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Public Law No: 109-8 (04/20/2005)

 
[109th Congress Public Law 8]
[From the U.S. Government Printing Office]


[DOCID: f:publ008.109]

[[Page 119 STAT. 23]]

Public Law 109-8
109th Congress

                                 An Act


 
       To amend title 11 of the United States Code, and for other 
             purposes. <<NOTE: Apr. 20, 2005 -  [S. 256]>> 

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

SECTION 1. SHORT TITLE; REFERENCES; TABLE OF <<NOTE: Bankruptcy Abuse 
            Prevention and Consumer Protection Act of 2005. 11 USC 101 
            note.>> CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Bankruptcy Abuse 
Prevention and Consumer Protection Act
of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; references; table of contents.

                     TITLE I--NEEDS-BASED BANKRUPTCY

Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Sense of Congress and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
Sec. 107. Schedules of reasonable and necessary expenses.

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation agreement practices.
Sec. 204. Preservation of claims and defenses upon sale of predatory 
           loans.
Sec. 205. GAO study and report on reaffirmation agreement process.

                   Subtitle B--Priority Child Support

Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases 
           involving domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation 
           proceedings.
Sec. 215. Nondischargeability of certain debts for alimony, maintenance, 
           and support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential 
           transfer motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and loans.

                 Subtitle C--Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.

[[Page 119 STAT. 24]]

Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of personally identifiable information.
Sec. 232. Consumer privacy ombudsman.
Sec. 233. Prohibition on disclosure of name of minor children.
Sec. 234. Protection of personal information.

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Technical amendments.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not 
           complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Reduction of homestead exemption for fraud.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide 
           required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the 
           plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the 
           Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitations on homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and 
           other property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy 
           professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Delay of discharge during pendency of certain proceedings.
Sec. 331. Limitation on retention bonuses, severance pay, and certain 
           other payments.
Sec. 332. Fraudulent involuntary bankruptcy.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

Sec. 401. Adequate protection for investors.
Sec. 402. Meetings of creditors and equity security holders.
Sec. 403. Protection of refinance of security interest.
Sec. 404. Executory contracts and unexpired leases.
Sec. 405. Creditors and equity security holders committees.
Sec. 406. Amendment to section 546 of title 11, United States Code.
Sec. 407. Amendments to section 330(a) of title 11, United States Code.
Sec. 408. Postpetition disclosure and solicitation.
Sec. 409. Preferences.
Sec. 410. Venue of certain proceedings.
Sec. 411. Period for filing plan under chapter 11.
Sec. 412. Fees arising from certain ownership interests.
Sec. 413. Creditor representation at first meeting of creditors.
Sec. 414. Definition of disinterested person.
Sec. 415. Factors for compensation of professional persons.
Sec. 416. Appointment of elected trustee.
Sec. 417. Utility service.
Sec. 418. Bankruptcy fees.
Sec. 419. More complete information regarding assets of the estate.

[[Page 119 STAT. 25]]

            Subtitle B--Small Business Bankruptcy Provisions

Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment 
           of trustee.
Sec. 443. Study of operation of title 11, United States Code, with 
           respect to small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.
Sec. 446. Duties with respect to a debtor who is a plan administrator of 
           an employee benefit plan.
Sec. 447. Appointment of committee of retired employees.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.

                        TITLE VI--BANKRUPTCY DATA

Sec. 601. Improved bankruptcy statistics.
Sec. 602. Uniform rules for the collection of bankruptcy data.
Sec. 603. Audit procedures.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and local 
           taxes.
Sec. 720. Dismissal for failure to timely file tax returns.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Other amendments to titles 11 and 28, United States Code.

                 TITLE IX--FINANCIAL CONTRACT PROVISIONS

Sec. 901. Treatment of certain agreements by conservators or receivers 
           of insured depository institutions.
Sec. 902. Authority of the FDIC and NCUAB with respect to failed and 
           failing institutions.
Sec. 903. Amendments relating to transfers of qualified financial 
           contracts.
Sec. 904. Amendments relating to disaffirmance or repudiation of 
           qualified financial contracts.
Sec. 905. Clarifying amendment relating to master agreements.
Sec. 906. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 907. Bankruptcy law amendments.
Sec. 908. Recordkeeping requirements.

[[Page 119 STAT. 26]]

Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
Sec. 1004. Definition of family farmer.
Sec. 1005. Elimination of requirement that family farmer and spouse 
           receive over 50 percent of income from farming operation in 
           year prior to bankruptcy.
Sec. 1006. Prohibition of retroactive assessment of disposable income.
Sec. 1007. Family fishermen.

               TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health 
           care business and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to automatic 
           stay.

                     TITLE XII--TECHNICAL AMENDMENTS

Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare 
           bankruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Bankruptcy cases and proceedings.
Sec. 1220. Knowing disregard of bankruptcy law or rule.
Sec. 1221. Transfers made by nonprofit charitable corporations.
Sec. 1222. Protection of valid purchase money security interests.
Sec. 1223. Bankruptcy Judgeships.
Sec. 1224. Compensating trustees.
Sec. 1225. Amendment to section 362 of title 11, United States Code.
Sec. 1226. Judicial education.
Sec. 1227. Reclamation.
Sec. 1228. Providing requested tax documents to the court.
Sec. 1229. Encouraging creditworthiness.
Sec. 1230. Property no longer subject to redemption.
Sec. 1231. Trustees.
Sec. 1232. Bankruptcy forms.
Sec. 1233. Direct appeals of bankruptcy matters to courts of appeals.
Sec. 1234. Involuntary cases.
Sec. 1235. Federal election law fines and penalties as nondischargeable 
           debt.

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a 
           dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance 
           charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent 
           students.

[[Page 119 STAT. 27]]

Sec. 1309. Clarification of clear and conspicuous.

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

Sec. 1401. Employee wage and benefit priorities.
Sec. 1402. Fraudulent transfers and obligations.
Sec. 1403. Payment of insurance benefits to retired employees.
Sec. 1404. Debts nondischargeable if incurred in violation of securities 
           fraud laws.
Sec. 1405. Appointment of trustee in cases of suspected fraud.
Sec. 1406. Effective date; application of amendments.

       TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1501. Effective date; application of amendments.
Sec. 1502. Technical corrections.

                     TITLE I--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 11 
                        or 13'';

        and
            (2) in subsection (b)--
                    (A) by inserting ``(1)'' after ``(b)'';
                    (B) in paragraph (1), as so redesignated by 
                subparagraph (A) of this paragraph--
                          (i) in the first sentence--
                                    (I) by striking ``but not at the 
                                request or suggestion of'' and inserting 
                                ``trustee (or bankruptcy administrator, 
                                if any), or'';
                                    (II) by inserting ``, or, with the 
                                debtor's consent, convert such a case to 
                                a case under chapter 11 or 13 of this 
                                title,'' after ``consumer debts''; and
                                    (III) by striking ``a substantial 
                                abuse'' and inserting ``an abuse''; and
                          (ii) by striking the next to last sentence; 
                      and
                    (C) by adding at the end the following:

    ``(2)(A)(i) In considering under paragraph (1) whether the granting 
of relief would be an abuse of the provisions of this chapter, the court 
shall presume abuse exists if the debtor's current monthly income 
reduced by the amounts determined under clauses (ii), (iii), and (iv), 
and multiplied by 60 is not less than the lesser of--
            ``(I) 25 percent of the debtor's nonpriority unsecured 
        claims in the case, or $6,000, whichever is greater; or
            ``(II) $10,000.

    ``(ii)(I) The debtor's monthly expenses shall be the debtor's 
applicable monthly expense amounts specified under the National 
Standards and Local Standards, and the debtor's actual monthly expenses 
for the categories specified as Other Necessary Expenses issued by the 
Internal Revenue Service for the area in which

[[Page 119 STAT. 28]]

the debtor resides, as in effect on the date of the order for relief, 
for the debtor, the dependents of the debtor, and the spouse of the 
debtor in a joint case, if the spouse is not otherwise a dependent. Such 
expenses shall include reasonably necessary health insurance, disability 
insurance, and health savings account expenses for the debtor, the 
spouse of the debtor, or the dependents of the debtor. Notwithstanding 
any other provision of this clause, the monthly expenses of the debtor 
shall not include any payments for debts. In addition, the debtor's 
monthly expenses shall include the debtor's reasonably necessary 
expenses incurred to maintain the safety of the debtor and the family of 
the debtor from family violence as identified under section 309 of the 
Family Violence Prevention and Services Act, or other applicable Federal 
law. The expenses included in the debtor's monthly expenses described in 
the preceding sentence shall be kept confidential by the court. In 
addition, if it is demonstrated that it is reasonable and necessary, the 
debtor's monthly expenses may also include an additional allowance for 
food and clothing of up to 5 percent of the food and clothing categories 
as specified by the National Standards issued by the Internal Revenue 
Service.
    ``(II) In addition, the debtor's monthly expenses may include, if 
applicable, the continuation of actual expenses paid by the debtor that 
are reasonable and necessary for care and support of an elderly, 
chronically ill, or disabled household member or member of the debtor's 
immediate family (including parents, grandparents, siblings, children, 
and grandchildren of the debtor, the dependents of the debtor, and the 
spouse of the debtor in a joint case who is not a dependent) and who is 
unable to pay for such reasonable and necessary expenses.
    ``(III) In addition, for a debtor eligible for chapter 13, the 
debtor's monthly expenses may include the actual administrative expenses 
of administering a chapter 13 plan for the district in which the debtor 
resides, up to an amount of 10 percent of the projected plan payments, 
as determined under schedules issued by the Executive Office for United 
States Trustees.
    ``(IV) In addition, the debtor's monthly expenses may include the 
actual expenses for each dependent child less than 18 years of age, not 
to exceed $1,500 per year per child, to attend a private or public 
elementary or secondary school if the debtor provides documentation of 
such expenses and a detailed explanation of why such expenses are 
reasonable and necessary, and why such expenses are not already 
accounted for in the National Standards, Local Standards, or Other 
Necessary Expenses referred to in subclause (I).
    ``(V) In addition, the debtor's monthly expenses may include an 
allowance for housing and utilities, in excess of the allowance 
specified by the Local Standards for housing and utilities issued by the 
Internal Revenue Service, based on the actual expenses for home energy 
costs if the debtor provides documentation of such actual expenses and 
demonstrates that such actual expenses are reasonable and necessary.
    ``(iii) The debtor's average monthly payments on account of secured 
debts shall be calculated as the sum of--
            ``(I) the total of all amounts scheduled as contractually 
        due to secured creditors in each month of the 60 months 
        following the date of the petition; and

[[Page 119 STAT. 29]]

            ``(II) any additional payments to secured creditors 
        necessary for the debtor, in filing a plan under chapter 13 of 
        this title, to maintain possession of the debtor's primary 
        residence, motor vehicle, or other property necessary for the 
        support of the debtor and the debtor's dependents, that serves 
        as collateral for secured debts;

divided by 60.
    ``(iv) The debtor's expenses for payment of all priority claims 
(including priority child support and alimony claims) shall be 
calculated as the total amount of debts entitled to priority, divided by 
60.
    ``(B)(i) In any proceeding brought under this subsection, the 
presumption of abuse may only be rebutted by demonstrating special 
circumstances, such as a serious medical condition or a call or order to 
active duty in the Armed Forces, to the extent such special 
circumstances that justify additional expenses or adjustments of current 
monthly income for which there is no reasonable alternative.
    ``(ii) In order to establish special circumstances, the debtor shall 
be required to itemize each additional expense or adjustment of income 
and to provide--
            ``(I) documentation for such expense or adjustment to 
        income; and
            ``(II) a detailed explanation of the special circumstances 
        that make such expenses or adjustment to income necessary and 
        reasonable.

    ``(iii) The debtor shall attest under oath to the accuracy of any 
information provided to demonstrate that additional expenses or 
adjustments to income are required.
    ``(iv) The presumption of abuse may only be rebutted if the 
additional expenses or adjustments to income referred to in clause (i) 
cause the product of the debtor's current monthly income reduced by the 
amounts determined under clauses (ii), (iii), and (iv) of subparagraph 
(A) when multiplied by 60 to be less than the lesser of--
            ``(I) 25 percent of the debtor's nonpriority unsecured 
        claims, or $6,000, whichever is greater; or
            ``(II) $10,000.

    ``(C) As part of the schedule of current income and expenditures 
required under section 521, the debtor shall include a statement of the 
debtor's current monthly income, and the calculations that determine 
whether a presumption arises under subparagraph (A)(i), that show how 
each such amount is calculated.
    ``(D) Subparagraphs (A) through (C) shall not apply, and the court 
may not dismiss or convert a case based on any form of means testing, if 
the debtor is a disabled veteran (as defined in section 3741(1) of title 
38), and the indebtedness occurred primarily during a period during 
which he or she was--
            ``(i) on active duty (as defined in section 101(d)(1) of 
        title 10); or
            ``(ii) performing a homeland defense activity (as defined in 
        section 901(1) of title 32).

    ``(3) In considering under paragraph (1) whether the granting of 
relief would be an abuse of the provisions of this chapter in a case in 
which the presumption in subparagraph (A)(i) of such paragraph does not 
arise or is rebutted, the court shall consider--

[[Page 119 STAT. 30]]

            ``(A) whether the debtor filed the petition in bad faith; or
            ``(B) 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.

    ``(4)(A) The court, on its own initiative or on the motion of a 
party in interest, in accordance with the procedures described in rule 
9011 of the Federal Rules of Bankruptcy Procedure, may order the 
attorney for the debtor to reimburse the trustee for all reasonable 
costs in prosecuting a motion filed under section 707(b), including 
reasonable attorneys' fees, if--
            ``(i) a trustee files a motion for dismissal or conversion 
        under this subsection; and
            ``(ii) the court--
                    ``(I) grants such motion; and
                    ``(II) finds that the action of the attorney for the 
                debtor in filing a case under this chapter violated rule 
                9011 of the Federal Rules of Bankruptcy Procedure.

    ``(B) If the court finds that the attorney for the debtor violated 
rule 9011 of the Federal Rules of Bankruptcy Procedure, the court, on 
its own initiative or on the motion of a party in interest, in 
accordance with such procedures, may order--
            ``(i) the assessment of an appropriate civil penalty against 
        the attorney for the debtor; and
            ``(ii) the payment of such civil penalty to the trustee, the 
        United States trustee (or the bankruptcy administrator, if any).

    ``(C) The signature of an attorney on a petition, pleading, or 
written motion shall constitute a certification that the attorney has--
            ``(i) performed a reasonable investigation into the 
        circumstances that gave rise to the petition, pleading, or 
        written motion; and
            ``(ii) determined that the petition, pleading, or written 
        motion--
                    ``(I) is well grounded in fact; and
                    ``(II) is warranted by existing law or a good faith 
                argument for the extension, modification, or reversal of 
                existing law and does not constitute an abuse under 
                paragraph (1).

    ``(D) The signature of an attorney on the petition shall constitute 
a certification that the attorney has no knowledge after an inquiry that 
the information in the schedules filed with such petition is incorrect.
    ``(5)(A) Except as provided in subparagraph (B) and subject to 
paragraph (6), the court, on its own initiative or on the motion of a 
party in interest, in accordance with the procedures described in rule 
9011 of the Federal Rules of Bankruptcy Procedure, may award a debtor 
all reasonable costs (including reasonable attorneys' fees) in 
contesting a motion filed by a party in interest (other than a trustee 
or United States trustee (or bankruptcy administrator, if any)) under 
this subsection if--
            ``(i) the court does not grant the motion; and
            ``(ii) the court finds that--
                    ``(I) the position of the party that filed the 
                motion violated rule 9011 of the Federal Rules of 
                Bankruptcy Procedure; or

[[Page 119 STAT. 31]]

                    ``(II) the attorney (if any) who filed the motion 
                did not comply with the requirements of clauses (i) and 
                (ii) of paragraph (4)(C), and the motion was made solely 
                for the purpose of coercing a debtor into waiving a 
                right guaranteed to the debtor under this title.

    ``(B) A small business that has a claim of an aggregate amount less 
than $1,000 shall not be subject to subparagraph (A)(ii)(I).
    ``(C) For purposes of this paragraph--
            ``(i) the term `small business' means an unincorporated 
        business, partnership, corporation, association, or organization 
        that--
                    ``(I) has fewer than 25 full-time employees as 
                determined on the date on which the motion is filed; and
                    ``(II) is engaged in commercial or business 
                activity; and
            ``(ii) the number of employees of a wholly owned subsidiary 
        of a corporation includes the employees of--
                    ``(I) a parent corporation; and
                    ``(II) any other subsidiary corporation of the 
                parent corporation.

    ``(6) Only the judge or United States trustee (or bankruptcy 
administrator, if any) may file a motion under section 707(b), if the 
current monthly income of the debtor, or in a joint case, the debtor and 
the debtor's spouse, as of the date of the order for relief, when 
multiplied by 12, is equal to or less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(C) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4.

    ``(7)(A) No judge, United States trustee (or bankruptcy 
administrator, if any), trustee, or other party in interest may file a 
motion under paragraph (2) if the current monthly income of the debtor, 
including a veteran (as that term is defined in section 101 of title 
38), and the debtor's spouse combined, as of the date of the order for 
relief when multiplied by 12, is equal to or less than--
            ``(i) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(ii) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(iii) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4.

    ``(B) In a case that is not a joint case, current monthly income of 
the debtor's spouse shall not be considered for purposes of subparagraph 
(A) if--
            ``(i)(I) the debtor and the debtor's spouse are separated 
        under applicable nonbankruptcy law; or

[[Page 119 STAT. 32]]

            ``(II) the debtor and the debtor's spouse are living 
        separate and apart, other than for the purpose of evading 
        subparagraph (A); and
            ``(ii) the debtor files a statement under penalty of 
        perjury--
                    ``(I) specifying that the debtor meets the 
                requirement of subclause (I) or (II) of clause (i); and
                    ``(II) disclosing the aggregate, or best estimate of 
                the aggregate, amount of any cash or money payments 
                received from the debtor's spouse attributed to the 
                debtor's current monthly income.''.

    (b) Definition.--Section 101 of title 11, United States Code, is 
amended by inserting after paragraph (10) the following:
            ``(10A) `current monthly income'--
                    ``(A) means the average monthly income from all 
                sources that the debtor receives (or in a joint case the 
                debtor and the debtor's spouse receive) without regard 
                to whether such income is taxable income, derived during 
                the 6-month period ending on--
                          ``(i) the last day of the calendar month 
                      immediately preceding the date of the commencement 
                      of the case if the debtor files the schedule of 
                      current income required by section 
                      521(a)(1)(B)(ii); or
                          ``(ii) the date on which current income is 
                      determined by the court for purposes of this title 
                      if the debtor does not file the schedule of 
                      current income required by section 
                      521(a)(1)(B)(ii); and
                    ``(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 for 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 benefits received under the 
                Social Security Act, payments to victims of war crimes 
                or crimes against humanity on account of their status as 
                victims of such crimes, and payments to victims of 
                international terrorism (as defined in section 2331 of 
                title 18) or domestic terrorism (as defined in section 
                2331 of title 18) on account of their status as victims 
                of such terrorism;''.

    (c) United States Trustee and Bankruptcy Administrator Duties.--
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) <<NOTE: Deadlines.>> With respect to a debtor who is an 
individual in a case under this chapter--
            ``(A) the United States trustee (or the bankruptcy 
        administrator, if any) shall review all materials filed by the 
        debtor and, not later than 10 days after the date of the first 
        meeting of creditors, file with the court a statement as to 
        whether the debtor's case would be presumed to be an abuse under 
        section 707(b); and
            ``(B) not later than 5 days after receiving a statement 
        under subparagraph (A), the court shall provide a copy of the 
        statement to all creditors.

    ``(2) The United States trustee (or bankruptcy administrator, if 
any) shall, not later than 30 days after the date of filing a statement 
under paragraph (1), either file a motion to dismiss or convert under 
section 707(b) or file a statement setting forth

[[Page 119 STAT. 33]]

the reasons the United States trustee (or the bankruptcy administrator, 
if any) does not consider such a motion to be appropriate, if the United 
States trustee (or the bankruptcy administrator, if any) determines that 
the debtor's case should be presumed to be an abuse under section 707(b) 
and the product of the debtor's current monthly income, multiplied by 12 
is not less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner; 
        or
            ``(B) in the case of a debtor in a household of 2 or more 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals.''.

    (d) Notice.--Section 342 of title 11, United States Code, is amended 
by adding at the end the following:
    ``(d) <<NOTE: Deadline.>> In a case under chapter 7 of this title in 
which the debtor is an individual and in which the presumption of abuse 
arises under section 707(b), the clerk shall give written notice to all 
creditors not later than 10 days after the date of the filing of the 
petition that the presumption of abuse has arisen.''.

    (e) <<NOTE: 11 USC 101 note.>> Nonlimitation of Information.--
Nothing in this title shall limit the ability of a creditor to provide 
information to a judge (except for information communicated ex parte, 
unless otherwise permitted by applicable law), United States trustee (or 
bankruptcy administrator, if any), or trustee.

    (f) Dismissal for Certain Crimes.--Section 707 of title 11, United 
States Code, is amended by adding at the end the following:
    ``(c)(1) In this subsection--
            ``(A) the term `crime of violence' has the meaning given 
        such term in section 16 of title 18; and
            ``(B) the term `drug trafficking crime' has the meaning 
        given such term in section 924(c)(2) of title 18.

    ``(2) Except as provided in paragraph (3), after notice and a 
hearing, the court, on a motion by the victim of a crime of violence or 
a drug trafficking crime, may when it is in the best interest of the 
victim dismiss a voluntary case filed under this chapter by a debtor who 
is an individual if such individual was convicted of such crime.
    ``(3) The court may not dismiss a case under paragraph (2) if the 
debtor establishes by a preponderance of the evidence that the filing of 
a case under this chapter is necessary to satisfy a claim for a domestic 
support obligation.''.
    (g) Confirmation of Plan.--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 a 
        semicolon; and
            (3) by inserting after paragraph (6) the following:
            ``(7) the action of the debtor in filing the petition was in 
        good faith;''.

    (h) Applicability of Means Test to Chapter 13.--Section 1325(b) of 
title 11, United States Code, is amended--
            (1) in paragraph (1)(B), by inserting ``to unsecured 
        creditors'' after ``to make payments''; and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) For purposes of this subsection, the term `disposable 
        income' means current monthly income received by the debtor 
        (other than child support payments, foster care payments, or

[[Page 119 STAT. 34]]

        disability payments for a dependent child made in accordance 
        with applicable nonbankruptcy law to the extent reasonably 
        necessary to be expended for such child) less amounts reasonably 
        necessary to be expended--
                    ``(A)(i) for the maintenance or support of the 
                debtor or a dependent of the debtor, or for a domestic 
                support obligation, that first becomes payable after the 
                date the petition is filed; and
                    ``(ii) for charitable contributions (that meet the 
                definition of `charitable contribution' under section 
                548(d)(3) to a qualified religious or charitable entity 
                or organization (as defined in section 548(d)(4)) in an 
                amount not to exceed 15 percent of gross income of the 
                debtor for the year in which the contributions are made; 
                and
                    ``(B) if the debtor is engaged in business, for the 
                payment of expenditures necessary for the continuation, 
                preservation, and operation of such business.
            ``(3) Amounts reasonably necessary to be expended under 
        paragraph (2) shall be determined in accordance with 
        subparagraphs (A) and (B) of section 707(b)(2), if the debtor 
        has current monthly income, when multiplied by 12, greater 
        than--
                    ``(A) in the case of a debtor in a household of 1 
                person, the median family income of the applicable State 
                for 1 earner;
                    ``(B) in the case of a debtor in a household of 2, 
                3, or 4 individuals, the highest median family income of 
                the applicable State for a family of the same number or 
                fewer individuals; or
                    ``(C) in the case of a debtor in a household 
                exceeding 4 individuals, the highest median family 
                income of the applicable State for a family of 4 or 
                fewer individuals, plus $525 per month for each 
                individual in excess of 4.''.

    (i) Special Allowance for Health Insurance.--Section 1329(a) 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) reduce amounts to be paid under the plan by the actual 
        amount expended by the debtor to purchase health insurance for 
        the debtor (and for any dependent of the debtor if such 
        dependent does not otherwise have health insurance coverage) if 
        the debtor documents the cost of such insurance and demonstrates 
        that--
                    ``(A) such expenses are reasonable and necessary;
                    ``(B)(i) if the debtor previously paid for health 
                insurance, the amount is not materially larger than the 
                cost the debtor previously paid or the cost necessary to 
                maintain the lapsed policy; or
                    ``(ii) if the debtor did not have health insurance, 
                the amount is not materially larger than the reasonable 
                cost that would be incurred by a debtor who purchases 
                health insurance, who has similar income, expenses, age, 
                and health status, and who lives in the same 
                geographical location with the same number of dependents 
                who do not otherwise have health insurance coverage; and

[[Page 119 STAT. 35]]

                    ``(C) the amount is not otherwise allowed for 
                purposes of determining disposable income under section 
                1325(b) of this title;
        and upon request of any party in interest, files proof that a 
        health insurance policy was purchased.''.

    (j) Adjustment of Dollar Amounts.--Section 104(b) of title 11, 
United States Code, is amended by striking ``and 523(a)(2)(C)'' each 
place it appears and inserting ``523(a)(2)(C), 707(b), and 1325(b)(3)''.
    (k) Definition of `Median Family Income'.--Section 101 of title 11, 
United States Code, is amended by inserting after paragraph (39) the 
following:
            ``(39A) `median family income' means for any year--
                    ``(A) the median family income both calculated and 
                reported by the Bureau of the Census in the then most 
                recent year; and
                    ``(B) if not so calculated and reported in the then 
                current year, adjusted annually after such most recent 
                year until the next year in which median family income 
                is both calculated and reported by the Bureau of the 
                Census, to reflect the percentage change in the Consumer 
                Price Index for All Urban Consumers during the period of 
                years occurring after such most recent year and before 
                such current year;''.

    (k) Clerical Amendment.--The table of sections for 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 11 or 
           13.''.

SEC. 103. SENSE OF CONGRESS AND STUDY.

    (a) Sense of Congress.--It is the sense of Congress that the 
Secretary of the Treasury has the authority to alter the Internal 
Revenue Service standards established to set guidelines for repayment 
plans as needed to accommodate their use under section 707(b) of title 
11, United States Code.
    (b) Study.--
            (1) <<NOTE: Deadline. Reports.>> In general.--Not later than 
        2 years after the date of enactment of this Act, the Director of 
        the Executive Office for United States Trustees shall submit a 
        report to the Committee on the Judiciary of the Senate and the 
        Committee on the Judiciary of the House of Representatives 
        containing the findings of the Director regarding the 
        utilization of Internal Revenue Service standards for 
        determining--
                    (A) the current monthly expenses of a debtor under 
                section 707(b) of title 11, United States Code; and
                    (B) the impact that the application of such 
                standards has had on debtors and on the bankruptcy 
                courts.
            (2) Recommendation.--The report under paragraph (1) may 
        include recommendations for amendments to title 11, United 
        States Code, that are consistent with the findings of the 
        Director under paragraph (1).

SEC. 104. NOTICE OF ALTERNATIVES.

    Section 342(b) of title 11, United States Code, is amended to read 
as follows:

[[Page 119 STAT. 36]]

    ``(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 case under this 
                title shall be subject to fine, imprisonment, or both; 
                and
                    ``(B) all information supplied by a debtor in 
                connection with a case under this title is subject to 
                examination by the Attorney General.''.

SEC. 105. <<NOTE: 11 USC 111 note.>> 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 serve in cases under chapter 13 of 
title 11, 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 debtors 
who are individuals on how to better manage their finances.
    (b) Test.--
            (1) Selection of districts.--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) <<NOTE: Deadline.>> Use.--For an 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 title 11, United 
        States Code.

    (c) Evaluation.--
            (1) In general.--During the 18-month 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, United States Code, and by 
                consumer counseling groups.
            (2) Report.--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

[[Page 119 STAT. 37]]

        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.

SEC. 106. CREDIT COUNSELING.

    (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 such individual has, during the 180-day period 
preceding the date of filing of the petition by such individual, 
received from an approved nonprofit budget and credit counseling agency 
described in section 111(a) an individual or group briefing (including a 
briefing conducted by telephone or on the Internet) that outlined the 
opportunities for available credit counseling and assisted such 
individual in performing a related budget analysis.
    ``(2)(A) Paragraph (1) shall not apply with respect to a debtor who 
resides in a district for which the United States trustee (or the 
bankruptcy administrator, if any) determines that the approved nonprofit 
budget and credit counseling agencies for such district are not 
reasonably able to provide adequate services to the additional 
individuals who would otherwise seek credit counseling from such 
agencies by reason of the requirements of paragraph (1).
    ``(B) <<NOTE: Deadline.>> The United States trustee (or the 
bankruptcy administrator, if any) who makes a determination described in 
subparagraph (A) shall review such determination not later than 1 year 
after the date of such determination, and not less frequently than 
annually thereafter. Notwithstanding the preceding sentence, a nonprofit 
budget and credit counseling agency may be disapproved by the United 
States trustee (or the bankruptcy administrator, if any) at any time.

    ``(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 nonprofit budget and credit counseling 
        agency, 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; 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, except that the court, for cause, may order an 
additional 15 days.
    ``(4) The requirements of paragraph (1) shall not apply with respect 
to a debtor whom the court determines, after notice and hearing, is 
unable to complete those requirements because of incapacity, disability, 
or active military duty in a military combat zone. For the purposes of 
this paragraph, incapacity means that the debtor is impaired by reason 
of mental illness or mental deficiency so that he is incapable of 
realizing and making rational decisions

[[Page 119 STAT. 38]]

with respect to his financial responsibilities; and ``disability'' means 
that the debtor is so physically impaired as to be unable, after 
reasonable effort, to participate in an in person, telephone, or 
Internet briefing required under paragraph (1).''.
    (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) <<NOTE: Deadline.>> after filing the petition, the 
        debtor failed to complete an instructional course concerning 
        personal financial management described in section 111, except 
        that this paragraph shall not apply with respect to a debtor who 
        is a person described in section 109(h)(4) or who resides in a 
        district for which the United States trustee (or the bankruptcy 
        administrator, if any) determines that the approved 
        instructional courses are not adequate to service the additional 
        individuals who would otherwise be required to complete such 
        instructional courses under this section (The United States 
        trustee (or the bankruptcy administrator, if any) who makes a 
        determination described in this paragraph shall review such 
        determination not later than 1 year after the date of such 
        determination, and not less frequently than annually 
        thereafter.).''.

    (c) Chapter 13 Discharge.--Section 1328 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(g)(1) 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.
    ``(2) Paragraph (1) shall not apply with respect to a debtor who is 
a person described in section 109(h)(4) or who resides in a district for 
which the United States trustee (or the bankruptcy administrator, if 
any) determines that the approved instructional courses are not adequate 
to service the additional individuals who would otherwise be required to 
complete such instructional course by reason of the requirements of 
paragraph (1).
    ``(3) <<NOTE: Deadline.>> The United States trustee (or the 
bankruptcy administrator, if any) who makes a determination described in 
paragraph (2) shall review such determination not later than 1 year 
after the date of such determination, and not less frequently than 
annually thereafter.''.

    (d) Debtor's Duties.--Section 521 of title 11, United States Code, 
is amended--
            (1) by inserting ``(a)'' before ``The debtor shall--''; and
            (2) by adding at the end the following:

    ``(b) In addition to the requirements under subsection (a), a debtor 
who is an individual shall file with the court--
            ``(1) a certificate from the approved nonprofit budget and 
        credit counseling agency that provided the debtor services under 
        section 109(h) describing the services provided to the debtor; 
        and
            ``(2) a copy of the debt repayment plan, if any, developed 
        under section 109(h) through the approved nonprofit budget and 
        credit counseling agency referred to in paragraph (1).''.

    (e) General Provisions.--

[[Page 119 STAT. 39]]

            (1) In general.--Chapter 1 of title 11, United States Code, 
        is amended by adding at the end the following:

``Sec. 111. Nonprofit budget and credit counseling agencies; financial 
                        management instructional courses

    ``(a) <<NOTE: Public information. Records.>> The clerk shall 
maintain a publicly available list of--
            ``(1) nonprofit budget and credit counseling agencies that 
        provide 1 or more services described in section 109(h) currently 
        approved by the United States trustee (or the bankruptcy 
        administrator, if any); and
            ``(2) instructional courses concerning personal financial 
        management currently approved by the United States trustee (or 
        the bankruptcy administrator, if any), as applicable.

    ``(b) The United States trustee (or bankruptcy administrator, if 
any) shall only approve a nonprofit budget and credit counseling agency 
or an instructional course concerning personal financial management as 
follows:
            ``(1) The United States trustee (or bankruptcy 
        administrator, if any) shall have thoroughly reviewed the 
        qualifications of the nonprofit budget and credit counseling 
        agency or of the provider of the instructional course under the 
        standards set forth in this section, and the services or 
        instructional courses that will be offered by such agency or 
        such provider, and may require such agency or such provider that 
        has sought approval to provide information with respect to such 
        review.
            ``(2) The United States trustee (or bankruptcy 
        administrator, if any) shall have determined that such agency or 
        such instructional course fully satisfies the applicable 
        standards set forth in this section.
            ``(3) If a nonprofit budget and credit counseling agency or 
        instructional course did not appear on the approved list for the 
        district under subsection (a) immediately before approval under 
        this section, approval under this subsection of such agency or 
        such instructional course shall be for a probationary period not 
        to exceed 6 months.
            ``(4) At the conclusion of the applicable probationary 
        period under paragraph (3), the United States trustee (or 
        bankruptcy administrator, if any) may only approve for an 
        additional 1-year period, and for successive 1-year periods 
        thereafter, an agency or instructional course that has 
        demonstrated during the probationary or applicable subsequent 
        period of approval that such agency or instructional course--
                    ``(A) has met the standards set forth under this 
                section during such period; and
                    ``(B) can satisfy such standards in the future.
            ``(5) <<NOTE: Deadline.>> Not later than 30 days after any 
        final decision under paragraph (4), an interested person may 
        seek judicial review of such decision in the appropriate 
        district court of the United States.

    ``(c)(1) The United States trustee (or the bankruptcy administrator, 
if any) shall only approve a nonprofit budget and credit counseling 
agency that demonstrates that it will provide qualified counselors, 
maintain adequate provision for safekeeping and payment of client funds, 
provide adequate counseling with respect to client credit problems, and 
deal responsibly and effectively with other matters relating to the 
quality, effectiveness, and financial security of the services it 
provides.

[[Page 119 STAT. 40]]

    ``(2) To be approved by the United States trustee (or the bankruptcy 
administrator, if any), a nonprofit budget and credit counseling agency 
shall, at a minimum--
            ``(A) have a board of directors the majority of which--
                    ``(i) are not employed by such agency; and
                    ``(ii) will not directly or indirectly benefit 
                financially from the outcome of the counseling services 
                provided by such agency;
            ``(B) if a fee is charged for counseling services, charge a 
        reasonable fee, and provide services without regard to ability 
        to pay the fee;
            ``(C) provide for safekeeping and payment of client funds, 
        including an annual audit of the trust accounts and appropriate 
        employee bonding;
            ``(D) provide full disclosures to a client, including 
        funding sources, counselor qualifications, possible impact on 
        credit reports, and any costs of such program that will be paid 
        by such client and how such costs will be paid;
            ``(E) provide adequate counseling with respect to a client's 
        credit problems that includes an analysis of such client's 
        current financial condition, factors that caused such financial 
        condition, and how such client can develop a plan to respond to 
        the problems without incurring negative amortization of debt;
            ``(F) provide trained counselors who receive no commissions 
        or bonuses based on the outcome of the counseling services 
        provided by such agency, and who have adequate experience, and 
        have been adequately trained to provide counseling services to 
        individuals in financial difficulty, including the matters 
        described in subparagraph (E);
            ``(G) demonstrate adequate experience and background in 
        providing credit counseling; and
            ``(H) have adequate financial resources to provide 
        continuing support services for budgeting plans over the life of 
        any repayment plan.

    ``(d) The United States trustee (or the bankruptcy administrator, if 
any) shall only approve an instructional course concerning personal 
financial management--
            ``(1) for an initial probationary period under subsection 
        (b)(3) if the course will provide at a minimum--
                    ``(A) trained personnel with adequate experience and 
                training in providing effective instruction and 
                services;
                    ``(B) learning materials and teaching methodologies 
                designed to assist debtors in understanding personal 
                financial management and that are consistent with stated 
                objectives directly related to the goals of such 
                instructional course;
                    ``(C) adequate facilities situated in reasonably 
                convenient locations at which such instructional course 
                is offered, except that such facilities may include the 
                provision of such instructional course by telephone or 
                through the Internet, if such instructional course is 
                effective;
                    ``(D) the preparation and retention of reasonable 
                records (which shall include the debtor's bankruptcy 
                case number) to permit evaluation of the effectiveness 
                of such instructional course, including any evaluation 
                of satisfaction of instructional course requirements for 
                each debtor

[[Page 119 STAT. 41]]

                attending such instructional course, which shall be 
                available for inspection and evaluation by the Executive 
                Office for United States Trustees, the United States 
                trustee (or the bankruptcy administrator, if any), or 
                the chief bankruptcy judge for the district in which 
                such instructional course is offered; and
            ``(E) if a fee is charged for the instructional course, 
        charge a reasonable fee, and provide services without regard to 
        ability to pay the fee.
            ``(2) for any 1-year period if the provider thereof has 
        demonstrated that the course meets the standards of paragraph 
        (1) and, in addition--
                    ``(A) has been effective in assisting a substantial 
                number of debtors to understand personal financial 
                management; and
                    ``(B) is otherwise likely to increase substantially 
                the debtor's understanding of personal financial 
                management.

    ``(e) The district court may, at any time, investigate the 
qualifications of a nonprofit budget and credit counseling agency 
referred to in subsection (a), and request production of documents to 
ensure the integrity and effectiveness of such agency. The district 
court may, at any time, remove from the approved list under subsection 
(a) a nonprofit budget and credit counseling agency upon finding such 
agency does not meet the qualifications of subsection (b).
    ``(f) <<NOTE: Notification.>> The United States trustee (or the 
bankruptcy administrator, if any) shall notify the clerk that a 
nonprofit budget and credit counseling agency or an instructional course 
is no longer approved, in which case the clerk shall remove it from the 
list maintained under subsection (a).

    ``(g)(1) No nonprofit budget and credit counseling agency may 
provide to a credit reporting agency information concerning whether a 
debtor has received or sought instruction concerning personal financial 
management from such agency.
    ``(2) A nonprofit budget and credit counseling agency that willfully 
or negligently fails to comply with any requirement under this title 
with respect to a debtor shall be liable for damages in an amount equal 
to the sum of--
            ``(A) any actual damages sustained by the debtor as a result 
        of the violation; and
            ``(B) any court costs or reasonable attorneys' fees (as 
        determined by the court) incurred in an action to recover those 
        damages.''.
            (2) Clerical amendment.--The table of sections for chapter 1 
        of title 11, United States Code, is amended by adding at the end 
        the following:

``111. Nonprofit budget and credit counseling agencies; financial 
           management instructional courses.''.

    (f) Limitation.--Section 362 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(i) If a case commenced under chapter 7, 11, or 13 is dismissed 
due to the creation of a debt repayment plan, for purposes of subsection 
(c)(3), any subsequent case commenced by the debtor under any such 
chapter shall not be presumed to be filed not in good faith.

[[Page 119 STAT. 42]]

    ``(j) On request of a party in interest, the court shall issue an 
order under subsection (c) confirming that the automatic stay has been 
terminated.''.

SEC. 107. <<NOTE: Deadline. 11 USC 707 note.>> SCHEDULES OF REASONABLE 
            AND NECESSARY EXPENSES.

    For purposes of section 707(b) of title 11, United States Code, as 
amended by this Act, the Director of the Executive Office for United 
States Trustees shall, not later than 180 days after the date of 
enactment of this Act, issue schedules of reasonable and necessary 
administrative expenses of administering a chapter 13 plan for each 
judicial district of the United States.

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

SEC. 201. 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 in whole on an 
unsecured consumer debt by not more than 20 percent of the claim, if--
            ``(A) the claim was filed by a creditor who unreasonably 
        refused to negotiate a reasonable alternative repayment schedule 
        proposed on behalf of the debtor by an approved nonprofit budget 
        and credit counseling agency described in section 111;
            ``(B) the offer of the debtor under subparagraph (A)--
                    ``(i) was made at least 60 days before the date of 
                the filing of the petition; and
                    ``(ii) 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.

    ``(2) The debtor shall have the burden of proving, by clear and 
convincing evidence, that--
            ``(A) the creditor unreasonably refused to consider the 
        debtor's proposal; and
            ``(B) the proposed alternative repayment schedule was made 
        prior to expiration of the 60-day period specified in paragraph 
        (1)(B)(i).''.

    (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 schedule between the debtor and 
any creditor of the debtor created by an approved nonprofit budget and 
credit counseling agency.''.

[[Page 119 STAT. 43]]

SEC. 202. 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, unless the order confirming the 
plan is revoked, the plan is in default, or the creditor has not 
received payments required to be made under the plan in the manner 
required by the plan (including crediting the amounts required under the 
plan), shall constitute a violation of an injunction under subsection 
(a)(2) if the act of the creditor to collect and failure to credit 
payments in the manner required by the plan caused material injury to 
the debtor.
    ``(j) Subsection (a)(2) does not operate as an injunction against an 
act by a creditor that is the holder of a secured claim, if--
            ``(1) such creditor retains a security interest in real 
        property that is the principal residence of the debtor;
            ``(2) such act is in the ordinary course of business between 
        the creditor and the debtor; and
            ``(3) such act is limited to seeking or obtaining periodic 
        payments associated with a valid security interest in lieu of 
        pursuit of in rem relief to enforce the lien.''.

SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION AGREEMENT PRACTICES.

