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106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-970
======================================================================
BANKRUPTCY REFORM ACT OF 2000
_______
October 11, 2000.--Ordered to be printed
_______
Mr. Hyde, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 2415]
The committee of conference on the disagreeing votes of
the two Houses on the amendment of the Senate to the bill (H.R.
2415), an Act to enhance security of United States missions and
personnel overseas, to authorize appropriations for the
Department of State for fiscal year 2000, and for other
purposes, having met, after full and free conference, have
agreed to recommend and do recommend to their respective Houses
as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an amendment
as follows:
In lieu of the matter proposed to be inserted by the
Senate amendment, insert the following:
SECTION 1. ENACTMENT OF BANKRUPTCY REFORM ACT OF 2000.
The provisions of S. 3186 of the 106th Congress, as
introduced on October 11, 2000, are hereby enacted into law.
SEC. 2. PUBLICATION OF ACT.
In publishing this Act in slip form and in the United
States Statutes at Large pursuant to section 112 of title 1,
United States Code, the Archivist of the United States shall
include after the date of approval an appendix setting forth
the provisions referred to in section 1.
And the Senate agree to the same.
Henry Hyde,
George W. Gekas,
Dick Armey,
Managers on the Part of the House.
Jesse Helms,
Richard G. Lugar,
Rod Grams,
Joe Biden,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendment of the Senate to the bill (H.R. 2415) an Act to
enhance security of United States missions and personnel
overseas, to authorize appropriations for the Department of
State for fiscal year 2000, and for other purposes, submit the
following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference report:
The Senate amendment struck out all of the House bill
after the enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment
of the Senate with an amendment which is a substitute for the
House bill and the Senate amendment.
The conference agreement would enact the provision of S.
3186 of the 106th Congress, as introduced on October 11, 2000.
The text of that bill follows:
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bankruptcy
Reform Act of 2000''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 100. 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 practices.
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.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
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. Residency requirement for homestead exemption.
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. Limitation.
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.
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.
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.
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 corporation 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 Code amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
Sec. 912. Asset-backed securitizations.
Sec. 913. Effective date; application of amendments.
TITLE X--PROTECTION OF FAMILY FARMERS
Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
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. Discharge under chapter 12.
Sec. 1220. Bankruptcy cases and proceedings.
Sec. 1221. Knowing disregard of bankruptcy law or rule.
Sec. 1222. Transfers made by nonprofit charitable corporations.
Sec. 1223. Protection of valid purchase money security interests.
Sec. 1224. Extensions.
Sec. 1225. Bankruptcy judgeships.
Sec. 1226. Compensating trustees.
Sec. 1227. Amendment to section 362 of title 11, United States Code.
Sec. 1228. Judicial education.
Sec. 1229. Reclamation.
Sec. 1230. Providing requested tax documents to the court.
Sec. 1231. Encouraging creditworthiness.
Sec. 1232. Property no longer subject to redemption.
Sec. 1233. Trustees.
Sec. 1234. Bankruptcy forms.
Sec. 1235. Expedited appeals of bankruptcy cases to courts of appeals.
Sec. 1236. Exemptions.
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.
Sec. 1309. Clarification of clear and conspicuous.
Sec. 1310. Enforcement of certain foreign judgments barred.
TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1401. Effective date; application of amendments.
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 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,
bankruptcy administrator, 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 the debtor resides, as in effect on the date
of the entry 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.
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 (42 U.S.C. 10408), 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, and siblings 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 under the
age of 18 years up to $1,500 per year per child to attend a
private elementary or secondary school, if the debtor provides
documentation of such expenses and a detailed explanation of
why such expenses are reasonable and necessary.
``(iii) The debtor's average monthly payments on account of
secured debts shall be calculated as--
``(I) the sum of--
``(aa) 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
``(bb) 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
``(II) 60.
``(iv) The debtor's expenses for payment of all priority
claims (including priority child support and alimony claims)
shall be calculated as--
``(I) the total amount of debts entitled to
priority; divided by
``(II) 60.
``(B)(i) In any proceeding brought under this subsection,
the presumption of abuse may only be rebutted by demonstrating
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--
``(I) itemize each additional expense or adjustment
of income; and
``(II) provide--
``(aa) documentation for such expense or
adjustment to income; and
``(bb) 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 shows how each such amount is
calculated.
``(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 apply or has been rebutted,
the court shall consider--
``(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 shall order the counsel for the debtor
to reimburse the trustee for all reasonable costs in
prosecuting a motion brought under section 707(b), including
reasonable attorneys' fees, if--
``(i) a trustee appointed under section 586(a)(1)
of title 28 or from a panel of private trustees
maintained by the bankruptcy administrator brings a
motion for dismissal or conversion under this
subsection; and
``(ii) the court--
``(I) grants that motion; and
``(II) finds that the action of the counsel
for the debtor in filing 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, at a minimum, the court shall order--
``(i) the assessment of an appropriate civil
penalty against the counsel for the debtor; and
``(ii) the payment of the civil penalty to the
trustee, the United States trustee, or the bankruptcy
administrator.
``(C) In the case of a petition, pleading, or written
motion, the signature of an attorney 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 may award a debtor all reasonable
costs (including reasonable attorneys' fees) in contesting a
motion brought by a party in interest (other than a trustee,
United States trustee, or bankruptcy administrator) 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
brought the motion violated rule 9011 of the
Federal Rules of Bankruptcy Procedure; or
``(II) the party brought the motion 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 less than 25 full-time employees
as determined on the date 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, United States trustee, or bankruptcy
administrator may bring 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 last reported by the Bureau of the
Census;
``(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 last reported by the Bureau of the
Census; 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 last reported by the Bureau of the
Census, plus $525 per month for each individual in
excess of 4.
``(7) No judge, United States trustee, panel trustee,
bankruptcy administrator or other party in interest may bring a
motion under paragraph (2), if the current monthly income of
the debtor 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--
``(A) in the case of a debtor in a household of 1
person, the median family income of the applicable
State for 1 earner last reported by the Bureau of the
Census;
``(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 last reported by the Bureau of the
Census; 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 last reported by the Bureau of the
Census, plus $525 per month for each individual in
excess of 4.''.
(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 which the debtor, or in a joint
case, the debtor and the debtor's spouse,
receive without regard to whether the income is
taxable income, derived during the 6-month
period preceding the date of determination; 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 to the household expenses of the
debtor or the debtor's dependents (and, in a
joint case, the debtor's spouse if not
otherwise a dependent), but excludes benefits
received under the Social Security Act and
payments to victims of war crimes or crimes
against humanity on account of their status as
victims of such crimes;''.
(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) With respect to an individual debtor under this
chapter--
``(A) the United States trustee or bankruptcy
administrator 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
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 the reasons the United States trustee or bankruptcy
administrator does not believe that such a motion would be
appropriate, if the United States trustee or bankruptcy
administrator 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 last reported by the Bureau of the
Census; 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 last reported by the Bureau of the
Census.
``(3) In any case in which a motion to dismiss or convert,
or a statement is required to be filed by this subsection, the
United States trustee or bankruptcy administrator may decline
to file a motion to dismiss or convert pursuant to section
704(b)(2) if the product of the debtor's current monthly income
multiplied by 12 exceeds 100 percent, but does not exceed 150
percent of--
``(A)(i) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner last reported by the Bureau of the
Census; or
``(ii) 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 last reported by the Bureau of the
Census; and
``(B) the product of the debtor's current monthly
income, reduced by the amounts determined under section
707(b)(2)(A)(ii) (except for the amount calculated
under the other necessary expenses standard issued by
the Internal Revenue Service) and clauses (iii) and
(iv) of section 707(b)(2)(A), multiplied by 60 is 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.''.
(d) Notice.--Section 342 of title 11, United States Code,
is amended by adding at the end the following:
``(d) In an individual case under chapter 7 in which the
presumption of abuse is triggered 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 been triggered.''.
(e) 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,
bankruptcy administrator or trustee.
(f) Dismissal for Certain Crimes.--Section 707 of title 11,
United States Code, as amended by this section, is amended by
adding at the end the following:
``(c)(1) In this subsection--
``(A) the term `crime of violence' has the meaning
given that term in section 16 of title 18; and
``(B) the term `drug trafficking crime' has the
meaning given that 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 victims dismiss a voluntary case filed by
an individual debtor under this chapter if that individual was
convicted of that 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 adding at the end 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 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) 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 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 that term
is 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 last
reported by the Bureau of the Census;
``(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 last reported by the Bureau of the
Census; 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 last
reported by the Bureau of the Census, plus $525
per month for each individual in excess of
4.''.
(i) 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) 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:
``(b) Before the commencement of a case under this title by
an individual whose debts are primarily consumer debts, the
clerk shall give to such individual written notice containing--
``(1) a brief description of--
``(A) chapters 7, 11, 12, and 13 and the
general purpose, benefits, and costs of
proceeding under each of those chapters; and
``(B) the types of services available from
credit counseling agencies; and
``(2) statements specifying that--
``(A) a person who knowingly and
fraudulently conceals assets or makes a false
oath or statement under penalty of perjury in
connection with a bankruptcy case shall be
subject to fine, imprisonment, or both; and
``(B) all information supplied by a debtor
in connection with a bankruptcy case is subject
to examination by the Attorney General.''.
SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.
(a) Development of Financial Management and Training
Curriculum and Materials.--The Director of the Executive Office
for United States Trustees (in this section referred to as the
``Director'') shall consult with a wide range of individuals
who are experts in the field of debtor education, including
trustees who are appointed under chapter 13 of title 11, United
States Code, and who operate financial management education
programs for debtors, and shall develop a financial management
training curriculum and materials that can be used to educate
individual debtors on how to better manage their finances.
(b) Test.--
(1) 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) Use.--For an 18-month period beginning not
later than 270 days after the date of 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 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 that
individual has, during the 180-day period preceding the date of
filing of the petition of that 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 that 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 bankruptcy administrator of the bankruptcy court of
that district determines that the approved nonprofit budget and
credit counseling agencies for that district are not reasonably
able to provide adequate services to the additional individuals
who would otherwise seek credit counseling from that agency by
reason of the requirements of paragraph (1).
``(B) Each United States trustee or bankruptcy
administrator that makes a determination described in
subparagraph (A) shall review that determination not later than
1 year after the date of that determination, and not less
frequently than every year thereafter. Notwithstanding the
preceding sentence, a nonprofit budget and credit counseling
service may be disapproved by the United States trustee or
bankruptcy administrator 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.''.
(b) Chapter 7 Discharge.--Section 727(a) of title 11,
United States Code, is amended--
(1) in paragraph (9), by striking ``or'' at the
end;
(2) in paragraph (10), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(11) after the filing of the petition, the debtor
failed to complete an instructional course concerning
personal financial management described in section 111.
``(12)(A) Paragraph (11) shall not apply with
respect to a debtor who resides in a district for which
the United States trustee or bankruptcy administrator
of that district determines that the approved
instructional courses are not adequate to service the
additional individuals required to complete such
instructional courses under this section.
``(B) Each United States trustee or bankruptcy
administrator that makes a determination described in
subparagraph (A) shall review that determination not
later than 1 year after the date of that determination,
and not less frequently than every year thereafter.''.
(c) Chapter 13 Discharge.--Section 1328 of title 11, United
States Code, is amended by adding at the end the following:
``(g) The court shall not grant a discharge under this
section to a debtor, unless after filing a petition the debtor
has completed an instructional course concerning personal
financial management described in section 111.
``(h) Subsection (g) shall not apply with respect to a
debtor who resides in a district for which the United States
trustee or bankruptcy administrator of the bankruptcy court of
that district determines that the approved instructional
courses are not adequate to service the additional individuals
who would be required to complete the instructional course by
reason of the requirements of this section.
``(i) Each United States trustee or bankruptcy
administrator that makes a determination described in
subsection (h) shall review that determination not later than 1
year after the date of that determination, and not less
frequently than every year thereafter.''.
(d) Debtor's Duties.--Section 521 of title 11, United
States Code, 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),
an individual debtor 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.--
(1) In general.--Chapter 1 of title 11, United
States Code, is amended by adding at the end the
following:
``Sec. 111. Credit counseling services; financial management
instructional courses
``(a) The clerk of each district shall maintain a publicly
available list of--
``(1) credit counseling agencies that provide 1 or
more programs described in section 109(h) currently
approved by the United States trustee or the bankruptcy
administrator for the district, as applicable; and
``(2) instructional courses concerning personal
financial management currently approved by the United
States trustee or the bankruptcy administrator for the
district, as applicable.
``(b) The United States trustee or bankruptcy administrator
shall only approve a credit counseling agency or instructional
course concerning personal financial management as follows:
``(1) The United States trustee or bankruptcy
administrator shall have thoroughly reviewed the
qualifications of the credit counseling agency or of
the provider of the instructional course under the
standards set forth in this section, and the programs
or instructional courses which will be offered by such
agency or provider, and may require an agency or
provider of an instructional course which has sought
approval to provide information with respect to such
review.
``(2) The United States trustee or bankruptcy
administrator shall have determined that the credit
counseling agency or course of instruction fully
satisfies the applicable standards set forth in this
section.
``(3) When an agency or course of instruction is
initially approved, such approval shall be for a
probationary period not to exceed 6 months. An agency
or course of instruction is initially approved if it
did not appear on the approved list for the district
under subsection (a) immediately prior to approval.
``(4) At the conclusion of the probationary period
under paragraph (3), the United States trustee or
bankruptcy administrator may only approve for an
additional 1-year period, and for successive 1-year
periods thereafter, any agency or course of instruction
which has demonstrated during the probationary or
subsequent period that such agency or course of
instruction--
``(A) has met the standards set forth under
this section during such period; and
``(B) can satisfy such standards in the
future.
``(5) Not later than 30 days after any final
decision under paragraph (4), that occurs either after
the expiration of the initial probationary period, or
after any 2-year period thereafter, an interested
person may seek judicial review of such decision in the
appropriate United States District Court.
``(c)(1) The United States trustee or bankruptcy
administrator shall only approve a 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 as relate to the quality, effectiveness, and
financial security of such programs.
