                the debtor's business, whichever occurs first,''; and
            (2) in paragraph (5)--
                    (A) in subparagraph (A)--
                            (i) by striking ``within 180 days''; and
                            (ii) by striking ``or the date of the 
                        cessation of the debtor's business, whichever 
                        occurs first''; and
                    (B) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) for each such plan, to the extent of the 
                number of employees covered by each such plan, 
                multiplied by $20,000.''.

SEC. 4. AUTOMATIC STAY IN BANKRUPTCY PROCEEDINGS.

    Section 362(b) of title 11, United States Code, is amended--
            (1) in paragraph (28), by striking ``and'' at the end;
            (2) in paragraph (29), by striking the period at the end 
        and inserting ``; and''; and
            (3) by inserting after paragraph (29) the following:
            ``(29) under subsection (a) of this section, the 
        commencement or continuation of an action or proceeding by the 
        Director of the Pension Benefits Guaranty Corporation to 
        enforce the minimum standard under section 303(k) of the 
        Employment Retirement Income Security Act of 1974 (29 U.S.C. 
        1083(k)).''.

SEC. 5. SALES OF PROPERTY IN BANKRUPTCY PROCEEDINGS.

    (a) In General.--Section 363 of title 11, United States Code, is 
amended--
            (1) in subsection (b)(1), in the matter preceding 
        subparagraph (A), by striking ``The trustee'' and inserting 
        ``Subject to subsection (q), the trustee'';
            (2) in subsection (c)(1), by striking ``If the business'' 
        and inserting ``Subject to subsection (q), if the business''; 
        and
            (3) by adding at the end the following:
    ``(q)(1) Subject to paragraphs (2) and (3), the trustee may not 
sell property of the estate under subsection (b) or (c) unless the 
trustee is able to demonstrate that--
            ``(A) the sale complies with the provisions of this title;
            ``(B) the sale has been proposed in good faith and not by 
        any means forbidden by the law;
            ``(C) any payment made for services or for costs and 
        expenses in or in connection with the sale is reasonable;
            ``(D) if, with respect to the case, there is any fee 
        payable under section 1930 of title 28, the proceeds of the 
        sale will be used to pay that fee; and
            ``(E) with respect to each class of claims or interests--
                    ``(i) such class has accepted the sale; or
                    ``(ii) such class is not impaired by the sale.
    ``(2) The trustee, on request of the proponent of the sale, may 
sell property of the estate under subsection (b) or (c) if--
            ``(A) all of the applicable requirements of paragraph (1) 
        other than subparagraph (E) are met with respect to a sale of 
        property; and
            ``(B) the sale does not discriminate unfairly, and is fair 
        and equitable, with respect to each class of claims or 
        interests that is impaired under, and has not accepted, the 
        sale.
    ``(3) The trustee may not sell substantially all of the property of 
the estate under subsection (b) or (c) during the 60-day period 
beginning on the date of the filing of the petition unless the court 
determines that--
            ``(A) there is a high likelihood that the value of the 
        property of the estate will decrease significantly during that 
        period; and
            ``(B) the requirements under paragraph (1) have been 
        satisfied with respect to each sale that would contribute to 
        substantially all of the property of the estate being sold.''.
    (b) Protection of Employee Benefits in a Sale of Assets.--Section 
363(b) of title 11, United States Code, is amended by adding at the end 
the following:
    ``(3) In approving a sale under this subsection, the court shall 
consider the extent to which a bidder has offered to maintain existing 
jobs, preserve terms and conditions of employment, and assume or match 
pension and retiree health benefit obligations in determining whether 
an offer constitutes the highest or best offer for such property.''.

SEC. 6. FRAUDULENT TRANSFERS AND OBLIGATIONS.

    Section 548 of title 11, United States Code, is amended--
            (1) in subsection (a)(1), in the matter preceding 
        subparagraph (A), by striking ``2 years'' and inserting ``6 
        years''; and
            (2) in subsection (b), by striking ``2 years'' and 
        inserting ``6 years''.

SEC. 7. LIMITATIONS ON EXECUTIVE COMPENSATION ENHANCEMENTS.

    Section 503(c) of title 11, United States Code, is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A)--
                    (A) by inserting ``, a senior executive officer, or 
                any of the 20 next most highly compensated employees or 
                consultants'' after ``an insider'';
                    (B) by inserting ``or for the payment of 
                performance or incentive compensation, or a bonus of 
                any kind, or other financial returns designed to 
                replace or enhance incentive, stock, or other 
                compensation in effect before the date of the 
                commencement of the case,'' after ``remain with the 
                debtor's business,''; and
                    (C) by inserting ``clear and convincing'' before 
                ``evidence in the record''; and
            (2) by amending paragraph (3) to read as follows:
            ``(3) other transfers or obligations, to or for the benefit 
        of insiders, senior executive officers, managers, or 
        consultants providing services to the debtor, in the absence of 
        a finding by the court, based upon clear and convincing 
        evidence, and without deference to the debtor's request for 
        such payments, that such transfers or obligations are essential 
        to the survival of the debtor's business or (in the case of a 
        liquidation of some or all of the debtor's assets) essential to 
        the orderly liquidation and maximization of value of the assets 
        of the debtor, in either case, because of the essential nature 
        of the services provided, and then only to the extent that the 
        court finds such transfers or obligations are reasonable 
        compared to individuals holding comparable positions at 
        comparable companies in the same industry and not 
        disproportionate in light of economic concessions by the 
        debtor's nonmanagement workforce during the case.''.

SEC. 8. APPLICABILITY.

    This Act and the amendments made by this Act shall apply with 
respect to any case that is commenced on or after the date of enactment 
of this Act.
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