[House Report 106-126]
[From the U.S. Government Publishing Office]
106th Congress Report
1st Session HOUSE OF REPRESENTATIVES 106-126
=======================================================================
PROVIDING FOR THE CONSIDERATION OF H.R. 833, THE BANKRUPTCY REFORM ACT
OF 1999
_______
May 4, 1999.--Referred to the House Calendar and ordered to be printed
_______
Mr. Sessions, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 158]
The Committee on Rules, having had under consideration
House Resolution 158, by a non-record vote report the same to
the House with the recommendation that the resolution be
adopted.
summary of provisions of resolution
The resolution provides for the consideration of H.R. 833,
the ``Bankruptcy Reform Act of 1999,'' under a structured rule.
The rule provides one hour of general debate divided equally
between the chairman and ranking minority member of the
Committee on the Judiciary.
The rule waives points of order against consideration of
the bill for failure to comply with section 302 (prohibiting
consideration of legislation which exceeds a committee's
allocation of new spending authority) or section 311
(prohibiting consideration of legislation that would cause the
total level of new budget authority or outlays in the most
recent budget resolution to be exceeded or cause revenues to be
less) of the Congressional Budget Act.
The rule provides that it shall be in order to consider as
an original bill for the purpose of amendment under the five-
minute rule the amendment in the nature of a substitute
recommended by the Committee on the Judiciary now printed in
the bill. The rule waives all points or order against the
committee amendment in the nature of a substitute and
amendments thereto.
The rule makes in order only those amendments printed in
this report. The rule provides that amendments made in order
may be offered only in the order printed in this report, may be
offered only by a Member designated in this report, shall be
considered as read, shall be debatable for the time specified
in this report equally divided and controlled by the proponent
and an opponent, shall not be subject to amendment, and shall
not be subject to a demand for division of the question in the
House or in the Committee of the Whole.
The rule allows for the Chairman of the Committee of the
Whole to postpone votes during consideration of the bill, and
to reduce voting time to five minutes on a postponed question
if the vote follows a fifteen minute vote. Finally, the rule
provides one motion to recommit with or without instructions.
The waiver of all points of order includes section 302 of
the Congressional Budget Act because section 128 of the
committee amendment in the nature of a substitute creates
several new judgeships and extends several existing judgeships.
The waiver of all points of order also includes section 311 of
the Congressional Budget Act because section 148 of the
committee amendment in the nature of a substitute waives
certain filing fees for indigent filers and section 608 waives
certain fees for small businesses. Both the underlying
legislation and the Nadler substitute require similar waivers.
committee votes
Pursuant to clause 3(b) of House rule XIII the results of
each record vote on an amendment or motion to report, together
with the names of those voting for and against, are printed
below:
Rules Committee Record Vote No. 20
Date: May 4, 1999.
Measure: H.R. 833, Bankruptcy Reform Act of 1999.
Motion by: Mr. Moakley.
Summary of motion: To make in order Amendment No. 28
offered by Mr. Delahunt to add a new section 154 to the bill
disallowing claims in bankruptcy for consumer credit card debts
if, at the time of the solicitation to open the account, the
debtor was not informed in writing in a clear and conspicuous
manner of 9 specific factors.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Hastings--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay;
Moakley--Yea; Frost--Yea; Hall--Yea; Dreier--Nay.
Rules Committee Record Vote No. 21
Date: May 4, 1999.
Measure: H.R. 833, Bankruptcy Reform Act of 1999.
Motion by: Mr. Moakley.
Summary of motion: To make in order Amendment No. 10
offered by Mr. Barrett of Wisconsin which caps liability for
the unauthorized use of a debit card at $50, the same level as
credit cards.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Hastings--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay;
Moakley--Yea; Frost--Yea; Hall--Yea; Dreier--Nay.
Rules Committee Record Vote No. 22
Date: May 4, 1999.
Measure: H.R. 833, Bankruptcy Reform Act of 1999.
Motion by: Mr. Moakley.
Summary of motion: To make in order Amendment No. 2 offered
by Mr. Scott which exempts veterans benefits from the
calculations of monthly income for the purpose of determining
income available to creditors.
Results: Defeated 4 to 7.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Hastings--Nay; Myrick--Nay; Sessions--Yea; Reynolds--Nay;
Moakley--Yea; Frost--Yea; Hall--Yea; Dreier--Nay.
Rules Committee Record Vote No. 23
Date: May 4, 1999.
Measure: H.R. 833, Bankruptcy Reform Act of 1999.
Motion by: Mr. Frost.
Summary of motion: To make in order Amendment No. 21
offered by Mr. Nadler and Ms. Jackson-Lee which excludes from
the bill's definition of a debtor's current monthly income,
which is used to determine that debtor's ability to repay
debts, and payments received in satisfaction of a domestic
support obligation.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Hastings--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay;
Moakley--Yea; Frost--Yea; Hall--Yea; Dreier--Nay.
Rules Committee Record Vote No. 24
Date: May 4, 1999.
Measure: H.R. 833, Bankruptcy Reform Act of 1999.
Motion by: Mr. Frost.
Summary of motion: To make in order Amendment No. 24
offered by Mr. Conyers which excludes from the bill's
definition of current monthly income any benefits received
under the Social Security Act, in addition to excluding payment
to victims of war crimes and crimes against humanity (as the
bill already does).
Results: Defeated 4 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings--Nay; Myrick--Nay; Sessions--Yea;
Reynolds--Nay; Moakley--Yea; Frost--Yea; Hall--Yea; Dreier--
Nay.
summary of amendments made in order to h.r. 833--bankruptcy reform act
of 1999
Gekas (10 Minutes). Manager's Amendment. The Amendment (1)
makes various technical changes; (2) makes a clarifying
revision to the type of expenses that a debtor may claim
pursuant to the IRS Other Necessary Expenses categories (the
revision specifies that the debtor must claim actual monthly
expenses for the specified categories); (3) revises certain
provisions so that they conform with the Bankruptcy Code's
other provisions pertaining to an award of attorneys' fees; (4)
clarifies that the chapter 7 trustee must file a statement as
to whether or not a case should be presumed to be an abuse in
every case administered by such trustee; (5) revised chapter
13's requirements for confirmation to require the court to find
that the debtor filed the chapter 13 case in good faith; (6)
revises the title of section 134 of the bill; (7) deletes
Section 215
(claims relating to insurance deposits in cases ancillary to
foreign proceedings) as this provision is included in title XI
of the bill, as revised by this Amendment; (8) adds a new
provision to describe to certain procedural matters pertaining
to appeals, as amended by the bill; (9) adds provisions with
respect to the treatment of certain funds subject to state
insurance law or regulation for the benefit of claim holders in
the United States; (10) repeals sections of the Bankruptcy Code
that are no longer necessary' and (11) amends a statutory
cross-reference so that it better comports with the drafters'
intent, which is to include in the definition of a ``financial
participant'' certain securities contracts, forward contracts,
repurchase agreements and swap agreements in addition to
certain commodity contracts.
Moran (VA)/Dooley/Ackerman (20 Minutes). Amends the Truth
in Lending Act (TILA) to require Credit Card Issuers to make
disclosures regarding minimum monthly payments. It would also
ensure that consumers have all the information they need in
order to avoid the imposition of late fees and requires that
Worldwide Web-Based Credit Card Solicitations are subject to
the same ``Schumer Box'' disclosures as all other credit card
solicitations.
Moran (VA) (20 minutes). Inserts a disclosure requiring
that a debt relief agency providing bankruptcy assistance to an
assisted person shall provide a written notice within three
business days after the first date on which a debt relief
agency first offers to provide any bankruptcy assistance
services to an assisted person, advising assisted persons of
their rights and responsibilities of disclosure. Requires that
an attorney or bankruptcy petition preparer give an assisted
person a written contract specifying what the attorney or
preparer will do and the cost. Inserts a ``debtor's bill of
rights.'' Requires that a debt relief agency disclose in any
advertisement of bankruptcy assistance services or of the
benefits of bankruptcy that the services or benefits are with
respect to proceedings under this title of the Bankruptcy Code.
Velazquez (20 minutes). To allow the expansion of the
credit committee membership under chapter 11 bankruptcies to
include a small business when it is determined that the small
business' claims are disproportionately large to its gross
revenues. And to ensure better access to information for those
small businesses not included in the committee by allowing the
committee to be open for comment and subject to additional
reports or disclosures.
Graham (20 minutes). The bankruptcy code prohibits the
discharge of federally made, guaranteed or insured education
loans or education loans made by non-profit institutions. This
amendment would extend the prohibition from discharge to all
qualified education loans. Includes exceptions for undue
hardships.
Dooley (20 minutes). Requires the Federal Trade Commission
to set standards to be used by the United States Trustees in
approving credit counseling agencies, programs described in
section 109(h) and instructional courses concerning personal
financial management.
Conyers (20 minutes). Waives the provision of chapter 11
relating to small business debtors or to single asset real
estate in cases where the application of those provisions could
result in the loss of 5 or more jobs.
Watt (20 minutes). Replaces the provisions of H.R. 833
which require that all bankruptcy filers file their tax returns
with the court and instead require that a debtor file tax
returns with the court at the request of any party in interest.
Whitfield (20 minutes). Establishes a mechanism whereby
bankruptcy trustees may receive compensation when they transfer
cases from chapter 7 to chapter 13. Under this provision, the
level of compensation would be determined by the bankruptcy
judge.
Hyde/Conyers (40 minutes). Deletes the reported bill's
application of modified IRS expense allowances for determining
permissible projected living expenses of debtors and their
families during the life of chapter 13 plans. In its place, the
amendment adopts a standard that allows only ``reasonably
necessary'' expenses and directs the Executive office of United
States Trustees to issue guidelines that will assist in making
assessments of whether expenses qualify. The amendment does not
affect other provisions of section 102 that are designed to
limit the availability of an immediate fresh start in chapter
7, channel significant numbers of chapter 7 debtors into five-
year chapter 13 repayment plans, and generate greater
recoveries from creditors.
Nadler/Conyers/Meehan/Berman (60 minutes). Substitute.
Provides a realistic means test which takes into account the
debtor's actual income and expenses. Does not omit expenses a
debtor would have to pay in a chapter 13 plan from the test
used to determine whether the debtor must file for chapter 13.
Does not rely on IRS guidelines to determine how much a debtor
should live on. Allows adequate judicial discretion to
determine whether the debtor appropriately belongs in chapter
7. Avoids using a debtor's ability to repay a specified
percentage of unsecured non-priority debts which is easy for
debtors to manipulate. Holds both debtor and creditor attorneys
to strict application of Rule 9011's penalties for misconduct
or bringing a frivolous case. Contains a safe harbor for
families below the median national income. Provides a balance
by requiring credit card lenders to behave responsibly and to
provide borrowers with the information they need to avoid
bankruptcy. Prevents some of the more highly publicized cases
in which creditors illegally enforced debts after bankruptcy
through ``reaffirmation agreements.'' Deletes a section which
would have denied victims in these cases a legal remedy by
prohibiting class action suits. Eliminates new grounds for
making credit card debts non-dischargeable, but leaves intact
current law which makes prebankruptcy debt run-up and
fraudulently incurred debt non-dischargeable. Eliminates a
provision which would have allowed landlords to evict debtors
without obtaining the permission of the bankruptcy court.
Removes a provision which allows secured creditors to treat the
unsecured part of some loans as secured debt. Modifies the
child support portions of the bill to take away the special new
rights over families that state and local governments would
have obtained in a bankruptcy case. Places families first.
Texts of amendments made in order:
1. An Amendment To Be Offered by Representative Gekas of Pennsylvania,
or a Designee, Debatable for 10 Minutes
In the table of contents of the bill--
(1) in the item relating to section 107, strike
``congress'' and insert ``Congress'', and
(2) in the item relating to section 134, strike
``Giving debtors the ability to keep'' and insert
``Allowing a debtor to retain''.
Page 9, line 1, strike ``applicable'' and insert ``actual''.
Page 9, beginning on line 1, strike ``specifically listed''
and insert ``specified''.
Page 10, line 3, strike ``proceeding brought'' and insert
``motion filed''.
Beginning on page 10, strike line 22 and all that follows
through line 5 on page 11.
Page 11, line 6, strike ``(D)'' and insert ``(C)''.
Page 12, beginning on line 11, strike ``in prosecuting the
motion''.
Page 16, line 13, insert ``or not'' after ``whether''.
Page 17, after line 16, insert the following (and make such
technical and conforming changes as may be appropriate):
(d) Debtor's Duties.--Section 521(a)(1)(B) of title 11,
United States Code, as amended by section 603, is amended--
(1) in clause (v) by striking ``and'' at the end;
(2) in clause (vi) by adding ``and'' at the end;
(3) by inserting the following after clause (vi):
``(vii) a statement of the debtor's
current monthly income, and the
calculations which determine whether a
presumption arises under section
707(b)(2)(A)(i), showing how each
amount is calculated.''.
(e) Bankruptcy Forms.--Section 2075 of title 28, United
States Code, is amended by adding the following at the end of
the 1st paragraph:
``The bankruptcy rules promulgated under this section shall
prescribe a form for the statement referred to in section
521(a)(1)(B)(vii) of title 11, United States Code, and may
provide general rules on the content of such statement.''.
(f) Chapter 13.--Section 1325(a) 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 and
inserting ``; and'';
(3) by inserting the following after paragraph (6):
``(7) the action of the debtor in filing the petition
under this chapter was in good faith.''.
Page 19, line 15, strike ``this title'' and insert ``title
11, United States Code''.
Page 22, lines 17 and 20, insert ``case or'' after ``a''.
Page 23, lines 9 and 12, strike ``proceeding'' and insert
``case''.
Page 77, strike line 1, and insert the following:
SEC. 134. ALLOWING THE DEBTOR TO RETAIN LEASED
Beginning on page 114, strike line 1 and all that follows
through line 5 on page 115 (and make such technical and
conforming changes as may be appropriate).
Page 91, line 15, insert ``(a) Amendment.--'' before
``Section''.
Page 92, beginning on line 13, strike ``expressly'' and all
that follows through ``this paragraph'', and insert ``provides
by statute''.
Page 92, after line 15, insert the following:
(b) Application of Amendment to Individual States.--(1)
Section 522(p) of title 11, United States Code, as added by
subsection (a), shall not apply with respect to a State before
the end of the first regular session of the State legislature
following the date of the enactment of this Act.
(2) For purposes of paragraph (1), the term ``State'' has the
meaning given such term in section 101 of title 11, United
States Code.
Page 115, beginning on line 20, strike ``(excluding'' and all
that follows through ``secret)''.
Page 116, line 7, insert ``(excluding executory contracts
that transfer a right or interest under a filed or issued
patent, copyright, trademark, trade dress, or trade secret)''
after ``contract''.
Page 117, line 15, strike ``365(b)(1)(A)'' and insert
``365(b)(2)''.
Page 174, line 2, insert ``(a) Appeals.--'' before ``Title''.
Page 175, line 9, strike ``(b)'' and insert ``(5)''.
Page 175, indent lines 9 through 11 2 ems to the right.
Page 175, line 12, strike ``(c)(1)'' and insert ``(b)(1)''.
Page 175, line 17, strike ``(1)-(4)'' and insert ``(1)
through (5)''.
Page 175, line 24, strike ``subsection (b)'' and insert
``paragraph (1)''
Page 176, after line 6, insert the following:
(b) Procedural Rules.--Until rules of practice and procedure
are promulgated or amended pursuant to the Rules Enabling Act
(28 U.S.C. sections 2071-77) to govern appeals to a bankruptcy
appellate panel or to a court of appeals exercising
jurisdiction pursuant to section 1293 of title 28, as added by
this Act, the following shall apply:
(1) A notice of appeal with respect to an appeal from
an order or judgment of a bankruptcy court to a court
of appeals or a bankruptcy appellate panel must be
filed within the time provided in Rule 8002 of the
Federal Rules of Bankruptcy Procedure.
(2) An appeal to a bankruptcy appellate panel shall
be taken in the manner provided in Part VIIIof the
Federal Rules of Bankruptcy Procedure and local court rules.
(3) An appeal from an order or judgment of a
bankruptcy court directly to a court of appeals shall
be governed by the rules of practice and procedure that
apply to a civil appeal from a judgment of a district
court exercising original jurisdiction, as if the
bankruptcy court were a district court, except as
provided in paragraph (1) regarding the time to appeal
or by local court rules.
(4) An appeal to a court of appeals from a decision,
judgment, order, or decree entered by a bankruptcy
appellate panel exercising appellate jurisdiction shall
be taken in the manner provided by Rule 6(b) of the
Federal Rules of Appellate Procedure.
(c) Repealer.--(1) Section 158 of title 28, United States
Code, is repealed.
(2) The table of sections of chapter 6 of title 28, United
States Code, is amended by striking the item relating to
section 158.
Page 208, line 9, insert ``, other than a foreign insurance
company,'' after ``entity''.
Page 208, after line 20, insert the following:
``(d) The court may not grant relief under this chapter 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.
Page 231, strike line 13, and insert the following:
``SEC. 902. OTHER AMENDMENTS TO TITLES 11 AND 28 OF THE UNITED STATES
CODE.
Page 233, after line 11, insert the following (and make such
technical and conforming changes as may be appropriate):
(d) Other Sections of Title 11.--(1) Section 109(b)(3) of
title 11, United States Code, is amended to read as follows:
``(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, which has a branch or agency (as defined in section 3101
of title 12, United States Code) in the United States.''.
(2) Section 303(k) of title 11, United States Code, is
repealed.
(3)(A) Section 304 of title 11, United States Code, is
repealed.
(B) The table of sections of chapter 3 of title 11, United
States Code, is amended by striking the item relating to
section 304.
(C) Section 306 of title 11, United States Code, is amended
by striking ``, 304,'' each place it appears.
Page 279, beginning on line 1, strike ``that is described in
section 561(a)(2)'' and insert ``described in paragraph (1),
(2), (3), (4), or (5) of section 561(a)''.
----------
2. An Amendment To Be Offered by Representative Moran of Virginia, or
Representative Dooley of California, or a Designee, Debatable for 20
Minutes
Page 34, strike lines 7 through 25 and insert the following:
``(C) the following examples:
``(i) if the average account balance
under a creditor's open-end consumer
credit plan, taken as an average of the
account balances for all consumer
accounts under that open-end consumer
credit plan, is $1,000 or less, two
examples, based on an annual percentage
rate and method for determining minimum
periodic payments recently in effect
for that creditor, and based on
outstanding balances of $250 and $500,
showing the estimated minimum periodic
payments, and the estimated period of
time it would take to repay those
outstanding balances of $250 and $500,
if the consumer paid only the minimum
periodic payment on each monthly or
periodic statement and obtained no
additional extensions of credit; or
``(ii) if the average account balance
under a creditor's open-end consumer
credit plan, taken as an average of the
account balances for all consumer
accounts under that open-end consumer
credit plan, is more than $1,000, three
examples, based on an annual percentage
rate and method for determining minimum
periodic payments recently in effect
for that creditor, and outstanding
balances of $1,000, $1,500 and $2,000,
showing the estimated minimum periodic
payments, and the estimated period of
time it would take to repay those
outstanding balances of $1,000, $1,500
and $2,000 if the consumer paid only
the minimum periodic payment on each
monthly or periodic statement and
obtained no additional extensions of
credit.
``(10) With respect to one billing cycle per calendar
year, the creditor shall transmit to each consumer to
whom the creditor is required to transmit a statement
pursuant to subsection (b) for such billing cycle the
following information:
``(A) the following statement: `The minimum
payment amount shown on your billing statement
is the smallest payment which you can make in
order to keep the account in good standing.
This payment option is offered as a convenience
and you may make larger payments at any time.
Making only the minimum payment each month will
increase the amount of interest you pay and the
length of time it takes to repay your
outstanding balance.';
``(B) if the plan provides that the consumer
will be permitted to forgo making a minimum
payment during a specified billing cycle, a
statement, if applicable, that if the consumer
chooses to forgo making the minimum payment,
finance charges will continue to accrue;
``(C) an example, based on an annual
percentage rate and method for determining
minimum periodic payments recently in effect
for that creditor, and a $500 outstanding
balance, showing the estimated minimum periodic
payment, and the estimated period of time it
would take to repay the $500 outstanding
balance if the consumer paid only the minimum
periodic payment on each monthly or periodic
statement and obtained no additional extensions
of credit; and
``(D) a worksheet prescribed by the Board to
assist the consumer in determining the
consumer's household income and debt
obligations.''.
Page 35, line 12, strike the close quotation marks and the
period at the end.
Page 35, after line 12 insert the following:
``(12) the required minimum payment amount
represented as a dollar figure.
``(13) the date by which or the period within which
the required minimum payment must be made.''.
(c) Disclosures Related to Introductory Rates.--Section
127(c)(1)(A)(i) of the Truth in Lending Act (15 U.S.C.
1637(c)(1)(A)(i)) is amended by inserting the following at the
end of subclause (III):
``(IV) Where the initial rate is
temporary and will expire within a
period of less than 1 year, and is
lower than the ratethat will apply
after the temporary rate expires--
``(A) the time period during
which the initial rate will
remain in effect; and
``(B) the annual percentage
rate that will apply to the
account after the temporary
rate expires, or if that rate
is a variable rate, the fact
that the rate is variable, the
rate at the time of mailing,
and how the rate is determined.
``(V)(A) Subject to subclauses (C)
and (D), where the initial rate may
increase upon the occurrence of one or
more specific events, the following
information:
``(i) the initial rate and
the increased rate that may
apply;
``(ii) if the increased rate
is a variable rate, the fact
that the increased rate is
variable, the rate at the time
of mailing, and how the rate is
determined; and
``(iii) the specific event or
events that may result in
imposing the increased rate.
``(B) At the creditor's option, the
creditor may disclose the period for
which the increased rate will remain in
effect.
``(C) If the increased rate cannot be
determined at the time disclosures are
given, an explanation of the specific
event or events that may result in an
increased rate must be disclosed.
``(D) A creditor is not required to
disclose an increased rate that is
imposed when credit privileges are
permanently terminated.''.
(d) Internet-Based Credit Card Solicitations.--(1)--Section
127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is
amended by inserting after paragraph (5) the following:
``(6)(A) Any application to open a credit card
account for any person under an open-end consumer
credit plan, and any solicitation to open such an
account without requiring an application, that is made
available through the Internet or an interactive
computer service, shall disclose the following:
``(i) the information.--
``(I) described in paragraph (1)(A)
in the form required under section
122(c) of this chapter, subject to
subsection (e), and
``(II) described in paragraph (1)(B)
in a clear and conspicuous form,
subject to subsections (e) and (f);
``(ii) a statement, in a conspicuous and
prominent location on or with the application
or solicitation, that--
``(I) the information is accurate as
of the date the application or
solicitation was posted;
``(II) the information contained in
the application or solicitation is
subject to change after such date;
``(III) the applicant should contact
the creditor for information on any
change in the information presented on
or with the application or solicitation
since it was posted;
``(iii) a clear and conspicuous disclosure of
the date the application or solicitation was
posted and how frequently the information
described in subclause (i) is updated; and
``(iv) a disclosure, in a conspicuous and
prominent location on or with the application
or solicitation, of a toll-free telephone
number or e-mail address at which the applicant
may contact the creditor to obtain any change
in the information provided on or with the
application or solicitation since it was
posted.
``(B) The disclosures required under subparagraph (A) may be
contained either:
``(i) on the webpage which contains the application
or solicitation; or
``(ii) on a separate webpage which can be directly
accessed using a hypertext link which is contained on
the webpage which contains the application or
solicitation.
``(C) Upon receipt of a request for any of the information
referred to in subparagraph (A), the creditor or its agent
shall promptly disclose any change in the information required
to be disclosed under subparagraph (A).
``(D) For purposes of this paragraph (6)--
``(i) the term `Internet' means the international
computer network of both Federal and non-Federal
interoperable packets switched data networks; and
``(ii) the term `interactive computer service' means
any information service system, or access software
provider that provides or enables computer access by
multiple users to a computer server, including
specifically a service or system that provides access
to the Internet and such systems operated or services
offered by libraries or educational institutions.''.
(2) Section 122(c)(1) of the Truth in Lending Act (15 U.S.C.
1632(c)(1)) is amended by striking ``and (4)(C)(i)(I)'' and
inserting ``, (4)(C)(i)(I) and (6)(A)(i)(I)''.
----------
3. An Amendment To Be Offered by Representative Moran of Virginia, or a
Designee, Debatable for 20 Minutes
Page 101, after line 9, insert the following (and make such
technical and conforming changes as may be appropriate):
SEC. 154. DISCLOSURES.
(a) Disclosures.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by section 106, is amended by
adding at the end the following:
``Sec. 527. Disclosures
``(a) A debt relief agency providing bankruptcy assistance to
an assisted person shall provide the following notices to the
assisted person:
``(1) the written notice required under section
342(b)(1) of this title; and
``(2) to the extent not covered in the written notice
described in paragraph (1) of this section and no later
than three business days after the first date on which
a debt relief agency first offers to provide any
bankruptcy assistance services to an assisted person, a
clear and conspicuous written notice advising assisted
persons of the following--
``(A) all information the assisted person is
required to provide with a petition and
thereafter during a case under this title must
be complete, accurate and truthful;
``(B) all assets and all liabilities must be
completely and accurately disclosed in the
documents filed to commence the case, and the
replacement value of each asset as defined in
section 506 of this title must be stated in
those documents where requested after
reasonable inquiry to establish such value;
``(C) current monthly income, the amounts
specified in section 707(b)(2) and, in a
chapter 13 case, disposable income (determined
in accordance with section 707(b)(2)) must be
stated after reasonable inquiry; and
``(D) that information an assisted person
provides during their case may be audited
pursuant to this title and that failure to
provide such information may result in
dismissal of the proceeding under this title or
other sanction including, in some instances,
criminal sanctions.
``(b) A debt relief agency providing bankruptcy assistance to
an assisted person shall provide each assisted person at the
same time as the notices required under subsection (a)(1) with
the following statement, to the extent applicable, or one
substantially similar. The statement shall be clear and
conspicuous and shall be in a single document separate from
other documents or notices provided to the assisted person:
`` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE
SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER
`` `If you decide to seek bankruptcy relief, you can
represent yourself, you can hire an attorney to represent you,
or you can get help in some localities from a bankruptcy
petition preparer who is not an attorney. THE LAW REQUIRES AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN
CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION
PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see
the contract before you hire anyone.
`` `The following information helps you understand what must
be done in a routine bankruptcy case to help you evaluate how
much service you need. Although bankruptcy can be complex, many
cases are routine.
`` `Before filing a bankruptcy case, either you or your
attorney should analyze your eligibility for different forms of
debt relief made available by the Bankruptcy Code and which
form of relief is most likely to be beneficial for you. Be sure
you understand the relief you can obtain and its limitations.
To file a bankruptcy case, documents called a Petition,
Schedules and Statement of Financial Affairs, as well as in
some cases a Statement of Intention need to be prepared
correctly and filed with the bankruptcy court. You will have to
pay a filing fee to the bankruptcy court. Once your case
starts, you will have to attend the required first meeting of
creditors where you may be questioned by a court official
called a ``trustee'' and by creditors.
`` `If you choose to file a chapter 7 case, you may be asked
by a creditor to reaffirm a debt. You may want help deciding
whether to do so and a creditor is not permitted to coerce you
into reaffirming your debts.
`` `If you choose to file a chapter 13 case in which you
repay your creditors what you can afford over three to five
years, you may also want help with preparing your chapter 13
plan and with the confirmation hearing on your plan which will
be before a bankruptcy judge.
`` `If you select another type of relief under the Bankruptcy
Code other than chapter 7 or chapter 13, you will want to find
out what needs to be done from someone familiar with that type
of relief.
`` `Your bankruptcy case may also involve litigation. You are
generally permitted to represent yourself in litigation in
bankruptcy court, but only attorneys, not bankruptcy petition
preparers, can give you legal advice.'.
``(c) Except to the extent the debt relief agency provides
the required information itself after reasonably diligent
inquiry of the assisted person or others so as to obtain such
information reasonably accurately for inclusion on the
petition, schedules or statement of financial affairs, a debt
relief agency providing bankruptcy assistance to an assisted
person, to the extent permitted by nonbankruptcy law, shall
provide each assisted person at the time required for the
notice required under subsection (a)(1) reasonably sufficient
information (which shall be provided in a clear and conspicuous
writing) to the assisted person on how to provide all the
information the assisted person is required to provide under
this title pursuant to section 521, including--
``(1) how to value assets at replacement value,
determine current monthly income, the amounts specified
in section 707(b)(2)) and, in a chapter 13 case, how to
determine disposable income in accordance with section
707(b)(2) and related calculations;
``(2) how to complete the list of creditors,
including how to determine what amount is owed and what
address for the creditor should be shown; and
``(3) how to determine what property is exempt and
how to value exempt property at replacement value as
defined in section 506 of this title.
``(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for two
years after the date on which the notice is given the assisted
person.''.
(b) Conforming Amendment.--The table of sections for chapter
5 of title 11, United States Code, as amended by section 106,
is amended by inserting after the item relating to section 526
the following:
``527. Disclosures.''.
SEC. 155. DEBTOR'S BILL OF RIGHTS.
Subchapter II of chapter 5 of title 11, United States Code,
as amended by sections 106 and 154, is amended by adding at the
end the following:
``Sec. 528. Debtor's bill of rights
``(a) A debt relief agency shall--
``(1) no later than five business days after the
first date on which a debt relief agency provides any
bankruptcy assistance services to an assisted person,
but prior to such assisted person's petition under this
title being filed, execute a written contract with the
assisted person specifying clearly and conspicuously
the services the agency will provide the assisted
person and the basis on which fees or charges will be
made for such services and the terms of payment, and
give the assisted person a copy of the fully executed
and completed contract in a form the person can keep;
``(2) disclose in any advertisement of bankruptcy
assistance services or of the benefits of bankruptcy
directed to the general public (whether in general
media, seminars or specific mailings, telephonic or
electronic messages or otherwise) that the services or
benefits are with respect to proceedings under this
title, clearly and conspicuously using the following
statement: `We are a debt relief agency. We help people
file Bankruptcy petitions to obtain relief under the
Bankruptcy Code.' or a substantially similar statement.
An advertisement shall be of bankruptcy assistance
services if it describes or offers bankruptcy
assistance with a chapter 13 plan, regardless of
whether chapter 13 is specifically mentioned, including
such statements as `federally supervised repayment
plan' or `Federal debt restructuring help' or other
similar statements which would lead a reasonable
consumer to believe that help with debts was being
offered when in fact in most cases the help available
is bankruptcy assistance with a chapter 13 plan; and
``(3) if an advertisement directed to the general
public indicates that the debt relief agency provides
assistance with respect to credit defaults, mortgage
foreclosures, lease eviction proceedings, excessive
debt, debt collection pressure, or inability to pay any
consumer debt, disclose conspicuously in that
advertisement that the assistance is with respect to or
may involve proceedings under this title, using the
following statement: `We are a debt relief agency. We
help people file Bankruptcy petitions to obtain relief
under the Bankruptcy Code.' or a substantially similar
statement.''.
(b) Conforming Amendment.--The table of sections for chapter
5 of title 11, United States Code, as amended by sections 106
and 154, is amended by inserting after the item relating to
section 527, the following:
``528. Debtor's bill of rights.''.
____________________________________________________
4. An Amendment To Be Offered by Representative Velazquez of New York,
or a Designee, Debatable for 20 Minutes
Page 109, line 23, insert ``(a) Appointment.--''.
Page 110, line 4, insert the following before the close
quotation marks:
The court may expand the membership of a committee to include a
creditor that is small business if the court determines that
such creditor holds claims of the kind represented by such
committee that are, in the aggregate, disproportionately large
when compared to the annual gross revenue of such creditor.
Page 110, after line 4, insert the following:
(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
provide access to information for creditors who hold claims of
the kind represented by such committee and who are not
appointed such committee, shall to be open for comment from
such creditors, and shall be subject to a court order
compelling additional reports or disclosure to be made to such
creditors.''
----------
5. An Amendment To Be Offered by Representative Graham of South
Carolina, or a Designee, Debatable for 20 Minutes
Page 119, after line 9, insert the following (and make such
technical and conforming changes as may be appropriate):
SEC. 219. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS AND
LOANS.
Section 523(a)(8) of title 11, United States Code, is amended
to read as follows:
``(8)(A) for an educational benefit overpayment or
loan made, insured or guaranteed by a governmental
unit, or made under any program funded in whole or in
part by a governmental unit or nonprofit institution,
or for an obligation to repay funds received as an
educational benefit, scholarship or stipend, or (B) for
any other education loan incurred by an individual
debtor that meets the definition of `Qualified
Education Loan' under section 221(e)(1) of the Internal
Revenue Code, unless excepting such debt from discharge
under this paragraph will impose an undue hardship on
the debtor and a debtor's dependents;''.
----------
6. An Amendment To Be Offered by Representative Dooley of California,
or a Designee, Debatable for 20 Minutes
Page 124, strike lines 13 through 20, and insert the
following:
``(a) The clerk of each district shall maintain a publicly
available list of credit counseling agencies and of programs
described in section 109(h) and instructional courses offered
by such agencies currently approved by--
``(1) the United States Trustee; or
``(2) the bankruptcy administrator for the district.
``(b) The United States Trustee or bankruptcy administrator
shall only approve credit counseling agencies which satisfy
standards set in regulations promulgated by the Federal Trade
Commission and which are accredited by the Council on
Accreditation or an equivalent third party nonprofit
accrediting organization.
``(c) The United States Trustee or bankruptcy administrator
shall only approve programs or courses under subsection (a) if
they satisfy standards set in regulations promulgated by the
Executive Office of the United States Trustees. The Executive
Office of the United States Trustee is authorized to promulgate
regulations setting such standards.