    (a) In General.--Section 524 of title 11, United States Code, as 
amended section 202, is amended--
            (1) in subsection (c), by striking paragraph (2) and 
        inserting the following:
            ``(2) the debtor received the disclosures described in 
        subsection (k) at or before the time at which the debtor signed 
        the agreement;''; and
            (2) by adding at the end the following:

    ``(k)(1) The disclosures required under subsection (c)(2) shall 
consist of the disclosure statement described in paragraph (3), 
completed as required in that paragraph, together with the agreement 
specified in subsection (c), statement, declaration, motion and order 
described, respectively, in paragraphs (4) through (8), and shall be the 
only disclosures required in connection with entering into such 
agreement.
    ``(2) Disclosures made under paragraph (1) shall be made clearly and 
conspicuously and in writing. The terms `Amount Reaffirmed' and `Annual 
Percentage Rate' shall be disclosed more conspicuously than other terms, 
data or information provided in connection with this disclosure, except 
that the phrases `Before agreeing to reaffirm a debt, review these 
important disclosures' and `Summary of Reaffirmation Agreement' may be 
equally conspicuous. Disclosures may be made in a different order and 
may use terminology different from that set forth in paragraphs (2) 
through (8), except that the terms `Amount Reaffirmed' and `Annual 
Percentage Rate' must be used where indicated.
    ``(3) The disclosure statement required under this paragraph shall 
consist of the following:
            ``(A) The statement: `Part A: Before agreeing to reaffirm a 
        debt, review these important disclosures:';
            ``(B) Under the heading `Summary of Reaffirmation 
        Agreement', the statement: `This Summary is made pursuant to the 
        requirements of the Bankruptcy Code';

[[Page 119 STAT. 44]]

            ``(C) The `Amount Reaffirmed', using that term, which shall 
        be--
                    ``(i) the total amount of debt that the debtor 
                agrees to reaffirm by entering into an agreement of the 
                kind specified in subsection (c), and
                    ``(ii) the total of any fees and costs accrued as of 
                the date of the disclosure statement, related to such 
                total amount.
            ``(D) In conjunction with the disclosure of the `Amount 
        Reaffirmed', the statements--
                    ``(i) `The amount of debt you have agreed to 
                reaffirm'; and
                    ``(ii) `Your credit agreement may obligate you to 
                pay additional amounts which may come due after the date 
                of this disclosure. Consult your credit agreement.'.
            ``(E) The `Annual Percentage Rate', using that term, which 
        shall be disclosed as--
                    ``(i) if, at the time the petition is filed, the 
                debt is an extension of credit under an open end credit 
                plan, as the terms `credit' and `open end credit plan' 
                are defined in section 103 of the Truth in Lending Act, 
                then--
                          ``(I) the annual percentage rate determined 
                      under paragraphs (5) and (6) of section 127(b) of 
                      the Truth in Lending Act, as applicable, as 
                      disclosed to the debtor in the most recent 
                      periodic statement prior to entering into an 
                      agreement of the kind specified in subsection (c) 
                      or, if no such periodic statement has been given 
                      to the debtor during the prior 6 months, the 
                      annual percentage rate as it would have been so 
                      disclosed at the time the disclosure statement is 
                      given to the debtor, or to the extent this annual 
                      percentage rate is not readily available or not 
                      applicable, then
                          ``(II) the simple interest rate applicable to 
                      the amount reaffirmed as of the date the 
                      disclosure statement is given to the debtor, or if 
                      different simple interest rates apply to different 
                      balances, the simple interest rate applicable to 
                      each such balance, identifying the amount of each 
                      such balance included in the amount reaffirmed, or
                          ``(III) if the entity making the disclosure 
                      elects, to disclose the annual percentage rate 
                      under subclause (I) and the simple interest rate 
                      under subclause (II); or
                    ``(ii) if, at the time the petition is filed, the 
                debt is an extension of credit other than under an open 
                end credit plan, as the terms `credit' and `open end 
                credit plan' are defined in section 103 of the Truth in 
                Lending Act, then--
                          ``(I) the annual percentage rate under section 
                      128(a)(4) of the Truth in Lending Act, as 
                      disclosed to the debtor in the most recent 
                      disclosure statement given to the debtor prior to 
                      the entering into an agreement of the kind 
                      specified in subsection (c) with respect to the 
                      debt, or, if no such disclosure statement was 
                      given to the debtor, the annual percentage rate as 
                      it would have been so disclosed at the time the 
                      disclosure statement is given to the debtor, or to 
                      the extent

[[Page 119 STAT. 45]]

                      this annual percentage rate is not readily 
                      available or not applicable, then
                          ``(II) the simple interest rate applicable to 
                      the amount reaffirmed as of the date the 
                      disclosure statement is given to the debtor, or if 
                      different simple interest rates apply to different 
                      balances, the simple interest rate applicable to 
                      each such balance, identifying the amount of such 
                      balance included in the amount reaffirmed, or
                          ``(III) if the entity making the disclosure 
                      elects, to disclose the annual percentage rate 
                      under (I) and the simple interest rate under (II).
            ``(F) If the underlying debt transaction was disclosed as a 
        variable rate transaction on the most recent disclosure given 
        under the Truth in Lending Act, by stating `The interest rate on 
        your loan may be a variable interest rate which changes from 
        time to time, so that the annual percentage rate disclosed here 
        may be higher or lower.'.
            ``(G) If the debt is secured by a security interest which 
        has not been waived in whole or in part or determined to be void 
        by a final order of the court at the time of the disclosure, by 
        disclosing that a security interest or lien in goods or property 
        is asserted over some or all of the debts the debtor is 
        reaffirming and listing the items and their original purchase 
        price that are subject to the asserted security interest, or if 
        not a purchase-money security interest then listing by items or 
        types and the original amount of the loan.
            ``(H) At the election of the creditor, a statement of the 
        repayment schedule using 1 or a combination of the following--
                    ``(i) by making the statement: `Your first payment 
                in the amount of $___ is due on ___ but the future 
                payment amount may be different. Consult your 
                reaffirmation agreement or credit agreement, as 
                applicable.', and stating the amount of the first 
                payment and the due date of that payment in the places 
                provided;
                    ``(ii) by making the statement: `Your payment 
                schedule will be:', and describing the repayment 
                schedule with the number, amount, and due dates or 
                period of payments scheduled to repay the debts 
                reaffirmed to the extent then known by the disclosing 
                party; or
                    ``(iii) by describing the debtor's repayment 
                obligations with reasonable specificity to the extent 
                then known by the disclosing party.
            ``(I) The following statement: `Note: When this disclosure 
        refers to what a creditor ``may'' do, it does not use the word 
        ``may'' to give the creditor specific permission. The word 
        ``may'' is used to tell you what might occur if the law permits 
        the creditor to take the action. If you have questions about 
        your reaffirming a debt or what the law requires, consult with 
        the attorney who helped you negotiate this agreement reaffirming 
        a debt. If you don't have an attorney helping you, the judge 
        will explain the effect of your reaffirming a debt when the 
        hearing on the reaffirmation agreement is held.'.
            ``(J)(i) The following additional statements:

    `` `Reaffirming a debt is a serious financial decision. The law 
requires you to take certain steps to make sure the decision is

[[Page 119 STAT. 46]]

in your best interest. If these steps are not completed, the 
reaffirmation agreement is not effective, even though you have signed 
it.
            `` `1. Read the disclosures in this Part A carefully. 
        Consider the decision to reaffirm carefully. Then, if you want 
        to reaffirm, sign the reaffirmation agreement in Part B (or you 
        may use a separate agreement you and your creditor agree on).
            `` `2. Complete and sign Part D and be sure you can afford 
        to make the payments you are agreeing to make and have received 
        a copy of the disclosure statement and a completed and signed 
        reaffirmation agreement.
            `` `3. If you were represented by an attorney during the 
        negotiation of your reaffirmation agreement, the attorney must 
        have signed the certification in Part C.
            `` `4. If you were not represented by an attorney during the 
        negotiation of your reaffirmation agreement, you must have 
        completed and signed Part E.
            `` `5. The original of this disclosure must be filed with 
        the court by you or your creditor. If a separate reaffirmation 
        agreement (other than the one in Part B) has been signed, it 
        must be attached.
            `` `6. If you were represented by an attorney during the 
        negotiation of your reaffirmation agreement, your reaffirmation 
        agreement becomes effective upon filing with the court unless 
        the reaffirmation is presumed to be an undue hardship as 
        explained in Part D.
            `` `7. If you were not represented by an attorney during the 
        negotiation of your reaffirmation agreement, it will not be 
        effective unless the court approves it. The court will notify 
        you of the hearing on your reaffirmation agreement. You must 
        attend this hearing in bankruptcy court where the judge will 
        review your reaffirmation agreement. The bankruptcy court must 
        approve your reaffirmation agreement as consistent with your 
        best interests, except that no court approval is required if 
        your reaffirmation agreement is for a consumer debt secured by a 
        mortgage, deed of trust, security deed, or other lien on your 
        real property, like your home.

    `` `Your right to rescind (cancel) your reaffirmation agreement. You 
may rescind (cancel) your reaffirmation agreement at any time before the 
bankruptcy court enters a discharge order, or before the expiration of 
the 60-day period that begins on the date your reaffirmation agreement 
is filed with the court, whichever occurs later. To rescind (cancel) 
your reaffirmation agreement, you must notify the creditor that your 
reaffirmation agreement is rescinded (or canceled).
    `` `What are your obligations if you reaffirm the debt? A reaffirmed 
debt remains your personal legal obligation. It is not discharged in 
your bankruptcy case. That means that if you default on your reaffirmed 
debt after your bankruptcy case is over, your creditor may be able to 
take your property or your wages. Otherwise, your obligations will be 
determined by the reaffirmation agreement which may have changed the 
terms of the original agreement. For example, if you are reaffirming an 
open end credit agreement, the creditor may be permitted by that 
agreement or applicable law to change the terms of that agreement in the 
future under certain conditions.
    `` `Are you required to enter into a reaffirmation agreement by any 
law? No, you are not required to reaffirm a debt by any

[[Page 119 STAT. 47]]

law. Only agree to reaffirm a debt if it is in your best interest. Be 
sure you can afford the payments you agree to make.
    `` `What if your creditor has a security interest or lien? Your 
bankruptcy discharge does not eliminate any lien on your property. A 
``lien'' is often referred to as a security interest, deed of trust, 
mortgage or security deed. Even if you do not reaffirm and your personal 
liability on the debt is discharged, because of the lien your creditor 
may still have the right to take the security property if you do not pay 
the debt or default on it. If the lien is on an item of personal 
property that is exempt under your State's law or that the trustee has 
abandoned, you may be able to redeem the item rather than reaffirm the 
debt. To redeem, you make a single payment to the creditor equal to the 
current value of the security property, as agreed by the parties or 
determined by the court.'.
            ``(ii) In the case of a reaffirmation under subsection 
        (m)(2), numbered paragraph 6 in the disclosures required by 
        clause (i) of this subparagraph shall read as follows:
            `` `6. <<NOTE: Effective date.>> If you were represented by 
        an attorney during the negotiation of your reaffirmation 
        agreement, your reaffirmation agreement becomes effective upon 
        filing with the court.'.

    ``(4) The form of such agreement required under this paragraph shall 
consist of the following:
    `` `Part B: Reaffirmation Agreement. I (we) agree to reaffirm the 
debts arising under the credit agreement described below.
    `` `Brief description of credit agreement:
    `` `Description of any changes to the credit agreement made as part 
of this reaffirmation agreement:
    `` `Signature:                    Date:
    `` `Borrower:
    `` `Co-borrower, if also reaffirming these debts:
    `` `Accepted by creditor:
    `` `Date of creditor acceptance:'.
    ``(5) The declaration shall consist of the following:
            ``(A) The following certification:

    `` `Part C: Certification by Debtor's Attorney (If Any).
    `` `I hereby certify that (1) this agreement represents a fully 
informed and voluntary agreement by the debtor; (2) this agreement does 
not impose an undue hardship on the debtor or any dependent of the 
debtor; and (3) I have fully advised the debtor of the legal effect and 
consequences of this agreement and any default under this agreement.
    `` `Signature of Debtor's Attorney:      Date:'.
            ``(B) If a presumption of undue hardship has been 
        established with respect to such agreement, such certification 
        shall state that in the opinion of the attorney, the debtor is 
        able to make the payment.

    ``(C) In the case of a reaffirmation agreement under subsection 
(m)(2), subparagraph (B) is not applicable.
    ``(6)(A) The statement in support of such agreement, which the 
debtor shall sign and date prior to filing with the court, shall consist 
of the following:
    `` `Part D: Debtor's Statement in Support of Reaffirmation 
Agreement.
    `` `1. I believe this reaffirmation agreement will not impose an 
undue hardship on my dependents or me. I can afford to make the payments 
on the reaffirmed debt because my monthly income

[[Page 119 STAT. 48]]

(take home pay plus any other income received) is $___, and my actual 
current monthly expenses including monthly payments on post-bankruptcy 
debt and other reaffirmation agreements total $___, leaving $___ to make 
the required payments on this reaffirmed debt. I understand that if my 
income less my monthly expenses does not leave enough to make the 
payments, this reaffirmation agreement is presumed to be an undue 
hardship on me and must be reviewed by the court. However, this 
presumption may be overcome if I explain to the satisfaction of the 
court how I can afford to make the payments here: ___.
    `` `2. I received a copy of the Reaffirmation Disclosure Statement 
in Part A and a completed and signed reaffirmation agreement.'.
    ``(B) Where the debtor is represented by an attorney and is 
reaffirming a debt owed to a creditor defined in section 19(b)(1)(A)(iv) 
of the Federal Reserve Act, the statement of support of the 
reaffirmation agreement, which the debtor shall sign and date prior to 
filing with the court, shall consist of the following:
    `` `I believe this reaffirmation agreement is in my financial 
interest. I can afford to make the payments on the reaffirmed debt. I 
received a copy of the Reaffirmation Disclosure Statement in Part A and 
a completed and signed reaffirmation agreement.'.
    ``(7) The motion that may be used if approval of such agreement by 
the court is required in order for it to be effective, shall be signed 
and dated by the movant and shall consist of the following:
    `` `Part E: Motion for Court Approval (To be completed only if the 
debtor is not represented by an attorney.). I (we), the debtor(s), 
affirm the following to be true and correct:
    `` `I am not represented by an attorney in connection with this 
reaffirmation agreement.
    `` `I believe this reaffirmation agreement is in my best interest 
based on the income and expenses I have disclosed in my Statement in 
Support of this reaffirmation agreement, and because (provide any 
additional relevant reasons the court should consider):
    `` `Therefore, I ask the court for an order approving this 
reaffirmation agreement.'.
    ``(8) The court order, which may be used to approve such agreement, 
shall consist of the following:
    `` `Court Order: The court grants the debtor's motion and approves 
the reaffirmation agreement described above.'.
    ``(l) <<NOTE: Applicability.>> Notwithstanding any other provision 
of this title the following shall apply:
            ``(1) A creditor may accept payments from a debtor before 
        and after the filing of an agreement of the kind specified in 
        subsection (c) with the court.
            ``(2) A creditor may accept payments from a debtor under 
        such agreement that the creditor believes in good faith to be 
        effective.
            ``(3) The requirements of subsections (c)(2) and (k) shall 
        be satisfied if disclosures required under those subsections are 
        given in good faith.

    ``(m)(1) Until 60 days after an agreement of the kind specified in 
subsection (c) is filed with the court (or such additional period as the 
court, after notice and a hearing and for cause, orders before the 
expiration of such period), it shall be presumed that such agreement is 
an undue hardship on the debtor if the debtor's monthly income less the 
debtor's monthly expenses as shown on the debtor's completed and signed 
statement in support of such

[[Page 119 STAT. 49]]

agreement required under subsection (k)(6)(A) is less than the scheduled 
payments on the reaffirmed debt. This presumption shall be reviewed by 
the court. The presumption may be rebutted in writing by the debtor if 
the statement includes an explanation that identifies additional sources 
of funds to make the payments as agreed upon under the terms of such 
agreement. If the presumption is not rebutted to the satisfaction of the 
court, the court may disapprove such agreement. No agreement shall be 
disapproved without notice and a hearing to the debtor and creditor, and 
such hearing shall be concluded before the entry of the debtor's 
discharge.
    ``(2) This subsection does not apply to reaffirmation agreements 
where the creditor is a credit union, as defined in section 
19(b)(1)(A)(iv) of the Federal Reserve Act.''.
    (b) Law Enforcement.--
            (1) In general.--Chapter 9 of title 18, United States Code, 
        is amended by adding at the end the following:

``Sec. 158. Designation of United States attorneys and agents of the 
                        Federal Bureau of Investigation to address 
                        abusive reaffirmations of debt and materially 
                        fraudulent statements in bankruptcy schedules

    ``(a) In General.--The Attorney General of the United States shall 
designate the individuals described in subsection (b) to have primary 
responsibility in carrying out enforcement activities in addressing 
violations of section 152 or 157 relating to abusive reaffirmations of 
debt. In addition to addressing the violations referred to in the 
preceding sentence, the individuals described under subsection (b) shall 
address violations of section 152 or 157 relating to materially 
fraudulent statements in bankruptcy schedules that are intentionally 
false or intentionally misleading.
    ``(b) United States Attorneys and Agents of the Federal Bureau of 
Investigation.--The individuals referred to in subsection (a) are--
            ``(1) the United States attorney for each judicial district 
        of the United States; and
            ``(2) an agent of the Federal Bureau of Investigation for 
        each field office of the Federal Bureau of Investigation.

    ``(c) Bankruptcy Investigations.--Each United States attorney 
designated under this section shall, in addition to any other 
responsibilities, have primary responsibility for carrying out the 
duties of a United States attorney under section 3057.
    ``(d) Bankruptcy Procedures.--The bankruptcy courts shall establish 
procedures for referring any case that may contain a materially 
fraudulent statement in a bankruptcy schedule to the individuals 
designated under this section.''.
            (2) Clerical amendment.--The table of sections for chapter 9 
        of title 18, United States Code, is amended by adding at the end 
        the following:

``158. Designation of United States attorneys and agents of the Federal 
           Bureau of Investigation to address abusive reaffirmations of 
           debt and materially fraudulent statements in bankruptcy 
           schedules.''.

SEC. 204. PRESERVATION OF CLAIMS AND DEFENSES UPON SALE OF PREDATORY 
            LOANS.

    Section 363 of title 11, United States Code, is amended--
            (1) by redesignating subsection (o) as subsection (p), and
            (2) by inserting after subsection (n) the following:

[[Page 119 STAT. 50]]

    ``(o) Notwithstanding subsection (f), if a person purchases any 
interest in a consumer credit transaction that is subject to the Truth 
in Lending Act or any interest in a consumer credit contract (as defined 
in section 433.1 of title 16 of the Code of Federal Regulations (January 
1, 2004), as amended from time to time), and if such interest is 
purchased through a sale under this section, then such person shall 
remain subject to all claims and defenses that are related to such 
consumer credit transaction or such consumer credit contract, to the 
same extent as such person would be subject to such claims and defenses 
of the consumer had such interest been purchased at a sale not under 
this section.''.

SEC. 205. GAO STUDY AND REPORT ON REAFFIRMATION AGREEMENT PROCESS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the reaffirmation agreement process that occurs under 
title 11 of the United States Code, to determine the overall treatment 
of consumers within the context of such process, and shall include in 
such study consideration of--
            (1) the policies and activities of creditors with respect to 
        reaffirmation agreements; and
            (2) whether consumers are fully, fairly, and consistently 
        informed of their rights pursuant to such title.

    (b) Report to the Congress.--Not later than 18 months after the date 
of the enactment of this Act, the Comptroller General shall submit to 
the President pro tempore of the Senate and the Speaker of the House of 
Representatives a report on the results of the study conducted under 
subsection (a), together with recommendations for legislation (if any) 
to address any abusive or coercive tactics found in connection with the 
reaffirmation agreement process that occurs under title 11 of the United 
States Code.

                   Subtitle B--Priority Child Support

SEC. 211. 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, on, or after the date of the order for relief in 
        a case under this title, including interest that accrues on that 
        debt as provided under applicable nonbankruptcy law 
        notwithstanding any other provision of this title, that is--
                    ``(A) owed to or recoverable by--
                          ``(i) a spouse, former spouse, or child of the 
                      debtor or such child's parent, legal guardian, or 
                      responsible relative; 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 of the 
                debtor or such child's parent, without regard to whether 
                such debt is expressly so designated;
                    ``(C) established or subject to establishment 
                before, on, or after the date of the order for relief in 
                a case under this title, by reason of applicable 
                provisions of--

[[Page 119 STAT. 51]]

                          ``(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 of the debtor, or such 
                child's parent, legal guardian, or responsible relative 
                for the purpose of collecting the debt;''.

SEC. 212. 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 so redesignated, by striking 
        ``First'' and inserting ``Second'';
            (4) in paragraph (3), as so redesignated, by striking 
        ``Second'' and inserting ``Third'';
            (5) in paragraph (4), as so redesignated--
                    (A) by striking ``Third'' and inserting ``Fourth''; 
                and
                    (B) by striking the semicolon at the end and 
                inserting a period;
            (6) in paragraph (5), as so redesignated, by striking 
        ``Fourth'' and inserting ``Fifth'';
            (7) in paragraph (6), as so redesignated, by striking 
        ``Fifth'' and inserting ``Sixth'';
            (8) in paragraph (7), as so redesignated, by striking 
        ``Sixth'' and inserting ``Seventh''; and
            (9) by inserting before paragraph (2), as so redesignated, 
        the following:
            ``(1) First:
                    ``(A) Allowed unsecured claims for domestic support 
                obligations that, as of the date of the filing of the 
                petition in a case under this title, are owed to or 
                recoverable by a spouse, former spouse, or child of the 
                debtor, or such child's parent, legal guardian, or 
                responsible relative, without regard to whether the 
                claim is filed by such person or is filed by a 
                governmental unit on behalf of such person, on the 
                condition that funds received under this paragraph by a 
                governmental unit under this title after the date of the 
                filing of the petition shall be applied and distributed 
                in accordance with applicable nonbankruptcy law.
                    ``(B) Subject to claims under subparagraph (A), 
                allowed unsecured claims for domestic support 
                obligations that, as of the date of the filing of the 
                petition, are assigned by a spouse, former spouse, child 
                of the debtor, or such child's parent, legal guardian, 
                or responsible relative to a governmental unit (unless 
                such obligation is assigned voluntarily by the spouse, 
                former spouse, child, parent, legal guardian, or 
                responsible relative of the child for the purpose of 
                collecting the debt) or are owed directly to or 
                recoverable by a governmental unit under applicable 
                nonbankruptcy law, on the condition that funds received

[[Page 119 STAT. 52]]

                under this paragraph by a governmental unit under this 
                title after the date of the filing of the petition be 
                applied and distributed in accordance with applicable 
                nonbankruptcy law.
                    ``(C) If a trustee is appointed or elected under 
                section 701, 702, 703, 1104, 1202, or 1302, the 
                administrative expenses of the trustee allowed under 
                paragraphs (1)(A), (2), and (6) of section 503(b) shall 
                be paid before payment of claims under subparagraphs (A) 
                and (B), to the extent that the trustee administers 
                assets that are otherwise available for the payment of 
                such claims.''.

SEC. 213. 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 by statute, to pay a domestic support 
        obligation, the debtor has paid all amounts payable under such 
        order or such statute for such obligation that first become 
        payable after the date of the filing of the petition.'';
            (2) in section 1208(c)--
                    (A) in paragraph (8), by striking ``or'' at the end;
                    (B) in paragraph (9), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(10) failure of the debtor to pay any domestic support 
        obligation that first becomes payable after the date of the 
        filing of the petition.'';
            (3) in section 1222(a)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(4) notwithstanding any other provision of this section, a 
        plan may provide for less than full payment of all amounts owed 
        for a claim entitled to priority under section 507(a)(1)(B) only 
        if the plan provides that all of the debtor's projected 
        disposable income for a 5-year period beginning on the date that 
        the first payment is due under the plan will be applied to make 
        payments under the plan.'';
            (4) in section 1222(b)--
                    (A) in paragraph (10), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (11) as paragraph 
                (12); and
                    (C) by inserting after paragraph (10) the following:
            ``(11) provide for the payment of interest accruing after 
        the date of the filing of the petition on unsecured claims that 
        are nondischargeable under section 1228(a), except that such 
        interest may be paid only to the extent that the debtor has 
        disposable income available to pay such interest after making 
        provision for full payment of all allowed claims; and'';
            (5) in section 1225(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:

[[Page 119 STAT. 53]]

            ``(7) the debtor has paid all amounts that are required to 
        be paid under a domestic support obligation and that first 
        become payable after the date of the filing of the petition if 
        the debtor is required by a judicial or administrative order, or 
        by statute, to pay such domestic support obligation.'';
            (6) in section 1228(a), in the matter preceding paragraph 
        (1), by inserting ``, and in the case of a debtor who is 
        required by a judicial or administrative order, or by statute, 
        to pay a domestic support obligation, after such debtor 
        certifies that all amounts payable under such order or such 
        statute that are due on or before the date of the certification 
        (including amounts due before the petition was filed, but only 
        to the extent provided for by the plan) have been paid'' after 
        ``completion by the debtor of all payments under the plan'';
            (7) in section 1307(c)--
                    (A) in paragraph (9), by striking ``or'' at the end;
                    (B) in paragraph (10), by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(11) failure of the debtor to pay any domestic support 
        obligation that first becomes payable after the date of the 
        filing of the petition.'';
            (8) in section 1322(a)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(4) notwithstanding any other provision of this section, a 
        plan may provide for less than full payment of all amounts owed 
        for a claim entitled to priority under section 507(a)(1)(B) only 
        if the plan provides that all of the debtor's projected 
        disposable income for a 5-year period beginning on the date that 
        the first payment is due under the plan will be applied to make 
        payments under the plan.'';
            (9) in section 1322(b)--
                    (A) in paragraph (9), by striking ``; and'' and 
                inserting a semicolon;
                    (B) by redesignating paragraph (10) as paragraph 
                (11); and
                    (C) inserting after paragraph (9) the following:
            ``(10) provide for the payment of interest accruing after 
        the date of the filing of the petition on unsecured claims that 
        are nondischargeable under section 1328(a), except that such 
        interest may be paid only to the extent that the debtor has 
        disposable income available to pay such interest after making 
        provision for full payment of all allowed claims; and'';
            (10) in section 1325(a), as amended by section 102, by 
        inserting after paragraph (7) the following:
            ``(8) the debtor has paid all amounts that are required to 
        be paid under a domestic support obligation and that first 
        become payable after the date of the filing of the petition if 
        the debtor is required by a judicial or administrative order, or 
        by statute, to pay such domestic support obligation; and'';
            (11) in section 1328(a), in the matter preceding paragraph 
        (1), by inserting ``, and in the case of a debtor who is 
        required by a judicial or administrative order, or by statute, 
        to pay a domestic support obligation, after such debtor 
        certifies that

[[Page 119 STAT. 54]]

        all amounts payable under such order or such statute that are 
        due on or before the date of the certification (including 
        amounts due before the petition was filed, but only to the 
        extent provided for by the plan) have been paid'' after 
        ``completion by the debtor of all payments under the plan''.

SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION 
            PROCEEDINGS.

    Section 362(b) of title 11, United States Code, is amended by 
striking paragraph (2) and inserting the following:
            ``(2) under subsection (a)--
                    ``(A) of the commencement or continuation of a civil 
                action or proceeding--
                          ``(i) for the establishment of paternity;
                          ``(ii) for the establishment or modification 
                      of an order for domestic support obligations;
                          ``(iii) concerning child custody or 
                      visitation;
                          ``(iv) for the dissolution of a marriage, 
                      except to the extent that such proceeding seeks to 
                      determine the division of property that is 
                      property of the estate; or
                          ``(v) regarding domestic violence;
                    ``(B) of the collection of a domestic support 
                obligation from property that is not property of the 
                estate;
                    ``(C) with respect to the withholding of income that 
                is property of the estate or property of the debtor for 
                payment of a domestic support obligation under a 
                judicial or administrative order or a statute;
                    ``(D) of the withholding, suspension, or restriction 
                of a driver's license, a professional or occupational 
                license, or a recreational license, under State law, as 
                specified in section 466(a)(16) of the Social Security 
                Act;
                    ``(E) of the reporting of overdue support owed by a 
                parent to any consumer reporting agency as specified in 
                section 466(a)(7) of the Social Security Act;
                    ``(F) of the interception of a tax refund, as 
                specified in sections 464 and 466(a)(3) of the Social 
                Security Act or under an analogous State law; or
                    ``(G) of the enforcement of a medical obligation, as 
                specified under title IV of the Social Security Act;''.

SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY, MAINTENANCE, 
            AND SUPPORT.

    Section 523 of title 11, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (5) and inserting the 
                following:
            ``(5) for a domestic support obligation;''; and
                    (B) by striking paragraph (18);
            (2) in subsection (c), by striking ``(6), or (15)'' each 
        place it appears and inserting ``or (6)''; and
            (3) in paragraph (15), as added by Public Law 103-394 (108 
        Stat. 4133)--
                    (A) by inserting ``to a spouse, former spouse, or 
                child of the debtor and'' before ``not of the kind'';
                    (B) by inserting ``or'' after ``court of record,''; 
                and
                    (C) by striking ``unless--'' and all that follows 
                through the end of the paragraph and inserting a 
                semicolon.

[[Page 119 STAT. 55]]

SEC. 216. 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));'';
            (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''; and
            (3) in subsection (g)(2), by striking ``subsection (f)(2)'' 
        and inserting ``subsection (f)(1)(B)''.

SEC. 217. 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;''.

SEC. 218. DISPOSABLE INCOME DEFINED.

    Section 1225(b)(2)(A) of title 11, United States Code, is amended by 
inserting ``or for a domestic support obligation that first becomes 
payable after the date of the filing of the petition'' after ``dependent 
of the debtor''.

SEC. 219. 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) in subsection (a)--
                    (A) in paragraph (8), by striking ``and'' at the 
                end;
                    (B) in paragraph (9), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(10) if with respect to the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (c); and''; and
            (2) by adding at the end the following:

    ``(c)(1) <<NOTE: Notices.>> In a case described in subsection 
(a)(10) to which subsection (a)(10) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (a)(10) of such claim and of the right 
        of such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of the 
        Social Security Act for the State in which such holder resides, 
        for assistance in collecting child support during and after the 
        case under this title;
            ``(ii) include in the notice provided under clause (i) the 
        address and telephone number of such State child support 
        enforcement agency; and
            ``(iii) include in the notice provided under clause (i) an 
        explanation of the rights of such holder to payment of such 
        claim under this chapter;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and

[[Page 119 STAT. 56]]

            ``(ii) include in the notice provided under clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 727, provide written notice to such holder and to 
        such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                          ``(I) is not discharged under paragraph (2), 
                      (4), or (14A) of section 523(a); or
                          ``(II) was reaffirmed by the debtor under 
                      section 524(c).

    ``(2)(A) The holder of a claim described in subsection (a)(10) or 
the State child support enforcement agency of the State in which such 
holder resides may request from a creditor described in paragraph 
(1)(C)(iv) 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 by reason 
of making such disclosure.''.
    (b) Duties of Trustee Under Chapter 11.--Section 1106 of title 11, 
United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (6), by striking ``and'' at the 
                end;
                    (B) in paragraph (7), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(8) if with respect to the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (c).''; and
            (2) by adding at the end the following:

    ``(c)(1) <<NOTE: Notices.>> In a case described in subsection (a)(8) 
to which subsection (a)(8) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (a)(8) of such claim and of the right of 
        such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of the 
        Social Security Act for the State in which such holder resides, 
        for assistance in collecting child support during and after the 
        case under this title; and
            ``(ii) include in the notice required by clause (i) the 
        address and telephone number of such State child support 
        enforcement agency;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice required by clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 1141, provide written notice to such holder and to 
        such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and

[[Page 119 STAT. 57]]

                    ``(iv) the name of each creditor that holds a claim 
                that--
                          ``(I) is not discharged under paragraph (2), 
                      (4), or (14A) of section 523(a); or
                          ``(II) was reaffirmed by the debtor under 
                      section 524(c).

    ``(2)(A) The holder of a claim described in subsection (a)(8) or the 
State child enforcement support agency of the State in which such holder 
resides may request from a creditor described in paragraph (1)(C)(iv) 
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 by reason 
of making such disclosure.''.
    (c) Duties of Trustee Under Chapter 12.--Section 1202 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 the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (c).''; and
            (2) by adding at the end the following:

    ``(c)(1) <<NOTE: Notices.>> In a case described in subsection (b)(6) 
to which subsection (b)(6) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (b)(6) of such claim and of the right of 
        such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of the 
        Social Security Act for the State in which such holder resides, 
        for assistance in collecting child support during and after the 
        case under this title; and
            ``(ii) include in the notice provided under clause (i) the 
        address and telephone number of such State child support 
        enforcement agency;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 1228, provide written notice to such holder and to 
        such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                          ``(I) is not discharged under paragraph (2), 
                      (4), or (14A) of section 523(a); or
                          ``(II) was reaffirmed by the debtor under 
                      section 524(c).

    ``(2)(A) The holder of a claim described in subsection (b)(6) or the 
State child support enforcement agency of the State in

[[Page 119 STAT. 58]]

which such holder resides may request from a creditor described in 
paragraph (1)(C)(iv) 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 by reason 
of making that disclosure.''.
    (d) 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 the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (d).''; and
            (2) by adding at the end the following:

    ``(d)(1) <<NOTE: Notices.>> In a case described in subsection (b)(6) 
to which subsection (b)(6) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (b)(6) of such claim and of the right of 
        such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of the 
        Social Security Act for the State in which such holder resides, 
        for assistance in collecting child support during and after the 
        case under this title; and
            ``(ii) include in the notice provided under clause (i) the 
        address and telephone number of such State child support 
        enforcement agency;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 1328, provide written notice to such holder and to 
        such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                          ``(I) is not discharged under paragraph (2) or 
                      (4) of section 523(a); or
                          ``(II) was reaffirmed by the debtor under 
                      section 524(c).

    ``(2)(A) The holder of a claim described in subsection (b)(6) or the 
State child support enforcement agency of the State in which such holder 
resides may request from a creditor described in paragraph (1)(C)(iv) 
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 by reason 
of making that disclosure.''.

[[Page 119 STAT. 59]]

SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS AND LOANS.

    Section 523(a) of title 11, United States Code, is amended by 
striking paragraph (8) and inserting the following:
            ``(8) unless excepting such debt from discharge under this 
        paragraph would impose an undue hardship on the debtor and the 
        debtor's dependents, for--
                    ``(A)(i) 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
                    ``(ii) an obligation to repay funds received as an 
                educational benefit, scholarship, or stipend; or
                    ``(B) any other educational loan that is a qualified 
                education loan, as defined in section 221(d)(1) of the 
                Internal Revenue Code of 1986, incurred by a debtor who 
                is an individual;''.

                 Subtitle C--Other Consumer Protections

SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY FILINGS.

    Section 110 of title 11, United States Code, is amended--
            (1) in subsection (a)(1), by striking ``or an employee of an 
        attorney'' and inserting ``for the debtor or an employee of such 
        attorney under the direct supervision of such attorney'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by adding at the end the 
                following: ``If a bankruptcy petition preparer is not an 
                individual, then an officer, principal, responsible 
                person, or partner of the bankruptcy petition preparer 
                shall be required to--
            ``(A) sign the document for filing; and
            ``(B) print on the document the name and address of that 
        officer, principal, responsible person, or partner.''; and
                    (B) by striking paragraph (2) and inserting the 
                following:

    ``(2)(A) <<NOTE: Notices.>> Before preparing any document for filing 
or accepting any fees from a debtor, the bankruptcy petition preparer 
shall provide to the debtor a written notice which shall be on an 
official form prescribed by the Judicial Conference of the United States 
in accordance with rule 9009 of the Federal Rules of Bankruptcy 
Procedure.

    ``(B) The notice under subparagraph (A)--
            ``(i) shall inform the debtor in simple language that a 
        bankruptcy petition preparer is not an attorney and may not 
        practice law or give legal advice;
            ``(ii) may contain a description of examples of legal advice 
        that a bankruptcy petition preparer is not authorized to give, 
        in addition to any advice that the preparer may not give by 
        reason of subsection (e)(2); and
            ``(iii) shall--
                    ``(I) be signed by the debtor and, under penalty of 
                perjury, by the bankruptcy petition preparer; and
                    ``(II) be filed with any document for filing.'';
            (3) in subsection (c)--
                    (A) in paragraph (2)--

[[Page 119 STAT. 60]]

                          (i) by striking ``(2) For purposes'' and 
                      inserting ``(2)(A) Subject to subparagraph (B), 
                      for purposes''; and
                          (ii) by adding at the end the following:

    ``(B) If a bankruptcy petition preparer is not an individual, the 
identifying number of the bankruptcy petition preparer shall be the 
Social Security account number of the officer, principal, responsible 
person, or partner of the bankruptcy petition preparer.''; and
                    (B) by striking paragraph (3);
            (4) in subsection (d)--
                    (A) by striking ``(d)(1)'' and inserting ``(d)''; 
                and
                    (B) by striking paragraph (2);
            (5) in subsection (e)--
                    (A) by striking paragraph (2); and
                    (B) by adding at the end the following:

    ``(2)(A) A bankruptcy petition preparer may not offer a potential 
bankruptcy debtor any legal advice, including any legal advice described 
in subparagraph (B).
    ``(B) The legal advice referred to in subparagraph (A) includes 
advising the debtor--
            ``(i) whether--
                    ``(I) to file a petition under this title; or
                    ``(II) commencing a case under chapter 7, 11, 12, or 
                13 is appropriate;
            ``(ii) whether the debtor's debts will be discharged in a 
        case under this title;
            ``(iii) whether the debtor will be able to retain the 
        debtor's home, car, or other property after commencing a case 
        under this title;
            ``(iv) concerning--
                    ``(I) the tax consequences of a case brought under 
                this title; or
                    ``(II) the dischargeability of tax claims;
            ``(v) whether the debtor may or should promise to repay 
        debts to a creditor or enter into a reaffirmation agreement with 
        a creditor to reaffirm a debt;
            ``(vi) concerning how to characterize the nature of the 
        debtor's interests in property or the debtor's debts; or
            ``(vii) concerning bankruptcy procedures and rights.'';
            (6) in subsection (f)--
                    (A) by striking ``(f)(1)'' and inserting ``(f)''; 
                and
                    (B) by striking paragraph (2);
            (7) in subsection (g)--
                    (A) by striking ``(g)(1)'' and inserting ``(g)''; 
                and
                    (B) by striking paragraph (2);
            (8) in subsection (h)--
                    (A) by redesignating paragraphs (1) through (4) as 
                paragraphs (2) through (5), respectively;
                    (B) by inserting before paragraph (2), as so 
                redesignated, the following:

    ``(1) The Supreme Court may promulgate rules under section 2075 of 
title 28, or the Judicial Conference of the United States may prescribe 
guidelines, for setting a maximum allowable fee chargeable by a 
bankruptcy petition preparer. <<NOTE: Notification.>> A bankruptcy 
petition preparer shall notify the debtor of any such maximum amount 
before preparing any document for filing for a debtor or accepting any 
fee from the debtor.'';

[[Page 119 STAT. 61]]

                    (C) in paragraph (2), as so redesignated--
                          (i) by striking ``Within 10 days after the 
                      date of the filing of a petition, a bankruptcy 
                      petition preparer shall file a'' and inserting 
                      ``A'';
                          (ii) by inserting ``by the bankruptcy petition 
                      preparer shall be filed together with the 
                      petition,'' after ``perjury''; and
                          (iii) by adding at the end the following: ``If 
                      rules or guidelines setting a maximum fee for 
                      services have been promulgated or prescribed under 
                      paragraph (1), the declaration under this 
                      paragraph shall include a certification that the 
                      bankruptcy petition preparer complied with the 
                      notification requirement under paragraph (1).'';
                    (D) by striking paragraph (3), as so redesignated, 
                and inserting the following:

    ``(3)(A) The court shall disallow and order the immediate turnover 
to the bankruptcy trustee any fee referred to in paragraph (2) found to 
be in excess of the value of any services--
            ``(i) rendered by the bankruptcy petition preparer during 
        the 12-month period immediately preceding the date of the filing 
        of the petition; or
            ``(ii) found to be in violation of any rule or guideline 
        promulgated or prescribed under paragraph (1).

    ``(B) All fees charged by a bankruptcy petition preparer may be 
forfeited in any case in which the bankruptcy petition preparer fails to 
comply with this subsection or subsection (b), (c), (d), (e), (f), or 
(g).
    ``(C) An individual may exempt any funds recovered under this 
paragraph under section 522(b).''; and
                    (E) in paragraph (4), as so redesignated, by 
                striking ``or the United States trustee'' and inserting 
                ``the United States trustee (or the bankruptcy 
                administrator, if any) or the court, on the initiative 
                of the court,'';
            (9) in subsection (i)(1), by striking the matter preceding 
        subparagraph (A) and inserting the following:

    ``(i)(1) If a bankruptcy petition preparer violates this section or 
commits any act that the court finds to be fraudulent, unfair, or 
deceptive, on the motion of the debtor, trustee, United States trustee 
(or the bankruptcy administrator, if any), and after notice and a 
hearing, the court shall order the bankruptcy petition preparer to pay 
to the debtor--'';
            (10) in subsection (j)--
                    (A) in paragraph (2)--
                          (i) in subparagraph (A)(i)(I), by striking ``a 
                      violation of which subjects a person to criminal 
                      penalty'';
                          (ii) in subparagraph (B)--
                                    (I) by striking ``or has not paid a 
                                penalty'' and inserting ``has not paid a 
                                penalty''; and
                                    (II) by inserting ``or failed to 
                                disgorge all fees ordered by the court'' 
                                after ``a penalty imposed under this 
                                section,'';
                    (B) by redesignating paragraph (3) as paragraph (4); 
                and
                    (C) by inserting after paragraph (2) the following:

    ``(3) The court, as part of its contempt power, may enjoin a 
bankruptcy petition preparer that has failed to comply with

[[Page 119 STAT. 62]]

a previous order issued under this section. The injunction under this 
paragraph may be issued on the motion of the court, the trustee, or the 
United States trustee (or the bankruptcy administrator, if any).''; and
            (11) by adding at the end the following:

    ``(l)(1) A bankruptcy petition preparer who fails to comply with any 
provision of subsection (b), (c), (d), (e), (f), (g), or (h) may be 
fined not more than $500 for each such failure.
    ``(2) The court shall triple the amount of a fine assessed under 
paragraph (1) in any case in which the court finds that a bankruptcy 
petition preparer--
            ``(A) advised the debtor to exclude assets or income that 
        should have been included on applicable schedules;
            ``(B) advised the debtor to use a false Social Security 
        account number;
            ``(C) failed to inform the debtor that the debtor was filing 
        for relief under this title; or
            ``(D) prepared a document for filing in a manner that failed 
        to disclose the identity of the bankruptcy petition preparer.

    ``(3) A debtor, trustee, creditor, or United States trustee (or the 
bankruptcy administrator, if any) may file a motion for an order 
imposing a fine on the bankruptcy petition preparer for any violation of 
this section.
    ``(4)(A) Fines imposed under this subsection in judicial districts 
served by United States trustees shall be paid to the United States 
trustee, who shall deposit an amount equal to such fines in a special 
account of the United States Trustee System Fund referred to in section 
586(e)(2) of title 28. Amounts deposited under this subparagraph shall 
be available to fund the enforcement of this section on a national 
basis.
    ``(B) Fines imposed under this subsection in judicial districts 
served by bankruptcy administrators shall be deposited as offsetting 
receipts to the fund established under section 1931 of title 28, and 
shall remain available until expended to reimburse any appropriation for 
the amount paid out of such appropriation for expenses of the operation 
and maintenance of the courts of the United States.''.

SEC. 222. SENSE OF CONGRESS.

    It is the sense of Congress that States should develop curricula 
relating to the subject of personal finance, designed for use in 
elementary and secondary schools.

SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.