``(2) To be approved by the United States trustee or
bankruptcy administrator, a credit counseling agency shall, at
a minimum--
``(A) be a nonprofit budget and credit counseling
agency, the majority of the board of directors of
which--
``(i) are not employed by the agency; and
``(ii) will not directly or indirectly
benefit financially from the outcome of a
credit counseling session;
``(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 clients,
including funding sources, counselor qualifications,
possible impact on credit reports, and any costs of
such program that will be paid by the debtor and how
such costs will be paid;
``(E) provide adequate counseling with respect to
client credit problems that includes an analysis of
their current situation, what brought them to that
financial status, and how they can develop a plan to
handle the problem without incurring negative
amortization of their debts;
``(F) provide trained counselors who receive no
commissions or bonuses based on the counseling session
outcome, 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 bankruptcy administrator
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 course of
instruction;
``(C) adequate facilities situated in
reasonably convenient locations at which such
course of instruction is offered, except that
such facilities may include the provision of
such course of instruction or program by
telephone or through the Internet, if the
course of instruction or program is effective;
and
``(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 course
of instruction or program, including any
evaluation of satisfaction of course of
instruction or program requirements for each
debtor attending such course of instruction or
program, which shall be available for
inspection and evaluation by the Executive
Office for United States Trustees, the United
States trustee, bankruptcy administrator, or
chief bankruptcy judge for the district in
which such course of instruction or program is
offered; and
``(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 debtor understanding of personal
financial management.
``(e) The District Court may, at any time, investigate the
qualifications of a credit counseling agency referred to in
subsection (a), and request production of documents to ensure
the integrity and effectiveness of such credit counseling
agencies. The District Court may, at any time, remove from the
approved list under subsection (a) a credit counseling agency
upon finding such agency does not meet the qualifications of
subsection (b).
``(f) The United States trustee or bankruptcy administrator
shall notify the clerk that a 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 credit counseling service may provide to a
credit reporting agency information concerning whether an
individual debtor has received or sought instruction concerning
personal financial management from the credit counseling
service.
``(2) A credit counseling service 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. Credit counseling services; 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.
``(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. 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 unsecured consumer debts 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 by an approved
credit counseling agency described in section 111
acting on behalf of the debtor;
``(B) the offer of the debtor under subparagraph
(A)--
``(i) was made at least 60 days before 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 plan between the
debtor and any creditor of the debtor created by an approved
credit counseling agency.''.
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 (including a
plan of reorganization confirmed under chapter 11 of this
title), unless the plan is dismissed, 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 PRACTICES.
(a) In General.--Section 524 of title 11, United States
Code, as amended by this Act, 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;'';
(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, statement, declaration, motion and
order described, respectively, in paragraphs (4) through (8),
and shall be the only disclosures required in connection with
the reaffirmation.
``(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';
``(C) The `Amount Reaffirmed', using that term,
which shall be--
``(i) the total amount which the debtor
agrees to reaffirm, and
``(ii) the total of any other fees or cost
accrued as of the date of the disclosure
statement.
``(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 open end credit as defined
under the Truth in Lending Act (15 U.S.C. 1601
et seq.), then--
``(I) the annual percentage rate
determined under paragraphs (5) and (6)
of section 127(b) of the Truth in
Lending Act (15 U.S.C. 1637(b)(5) and
(6)), as applicable, as disclosed to
the debtor in the most recent periodic
statement prior to the agreement or, if
no such periodic statement has been
provided 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
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);
``(ii) if, at the time the petition is
filed, the debt is closed end credit as defined
under the Truth in Lending Act (15 U.S.C. 1601
et seq.), then--
``(I) the annual percentage rate
under section 128(a)(4) of the Truth in
Lending Act (15 U.S.C. 1638(a)(4)), as
disclosed to the debtor in the most
recent disclosure statement given the
debtor prior to the reaffirmation
agreement with respect to the debt, or,
if no such disclosure statement was
provided the debtor, the annual
percentage rate as it would have been
so disclosed at the time the disclosure
statement is given 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 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
(15 U.S.C. 1601 et seq.), 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 obligations you are
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 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 obligations 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 reaffirmation
or what the law requires, talk to the attorney who
helped you negotiate this agreement. If you don't have
an attorney helping you, the judge will explain the
effect of your reaffirmation when the reaffirmation
hearing 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 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 the 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 the 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 the 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 the 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
agreement. The bankruptcy court must approve the
agreement as consistent with your best interests,
except that no court approval is required if the
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 a reaffirmation. You may rescind
(cancel) your reaffirmation at any time before the bankruptcy
court enters a discharge order or within 60 days after the
agreement is filed with the court, whichever is longer. To
rescind or cancel, you must notify the creditor that the
agreement is 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. That means that if you
default on your reaffirmed debt after your bankruptcy 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 the
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 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. If you were represented by an attorney
during the negotiation of the reaffirmation agreement,
your reaffirmation agreement becomes effective upon
filing with the court.'.
``(4) The form of reaffirmation agreement required under
this paragraph shall consist of the following:
`` `Part B: Reaffirmation Agreement. I/we agree to reaffirm
the obligations 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:
`` `Accepted by creditor:
`` `Date of creditor acceptance:'.
``(5)(A) The declaration shall consist of the following:
`` `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(s); (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) In the case of reaffirmations in which a presumption
of undue hardship has been established, the 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 reaffirmation
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 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 (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 counsel and is
reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)(iv)), 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 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, which may be used if approval of the
agreement by the court is required in order for it to be
effective and shall be signed and dated by the moving party,
shall consist of the following:
`` `Part E: Motion for Court Approval (To be completed only
where debtor is not represented by an attorney.). I (we), the
debtor, affirm the following to be true and correct:
`` `I am not represented by an attorney in connection with
this reaffirmation agreement.
`` `I believe this agreement is in my best interest based
on the income and expenses I have disclosed in my Statement in
Support of this reaffirmation agreement above, 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 a
reaffirmation, shall consist of the following:
`` `Court Order: The court grants the debtor's motion and
approves the reaffirmation agreement described above.'.
``(9) Subsection (a)(2) does not operate as an injunction
against an act by a creditor that is the holder of a secured
claim, if--
``(A) such creditor retains a security interest in
real property that is the debtor's principal residence;
``(B) such act is in the ordinary course of
business between the creditor and the debtor; and
``(C) 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.
``(l) Notwithstanding any other provision of this title:
``(1) A creditor may accept payments from a debtor
before and after the filing of a reaffirmation
agreement with the court.
``(2) A creditor may accept payments from a debtor
under a reaffirmation agreement which 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 a reaffirmation agreement is
filed with the court (or such additional period as the court,
after notice and hearing and for cause, orders before the
expiration of such period), it shall be presumed that the
reaffirmation 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 the reaffirmation 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 which identifies
additional sources of funds to make the payments as agreed upon
under the terms of the reaffirmation agreement. If the
presumption is not rebutted to the satisfaction of the court,
the court may disapprove the agreement. No agreement shall be
disapproved without notice and 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 (12 U.S.C.
461(b)(1)(A)(iv)).''.
(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 District Attorneys and Agents of the
Federal Bureau of Investigation--The individuals referred to in
subsection (a) are--
``(1) a United States attorney for each judicial
district of the United States; and
``(2) an agent of the Federal Bureau of
Investigation (within the meaning of section 3107) 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 which may contain a
materially fraudulent statement in a bankruptcy schedule to the
individuals designated under this section.''.
(2) Clerical amendment.--The analysis 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.''.
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 or after the entry of an order for
relief 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 or after entry of an order
for relief under this title, by reason of
applicable provisions of--
``(i) a separation agreement,
divorce decree, or property settlement
agreement;
``(ii) an order of a court of
record; or
``(iii) a determination made in
accordance with applicable
nonbankruptcy law by a governmental
unit; and
``(D) not assigned to a nongovernmental
entity, unless that obligation is assigned
voluntarily by the spouse, former spouse,
child, or parent, legal guardian, or
responsible relative of the child 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 redesignated, by striking
``First'' and inserting ``Second'';
(4) in paragraph (3), as redesignated, by striking
``Second'' and inserting ``Third'';
(5) in paragraph (4), as redesignated--
(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 redesignated, by striking
``Fourth'' and inserting ``Fifth'';
(7) in paragraph (6), as redesignated, by striking
``Fifth'' and inserting ``Sixth'';
(8) in paragraph (7), as redesignated, by striking
``Sixth'' and inserting ``Seventh''; and
(9) by inserting before paragraph (2), as
redesignated, the following:
``(1) First:
``(A) Allowed unsecured claims for domestic
support obligations that, as of the date of the
filing of the petition, are owed to or
recoverable by a spouse, former spouse, or
child of the debtor, or the parent, legal
guardian, or responsible relative of such
child, without regard to whether the claim is
filed by such person or is filed by a
governmental unit on behalf of that person, on
the condition that funds received under this
paragraph by a governmental unit under this
title after the date of 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 the
petition was filed 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 government
unit under applicable nonbankruptcy law, on the
condition that funds received under this
paragraph by a governmental unit under this
title after the date of filing of the petition
be applied and distributed in accordance with
applicable nonbankruptcy law.''.
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 statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or statute for such obligation
that first become payable after the date on which the
petition is filed.'';
(2) in section 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 on which the petition is filed.'';
(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) by redesignating paragraph (11) as
paragraph (12); and
(B) 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 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;'';
(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:
``(7) if the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order for such obligation that first
become payable after the date on which the petition is
filed.'';
(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 to pay a domestic support obligation, after such
debtor certifies that all amounts payable under such
order or 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
in 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 on which the petition is filed.'';
(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 in 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 this Act),
by adding at the end the following:
``(8) the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or statute for such obligation
that first becomes payable after the date on which the
petition is filed; 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 to pay a domestic support obligation, after such
debtor certifies that all amounts payable under such
order or 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
in 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) 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;
``(D) the withholding, suspension, or
restriction of drivers' licenses, professional
and occupational licenses, and recreational
licenses under State law, as specified in
section 466(a)(16) of the Social Security Act
(42 U.S.C. 666(a)(16));
``(E) 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 (42 U.S.C. 666(a)(7));
``(F) the interception of tax refunds, as
specified in sections 464 and 466(a)(3) of the
Social Security Act (42 U.S.C. 664 and
666(a)(3)) or under an analogous State law; or
``(G) the enforcement of medical
obligations as specified under title IV of the
Social Security Act (42 U.S.C. 601 et seq.);''.
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;'';
(B) in paragraph (15)--
(i) by inserting ``to a spouse,
former spouse, or child of the debtor
and'' before ``not of the kind'';
(ii) by inserting ``or'' after
``court of record,''; and
(iii) by striking ``unless--'' and
all that follows through the end of the
paragraph and inserting a semicolon;
and
(C) by striking paragraph (18); and
(2) in subsection (c), by striking ``(6), or (15)''
each place it appears and inserting ``or (6)''.
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.
(a) Confirmation of Plan Under Chapter 12.--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 on which the petition is filed''
after ``dependent of the debtor''.
(b) Confirmation of Plan Under Chapter 13.--Section
1325(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 on which the petition is filed''
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 this Act, 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 an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in
subsection (c); and''; and
(2) by adding at the end the following:
``(c)(1) In any case described in subsection (a)(10), the
trustee shall--
``(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
(42 U.S.C. 664, 666) for the State in which the holder
resides for assistance in collecting child support
during and after the bankruptcy procedures;
``(ii) include in the notice under this paragraph
the address and telephone number of the child support
enforcement agency; and
``(iii) include in the notice an explanation of the
rights of the holder of the claim to payment of the
claim under this chapter; and
``(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
``(ii) include in the notice under this paragraph
the name, address, and telephone number of the holder
of the claim; and
``(iii) at such time as the debtor is granted a
discharge under section 727, notify the holder of that
claim and the State child support agency of the State
in which that holder resides 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) with respect to the debtor's case,
the name of each creditor that holds a claim
that--
``(aa) is not discharged under
paragraph (2), (4), or (14A) of section
523(a); or
``(bb) was reaffirmed by the debtor
under section 524(c).
``(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in paragraph
(1)(B)(iii)(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 to the debtor or any other person by reason
of making that 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 an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in
subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In any case described in subsection (a)(7), the
trustee shall--
``(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
(42 U.S.C. 664, 666) for the State in which the holder
resides; and
``(ii) include in the notice under this paragraph
the address and telephone number of the child support
enforcement agency; and
``(B)(i) notify, in writing, the State child
support agency (of the State in which the holder of the
claim resides) of the claim;
``(ii) include in the notice under this paragraph
the name, address, and telephone number of the holder
of the claim; and
``(iii) at such time as the debtor is granted a
discharge under section 1141, notify the holder of the
claim and the State child support agency of the State
in which that holder resides 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) with respect to the debtor's case,
the name of each creditor that holds a claim
that--
``(aa) is not discharged under
paragraph (2), (3), or (14) of section
523(a); or
``(bb) was reaffirmed by the debtor
under section 524(c).
``(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in paragraph
(1)(B)(iii)(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 to the debtor or any other person by reason
of making that 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 an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in
subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In any case described in subsection (b)(6), the
trustee shall--
``(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
(42 U.S.C. 664, 666) for the State in which the holder
resides; and
``(ii) include in the notice under this paragraph
the address and telephone number of the child support
enforcement agency; and
``(B)(i) notify, in writing, the State child
support agency (of the State in which the holder of the
claim resides) of the claim;
``(ii) include in the notice under this paragraph
the name, address, and telephone number of the holder
of the claim; and
``(iii) at such time as the debtor is granted a
discharge under section 1228, notify the holder of the
claim and the State child support agency of the State
in which that holder resides 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) with respect to the debtor's case,
the name of each creditor that holds a claim
that--
``(aa) is not discharged under
paragraph (2), (4), or (14) of section
523(a); or
``(bb) was reaffirmed by the debtor
under section 524(c).
``(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in paragraph
(1)(B)(iii)(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 to the debtor or any other person 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 an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in
subsection (d).''; and
(2) by adding at the end the following:
``(d)(1) In any case described in subsection (b)(6), the
trustee shall--
``(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security Act
(42 U.S.C. 664, 666) for the State in which the holder
resides; and
``(ii) include in the notice under this paragraph
the address and telephone number of the child support
enforcement agency; and
``(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
``(ii) include in the notice under this paragraph
the name, address, and telephone number of the holder
of the claim; and
``(iii) at such time as the debtor is granted a
discharge under section 1328, notify the holder of the
claim and the State child support agency of the State
in which that holder resides 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) with respect to the debtor's case,
the name of each creditor that holds a claim
that--
``(aa) is not discharged under
paragraph (2), (4), or (14) of section
523(a); or
``(bb) was reaffirmed by the debtor
under section 524(c).
``(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in paragraph
(1)(B)(iii)(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 to the debtor or any other person by reason
of making that disclosure.''.
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 that term is
defined in section 221(e)(1) of the Internal
Revenue Code of 1986, incurred by an individual
debtor;''.