``(d) The Federal Trade Commission shall have authority to
promulgate regulations setting standards for credit counseling
agencies for the purposes of subsection (b). Such standards
shall establish minimum requirements for such agencies with
respect to providing qualified counselors, safekeeping and
payment of client funds, disclosure to clients, adequate
counseling with respect to client credit problems, and such
other matters as relate to the quality and financial security
of such programs. Nothing in this provision shall limit the
authority of the Federal Trade Commission pursuant to the
Federal Trade Commission Act (15 U.S.C. 45 et seq.).
``(e) The United States Trustee or bankruptcy administrator
may notify the clerk that a credit counseling agency, or a
program or course, is no longer approved, in which case the
clerk shall remove it from the list maintained under subsection
(a).
``(2) Regulations.--The Federal Trade Commission and the
Executive Office of United States Trustees shall promulgate
regulations pursuant to the power delegated in this section
within 180 days of the date of the enactment of this Act.''.
Page 124, line 21, strike ``(2)'' and insert ``(3)''.
----------
7. An Amendment To Be Offered by Representative Conyers of Michigan, or
a Designee, Debatable for 20 Minutes
Page 151, after line 24, insert the following (and make
such technical and conforming changes as may be appropriate):
SEC. 416. APPLICABILITY OF CERTAIN PROVISIONS.
The provisions of title 11 of the United States Code
relating to small business debtors or to single asset real
estate shall not apply in a case under such title if the
application of any of such provisions in such case could result
in the loss of 5 or more jobs.
----------
8. An Amendment To Be Offered by Representative Watt of North Carolina,
or a Designee, Debatable for 20 Minutes
Beginning on page 160, strike line 23 and all that follows
through line 2 on page 161.
Page 162, strike lines 1 through 15, and insert the
following (and make such technical and conforming changes as
may be appropriate):
``(f) An individual debtor in a case under chapter 7 or 13
of this title shall file with the court at the request of any
party in interest--
``(1) all tax returns, including any schedules or
attachments, with respect to the period from the commencement
of the case until such time as the case is closed;
``(2) at the time filed with the taxing authority, all tax
returns, including any schedules or attachments, that were not
filed with the taxing authority when the schedules under
subsection (a)(1) were filed with respect to the period that is
3 years before the order of relief;
``(3) any amendments to any of the tax returns, including
schedules or attachments, described in paragraph (1) or (2);
and
----------
9. An Amendment To Be Offered by Representative Whitfield of Kentucky,
or a Designee, Debatable for 20 Minutes
Page 176, after line 24, insert the following:
SEC. 614. COMPENSATING TRUSTEES.
Title 11, United States Code, is amended--
(1) in section 104(b)(1) in the material preceding
subparagraph (A)--
(A) by striking ``and''; and
(B) by inserting ``, 1326(b)(3)'' before
``immediately'';
(2) in section 326, by inserting at the end the
following:
``(e) Notwithstanding any other provision of this section,
the court shall allow reasonable compensation under section
330(a) of this title for the services and expenses of the
trustee in taking the actions described in paragraphs (1) and
(2) if--
``(1) a trustee in a chapter 7 case commences a
motion to dismiss or convert under section 707(b) and
such motion is granted; or
``(2) the trustee demonstrates by a preponderance of
the evidence that the case was converted or dismissed
because of the trustee's actions.''; and
(3) in section 1326(b)--
(A) in paragraph (1), by striking ``and'';
(B) in paragraph (2), by striking the period
at the end thereof and inserting ``; and''; and
(C) by adding at the end the following:
``(3)(A) the amount of the compensation described in
subclauses (I) and (II) which is unpaid at the time of
each such payment, prorated over the remaining duration
of the plan--
``(i) and which has been allowed in a case--
``(I) converted to this chapter; or
``(II) dismissed from chapter 7 in
which the debtor in this case was a
debtor, whether dismissed voluntarily
by the debtor or on motion of the
trustee under section 707(b);
``(ii) but only to the extent such
compensation has been allowed to a chapter 7
trustee under section 326(e);
``(B) the compensation payable to the chapter 7
trustee in the case under this chapter shall not exceed
the greater of the trustee fee allowed pursuant to
section 330 of this title plus--
``(i) $25 per month; or
``(ii) the amount payable to unsecured
nonpriority creditors as provided by the plan
multiplied by 5 percent, and the result divided
by the number of months in the plan; and
``(C) notwithstanding any other provision of this
title, any such compensation awarded to a chapter 7
trustee in a converted or dismissed case shall be
payable and may be collected in a case under this
chapter--
``(i) even if such amount has been discharged
in a prior proceeding under this title; and
``(ii) only to the extent permitted by this
section.''.
10. An Amendment To Be Offered by Representative Hyde of Illinois, or
Representative Conyers of Michigan, or a Designee, Debatable for 40
Minutes
Page 8, beginning on line 14, strike ``(which'' and all that
follows through ``104(b))'' on line 19.
Beginning on page 8, strike line 23, and all that follows
through line 13 on page 9, and insert the following (and make
such technical and conforming changes as may be appropriate):
``(ii) The debtor's monthly expenses shall be the debtor's
monthly expenses reasonably necessary to be expended--
``(I) for the maintenance or support of the debtor,
the dependents of the debtor, and, in a joint case, the
spouse of the debtor if the spouse is not otherwise a
dependent; and
``(II) if the debtor is engaged in business, for the
payment of expenditures necessary for the continuation,
preservation, and operation of such business.
Notwithstanding any other provision of this clause, the
debtor's monthly expenses shall not include any payments for
debts described in clauses (iii) and (iv).
Page 14, line 15, add close quotation marks and a period at
the end.
Beginning on page 14, strike line 16 and all that follows
through line 3 on page 15.
Page 101, after line 9, insert the following (and make such
technical and conforming changes as may be appropriate):
SEC. 154. GUIDELINES FOR ASSESSING INCOME.
Section 586 of title 28, United States Code, is amended by
adding at the end the following:
``(f) Not later than 1 year after the effective date of this
subsection, the Director of the Executive Office for United
States Trustees shall issue guidelines to assist in making
assessments of whether income is not reasonably necessary to be
expended by a debtor for the maintenance or support of the
debtor, the dependents of the debtor, and, in a joint case, the
spouse of the debtor if the spouse is not otherwise a
dependent.''.
Page 153, line 23, insert ``as amended by section 154,''
after ``Code,''.
Page 154, line 3, strike ``(f)'' and insert ``(g)''.
Page 154, line 5, strike ``(f)(1)(A)'' and insert
``(g)(1)(A)''.
Page 156, line 22, strike ``586(f)'' and insert ``586(g)''.
Page 157, line 4, strike ``586(f)'' and insert ``586(g)''.
11. An Amendment To Be Offered by Representative Nadler of New York, or
a Designee, Debatable for 60 Minutes
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bankruptcy
Reform Act of 1999''.
(b) Table of Contents.--The table of contents of this Act is
as follows:
Sec. 1. Short title; table of contents.
TITLE I--CONSUMER BANKRUPTCY PROVISIONS
Subtitle A--Needs based bankruptcy
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Subtitle B--Consumer Bankruptcy Protections
Sec. 105. Definitions.
Sec. 106. Enforcement.
Sec. 107. Sense of the congress.
Sec. 108. Discouraging abusive reaffirmation practices.
Sec. 109. Promotion of alternative dispute resolution.
Sec. 110. Enhanced disclosure for credit extensions secured by a
dwelling.
Sec. 111. Dual use debit card.
Sec. 112. Discouraging reckless lending practices.
Sec. 113. Protection of savings earmarked for the postsecondary
education of children.
Sec. 114. Effect of discharge.
Sec. 115. Limiting trustee liability.
Sec. 116. Reinforce the fresh start.
Sec. 117. Discouraging bad faith repeat filings.
Sec. 118. Curbing abusive filings.
Sec. 119. Debtor retention of personal property security.
Sec. 120. Relief from the automatic stay when the debtor does not
complete intended surrender of consumer debt collateral.
Sec. 121. Giving secured creditors fair treatment in chapter 13.
Sec. 123. Fair valuation of collateral.
Sec. 124. Domiciliary requirements for exemptions.
Sec. 125. Restrictions on certain exempt property obtained through
fraud.
Sec. 126. Rolling stock equipment.
Sec. 127. Discharge under chapter 13.
Sec. 128. Bankruptcy judgeships.
Sec. 129. Additional amendments to title 11, United States Code.
Sec. 131. Application of the codebtor stay only when the stay protects
the debtor.
Sec. 132. Adequate protection for investors.
Sec. 134. Giving debtors the ability to keep leased personal property by
assumption.
Sec. 135. Adequate protection of lessors and purchase money secured
creditors.
Sec. 136. Automatic stay.
Sec. 137. Extend period between bankruptcy discharges.
Sec. 139. Priorities for claims for domestic support obligations.
Sec. 142. Nondischargeability of certain debts for alimony, maintenance,
and support.
Sec. 143. Continued liability of property.
Sec. 144. Protection of domestic support claims against preferential
transfer motions.
Sec. 145. Clarification of meaning of household goods.
Sec. 147. Monetary limitation on certain exempt property.
Sec. 148. Bankruptcy fees.
Sec. 149. Collection of child support.
Sec. 150. Excluding employee benefit plan participant contributions and
other property from the estate.
Sec. 151. Clarification of postpetition wages and benefits.
Sec. 152. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 153. Automatic stay inapplicable to certain proceedings against the
debtor.
Sec. 154. Definition of domestic support obligation.
Sec. 155. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 156. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 157. Exemption for right to receive certain alimony, maintenance,
or support.
Sec. 158. Automatic stay inapplicable to certain proceedings against the
debtor.
TITLE II--DISCOURAGING BANKRUPTCY ABUSE
Sec. 201. Reenactment of chapter 12.
Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.
Sec. 207. Amendment to section 546 of title 11, United States Code.
Sec. 208. Limitation.
Sec. 209. Amendment to section 330(a) of title 11, United States Code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 211. Preferences.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Claims relating to insurance deposits in cases ancillary to
foreign proceedings.
Sec. 216. Defaults based on nonmonetary obligations.
Sec. 217. Sharing of compensation.
Sec. 218. Priority for administrative expenses.
TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS
Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.
Sec. 303. Extensions.
Sec. 304. Local filing of bankruptcy cases.
Sec. 305. Permitting assumption of contracts.
TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS
Sec. 401. Flexible rules for disclosure Statement and plan.
Sec. 402. Definitions.
Sec. 403. Standard form disclosure Statement and plan.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms for small business cases.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment
of trustee or examiner.
Sec. 414. Study of operation of title 11 of the United States Code with
respect to small businesses.
Sec. 415. Payment of interest.
Sec. 416. Protection of jobs.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM
Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide
required information.
Sec. 605. Adequate time to prepare for hearing on confirmation of the
plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the
Federal Rules of Bankruptcy Procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy
cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent
students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.
Sec. 612. Bankruptcy appeals.
Sec. 613. GAO study.
TITLE VII--BANKRUPTCY DATA
Sec. 701. Improved bankruptcy statistics.
Sec. 702. Uniform rules for the collection of bankruptcy data.
Sec. 703. Sense of the Congress regarding availability of bankruptcy
data.
TITLE VIII--BANKRUPTCY TAX PROVISIONS
Sec. 801. Treatment of certain liens.
Sec. 802. Effective notice to government.
Sec. 803. Notice of request for a determination of taxes.
Sec. 804. Rate of interest on tax claims.
Sec. 805. Tolling of priority of tax claim time periods.
Sec. 806. Priority property taxes incurred.
Sec. 807. Chapter 13 discharge of fraudulent and other taxes.
Sec. 808. Chapter 11 discharge of fraudulent taxes.
Sec. 809. Stay of tax proceedings.
Sec. 810. Periodic payment of taxes in chapter 11 cases.
Sec. 811. Avoidance of statutory tax liens prohibited.
Sec. 812. Payment of taxes in the conduct of business.
Sec. 813. Tardily filed priority tax claims.
Sec. 814. Income tax returns prepared by tax authorities.
Sec. 815. Discharge of the estate's liability for unpaid taxes.
Sec. 816. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 817. Standards for tax disclosure.
Sec. 818. Setoff of tax refunds.
TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 901. Amendment to add chapter 15 to title 11, United States Code.
Sec. 902. Amendments to other chapters in title 11, United States Code.
TITLE X--FINANCIAL CONTRACT PROVISIONS
Sec. 1001. Treatment of certain agreements by conservators or receivers
of insured depository institutions.
Sec. 1002. Authority of the corporation with respect to failed and
failing institutions.
Sec. 1003. Amendments relating to transfers of qualified financial
contracts.
Sec. 1004. Amendments relating to disaffirmance or repudiation of
qualified financial contracts.
Sec. 1005. Clarifying amendment relating to master agreements.
Sec. 1006. Federal Deposit Insurance Corporation Improvement Act of
1991.
Sec. 1007. Bankruptcy Code amendments.
Sec. 1008. Recordkeeping requirements.
Sec. 1009. Exemptions from contemporaneous execution requirement.
Sec. 1010. Damage measure.
Sec. 1011. SIPC stay.
Sec. 1012. Asset-backed securitizations.
Sec. 1013. Federal Reserve collateral requirements.
Sec. 1014. Effective date; application of amendments.
TITLE XI--TECHNICAL CORRECTIONS
Sec. 1101. Definitions.
Sec. 1102. Adjustment of dollar amounts.
Sec. 1103. Extension of time.
Sec. 1104. Technical amendments.
Sec. 1105. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 1106. Limitation on compensation of professional persons.
Sec. 1107. Special tax provisions.
Sec. 1108. Effect of conversion.
Sec. 1109. Allowance of administrative expenses.
Sec. 1110. Priorities.
Sec. 1111. Exemptions.
Sec. 1112. Exceptions to discharge.
Sec. 1113. Effect of discharge.
Sec. 1114. Protection against discriminatory treatment.
Sec. 1115. Property of the estate.
Sec. 1116. Preferences.
Sec. 1117. Postpetition transactions.
Sec. 1118. Disposition of property of the estate.
Sec. 1119. General provisions.
Sec. 1120. Appointment of elected trustee.
Sec. 1121. Abandonment of railroad line.
Sec. 1122. Contents of plan.
Sec. 1123. Discharge under chapter 12.
Sec. 1124. Bankruptcy cases and proceedings.
Sec. 1125. Knowing disregard of bankruptcy law or rule.
Sec. 1126. Transfers made by nonprofit charitable corporations.
Sec. 1127. Prohibition on certain actions for failure to incur finance
charges.
Sec. 1128. Protection of valid purchase money security interests.
Sec. 1129. Trustees.
TITLE XII--GENERAL EFF ECTIVE DATE; APP LICATION OF AMENDMENTS
Sec. 1201. Effective date; application of amendments.
TITLE I--CONSUMER BANKRUPTCY PROVISIONS
Subtitle A--Needs based bankruptcy
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended by
inserting ``or consents to'' after ``requests''.
SEC. 102. DISMISSAL OR CONVERSION.
(a) In General.--Section 707 of title 11, United States Code,
is amended--
(1) by striking the section heading and inserting the
following:
``Sec. 707. Dismissal of a case or conversion to a case under chapter
13''; and
(2) by amending subsection (b) to read as follows:
``(b)(1) After notice and a hearing, a court, on its own
motion or on a motion by the United States trustee, the
trustee, or any part in interest who is eligible to bring a
motion, may dismiss a case filed by an individual debtor under
this chapter, or with the debtor's consent, convert such a case
to a case under chapter 11 or 13 of this title if it finds that
the granting of relief would be an abuse of the provisions of
this chapter, the court shall consider whether--
``(A) the debtor has the ability to repay some
portion of the debtor's unsecured nonpriority debt as
determined under paragraphs (2) and (3);
``(B) the debtor has filed the petition in bad faith;
or
``(C) the totality of the circumstances (including
whether the debtor seeks to reject a personal services
contract and the financial need for such rejection as
sought by the debtor) of the debtor's financial
situation demonstrates abuse.
``(2) In considering under paragraph (1)(A) whether the
granting of relief would be an abuse of the provisions of this
chapter, the court shall conclusively presume abuse does not
exist if the debtor's current monthly income, when multiplied
by 12, is less than or equal to 100 percent of the highest
national or applicable State or Statistical Area median family
income reported for a family of equal size, whichever is
greater, or in the case of a household of 1 person, less than
or equal to 100 percent of the highest national or State or
Metropolitan Statistical Area median household income for 1
earner, whichever is greater, as adjusted, if applicable, as
provided in paragraph (6).
``(3) In considering under paragraph (1)(A) whether the
granting of relief would be an abuse of the provision of this
chapter, the court shall presume abuse exists if--
``(A) the debtor's current monthly income, when
multiplied by 12, is less than or equal to 100 percent
of the highest national or applicable State or
Metropolitan Statistical Area median family income
reported for a family of equal size, whichever is
greater, or in the case of a household of 1 person,
less than or equal to 100 percent of the highest
national or State or Metropolitan Statistical Area
median household income for 1 yearner, whichever is
greater, as adjusted, if applicable, as provided in
paragraph (6); and
``(B) the product of--
``(i) the debtor's current monthly income,
reduced by allowable monthly expenses specified
in paragraph (4) (which shall include, if
applicable the continuation of actual expenses
of a dependent child under the age of 18 for
tuition, books, and required fees at a private
elementary or secondary school, or comparable
expenses stemming from the home education of
such child, or the attendance of such child at
a public elementary or secondary school, not
exceeding $10,000) and monthly debt payments
specified in paragraph (5), and
``(ii) multiplied by 36,
less estimated administrative expenses and reasonable
attorneys' fees, is not less than $6,000 of the
debtor's nonpriority unsecured claims in the case.
``(4) For the purposes of this subsection, the debtor's
allowable monthly expenses shall be the expenses reasonably
necessary--
``(A) for the maintenance or support of the debtor,
the dependents of the debtor, and in a jointcase, the
spouse of the debtor if the spouse is not otherwise a dependent; and
``(B) if the debtor is engaged in business, for the
payment of expenditures necessary for the continuation,
preservation, and operation of such business.
Notwithstanding any other provision of this clause, the
debtor's monthly expenses shall not include payments for debts
described in paragraph (5).
``(5) For purposes of this subsection, the debtor's monthly
debt payments shall include--
``(A) the total amount scheduled as contractually due
on all secured debts in each month of the 36 months
following the date of the petition and divided by 36;
and
``(B) the debtor's expenses for payment of all
priority claims, including priority domestic support
obligations, calculated as the total amount of debts
entitled to priority in each month of the 36 months
following the date of the petition and divided by 36.
``(6) For the purposes of this subsection--
``(A) national or applicable State or Metropolitan
Statistical Area median family income reported for a
household of more than 4 individuals shall be that of a
household of 4 individuals plus $583 per month for each
additional member of that household;
``(B) a family or household shall consist of the
debtor, the debtor's spouse, and the debtor's
dependents, but not a legally separated spouse unless
the spouse files a joint case with the debtor.
``(7) In any proceeding brought under this subsection, the
presumption of abuse may be rebutted by demonstrating special
circumstances that justify additional reasonable expenses or
adjustments of current monthly total income. In order to
establish such circumstances, the debtor shall be required to--
``(A) itemize each additional expense or adjustment
of income; and
``(B) provide documentation of such expenses and a
detailed explanation of the circumstances that warrant
such expenses.
``(8)(A) As part of the schedule of current income and
expenditures required under section 521, the debtor shall
include--
``(i) a statement of the debtor's current monthly
income and calculations that show whether a presumption
arises under paragraph (1)(A) of this subsection; or
``(ii) a statement of the debtor's current monthly
income showing that the debtor is a debtor described in
paragraph (14) of this subsection.
``(B) The Supreme Court shall promulgate rules under section
2075 of title 28, United States Code, that prescribe a form for
a statement under subparagraph (A) and may provide general
rules on the content of such statement.
``(9) If a trustee brings a motion for dismissal or
conversion under this subsection, and the court grants that
motion and finds that the action of the counsel for the debtor
in filing under this chapter violated Rule 9011, the courts
hall assess damages, which may include ordering--
``(A) the counsel for the debtor to reimburse the
trustee for all reasonable costs in prosecuting a
motion brought under section 707(b), including
reasonable attorneys' fees;
``(B) the assessment of an appropriate civil penalty
against the counsel for the debtor; and
``(C) the payment of the civil penalty to the trustee
or the United States trustee.
``(10) The court may award a debtor all reasonable costs and
other appropriate damages in contesting a motion brought by a
party in interest (other than a trustee, bankruptcy
administrator, or United States trustee) under this subsection
(including reasonable attorneys' fees) if the court does not
grant the motion and the court finds that--
``(A) the position of the party that brought the
motion was not substantially justified; or
``(B) the party brought the motion solely for the
purpose of coercing the debtor into waiving a right
guaranteed to the debtor under this title.
``(11) A party in interest may not bring a motion under this
section until the United States trustee has either filed a
statement under section 704(b)(2)(A) or filed a motion under
section 704(b)(2)(B).
``(12) If an attorney for a party in interest (other than a
trustee, bankruptcy administrator, or United States trustee)
brings a motion for dismissal or conversion under this
subsection, and the court does not grant that motion and finds
that the action of the counsel for the moving party in filing
such motion under this chapter violated Rule 9011, the court
shall assess damages, which may include ordering--
``(A) the counsel for the moving party to reimburse
the debtor for all reasonable costs in defending a
motion brought under section 707(b), including
reasonable attorneys' fees;
``(B) the assessment of an appropriate civil penalty
against the counsel for the moving party.
``(13) In making a determination whether to dismiss a case
under this section, the court may not take into consideration
whether a debtor has made, or continues to make, charitable
contributions (that meet the definition of `charitable
contribution' under section 548(d)(3) and as described by
section 548(a)(2)of this title to any qualified religious or
charitable entity or organization (as that term is defined in
section 548(d)(4)) of this title.
``(14) No court, United States trustee, bankruptcy
administrator, or other party in interest shall bring a motion
under subsection (b)(1)(A) if, as of the date of the order for
relief, the debtor's current monthly income, when multiplied by
12, is less than or equal to 100 percent of the highest
national or applicable State or Metropolitan Statistical Area
median family income reported for a family of equal size,
whichever is greater, or in the case of a household of 1
person, less than or equal to 100 percent of the highest
national or State or Metropolitan Statistical Area median
household income for 1 earner, whichever is greater, as
adjusted, if applicable, as provided in paragraph(6);''.
(b) Definition.--Section 101 of title 11, United States Code,
is amended--
(1) by inserting after paragraph (10)the following:
``(10A) `current monthly income'--
``(A) means the average monthly income from
all sources which the debtor, or in a joint
case, the debtor and the debtor's spouse,
receive without regard to whether the income is
taxable income, derived during the 180-day
period preceding the date of determination;
``(B) includes any amount paid by any entity
other than the debtor (or, in a joint case, the
debtor and the debtor's spouse), on a regular
basis to the household expenses of the debtor
or the debtor's dependents (and, in a joint
case, the debtor's spouse if not otherwise a
dependent), but excludes--
``(i) payments to victims of war
crimes or crimes against humanity;
``(ii) benefits received from the
Department of Veterans Affairs in
connection with service in the armed
forces of the United States;
``(iii) income received on account of
disability;and
``(iv) benefits received under the
Social Security Act.'';
(2) by inserting after paragraph (17) the following:
``(17A) `estimated administrative expenses' means 10
percent of projected payments under a chapter 13
plan;''.
(c) Duties of Chapter 7 Trustee.--Section 704 of title 11,
United States Code, is amended--
(1) by inserting ``(a)'' before ``The trustee shall--
''; and
(2) by adding at the end the following:
``(b)(1) With respect to an individual debtor under this
chapter, the trustee shall review all materials filed by the
debtor and, not later than 10 days after the first meeting of
creditors, file with the court and the United States trustee a
statement as to whether the debtor's case could be presumed to
be an abuse under section 707(b).
``(2) Not later than 60 days after receiving a statement
filed under paragraph (1), the United States trustee or
bankruptcy administrator shall--
``(A) file a statement setting forth the reasons why
the bankruptcy administrator does not believe that such
a motion would be appropriate or would be prohibited
because the debtor is a debtor of the kind described in
section 707(b)(14) of this title; or
``(B) file a motion to dismiss or convert under
section 707(b) if, based on the filing of such
statement with the court, the United States trustee or
bankruptcy administrator determines that the case
should be presumed to be an abuse under section 707(b)
and the debtor's current monthly income, when
multiplied by 12, is less than or equal to 100 percent
of the highest national or applicable State or State
Metropolitan Statistical Area median family income
reported for a family of equal size, whichever is
greater, or in the case of a household of 1 person,
less than or equal to 100 percent of the highest
national or State or Metropolitan Statistical Area
median household income for 1 earner, whichever is
greater. For the purposes of determining whether a
motion would be appropriate to be filed, the United
States trustee shall consider adjustments to current
monthly income for income items received over the most
recent 180 days that are not reasonably expected to be
reflected in future income, or expenses likely to be
due under a chapter 13 plan which are not included in
the required statement of the debtor's expense. The
debtor shall, at the request of the United States
trustee, provide documentation for any current income
items that are not reasonably expected to be reelected
in future income, and a detailed explanation of the
circumstances that warrant making such adjustments. If
the United States trustee determines that, after
accounting for these adjustments, the debtor's current
monthly income, which multiplied by 12, is less than or
equal to 100 percent of the higher of the national,
State, or Metropolitan Statistical Area median family
income reported for a family of equal or lesser size,
or in the case of a household of 1 person, the national
median household income for 1 earner, then the case
shall be presumed not be an abuse of the previous of
this chapter.
For the purpose of this subsection, the national or applicable
State or Metropolitan Statistical Area median family income
reported for a household of more than 4 individuals shall be
that of a household of 4 individuals plus $583 per month for
each additional member of that household.
``(3) Paragraph (2) shall not be construed to preclude the
court or any other party who is eligible to file a motion under
section 707(b) from bringing such a motion.''.
(d) Meeting of Creditors and Equity Security Holders.--
Section 341 of title 11, United States Code, is amended by
adding the following new subsection:
``(e) The initial notice of the meeting of creditors shall
indicate whether the debtor's current monthly income is
reported to be equal or greater than the applicable median
income for purposes of subsection 707(b) of this title.''.
(e) Guidelines for Assessing Income.--Section 586 of title
28, United States Code, is amended by adding the following new
subsection:
``(f) Not later than 1 year after the effective date of this
subsection, the Director of the Executive Office for the United
States Trustees shall issue guidelines to assist in making
assessment of whether income is not reasonably necessary to be
expended by a debtor for the maintenance or support of the
debtor, the dependents of the debtor, and in a joint case, the
spouse of the debtor if the spouse is not otherwise a
dependent. The director shall consult with the Department of
the Treasury, and others as needed in developing the
guidelines.''.
(f) Section 104, title 11, United States Code, as amended by
subsection ____ of this Act, is amended by striking out
``523(a)(2)(C), and 707(b)(3)'' each place it appears and
inserting ``523(a)(2)(C), and 707(b)'' in lieu thereof.
(g) Clerical Amendment.--The table of sections at the
beginning of chapter 7 of title 11, United States Code, is
amended by striking the item relating to section 707 and
inserting the following:
``707. Dismissal of a case or conversion to a case under chapter 13.''.
SEC. 103. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is amended to
read as follows:
``(b) Before the commencement of a case under this title by
an individual whose debts are primarily consumer debts, the
clerk shall give to such individual written notice containing--
``(1) a brief description of--
``(A) chapters 7, 11, 12, and 13 and the
general purpose, benefits, and costs of
proceeding under each of those chapters; and
``(B) the types of services available from
credit counseling agencies; and
``(2) statements specifying that--
``(A) a person who knowingly and fraudulently
conceals assets or makes a false oath or
statement under penalty of perjury in
connection with a bankruptcy case shall be
subject to fine, imprisonment, or both; and
``(B) all information supplied by a debtor in
connection with a bankruptcy case is subject to
examination by the Attorney General.''.
SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.
(a) Development of Financial Management and Training
Curriculum and Materials.--The Director of the Executive Office
for United States Trustees (in this section referred to as the
``Director'') shall consult with a wide range of individuals
who are experts in the field of debtor education, including
trustees who are appointed under chapter 13 of title 11 of the
United States Code and who operate financial management
education programs for debtors, and shall develop a financial
management training curriculum and materials that can be used
to educate individual debtors on how to better manage their
finances.
(b) Test--(1) The Director shall select 6 judicial districts
of the United States in which to test the effectiveness of the
financial management training curriculum and materials
developed under subsection (a).
(2) For a 18-month period beginning not later than 270 days
after the date of the enactment of this Act, such curriculum
and materials shall be, for the 6 judicial districts selected
under paragraph (1), used as the instructional course
concerning personal financial management for purposes of
section 111 of this title.
(c) Evaluation.--(1) During the 1-year period referred to in
subsection (b), the Director shall evaluate the effectiveness
of--
(A) the financial management training curriculum and
materials developed under subsection (a); and
(B) a sample of existing consumer education programs
such as those described in the Report of the National
Bankruptcy Review Commission (October 20, 1997) that
are representative of consumer education programs
carried out by the credit industry, by trustees serving
under chapter 13 of title 11 of the United States Code,
and by consumer counselling groups.
(2) Not later than 3 months after concluding such evaluation,
the Director shall submit a report to the Speaker of the House
of Representatives and the President pro tempore of the Senate,
for referral to the appropriate committees of the Congress,
containing the findings of the Director regarding the
effectiveness of such curriculum, such materials, and such
programs and their costs.
Subtitle B--Consumer Bankruptcy Protections
SEC. 105. DEFINITIONS.
(a) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (2) the following:
``(3) `assisted person' means any person whose debts
consist primarily of consumer debts and whose non-
exempt assets are less than $150,000;'';
(2) by inserting after paragraph (4) the following:
``(4A) `bankruptcy assistance' means any goods or
services sold or otherwise provided to an assisted
person with the express or implied purpose of providing
information, advice, counsel, document preparation or
filing, or attendance at a creditors' meeting or
appearing in a proceeding on behalf of another or
providing legal representation with respect to a
proceeding under this title;''; and
(3) by inserting after paragraph (12A) the following:
``(12B) `debt relief agency' means any person who
provides any bankruptcy assistance to an assisted
person in return for the payment of money or other
valuable consideration, or who is a bankruptcy petition
preparer pursuant to section 110 of this title, but
does not include any person that is any of the
following or an officer, director, employee or agent
thereof--
``(A) any nonprofit organization which is
exempt from taxation under section 501(c)(3) of
the Internal Revenue Code of 1986;
``(B) any creditor of the person to the
extent the creditor is assisting the person to
restructure any debt owed by the person to the
creditor; or
``(C) any depository institution (as defined
in section 3 of the Federal Deposit Insurance
Act) or any Federal credit union or State
credit union (as those terms are defined in
section 101 of the Federal Credit Union Act),
or any affiliate or subsidiary of such a
depository institution or credit union;''.
(b) Conforming Amendment.--In section 104(b)(1) by inserting
``101(3),'' after ``sections''.
SEC. 106. ENFORCEMENT.
(a) Enforcement.--Subchapter II of chapter 5 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 526. Debt relief agency enforcement
``(a) A debt relief agency shall not--
``(1) fail to perform any service which the debt
relief agency has told the assisted person or
prospective assisted person the agency would provide
that person in connection with the preparation for or
activities during a proceeding under this title;
``(2) make any statement, or counsel or advise any
assisted person to make any statement in any document
filed in a proceeding under this title, which is untrue
and misleading or which upon the exercise of reasonable
care, should be known by the debt relief agency to be
untrue or misleading;
``(3) misrepresent to any assisted person or
prospective assisted person, directly or indirectly,
affirmatively or by material omission, what services
the debt relief agency can reasonably expect to provide
that person, or the benefits an assisted person may
obtain or the difficulties the person may experience if
the person seeks relief in a proceeding pursuant to
this title; or
``(4) advise an assisted person or prospective
assisted person to incur more debt in contemplation of
that person filing a proceeding under this title or in
order to pay an attorney or bankruptcy petition
preparer fee or charge for services performed as part
of preparing for or representing a debtor in a
proceeding under this title.''.
``(b) Assisted Person Waivers Invalid.--Any waiver by any
assisted person of any protection or right provided by or under
this section shall not be enforceable against the debtor by any
Federal or State court or any other person, but may be enforced
against a debt relief agency.
``(c) Noncompliance.--
``(1) Any contract between a debt relief agency and
an assisted person for bankruptcy assistance which does
not comply with the material requirements of this
section shall be treated as void and may not be
enforced by any Federal or State court or by any other
person.
``(2) Any debt relief agency shall be liable to an
assisted person in the amount of any fees or charges in
connection with providing bankruptcy assistance to such
person which the debt relief agency has received, for
actual damages, and for reasonable attorneys' fees and
costs if the debt relief agency is found, after notice
and hearing, to have--
``(A) intentionally or negligently failed to
comply with any provision of this section
withrespect to a bankruptcy case or related proceeding of the assisted
person;
``(B) provided bankruptcy assistance to an
assisted person in a case or related proceeding
which is dismissed or converted because of the
debt relief agency's intentional or negligent
failure to file bankruptcy papers, including
papers specified in section 521 of this title;
or
``(C) intentionally or negligently
disregarded the material requirements of this
title or the Federal Rules of Bankruptcy
Procedure applicable to such debt relief
agency.
``(3) In addition to such other remedies as are
provided under State law, whenever the chief law
enforcement officer of a State, or an official or
agency designated by a State, has reason to believe
that any person has violated or is violating this
section, the State--
``(A) may bring an action to enjoin such
violation;
``(B) may bring an action on behalf of its
residents to recover the actual damages of
assisted persons arising from such violation,
including any liability under paragraph (2);
and
``(C) in the case of any successful action
under subparagraph (A) or (B), shall be awarded
the costs of the action and reasonable attorney
fees as determined by the court.