    Section 507(a) of title 11, United States Code, as amended by 
section 212, is amended by inserting after paragraph (9) the following:
            ``(10) Tenth, allowed claims for death or personal injury 
        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. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

    (a) In General.--Section 522 of title 11, United States Code, is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (2)--

[[Page 119 STAT. 63]]

                          (i) in subparagraph (A), by striking ``and'' 
                      at the end;
                          (ii) in subparagraph (B), by striking the 
                      period at the end and inserting ``; and'';
                          (iii) by adding at the end the following:
            ``(C) 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.''; and
                          (iv) by striking ``(2)(A) any property'' and 
                      inserting:

    ``(3) Property listed in this paragraph is--
            ``(A) any property'';
                    (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) by striking ``(b) Notwithstanding'' and 
                inserting ``(b)(1) Notwithstanding'';
                    (D) by striking ``paragraph (2)'' each place it 
                appears and inserting ``paragraph (3)'';
                    (E) by striking ``paragraph (1)'' each place it 
                appears and inserting ``paragraph (2)'';
                    (F) by striking ``Such property is--''; and
                    (G) by adding at the end the following:

    ``(4) <<NOTE: Applicability.>> For purposes of paragraph (3)(C) and 
subsection (d)(12), the following shall apply:
            ``(A) If the retirement funds are in a retirement fund that 
        has received a favorable determination under section 7805 of the 
        Internal Revenue Code of 1986, and that determination is in 
        effect as of the date of the filing of the petition in a case 
        under 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 under 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)(I) the retirement fund is in substantial 
                compliance with the applicable requirements of the 
                Internal Revenue Code of 1986; or
                    ``(II) the retirement fund fails to be in 
                substantial compliance with the applicable requirements 
                of the Internal Revenue Code of 1986 and the debtor is 
                not materially responsible for that failure.
            ``(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, under section 401(a)(31) of the Internal Revenue Code of 
        1986, or otherwise, shall not cease to qualify for exemption 
        under paragraph (3)(C) or subsection (d)(12) by reason of such 
        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

[[Page 119 STAT. 64]]

        not cease to qualify for exemption under paragraph (3)(C) or 
        subsection (d)(12) by reason of such 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 such 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, 
is amended--
            (1) in paragraph (17), by striking ``or'' at the end;
            (2) in paragraph (18), by striking the period and inserting 
        a semicolon; and
            (3) by inserting after paragraph (18) the following:
            ``(19) under subsection (a), of withholding of income from a 
        debtor's wages and collection of amounts withheld, under 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(c) 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 under 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) a loan from a thrift savings plan permitted 
                under subchapter III of chapter 84 of title 5, that 
                satisfies the requirements of section 8433(g) of such 
                title;
        but nothing in this paragraph 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, as amended by section 215, is amended by inserting after 
paragraph (17) the following:
            ``(18) 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, under--
                    ``(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

[[Page 119 STAT. 65]]

                    ``(B) a loan from a thrift savings plan permitted 
                under subchapter III of chapter 84 of title 5, that 
                satisfies the requirements of section 8433(g) of such 
                title;
        but nothing in this paragraph 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; or''.

    (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)(19) and any amounts required to repay such loan shall 
not constitute `disposable income' under section 1325.''.
    (e) Asset Limitation.--
            (1) Limitation.--Section 522 of title 11, United States 
        Code, is amended by adding at the end the following:

    ``(n) For assets in individual retirement accounts described in 
section 408 or 408A of the Internal Revenue Code of 1986, other than a 
simplified employee pension under section 408(k) of such Code or a 
simple retirement account under section 408(p) of such Code, the 
aggregate value of such assets exempted under this section, without 
regard to amounts attributable to rollover contributions under section 
402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal 
Revenue Code of 1986, and earnings thereon, shall not exceed $1,000,000 
in a case filed by a debtor who is an individual, except that such 
amount may be increased if the interests of justice so require.''.
            (2) Adjustment of dollar amounts.--Paragraphs (1) and (2) of 
        section 104(b) of title 11, United States Code, are amended by 
        inserting ``522(n),'' after ``522(d),''.

SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

    (a) Exclusions.--Section 541 of title 11, United States Code, is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``or'' at the end;
                    (B) by redesignating paragraph (5) as paragraph (9); 
                and
                    (C) by inserting after paragraph (4) the following:
            ``(5) funds placed in an education individual retirement 
        account (as defined in section 530(b)(1) of the Internal Revenue 
        Code of 1986) not later than 365 days before the date of the 
        filing of the petition in a case under this title, but--
                    ``(A) only if the designated beneficiary of such 
                account was a child, stepchild, grandchild, or 
                stepgrandchild of the debtor for the taxable year for 
                which funds were placed in such account;
                    ``(B) only to the extent that 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
                    ``(C) in the case of funds placed in all such 
                accounts having the same designated beneficiary not 
                earlier than

[[Page 119 STAT. 66]]

                720 days nor later than 365 days before such date, only 
                so much of such funds as does not exceed $5,000;
            ``(6) funds used to purchase a tuition credit or certificate 
        or contributed to an account in accordance with section 
        529(b)(1)(A) of the Internal Revenue Code of 1986 under a 
        qualified State tuition program (as defined in section 529(b)(1) 
        of such Code) not later than 365 days before the date of the 
        filing of the petition in a case under this title, but--
                    ``(A) only if the designated beneficiary of the 
                amounts paid or contributed to such tuition program was 
                a child, stepchild, grandchild, or stepgrandchild of the 
                debtor for the taxable year for which funds were paid or 
                contributed;
                    ``(B) with respect to the aggregate amount paid or 
                contributed to such program having the same designated 
                beneficiary, only so much of such amount as does not 
                exceed the total contributions permitted under section 
                529(b)(7) of such Code with respect to such beneficiary, 
                as adjusted beginning on the date of the filing of the 
                petition in a case under this title by the annual 
                increase or decrease (rounded to the nearest tenth of 1 
                percent) in the education expenditure category of the 
                Consumer Price Index prepared by the Department of 
                Labor; and
                    ``(C) in the case of funds paid or contributed to 
                such program having the same designated beneficiary not 
                earlier than 720 days nor later than 365 days before 
                such date, only so much of such funds as does not exceed 
                $5,000;''; and
            (2) by adding at the end the following:

    ``(e) In determining whether any of the relationships specified in 
paragraph (5)(A) or (6)(A) of subsection (b) exists, a legally adopted 
child of an individual (and a child who is a member of an individual's 
household, if placed with such individual by an authorized placement 
agency for legal adoption by such individual), or a foster child of an 
individual (if such child has as the child's principal place of abode 
the home of the debtor and is a member of the debtor's household) shall 
be treated as a child of such individual by blood.''.
    (b) Debtor's Duties.--Section 521 of title 11, United States Code, 
as amended by section 106, is amended by adding at the end the 
following:
    ``(c) In addition to meeting the requirements under subsection (a), 
a debtor shall file with the court a record of any interest that a 
debtor has in an education individual retirement account (as defined in 
section 530(b)(1) of the Internal Revenue Code of 1986) or under a 
qualified State tuition program (as defined in section 529(b)(1) of such 
Code).''.

SEC. 226. 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 the value of whose nonexempt 
        property is 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

[[Page 119 STAT. 67]]

        express or implied purpose of providing information, advice, 
        counsel, document preparation, or filing, or attendance at a 
        creditors' meeting or appearing in a case or proceeding on 
        behalf of another or providing legal representation with respect 
        to a case or proceeding under this title;''; and
            (3) by inserting after paragraph (12) the following:
            ``(12A) `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 under section 110, but does not 
        include--
                    ``(A) any person who is an officer, director, 
                employee, or agent of a person who provides such 
                assistance or of the bankruptcy petition preparer;
                    ``(B) a nonprofit organization that is exempt from 
                taxation under section 501(c)(3) of the Internal Revenue 
                Code of 1986;
                    ``(C) a creditor of such assisted person, to the 
                extent that the creditor is assisting such assisted 
                person to restructure any debt owed by such assisted 
                person to the creditor;
                    ``(D) a 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 
                depository institution or credit union; or
                    ``(E) an author, publisher, distributor, or seller 
                of works subject to copyright protection under title 17, 
                when acting in such capacity.''.

    (b) Conforming Amendment.--Section 104(b) of title 11, United States 
Code, is amended by inserting ``101(3),'' after ``sections'' each place 
it appears.

SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

    (a) Enforcement.--Subchapter II of chapter 5 of title 11, United 
States Code, is amended by adding at the end the following:

``Sec. 526. Restrictions on debt relief agencies

    ``(a) A debt relief agency shall not--
            ``(1) fail to perform any service that such agency informed 
        an assisted person or prospective assisted person it would 
        provide in connection with a case or proceeding under this 
        title;
            ``(2) make any statement, or counsel or advise any assisted 
        person or prospective assisted person to make a statement in a 
        document filed in a case or proceeding under this title, that is 
        untrue and misleading, or that upon the exercise of reasonable 
        care, should have been known by such agency to be untrue or 
        misleading;
            ``(3) misrepresent to any assisted person or prospective 
        assisted person, directly or indirectly, affirmatively or by 
        material omission, with respect to--
                    ``(A) the services that such agency will provide to 
                such person; or
                    ``(B) the benefits and risks that may result if such 
                person becomes a debtor in a case under this title; or

[[Page 119 STAT. 68]]

            ``(4) advise an assisted person or prospective assisted 
        person to incur more debt in contemplation of such person filing 
        a case under this title or 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 case under this 
        title.

    ``(b) Any waiver by any assisted person of any protection or right 
provided 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)(1) Any contract for bankruptcy assistance between a debt 
relief agency and an assisted person that does not comply with the 
material requirements of this section, section 527, or section 528 shall 
be void and may not be enforced by any Federal or State court or by any 
other person, other than such assisted 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 that such debt relief agency has 
received, for actual damages, and for reasonable attorneys' fees and 
costs if such agency is found, after notice and a hearing, to have--
            ``(A) intentionally or negligently failed to comply with any 
        provision of this section, section 527, or section 528 with 
        respect to a case or proceeding under this title for such 
        assisted person;
            ``(B) provided bankruptcy assistance to an assisted person 
        in a case or proceeding under this title that is dismissed or 
        converted to a case under another chapter of this title because 
        of such agency's intentional or negligent failure to file any 
        required document including those specified in section 521; or
            ``(C) intentionally or negligently disregarded the material 
        requirements of this title or the Federal Rules of Bankruptcy 
        Procedure applicable to such 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 attorneys' fees as determined by the 
        court.

    ``(4) The district courts of the United States for districts 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.

[[Page 119 STAT. 69]]

    ``(d) No provision of this section, section 527, or section 528 
shall--
            ``(1) annul, alter, affect, or exempt any person subject to 
        such 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; or
            ``(2) be deemed to limit or curtail the authority or 
        ability--
                    ``(A) of a State or subdivision or instrumentality 
                thereof, to determine and enforce qualifications for the 
                practice of law under the laws of that State; or
                    ``(B) of a Federal court to determine and enforce 
                the qualifications for the practice of law before that 
                court.''.

    (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 525, the following:

``526. Restrictions on debt relief agencies.''.

SEC. 228. DISCLOSURES.

    (a) Disclosures.--Subchapter II of chapter 5 of title 11, United 
States Code, as amended by section 227, 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--
            ``(1) <<NOTE: Notices.>> the written notice required under 
        section 342(b)(1); and
            ``(2) <<NOTE: Deadline.>> to the extent not covered in the 
        written notice described in paragraph (1), and not later than 3 
        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 that--
                    ``(A) all information that the assisted person is 
                required to provide with a petition and thereafter 
                during a case under this title is required to be 
                complete, accurate, and truthful;
                    ``(B) all assets and all liabilities are required to 
                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 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 case under chapter 13 of 
                this title, disposable income (determined in accordance 
                with section 707(b)(2)), are required to be stated after 
                reasonable inquiry; and
                    ``(D) information that 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 case under this title or other 
                sanction, including a criminal sanction.

    ``(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) the following

[[Page 119 STAT. 70]]

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 
available under 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. 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 3 to 5 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 
should 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

[[Page 119 STAT. 71]]

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.

    ``(d) <<NOTE: Records.>> A debt relief agency shall maintain a copy 
of the notices required under subsection (a) of this section for 2 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 227, is amended by 
inserting after the item relating to section 526 the following:

``527. Disclosures.''.

SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

    (a) Enforcement.--Subchapter II of chapter 5 of title 11, United 
States Code, as amended by sections 227 and 228, is amended by adding at 
the end the following:

``Sec. 528. Requirements for debt relief agencies

    ``(a) A debt relief agency shall--
            ``(1) <<NOTE: Deadline. Contracts.>> not later than 5 
        business days after the first date on which such 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 such assisted person that 
        explains clearly and conspicuously--
                    ``(A) the services such agency will provide to such 
                assisted person; and
                    ``(B) the fees or charges for such services, and the 
                terms of payment;
            ``(2) provide the assisted person with a copy of the fully 
        executed and completed contract;
            ``(3) clearly and conspicuously 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 bankruptcy relief under this title; and
            ``(4) clearly and conspicuously use the following statement 
        in such advertisement: `We are a debt relief agency. We help 
        people file for bankruptcy relief under the Bankruptcy Code.' or 
        a substantially similar statement.

    ``(b)(1) An advertisement of bankruptcy assistance services or of 
the benefits of bankruptcy directed to the general public includes--

[[Page 119 STAT. 72]]

            ``(A) descriptions of bankruptcy assistance in connection 
        with a chapter 13 plan whether or not chapter 13 is specifically 
        mentioned in such advertisement; and
            ``(B) statements such as `federally supervised repayment 
        plan' or `Federal debt restructuring help' or other similar 
        statements that could lead a reasonable consumer to believe that 
        debt counseling was being offered when in fact the services were 
        directed to providing bankruptcy assistance with a chapter 13 
        plan or other form of bankruptcy relief under this title.

    ``(2) An advertisement, directed to the general public, indicating 
that the debt relief agency provides assistance with respect to credit 
defaults, mortgage foreclosures, eviction proceedings, excessive debt, 
debt collection pressure, or inability to pay any consumer debt shall--
            ``(A) disclose clearly and conspicuously in such 
        advertisement that the assistance may involve bankruptcy relief 
        under this title; and
            ``(B) include the following statement: `We are a debt relief 
        agency. We help people file for bankruptcy 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 section 227 and 228, is 
amended by inserting after the item relating to section 527, the 
following:

``528. Requirements for debt relief agencies.''.

SEC. 230. GAO STUDY.

    (a) Study.--Not later than 270 days after the date of 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, United States Code, or the bankruptcy courts, 
to provide to the Office of Child Support Enforcement promptly after the 
commencement of cases by debtors who are individuals under such title, 
the names and social security account 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 enactment of 
this Act, the Comptroller General shall submit to the President pro 
tempore of the Senate and the Speaker of the House of Representatives a 
report containing the results of the study required by subsection (a).

SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.

    (a) Limitation.--Section 363(b)(1) of title 11, United States Code, 
is amended by striking the period at the end and inserting the 
following:
``, except that if the debtor in connection with offering a product or a 
service discloses to an individual a policy prohibiting the transfer of 
personally identifiable information about individuals to persons that 
are not affiliated with the debtor and if such policy is in effect on 
the date of the commencement of the case, then the trustee may not sell 
or lease personally identifiable information to any person unless--

[[Page 119 STAT. 73]]

            ``(A) such sale or such lease is consistent with such 
        policy; or
            ``(B) after appointment of a consumer privacy ombudsman in 
        accordance with section 332, and after notice and a hearing, the 
        court approves such sale or such lease--
                    ``(i) giving due consideration to the facts, 
                circumstances, and conditions of such sale or such 
                lease; and
                    ``(ii) finding that no showing was made that such 
                sale or such lease would violate applicable 
                nonbankruptcy law.''.

    (b) Definition.--Section 101 of title 11, United States Code, is 
amended by inserting after paragraph (41) the following:
            ``(41A) `personally identifiable information' means--
                    ``(A) if provided by an individual to the debtor in 
                connection with obtaining a product or a service from 
                the debtor primarily for personal, family, or household 
                purposes--
                          ``(i) the first name (or initial) and last 
                      name of such individual, whether given at birth or 
                      time of adoption, or resulting from a lawful 
                      change of name;
                          ``(ii) the geographical address of a physical 
                      place of residence of such individual;
                          ``(iii) an electronic address (including an e-
                      mail address) of such individual;
                          ``(iv) a telephone number dedicated to 
                      contacting such individual at such physical place 
                      of residence;
                          ``(v) a social security account number issued 
                      to such individual; or
                          ``(vi) the account number of a credit card 
                      issued to such individual; or
                    ``(B) if identified in connection with 1 or more of 
                the items of information specified in subparagraph (A)--
                          ``(i) a birth date, the number of a 
                      certificate of birth or adoption, or a place of 
                      birth; or
                          ``(ii) any other information concerning an 
                      identified individual that, if disclosed, will 
                      result in contacting or identifying such 
                      individual physically or electronically;''.

SEC. 232. CONSUMER PRIVACY OMBUDSMAN.

    (a) Consumer Privacy Ombudsman.--Title 11 of the United States Code 
is amended by inserting after section 331 the following:

``Sec. 332. Consumer privacy ombudsman

    ``(a) <<NOTE: Deadline.>> If a hearing is required under section 
363(b)(1)(B), the court shall order the United States trustee to 
appoint, not later than 5 days before the commencement of the hearing, 1 
disinterested person (other than the United States trustee) to serve as 
the consumer privacy ombudsman in the case and shall require that notice 
of such hearing be timely given to such ombudsman.

    ``(b) The consumer privacy ombudsman may appear and be heard at such 
hearing and shall provide to the court information to assist the court 
in its consideration of the facts, circumstances, and conditions of the 
proposed sale or lease of personally identifiable information under 
section 363(b)(1)(B). Such information may include presentation of--
            ``(1) the debtor's privacy policy;

[[Page 119 STAT. 74]]

            ``(2) the potential losses or gains of privacy to consumers 
        if such sale or such lease is approved by the court;
            ``(3) the potential costs or benefits to consumers if such 
        sale or such lease is approved by the court; and
            ``(4) the potential alternatives that would mitigate 
        potential privacy losses or potential costs to consumers.

    ``(c) A consumer privacy ombudsman shall not disclose any personally 
identifiable information obtained by the ombudsman under this title.''.
    (b) Compensation of Consumer Privacy Ombudsman.--Section 330(a)(1) 
of title 11, United States Code, is amended in the matter preceding 
subparagraph (A), by inserting ``a consumer privacy ombudsman appointed 
under section 332,'' before ``an examiner''.
    (c) Conforming Amendment.--The table of sections for subchapter II 
of chapter 3 of title 11, United States Code, is amended by adding at 
the end the following:

``332. Consumer privacy ombudsman.''.

SEC. 233. PROHIBITION ON DISCLOSURE OF NAME OF MINOR CHILDREN.

    (a) Prohibition.--Title 11 of the United States Code, as amended by 
section 106, is amended by inserting after section 111 the following:

``Sec. 112. Prohibition on disclosure of name of minor children

    ``The debtor may be required to provide information regarding a 
minor child involved in matters under this title but may not be required 
to disclose in the public records in the case the name of such minor 
child. The debtor may be required to disclose the name of such minor 
child in a nonpublic record that is maintained by the court and made 
available by the court for examination by the United States trustee, the 
trustee, and the auditor (if any) serving under section 586(f) of title 
28, in the case. The court, the United States trustee, the trustee, and 
such auditor shall not disclose the name of such minor child maintained 
in such nonpublic record.''.
    (b) Clerical Amendment.--The table of sections for chapter 1 of 
title 11, United States Code, as amended by section 106, is amended by 
inserting after the item relating to section 111 the following:

``112. Prohibition on disclosure of name of minor children.''.

    (c) Conforming Amendment.--Section 107(a) of title 11, United States 
Code, is amended by inserting ``and subject to section 112'' after 
``section''.

SEC. 234. PROTECTION OF PERSONAL INFORMATION.

    (a) Restriction of Public Access to Certain Information Contained in 
Bankruptcy Case Files.--Section 107 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(c)(1) The bankruptcy court, for cause, may protect an individual, 
with respect to the following types of information to the extent the 
court finds that disclosure of such information would create undue risk 
of identity theft or other unlawful injury to the individual or the 
individual's property:

[[Page 119 STAT. 75]]

            ``(A) Any means of identification (as defined in section 
        1028(d) of title 18) contained in a paper filed, or to be filed, 
        in a case under this title.
            ``(B) Other information contained in a paper described in 
        subparagraph (A).

    ``(2) Upon ex parte application demonstrating cause, the court shall 
provide access to information protected pursuant to paragraph (1) to an 
entity acting pursuant to the police or regulatory power of a domestic 
governmental unit.
    ``(3) The United States trustee, bankruptcy administrator, trustee, 
and any auditor serving under section 586(f) of title 28--
            ``(A) shall have full access to all information contained in 
        any paper filed or submitted in a case under this title; and
            ``(B) shall not disclose information specifically protected 
        by the court under this title.''.

    (b) Security of Social Security Account Number of Debtor in Notice 
to Creditor.--Section 342(c) of title 11, United States Code, is 
amended--
            (1) by inserting ``last 4 digits of the'' before ``taxpayer 
        identification number''; and
            (2) by adding at the end the following: ``If the notice 
        concerns an amendment that adds a creditor to the schedules of 
        assets and liabilities, the debtor shall include the full 
        taxpayer identification number in the notice sent to that 
        creditor, but the debtor shall include only the last 4 digits of 
        the taxpayer identification number in the copy of the notice 
        filed with the court.''.

    (c) Conforming Amendment.--Section 107(a) of title 11, United States 
Code, is amended by striking ``subsection (b),'' and inserting 
``subsections (b) and (c),''.

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

SEC. 301. TECHNICAL AMENDMENTS.

    Section 523(a)(17) of title 11, United States Code, is amended--
            (1) by striking ``by a court'' and inserting ``on a prisoner 
        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. 302. 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:
            ``(3) if a single or joint case is filed by or against 
        debtor who is an individual in a case under chapter 7, 11, or 
        13, and if a single or joint case of the debtor was pending 
        within the preceding 1-year period but was dismissed, other than 
        a case refiled under a chapter other than chapter 7 after 
        dismissal under section 707(b)--

[[Page 119 STAT. 76]]

                    ``(A) <<NOTE: Termination date.>> 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 shall terminate with respect to the 
                debtor on the 30th day after the filing of the later 
                case;
                    ``(B) on the motion of 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; and
                    ``(C) for purposes of subparagraph (B), a case is 
                presumptively filed not in good faith (but such 
                presumption may be rebutted by clear and convincing 
                evidence to the contrary)--
                          ``(i) as to all creditors, if--
                                    ``(I) more than 1 previous case 
                                under any of chapters 7, 11, and 13 in 
                                which the individual was a debtor was 
                                pending within the preceding 1-year 
                                period;
                                    ``(II) a previous case under any of 
                                chapters 7, 11, and 13 in which the 
                                individual was a debtor was dismissed 
                                within such 1-year period, after the 
                                debtor failed to--
                                            ``(aa) 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 a 
                                        substantial excuse unless the 
                                        dismissal was caused by the 
                                        negligence of the debtor's 
                                        attorney);
                                            ``(bb) provide adequate 
                                        protection as ordered by the 
                                        court; or
                                            ``(cc) 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 chapter 7, 11, or 13 or any other 
                                reason to conclude that the later case 
                                will be concluded--
                                            ``(aa) if a case under 
                                        chapter 7, with a discharge; or
                                            ``(bb) if a case under 
                                        chapter 11 or 13, with a 
                                        confirmed plan that will be 
                                        fully performed; and
                          ``(ii) 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; and
            ``(4)(A)(i) if a single or joint case is filed by or against 
        a debtor who is an individual under this title, and if 2 or more 
        single or joint cases of the debtor were pending within the 
        previous year but were dismissed, other than a case refiled

[[Page 119 STAT. 77]]

        under section 707(b), the stay under subsection (a) shall not go 
        into effect upon the filing of the later case; and
            ``(ii) on request of a party in interest, the court shall 
        promptly enter an order confirming that no stay is in effect;
            ``(B) if, within 30 days after the filing of the later case, 
        a party in interest requests 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 a 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;
            ``(C) <<NOTE: Effective date.>> a stay imposed under 
        subparagraph (B) shall be effective on the date of the entry of 
        the order allowing the stay to go into effect; and
            ``(D) for purposes of subparagraph (B), a case is 
        presumptively filed not in good faith (but such presumption may 
        be rebutted by clear and convincing evidence to the contrary)--
                    ``(i) 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 any other 
                      reason to conclude that the later case will not 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
                    ``(ii) 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 such action of such creditor.''.

SEC. 303. 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 property, if the court finds that

[[Page 119 STAT. 78]]

        the filing of the 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, such real property without the consent of 
                the secured creditor or court approval; or
                    ``(B) multiple bankruptcy filings affecting such 
                real property.

If recorded in compliance with applicable State laws governing notices 
of interests or liens in real property, an order entered under paragraph 
(4) shall be binding in any other case under this title purporting to 
affect such real property filed not later than 2 years after the date of 
the entry of such order by the court, except that a debtor in a 
subsequent case under this title 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 that 
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, 
as amended by section 224, is amended by inserting after paragraph (19), 
the following:
            ``(20) under subsection (a), of any act to enforce any lien 
        against or security interest in real property following entry of 
        the order under subsection (d)(4) as to such real property in 
        any prior case under this title, for a period of 2 years after 
        the date of the entry of such an order, except that the debtor, 
        in a subsequent case under this title, may move for relief from 
        such order based upon changed circumstances or for other good 
        cause shown, after notice and a hearing;
            ``(21) 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) to be a debtor in a case under this title; or
                    ``(B) if the case under this title was filed in 
                violation of a bankruptcy court order in a prior case 
                under this title prohibiting the debtor from being a 
                debtor in another case under this title;''.

SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

    Title 11, United States Code, is amended--
            (1) in section 521(a), as so designated by section 106--
                    (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) <<NOTE: Deadline.>> in a case under chapter 7 of this 
        title in which the debtor is an individual, 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 such personal property unless the debtor, not 
        later than 45 days after the first meeting of creditors under 
        section 341(a), either--
                    ``(A) enters into an agreement with the creditor 
                pursuant to section 524(c) with respect to the claim 
                secured by such property; or

[[Page 119 STAT. 79]]

                    ``(B) redeems such property from the security 
                interest pursuant to section 722.

If the debtor fails to so act within the 45-day period referred to in 
paragraph (6), the stay under section 362(a) 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 filed 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. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT 
            COMPLETE INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.

    Title 11, United States Code, is amended--
            (1) in section 362, as amended by section 106--
                    (A) in subsection (c), by striking ``(e), and (f)'' 
                and inserting ``(e), (f), and (h)'';
                    (B) by redesignating subsection (h) as subsection 
                (k) and transferring such subsection so as to insert it 
                after subsection (j) as added by section 106; and
                    (C) by inserting after subsection (g) the following:

    ``(h)(1) In a case in which the debtor is an individual, 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)--
            ``(A) to file timely any statement of intention required 
        under section 521(a)(2) with respect to such personal property 
        or to indicate in such statement that the debtor will either 
        surrender such personal property or retain it and, if retaining 
        such personal property, either redeem such personal property 
        pursuant to section 722, enter into an agreement of the kind 
        specified in section 524(c) applicable to the debt secured by 
        such personal property, or assume such unexpired lease pursuant 
        to section 365(p) if the trustee does not do so, as applicable; 
        and
            ``(B) to take timely the action specified in such statement, 
        as it may be amended before expiration of the period for taking 
        action, unless such statement specifies the debtor's intention 
        to reaffirm such debt on the original contract terms and the 
        creditor refuses to agree to the reaffirmation on such terms.

    ``(2) Paragraph (1) does not apply if the court determines, on the 
motion of the trustee filed before the expiration of the applicable time 
set by section 521(a)(2), after notice and a hearing, that such personal 
property is of consequential value or benefit to the estate, and 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

[[Page 119 STAT. 80]]

so determine, the stay provided by subsection (a) shall terminate upon 
the conclusion of the hearing on the motion.''; and
            (2) in section 521, as amended by sections 106 and 225--
                    (A) in subsection (a)(2) by striking ``consumer'';
                    (B) in subsection (a)(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)''; and
                          (ii) by striking ``forty-five day'' and 
                      inserting ``30-day'';
                    (C) in subsection (a)(2)(C) by inserting ``, except 
                as provided in section 362(h)'' before the semicolon; 
                and
                    (D) by adding at the end the following:

    ``(d) 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), 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, nothing in this title shall prevent 
or limit the operation of a provision in the underlying lease or 
agreement that 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. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.

    (a) In General.--Section 1325(a)(5)(B)(i) of title 11, United States 
Code, is amended to read as follows:
                    ``(i) the plan provides that--
                          ``(I) the holder of such claim retain the lien 
                      securing such claim until the earlier of--
                                    ``(aa) the payment of the underlying 
                                debt determined under nonbankruptcy law; 
                                or
                                    ``(bb) discharge under section 1328; 
                                and
                          ``(II) 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''.

    (b) Restoring the Foundation for Secured Credit.--Section 1325(a) of 
title 11, United States Code, is amended by adding at the end the 
following:
``For purposes of paragraph (5), section 506 shall not apply to a claim 
described in that paragraph if the creditor has a purchase money 
security interest securing the debt that is the subject of the claim, 
the debt was incurred within the 910-day preceding the date of the 
filing of the petition, and the collateral for that debt consists of a 
motor vehicle (as defined in section 30102 of title 49) acquired for the 
personal use of the debtor, or if collateral for that debt consists of 
any other thing of value, if the debt was incurred during the 1-year 
period preceding that filing.''.
    (c) Definitions.--Section 101 of title 11, United States Code, is 
amended--
            (1) by inserting after paragraph (13) the following:

[[Page 119 STAT. 81]]

            ``(13A) `debtor's principal residence'--
                    ``(A) means a residential structure, including 
                incidental property, without regard to whether that 
                structure is attached to real property; and
                    ``(B) includes an individual condominium or 
                cooperative unit, a mobile or manufactured home, or 
                trailer;''; and
            (2) by inserting after paragraph (27), the following:
            ``(27A) `incidental property' means, with respect to a 
        debtor's principal residence--
                    ``(A) property commonly conveyed with a principal 
                residence in the area where the real property is 
                located;
                    ``(B) all easements, rights, appurtenances, 
                fixtures, rents, royalties, mineral rights, oil or gas 
                rights or profits, water rights, escrow funds, or 
                insurance proceeds; and
                    ``(C) all replacements or additions;''.

SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

    Section 522(b)(3) of title 11, United States Code, as so designated 
by section 106, is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``180 days'' and inserting ``730 
                days''; and
                    (B) 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''; and
            (2) by adding at the end the following:

``If the effect of the domiciliary requirement under subparagraph (A) is 
to render the debtor ineligible for any exemption, the debtor may elect 
to exempt property that is specified under subsection (d).''.

SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.

    Section 522 of title 11, United States Code, as amended by section 
224, is amended--
            (1) in subsection (b)(3)(A), as so designated by this Act, 
        by inserting ``subject to subsections (o) and (p),'' 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;
            ``(3) a burial plot for the debtor or a dependent of the 
        debtor; or
            ``(4) real or personal property that the debtor or a 
        dependent of the debtor claims as a homestead;

shall be reduced to the extent that such value is attributable to any 
portion of any property that the debtor disposed of in the 10-year 
period ending on 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

[[Page 119 STAT. 82]]

not exempt, under subsection (b), if on such date the debtor had held 
the property so disposed of.''.

SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.

    (a) 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 a case under chapter 11 or 12, but not in a 
                case converted to a case under 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 case under chapter 13; and
                    ``(ii) unless a prebankruptcy default has been fully 
                cured under 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.''.

    (b) 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) is 
automatically terminated.
    ``(2)(A) If the debtor in a case under chapter 7 is an individual, 
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 condition such assumption on cure of any 
outstanding default on terms set by the contract.
    ``(B) <<NOTE: Deadline.>> If, not later than 30 days after notice is 
provided under subparagraph (A), 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.

    ``(C) The stay under section 362 and the injunction under section 
524(a)(2) shall not be violated by notification of the debtor and 
negotiation of cure under this subsection.
    ``(3) In a case under chapter 11 in which the debtor is an 
individual and in a case under chapter 13, 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 and any stay under section 1301 is automatically 
terminated with respect to the property subject to the lease.''.

[[Page 119 STAT. 83]]

    (c) Adequate Protection of Lessors and Purchase Money Secured 
Creditors.--
            (1) Confirmation of plan.--Section 1325(a)(5)(B) of title 
        11, United States Code, as amended by section 306, is amended--
                    (A) in clause (i), by striking ``and'' at the end;
                    (B) in clause (ii), by striking ``or'' at the end 
                and inserting ``and''; and
                    (C) by adding at the end the following:
                    ``(iii) if--
                          ``(I) property to be distributed pursuant to 
                      this subsection is in the form of periodic 
                      payments, such payments shall be in equal monthly 
                      amounts; and
                          ``(II) the holder of the claim is secured by 
                      personal property, the amount of such payments 
                      shall not be less than an amount sufficient to 
                      provide to the holder of such claim adequate 
                      protection during the period of the plan; or''.
            (2) Payments.--Section 1326(a) of title 11, United States 
        Code, is amended to read as follows:

    ``(a)(1) <<NOTE: Deadline.>> Unless the court orders otherwise, the 
debtor shall commence making payments not later than 30 days after the 
date of the filing of the plan or the order for relief, whichever is 
earlier, in the amount--
            ``(A) proposed by the plan to the trustee;
            ``(B) scheduled in a lease of personal property directly to 
        the lessor for that portion of the obligation that becomes due 
        after the order for relief, reducing the payments under 
        subparagraph (A) by the amount so paid and providing the trustee 
        with evidence of such payment, including the amount and date of 
        payment; and
            ``(C) that provides adequate protection directly to a 
        creditor holding an allowed claim secured by personal property 
        to the extent the claim is attributable to the purchase of such 
        property by the debtor for that portion of the obligation that 
        becomes due after the order for relief, reducing the payments 
        under subparagraph (A) by the amount so paid and providing the 
        trustee with evidence of such payment, including the amount and 
        date of payment.

    ``(2) A payment made under paragraph (1)(A) shall be retained by the 
trustee until confirmation or denial of confirmation. If a plan is 
confirmed, the trustee shall distribute any such payment in accordance 
with the plan as soon as is practicable. If a plan is not confirmed, the 
trustee shall return any such payments not previously paid and not yet 
due and owing to creditors pursuant to paragraph (3) to the debtor, 
after deducting any unpaid claim allowed under section 503(b).
    ``(3) Subject to section 363, the court may, upon notice and a 
hearing, modify, increase, or reduce the payments required under this 
subsection pending confirmation of a plan.
    ``(4) <<NOTE: Deadline.>> Not later than 60 days after the date of 
filing 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 
the lessor or secured creditor reasonable evidence of the maintenance of 
any required insurance coverage with respect to the use

[[Page 119 STAT. 84]]

or ownership of such property and continue to do so for so long as the 
debtor retains possession of such property.''.

SEC. 310. LIMITATION ON LUXURY GOODS.

    Section 523(a)(2)(C) of title 11, United States Code, is amended to 
read as follows:
                    ``(C)(i) for purposes of subparagraph (A)--
                          ``(I) consumer debts owed to a single creditor 
                      and aggregating more than $500 for luxury goods or 
                      services incurred by an individual debtor on or 
                      within 90 days before the order for relief under 
                      this title are presumed to be nondischargeable; 
                      and
                          ``(II) cash advances aggregating more than 
                      $750 that are extensions of consumer credit under 
                      an open end credit plan obtained by an individual 
                      debtor on or within 70 days before the order for 
                      relief under this title, are presumed to be 
                      nondischargeable; and
                    ``(ii) for purposes of this subparagraph--
                          ``(I) the terms `consumer', `credit', and 
                      `open end credit plan' have the same meanings as 
                      in section 103 of the Truth in Lending Act; and
                          ``(II) the term `luxury goods or services' 
                      does not include goods or services reasonably 
                      necessary for the support or maintenance of the 
                      debtor or a dependent of the debtor.''.

SEC. 311. AUTOMATIC STAY.

    (a) In general.--Section 362(b) of title 11, United States Code, as 
amended by sections 224 and 303, is amended by inserting after paragraph 
(21), the following:
            ``(22) subject to subsection (l), under subsection (a)(3), 
        of the continuation of any eviction, unlawful detainer action, 
        or similar proceeding by a lessor against a debtor involving 
        residential property in which the debtor resides as a tenant 
        under a lease or rental agreement and with respect to which the 
        lessor has obtained before the date of the filing of the 
        bankruptcy petition, a judgment for possession of such property 
        against the debtor;
            ``(23) subject to subsection (m), under subsection (a)(3), 
        of an eviction action that seeks possession of the residential 
        property in which the debtor resides as a tenant under a lease 
        or rental agreement based on endangerment of such property or 
        the illegal use of controlled substances on such property, but 
        only if the lessor files with the court, and serves upon the 
        debtor, a certification under penalty of perjury that such an 
        eviction action has been filed, or that the debtor, during the 
        30-day period preceding the date of the filing of the 
        certification, has endangered property or illegally used or 
        allowed to be used a controlled substance on the property;
            ``(24) under subsection (a), of any transfer that is not 
        avoidable under section 544 and that is not avoidable under 
        section 549;''.

    (b) Limitations.--Section 362 of title 11, United States Code, as 
amended by sections 106 and 305, is amended by adding at the end the 
following:
    ``(l)(1) <<NOTE: Applicability.>> Except as otherwise provided in 
this subsection, subsection (b)(22) shall apply on the date that is 30 
days after the date on which the bankruptcy petition is filed, if the 
debtor files

[[Page 119 STAT. 85]]

with the petition and serves upon the lessor a certification under 
penalty of perjury that--
            ``(A) under nonbankruptcy law applicable in the 
        jurisdiction, there are circumstances under which the debtor 
        would be permitted to cure the entire monetary default that gave 
        rise to the judgment for possession, after that judgment for 
        possession was entered; and
            ``(B) the debtor (or an adult dependent of the debtor) has 
        deposited with the clerk of the court, any rent that would 
        become due during the 30-day period after the filing of the 
        bankruptcy petition.

    ``(2) If, within the 30-day period after the filing of the 
bankruptcy petition, the debtor (or an adult dependent of the debtor) 
complies with paragraph (1) and files with the court and serves upon the 
lessor a further certification under penalty of perjury that the debtor 
(or an adult dependent of the debtor) has cured, under nonbankrupcty law 
applicable in the jurisdiction, the entire monetary default that gave 
rise to the judgment under which possession is sought by the lessor, 
subsection (b)(22) shall not apply, unless ordered to apply by the court 
under paragraph (3).
    ``(3)(A) <<NOTE: Deadline.>> If the lessor files an objection to any 
certification filed by the debtor under paragraph (1) or (2), and serves 
such objection upon the debtor, the court shall hold a hearing within 10 
days after the filing and service of such objection to determine if the 
certification filed by the debtor under paragraph (1) or (2) is true.

    ``(B) If the court upholds the objection of the lessor filed under 
subparagraph (A)--
            ``(i) <<NOTE: Applicability.>> subsection (b)(22) shall 
        apply immediately and relief from the stay provided under 
        subsection (a)(3) shall not be required to enable the lessor to 
        complete the process to recover full possession of the property; 
        and
            ``(ii) the clerk of the court shall immediately serve upon 
        the lessor and the debtor a certified copy of the court's order 
        upholding the lessor's objection.

    ``(4) If a debtor, in accordance with paragraph (5), indicates on 
the petition that there was a judgment for possession of the residential 
rental property in which the debtor resides and does not file a 
certification under paragraph (1) or (2)--
            ``(A) <<NOTE: Applicability.>> subsection (b)(22) shall 
        apply immediately upon failure to file such certification, and 
        relief from the stay provided under subsection (a)(3) shall not 
        be required to enable the lessor to complete the process to 
        recover full possession of the property; and
            ``(B) the clerk of the court shall immediately serve upon 
        the lessor and the debtor a certified copy of the docket 
        indicating the absence of a filed certification and the 
        applicability of the exception to the stay under subsection 
        (b)(22).

    ``(5)(A) Where a judgment for possession of residential property in 
which the debtor resides as a tenant under a lease or rental agreement 
has been obtained by the lessor, the debtor shall so indicate on the 
bankruptcy petition and shall provide the name and address of the lessor 
that obtained that pre-petition judgment on the petition and on any 
certification filed under this subsection.
    ``(B) <<NOTE: Certification.>> The form of certification filed with 
the petition, as specified in this subsection, shall provide for the 
debtor to certify, and the debtor shall certify--

[[Page 119 STAT. 86]]

            ``(i) whether a judgment for possession of residential 
        rental housing in which the debtor resides has been obtained 
        against the debtor before the date of the filing of the 
        petition; and
            ``(ii) whether the debtor is claiming under paragraph (1) 
        that under nonbankruptcy law applicable in the jurisdiction, 
        there are circumstances under which the debtor would be 
        permitted to cure the entire monetary default that gave rise to 
        the judgment for possession, after that judgment of possession 
        was entered, and has made the appropriate deposit with the 
        court.

    ``(C) The standard forms (electronic and otherwise) used in a 
bankruptcy proceeding shall be amended to reflect the requirements of 
this subsection.
    ``(D) The clerk of the court shall arrange for the prompt 
transmittal of the rent deposited in accordance with paragraph (1)(B) to 
the lessor.
    ``(m)(1) <<NOTE: Applicability.>> Except as otherwise provided in 
this subsection, subsection (b)(23) shall apply on the date that is 15 
days after the date on which the lessor files and serves a certification 
described in subsection (b)(23).

    ``(2)(A) If the debtor files with the court an objection to the 
truth or legal sufficiency of the certification described in subsection 
(b)(23) and serves such objection upon the lessor, subsection (b)(23) 
shall not apply, unless ordered to apply by the court under this 
subsection.
    ``(B) <<NOTE: Deadline.>> If the debtor files and serves the 
objection under subparagraph (A), the court shall hold a hearing within 
10 days after the filing and service of such objection to determine if 
the situation giving rise to the lessor's certification under paragraph 
(1) existed or has been remedied.

    ``(C) If the debtor can demonstrate to the satisfaction of the court 
that the situation giving rise to the lessor's certification under 
paragraph (1) did not exist or has been remedied, the stay provided 
under subsection (a)(3) shall remain in effect until the termination of 
the stay under this section.
    ``(D) If the debtor cannot demonstrate to the satisfaction of the 
court that the situation giving rise to the lessor's certification under 
paragraph (1) did not exist or has been remedied--
            ``(i) relief from the stay provided under subsection (a)(3) 
        shall not be required to enable the lessor to proceed with the 
        eviction; and
            ``(ii) the clerk of the court shall immediately serve upon 
        the lessor and the debtor a certified copy of the court's order 
        upholding the lessor's certification.