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 ``a person,
other than an attorney or an employee of an attorney''
and inserting ``the attorney 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 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) 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 to
debtors concerning bankruptcy petition preparers, which shall
be on an official form issued by the Judicial Conference of the
United States.
``(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--
``(aa) the debtor; and
``(bb) the bankruptcy petition
preparer, under penalty of perjury; and
``(II) be filed with any document for
filing.'';
(3) in subsection (c)--
(A) in paragraph (2)--
(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
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
eliminated or 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
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. 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.'';
(C) in paragraph (2), as redesignated--
(i) by striking ``Within 10 days
after the date of filing 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
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 preparer during the
12-month period immediately preceding the date
of 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 redesignated, by
striking ``or the United States trustee'' and
inserting ``the United States trustee, the
bankruptcy administrator, 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 motion of the debtor,
trustee, United States trustee, or bankruptcy administrator,
and after the court holds a hearing with respect to that
violation or act, 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 a
previous order issued under this section. The injunction under
this paragraph may be issued upon motion of the court, the
trustee, the United States trustee, or the bankruptcy
administrator.''; 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 preparer.
``(3) The debtor, the trustee, a creditor, the United
States trustee, or the bankruptcy administrator may file a
motion for an order imposing a fine on the bankruptcy petition
preparer for each 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, is amended
by inserting after paragraph (9) the following:
``(10) Tenth, allowed claims for death or personal
injuries resulting from the operation of a motor
vehicle or vessel if such operation was unlawful
because the debtor was intoxicated from using alcohol,
a drug, or another substance.''.
SEC. 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)--
(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) 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
commencement of the case under section 301, 302, or 303
of this title, those funds shall be presumed to be
exempt from the estate.
``(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
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
that direct transfer.
``(D)(i) Any distribution that qualifies as an
eligible rollover distribution within the meaning of
section 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
qualify for exemption under paragraph (3)(C) or
subsection (d)(12) by reason of that distribution.
``(ii) A distribution described in this clause is
an amount that--
``(I) has been distributed from a fund or
account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986;
and
``(II) to the extent allowed by law, is
deposited in such a fund or account not later
than 60 days after the distribution of that
amount.''; and
(2) in subsection (d)--
(A) in the matter preceding paragraph (1),
by striking ``subsection (b)(1)'' and inserting
``subsection (b)(2)''; and
(B) by adding at the end the following:
``(12) Retirement funds to the extent that those funds are
in a fund or account that is exempt from taxation under section
401, 403, 408, 408A, 414, 457, or 501(a) of the Internal
Revenue Code of 1986.''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, is amended--
(1) in paragraph (17), by striking ``or'' at the
end;
(2) in paragraph (18), by striking the period and
inserting a semicolon;
(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(a) of the Internal Revenue Code of 1986,
that is sponsored by the employer of the debtor, or an
affiliate, successor, or predecessor of such employer--
``(A) to the extent that the amounts
withheld and collected are used solely for
payments relating to a loan from a plan that
satisfies the requirements of section 408(b)(1)
of the Employee Retirement Income Security Act
of 1974 or is subject to section 72(p) of the
Internal Revenue Code of 1986; or
``(B) in the case of a loan from a thrift
savings plan described in subchapter III of
chapter 84 of title 5, that satisfies the
requirements of section 8433(g) of such
title;''; and
(4) by adding at the end of the flush material at
the end of the subsection, the following: ``Nothing in
paragraph (19) may be construed to provide that any
loan made under a governmental plan under section
414(d), or a contract or account under section 403(b)
of the Internal Revenue Code of 1986 constitutes a
claim or a debt under this title.''.
(c) Exceptions To Discharge.--Section 523(a) of title 11,
United States Code, as amended by this Act, is amended by
adding at the end 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
``(B) a loan from the thrift savings plan
described in subchapter III of chapter 84 of
title 5, that satisfies the requirements of
section 8433(g) of such title.
Nothing in paragraph (18) may be construed to provide
that any loan made under a governmental plan under
section 414(d), or a contract or account under section
403(b), of the Internal Revenue Code of 1986
constitutes a claim or a debt under this title.''.
(d) Plan Contents.--Section 1322 of title 11, United States
Code, is amended by adding at the end the following:
``(f) A plan may not materially alter the terms of a loan
described in section 362(b)(19) and any amounts required to
repay such loan shall not constitute `disposable income' under
section 1325.''.
(e) Asset 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 that Code or a simple retirement account under
section 408(p) of that 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 (which amount shall be adjusted as provided in
section 104 of this title) in a case filed by an individual
debtor, except that such amount may be increased if the
interests of justice so require.''.
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 (10); 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 filing of the petition, but--
``(A) only if the designated beneficiary of
such account was a son, daughter, stepson,
stepdaughter, grandchild, or step-grandchild 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 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 filing of the
petition, but--
``(A) only if the designated beneficiary of
the amounts paid or contributed to such tuition
program was a son, daughter, stepson,
stepdaughter, grandchild, or step-grandchild 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 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 this Act, 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 whose
non-exempt assets are less than $150,000;'';
(2) by inserting after paragraph (4) the following:
``(4A) `bankruptcy assistance' means any goods or
services sold or otherwise provided to an assisted
person with the express or implied purpose of providing
information, advice, counsel, document preparation, or
filing, or attendance at a creditors' meeting or
appearing in a proceeding on behalf of another or
providing legal representation with respect to a 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 that is an officer,
director, employee or agent of that person;
``(B) a nonprofit organization which is
exempt from taxation under section 501(c)(3) of
the Internal Revenue Code of 1986;
``(C) a creditor of the person, to the
extent that the creditor is assisting the
person to restructure any debt owed by the
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 a
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)(1) of title 11,
United States Code, is amended by inserting ``101(3),'' after
``sections''.
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--
``(i) the services that such agency will
provide to such person; or
``(ii) the benefits and risks that may
result if such person becomes a debtor in a
case under this title; or
``(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 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 attorney fees as determined
by the court.
``(4) The United States District Court for any district
located in the State shall have concurrent jurisdiction of any
action under subparagraph (A) or (B) of paragraph (3).
``(5) Notwithstanding any other provision of Federal law
and in addition to any other remedy provided under Federal or
State law, if the court, on its own motion or on 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.''.
``(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 before the item relating to section 527, the
following:
``526. Debt relief enforcement.''.
SEC. 228. DISCLOSURES.
(a) Disclosures.--Subchapter II of chapter 5 of title 11,
United States Code, as amended by this Act, 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) the written notice required under section
342(b)(1) of this title; and
``(2) to the extent not covered in the written
notice described in paragraph (1), 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 of this title
must be stated in those documents where
requested after reasonable inquiry to establish
such value;
``(C) current monthly income, the amounts
specified in section 707(b)(2), and, in a case
under chapter 13, 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 proceeding under this title or
other sanction including, in some instances,
criminal sanctions.
``(b) A debt relief agency providing bankruptcy assistance
to an assisted person shall provide each assisted person at the
same time as the notices required under subsection (a)(1) with
the following statement, to the extent applicable, or one
substantially similar. The statement shall be clear and
conspicuous and shall be in a single document separate from
other documents or notices provided to the assisted person:
`` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE
SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.
`` `If you decide to seek bankruptcy relief, you can
represent yourself, you can hire an attorney to represent you,
or you can get help in some localities from a bankruptcy
petition preparer who is not an attorney. THE LAW REQUIRES AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN
CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION
PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see
the contract before you hire anyone.
`` `The following information helps you understand what
must be done in a routine bankruptcy case to help you evaluate
how much service you need. Although bankruptcy can be complex,
many cases are routine.
`` `Before filing a bankruptcy case, either you or your
attorney should analyze your eligibility for different forms of
debt relief made available by the Bankruptcy Code and which
form of relief is most likely to be beneficial for you. Be sure
you understand the relief you can obtain and its limitations.
To file a bankruptcy case, documents called a Petition,
Schedules and Statement of Financial Affairs, as well as in
some cases a Statement of Intention need to be prepared
correctly and filed with the bankruptcy court. You will have to
pay a filing fee to the bankruptcy court. Once your case
starts, you will have to attend the required first meeting of
creditors where you may be questioned by a court official
called a `trustee' and by creditors.
`` `If you choose to file a chapter 7 case, you may be
asked by a creditor to reaffirm a debt. You may want help
deciding whether to do so and a creditor is not permitted to
coerce you into reaffirming your debts.
`` `If you choose to file a chapter 13 case in which you
repay your creditors what you can afford over 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 needs to be done from someone familiar
with that type of relief.
`` `Your bankruptcy case may also involve litigation. You
are generally permitted to represent yourself in litigation in
bankruptcy court, but only attorneys, not bankruptcy petition
preparers, can give you legal advice.'.
``(c) Except to the extent the debt relief agency provides
the required information itself after reasonably diligent
inquiry of the assisted person or others so as to obtain such
information reasonably accurately for inclusion on the
petition, schedules or statement of financial affairs, a debt
relief agency providing bankruptcy assistance to an assisted
person, to the extent permitted by nonbankruptcy law, shall
provide each assisted person at the time required for the
notice required under subsection (a)(1) reasonably sufficient
information (which shall be provided in a clear and conspicuous
writing) to the assisted person on how to provide all the
information the assisted person is required to provide under
this title pursuant to section 521, including--
``(1) how to value assets at replacement value,
determine current monthly income, the amounts specified
in section 707(b)(2)) and, in a chapter 13 case, how to
determine disposable income in accordance with section
707(b)(2) and related calculations;
``(2) how to complete the list of creditors,
including how to determine what amount is owed and what
address for the creditor should be shown; and
``(3) how to determine what property is exempt and
how to value exempt property at replacement value as
defined in section 506 of this title.
``(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for 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 this
Act, 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 this Act, is amended by
adding at the end the following:
``Sec. 528. Requirements for debt relief agencies
``(a) A debt relief agency shall--
``(1) not later than 5 business days after the
first date 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 using 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)(1) An advertisement of bankruptcy assistance services
or of the benefits of bankruptcy directed to the general public
includes--
``(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 this
Act, is amended by inserting after the item relating to section
527, the following:
``528. Debtor's bill of rights.''.
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 individual debtors under such title, the names and
social security numbers of such debtors for the purposes of
allowing such Office to determine whether such debtors have
outstanding obligations for child support (as determined on the
basis of information in the Federal Case Registry or other
national database).
(b) Report.--Not later than 300 days after the date of
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).
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. REINFORCEMENT OF THE FRESH START.
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 an individual debtor 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)--
``(A) 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) upon motion by a party in interest
for continuation of the automatic stay and upon
notice and a hearing, the court may extend the
stay in particular cases as to any or all
creditors (subject to such conditions or
limitations as the court may then impose) after
notice and a hearing completed before the
expiration of the 30-day period only if the
party in interest demonstrates that the filing
of the later case is in good faith as to the
creditors to be stayed; 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 chapter 7,
11, or 13 in which the
individual was a debtor was
pending within the preceding 1-
year period;
``(II) a previous case
under any of chapter 7, 11, or
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
which 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 an individual debtor 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 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
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) a stay imposed under subparagraph (B) shall
be effective on the date of entry of the order allowing
the stay to go into effect; and
``(D) for purposes of subparagraph (B), a case is
presumptively not filed 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 pay
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 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 estate, if
the court finds that the filing of the bankruptcy
petition was part of a scheme to delay, hinder, and
defraud creditors that involved either--
``(A) transfer of all or part ownership of,
or other interest in, the real property without
the consent of the secured creditor or court
approval; or
``(B) multiple bankruptcy filings affecting
the real property.
If recorded in compliance with applicable State laws governing
notices of interests or liens in real property, an order
entered under this subsection shall be binding in any other
case under this title purporting to affect the real property
filed not later than 2 years after the date of entry of such
order by the court, except that a debtor in a subsequent case
may move for relief from such order based upon changed
circumstances or for good cause shown, after notice and a
hearing. Any Federal, State, or local governmental unit 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, is amended by inserting after paragraph (19), as
added by this Act, the following:
``(20) under subsection (a), of any act to enforce
any lien against or security interest in real property
following the entry of an order under section 362(d)(4)
as to that property in any prior bankruptcy case for a
period of 2 years after entry of such an order, except
that the debtor, in a subsequent case, may move the
court 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 bankruptcy
case; or
``(B) if the bankruptcy case was filed in
violation of a bankruptcy court order in a
prior bankruptcy case prohibiting the debtor
from being a debtor in another bankruptcy
case;''.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521(a) (as so designated by this
Act)--
(A) in paragraph (4), by striking ``, and''
at the end and inserting a semicolon;
(B) in paragraph (5), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(6) in an individual case under chapter 7 of this
title, not retain possession of personal property as to
which a creditor has an allowed claim for the purchase
price secured in whole or in part by an interest in
that personal property unless, in the case of an
individual debtor, the debtor, 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) of this
title with respect to the claim secured by such
property; or
``(B) redeems such property from the
security interest pursuant to section 722 of
this title.
If the debtor fails to so act within the 45-day period referred
to in paragraph (6), the stay under section 362(a) of this
title is terminated with respect to the personal property of
the estate or of the debtor which is affected, such property
shall no longer be property of the estate, and the creditor may
take whatever action as to such property as is permitted by
applicable nonbankruptcy law, unless the court determines on
the motion of the trustee brought before the expiration of such
45-day period, and after notice and a hearing, that such
property is of consequential value or benefit to the estate,
orders appropriate adequate protection of the creditor's
interest, and orders the debtor to deliver any collateral in
the debtor's possession to the trustee.''; and
(2) in section 722, by inserting ``in full at the
time of redemption'' before the period at the end.
SEC. 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--
(A) in subsection (c), by striking ``(e),
and (f)'' inserting ``(e), (f), and (h)'';
(B) by redesignating subsection (h) as
subsection (k); and
(C) by inserting after subsection (g) the
following:
``(h)(1) In an individual case under chapter 7, 11, or 13,
the stay provided by subsection (a) is terminated with respect
to personal property of the estate or of the debtor securing in
whole or in part a claim, or subject to an unexpired lease, and
such personal property shall no longer be property of the
estate if the debtor fails within the applicable time set by
section 521(a)(2) of this title--
``(A) to file timely any statement of intention
required under section 521(a)(2) of this title with
respect to that property or to indicate in that
statement that the debtor will either surrender the
property or retain it and, if retaining it, either
redeem the property pursuant to section 722 of this
title, reaffirm the debt it secures pursuant to section
524(c) of this title, or assume the unexpired lease
pursuant to section 365(p) of this title if the trustee
does not do so, as applicable; and
``(B) to take timely the action specified in that
statement of intention, as it may be amended before
expiration of the period for taking action, unless the
statement of intention specifies reaffirmation and the
creditor refuses to reaffirm on the original contract
terms.