``(4) The United States District Court for any
district located in the State shall have concurrent
jurisdiction of any action under subparagraph (A) or
(B) of paragraph (3).
``(5) Notwithstanding any other provision of Federal
law and in addition to any other remedy provided under
Federal or State law, if the court, on its own motion
or on the motion of the United States trustee or the
debtor, finds that a person intentionally violated this
section, or engaged in a clear and consistent pattern
or practice of violating this section, the court may--
``(A) enjoin the violation of such section;
or
``(B) impose an appropriate civil penalty
against such person.
``(c) Relation to State Law.--This section shall not annul,
alter, affect or exempt any person subject to those sections
from complying with any law of any State except to the extent
that such law is inconsistent with those sections, and then
only to the extent of the inconsistency.''.
(b) Conforming Amendment.--The table of sections for chapter
5 of title 11, United States Code, is amended by inserting
after the item relating to section 527, the following:
``526. Debt relief agency enforcement.''.
SEC. 107. SENSE OF THE CONGRESS.
It is the sense of the Congress that States should develop
curricula relating to the subject of personal finance, designed
for use in elementary and secondary schools.
SEC. 108. DISCOURAGING ABUSIVE REAFFIRMATION PRACTICES.
(a) Section 524 of title 11, United States Code, is amended--
(1) in subsection (c)(2)(B) by adding at the end the
following:
``(C)(i) such agreement contains a clear and
conspicuous statement advising the debtor of
the amount of the monthly payments, the total
amount payable and number of payments if the
payments are made according to schedule, the
amount of the total payment attributable to
principal, interest, late fees, and creditor's
attorneys fees, the interest rate, and the ways
in which terms differ from the original
agreement; and
``(ii) if the debt is secured, the agreement
is accompanied by a copy of the instrument
creating the debt and any security interest or
lien and the documents necessary to show
perfection of the interest, and the agreement
contains a clear and conspicuous statement that
advises the debtor of the value of the
collateral and the date on which the lien will
be released if payments are made according to
schedule;'';
(2) in subsection (c)(6)(B), by inserting after
``real property'' the following: ``or is a debt
described in subsection (c)(7)''; and
(3) by adding at the end of subsection (c) the
following:
``(7) in a case concerning an individual, if the
consideration for such agreement is based on whole or
in part on an unsecured consumer debt, or is based on
whole or in part upon a debt for an item of personalty,
the value of which at point of purchase was $500 or
less, and in which the creditor asserts a security
interest, the court approves such agreement as--
``(A) in the best interest of the debtor in
light of the debtor's income and expenses;
``(B) not imposing an undue hardship on the
debtor's future ability of the debtor to pay
for the needs of children and other dependents
(including court ordered support);
``(C) not requiring the debtor to pay the
creditor's attorney's fees, expenses, or other
costs relating to the collection of the debt;
``(D) not agreed upon by the debtor to
protect property necessary for the care and
maintenance of children or other dependents
that would have nominal value on repossession;
``(E) not the product of coercive threats or
actions by the creditor in the creditor's
course of dealings with the debtor; and
``(F) not unfair because excessive in amount
as compared to the value of the collateral;
(4) in subsection (d)(2) by striking ``subsections
(c)(6)'' and inserting ``subsections (c)(6) and
(c)(7)'', and after ``of this section,'' by striking
``if the consideration for such agreement is based in
whole or in part on a consumer debt that is not secured
by real property of the debtor'' and adding at the end
``as applicable''.
(b) Section 104 of title 11, United States Code, as amended
by subsection ____ of this Act, is amended by striking out
``523(a)(2)(C), and 707(b)(3)'' each place it appears and
inserting ``523(a)(2)(C), 524(c)(7), and 707(b)(3)'' in lieu
thereof.
SEC. 109. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.
(a) Reduction of Claim.--Section 502 of title 11, United
States Code, is amended by adding at the end the following:
``(k)(1) The court, on the motion of the debtor and after a
hearing, may reduce a claim filed under this section based
wholly on unsecured consumer debts by not more than 20 percent,
if the debtor can prove by clear and convincing evidence that
the claim was filed by a creditor who unreasonably refused to
negotiate a reasonable alternative repayment schedule proposed
by an approved credit counseling agency acting on behalf of the
debtor, and if--
``(A) such offer was made within the period beginning
60 days before the filing of the petition;
``(B) such offer provided for payment of at least 60
percent of the amount of the debt over a period not to
exceed the repayment period of the loan, or a
reasonable extension thereof; and
``(C) no part of the debt under the alternative
repayment schedule is nondischargeable, is entitled to
priority under section 507 of this title, or would be
paid a greater percentage in a chapter 13 proceeding
than offered by the debtor.
``(2) The debtor shall have the burden of proving that the
proposed alternative repayment schedule was made in the 60-day
period specified in subparagraph (A) and that the creditor
unreasonably refused to consider the debtor's proposal.''.
(b) Limitation on Avoidability.--Section 547 of title 11,
United States Code, is amended by adding at the end the
following:
``(h) The trustee may not avoid a transfer if such transfer
was made as a part of an alternative repayment plan between the
debtor and any creditor of the debtor created by an approved
credit counseling agency.''.
SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A
DWELLING.
(a) Study Required.--During the period beginning 180 days
after the date of enactment of this Act and ending 18 months
after the date of the enactment, the Board of Governors of the
Federal Reserve System (in this section referred to as the
``Board'') shall conduct a study and submit to Congress a
report (including recommendations for any appropriate
legislation) regarding--
(1) whether a consumer engaging in an open-end credit
transaction (as defined pursuant to section 103 of the
Truth in lending Act) secured by the consumer's
principal dwelling is provided adequate information
under Federal law, including under section 127A of the
Truth in Lending Act, regarding the tax deductibility
of interest paid on such transaction; and
(2) whether a consumer engaging in a closed-end
credit transaction (as defined pursuant to section 103
of the Truth in Lending Act) secured by the consumer's
principal dwelling is provided adequate information
regarding the tax deductibility of interest paid on
such transaction.
In conducting such study, the Board shall specifically consider
whether additional disclosures are necessary with respect to
such open-end or closed-end credit transactions in which the
amount of the credit extended exceeds the fair market value of
the dwelling.
(b) Regulations.--If the Board determines that additional
disclosures are necessary in connection with transactions
described in subsection (a), the Board, pursuant to its
authority under the Truth in Lending Act, may promulgate
regulations that would require such additional disclosures. Any
such regulations promulgated by the Board under this section
shall not take effect before the end of the 36-month period
after the date of the enactment of this Act.
SEC. 111. DUAL USE DEBIT CARD.
(a) Study Required.--The Board of Governors of the Federal
Reserve System (in this section referred to as the ``Board'')
shall conduct a study of existing protections provided to
consumers to limit their liability for unauthorized use of a
debit card or similar access device.
(b) Specific Considerations.--In conducting the study
required by subsection (a), the Board shall specifically
consider the following--
(1) the extent to which existing provisions of
section 909 of the Electronic Fund Transfer Act and the
Board's implementing regulations provide adequate
unauthorized use liability protection for consumers;
(2) the extent to which any voluntary industry rules
have enhanced the level of protection afforded
consumers in connection with such unauthorized use
liability; and
(3) whether amendments to the Electronic Funds
Transfer Act or the Board's implementingregulations
thereto are necessary to provide adequate protection for consumers in
this area.
(c) Report and Regulations.--Not later than 2 years after the
date of the enactment of this Act, the Board shall make public
a report on its findings with respect to the adequacy of
existing protections afforded consumers with respect to
unauthorized-use liability for debit cards and similar access
devices. If the Board determines that such protections are
inadequate, the Board, pursuant to its authority under the
Electronic Funds Transfer Act, may issue regulations to address
such inadequacy. Any regulations issued by the Board shall not
be effective before 36 months after the date of the enactment
of this Act.
SEC. 112. DISCOURAGING RECKLESS LENDING PRACTICES.
(a) Limiting Claims Arising From Irresponsible Lending
Practices.--Section 502(b) of title 11, United States Code, is
amended--
(1) in paragraph (8) by striking ``or'' at the end,
(2) in paragraph (9) by striking the period at the
end and inserting a semicolon; and
(3) by adding at the end the following:
``(10) the claim is for a consumer debt under an open
end credit plan (as defined in section 103 of the Truth
in Lending Act) and before incurring such debt under
such plan the debtor was not informed in writing in a
clear and conspicuous manner (or in the case of a
worldwide web-based solicitation to open a credit card
account under such plan, at the time of solicitation by
the person making the solicitation to open such
account)--
``(A) of the method of determining the
required minimum payment amount, if a minimum
payment is required that is different from the
amount of any finance charge, and the charges
or penalties, if any, which may be imposed for
failure by the obligor to pay the required
finance charge or minimum payment amount;
``(B) of repayment information that would
apply to the outstanding balance of the
consumer under the credit plan, including--
``(i) the required minimum monthly
payment on that balance, represented as
both a dollar figure and a percentage
of that balance;
``(ii) the number of months (rounded
to the nearest month) that it would
take to pay the entire amount of that
current balance if the consumer pays
only the required minimum monthly
payments and if no further advances are
made;
``(iii) the total cost to the
consumer, including interest and
principal payments, of paying that
balance in full if the consumer pays
only the required minimum monthly
payments and if no further advances are
made; and
(iv) the following statement: `If
your current rate is a temporary
introductory rate, your total costs may
be higher.' ;
``(C) of the method for determining the
required minimum payment amount to be paid for
each billing cycle, and the charge or penalty,
if any, to be imposed for any failure by the
obligor to pay the required minimum payment
amount;
``(D) of any charge that may be imposed due
to the failure of the obligor to make payment
on or before a required payment due date, the
date that payment is due or, if different, the
date on which a late payment fee will be
charged, and that the terms and conditions of
such charge will be stated prominently in a
conspicuous location on each billing statement,
together with the amount of the charge to be
imposed if payment is made after such date; and
``(E) in any application or solicitation for
a credit card issued under such plan that
offers, during an introductory period of less
than 1 year, an annual percentage rate of
interest that--
``(i) is less than the annual
percentage rate of interest which will
apply after the end of such
introductory period, of such rate in a
statement that includes the following:
`The annual percentage rate of interest
applicable during the introductory
period is not the annual percentage
rate which will apply after the end of
the introductory period. The permanent
annual percentage rate will apply after
[insert applicable date] and will be
[insert applicable percentage rate].'
; or
``(ii) varies in accordance with an
index, which is less than the current
annual percentage rate under the index
which will apply after the end of such
period, of such rate in a statement
that includes the following: `The
annual percentage rate of interest
applicable during the introductory
period is not the annual percentage
rate which will apply after the end of
the introductory period. The permanent
annual percentage rate will be
determined by an index and will apply
after [insert date]. If the index which
will apply after such date were applied
to your account today, the annual
percentage rate would be [insert
applicable percentage rate].' ;
``(11) such claim is for a debt that arose from a
credit card account under an open end credit plan (as
defined in section 103 of the Truth in Lending Act, for
which account a creditor imposed a fee based on
inactivity for the account during any period in which
no advances were made if the obligor maintains any
outstanding balance and is charged a finance charge
applicable to such balance;
``(12) such claim is for a debt that arose from a
credit card account for which a credit card that was
issued to or on behalf of, any individual who has not
attained 21 years of age except in response to a
written request or application to the card issuer to
open a credit card account containing--
``(A) the signature of the parent or guardian
of such individual indicating joint liability
for debts incurred by such individual in
connection with the account before such
individual reaches the age of 21; or
``(B) a submission by such individual of
financial information indicating an independent
means of repaying any obligation arising from
the proposed extension of credit in connection
with the account;
``(13) such claim is for a debt that arose on an
account that a creditor cancelled, imposed a minimum
finance charge for any period (including any annual
period), imposed any fee in lieu of a minimum finance
charge, or imposed any other charge or penalty with
regard to such account or credit extended under such
account solely on the basis that any credit extended
has been repaid in full before the end of any grace
period applicable with respect to the extension of
credit, excluding a flat annual fee imposed on the
consumer in advance of any annual period to cover the
cost of maintaining a credit card account during such
annual period without regard to whether any credit is
actually extended under such account during such
period, or the actual finance charge applicable with
respect to any credit extended under such account
during such annual period at the annual percentage rate
disclosed to the consumer in accordance with this title
for the period of time any such credit is outstanding;
``(14) such claim is for a debt that arose from an
increase in any annual percentage rate of interest
(other than an increase due to the expiration of any
introductory percentage rate of interest or due solely
to a change in another rate of interest to which such
rate is indexed) applicable to any outstanding balance
of credit under such plan may take effect before the
beginning of the billing cycle which begins not less
than 15 days after the obligor receives notice of such
increase; and
``(15) that if an obligor referred to in paragraph
(14) cancels the credit card account before the
beginning of the billing cycle referred to in such
paragraph--
``(A) if the an annual percentage rate of
interest applicable after the cancellation with
respect to such outstanding balance on such
account as of the date of cancellation exceeds
any annual percentage rate of interest
applicable with respect to such balance under
the terms and conditions in effect before the
increase referred to in paragraph (14); and
``(B) the repayment of such outstanding
balance after the cancellation is not subject
to all other terms and conditions applicable
with respect to such account before the
increase referred to in such paragraph;
(b) Definition.--Section 101 of title 11, United States Code,
is amended by inserting after paragraph (9) the following:
``(9A) `credit card' includes any dual purpose or
multifunction card, including a stored-value card,
debit card, check card, check guarantee card, or
purchase-price discount card, that is connected with an
open end credit plan (as defined in section 103 of the
Truth in Lending Act) and can be used, either on
issuance or upon later activation, to obtain credit
directly or indirectly.''.
SEC. 113. PROTECTION OF SAVINGS EARMARKED FOR THE POSTSECONDARY
EDUCATION OF CHILDREN.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (b)(2)--
(A) in subparagraph (A) by striking ``and''
at the end;
(B) in subparagraph (B) by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(C) except as provided in paragraph (n), funds
placed in an education individual retirement account
(as defined in section 530(b)(1) of the Internal
Revenue Code of 1986) not less than 365 days before the
date of entry of the order of relief but only to the
extent such funds--
``(i) are not pledged or promised to any
entity in connection with any extension of
credit; and
``(ii) are not excess contributions (as
described in section 4973(e) of the Internal
Revenue Code of 1986).''; and
(2) by adding at the end the following:
``(n) For purposes of subsection (b)(3)(C), funds placed in
an education individual retirement account shall not be exempt
under this subsection--
``(1) unless the designated beneficiary of such
account was a dependent child of the debtor for the
taxable year for which the funds were placed in such
account; and
``(2) to the extent such funds exceed--
``(A) $50,000 in the aggregate in all such
accounts having the same designated
beneficiary; or
``(B) $100,000 in the aggregate in all such
accounts attributable to all such dependent
children of the debtor.''.
SEC. 114. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by
adding at the end the following:
``(i) The willful failure of a creditor to credit payments
received under a plan confirmed under this title (including a
plan of reorganization confirmed under chapter 11 of this
title) in the manner required by the plan (including crediting
the amounts required under the plan) shall constitute a
violation of any injunction under subsection (a)(2) which has
arisen at the time of the failure.
``(j) An individual who is injured by the willful failure of
a creditor to comply with the requirements for a reaffirmation
agreement under subsections (c) and (d), or by any willful
violation of the injunction under subsection (a)(2), shall be
entitled to recover--
``(1) the greater of--
``(A) the amount of actual damages; or
``(B) $1,000; and
``(2) costs and attorneys' fees.''.
SEC. 115. LIMITING TRUSTEE LIABILITY.
(a) Qualification of Trustee.--Section 322 of title 11,
United States Code, is amended--
(1) in subsection (a) by adding at the end the
following:
``The trustee in a case under this title is not liable
personally or on such trustee's bond for acts taken
within the scope of the trustee's duties or authority
as delineated by other sections of this title or by
order of the court, except to the extent that the
trustee acted with gross negligence. Gross negligence
shall be defined as reckless indifference or deliberate
disregard of the trustee's fiduciary duty.''; and
(2) in subsection (c) by inserting ``for any acts
within the scope of the trustee's authority defined in
subsection (a)'' before the period at the end.
(b) Role and Capacity of Trustee.--Section 323 of title 11,
United States Code, is amended--
(1) in subsection (b) by inserting at the end the
following: ``in the trustee's official capacity as
representative of the estate'' before the period at the
end; and
(2) by adding at the end the following:
``(c) The trustee in a case under this title may not be sued,
either personally, in a representative capacity, or against the
trustee's bond in favor of the United States--
``(1) for acts taken in furtherance of the trustee's
duties or authority in a case in which the debtor is
subsequently determined to be ineligible for relief
under the chapter in which the trustee was appointed;
or
``(2) for the dissemination of statistics and other
information regarding a case or cases, unless the
trustee has actual knowledge that the information is
false.
``(d) The trustee in a case under this title may not be sued
in a personal capacity without leave of the bankruptcy court in
which the case is pending.''.
SEC. 116. REINFORCE THE FRESH START.
(a) Restoration of an Effective Discharge.--Section
523(a)(17) of title 11, United States Code, is amended--
(1) by striking ``by a court'' and inserting ``by any
court'',
(2) by striking ``section 1915(b) or (f)'' and
inserting ``subsection (b) or (f)(2) of section 1915'',
and
(3) by inserting ``(or a similar non-Federal law)''
after ``title 28'' each place it appears.
SEC. 117. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is amended--
(1) in paragraph (1) by striking ``and'' at the end;
(2) in paragraph (2) by striking the period at the
end and inserting a semicolon; and
(3) by adding at the end the following new
paragraphs:
``(3) If a single or joint case is filed by or
against an individual debtor under chapter 7, 11, or 13
(other than a case refiled under a chapter other than
chapter 7 after dismissal under section 707(b) of this
title), and if a single or joint case of the debtor was
pending within the previous 1-year period but was
dismissed, the stay under subsection (a) with respect
to any action taken with respect to a debt or property
securing such debt or with respect to any lease will
terminate with respect to the debtor on the 30th day
after the filing of the later case. Upon motion by a
party in interest for continuation of the automatic
stay and upon notice and a hearing, the court may
extend the stay in particular cases as to any or all
creditors (subject to such conditions or limitations as
the court may then impose) after notice and a hearing
completed before the expiration of the 30-day period
only if the party in interest demonstrates that the
filing of the later case is in good faith as to the
creditors to be stayed. A case is presumptively filed
not in good faith (but such presumption may be rebutted
by clear and convincing evidence to the contrary)--
``(A) as to all creditors if--
``(i) more than 1 previous case under
any of chapter 7, 11, or 13 in which
the individual was a debtor was pending
within such 1-year period;
``(ii) a previous case under any of
chapters 7, 11, or 13 in which the
individual was a debtor was dismissed
within such 1-year period, after the
debtor failed to file or amend the
petition or other documents as required
by this title or the court without
substantial excuse (but mere
inadvertence or negligence shall not be
substantial excuse unless the dismissal
was caused by the negligence of the
debtor's attorney), failed to provide
adequate protection as ordered by the
court, or failed to perform the terms
of a plan confirmed by the court; or
``(iii) there has not been a
substantial change in the financial or
personal affairs of the debtor since
the dismissal of the next most previous
case under any of chapters 7, 11, or 13
of this title, or there is not any
other reason to conclude that the later
case will be concluded, if a case under
chapter 7 of this title, with a
discharge, and if a chapter 11 or 13
case, a confirmed plan which will be
fully performed;
``(B) as to any creditor that commenced an
action under subsection (d) in a previous case
in which the individual was a debtor if, as of
the date of dismissal of such case, that action
was still pending or had been resolved by
terminating, conditioning, or limiting the stay
as to actions of such creditor.
``(4) If a single or joint case is filed by or
against an individual debtor under this title (other
than a case refiled under a chapter other than chapter
7 after a dismissal under section 707(b) of this
title), and if 2 or more single or joint cases of the
debtor were pending within the previous year but were
dismissed, the stay under subsection (a) will not go
into effect upon the filing of the later case. On
request of a party in interest, the court shall
promptly enter an order confirming that no stay is in
effect. If a party in interest requests within 30 days
of the filing of the later case, the court may order
the stay to take effect in the case as to any or all
creditors (subject to such conditions or limitations as
the court may impose), after notice and hearing, only
if the party in interest demonstrates that the filing
of the later case is in good faith as to the creditors
to be stayed. A stay imposed pursuant to the preceding
sentence will be effective on the date of entry of the
order allowing the stay to go into effect. A case is
presumptively not filed in good faith (but such
presumption may be rebutted by clear and convincing
evidence to the contrary)--
``(A) as to all creditors if--
``(i) 2 or more previous cases under
this title in which the individual was
a debtor were pending within the 1-year
period;
``(ii) a previous case under this
title in which the individual was a
debtor was dismissed within the time
period stated in this paragraph after
the debtor failed to file or amend the
petition or other documents as required
by this title or the court without
substantial excuse (but mere
inadvertence or negligence shall not be
substantial excuse unless the dismissal
was caused by the negligence of the
debtor's attorney), failed to provide
adequate protection as ordered by the
court, or failed to perform the terms
of a plan confirmed by the court; or
``(iii) there has not been a
substantial change in the financial or
personal affairs of the debtor since
the dismissal of the next most previous
case under this title, or there is not
any other reason to conclude that the
later case will be concluded, if a case
under chapter 7, with a discharge, and
if a case under chapter 11 or 13, with
a confirmed plan that will be fully
performed; or
``(B) as to any creditor that commenced an
action under subsection (d) in a previous case
in which the individual was a debtor if, as of
the date of dismissal of such case, such action
was still pending or had been resolved by
terminating, conditioning, or limiting the stay
as to action of such creditor.''.
SEC. 118. CURBING ABUSIVE FILINGS.
(a) In General.--Section 362(d) of title 11, United States
Code, is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(4) with respect to a stay of an act against real
property under subsection (a), by a creditor whose
claim is secured by an interest in such real estate, if
the court finds that the filing of the bankruptcy
petition was part of a scheme to delay, hinder, and
defraud creditors that involved either--
``(A) transfer of all or part ownership of,
or other interest in, the real property without
the consent of the secured creditor or court
approval; or
``(B) multiple bankruptcy filings affecting
the real property.
If recorded in compliance with applicable State laws governing
notices of interests or liens in real property, an order
entered pursuant to this subsection shall be bindingin any
other case under this title purporting to affect the real property
filed not later than 2 years after that recording, except that a debtor
in a subsequent case may move for relief from such order based upon
changed circumstances or for good cause shown, after notice and a
hearing. Any Federal, State, or local governmental unit which accepts
notices of interests or liens in real property shall accept any
certified copy of an order described in this subsection for indexing
and recording.''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, is amended--
(1) in paragraph (17), by striking ``or'' at the end;
(2) in paragraph (18) by striking the period at the
end and inserting a semicolon; and
(3) by inserting after paragraph (18) the following:
``(19) under subsection (a), of any act to enforce
any lien against or security interest in real property
following the entry of an order under section 362(d)(4)
of this title as to that property in any prior
bankruptcy case for a period of 2 years after entry of
such an order. The debtor in a subsequent case,
however, may move the court for relief from such order
based upon changed circumstances or for other good
cause shown (consistent with the standards for good
faith in subsection (c)), after notice and a hearing;
or
``(20) under subsection (a), of any act to enforce
any lien against or security interest in real
property--
``(A) if the debtor is ineligible under
section 109(g) of this title to be a debtor in
a bankruptcy case; or
``(B) if the bankruptcy case was filed in
violation of a bankruptcy court order in a
prior bankruptcy case prohibiting the debtor
from being a debtor in another bankruptcy
case.''.
SEC. 119. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521--
(A) in paragraph (4) by striking ``, and'' at
the end and inserting a semicolon;
(B) in paragraph (5) by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(6) in an individual case under chapter 7 of this
title, not retain possession of personal property as to
which a creditor has an allowed claim for the purchase
price secured in whole or in part by an interest in
that personal property unless, in the case of an
individual debtor, the debtor takes 1 of the following
actions within 45 days after the first meeting of
creditors under section 341(a)--
``(A) enters into an agreement with the
creditor pursuant to section 524(c) of this
title with respect to the claim secured by such
property; or
``(B) redeems such property from the security
interest pursuant to section 722 of this title.
``If the debtor fails to so act within the 45-day
period, the stay under section 362(a) of this title is
terminated with respect to the personal property of the
estate or of the debtor which is affected, such
property shall no longer be property of the estate, and
the creditor may take whatever action as to such
property as is permitted by applicable nonbankruptcy
law, unless the court determines on the motion of the
trustee brought before the expiration of such 45-day
period, and after notice and a hearing, that such
property is of consequential value or benefit to the
estate, orders appropriate adequate protection of the
creditor's interest, and orders the debtor to deliver
any collateral in the debtor's possession to the
trustee.''; and
(2) in section 722 by inserting ``in full at the time
of redemption'' before the period at the end.
SEC. 120. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT
COMPLETE INTENDED SURRENDER OF CONSUMER DEBT
COLLATERAL.
Title 11, United States Code, is amended as follows--
(1) in section 362--
(A) by striking ``(e), and (f)'' in
subsection (c) and inserting in lieu thereof
``(e), (f), and (h)''; and
(B) by redesignating subsection (h) as
subsection (i) and by inserting after
subsection (g) the following:
``(h) In an individual case pursuant to chapter 7, 11, or 13
the stay provided by subsection (a) is terminated with respect
to personal property of the estate or of the debtor securing in
whole or in part a claim, or subject to an unexpired lease, and
such personal property shall no longer be property of the
estate if the debtor fails within the applicable time set by
section 521(a)(2) of this title--
``(1) to file timely any statement of intention
required under section 521(a)(2) of this title with
respect to that property or to indicate therein that
the debtor will either surrender the property or retain
it and, if retaining it, either redeem the property
pursuant to section 722 of this title, reaffirm the
debt it secures pursuant to section 524(c) of this
title, or assume the unexpired lease pursuant to
section 365(p) of this title if the trustee does not do
so, as applicable; or
``(2) to take timely the action specified in that
statement of intention, as it may be amended before
expiration of the period for taking action, unless the
statement of intention specifies reaffirmation and the
creditor refuses to reaffirm on the original contract
terms;
unless the court determines on the motion of the trustee filed
before the expiration of the applicable time set by section
521(a)(2), and after notice and a hearing, that such property
is of consequential value or benefit to the estate, orders
appropriate adequate protection of the creditor's interest, and
orders the debtor to deliver any collateral in the debtor's
possession to the trustee. If the court does not so determine
an order, the stay shall terminate upon the conclusion of the
proceeding on the motion.''; and
(2) in section 521, as amended by sections 603 and
604--
(A) in paragraph (2) by striking
``consumer'';
(B) in paragraph (2)(B)--
(i) by striking ``forty-five days
after the filing of a notice of intent
under this section'' and inserting ``30
days after the first date set for the
meeting of creditors under section
341(a) of this title''; and
(ii) by striking ``forty-five day''
the second place it appears and
inserting ``30-day'';
(C) in paragraph (2)(C) by inserting ``except
as provided in section 362(h) of this title''
before the semicolon; and
(D) by inserting after subsection (b) the
following:
``(c) If the debtor fails timely to take the action specified
in subsection (a)(6) of this section, or in paragraphs (1) and
(2) of section 362(h) of this title, with respect to property
which a lessor or bailor owns and has leased, rented, or bailed
to the debtor or as to which a creditor holds a security
interest not otherwise voidable under section 522(f), 544, 545,
547, 548, or 549 of this title, nothing in this title shall
prevent or limit the operation of a provision in the underlying
lease or agreement which has the effect of placing the debtor
in default under such lease or agreement by reason of the
occurrence, pendency, or existence of a proceeding under this
title or the insolvency of the debtor. Nothing in this
subsection shall be deemed to justify limiting such a provision
in any other circumstance.''.
SEC. 121. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
Section 1325(a)(5)(B)(i) of title 11, United States Code, is
amended to read as follows:
``(i) the plan provides that the holder of
such claim retain the lien securing such claim
until the earlier of payment of the underlying
debt determined under nonbankruptcy law or
discharge under section 1328 of this title, and
that if the case under this chapter is
dismissed or converted without completion of
the plan, such lien shall also be retained by
such holder to the extent recognized by
applicable nonbankruptcy law; and''.
SEC. 123. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code, is amended by
adding at the end the following:
``In the case of an individual debtor under chapters 7 and 13,
such value with respect to personal property 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 personal, family, or household
purpose, 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. 124. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.
Section 522(b)(2)(A) of title 11, United States Code, is
amended--
(1) by striking ``180'' and inserting ``730''; and
(2) by striking ``, or for a longer portion of such
180-day period than in any other place'' and inserting
``or if the debtor's domicile has not been located at a
single State for such 730-day period, the place in
which the debtor's domicile was located for 180 days
immediately preceding the 730-day period or for a
longer portion of such 180-day period than in any other
place''.
SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT PROPERTY OBTAINED THROUGH
FRAUD.
Section 522 of title 11, United States Code, as amended by
section 113, is amended--
(1) in subsection (b)(2)(A) by inserting ``subject to
subsection (o),'' before ``any property''; and
(2) by adding at the end the following:
``(o) For purposes of subsection (b)(3)(A) and
notwithstanding subsection (a), the value of an interest in--
``(1) real or personal property that the debtor or a
dependent of the debtor uses as a residence;
``(2) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a
residence; or
``(3) a burial plot for the debtor or a dependent of
the debtor;
shall be reduced to the extent such value is attributable to
any portion of any property that the debtor disposed of in the
730-day period ending of the date of the filing of the
petition, with the intent to hinder, delay, or defraud a
creditor and that the debtor could not exempt, or that portion
that the debtor could not exempt, under subsection (b) if on
such date the debtor had held the property so disposed of.''.
SEC. 126. ROLLING STOCK EQUIPMENT.
(a) In General.--Section 1168 of title 11, United States
Code, is amended to read as follows:
``Sec. 1168. Rolling stock equipment
``(a)(1) The right of a secured party with a security
interest in or of a lessor or conditional vendor of equipment
described in paragraph (2) to take possession of such equipment
in compliance with an equipment security agreement, lease, or
conditional sale contract, and to enforce any of its other
rights or remedies under such security agreement, lease, or
conditional sale contract, to sell, lease, or otherwise retain
or dispose of such equipment, is not limited or otherwise
affected by any other provision of this title or by any power
of the court, except that the right to take possession and
enforce those other rights and remedies shall be subject to
section 362 of this title, if--
``(A) before the date that is 60 days after the date
of commencement of a case under this chapter, the
trustee, subject to the court's approval, agrees to
perform all obligations of the debtor under such
security agreement, lease, or conditional sale
contract; and
``(B) any default, other than a default of a kind
described in section 365(b)(2) of this title, under
such security agreement, lease, or conditional sale
contract--
``(i) that occurs before the date of
commencement of the case and is an event of
default therewith is cured before the
expiration of such 60-day period;
``(ii) that occurs or becomes an event of
default after the date of commencement of the
case and before the expiration of such 60-day
period is cured before the later of--
``(I) the date that is 30 days after
the date of the default or event of the
default; or
``(II) the expiration of such 60-day
period; and
``(iii) that occurs on or after the
expiration of such 60-day period is cured in
accordance with the terms of such security
agreement, lease, or conditional sale contract,
if cure is permitted under that agreement,
lease, or conditional sale contract.
``(2) The equipment described in this paragraph--
``(A) is rolling stock equipment or accessories used
on rolling stock equipment, including superstructures
or racks, that is subject to a security interest
granted by, leased to, or conditionally sold to a
debtor; and
``(B) includes all records and documents relating to
such equipment that are required, under the terms of
the security agreement, lease, or conditional sale
contract, that is to be surrendered or returned by the
debtor in connection with the surrender or return of
such equipment.
``(3) Paragraph (1) applies to a secured party, lessor, or
conditional vendor acting in its own behalf or acting as
trustee or otherwise in behalf of another party.
``(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is protected
under subsection (a) may agree, subject to the court's
approval, to extend the 60-day period specified in subsection
(a)(1).
``(c)(1) In any case under this chapter, the trustee shall
immediately surrender and return to a secured party, lessor, or
conditional vendor, described in subsection (a)(1), equipment
described in subsection (a)(2), if at any time after the date
of commencement of the case under this chapter such secured
party, lessor, or conditional vendor is entitled pursuant to
subsection (a)(1) to take possession of such equipment and
makes a written demand for such possession of the trustee.
``(2) At such time as the trustee is required under paragraph
(1) to surrender and return equipment described in subsection
(a)(2), any lease of such equipment, and any security agreement
or conditional sale contract relating to such equipment, if
such security agreement or conditional sale contract is an
executory contract, shall be deemed rejected.
``(d) With respect to equipment first placed in service on or
prior to October 22, 1994, for purposes of this section--
``(1) the term `lease' includes any written agreement
with respect to which the lessor and the debtor, as
lessee, have expressed in the agreement or in a
substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal
income tax purposes; and
``(2) the term `security interest' means a purchase-
money equipment security interest.
``(e) With respect to equipment first placed in service after
October 22, 1994, for purposes of this section, the term
`rolling stock equipment' includes rolling stock equipment that
is substantially rebuilt and accessories used on such
equipment.''.
(b) Aircraft Equipment and Vessels.--Section 1110 of title
11, United States Code, is amended to read as follows:
``Sec. 1110. Aircraft equipment and vessels
``(a)(1) Except as provided in paragraph (2) and subject to
subsection (b), the right of a secured party with a security
interest in equipment described in paragraph (3), or of a
lessor or conditional vendor of such equipment, to take
possession of such equipment in compliance with a security
agreement, lease, or conditional sale contract, and to enforce
any of its other rights or remedies, under such security
agreement, lease, or conditional sale contract, to sell, lease,
or otherwise retain or dispose of such equipment, is not
limited or otherwise affected by any other provision of this
title or by any power of the court.