    ``(3) <<NOTE: Deadline.>> If the debtor fails to file, within 15 
days, an objection under paragraph (2)(A)--
            ``(A) <<NOTE: Applicability.>> subsection (b)(23) shall 
        apply immediately upon such failure and relief from the stay 
        provided under subsection (a)(3) shall not be required to enable 
        the lessor to complete the process to recover full possession of 
        the property; and
            ``(B) the clerk of the court shall immediately serve upon 
        the lessor and the debtor a certified copy of the docket 
        indicating such failure.''.

SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

    Title 11, United States Code, is amended--

[[Page 119 STAT. 87]]

            (1) in section 727(a)(8), by striking ``six'' and inserting 
        ``8''; and
            (2) in section 1328, by inserting after subsection (e) the 
        following:

    ``(f) Notwithstanding subsections (a) and (b), the court shall not 
grant a discharge of all debts provided for in the plan or disallowed 
under section 502, if the debtor has received a discharge--
            ``(1) in a case filed under chapter 7, 11, or 12 of this 
        title during the 4-year period preceding the date of the order 
        for relief under this chapter, or
            ``(2) in a case filed under chapter 13 of this title during 
        the 2-year period preceding the date of such order.''.

SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

    (a) Definition.--Section 522(f) of title 11, United States Code, is 
amended by adding at the end the following:
    ``(4)(A) Subject to subparagraph (B), for purposes of paragraph 
(1)(B), the term `household goods' means--
            ``(i) clothing;
            ``(ii) furniture;
            ``(iii) appliances;
            ``(iv) 1 radio;
            ``(v) 1 television;
            ``(vi) 1 VCR;
            ``(vii) linens;
            ``(viii) china;
            ``(ix) crockery;
            ``(x) kitchenware;
            ``(xi) educational materials and educational equipment 
        primarily for the use of minor dependent children of the debtor;
            (xii) medical equipment and supplies;
            ``(xiii) furniture exclusively for the use of minor 
        children, or elderly or disabled dependents of the debtor;
            ``(xiv) personal effects (including the toys and hobby 
        equipment of minor dependent children and wedding rings) of the 
        debtor and the dependents of the debtor; and
            ``(xv) 1 personal computer and related equipment.

    ``(B) The term `household goods' does not include--
            ``(i) works of art (unless by or of the debtor, or any 
        relative of the debtor);
            ``(ii) electronic entertainment equipment with a fair market 
        value of more than $500 in the aggregate (except 1 television, 1 
        radio, and 1 VCR);
            ``(iii) items acquired as antiques with a fair market value 
        of more than $500 in the aggregate;
            ``(iv) jewelry with a fair market value of more than $500 in 
        the aggregate (except wedding rings); and
            ``(v) a computer (except as otherwise provided for in this 
        section), motor vehicle (including a tractor or lawn tractor), 
        boat, or a motorized recreational device, conveyance, vehicle, 
        watercraft, or aircraft.''.

    (b) <<NOTE: Reports.>> Study.--Not later than 2 years after the date 
of enactment of this Act, the Director of the Executive Office for 
United States Trustees shall submit a report to the Committee on the 
Judiciary of the Senate and the Committee on the Judiciary of the House 
of Representatives containing its findings regarding utilization of

[[Page 119 STAT. 88]]

the definition of household goods, as defined in section 522(f)(4) of 
title 11, United States Code, as added by subsection (a), with respect 
to the avoidance of nonpossessory, nonpurchase money security interests 
in household goods under section 522(f)(1)(B) of title 11, United States 
Code, and the impact such section 522(f)(4) has had on debtors and on 
the bankruptcy courts. Such report may include recommendations for 
amendments to such section 522(f)(4) consistent with the Director's 
findings.

SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

    (a) In General.--Section 523(a) of title 11, United States Code, is 
amended by inserting after paragraph (14) the following:
            ``(14A) incurred to pay a tax to a governmental unit, other 
        than the United States, that would be nondischargeable under 
        paragraph (1);''.

    (b) 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);
            ``(2) of the kind specified in paragraph (2), (3), (4), (5), 
        (8), or (9) of section 523(a);
            ``(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. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13 CASES.

    (a) Notice.--Section 342 of title 11, United States Code, as amended 
by section 102, is amended--
            (1) in subsection (c)--
                    (A) by inserting ``(1)'' after ``(c)'';
                    (B) by striking ``, but the failure of such notice 
                to contain such information shall not invalidate the 
                legal effect of such notice''; and
                    (C) by adding at the end the following:

    ``(2)(A) If, within the 90 days before the commencement of a 
voluntary case, a creditor supplies the debtor in at least 2 
communications sent to the debtor with the current account number of the 
debtor and the address at which such creditor requests to receive 
correspondence, then any notice required by this title to be sent by the 
debtor to such creditor shall be sent to such address and shall include 
such account number.
    ``(B) If a creditor would be in violation of applicable 
nonbankruptcy law by sending any such communication within such 90-day 
period and if such creditor supplies the debtor in the last 2 
communications with the current account number of the debtor and the 
address at which such creditor requests to receive correspondence, then 
any notice required by this title to be sent by the debtor to such 
creditor shall be sent to such address and shall include such account 
number.''; and
            (2) by adding at the end the following:

    ``(e)(1) In a case under chapter 7 or 13 of this title of a debtor 
who is an individual, a creditor at any time may both file with the 
court and serve on the debtor a notice of address to be used to provide 
notice in such case to such creditor.

[[Page 119 STAT. 89]]

    ``(2) Any notice in such case required to be provided to such 
creditor by the debtor or the court later than 5 days after the court 
and the debtor receive such creditor's notice of address, shall be 
provided to such address.
    ``(f)(1) An entity may file with any bankruptcy court a notice of 
address to be used by all the bankruptcy courts or by particular 
bankruptcy courts, as so specified by such entity at the time such 
notice is filed, to provide notice to such entity in all cases under 
chapters 7 and 13 pending in the courts with respect to which such 
notice is filed, in which such entity is a creditor.
    ``(2) In any case filed under chapter 7 or 13, any notice required 
to be provided by a court with respect to which a notice is filed under 
paragraph (1), to such entity later than 30 days after the filing of 
such notice under paragraph (1) shall be provided to such address unless 
with respect to a particular case a different address is specified in a 
notice filed and served in accordance with subsection (e).
    ``(3) A notice filed under paragraph (1) may be withdrawn by such 
entity.
    ``(g)(1) Notice provided to a creditor by the debtor or the court 
other than in accordance with this section (excluding this subsection) 
shall not be effective notice until such notice is brought to the 
attention of such creditor. If such creditor designates a person or an 
organizational subdivision of such creditor to be responsible for 
receiving notices under this title and establishes reasonable procedures 
so that such notices receivable by such creditor are to be delivered to 
such person or such subdivision, then a notice provided to such creditor 
other than in accordance with this section (excluding this subsection) 
shall not be considered to have been brought to the attention of such 
creditor until such notice is received by such person or such 
subdivision.
    ``(2) A monetary penalty may not be imposed on a creditor for a 
violation of a stay in effect under section 362(a) (including a monetary 
penalty imposed under section 362(k)) or for failure to comply with 
section 542 or 543 unless the conduct that is the basis of such 
violation or of such failure occurs after such creditor receives notice 
effective under this section of the order for relief.''.
    (b) Debtor's Duties.--Section 521 of title 11, United States Code, 
as amended by sections 106, 225, and 305, is amended--
            (1) in subsection (a), as so designated by section 106, by 
        amending paragraph (1) to read as follows:
            ``(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 income and 
                      current expenditures;
                          ``(iii) a statement of the debtor's financial 
                      affairs and, if section 342(b) applies, a 
                      certificate--
                                    ``(I) of an attorney whose name is 
                                indicated on the petition as the 
                                attorney for the debtor, or a bankruptcy 
                                petition preparer signing the petition 
                                under section 110(b)(1), indicating that 
                                such attorney or the bankruptcy petition 
                                preparer delivered to the debtor the 
                                notice required by section 342(b); or

[[Page 119 STAT. 90]]

                                    ``(II) if no attorney is so 
                                indicated, and no bankruptcy petition 
                                preparer signed the petition, of the 
                                debtor that such notice was received and 
                                read by the debtor;
                          ``(iv) copies of all payment advices or other 
                      evidence of payment received within 60 days before 
                      the date of the filing of the petition, by the 
                      debtor from any employer of the debtor;
                          ``(v) a statement of the amount of monthly net 
                      income, itemized to show how the amount is 
                      calculated; and
                          ``(vi) a statement disclosing any reasonably 
                      anticipated increase in income or expenditures 
                      over the 12-month period following the date of the 
                      filing of the petition;''; and
            (2) by adding at the end the following:

    ``(e)(1) If the debtor in a case under chapter 7 or 13 is an 
individual and if a creditor files with the court at any time a request 
to receive a copy of the petition, schedules, and statement of financial 
affairs filed by the debtor, then the court shall make such petition, 
such schedules, and such statement available to such creditor.
    ``(2)(A) The debtor shall provide--
            ``(i) <<NOTE: Deadline.>> not later than 7 days before the 
        date first set for the first meeting of creditors, to the 
        trustee a copy of the Federal income tax return required under 
        applicable law (or at the election of the debtor, a transcript 
        of such return) for the most recent tax year ending immediately 
        before the commencement of the case and for which a Federal 
        income tax return was filed; and
            ``(ii) at the same time the debtor complies with clause (i), 
        a copy of such return (or if elected under clause (i), such 
        transcript) to any creditor that timely requests such copy.

    ``(B) If the debtor fails to comply with clause (i) or (ii) of 
subparagraph (A), the court shall dismiss the case unless the debtor 
demonstrates that the failure to so comply is due to circumstances 
beyond the control of the debtor.
    ``(C) If a creditor requests a copy of such tax return or such 
transcript and if the debtor fails to provide a copy of such tax return 
or such transcript to such creditor at the time the debtor provides such 
tax return or such transcript to the trustee, then the court shall 
dismiss the case unless the debtor demonstrates that the failure to 
provide a copy of such tax return or such transcript is due to 
circumstances beyond the control of the debtor.
    ``(3) If a creditor in a case under chapter 13 files with the court 
at any time a request to receive a copy of the plan filed by the debtor, 
then the court shall make available to such creditor a copy of the 
plan--
            ``(A) at a reasonable cost; and
            ``(B) <<NOTE: Deadline.>> not later than 5 days after such 
        request is filed.

    ``(f) At the request of the court, the United States trustee, or any 
party in interest in a case under chapter 7, 11, or 13, a debtor who is 
an individual shall file with the court--
            ``(1) at the same time filed with the taxing authority, a 
        copy of each Federal income tax return required under applicable 
        law (or at the election of the debtor, a transcript

[[Page 119 STAT. 91]]

        of such tax return) with respect to each tax year of the debtor 
        ending while the case is pending under such chapter;
            ``(2) at the same time filed with the taxing authority, each 
        Federal income tax return required under applicable law (or at 
        the election of the debtor, a transcript of such tax return) 
        that had not been filed with such authority as of the date of 
        the commencement of the case and that was subsequently filed for 
        any tax year of the debtor ending in the 3-year period ending on 
        the date of the commencement of the case;
            ``(3) a copy of each amendment to any Federal income tax 
        return or transcript filed with the court under paragraph (1) or 
        (2); and
            ``(4) in a case under chapter <<NOTE: Deadline.>> 13--
                    ``(A) on the date that is either 90 days after the 
                end of such tax year or 1 year after the date of the 
                commencement of the case, whichever is later, if a plan 
                is not confirmed before such later date; and
                    ``(B) annually after the plan is confirmed and until 
                the case is closed, not later than the date that is 45 
                days before the anniversary of the confirmation of the 
                plan;
        a statement, under penalty of perjury, of the income and 
        expenditures of the debtor during the tax year of the debtor 
        most recently concluded before such statement is filed under 
        this paragraph, and of the monthly income of the debtor, that 
        shows how income, expenditures, and monthly income are 
        calculated.

    ``(g)(1) A statement referred to in subsection (f)(4) shall 
disclose--
            ``(A) the amount and sources of the income of the debtor;
            ``(B) the identity of any person responsible with the debtor 
        for the support of any dependent of the debtor; and
            ``(C) the identity of any person 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 subsections (e)(2)(A) and (f) shall be 
available to the United States trustee (or the bankruptcy administrator, 
if any), the trustee, and any party in interest for inspection and 
copying, subject to the requirements of section 315(c) of the Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2005.
    ``(h) If requested by the United States trustee or by the trustee, 
the debtor shall provide--
            ``(1) 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; or
            ``(2) such other personal identifying information relating 
        to the debtor that establishes the identity of the debtor.''.

    (c)(1) <<NOTE: Deadline. Procedures. 11 USC 521 note.>> Not later 
than 180 days after the date of the enactment of this Act, 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 restrictions on 
creditor access to tax information that is required to be provided under 
this section.

[[Page 119 STAT. 92]]

    (3) <<NOTE: Deadline. Reports.>> Not later than 540 days after the 
date of enactment of this Act, the Director of the Administrative Office 
of the United States Courts shall prepare and submit to the President 
pro tempore of the Senate and the Speaker of the House of 
Representatives a report that--
            (A) assesses the effectiveness of the procedures established 
        under paragraph (1); and
            (B) if appropriate, includes proposed legislation to--
                    (i) further protect the confidentiality of tax 
                information; and
                    (ii) provide penalties for the improper use by any 
                person of the tax information required to be provided 
                under this section.

SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE 
            REQUIRED INFORMATION.

    Section 521 of title 11, United States Code, as amended by sections 
106, 225, 305, and 315, is amended by adding at the end the following:
    ``(i)(1) Subject to paragraphs (2) and (4) and notwithstanding 
section 707(a), 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 date of the filing of the 
petition, the case shall be automatically dismissed effective on the 
46th day after the date of the filing of the petition.
    ``(2) Subject to paragraph (4) and with respect to a case described 
in paragraph (1), any party in interest may request the court to enter 
an order dismissing the case. <<NOTE: Deadline.>> If requested, the 
court shall enter an order of dismissal not later than 5 days after such 
request.

    ``(3) Subject to paragraph (4) and upon request of the debtor made 
within 45 days after the date of the filing of the petition described in 
paragraph (1), the court may allow the debtor an additional period of 
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.
    ``(4) Notwithstanding any other provision of this subsection, on the 
motion of the trustee filed before the expiration of the applicable 
period of time specified in paragraph (1), (2), or (3), and after notice 
and a hearing, the court may decline to dismiss the case if the court 
finds that the debtor attempted in good faith to file all the 
information required by subsection (a)(1)(B)(iv) and that the best 
interests of creditors would be served by administration of the case.''.

SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE 
            PLAN.

    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) <<NOTE: Deadline.>> The hearing on confirmation of the plan 
may be held not earlier than 20 days and not later than 45 days after 
the date of the meeting of creditors under section 341(a), unless the 
court determines that it would be in the best interests of the creditors 
and the estate to hold such hearing at an earlier date and there is no 
objection to such earlier date.''.

[[Page 119 STAT. 93]]

SEC. 318. 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)(1) If the current monthly income of the debtor and the 
debtor's spouse combined, when multiplied by 12, is not less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(C) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4,

the plan may not provide for payments over a period that is longer than 
5 years.
    ``(2) If the current monthly income of the debtor and the debtor's 
spouse combined, when multiplied by 12, is less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(C) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4,

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.'';
            (2) in section 1325(b)(1)(B), by striking ``three-year 
        period'' and inserting ``applicable commitment period''; and
            (3) in section 1325(b), as amended by section 102, by adding 
        at the end the following:

    ``(4) For purposes of this subsection, the `applicable commitment 
period'--
            ``(A) subject to subparagraph (B), shall be--
                    ``(i) 3 years; or
                    ``(ii) not less than 5 years, if the current monthly 
                income of the debtor and the debtor's spouse combined, 
                when multiplied by 12, is not less than--
                          ``(I) in the case of a debtor in a household 
                      of 1 person, the median family income of the 
                      applicable State for 1 earner;
                          ``(II) in the case of a debtor in a household 
                      of 2, 3, or 4 individuals, the highest median 
                      family income of the applicable State for a family 
                      of the same number or fewer individuals; or
                          ``(III) in the case of a debtor in a household 
                      exceeding 4 individuals, the highest median family 
                      income of the applicable State for a family of 4 
                      or fewer individuals, plus $525 per month for each 
                      individual in excess of 4; and

[[Page 119 STAT. 94]]

            ``(B) may be less than 3 or 5 years, whichever is applicable 
        under subparagraph (A), but only if the plan provides for 
        payment in full of all allowed unsecured claims over a shorter 
        period.''; and
            (4) in section 1329(c), by striking ``three years'' and 
        inserting ``the applicable commitment period under section 
        1325(b)(1)(B)''.

SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE 
            FEDERAL RULES OF BANKRUPTCY PROCEDURE.

    It is the sense of 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 attorneys be 
submitted only after the debtors or the debtors' attorneys have made 
reasonable inquiry to verify that the information contained in such 
documents is--
            (1) well grounded in fact; and
            (2) warranted by existing law or a good faith argument for 
        the extension, modification, or reversal of existing law.

SEC. 320. 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) <<NOTE: Termination date.>> Notwithstanding paragraph (1), in 
a case under chapter 7, 11, or 13 in which the debtor is an individual, 
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) such 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 for good cause, as 
                described in findings made by the court.''.

SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

    (a) Property of the Estate.--
            (1) In general.--Subchapter I of chapter 11 of title 11, 
        United States Code, is amended by adding at the end the 
        following:

``Sec. 1115. Property of the estate

    ``(a) In a case in which the debtor is an individual, property of 
the estate includes, in addition to the property specified in section 
541--
            ``(1) all property of the kind specified in section 541 that 
        the debtor acquires after the commencement of the case but 
        before the case is closed, dismissed, or converted to a case 
        under chapter 7, 12, or 13, whichever occurs first; and
            ``(2) earnings from services performed by the debtor after 
        the commencement of the case but before the case is closed, 
        dismissed, or converted to a case under chapter 7, 12, or 13, 
        whichever occurs first.

[[Page 119 STAT. 95]]

    ``(b) Except as provided in section 1104 or a confirmed plan or 
order confirming a plan, the debtor shall remain in possession of all 
property of the estate.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter I of chapter 11 of title 11, United States Code, is 
        amended by adding at the end the following:

``1115. Property of the estate.''.

    (b) Contents of Plan.--Section 1123(a) of title 11, United States 
Code, is amended--
            (1) in paragraph (6), by striking ``and'' at the end;
            (2) in paragraph (7), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(8) in a case in which the debtor is an individual, 
        provide for the payment to creditors under the plan of all or 
        such portion of earnings from personal services performed by the 
        debtor after the commencement of the case or other future income 
        of the debtor as is necessary for the execution of the plan.''.

    (c) Confirmation of Plan.--
            (1) Requirements relating to value of property.--Section 
        1129(a) of title 11, United States Code, as amended by section 
        213, is amended by adding at the end the following:
            ``(15) In a case in which the debtor is an individual and in 
        which the holder of an allowed unsecured claim objects to the 
        confirmation of the plan--
                    ``(A) the value, as of the effective date of the 
                plan, of the property to be distributed under the plan 
                on account of such claim is not less than the amount of 
                such claim; or
                    ``(B) the value of the property to be distributed 
                under the plan is not less than the projected disposable 
                income of the debtor (as defined in section 1325(b)(2)) 
                to be received during the 5-year period beginning on the 
                date that the first payment is due under the plan, or 
                during the period for which the plan provides payments, 
                whichever is longer.''.
            (2) Requirement relating to interests in property.--Section 
        1129(b)(2)(B)(ii) of title 11, United States Code, is amended by 
        inserting before the period at the end the following: ``, except 
        that in a case in which the debtor is an individual, the debtor 
        may retain property included in the estate under section 1115, 
        subject to the requirements of subsection (a)(14) of this 
        section''.

    (d) Effect of Confirmation.--Section 1141(d) of title 11, United 
States Code, is amended--
            (1) in paragraph (2), by striking ``The confirmation of a 
        plan does not discharge an individual debtor'' and inserting ``A 
        discharge under this chapter does not discharge a debtor who is 
        an individual''; and
            (2) by adding at the end the following:

    ``(5) In a case in which the debtor is an individual--
            ``(A) unless after notice and a hearing the court orders 
        otherwise for cause, confirmation of the plan does not discharge 
        any debt provided for in the plan until the court grants a 
        discharge on completion of all payments under the plan;

[[Page 119 STAT. 96]]

            ``(B) at any time after the confirmation of the plan, and 
        after notice and a hearing, the court may grant a discharge to 
        the debtor who has not completed payments under the plan if--
                    ``(i) the value, as of the effective date of the 
                plan, of property actually distributed under the plan on 
                account of each allowed unsecured claim is not less than 
                the amount that would have been paid on such claim if 
                the estate of the debtor had been liquidated under 
                chapter 7 on such date; and
                    ``(ii) modification of the plan under section 1127 
                is not practicable; and''.

    (e) Modification of Plan.--Section 1127 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(e) If the debtor is an individual, the plan may be modified at 
any time after confirmation of the plan but before the completion of 
payments under the plan, whether or not the plan has been substantially 
consummated, upon request of the debtor, the trustee, the United States 
trustee, or the holder of an allowed unsecured claim, to--
            ``(1) increase or reduce the amount of payments on claims of 
        a particular class provided for by the plan;
            ``(2) extend or reduce the time period for such payments; or
            ``(3) alter the amount of the distribution to a creditor 
        whose claim is provided for by the plan to the extent necessary 
        to take account of any payment of such claim made other than 
        under the plan.

    ``(f)(1) <<NOTE: Applicability.>> Sections 1121 through 1128 and the 
requirements of section 1129 apply to any modification under subsection 
(a).

    ``(2) The plan, as modified, shall become the plan only after there 
has been disclosure under section 1125 as the court may direct, notice 
and a hearing, and such modification is approved.''.

SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION.

    (a) Exemptions.--Section 522 of title 11, United States Code, as 
amended by sections 224 and 308, is amended by adding at the end the 
following:
    ``(p)(1) Except as provided in paragraph (2) of this subsection and 
sections 544 and 548, as a result of electing under subsection (b)(3)(A) 
to exempt property under State or local law, a debtor may not exempt any 
amount of interest that was acquired by the debtor during the 1215-day 
period preceding the date of the filing of the petition that exceeds in 
the aggregate $125,000 in value 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;
            ``(C) a burial plot for the debtor or a dependent of the 
        debtor; or
            ``(D) real or personal property that the debtor or dependent 
        of the debtor claims as a homestead.

    ``(2)(A) 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 such farmer.

[[Page 119 STAT. 97]]

    ``(B) For purposes of paragraph (1), any amount of such interest 
does not include any interest transferred from a debtor's previous 
principal residence (which was acquired prior to the beginning of such 
1215-day period) into the debtor's current principal residence, if the 
debtor's previous and current residences are located in the same State.
    ``(q)(1) As a result of electing under subsection (b)(3)(A) to 
exempt property under State or local law, a debtor may not exempt any 
amount of an interest in property described in subparagraphs (A), (B), 
(C), and (D) of subsection (p)(1) which exceeds in the aggregate 
$125,000 if--
            ``(A) the court determines, after notice and a hearing, that 
        the debtor has been convicted of a felony (as defined in section 
        3156 of title 18), which under the circumstances, demonstrates 
        that the filing of the case was an abuse of the provisions of 
        this title; or
            ``(B) the debtor owes a debt arising from--
                    ``(i) any violation of the Federal securities laws 
                (as defined in section 3(a)(47) of the Securities 
                Exchange Act of 1934), any State securities laws, or any 
                regulation or order issued under Federal securities laws 
                or State securities laws;
                    ``(ii) fraud, deceit, or manipulation in a fiduciary 
                capacity or in connection with the purchase or sale of 
                any security registered under section 12 or 15(d) of the 
                Securities Exchange Act of 1934 or under section 6 of 
                the Securities Act of 1933;
                    ``(iii) any civil remedy under section 1964 of title 
                18; or
                    ``(iv) any criminal act, intentional tort, or 
                willful or reckless misconduct that caused serious 
                physical injury or death to another individual in the 
                preceding 5 years.

    ``(2) Paragraph (1) shall not apply to the extent the amount of an 
interest in property described in subparagraphs (A), (B), (C), and (D) 
of subsection (p)(1) is reasonably necessary for the support of the 
debtor and any dependent of the debtor.''.
    (b) Adjustment of Dollar Amounts.--Paragraphs (1) and (2) of section 
104(b) of title 11, United States Code, as amended by section 224, are 
amended by inserting ``522(p), 522(q),'' after ``522(n),''.

SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND 
            OTHER PROPERTY FROM THE ESTATE.

    Section 541(b) of title 11, United States Code, as amended by 
section 225, is amended by adding after paragraph (6), as added by 
section 225(a)(1)(C), the following:
            ``(7) any amount--
                    ``(A) withheld by an employer from the wages of 
                employees for payment as contributions--
                          ``(i) to--
                                    ``(I) an employee benefit plan that 
                                is subject to title I of the Employee 
                                Retirement Income Security Act of 1974 
                                or under an employee benefit plan which 
                                is a governmental plan under section 
                                414(d) of the Internal Revenue Code of 
                                1986;

[[Page 119 STAT. 98]]

                                    ``(II) a deferred compensation plan 
                                under section 457 of the Internal 
                                Revenue Code of 1986; or
                                    ``(III) a tax-deferred annuity under 
                                section 403(b) of the Internal Revenue 
                                Code of 1986;
                      except that such amount under this subparagraph 
                      shall not constitute disposable income as defined 
                      in section 1325(b)(2); or
                          ``(ii) to a health insurance plan regulated by 
                      State law whether or not subject to such title; or
                    ``(B) received by an employer from employees for 
                payment as contributions--
                          ``(i) to--
                                    ``(I) an employee benefit plan that 
                                is subject to title I of the Employee 
                                Retirement Income Security Act of 1974 
                                or under an employee benefit plan which 
                                is a governmental plan under section 
                                414(d) of the Internal Revenue Code of 
                                1986;
                                    ``(II) a deferred compensation plan 
                                under section 457 of the Internal 
                                Revenue Code of 1986; or
                                    ``(III) a tax-deferred annuity under 
                                section 403(b) of the Internal Revenue 
                                Code of 1986;
                      except that such amount under this subparagraph 
                      shall not constitute disposable income, as defined 
                      in section 1325(b)(2); or
                          ``(ii) to a health insurance plan regulated by 
                      State law whether or not subject to such title;''.

SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING BANKRUPTCY 
            PROFESSIONALS.

    (a) In General.--Section 1334 of title 28, United States Code, is 
amended--
            (1) in subsection (b), by striking ``Notwithstanding'' and 
        inserting ``Except as provided in subsection (e)(2), and 
        notwithstanding''; and
            (2) by striking subsection (e) and inserting the following:

    ``(e) The district court in which a case under title 11 is commenced 
or is pending shall have exclusive jurisdiction--
            ``(1) of all the property, wherever located, of the debtor 
        as of the commencement of such case, and of property of the 
        estate; and
            ``(2) over all claims or causes of action that involve 
        construction of section 327 of title 11, United States Code, or 
        rules relating to disclosure requirements under section 327.''.

    (b) <<NOTE: 28 USC 1334 note.>> Applicability.--This section shall 
only apply to cases filed after the date of enactment of this Act.

SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.

    (a) Actions Under Chapter 7, 11, or 13 of Title 11, United States 
Code.--Section 1930(a) of title 28, United States Code, is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) For a case commenced under--
                    ``(A) chapter 7 of title 11, $200; and
                    ``(B) chapter 13 of title 11, $150.''; and
            (2) in paragraph (3), by striking ``$800'' and inserting 
        ``$1000''.

[[Page 119 STAT. 99]]

    (b) United States Trustee System Fund.--Section 589a(b) of title 28, 
United States Code, is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1)(A) 40.63 percent of the fees collected under section 
        1930(a)(1)(A) of this title; and
            ``(B) 70.00 percent of the fees collected under section 
        1930(a)(1)(B);'';
            (2) in paragraph (2), by striking ``one-half'' and inserting 
        ``75 percent''; and
            (3) in paragraph (4), by striking ``one-half'' and inserting 
        ``100 percent''.

    (c) Collection and Deposit of Miscellaneous Bankruptcy Fees.--
Section 406(b) of the Judiciary Appropriations Act, 1990 (28 U.S.C. 1931 
note) is amended by striking ``pursuant to 28 U.S.C. section 1930(b)'' 
and all that follows through ``28 U.S.C. section 1931'' and inserting 
``under section 1930(b) of title 28, United States Code, 31.25 of the 
fees collected under section 1930(a)(1)(A) of that title, 30.00 percent 
of the fees collected under section 1930(a)(1)(B) of that title, and 25 
percent of the fees collected under section 1930(a)(3) of that title 
shall be deposited as offsetting receipts to the fund established under 
section 1931 of that title''.
    (d) <<NOTE: 28 USC 589a note.>> Sunset Date.--The amendments made by 
subsections (b) and (c) shall be effective during the 2-year period 
beginning on the date of enactment of this Act.

    (e) <<NOTE: 28 USC 1930 note.>> Use of Increased Receipts.--
            (1) Judges' salaries and benefits.--The amount of fees 
        collected under paragraphs (1) and (3) of section 1930(a) of 
        title 28, United States Code, during the 5-year period beginning 
        on the date of enactment of this Act, that is greater than the 
        amount that would have been collected if the amendments made by 
        subsection (a) had not taken effect shall be used, to the extent 
        necessary, to pay the salaries and benefits of the judges 
        appointed pursuant to section 1223 of this Act.
            (2) Remainder.--Any amount described in paragraph (1), which 
        is not used for the purpose described in paragraph (1), shall be 
        deposited into the Treasury of the United States to the extent 
        necessary to offset the decrease in governmental receipts 
        resulting from the amendments made by subsections (b) and (c).

SEC. 326. 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. 327. FAIR VALUATION OF COLLATERAL.

    Section 506(a) of title 11, United States Code, is amended by--
            (1) inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following:

    ``(2) If the debtor is an individual in a case under chapter 7 or 
13, such value with respect to personal property securing an allowed 
claim shall be determined based on the replacement

[[Page 119 STAT. 100]]

value of such property as of the date of the filing of the petition 
without deduction for costs of sale or marketing. With respect to 
property acquired for personal, family, or household purposes, 
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. 328. 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 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, if it is impossible 
                for the trustee to cure such default by performing 
                nonmonetary acts at and after the time of assumption, 
                except that if such default arises from a failure to 
                operate in accordance with a nonresidential real 
                property lease, then such default shall be cured by 
                performance at and after the time of assumption in 
                accordance with such lease, and pecuniary losses 
                resulting from such default shall be compensated in 
                accordance with the provisions of this paragraph;''; and
                    (B) in paragraph (2)(D), by striking ``penalty rate 
                or provision'' and inserting ``penalty rate or penalty 
                provision'';
            (2) in subsection (c)--
                    (A) in paragraph (2), by inserting ``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)(2) 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, other than 
                a default arising from failure to operate a 
                nonresidential real property lease subject to section 
                365(b)(1)(A), 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''.

[[Page 119 STAT. 101]]

SEC. 329. 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--
                    ``(i) wages, salaries, and commissions for services 
                rendered after the commencement of the case; and
                    ``(ii) wages and benefits awarded pursuant to a 
                judicial proceeding or a proceeding of the National 
                Labor Relations Board as back pay attributable to any 
                period of time occurring after commencement of the case 
                under this title, as a result of a violation of Federal 
                or State law by the debtor, without regard to the time 
                of the occurrence of unlawful conduct on which such 
                award is based or to whether any services were rendered, 
                if the court determines that payment of wages and 
                benefits by reason of the operation of this clause will 
                not substantially increase the probability of layoff or 
                termination of current employees, or of nonpayment of 
                domestic support obligations, during the case under this 
                title;''.

SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF CERTAIN PROCEEDINGS.

    (a) Chapter 7.--Section 727(a) of title 11, United States Code, as 
amended by section 106, is amended--
            (1) in paragraph (10), by striking ``or'' at the end;
            (2) in paragraph (11) by striking the period at the end and 
        inserting ``; or''; and
            (3) by inserting after paragraph (11) the following:
            ``(12) the court after notice and a hearing held not more 
        than 10 days before the date of the entry of the order granting 
        the discharge finds that there is reasonable cause to believe 
        that--
                    ``(A) section 522(q)(1) may be applicable to the 
                debtor; and
                    ``(B) there is pending any proceeding in which the 
                debtor may be found guilty of a felony of the kind 
                described in section 522(q)(1)(A) or liable for a debt 
                of the kind described in section 522(q)(1)(B).''.

    (b) Chapter 11.--Section 1141(d) of title 11, United States Code, as 
amended by section 321, is amended by adding at the end the following:
            ``(C) unless after notice and a hearing held not more than 
        10 days before the date of the entry of the order granting the 
        discharge, the court finds that there is no reasonable cause to 
        believe that--
                    ``(i) section 522(q)(1) may be applicable to the 
                debtor; and
                    ``(ii) there is pending any proceeding in which the 
                debtor may be found guilty of a felony of the kind 
                described in section 522(q)(1)(A) or liable for a debt 
                of the kind described in section 522(q)(1)(B).''.

    (c) Chapter 12.--Section 1228 of title 11, United States Code, is 
amended--
            (1) in subsection (a) by striking ``As'' and inserting 
        ``Subject to subsection (d), as'',

[[Page 119 STAT. 102]]

            (2) in subsection (b) by striking ``At'' and inserting 
        ``Subject to subsection (d), at'', and
            (3) by adding at the end the following:

    ``(f) The court may not grant a discharge under this chapter unless 
the court after notice and a hearing held not more than 10 days before 
the date of the entry of the order granting the discharge finds that 
there is no reasonable cause to believe that--
            ``(1) section 522(q)(1) may be applicable to the debtor; and
            ``(2) there is pending any proceeding in which the debtor 
        may be found guilty of a felony of the kind described in section 
        522(q)(1)(A) or liable for a debt of the kind described in 
        section 522(q)(1)(B).''.

    (d) Chapter 13.--Section 1328 of title 11, United States Code, as 
amended by section 106, is amended--
            (1) in subsection (a) by striking ``As'' and inserting 
        ``Subject to subsection (d), as'',
            (2) in subsection (b) by striking ``At'' and inserting 
        ``Subject to subsection (d), at'', and
            (3) by adding at the end the following:

    ``(h) The court may not grant a discharge under this chapter unless 
the court after notice and a hearing held not more than 10 days before 
the date of the entry of the order granting the discharge finds that 
there is no reasonable cause to believe that--
            ``(1) section 522(q)(1) may be applicable to the debtor; and
            ``(2) there is pending any proceeding in which the debtor 
        may be found guilty of a felony of the kind described in section 
        522(q)(1)(A) or liable for a debt of the kind described in 
        section 522(q)(1)(B).''.

SEC. 331. LIMITATION ON RETENTION BONUSES, SEVERANCE PAY, AND CERTAIN 
            OTHER PAYMENTS.

    Section 503 of title 11, United States Code, is amended by adding at 
the end the following:
    ``(c) Notwithstanding subsection (b), there shall neither be 
allowed, nor paid--
            ``(1) a transfer made to, or an obligation incurred for the 
        benefit of, an insider of the debtor for the purpose of inducing 
        such person to remain with the debtor's business, absent a 
        finding by the court based on evidence in the record that--
                    ``(A) the transfer or obligation is essential to 
                retention of the person because the individual has a 
                bona fide job offer from another business at the same or 
                greater rate of compensation;
                    ``(B) the services provided by the person are 
                essential to the survival of the business; and
                    ``(C) either--
                          ``(i) the amount of the transfer made to, or 
                      obligation incurred for the benefit of, the person 
                      is not greater than an amount equal to 10 times 
                      the amount of the mean transfer or obligation of a 
                      similar kind given to nonmanagement employees for 
                      any purpose during the calendar year in which the 
                      transfer is made or the obligation is incurred; or
                          ``(ii) if no such similar transfers were made 
                      to, or obligations were incurred for the benefit 
                      of, such nonmanagement employees during such 
                      calendar year, the amount of the transfer or 
                      obligation is not greater

[[Page 119 STAT. 103]]

                      than an amount equal to 25 percent of the amount 
                      of any similar transfer or obligation made to or 
                      incurred for the benefit of such insider for any 
                      purpose during the calendar year before the year 
                      in which such transfer is made or obligation is 
                      incurred;
            ``(2) a severance payment to an insider of the debtor, 
        unless--
                    ``(A) the payment is part of a program that is 
                generally applicable to all full-time employees; and
                    ``(B) the amount of the payment is not greater than 
                10 times the amount of the mean severance pay given to 
                nonmanagement employees during the calendar year in 
                which the payment is made; or
            ``(3) other transfers or obligations that are outside the 
        ordinary course of business and not justified by the facts and 
        circumstances of the case, including transfers made to, or 
        obligations incurred for the benefit of, officers, managers, or 
        consultants hired after the date of the filing of the 
        petition.''.

SEC. 332. FRAUDULENT INVOLUNTARY <<NOTE: Involuntary Bankruptcy 
            Improvement Act of 2005. 11 USC 101 note.>> BANKRUPTCY.

    (a) Short Title.--This section may be cited as the ``Involuntary 
Bankruptcy Improvement Act of 2005''.
    (b) Involuntary Cases.--Section 303 of title 11, United States Code, 
is amended by adding at the end the following:
    ``(l)(1) If--
            ``(A) the petition under this section is false or contains 
        any materially false, fictitious, or fraudulent statement;
            ``(B) the debtor is an individual; and
            ``(C) the court dismisses such petition,

the court, upon the motion of the debtor, shall seal all the records of 
the court relating to such petition, and all references to such 
petition.
    ``(2) If the debtor is an individual and the court dismisses a 
petition under this section, the court may enter an order prohibiting 
all consumer reporting agencies (as defined in section 603(f) of the 
Fair Credit Reporting Act (15 U.S.C. 1681a(f))) from making any consumer 
report (as defined in section 603(d) of that Act) that contains any 
information relating to such petition or to the case commenced by the 
filing of such petition.
    ``(3) Upon the expiration of the statute of limitations described in 
section 3282 of title 18, for a violation of section 152 or 157 of such 
title, the court, upon the motion of the debtor and for good cause, may 
expunge any records relating to a petition filed under this section.''.
    (c) Bankruptcy Fraud.--Section 157 of title 18, United States Code, 
is amended by inserting ``, including a fraudulent involuntary 
bankruptcy petition under section 303 of such title'' after ``title 
11''.

[[Page 119 STAT. 104]]

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

SEC. 401. 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 under section 15A of the Securities 
        Exchange Act of 1934 or a national securities exchange 
        registered with the Securities and Exchange Commission under 
        section 6 of the Securities Exchange Act of 1934;''.

    (b) Automatic Stay.--Section 362(b) of title 11, United States Code, 
as amended by sections 224, 303, and 311, is amended by inserting after 
paragraph (24) the following:
            ``(25) under subsection (a), of--
                    ``(A) the commencement or continuation of an 
                investigation or action by a securities self regulatory 
                organization to enforce such organization's regulatory 
                power;
                    ``(B) the enforcement of an order or decision, other 
                than for monetary sanctions, obtained in an action by 
                such securities self regulatory organization to enforce 
                such organization's regulatory power; or
                    ``(C) any act taken by such securities self 
                regulatory organization to delist, delete, or refuse to 
                permit quotation of any stock that does not meet 
                applicable regulatory requirements;''.

SEC. 402. 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. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.

    Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11, 
United States Code, are each amended by striking ``10'' each place it 
appears and inserting ``30''.

SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

    (a) In General.--Section 365(d)(4) of title 11, United States Code, 
is amended to read as follows:
    ``(4)(A) <<NOTE: Deadlines.>> Subject to subparagraph (B), an 
unexpired lease of nonresidential real property under which the debtor 
is the lessee shall be deemed rejected, and the trustee shall 
immediately surrender that nonresidential real property to the lessor, 
if the trustee does not assume or reject the unexpired lease by the 
earlier of--

[[Page 119 STAT. 105]]

            ``(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), prior to the expiration of the 120-day period, for 90 
days on the motion of the trustee or 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 in each instance.''.
    (b) Exception.--Section 365(f)(1) of title 11, United States Code, 
is amended by striking ``subsection'' the first place it appears and 
inserting ``subsections (b) and''.

SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

    (a) Appointment.--Section 1102(a) of title 11, United States Code, 
is amended by adding at the end the following:
    ``(4) On request of a party in interest and after notice and a 
hearing, the court may order the United States trustee to change 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. The court may 
order the United States trustee to increase the number of members of a 
committee to include a creditor that is a small business concern (as 
described in section 3(a)(1) of the Small Business Act), if the court 
determines that the creditor holds claims (of the kind represented by 
the committee) the aggregate amount of which, in comparison to the 
annual gross revenue of that creditor, is disproportionately large.''.
    (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--
            ``(A) provide access to information for creditors who--
                    ``(i) hold claims of the kind represented by that 
                committee; and
                    ``(ii) are not appointed to the committee;
            ``(B) solicit and receive comments from the creditors 
        described in subparagraph (A); and
            ``(C) be subject to a court order that compels any 
        additional report or disclosure to be made to the creditors 
        described in subparagraph (A).''.

SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.

    Section 546 of title 11, United States Code, is amended--
            (1) by redesignating the second subsection (g) (as added by 
        section 222(a) of Public Law 103-394) as subsection (h);
            (2) in subsection (h), as so redesignated, by inserting 
        ``and subject to the prior rights of holders of security 
        interests in such goods or the proceeds of such goods'' after 
        ``consent of a creditor''; and
            (3) by adding at the end the following:

    ``(i)(1) Notwithstanding paragraphs (2) and (3) of section 545, the 
trustee may not avoid a warehouseman's lien for storage, transportation, 
or other costs incidental to the storage and handling of goods.
    ``(2) <<NOTE: Applicability.>> The prohibition under paragraph (1) 
shall be applied in a manner consistent with any State statute 
applicable to such lien that is similar to section 7-209 of the Uniform 
Commercial

[[Page 119 STAT. 106]]

Code, as in effect on the date of enactment of the Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2005, or any successor to such 
section 7-209.''.

SEC. 407. AMENDMENTS 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) by striking ``(A) In'' and inserting ``In''; and
                    (B) by inserting ``to an examiner, trustee under 
                chapter 11, or professional person'' after ``awarded''; 
                and
            (2) by adding at the end the following:

    ``(7) In determining the amount of reasonable compensation to be 
awarded to a trustee, the court shall treat such compensation as a 
commission, based on section 326.''.

SEC. 408. 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. 409. PREFERENCES.

    Section 547(c) of title 11, United States Code, is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(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 (8), by striking the period at the end and 
        inserting ``; or''; and
            (3) 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. 410. VENUE OF CERTAIN PROCEEDINGS.

    Section 1409(b) of title 28, United States Code, is amended by 
inserting ``, or a debt (excluding a consumer debt) against a noninsider 
of less than $10,000,'' after ``$5,000''. Section 1409(b) of title 28, 
United States Code, is further amended by striking ``$5,000'' and 
inserting ``$15,000''.

