Bankruptcy Administration Improvement Act of 2024

Bill: 118-hr-9154
Sponsor: full_name: Rep. Ivey, Glenn [D-MD-4]
Introduced: 2024-07-25
Policy area: Finance and Financial Sector
Latest action: action_date: 2024-07-25
text: Referred to the House Committee on the Judiciary.

Summaries:

tv_txt: I 118th CONGRESS 2d Session H. R. 9154 IN THE HOUSE OF REPRESENTATIVES July 25, 2024 Mr. Ivey (for himself, Mr. Cline , Mr. Gooden of Texas , and Mr. Johnson of Georgia ) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend titles 11 and 28 of the United States Code to modify the compensation payable to trustees serving in cases under chapter 7 of such title; to extend the term of certain temporary offices of bankruptcy judge, and for other purposes.

1. Short title This Act may be cited as the Bankruptcy Administration Improvement Act of 2024 . 2. Findings The Congress finds the following: (1) Congress has amended the laws governing bankruptcy fees as necessary to ensure that the bankruptcy system remains self-supporting, while also fairly allocating the costs of the system among those who use the system. (2) Because of the importance for the bankruptcy system to be self-funded, at no cost to taxpayers, Congress has closely monitored the funding needs of the bankruptcy system, including by requiring periodic reporting by the Attorney General regarding the United States Trustee System Fund. (3) Because the system governing bankruptcies of various types is interconnected, Congress has established fees, including filing fees, quarterly fees in chapter 11 cases, and other fees, that together fund the courts, judges, United States trustees, and trustees serving in bankruptcy cases under chapter 7 of title 11 of the United States Code. (4) Trustees serving in bankruptcy cases under chapter 7 of title 11 of the United States Code are vital to the functioning of the bankruptcy system, as they provide services at the front lines of the bankruptcy process, administering thousands of cases. (5) Chapter 7 bankruptcy trustees provide valuable returns of assets to government creditors including the Internal Revenue Service, Department of Agriculture, Small Business Administration, and other Federal, State, and municipal governments. (6) Due to the work of the chapter 7 bankruptcy trustees, millions of dollars are also disbursed annually to private creditors of all types including medical providers, unsecured creditors, small businesses, and micro-enterprises such as domestic support providers. (7) Despite the essential role of chapter 7 bankruptcy trustees, since 1994 the amount of compensation paid to these trustees has not been increased. As in 1994, bankruptcy trustees receive only $60 per case (composed of $45 from subsection 330(b)(1), and $15 from subsection 330(b)(2), of title 11 of the United States Code) in nearly ninety percent of chapter 7 cases, and they receive no compensation at all for cases in which the filing fee is waived by the Bankruptcy Court. (8) Since 1994 there have been significant increases in salaries, attorney fees, budget appropriations, filing fees, and court-related fees associated with chapter 7 bankruptcies. In contrast, the $60 paid to chapter 7 trustees has remained the same and has not even been increased for inflation. In 2021, Congress attempted to implement a mechanism that would give chapter 7 trustees a raise, but the trustees only received increased compensation for one fiscal year. Based on CPI estimates, the $60 of in 1994 would be the equivalent of over $125 today. (9) This Act and the amendments made by this Act— (A) increase the compensation of chapter 7 bankruptcy trustees to the level that is appropriate, overdue, and proportionate with the level that was intended in 1994, by increasing their total compensation to $120 per case and ensuring that the amount is indexed for inflation; (B) ensure adequate funding of the United States trustee system; and (C) support the preservation of existing bankruptcy judgeships that are urgently needed to handle existing and anticipated increases in business and consumer caseloads. (10) This Act will not alter the chapter 7 filing fee and will not modify, impair, or supersede the current authority of the district courts of the United States, or of bankruptcy courts, to waive the payment of filing fees by indigent individuals. 3. Trustee compensation (a) Compensation of officers Section 330 of title 11, United States Code, is amended— (1) in subsection (b)(1) by striking $45 and inserting $105 , and (2) by striking subsection (e). (b) Remainder of fees Notwithstanding any other provision of law, the remainder of fees collected under section 1930(a)(1)(A) of title 28, United States Code, after compensating trustees under section 330(b)(1) of title 11, United States Code, shall be deposited as follows: (1) $63.51 in the Special Fund established under section 1931 of title 28, United States Code, (2) $25 in the Special Fund established in accordance with section 10101(b) of Public Law 109–171 , and (3) $51.49 in the United States Trustee Fund established under Section 589a of title 28, United States Code. (c) United States Trustee System Fund Section 589a(f)(1) of title 28, United States Code, is amended— (1) in subparagraph (D) by striking Fourth and inserting Second , (2) by striking subparagraphs (B) and (C), and (3) by redesignating subparagraph (D) as subparagraph (B). 4. Bankruptcy fees (a) Section 1930(a)(6)(B) of title 28 of the United States Code, is amended— (1) in clause (i) by striking 5-year and inserting 10-year , and (2) in clause (ii) by striking 0.8 and inserting 1.1 . (b) Section 589a(f) of title 28 of the United States Code is amended by striking 2026 each place it appears and inserting 2031 . 5. Extension of term of certain temporary offices of bankruptcy judge (a) Section 4 of the Bankruptcy Administration Improvement Act of 2020 ( Public Law 116–325 ) is amended— (1) in subsection (a)(2)— (A) in subparagraph (A)(i) by striking 5 years and inserting 10 years , and (B) in subparagraph (B)(i) by striking 5 years and inserting 10 years , (2) in subsection (b)(2)— (A) in subparagraph (A)(i) by striking 5 years and inserting 10 years , (B) in subparagraph (B)(i) by striking 5 years and inserting 10 years , (C) in subparagraph (C)(i) by striking 5 years and inserting 10 years , (D) in subparagraph (D)(i) by striking 5 years and inserting 10 years , (E) in subparagraph (E)(i) by striking 5 years and inserting 10 years , and (F) in subparagraph (F)(i) by striking 5 years and inserting 10 years , (3) in subsection (c)(2)— (A) in subparagraph (A)(i) by striking 5 years and inserting 10 years , and (B) in subparagraph (B)(i) by striking 5 years and inserting 10 years , (4) in subsection (d)(2)— (A) in subparagraph (A)(i) by striking 5 years and inserting 10 years , and (B) in subparagraph (B)(i) by striking 5 years and inserting 10 years , (5) in subsection (e)(2)(A) by striking 5 years and inserting 10 years , and (6) in subsection (f)(2)(A) by striking 5 years and inserting 10 years . (b) Section 1003(b)(2)(A) of the Bankruptcy Judgeship Act of 2017 (Pub. L. No. 115-72) is amended by striking ‘‘5 years’’ and inserting ‘‘10 years’’. 6. Effective date; application of amendments (a) In general Except as provided in paragraph (2), the amendments made by this Act shall take effect on October 1 that first occurs after the date of the enactment of this Act. (b) Exceptions (1) Compensation of officers The amendments made by section 3 shall apply to any case under title 11 of the United States Code commenced on or after October 1 that first occurs after the date of the enactment of this Act— (A) under chapter 7, or (B) under chapter 11, 12, or 13 and converted to a case chapter 7. (2) Bankruptcy fees The amendments made by section 4 shall apply to— (A) any case pending under chapter 11 of title 11 of the United States Code on or after October 1 that first occurs after October 1 that first occurs after the date of the enactment of this Act, and (B) quarterly fees payable under section 1930(a)(6) of title 28 of the United States Code for disbursements made in any calendar quarter that begins on or after October 1 that first occurs after the date of the enactment of this Act.