``(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 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 so determine, the stay provided
by subsection (a) shall terminate upon the conclusion of the
proceeding on the motion.''; and
(2) in section 521--
(A) in subsection (a)(2), as so designated
by this Act, by striking ``consumer'';
(B) in subsection (a)(2)(B), as so
designated by this Act--
(i) by striking ``forty-five days
after the filing of a notice of intent
under this section'' and inserting ``30
days after the first date set for the
meeting of creditors under section
341(a) of this title''; and
(ii) by striking ``forty-five day''
and inserting ``30-day'';
(C) in subsection (a)(2)(C), as so
designated by this Act, by inserting ``, except
as provided in section 362(h) of this title''
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) of this title, with
respect to property which a lessor or bailor owns and has
leased, rented, or bailed to the debtor or as to which a
creditor holds a security interest not otherwise voidable under
section 522(f), 544, 545, 547, 548, or 549 of this title,
nothing in this title shall prevent or limit the operation of a
provision in the underlying lease or agreement which has the
effect of placing the debtor in default under such lease or
agreement by reason of the occurrence, pendency, or existence
of a proceeding under this title or the insolvency of the
debtor. Nothing in this subsection shall be deemed to justify
limiting such a provision in any other circumstance.''.
SEC. 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 flush sentence:
``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 5-year
period preceding 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, as amended by this Act, is amended--
(1) by inserting after paragraph (13) the
following:
``(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
estate 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)(A) of title 11, United States Code, as so
designated by this Act, is amended--
(1) by striking ``180 days'' and inserting ``730
days''; and
(2) by striking ``, or for a longer portion of such
180-day period than in any other place'' and inserting
``or if the debtor's domicile has not been located at a
single State for such 730-day period, the place in
which the debtor's domicile was located for 180 days
immediately preceding the 730-day period or for a
longer portion of such 180-day period than in any other
place''.
SEC. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EXEMPTION.
Section 522 of title 11, United States Code, 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; or
``(3) a burial plot for the debtor or a dependent
of the debtor;
shall be reduced to the extent that such value is attributable
to any portion of any property that the debtor disposed of in
the 7-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 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 chapter 13 proceeding;
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) In the case of an individual under chapter 7, the
debtor may notify the creditor in writing that the debtor
desires to assume the lease. Upon being so notified, the
creditor may, at its option, notify the debtor that it is
willing to have the lease assumed by the debtor and may
condition such assumption on cure of any outstanding default on
terms set by the contract.
``(B) 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.''.
(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, 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) 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) 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 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 $250 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 term `extension of credit under
an open end credit plan' means an extension of
credit under an open end credit plan, within
the meaning of the Consumer Credit Protection
Act (15 U.S.C. 1601 et seq.);
``(II) the term `open end credit plan' has
the meaning given that term under section 103
of Consumer Credit Protection Act (15 U.S.C.
1602); and
``(III) 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.
Section 362(b) of title 11, United States Code, is amended
by inserting after paragraph (21), as added by this Act, the
following:
``(22) under subsection (a)(3), of the continuation
of any eviction, unlawful detainer action, or similar
proceeding by a lessor against a debtor involving
residential real property in which the debtor resides
as a tenant under a rental agreement;
``(23) under subsection (a)(3), of the commencement
of any eviction, unlawful detainer action, or similar
proceeding by a lessor against a debtor involving
residential real property in which the debtor resides
as a tenant under a rental agreement that has
terminated under the lease agreement or applicable
State law;
``(24) under subsection (a)(3), of eviction actions
based on endangerment to property or person or the use
of illegal drugs;
``(25) under subsection (a) of any transfer that is
not avoidable under section 544 and that is not
avoidable under section 549;''.
SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended--
(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 by the
plan or disallowed under section 502 if the debtor has received
a discharge in any case filed under this title within 5 years
before the order for relief under this chapter.''.
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, but only 1 personal computer
only if used primarily for the education or
entertainment of such minor children;
``(xii) medical equipment and supplies;
``(xiii) furniture exclusively for the use of minor
children, or elderly or disabled dependents of the
debtor; and
``(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.
``(B) The term `household goods' does not include--
``(i) works of art (unless by or of the debtor or
the dependents of the debtor);
``(ii) electronic entertainment equipment (except 1
television, 1 radio, and 1 VCR);
``(iii) items acquired as antiques;
``(iv) jewelry (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) 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 the definition of household
goods, as defined in section 522(f)(4) of title 11, United
States Code, as added by this section, 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 that section
522(f)(4) of that title, as added by this section, has had on
debtors and on the bankruptcy courts. Such report may include
recommendations for amendments to section 522(f)(4) of title
11, United States Code, 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 this Act, 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) If, within the 90 days prior to the date of
the filing of a petition in a voluntary case, the
creditor supplied the debtor in at least 2
communications sent to the debtor with the current
account number of the debtor and the address at which
the creditor wishes to receive correspondence, then the
debtor shall send any notice required under this title
to the address provided by the creditor and such notice
shall include the account number. In the event the
creditor would be in violation of applicable
nonbankruptcy law by sending any such communication
within such 90-day period and if the creditor supplied
the debtor in the last 2 communications with the
current account number of the debtor and the address at
which the creditor wishes to receive correspondence,
then the debtor shall send any notice required under
this title to the address provided by the creditor and
such notice shall include the account number.''; and
(2) by adding at the end the following:
``(e) At any time, a creditor, in a case of an individual
debtor under chapter 7 or 13, may file with the court and serve
on the debtor a notice of the address to be used to notify the
creditor in that case. Five days after receipt of such notice,
if the court or the debtor is required to give the creditor
notice, such notice shall be given at that address.
``(f) An entity may file with the court a notice stating
its address for notice in cases under chapters 7 and 13. After
30 days following the filing of such notice, any notice in any
case filed under chapter 7 or 13 given by the court shall be to
that address unless specific notice is given under subsection
(e) with respect to a particular case.
``(g)(1) Notice given to a creditor other than as provided
in this section shall not be effective notice until that notice
has been brought to the attention of the creditor. If the
creditor designates a person or department to be responsible
for receiving notices concerning bankruptcy cases and
establishes reasonable procedures so that bankruptcy notices
received by the creditor are to be delivered to such department
or person, notice shall not be considered to have been brought
to the attention of the creditor until received by such person
or department.
``(2) No sanction under section 362(k) or any other
sanction that a court may impose on account of violations of
the stay under section 362(a) or failure to comply with section
542 or 543 may be imposed on any action of the creditor unless
the action takes place after the creditor has received notice
of the commencement of the case effective under this
section.''.
(b) Debtor's Duties.--Section 521 of title 11, United
States Code, as amended by this Act, is amended--
(1) in subsection (a), as so designated by this
Act, by striking paragraph (1) and inserting the
following:
``(1) file--
``(A) a list of creditors; and
``(B) unless the court orders otherwise--
``(i) a schedule of assets and
liabilities;
``(ii) a schedule of current income
and current expenditures;
``(iii) a statement of the debtor's
financial affairs and, if applicable, a
certificate--
``(I) of an attorney whose
name is on the petition as the
attorney for the debtor or any
bankruptcy petition preparer
signing the petition under
section 110(b)(1) indicating
that such attorney or
bankruptcy petition preparer
delivered to the debtor any
notice required by section
342(b); or
``(II) if no attorney for
the debtor is indicated and no
bankruptcy petition preparer
signed the petition, of the
debtor that such notice was
obtained and read by the
debtor;
``(iv) copies of all payment
advices or other evidence of payment,
if any, received by the debtor from any
employer of the debtor in the period 60
days before the filing of the petition;
``(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
filing;''; and
(2) by adding at the end the following:
``(e)(1) At any time, a creditor, in the case of an
individual under chapter 7 or 13, may file with the court
notice that the creditor requests the petition, schedules, and
a statement of affairs filed by the debtor in the case, and the
court shall make those documents available to the creditor who
requests those documents.
``(2)(A) The debtor shall provide either a tax return or
transcript at the election of the debtor, for the latest
taxable period prior to filing for which a tax return has been
or should have been filed, to the trustee, not later than 7
days before the date first set for the first meeting of
creditors, or the case shall be dismissed, unless the debtor
demonstrates that the failure to file a return as required is
due to circumstances beyond the control of the debtor.
``(B) If a creditor has requested a tax return or
transcript referred to in subparagraph (A), the debtor shall
provide such tax return or transcript to the requesting
creditor at the time the debtor provides the tax return or
transcript to the trustee, or the case shall be dismissed,
unless the debtor demonstrates that the debtor is unable to
provide such information due to circumstances beyond the
control of the debtor.
``(3)(A) At any time, a creditor in a case under chapter 13
may file with the court notice that the creditor requests the
plan filed by the debtor in the case.
``(B) The court shall make such plan available to the
creditor who request such plan--
``(i) at a reasonable cost; and
``(ii) not later than 5 days after such request.
``(f) An individual debtor in a case under chapter 7, 11,
or 13 shall file with the court at the request of any party in
interest--
``(1) at the time filed with the taxing authority,
all tax returns required under applicable law,
including any schedules or attachments, with respect to
the period from the commencement of the case until such
time as the case is closed;
``(2) at the time filed with the taxing authority,
all tax returns required under applicable law,
including any schedules or attachments, that were not
filed with the taxing authority when the schedules
under subsection (a)(1) were filed with respect to the
period that is 3 years before the order of relief;
``(3) any amendments to any of the tax returns,
including schedules or attachments, described in
paragraph (1) or (2); and
``(4) in a case under chapter 13, a statement
subject to the penalties of perjury by the debtor of
the debtor's income and expenditures in the preceding
tax year and monthly income, that shows how the amounts
are calculated--
``(A) beginning on the date that is the
later of 90 days after the close of the
debtor's tax year or 1 year after the order for
relief, unless a plan has been confirmed; and
``(B) thereafter, on or before the date
that is 45 days before each anniversary of the
confirmation of the plan until the case is
closed.
``(g)(1) A statement referred to in subsection (f)(4) shall
disclose--
``(A) the amount and sources of income of the
debtor;
``(B) the identity of any 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 subsection (e)(2)(A) and
subsection (f) shall be available to the United States trustee,
any bankruptcy administrator, any trustee, and any party in
interest for inspection and copying, subject to the
requirements of subsection (h).
``(h)(1) Not later than 180 days after the date of
enactment of the Bankruptcy Reform Act of 2000, 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.
``(3) Not later than 1 year and 180 days after the date of
enactment of the Bankruptcy Reform Act of 2000, the Director of
the Administrative Office of the United States Courts shall
prepare and submit to Congress a report that--
``(A) assesses the effectiveness of the procedures
under paragraph (1); 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.
``(i) If requested by the United States trustee or a
trustee serving in the case, 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; and
``(2) such other personal identifying information
relating to the debtor that establishes the identity of
the debtor.''.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE
REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as amended by
this Act, is amended by adding at the end the following:
``(j)(1) Notwithstanding section 707(a), and subject to
paragraph (2), if an individual debtor in a voluntary case
under chapter 7 or 13 fails to file all of the information
required under subsection (a)(1) within 45 days after the
filing of the petition commencing the case, the case shall be
automatically dismissed effective on the 46th day after the
filing of the petition.
``(2) With respect to a case described in paragraph (1),
any party in interest may request the court to enter an order
dismissing the case. If requested, the court shall enter an
order of dismissal not later than 5 days after such request.
``(3) Upon request of the debtor made within 45 days after
the filing of the petition commencing a case described in
paragraph (1), the court may allow the debtor an additional
period 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.''.
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) 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).''.
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 last reported by the Bureau of the
Census;
``(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 last reported by the Bureau of the
Census; 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 last reported by the Bureau of the
Census, 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 last reported by the Bureau of the
Census;
``(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 last reported by the Bureau of the
Census; 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 last reported by the Bureau of the
Census, 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 this Act, 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 last reported by the
Bureau of the Census;
``(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 last
reported by the Bureau of the Census;
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 last reported by the
Bureau of the Census, plus $525 per
month for each individual in excess of
4; and
``(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 an attorney be submitted only after the debtor
or the debtor's attorney has made reasonable inquiry to verify
that the information contained in such documents is--
(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) Notwithstanding paragraph (1), in the case of an
individual filing under chapter 7, 11, or 13, the stay under
subsection (a) shall terminate on the date that is 60 days
after a request is made by a party in interest under subsection
(d), unless--
``(A) a final decision is rendered by the court
during the 60-day period beginning on the date of the
request; or
``(B) that 60-day period is extended--
``(i) by agreement of all parties in
interest; or
``(ii) by the court for such specific
period of time as the court finds is required
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 concerning an individual debtor, 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.''.
``(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
chapter 11 of title 11, United States Code, is amended
by adding at the end of the matter relating to
subchapter I 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 concerning an individual, provide
for the payment to creditors through 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, is
amended by adding at the end the following:
``(15) In a case concerning an individual in which
the holder of an allowed unsecured claim objects to the
confirmation of the plan--
``(A) the value of the property to be
distributed under the plan on account of such
claim is, as of the effective date of the plan,
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
debtor's projected disposable income (as that
term is 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 term of the plan,
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 concerning an individual, the debtor may retain
property included in the estate under section 1115,
subject to the requirements of subsection (a)(14)''.
(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''; and
(2) by adding at the end the following:
``(5) In a case concerning an individual--
``(A) except as otherwise ordered for cause shown,
the discharge is not effective until completion of all
payments under the plan; and
``(B) at any time after the confirmation of the
plan and after notice and a hearing, the court may
grant a discharge to a debtor that has not completed
payments under the plan only if--
``(i) for each allowed unsecured claim, the
value, as of the effective date of the plan, of
property actually distributed under the plan on
account of that 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 of this title on such date; and
``(ii) modification of the plan under 1127
of this title is not practicable.''.
(e) Modification of Plan.--Section 1127 of title 11, United
States Code, is amended by adding at the end the following:
``(e) In a case concerning 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) Sections 1121 through 1128 of this title and the
requirements of section 1129 of this title 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. LIMITATION.
(a) Exemptions.--Section 522 of title 11, United States
Code, as amended by this Act, 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 of this title, 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 2-year
period preceding the filing of the petition which exceeds in
the aggregate $100,000 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; or
``(C) a burial plot for the debtor or a dependent
of the debtor.