``(2) The right to take possession and to enforce the other
rights and remedies described in paragraph (1) shall be subject
to section 362 of this title if--
``(A) before the date that is 60 days after the date
of the order for relief under this chapter, the
trustee, subject to the approval of the court, agrees
to perform all obligations of the debtor under such
security agreement, lease, or conditional sale
contract; and
``(B) any default, other than a default of a kind
specified in section 365(b)(2) of this title, under
such security agreement, lease, or conditional sale
contract--
``(i) that occurs before the date of the
order is cured before the expiration of such
60-day period;
``(ii) that occurs after the date of the
order and before the expiration of such 60-day
period is cured before the later of--
``(I) the date that is 30 days after
the date of the default; or
``(II) the expiration of such 60-day
period; and
``(iii) that occurs on or after the
expiration of such 60-day period is cured in
compliance with the terms of such security
agreement, lease, or conditional sale contract,
if a cure is permitted under that agreement,
lease, or contract.
``(3) The equipment described in this paragraph--
``(A) is--
``(i) an aircraft, aircraft engine,
propeller, appliance, or spare part (as defined
in section 40102 of title 49) that is subject
to a security interest granted by, leased to,
or conditionally sold to a debtor that, at the
time such transaction is entered into, holds an
air carrier operating certificate issued
pursuant to chapter 447 of title 49 for
aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo;
or
``(ii) a documented vessel (as defined in
section 30101(1) of title 46) that is subject
to a security interest granted by, leased to,
or conditionally sold to a debtor that is a
water carrier that, at the time such
transaction is entered into, holds a
certificate of public convenience and necessity
or permit issued by the Department of
Transportation; and
``(B) includes all records and documents relating to
such equipment that are required, under the terms of
the security agreement, lease, or conditional sale
contract, to be surrendered or returned by the debtor
in connection with the surrender or return of such
equipment.
``(4) Paragraph (1) applies to a secured party, lessor, or
conditional vendor acting in its own behalf or acting as
trustee or otherwise in behalf of another party.
``(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is protected
under subsection (a) may agree, subject to the approval of the
court, to extend the 60-day period specified in subsection
(a)(1).
``(c)(1) In any case under this chapter, the trustee shall
immediately surrender and return to a secured party, lessor, or
conditional vendor, described in subsection (a)(1), equipment
described in subsection (a)(3), if at any time after the date
of the order for relief under this chapter such secured party,
lessor, or conditional vendor is entitled pursuant to
subsection (a)(1) to take possession of such equipment and
makes a written demand for such possession to the trustee.
``(2) At such time as the trustee is required under paragraph
(1) to surrender and return equipment described in subsection
(a)(3), any lease of such equipment, and any security agreement
or conditional sale contract relating to such equipment, if
such security agreement or conditional sale contract is an
executory contract, shall be deemed rejected.
``(d) With respect to equipment first placed in service on or
before October 22, 1994, for purposes of this section--
``(1) the term `lease' includes any written agreement
with respect to which the lessor and the debtor, as
lessee, have expressed in the agreement or in a
substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal
income tax purposes; and
``(2) the term `security interest' means a purchase-
money equipment security interest.''.
SEC. 127. DISCHARGE UNDER CHAPTER 13.
Section 1328(a) of title 11, United States Code, is amended
by striking paragraphs (1) through (3) and inserting the
following:
``(1) provided for under section 1322(b)(5) of this
title;
``(2) of the kind specified in paragraph (2), (4),
(3)(B), (5), (8), or (9) of section 523(a) of this
title;
``(3) for restitution, or a criminal fine, included
in a sentence on the debtor's conviction of a crime; or
``(4) for restitution, or damages, awarded in a civil
action against the debtor as a result of willful or
malicious injury by the debtor that caused personal
injury to an individual or the death of an
individual.''.
SEC. 128. BANKRUPTCY JUDGESHIPS.
(a) Short Title.--This section may be cited as the
``Bankruptcy Judgeship Act of 1999''.
(b) Temporary Judgeships.--
(1) Appointments.--The following judgeship positions
shall be filled in the manner prescribed in section
152(a)(1) of title 28, United States Code, for the
appointment of bankruptcy judges provided for in
section 152(a)(2) of such title:
(A) One additional bankruptcy judgeship for
the eastern district of California.
(B) Four additional bankruptcy judgeships for
the central district of California.
(C) One additional bankruptcy judgeship for
the southern district of Florida.
(D) Two additional bankruptcy judgeships for
the district of Maryland.
(E) One additional bankruptcy judgeship for
the eastern district of Michigan.
(F) One additional bankruptcy judgeship for
the southern district of Mississippi.
(G) One additional bankruptcy judgeship for
the district of New Jersey.
(H) One additional bankruptcy judgeship for
the eastern district of New York.
(I) One additional bankruptcy judgeship for
the northern district of New York.
(J) One additional bankruptcy judgeship for
the southern district of New York.
(K) One additional bankruptcy judgeship for
the eastern district of Pennsylvania.
(L) One additional bankruptcy judgeship for
the middle district of Pennsylvania.
(M) One additional bankruptcy judgeship for
the western district of Tennessee.
(N) One additional bankruptcy judgeship for
the eastern district of Virginia.
(2) Vacancies.--The first vacancy occurring in the
office of a bankruptcy judge in each of the judicial
districts set forth in paragraph (1) that--
(A) results from the death, retirement,
resignation, or removal of a bankruptcy judge;
and
(B) occurs 5 years or more after the
appointment date of a bankruptcy judge
appointed under paragraph (1);
shall not be filled.
(c) Extensions.--
(1) In general.--The temporary bankruptcy judgeship
positions authorized for the northern district of
Alabama, the district of Delaware, the district of
Puerto Rico, the district of South Carolina, and the
eastern district of Tennessee under section 3(a) (1),
(3), (7), (8), and (9) of the Bankruptcy Judgeship Act
of 1992 (28 U.S.C. 152 note) are extended until the
first vacancy occurring in the office of a bankruptcy
judge in the applicable district resulting from the
death, retirement, resignation, or removal of a
bankruptcy judge and occurring--
(A) 8 years or more after November 8, 1993,
with respect to the northern district of
Alabama;
(B) 10 years or more after October 28, 1993,
with respect to the district of Delaware;
(C) 8 years or more after August 29, 1994,
with respect to the district of Puerto Rico;
(D) 8 years or more after June 27, 1994, with
respect to the district of South Carolina; and
(E) 8 years or more after November 23, 1993,
with respect to the eastern district of
Tennessee.
(2) Applicability of other provisions.--All other
provisions of section 3 of the Bankruptcy Judgeship Act
of 1992 remain applicable to such temporary judgeship
position.
(d) Technical Amendment.--The first sentence of section
152(a)(1) of title 28, United States Code, is amended to read
as follows: ``Each bankruptcy judge to be appointed for a
judicial district as provided in paragraph (2) shall be
appointed by the United States courtof appeals for the circuit
in which such district is located.''.
(e) Travel Expenses of Bankruptcy Judges.--Section 156 of
title 28, United States Code, is amended by adding at the end
the following new subsection:
``(g)(1) In this subsection, the term `travel expenses'--
``(A) means the expenses incurred by a bankruptcy
judge for travel that is not directly related to any
case assigned to such bankruptcy judge; and
``(B) shall not include the travel expenses of a
bankruptcy judge if--
``(i) the payment for the travel expenses is
paid by such bankruptcy judge from the personal
funds of such bankruptcy judge; and
``(ii) such bankruptcy judge does not receive
funds (including reimbursement) from the United
States or any other person or entity for the
payment of such travel expenses.
``(2) Each bankruptcy judge shall annually submit the
information required under paragraph (3) to the chief
bankruptcy judge for the district in which the bankruptcy judge
is assigned.
``(3)(A) Each chief bankruptcy judge shall submit an annual
report to the Director of the Administrative Office of the
United States Courts on the travel expenses of each bankruptcy
judge assigned to the applicable district (including the travel
expenses of the chief bankruptcy judge of such district).
``(B) The annual report under this paragraph shall include--
``(i) the travel expenses of each bankruptcy judge,
with the name of the bankruptcy judge to whom the
travel expenses apply;
``(ii) a description of the subject matter and
purpose of the travel relating to each travel expense
identified under clause (i), with the name of the
bankruptcy judge to whom the travel applies; and
``(iii) the number of days of each travel described
under clause (ii), with the name of the bankruptcy
judge to whom the travel applies.
``(4)(A) The Director of the Administrative Office of the
United States Courts shall--
``(i) consolidate the reports submitted under
paragraph (3) into a single report; and
``(ii) annually submit such consolidated report to
Congress.
``(B) The consolidated report submitted under this paragraph
shall include the specific information required under paragraph
(3)(B), including the name of each bankruptcy judge with
respect to clauses (i), (ii), and (iii) of paragraph (3)(B).''.
SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
Section 507(a) of title 11, United States Code, is amended by
inserting after paragraph (9) the following:
``(10) Tenth, allowed claims for death or personal
injuries resulting from the operation of a motor
vehicle or vessel if such operation was unlawful
because the debtor was intoxicated from using alcohol,
a drug or another substance.''.
SEC. 131. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE STAY PROTECTS
THE DEBTOR.
Section 1301(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) Notwithstanding subsection (c) and except as
provided in subparagraph (B), in any case in which the debtor
did not receive the consideration for the claim held by a
creditor, the stay provided by subsection (a) shall apply to
that creditor for a period not to exceed 30 days beginning on
the date of the order for relief, to the extent the creditor
proceeds against--
``(i) the individual that received that
consideration; or
``(ii) property not in the possession of the debtor
that secures that claim.
``(B) Notwithstanding subparagraph (A), the stay provided by
subsection (a) shall apply in any case in which the debtor is
primarily obligated to pay the creditor in whole or in part
with respect to a claim described in subparagraph (A) under a
legally binding separation or property settlement agreement or
divorce or dissolution decree with respect to--
``(i) an individual described in subparagraph (A)(i);
or
``(ii) property described in subparagraph (A)(ii).
``(3) Notwithstanding subsection (c), the stay provided by
subsection (a) shall terminate as of the date of confirmation
of the plan, in any case in which the plan of the debtor
provides that the debtor's interest in personal property
subject to a lease with respect to which the debtor is the
lessee will be surrendered or abandoned or no payments will be
made under the plan on account of the debtor's obligations
under the lease.''.
SEC. 132. ADEQUATE PROTECTION FOR INVESTORS.
(a) Definition.--Section 101 of title 11, United States Code,
is amended by inserting after paragraph (48) the following:
``(48A) `securities self regulatory organization'
means either a securities association registered with
the Securities and Exchange Commission pursuant to
section 15A of the Securities Exchange Act of 1934 or a
national securities exchange registered with the
Securities and Exchange Commission pursuant to section
6 of the Securities Exchange Act of 1934;''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, as amended by section 118, is amended--
(1) in paragraph (19) by striking ``or'' at the end;
(2) in paragraph (20) by striking the period at the
end and a inserting ``; or''; and
(3) by inserting after paragraph (20) the following:
``(21) under subsection (a), of the commencement or
continuation of an investigation or action by a
securities self regulatory organization to enforce such
organization's regulatory power; of the enforcement of
an order or decision, other than for monetary
sanctions, obtained in an action by the securities self
regulatory organization to enforce such organization's
regulatory power; or of 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 requirements.''.
SEC. 134. GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL PROPERTY
BY ASSUMPTION.
Section 365 of title 11, United States Code, is amended by
adding at the end the following:
``(p)(1) If a lease of personal property is rejected or not
timely assumed by the trustee under subsection (d), the leased
property is no longer property of the estate and the stay under
section 362(a) of this title is automatically terminated.
``(2) In the case of an individual under chapter 7, the
debtor may notify the creditor in writing that the debtor
desires to assume the lease. Upon being so notified, the
creditor may, at its option, notify the debtor that it is
willing to have the lease assumed by the debtor and may, at its
option, condition such assumption on cure of any outstanding
default on terms set by the contract. If within 30 days of the
notice from the creditor the debtor notifies the lessor in
writing that the lease is assumed, the liability under the
lease will be assumed by the debtor and not by the estate. The
stay under section 362 of this title and the injunction under
section 524(a) of this title shall not be violated by
notification of the debtor and negotiation of cure under this
subsection. Nothing in this paragraph shall require a debtor to
assume a lease, or a creditor to permit assumption.
``(3) In a case under chapter 11 of this title in which the
debtor is an individual and in a case under chapter 13 of this
title, if the debtor is the lessee with respect to personal
property and the lease is not assumed in the plan confirmed by
the court, the lease is deemed rejected as of the conclusion of
the hearing on confirmation. If the lease is rejected, the stay
under section 362 of this title and any stay under section 1301
is automatically terminated with respect to the property
subject to the lease.''.
SEC. 135. ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED
CREDITORS.
(a) In General.--Chapter 13 of title 11, United States Code,
is amended by adding after section 1307 the following:
``Sec. 1307A. Adequate protection in chapter 13 cases
``(a)(1)(A) On or before the date that is 30 days after the
filing of a case under this chapter, the debtor shall make cash
payments in an amount determined under paragraph (2), to--
``(i) any lessor of personal property; and
``(ii) any creditor holding a claim secured by
personal property to the extent that the claim is
attributable to the purchase of that property by the
debtor.
``(B) The debtor or the plan shall continue making the
adequate protection payments required under subparagraph (A)
until the earlier of the date on which--
``(i) the creditor begins to receive actual payments
under the plan; or
``(ii) the debtor relinquishes possession of the
property referred to in subparagraph (A) to--
``(I) the lessor or creditor; or
``(II) any third party acting under claim of
right, as applicable.
``(2) The payments referred to in paragraph (1)(A) shall be
the contract amount and shall reduce any amount payable under
section 1326(a) of the title.
``(b)(1) Subject to the limitations under paragraph (2), the
court may, after notice and hearing, change the amount and
timing of the dates of payment of payments made under
subsection (a).
``(2)(A) The payments referred to in paragraph (1) shall be
payable not less frequently than monthly.
``(B) The amount of payments referred to in paragraph (1)
shall not be less than the amount of any weekly, biweekly,
monthly, or other periodic payment scheduled as payable under
the contract between the debtor and creditor.
``(c) Notwithstanding section 1326(b), the payments referred
to in subsection (a)(1)(A) shall be continued in addition to
plan payments under a confirmed plan until actual payments to
the creditor begin under that plan, if the confirmed plan
provides--
``(1) for payments to a creditor or lessor described
in subsection (a)(1); and
``(2) for the deferral of payments to such creditor
or lessor under the plan until the payment of amounts
described in section 1326(b).
``(d) Notwithstanding sections 362, 542, and 543, a lessor or
creditor described in subsection (a) may retain possession of
property described in that subsection that was obtained in
accordance with applicable law before the date of filing of the
petition until the first payment under subsection (a)(1)(A) is
received by the lessor or creditor.
``(e) On or before 60 days after the filling of a case under
this chapter, a debtor retaining possession of personal
property subject to a lease or securing a claim attributable in
whole or in part to the purchase price of such property shall
provide each creditor or lessor reasonable evidence of the
maintenance of any required insurance coverage with respect to
the use or ownership of such property and continue to do so for
so long as the debtor retains possession of such property.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 13 of title 11, United States Code, is
amended by inserting after the item relating to section 1307
the following:
``1307A. Adequate protection in chapter 13 cases.''.
SEC. 136. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended by
sections 118 and 132, is amended--
(1) in paragraph (20), by striking ``or'' at the end;
(2) in paragraph (21), by striking the period at the
end and inserting a semicolon; and
(3) by inserting after paragraph (21) the following:
``(22) under subsection (a) of any transfer that is
not avoidable under section 544 of this title and that
is not avoidable under section 549 of this title; or
``(23) under subsection (a)(3), of eviction actions
based on endangerment to property or person or the use
of illegal drugs.''.
SEC. 137. EXTEND PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended--
(1) in section 727(a)(8) by striking ``six'' and
inserting ``7''; and
(2) in section 1328 by adding at the end the
following:
``(f) Notwithstanding subsections (a) and (b), the court
shall not grant a discharge of all debts provided for by the
plan or disallowed under section 502 of this title if the
debtor has received a discharge in any case filed under this
title within 5 years of the order for relief under this
chapter.''.
SEC. 139. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is amended--
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through (6) as
paragraphs (2) through (7), respectively;
(3) in paragraph (2), as redesignated, by striking
``First'' and inserting ``Second'';
(4) in paragraph (3), as redesignated, by striking
``Second'' and inserting ``Third'';
(5) in paragraph (4), as redesignated, by striking
``Third'' and inserting ``Fourth'';
(6) in paragraph (5), as redesignated, by striking
``Fourth'' and inserting ``Fifth'';
(7) in paragraph (6), as redesignated, by striking
``Fifth'' and inserting ``Sixth'';
(8) in paragraph (7), as redesignated, by striking
``Sixth'' and inserting ``Seventh''; and
(9) by inserting before paragraph (2), as
redesignated, the following:
``(1) First, allowed claims for domestic support
obligations to be paid in the following order on the
condition that funds received under this paragraph by a
governmental unit in a case under this title be
applied:
``(A) Claims that, as of the date of entry of
the order for relief, are owed directly to a
spouse, former spouse, or child of the debtor,
or the parent of such child, without regard to
whether the claim is filed by the spouse,
former spouse, child, or parent, or is filed by
a governmental unit on behalf of that person.
``(B) Claims that, as of the date of entry of
the order for relief, are assigned by a spouse,
former spouse, child of the debtor, or the
parent of that child to a governmental unit or
are owed directly to a governmental unit under
applicable nonbankruptcy law.''.
SEC. 142. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY,
MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a), by striking paragraph (5) and
inserting the following:
``(5) for a domestic support obligation;'';
(2) in subsection (a)(15)--
(A) by inserting ``or'' after ``court of
record,'';
(B) by striking ``unless--'' and all that
follows through ``debtor'' the last place it
appears; and
(3) in subsection (c), by striking ``(6), or (15)''
each place it appears and inserting ``or (6)''.
SEC. 143. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (c), by striking paragraph (1) and
inserting the following:
``(1) a debt of a kind specified in paragraph (1) or
(5) of section 523(a) (in which case, notwithstanding
any provision of applicable nonbankruptcy law to the
contrary, such property shall be liable for a debt of a
kind specified in section 523(a)(5);''; and
(2) in subsection (f)(1)(A), by striking the dash and
all that follows through the end of the subparagraph
and inserting ``of a kind that is specified in section
523(a)(5); or''.
SEC. 144. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL
TRANSFER MOTIONS.
Section 547(c)(7) of title 11, United States Code, is amended
to read as follows:
``(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obligation;
or''.
SEC. 145. CLARIFICATION OF MEANING OF HOUSEHOLD GOODS.
Section 101 of title 11, United States Code, is amended by
inserting after paragraph (27) the following:
``(27A) `household goods' includes tangible personal
property normally found in or around a residence, but
does not include motorized vehicles used for
transportation purposes;''.
SEC. 147. MONETARY LIMITATION ON CERTAIN EXEMPT PROPERTY.
Section 522 of title 11, United States Code, as amended by
section 125, is amended--
(1) in subsection (b)(2)(A) by striking ``subsection
(o)'' and inserting ``subsections (o) and (p)'' before
``any property''; and
(2) by adding at the end the following:
``(p)(1) Except as provided in paragraphs (2) and (3), as a
result of electing under subsection (b)(3)(A) to exempt
property under State or local law, a debtor may not exempt any
interest that exceeds $250,000 in value, in the aggregate, in--
``(A) real or personal property that the debtor or a
dependent of the debtor uses as a residence;
``(B) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a
residence; or
``(C) a burial plot for the debtor or a dependent of
the debtor.
``(2) 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.
``(3) Paragraph (1) shall not apply to debtors if applicable
State law expressly provides by a statute enacted after the
effective date of this paragraph that such paragraph shall not
apply to debtors.''.
SEC. 148. 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) Pursuant to procedures prescribed by the Judicial
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 debtor who is unable to
pay such fee in installments. For purposes of this paragraph,
the term `filing fee' means the filing fee required by
subsection (a), or any other fee prescribed by the Judicial
Conference under subsections (b) and (c) that is payable to the
clerk upon the commencement of a case under chapter 7 of title
11.
``(2) The district court or the bankruptcy court may also
waive for such debtors other fees prescribed pursuant to
subsections (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 pursuant to such subsections
for other debtors and creditors.''.
SEC. 149. COLLECTION OF CHILD SUPPORT.
(a) Duties of Trustee Under Chapter 7.--Section 704 of title
11, United States Code, as amended by section 102, is amended--
(1) by inserting ``(a)'' before ``The trustee'',
(2) in paragraph (9) by striking ``and'' at the end,
(3) in paragraph (10) by striking the period and
inserting ``; and'', and
(4) by adding at the end the following:
``(11) if, with respect to an individual debtor,
there is a claim for support of a child of the debtor
or a custodial parent of such child entitled to receive
priority under section 507(a)(1) of this title, provide
the applicable notification specified in subsection
(b).
``(b)(1) In any case described in subsection (a)(11), the
trustee shall--
``(A)(i) notify in writing the holder of the claim of
the right of such holder to use the services of a State
child support enforcement agency established under
sections 464 and 466 of the Social Security Act for the
State in which the holder resides; and
``(ii) include in the notice under this paragraph the
address and telephone number of the child support
enforcement agency; and
``(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
``(ii) include in the notice under this paragraph the
name, address, and telephone number of the holder of
the claim; and
``(iii) at such time as the debtor is granted a
discharge under section 727 of this title, notify the
holder of such claim and the State child support agency
of the State in which such holder resides of--
``(I) the granting of the discharge;
``(II) the last recent known address of the
debtor; and
``(III) with respect to the debtor's case,
the name of each creditor that holds a claim
that is not discharged under paragraph (2),
(4), or (14A) of section 523(a) of this title
or that was reaffirmed by the debtor under
section 524(c) of this title.
``(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject of
the notice, such holder or such agency may request from a
creditor described in paragraph (1)(B)(iii)(III) the last known
address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor
that makes a disclosure of a last known address of a debtor in
connection with a request made under subparagraph (A) shall not
be liable to the debtor or any other person by reason of making
such disclosure.''.
(b) Duties of Trustee Under Chapter 13.--Section 1302 of
title 11, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (4) by striking ``and'' at
the end,
(B) in paragraph (5) by striking the period
and inserting ``; and'', and
(C) by adding at the end the following:
``(6) if, with respect to an individual debtor, there
is a claim for support of a child of the debtor or a
custodial parent of such child entitled to receive
priority under section 507(a)(1) of this title, provide
the applicable notification specified in subsection
(d).'', and
(2) by adding at the end the following:
``(d)(1) In any case described in subsection (b)(6), the
trustee shall--
``(A)(i) notify in writing the holder of the claim of
the right of such holder to use the services of a State
child support enforcement agency established under
sections 464 and 466 of the Social Security Act for the
State in which the holder resides; and
``(ii) include in the notice under this paragraph the
address and telephone number of the child support
enforcement agency; and
``(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim; and
``(ii) include in the notice under this paragraph the
name, address, and telephone number of the holder of
the claim;
``(iii) at such time as the debtor is granted a
discharge under section 1328 of this title, notify the
holder of the claim and the State child support agency
of the State in which such holder resides of--
``(I) the granting of the discharge;
``(II) the last recent known address of the
debtor; and
``(III) with respect to the debtor's case,
the name of each creditor that holds a claim
that is not discharged under paragraph (2),
(4), or (14A) of section 523(a) of this title
or that was reaffirmed by the debtor under
section 524(c) of this title.
``(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject of
the notice, such holder or such agency may request from a
creditor described in paragraph (1)(B)(iii) the last known
address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor
that makes a disclosure of a last known address of a debtor in
connection with a request made under subparagraph (A) shall not
be liable to the debtor or any other person by reason of making
such disclosure.''.
SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND
OTHER PROPERTY FROM THE ESTATE.
(a) In General.--Section 541(b) of title 11 of the United
States Code is amended--
(1) by striking ``or'' at the end of paragraph
(4)(B)(ii);
(2) by striking the period at the end of paragraph
(5) and inserting ``; or''; and
(3) by inserting after paragraph (5) the following:
``(7) any amount or interest in property to the
extent that an employer has withheld amounts from the
wages of employees for contribution to an employee
benefit plan subject to title I of the Employee
Retirement Income Security Act of 1974, or to the
extent that the employer has received amounts as a
result of payments by participants or beneficiaries to
an employer for contribution to an employee benefit
plan subject to title I of the Employee Retirement
Income Security Act of 1974.''.
(b) Application of Amendment.--The amendment made by this
section shall not apply to cases commenced under title 11 of
the United States Code before the expiration of the 180-day
period beginning on the date of the enactment of this Act.
SEC. 151. 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
preserving the estate, including wages, salaries, or
commissions for services rendered after the
commencement of the case, and wages and benefits
attributable to any period of time after commencement
of the case as a result of the debtor's violation of
Federal law, without regard to when the original
unlawful act occurred or to whether any services were
rendered;''.
SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b)(2) of title 11, United States Code, is
amended--
(1) in subparagraph (A) by striking ``or'' at the
end;
(2) in subparagraph (B) by adding ``or'' at the end;
and
(3) by adding at the end the following:
``(C) under subsection (a) of--
``(i) the withholding of income for
payment of a domestic support
obligation pursuant to a judicial or
administrative order or statute for
such obligation that first becomes
payable after the date on which the
petition is filed; or
``(ii) the withholding of income for
payment of a domestic support
obligation owed directly to the spouse,
former spouse or child of the debtor or
the parent of such child, pursuant to a
judicial or administrative order or
statute for such obligation that
becomes payable before the date on
which the petition is filed unless the
court finds, after notice and hearing,
that such withholding would render the
plan infeasible;''.
SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS AGAINST
THE DEBTOR.
Section 362(b)(2) of title 11, United States Code, as amended
by section 153, is amended--
(1) in subparagraph (B) by striking ``or'' at the
end;
(2) by inserting after subparagraph (C) the
following:
``(D) the commencement or continuation of a
proceeding concerning a child custody or
visitation;
``(E) the commencement or continuation of a
proceeding alleging domestic violence; or
``(F) the commencement or continuation of a
proceeding seeking a dissolution of marriage,
except to the extent the proceeding concerns
property of the estate;''.
SEC. 154. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.
Section 101 of title 11, United States Code, is amended--
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the following:
``(14A) `domestic support obligation' means a debt
that accrues before or after the entry of an order for
relief under this title that is--
``(A) owed to or recoverable by--
``(i) a spouse, former spouse, or
child of the debtor or that child's
legal guardian; or
``(ii) a governmental unit;
``(B) in the nature of alimony, maintenance,
or support (including assistance provided by a
governmental unit) of such spouse, former
spouse, or child, without regard to whether
such debt is expressly so designated;
``(C) established or subject to establishment
before or after entry of an order for relief
under this title, by reason of applicable
provisions of--
``(i) a separation agreement, divorce
decree, or property settlement
agreement;
``(ii) an order of a court of record;
or
``(iii) a determination made in
accordance with applicable
nonbankruptcy law by a governmental
unit; and
``(D) not assigned to a nongovernmental
entity, unless that obligation is assigned
voluntarily by the spouse, former spouse,
child, or parent solely for the purpose of
collecting the debt.''.
SEC. 155. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES
INVOLVING DOMESTIC SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended--
(1) in section 1129(a), by adding at the end the
following:
``(14) If the debtor is required by a judicial or
administrative order or statute to pay a
domesticsupport obligation, the debtor has paid all amounts payable
under such order or statute for such obligation that first become
payable after the date on which the petition is filed.'';
(2) in section 1325(a)--
(A) in paragraph (5), by striking ``and'' at
the end;
(B) in paragraph (6), by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(7) if the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order for such obligation that
become payable after the date on which the petition is
filed.''; and
(3) in section 1328(a) in the matter preceding
paragraph (1), by inserting ``, after a debtor who is
required by a judicial or administrative order to pay a
domestic support obligation certifies that all amounts
payable under such order that are due on or after the
date the petition was filed have been paid, and after a
debtor who is required by a judicial or administrative
order to pay a domestic support obligation, certifies
that all amounts payable under such order that are due
before the date on which the petition was filed if such
amounts are due solely to a spouse, former spouse or
child of the debtor or the parent of such child
pursuant to a judicial or administrative order, unless
the holder of such claim agrees to a different
treatment of such claim'' after ``completion by the
debtor of all payments under the plan''.
SEC. 156. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b) of title 11, United States Code, as amended by
sections 104 and 606, is amended--
(1) amending paragraph (2) to read as follows:
``(2) under subsection (a)--
``(A) of the commencement or continuation of
an action or proceeding for--
``(i) the establishment of paternity
as a part of an effort to collect
domestic support obligations; or
``(ii) the establishment or
modification of an order for domestic
support obligations; or
``(B) the collection of a domestic support
obligation from property that is not property
of the estate; or
``(C) under subsection (a) of--
``(i) the withholding of income for
payment of a domestic support
obligation pursuant to a judicial or
administrative order or statute for
such obligation that first becomes
payable after the date on which the
petition is filed; or
``(ii) the withholding of income for
payment of a domestic support
obligation owed directly to the spouse,
former spouse or child of the debtor or
the parent of such child, pursuant to a
judicial or administrative order or
statute for such obligation that
becomes payable before the date on
which the petition is filed unless the
court finds, after notice and hearing,
that such withholding would render the
plan infeasible;'';
(2) in paragraph (19), by striking ``or'' at the end;
(3) in paragraph (20), by striking the period at the
end and inserting a semicolon; and
(4) by inserting after paragraph (20) the following:
``(21) under subsection (a) with respect to--
``(A) the withholding, suspension, or
restriction of drivers' licenses, professional
and occupational licenses, and recreational
licenses pursuant to State law, as specified in
section 466(a)(16) of the Social Security Act
(42 U.S.C. 666(a)(16)) or with respect to the
reporting of overdue support owed by an absent
parent to any consumer reporting agency as
specified in section 466(a)(7) of the Social
Security Act (42 U.S.C. 666(a)(7)) if such debt
is payable solely to a spouse, former spouse or
child of the debtor or the parent of such child
pursuant to a judicial or administrative order
or statute, unless the holder of such claim
agrees to waive such withholding, suspension or
restriction;
``(B) the interception of tax refunds, as
specified in sections 464 and 466(a)(3) of the
Social Security Act (42 U.S.C. 664 and
666(a)(3)) if such tax refund is payable solely
to a spouse, former spouse or child of the
debtor or the parent of such child pursuant to
a judicial or administrative order or statute;
or
``(C) the enforcement of medical obligations
as specified under title IV of the Social
Security Act (42 U.S.C. 601 et seq.).''.
SEC. 157. EXEMPTION FOR RIGHT TO RECEIVE CERTAIN ALIMONY, MAINTENANCE,
OR SUPPORT.
Section 522(b)(3) of title 11, United States Code, as so
redesignated and amended by sections 115 and 203, is amended--
(1) in subparagraph (C) by striking ``and'' at the
end,
(2) in subparagraph (D) by striking the period at the
end and inserting ``; and'', and
(3) by inserting after subparagraph (D) the
following:
``(E) the right to receive--
``(i) alimony, maintenance , support, or
property traceable to alimony, maintenance ,
support; or
``(ii) amounts payable as a result of a
property settlement agreement with the debtor's
spouse or former spouse; or of an interlocutory
or final divorce decree;
to the extent reasonably necessary for the support of
the debtor or a dependent of the debtor.''.
SEC. 158. AUTOMATIC STAY INAPPLICABLE TO CERTAIN PROCEEDINGS AGAINST
THE DEBTOR.
Section 362(b)(2) of title 11, United States Code, as amended
by section 156, is amended--
(1) in subparagraph (A) by striking ``or'' at the
end;
(2) by inserting after subparagraph (B) the
following:
``(C) the commencement or continuation of a
proceeding concerning a child custody or
visitation;
``(D) the commencement or continuation of a
proceeding alleging domestic violence; or
``(E) the commencement or continuation of a
proceeding seeking a dissolution of marriage,
except to the extent the proceeding concerns
property of the estate;''.
TITLE II--DISCOURAGING BANKRUPTCY ABUSE
SEC. 201. REENACTMENT OF CHAPTER 12.
(a) Reenactment.--(1) Chapter 12 of title 11 of the United
States Code, as in effect on September 30, 1999, is hereby
reenacted.
(2) Paragraph (1) shall take effect on September 30, 1999.
(b) Contents of Chapter 12 Plan.--Section 1222(a)(2) of title
11, United States Code, is amended to read as follows:
``(2) provide for the full payment, in deferred cash
payments, of all claims entitled to priority under
section 507, unless--
``(A) the claim is a claim owed to a
governmental unit that arises as a result of
the sale, transfer, exchange, or other
disposition of any farm asset used in the
debtor's farming operation, in which case the
claim shall be treated as an unsecured claim
that is not entitled to priority under section
507, but the debt shall be treated in such
manner only if the debtor receives a discharge;
or
``(B) the holder of a particular claim agrees
to a different treatment of that claim; and''.
(c) Special Notice Provisions.--Section 1231(d) of title 11,
United States Code, is amended by striking ``a State or local
governmental unit'' and inserting ``any governmental unit''.
(d) Expanded Definition of Family Farmer.--Section 101(18) of
title 11, United States Code, is amended--
(1) in subparagraph (A)--
(A) by striking ``$1,500,000'' and inserting
``$3,000,000'';
(B) by striking ``80'' and inserting ``50'';
and
(C) by striking ``the taxable year preceding
the taxable year'' and inserting ``at least 1
of the 3 taxable years preceding the taxable
year''; and
(2) in subparagraph (B)--
(A) in clause (i), by striking ``80'' and
inserting ``50''; and
(B) in clause (ii), by striking
``$1,500,000'' and inserting ``$3,000,000''.