SEC. 411. 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 (2), on''; and
            (2) by adding at the end the following:

    ``(2)(A) The 120-day period specified in paragraph (1) may not be 
extended beyond a date that is 18 months after the date of the order for 
relief under this chapter.

[[Page 119 STAT. 107]]

    ``(B) The 180-day period specified in paragraph (1) may not be 
extended beyond a date that is 20 months after the date of the order for 
relief under this chapter.''.

SEC. 412. 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. 413. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.

    Section 341(c) of title 11, United States Code, is amended by 
inserting at the end the following: ``Notwithstanding any local court 
rule, provision of a State constitution, any otherwise applicable 
nonbankruptcy law, or any 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 1 creditor) shall be permitted to appear at 
and participate in the meeting of creditors 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. 414. 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. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.

    Section 330(a)(3) of title 11, United States Code, is amended--
            (1) in subparagraph (D), by striking ``and'' at the end;
            (2) by redesignating subparagraph (E) as subparagraph (F); 
        and
            (3) by inserting after subparagraph (D) the following:
            ``(E) with respect to a professional person, whether the 
        person is board certified or otherwise has demonstrated skill 
        and experience in the bankruptcy field; and''.

SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.

    Section 1104(b) of title 11, United States Code, is amended--

[[Page 119 STAT. 108]]

            (1) by inserting ``(1)'' after ``(b)''; and
            (2) by adding at the end the following:

    ``(2)(A) <<NOTE: Reports.>> 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.

    ``(B) Upon the filing of a report under subparagraph (A)--
            ``(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.

    ``(C) The court shall resolve any dispute arising out of an election 
described in subparagraph (A).''.

SEC. 417. UTILITY SERVICE.

    Section 366 of title 11, United States Code, is amended--
            (1) in subsection (a), by striking ``subsection (b)'' and 
        inserting ``subsections (b) and (c)''; and
            (2) by adding at the end the following:

    ``(c)(1)(A) For purposes of this subsection, the term `assurance of 
payment' means--
            ``(i) a cash deposit;
            ``(ii) a letter of credit;
            ``(iii) a certificate of deposit;
            ``(iv) a surety bond;
            ``(v) a prepayment of utility consumption; or
            ``(vi) another form of security that is mutually agreed on 
        between the utility and the debtor or the trustee.

    ``(B) For purposes of this subsection an administrative expense 
priority shall not constitute an assurance of payment.
    ``(2) Subject to paragraphs (3) and (4), with respect to a case 
filed under chapter 11, a utility referred to in subsection (a) may 
alter, refuse, or discontinue utility service, if during the 30-day 
period beginning on the date of the filing of the petition, the utility 
does not receive from the debtor or the trustee adequate assurance of 
payment for utility service that is satisfactory to the utility.
    ``(3)(A) On request of a party in interest and after notice and a 
hearing, the court may order modification of the amount of an assurance 
of payment under paragraph (2).
    ``(B) In making a determination under this paragraph whether an 
assurance of payment is adequate, the court may not consider--
            ``(i) the absence of security before the date of the filing 
        of the petition;
            ``(ii) the payment by the debtor of charges for utility 
        service in a timely manner before the date of the filing of the 
        petition; or
            ``(iii) the availability of an administrative expense 
        priority.

    ``(4) Notwithstanding any other provision of law, with respect to a 
case subject to this subsection, a utility may recover or set off 
against a security deposit provided to the utility by the debtor before 
the date of the filing of the petition without notice or order of the 
court.''.

SEC. 418. 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

[[Page 119 STAT. 109]]

            (2) by adding at the end the following:

    ``(f)(1) Under the 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 if the court determines that such individual has income less 
than 150 percent of the income official poverty line (as defined by the 
Office of Management and Budget, and revised annually in accordance with 
section 673(2) of the Omnibus Budget Reconciliation Act of 1981) 
applicable to a family of the size involved and is unable to pay that 
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.
    ``(2) The district court or the bankruptcy court may waive for such 
debtors other fees prescribed under 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 under this section for other debtors and 
creditors.''.

SEC. 419. <<NOTE: 28 USC 2073 note.>> MORE COMPLETE INFORMATION 
            REGARDING ASSETS OF THE ESTATE.

    (a) In General.--
            (1) Disclosure.--The Judicial Conference of the United 
        States, in accordance with section 2075 of title 28 of the 
        United States Code and after consideration of the views of the 
        Director of the Executive Office for United States Trustees, 
        shall propose amended Federal Rules of Bankruptcy Procedure and 
        in accordance with rule 9009 of the Federal Rules of Bankruptcy 
        Procedure shall prescribe official bankruptcy forms directing 
        debtors under chapter 11 of title 11 of United States Code, to 
        disclose the information described in paragraph (2) by filing 
        and serving periodic financial and other reports designed to 
        provide such information.
            (2) Information.--The information referred to in paragraph 
        (1) is the value, operations, and profitability of any closely 
        held corporation, partnership, or of any other entity in which 
        the debtor holds a substantial or controlling interest.

    (b) Purpose.--The purpose of the rules and reports under subsection 
(a) shall be to assist parties in interest taking steps to ensure that 
the debtor's interest in any entity referred to in subsection (a)(2) is 
used for the payment of allowed claims against debtor.

            Subtitle B--Small Business Bankruptcy Provisions

SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.

    Section 1125 of title 11, United States Code, is amended--
            (1) in subsection (a)(1), by inserting before the semicolon 
        ``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

[[Page 119 STAT. 110]]

        and other parties in interest, and the cost of providing 
        additional information''; and
            (2) by striking subsection (f), and inserting the following:

    ``(f) Notwithstanding subsection (b), in a small business case--
            ``(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 under 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) <<NOTE: Deadline.>> 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 
        later than 25 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. 432. 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;
            ``(51D) `small business debtor'--
                    ``(A) subject to subparagraph (B), means a person 
                engaged in commercial or business activities (including 
                any affiliate of such person that is also a debtor under 
                this title and excluding a person whose primary activity 
                is the business of owning or operating real property or 
                activities incidental thereto) that has aggregate 
                noncontingent liquidated secured and unsecured debts as 
                of the date of the petition or the date of the order for 
                relief in an amount not more than $2,000,000 (excluding 
                debts owed to 1 or more affiliates or insiders) for a 
                case in which the United States trustee has not 
                appointed under section 1102(a)(1) a committee of 
                unsecured creditors or where the court has determined 
                that the committee of unsecured creditors is not 
                sufficiently active and representative to provide 
                effective oversight of the debtor; and
                    ``(B) does not include any member of a group of 
                affiliated debtors that has aggregate noncontingent 
                liquidated secured and unsecured debts in an amount 
                greater than $2,000,000 (excluding debt owed to 1 or 
                more affiliates or insiders);''.

    (b) Conforming Amendment.--Section 1102(a)(3) of title 11, United 
States Code, is amended by inserting ``debtor'' after ``small 
business''.
    (c) Adjustment of Dollar Amounts.--Section 104(b) of title 11, 
United States Code, as amended by section 226, is amended by inserting 
``101(51D),'' after ``101(3),'' each place it appears.

SEC. 433. <<NOTE: 28 USC 2073 note.>> STANDARD FORM DISCLOSURE STATEMENT 
            AND PLAN.

    Within a reasonable period of time after the date of enactment of 
this Act, the Judicial Conference of the United States shall

[[Page 119 STAT. 111]]

prescribe in accordance with rule 9009 of the Federal Rules of 
Bankruptcy Procedure official 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. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.

    (a) Reporting Required.--
            (1) In general.--Chapter 3 of title 11, United States Code, 
        is amended by inserting after section 307 the following:

``Sec. 308. Debtor reporting requirements

    ``(a) For purposes of this section, the term `profitability' means, 
with respect to a debtor, the amount of money that the debtor has earned 
or lost during current and recent fiscal periods.
    ``(b) A small business debtor shall file periodic financial and 
other reports containing information including--
            ``(1) the debtor's profitability;
            ``(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;
            ``(4)(A) whether the debtor is--
                    ``(i) in compliance in all material respects with 
                postpetition requirements imposed by this title and the 
                Federal Rules of Bankruptcy Procedure; and
                    ``(ii) timely filing tax returns and other required 
                government filings and paying taxes and other 
                administrative expenses when due;
            ``(B) if the debtor is not in compliance with the 
        requirements referred to in subparagraph (A)(i) or filing tax 
        returns and other required government filings and making the 
        payments referred to in subparagraph (A)(ii), what the failures 
        are and how, at what cost, and when the debtor intends to remedy 
        such failures; and
            ``(C) 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) Clerical amendment.--The table of sections for 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) <<NOTE: 11 USC 308 note.>> Effective Date.--The amendments made 
by subsection (a) shall take effect 60 days after the date on which 
rules are prescribed under section 2075 of 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. 435. <<NOTE: 28 USC 2073 note.>> UNIFORM REPORTING RULES AND FORMS 
            FOR SMALL BUSINESS CASES.

    (a) Proposal of Rules and Forms.--The Judicial Conference of the 
United States shall propose in accordance with section 2073 of title 28 
of the United States Code amended Federal Rules of

[[Page 119 STAT. 112]]

Bankruptcy Procedure, and shall prescribe in accordance with rule 9009 
of the Federal Rules of Bankruptcy Procedure official bankruptcy forms, 
directing 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 expenses when due.

    (b) Purpose.--The rules and forms proposed under subsection (a) 
shall be designed to achieve a practical balance among--
            (1) the reasonable needs of the bankruptcy court, the United 
        States trustee, creditors, and other parties in interest for 
        reasonably complete information;
            (2) a 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 such debtor to understand such debtor's financial condition 
        and plan the such debtor's future.

SEC. 436. DUTIES IN SMALL BUSINESS CASES.

    (a) Duties in Chapter 11 Cases.--Subchapter I of chapter 11 of title 
11, United States Code, as amended by section 321, is amended by adding 
at the end the following:

``Sec. 1116. Duties of trustee or debtor in possession in small business 
                        cases

    ``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) <<NOTE: Deadline.>> append to the voluntary petition 
        or, in an involuntary case, file not later than 7 days after the 
        date of the order for relief--
                    ``(A) its most recent balance sheet, statement of 
                operations, cash-flow statement, and 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 senior management personnel and 
        counsel, meetings scheduled by the court or the United States 
        trustee, including initial debtor interviews, scheduling 
        conferences, and meetings of creditors convened under section 
        341 unless the court, after notice and a hearing, waives that 
        requirement upon a finding of extraordinary and compelling 
        circumstances;
            ``(3) <<NOTE: Deadline.>> 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), maintain insurance 
        customary and appropriate to the industry;

[[Page 119 STAT. 113]]

            ``(6)(A) timely file tax returns and other required 
        government filings; and
            ``(B) subject to section 363(c)(2), timely pay all taxes 
        entitled to administrative expense priority except those being 
        contested by appropriate proceedings being diligently 
        prosecuted; and
            ``(7) allow the United States trustee, or a designated 
        representative of the United States trustee, 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) Clerical Amendment.--The table of sections for chapter 11 of 
title 11, United States Code, as amended by section 321, is amended by 
inserting after the item relating to section 1115 the following:

``1116. Duties of trustee or debtor in possession in small business 
           cases.''.

SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

    Section 1121 of title 11, United States Code, is amended by striking 
subsection (e) and inserting the following:
    ``(e) In a small business case--
            ``(1) only the debtor may file a plan until after 180 days 
        after the date of the order for relief, unless that period is--
                    ``(A) extended as provided by this subsection, after 
                notice and a hearing; or
                    ``(B) the court, for cause, orders otherwise;
            ``(2) the plan and a disclosure statement (if any) shall be 
        filed not later than 300 days after the date of the order for 
        relief; and
            ``(3) the time periods specified in paragraphs (1) and (2), 
        and the time fixed in section 1129(e) within which the plan 
        shall be confirmed, may be extended only if--
                    ``(A) the debtor, after providing notice to parties 
                in interest (including the United States trustee), 
                demonstrates by a preponderance of the evidence that it 
                is more likely than not that the court will confirm a 
                plan within a reasonable period of time;
                    ``(B) a new deadline is imposed at the time the 
                extension is granted; and
                    ``(C) the order extending time is signed before the 
                existing deadline has expired.''.

SEC. 438. 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 court shall confirm a plan that 
complies with the applicable provisions of this title and that is filed 
in accordance with section 1121(e) not later than 45 days after the plan 
is filed unless the time for confirmation is extended in accordance with 
section 1121(e)(3).''.

SEC. 439. 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:

[[Page 119 STAT. 114]]

                    ``(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; and'';
            (2) in paragraph (5), by striking ``and'' at the end;
            (3) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (4) by adding at the end the following:
            ``(7) in each of such small business cases--
                    ``(A) conduct an initial debtor interview as soon as 
                practicable after the date of the order for relief but 
                before the first meeting scheduled under section 341(a) 
                of title 11, at which time the United States trustee 
                shall--
                          ``(i) begin to investigate the debtor's 
                      viability;
                          ``(ii) inquire about the debtor's business 
                      plan;
                          ``(iii) explain the debtor's obligations to 
                      file monthly operating reports and other required 
                      reports;
                          ``(iv) attempt to develop an agreed scheduling 
                      order; and
                          ``(v) inform the debtor of other obligations;
                    ``(B) if determined to be appropriate and advisable, 
                visit the appropriate business premises of the debtor, 
                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) <<NOTE: Applicability.>> in any case 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 after making that finding to the court for 
        relief.''.

SEC. 440. SCHEDULING CONFERENCES.

    Section 105(d) of title 11, United States Code, is amended--
            (1) in the matter preceding paragraph (1), by striking ``, 
        may''; and
            (2) by striking paragraph (1) and inserting the following:
            ``(1) shall hold such status conferences as are necessary to 
        further the expeditious and economical resolution of the case; 
        and''.

SEC. 441. SERIAL FILER PROVISIONS.

    Section 362 of title 11, United States Code, as amended by sections 
106, 305, and 311, is amended--
            (1) in subsection (k), as so redesignated by section 305--
                    (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, the 
recovery under paragraph (1) of this subsection against such entity 
shall be limited to actual damages.''; and
            (2) by adding at the end the following:

    ``(n)(1) Except as provided in paragraph (2), subsection (a) does 
not apply in a case in which the debtor--
            ``(A) is a debtor in a small business case pending at the 
        time the petition is filed;
            ``(B) was a debtor in a small business case that was 
        dismissed for any reason by an order that became final in the

[[Page 119 STAT. 115]]

        2-year period ending on the date of the order for relief entered 
        with respect to the petition;
            ``(C) was a debtor in a small business case in which a 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 acquired substantially all of 
        the assets or business of a small business debtor described in 
        subparagraph (A), (B), or (C), unless such entity establishes by 
        a preponderance of the evidence that such entity acquired 
        substantially all of the assets or business of such small 
        business debtor in good faith and not for the purpose of evading 
        this paragraph.

    ``(2) Paragraph (1) does not apply--
            ``(A) to an involuntary case involving no collusion by the 
        debtor with creditors; or
            ``(B) to the filing of a petition if--
                    ``(i) the debtor proves by a preponderance of the 
                evidence that the filing of the petition resulted from 
                circumstances beyond the control of the debtor not 
                foreseeable at the time the case then pending was filed; 
                and
                    ``(ii) it is more likely than not that the court 
                will confirm a feasible plan, but not a liquidating 
                plan, within a reasonable period of time.''.

SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT 
            OF TRUSTEE.

    (a) Expanded Grounds for Dismissal or Conversion.--Section 1112 of 
title 11, United States Code, is amended by striking subsection (b) and 
inserting the following:
    ``(b)(1) Except as provided in paragraph (2) of this subsection, 
subsection (c) of this section, and section 1104(a)(3), on request of a 
party in interest, and after notice and a hearing, absent unusual 
circumstances specifically identified by the court that establish that 
the requested conversion or dismissal is not in the best interests of 
creditors and the estate, the court shall convert a case under this 
chapter to a case under chapter 7 or dismiss a case under this chapter, 
whichever is in the best interests of creditors and the estate, if the 
movant establishes cause.
    ``(2) The relief provided in paragraph (1) shall not be granted 
absent unusual circumstances specifically identified by the court that 
establish that such relief is not in the best interests of creditors and 
the estate, if the debtor or another party in interest objects and 
establishes that--
            ``(A) there is a reasonable likelihood that a plan will be 
        confirmed within the timeframes established in sections 1121(e) 
        and 1129(e) of this title, or if such sections do not apply, 
        within a reasonable period of time; and
            ``(B) the grounds for granting such relief include an act or 
        omission of the debtor other than under paragraph (4)(A)--
                    ``(i) for which there exists a reasonable 
                justification for the act or omission; and
                    ``(ii) that will be cured within a reasonable period 
                of time fixed by the court.

    ``(3) <<NOTE: Deadlines.>> The court shall commence the hearing on a 
motion under this subsection not later than 30 days after filing of the 
motion,

[[Page 119 STAT. 116]]

and shall decide the motion not later than 15 days after commencement of 
such 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.

    ``(4) For purposes of this subsection, the term `cause' includes--
            ``(A) substantial or continuing loss to or diminution of the 
        estate and the absence of a reasonable likelihood of 
        rehabilitation;
            ``(B) gross mismanagement of the estate;
            ``(C) failure to maintain appropriate insurance that poses a 
        risk to the estate or to the public;
            ``(D) unauthorized use of cash collateral substantially 
        harmful to 1 or more creditors;
            ``(E) failure to comply with an order of the court;
            ``(F) unexcused failure to satisfy timely 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) or an examination ordered under rule 2004 
        of the Federal Rules of Bankruptcy Procedure without good cause 
        shown by the debtor;
            ``(H) failure timely to provide information or attend 
        meetings reasonably requested by the United States trustee (or 
        the bankruptcy administrator, if any);
            ``(I) failure timely to pay taxes owed after the date of the 
        order for relief or to file tax returns due after the date of 
        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;
            ``(M) inability to effectuate substantial consummation of a 
        confirmed plan;
            ``(N) material default by the debtor with respect to a 
        confirmed plan;
            ``(O) termination of a confirmed plan by reason of the 
        occurrence of a condition specified in the plan; and
            ``(P) failure of the debtor to pay any domestic support 
        obligation that first becomes payable after the date of the 
        filing of the petition.''.

    (b) Additional Grounds for Appointment of Trustee.--Section 1104(a) 
of title 11, United States Code, is amended--
            (1) in paragraph (1), by striking ``or'' at the end;
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(3) if grounds exist to convert or dismiss the case under 
        section 1112, but the court determines that the appointment of a 
        trustee or an examiner is in the best interests of creditors and 
        the estate.''.

[[Page 119 STAT. 117]]

SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE, WITH 
            RESPECT TO SMALL BUSINESSES.

    Not later than 2 years after the date of enactment of this Act, the 
Administrator of the Small Business Administration, in consultation with 
the Attorney General, the Director of the Executive Office for 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, 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) <<NOTE: Reports.>> submit to the President pro tempore 
        of the Senate and the Speaker of the House of Representatives a 
        report summarizing that study.

SEC. 444. 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 striking subparagraph (B) and inserting the 
        following:
                    ``(B) the debtor has commenced monthly payments 
                that--
                          ``(i) may, in the debtor's sole discretion, 
                      notwithstanding section 363(c)(2), be made from 
                      rents or other income generated before, on, or 
                      after the date of 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); and
                          ``(ii) 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. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.

    Section 503(b) 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 at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(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 a penalty 
        provision, for the period of 2 years following the later of the 
        rejection date or the 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 an entity other 
        than the debtor, and the claim for remaining

[[Page 119 STAT. 118]]

        sums due for the balance of the term of the lease shall be a 
        claim under section 502(b)(6);''.

SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A PLAN ADMINISTRATOR OF 
            AN EMPLOYEE BENEFIT PLAN.

    (a) In General.--Section 521(a) of title 11, United States Code, as 
amended by sections 106 and 304, is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding after paragraph (6) the following:
            ``(7) unless a trustee is serving in the case, continue to 
        perform the obligations required of the administrator (as 
        defined in section 3 of the Employee Retirement Income Security 
        Act of 1974) of an employee benefit plan if at the time of the 
        commencement of the case the debtor (or any entity designated by 
        the debtor) served as such administrator.''.

    (b) Duties of Trustees.--Section 704(a) of title 11, United States 
Code, as amended by sections 102 and 219, is amended--
            (1) in paragraph (10), by striking ``and'' at the end; and
            (2) by adding at the end the following:
            ``(11) if, at the time of the commencement of the case, the 
        debtor (or any entity designated by the debtor) served as the 
        administrator (as defined in section 3 of the Employee 
        Retirement Income Security Act of 1974) of an employee benefit 
        plan, continue to perform the obligations required of the 
        administrator; and''.

    (c) Conforming Amendment.--Section 1106(a)(1) of title 11, United 
States Code, is amended to read as follows:
            ``(1) perform the duties of the trustee, as specified in 
        paragraphs (2), (5), (7), (8), (9), (10), and (11) of section 
        704;''.

SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.

    Section 1114(d) of title 11, United States Code, is amended--
            (1) by striking ``appoint'' and inserting ``order the 
        appointment of'', and
            (2) by adding at the end the following: ``The United States 
        trustee shall appoint any such committee.''.

                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 striking the last sentence and inserting the 
        following:

    ``(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--

[[Page 119 STAT. 119]]

            (1) by inserting ``555, 556,'' after ``553,''; and
            (2) by inserting ``559, 560, 561, 562,'' after ``557,''.

                        TITLE VI--BANKRUPTCY DATA

SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

    (a) In General.--Chapter 6 of title 28, United States Code, is 
amended by adding at the end the following:

``Sec. 159. Bankruptcy statistics

    ``(a) The clerk of the district court, or the clerk of the 
bankruptcy court if one is certified pursuant to section 156(b) of this 
title, shall collect statistics regarding debtors who are individuals 
with primarily consumer debts seeking relief under chapters 7, 11, and 
13 of title 11. Those statistics shall be in a standardized format 
prescribed by the Director of the Administrative Office of the United 
States Courts (referred to in this section as the `Director').
    ``(b) The Director shall--
            ``(1) compile the statistics referred to in subsection (a);
            ``(2) <<NOTE: Public information. Deadline. Reports.>> make 
        the statistics available to the public; and
            ``(3) not later than July 1, 2008, 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 debtors;
                    ``(B) the current monthly income, average income, 
                and average expenses of 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 
                cases filed during 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 date of 
                the filing of the petition and the closing of the case 
                for cases closed during the reporting period;
                    ``(E) for cases closed during the reporting period--
                          ``(i) the number of cases in which a 
                      reaffirmation agreement was filed; and
                          ``(ii)(I) the total number of reaffirmation 
                      agreements filed;
                          ``(II) of those cases in which a reaffirmation 
                      agreement was filed, the number of cases in which 
                      the debtor was not represented by an attorney; and

[[Page 119 STAT. 120]]

                          ``(III) of those cases in which a 
                      reaffirmation agreement was filed, the number of 
                      cases in which the reaffirmation agreement 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 entered 
                      determining the value of property securing a 
                      claim;
                          ``(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 during the 6-year period 
                      preceding 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 attorney or damages 
                awarded under such Rule.''.

    (b) Clerical Amendment.--The table of sections for chapter 6 of 
title 28, United States Code, is amended by adding at the end the 
following:

``159. Bankruptcy statistics.''.

    (c) <<NOTE: 28 USC 159 note.>> Effective Date.--The amendments made 
by this section shall take effect 18 months after the date of enactment 
of this Act.

SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.

    (a) Amendment.--Chapter 39 of title 28, United States Code, is 
amended by adding at the end 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 
        in cases under chapter 11 of title 11.

    ``(b) <<NOTE: Public information. Internet.>> Reports.--Each report 
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 one or more central filing locations, and by 
electronic access through the Internet or other appropriate media.

[[Page 119 STAT. 121]]

    ``(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;
            ``(2) economy, simplicity, and lack of undue burden on 
        persons with a duty to file reports; and
            ``(3) appropriate privacy concerns and safeguards.

    ``(d) Final Reports.--The uniform forms for final reports required 
under subsection (a) for use 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, including for use under 
        section 707(b), actual costs of administering cases under 
        chapter 13 of title 11;
            ``(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.--The uniform forms for periodic reports 
required under subsection (a) for use 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 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 of the date of the 
        order for relief and at the 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, for the 
        professional fees incurred by or on behalf of the debtor, 
        between those

[[Page 119 STAT. 122]]

        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) Clerical Amendment.--The table of sections for chapter 39 of 
title 28, United States Code, is amended by adding at the end the 
following:

``589b. Bankruptcy data.''.

SEC. 603. AUDIT PROCEDURES.

    (a) <<NOTE: 28 USC 586 note.>> In General.--
            (1) Establishment of procedures.--The Attorney General (in 
        judicial districts served by United States trustees) and the 
        Judicial Conference of the United States (in judicial districts 
        served by bankruptcy administrators) shall establish procedures 
        to determine the accuracy, veracity, and completeness of 
        petitions, schedules, and other information that the debtor is 
        required to provide under sections 521 and 1322 of title 11, 
        United States Code, and, if applicable, section 111 of such 
        title, in cases filed under chapter 7 or 13 of such title in 
        which the debtor is an individual. Such audits shall be in 
        accordance with generally accepted auditing standards and 
        performed by independent certified public accountants or 
        independent licensed public accountants, provided that the 
        Attorney General and the Judicial Conference, as appropriate, 
        may develop alternative auditing standards not later than 2 
        years after the date of enactment of this Act.
            (2) Procedures.--Those procedures required by paragraph (1) 
        shall--
                    (A) establish a method of selecting appropriate 
                qualified persons to contract to perform those audits;
                    (B) 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;
                    (C) require audits of schedules of income and 
                expenses that reflect greater than average variances 
                from the statistical norm of the district in which the 
                schedules were filed if those variances occur by reason 
                of higher income or higher expenses than the statistical 
                norm of the district in which the schedules were filed; 
                and
                    (D) <<NOTE: Public information.>> 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.

    (b) Amendments.--Section 586 of title 28, United States Code, is 
amended--
            (1) in subsection (a), by striking paragraph (6) and 
        inserting the following:
            ``(6) <<NOTE: Reports.>> make such reports as the Attorney 
        General directs, including the results of audits performed under 
        section 603(a) of the Bankruptcy Abuse Prevention and Consumer 
        Protection Act of 2005;''; and

[[Page 119 STAT. 123]]

            (2) by adding at the end the following:

    ``(f)(1) The United States trustee for each district is authorized 
to contract with auditors to perform audits in cases designated by the 
United States trustee, in accordance with the procedures established 
under section 603(a) of the Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2005.
    ``(2)(A) The report of each audit referred to in paragraph (1) 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. <<NOTE: Notice.>> In any case in which a 
material misstatement of income or expenditures or of assets has been 
reported, the clerk of the district court (or the clerk of the 
bankruptcy court if one is certified under section 156(b) of this title) 
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; 
        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.''.

    (c) Amendments to Section 521 of Title 11, U.S.C.--Section 521(a) of 
title 11, United States Code, as so designated by section 106, is 
amended in each of paragraphs (3) and (4) by inserting ``or an auditor 
serving under section 586(f) of title 28'' after ``serving in the 
case''.
    (d) Amendments to Section 727 of Title 11, U.S.C.--Section 727(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) the debtor has failed to explain satisfactorily--
                    ``(A) a material misstatement in an audit referred 
                to in section 586(f) of title 28; 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 referred to in section 586(f) of title 28.''.

    (e) <<NOTE: 11 USC 521 note.>> Effective Date.--The amendments made 
by this section shall take effect 18 months after the date of enactment 
of this Act.

SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY DATA.

    It is the sense of 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, 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 Congress

[[Page 119 STAT. 124]]

        and 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 VII--BANKRUPTCY TAX PROVISIONS

SEC. 701. 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), by inserting ``(except that such 
        expenses, other than claims for wages, salaries, or commissions 
        that arise after the date of the filing of the 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)'' after ``507(a)(1)''; 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), recover 
        from property securing an allowed secured claim the reasonable, 
        necessary costs and expenses of preserving or disposing of such 
        property.

    ``(f) Notwithstanding the exclusion of ad valorem tax liens under 
this section and subject to the requirements of subsection (e), the 
following may be paid from property of the estate which secures a tax 
lien, or the proceeds of such property:
            ``(1) Claims for wages, salaries, and commissions that are 
        entitled to priority under section 507(a)(4).
            ``(2) Claims for contributions to an employee benefit plan 
        entitled to priority under section 507(a)(5).''.

    (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.''.

[[Page 119 STAT. 125]]

SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

    Section 501 of title 11, United States Code, is amended by adding at 
the end the following:
    ``(e) A claim arising from the liability of a debtor for fuel use 
tax assessed consistent with the requirements of section 31705 of title 
49 may be filed by the base jurisdiction designated pursuant to the 
International Fuel Tax Agreement (as defined in section 31701 of title 
49) and, if so filed, shall be allowed as a single claim.''.

SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.

    Section 505(b) of title 11, United States Code, is amended--
            (1) in the first sentence, by inserting ``at the address and 
        in the manner designated in paragraph (1)'' after 
        ``determination of such tax'';
            (2) by striking ``(1) upon payment'' and inserting ``(A) 
        upon payment'';
            (3) by striking ``(A) such governmental unit'' and inserting 
        ``(i) such governmental unit'';
            (4) by striking ``(B) such governmental unit'' and inserting 
        ``(ii) such governmental unit'';
            (5) by striking ``(2) upon payment'' and inserting ``(B) 
        upon payment'';
            (6) by striking ``(3) upon payment'' and inserting ``(C) 
        upon payment'';
            (7) by striking ``(b)'' and inserting ``(2)''; and
            (8) by inserting before paragraph (2), as so designated, the 
        following:

    ``(b)(1)(A) <<NOTE: Records.>> The clerk shall maintain a list under 
which a Federal, State, or local governmental unit responsible for the 
collection of taxes within the district may--
            ``(i) designate an address for service of requests under 
        this subsection; and
            ``(ii) describe where further information concerning 
        additional requirements for filing such requests may be found.

    ``(B) If such governmental unit does not designate an address and 
provide such address to the clerk under subparagraph (A), any request 
made under this subsection may be served at the address for the filing 
of a tax return or protest with the appropriate taxing authority of such 
governmental unit.''.

SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

    (a) In General.--Subchapter I of 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

    ``(a) If any provision of this title requires the payment of 
interest on a tax claim or on an administrative expense tax, or 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 the 
rate determined under applicable nonbankruptcy law.
    ``(b) In the case of taxes paid under a confirmed plan under this 
title, the rate of interest shall be determined as of the calendar month 
in which the plan is confirmed.''.

[[Page 119 STAT. 126]]

    (b) Clerical Amendment.--The table of sections for subchapter I of 
chapter 5 of title 11, United States Code, is amended by adding at the 
end the following:

``511. Rate of interest on tax claims.''.

SEC. 705. PRIORITY OF TAX CLAIMS.

    Section 507(a)(8) of title 11, United States Code, is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by inserting 
                ``for a taxable year ending on or before the date of the 
                filing of the petition'' after ``gross receipts'';
                    (B) in clause (i), by striking ``for a taxable year 
                ending on or before the date of the filing of the 
                petition''; and
                    (C) <<NOTE: Deadline.>> by striking clause (ii) and 
                inserting the following:
                          ``(ii) assessed within 240 days before the 
                      date of the filing of the petition, exclusive of--
                                    ``(I) any time during which an offer 
                                in compromise with respect to that tax 
                                was pending or in effect during that 
                                240-day period, plus 30 days; and
                                    ``(II) any time during which a stay 
                                of proceedings against collections was 
                                in effect in a prior case under this 
                                title during that 240-day period, plus 
                                90 days.''; and
            (2) by adding at the end the following:
        ``An otherwise applicable time period specified in this 
        paragraph shall be suspended for any period during which a 
        governmental unit is prohibited under applicable nonbankruptcy 
        law from collecting a tax as a result of a request by the debtor 
        for a hearing and an appeal of any collection action taken or 
        proposed against the debtor, plus 90 days; plus any time during 
        which the stay of proceedings was in effect in a prior case 
        under this title or during which collection was precluded by the 
        existence of 1 or more confirmed plans under this title, plus 90 
        days.''.

SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

    Section 507(a)(8)(B) of title 11, United States Code, is amended by 
striking ``assessed'' and inserting ``incurred''.

SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 13.

    Section 1328(a)(2) of title 11, United States Code, as amended by 
section 314, is amended by striking ``paragraph'' and inserting 
``section 507(a)(8)(C) or in paragraph (1)(B), (1)(C),''.

SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 11.

    Section 1141(d) of title 11, United States Code, as amended by 
sections 321 and 330, is amended by adding at the end the following:
    ``(6) Notwithstanding paragraph (1), the confirmation of a plan does 
not discharge a debtor that is a corporation from any debt--
            ``(A) of a kind specified in paragraph (2)(A) or (2)(B) of 
        section 523(a) that is owed to a domestic governmental unit, or 
        owed to a person as the result of an action filed under 
        subchapter III of chapter 37 of title 31 or any similar State 
        statute; or

[[Page 119 STAT. 127]]

            ``(B) for a tax or customs duty with respect to which the 
        debtor--
                    ``(i) made a fraudulent return; or
                    ``(ii) willfully attempted in any manner to evade or 
                to defeat such tax or such customs duty.''.

SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO PREPETITION TAXES.

    Section 362(a)(8) of title 11, United States Code, is amended by 
striking ``the debtor'' and inserting ``a corporate debtor's tax 
liability for a taxable period the bankruptcy court may determine or 
concerning the tax liability of a debtor who is an individual for a 
taxable period ending before the date of the order for relief under this 
title''.

SEC. 710. 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;
            (2) in subparagraph (C), by striking ``deferred cash 
        payments,'' and all that follows through the end of the 
        subparagraph, and inserting ``regular installment payments in 
        cash--
                          ``(i) of a total value, as of the effective 
                      date of the plan, equal to the allowed amount of 
                      such claim;
                          ``(ii) over a period ending not later than 5 
                      years after the date of the order for relief under 
                      section 301, 302, or 303; and
                          ``(iii) in a manner not less favorable than 
                      the most favored nonpriority unsecured claim 
                      provided for by the plan (other than cash payments 
                      made to a class of creditors under section 
                      1122(b)); and''; and
            (3) by adding at the end the following:
                    ``(D) with respect to a secured claim which would 
                otherwise meet the description of an unsecured claim of 
                a governmental unit under section 507(a)(8), but for the 
                secured status of that claim, the holder of that claim 
                will receive on account of that claim, cash payments, in 
                the same manner and over the same period, as prescribed 
                in subparagraph (C).''.

SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

    Section 545(2) of title 11, United States Code, is amended by 
inserting before the semicolon at the end the following: ``, except in 
any case in which a purchaser is a purchaser described in section 6323 
of the Internal Revenue Code of 1986, or in any other similar provision 
of State or local law''.

SEC. 712. 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) A tax under subsection (a) shall be paid on or before the due 
date of the tax under applicable nonbankruptcy law, unless--
            ``(1) the tax is a property tax secured by a lien against 
        property that is abandoned under section 554 of title 11, within 
        a reasonable period of time after the lien attaches, by the 
        trustee in a case under title 11; or

[[Page 119 STAT. 128]]

            ``(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 
        or elected under chapter 7 of title 11; or
            ``(2) before the due date of the tax, an order of the court 
        makes 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 the priority of that tax.''.

    (b) Payment of Ad Valorem Taxes Required.--Section 503(b)(1)(B)(i) 
of title 11, United States Code, is amended by inserting ``whether 
secured or unsecured, including property taxes for which liability is in 
rem, in personam, or both,'' before ``except''.
    (c) Request for Payment of Administrative Expense Taxes 
Eliminated.--Section 503(b)(1) of title 11, United States Code, is 
amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by adding ``and'' at the end; and
            (3) by adding at the end the following:
            ``(D) notwithstanding the requirements of subsection (a), a 
        governmental unit shall not be required to file a request for 
        the payment of an expense described in subparagraph (B) or (C), 
        as a condition of its being an allowed administrative 
        expense;''.

    (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 with respect to the 
        property'' before the period at the end.

SEC. 713. 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 the following: ``on or before the 
earlier of--
                    ``(A) the date that is 10 days after the mailing to 
                creditors of the summary of the trustee's final report; 
                or
                    ``(B) the date on which the trustee commences final 
                distribution under this section;''.

SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.

    Section 523(a) of title 11, United States Code, as amended by 
sections 215 and 224, is amended--
            (1) in paragraph (1)(B)--
                    (A) in the matter preceding clause (i), by inserting 
                ``or equivalent report or notice,'' after ``a return,'';
                    (B) in clause (i), by inserting ``or given'' after 
                ``filed''; and
                    (C) in clause (ii)--
                          (i) by inserting ``or given'' after ``filed''; 
                      and
                          (ii) by inserting ``, report, or notice'' 
                      after ``return''; and
            (2) by adding at the end the following:

[[Page 119 STAT. 129]]

``For purposes of this subsection, the term `return' means a return that 
satisfies the requirements of applicable nonbankruptcy law (including 
applicable filing requirements). Such term 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 or a 
final order 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 a similar State or local law.''.

SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.

    Section 505(b)(2) of title 11, United States Code, as amended by 
section 703, is amended by inserting ``the estate,'' after 
``misrepresentation,''.

SEC. 716. 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 sections 102, 213, and 306, is amended by inserting after 
paragraph (8) the following:
            ``(9) the debtor has filed all applicable Federal, State, 
        and local tax returns as required by section 1308.''.

    (b) Additional Time Permitted for Filing Tax Returns.--
            (1) In general.--Subchapter I of chapter 13 of title 11, 
        United States Code, is amended by adding at the end the 
        following:

``Sec. 1308. <<NOTE: Deadlines.>> Filing of prepetition tax returns

    ``(a) Not later than the day before the date on which the meeting of 
the creditors is first scheduled to be held under section 341(a), if the 
debtor was required to file a tax return under applicable nonbankruptcy 
law, the debtor shall file with appropriate tax authorities all tax 
returns for all taxable periods ending during the 4-year period ending 
on the date of the filing of the petition.
    ``(b)(1) Subject to paragraph (2), if the tax returns required by 
subsection (a) have not been filed by the date on which the meeting of 
creditors is first scheduled to be held under section 341(a), the 
trustee may hold open that meeting for a reasonable period of time to 
allow the debtor an additional period of time to file any unfiled 
returns, but such additional period of time shall not extend beyond--
            ``(A) for any return that is past due as of the date of the 
        filing of the petition, the date that is 120 days after the date 
        of that meeting; or
            ``(B) for any return that is not past due as of the date of 
        the filing of the petition, the later of--
                    ``(i) the date that is 120 days after the date of 
                that meeting; or
                    ``(ii) the date on which the return is due under the 
                last automatic extension of time for filing that return 
                to which the debtor is entitled, and for which request 
                is timely made, in accordance with applicable 
                nonbankruptcy law.

[[Page 119 STAT. 130]]

    ``(2) After notice and a hearing, and order entered before the 
tolling of any applicable filing period determined under this 
subsection, if the debtor demonstrates by a preponderance of the 
evidence that the failure to file a return as required under this 
subsection is attributable to circumstances beyond the control of the 
debtor, the court may extend the filing period established by the 
trustee under this subsection for--
            ``(A) a period of not more than 30 days for returns 
        described in paragraph (1); and
            ``(B) a period not to extend after the applicable extended 
        due date for a return described in paragraph (2).

    ``(c) For purposes of this section, the term `return' includes a 
return prepared pursuant to subsection (a) or (b) of section 6020 of the 
Internal Revenue Code of 1986, or a similar State or local law, or a 
written stipulation to a judgment or a final order entered by a 
nonbankruptcy tribunal.''.
            (2) Conforming amendment.--The table of sections for 
        subchapter I of chapter 13 of title 11, United States Code, is 
        amended by adding at the end 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 a tax return under 
section 1308, 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 interest of the creditors and the 
estate.''.
    (d) Timely Filed Claims.--Section 502(b)(9) of title 11, United 
States Code, is amended by inserting before the period at the end the 
following: ``, and except that in a case under chapter 13, a claim of a 
governmental unit for a tax with respect to a return filed under section 
1308 shall be timely if the claim is filed on or before the date that is 
60 days after the date on which such return was filed as required''.
    (e) Rules for Objections to Claims and to Confirmation.--It is the 
sense of Congress that the Judicial Conference of the United States 
should, as soon as practicable after the date of enactment of this Act, 
propose amended Federal Rules of Bankruptcy Procedure that provide--
            (1) notwithstanding the provisions of Rule 3015(f), in cases 
        under chapter 13 of title 11, United States Code, that an 
        objection to the confirmation of a plan filed by a governmental 
        unit on or before the date that is 60 days after the date on 
        which the debtor files all tax returns required under sections 
        1308 and 1325(a)(7) of title 11, United States Code, shall be 
        treated for all purposes as if such objection had been timely 
        filed before such confirmation; and
            (2) in addition to the provisions of Rule 3007, in a case 
        under chapter 13 of title 11, United States Code, that no 
        objection to a claim for a tax with respect to which a return is 
        required to be filed under section 1308 of title 11, United

[[Page 119 STAT. 131]]

        States Code, shall be filed until such return has been filed as 
        required.

SEC. 717. STANDARDS FOR TAX DISCLOSURE.

    Section 1125(a)(1) of title 11, United States Code, is amended--
            (1) by inserting ``including a discussion of the potential 
        material Federal tax consequences of the plan to the debtor, any 
        successor to the debtor, and a hypothetical investor typical of 
        the holders of claims or interests in the case,'' after 
        ``records,''; and
            (2) by striking ``a hypothetical reasonable investor typical 
        of holders of claims or interests'' and inserting ``such a 
        hypothetical investor''.

SEC. 718. SETOFF OF TAX REFUNDS.

    Section 362(b) of title 11, United States Code, as amended by 
sections 224, 303, 311, and 401, is amended by inserting after paragraph 
(25) the following:
            ``(26) under subsection (a), of the setoff under applicable 
        nonbankruptcy law of an income tax refund, by a governmental 
        unit, with respect to a taxable period that ended before the 
        date of the order for relief against an income tax liability for 
        a taxable period that also ended before the date of the order 
        for relief, except that in any case in which the setoff of an 
        income tax refund is not permitted under applicable 
        nonbankruptcy law 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, unless the 
        court, on the motion of the trustee and after notice and a 
        hearing, grants the taxing authority adequate protection (within 
        the meaning of section 361) for the secured claim of such 
        authority in the setoff under section 506(a);''.

SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF STATE AND LOCAL 
            TAXES.