``(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 that farmer.
``(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 the 2-year period) into the debtor's
current principal residence, where the debtor's previous and
current residences are located in the same State.''.
(b) Adjustment of Dollar Amounts.--Section 104(b) of title
11, United States Code, is amended--
(1) in paragraph (1), by striking ``522(d),'' and
inserting ``522(d), 522(n), 522(p),''; and
(2) in paragraph (3), by striking ``522(d),'' and
inserting ``522(d), 522(n), 522(p),''.
SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND
OTHER PROPERTY FROM THE ESTATE.
(a) In General.--Section 541(b) of title 11, United States
Code, is amended by inserting after paragraph (6), as added by
this Act, the following:
``(7) any amount--
``(A) withheld by an employer from the
wages of employees for payment as contributions
to--
``(i) an employee benefit plan
subject to title I of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1001 et seq.) or under an
employee benefit plan which is a
governmental plan under section 414(d)
of the Internal Revenue Code of 1986, a
deferred compensation plan under
section 457 of the Internal Revenue
Code of 1986, or a tax-deferred annuity
under section 403(b) of the Internal
Revenue Code of 1986, except that
amount shall not constitute disposable
income, as defined in section
1325(b)(2) of this title; or
``(ii) a health insurance plan
regulated by State law whether or not
subject to such title; or
``(B) received by the employer from
employees for payment as contributions to--
``(i) an employee benefit plan
subject to title I of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1001 et seq.) or under an
employee benefit plan which is a
governmental plan under section 414(d)
of the Internal Revenue Code of 1986, a
deferred compensation plan under
section 457 of the Internal Revenue
Code of 1986, or a tax-deferred annuity
under section 403(b) of the Internal
Revenue Code of 1986, except that
amount shall not constitute disposable
income, as defined in section
1325(b)(2) of this title; or
``(ii) a health insurance plan
regulated by State law whether or not
subject to such title;''.
(b) Application of Amendment.--The amendments made by this
section shall not apply to cases commenced under title 11,
United States Code, before the expiration of the 180-day period
beginning on the date of enactment of this Act.
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 date of 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) 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 or 13 of Title 11, United
States Code.--Section 1930(a) of title 28, United States Code,
is amended by striking paragraph (1) and inserting the
following:
``(1) For a case commenced--
``(A) under chapter 7 of title 11, $160; or
``(B) under chapter 13 of title 11,
$150.''.
(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 in cases commenced
under chapter 7 of title 11; and
``(B) 70.00 percent of the fees collected under
section 1930(a)(1)(B) of this title in cases commenced
under chapter 13 of title 11;'';
(2) in paragraph (2), by striking ``one-half'' and
inserting ``three-fourths''; 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 30.76 per centum of the fees
hereafter collected under 28 U.S.C. section 1930(a)(1) and 25
percent of the fees hereafter collected under 28 U.S.C. section
1930(a)(3) shall be deposited as offsetting receipts to the
fund established under 28 U.S.C. section 1931'' and inserting
``under section 1930(b) of title 28, United States Code, and
31.25 percent 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''.
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) In the case of an individual debtor under chapters 7
and 13, such value with respect to personal property securing
an allowed claim shall be determined based on the replacement
value of such property as of the date of filing the petition
without deduction for costs of sale or marketing. With respect
to property acquired for personal, family, or household
purpose, replacement value shall mean the price a retail
merchant would charge for property of that kind considering the
age and condition of the property at the time value is
determined.''.
SEC. 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 paragraph (b)(l);''; 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) of this title expressly
does not require to be cured'' before the semicolon at
the end;
(2) in subparagraph (C), by striking ``and'' at the
end;
(3) by redesignating subparagraph (D) as
subparagraph (E); and
(4) by inserting after subparagraph (C) the
following:
``(D) if such claim or such interest arises
from any failure to perform a nonmonetary
obligation, other than a default arising from
failure to operate a non-residential 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''.
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, as amended by this Act, 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 (15 U.S.C.
78o-3) or a national securities exchange registered
with the Securities and Exchange Commission under
section 6 of the Securities Exchange Act of 1934 (15
U.S.C. 78f);''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, is amended by inserting after paragraph (25), as
added by this Act, the following:
``(26) 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 the securities self
regulatory organization to enforce such
organization's regulatory power; or
``(C) any act taken by the securities self
regulatory organization to delist, delete, or
refuse to permit quotation of any stock that
does not meet applicable regulatory
requirements;''.
SEC. 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) Subject to subparagraph (B), in any case under any
chapter of this title, an unexpired lease of nonresidential
real property under which the debtor is the lessee shall be
deemed rejected, and the trustee shall immediately surrender
that nonresidential real property to the lessor, if the trustee
does not assume or reject the unexpired lease by the earlier
of--
``(i) the date that is 120 days after the date of
the order for relief; or
``(ii) the date of the entry of an order confirming
a plan.
``(B)(i) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day
period, for 90 days upon 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 (15
U.S.C. 632(a)(1))), 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
designated as subsection (g) (as added by section
222(a) of Public Law 103-394) as subsection (i); and
(2) by adding at the end the following:
``(j)(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) The prohibition under paragraph (1) shall be applied
in a manner consistent with any applicable State statute that
is similar to section 7-209 of the Uniform Commercial Code, as
in effect on the date of enactment of the Bankruptcy Reform Act
of 2000, or any successor thereto.''.
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 of this title.''.
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 nonconsumer debt against a noninsider of
less than $10,000,'' after ``$5,000''.
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.
``(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 other
Federal or State law that is not a bankruptcy law, or other
requirement that representation at the meeting of creditors
under subsection (a) be by an attorney, a creditor holding a
consumer debt or any representative of the creditor (which may
include an entity or an employee of an entity and may be a
representative for more than 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, as
amended by this Act, 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--
(1) by inserting ``(1)'' after ``(b)''; and
(2) by adding at the end the following:
``(2)(A) If an eligible, disinterested trustee is elected
at a meeting of creditors under paragraph (1), the United
States trustee shall file a report certifying that election.
``(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) In the case of any dispute arising out of an election
described in subparagraph (A), the court shall resolve the
dispute.''.
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) through (5), 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
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
filing of the petition;
``(ii) the payment by the debtor of charges for
utility service in a timely manner before the date of
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 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
(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 debtor 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 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. MORE COMPLETE INFORMATION REGARDING ASSETS OF THE ESTATE.
(a) In General.--
(1) Disclosure.--The Advisory Committee on
Bankruptcy Rules of the Judicial Conference of the
United States, after consideration of the views of the
Director of the Executive Office for United States
Trustees, shall propose for adoption amended Federal
Rules of Bankruptcy Procedure and Official Bankruptcy
Forms directing debtors under chapter 11 of title 11,
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 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) 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 20 days before
the date of the hearing on confirmation of the plan;
and
``(C) the hearing on the disclosure statement may
be combined with the hearing on confirmation of a
plan.''.
SEC. 432. DEFINITIONS.
(a) Definitions.--Section 101 of title 11, United States
Code, as amended by this Act, 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 order for relief in an amount
not more than $3,000,000 (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 $3,000,000
(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''.
SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
Within a reasonable period of time after the date of
enactment of this Act, the Advisory Committee on Bankruptcy
Rules of the Judicial Conference of the United States shall
propose for adoption standard form disclosure statements and
plans of reorganization for small business debtors (as defined
in section 101 of title 11, United States Code, as amended by
this Act), designed to achieve a practical balance between--
(1) the reasonable needs of the courts, the United
States trustee, creditors, and other parties in
interest for reasonably complete information; and
(2) economy and simplicity for debtors.
SEC. 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 claims 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) 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. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) Proposal of Rules and Forms.--The Advisory Committee on
Bankruptcy Rules of the Judicial Conference of the United
States shall propose for adoption amended Federal Rules of
Bankruptcy Procedure and Official Bankruptcy Forms to be used
by small business debtors to file periodic financial and other
reports containing information, including information relating
to--
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements;
and
(3) whether the debtor is timely filing tax returns
and paying taxes and other administrative claims when
due.
(b) Purpose.--The rules and forms proposed under subsection
(a) shall be designed to achieve a practical balance among--
(1) the reasonable needs of the bankruptcy court,
the United States trustee, creditors, and other parties
in interest for reasonably complete information;
(2) the small business debtor's interest that
required reports be easy and inexpensive to complete;
and
(3) the interest of all parties that the required
reports help the small business debtor to understand
the small business debtor's financial condition and
plan the small business debtor's future.
SEC. 436. DUTIES IN SMALL BUSINESS CASES.
(a) Duties in Chapter 11 Cases.--Subchapter I of title 11,
United States Code, as amended by this Act, 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) 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,
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
waives that requirement after notice and hearing, upon
a finding of extraordinary and compelling
circumstances;
``(3) timely file all schedules and statements of
financial affairs, unless the court, after notice and a
hearing, grants an extension, which shall not extend
such time period to a date later than 30 days after the
date of the order for relief, absent extraordinary and
compelling circumstances;
``(4) file all postpetition financial and other
reports required by the Federal Rules of Bankruptcy
Procedure or by local rule of the district court;
``(5) subject to section 363(c)(2), maintain
insurance customary and appropriate to the industry;
``(6)(A) timely file tax returns and other required
government filings; and
``(B) subject to section 363(c)(2), timely pay all
administrative expense tax claims, 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, is amended by adding at the
end of the matter relating to subchapter I 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 hearing; or
``(B) the court, for cause, orders
otherwise;
``(2) the plan, and any necessary disclosure
statement, 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 plan shall be confirmed
not later than 175 days after the date of the order for relief,
unless such 175-day period is extended as provided in 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:
``(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 entry of order
for relief but before the first meeting
scheduled under section 341(a) of title 11, at
which time the United States trustee shall--
``(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 and ascertain the state
of the debtor's books and records and verify
that the debtor has filed its tax returns; and
``(C) review and monitor diligently the
debtor's activities, to identify as promptly as
possible whether the debtor will be unable to
confirm a plan; and
``(8) in 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
this Act is amended--
(1) in subsection (k), as redesignated by this
Act--
(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:
``(l)(1) Except as provided in paragraph (2) of this
subsection, the provisions of subsection (a) do 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 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 succeeded to
substantially all of the assets or business of a small
business debtor described in subparagraph (A), (B), or
(C).
``(2) This subsection 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 that
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, 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 interest of creditors and the
estate, if the movant establishes cause.
``(2) The relief provided in paragraph (1) shall not be
granted if the debtor or another party in interest objects and
establishes by a preponderance of the evidence that--
``(A) a plan with a reasonable possibility of being
confirmed will be filed within a reasonable period of
time; and
``(B) the grounds include an act or omission of the
debtor--
``(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) The court shall commence the hearing on any motion
under this subsection not later than 30 days after filing of
the motion, and shall decide the motion not later than 15 days
after commencement of the hearing, unless the movant expressly
consents to a continuance for a specific period of time or
compelling circumstances prevent the court from meeting the
time limits established by this paragraph.
``(4) For purposes of this subsection, the term `cause'
includes--
``(A) substantial or continuing loss to or
diminution of the estate;
``(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 harmful
to 1 or more creditors;
``(E) failure to comply with an order of the court;
``(F) repeated failure timely to satisfy any filing
or reporting requirement established by this title or
by any rule applicable to a case under this chapter;
``(G) failure to attend the meeting of creditors
convened under section 341(a) or an examination ordered
under rule 2004 of the Federal Rules of Bankruptcy
Procedure;
``(H) failure timely to provide information or
attend meetings reasonably requested by the United
States trustee or the bankruptcy administrator;
``(I) failure timely to pay taxes due after the
date of the order for relief or to file tax returns due
after the order for relief;
``(J) failure to file a disclosure statement, or to
file or confirm a plan, within the time fixed by this
title or by order of the court;
``(K) failure to pay any fees or charges required
under chapter 123 of title 28;
``(L) revocation of an order of confirmation under
section 1144;
``(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 on which the petition is filed.
``(5) The court shall commence the hearing on any motion
under this subsection not later than 30 days after filing of
the motion, and shall decide the motion not later than 15 days
after commencement of the hearing, unless the movant expressly
consents to a continuance for a specific period of time or
compelling circumstances prevent the court from meeting the
time limits established by this paragraph.''.
(b) Additional Grounds for Appointment of Trustee.--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.''.
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
Administrative Office of United States Trustees, and the
Director of the Administrative Office of the United States
Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that
cause small businesses, especially sole
proprietorships, to become debtors in cases
under title 11, United States Code, and that
cause certain small businesses to successfully
complete cases under chapter 11 of such title;
and
(B) how Federal laws relating to bankruptcy
may be made more effective and efficient in
assisting small businesses to remain viable;
and
(2) submit to the President pro tempore of the
Senate and the Speaker of the House of Representatives
a report summarizing that study.
SEC. 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 or after the
commencement of the case by or from the
property to each creditor whose claim
is secured by such real estate (other
than a claim secured by a judgment lien
or by an unmatured statutory lien); 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 penalty provisions,
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 a nondebtor, and the claim for remaining
sums due for the balance of the term of the lease shall
be a claim under section 502(b)(6);''.
TITLE 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--
(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 each district shall collect statistics
regarding individual debtors with primarily consumer debts
seeking relief under chapters 7, 11, and 13 of title 11. Those
statistics shall be on a standardized form 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) make the statistics available to the public;
and
``(3) not later than October 31, 2002, and annually
thereafter, prepare, and submit to Congress a report
concerning the information collected under subsection
(a) that contains an analysis of the information.
``(c) The compilation required under subsection (b) shall--
``(1) be itemized, by chapter, with respect to
title 11;
``(2) be presented in the aggregate and for each
district; and
``(3) include information concerning--
``(A) the total assets and total
liabilities of the debtors described in
subsection (a), and in each category of assets
and liabilities, as reported in the schedules
prescribed pursuant to section 2075 of this
title and filed by those debtors;
``(B) the current monthly income, average
income, and average expenses of those debtors
as reported on the schedules and statements
that each such debtor files under sections 521
and 1322 of title 11;
``(C) the aggregate amount of debt
discharged in the reporting period, determined
as the difference between the total amount of
debt and obligations of a debtor reported on
the schedules and the amount of such debt
reported in categories which are predominantly
nondischargeable;
``(D) the average period of time between
the filing of the petition and the closing of
the case;
``(E) for the reporting period--
``(i) the number of cases in which
a reaffirmation was filed; and
``(ii)(I) the total number of
reaffirmations filed;
``(II) of those cases in which a
reaffirmation was filed, the number of
cases in which the debtor was not
represented by an attorney; and
``(III) of those cases in which a
reaffirmation was filed, the number of
cases in which the reaffirmation was
approved by the court;
``(F) with respect to cases filed under
chapter 13 of title 11, for the reporting
period--
``(i)(I) the number of cases in
which a final order was entered
determining the value of property
securing a claim in an amount less than
the amount of the claim; and
``(II) the number of final orders
determining the value of property
securing a claim issued;
``(ii) the number of cases
dismissed, the number of cases
dismissed for failure to make payments
under the plan, the number of cases
refiled after dismissal, and the number
of cases in which the plan was
completed, separately itemized with
respect to the number of modifications
made before completion of the plan, if
any; and
``(iii) the number of cases in
which the debtor filed another case
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 counsel 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) 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, as the case may be, in cases under chapter 11
of title 11.