(e) 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 security holders if
the debtor has filed a plan as to which the debtor solicited
acceptances prior to the commencement of the case.''.
SEC. 202. 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 security holders if
the debtor has filed a plan as to which the debtor solicited
acceptances prior to the commencement of the case.''.
SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) In General.--Section 522 of title 11, United States Code,
as amended by sections 113, 125, and 147 is amended--
(1) in subsection (b)--
(A) in paragraph (2)--
(i) by striking ``(2)(A)'' and
inserting:
``(3) Property listed in this paragraph is--
``(A) subject to subsections (o) and (p),'';
(ii) in subparagraph (B), by striking
``and'' at the end;
(iii) in subparagraph (C), by
striking the period at the end and
inserting ``; and''; and
(iv) by adding at the end the
following:
``(D) retirement funds to the extent that those funds
are in a fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or 501(a)
of the Internal Revenue Code of 1986.'';
(B) by striking paragraph (1) and inserting:
``(2) Property listed in this paragraph is property that is
specified under subsection (d), unless the State law that is
applicable to the debtor under paragraph (3)(A) specifically
does not so authorize.'';
(C) in the matter preceding paragraph (2)--
(i) by striking ``(b)'' and inserting
``(b)(1)'';
(ii) by striking ``paragraph (2)''
both places it appears and inserting
``paragraph (3)'';
(iii) by striking ``paragraph (1)''
each place it appears and inserting
``paragraph (2)''; and
(iv) by striking ``Such property is--
''; and
(D) by adding at the end of the subsection
the following:
``(4) For purposes of paragraph (3)(D) and subsection
(d)(12), the following shall apply:
``(A) If the retirement funds are in a retirement
fund that has received a favorable determination
pursuant to section 7805 of the Internal Revenue Code
of 1986, and that determination is in effect as of the
date of the commencement of the case under section 301,
302, or 303 of this title, those funds shall be
presumed to be exempt from the estate.
``(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
pursuant to such section 7805, those funds are exempt
from the estate if the debtor demonstrates that--
``(i) no prior determination to the contrary
has been made by a court or the Internal
Revenue Service; and
``(ii) the retirement fund is in substantial
compliance with the applicable requirements of
the Internal Revenue Code of 1986.
``(C) A direct transfer of retirement funds from 1
fund or account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986, pursuant to section
401(a)(31) of the Internal Revenue Code of 1986, or
otherwise, shall not cease to qualify for exemption
under paragraph (3)(D) or subsection (d)(12) by reason
of that direct transfer.
``(D)(i) Any distribution that qualifies as an
eligible rollover distribution within the meaning of
section 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
qualify for exemption under paragraph (3)(D) or
subsection (d)(12) by reason of that distribution.
``(ii) A distribution described in this clause is an
amount that--
``(I) has been distributed from a fund or
account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986;
and
``(II) to the extent allowed by law, is
deposited in such a fund or account not later
than 60 days after the distribution of that
amount.''; and
(2) in subsection (d)--
(A) in the matter preceding paragraph (1), by
striking ``subsection (b)(1)'' and inserting
``subsection (b)(2)''; and
(B) by adding at the end the following:
``(12) Retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414, 457,
or 501(a) of the Internal Revenue Code of 1986.''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, as amended by sections 118, 132, 136, and 141 is
amended--
(1) in paragraph (27), by striking ``or'' at the end;
(2) in paragraph (28), by striking the period and
inserting ``; or'';
(3) by inserting after paragraph (28) the following:
``(29) under subsection (a), of withholding of income
from a debtor's wages and collection of amounts
withheld, pursuant to the debtor's agreement
authorizing that withholding and collection for the
benefit of a pension, profit-sharing, stock bonus, or
other plan established under section 401, 403, 408,
408A, 414, 457, or 501(a) of the Internal Revenue Code
of 1986 that is sponsored by the employer of the
debtor, or an affiliate, successor, or predecessor of
such employer--
``(A) to the extent that the amounts withheld
and collected are used solely for payments
relating to a loan from a plan that satisfies
the requirements of section 408(b)(1) of the
Employee Retirement Income Security Act of 1974
or is subject to section 72(p) of the Internal
Revenue Code of 1986; or
``(B) in the case of a loan from a thrift
savings plan described in subchapter III of
title 5, that satisfies the requirements of
section 8433(g) of such title.''; and
(4) by adding at the end of the flush material
following paragraph (29) the following: ``Paragraph
(29) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under a
loan made during the 1-year period preceding the filing
of a petition. Nothing in paragraph (29) may be
construed to provide that any loan made under a
governmental plan under section 414(d), or a contract
or account under section 403(b), of the Internal
Revenue Code of 1986 constitutes a claim or a debt
under this title.''.
(c) Exceptions to Discharge.--Section 523(a) of title 11,
United States Code, is amended--
(1) by striking ``or'' at the end of paragraph (17);
(2) by striking the period at the end of paragraph
(18) and inserting ``; or''; and
(3) by adding at the end the following:
``(19) owed to a pension, profit-sharing, stock
bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(c) of the Internal
Revenue Code of 1986, pursuant to--
``(A) a loan permitted under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974) or subject to section
72(p) of the Internal Revenue Code of 1986; or
``(B) a loan from the thrift savings plan
described in subchapter III of title 5, that
satisfies the requirements of section 8433(g)
of such title.
Paragraph (19) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under a loan
made during the 1-year period preceding the filing of a
petition. Nothing in paragraph (19) may be construed to provide
that any loan made under a governmental plan under section
414(d), or a contract or account under section 403(b), of the
Internal Revenue Code of 1986 constitutes a claim or a debt
under this title.''.
(d) Plan Contents.--Section 1322 of title 11, United States
Code, is amended by adding at the end the following:
``(f) A plan may not materially alter the terms of a loan
described in section 362(b)(29) of this title.''.
SEC. 204. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of title
11, United States Code, are amended by striking ``10'' each
place it appears and inserting ``30''.
SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
Section 365(d)(4) of title 11, United States Code, is amended
to read as follows:
``(4)(A) Subject to subparagraph (B), in any case under any
chapter in this title, an unexpired lease of nonresidential
real property under which the debtor is the lessee shall be
deemed rejected, and the trustee shall immediately surrender
such property 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 confirming a
plan.
``(B)(i) The court may extend the period determined under
subparagraph (A) for 120 days upon motion of the trustee or the
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.''.
SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.
Section 1102(a)(2) of title 11, United States Code, is
amended by inserting before the first sentence the following:
``On its own motion or on request of a party in interest, and
after notice and hearing, the court may order a change in the
membership of a committee appointed under this subsection, if
the court determines that the change is necessary to ensure
adequate representation of creditors or equity security
holders.''.
SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.
Section 546 of title 11, United States Code, is amended by
inserting at the end thereof:
``(i) Notwithstanding section 545 (2) and (3) of this title,
the trustee may not avoid a warehouseman's lien for storage,
transportation or other costs incidental to the storage and
handling of goods, as provided by section 7-209 of the Uniform
Commercial Code.''.
SEC. 208. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code, is
amended by striking ``20'' and inserting ``45''.
SEC. 209. AMENDMENT 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) in subparagraph (A) after ``awarded'', by
inserting ``to an examiner, chapter 11 trustee,
or professional person''; and
(B) by redesignating subdivisions (A) through
(E) as clauses (i) through (iv), respectively;
and
(2) by adding at the end the following:
``(B) In determining the amount of reasonable
compensation to be awarded a trustee, the court shall
treat such compensation as a commission based on the
results achieved.''.
SEC. 210. 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 applicable
nonbankruptcy law and if such holder was solicited before the
commencement of the case in a manner complying with applicable
nonbankruptcy law.''.
SEC. 211. PREFERENCES.
Section 547(c) of title 11, United States Code, is amended--
(1) by amending paragraph (2) to read as follows:
``(2) to the extent that such transfer was in payment
of a debt incurred by the debtor in the ordinary course
of business or financial affairs of the debtor and the
transferee, and such transfer was--
``(A) made in the ordinary course of business
or financial affairs of the debtor and the
transferee; or
``(B) made according to ordinary business
terms;'';
(2) in paragraph (7) by striking ``or'' at the end;
(3) in paragraph (8) by striking the period at the
end and inserting ``; or''; and
(4) 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. 212. 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. 213. 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 (1), on''; and
(2) by adding at the end the following:
``(2)(A) Such 120-day period may not be extended beyond a
date that is 18 months after the date of the order for relief
under this chapter.
``(B) Such 180-day period may not be extended beyond a date
that is 20 months after the date of the order for relief under
this chapter.''.
SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.
Section 523(a)(16) of title 11, United States Code, is
amended--
(1) by striking ``dwelling'' the first place it
appears;
(2) by striking ``ownership or'' and inserting
``ownership,'';
(3) by striking ``housing'' the first place it
appears; 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
ownership interest in such unit, such corporation, or
such lot,''.
SEC. 215. CLAIMS RELATING TO INSURANCE DEPOSITS IN CASES ANCILLARY TO
FOREIGN PROCEEDINGS.
Section 304 of title 11, United States Code, is amended to
read as follows:
``Sec. 304. Cases ancillary to foreign proceedings
``(a) For purposes of this section--
``(1) the term `domestic insurance company' means a
domestic insurance company, as such term is used in
section 109(b)(2);
``(2) the term `foreign insurance company' means a
foreign insurance company, as such term is used in
section 109(b)(3);
``(3) the term `United States claimant' means a
beneficiary of any deposit referred to in subsection
(b) or any multibeneficiary trust referred to in
subsection (b);
``(4) the term `United States creditor' means, with
respect to a foreign insurance company--
``(A) a United States claimant; or
``(B) any business entity that operates in
the United States and that is a creditor; and
``(5) the term `United States policyholder' means a
holder of an insurance policy issued in the United
States.
``(b) The court may not grant relief under chapter 15 of this
title 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.''.
SEC. 216. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.
(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
following:
``other than a default that is a breach of a provision
relating to--
``(i) the satisfaction of any provision
(other than a penalty rate or penalty
provision) relating to a default arising from
any failure to perform nonmonetary obligations
under an unexpired lease of real property
(excluding executory contracts that transfer a
right or interest under a filed or issued
patent, copyright, trademark, trade dress, or
trade secret), if it is impossible for the
trustee to cure such default by performing
nonmonetary acts at and after the time of
assumption; or
``(ii) the satisfaction of any provision
(other than a penalty rate or penalty
provision) relating to a default arising from
any failure to perform nonmonetary obligations
under an executory contract, if it is
impossible for the trustee to cure such default
by performing nonmonetary acts at and after the
time of assumption and if the court determines,
based on the equities of the case, that this
subparagraph should not apply with respect to
such default;''; and
(B) by amending paragraph (2)(D) to read as
follows:
``(D) the satisfaction of any penalty rate or penalty
provision relating to a default arising from a failure
to perform nonmonetary obligations under an executory
contract (excluding executory contracts that transfer a
right or interest under a filed or issued patent,
copyright, trademark, trade dress, or trade secret) or
under an unexpired lease of real or 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)--
(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.--Section 1124(2) of
title 11, United States Code, is amended--
(1) in subparagraph (A) by inserting ``or of a kind
that section 365(b)(1)(A) 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 subparagraph
(E); and
(4) by inserting after subparagraph (C) the
following:
``(D) if such claim or such interest arises
from any failure to perform a nonmonetary
obligation, compensates the holder of such
claim or such interest (other than the debtor
or an insider) for any actual pecuniary loss
incurred by such holder as a result of such
failure; and''.
SEC. 217. 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 sharing,
or agreeing to share, compensation with a bona fide public
service attorney referral program that operates in accordance
with non-Federal law regulating attorney referral services and
with rules of professional responsibility applicable to
attorney acceptance of referrals.''.
SEC. 218. PRIORITY FOR ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, is amended--
(1) by deleting ``and'' at the end of paragraph (5);
(2) by striking the period at the end of paragraph
(6) and inserting ``; and'';
(3) by inserting the following after paragraph (6):
``(7) with respect to a nonresidential real property
lease previously assumed under section 365, and
subsequently rejected, a sum equal to all monetary
obligations due, excluding those arising from or
relating to a failure to operate or penalty provisions,
for the period of one year following the later of the
rejection date or 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).''.
TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS
SEC. 301. 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
before the date of the filing of the petition,
a director, 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;''.
SEC. 302. MISCELLANEOUS IMPROVEMENTS.
(a) Who May Be a Debtor.--Section 109 of title 11, United
States Code, is amended by adding at the end the following:
``(h)(1) Subject to paragraphs (2) and (3) and
notwithstanding any other provision of this section, an
individual may not be a debtor under this title unless that
individual has, during the 90-day period preceding the date of
filing of the petition of that individual, received credit
counseling, including, at a minimum, participation in an
individual or group briefing that outlined the opportunities
for available credit counseling and assisted that individual in
performing an initial budget analysis, through a credit
counseling program (offered through an approved credit
counseling service described in section 111(a)).
``(2)(A) Paragraph (1) shall not apply with respect to a
debtor who resides in a district for which the United States
trustee or bankruptcy administrator of the bankruptcy court of
that district determines that the approved credit counseling
services for that district are not reasonably able to provide
adequate services to the additional individuals who would
otherwise seek credit counseling from those programs by reason
of the requirements of paragraph (1).
``(B) Each United States trustee or bankruptcy administrator
that makes a determination described in subparagraph (A) shall
review that determination not later than one year after the
date of that determination, and not less frequently than every
year thereafter.
``(3)(A) Subject to subparagraph (B), the requirements of
paragraph (1) shall not apply with respect to a debtor who
submits to the court a certification that--
``(i) describes exigent circumstances that merit a
waiver of the requirements of paragraph (1);
``(ii) states that the debtor requested credit
counseling services from an approved credit counseling
service, but was unable to obtain the services referred
to in paragraph (1) during the 5-day period beginning
on the date on which the debtor made that request or
that the exigent circumstances require filing before
such 5-day period expires; and
``(iii) is satisfactory to the court.
``(B) With respect to a debtor, an exemption under
subparagraph (A) shall cease to apply to that debtor on the
date on which the debtor meets the requirements of paragraph
(1), but in no case may the exemption apply to that debtor
after the date that is 30 days after the debtor files a
petition.''.
(b) Chapter 7 Discharge.--Section 727(a) of title 11, United
States Code, is amended--
(1) in paragraph (9), by striking ``or'' at the end;
(2) in paragraph (10), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(11) after the filing of the petition, the debtor
failed to complete an instructional course concerning
personal financial management described in section 111
unless the debtor resides in a district for which the
United States trustee or bankruptcy administrator of
the bankruptcy court of that district determines that
the approved instructional courses are not adequate to
provide service to the additional individuals who would
be required to compete the instructional course by
reason of the requirements of this section. Each United
States trustee or bankruptcy administrator that makes
such a determination shall review that determination
not later than 1 year after the date of that
determination, and not less frequently than every year
thereafter.''.
(c) Chapter 13 Discharge.--Section 1328 of title 11, United
States Code, as amended by section 137, is amended by adding at
the end the following:
``(g) The court shall not grant a discharge under this
section to a debtor, unless after filing a petition the debtor
has completed an instructional course concerning personal
financial management described in section 111.
``(h) Subsection (g) shall not apply with respect to a debtor
who resides in a district for which the United States trustee
or bankruptcy administrator of the bankruptcy court of that
district determines that the approved instructional courses are
not adequate to provide service to the additional individuals
who would be required to complete the instructional course by
reason of the requirements of this section.
``(i) Each United States trustee or bankruptcy administrator
that makes a determination described in subsection (h) shall
review that determination not later than1 year after the date
of that determination, and not less frequently than every year
thereafter.''.
(d) Debtor's Duties.--Section 521 of title 11, United States
Code, as amended by sections 604 and 120, is amended by adding
at the end the following:
``(d) In addition to the requirements under subsection (a),
an individual debtor shall file with the court--
``(1) a certificate from the credit counseling
service that provided the debtor services under section
109(h); and
``(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the credit
counseling service referred to in paragraph (1).''.
(e) General Provisions.--
(1) In general.--Chapter 1 of title 11, United States
Code, is amended by adding at the end the following:
``Sec. 111. Credit counseling services; financial management
instructional courses
``The clerk of each district shall maintain a list of credit
counseling services that provide 1 or more programs described
in section 109(h) and a list of instructional courses
concerning personal financial management that have been
approved by--
``(1) the United States trustee; or
``(2) the bankruptcy administrator for the
district.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 1 of title 11, United States Code,
is amended by adding at the end the following:
``111. Credit counseling services; financial management instructional
courses.''.
(e) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (13) the following:
``(13A) `debtor's principal residence' means a
residential structure including incidental property
when the structure contains 1 to 4 units, whether or
not that structure is attached to real property, and
includes, without limitation, an individual condominium
or cooperative unit or mobile or manufactured home or
trailer;'';
(2) by inserting after paragraph (27A), as added by
section 318 of this Act, the following:
``(27B) `incidental property' means property
incidental to such residence including, without
limitation, property commonly conveyed with a principal
residence where the real estate is located, window
treatments, carpets, appliances and equipment located
in the residence, and easements, appurtenances,
fixtures, rents, royalties, mineral rights, oil and gas
rights, escrow funds and insurance proceeds;'';
(3) in section 362(b), as amended by sections 117,
118, 132, 136, 141 203, 818, and 1007,--
(A) in paragraph (28) by striking ``or'' at
the end thereof;
(B) in paragraph (29) by striking the period
at the end and inserting ``; or''; and
(C) by inserting after paragraph (29) the
following:
``(30) under subsection (a), until a prepetition
default is cured fully in a case under chapter 13 of
this title by actual payment of all arrears as required
by the plan, of the postponement, continuation or other
similar delay of a prepetition foreclosure proceeding
or sale in accordance with applicable nonbankruptcy
law, but nothing herein shall imply that such
postponement, continuation or other similar delay is a
violation of the stay under subsection (a).''; and
(4) by amending section 1322(b)(2) to read as
follows:
``(2) modify the rights of holders of secured claims,
other than a claim secured primarily by a security
interest in property used as the debtor's principal
residence at any time during 180 days prior to the
filing of the petition, or of holders of unsecured
claims, or leave unaffected the rights of holders of
any class of claims;''.
(f) Limitation.--Section 362 of title 11, United States Code,
is amended by adding at the end the following:
``(j) If one case commenced under chapter 7, 11, or 13 of
this title is dismissed due to the creation of a debt repayment
plan administered by a credit counseling agency approved
pursuant to section 111 of this title, then for purposes of
section 362(c)(3) of this title the subsequent case commenced
under any such chapter shall not be presumed to be filed not in
good faith.''.
(g) Return of Goods Shipped.--Section 546(g) of title 11,
United States Code, as added by section 222(a) of Public Law
103-394, is amended to read as follows:
``(h) Notwithstanding the rights and powers of a trustee
under sections 544(a), 545, 547, 549, and 553 of this title, if
the court determines on a motion by the trustee made not later
than 120 days after the date of the order for relief in a case
under chapter 11 of this title and after notice and hearing,
that a return is in the best interests of the estate, the
debtor, with the consent of the creditor, and subject to the
prior rights, if any, of third parties in such goods, may
return goods shipped to the debtor by the creditor before the
commencement of the case, and the creditor may offset the
purchase price of such goods against any claim of the creditor
against the debtor that arose before the commencement of the
case.''.
SEC. 303. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United States
Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C.
581 note) is amended--
(1) in subparagraph (A), in the matter following
clause (ii), by striking ``or October 1, 2002,
whichever occurs first''; and
(2) in subparagraph (F)--
(A) in clause (i)--
(i) in subclause (II), by striking
``or October 1, 2002, whichever occurs
first''; and
(ii) in the matter following
subclause (II), by striking ``October
1, 2003, or''; and
(B) in clause (ii), in the matter following
subclause (II)--
(i) by striking ``before October 1,
2003, or''; and
(ii) by striking ``, whichever occurs
first''.
SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.
Section 1408 of title 28, United States Code, is amended--
(1) by striking ``Except'' and inserting ``(a)
Except''; and
(2) by adding at the end the following:
``(b) For the purposes of subsection (a), if the debtor is a
corporation, the domicile and residence of the debtor are
conclusively presumed to be where the debtor's principal place
of business in the United States is located.''.
SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.
(a) Section 365(c) of title 11, United States Code, is
amended to read as follows:
``(c)(1) The trustee may not assume or assign an executory
contract or unexpired lease of the debtor, whether or not the
contract or lease prohibits or restricts assignment of rights
or delegation of duties, if--
``(A)(i) applicable law excuses a party to the
contract or lease from accepting performance from or
rendering performance to an assignee of the contract or
lease, whether or not the contract or lease prohibits
or restricts assignment of rights or delegation of
duties; and
``(ii) the party does not consent to the assumption
or assignment; or
``(B) the contract is a contract to make a loan, or
extend other debt financing or financial
accommodations, to or for the benefit of the debtor, or
to issue a security of the debtor.
``(2) Notwithstanding paragraph (1)(A) and applicable
nonbankruptcy law, in a case under chapter 11 of this title, a
trustee in a case in which a debtor is a corporation, or a
debtor in possession, may assume an executory contract or
unexpired lease of the debtor, whether or not the contract or
lease prohibits or restricts assignment of rights or delegation
of duties.
``(3) The trustee may not assume or assign an unexpired lease
of the debtor of nonresidential real property, whether or not
the contract or lease prohibits or restricts assignment of
rights or delegation of duties, if the lease has been
terminated under applicable nonbankruptcy law before the order
for relief.''.
(b) Section 365(d) of title 11, United States Code, is
amended by striking paragraphs (5), (6), (7), (8), and (9), and
redesignating paragraph (10) as paragraph (5).
(c) Section 365(e) of title 11, United States Code, is
amended to read as follows:
``(e)(1) Notwithstanding a provision in an executory contract
or unexpired lease, or in applicable law, an executory contract
or unexpired lease of the debtor may not be terminated or
modified, and any right or obligation under such contract or
lease may not be terminated or modified, at any time after the
commencement of the case solely because of a provision in such
contract or lease that is conditioned on--
``(A) the insolvency or financial condition of the
debtor at any time before the closing of the case;
``(B) the commencement of a case under this title; or
``(C) the appointment of or taking possession by a
trustee in a case under this title or a custodian
before such commencement.
``(2) Paragraph (1) does not apply to an executory contract
or unexpired lease of the debtor if the trustee may not assume
or assign, and the debtor in possession may not assume, the
contract or lease by reason of the provisions of subsection (c)
of this section.''.
(d) Section 365(f)(1) of title 11, United States Code, is
amended by striking the semicolon and all that follows through
``event''.
TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS
SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
(a) Section 1125(a)(1) of title 11, United States Code, is
amended by inserting before the semicolon following:
``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 parties in interest, and the cost of providing
additional information''.
(b) Section 1125(f) of title 11, United States Code, is
amended to read as follows:
``(f) Notwithstanding subsection (b)--
``(1) the court may determine that the plan itself
provides adequate information and that a separate
disclosure statement is not necessary;
``(2) the court may approve a disclosure statement
submitted on standard forms approved by the court or
adopted pursuant to 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 disclosure
statement if the debtor provides adequate information
to each holder of a claim or interest that is
solicited, but a conditionally approved disclosure
statement shall be mailed not less than 20 days before
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. 402. DEFINITIONS.
(a) Definitions. Section 101 of title 11, United States Code,
is amended by striking paragraph (51C) and inserting the
following:
``(51C) `small business case' means a case filed
under chapter 11 of this title in which the debtor is a
small business debtor; and
``(51D) `small business debtor' means (A) a person
(including affiliates of such person that are also
debtors under this title) that has aggregate
noncontingent, liquidated secured and unsecured debts
as of the date of the petition or the order for relief
in an amount not more than $4,000,000 (excluding debts
owed to 1 or more affiliates or insiders), except that
if a group of affiliated debtors has aggregate
noncontingent liquidated secured and unsecured debts
greater than $4,000,000 (excluding debt owed to 1 or
more affiliates or insiders), then no member of such
group is a small business debtor;''.
(b) Conforming Amendment.--Section 1102(a)(3) of title 11,
United States Code, is amended by inserting ``debtor'' after
``small business'' .
SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
The Advisory Committee on Bankruptcy Rules of the Judicial
Conference of the United States shall, within a reasonable
period of time after the date of the enactment of this Act,
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.
SEC. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(a) Reporting Required.--
(1) Title 11 of the United States Code is amended by
inserting after section 307 the following:
``Sec. 308. Debtor reporting requirements
``A small business debtor shall file periodic financial and
other reports containing information including--
``(1) the debtor's profitability, that is,
approximately how much money the debtor has been
earning or losing during current and recent fiscal
periods;
``(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; and
``(4) whether the debtor is--
``(A) in compliance in all material respects
with postpetition requirements imposed by this
title and the Federal Rules of Bankruptcy
Procedure; and
``(B) timely filing tax returns and paying
taxes and other administrative claims when due,
and, if not, what the failures are and how, at
what cost, and when the debtor intends to
remedy such failures; and
``(5) such other matters as are in the best interests
of the debtor and creditors, and in the public interest
in fair and efficient procedures under chapter 11 of
this title.''.
(2) The table of sections of 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 pursuant to section 2075, title 28, United States
Code to establish forms to be used to comply with section 308
of title 11, United States Code, as added by subsection (a).
SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) Proposal of Rules and Forms.--The Advisory Committee on
Bankruptcy Rules of the Judicial Conference of the United
States shall propose for adoption amended Federal Rules of
Bankruptcy Procedure and Official Bankruptcy Forms to be used
by small business debtors to file periodic financial and other
reports containing information, including information relating
to--
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements; and
(3) whether the debtor is timely filing tax returns
and paying taxes and other administrative claims when
due.
(b) Purpose.--The rules and forms proposed under subsection
(a) shall be designed to achieve a practical balance between--
(1) the reasonable needs of the bankruptcy court, the
United States trustee, creditors, and other parties in
interest for reasonably complete information;
(2) the small business debtor's interest that
required reports be easy and inexpensive to complete;
and
(3) the interest of all parties that the required
reports help the small business debtor to understand
its financial condition and plan its future.
SEC. 406. DUTIES IN SMALL BUSINESS CASES.
(a) Duties in Chapter 11 Cases.--Title 11 of the United
States Code is amended by inserting after section 1114 the
following:
``Sec. 1115. Duties of trustee or debtor in possession in small
business cases
``(a) 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 within 3 days after the date of
the order for relief--
``(A) its most recent balance sheet,
statement of operations, cash-flow statement,
Federal income tax return; or
``(B) a statement made under penalty of
perjury that no balance sheet, statement of
operations, or cash-flow statement has been
prepared and no Federal tax return has been
filed;
``(2) attend, through its responsible individual,
meetings scheduled by the court or the United States
trustee, including initial debtor interviews and
meetings of creditors convened under section 341 of
this title;
``(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
reports required by the Federal Rules of Bankruptcy
Procedure or by local rule of the district court;
``(5) subject to section 363(c)(2) of this title,
maintain insurance customary and appropriate to the
industry;
``(6)(A) timely file tax returns;
``(B) subject to section 363(c)(2) of this title,
timely pay all administrative expense tax claims,
except those being contested by appropriate proceedings
being diligently prosecuted; and
``(C) subject to section 363(c)(2) of this title,
establish 1 or more separate deposit accounts not later
than 10 business days after the date of order for
relief (or as soon thereafter as possible if all banks
contacted decline the business) and deposit therein,
not later than 1 business day after receipt thereof or
a responsible time set by the court, all taxes payable
for periods beginning after the date the case is
commenced that are collected or withheld by the debtor
for governmental units unless the court waives this
requirement after notice and hearing; and
``(7) allow the United States trustee, or its
designated representative, to inspect the debtor's
business premises, books, and records at reasonable
times, after reasonable prior written notice, unless
notice is waived by the debtor.''.
(b) Technical Amendment.--The table of sections of chapter
11, United States Code, is amended by inserting after the item
relating to section 1114 the following:
``1115. Duties of trustee or debtor in possession in small business
cases.''.
SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121(e) of title 11, United States Code, is amended
to read as follows:
``(e) In a small business case--
``(1) only the debtor may file a plan until after 90
days after the date of the order for relief, unless a
trustee has been appointed under this chapter, or
unless the court, on request of a party in interest and
after notice and hearing, shortens such time;
``(2) the debtor shall file a plan, and any necessary
disclosure statement, not later than 90 days after the
date of the order for relief, unless the United States
Trustee has appointed under section 1102(a)(1) of this
title a committee of unsecured creditors that the court
has determined, before the 90 days has expired, is
sufficiently active and representative to provide
effective oversight of the debtor; and
``(3) the time periods specified in paragraphs (1)
and (2) of this subsection and the time fixed in
section 1129(e) of this title for confirmation of a
plan, may be extended only as follows:
``(A) On request of a party in interest made
within the respective periods, and after notice
and hearing, the court may for cause grant one
or more extensions, cumulatively not to exceed
60 days, if the movant establishes--
``(i) that no cause exists to dismiss
or convert the case or appoint a
trustee or examiner under subparagraphs
(A) (I) of section 1112(b) of this
title; and
``(ii) that there is a reasonable
possibility the court will confirm a
plan within a reasonable time;
``(B) On request of a party in interest made
within the respective periods, and after notice
and hearing, the court may for cause grant one
or more extensions in excess of those
authorized under subparagraph (A) of this
paragraph, if the movant establishes:
``(i) that no cause exists to dismiss
or convert the case or appoint a
trustee or examiner under subparagraphs
(A) (I) of section 1112(b)(3) of this
title; and
``(ii) that it is more likely than
not that the court will confirm a plan
within a reasonable time; and
``(C) a new deadline shall be imposed
whenever an extension is granted.''.
SEC. 408. 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 debtor shall confirm a
plan not later than 150 days after the date of the order for
relief unless--
``(1) the United States Trustee has appointed, under
section 1102(a)(1) of this title, a committee of
unsecured creditors that the court has determined,
before the 150 days has expired, is sufficiently active
and representative to provide effective oversight of
the debtor; or
``(2) such 150-day period is extended as provided in
section 1121(e)(3) of this title.''.
SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.
Section 105(d) of title 11, United States Code, is amended--
(1) in paragraph (2)(B)(vi) by striking the period at
the end and inserting ``; and''; and
(2) by adding at the end the following:
``(3) in a small business case, not extend the time
periods specified in sections 1121(e) and 1129(e) of
this title except as provided in section 1121(e)(3) of
this title.''.
SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.
(a) 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
additional duties specified in title 11
pertaining to such cases'';
(2) in paragraph (5) by striking ``and at the end'';
(3) in paragraph (6) by striking the period at the
end and inserting ``; and''; and
(4) by inserting after paragraph (7) 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
begin to investigate the debtor's viability,
inquire about the debtor's business plan,
explain the debtor's obligations to file
monthly operating reports and other required
reports, attempt to develop an agreed
scheduling order, and inform the debtor of
other obligations;
``(B) when determined to be appropriate and
advisable, visit the appropriate business
premises 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 cases 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 to the court for relief.''.
SEC. 411. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is amended--
(1) in the matter preceding paragraph (1) by striking
``, may'';
(2) by amending paragraph (1) to read as follows:
``(1) shall hold such status conferences as are
necessary to further the expeditious and economical
resolution of the case; and''; and
(3) in paragraph (2) by striking ``unless
inconsistent with another provision of this title or
with applicable Federal Rules of Bankruptcy
Procedure'', and inserting ``may''.
SEC. 412. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, as amended by
section 302, is amended--
(1) in subsection (i) as so redesignated by section
122--
(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) applies to
the debtor, then recovery under paragraph (1) against such
entity shall be limited to actual damages.''; and
(2) by inserting after subsection (j), as added by
section 302, the following:
``(k)(1) Except as provided in paragraph (2) of this
subsection, the provisions of subsection (a) of thissection
shall not apply in a case in which the debtor--
``(A) is a debtor in a case under this title pending
at the time the petition is filed;
``(B) was a debtor in a case under this title which
was dismissed for any reason by an order that became
final in the 2-year period ending on the date of the
order for relief entered with respect to the petition;
``(C) was a debtor in a case under this title in
which a chapter 11, 12, or 13 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 succeeded to
substantially all of the assets or business of a debtor
described in subparagraph (A), (B), or (C).
``(2) This subsection shall not apply--
``(A) to a case initiated by an involuntary petition
filed by a creditor that is not an insider or affiliate
of the debtor; or
``(B) after such time as the debtor, after notice and
a hearing, demonstrates by a preponderance of the
evidence, that the filing of such petition resulted
from circumstances beyond the control of the debtor and
not foreseeable at the time the earlier case was filed;
and that it is more likely than not that the court will
confirm a plan, other than a liquidating plan, within a
reasonable time.''.
SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT
OF TRUSTEE OR EXAMINER.
(a) Expanded Grounds for Dismissal or Conversion.--Section
1112(b) of title 11, United States Code, is amended to read as
follows:
``(b)(1) Except as provided in paragraphs (2) and (4) of this
subsection, and in subsection (c) of this section, on request
of a party in interest, and after notice and a hearing, the
court shall convert a case under this chapter to a case under
chapter 7 of this title or dismiss a case under this chapter,
or appoint a trustee or examiner under section 1104(e) of this
title, whichever is in the best interest of creditors and the
estate, if the movant establishes cause.