    (a) In General.--
            (1) Special provisions.--Section 346 of title 11, United 
        States Code, is amended to read as follows:

``Sec. 346. Special provisions related to the treatment of State and 
                        local taxes

    ``(a) Whenever the Internal Revenue Code of 1986 provides that a 
separate taxable estate or entity is created in a case concerning a 
debtor under this title, and the income, gain, loss, deductions, and 
credits of such estate shall be taxed to or claimed by the estate, a 
separate taxable estate is also created for purposes of any State and 
local law imposing a tax on or measured by income and such income, gain, 
loss, deductions, and credits shall be taxed to or claimed by the estate 
and may not be taxed to or claimed by the debtor. The preceding sentence 
shall not apply if the case is dismissed. The trustee shall make tax 
returns of income required under any such State or local law.
    ``(b) Whenever the Internal Revenue Code of 1986 provides that no 
separate taxable estate shall be created in a case concerning a debtor 
under this title, and the income, gain, loss, deductions, and credits of 
an estate shall be taxed to or claimed by the debtor, such income, gain, 
loss, deductions, and credits shall be taxed to or claimed by the debtor 
under a State or local law imposing

[[Page 119 STAT. 132]]

a tax on or measured by income and may not be taxed to or claimed by the 
estate. The trustee shall make such tax returns of income of 
corporations and of partnerships as are required under any State or 
local law, but with respect to partnerships, shall make such returns 
only to the extent such returns are also required to be made under such 
Code. The estate shall be liable for any tax imposed on such corporation 
or partnership, but not for any tax imposed on partners or members.
    ``(c) With respect to a partnership or any entity treated as a 
partnership under a State or local law imposing a tax on or measured by 
income that is a debtor in a case under this title, any gain or loss 
resulting from a distribution of property from such partnership, or any 
distributive share of any income, gain, loss, deduction, or credit of a 
partner or member that is distributed, or considered distributed, from 
such partnership, after the commencement of the case, is gain, loss, 
income, deduction, or credit, as the case may be, of the partner or 
member, and if such partner or member is a debtor in a case under this 
title, shall be subject to tax in accordance with subsection (a) or (b).
    ``(d) For purposes of any State or local law imposing a tax on or 
measured by income, the taxable period of a debtor in a case under this 
title shall terminate only if and to the extent that the taxable period 
of such debtor terminates under the Internal Revenue Code of 1986.
    ``(e) The estate in any case described in subsection (a) shall use 
the same accounting method as the debtor used immediately before the 
commencement of the case, if such method of accounting complies with 
applicable nonbankruptcy tax law.
    ``(f) For purposes of any State or local law imposing a tax on or 
measured by income, a transfer of property from the debtor to the estate 
or from the estate to the debtor shall not be treated as a disposition 
for purposes of any provision assigning tax consequences to a 
disposition, except to the extent that such transfer is treated as a 
disposition under the Internal Revenue Code of 1986.
    ``(g) Whenever a tax is imposed pursuant to a State or local law 
imposing a tax on or measured by income pursuant to subsection (a) or 
(b), such tax shall be imposed at rates generally applicable to the same 
types of entities under such State or local law.
    ``(h) The trustee shall withhold from any payment of claims for 
wages, salaries, commissions, dividends, interest, or other payments, or 
collect, any amount required to be withheld or collected under 
applicable State or local tax law, and shall pay such withheld or 
collected amount to the appropriate governmental unit at the time and in 
the manner required by such tax law, and with the same priority as the 
claim from which such amount was withheld or collected was paid.
    ``(i)(1) To the extent that any State or local law imposing a tax on 
or measured by income provides for the carryover of any tax attribute 
from one taxable period to a subsequent taxable period, the estate shall 
succeed to such tax attribute in any case in which such estate is 
subject to tax under subsection (a).
    ``(2) After such a case is closed or dismissed, the debtor shall 
succeed to any tax attribute to which the estate succeeded under 
paragraph (1) to the extent consistent with the Internal Revenue Code of 
1986.

[[Page 119 STAT. 133]]

    ``(3) The estate may carry back any loss or tax attribute to a 
taxable period of the debtor that ended before the date of the order for 
relief under this title to the extent that--
            ``(A) applicable State or local tax law provides for a 
        carryback in the case of the debtor; and
            ``(B) the same or a similar tax attribute may be carried 
        back by the estate to such a taxable period of the debtor under 
        the Internal Revenue Code of 1986.

    ``(j)(1) For purposes of any State or local law imposing a tax on or 
measured by income, income is not realized by the estate, the debtor, or 
a successor to the debtor by reason of discharge of indebtedness in a 
case under this title, except to the extent, if any, that such income is 
subject to tax under the Internal Revenue Code of 1986.
    ``(2) Whenever the Internal Revenue Code of 1986 provides that the 
amount excluded from gross income in respect of the discharge of 
indebtedness in a case under this title shall be applied to reduce the 
tax attributes of the debtor or the estate, a similar reduction shall be 
made under any State or local law imposing a tax on or measured by 
income to the extent such State or local law recognizes such attributes. 
Such State or local law may also provide for the reduction of other 
attributes to the extent that the full amount of income from the 
discharge of indebtedness has not been applied.
    ``(k)(1) Except as provided in this section and section 505, the 
time and manner of filing tax returns and the items of income, gain, 
loss, deduction, and credit of any taxpayer shall be determined under 
applicable nonbankruptcy law.
    ``(2) For Federal tax purposes, the provisions of this section are 
subject to the Internal Revenue Code of 1986 and other applicable 
Federal nonbankruptcy law.''.
            (2) Clerical Amendment.--The table of sections for chapter 3 
        of title 11, United States Code, is amended by striking the item 
        relating to section 346 and inserting the following:

``346. Special provisions related to the treatment of State and local 
           taxes.''.

    (b) Conforming Amendments.--Title 11 of the United States Code is 
amended--
            (1) by striking section 728;
            (2) in the table of sections for chapter 7 by striking the 
        item relating to section 728;
            (3) in section 1146--
                    (A) by striking subsections (a) and (b); and
                    (B) by redesignating subsections (c) and (d) as 
                subsections (a) and (b), respectively; and
            (4) in section 1231--
                    (A) by striking subsections (a) and (b); and
                    (B) by redesignating subsections (c) and (d) as 
                subsections (a) and (b), respectively.

SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RETURNS.

    Section 521 of title 11, United States Code, as amended by sections 
106, 225, 305, 315, and 316, is amended by adding at the end the 
following:
    ``(j)(1) Notwithstanding any other provision of this title, if the 
debtor fails to file a tax return that becomes due after the 
commencement of the case or to properly obtain an extension of

[[Page 119 STAT. 134]]

the due date for filing such return, the taxing authority may request 
that the court enter an order converting or dismissing the case.
    ``(2) <<NOTE: Deadline.>> If the debtor does not file the required 
return or obtain the extension referred to in paragraph (1) within 90 
days after a request is filed by the taxing authority under that 
paragraph, the court shall convert or dismiss the case, whichever is in 
the best interests of creditors and the estate.''.

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

SEC. 801. 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.
``1516. Presumptions concerning recognition.
``1517. Order granting recognition.
``1518. Subsequent information.
``1519. Relief that may be granted upon filing petition for recognition.
``1520. Effects of recognition of a foreign main proceeding.
``1521. Relief that may be granted upon recognition.
``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.

[[Page 119 STAT. 135]]

``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) courts of the United States, 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 all creditors, 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) <<NOTE: Applicability.>> 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 pending 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, other than a 
        foreign insurance company, identified by exclusion in section 
        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 of 1970, 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.

    ``(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.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

``Sec. 1502. Definitions

    ``For the purposes of this chapter, the term--

[[Page 119 STAT. 136]]

            ``(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 
        pending 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, pending 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;
            ``(7) `recognition' means the entry of an order granting 
        recognition of a foreign main proceeding or foreign nonmain 
        proceeding under this chapter; and
            ``(8) `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 one 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, if recognition is granted, 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

[[Page 119 STAT. 137]]

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 by filing directly with the court a petition for recognition of a 
foreign proceeding under section 1515.
    ``(b) If the court grants recognition under section 1517, 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 other than the court 
which granted recognition shall be accompanied by a certified copy of an 
order granting recognition under section 1517.
    ``(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, 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 States to 
collect or recover a claim which is the property of the debtor.

[[Page 119 STAT. 138]]

``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 a 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 the recognized 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, 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 letter or other formality is 
required.
    ``(c) When a notification of commencement of a case is to be given 
to foreign creditors, such notification shall--

[[Page 119 STAT. 139]]

            ``(1) indicate the time period for filing proofs of claim 
        and specify the place for filing such proofs of claim;
            ``(2) indicate whether secured creditors need to file proofs 
        of claim; and
            ``(3) contain any other information required to be included 
        in such 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 proof of 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

    ``(a) A foreign representative applies to the court for recognition 
of a foreign proceeding in which the foreign representative has been 
appointed by filing a petition for recognition.
    ``(b) <<NOTE: Certification.>> A petition for recognition shall be 
accompanied by--
            ``(1) a certified copy of the decision commencing such 
        foreign proceeding and appointing the foreign representative;
            ``(2) a certificate from the foreign court affirming the 
        existence of such 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 such 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) shall 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 and that 
the person or body is a foreign representative, 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 granting recognition

    ``(a) Subject to section 1506, after notice and a hearing, an order 
recognizing a foreign proceeding shall be entered if--
            ``(1) such foreign proceeding for which recognition is 
        sought 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; and
            ``(3) the petition meets the requirements of section 1515.

[[Page 119 STAT. 140]]

    ``(b) Such foreign proceeding shall be recognized--
            ``(1) as a foreign main proceeding if it is pending 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 order granting 
recognition. A case under this chapter may be closed in the manner 
prescribed under section 350.

``Sec. 1518. <<NOTE: Notice.>> Subsequent information

    ``From the time of filing the petition for recognition of a 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 such 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 filing petition for 
                        recognition

    ``(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 
granted.
    ``(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) <<NOTE: Applicability.>> The standards, procedures, and 
limitations applicable to an injunction shall apply to relief under this 
section.

[[Page 119 STAT. 141]]

    ``(f) The exercise of rights not subject to the stay arising under 
section 362(a) pursuant to paragraph (6), (7), (17), or (27) of section 
362(b) or pursuant to section 362(n) shall not be stayed by any order of 
a court or administrative agency in any proceeding under this chapter.

``Sec. 1520. Effects of recognition of a foreign main proceeding

    ``(a) <<NOTE: Applicability.>> Upon recognition of a foreign 
proceeding that is a foreign main proceeding--
            ``(1) sections 361 and 362 apply with respect to the debtor 
        and the property of the debtor that is within the territorial 
        jurisdiction of the United States;
            ``(2) sections 363, 549, and 552 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

    ``(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).

[[Page 119 STAT. 142]]

    ``(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) <<NOTE: Applicability.>> The standards, procedures, and 
limitations applicable to an injunction shall apply to relief under 
paragraphs (1), (2), (3), and (6) of subsection (a).

    ``(f) The exercise of rights not subject to the stay arising under 
section 362(a) pursuant to paragraph (6), (7), (17), or (27) of section 
362(b) or pursuant to section 362(n) shall not be stayed by any order of 
a court or administrative agency in any proceeding under this chapter.

``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), 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) <<NOTE: Applicability.>> 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, 553, and 724(a).
    ``(b) When a 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.

[[Page 119 STAT. 143]]

      ``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 a foreign court or a foreign 
representative, either directly or through the trustee.
    ``(b) The court is entitled to communicate directly with, or to 
request information or assistance directly from, a foreign court or a 
foreign representative, subject to the rights of a party 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 
a foreign court or a foreign representative.
    ``(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 a foreign court or a foreign representative.

``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.

[[Page 119 STAT. 144]]

``Sec. 1529. <<NOTE: Applicability.>> Coordination of a case under this 
                        title and a foreign proceeding

    ``If a foreign proceeding and a case under another chapter of this 
title are pending concurrently regarding the same debtor, the court 
shall seek cooperation and coordination under sections 1525, 1526, and 
1527, and the following shall apply:
            ``(1) If the case in the United States pending at the time 
        the petition for recognition of such foreign proceeding is 
        filed--
                    ``(A) any relief granted under section 1519 or 1521 
                must be consistent with the relief granted in the case 
                in the United States; and
                    ``(B) section 1520 does not apply even if such 
                foreign proceeding is recognized as a foreign main 
                proceeding.
            ``(2) If a case in the United States under this title 
        commences after recognition, or after the date of the filing of 
        the petition for recognition, of such foreign proceeding--
                    ``(A) 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 case in 
                the United States; and
                    ``(B) if such 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 
        laws 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. <<NOTE: Applicability.>> 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

[[Page 119 STAT. 145]]

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. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, 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, 362(n), 555 
        through 557, and 559 through 562 apply in a case under chapter 
        15''; and
            (2) by adding at the end the following:

    ``(k) 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.--Section 101 of title 11, United States Code, is 
amended by striking paragraphs (23) and (24) and inserting the 
following:
            ``(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 such 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

[[Page 119 STAT. 146]]

        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''.
            (4) Venue of cases ancillary to foreign proceedings.--
        Section 1410 of title 28, United States Code, is amended to read 
        as follows:

``Sec. 1410. Venue of cases ancillary to foreign proceedings

    ``A case under chapter 15 of title 11 may be commenced in the 
district court of the United States for the district--
            ``(1) in which the debtor has its principal place of 
        business or principal assets in the United States;
            ``(2) if the debtor does not have a place of business or 
        assets in the United States, in which there is pending against 
        the debtor an action or proceeding in a Federal or State court; 
        or
            ``(3) in a case other than those specified in paragraph (1) 
        or (2), in which venue will be consistent with the interests of 
        justice and the convenience of the parties, having regard to the 
        relief sought by the foreign representative.''.

    (d) Other Sections of Title 11.--Title 11 of the United States Code 
is amended--
            (1) in section 109(b), by striking paragraph (3) and 
        inserting the following:
            ``(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, that has a branch or agency (as defined in section 
        1(b) of the International Banking Act of 1978 in the United 
        States.'';
            (2) in section 303, by striking subsection (k);
            (3) by striking section 304;
            (4) in the table of sections for chapter 3 by striking the 
        item relating to section 304;
            (5) in section 306 by striking ``, 304,'' each place it 
        appears;
            (6) in section 305(a) by striking paragraph (2) and 
        inserting the following:
            ``(2)(A) a petition under section 1515 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.''; and
            (7) in section 508--
                    (A) by striking subsection (a); and
                    (B) in subsection (b), by striking ``(b)''.

                 TITLE IX--FINANCIAL CONTRACT PROVISIONS

SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS 
            OF INSURED DEPOSITORY INSTITUTIONS.

    (a) Definition of Qualified Financial Contract.--

[[Page 119 STAT. 147]]

            (1) FDIC-insured depository institutions.--Section 
        11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
        1821(e)(8)(D)) is amended--
                    (A) by striking ``subsection--'' and inserting 
                ``subsection, the following definitions shall apply:''; 
                and
                    (B) in clause (i), by inserting ``, resolution, or 
                order'' after ``any similar agreement that the 
                Corporation determines by regulation''.
            (2) Insured credit unions.--Section 207(c)(8)(D) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended--
                    (A) by striking ``subsection--'' and inserting 
                ``subsection, the following definitions shall apply:''; 
                and
                    (B) in clause (i), by inserting ``, resolution, or 
                order'' after ``any similar agreement that the Board 
                determines by regulation''.

    (b) Definition of Securities Contract.--
            (1) FDIC-insured depository institutions.--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, 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 
                                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, mortgage loan, 
                                interest, group or index, or option, and 
                                including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage 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, mortgage loan, 
                                interest, group or index, or option;
                                    ``(V) means any margin loan;

[[Page 119 STAT. 148]]

                                    ``(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, 
                                including any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.''.
            (2) Insured credit unions.--Section 207(c)(8)(D)(ii) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(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, 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 
                                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, mortgage loan, 
                                interest, group or index, or option, and 
                                including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage 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 Board 
                                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

[[Page 119 STAT. 149]]

                                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, mortgage 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, 
                                including any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.''.

    (c) Definition of Commodity Contract.--
            (1) FDIC-insured depository institutions.--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;

[[Page 119 STAT. 150]]

                                    ``(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 referred to in subclause (I), 
                                (II), (III), (IV), (V), (VI), (VII), or 
                                (VIII); or
                                    ``(X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.''.
            (2) Insured credit unions.--Section 207(c)(8)(D)(iii) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(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;

[[Page 119 STAT. 151]]

                                    ``(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 referred to in subclause (I), 
                                (II), (III), (IV), (V), (VI), (VII), or 
                                (VIII); or
                                    ``(X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.''.

    (d) Definition of Forward Contract.--
            (1) FDIC-insured depository institutions.--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, a 
                                repurchase transaction, reverse 
                                repurchase transaction, 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

[[Page 119 STAT. 152]]

                                    ``(V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.''.
            (2) Insured credit unions.--Section 207(c)(8)(D)(iv) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(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, a 
                                repurchase transaction, reverse 
                                repurchase transaction, 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) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.''.

    (e) Definition of Repurchase Agreement.--
            (1) FDIC-insured depository institutions.--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) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or

[[Page 119 STAT. 153]]

                                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, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee to transfer to the transferor 
                                thereof certificates of deposit, 
                                eligible bankers' acceptances, 
                                securities, mortgage 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 any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                      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).''.

[[Page 119 STAT. 154]]

            (2) Insured credit unions.--Section 207(c)(8)(D)(v) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(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) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one 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, mortgage loans, or interests 
                                with a simultaneous agreement by such 
                                transferee to transfer to the transferor 
                                thereof certificates of deposit, 
                                eligible bankers' acceptances, 
                                securities, mortgage 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 Board 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 any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.

[[Page 119 STAT. 155]]

                      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.--
            (1) FDIC-insured depository institutions.--Section 
        11(e)(8)(D)(vi) 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 
                                total return, credit spread or credit 
                                swap, option, future, or forward 
                                agreement; a commodity index or 
                                commodity swap, option, future, or 
                                forward agreement; or a weather swap, 
                                weather derivative, or weather option;
                                    ``(II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap markets (including 
                                terms and conditions incorporated by 
                                reference in such agreement) and that is 
                                a forward, swap, future, or option on 
                                one or more rates, currencies, 
                                commodities, equity securities or other 
                                equity instruments, debt securities or 
                                other debt instruments, quantitative 
                                measures associated with an occurrence, 
                                extent of an occurrence, or contingency 
                                associated with a financial, commercial, 
                                or economic consequence, or economic or 
                                financial indices or measures of 
                                economic or financial 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

[[Page 119 STAT. 156]]

                                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 subclause 
                                (I), (II), (III), (IV), or (V), 
                                including any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                any such subclause.
                      Such <<NOTE: Applicability.>> term is applicable 
                      for purposes of this subsection 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, the Gramm-Leach-Bliley Act, and the Legal 
                      Certainty for Bank Products Act of 2000.''.
            (2) Insured credit unions.--Section 207(c)(8)(D) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended by 
        adding at the end the following new clause:
                          ``(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 
                                total return, credit spread or credit 
                                swap, option, future, or forward 
                                agreement; a commodity index or 
                                commodity swap, option, future, or 
                                forward agreement; or a weather swap, 
                                weather derivative, or weather option;
                                    ``(II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap markets (including 
                                terms and conditions incorporated by 
                                reference in such agreement) and that is 
                                a forward, swap, future, or option on 
                                one or more rates, currencies, 
                                commodities, equity securities or other 
                                equity instruments, debt securities or 
                                other debt instruments, quantitative 
                                measures associated with an occurrence, 
                                extent of an

[[Page 119 STAT. 157]]

                                occurrence, or contingency associated 
                                with a financial, commercial, or 
                                economic consequence, or economic or 
                                financial indices or measures of 
                                economic or financial 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 subclause 
                                (I), (II), (III), (IV), or (V), 
                                including any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                any such subclause.
                      Such <<NOTE: Applicability.>> term is applicable 
                      for purposes of this subsection 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, the Gramm-Leach-Bliley Act, and the Legal 
                      Certainty for Bank Products Act of 2000.''.

    (g) Definition of Transfer.--
            (1) FDIC-insured depository institutions.--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 institution's equity of redemption.''.
            (2) Insured credit unions.--Section 207(c)(8)(D) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) (as amended 
        by subsection (f) of this section) is amended by adding at the 
        end the following new clause:
                          ``(viii) Transfer.--The term `transfer' means 
                      every mode, direct or indirect, absolute or 
                      conditional, voluntary or involuntary, of 
                      disposing of or parting with

[[Page 119 STAT. 158]]

                      property or with an interest in property, 
                      including retention of title as a security 
                      interest and foreclosure of the depository 
                      institution's equity of redemption.''.

    (h) Treatment of Qualified Financial Contracts.--
            (1) FDIC-insured depository institutions.--Section 11(e)(8) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is 
        amended--
                    (A) in subparagraph (A)--
                          (i) by striking ``paragraph (10)'' and 
                      inserting ``paragraphs (9) and (10)'';
                          (ii) in clause (i), by striking ``to cause the 
                      termination or liquidation'' and inserting ``such 
                      person has to cause the termination, liquidation, 
                      or acceleration''; and
                          (iii) by striking clause (ii) and inserting 
                      the following new clause:
                          ``(ii) any right under any security agreement 
                      or arrangement or other credit enhancement related 
                      to one or more qualified financial contracts 
                      described in clause (i);''; and
                    (B) in subparagraph (E), by striking clause (ii) and 
                inserting the following:
                          ``(ii) any right under any security agreement 
                      or arrangement or other credit enhancement related 
                      to one or more qualified financial contracts 
                      described in clause (i);''.
            (2) Insured credit unions.--Section 207(c)(8) of the Federal 
        Credit Union Act (12 U.S.C. 1787(c)(8)) is amended--
                    (A) in subparagraph (A)--
                          (i) by striking ``paragraph (12)'' and 
                      inserting ``paragraphs (9) and (10)'';
                          (ii) in clause (i), by striking ``to cause the 
                      termination or liquidation'' and inserting ``such 
                      person has to cause the termination, liquidation, 
                      or acceleration''; and
                          (iii) by striking clause (ii) and inserting 
                      the following new clause:
                          ``(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
                    (B) in subparagraph (E), by striking clause (ii) and 
                inserting the following new clause:
                          ``(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.--
            (1) FDIC-insured depository institutions.--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 or any other Federal or 
        State law relating to the avoidance of preferential or 
        fraudulent transfers,'' before ``the Corporation''.
            (2) Insured credit unions.--Section 207(c)(8)(C)(i) of the 
        Federal Credit Union Act (12 U.S.C. 1787(c)(8)(C)(i)) is amended 
        by inserting ``section 5242 of the Revised Statutes of the 
        United

[[Page 119 STAT. 159]]

        States or any other Federal or State law relating to the 
        avoidance of preferential or fraudulent transfers,'' before 
        ``the Board''.

SEC. 902. AUTHORITY OF THE FDIC AND NCUAB WITH RESPECT TO FAILED AND 
            FAILING INSTITUTIONS.

    (a) Federal Deposit Insurance Corporation.--
            (1) In general.--Section 11(e)(8) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
                    (A) 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
                    (B) 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.''.
            (2) 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 by'' after ``the appointment of''.

    (b) National Credit Union Administration Board.--
            (1) In general.--Section 207(c)(8) of the Federal Credit 
        Union Act (12 U.S.C. 1787(c)(8)) is amended--
                    (A) in subparagraph (E) (as amended by section 
                901(h)), by striking ``other than paragraph (12) of this 
                subsection, subsection (b)(9)'' and inserting ``other 
                than subsections (b)(9) and (c)(10)''; and
                    (B) 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 Board, 
                or authorizing any court or agency to limit or delay, in 
                any manner, the right or power of the Board to transfer 
                any qualified financial contract in accordance with 
                paragraphs

[[Page 119 STAT. 160]]

                (9) and (10) of this subsection or to disaffirm or 
                repudiate any such contract in accordance with 
                subsection (c)(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 credit 
                      union 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.''.
            (2) Technical and conforming amendment.--Section 
        207(c)(12)(A) of the Federal Credit Union Act (12 U.S.C. 
        1787(c)(12)(A)) is amended by inserting ``or the exercise of 
        rights or powers by'' after ``the appointment of''.

SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL 
            CONTRACTS.

    (a) FDIC-Insured Depository Institutions.--
            (1) 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 one 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

[[Page 119 STAT. 161]]

                                    ``(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 
                under subparagraph (A)(i), the conservator or receiver 
                for the 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 other 
                credit enhancement related to one 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 cleared by or 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) Definitions.--For purposes of this paragraph, 
                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, 
                and the term `clearing organization' has the same 
                meaning as in section 402 of the Federal Deposit 
                Insurance Corporation Improvement Act of 1991.''.
            (2) 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 in the material immediately 
        following clause (ii) by striking ``the conservator'' and all 
        that follows through the period and inserting the following: 
        ``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.''.
            (3) Rights against receiver and conservator and treatment of 
        bridge banks.--Section 11(e)(10) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1821(e)(10)) is amended--

[[Page 119 STAT. 162]]

                    (A) by redesignating subparagraph (B) as 
                subparagraph (D); and
                    (B) 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 
                      that such person has to terminate, liquidate, or 
                      net such contract under paragraph (8)(A) of this 
                      subsection 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 that such person has to terminate, 
                      liquidate, or net such contract under paragraph 
                      (8)(E) of this subsection 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 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 
                      paragraph, 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).
                    ``(C) Treatment of bridge banks.--The following 
                institutions shall not be considered to be 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 
                paragraph (9):
                          ``(i) A bridge bank.
                          ``(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 the 
                                depository institution and the 
                                Corporation as receiver for a depository 
                                institution in default.''.

    (b) Insured Credit Unions.--

[[Page 119 STAT. 163]]

            (1) Transfers of qualified financial contracts to financial 
        institutions.--Section 207(c)(9) of the Federal Credit Union Act 
        (12 U.S.C. 1787(c)(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 credit union in default which 
                includes any qualified financial contract, the 
                conservator or liquidating agent for such credit union 
                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 credit 
                                union in default;
                                    ``(II) all claims of such person or 
                                any affiliate of such person against 
                                such credit union 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 credit 
                                union);
                                    ``(III) all claims of such credit 
                                union 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 
                under subparagraph (A)(i), the conservator or 
                liquidating agent for the credit union 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 other 
                credit 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 liquidating agent transfers any qualified 
                financial contract and related claims, property, and 
                credit enhancements pursuant to subparagraph (A)(i) and 
                such contract

[[Page 119 STAT. 164]]

                is cleared by or 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) Definitions.--For purposes of this paragraph--
                          ``(i) the term `financial institution' means a 
                      broker or dealer, a depository institution, a 
                      futures commission merchant, a credit union, or 
                      any other institution, as determined by the Board 
                      by regulation to be a financial institution; and
                          ``(ii) the term `clearing organization' has 
                      the same meaning as in section 402 of the Federal 
                      Deposit Insurance Corporation Improvement Act of 
                      1991.''.
            (2) Notice to qualified financial contract counterparties.--
        Section 207(c)(10)(A) of the Federal Credit Union Act (12 U.S.C. 
        1787(c)(10)(A)) is amended in the material immediately following 
        clause (ii) by striking ``the conservator'' and all that follows 
        through the period and inserting the following: ``the 
        conservator or liquidating agent 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 liquidating agent in the case of a 
        liquidation, or the business day following such transfer in the 
        case of a conservatorship.''.
            (3) Rights against liquidating agent and conservator and 
        treatment of bridge banks.--Section 207(c)(10) of the Federal 
        Credit Union Act (12 U.S.C. 1787(c)(10)) is amended--
                    (A) by redesignating subparagraph (B) as 
                subparagraph (D); and
                    (B) by inserting after subparagraph (A) the 
                following new subparagraphs:
                    ``(B) Certain rights not enforceable.--
                          ``(i) Liquidation.--A person who is a party to 
                      a qualified financial contract with an insured 
                      credit union may not exercise any right that such 
                      person has to terminate, liquidate, or net such 
                      contract under paragraph (8)(A) of this subsection 
                      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 liquidating agent for the credit 
                      union institution (or the insolvency or financial 
                      condition of the credit union for which the 
                      liquidating agent has been appointed)--
                                    ``(I) until 5:00 p.m. (eastern time) 
                                on the business day following the date 
                                of the appointment of the liquidating 
                                agent; 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 credit union may not exercise any right 
                      that such person has to terminate, liquidate, or 
                      net such contract under paragraph (8)(E) of this 
                      subsection 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 conservator for the credit union 
                      or the insolvency or financial condition

[[Page 119 STAT. 165]]

                      of the credit union for which the conservator has 
                      been appointed).
                          ``(iii) Notice.--For purposes of this 
                      paragraph, the Board as conservator or liquidating 
                      agent of an insured credit union shall be deemed 
                      to have notified a person who is a party to a 
                      qualified financial contract with such credit 
                      union if the Board has taken steps reasonably 
                      calculated to provide notice to such person by the 
                      time specified in subparagraph (A).
                    ``(C) Treatment of bridge banks.--The following 
                institutions shall not be considered to be 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 
                paragraph (9):
                          ``(i) A bridge bank.
                          ``(ii) A credit union organized by the Board, 
                      for which a conservator is appointed either--
                                    ``(I) immediately upon the 
                                organization of the credit union; or
                                    ``(II) at the time of a purchase and 
                                assumption transaction between the 
                                credit union and the Board as receiver 
                                for a credit union in default.''.

SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF 
            QUALIFIED FINANCIAL CONTRACTS.

    (a) FDIC-Insured Depository Institutions.--Section 11(e) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is amended--
            (1) by redesignating paragraphs (11) through (15) as 
        paragraphs (12) through (16), respectively;
            (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).''; and
            (3) by adding at the end the following new paragraph:
            ``(17) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section 3(a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act.''.

[[Page 119 STAT. 166]]

    (b) Insured Credit Unions.--Section 207(c) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)) is amended--
            (1) by redesignating paragraphs (11), (12), and (13) as 
        paragraphs (12), (13), and (14), respectively;
            (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 liquidating agent with respect 
        to any qualified financial contract to which an insured credit 
        union is a party, the conservator or liquidating agent for such 
        credit union shall either--
                    ``(A) disaffirm or repudiate all qualified financial 
                contracts between--
                          ``(i) any person or any affiliate of such 
                      person; and
                          ``(ii) the credit union 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).''; and
            (3) by adding at the end the following new paragraph:
            ``(15) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section (a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act.''.

SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

    (a) FDIC-Insured Depository Institutions.--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 one 
                      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.''.

    (b) Insured Credit Unions.--Section 207(c)(8)(D) of the Federal 
Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended by inserting after 
clause (vi) (as added by section 901(f)) the following new clause:
                          ``(vii) Treatment of master agreement as one 
                      agreement.--Any master agreement for any contract 
                      or agreement described in any preceding clause of 
                      this

[[Page 119 STAT. 167]]

                      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. 906. 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 (2)--
                    (A) in subparagraph (A)(ii), by inserting before the 
                semicolon ``, or is exempt from such registration by 
                order of the Securities and Exchange Commission''; and
                    (B) in subparagraph (B), by inserting before the 
                period ``, that has been granted an exemption under 
                section 4(c)(1) of the Commodity Exchange Act, or that 
                is a multilateral clearing organization (as defined in 
                section 408 of this Act)'';
            (2) 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), so 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;'';
            (3) in paragraph (11), by inserting before the period ``and 
        any other clearing organization with which such clearing 
        organization has a netting contract'';
            (4) 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 
                      close out values relating to such obligations or 
                      entitlements) among the parties to the agreement; 
                      and''; and
            (5) by adding at the end the following new paragraph:

[[Page 119 STAT. 168]]

            ``(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 striking subsection (a) and inserting the following:

    ``(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, paragraphs (8)(E), 
(8)(F), and (10)(B) of section 207(c) of the Federal Credit Union 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, United States Code).''; 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 
one 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, 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, paragraphs (8)(E), (8)(F), and (10)(B) of 
section 207(c) of the Federal Credit Union 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 striking subsection (a) and inserting the following:

    ``(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, paragraphs (8)(E), 
(8)(F), and (10)(B) of section 207(c) of the Federal Credit Union 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 
one 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, paragraphs (8)(E), 
(8)(F), and (10)(B)

[[Page 119 STAT. 169]]

of section 207(c) of the Federal Credit Union Act, and section 5(b)(2) 
of the Securities Investor Protection Act of 1970).''.
    (d) Enforceability of Contracts With Uninsured National Banks, 
Uninsured Federal Branches and Agencies, Certain Uninsured State Member 
Banks, and Edge Act Corporations.--The Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.) is 
amended--
            (1) by redesignating section 407 <<NOTE: 12 USC 4407.>> as 
        section 407A; and
            (2) by inserting after section 406 the following new 
        section:

``SEC. 407. <<NOTE: 12 USC 4406a.>> TREATMENT OF CONTRACTS WITH 
            UNINSURED NATIONAL BANKS, UNINSURED FEDERAL BRANCHES AND 
            AGENCIES, CERTAIN UNINSURED STATE MEMBER BANKS, AND EDGE ACT 
            CORPORATIONS.

    ``(a) <<NOTE: Applicability.>> 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, a 
corporation chartered under section 25A of the Federal Reserve Act, or 
an uninsured State member bank which operates, or operates as, a 
multilateral clearing organization pursuant to section 409 of this Act, 
except that for such purpose--
            ``(1) any reference to the `Corporation as receiver' or `the 
        receiver or the Corporation' shall refer to the receiver 
        appointed by the Comptroller of the Currency in the case of an 
        uninsured national bank or uninsured Federal branch or agency, 
        or to the receiver appointed by the Board of Governors of the 
        Federal Reserve System in the case of a corporation chartered 
        under section 25A of the Federal Reserve Act or an uninsured 
        State member bank;
            ``(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 
        appointed by the Comptroller of the Currency in the case of an 
        uninsured national bank or uninsured Federal branch or agency, 
        or to the receiver or conservator appointed by the Board of 
        Governors of the Federal Reserve System in the case of a 
        corporation chartered under section 25A of the Federal Reserve 
        Act or an uninsured State member bank; and
            ``(3) any reference to an `insured depository institution' 
        or `depository institution' shall refer to an uninsured national 
        bank, an uninsured Federal branch or Federal agency, a 
        corporation chartered under section 25A of the Federal Reserve 
        Act, or an uninsured State member bank which operates, or 
        operates as, a multilateral clearing organization pursuant to 
        section 409 of this Act.

    ``(b) Liability.--The liability of a receiver or conservator of an 
uninsured national bank, uninsured Federal branch or agency, a 
corporation chartered under section 25A of the Federal Reserve Act, or 
an uninsured State member bank which operates, or operates as, a 
multilateral clearing organization pursuant to section 409 of this Act, 
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.--

[[Page 119 STAT. 170]]

            ``(1) In general.--The Comptroller of the Currency in the 
        case of an uninsured national bank or uninsured Federal branch 
        or agency and the Board of Governors of the Federal Reserve 
        System in the case of a corporation chartered under section 25A 
        of the Federal Reserve Act, or an uninsured State member bank 
        that operates, or operates as, a multilateral clearing 
        organization pursuant to section 409 of this Act, in 
        consultation with the Federal Deposit Insurance Corporation, may 
        each promulgate regulations solely to implement this section.
            ``(2) Specific requirement.--In promulgating regulations, 
        limited solely to implementing paragraphs (8), (9), (10), and 
        (11) of section 11(e) of the Federal Deposit Insurance Act, the 
        Comptroller of the Currency and the Board of Governors of the 
        Federal Reserve System each 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 meanings as 
in section 1(b) of the International Banking Act of 1978.''.

SEC. 907. BANKRUPTCY LAW 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) any security agreement or arrangement, or 
                other credit enhancement related to any agreement or 
                transaction referred to in subparagraph (A), (B), (C), 
                or (D), including any guarantee or reimbursement 
                obligation by or to a forward contract merchant or 
                financial participant in connection with any agreement 
                or transaction referred to in any such subparagraph, but 
                not to exceed the damages

[[Page 119 STAT. 171]]

                in connection with any such agreement or transaction, 
                measured in accordance with section 562;'';
                    (B) in paragraph (46), by striking ``on any day 
                during the period beginning 90 days before the date of'' 
                and inserting ``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)--
                    ``(A) means--
                          ``(i) an agreement, including related terms, 
                      which provides for the transfer of one or more 
                      certificates of deposit, mortgage related 
                      securities (as defined in section 3 of the 
                      Securities Exchange Act of 1934), mortgage loans, 
                      interests in mortgage related securities or 
                      mortgage loans, eligible bankers' acceptances, 
                      qualified foreign government securities (defined 
                      as 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), 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, mortgage loans, or interests, with a 
                      simultaneous agreement by such transferee to 
                      transfer to the transferor thereof certificates of 
                      deposit, eligible bankers' acceptance, securities, 
                      mortgage loans, or interests of the kind described 
                      in this clause, 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) any security agreement or arrangement or 
                      other credit enhancement related to any agreement 
                      or transaction referred to in clause (i), (ii), 
                      (iii), or (iv), including any guarantee or 
                      reimbursement obligation by or to a repo 
                      participant or financial participant in connection 
                      with any agreement or transaction referred to in 
                      any such clause, but not to exceed the damages in 
                      connection with any such agreement or transaction, 
                      measured in accordance with section 562 of this 
                      title; and

[[Page 119 STAT. 172]]

                    ``(B) does not include a repurchase obligation under 
                a participation in a commercial mortgage loan;'';
                    (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--
                                    ``(I) an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap;
                                    ``(II) a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other foreign 
                                exchange or precious metals agreement;
                                    ``(III) a currency swap, option, 
                                future, or forward agreement;
                                    ``(IV) an equity index or equity 
                                swap, option, future, or forward 
                                agreement;
                                    ``(V) a debt index or debt swap, 
                                option, future, or forward agreement;
                                    ``(VI) a total return, credit spread 
                                or credit swap, option, future, or 
                                forward agreement;
                                    ``(VII) a commodity index or a 
                                commodity swap, option, future, or 
                                forward agreement; or
                                    ``(VIII) a weather swap, weather 
                                derivative, or weather option;
                          ``(ii) any agreement or transaction that is 
                      similar to any other agreement or transaction 
                      referred to in this paragraph and that--
                                    ``(I) is of a type that has been, is 
                                presently, or in the future becomes, the 
                                subject of recurrent dealings in the 
                                swap markets (including terms and 
                                conditions incorporated by reference 
                                therein); and
                                    ``(II) is a forward, swap, future, 
                                or option on one or more rates, 
                                currencies, commodities, equity 
                                securities, or other equity instruments, 
                                debt securities or other debt 
                                instruments, quantitative measures 
                                associated with an occurrence, extent of 
                                an occurrence, or contingency associated 
                                with a financial, commercial, or 
                                economic consequence, or economic or 
                                financial indices or measures of 
                                economic or financial risk or value;
                          ``(iii) any combination of agreements or 
                      transactions referred to in this subparagraph;
                          ``(iv) any option to enter into an agreement 
                      or transaction referred to in this subparagraph;
                          ``(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

[[Page 119 STAT. 173]]

                      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
                          ``(vi) any security agreement or arrangement 
                      or other credit enhancement related to any 
                      agreements or transactions referred to in clause 
                      (i) through (v), including any guarantee or 
                      reimbursement obligation by or to a swap 
                      participant or financial participant in connection 
                      with any agreement or transaction referred to in 
                      any such clause, but not to exceed the damages in 
                      connection with any such agreement or transaction, 
                      measured in accordance with section 562; and
                    ``(B) <<NOTE: Applicability.>> 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, the Gramm-Leach-Bliley 
                Act, and the Legal Certainty for Bank Products Act of 
                2000;'';
            (2) in section 741(7), by striking paragraph (7) and 
        inserting the following:
            ``(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, mortgage loan, 
                      interest, group or index, or option, and including 
                      any repurchase or reverse repurchase transaction 
                      on any such security, certificate of deposit, 
                      mortgage 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, mortgage loan, 
                      interest, group or index, or option;
                          ``(iv) any margin loan;

[[Page 119 STAT. 174]]

                          ``(v) any other agreement or transaction that 
                      is similar to an agreement or transaction referred 
                      to in this subparagraph;
                          ``(vi) any combination of the agreements or 
                      transactions referred to in this subparagraph;
                          ``(vii) any option to enter into any agreement 
                      or transaction referred to in this subparagraph;
                          ``(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 
                      subparagraph, except that such master agreement 
                      shall be considered to be a securities contract 
                      under this subparagraph 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 
                      subparagraph, including any guarantee or 
                      reimbursement obligation by or to a stockbroker, 
                      securities clearing agency, financial institution, 
                      or financial participant in connection with any 
                      agreement or transaction referred to in this 
                      subparagraph, but not to exceed the damages in 
                      connection with any such agreement or transaction, 
                      measured in accordance with section 562; 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 agreement, without regard 
                to whether the master 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

[[Page 119 STAT. 175]]

                    ``(J) any security agreement or arrangement or other 
                credit enhancement related to any agreement or 
                transaction referred to in this paragraph, including any 
                guarantee or reimbursement obligation by or to a 
                commodity broker or financial participant in connection 
                with any agreement or transaction referred to in this 
                paragraph, but not to exceed the damages in connection 
                with any such agreement or transaction, measured in 
                accordance with section 562;''.

    (b) Definitions of Financial Institution, Financial Participant, and 
Forward Contract Merchant.--Section 101 of title 11, United States Code, 
is amended--
            (1) by striking paragraph (22) and inserting the following:
            ``(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, federally-insured credit union, or 
                receiver, liquidating agent, or conservator for such 
                entity and, when any such Federal reserve bank, 
                receiver, liquidating agent, conservator or entity is 
                acting as agent or custodian for a customer in 
                connection with a securities contract (as defined in 
                section 741) such customer; or
                    ``(B) in connection with a securities contract (as 
                defined in section 741) an investment company registered 
                under the Investment Company Act of 1940;'';
            (2) by inserting after paragraph (22) the following:
            ``(22A) `financial participant' means--
                    ``(A) an entity that, at the time it enters into a 
                securities contract, commodity contract, swap agreement, 
                repurchase agreement, or forward contract, or at the 
                time of the date of the filing of the petition, has one 
                or more agreements or transactions described in 
                paragraph (1), (2), (3), (4), (5), or (6) of section 
                561(a) with the debtor or any other entity (other than 
                an affiliate) of a total gross dollar value of not less 
                than $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 
                not less than $100,000,000 (aggregated across 
                counterparties) in one or more such agreements or 
                transactions with the debtor or any other entity (other 
                than an affiliate) on any day during the previous 15-
                month period; or
                    ``(B) a clearing organization (as defined in section 
                402 of the Federal Deposit Insurance Corporation 
                Improvement Act of 1991);''; and
            (3) by striking paragraph (26) and inserting the following:
            ``(26) `forward contract merchant' means a Federal reserve 
        bank, or an entity the business of which consists in whole or in 
        part of entering into forward contracts as or with merchants in 
        a commodity (as defined in section 761) 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;''.