``(b) 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.
``(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.--Final reports proposed for adoption
by trustees under chapters 7, 12, and 13 of title 11 shall, in
addition to such other matters as are required by law or as the
Attorney General in the discretion of the Attorney General,
shall propose, include with respect to a case under such
title--
``(1) information about the length of time the case
was pending;
``(2) assets abandoned;
``(3) assets exempted;
``(4) receipts and disbursements of the estate;
``(5) expenses of administration, 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.--Periodic reports proposed for
adoption by trustees or debtors in possession under chapter 11
of title 11 shall, in addition to such other matters as are
required by law or as the Attorney General, in the discretion
of the Attorney General, shall propose, include--
``(1) information about the standard industry
classification, published by the Department of
Commerce, for the businesses conducted by the debtor;
``(2) length of time the case has been pending;
``(3) number of full-time employees as 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 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 at the
beginning of 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) 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 which the debtor is
required to provide under sections 521 and 1322 of
title 11, and, if applicable, section 111 of title 11,
in individual cases filed under chapter 7 or 13 of such
title. Such audits shall be in accordance with
generally accepted auditing standards and performed by
independent certified public accountants or independent
licensed public accountants, 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 for schedules of income
and expenses which reflect greater than average
variances from the statistical norm of the
district in which the schedules were filed 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) 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) make such reports as the Attorney General
directs, including the results of audits performed
under section 603(a) of the Bankruptcy Reform Act of
2000; and''; and
(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
Reform Act of 2000.
``(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. In any
case in which a material misstatement of income or expenditures
or of assets has been reported, the clerk of the bankruptcy
court shall give notice of the misstatement to the creditors in
the case.
``(B) If a material misstatement of income or expenditures
or of assets is reported, the United States trustee shall--
``(i) report the material misstatement, if
appropriate, to the United States Attorney pursuant to
section 3057 of title 18; 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
this Act, is amended in each of paragraphs (3) and (4) by
inserting ``or an auditor appointed 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) 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
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 which arise after the filing
of a petition, shall be limited to expenses incurred
under chapter 7 of this title and shall not include
expenses incurred under chapter 11 of this title)''
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 that 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.''.
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
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) The clerk of each district shall maintain a
listing 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 a governmental unit referred to in subparagraph
(A) does not designate an address and provide that address to
the clerk under that subparagraph, 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 that
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.''.
(b) Clerical Amendment.--The table of sections for chapter
5 of title 11, United States Code, is amended by inserting
after the item relating to section 510 the following:
``511. Rate of interest on tax claims.''.
SEC. 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 filing of the petition''
after ``gross receipts'';
(B) in clause (i), by striking ``for a
taxable year ending on or before the date of
filing of the petition''; and
(C) 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 (i) 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 (ii) 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 of this Act, 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 this Act, 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 described in section 523(a)(2) or for a tax or customs
duty with respect to which the debtor--
``(A) made a fraudulent return; or
``(B) willfully attempted in any manner to evade or
defeat that tax or 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 an individual debtor's tax
liability for a taxable period ending before 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 entry 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 in 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 within a reasonable
period of time after the lien attaches by the trustee
of a bankruptcy estate under section 554 of title 11;
or
``(2) payment of the tax is excused under a
specific provision of title 11.
``(c) In a case pending under chapter 7 of title 11,
payment of a tax may be deferred until final distribution is
made under section 726 of title 11, if--
``(1) the tax was not incurred by a trustee duly
appointed under chapter 7 of title 11; or
``(2) before the due date of the tax, 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 this Act, 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:
``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 this Act, 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 this Act, is amended by adding at the end 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. 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.
``(2) Upon notice and 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 at
the beginning of chapter 13 of title 11, United States
Code, is amended by inserting after the item relating
to section 1307 the following:
``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 Advisory Committee on
Bankruptcy Rules of the Judicial Conference of the United
States should, as soon as practicable after the date of
enactment of this Act, propose for adoption amended Federal
Rules of Bankruptcy Procedure which provide that--
(1) notwithstanding the provisions of Rule 3015(f),
in cases under chapter 13 of title 11, United States
Code, 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, no objection to a tax with respect to which a
return is required to be filed under section 1308 of
title 11, United 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, is amended
by inserting after paragraph (26), as added by this Act, the
following:
``(27) 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 order for relief against
an income tax liability for a taxable period that also
ended before 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, upon motion of the trustee and after notice and
hearing, grants the taxing authority adequate
protection (within the meaning of section 361) for the
secured claim of that authority in the setoff under
section 506(a);''.
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF STATE AND
LOCAL TAXES.
(a) In General.--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 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 said 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.
``(3) The estate may carry back any loss or tax attribute
to a taxable period of the debtor that ended before 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.''.
(b) Conforming Amendments.--
(1) Section 728 of title 11, United States Code, is
repealed.
(2) Section 1146 of title 11, United States Code,
is amended--
(A) by striking subsections (a) and (b);
and
(B) by redesignating subsections (c) and
(d) as subsections (a) and (b), respectively.
(3) Section 1231 of title 11, United States Code,
is amended--
(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
this Act, is amended by adding at the end the following:
``(k)(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 the due date for filing such return, the taxing authority
may request that the court enter an order converting or
dismissing the case.
``(2) 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.
``1529. Coordination of a case under this title and a foreign
proceeding.
``1530. Coordination of more than 1 foreign proceeding.
``1531. Presumption of insolvency based on recognition of a foreign main
proceeding.
``1532. Rule of payment in concurrent proceedings.
``Sec. 1501. Purpose and scope of application
``(a) The purpose of this chapter is to incorporate the
Model Law on Cross-Border Insolvency so as to provide effective
mechanisms for dealing with cases of cross-border insolvency
with the objectives of--
``(1) cooperation between--
``(A) United States courts, United States
trustees, trustees, examiners, debtors, and
debtors in possession; and
``(B) the courts and other competent
authorities of foreign countries involved in
cross-border insolvency cases;
``(2) greater legal certainty for trade and
investment;
``(3) fair and efficient administration of cross-
border insolvencies that protects the interests of 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) This chapter applies where--
``(1) assistance is sought in the United States by
a foreign court or a foreign representative in
connection with a foreign proceeding;
``(2) assistance is sought in a foreign country in
connection with a case under this title;
``(3) a foreign proceeding and a case under this
title with respect to the same debtor are taking place
concurrently; or
``(4) creditors or other interested persons in a
foreign country have an interest in requesting the
commencement of, or participating in, a case or
proceeding under this title.
``(c) This chapter does not apply to--
``(1) a proceeding concerning an entity, 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--
``(1) `debtor' means an entity that is the subject
of a foreign proceeding;
``(2) `establishment' means any place of operations
where the debtor carries out a nontransitory economic
activity;
``(3) `foreign court' means a judicial or other
authority competent to control or supervise a foreign
proceeding;
``(4) `foreign main proceeding' means a foreign
proceeding taking place in the country where the debtor
has the center of its main interests;
``(5) `foreign nonmain proceeding' means a foreign
proceeding, other than a foreign main proceeding,
taking place in a country where the debtor has an
establishment;
``(6) `trustee' includes a trustee, a debtor in
possession in a case under any chapter of this title,
or a debtor under chapter 9 of this title;
``(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 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 1515,
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.
``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 of
this title, except that the claim of a foreign creditor under
those sections shall not be given a lower priority than that of
general unsecured claims without priority solely because the
holder of such claim is a foreign creditor.
``(2)(A) Subsection (a) and paragraph (1) do not change or
codify present law as to the allowability of foreign revenue
claims or other foreign public law claims in a proceeding under
this title.
``(B) Allowance and priority as to a foreign tax claim or
other foreign public law claim shall be governed by any
applicable tax treaty of the United States, under the
conditions and circumstances specified therein.
``Sec. 1514. Notification to foreign creditors concerning a case under
this title
``(a) Whenever in a case under this title notice is to be
given to creditors generally or to any class or category of
creditors, such notice shall also be given to the known
creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States. The
court may order that appropriate steps be taken with a view to
notifying any creditor whose address is not yet known.
``(b) Such notification to creditors with foreign addresses
described in subsection (a) shall be given individually, unless
the court considers that, under the circumstances, some other
form of notification would be more appropriate. No letter or
other formality is required.
``(c) When a notification of commencement of a case is to
be given to foreign creditors, the notification shall--
``(1) indicate the time period for filing proofs of
claim and specify the place for their filing;
``(2) indicate whether secured creditors need to
file their proofs of claim; and
``(3) contain any other information required to be
included in such a notification to creditors under this
title and the orders of the court.
``(d) Any rule of procedure or order of the court as to
notice or the filing of a claim shall provide such additional
time to creditors with foreign addresses as is reasonable under
the circumstances.
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``Sec. 1515. Application for recognition
``(a) A foreign representative applies to the court for
recognition of the foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
``(b) A petition for recognition shall be accompanied by--
``(1) a certified copy of the decision commencing
the foreign proceeding and appointing the foreign
representative;
``(2) a certificate from the foreign court
affirming the existence of the foreign proceeding and
of the appointment of the foreign representative; or
``(3) in the absence of evidence referred to in
paragraphs (1) and (2), any other evidence acceptable
to the court of the existence of the foreign proceeding
and of the appointment of the foreign representative.
``(c) A petition for recognition shall also be accompanied
by a statement identifying all foreign proceedings with respect
to the debtor that are known to the foreign representative.
``(d) The documents referred to in paragraphs (1) and (2)
of subsection (b) 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 (as defined in section 101) and that the person or
body is a foreign representative (as defined in section 101),
the court is entitled to so presume.
``(b) The court is entitled to presume that documents
submitted in support of the petition for recognition are
authentic, whether or not they have been legalized.
``(c) In the absence of evidence to the contrary, the
debtor's registered office, or habitual residence in the case
of an individual, is presumed to be the center of the debtor's
main interests.
``Sec. 1517. Order granting recognition
``(a) Subject to section 1506, after notice and a hearing,
an order recognizing a foreign proceeding shall be entered if--
``(1) the 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 as defined in section
101; and
``(3) the petition meets the requirements of
section 1515.
``(b) The foreign proceeding shall be recognized--
``(1) as a foreign main proceeding if it is taking
place in the country where the debtor has the center of
its main interests; or
``(2) as a foreign nonmain proceeding if the debtor
has an establishment within the meaning of section 1502
in the foreign country where the proceeding is pending.
``(c) A petition for recognition of a foreign proceeding
shall be decided upon at the earliest possible time. Entry of
an order recognizing a foreign proceeding constitutes
recognition under this chapter.
``(d) The provisions of this subchapter do not prevent
modification or termination of recognition if it is shown that
the grounds for granting it were fully or partially lacking or
have ceased to exist, but in considering such action the court
shall give due weight to possible prejudice to parties that
have relied upon the order granting recognition. The case under
this chapter may be closed in the manner prescribed under
section 350.
``Sec. 1518. Subsequent information
``From the time of filing the petition for recognition of
the foreign proceeding, the foreign representative shall file
with the court promptly a notice of change of status
concerning--
``(1) any substantial change in the status of the
foreign proceeding or the status of the foreign
representative's appointment; and
``(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign
representative.
``Sec. 1519. Relief that may be granted upon 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) The standards, procedures, and limitations applicable
to an injunction shall apply to relief under this section.
``(f) The exercise of rights not subject to the stay
arising under section 362(a) pursuant to paragraph (6), (7),
(17), or (28) of section 362(b) or pursuant to section 362(l)
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) Upon recognition of a foreign proceeding that is a
foreign main proceeding--
``(1) sections 361 and 362 apply with respect to
the debtor and that property of the debtor that is
within the territorial jurisdiction of the United
States;
``(2) sections 363, 549, and 552 of this title
apply to a transfer of an interest of the debtor in
property that is within the territorial jurisdiction of
the United States to the same extent that the sections
would apply to property of an estate;
``(3) unless the court orders otherwise, the
foreign representative may operate the debtor's
business and may exercise the rights and powers of a
trustee under and to the extent provided by sections
363 and 552; and
``(4) section 552 applies to property of the debtor
that is within the territorial jurisdiction of the
United States.
``(b) Subsection (a) does not affect the right to commence
an individual action or proceeding in a foreign country to the
extent necessary to preserve a claim against the debtor.
``(c) Subsection (a) does not affect the right of a foreign
representative or an entity to file a petition commencing a
case under this title or the right of any party to file claims
or take other proper actions in such a case.
``Sec. 1521. Relief that may be granted upon recognition
``(a) Upon recognition of a foreign proceeding, whether
main or nonmain, where necessary to effectuate the purpose of
this chapter and to protect the assets of the debtor or the
interests of the creditors, the court may, at the request of
the foreign representative, grant any appropriate relief,
including--
``(1) staying the commencement or continuation of
an individual action or proceeding concerning the
debtor's assets, rights, obligations or liabilities to
the extent they have not been stayed under section
1520(a);
``(2) staying execution against the debtor's assets
to the extent it has not been stayed under section
1520(a);
``(3) suspending the right to transfer, encumber or
otherwise dispose of any assets of the debtor to the
extent this right has not been suspended under section
1520(a);
``(4) providing for the examination of witnesses,
the taking of evidence or the delivery of information
concerning the debtor's assets, affairs, rights,
obligations or liabilities;
``(5) entrusting the administration or realization
of all or part of the debtor's assets within the
territorial jurisdiction of the United States to the
foreign representative or another person, including an
examiner, authorized by the court;
``(6) extending relief granted under section
1519(a); and
``(7) granting any additional relief that may be
available to a trustee, except for relief available
under sections 522, 544, 545, 547, 548, 550, and
724(a).