``(2) The court may decline to grant the relief specified in
paragraph (1) of this subsection if the debtor or another party
in interest objects and establishes by a preponderance of the
evidence that--
``(A) it is more likely than not that a plan will be
confirmed within a time as fixed by this title or by
order of the court entered pursuant to section
1121(e)(3), or within a reasonable time if no time has
been fixed; and
``(B) if the cause is an act or omission of the
debtor that--
``(i) there exists a reasonable justification
for the act or omission; and
``(ii) the act or omission will be cured
within a reasonable time fixed by the court not
to exceed 30 days after the court decides the
motion, unless the movant expressly consents to
a continuance for a specific period of time, or
compelling circumstances beyond the control of
the debtor justify an extension.
``(3) For purposes of this subsection, cause includes--
``(A) substantial or continuing loss to or diminution
of the estate;
``(B) gross mismanagement of the estate;
``(C) failure to maintain insurance that poses a
material risk to the estate or the public;
``(D) unauthorized use of cash collateral harmful to
1 or more creditors;
``(E) failure to comply with an order of the court;
``(F) failure timely to satisfy any filing or
reporting requirement established by this title or by
any rule applicable to a case under this chapter;
``(G) failure to attend the meeting of creditors
convened under section 341(a) of this title;
``(H) failure timely to provide information or attend
meetings reasonably requested by the United States
trustee or bankruptcy administrator;
``(I) failure timely to pay taxes due 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 of this title;
``(M) inability to effectuate substantial
consummation of a confirmed plan;
``(N) material default by the debtor with respect to
a confirmed plan; and
``(O) termination of a plan by reason of the
occurrence of a condition specified in the plan.
``(4) The court may grant relief under this subsection for
cause as defined in subparagraphs C, F, G, H, or K of paragraph
3 of this subsection only upon motion of the United States
trustee or bankruptcy administrator or upon the court s own
motion.
``(5) The court shall commence the hearing on any motion
under this subsection not later than 30 days after filing of
the motion, and shall decide the motion within 15 days after
commencement of the hearing, unless the movant expressly
consents to a continuance for a specific 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 or
Examiner.--Section 1104 of title 11, United States Code, is
amended by adding at the end the following:
``(e) If grounds exist to convert or dismiss the case under
section 1112 of this title, the court may instead appoint a
trustee or examiner, if it determines that such appointment is
in the best interests of creditors and the estate.''.
SEC. 414. STUDY OF OPERATION OF TITLE 11 OF THE UNITED STATES CODE WITH
RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of the enactment of
this Act, the Administrator of the Small Business
Administration, in consultation with the Attorney General, the
Director of the Administrative Office of United States
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
proprietorships, to become debtors in cases
under title 11 of the 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 bankruptcy
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 Representatives a
report summarizing that study.
SEC. 415. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is
amended--
(1) by inserting ``or 30 days after the court
determines that the debtor is subject to this
paragraph, whichever is later'' after ``90-day
period)''; and
(2) by amending subparagraph (B) to read as follows:
``(B) the debtor has commenced monthly
payments (which payments may, in the debtor's
sole discretion, notwithstanding section
363(c)(2) of this title, be made from rents or
other income generated before or after the
commencement of the case by or from the
property) to each creditor whose claim is
secured by such real estate (other than a claim
secured by a judgment lien or by an unmatured
statutory lien), which payments are in an
amount equal to interest at the then-applicable
nondefault contract rate of interest on the
value of the creditor's interest in the real
estate; or''.
SEC. 416. PROTECTION OF JOBS.
The provisions of title 11 of the United States Code relating
to small business debtors or to single asset real estate shall
not apply in a case under such title if the application of any
of such provisions in such case could result in the loss of 5
or more jobs.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.
(a) Technical Amendment Relating to Municipalities.--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 amending the last sentence to read as follows:
``(b) The commencement of a voluntary case under a chapter of
this title constitutes an order for relief under such
chapter.''.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 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--STREAMLINING THE BANKRUPTCY SYSTEM
SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.
Section 341(c) of title 11, United States Code, is amended by
inserting after the first sentence 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 representation 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 or an employee of an
entity and may be a representative for more than one creditor)
shall be permitted to appear at and participate in the meeting
of creditors and activities related thereto 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. 602. AUDIT PROCEDURES.
(a) Amendments.--Section 586 of title 28, United States Code,
is amended--
(1) in subsection (a) by amending striking paragraph
(6) to read as follows:
``(6) make such reports as the Attorney General
directs, including the results of audits performed
under subsection (f); and''; and
(2) by adding at the end the following:
``(f)(1)(A) The Attorney General shall establish procedures
to determine the accuracy, veracity, and completeness of
petitions, schedules, and other information which the debtor is
required to provide under sections 521 and 1322 of title 11,
and, if applicable, section 111 of title 11, in individual
cases filed under chapter 7 or 13 of such title. Such audits
shall be in accordance with generally accepted auditing
standards and performed by independent certified public
accountants or independent licensed public accountants.
``(B) Those procedures shall--
``(i) establish a method of selecting appropriate
qualified persons to contract to perform those audits;
``(ii) establish a method of randomly selecting 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;
``(iii) require audits for schedules of income and
expenses which reflect greater than average variances
from the statistical norm of the district in which the
schedules were filed; and
``(iv) establish procedures for providing, not less
frequently than annually, public information concerning
the aggregate results of such audits including the
percentage of cases, by district, in which a material
misstatement of income or expenditures is reported.
``(2) The United States trustee for each district is
authorized to contract with auditors to perform audits in cases
designated by the United States trustee according to the
procedures established under paragraph (1).
``(3)(A) The report of each audit conducted under this
subsection 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 performing
the audit. In any case where a material misstatement of income
or expenditures or of assets has been reported, the clerk of
the bankruptcy court shall give notice of the misstatement to
the creditors in the case.
``(B) If a material misstatement of income or expenditures or
of assets is reported, the United States trustee shall--
``(i) report the material misstatement, if
appropriate, to the United States Attorney pursuant to
section 3057 of title 18, United States Code; and
``(ii) if advisable, take appropriate action,
including but not limited to commencing an adversary
proceeding to revoke the debtor's discharge pursuant to
section 727(d) of title 11, United States Code.''.
(b) Amendments to Section 521 of Title 11, U.S.C.--Section
521(a) of title 11, United States Code, as amended by section
603, is amended in paragraphs (3) and (4) by adding ``or an
auditor appointed pursuant to section 586 of title 28, United
States Code'' after ``serving in the case''.
(c) Amendments to Section 727 of Title 11, U.S.C.--Section
727(d) of title 11, United States Code, is amended--
(1) by deleting ``or'' at the end of paragraph (2);
(2) by substituting ``; or'' for the period at the
end of paragraph (3); and
(3) by adding the following at the end the following:
``(4) the debtor has failed to explain
satisfactorily--
``(A) a material misstatement in an audit
performed pursuant to section 586(f) of title
28, United States Code; or
``(B) a failure to make available for
inspection 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
conducted pursuant to section 586(f) of title
28, United States Code.''.
(d) Effective Date.--The amendments made by this section
shall take effect 18 months after the date of enactment of this
Act.
SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7 AND 13 CASES.
(a) Notice.--Section 342 of title 11, United States Code, is
amended--
(1) in subsection (c)--
(A) by striking ``, but the failure of such
notice to contain such information shall not
invalidate the legal effect of such notice'';
and
(B) by adding the following at the end:
``If the credit agreement between the debtor and the creditor
or the last communication before the filing of the petition in
a voluntary case from the creditor to a debtor who is an
individual states an account number of the debtor which is the
current account number of the debtor with respect to any debt
held by the creditor against the debtor, the debtor shall
include such account number in any notice to the creditor
required to be given under this title. If the creditor has
specified to the debtor an address at which the creditor wishes
to receive correspondence regarding the debtor's account, any
notice to the creditor required to be given by the debtor under
this title shall be given at such address. For the purposes of
this section, `notice' shall include, but shall not be limited
to, any correspondence from the debtor to the creditor after
the commencement of the case, any statement of the debtor's
intention under section 521(a)(2) of this title, notice of the
commencement of any proceeding in the case to which the
creditor is a party, and any notice of the hearing under
section 1324 of this title.'';
(2) by adding at the end the following:
``(d) At any time, a creditor in a case of an individual
debtor under chapter 7 or 13 may file with the court and serve
on the debtor a notice of the address to be used tonotify the
creditor in that case. After 5 days following receipt of such notice,
any notice the court or the debtor is required to give the creditor
shall be given at that address.
``(e) An entity may file with the court a notice stating its
address for notice in cases under chapters 7 and 13. After 30
days following the filing of such notice, any notice in any
case filed under chapter 7 or 13 given by the court shall be to
that address unless specific notice is given under subsection
(d) with respect to a particular case.
``(f) Notice given to a creditor other than as provided in
this section shall not be effective notice until it has been
brought to the attention of the creditor. If the creditor has
designated a person or department to be responsible for
receiving notices concerning bankruptcy cases and has
established reasonable procedures so that bankruptcy notices
received by the creditor will be delivered to such department
or person, notice will not be brought to the attention of the
creditor until received by such person or department. No
sanction under section 362(h) of this title or any other
sanction which a court may impose on account of violations of
the stay under section 362(a) of this title or failure to
comply with section 542 or 543 of this title may be imposed on
any action of the creditor unless the action takes place after
the creditor has received notice of the commencement of the
case effective under this section.''.
(b) Debtor's Duties.--Section 521 of title 11, United States
Code, as amended by sections 604, 120, and 302, is amended--
(1) by inserting ``(a)'' before ``The debtor shall--
'';
(2) by striking paragraph (1) and inserting the
following:
``(1) file--
``(A) a list of creditors; and
``(B) unless the court orders otherwise--
``(i) a schedule of assets and
liabilities;
``(ii) a schedule of current monthly
income and current expenditures
prepared in accordance with section
707(b)(2);
``(iii) a statement of the debtor's
financial affairs and, if applicable, a
certificate--
``(I) of an attorney whose
name is on the petition as the
attorney for the debtor or any
bankruptcy petition preparer
signing the petition pursuant
to section 110(b)(1) of this
title indicating that such
attorney or bankruptcy petition
preparer delivered to the
debtor any notice required by
section 342(b) of this title;
or
``(II) if no attorney for the
debtor is indicated and no
bankruptcy petition preparer
signed the petition, of the
debtor that such notice was
obtained and read by the
debtor;
``(iv) copies of any Federal tax
returns, including any schedules or
attachments, filed by the debtor for
the 3-year period preceding the order
for relief;
``(v) copies of all payment advices
or other evidence of payment, if any,
received by the debtor from any
employer of the debtor in the period 60
days prior to the filing of the
petition; and
``(vi) a statement disclosing any
reasonably anticipated increase in
income or expenditures over the 12-
month period following the date of
filing;'';
(3) by adding at the end the following:
``(e)(1) At any time, a creditor, in the case of an
individual under chapter 7 or 13, may file with the court
notice that the creditor requests the petition, schedules, and
a statement of affairs filed by the debtor in the case and the
court shall make those documents available to the creditor who
requests those documents at a reasonable cost within 5 business
days after such request.
``(2) At any time, a creditor in a case under chapter 13 may
file with the court notice that the creditor requests the plan
filed by the debtor in the case, and the court shall make such
plan available to the creditor who requests such plan at a
reasonable cost and not later than 5 days after such request.
``(f) An individual debtor in a case under chapter 7 or 13
shall file with the court--
``(1) at the time filed with the taxing authority,
all tax returns, including any schedules or
attachments, with respect to the period from the
commencement of the case until such time as the case is
closed;
``(2) at the time filed with the taxing authority,
all tax returns, including any schedules or
attachments, that were not filed with the taxing
authority when the schedules under subsection (a)(1)
were filed with respect to the period that is 3 years
before the order for relief;
``(3) any amendments to any of the tax returns,
including schedules or attachments, described in
paragraph (1) or (2); and
``(4) in a case under chapter 13, a statement subject
to the penalties of perjury by the debtor of the
debtor's current monthly income and expenditures in the
preceding tax year and current monthly income less
expenditures for the month preceding the statement
prepared in accordance with section 707(b)(2) that
shows how the amounts are calculated--
``(A) beginning on the date that is the later
of 90 days after the close of the debtor's tax
year or 1 year after the order for relief,
unless a plan has been confirmed; and
``(B) thereafter, on or before the date that
is 45 days before each anniversary of the
confirmation of the plan until the case is
closed.
``(g)(1) A statement referred to in subsection (f)(4) shall
disclose--
``(A) the amount and sources of income of the debtor;
``(B) the identity of any persons responsible with
the debtor for the support of any dependents of the
debtor; and
``(C) the identity of any persons who contributed,
and the amount contributed, to the household in which
the debtor resides.
``(2) The tax returns, amendments, and statement of income
and expenditures described in paragraph (1) shall be available
to the United States trustee, any bankruptcy administrator, any
trustee, and any party in interest for inspection and copying,
subject to the requirements of subsection (h).
``(h)(1) Not later than 30 days after the date of enactment
of the Consumer Bankruptcy Reform Act of 1999, the Director of
the Administrative Office of the United States Courts shall
establish procedures for safeguarding the confidentiality of
any tax information required to be provided under this section.
``(2) The procedures under paragraph (1) shall include
reasonable restrictions on creditor access to tax information
that is required to be provided under this section to verify
creditor identity and to restrict use of the information except
with respect to the case.
``(3) Not later than 1 year after the date of enactment of
the Consumer Bankruptcy Reform Act of 1999, the Director of the
Administrative Office of the United States Courts shall
prepare, and submit to Congress a report that--
``(A) assesses the effectiveness of the procedures
under paragraph (1) to provide timely and sufficient
information to creditors concerning the case; and
``(B) if appropriate, includes proposed legislation--
``(i) to further protect the confidentiality
of tax information or to make it better
available to creditors; and
``(ii) to provide penalties for the improper
use by any person of the tax information
required to be provided under this section.
``(i) If requested by the United States trustee or a trustee
serving in the case, the debtor provide a document that
establishes the identity of the debtor, including a driver's
license, passport, or other document that contains a photograph
of the debtor and such other personal identifying information
relating to the debtor that establishes the identity of the
debtor.''.
(c) Section 1324 of title 11, United States Code, is
amended--
(1) by inserting ``(a)'' before ``After''; and
(2) by inserting at the end thereof--
``(c) Whenever a party in interest is given notice of a
hearing on the confirmation or modification of a plan under
this chapter, such notice shall include the information
provided by the debtor on the most recent statement filed with
the court pursuant to section 521(a)(1)(B)(ii) or (f)(4) of
this title.''.
SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE
REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as amended by
section 603 is amended by inserting after subsection (a) the
following:
``(b)(1) Notwithstanding section 707(a) of this title, and
subject to paragraph (2), if an individual debtor in a
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) With respect to a case described in paragraph (1), any
party in interest may request the court to enter an order
dismissing the case. The court shall, if so requested, enter an
order of dismissal not later than 5 days after such request.
``(3) Upon request of the debtor made within 45 days after
the filing of the petition commencing a case described in
paragraph (1), the court may allow the debtor an additional
period not to exceed 45 days to file the information required
under subsection (a)(1) if the court finds justification for
extending the period for the filing.''.
SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE
PLAN.
(a) Hearing.--Section 1324 of title 11, United States Code,
is amended--
(1) by striking ``After'' and inserting the
following:
``(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
meeting of creditors under section 341(a) of this title.''.
SEC. 606. 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 follows:
``(d) If the current monthly income of the debtor and the
debtor's spouse combined, when multiplied by 12, is not less
than the highest national median family income last reported by
the Bureau of the Census for a family of equal or lesser size
or, in the case of a household of 1 person, not less than the
national median household income for 1 earner, the plan may not
provide for payments over a period that is longer than 5 years.
If the current monthly income of the debtor and the debtor's
spouse combined, when multiplied by 12, is less than the
highest national median family income for a family of equal or
lesser size, or in the case of a household of 1 person, the
national median household income for 1 earner, the plan may not
provide for payments over a period that is longer than 3 years,
unless the court, for cause, approves a longer period, but the
court may not approve a period that is longer than 5 years.
Notwithstanding the foregoing, the national median family
income for a family of more than 4 individuals shall be the
national median family income last reported by the Bureau of
the Census for a family of 4 individuals plus $583 for each
additional member of the family.'';
(2) in section 1325(b)(1)(B) as amended by section
130--
(A) by striking ``three year period'' and
inserting ``applicable commitment period''; and
(B) by inserting at the end of subparagraph
(B) the following: ``The `applicable commitment
period' shall be not less than 5 years if the
current monthly income of the debtor andthe
debtor's spouse combined, when multiplied by 12, is not less than the
highest national median family income last reported by the Bureau of
the Census for a family of equal or lesser size, or in the case of a
household of 1 person, the national median household income for 1
earner. Notwithstanding the foregoing, the national median family
income for a family of more than 4 individuals shall be the national
median family income last reported by the Bureau of the Census for a
family of 4 individuals plus $583 for each additional member of the
family.''; and
(3) in section 1329--
(A) by striking in subsection (c) ``three
years'' and inserting ``the applicable
commitment period under section
1325(b)(1)(B)''; and
(B) by inserting at the end of subsection (c)
the following:
``The duration period shall be 5 years if the current monthly
income of the debtor and the debtor's spouse combined, when
multiplied by 12, is not less than the highest national median
family income last reported by the Bureau of the Census for a
family of equal or lesser size or, in the case of a household
of 1 person, the national median household income for 1 earner,
as of the date of the modification and shall be 3 years if the
current monthly total income of the debtor and the debtor's
spouse combined, when multiplied by 12, is less than the
highest national median family income last reported by the
Bureau of the Census for a family of equal or lesser size or,
in the case of a household of 1 person, less than the national
median household income for 1 earner as of the date of the
modification. Notwithstanding the foregoing, the national
median family income for a family of more than 4 individuals
shall be the national median family income last reported by the
Bureau of the Census for a family of 4 individuals plus $583
for each additional member of the family.''.
SEC. 607. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE
FEDERAL RULES OF BANKRUPTCY PROCEDURE.
It is the sense of the Congress that rule 9011 of the Federal
Rules of Bankruptcy Procedure (11 U.S.C. App) should be
modified to include a requirement that all documents (including
schedules), signed and unsigned, submitted to the court or to a
trustee by debtors who represent themselves and debtors who are
represented by an attorney be submitted only after the debtor
or the debtor's attorney has made reasonable inquiry to verify
that the information contained in such documents is well
grounded in fact, and is warranted by existing law or a good-
faith argument for the extension, modification, or reversal of
existing law.
SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN CHAPTER 11 BANKRUPTCY
CASES.
(a) Amendments.--Section 1930(a)(6) of title 28, United
States Code, is amended--
(1) in the 1st sentence by striking ``until the case
is converted or dismissed, whichever occurs first'';
and
(2) in the 2d sentence--
(A) by striking ``The'' and inserting ``Until
the plan is confirmed or the case is converted
(whichever occurs first) the''; and
(B) by striking ``less than $300,000;'' and
inserting ``less than $300,000. Until the case
is converted, dismissed, or closed (whichever
occurs first and without regard to confirmation
of the plan) the fee shall be''.
(b) Delayed Effective Date.--The amendments made by
subsection (a) shall take effect on October 1, 1999.
SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO DEPENDENT
STUDENTS.
Not later than 1 year after the date of the enactment of this
Act, the Comptroller General of the United States shall--
(1) conduct a study regarding the impact that the
extension of credit to individuals who are--
(A) claimed as dependents for purposes of the
Internal Revenue Code of 1986; and
(B) enrolled in post-secondary educational
institutions,
has on the rate of cases filed under title 11 of the
United States Code; and
(2) submit to the Speaker of the House of
Representatives and the President pro tempore of the
Senate a report summarizing such study.
SEC. 610. 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 the case of an
individual filing under chapter 7, 11, or 13, the stay under
subsection (a) shall terminate on the date that is 60 days
after a request is made by a party in interest 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 by for
good cause as described in findings made by the
court.''.
SEC. 611. STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.
Section 348(f)(1) of title 11, United States Code, is
amended--
(1) in subparagraph (A), by striking ``and'' at the
end;
(2) in subparagraph (B)--
(A) by striking ``in the converted case, with
allowed secured claims'' and inserting ``only
in a case converted to chapter 11 or 12 but not
in a case converted to chapter 7, with allowed
secured claims in cases under chapters 11 and
12''; and
(B) by striking the period and inserting ``;
and''; and
(3) by adding at the end the following:
``(C) with respect to cases converted from chapter
13--
``(i) the claim of any creditor holding
security as of the date of the petition shall
continue to be secured by that security unless
the full amount of such claim determined under
applicable nonbankruptcy law has been paid in
full as of the date of conversion,
notwithstanding any valuation or determination
of the amount of an allowed secured claim made
for the purposes of the chapter 13 proceeding;
and
``(ii) unless a prebankruptcy default has
been fully cured pursuant to the plan at the
time of conversion, in any proceeding under
this title or otherwise, the default shall have
the effect given under applicable nonbankruptcy
law.''.
SEC. 612. BANKRUPTCY APPEALS.
Title 28 of the United States Code is amended by inserting
after section 1292 the following:
``Sec. 1293. Bankruptcy appeals
``(a) The courts of appeals (other than the United States
Court of Appeals for the Federal Circuit) shall have
jurisdiction of appeals from the following:
``(1) Final orders and judgments entered by
bankruptcy courts and district courts in cases under
title 11, in proceedings arising under title 11, and in
proceedings arising in or related to a case under title
11, including final orders in proceedings regarding the
automatic stay of section 362 of title 11.
``(2) Interlocutory orders entered by bankruptcy
courts and district courts granting, continuing,
modifying, refusing or dissolving injunctions, or
refusing to dissolve or modify injunctions in cases
under title 11, in proceedings arising under title 11,
and in proceedings arising in or related to a case
under title 11, other than interlocutory orders in
proceedings regarding the automatic stay of section 362
of title 11.
``(3) Interlocutory orders of bankruptcy courts and
district courts entered under section 1104(a) or
1121(d) of title 11, or the refusal to enter an order
under such section.
``(4) An interlocutory order of a bankruptcy court or
district court entered in a case under title 11, in a
proceeding arising under title 11, or in a proceeding
arising in or related to a case under title 11, if the
court of appeals that would have jurisdiction of an
appeal of a final order entered in such case or such
proceeding permits, in its discretion, appeal to be
taken from such interlocutory order.
``(b) Final decisions, judgments, orders, and decrees entered
by a bankruptcy appellate panel under subsection (b) of this
section.
``(c)(1) The judicial council of a circuit may establish a
bankruptcy appellate panel composed of bankruptcy judges in the
circuit who are appointed by the judicial council, which panel
shall exercise the jurisdiction to review orders and judgments
of bankruptcy courts described in paragraphs (1)-(4) of
subsection (a) of this section unless--
``(A) the appellant elects at the time of filing the
appeal; or
``(B) any other party elects, not later than 10 days
after service of the notice of the appeal;
to have such jurisdiction exercised by the court of appeals.
``(2) An appeal to be heard by a bankruptcy appellate panel
under this subsection (b) shall be heard by 3 members of the
bankruptcy appellate panel, provided that a member of such
panel may not hear an appeal originating in the district for
which such member is appointed or designated under section 152
of this title.
``(3) If authorized by the Judicial Conference of the United
States, the judicial councils of 2 or more circuits may
establish a joint bankruptcy appellate panel.''.
SEC. 613. GAO STUDY.
(a) Study.--Not later than 270 days after the date of the
enactment of this Act, the Comptroller General of the United
States shall conduct a study of the feasibility, effectiveness,
and cost of requiring trustees appointed under title 11 of the
United States Code, or the bankruptcy courts, to provide to the
Office of Child Support Enforcement promptly after the
commencement of cases by individual debtors under such title,
the names and social security numbers of such debtors for the
purposes of allowing such Office to determine whether such
debtors have outstanding obligations for child support (as
determined on the basis of information in the Federal Case
Registry or other national database).
(b) Report.--Not later than 300 days after the date of the
enactment of this Act, the Comptroller General shall submit to
the Speaker of the House of Representatives and the President
pro tempore of the Senate, a report containing the results of
the study required by subsection (a).
TITLE VII--BANKRUPTCY DATA
SEC. 701. IMPROVED BANKRUPTCY STATISTICS.
(a) Amendment.--Chapter 6 of part I of title 28, United
States Code, is amended by adding at the end the following:
``Sec. 159. Bankruptcy statistics
``(a) The clerk of each district shall compile statistics
regarding individual debtors with primarily consumer debts
seeking relief under chapters 7, 11, and 13 of title 11. Those
statistics shall be in a form prescribed by the Director of the
Administrative Office of the United States Courts (referred to
in this section as the `Office').
``(b) The Director shall--
``(1) compile the statistics referred to in
subsection (a);
``(2) make the statistics available to the public;
and
``(3) not later than October 31, 2000, and annually
thereafter, prepare, and submit to Congress a report
concerning the information collected under subsection
(a) that contains an analysis of the information.
``(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
reported in the schedules prescribed pursuant
to section 2075 of this title and filed by
those debtors;
``(B) the current monthly income, and 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;
``(C) the aggregate amount of debt discharged
in the reporting period, 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 predominantly
nondischargeable;
``(D) the average period of time between the
filing of the petition and the closing of the
case;
``(E) for the reporting period--
``(i) the number of cases in which a
reaffirmation was filed; and
``(ii)(I) the total number of
reaffirmations filed;
``(II) of those cases in which a
reaffirmation was filed, the number in
which the debtor was not represented by
an attorney; and
``(III) of those cases, the number of
cases in which the reaffirmation was
approved by the court;
``(F) with respect to cases filed under
chapter 13 of title 11, for the reporting
period--
``(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
determining the value of property
securing a claim issued;
``(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 respect 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 within
the 6 years previous to the filing;
``(G) the number of cases in which creditors
were fined for misconduct and any amount of
punitive damages awarded by the court for
creditor misconduct; and
``(H) the number of cases in which sanctions
under rule 9011 of the Federal Rules of
Bankruptcy Procedure were imposed against
debtor's counsel and damages awarded under such
Rule.''.
(b) Clerical Amendment.--The table of sections at the
beginning of 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. 702. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) Amendment.--Title 28 of the United States Code is amended
by inserting after section 589a the following:
``Sec. 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
``(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter 11
of title 11.
``(b) Reports.--All reports referred to in subsection (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 access of the public, both by
physical inspection at 1 or more central filing locations, and
by electronic access through the Internet or other appropriate
media.
``(c) Required Information.--The information required 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 practicality of the
Federal bankruptcy system. In issuing rules proposing the forms
referred to in subsection (a), the Attorney General shall
strike the best achievable practical balance between--
``(1) the reasonable needs of the public for
information about the operational results of the
Federal bankruptcy system; and
``(2) economy, simplicity, and lack of undue burden
on persons with a duty to file reports.
``(d) Final Reports.--Final reports proposed for adoption 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;
``(6) claims asserted;
``(7) claims allowed; and
``(8) distributions to claimants and claims
discharged 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.--Periodic reports proposed for
adoption by 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
Commerce, for the businesses conducted by the debtor;
``(2) length of time the case has been pending;
``(3) number of full-time employees as at the date of
the order for relief and at 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
relief;
``(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 cumulatively
since the date of the order for relief (separately
reported, in for the professional fees incurred by or
on behalf of the debtor, between those that would have
been incurred absent a bankruptcy case and those not);
and
``(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) Technical Amendment.--The table of sections of chapter 39
of title 28, United States Code, is amended by adding at the
end the following:
``589b. Bankruptcy data.''.
SEC. 703. SENSE OF THE CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY
DATA.
It is the sense of the 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
of the United States Code), should be released in a
usable electronic form in bulk to the public subject to
such appropriate privacy concerns and safeguards as 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 VIII--BANKRUPTCY TAX PROVISIONS
SEC. 801. 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 extent
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), after ``507(a)(1)'', insert
``(except that such expenses, other than claims for
wages, salaries, or commissions which arise after the
filing of a petition, shall be limited to expenses
incurred under chapter 7 of this title and shall not
include expenses incurred under chapter 11 of this
title)''; and
(3) by adding at the end the following:
``(e) Before subordinating a tax lien on real or personal
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) of
this title, 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
set forth in this section and subject to the requirements of
subsection (e)--
``(1) claims for wages, salaries, and commissions
that are entitled to priority under section 507(a)(3)
of this title; or
``(2) claims for contributions to an employee benefit
plan entitled to priority under section 507(a)(4) of
this title,
may be paid from property of the estate which secures a tax
lien, or the proceeds of such property.''.
(b) Determination of Tax Liability.--Section 505(a)(2) of
title 11, United States Code, is amended--
(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 arising in
connection with an ad valorem tax on real or personal
property of the estate, if the applicable period for
contesting or redetermining that amount under any law
(other than a bankruptcy law) has expired.''.
SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.
(a) Effective Notice to Governmental Units.--Section 342 of
title 11, United States Code, as amended by section 603, is
amended by adding at the end the following:
``(g) If a debtor lists a governmental unit as a creditor in
a list or schedule, any notice required to be given by the
debtor under this title, any rule, any applicable law, or any
order of the court, shall identify the department, agency, or
instrumentality through which the debtor is indebted. The
debtor shall identify (with information such as a taxpayer
identification number, loan, account or contract number, or
real estate parcel number, where applicable), and describe the
underlying basis for the governmental unit's claim. If the
debtor's liability to a governmental unit arises from a debt or
obligation owed or incurred by another individual, entity, or
organization, or under a different name, the debtor shall
identify such individual, entity, organization, or name.
``(h) The clerk shall keep and update quarterly, in the form
and manner as the Director of the Administrative Office of the
United States Courts prescribes, and make available to debtors,
a register in which a governmental unit may designate a safe
harbor mailing address for service of notice in cases pending
in the district. A governmental unit may file a statement with
the clerk designating a safe harbor address to which notices
are to be sent, unless such governmental unit files a notice of
change of address.''.
(b) Adoption of Rules Providing Notice.--The Advisory
Committee on Bankruptcy Rules of the Judicial Conference shall,
within a reasonable period of time afterthe date of the
enactment of this Act, propose for adoption enhanced rules for
providing notice to State, Federal, and local government units that
have regulatory authority over the debtor or which may be creditors in
the debtor's case. Such rules shall be reasonably calculated to ensure
that notice will reach the representatives of the governmental unit, or
subdivision thereof, who will be the proper persons authorized to act
upon the notice. At a minimum, the rules should require that the
debtor--
(1) identify in the schedules and the notice, the
subdivision, agency, or entity in respect of which such
notice should be received;
(2) provide sufficient information (such as case
captions, permit numbers, taxpayer identification
numbers, or similar identifying information) to permit
the governmental unit or subdivision thereof, entitled
to receive such notice, to identify the debtor or the
person or entity on behalf of which the debtor is
providing notice where the debtor may be a successor in
interest or may not be the same as the person or entity
which incurred the debt or obligation; and
(3) identify, in appropriate schedules, served
together with the notice, the property in respect of
which the claim or regulatory obligation may have
arisen, if any, the nature of such claim or regulatory
obligation and the purpose for which notice is being
given.
(c) Effect of Failure of Notice.--Section 342 of title 11,
United States Code, as amended by section 603 and subsection
(a), is amended by adding at the end the following:
``(i) A notice that does not comply with subsections (d) and
(e) shall not be effective unless the debtor demonstrates, by
clear and convincing evidence, that timely notice was given in
a manner reasonably calculated to satisfy the requirements of
this section was given, and that--
``(1) either the notice was timely sent to the safe
harbor address provided in the register maintained by
the clerk of the district in which the case was pending
for such purposes; or
``(2) no safe harbor address was provided in such
list for the governmental unit and that an officer of
the governmental unit who is responsible for the matter
or claim had actual knowledge of the case in sufficient
time to act.''.
SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
Section 505(b) of title 11, United States Code, is amended by
striking ``Unless'' at the beginning of the second sentence
thereof and inserting ``If the request is made substantially in
the manner designated by the governmental unit and unless''.
SEC. 804. RATE OF INTEREST ON TAX CLAIMS.
(a) Amendment.--Chapter 5 of title 11, United States Code, is
amended by adding at the end the following:
``Sec. 511. Rate of interest on tax claims
``If any provision of this title requires the payment of
interest on a tax claim or requires 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 as
follows:
``(1) In the case of ad valorem tax claims, whether
secured or unsecured, other unsecured tax claims where
interest is required to be paid under section 726(a)(5)
of this title, secured tax claims, and administrative
tax claims paid under section 503(b)(1) of this title,
the rate shall be determined under applicable
nonbankruptcy law.
``(2) In the case of all other tax claims, the
minimum rate of interest shall be the Federal short-
term rate rounded to the nearest full percent,
determined under section 1274(d) of the Internal
Revenue Code of 1986, plus 3 percentage points.
``(A) In the case of claims for Federal
income taxes, such rate shall be subject to any
adjustment that may be required under section
6621(d) of the Internal Revenue Code of 1986.
``(B) In the case of taxes paid under a
confirmed plan or reorganization, such rate
shall be determined as of the calendar month in
which the plan is confirmed.''.
(b) Conforming Amendment.--The table of sections of chapter 5
of title 11, United States Code, is amended by inserting after
the item relating to section 510 the following:
``511. Rate of interest on tax claims.''.
SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.
Section 507(a)(8)(A) of title 11, United States Code, as so
redesignated, is amended--
(1) in clause (i) by inserting after ``petition'' and
before the semicolon ``, plus any time, plus 6 months,
during which the stay of proceedings was in effect in a
prior case under this title''; and
(2) amend clause (ii) to read as follows:
``(ii) assessed within 240 days
before the date of the filing of the
petition, exclusive of--
``(I) any time plus 30 days
during which an offer in
compromise with respect of such
tax, was pending or in effect
during such 240-day period;
``(II) any time plus 30 days
during which an installment
agreement with respect of such
tax was pending or in effect
during such 240-day period, up
to 1 year; and
``(III) any time plus 6
months during which a stay of
proceedings against collections
was in effect in a prior case
under this title during such
240-day period.''.