    (c) Definition of Master Netting Agreement and Master Netting 
Agreement Participant.--Section 101 of title 11, United

[[Page 119 STAT. 176]]

States Code, is amended by inserting after paragraph (38) the following 
new paragraphs:
            ``(38A) `master netting agreement'--
                    ``(A) means an agreement providing for the exercise 
                of rights, including rights of netting, setoff, 
                liquidation, termination, acceleration, or close out, 
                under or in connection with one or more contracts that 
                are described in any one or more of paragraphs (1) 
                through (5) of section 561(a), or any security agreement 
                or arrangement or other credit enhancement related to 
                one or more of the foregoing, including any guarantee or 
                reimbursement obligation related to 1 or more of the 
                foregoing; and
                    ``(B) if the agreement contains provisions relating 
                to agreements or transactions that are not contracts 
                described in paragraphs (1) through (5) of section 
                561(a), shall be deemed to be a master netting agreement 
                only with respect to those agreements or transactions 
                that are described in any one or more of paragraphs (1) 
                through (5) of section 561(a);
            ``(38B) `master netting agreement participant' means an 
        entity that, at any time before the date of 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 224, 303, 311, 401, and 718, is 
        amended--
                    (A) in paragraph (6), by inserting ``, pledged to, 
                under the control of,'' after ``held by'';
                    (B) in paragraph (7), by inserting ``, pledged to, 
                under the control of,'' after ``held by'';
                    (C) by striking paragraph (17) and inserting the 
                following:
            ``(17) under subsection (a), of the setoff by a swap 
        participant or financial participant of a mutual debt and claim 
        under or in connection with one 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 or financial participant 
        under or in connection with any swap agreement or against cash, 
        securities, or other property held by, pledged to, under the 
        control of, or due from such swap participant or financial 
        participant to margin, guarantee, secure, or settle any swap 
        agreement;''; and
                    (D) by inserting after paragraph (26) the following:
            ``(27) under subsection (a), of the setoff by a master 
        netting agreement participant of a mutual debt and claim under 
        or in connection with one 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

[[Page 119 STAT. 177]]

        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 to, 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 that 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; and''.
            (2) Limitation.--Section 362 of title 11, United States 
        Code, as amended by sections 106, 305, 311, and 441, is amended 
        by adding at the end the following:

    ``(o) The exercise of rights not subject to the stay arising under 
subsection (a) pursuant to paragraph (6), (7), (17), or (27) 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, 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
                    (C) by inserting ``or financial participant'' after 
                ``swap participant''; and
            (2) by adding at the end the following:

    ``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and 
548(b) 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) and except to the extent that 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'' at the end;
            (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 that, with respect to a transfer 
        under any individual contract covered thereby, to the extent 
        that 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:

[[Page 119 STAT. 178]]

``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'';

            (2) in the first sentence, by striking ``liquidation'' and 
        inserting ``liquidation, termination, or acceleration''; and
            (3) in the second sentence, by striking ``As used'' and all 
        that follows through ``right,'' and inserting ``As used in this 
        section, the term `contractual right' includes a right set forth 
        in a rule or bylaw of a derivatives clearing organization (as 
        defined in the Commodity Exchange Act), a multilateral clearing 
        organization (as defined in the Federal Deposit Insurance 
        Corporation Improvement Act of 1991), a national securities 
        exchange, a national securities association, a securities 
        clearing agency, a contract market designated under the 
        Commodity Exchange Act, a derivatives transaction execution 
        facility registered under the Commodity Exchange Act, or a board 
        of trade (as defined in the Commodity Exchange Act) or in a 
        resolution of the governing board thereof and a right,''.

    (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'';

            (2) in the first sentence, by striking ``liquidation'' and 
        inserting ``liquidation, termination, or acceleration''; and
            (3) in the third sentence, by striking ``As used'' and all 
        that follows through ``right,'' and inserting ``As used in this 
        section, the term `contractual right' includes a right set forth 
        in a rule or bylaw of a derivatives clearing organization (as 
        defined in the Commodity Exchange Act), a multilateral clearing 
        organization (as defined in the Federal Deposit Insurance 
        Corporation Improvement Act of 1991), a national securities 
        exchange, a national securities association, a securities 
        clearing agency, a contract market designated under the 
        Commodity Exchange Act, a derivatives transaction execution 
        facility registered under the Commodity Exchange Act, or a board 
        of trade (as defined in the Commodity Exchange Act) or in a 
        resolution of the governing board thereof and a right,''.

    (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:

[[Page 119 STAT. 179]]

``Sec. 560. Contractual right to liquidate, terminate, or accelerate a 
                        swap agreement'';

            (2) in the first sentence, by striking ``termination of a 
        swap agreement'' and inserting ``liquidation, termination, or 
        acceleration of one or more swap agreements'';
            (3) by striking ``in connection with any swap agreement'' 
        and inserting ``in connection with the termination, liquidation, 
        or acceleration of one or more swap agreements''; and
            (4) in the second sentence, by striking ``As used'' and all 
        that follows through ``right,'' and inserting ``As used in this 
        section, the term `contractual right' includes a right set forth 
        in a rule or bylaw of a derivatives clearing organization (as 
        defined in the Commodity Exchange Act), a multilateral clearing 
        organization (as defined in the Federal Deposit Insurance 
        Corporation Improvement Act of 1991), a national securities 
        exchange, a national securities association, a securities 
        clearing agency, a contract market designated under the 
        Commodity Exchange Act, a derivatives transaction execution 
        facility registered under the Commodity Exchange Act, or a board 
        of trade (as defined in the Commodity Exchange Act) or in a 
        resolution of the governing board thereof and a right,''.

    (k) Liquidation, Termination, Acceleration, or Offset Under a Master 
Netting Agreement and Across Contracts.--
            (1) In general.--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; proceedings under chapter 15

    ``(a) 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 one or more (or the 
termination, liquidation, or acceleration of one 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)(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--
            ``(A) a party may not net or offset an obligation to the 
        debtor arising under, or in connection with, a commodity 
        contract traded on or subject to the rules of a contract market 
        designated under the Commodity Exchange Act or a derivatives 
        transaction execution facility registered under the Commodity 
        Exchange Act against any claim arising under, or in connection

[[Page 119 STAT. 180]]

        with, other instruments, contracts, or agreements listed in 
        subsection (a) except to the extent that the party has positive 
        net equity in the commodity accounts at the debtor, as 
        calculated under such subchapter; 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 and traded on or subject to the rules of a 
        contract market designated under the Commodity Exchange Act or a 
        derivatives transaction execution facility registered under the 
        Commodity Exchange Act against any claim arising under, or in 
        connection with, other instruments, contracts, or agreements 
        listed in subsection (a).

    ``(3) No provision of subparagraph (A) or (B) of paragraph (2) shall 
prohibit the offset of claims and obligations that arise under--
            ``(A) a cross-margining agreement or similar arrangement 
        that has been approved by the Commodity Futures Trading 
        Commission or submitted to the Commodity Futures Trading 
        Commission under paragraph (1) or (2) of section 5c(c) of the 
        Commodity Exchange Act and has not been abrogated or rendered 
        ineffective by the Commodity Futures Trading Commission; or
            ``(B) any other netting agreement between a clearing 
        organization (as defined in section 761) and another entity that 
        has been approved by the Commodity Futures Trading Commission.

    ``(c) As used in this section, the term `contractual right' includes 
a right set forth in a rule or bylaw of a derivatives clearing 
organization (as defined in the Commodity Exchange Act), a multilateral 
clearing organization (as defined in the Federal Deposit Insurance 
Corporation Improvement Act of 1991), a national securities exchange, a 
national securities association, a securities clearing agency, a 
contract market designated under the Commodity Exchange Act, a 
derivatives transaction execution facility registered under the 
Commodity Exchange Act, or a board of trade (as defined in the Commodity 
Exchange Act) 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.
    ``(d) 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 under 
chapter 15, 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).''.

[[Page 119 STAT. 181]]

            (2) 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 560 the following:

``561. Contractual right to terminate, liquidate, accelerate, or offset 
           under a master netting agreement and across contracts; 
           proceedings under chapter 15.''.

    (l) 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, financial participants, 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, financial participant, 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.''.
    (m) 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, financial participants, 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, financial participant, 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) Setoff.--Section 553 of title 11, United States Code, is 
amended--
            (1) in subsection (a)(2)(B)(ii), by inserting before the 
        semicolon the following: ``(except for a setoff of a kind 
        described in section 362(b)(6), 362(b)(7), 362(b)(17), 
        362(b)(27), 555, 556, 559, 560, or 561)'';
            (2) in subsection (a)(3)(C), by inserting before the period 
        the following: ``(except for a setoff of a kind described in 
        section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 
        559, 560, or 561)''; and
            (3) in subsection (b)(1), by striking ``362(b)(14),'' and 
        inserting ``362(b)(17), 362(b)(27), 555, 556, 559, 560, 561,''.

    (o) 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,'';

[[Page 119 STAT. 182]]

            (2) in sections 362(b)(7) and 546(f), by inserting ``or 
        financial participant'' after ``repo participant'' each place 
        such term appears;
            (3) in section 546(e), by inserting ``financial 
        participant,'' after ``financial institution,'';
            (4) in section 548(d)(2)(B), by inserting ``financial 
        participant,'' after ``financial institution,'';
            (5) in section 548(d)(2)(C), by inserting ``or financial 
        participant'' after ``repo participant'';
            (6) in section 548(d)(2)(D), by inserting ``or financial 
        participant'' after ``swap participant'';
            (7) in section 555--
                    (A) by inserting ``financial participant,'' after 
                ``financial institution,''; and
                    (B) by striking the second sentence and inserting 
                the following: ``As used in this section, the term 
                `contractual right' includes a right set forth in a rule 
                or bylaw of a derivatives clearing organization (as 
                defined in the Commodity Exchange Act), a multilateral 
                clearing organization (as defined in the Federal Deposit 
                Insurance Corporation Improvement Act of 1991), a 
                national securities exchange, a national securities 
                association, a securities clearing agency, a contract 
                market designated under the Commodity Exchange Act, a 
                derivatives transaction execution facility registered 
                under the Commodity Exchange Act, or a board of trade 
                (as defined in the Commodity Exchange Act), 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.'';
            (8) in section 556, by inserting ``, financial 
        participant,'' after ``commodity broker'';
            (9) in section 559, by inserting ``or financial 
        participant'' after ``repo participant'' each place such term 
        appears; and
            (10) in section 560, by inserting ``or financial 
        participant'' after ``swap participant''.

    (p) Conforming Amendments.--Title 11, United States Code, is 
amended--
            (1) in the table of sections for 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 for chapter 7--

[[Page 119 STAT. 183]]

                    (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, 
           financial participants, 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, financial 
           participants, securities clearing agencies, swap 
           participants, repo participants, and master netting agreement 
           participants.''.

SEC. 908. RECORDKEEPING REQUIREMENTS.

    (a) FDIC-Insured Depository Institutions.--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 by any insured depository 
                institution with respect to qualified financial 
                contracts (including market valuations) only if such 
                insured depository institution is in a troubled 
                condition (as such term is defined by the Corporation 
                pursuant to section 32).''.

    (b) Insured Credit Unions.--Section 207(c)(8) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)(8)) is amended by adding at the end the 
following new subparagraph:
                    ``(H) Recordkeeping requirements.--The Board, in 
                consultation with the appropriate Federal banking 
                agencies, may prescribe regulations requiring more 
                detailed recordkeeping by any insured credit union with 
                respect to qualified financial contracts (including 
                market valuations) only if such insured credit union is 
                in a troubled condition (as such term is defined by the 
                Board pursuant to section 212).''.

SEC. 909. 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) one or more qualified financial contracts, as 
                defined in section 11(e)(8)(D),

[[Page 119 STAT. 184]]

        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. 910. DAMAGE MEASURE.

    (a) In General.--Title 11, United States Code, is amended--
            (1) by inserting after section 561, as added by section 907, 
        the following:

``Sec. 562. Timing of damage measurement in connection with swap 
                        agreements, securities contracts, forward 
                        contracts, commodity contracts, repurchase 
                        agreements, and master netting agreements

    ``(a) If the trustee rejects a swap agreement, securities contract 
(as defined in section 741), forward contract, commodity contract (as 
defined in section 761), repurchase agreement, or master netting 
agreement pursuant to section 365(a), 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 or dates of such liquidation, termination, or 
        acceleration.

    ``(b) If there are not any commercially reasonable determinants of 
value as of any date referred to in paragraph (1) or (2) of subsection 
(a), damages shall be measured as of the earliest subsequent date or 
dates on which there are commercially reasonable determinants of value.
    ``(c) For the purposes of subsection (b), if damages are not 
measured as of the date or dates of rejection, liquidation, termination, 
or acceleration, and the forward contract merchant, stockbroker, 
financial institution, securities clearing agency, repo participant, 
financial participant, master netting agreement participant, or swap 
participant or the trustee objects to the timing of the measurement of 
damages--
            ``(1) the trustee, in the case of an objection by a forward 
        contract merchant, stockbroker, financial institution, 
        securities clearing agency, repo participant, financial 
        participant, master netting agreement participant, or swap 
        participant; or
            ``(2) the forward contract merchant, stockbroker, financial 
        institution, securities clearing agency, repo participant, 
        financial participant, master netting agreement participant, or 
        swap participant, in the case of an objection by the trustee,

has the burden of proving that there were no commercially reasonable 
determinants of value as of such date or dates.''; and
            (2) in the table of sections for chapter 5, by inserting 
        after the item relating to section 561 (as added by section 907) 
        the following new item:

``562. Timing of 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--

[[Page 119 STAT. 185]]

            (1) by inserting ``(1)'' after ``(g)''; and
            (2) by adding at the end the following:

    ``(2) A claim for damages calculated in accordance with section 562 
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. 911. 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 at the end 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 SIPC 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, as those terms are 
                      defined in sections 101, 741, and 761 of title 11, 
                      United States Code, to offset or net termination 
                      values, payment amounts, or other transfer 
                      obligations arising under or in connection with 
                      one or more of such contracts or agreements, or to 
                      foreclose on any cash collateral pledged by the 
                      debtor, whether or not with respect to one 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, or disposition of, 
                      securities collateral pledged by the debtor, 
                      whether or not with respect to one 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 subparagraph, 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.''.

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

    (a) <<NOTE: 11 USC 1201 note.>> Reenactment.--
            (1) In general.--Chapter 12 of title 11, United States Code, 
        as reenacted by section 149 of division C of the Omnibus 
        Consolidated and Emergency Supplemental Appropriations Act, 1999 
        (Public Law 105-277), <<NOTE: 11 USC 1201 et seq.>> and as in 
        effect on June 30, 2005, is hereby reenacted.
            (2) Effective date of reenactment.--Paragraph (1) shall take 
        effect on July 1, 2005.

[[Page 119 STAT. 186]]

    (b) Amendments--Chapter 12 of title 11, United States Code, as 
reenacted by subsection (a), is amended by this Act.
    (c) Conforming Amendment.--Section 302 of the Bankruptcy Judges, 
United States Trustees, and Family Farmer Bankruptcy Act of 1986 (28 
U.S.C. 581 note) is amended by striking subsection (f).

SEC. 1002. DEBT LIMIT INCREASE.

    Section 104(b) of title 11, United States Code, as amended by 
section 226, is amended by inserting ``101(18),'' after ``101(3),'' each 
place it appears.

SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

    (a) Contents of Plan.--Section 1222(a)(2) of title 11, United States 
Code, as amended by section 213, 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;''.

    (b) Special Notice Provisions.--Section 1231(b) of title 11, United 
States Code, as so designated by section 719, is amended by striking ``a 
State or local governmental unit'' and inserting ``any governmental 
unit''.
    (c) <<NOTE: 11 USC 1222 note.>> Effective Date; Application of 
Amendments.--This section and the amendments made by this section shall 
take effect on the date of the enactment of this Act and shall not apply 
with respect to cases commenced under title 11 of the United States Code 
before such date.

SEC. 1004. 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 
                ``$3,237,000''; and
                    (B) by striking ``80'' and inserting ``50''; and
            (2) in subparagraph (B)(ii)--
                    (A) by striking ``$1,500,000'' and inserting 
                ``$3,237,000''; and
                    (B) by striking ``80'' and inserting ``50''.

SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND SPOUSE 
            RECEIVE OVER 50 PERCENT OF INCOME FROM FARMING OPERATION IN 
            YEAR PRIOR TO BANKRUPTCY.

    Section 101(18)(A) of title 11, United States Code, is amended by 
striking ``for the taxable year preceding the taxable year'' and 
inserting the following:
                ``for--
                          ``(i) the taxable year preceding; or

[[Page 119 STAT. 187]]

                          ``(ii) each of the 2d and 3d taxable years 
                      preceding;
                the taxable year''.

SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE INCOME.

    (a) Confirmation of Plan.--Section 1225(b)(1) 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 value of the property to be distributed under the 
        plan in the 3-year period, or such longer period as the court 
        may approve under section 1222(c), beginning on the date that 
        the first distribution is due under the plan is not less than 
        the debtor's projected disposable income for such period.''.

    (b) Modification of Plan.--Section 1229 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(d) A plan may not be modified under this section--
            ``(1) to increase the amount of any payment due before the 
        plan as modified becomes the plan;
            ``(2) by anyone except the debtor, based on an increase in 
        the debtor's disposable income, to increase the amount of 
        payments to unsecured creditors required for a particular month 
        so that the aggregate of such payments exceeds the debtor's 
        disposable income for such month; or
            ``(3) in the last year of the plan by anyone except the 
        debtor, to require payments that would leave the debtor with 
        insufficient funds to carry on the farming operation after the 
        plan is completed.''.

SEC. 1007. FAMILY FISHERMEN.

    (a) Definitions.--Section 101 of title 11, United States Code, is 
amended--
            (1) by inserting after paragraph (7) the following:
            ``(7A) `commercial fishing operation' means--
                    ``(A) the catching or harvesting of fish, shrimp, 
                lobsters, urchins, seaweed, shellfish, or other aquatic 
                species or products of such species; or
                    ``(B) for purposes of section 109 and chapter 12, 
                aquaculture activities consisting of raising for market 
                any species or product described in subparagraph (A);
            ``(7B) `commercial fishing vessel' means a vessel used by a 
        family fisherman to carry out a commercial fishing operation;''; 
        and
            (2) by inserting after paragraph (19) the following:
            ``(19A) `family fisherman' means--
                    ``(A) an individual or individual and spouse engaged 
                in a commercial fishing operation--
                          ``(i) whose aggregate debts do not exceed 
                      $1,500,000 and not less than 80 percent of whose 
                      aggregate noncontingent, liquidated debts 
                      (excluding a debt for the principal residence of 
                      such individual or such individual and spouse, 
                      unless such debt arises out of a commercial 
                      fishing operation), on the date the case is filed, 
                      arise out of a commercial fishing operation

[[Page 119 STAT. 188]]

                      owned or operated by such individual or such 
                      individual and spouse; and
                          ``(ii) who receive from such commercial 
                      fishing operation more than 50 percent of such 
                      individual's or such individual's and spouse's 
                      gross income for the taxable year preceding the 
                      taxable year in which the case concerning such 
                      individual or such individual and spouse was 
                      filed; or
                    ``(B) a corporation or partnership--
                          ``(i) in which more than 50 percent of the 
                      outstanding stock or equity is held by--
                                    ``(I) 1 family that conducts the 
                                commercial fishing operation; or
                                    ``(II) 1 family and the relatives of 
                                the members of such family, and such 
                                family or such relatives conduct the 
                                commercial fishing operation; and
                          ``(ii)(I) more than 80 percent of the value of 
                      its assets consists of assets related to the 
                      commercial fishing operation;
                          ``(II) its aggregate debts do not exceed 
                      $1,500,000 and not less than 80 percent of its 
                      aggregate noncontingent, liquidated debts 
                      (excluding a debt for 1 dwelling which is owned by 
                      such corporation or partnership and which a 
                      shareholder or partner maintains as a principal 
                      residence, unless such debt arises out of a 
                      commercial fishing operation), on the date the 
                      case is filed, arise out of a commercial fishing 
                      operation owned or operated by such corporation or 
                      such partnership; and
                          ``(III) if such corporation issues stock, such 
                      stock is not publicly traded;
            ``(19B) `family fisherman with regular annual income' means 
        a family fisherman whose annual income is sufficiently stable 
        and regular to enable such family fisherman to make payments 
        under a plan under chapter 12 of this title;''.

    (b) Who May Be a Debtor.--Section 109(f) of title 11, United States 
Code, is amended by inserting ``or family fisherman'' after ``family 
farmer''.
    (c)  Chapter 12.--Chapter 12 of title 11, United States Code, is 
amended--
            (1) in the chapter heading, by inserting ``OR FISHERMAN'' 
        after ``FAMILY FARMER'';
            (2) in section 1203, by inserting ``or commercial fishing 
        operation'' after ``farm''; and
            (3) in section 1206, by striking ``if the property is 
        farmland or farm equipment'' and inserting ``if the property is 
        farmland, farm equipment, or property used to carry out a 
        commercial fishing operation (including a commercial fishing 
        vessel)''.

    (d) Clerical Amendment.--In the table of chapters for title 11, 
United States Code, the item relating to chapter 12, is amended to read 
as follows:

``12. Adjustments of Debts of a Family Farmer or Family Fisherman 
with Regular Annual Income.......................................1201''.

    (e) <<NOTE: 11 USC 101 note.>> Applicability.--Nothing in this 
section shall change, affect, or amend the Fishery Conservation and 
Management Act of 1976 (16 U.S.C. 1801 et seq.).

[[Page 119 STAT. 189]]

               TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

SEC. 1101. DEFINITIONS.

    (a) Health Care Business Defined.--Section 101 of title 11, United 
States Code, as amended by section 306, is amended--
            (1) by redesignating paragraph (27A) as paragraph (27B); and
            (2) by inserting after paragraph (27) the following:
            ``(27A) `health care business'--
                    ``(A) means any public or private entity (without 
                regard to whether that entity is organized for profit or 
                not for profit) that is primarily engaged in offering to 
                the general public facilities and services for--
                          ``(i) the diagnosis or treatment of injury, 
                      deformity, or disease; and
                          ``(ii) surgical, drug treatment, psychiatric, 
                      or obstetric care; and
                    ``(B) includes--
                          ``(i) any--
                                    ``(I) general or specialized 
                                hospital;
                                    ``(II) ancillary ambulatory, 
                                emergency, or surgical treatment 
                                facility;
                                    ``(III) hospice;
                                    ``(IV) home health agency; and
                                    ``(V) other health care institution 
                                that is similar to an entity referred to 
                                in subclause (I), (II), (III), or (IV); 
                                and
                          ``(ii) any long-term care facility, including 
                      any--
                                    ``(I) skilled nursing facility;
                                    ``(II) intermediate care facility;
                                    ``(III) assisted living facility;
                                    ``(IV) home for the aged;
                                    ``(V) domiciliary care facility; and
                                    ``(VI) health care institution that 
                                is related to a facility referred to in 
                                subclause (I), (II), (III), (IV), or 
                                (V), if that institution is primarily 
                                engaged in offering room, board, 
                                laundry, or personal assistance with 
                                activities of daily living and 
                                incidentals to activities of daily 
                                living;''.

    (b) Patient and Patient Records Defined.--Section 101 of title 11, 
United States Code, is amended by inserting after paragraph (40) the 
following:
            ``(40A) `patient' means any individual who obtains or 
        receives services from a health care business;
            ``(40B) `patient records' means any written document 
        relating to a patient or a record recorded in a magnetic, 
        optical, or other form of electronic medium;''.

    (c) <<NOTE: 11 USC 101 note.>> Rule of Construction.--The amendments 
made by subsection (a) of this section shall not affect the 
interpretation of section 109(b) of title 11, United States Code.

SEC. 1102. DISPOSAL OF PATIENT RECORDS.

    (a) In General.--Subchapter III of chapter 3 of title 11, United 
States Code, is amended by adding at the end the following:

[[Page 119 STAT. 190]]

``Sec. 351. <<NOTE: Applicability.>> Disposal of patient records

    ``If a health care business commences a case under chapter 7, 9, or 
11, and the trustee does not have a sufficient amount of funds to pay 
for the storage of patient records in the manner required under 
applicable Federal or State law, the following requirements shall apply:
            ``(1) <<NOTE: Notices. Newspaper, publication.>> The trustee 
        shall--
                    ``(A) promptly publish notice, in 1 or more 
                appropriate newspapers, that if patient records are not 
                claimed by the patient or an insurance provider (if 
                applicable law permits the insurance provider to make 
                that claim) by the date that is 365 days after the date 
                of that notification, the trustee will destroy the 
                patient records; and
                    ``(B) during the first 180 days of the 365-day 
                period described in subparagraph (A), promptly attempt 
                to notify directly each patient that is the subject of 
                the patient records and appropriate insurance carrier 
                concerning the patient records by mailing to the most 
                recent known address of that patient, or a family member 
                or contact person for that patient, and to the 
                appropriate insurance carrier an appropriate notice 
                regarding the claiming or disposing of patient records.
            ``(2) If, after providing the notification under paragraph 
        (1), patient records are not claimed during the 365-day period 
        described under that paragraph, the trustee shall mail, by 
        certified mail, at the end of such 365-day period a written 
        request to each appropriate Federal agency to request permission 
        from that agency to deposit the patient records with that 
        agency, except that no Federal agency is required to accept 
        patient records under this paragraph.
            ``(3) If, following the 365-day period described in 
        paragraph (2) and after providing the notification under 
        paragraph (1), patient records are not claimed by a patient or 
        insurance provider, or request is not granted by a Federal 
        agency to deposit such records with that agency, the trustee 
        shall destroy those records by--
                    ``(A) if the records are written, shredding or 
                burning the records; or
                    ``(B) if the records are magnetic, optical, or other 
                electronic records, by otherwise destroying those 
                records so that those records cannot be retrieved.''.

    (b) Clerical Amendment.--The table of sections for subchapter III of 
chapter 3 of title 11, United States Code, is amended by adding at the 
end the following:

``351. Disposal of patient records.''.

SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING A HEALTH 
            CARE BUSINESS AND OTHER ADMINISTRATIVE EXPENSES.

    Section 503(b) of title 11, United States Code, as amended by 
section 445, is amended by adding at the end the following:
            ``(8) the actual, necessary costs and expenses of closing a 
        health care business incurred by a trustee or by a Federal 
        agency (as defined in section 551(1) of title 5) or a department 
        or agency of a State or political subdivision thereof, including 
        any cost or expense incurred--

[[Page 119 STAT. 191]]

                    ``(A) in disposing of patient records in accordance 
                with section 351; or
                    ``(B) in connection with transferring patients from 
                the health care business that is in the process of being 
                closed to another health care business; and''.

SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT ADVOCATE.

    (a) Ombudsman To Act as Patient Advocate.--
            (1) Appointment of ombudsman.--Title 11, United States Code, 
        as amended by section 232, is amended by inserting after section 
        332 the following:

``Sec. 333. Appointment of patient care ombudsman

    ``(a)(1) <<NOTE: Deadline.>> If the debtor in a case under chapter 
7, 9, or 11 is a health care business, the court shall order, not later 
than 30 days after the commencement of the case, the appointment of an 
ombudsman to monitor the quality of patient care and to represent the 
interests of the patients of the health care business unless the court 
finds that the appointment of such ombudsman is not necessary for the 
protection of patients under the specific facts of the case.

    ``(2)(A) If the court orders the appointment of an ombudsman under 
paragraph (1), the United States trustee shall appoint 1 disinterested 
person (other than the United States trustee) to serve as such 
ombudsman.
    ``(B) If the debtor is a health care business that provides long-
term care, then the United States trustee may appoint the State Long-
Term Care Ombudsman appointed under the Older Americans Act of 1965 for 
the State in which the case is pending to serve as the ombudsman 
required by paragraph (1).
    ``(C) <<NOTE: Notification.>> If the United States trustee does not 
appoint a State Long-Term Care Ombudsman under subparagraph (B), the 
court shall notify the State Long-Term Care Ombudsman appointed under 
the Older Americans Act of 1965 for the State in which the case is 
pending, of the name and address of the person who is appointed under 
subparagraph (A).

    ``(b) An ombudsman appointed under subsection (a) shall--
            ``(1) monitor the quality of patient care provided to 
        patients of the debtor, to the extent necessary under the 
        circumstances, including interviewing patients and physicians;
            ``(2) <<NOTE: Deadlines. Reports.>> not later than 60 days 
        after the date of appointment, and not less frequently than at 
        60-day intervals thereafter, report to the court after notice to 
        the parties in interest, at a hearing or in writing, regarding 
        the quality of patient care provided to patients of the debtor; 
        and
            ``(3) if such ombudsman determines that the quality of 
        patient care provided to patients of the debtor is declining 
        significantly or is otherwise being materially compromised, file 
        with the court a motion or a written report, with notice to the 
        parties in interest immediately upon making such determination.

    ``(c)(1) <<NOTE: Records. Confidentiality.>> An ombudsman appointed 
under subsection (a) shall maintain any information obtained by such 
ombudsman under this section that relates to patients (including 
information relating to patient records) as confidential information. 
Such ombudsman may not review confidential patient records unless the 
court approves

[[Page 119 STAT. 192]]

such review in advance and imposes restrictions on such ombudsman to 
protect the confidentiality of such records.

    ``(2) An ombudsman appointed under subsection (a)(2)(B) shall have 
access to patient records consistent with authority of such ombudsman 
under the Older Americans Act of 1965 and under non-Federal laws 
governing the State Long-Term Care Ombudsman program.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter II of chapter 3 of title 11, United States Code, as 
        amended by section 232, is amended by adding at the end the 
        following:

``333. Appointment of ombudsman.''.

    (b) Compensation of Ombudsman.--Section 330(a)(1) of title 11, 
United States Code, is amended--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``an ombudsman appointed under section 333, or'' before ``a 
        professional person''; and
            (2) in subparagraph (A), by inserting ``ombudsman,'' before 
        ``professional person''.

SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER PATIENTS.

    (a) In General.--Section 704(a) of title 11, United States Code, as 
amended by sections 102, 219, and 446, is amended by adding at the end 
the following:
            ``(12) use all reasonable and best efforts to transfer 
        patients from a health care business that is in the process of 
        being closed to an appropriate health care business that--
                    ``(A) is in the vicinity of the health care business 
                that is closing;
                    ``(B) provides the patient with services that are 
                substantially similar to those provided by the health 
                care business that is in the process of being closed; 
                and
                    ``(C) maintains a reasonable quality of care.''.

    (b) Conforming Amendment.--Section 1106(a)(1) of title 11, United 
States Code, as amended by section 446, is amended by striking ``and 
(11)'' and inserting ``(11), and (12)''.

SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION NOT SUBJECT TO AUTOMATIC 
            STAY.

    Section 362(b) of title 11, United States Code, is amended by 
inserting after paragraph (27), as amended by sections 224, 303, 311, 
401, 718, and 907, the following:
            ``(28) under subsection (a), of the exclusion by the 
        Secretary of Health and Human Services of the debtor from 
        participation in the medicare program or any other Federal 
        health care program (as defined in section 1128B(f) of the 
        Social Security Act pursuant to title XI or XVIII of such 
        Act).''.

                     TITLE XII--TECHNICAL AMENDMENTS

SEC. 1201. DEFINITIONS.

    Section 101 of title 11, United States Code, as amended by this Act, 
is further amended--
            (1) by striking ``In this title--'' and inserting ``In this 
        title the following definitions shall apply:'';

[[Page 119 STAT. 193]]

            (2) in each paragraph (other than paragraph (54A)), 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), (38), and (54A), 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 and 
                inserting a semicolon;
            (6) by striking paragraph (54) and inserting the following:
            ``(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 paragraph (54A)--
                    (A) by striking ``the term'' and inserting ``The 
                term''; and
                    (B) by indenting the left margin of paragraph (54A) 
                2 ems to the right; and
            (8) in each of paragraphs (1) through (35), in each of 
        paragraphs (36), (37), (38A), (38B) and (39A), and in each of 
        paragraphs (40) through (55), by striking the semicolon at the 
        end and inserting a period.

SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

    Section 104(b) of title 11, United States Code, as amended by this 
Act, is further amended--
            (1) by inserting ``101(19A),'' after ``101(18),'' each place 
        it appears;
            (2) by inserting ``522(f)(3) and 522(f)(4),'' after 
        ``522(d),'' each place it appears;
            (3) by inserting ``541(b), 547(c)(9),'' after 
        ``523(a)(2)(C),'' each place it appears;
            (4) in paragraph (1), by striking ``and 1325(b)(3)'' and 
        inserting ``1322(d), 1325(b), and 1326(b)(3) of this title and 
        section 1409(b) of title 28''; and
            (5) in paragraph (2), by striking ``and 1325(b)(3) of this 
        title'' and inserting ``1322(d), 1325(b), and 1326(b)(3) of this 
        title and section 1409(b) of title 28''.

SEC. 1203. 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. 1204. TECHNICAL AMENDMENTS.

    Title 11, United States Code, is amended--
            (1) in section 109(b)(2), by striking ``subsection (c) or 
        (d) of''; and

[[Page 119 STAT. 194]]

            (2) in section 552(b)(1), by striking ``product'' each place 
        it appears and inserting ``products''.

SEC. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE 
            BANKRUPTCY PETITIONS.

    Section 110(j)(4) of title 11, United States Code, as so 
redesignated by section 221, is amended by striking ``attorney's'' and 
inserting ``attorneys' ''.

SEC. 1206. 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. 1207. 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. 1208. 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. 1209. EXCEPTIONS TO DISCHARGE.

    Section 523 of title 11, United States Code, as amended by sections 
215 and 314, is amended--
            (1) by transferring paragraph (15), as added by section 
        304(e) of Public Law 103-394 (108 Stat. 4133), so as to insert 
        such paragraph after subsection (a)(14A);
            (2) in subsection (a)(9), by striking ``motor vehicle'' and 
        inserting ``motor vehicle, vessel, or aircraft''; and
            (3) in subsection (e), by striking ``a insured'' and 
        inserting ``an insured''.

SEC. 1210. 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), or that''.

SEC. 1211. 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. 1212. 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. 1213. PREFERENCES.

    (a) In General.--Section 547 of title 11, United States Code, as 
amended by section 201, 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:

[[Page 119 STAT. 195]]

    ``(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 shall be 
considered to be avoided under this section only with respect to the 
creditor that is an insider.''.
    (b) <<NOTE: 11 USC 547 note.>> 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. 1214. POSTPETITION TRANSACTIONS.

    Section 549(c) of title 11, United States Code, is amended--
            (1) by inserting ``an interest in'' after ``transfer of'' 
        each place it appears;
            (2) by striking ``such property'' and inserting ``such real 
        property''; and
            (3) by striking ``the interest'' and inserting ``such 
        interest''.

SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.

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

SEC. 1216. GENERAL PROVISIONS.

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

SEC. 1217. 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. 1218. 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. 1219. 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. 1220. 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. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.

    (a) Sale of Property of Estate.--Section 363(d) of title 11, United 
States Code, is amended by striking ``only'' and all that follows 
through the end of the subsection and inserting ``only--

[[Page 119 STAT. 196]]

            ``(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.''.

    (b) Confirmation of Plan of Reorganization.--Section 1129(a) of 
title 11, United States Code, as amended by sections 213 and 321, is 
amended by adding at the end the following:
            ``(16) 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 225, 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) <<NOTE: 11 USC 363 note.>> 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, or filed under that 
title on or after that date of enactment, except that the court shall 
not confirm a plan under chapter 11 of title 11, United States Code, 
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 filing 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 
construed to require the court in which a case under chapter 11 of title 
11, United States Code, 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. 1222. 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. 1223. BANKRUPTCY <<NOTE: Bankruptcy Judgeship Act of 2005. 28 USC 1 
            note.>> JUDGESHIPS.

    (a) Short Title.--This section may be cited as the ``Bankruptcy 
Judgeship Act of 2005''.
    (b) <<NOTE: 28 USC 152 note.>> Temporary Judgeships.--
            (1) Appointments.--The following bankruptcy judges shall be 
        appointed 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 judge for the eastern 
                district of California.
                    (B) Three additional bankruptcy judges for the 
                central district of California.

[[Page 119 STAT. 197]]

                    (C) Four additional bankruptcy judges for the 
                district of Delaware.
                    (D) Two additional bankruptcy judges for the 
                southern district of Florida.
                    (E) One additional bankruptcy judge for the southern 
                district of Georgia.
                    (F) Three additional bankruptcy judges for the 
                district of Maryland.
                    (G) One additional bankruptcy judge for the eastern 
                district of Michigan.
                    (H) One additional bankruptcy judge for the southern 
                district of Mississippi.
                    (I) One additional bankruptcy judge for the district 
                of New Jersey.
                    (J) One additional bankruptcy judge for the eastern 
                district of New York.
                    (K) One additional bankruptcy judge for the northern 
                district of New York.
                    (L) One additional bankruptcy judge for the southern 
                district of New York.
                    (M) One additional bankruptcy judge for the eastern 
                district of North Carolina.
                    (N) One additional bankruptcy judge for the eastern 
                district of Pennsylvania.
                    (O) One additional bankruptcy judge for the middle 
                district of Pennsylvania.
                    (P) One additional bankruptcy judge for the district 
                of Puerto Rico.
                    (Q) One additional bankruptcy judge for the western 
                district of Tennessee.
                    (R) One additional bankruptcy judge for the eastern 
                district of Virginia.
                    (S) One additional bankruptcy judge for the district 
                of South Carolina.
                    (T) One additional bankruptcy judge for the district 
                of Nevada.
            (2) Vacancies.--
                    (A) Districts with single appointments.--Except as 
                provided in subparagraphs (B), (C), (D), and (E), the 
                first vacancy occurring in the office of bankruptcy 
                judge in each of the judicial districts set forth in 
                paragraph (1)--
                          (i) occurring 5 years or more after the 
                      appointment date of the bankruptcy judge appointed 
                      under paragraph (1) to such office; and
                          (ii) resulting from the death, retirement, 
                      resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (B) Central district of california.--The 1st, 2d, 
                and 3d vacancies in the office of bankruptcy judge in 
                the central district of California--
                          (i) occurring 5 years or more after the 
                      respective 1st, 2d, and 3d appointment dates of 
                      the bankruptcy judges appointed under paragraph 
                      (1)(B); and
                          (ii) resulting from the death, retirement, 
                      resignation, or removal of a bankruptcy judge;
                shall not be filled.

[[Page 119 STAT. 198]]

                    (C) District of delaware.--The 1st, 2d, 3d, and 4th 
                vacancies in the office of bankruptcy judge in the 
                district of Delaware--
                          (i) occurring 5 years or more after the 
                      respective 1st, 2d, 3d, and 4th appointment dates 
                      of the bankruptcy judges appointed under paragraph 
                      (1)(F); and
                          (ii) resulting from the death, retirement, 
                      resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (D) Southern district of florida.--The 1st and 2d 
                vacancies in the office of bankruptcy judge in the 
                southern district of Florida--
                          (i) occurring 5 years or more after the 
                      respective 1st and 2d appointment dates of the 
                      bankruptcy judges appointed under paragraph 
                      (1)(D); and
                          (ii) resulting from the death, retirement, 
                      resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (E) District of maryland.--The 1st, 2d, and 3d 
                vacancies in the office of bankruptcy judge in the 
                district of Maryland--
                          (i) occurring 5 years or more after the 
                      respective 1st, 2d, and 3d appointment dates of 
                      the bankruptcy judges appointed under paragraph 
                      (1)(F); and
                          (ii) resulting from the death, retirement, 
                      resignation, or removal of a bankruptcy judge;
                shall not be filled.

    (c) Extensions.--
            (1) In general.--The temporary office of bankruptcy judges 
        authorized for the northern district of Alabama, the district of 
        Delaware, the district of Puerto Rico, and the eastern district 
        of Tennessee under paragraphs (1), (3), (7), and (9) of section 
        3(a) 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 5 years after the date of the 
        enactment of this Act.
            (2) Applicability of other provisions.--All other provisions 
        of section 3 of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 
        152 note) remain applicable to the temporary office of 
        bankruptcy judges referred to in this subsection.

    (d) Technical Amendments.--Section 152(a) of title 28, United States 
Code, is amended--
            (1) in paragraph (1), by striking the first sentence and 
        inserting the following: ``Each bankruptcy judge to be appointed 
        for a judicial district, as provided in paragraph (2), shall be 
        appointed by the court of appeals of the United States for the 
        circuit in which such district is located.''; and
            (2) in paragraph (2)--
                    (A) in the item relating to the middle district of 
                Georgia, by striking ``2'' and inserting ``3''; and
                    (B) in the collective item relating to the middle 
                and southern districts of Georgia, by striking ``Middle 
                and Southern . . . . . . 1''.

    (e) <<NOTE: 28 USC 152 note.>> Effective Date.--The amendments made 
by this section shall take effect on the date of the enactment of this 
Act.

[[Page 119 STAT. 199]]

SEC. 1224. COMPENSATING TRUSTEES.

    Section 1326 of title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``and'';
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) if a chapter 7 trustee has been allowed compensation 
        due to the conversion or dismissal of the debtor's prior case 
        pursuant to section 707(b), and some portion of that 
        compensation remains unpaid in a case converted to this chapter 
        or in the case dismissed under section 707(b) and refiled under 
        this chapter, the amount of any such unpaid compensation, which 
        shall be paid monthly--
                    ``(A) by prorating such amount over the remaining 
                duration of the plan; and
                    ``(B) by monthly payments not to exceed the greater 
                of--
                          ``(i) $25; 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
            (2) by adding at the end the following:

    ``(d) Notwithstanding any other provision of this title--
            ``(1) compensation referred to in subsection (b)(3) is 
        payable and may be collected by the trustee under that 
        paragraph, even if such amount has been discharged in a prior 
        case under this title; and
            ``(2) such compensation is payable in a case under this 
        chapter only to the extent permitted by subsection (b)(3).''.

SEC. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED STATES CODE.

    Section 362(b)(18) of title 11, United States Code, is amended to 
read as follows:
            ``(18) under subsection (a) of the creation or perfection of 
        a statutory lien for an ad valorem property tax, or a special 
        tax or special assessment on real property whether or not ad 
        valorem, imposed by a governmental unit, if such tax or 
        assessment comes due after the date of the filing of the 
        petition;''.

SEC. 1226. JUDICIAL <<NOTE: 11 USC 101 note.>> EDUCATION.

    The Director of the Federal Judicial Center, in consultation with 
the Director of the Executive Office for United States Trustees, shall 
develop materials and conduct such training as may be useful to courts 
in implementing this Act and the amendments made by this Act, including 
the requirements relating to the means test under section 707(b), and 
reaffirmation agreements under section 524, of title 11 of the United 
States Code, as amended by this Act.

SEC. 1227. <<NOTE: Deadlines.>> RECLAMATION.

    (a) Rights and Powers of the Trustee.--Section 546(c) of title 11, 
United States Code, is amended to read as follows:
    ``(c)(1) Except as provided in subsection (d) of this section and in 
section 507(c), and subject to the prior rights of a holder of

[[Page 119 STAT. 200]]

a security interest in such goods or the proceeds thereof, the rights 
and powers of the trustee under sections 544(a), 545, 547, and 549 are 
subject to the right of a seller of goods that has sold goods to the 
debtor, in the ordinary course of such seller's business, to reclaim 
such goods if the debtor has received such goods while insolvent, within 
45 days before the date of the commencement of a case under this title, 
but such seller may not reclaim such goods unless such seller demands in 
writing reclamation of such goods--
            ``(A) not later than 45 days after the date of receipt of 
        such goods by the debtor; or
            ``(B) not later than 20 days after the date of commencement 
        of the case, if the 45-day period expires after the commencement 
        of the case.