``(b) Upon recognition of a foreign proceeding, whether
main or nonmain, the court may, at the request of the foreign
representative, entrust the distribution of all or part of the
debtor's assets located in the United States to the foreign
representative or another person, including an examiner,
authorized by the court, provided that the court is satisfied
that the interests of creditors in the United States are
sufficiently protected.
``(c) In granting relief under this section to a
representative of a foreign nonmain proceeding, the court must
be satisfied that the relief relates to assets that, under the
law of the United States, should be administered in the foreign
nonmain proceeding or concerns information required in that
proceeding.
``(d) The court may not enjoin a police or regulatory act
of a governmental unit, including a criminal action or
proceeding, under this section.
``(e) The standards, procedures, and limitations applicable
to an injunction shall apply to relief under paragraphs (1),
(2), (3), and (6) of subsection (a).
``(f) The exercise of rights not subject to the stay
arising under section 362(a) pursuant to paragraph (6), (7),
(17), or (28) of section 362(b) or pursuant to section 362(l)
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) of this title, to conditions it considers
appropriate, including the giving of security or the filing of
a bond.
``(c) The court may, at the request of the foreign
representative or an entity affected by relief granted under
section 1519 or 1521, or at its own motion, modify or terminate
such relief.
``(d) Section 1104(d) shall apply to the appointment of an
examiner under this chapter. Any examiner shall comply with the
qualification requirements imposed on a trustee by section 322.
``Sec. 1523. Actions to avoid acts detrimental to creditors
``(a) Upon recognition of a foreign proceeding, the foreign
representative has standing in a case concerning the debtor
pending under another chapter of this title to initiate actions
under sections 522, 544, 545, 547, 548, 550, 553, and 724(a).
``(b) When the foreign proceeding is a foreign nonmain
proceeding, the court must be satisfied that an action under
subsection (a) relates to assets that, under United States law,
should be administered in the foreign nonmain proceeding.
``Sec. 1524. Intervention by a foreign representative
``Upon recognition of a foreign proceeding, the foreign
representative may intervene in any proceedings in a State or
Federal court in the United States in which the debtor is a
party.
``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
``Sec. 1525. Cooperation and direct communication between the court and
foreign courts or foreign representatives
``(a) Consistent with section 1501, the court shall
cooperate to the maximum extent possible with foreign courts or
foreign representatives, either directly or through the
trustee.
``(b) The court is entitled to communicate directly with,
or to request information or assistance directly from, foreign
courts or foreign representatives, subject to the rights of
parties in interest to notice and participation.
``Sec. 1526. Cooperation and direct communication between the trustee
and foreign courts or foreign representatives
``(a) Consistent with section 1501, the trustee or other
person, including an examiner, authorized by the court, shall,
subject to the supervision of the court, cooperate to the
maximum extent possible with foreign courts or foreign
representatives.
``(b) The trustee or other person, including an examiner,
authorized by the court is entitled, subject to the supervision
of the court, to communicate directly with foreign courts or
foreign representatives.
``Sec. 1527. Forms of cooperation
``Cooperation referred to in sections 1525 and 1526 may be
implemented by any appropriate means, including--
``(1) appointment of a person or body, including an
examiner, to act at the direction of the court;
``(2) communication of information by any means
considered appropriate by the court;
``(3) coordination of the administration and
supervision of the debtor's assets and affairs;
``(4) approval or implementation of agreements
concerning the coordination of proceedings; and
``(5) coordination of concurrent proceedings
regarding the same debtor.
``SUBCHAPTER V--CONCURRENT PROCEEDINGS
``Sec. 1528. Commencement of a case under this title after recognition
of a foreign main proceeding
``After recognition of a foreign main proceeding, a case
under another chapter of this title may be commenced only if
the debtor has assets in the United States. The effects of such
case shall be restricted to the assets of the debtor that are
within the territorial jurisdiction of the United States and,
to the extent necessary to implement cooperation and
coordination under sections 1525, 1526, and 1527, to other
assets of the debtor that are within the jurisdiction of the
court under sections 541(a) of this title, and 1334(e) of title
28, to the extent that such other assets are not subject to the
jurisdiction and control of a foreign proceeding that has been
recognized under this chapter.
``Sec. 1529. Coordination of a case under this title and a foreign
proceeding
``If a foreign proceeding and a case under another chapter
of this title are taking place concurrently regarding the same
debtor, the court shall seek cooperation and coordination under
sections 1525, 1526, and 1527, and the following shall apply:
``(1) If the case in the United States is taking
place at the time the petition for recognition of the
foreign proceeding is filed--
``(A) any relief granted under sections
1519 or 1521 must be consistent with the relief
granted in the case in the United States; and
``(B) even if the foreign proceeding is
recognized as a foreign main proceeding,
section 1520 does not apply.
``(2) If a case in the United States under this
title commences after recognition, or after the filing
of the petition for recognition, of the foreign
proceeding--
``(A) any relief in effect under sections
1519 or 1521 shall be reviewed by the court and
shall be modified or terminated if inconsistent
with the case in the United States; and
``(B) if the foreign proceeding is a
foreign main proceeding, the stay and
suspension referred to in section 1520(a) shall
be modified or terminated if inconsistent with
the relief granted in the case in the United
States.
``(3) In granting, extending, or modifying relief
granted to a representative of a foreign nonmain
proceeding, the court must be satisfied that the relief
relates to assets that, under the 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. Coordination of more than 1 foreign proceeding
``In matters referred to in section 1501, with respect to
more than 1 foreign proceeding regarding the debtor, the court
shall seek cooperation and coordination under sections 1525,
1526, and 1527, and the following shall apply:
``(1) Any relief granted under section 1519 or 1521
to a representative of a foreign nonmain proceeding
after recognition of a foreign main proceeding must be
consistent with the foreign main proceeding.
``(2) If a foreign main proceeding is recognized
after recognition, or after the filing of a petition
for recognition, of a foreign nonmain proceeding, any
relief in effect under section 1519 or 1521 shall be
reviewed by the court and shall be modified or
terminated if inconsistent with the foreign main
proceeding.
``(3) If, after recognition of a foreign nonmain
proceeding, another foreign nonmain proceeding is
recognized, the court shall grant, modify, or terminate
relief for the purpose of facilitating coordination of
the proceedings.
``Sec. 1531. Presumption of insolvency based on recognition of a
foreign main proceeding
``In the absence of evidence to the contrary, recognition
of a foreign main proceeding is, for the purpose of commencing
a proceeding under section 303, proof that the debtor is
generally not paying its debts as such debts become due.
``Sec. 1532. Rule of payment in concurrent proceedings
``Without prejudice to secured claims or rights in rem, a
creditor who has received payment with respect to its claim in
a foreign proceeding pursuant to a law relating to insolvency
may not receive a payment for the same claim in a case under
any other chapter of this title regarding the debtor, so long
as the payment to other creditors of the same class is
proportionately less than the payment the creditor has already
received.''.
(b) Clerical Amendment.--The table of chapters for title
11, United States Code, is amended by inserting after the item
relating to chapter 13 the following:
``15. Ancillary and Other Cross-Border Cases.....................1501''.
SEC. 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(l), 555 through 557, and 559 through 562 apply
in a case under chapter 15''; and
(2) by adding at the end the following:
``(j) Chapter 15 applies only in a case under such chapter,
except that--
``(1) sections 1505, 1513, and 1514 apply in all
cases under this title; and
``(2) section 1509 applies whether or not a case
under this title is pending.''.
(b) Definitions.--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 the foreign proceeding;''.
(c) Amendments to Title 28, United States Code.--
(1) Procedures.--Section 157(b)(2) of title 28,
United States Code, is amended--
(A) in subparagraph (N), by striking
``and'' at the end;
(B) in subparagraph (O), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(P) recognition of foreign proceedings and other
matters under chapter 15 of title 11.''.
(2) Bankruptcy cases and proceedings.--Section
1334(c) of title 28, United States Code, is amended by
striking ``Nothing in'' and inserting ``Except with
respect to a case under chapter 15 of title 11, nothing
in''.
(3) Duties of trustees.--Section 586(a)(3) of title
28, United States Code, is amended by striking ``or
13'' and inserting ``13, or 15,''.
(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 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.--
(1) Section 109(b)(3) of title 11, United States
Code, is amended to read as follows:
``(3)(A) a foreign insurance company, engaged in
such business in the United States; or
``(B) a foreign bank, savings bank, cooperative
bank, savings and loan association, building and loan
association, or credit union, that has a branch or
agency (as defined in section 1(b) of the International
Banking Act of 1978 (12 U.S.C. 3101) in the United
States.''.
(2) Section 303(k) of title 11, United States Code,
is repealed.
(3)(A) Section 304 of title 11, United States Code,
is repealed.
(B) The table of sections at the beginning of
chapter 3 of title 11, United States Code, is amended
by striking the item relating to section 304.
(C) Section 306 of title 11, United States Code, is
amended by striking ``, 304,'' each place it appears.
(4) Section 305(a)(2) of title 11, United States
Code, is amended to read as follows:
``(2)(A) a petition under section 1515 of this
title for recognition of a foreign proceeding has been
granted; and
``(B) the purposes of chapter 15 of this title
would be best served by such dismissal or
suspension.''.
(5) Section 508 of title 11, United States Code, is
amended--
(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.--Section
11(e)(8)(D)(i) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(i)) is amended by inserting ``, resolution, or
order'' after ``any similar agreement that the Corporation
determines by regulation''.
(b) Definition of Securities Contract.--Section
11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(ii)) is amended to read as follows:
``(ii) Securities contract.--The
term `securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, 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, loan, interest, group
or index, or option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, resolution, or
order to include any such
agreement within the meaning of
such term;
``(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
``(IV) means the guarantee
by or to any securities
clearing agency of any
settlement of cash, securities,
certificates of deposit,
mortgage loans or interests
therein, group or index of
securities, certificates of
deposit, or mortgage loans or
interests therein (including
any interest therein or based
on the value thereof) or option
on any of the foregoing,
including any option to
purchase or sell any such
security, certificate of
deposit, loan, interest, group
or index or option;
``(V) means any margin
loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any
combination of the agreements
or transactions referred to in
this clause;
``(VIII) means any option
to enter into any agreement or
transaction referred to in this
clause;
``(IX) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
or (VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
securities contract under this
clause, except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII);
and
``(X) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause.''.
(c) Definition of Commodity Contract.--Section
11(e)(8)(D)(iii) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(iii)) is amended to read as follows:
``(iii) Commodity contract.--The
term `commodity contract' means--
``(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
``(II) with respect to a
foreign futures commission
merchant, a foreign future;
``(III) with respect to a
leverage transaction merchant,
a leverage transaction;
``(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
``(V) with respect to a
commodity options dealer, a
commodity option;
``(VI) any other agreement
or transaction that is similar
to any agreement or transaction
referred to in this clause;
``(VII) any combination of
the agreements or transactions
referred to in this clause;
``(VIII) any option to
enter into any agreement or
transaction referred to in this
clause;
``(IX) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is 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.''.
(d) Definition of Forward Contract.--Section
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(iv)) is amended to read as follows:
``(iv) Forward contract.--The term
`forward contract' means--
``(I) a contract (other
than a commodity contract) for
the purchase, sale, or transfer
of a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date more than
2 days after the date the
contract is entered into,
including, 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).''.
(e) Definition of Repurchase Agreement.--Section
11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(v)) is amended to read as follows:
``(v) Repurchase agreement.--The
term `repurchase agreement' (which
definition also applies to a reverse
repurchase agreement)--
``(I) 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, loans,
or interests with a
simultaneous agreement by such
transferee to transfer to the
transferor thereof certificates
of deposit, eligible bankers'
acceptances, securities, loans,
or interests as described
above, at a date certain not
later than 1 year after such
transfers or on demand, against
the transfer of funds, or any
other similar agreement;
``(II) does not include any
repurchase obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, resolution, or
order to include any such
participation within the
meaning of such term;
``(III) means any
combination of agreements or
transactions referred to in
subclauses (I) and (IV);
``(IV) means any option to
enter into any agreement or
transaction referred to in
subclause (I) or (III);
``(V) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), or (IV), together with
all supplements to any such
master agreement, without
regard to whether the master
agreement provides for an
agreement or transaction that
is not a repurchase agreement
under this clause, except that
the master agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
``(VI) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V).
For purposes of this clause, the term
`qualified foreign government security'
means a security that is a direct
obligation of, or that is fully
guaranteed by, the central government
of a member of the Organization for
Economic Cooperation and Development
(as determined by regulation or order
adopted by the appropriate Federal
banking authority).''.
(f) Definition of Swap Agreement.--Section 11(e)(8)(D)(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 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 similar to any
other agreement or transaction
referred to in this clause that
is presently, or in the future
becomes, regularly entered into
in the swap market (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, or
option on one or more rates,
currencies, commodities, equity
securities or other equity
instruments, debt securities or
other debt instruments, or
economic indices or measures of
economic risk or value;
``(III) any combination of
agreements or transactions
referred to in this clause;
``(IV) any option to enter
into any agreement or
transaction referred to in this
clause;
``(V) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III), or
(IV), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
contains an agreement or
transaction that is not a swap
agreement under this clause,
except that the master
agreement shall be considered
to be a swap agreement under
this clause only with respect
to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
or (IV); and
``(VI) any security
agreement or arrangement or
other credit enhancement
related to any agreements or
transactions referred to in
subparagraph (I), (II), (III),
(IV), or (V).
Such term is applicable for purposes of
this title only and shall not be
construed or applied so as to challenge
or affect the characterization,
definition, or treatment of any swap
agreement under any other statute,
regulation, or rule, including the
Securities Act of 1933, the Securities
Exchange Act of 1934, the Public
Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, the
Securities Investor Protection Act of
1970, the Commodity Exchange Act, and
the regulations promulgated by the
Securities and Exchange Commission or
the Commodity Futures Trading
Commission.''.
(g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of
the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(viii)) is amended to read as follows:
``(viii) Transfer.--The term
`transfer' means every mode, direct or
indirect, absolute or conditional,
voluntary or involuntary, of disposing
of or parting with property or with an
interest in property, including
retention of title as a security
interest and foreclosure of the
depository institutions's equity of
redemption.''.
(h) Treatment of Qualified Financial Contracts.--Section
11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)) is amended--
(1) in subparagraph (A)--
(A) by striking ``paragraph (10)'' and
inserting ``paragraphs (9) and (10)'';
(B) in clause (i), by striking ``to cause
the termination or liquidation'' and inserting
``such person has to cause the termination,
liquidation, or acceleration''; and
(C) 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);''; and
(2) 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);''.