SEC. 806. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code, is
amended by striking ``assessed'' and inserting ``incurred''.
SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code, is
amended by inserting ``(1),'' after ``paragraph''.
SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, is amended
by adding at the end the following:
``(6) Notwithstanding the provisions of paragraph (1), the
confirmation of a plan does not discharge a debtor which is a
corporation from any debt for a tax or customs duty with
respect to which the debtor made a fraudulent return or
willfully attempted in any manner to evade or defeat such
tax.''.
SEC. 809. STAY OF TAX PROCEEDINGS.
(a) Section 362 Stay Limited to Prepetition Taxes.--Section
362(a)(8) of title 11, United States Code, is amended by
striking the period at the end and inserting ``, in respect of
a tax liability for a taxable period ending before the order
for relief.''.
(b) Appeal of Tax Court Decisions Permitted.--Section
362(b)(9) of title 11, United States Code, is amended--
(1) in subparagraph (C) by striking ``or'' at the
end;
(2) in subparagraph (D) by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following:
``(E) the appeal of a decision by a court or
administrative tribunal which determines a tax
liability of the debtor without regard to
whether such determination was made prepetition
or postpetition.''.
SEC. 810. 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; and
(2) in subparagraph (C)--
(A) by striking ``deferred cash payments,
over a period not exceeding six years after the
date of assessment of such claim,'' and
inserting ``regular installment payments in
cash, but in no case with a balloon provision,
and no more than three months apart, beginning
no later than the effective date of the plan
and ending on the earlier of five years after
the petition date or the last date payments are
to be made under the plan to unsecured
creditors,'';
(B) by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(D) with respect to a secured claim which
would be described in section 507(a)(8) of this
title but for its secured status, the holder of
such claim will receive on account of such
claim cash payments of not less than is
required in subparagraph (C) and over a period
no greater than is required in such
subparagraph.''.
SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended by
striking the semicolon at the end and inserting ``, except
where such purchaser is a purchaser described in section 6323
of the Internal Revenue Code of 1986 or similar provision of
State or local law;''.
SEC. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.
(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:
``(b) Such taxes shall be paid when due in the conduct of
such business unless--
``(1) the tax is a property tax secured by a lien
against property that is abandoned within a reasonable
time after the lien attaches, by the trustee of a
bankruptcy estate, pursuant to section 554 of title 11;
or
``(2) payment of the tax is excused under a specific
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, the court has
made a finding of probable insufficiency of funds of
the estate to pay in full the administrative expenses
allowed under section 503(b) of title 11 that have the
same priority in distribution under section 726(b) of
title 11 as such tax.''.
(b) Payment of Ad Valorem Taxes Required.--Section
503(b)(1)(B) of title 11, United States Code, is amended in
clause (i) by inserting after ``estate,'' and before ``except''
the following: ``whether secured or unsecured, including
property taxes for which liability is in rem only, in personam
or both,''.
(c) Request for Payment of Administrative Expense Taxes
Eliminated.--Section 503(b)(1) of title 11, United States Code,
is amended by adding at the end the following:
``(D) notwithstanding the requirements of subsection
(a) of this section, a governmental unit shall not be
required to file a request for the payment of a claim
described in subparagraph (B) or (C);''.
(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 in respect of
the property'' before the period at the end.
SEC. 813. 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 ``on or before
the earlier of 10 days after the mailing to creditors of the
summary of the trustee's final report or the date on which the
trustee commences final distribution under this section''.
SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a)(1)(B) of title 11, United States Code, is
amended--
(1) by inserting ``or equivalent report or notice,''
after ``a return,'';
(2) in clause (i)--
(A) by inserting ``or given'' after
``filed''; and
(B) by striking ``or'' at the end;
(3) in clause (ii)--
(A) by inserting ``or given'' after
``filed''; and
(B) by inserting ``, report, or notice''
after ``return''; and
(4) by adding at the end the following:
``(iii) for purposes of this
subsection, a return--
``(I) must satisfy the
requirements of applicable
nonbankruptcy law, and 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 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 similar State or local
law; and
``(II) must have been filed
in a manner permitted by
applicable nonbankruptcy law;
or''.
SEC. 815. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.
Section 505(b) of title 11, United States Code, is amended in
the second sentence by inserting ``the estate,'' after
``misrepresentation,''.
SEC. 816. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.
(a) Filing of Prepetition Tax Returns Required for Plan
Confirmation.--Section 1325(a) of title 11, United States Code,
as amended by section 140, is amended--
(1) in paragraph (6) by striking ``and'' at the end;
(2) in paragraph (7) by striking the period at the
end and inserting ``; and''; and
(3) by adding at the end the following:
``(8) if the debtor has filed all Federal, State, and
local tax returns as required by section 1308 of this
title.''.
(b) Additional Time Permitted for Filing Tax Returns.--(1)
Chapter 13 of title 11, United States Code, as amended by
section 135, is amended by adding at the end the following:
``Sec. 1308. Filing of prepetition tax returns
``(a) On or before the day prior to the day on which the
first meeting of the creditors is convened under section 341(a)
of this title, the debtor shall have filed with appropriate tax
authorities all tax returns for all taxable periods ending in
the 3-year period ending on the date of filing of the petition.
``(b) If the tax returns required by subsection (a) have not
been filed by the date on which the first meeting of creditors
is convened under section 341(a) of this title, the trustee may
continue such meeting for a reasonable period of time, to allow
the debtor additional time to file any unfiled returns, but
such additional time shall be no more than--
``(1) for returns that are past due as of the date of
the filing of the petition, 120 days from such date;
``(2) for returns which are not past due as of the
date of the filing of the petition, the later of 120
days from such date or the due date for such returns
under the last automatic extension of time for filing
such returns to which the debtor is entitled, and for
which request has been timely made, according to
applicable nonbankruptcy law; and
``(3) upon notice and hearing, and order entered
before the lapse of any deadline fixed according to
this subsection, where the debtor demonstrates, by
clear and convincing evidence, that the failure to file
the returns as required is because of circumstances
beyond the control of the debtor, the court may extend
the deadlines set by the trustee as provided in this
subsection for--
``(A) a period of no more than 30 days for
returns described in paragraph (1) of this
subsection; and
``(B) for no more than the period of time
ending on the applicable extended due date for
the returns described in paragraph (2).
``(c) For purposes of this section only, a return includes a
return prepared pursuant to section 6020 (a) or (b) of the
Internal Revenue Code of 1986 or similar State or local law, or
a written stipulation to a judgment entered by a nonbankruptcy
tribunal.''.
(2) The table of sections of chapter 13 of title 11, United
States Code, is amended by inserting after the item relating to
section 1307 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 following:
``(e) Upon the failure of the debtor to file tax returns
under section 1308 of this title, 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 interests of creditors and the estate.''.
(d) Timely Filed Claims.--Section 502(b)(9) of title 11,
United States Code, is amended by striking the period at the
end and inserting ``, and except that in a case under chapter
13 of this title, a claim of a governmental unit for a tax in
respect of a return filed under section 1308 of this title
shall be timely if it is filed on or before 60 days after such
return or returns were filed as required.''.
(e) Rules for Objections to Claims and to Confirmation.--It
is the sense of the Congress that the Advisory Committee on
Bankruptcy Rules of the Judicial Conference should, within a
reasonable period of time after the date of the enactment of
this Act, propose for adoption amended Federal Rules of
Bankruptcy Procedure which provide that--
(1) notwithstanding the provisions of Rule 3015(f),
in cases under chapter 13 of title 11, United States
Code, a governmental unit may object to the
confirmation of a plan on or before 60 days after the
debtor files all tax returns required under sections
1308 and 1325(a)(7) of title 11, United States Code;
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 tax in respect of a return required
to be filed under such section 1308 shall be filed
until such return has been filed as required.
SEC. 817. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a) of title 11, United States Code, is amended
in paragraph (1)--
(1) by inserting after ``records,'' the following:
``including a full discussion of the potential material
Federal, State, and local tax consequences of the plan
to the debtor, any successor to the debtor, and a
hypothetical investor domiciled in the State in which
the debtor resides or has its principal place of
business typical of the holders of claims or interests
in the case,'';
(2) by inserting ``such'' after ``enable''; and
(3) by striking ``reasonable'' where it appears after
``hypothetical'' and by striking ``typical of holders
of claims or interests'' after ``investor''.
SEC. 818. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended by
sections 118, 132, 136, and 203, is amended--
(1) in paragraph (29) by striking ``or'';
(2) in paragraph (30) by striking the period at the
end and inserting ``; or''; and
(3) by inserting after paragraph (30) the following:
``(31) under subsection (a) of the setoff of an
income tax refund, by a governmental unit, in respect
of a taxable period which ended before the order for
relief against an income tax liability for a taxable
period which also ended before the order for relief,
unless--
``(A) prior to such setoff, an action to
determine the amount or legality of such tax
liability under section 505(a) was commenced;
or
``(B) where the setoff of an income tax
refund is not permitted because of a pending
action to determine the amount or legality of a
tax liability, the governmental unit may hold
the refund pending the resolution of the
action.''.
TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 901. 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 of a foreign proceeding.
``1516. Presumptions concerning recognition.
``1517. Order recognizing a foreign proceeding.
``1518. Subsequent information.
``1519. Relief that may be granted upon petition for recognition of a
foreign proceeding.
``1520. Effects of recognition of a foreign main proceeding.
``1521. Relief that may be granted upon recognition of a foreign
proceeding.
``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
``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
proceeding.
``1532. Rule of payment in concurrent proceedings.
``Sec. 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-border insolvency
with the objectives of--
``(1) cooperation between--
``(A) United States courts, United States
trustees, trustees, examiners, debtors, and
debtors in possession; and
``(B) the courts and other competent
authorities of foreign countries involved in
cross-border insolvency cases;
``(2) greater legal certainty for trade and
investment;
``(3) fair and efficient administration of cross-
border insolvencies that protects the interests of
allcreditors, and other interested entities, including the debtor;
``(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 connection
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
proceeding under this title.
``(c) This chapter does not apply to--
``(1) a proceeding concerning an entity identified by
exclusion in subsection 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 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, a stockbroker
subject to subchapter III of chapter 7 of this title,
or a commodity broker subject to subchapter IV of
chapter 7 of this title.
``SUBCHAPTER I--GENERAL PROVISIONS
``Sec. 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 operations
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;
``(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 foreign
proceeding, other than a foreign main proceeding,
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; and
``(7) `within the territorial jurisdiction of the
United States' when used with reference to property of
a debtor refers to tangible property located within 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.
``Sec. 1503. International obligations of the United States
``To the extent that this chapter conflicts with an
obligation of the United States arising out of any treaty or
other form of agreement to which it is a party with 1 or more
other countries, the requirements of the treaty or agreement
prevail.
``Sec. 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.
``Sec. 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.
``Sec. 1506. Public policy exception
``Nothing in this chapter prevents the court from refusing to
take an action governed by this chapter if the action would be
manifestly contrary to the public policy of the United States.
``Sec. 1507. Additional assistance
``(a) Subject to the specific limitations stated elsewhere in
this chapter the court, upon recognition of a foreign
proceeding, the court may provide additional assistance to a
foreign representative under this title or under other laws of
the United States.
``(b) In determining whether to provide additional assistance
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 opportunity
for a fresh start for the individual that such foreign
proceeding concerns.
``Sec. 1508. Interpretation
``In interpreting this chapter, the court shall consider its
international origin, and the need to promote an application of
this chapter that is consistent with the application of similar
statutes adopted by foreign jurisdictions.
``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
``Sec. 1509. Right of direct access
``(a) A foreign representative may commence a case under
section 1504 of this title by filing with the court a petition
for recognition of a foreign proceeding under section 1515 of
this title.
``(b) If the court grants recognition under section 1515 of
this title, 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 directly
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 shall be
accompanied by a certified copy of an order granting
recognition under section 1517 of this title.
``(d) If the court denies recognition under this chapter, the
court may issue any appropriate order necessary to prevent the
foreign representative from obtaining comity or cooperation
from courts in the United States.
``(e) Whether or not the court grants recognition, and
subject to sections 306 and 1510 of this title, a foreign
representative is subject to applicable nonbankruptcy law.
``(f) Notwithstanding any other provision of this section,
the failure of a foreign representative to commence a case or
to obtain recognition under this chapter does not affect any
right the foreign representative may have to sue in a court in
the United State to collect or recover a claim which is the
property of the debtor.''.
``Sec. 1510. Limited jurisdiction
``The sole fact that a foreign representative files a
petition under section 1515 does not subject the foreign
representative to the jurisdiction of any court in the United
States for any other purpose.
``Sec. 1511. Commencement of case under section 301 or 303
``(a) Upon recognition, a foreign representative may
commence--
``(1) an involuntary case under section 303; or
``(2) a voluntary case under section 301 or 302, if
the foreign proceeding is a foreign main proceeding.
``(b) The petition commencing a case under subsection (a)
must be accompanied by certified copy of an order granting
recognition. The court where the petition 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.
``Sec. 1512. Participation of a foreign representative in a case under
this title
``Upon recognition of a foreign proceeding, the foreign
representative in that proceeding is entitled to participate as
a party in interest in a case regarding the debtor under this
title.
``Sec. 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 creditor 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 creditor.
``(2)(A) Subsection (a) and paragraph (1) do not change or
codify present law as to the allowability of foreign 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
conditions and circumstances specified therein.
``Sec. 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 addresses
described in subsection (a) shall be given individually, unless
the court considers that, under the circumstances, some other
form of notification would be more appropriate. No letters
rogatory or other similar formality is required.
``(c) When a notification of commencement of a case is to be
given to foreign creditors, the notification shall--
``(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 additional
time to creditors with foreign addresses as is reasonable under
the circumstances.
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``Sec. 1515. Application for recognition of a foreign proceeding
``(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 commencing the
foreign proceeding and appointing the foreign
representative;
``(2) a certificate from the foreign court affirming
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 acceptable
to the court of the existence of the foreign proceeding
and of the appointment of the foreign representative.
``(c) A petition for recognition shall also be accompanied 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) must be translated into English. The court may
require a translation into English of additional documents.
``Sec. 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 as defined in section 101 and that the person or
body is a foreign representative as defined in section 101, 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.
``(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 debtor's
main interests.
``Sec. 1517. Order recognizing a foreign proceeding
``(a) Subject to section 1506, after notice and a hearing an
order recognizing a foreign proceeding shall be entered if--
``(1) the foreign proceeding is a foreign main
proceeding or foreign nonmain proceeding within the
meaning of section 1502;
``(2) the foreign representative applying for
recognition is a person or body as defined in section
101; and
``(3) the petition meets the requirements of section
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 proceeding is pending.
``(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 granting of recognition. The case under
this chapter may be closed in the manner prescribed under
section 350.
``Sec. 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
representative's appointment; and
``(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign
representative.
``Sec. 1519. Relief that may be granted upon petition for recognition
of a foreign proceeding
``(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 nature,
including--
``(1) staying execution against the debtor's assets;
``(2) entrusting the administration or realization 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
devaluation 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 petition for
recognition is decided upon.
``(c) It is a ground for denial of relief under this section
that such relief would interfere with the administration of a
foreign main 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 applicable
to an injunction shall apply to relief under this section.
``Sec. 1520. Effects of recognition of a foreign main proceeding
``(a) Upon recognition of a foreign proceeding that is a
foreign main proceeding--
``(1) sections 361 and 362 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 sections
would apply to property of an estate;
``(3) unless the court orders otherwise, the foreign
representative may operate the debtor's business 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 debtor
that is within the territorial jurisdiction of the
United States.''.
``(b) Subsection (a) does not affect the right to commence 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 foreign
representative or an entity to file a petition commencing a
case under this title or the right of any party to file claims
or take other proper actions in such a case.
``Sec. 1521. Relief that may be granted upon recognition of a foreign
proceeding
``(a) Upon recognition of a foreign proceeding, whether 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 appropriate relief,
including--
``(1) staying the commencement or continuation of an
individual action or proceeding concerning the 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 assets
to the extent it has not been stayed under section
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,
obligations or liabilities;
``(5) entrusting the administration or realization 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).
``(b) Upon recognition of a foreign proceeding, whether 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
representative 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 administered in the foreign
nonmain proceeding or concerns information 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 applicable
to an injunction shall apply to relief under paragraphs (1),
(2), (3), and (6) of subsection (a).
``Sec. 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 subsection (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 section 1519
or 1521, or the operation of the debtor's business 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
representative 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.
``Sec. 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, and 724(a).
``(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.
``Sec. 1524. Intervention by a foreign representative
``Upon recognition of a foreign proceeding, the foreign
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 FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
``Sec. 1525. Cooperation and direct communication between the court and
foreign courts or foreign representatives
``(a) Consistent with section 1501, the court shall cooperate
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.
``Sec. 1526. Cooperation and direct communication between 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, cooperate to the
maximum extent possible with foreign courts or foreign
representatives.
``(b) The trustee or other person, including an examiner,
authorized by the court is entitled, subject to the supervision
of the court, to communicate directly with foreign courts or
foreign representatives.
``Sec. 1527. Forms of cooperation
``Cooperation referred to in sections 1525 and 1526 may be
implemented by any appropriate means, including--
``(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
supervision of the debtor's assets and affairs;
``(4) approval or implementation of agreements
concerning the coordination of proceedings; and
``(5) coordination of concurrent proceedings
regarding the same debtor.
``SUBCHAPTER V--CONCURRENT PROCEEDINGS
``Sec. 1528. Commencement of a case under this title after recognition
of a foreign main proceeding
``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.
``Sec. 1529. Coordination of a case under this title and a foreign
proceeding
``Where a foreign proceeding and a case under another chapter
of this title are taking place concurrently regarding the same
debtor, the court shall seek cooperation and coordination under
sections 1525, 1526, and 1527, and the following shall apply:
``(1) When 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 sections 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
recognized as a foreign main proceeding,
section 1520 does not apply.
``(2) When a case in the United States under this
title commences after recognition, or after the filing
of the petition for recognition, of the foreign
proceeding--
``(A) any relief in effect under sections
1519 or 1521 shall be reviewed by the court and
shall be modified or terminated if inconsistent
with the case in the United States; and
``(B) if the foreign proceeding is a foreign
main proceeding, the stay and suspension
referred to in section 1520(a) shall be
modified or terminated if inconsistent with the
relief granted 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 relief
relates to assets that, under the law of the United
States, should be administered in the foreign nonmain
proceeding or concerns information required 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.
``Sec. 1530. Coordination of more than 1 foreign proceeding
``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 proceeding
after recognition of a foreign main proceeding 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
terminated if inconsistent with the foreign main
proceeding.
``(3) If, after recognition of a foreign nonmain
proceeding, another foreign nonmain proceeding is
recognized, the court shall grant, modify, or terminate
relief for the purpose of facilitating coordination of
the proceedings.
``Sec. 1531. Presumption of insolvency based on recognition of a
foreign main proceeding
``In the absence of evidence to the contrary, recognition 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.
``Sec. 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 regarding the debtor, so long
as the payment to other creditors of the same class is
proportionately less than the payment the creditor has already
received.''.
(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. 902. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, 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 period
the following: ``, and this chapter, sections 307, 304,
555 through 557, 559, and 560 apply in a case under
chapter 15''; and
(2) by adding at the end the following:
``(j) 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.--Paragraphs (23) and (24) of title 11,
United States Code, are amended to read as follows:
``(23) `foreign proceeding' means a collective
judicial or administrative proceeding in a foreign
country, including an interim proceeding, under a law
relating to insolvency or adjustment of debt in which
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
representative 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''.
(3) Duties of trustees.--Section 586(a)(3) of title
28, United States Code, is amended by striking ``or
13'' and inserting ``13, or 15,'' after ``chapter''.
(4) Section 305(a)(2) of title 11, United States
Code, is amended to read:
``(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 suspension.''.
(5) Section 508 of title 11, United States Code, is
amended by striking subsection (a) and by striking out
the letter ``(b)'' at the beginning of the second
paragraph.
TITLE X--FINANCIAL CONTRACT PROVISIONS
SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS
OF INSURED DEPOSITORY INSTITUTIONS.
(a) Definition of Qualified Financial Contract.--Section
11(e)(8)(D)(i) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(i)) is amended by inserting ``, resolution or
order'' after ``any similar agreement that the Corporation
determines by regulation''.
(b) Definition of Securities Contract.--Section
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 follows:
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, acertificate of
deposit, a mortgage loan, or any interest in a mortgage loan, a group
or index of securities, certificates of deposit, or mortgage loans or
interests therein (including any interest 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, loan,
interest, group or index, or option;
``(II) does not include any
purchase, 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
agreement within the meaning of
such term;
``(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, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
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 security, certificate of
deposit, loan, interest, group
or index or option;
``(V) means any margin loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any combination
of the agreements or
transactions referred to in
this clause;
``(VIII) means any option to
enter into any agreement or
transaction 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, without 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 considered
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
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause.''.
(c) Definition of Commodity Contract.--Section
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 follows:
``(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 futures 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 purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing 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 organization;
``(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 transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referredto in
subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII); or
``(X) a security agreement or
arrangement or other credit
enhancement related to 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--
``(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, but not limited to,
a repurchase agreement, reverse
repurchase agreement,
consignment, lease, swap, hedge
transaction, deposit, loan,
option, allocated transaction,
unallocated transaction, or any
other similar agreement;
``(II) any combination of
agreements 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 transaction referred to in
subclauses (I), (II), or (III),
together with all supplements
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
considered 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) a security agreement or
arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV).''.
(e) Definition of Repurchase Agreement.--Section
11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(v)) is amended to read as follows:
``(v) Repurchase agreement.--The term
`repurchase agreement' (which
definition also applies to a reverse
repurchase agreement)--
``(I) mean an agreement,
including related terms, which
provides for the transfer of 1
or more certificates of
deposit, mortgage-related
securities (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
securities 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 certificates
of deposit, eligible bankers'
acceptances, securities, loans,
or interests with a
simultaneous agreement by such
transferee to transfer to the
transferor thereof certificates
of deposit, eligible bankers'
acceptances, securities, 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
repurchase obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, 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 referred 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 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 agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
``(VI) means a security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V).
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 central government
of a member of the Organization for
Economic Cooperation and Development
(as determined by regulation or order
adopted by the appropriate Federal
banking authority).''.
(f) Definition of Swap Agreement.--Section 11(e)(8)(D)(iv) 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, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange or precious metals
agreement; a currency swap,
option, future, or forward
agreement; an equity index or
equity swap, option, future, or
forward agreement; a debt index
or debt swap, option, future,
or forward agreement; a credit
spread or credit swap, option,
future, or forward agreement; a
commodity index or commodity
swap, option, future, or
forward agreement;
``(II) any agreement or
transaction similar to any
other agreement or transaction
referred to in this clause that
is presently, or in the future
becomes, regularly entered into
in the swap market (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, or
option on 1 or more rates,
currencies, commodities, equity
securities or other equity
instruments, debt securities or
other debt instruments, or
economic indices or measures of
economic risk or value;
``(III) any combination of
agreements 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
transaction 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,
except 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
``(VI) any security agreement
or arrangement or other credit
enhancement related to any
agreements or transactions
referred to in subparagraph
(I), (II), (III), or (IV).
Such term 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, including the
Securities Act of 1933, the Securities
Exchange Act of 1934, the Public
Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, the
Securities Investor Protection Act of
1970, the Commodity Exchange Act, and
the regulations promulgated by the
Securities and Exchange Commission or
the Commodity Futures Trading
Commission.''.
(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
indirect, 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
interest and foreclosure of the
depository institutions's equity of
redemption.''.
(h) Treatment of Qualified Financial Contracts.--Section
11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)) is amended--
(1) in subparagraph (A), by striking ``paragraph
(10)'' and inserting ``paragraphs (9) and (10)'';
(2) in subparagraph (A)(i), by striking ``to cause
the termination or liquidation'' and inserting ``such
person has to cause the termination, liquidation, or
acceleration'';
(3) by amending subparagraph (A)(ii) to read as
follows:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to 1 or more
qualified financial contracts described
in clause (i);''; and
(4) by amending subparagraph (E)(ii) to read as
follows:
``(ii) any right under any security
agreement or arrangement or other
credit enhancement related to 1 or more
qualified 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 (12 U.S.C. 91) or any other Federal or State
law relating to the avoidance of preferential or fraudulent
transfers,'' before ``the Corporation''.
SEC. 1002. AUTHORITY OF THE CORPORATION WITH RESPECT TO FAILED AND
FAILING INSTITUTIONS.
(a) In General.--Section 11(e)(8) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(1) in subparagraph (E), by striking ``other than
paragraph (12) of this subsection, subsection (d)(9)''
and inserting ``other than subsections (d)(9) and
(e)(10)''; and
(2) by adding at the end the following new
subparagraphs:
``(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
manner, the right or power of the Corporation
to transfer any qualified financial contract in
accordance 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 effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of an
insured depository institution in
default.
``(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 parties in accordance
with its terms upon termination,
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''
after ``the appointment''.
SEC. 1003. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL
CONTRACTS.
(a) Transfers of Qualified Financial Contracts 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:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of
assets or liabilities of a depository
institution in default which includes any
qualified financial contract, the conservator
or receiver for such depository institution
shall either--
``(i) transfer to 1 financial
institution, 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
proceeding--
``(I) all qualified financial
contracts between any person or
any affiliate of such person
and the depository 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 of general
unsecured creditors of such
institution);
``(III) all claims of such
depository 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
financial contracts, claims, property
or other credit enhancement referred to
in clause (i) (with respect to such
person and any affiliate of such
person).
``(B) Transfer to foreign bank, foreign
financial institution, or branch or agency of a
foreign bank or financial institution.--In
transferring any qualified financial contracts
and related claims and property pursuant to
subparagraph (A)(i), the conservator or
receiver for such depository institution shall
not make such transfer to a foreign bank,
financial institution organized under the laws
of 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 othercredit enhancement related
to 1 or more qualified financial contracts, the contractual rights of
the parties to such qualified financial contracts, netting contracts,
security agreements or arrangements, or other credit enhancements are
enforceable substantially to the same extent as permitted under this
section.
``(C) Transfer of contracts subject to the
rules of a clearing organization.--In the event
that a conservator or receiver transfers any
qualified financial contract and related
claims, property and credit enhancements
pursuant to subparagraph (A)(i) and such
contract is subject to the rules of a clearing
organization, the clearing organization shall
not be required to accept the transferee as a
member by virtue of the transfer.
``(D) Definition.--For purposes of this
section, the term `financial institution' means
a broker or dealer, a depository institution, a
futures commission merchant, or any other
institution as determined by the Corporation by
regulation to be a financial institution.''.
(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 by amending the flush
material following clause (ii) to read as follows: ``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
conservatorship.''.
(c) Rights Against Receiver and Treatment of Bridge Banks.--
Section 11(e)(10) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(10)) is further amended--
(1) by redesignating subparagraph (B) as subparagraph
(D); and
(2) by inserting after subparagraph (A) the following
new subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is
a party to a qualified financial
contract with an insured depository
institution may not exercise any right
such person has to terminate,
liquidate, or net such contract under
paragraph (8)(A) 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 receiver for the
depository institution (or the
insolvency or financial condition of
the depository institution for which
the receiver has been appointed)--
``(I) until 5:00 p.m.
(eastern time) on the business
day following the date of the
appointment of the receiver; or
``(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who
is a party to a qualified financial
contract with an insured depository
institution may not exercise any right
such person has to terminate,
liquidate, or net such contract under
paragraph (8)(E) or sections 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
subsection, the Corporation as receiver
or conservator of an insured depository
institution shall be deemed to have
notified a person who is a party to a
qualified financial contract with such
depository institution if the
Corporation has taken steps reasonably
calculated to provide notice to such
person by the time specified in
subparagraph (A) of this subsection.
``(C) Treatment of bridge banks.--The
following institutions shall not be considered
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
subsection (e)(9)--
``(i) a bridge bank; or
``(ii) a depository institution
organized by the Corporation, for which
a conservator is appointed either--
``(I) immediately upon the
organization of the
institution; or
``(II) at the time of a
purchase and assumption
transaction between such
institution and the Corporation
as receiver for a depository
institution in default.''.
SEC. 1004. 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 further amended--
(1) by redesignating paragraphs (11) through (15) as
paragraphs (12) through (16), respectively; and
(2) by inserting after paragraph (10) the following
new paragraph:
``(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of a conservator or
receiver with respect to any qualified financial
contract to which an insured depository institution is
a party, the conservator or receiver for such
institution shall either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of
such person; and
``(ii) the depository institution in
default; or
``(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).''.
SEC. 1005. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:
``(vii) Treatment of master agreement
as 1 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 to such master agreement,
shall be treated as a single agreement
and a single qualified financial
contract. If a master agreement
contains provisions relating to
agreements or transactions that are not
themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.''.
SEC. 1006. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
1991.
(a) Definitions.--Section 402 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4402)
is amended--
(1) 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
uninsured State bank that is a member of the
Federal Reserve System if the national bank or
State member bank is not eligible to make
application to become an insured bank under
section 5 of the Federal Deposit Insurance
Act;''; and
(C) by amending subparagraph (C) (as
redesignated) 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
established the branch or agency, as those
terms are defined in section 1(b) of the
International Banking Act of 1978;'';
(2) in paragraph (11), by adding before the period
``and any other clearing organization with which such
clearing organization has a netting contract'';
(3) 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 payment obligations
or payment entitlements (including
liquidation or closeout values relating
to such obligations or entitlements)
among the parties to the agreement;
and''; and
(4) 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, including a
payment or delivery to liquidate an unmatured
obligation.''.
(b) Enforceability of Bilateral Netting Contracts.--Section
403 of the Federal Deposit Insurance Corporation Improvement
Act of 1991 (12 U.S.C. 4403) is amended--
(1) by amending subsection (a) to read as follows:
``(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 section 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 applicable netting contract (except as
provided in section 561(b)(2) of title 11).''; and
(2) by adding at the end the following new
subsection:
``(f) Enforceability of Security Agreements.--The provisions
of any security agreement or arrangement or other credit
enhancement related to 1 or more netting contracts between any
2 financial institutions shall be enforceable in accordance
with their terms (except as provided in section 561(b)(2) of
title 11) 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 section 11(e) of the 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 Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4404) is
amended--
(1) by amending subsection (a) to read as follows:
``(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 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
subsection:
``(h) Enforceability of Security Agreements.--The provisions
of any security agreement or arrangement or other credit
enhancement related to 1 or more netting contracts between any
2 members of a clearing 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
section 11(e) of the Federal Deposit Insurance Act and section
5(b)(2) of the Securities Investor Protection Act of 1970.''.
(d) Enforceability of Contracts With Uninsured National Banks
and Uninsured Federal Branches and Agencies.--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 408; and
(2) by adding after section 406 the following new
section:
``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND
UNINSURED FEDERAL BRANCHES AND AGENCIES.
``(a) In General.--Notwithstanding any other provision 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
except--
``(1) any reference to the `Corporation as receiver'
or `the receiver or the Corporation' shall refer to the
receiver of an uninsured national bank or uninsured
Federal branch or Federal agency appointed by the
Comptroller of the Currency;
``(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 conservator or receiver',
a `receiver', or a `conservator' shall refer to the
receiver or conservator of an uninsured national bank
or uninsured Federal branch or Federal agency appointed
by the Comptroller of the Currency; and
``(3) any reference to an `insured depository
institution' or `depository institution' shall refer to
an uninsured national bank or an uninsured Federal
branch or Federal agency.
``(b) Liability.--The liability of a receiver or conservator
of an uninsured national bank or uninsured Federal branch or
agency shall be determined in the same manner and subject to
the same limitations that apply to receivers and conservators
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 consultation with the Federal Deposit Insurance
Corporation, may promulgate regulations to implement
this section.
``(2) Specific requirement.--In promulgating
regulations to implement this section, the Comptroller
of the Currency shall ensure that the regulations
generally are consistent with the regulations and
policies of the Federal Deposit Insurance Corporation
adopted pursuant to the Federal Deposit Insurance Act.
``(d) Definitions.--For purposes of this section, the terms
`Federal branch', `Federal agency', and `foreign bank' have the
same meaning as in section 1(b) of the International Banking
Act.''.