    ``(2) If a seller of goods fails to provide notice in the manner 
described in paragraph (1), the seller still may assert the rights 
contained in section 503(b)(9).''.
    (b) Administrative Expenses.--Section 503(b) of title 11, United 
States Code, as amended by sections 445 and 1103, is amended by adding 
at the end the following:
            ``(9) the value of any goods received by the debtor within 
        20 days before the date of commencement of a case under this 
        title in which the goods have been sold to the debtor in the 
        ordinary course of such debtor's business.''.

SEC. 1228. <<NOTE: 11 USC 521 note.>> PROVIDING REQUESTED TAX DOCUMENTS 
            TO THE COURT.

    (a) Chapter 7 Cases.--The court shall not grant a discharge in the 
case of an individual who is a debtor in a case under chapter 7 of title 
11, United States Code, unless requested tax documents have been 
provided to the court.
    (b) Chapter 11 and Chapter 13 Cases.--The court shall not confirm a 
plan of reorganization in the case of an individual under chapter 11 or 
13 of title 11, United States Code, unless requested tax documents have 
been filed with the court.
    (c) <<NOTE: Deadline.>> Document Retention.--The court shall destroy 
documents submitted in support of a bankruptcy claim not sooner than 3 
years after the date of the conclusion of a case filed by an individual 
under chapter 7, 11, or 13 of title 11, United States Code. In the event 
of a pending audit or enforcement action, the court may extend the time 
for destruction of such requested tax documents.

SEC. 1229. ENCOURAGING CREDITWORTHINESS.

    (a) Sense of the Congress.--It is the sense of the Congress that--
            (1) certain lenders may sometimes offer credit to consumers 
        indiscriminately, without taking steps to ensure that consumers 
        are capable of repaying the resulting debt, and in a manner 
        which may encourage certain consumers to accumulate additional 
        debt; and
            (2) resulting consumer debt may increasingly be a major 
        contributing factor to consumer insolvency.

    (b) Study Required.--The Board of Governors of the Federal Reserve 
System (hereafter in this section referred to as the ``Board'') shall 
conduct a study of--
            (1) consumer credit industry practices of soliciting and 
        extending credit--
                    (A) indiscriminately;

[[Page 119 STAT. 201]]

                    (B) without taking steps to ensure that consumers 
                are capable of repaying the resulting debt; and
                    (C) in a manner that encourages consumers to 
                accumulate additional debt; and
            (2) the effects of such practices on consumer debt and 
        insolvency.

    (c) Report and Regulations.--Not later than 12 months after the date 
of enactment of this Act, the Board--
            (1) shall make public a report on its findings with respect 
        to the indiscriminate solicitation and extension of credit by 
        the credit industry;
            (2) may issue regulations that would require additional 
        disclosures to consumers; and
            (3) may take any other actions, consistent with its existing 
        statutory authority, that the Board finds necessary to ensure 
        responsible industrywide practices and to prevent resulting 
        consumer debt and insolvency.

SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMPTION.

    Section 541(b) of title 11, United States Code, as amended by 
sections 225 and 323, is amended by adding after paragraph (7), as added 
by section 323, the following:
            ``(8) subject to subchapter III of chapter 5, any interest 
        of the debtor in property where the debtor pledged or sold 
        tangible personal property (other than securities or written or 
        printed evidences of indebtedness or title) as collateral for a 
        loan or advance of money given by a person licensed under law to 
        make such loans or advances, where--
                    ``(A) the tangible personal property is in the 
                possession of the pledgee or transferee;
                    ``(B) the debtor has no obligation to repay the 
                money, redeem the collateral, or buy back the property 
                at a stipulated price; and
                    ``(C) neither the debtor nor the trustee have 
                exercised any right to redeem provided under the 
                contract or State law, in a timely manner as provided 
                under State law and section 108(b); or''.

SEC. 1231. 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, United States Code, may obtain judicial review of the 
final agency decision by commencing an action in the district court of 
the United States for the district for which the panel to which the 
trustee is appointed under subsection (a)(1), or in the district court 
of the United States 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. <<NOTE: Deadline.>> 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

[[Page 119 STAT. 202]]

90 days after the trustee requests administrative 
remedies. <<NOTE: Procedures.>> 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 district court of 
the United States for 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) <<NOTE: Procedures.>> The Attorney General shall prescribe 
procedures to implement this subsection.''.

SEC. 1232. BANKRUPTCY FORMS.

    Section 2075 of title 28, United States Code, is amended by adding 
at the end the following:
    ``The bankruptcy rules promulgated under this section shall 
prescribe a form for the statement required under section 707(b)(2)(C) 
of title 11 and may provide general rules on the content of such 
statement.''.

SEC. 1233. DIRECT APPEALS OF BANKRUPTCY MATTERS TO COURTS OF APPEALS.

    (a) Appeals.--Section 158 of title 28, United States Code, is 
amended--
            (1) in subsection (c)(1), by striking ``Subject to 
        subsection (b),'' and inserting ``Subject to subsections (b) and 
        (d)(2),''; and
            (2) in subsection (d)--
                    (A) by inserting ``(1)'' after ``(d)''; and
                    (B) by adding at the end the following:

    ``(2)(A) <<NOTE: Certification.>> The appropriate court of appeals 
shall have jurisdiction of appeals described in the first sentence of 
subsection (a) if the bankruptcy court, the district court, or the 
bankruptcy appellate panel involved, acting on its own motion or on the 
request of a party to the judgment, order, or decree described in such 
first sentence, or all the appellants and appellees (if any) acting 
jointly, certify that--
            ``(i) the judgment, order, or decree involves a question of 
        law as to which there is no controlling decision of the court of 
        appeals for the circuit or of the Supreme Court of the United 
        States, or involves a matter of public importance;
            ``(ii) the judgment, order, or decree involves a question of 
        law requiring resolution of conflicting decisions; or
            ``(iii) an immediate appeal from the judgment, order, or 
        decree may materially advance the progress of the case or 
        proceeding in which the appeal is taken;

and if the court of appeals authorizes the direct appeal of the 
judgment, order, or decree.
    ``(B) If the bankruptcy court, the district court, or the bankruptcy 
appellate panel--

[[Page 119 STAT. 203]]

            ``(i) on its own motion or on the request of a party, 
        determines that a circumstance specified in clause (i), (ii), or 
        (iii) of subparagraph (A) exists; or
            ``(ii) receives a request made by a majority of the 
        appellants and a majority of appellees (if any) to make the 
        certification described in subparagraph (A);

then the bankruptcy court, the district court, or the bankruptcy 
appellate panel shall make the certification described in subparagraph 
(A).
    ``(C) The parties may supplement the certification with a short 
statement of the basis for the certification.
    ``(D) An appeal under this paragraph does not stay any proceeding of 
the bankruptcy court, the district court, or the bankruptcy appellate 
panel from which the appeal is taken, unless the respective bankruptcy 
court, district court, or bankruptcy appellate panel, or the court of 
appeals in which the appeal in pending, issues a stay of such proceeding 
pending the appeal.
    ``(E) <<NOTE: Deadline.>> Any request under subparagraph (B) for 
certification shall be made not later than 60 days after the entry of 
the judgment, order, or decree.''.

    (b) <<NOTE: 28 USC 158 note.>> Procedural Rules.--
            (1) Temporary application.--A provision of this subsection 
        shall apply to appeals under section 158(d)(2) of title 28, 
        United States Code, until a rule of practice and procedure 
        relating to such provision and such appeals is promulgated or 
        amended under chapter 131 of such title.
            (2) Certification.--A district court, a bankruptcy court, or 
        a bankruptcy appellate panel may make a certification under 
        section 158(d)(2) of title 28, United States Code, only with 
        respect to matters pending in the respective bankruptcy court, 
        district court, or bankruptcy appellate panel.
            (3) Procedure.--Subject to any other provision of this 
        subsection, an appeal authorized by the court of appeals under 
        section 158(d)(2)(A) of title 28, United States Code, shall be 
        taken in the manner prescribed in subdivisions (a)(1), (b), (c), 
        and (d) of rule 5 of the Federal Rules of Appellate Procedure. 
        For purposes of subdivision (a)(1) of rule 5--
                    (A) a reference in such subdivision to a district 
                court shall be deemed to include a reference to a 
                bankruptcy court and a bankruptcy appellate panel, as 
                appropriate; and
                    (B) a reference in such subdivision to the parties 
                requesting permission to appeal to be served with the 
                petition shall be deemed to include a reference to the 
                parties to the judgment, order, or decree from which the 
                appeal is taken.
            (4) Filing of petition with attachment.--A petition 
        requesting permission to appeal, that is based on a 
        certification made under subparagraph (A) or (B) of section 
        158(d)(2) shall--
                    (A) <<NOTE: Deadline.>> be filed with the circuit 
                clerk not later than 10 days after the certification is 
                entered on the docket of the bankruptcy court, the 
                district court, or the bankruptcy appellate panel from 
                which the appeal is taken; and
                    (B) have attached a copy of such certification.
            (5) References in rule 5.--For purposes of rule 5 of the 
        Federal Rules of Appellate Procedure--

[[Page 119 STAT. 204]]

                    (A) a reference in such rule to a district court 
                shall be deemed to include a reference to a bankruptcy 
                court and to a bankruptcy appellate panel; and
                    (B) a reference in such rule to a district clerk 
                shall be deemed to include a reference to a clerk of a 
                bankruptcy court and to a clerk of a bankruptcy 
                appellate panel.
            (6) Application of rules.--The Federal Rules of Appellate 
        Procedure shall apply in the courts of appeals with respect to 
        appeals authorized under section 158(d)(2)(A), to the extent 
        relevant and as if such appeals were taken from final judgments, 
        orders, or decrees of the district courts or bankruptcy 
        appellate panels exercising appellate jurisdiction under 
        subsection (a) or (b) of section 158 of title 28, United States 
        Code.

SEC. 1234. INVOLUNTARY CASES.

    (a) Amendments.--Section 303 of title 11, United States Code, is 
amended--
            (1) in subsection (b)(1), by--
                    (A) inserting ``as to liability or amount'' after 
                ``bona fide dispute''; and
                    (B) striking ``if such claims'' and inserting ``if 
                such noncontingent, undisputed claims''; and
            (2) in subsection (h)(1), by inserting ``as to liability or 
        amount'' before the semicolon at the end.

    (b) <<NOTE: 11 USC 303 note.>> Effective Date; Application of 
Amendments.--This section and the amendments made by this section shall 
take effect on the date of the enactment of this Act and shall apply 
with respect to cases commenced under title 11 of the United States Code 
before, on, and after such date.

SEC. 1235. FEDERAL ELECTION LAW FINES AND PENALTIES AS NONDISCHARGEABLE 
            DEBT.

    Section 523(a) of title 11, United States Code, as amended by 
section 314, is amended by inserting after paragraph (14A) the 
following:
            ``(14B) incurred to pay fines or penalties imposed under 
        Federal election law;''.

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

SEC. 1301. ENHANCED DISCLOSURES UNDER AN OPEN END CREDIT PLAN.

    (a) Minimum Payment Disclosures.--Section 127(b) of the Truth in 
Lending Act (15 U.S.C. 1637(b)) is amended by adding at the end the 
following:
            ``(11)(A) In the case of an open end credit plan that 
        requires a minimum monthly payment of not more than 4 percent of 
        the balance on which finance charges are accruing, the following 
        statement, located on the front of the billing statement, 
        disclosed clearly and conspicuously: `Minimum Payment Warning: 
        Making only the minimum payment will increase the interest you 
        pay and the time it takes to repay your balance. For example, 
        making only the typical 2% minimum monthly payment on a balance 
        of $1,000 at an interest rate of 17% would

[[Page 119 STAT. 205]]

        take 88 months to repay the balance in full. For an estimate of 
        the time it would take to repay your balance, making only 
        minimum payments, call this toll-free number: ______.' (the 
        blank space to be filled in by the creditor).
            ``(B) In the case of an open end credit plan that requires a 
        minimum monthly payment of more than 4 percent of the balance on 
        which finance charges are accruing, the following statement, in 
        a prominent location on the front of the billing statement, 
        disclosed clearly and conspicuously: `Minimum Payment Warning: 
        Making only the required minimum payment will increase the 
        interest you pay and the time it takes to repay your balance. 
        Making a typical 5% minimum monthly payment on a balance of $300 
        at an interest rate of 17% would take 24 months to repay the 
        balance in full. For an estimate of the time it would take to 
        repay your balance, making only minimum monthly payments, call 
        this toll-free number: ______.' (the blank space to be filled in 
        by the creditor).
            ``(C) Notwithstanding subparagraphs (A) and (B), in the case 
        of a creditor with respect to which compliance with this title 
        is enforced by the Federal Trade Commission, the following 
        statement, in a prominent location on the front of the billing 
        statement, disclosed clearly and conspicuously: `Minimum Payment 
        Warning: Making only the required minimum payment will increase 
        the interest you pay and the time it takes to repay your 
        balance. For example, making only the typical 5% minimum monthly 
        payment on a balance of $300 at an interest rate of 17% would 
        take 24 months to repay the balance in full. For an estimate of 
        the time it would take to repay your balance, making only 
        minimum monthly payments, call the Federal Trade Commission at 
        this toll-free number: ______.' (the blank space to be filled in 
        by the creditor). A creditor who is subject to this subparagraph 
        shall not be subject to subparagraph (A) or (B).
            ``(D) Notwithstanding subparagraph (A), (B), or (C), in 
        complying with any such subparagraph, a creditor may substitute 
        an example based on an interest rate that is greater than 17 
        percent. Any creditor that is subject to subparagraph (B) may 
        elect to provide the disclosure required under subparagraph (A) 
        in lieu of the disclosure required under subparagraph (B).
            ``(E) <<NOTE: Regulations.>> The Board shall, by rule, 
        periodically recalculate, as necessary, the interest rate and 
        repayment period under subparagraphs (A), (B), and (C).
            ``(F)(i) The toll-free telephone number disclosed by a 
        creditor or the Federal Trade Commission under subparagraph (A), 
        (B), or (G), as appropriate, may be a toll-free telephone number 
        established and maintained by the creditor or the Federal Trade 
        Commission, as appropriate, or may be a toll-free telephone 
        number established and maintained by a third party for use by 
        the creditor or multiple creditors or the Federal Trade 
        Commission, as appropriate. The toll-free telephone number may 
        connect consumers to an automated device through which consumers 
        may obtain information described in subparagraph (A), (B), or 
        (C), by inputting information using a touch-tone telephone or 
        similar device, if consumers whose telephones are not equipped 
        to use such automated device are provided

[[Page 119 STAT. 206]]

        the opportunity to be connected to an individual from whom the 
        information described in subparagraph (A), (B), or (C), as 
        applicable, may be obtained. A person that receives a request 
        for information described in subparagraph (A), (B), or (C) from 
        an obligor through the toll-free telephone number disclosed 
        under subparagraph (A), (B), or (C), as applicable, shall 
        disclose in response to such request only the information set 
        forth in the table promulgated by the Board under subparagraph 
        (H)(i).
            ``(ii)(I) <<NOTE: Communications and tele- 
        communications. Expiration date.>> The Board shall establish and 
        maintain for a period not to exceed 24 months following the 
        effective date of the Bankruptcy Abuse Prevention and Consumer 
        Protection Act of 2005, a toll-free telephone number, or provide 
        a toll-free telephone number established and maintained by a 
        third party, for use by creditors that are depository 
        institutions (as defined in section 3 of the Federal Deposit 
        Insurance Act), including a Federal credit union or State credit 
        union (as defined in section 101 of the Federal Credit Union 
        Act), with total assets not exceeding $250,000,000. The toll-
        free telephone number may connect consumers to an automated 
        device through which consumers may obtain information described 
        in subparagraph (A) or (B), as applicable, by inputting 
        information using a touch-tone telephone or similar device, if 
        consumers whose telephones are not equipped to use such 
        automated device are provided the opportunity to be connected to 
        an individual from whom the information described in 
        subparagraph (A) or (B), as applicable, may be obtained. A 
        person that receives a request for information described in 
        subparagraph (A) or (B) from an obligor through the toll-free 
        telephone number disclosed under subparagraph (A) or (B), as 
        applicable, shall disclose in response to such request only the 
        information set forth in the table promulgated by the Board 
        under subparagraph (H)(i). The dollar amount contained in this 
        subclause shall be adjusted according to an indexing mechanism 
        established by the Board.
            ``(II) <<NOTE: Deadline. Reports.>> Not later than 6 months 
        prior to the expiration of the 24-month period referenced in 
        subclause (I), the Board shall submit to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives 
        a report on the program described in subclause (I).
            ``(G) <<NOTE: Communications and tele- communications.>> The 
        Federal Trade Commission shall establish and maintain a toll-
        free number for the purpose of providing to consumers the 
        information required to be disclosed under subparagraph (C).
            ``(H) The Board shall--
                    ``(i) establish a detailed table illustrating the 
                approximate number of months that it would take to repay 
                an outstanding balance if a consumer pays only the 
                required minimum monthly payments and if no other 
                advances are made, which table shall clearly present 
                standardized information to be used to disclose the 
                information required to be disclosed under subparagraph 
                (A), (B), or (C), as applicable;
                    ``(ii) establish the table required under clause (i) 
                by assuming--

[[Page 119 STAT. 207]]

                          ``(I) a significant number of different annual 
                      percentage rates;
                          ``(II) a significant number of different 
                      account balances;
                          ``(III) a significant number of different 
                      minimum payment amounts; and
                          ``(IV) that only minimum monthly payments are 
                      made and no additional extensions of credit are 
                      obtained; and
                    ``(iii) <<NOTE: Regulations.>> promulgate 
                regulations that provide instructional guidance 
                regarding the manner in which the information contained 
                in the table established under clause (i) should be used 
                in responding to the request of an obligor for any 
                information required to be disclosed under subparagraph 
                (A), (B), or (C).
            ``(I) The disclosure requirements of this paragraph do not 
        apply to any charge card account, the primary purpose of which 
        is to require payment of charges in full each month.
            ``(J) A creditor that maintains a toll-free telephone number 
        for the purpose of providing customers with the actual number of 
        months that it will take to repay the customer's outstanding 
        balance is not subject to the requirements of subparagraph (A) 
        or (B).
            ``(K) A creditor that maintains a toll-free telephone number 
        for the purpose of providing customers with the actual number of 
        months that it will take to repay an outstanding balance shall 
        include the following statement on each billing statement: 
        `Making only the minimum payment will increase the interest you 
        pay and the time it takes to repay your balance. For more 
        information, call this toll-free number: ____.' (the blank space 
        to be filled in by the creditor).''.

    (b) Regulatory Implementation.--
            (1) <<NOTE: 15 USC 1637 note.>> In general.--The Board of 
        Governors of the Federal Reserve System (hereafter in this title 
        referred to as the ``Board'') shall promulgate regulations 
        implementing the requirements of section 127(b)(11) of the Truth 
        in Lending Act, as added by subsection (a) of this section.
            (2) <<NOTE: 15 USC 1637 note.>> Effective date.--Section 
        127(b)(11) of the Truth in Lending Act, as added by subsection 
        (a) of this section, and the regulations issued under paragraph 
        (1) of this subsection shall not take effect until the later 
        of--
                    (A) 18 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the publication of such final 
                regulations by the Board.

    (c) Study of Financial Disclosures.--
            (1) In general.--The Board may conduct a study to determine 
        the types of information available to potential borrowers from 
        consumer credit lending institutions regarding factors 
        qualifying potential borrowers for credit, repayment 
        requirements, and the consequences of default.
            (2) Factors for consideration.--In conducting a study under 
        paragraph (1), the Board should, in consultation with the other 
        Federal banking agencies (as defined in section 3 of the Federal 
        Deposit Insurance Act), the National Credit Union 
        Administration, and the Federal Trade Commission, consider the 
        extent to which--

[[Page 119 STAT. 208]]

                    (A) consumers, in establishing new credit 
                arrangements, are aware of their existing payment 
                obligations, the need to consider those obligations in 
                deciding to take on new credit, and how taking on 
                excessive credit can result in financial difficulty;
                    (B) minimum periodic payment features offered in 
                connection with open end credit plans impact consumer 
                default rates;
                    (C) consumers make only the required minimum payment 
                under open end credit plans;
                    (D) consumers are aware that making only required 
                minimum payments will increase the cost and repayment 
                period of an open end credit obligation; and
                    (E) the availability of low minimum payment options 
                is a cause of consumers experiencing financial 
                difficulty.
            (3) Report to congress.--Findings of the Board in connection 
        with any study conducted under this subsection shall be 
        submitted to Congress. Such report shall also include 
        recommendations for legislative initiatives, if any, of the 
        Board, based on its findings.

SEC. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A 
            DWELLING.

    (a) Open End Credit Extensions.--
            (1) Credit applications.--Section 127A(a)(13) of the Truth 
        in Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
                    (A) by striking ``consultation of tax adviser.--A 
                statement that the'' and inserting the following: ``tax 
                deductibility.--A statement that--
                    ``(A) the''; and
                    (B) by striking the period at the end and inserting 
                the following: ``; and
                    ``(B) in any case in which the extension of credit 
                exceeds the fair market value (as defined under the 
                Internal Revenue Code of 1986) of the dwelling, the 
                interest on the portion of the credit extension that is 
                greater than the fair market value of the dwelling is 
                not tax deductible for Federal income tax purposes.''.
            (2) Credit advertisements.--Section 147(b) of the Truth in 
        Lending Act (15 U.S.C. 1665b(b)) is amended--
                    (A) by striking ``If any'' and inserting the 
                following:
            ``(1) In general.--If any''; and
                    (B) by adding at the end the following:
            ``(2) Credit in excess of fair market value.--Each 
        advertisement described in subsection (a) that relates to an 
        extension of credit that may exceed the fair market value of the 
        dwelling, and which advertisement is disseminated in paper form 
        to the public or through the Internet, as opposed to by radio or 
        television, shall include a clear and conspicuous statement 
        that--
                    ``(A) the interest on the portion of the credit 
                extension that is greater than the fair market value of 
                the dwelling is not tax deductible for Federal income 
                tax purposes; and
                    ``(B) the consumer should consult a tax adviser for 
                further information regarding the deductibility of 
                interest and charges.''.

    (b) Non-Open End Credit Extensions.--

[[Page 119 STAT. 209]]

            (1) Credit applications.--Section 128 of the Truth in 
        Lending Act (15 U.S.C. 1638) is amended--
                    (A) in subsection (a), by adding at the end the 
                following:
            ``(15) In the case of a consumer credit transaction that is 
        secured by the principal dwelling of the consumer, in which the 
        extension of credit may exceed the fair market value of the 
        dwelling, a clear and conspicuous statement that--
                    ``(A) the interest on the portion of the credit 
                extension that is greater than the fair market value of 
                the dwelling is not tax deductible for Federal income 
                tax purposes; and
                    ``(B) the consumer should consult a tax adviser for 
                further information regarding the deductibility of 
                interest and charges.''; and
                    (B) in subsection (b), by adding at the end the 
                following:

    ``(3) In the case of a credit transaction described in paragraph 
(15) of subsection (a), disclosures required by that paragraph shall be 
made to the consumer at the time of application for such extension of 
credit.''.
            (2) Credit advertisements.--Section 144 of the Truth in 
        Lending Act (15 U.S.C. 1664) is amended by adding at the end the 
        following:

    ``(e) Each advertisement to which this section applies that relates 
to a consumer credit transaction that is secured by the principal 
dwelling of a consumer in which the extension of credit may exceed the 
fair market value of the dwelling, and which advertisement is 
disseminated in paper form to the public or through the Internet, as 
opposed to by radio or television, shall clearly and conspicuously state 
that--
            ``(1) the interest on the portion of the credit extension 
        that is greater than the fair market value of the dwelling is 
        not tax deductible for Federal income tax purposes; and
            ``(2) the consumer should consult a tax adviser for further 
        information regarding the deductibility of interest and 
        charges.''.

    (c) <<NOTE: 15 USC 1637a note.>> Regulatory Implementation.--
            (1) In general.--The Board shall promulgate regulations 
        implementing the amendments made by this section.
            (2) Effective date.--Regulations issued under paragraph (1) 
        shall not take effect until the later of--
                    (A) 12 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

SEC. 1303. DISCLOSURES RELATED TO ``INTRODUCTORY RATES''.

    (a) Introductory Rate Disclosures.--Section 127(c) of the Truth in 
Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the 
following:
            ``(6) Additional notice concerning `introductory rates'.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an application or solicitation to open 
                a credit card account and all promotional materials 
                accompanying such application or solicitation for which 
                a disclosure is required under paragraph (1), and that 
                offers a temporary annual percentage rate of interest, 
                shall--

[[Page 119 STAT. 210]]

                          ``(i) use the term `introductory' in immediate 
                      proximity to each listing of the temporary annual 
                      percentage rate applicable to such account, which 
                      term shall appear clearly and conspicuously;
                          ``(ii) if the annual percentage rate of 
                      interest that will apply after the end of the 
                      temporary rate period will be a fixed rate, state 
                      in a clear and conspicuous manner in a prominent 
                      location closely proximate to the first listing of 
                      the temporary annual percentage rate (other than a 
                      listing of the temporary annual percentage rate in 
                      the tabular format described in section 122(c)), 
                      the time period in which the introductory period 
                      will end and the annual percentage rate that will 
                      apply after the end of the introductory period; 
                      and
                          ``(iii) if the annual percentage rate that 
                      will apply after the end of the temporary rate 
                      period will vary in accordance with an index, 
                      state in a clear and conspicuous manner in a 
                      prominent location closely proximate to the first 
                      listing of the temporary annual percentage rate 
                      (other than a listing in the tabular format 
                      prescribed by section 122(c)), the time period in 
                      which the introductory period will end and the 
                      rate that will apply after that, based on an 
                      annual percentage rate that was in effect within 
                      60 days before the date of mailing the application 
                      or solicitation.
                    ``(B) Exception.--Clauses (ii) and (iii) of 
                subparagraph (A) do not apply with respect to any 
                listing of a temporary annual percentage rate on an 
                envelope or other enclosure in which an application or 
                solicitation to open a credit card account is mailed.
                    ``(C) Conditions for introductory rates.--An 
                application or solicitation to open a credit card 
                account for which a disclosure is required under 
                paragraph (1), and that offers a temporary annual 
                percentage rate of interest shall, if that rate of 
                interest is revocable under any circumstance or upon any 
                event, clearly and conspicuously disclose, in a 
                prominent manner on or with such application or 
                solicitation--
                          ``(i) a general description of the 
                      circumstances that may result in the revocation of 
                      the temporary annual percentage rate; and
                          ``(ii) if the annual percentage rate that will 
                      apply upon the revocation of the temporary annual 
                      percentage rate--
                                    ``(I) will be a fixed rate, the 
                                annual percentage rate that will apply 
                                upon the revocation of the temporary 
                                annual percentage rate; or
                                    ``(II) will vary in accordance with 
                                an index, the rate that will apply after 
                                the temporary rate, based on an annual 
                                percentage rate that was in effect 
                                within 60 days before the date of 
                                mailing the application or solicitation.
                    ``(D) Definitions.--In this paragraph--
                          ``(i) the terms `temporary annual percentage 
                      rate of interest' and `temporary annual percentage 
                      rate' mean any rate of interest applicable to a 
                      credit card

[[Page 119 STAT. 211]]

                      account for an introductory period of less than 1 
                      year, if that rate is less than an annual 
                      percentage rate that was in effect within 60 days 
                      before the date of mailing the application or 
                      solicitation; and
                          ``(ii) the term `introductory period' means 
                      the maximum time period for which the temporary 
                      annual percentage rate may be applicable.
                    ``(E) Relation to other disclosure requirements.--
                Nothing in this paragraph may be construed to supersede 
                subsection (a) of section 122, or any disclosure 
                required by paragraph (1) or any other provision of this 
                subsection.''.

    (b) Regulatory Implementation.--
            (1) <<NOTE: 15 USC 1637 note.>> In general.--The Board shall 
        promulgate regulations implementing the requirements of section 
        127(c)(6) of the Truth in Lending Act, as added by this section.
            (2) <<NOTE: 15 USC 1637 note.>> Effective date.--Section 
        127(c)(6) of the Truth in Lending Act, as added by this section, 
        and regulations issued under paragraph (1) of this subsection 
        shall not take effect until the later of--
                    (A) 12 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.

    (a) Internet-Based Solicitations.--Section 127(c) of the Truth in 
Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the 
following:
            ``(7) Internet-based solicitations.--
                    ``(A) In general.--In any solicitation to open a 
                credit card account for any person under an open end 
                consumer credit plan using the Internet or other 
                interactive computer service, the person making the 
                solicitation shall clearly and conspicuously disclose--
                          ``(i) the information described in 
                      subparagraphs (A) and (B) of paragraph (1); and
                          ``(ii) the information described in paragraph 
                      (6).
                    ``(B) Form of disclosure.--The disclosures required 
                by subparagraph (A) shall be--
                          ``(i) readily accessible to consumers in close 
                      proximity to the solicitation to open a credit 
                      card account; and
                          ``(ii) updated regularly to reflect the 
                      current policies, terms, and fee amounts 
                      applicable to the credit card account.
                    ``(C) Definitions.--For purposes of this paragraph--
                          ``(i) the term `Internet' means the 
                      international computer network of both Federal and 
                      non-Federal interoperable packet 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.''.

    (b) Regulatory Implementation.--

[[Page 119 STAT. 212]]

            (1) <<NOTE: 15 USC 1637 note.>> In general.--The Board shall 
        promulgate regulations implementing the requirements of section 
        127(c)(7) of the Truth in Lending Act, as added by this section.
            (2) <<NOTE: 15 USC 1637 note.>> Effective date.--The 
        amendment made by subsection (a) and the regulations issued 
        under paragraph (1) of this subsection shall not take effect 
        until the later of--
                    (A) 12 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND PENALTIES.

    (a) Disclosures Related to Late Payment Deadlines and Penalties.--
Section 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) is 
amended by adding at the end the following:
            ``(12) If a late payment fee is to be imposed due to the 
        failure of the obligor to make payment on or before a required 
        payment due date, the following shall be stated clearly and 
        conspicuously on the billing statement:
                    ``(A) The date on which that payment is due or, if 
                different, the earliest date on which a late payment fee 
                may be charged.
                    ``(B) The amount of the late payment fee to be 
                imposed if payment is made after such date.''.

    (b) Regulatory Implementation.--
            (1) <<NOTE: 15 USC 1637 note.>> In general.--The Board shall 
        promulgate regulations implementing the requirements of section 
        127(b)(12) of the Truth in Lending Act, as added by this 
        section.
            (2) <<NOTE: 15 USC 1637 note.>> Effective date.--The 
        amendment made by subsection (a) and regulations issued under 
        paragraph (1) of this subsection shall not take effect until the 
        later of--
                    (A) 12 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE 
            CHARGES.

    (a) 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:
    ``(h) 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.''.
    (b) Regulatory Implementation.--
            (1) <<NOTE: 15 USC 1637 note.>> In general.--The Board shall 
        promulgate regulations implementing the requirements of section 
        127(h) of the Truth in Lending Act, as added by this section.
            (2) <<NOTE: 15 USC 1637 note.>> Effective date.--The 
        amendment made by subsection (a) and regulations issued under 
        paragraph (1) of this subsection shall not take effect until the 
        later of--
                    (A) 12 months after the date of enactment of this 
                Act; or

[[Page 119 STAT. 213]]

                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

SEC. 1307. DUAL USE DEBIT CARD.

    (a) Report.--The Board may conduct a study of, and present to 
Congress a report containing its analysis of, consumer protections under 
existing law to limit the liability of consumers for unauthorized use of 
a debit card or similar access device. Such report, if submitted, shall 
include recommendations for legislative initiatives, if any, of the 
Board, based on its findings.
    (b) Considerations.--In preparing a report under subsection (a), the 
Board may include--
            (1) the extent to which section 909 of the Electronic Fund 
        Transfer Act (15 U.S.C. 1693g), as in effect at the time of the 
        report, and the implementing regulations promulgated by the 
        Board to carry out that section provide adequate unauthorized 
        use liability protection for consumers;
            (2) the extent to which any voluntary industry rules have 
        enhanced or may enhance the level of protection afforded 
        consumers in connection with such unauthorized use liability; 
        and
            (3) whether amendments to the Electronic Fund Transfer Act 
        (15 U.S.C. 1693 et seq.), or revisions to regulations 
        promulgated by the Board to carry out that Act, are necessary to 
        further address adequate protection for consumers concerning 
        unauthorized use liability.

SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO DEPENDENT 
            STUDENTS.

    (a) Study.--
            (1) In general.--The Board shall conduct a study regarding 
        the impact that the extension of credit described in paragraph 
        (2) has on the rate of cases filed under title 11 of the United 
        States Code.
            (2) Extension of credit.--The extension of credit described 
        in this paragraph is the extension of credit to individuals who 
        are--
                    (A) claimed as dependents for purposes of the 
                Internal Revenue Code of 1986; and
                    (B) enrolled within 1 year of successfully 
                completing all required secondary education requirements 
                and on a full-time basis, in postsecondary educational 
                institutions.

    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Board shall submit to the Senate and the House of 
Representatives a report summarizing the results of the study conducted 
under subsection (a).

SEC. 1309. CLARIFICATION OF CLEAR AND <<NOTE: 15 USC 1637 
            note. Deadline.>> CONSPICUOUS.

    (a) Regulations.--Not later than 6 months after the date of 
enactment of this Act, the Board, in consultation with the other Federal 
banking agencies (as defined in section 3 of the Federal Deposit 
Insurance Act), the National Credit Union Administration Board, and the 
Federal Trade Commission, shall promulgate regulations to provide 
guidance regarding the meaning of the term ``clear and conspicuous'', as 
used in subparagraphs (A), (B), and (C) of section 127(b)(11) and 
clauses (ii) and (iii) of section 127(c)(6)(A) of the Truth in Lending 
Act.
    (b) Examples.--Regulations promulgated under subsection (a) shall 
include examples of clear and conspicuous model disclosures

[[Page 119 STAT. 214]]

for the purposes of disclosures required by the provisions of the Truth 
in Lending Act referred to in subsection (a).
    (c) Standards.--In promulgating regulations under this section, the 
Board shall ensure that the clear and conspicuous standard required for 
disclosures made under the provisions of the Truth in Lending Act 
referred to in subsection (a) can be implemented in a manner which 
results in disclosures which are reasonably understandable and designed 
to call attention to the nature and significance of the information in 
the notice.

            TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE

SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

    Section 507(a) of title 11, United States Code, as amended by 
section 212, is amended--
            (1) in paragraph (4) by striking ``90'' and inserting 
        ``180'', and
            (2) in paragraphs (4) and (5) by striking ``$4,000'' and 
        inserting ``$10,000''.

SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS.

    Section 548 of title 11, United States Code, is amended--
            (1) in subsections (a) and (b) by striking ``one year'' and 
        inserting ``2 years'',
            (2) in subsection (a)--
                    (A) by inserting ``(including any transfer to or for 
                the benefit of an insider under an employment 
                contract)'' after ``transfer'' the 1st place it appears, 
                and
                    (B) by inserting ``(including any obligation to or 
                for the benefit of an insider under an employment 
                contract)'' after ``obligation'' the 1st place it 
                appears, and
            (3) in subsection (a)(1)(B)(ii)--
                    (A) in subclause (II) by striking ``or'' at the end,
                    (B) in subclause (III) by striking the period at the 
                end and inserting ``; or'', and
                    (C) by adding at the end the following:
            ``(IV) made such transfer to or for the benefit of an 
        insider, or incurred such obligation to or for the benefit of an 
        insider, under an employment contract and not in the ordinary 
        course of business.''.
            (4) by adding at the end the following:

    ``(e)(1) In addition to any transfer that the trustee may otherwise 
avoid, the trustee may avoid any transfer of an interest of the debtor 
in property that was made on or within 10 years before the date of the 
filing of the petition, if--
            ``(A) such transfer was made to a self-settled trust or 
        similar device;
            ``(B) such transfer was by the debtor;
            ``(C) the debtor is a beneficiary of such trust or similar 
        device; and
            ``(D) the debtor made such transfer with actual intent to 
        hinder, delay, or defraud any entity to which the debtor was or 
        became, on or after the date that such transfer was made, 
        indebted.

[[Page 119 STAT. 215]]

    ``(2) For the purposes of this subsection, a transfer includes a 
transfer made in anticipation of any money judgment, settlement, civil 
penalty, equitable order, or criminal fine incurred by, or which the 
debtor believed would be incurred by--
            ``(A) any violation of the securities laws (as defined in 
        section 3(a)(47) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(47))), any State securities laws, or any 
        regulation or order issued under Federal securities laws or 
        State securities laws; or
            ``(B) fraud, deceit, or manipulation in a fiduciary capacity 
        or in connection with the purchase or sale of any security 
        registered under section 12 or 15(d) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78l and 78o(d)) or under section 6 of the 
        Securities Act of 1933 (15 U.S.C. 77f).''.

SEC. 1403. PAYMENT OF INSURANCE BENEFITS TO RETIRED EMPLOYEES.

    Section 1114 of title 11, United States Code, is amended--
            (1) by redesignating subsection (l) as subsection (m), and
            (2) by inserting after subsection (k) the following:

    ``(l) If the debtor, during the 180-day period ending on the date of 
the filing of the petition--
            ``(1) modified retiree benefits; and
            ``(2) was insolvent on the date such benefits were modified;

the court, on motion of a party in interest, and after notice and a 
hearing, shall issue an order reinstating as of the date the 
modification was made, such benefits as in effect immediately before 
such date unless the court finds that the balance of the equities 
clearly favors such modification.''.

SEC. 1404. DEBTS NONDISCHARGEABLE IF INCURRED IN VIOLATION OF SECURITIES 
            FRAUD LAWS.

    (a) Prepetition and Postpetition Effect.--Section 523(a)(19)(B) of 
title 11, United States Code, is amended by inserting ``, before, on, or 
after the date on which the petition was filed,'' after ``results''.
    (b) <<NOTE: 11 USC 523 note.>> Effective Date Upon Enactment of 
Sarbanes-Oxley Act.--The amendment made by subsection (a) is effective 
beginning July 30, 2002.

SEC. 1405. APPOINTMENT OF TRUSTEE IN CASES OF SUSPECTED FRAUD.

    Section 1104 of title 11, United States Code, is amended by adding 
at the end the following:
    ``(e) The United States trustee shall move for the appointment of a 
trustee under subsection (a) if there are reasonable grounds to suspect 
that current members of the governing body of the debtor, the debtor's 
chief executive or chief financial officer, or members of the governing 
body who selected the debtor's chief executive or chief financial 
officer, participated in actual fraud, dishonesty, or criminal conduct 
in the management of the debtor or the debtor's public financial 
reporting.''.

SEC. 1406. EFFECTIVE DATE; APPLICATION OF <<NOTE: 11 USC 507 
            note.>> AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this 
title and the amendments made by this title shall take effect on the 
date of the enactment of this Act.
    (b) Application of Amendments.--

[[Page 119 STAT. 216]]

            (1) In general.--cept as provided in paragraph (2), the 
        amendments made by this title shall apply only with respect to 
        cases commenced under title 11 of the United States Code on or 
        after the date of the enactment of this Act.
            (2) Avoidance period.--The amendment made by section 1402(1) 
        shall apply only with respect to cases commenced under title 11 
        of the United States Code more than 1 year after the date of the 
        enactment of this Act.

       TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

SEC. 1501. EFFECTIVE DATE; APPLICATION OF <<NOTE: 11 USC 101 
            note.>> AMENDMENTS.

    (a) Effective Date.--Except as otherwise provided in this Act, this 
Act and the amendments made by this Act shall take effect 180 days after 
the date of enactment of this Act.
    (b) Application of Amendments.--
            (1) In general.--Except as otherwise provided in this Act 
        and paragraph (2), the amendments made by this Act shall not 
        apply with respect to cases commenced under title 11, United 
        States Code, before the effective date of this Act.
            (2) Certain limitations applicable to debtors.--The 
        amendments made by sections 308, 322, and 330 shall apply with 
        respect to cases commenced under title 11, United States Code, 
        on or after the date of the enactment of this Act.

SEC. 1502. TECHNICAL CORRECTIONS.

    (a) Conforming Amendments to Title 11 of the United States Code.--
Title 11 of the United States Code, as amended by the preceding 
provisions of this Act, is amended--
            (1) in section 507--
                    (A) in subsection (a)--
                          (i) in paragraph (5)(B)(ii) by striking 
                      ``paragraph (3)'' and inserting ``paragraph (4)''; 
                      and
                          (ii) in paragraph (8)(D) by striking 
                      ``paragraph (3)'' and inserting ``paragraph (4)'';
                    (B) in subsection (b) by striking ``subsection 
                (a)(1)'' and inserting ``subsection (a)(2)''; and
                    (C) in subsection (d) by striking ``subsection 
                (a)(3)'' and inserting ``subsection (a)(1)'';
            (2) in section 523(a)(1)(A) by striking ``507(a)(2)'' and 
        inserting ``507(a)(3)'';
            (3) in section 752(a) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)'';
            (4) in section 766--
                    (A) in subsection (h) by striking ``507(a)(1)'' and 
                inserting ``507(a)(2)''; and
                    (B) in subsection (i) by striking ``507(a)(1)'' each 
                place it appears and inserting ``507(a)(2)'';
            (5) in section 901(a) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)'';
            (6) in section 943(b)(5) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)'';
            (7) in section 1123(a)(1) by striking ``507(a)(1), 
        507(a)(2)'' and inserting ``507(a)(2), 507(a)(3)'';
            (8) in section 1129(a)(9)--

[[Page 119 STAT. 217]]

                    (A) in subparagraph (A) by striking ``507(a)(1) or 
                507(a)(2)'' and inserting ``507(a)(2) or 507(a)(3)''; 
                and
                    (B) in subparagraph (B) by striking ``507(a)(3)'' 
                and inserting ``507(a)(1)'';
            (9) in section 1226(b)(1) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)''; and
            (10) in section 1326(b)(1) by striking ``507(a)(1)'' and 
        inserting ``507(a)(2)''.

    (b) Related Conforming Amendment.--Section 6(e) of the Securities 
Investor Protection Act of 1970 (15 U.S.C. 78fff(e)) is amended by 
striking ``507(a)(1)'' and inserting ``507(a)(2)''.

    Approved April 20, 2005.

LEGISLATIVE HISTORY--S. 256:
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HOUSE REPORTS: No. 109-31, Pt. 1 (Comm. on the Judiciary).
CONGRESSIONAL RECORD, Vol. 151 (2005):
            Feb. 28, Mar. 1-4, 7-10, considered and passed Senate.
            Apr. 14, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 41 (2005):
            Apr. 20, Presidential remarks.

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