SEC. 1007. BANKRUPTCY CODE 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
following:
``(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
``(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
subparagraph (A), (B), or (C), together with
all supplements to any such master agreement,
without regard to whether such master agreement
provides for an agreement or transaction that
is not a forward contract under this paragraph,
except that such master agreement shall be
considered to be a forward contract under this
paragraph only with respect to each agreement
or transaction under such master agreement that
is referred to in subparagraph (A), (B) or (C);
or
``(E) a security agreement or arrangement, or
other credit enhancement related to any
agreement or transaction referred to in
subparagraph (A), (B), (C), or (D), but not to
exceed the actual value of such contract,
option, agreement, or transaction on the date
of the filing of the petition;'';
(B) in paragraph (46), by striking ``on any
day during the period beginning 90 days before
the date of'' and replacing it with ``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) means--
``(i) an agreement, including related
terms, which provides for the transfer
of 1 or more certificates of deposit,
mortgage-related securities (as 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 securities 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 certificates of
deposit, eligible bankers' acceptances,
securities, loans, or interests; with a
simultaneous agreement by such
transferee to transfer to the
transferor thereof certificates of
deposit, eligible bankers' acceptance,
securities, loans, or interests of the
kind described above, 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
agreement or transaction referred to in
clause (i) or (ii);
``(iv) a master agreement that
provides for an agreement or
transaction referred to in clause (i),
(ii), or (iii), together with all
supplements to any such master
agreement, without regard to whether
such master agreement provides for an
agreement or transaction that is not a
repurchase agreement under this
paragraph, except 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) a security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in clause (i), (ii), (iii),
or (iv), but not to exceed the actual
value of such contract on the date of
the filing of the petition; and
``(B) does not include a repurchase
obligation under a participation in a
commercial mortgage loan;
and, for purposes of this paragraph, the term
`qualified foreign government security' means a
security that is a direct obligation of, or that is
fully guaranteed by, the central government of a member
of the Organization for Economic Cooperation and
Development;'';
(D) in paragraph (48) by inserting ``or
exempt from such registration under such
section 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
reference in such agreement, which is
an interest rate swap, option, future,
or forward agreement, including a rate
floor, rate cap, rate collar, cross-
currency rate swap, and basis swap; a
spot, same day-tomorrow, tomorrow-next,
forward, or other foreign exchange or
precious metals agreement; a currency
swap, option, future, or forward
agreement; an equity index or an equity
swap, option, future, or forward
agreement; a debt index or a debt swap,
option, future, or forward agreement; a
credit spread or a credit swap, option,
future, or forward agreement; or a
commodity index or a commodity swap,
option, future, or forward agreement;
``(ii) any agreement or transaction
similar to any other agreement or
transaction referred to in this
paragraph that--
``(I) is presently, or in the
future becomes, regularly
entered into in the swap market
(including terms and conditions
incorporated by reference
therein); and
``(II) is a forward, swap,
future, or option on 1 or more
rates, currencies commodities,
equity securities, or other
equity instruments, debt
securities or other debt
instruments, or on an economic
index or measure of economic
risk or value;
``(iii) any combination of agreements
or transactions referred to in this
paragraph;
``(iv) any option to enter into an
agreement or transaction referred to in
this paragraph;
``(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 agreement or transaction that is not
a swap agreement under this paragraph,
except that the master agreement shall
be considered to be a swap agreement
under this paragraph only with respect
to each agreement or transaction under
the master agreement that is referred
to in clause (i), (ii), (iii), or (iv);
or
``(B) any security agreement or arrangement
or other credit enhancement related to any
agreements or transactions referred to in
subparagraph (A); and
``(C) 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, including the Securities
Act of 1933, the Securities Exchange Act of
1934, the Public Utility Holding Company Act of
1935, the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Investor
Protection Act of 1970, the Commodity Exchange
Act, and the regulations prescribed by the
Securities and Exchange Commission or the
Commodity Futures Trading Commission.'';
(2) by amending section 741(7) to read as follows:
``(7) `securities contract'--
``(A) means--
``(i) a contract for the purchase,
sale, or loan of a security, a
certificate of deposit, a mortgage loan
or any interest in a mortgage loan, a
group or index of securities,
certificates of deposit or mortgage
loans or interests therein (including
an interest therein or based on the
value thereof), or option on any of the
foregoing, including an option to
purchase or sell any such security
certificate of deposit, loan, interest,
group or index or option;
``(ii) any option entered into on a
national securities exchange relating
to foreign currencies;
``(iii) the guarantee by or to any
securities 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 security
certificate of deposit, loan, interest,
group or index or option;
``(iv) any margin loan;
``(v) any other agreement or
transaction that is similar to an
agreement or transaction referred to in
this paragraph;
``(vi) any combination of the
agreements or transactions referred to
in this paragraph;
``(vii) any option to enter into any
agreement or transaction referred to in
this paragraph;
``(viii) a master agreement that
provides for an agreement or
transaction referred to in clause (i),
(ii), (iii), (iv), (v), (vi), or (vii),
together with all supplements to any
such master agreement, without regard
to whether the master agreement
provides for an agreement or
transaction that is not a securities
contract under this paragraph, except
that such master agreement shall be
considered to be a securities contract
under this paragraph only with respect
to each agreement or transaction under
such master agreement that is referred
to in clause (i), (ii), (iii), (iv),
(v), (vi), or (vii); or
``(ix) any security agreement or
arrangement, or other credit
enhancement, related to any agreement
or transaction referred to in this
paragraph, but not to exceed the actual
value of such contract on the date of
the filing of the petition; and
``(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
subparagraph (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 agreement
or transaction referred to in this paragraph;
``(I) a master agreement that provides for an
agreement or transaction referred to in
subparagraph (A), (B), (C), (D), (E), (F), (G),
or (H), together with all supplements to such
master netting agreement, without regard to
whether the master netting 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 commodity contract under this paragraph
only with respect to each agreement or
transaction under the master agreement that is
referred to in subparagraph (A), (B), (C), (D),
(E), (F), (G), or (H); or
``(J) a security agreement or arrangement, or
other credit enhancement related to any
agreement or transaction referred to in this
paragraph, but not to exceed the actual value
of such contract on the date of the filing of
the petition;''.
(b) Definitions of Financial Institution, Financial
Participant, and Forward Contract Merchant.--Section 101 of
title 11, United States Code, is amended--
(1) by amending paragraph (22) to read as follows:
``(22) `financial institution' means--
``(A) a Federal reserve bank, or an entity
(domestic or foreign) that is a commercial or
savings bank, industrial savings bank, savings
and loan association, trust company, or
receiver or conservator for such entity and,
when any such Federal reserve bank, receiver,
conservator or entity is acting as agent or
custodian for a customer in connection with a
securities contract, as defined in section 741
of this title, such customer; or
``(B) in connection with a securities
contract, as defined in section 741 of this
title, an investment company registered under
the Investment Company Act of 1940;'';
(2) by inserting after paragraph (22) the following:
``(22A) `financial participant' means an entity that,
at the time it enters into a securities contract,
commodity contract or forward contract, or at the time
of the filing of the petition, has 1 or more agreements
or transactions that is described in section 561(a)(2)
with the debtor or any other entity (other than an
affiliate) of a total gross dollar value of at least
$1,000,000,000 in notional or actual principal amount
outstanding on any day during the previous 15-month
period, or has gross mark-to-market positions of at
least $100,000,000 (aggregated across counterparties)
in 1 or more such agreement or transaction with the
debtor or any other entity (other than an affiliate) on
any day during the previous 15-month period;''; and
(3) by amending paragraph (26) to read as follows:
``(26) `forward contract merchant' means a Federal
reserve bank, or an entity whose business consists in
whole or in part of entering into forward contracts as
or with merchants or in a commodity, as defined or in
section 761 of this title, or any similar good,
article, service, right, or interest which is presently
or in the future becomes the subject of dealing or in
the forward contract trade;''.
(c) Definition of Master Netting Agreement and Master Netting
Agreement Participant.--Section 101 of title 11, United States
Code, is amended by inserting after paragraph (38) the
following new paragraphs:
``(38A) `master netting agreement' means an agreement
providing for the exercise of rights, including rights
of netting, setoff, liquidation, termination,
acceleration, or closeout, under or in connection with
1 or more contracts that are described in any 1 or more
of paragraphs (1) through (5) of section 561(a), or any
security agreement or arrangement or other credit
enhancement related to 1 or more of the foregoing. If a
master netting agreement contains provisions relating
to agreements or transactions that are not contracts
described in paragraphs (1) through (5) of section
561(a), the master netting agreement shall be deemed to
be a master netting agreement only with respect to
those agreements or transactions that are described in
any 1 or more of the paragraphs (1) through (5) of
section 561(a);
``(38B) `master netting agreement participant' means
an entity that, at any time before the filing of the
petition, is a party to an outstanding master netting
agreement with the debtor;''.
(d) Swap Agreements, Securities Contracts, Commodity
Contracts, Forward Contracts, Repurchase Agreements, and Master
Netting Agreements Under the Automatic-Stay.--
(1) In general.--Section 362(b) of title 11, United
States Code, as amended by sections 118, 132, 136, 142,
203 and 818, is amended--
(A) in paragraph (6), by inserting ``,
pledged to, and under the control of,'' after
``held by'';
(B) in paragraph (7), by inserting ``,
pledged to, and under the control of,'' after
``held by'';
(C) by amending paragraph (17) to read as
follows:
``(17) under subsection (a), of the setoff by a swap
participant of a mutual debt and claim under or in
connection with 1 or more swap agreements that
constitutes the setoff of a claim against the debtor
for any payment or other transfer of property due from
the debtor under or in connection with any swap
agreement against any payment due to the debtor from
the swap participant under or in connection with any
swap agreement or against cash, securities, or other
property held by, pledged to, and under the control of,
or due from such swap participant to margin guarantee,
secure, or settle a swap agreement;'';
(D) in paragraph (30) by striking ``or'' at
the end;
(E) in paragraph (31) by striking the period
at the end and inserting ``; or''; and
(F) by inserting after paragraph (31) the
following new paragraph:
``(32) under subsection (a), of the setoff by a
master netting agreement participant of a mutual debt
and claim under or in connection with 1 or more master
netting agreements or any contract or agreement subject
to such agreements that constitutes the setoff of a
claim against the debtor for any payment or other
transfer of property due from the debtor under or in
connection with such agreements or any contract or
agreement subject to such agreements against any
payment due to the debtor from such master netting
agreement participant under or in connection with such
agreements or any contract or agreement subject to such
agreements or against cash, securities, or other
property held by, pledged or and under the control of,
or due from such master netting agreement participant
to margin, guarantee, secure, or settle such agreements
or any contract or agreement subject to such
agreements, to the extent such participant is eligible
to exercise such offset rights under paragraph (6),
(7), or (17) for each individual contract covered by
the master netting agreement in issue.''.
(2) Limitation.--Section 362 of title 11, United
States Code, as amended by sections 120, 302, and 412,
is amended by adding at the end the following:
``(l) Limitation.--The exercise of rights not subject to the
stay arising under subsection (a) pursuant to paragraph (6),
(7), or (17), or (31) of subsection (b) shall not be stayed by
any order of a court or administrative agency in any proceeding
under this title.''.
(e) Limitation of Avoidance Powers Under Master Netting
Agreement.--Section 546 of title 11, United States Code, as
amended by sections 207 and 302, is amended--
(1) in subsection (g) (as added by section 103 of
Public Law 101-311)--
(A) by striking ``under a swap agreement'';
(B) by striking ``in connection with a swap
agreement'' and inserting ``under or in
connection with any swap agreement''; and
(2) by adding at the end the following:
``(j) Notwithstanding sections 544, 545, 547, 548(a)(2)(B),
and 548(b) of this title, the trustee may not avoid a transfer
made by or to a master netting agreement participant under or
in connection with any master netting agreement or any
individual contract covered thereby that is made before the
commencement of the case, except under section 548(a)(1)(A) of
this title, and except to the extent the trustee could
otherwise avoid such a transfer made under an individual
contract covered by such master netting agreement.''.
(f) Fraudulent Transfers of Master Netting Agreements.--
Section 548(d)(2) of title 11, United States Code, is amended--
(1) in subparagraph (C), by striking ``and'';
(2) in subparagraph (D), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(E) a master netting agreement participant that
receives a transfer in connection with a master netting
agreement or any individual contract covered thereby
takes for value to the extent of such transfer, except,
with respect to a transfer under any individual
contract covered thereby, to the extent such master
netting agreement participant otherwise did not take
(or is otherwise not deemed to have taken) such
transfer for value.''.
(g) Termination or Acceleration of Securities Contracts.--
Section 555 of title 11, United States Code, is amended--
(1) by amending the section heading to read as
follows:
``Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract''; and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(h) Termination or Acceleration of Commodities or Forward
Contracts.--Section 556 of title 11, United States Code, is
amended--
(1) by amending the section heading to read as
follows:
``Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract''; and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(i) Termination or Acceleration of Repurchase Agreements.--
Section 559 of title 11, United States Code, is amended--
(1) by amending the section heading to read as
follows:
``Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement''; and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(j) Liquidation, Termination, or Acceleration of Swap
Agreements.--Section 560 of title 11, United States Code, is
amended--
(1) by amending the section heading to read as
follows:
``Sec. 560. Contractual right to liquidate, terminate, or accelerate a
swap agreement''; and
(2) in the first sentence, by striking ``termination
of a swap agreement'' and inserting ``liquidation,
termination, or acceleration of 1 or more swap
agreements''; and
(3) by striking ``in connection with any swap
agreement'' and inserting ``in connection with the
termination, liquidation, or acceleration of 1 or more
swap agreements''.
(k) Liquidation, Termination, Acceleration, or Offset Under a
Master Netting Agreement and Across Contracts.--(1) Title 11,
United States Code, is amended by inserting after section 560
the following:
``Sec. 561. Contractual right to terminate, liquidate, accelerate, or
offset under a master netting agreement and across
contracts
``(a) In General.--Subject to subsection (b), the exercise of
any contractual right, because of a condition of the kind
specified in section 365(e)(1), to cause the termination,
liquidation, or acceleration of or to offset or net termination
values, payment amounts or other transfer obligations arising
under or in connection with 1 or more (or the termination,
liquidation, or acceleration of 1 or more)--
``(1) securities contracts, as defined in section
741(7);
``(2) commodity contracts, as defined in section
761(4);
``(3) forward contracts;
``(4) repurchase agreements;
``(5) swap agreements; or
``(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation
of any provision of this title or by any order of a court or
administrative agency in any proceeding under this title.
``(b) Exception.--
``(1) A party may exercise a contractual right
described in subsection (a) to terminate, liquidate, or
accelerate only to the extent that such party could
exercise such a right under section 555, 556, 559, or
560 for each individual contract covered by the master
netting agreement in issue.
``(2) If a debtor is a commodity broker subject to
subchapter IV of chapter 7 of this title--
``(A) a party may not net or offset an
obligation to the debtor arising under, or in
connection with, a commodity contract against
any claim arising under, or in connection with,
other instruments, contracts, or agreements
listed in subsection (a) except to the extent
the party has positive net equity in the
commodity accounts at the debtor, as calculated
under subchapter IV; and
``(B) another commodity broker may not net or
offset an obligation to the debtor arising
under, or in connection with, a commodity
contract entered into or held on behalf of a
customer of the debtor against any claim
arising under, or in connection with, other
instruments, contracts, or agreements listed in
subsection (a).
``(c) Definition.--As used in this section, the term
`contractual right' includes a right set forth in a rule or
bylaw of a national securities exchange, a national securities
association, or a securities clearing agency, a right set forth
in a bylaw of a clearing organization or contract market or in
a resolution of the governing board thereof, and a right,
whether or not evidenced in writing, arising under common law,
under law merchant, or by reason of normal business
practice.''.
(2) Conforming amendment.--The table of sections of chapter 9
of title 11, United States Code, is amended by inserting after
the item relating to section 560 the following:
``561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts.
(l) Ancillary Proceedings.--Section 304 of title 11, United
States Code, as amended by section 215, is amended by adding at
the end the following:
``(c) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repurchase
agreements, swap agreements, or master netting agreements shall
apply in a case ancillary to a foreign proceeding under this
section or any other section of this title, so that enforcement
of contractual provisions of such contracts and agreements in
accordance with their terms will not be stayed or otherwise
limited by operation of any provision of this title or by order
of a court in any case under this title, and to limit avoidance
powers to the same extent as in a proceeding under chapter 7 or
11 of this title (such enforcement not to be limited based on
the presence or absence of assets of the debtor in the United
States).''.
(m) Commodity Broker Liquidations.--Title 11, United States
Code, is amended by inserting after section 766 the following:
``Sec. 767. Commodity broker liquidation and forward contract
merchants, commodity brokers, stockbrokers,
financial institutions, securities clearing
agencies, swap participants, repo participants, and
master netting agreement participants
``Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commodity
broker, stockbroker, financial institution, securities clearing
agency, swap participant, repo participant, or master netting
agreement participant under this title shall not affect the
priority of any unsecured claim it may have after the exercise
of such rights.''.
(n) Stockbroker Liquidations.--Title 11, United States Code,
is amended by inserting after section 752 the following:
``Sec. 753. Stockbroker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial
institutions, securities clearing agencies, swap
participants, repo participants, and master netting
agreement participants
``Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commodity
broker, stockbroker, financial institution, securities clearing
agency, swap participant, repo participant, financial
participant, or master netting agreement participant under this
title shall not affect the priority of any unsecured claim it
may have after the exercise of such rights.''.
(o) Setoff.--Section 553 of title 11, United States Code, is
amended--
(1) in subsection (a)(3)(C), by inserting ``(except
for a setoff of a kind described in section 362(b)(6),
362(b)(7), 362(b)(17), 362(b)(19), 555, 556, 559, 560
or 561 of this title)'' before the period; and
(2) in subsection (b)(1), by striking ``362(b)(14),''
and inserting ``362(b)(17), 362(b)(19), 555, 556, 559,
560, 561''.
(p) Securities Contracts, Commodity Contracts, and Forward
Contracts.--Title 11, United States Code, is amended--
(1) in section 362(b)(6), by striking ``financial
institutions,'' each place such term appears and
inserting ``financial institution, financial
participant'';
(2) in section 546(e), by inserting ``financial
participant,'' after ``financial institution,'';
(3) in section 548(d)(2)(B), by inserting ``financial
participant,'' after ``financial institution,'';
(4) in section 555--
(A) by inserting ``financial participant,''
after ``financial institution,''; and
(B) by inserting before the period at the end
``, a right set forth in a bylaw of a clearing
organization or contract market or in a
resolution of the governing board thereof, and
a right, whether or not in writing, arising
under common law, under law merchant, or by
reason of normal business practice''; and
(5) in section 556, by inserting ``, financial
participant'' after ``commodity broker''.
(q) Conforming Amendments.--Title 11 of the United States
Code is amended--
(1) in the table of sections of chapter 5--
(A) by amending the items relating to
sections 555 and 556 to read as follows:
``555. Contractual right to liquidate, terminate, or accelerate a
securities contract.
``556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract.''; and
(B) by amending the items relating to
sections 559 and 560 to read as follows:
``559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement.
``560. Contractual right to liquidate, terminate, or accelerate a swap
agreement.''; and
(2) in the table of sections of chapter 7--
(A) by inserting after the item relating to
section 766 the following:
``767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions,
securities clearing agencies, swap participants, repo
participants, and master netting agreement participants.'';
and
(B) by inserting after the item relating to
section 752 the following:
``753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, securities
clearing agencies, swap participants, repo participants, and
master netting agreement participants.''.
SEC. 1008. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)) is amended by adding at the end the
following new subparagraph:
``(H) Recordkeeping requirements.--The
Corporation, in consultation with the
appropriate Federal banking agencies, may
prescribe regulations requiring more detailed
recordkeeping with respect to qualified
financial contracts (including market
valuations) by insured depository
institutions.''.
SEC. 1009. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION ---REQUIREMENT.
Section 13(e)(2) of the Federal Deposit Insurance Act (12
U.S.C. 1823(e)(2)) is amended to read as follows:
``(2) Exemptions from contemporaneous execution
requirement.--An agreement to provide for the lawful
collateralization of--
``(A) deposits of, or other credit extension
by, a Federal, State, or local governmental
entity, or of any depositor referred to in
section 11(a)(2), including an agreement to
provide collateral in lieu of a surety bond;
``(B) bankruptcy estate funds pursuant to
section 345(b)(2) of title 11, United States
Code;
``(C) extensions of credit, including any
overdraft, from a Federal reserve bank or
Federal home loan bank; or
``(D) 1 or more qualified financial
contracts, as defined in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph
(1)(B) solely because such agreement was not executed
contemporaneously with the acquisition of the
collateral or because of pledges, delivery, or
substitution of the collateral made in accordance with
such agreement.''.
SEC. 1010. DAMAGE MEASURE.
(a) Title 11, United States Code, as amended by section 1007,
is amended--
(1) by inserting after section 561 the following:
``Sec. 562. Damage measure in connection with swap agreements,
securities contracts, forward contracts, commodity
contracts, repurchase agreements, or master netting
agreements
``If the trustee rejects a swap agreement, securities
contract as defined in section 741 of this title, forward
contract, commodity contract (as defined in section 761 of this
title) repurchase agreement, or master netting agreement
pursuant to section 365(a) of this title, or if a forward
contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial
participant, master netting agreement participant, or swap
participant liquidates, terminates, or accelerates such
contract or agreement, damages shall be measured as of the
earlier of--
``(1) the date of such rejection; or
``(2) the date of such liquidation, termination, or
acceleration.''; and
(2) in the table of sections of chapter 5 by
inserting after the item relating to section 561 the
following:
``562. Damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase
agreements, or master netting agreements.''.
(b) Claims Arising From Rejection.--Section 502(g) of title
11, United States Code, is amended--
(1) by designating the existing text as paragraph
(1); and
(2) by adding at the end the following:
``(2) A claim for damages calculated in accordance with
section 561 of this title shall be allowed under subsection
(a), (b), or (c), or disallowed under subsection (d) or (e), as
if such claim had arisen before the date of the filing of the
petition.''.
SEC. 1011. SIPC STAY.
Section 5(b)(2) of the Securities Investor Protection Act of
1970 (15 U.S.C. 78eee(b)(2)) is amended by adding after
subparagraph (B) the following new subparagraph:
``(C) Exception from stay.--
``(i) Notwithstanding section 362 of
title 11, United States Code, neither
the filing of an application under
subsection (a)(3) nor any order or
decree obtained by Securities Investor
Protection Corporation from the court
shall operate as a stay of any
contractual rights of a creditor to
liquidate, terminate, or accelerate a
securities contract, commodity
contract, forward contract, repurchase
agreement, swap agreement, or master
netting agreement, each as defined in
title 11, to offset or net termination
values, payment amounts, or other
transfer obligations arising under or
in connection with 1 or more of such
contracts or agreements, or to
foreclose on any cash collateral
pledged by the debtor whether or not
with respect to 1 or more of such
contracts or agreements.
``(ii) Notwithstanding clause (i),
such application, order, or decree may
operate as a stay of the foreclosure on
securities collateral pledged by the
debtor, whether or not with respect to
1 or more of such contracts or
agreements, securities sold by the
debtor under a repurchase agreement or
securities lent under a securities
lending agreement.
``(iii) As used in this section, the
term `contractual right' includes a
right set forth in a rule or bylaw of a
national securities exchange, a
national securities association, or a
securities clearing agency, a right set
forth in a bylaw of a clearing
organization or contract market or in a
resolution of the governing board
thereof, and a right, whether or not in
writing, arising under common law,
under law merchant, or by reason of
normal business practice.''.
SEC. 1012. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, as amended by
section 150, is amended--
(1) by redesignating paragraph (5) of subsection (b)
as paragraph (6);
(2) by inserting after paragraph (4) of subsection
(b) the following new paragraph:
``(5) any eligible asset (or proceeds thereof), to
the extent that such eligible asset was transferred by
the debtor, before the date of commencement of the
case, to an eligible entity in connection with an
asset-backed securitization, except to the extent such
asset (or proceeds or value thereof) may be recovered
by the trustee under section 550 by virtue of avoidance
under section 548(a);''; and
(3) by adding at the end the following new
subsection:
``(e) For purposes of this section, the following definitions
shall apply:
``(1) the term `asset-backed securitization' means a
transaction in which eligible assets transferred to an
eligible entity are used as the source of payment on
securities, the most senior of which are rated
investment grade by 1 or more nationally recognized
securities rating organizations, issued by an issuer;
``(2) the term `eligible asset' means--
``(A) financial assets (including interests
therein and proceeds thereof), either fixed or
revolving, including residential and commercial
mortgage loans, consumer receivables, trade
receivables, and lease receivables, that, by
their terms, convert into cash within a finite
time period, plus any residual interest in
property subject to receivables included in
such financial assets plus any rights or other
assets designed to assure the servicing or
timely distribution of proceeds to security
holders;
``(B) cash; and
``(C) securities.
``(3) the term `eligible entity' means--
``(A) an issuer; or
``(B) a trust, corporation, partnership, or
other entity engaged exclusively in the
business of acquiring and transferring eligible
assets directly or indirectly to an issuer and
taking actions ancillary thereto;
``(4) the term `issuer' means a trust, corporation,
partnership, or other entity engaged exclusively in the
business of acquiring and holding eligible assets,
issuing securities backed by eligible assets, and
taking actions ancillary thereto; and
``(5) the term `transferred' means the debtor,
pursuant to a written agreement, represented and
warranted that eligible assets were sold, contributed,
or otherwise conveyed with the intention of removing
them from the estate of the debtor pursuant to
subsection (b)(5), irrespective, without limitation
of--
``(A) whether the debtor directly or
indirectly obtained or held an interest in the
issuer or in any securities issued by the
issuer;
``(B) whether the debtor had an obligation to
repurchase or to service or supervise the
servicing of all or any portion of such
eligible assets; or
``(C) the characterization of such sale,
contribution, or other conveyance for tax,
accounting, regulatory reporting, or other
purposes.''.
SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIREMENTS.
The 3d sentence of the 3d undesignated paragraph of section
16 of the Federal Reserve Act (12 U.S.C. 412) is amended by
striking ``acceptances acquired under the provisions of section
13 of this Act'' and inserting ``acceptances acquired under
section 10A, 10B, 13, or 13A of this Act''.
SEC. 1014. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--This title shall take effect on the date
of the enactment of this Act.
(b) Application of Amendments.--The amendments made by this
title shall apply with respect to cases commenced or
appointments made under any Federal or State law after the date
of enactment of this Act, but shall not apply with respect to
cases commenced or appointments made under any Federal or State
law before the date of enactment of this Act.
TITLE XI--TECHNICAL CORRECTIONS
SEC. 1101. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by
sections 102, 105, 132, 138, 301, 302, 402, 902, and 1007, is
amended--
(1) by striking ``In this title--'' and inserting
``In this title:'';
(2) in each paragraph, by inserting ``The term''
after the paragraph designation;
(3) in paragraph (35)(B), by striking ``paragraphs
(21B) and (33)(A)'' and inserting ``paragraphs (23) and
(35)'';
(4) in each of paragraphs (35A) and (38), by striking
``; and'' at the end and inserting a period;
(5) in paragraph (51B)--
(A) by inserting ``who is not a family
farmer'' after ``debtor'' the first place it
appears; and
(B) by striking ``thereto having aggregate''
and all that follows through the end of the
paragraph;
(6) by amending paragraph (54) to read as follows:
``(54) The term `transfer' means--
``(A) the creation of a lien;
``(B) the retention of title as a security
interest;
``(C) the foreclosure of a debtor's equity of
redemption; or
``(D) each mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of
disposing of or parting with--
``(i) property; or
``(ii) an interest in property;'';
(7) in each of paragraphs (1) through (35), in each
of paragraphs (36) and (37), and in each of paragraphs
(40) through (55) (including paragraph (54), as amended
by paragraph (6) of this section), by striking the
semicolon at the end and inserting a period; and
(8) by redesignating paragraphs (4) through (55),
including paragraph (54), as amended by paragraph (6)
of this section, in entirely numerical sequence.
SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is amended by
inserting ``522(f)(3), 707(b)(5),'' after ``522(d),'' each
place it appears.
SEC. 1103. 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. 1104. TECHNICAL AMENDMENTS.
Title 11 of the United States Code is amended--
(1) in section 109(b)(2) by striking ``subsection (c)
or (d) of''; and
(2) in section 552(b)(1) by striking ``product'' each
place it appears and inserting ``products''.
SEC. 1105. 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. 1106. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.
Section 328(a) of title 11, United States Code, is amended by
inserting ``on a fixed or percentage fee basis,'' after
``hourly basis,''.
SEC. 1107. 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. 1108. 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. 1109. 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. 1110. PRIORITIES.
Section 507(a) of title 11, United States Code, as amended by
section 323, is amended in paragraph (4), as so redesignated by
section 142, by striking the semicolon at the end and inserting
a period.
SEC. 1111. EXEMPTIONS.
Section 522(g)(2) of title 11, United States Code, is amended
by striking ``subsection (f)(2)'' and inserting ``subsection
(f)(1)(B)''.
SEC. 1112. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by
section 146, 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), by
transferring such paragraph so as to insert it after
paragraph (14A) of subsection (a);
(3) in subsection (a)(9), by inserting ``,
watercraft, or aircraft'' after ``motor vehicle'';
(4) in subsection (a)(15), as so redesignated by
paragraph (2) of this subsection, by inserting ``to a
spouse, former spouse, or child of the debtor and''
after ``(15)''; and
(5) in subsection (e), by striking ``a insured'' and
inserting ``an insured''.
SEC. 1113. 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. 1114. 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. 1115. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States Code, is
amended by inserting ``365 or'' before ``542''.
SEC. 1116. PREFERENCES.
(a) In General.--Section 547 of title 11, United States Code,
is amended--
(1) in subsection (b), by striking ``subsection (c)''
and inserting ``subsections (c) and (i)''; and
(2) by adding at the end the following:
``(i) If the trustee avoids under subsection (b) a transfer
made between 90 days and 1 year before the date of the filing
of the petition, by the debtor to an entity that is not an
insider for the benefit of a creditor that is an insider, such
transfer may be avoided under this section only with respect to
the creditor that is an insider.''.
(b) Applicability.--The amendments made by this section shall
apply to any case that is pending or commenced on or after the
date of enactment of this Act.
SEC. 1117. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is amended--
(1) by inserting ``an interest in'' after ``transfer
of'';
(2) by striking ``such property'' and inserting
``such real property''; and
(3) by striking ``the interest'' and inserting ``such
interest''.
SEC. 1118. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by
striking ``1009,''.
SEC. 1119. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, is amended by
inserting ``1123(d),'' after ``1123(b),''.
SEC. 1120. 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. 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. 1121. 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. 1122. 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. 1123. DISCHARGE UNDER CHAPTER 12.
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. 1124. 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. 1125. 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. 1126. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.
(a) Sale of Property of Estate.--Section 363(d) of title 11,
United States Code, is amended--
(1) by striking ``only'' and all that follows through
the end of the subsection and inserting ``only--
``(1) in accordance with applicable nonbankruptcy law
that governs the transfer of property by a corporation
or trust that is not a moneyed, business, or commercial
corporation or trust; and
``(2) to the extent not inconsistent with any relief
granted under subsection (c), (d), (e), or (f) of
section 362 of this title.''.
(b) Confirmation of Plan for Reorganization.--Section 1129(a)
of title 11, United States Code,as amended by section 140, is
amended by adding at the end the following:
``(15) All transfers of property of the plan shall be
made in accordance with any applicable provisions of
nonbankruptcy law that govern the transfer of property
by a corporation or trust that is not a moneyed,
business, or commercial corporation or trust.''.
(c) Transfer of Property.--Section 541 of title 11, United
States Code, as amended by section 1102, is amended by adding
at the end the following:
``(f) Notwithstanding any other provision of this title,
property that is held by a debtor that is a corporation
described in section 501(c)(3) of the Internal Revenue Code of
1986 and exempt from tax under section 501(a) of such Code may
be transferred to an entity that is not such a corporation, but
only under the same conditions as would apply if the debtor had
not filed a case under this title.''.
(d) Applicability.--The amendments made by this section shall
apply to a case pending under title 11, United States Code, on
the date of enactment of this Act, except that the court shall
not confirm a plan under chapter 11 of this title without
considering whether this section would substantially affect the
rights of a party in interest who first acquired rights with
respect to the debtor after the date of the petition. The
parties who may appear and be heard in a proceeding under this
section include the attorney general of the State in which the
debtor is incorporated, was formed, or does business.
(e) Rule of Construction.--Nothing in this section shall be
deemed to require the court in which a case under chapter 11 is
pending to remand or refer any proceeding, issue, or
controversy to any other court or to require the approval of
any other court for the transfer of property.
SEC. 1127. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE
CHARGES.
Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is
amended by adding at the end the following:
``(i) Prohibition on Certain Actions for Failure To Incur
Finance Charges.--A creditor of an account under an open end
consumer credit plan may not terminate an account prior to its
expiration date solely because the consumer has not incurred
finance charges on the account. Nothing in this subsection
shall prohibit a creditor from terminating an account for
inactivity in 3 or more consecutive months.''.
SEC. 1128. PROTECTION OF VALID PURCHASE MONEY SECURITY INTERESTS.
Section 547(c)(3)(B) of title 11, United States Code, is
amended by striking ``20'' and inserting ``30''.
SEC. 1129. TRUSTEES.
(a) Suspension and Termination of Panel Trustees and Standing
Trustees.--Section 586(d) of title 28, United States Code, is
amended--
(1) by inserting ``(1)'' after ``(d)''; and
(2) by adding at the end the following:
``(2) A trustee whose appointment under subsection (a)(1) or
under subsection (b) is terminated or who ceases to be assigned
to cases filed under title 11 of the United States Code may
obtain judicial review of the final agency decision by
commencing an action in the United States district court for
the district for which the panel to which the trustee is
appointed under subsection (a)(1), or in the United States
district court for the district in which the trustee is
appointed under subsection (b) resides, after first exhausting
all available administrative remedies, which if the trustee so
elects, shall also include an administrative hearing on the
record. Unless the trustee elects to have an administrative
hearing on the record, the trustee shall be deemed to have
exhausted all administrative remedies for purposes of this
paragraph if the agency fails to make a final agency decision
within 90 days after the trustee requests administrative
remedies. The Attorney General shall prescribe procedures to
implement this paragraph. The decision of the agency shall be
affirmed by the district court unless it is unreasonable and
without cause based on the administrative record before the
agency.''.
(b) Expenses of Standing Trustees.--Section 586(e) of title
28, United States Code, is amended by adding at the end the
following:
``(3) After first exhausting all available administrative
remedies, an individual appointed under subsection (b) may
obtain judicial review of final agency action to deny a claim
of actual, necessary expenses under this subsection by
commencing an action in the United States district court in the
district where the individual resides. The decision of the
agency shall be affirmed by the district court unless it is
unreasonable and without cause based upon the administrative
record before the agency.
``(4) The Attorney General shall prescribe procedures to
implement this subsection.''.
TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided otherwise in this
Act, this Act and the amendments made by this Act shall take
effect 180 days after the date of the enactment of this Act.
(b) Application of Amendments.--Except as otherwise provided
in this Act, the amendments made by this Act shall not apply
with respect to cases commenced under title 11 of the United
States Code before the effective date of this Act.