(i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is
amended by inserting ``section 5242 of the Revised Statutes of
the United States (12 U.S.C. 91) or any other Federal or State
law relating to the avoidance of preferential or fraudulent
transfers,'' before ``the Corporation''.
SEC. 902. AUTHORITY OF THE CORPORATION WITH RESPECT TO FAILED AND
FAILING INSTITUTIONS.
(a) In General.--Section 11(e)(8) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(1) in subparagraph (E), by striking ``other than
paragraph (12) of this subsection, subsection (d)(9)''
and inserting ``other than subsections (d)(9) and
(e)(10)''; and
(2) by adding at the end the following new
subparagraphs:
``(F) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
court or agency to limit or delay, in any
manner, the right or power of the Corporation
to transfer any qualified financial contract in
accordance with paragraphs (9) and (10) of this
subsection or to disaffirm or repudiate any
such contract in accordance with subsection
(e)(1) of this section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of an
insured depository institution in
default.
``(ii) Walkaway clause defined.--
For purposes of this subparagraph, the
term `walkaway clause' means a
provision in a qualified financial
contract that, after calculation of a
value of a party's position or an
amount due to or from 1 of the parties
in accordance with its terms upon
termination, liquidation, or
acceleration of the qualified financial
contract, either does not create a
payment obligation of a party or
extinguishes a payment obligation of a
party in whole or in part solely
because of such party's status as a
nondefaulting party.''.
(b) Technical and Conforming Amendment.--Section
11(e)(12)(A) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(12)(A)) is amended by inserting ``or the exercise of
rights or powers by'' after ``the appointment of''.
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL
CONTRACTS.
(a) Transfers of Qualified Financial Contracts to Financial
Institutions.--Section 11(e)(9) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(9)) is amended to read as
follows:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer
of assets or liabilities of a depository
institution in default which includes any
qualified financial contract, the conservator
or receiver for such depository institution
shall either--
``(i) transfer to 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
``(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 contract
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 subject to the rules of a clearing
organization, the clearing organization shall
not be required to accept the transferee as a
member by virtue of the transfer.
``(D) Definition.--For purposes of this
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.''.
(b) Notice to Qualified Financial Contract
Counterparties.--Section 11(e)(10)(A) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended 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.''.
(c) Rights Against Receiver and Treatment of Bridge
Banks.--Section 11(e)(10) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(10)) is amended--
(1) by redesignating subparagraph (B) as
subparagraph (D); and
(2) by inserting after subparagraph (A) the
following new subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who
is a party to a qualified financial
contract with an insured depository
institution may not exercise any right
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
sections 403 or 404 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991, solely by
reason of or incidental to the
appointment of a conservator for the
depository institution (or the
insolvency or financial condition of
the depository institution for which
the conservator has been appointed).
``(iii) Notice.--For purposes of
this 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.''.
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF
QUALIFIED FINANCIAL CONTRACTS.
Section 11(e) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)) is amended--
(1) by redesignating paragraphs (11) through (15)
as paragraphs (12) through (16), respectively; and
(2) by inserting after paragraph (10) the following
new paragraph:
``(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of a conservator or
receiver with respect to any qualified financial
contract to which an insured depository institution is
a party, the conservator or receiver for such
institution shall either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate
of such person; and
``(ii) the depository institution
in default; or
``(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).''.
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as
follows:
``(vii) Treatment of master
agreement as 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.''.
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 ``or that has been granted an
exemption under section 4(c)(1) of the
Commodity Exchange 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) (as
redesignated) to read as follows:
``(C) a branch or agency of a foreign bank,
a foreign bank and any branch or agency of the
foreign bank, or the foreign bank that
established the branch or agency, as those
terms are defined in section 1(b) of the
International Banking Act of 1978;'';
(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 closeout 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:
``(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
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 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
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
and section 5(b)(2) of the Securities Investor Protection Act
of 1970).''.
(d) Enforceability of Contracts With Uninsured National
Banks and Uninsured Federal Branches and Agencies.--The Federal
Deposit Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4401 et seq.) is amended--
(1) by redesignating section 407 as section 408;
and
(2) by inserting after section 406 the following
new section:
``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND
UNINSURED FEDERAL BRANCHES AND AGENCIES.
``(a) In General.--Notwithstanding any other provision of
law, paragraphs (8), (9), (10), and (11) of section 11(e) of
the Federal Deposit Insurance Act shall apply to an uninsured
national bank or uninsured Federal branch or Federal agency,
except that for such purpose--
``(1) any reference to the `Corporation as
receiver' or `the receiver or the Corporation' shall
refer to the receiver of an uninsured national bank or
uninsured Federal branch or Federal agency appointed by
the Comptroller of the Currency;
``(2) any reference to the `Corporation' (other
than in section 11(e)(8)(D) of such Act), the
`Corporation, whether acting as such or as conservator
or receiver', a `receiver', or a `conservator' shall
refer to the receiver or conservator of an uninsured
national bank or uninsured Federal branch or Federal
agency appointed by the Comptroller of the Currency;
and
``(3) any reference to an `insured depository
institution' or `depository institution' shall refer to
an uninsured national bank or an uninsured Federal
branch or Federal agency.
``(b) Liability.--The liability of a receiver or
conservator of an uninsured national bank or uninsured Federal
branch or agency shall be determined in the same manner and
subject to the same limitations that apply to receivers and
conservators of insured depository institutions under section
11(e) of the Federal Deposit Insurance Act.
``(c) Regulatory Authority.--
``(1) In general.--The Comptroller of the Currency,
in consultation with the Federal Deposit Insurance
Corporation, may promulgate regulations to implement
this section.
``(2) Specific requirement.--In promulgating
regulations to implement this section, the Comptroller
of the Currency shall ensure that the regulations
generally are consistent with the regulations and
policies of the Federal Deposit Insurance Corporation
adopted pursuant to the Federal Deposit Insurance Act.
``(d) Definitions.--For purposes of this section, the terms
`Federal branch', `Federal agency', and `foreign bank' have the
same meanings as in section 1(b) of the International Banking
Act of 1978.''.
SEC. 907. BANKRUPTCY CODE AMENDMENTS.
(a) Definitions of Forward Contract, Repurchase Agreement,
Securities Clearing Agency, Swap Agreement, Commodity Contract,
and Securities Contract.--Title 11, United States Code, is
amended--
(1) in section 101--
(A) in paragraph (25)--
(i) by striking ``means a
contract'' and inserting ``means--
``(A) a contract'';
(ii) by striking ``, or any
combination thereof or option
thereon;'' and inserting ``, or any
other similar agreement;''; and
(iii) by adding at the end the
following:
``(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
``(C) any option to enter into an agreement
or transaction referred to in subparagraph (A)
or (B);
``(D) a master agreement that provides for
an agreement or transaction referred to in
subparagraph (A), (B), or (C), together with
all supplements to any such master agreement,
without regard to whether such master agreement
provides for an agreement or transaction that
is not a forward contract under this paragraph,
except that such master agreement shall be
considered to be a forward contract under this
paragraph only with respect to each agreement
or transaction under such master agreement that
is referred to in subparagraph (A), (B), or
(C); or
``(E) any security agreement or
arrangement, or other credit enhancement
related to any agreement or transaction
referred to in subparagraph (A), (B), (C), or
(D), but not to exceed the actual value of such
contract on the date of the filing of the
petition;'';
(B) in paragraph (46), by striking ``on any
day during the period beginning 90 days before
the date of'' and 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,
loans, or interests, with a
simultaneous agreement by such
transferee to transfer to the
transferor thereof certificates of
deposit, eligible bankers' acceptance,
securities, loans, or interests of the
kind described 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), but not to exceed the actual
value of such contract on the date of
the filing of the petition; and
``(B) does not include a repurchase
obligation under a participation in a
commercial mortgage loan;'';
(D) in paragraph (48), by inserting ``, or
exempt from such registration under such
section pursuant to an order of the Securities
and Exchange Commission,'' after ``1934''; and
(E) by amending paragraph (53B) to read as
follows:
``(53B) `swap agreement'--
``(A) means--
``(i) any agreement, including the
terms and conditions incorporated by
reference in such agreement, which is
an interest rate swap, option, future,
or forward agreement, including--
``(I) 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
an equity swap, option, future,
or forward agreement;
``(V) a debt index or a
debt swap, option, future, or
forward agreement;
``(VI) a credit spread or a
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
similar to any other agreement or
transaction referred to in this
paragraph that--
``(I) is presently, or in
the future becomes, regularly
entered into in the swap market
(including terms and conditions
incorporated by reference
therein); and
``(II) is a forward, swap,
future, or option on one or
more rates, currencies,
commodities, equity securities,
or other equity instruments,
debt securities or other debt
instruments, or economic
indices or measures of economic
risk or value;
``(iii) any combination of
agreements or transactions referred to
in this 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 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), but do not to exceed the
actual value of such contract on the
date of the filing of the petition; and
``(B) is applicable for purposes of this
title only, and shall not be construed or
applied so as to challenge or affect the
characterization, definition, or treatment of
any swap agreement under any other statute,
regulation, or rule, including the Securities
Act of 1933, the Securities Exchange Act of
1934, the Public Utility Holding Company Act of
1935, the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Investor
Protection Act of 1970, the Commodity Exchange
Act, and the regulations prescribed by the
Securities and Exchange Commission or the
Commodity Futures Trading Commission.'';
(2) 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, loan, interest,
group or index, or option;
``(ii) any option entered into on a
national securities exchange relating
to foreign currencies;
``(iii) the guarantee by or to any
securities clearing agency of a
settlement of cash, securities,
certificates of deposit, mortgage loans
or interests therein, group or index of
securities, or mortgage loans or
interests therein (including any
interest therein or based on the value
thereof), or option on any of the
foregoing, including an option to
purchase or sell any such security,
certificate of deposit, loan, interest,
group or index, or option;
``(iv) any margin loan;
``(v) any other agreement or
transaction that is similar to an
agreement or transaction referred to in
this 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, but not to exceed the
actual value of such contract on the
date of the filing of the petition; and
``(B) does not include any purchase, sale,
or repurchase obligation under a participation
in a commercial mortgage loan.''; and
(3) in section 761(4)--
(A) by striking ``or'' at the end of
subparagraph (D); and
(B) by adding at the end the following:
``(F) any other agreement or transaction
that is similar to an agreement or transaction
referred to in this paragraph;
``(G) any combination of the agreements or
transactions referred to in this paragraph;
``(H) any option to enter into an agreement
or transaction referred to in this paragraph;
``(I) a master agreement that provides for
an agreement or transaction referred to in
subparagraph (A), (B), (C), (D), (E), (F), (G),
or (H), together with all supplements to such
master 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
``(J) any security agreement or arrangement
or other credit enhancement related to any
agreement or transaction referred to in this
paragraph, but not to exceed the actual value
of such contract on the date of the filing of
the petition;''.
(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, or
receiver or conservator for such entity and,
when any such Federal reserve bank, receiver,
conservator or entity is acting as agent or
custodian for a customer in connection with a
securities contract, as defined in section 741,
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 an entity
that, at the time it enters into a securities contract,
commodity contract, or forward contract, or at the time
of the filing of the petition, has 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;''; 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 or in a commodity, as
defined or 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
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 closeout, 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; 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 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 this Act, is amended--
(A) in paragraph (6), by inserting ``,
pledged to, and under the control of,'' after
``held by'';
(B) in paragraph (7), by inserting ``,
pledged to, and under the control of,'' after
``held by'';
(C) by striking paragraph (17) and
inserting the following:
``(17) under subsection (a), of the setoff by a
swap 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 under or in connection with any
swap agreement or against cash, securities, or other
property held by, pledged to, and under the control of,
or due from such swap participant to margin, guarantee,
secure, or settle any swap agreement;''; and
(D) by inserting after paragraph (27), as
added by this Act, the following new paragraph:
``(28) 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 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, and under the control of,
or due from such master netting agreement participant
to margin, guarantee, secure, or settle such agreements
or any contract or agreement subject to such
agreements, to the extent 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; or''.
(2) Limitation.--Section 362 of title 11, United
States Code, as amended by this Act, is amended by
adding at the end the following:
``(l) Limitation.--The exercise of rights not subject to
the stay arising under subsection (a) pursuant to paragraph
(6), (7), (17), or (28) of subsection (b) shall not be stayed
by any order of a court or administrative agency in any
proceeding under this title.''.
(e) Limitation of Avoidance Powers Under Master Netting
Agreement.--Section 546 of title 11, United States Code, as
amended by this Act, is amended--
(1) in subsection (g) (as added by section 103 of
Public Law 101-311)--
(A) by striking ``under a swap agreement'';
and
(B) by striking ``in connection with a swap
agreement'' and inserting ``under or in
connection with any swap agreement''; and
(2) by adding at the end the following:
``(k) 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:
``Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract'';
and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(h) Termination or Acceleration of Commodities or Forward
Contracts.--Section 556 of title 11, United States Code, is
amended--
(1) by amending the section heading to read as
follows:
``Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract'';
and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(i) Termination or Acceleration of Repurchase Agreements.--
Section 559 of title 11, United States Code, is amended--
(1) by amending the section heading to read as
follows:
``Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement'';
and
(2) in the first sentence, by striking
``liquidation'' and inserting ``liquidation,
termination, or acceleration''.
(j) Liquidation, Termination, or Acceleration of Swap
Agreements.--Section 560 of title 11, United States Code, is
amended--
(1) by amending the section heading to read as
follows:
``Sec. 560. Contractual right to liquidate, terminate, or accelerate a
swap agreement'';
(2) in the first sentence, by striking
``termination of a swap agreement'' and inserting
``liquidation, termination, or acceleration of one or
more swap agreements''; and
(3) by striking ``in connection with any swap
agreement'' and inserting ``in connection with the
termination, liquidation, or acceleration of one or
more swap agreements''.
(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
``(a) In General.--Subject to subsection (b), the exercise
of any contractual right, because of a condition of the kind
specified in section 365(e)(1), to cause the termination,
liquidation, or acceleration of or to offset or net termination
values, payment amounts, or other transfer obligations arising
under or in connection with 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) Exception.--
``(1) In general.--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) Commodity brokers.--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 against
any claim arising under, or in connection 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 that subchapter IV; and
``(B) another commodity broker may not net
or offset an obligation to the debtor arising
under, or in connection with, a commodity
contract entered into or held on behalf of a
customer of the debtor against any claim
arising under, or in connection with, other
instruments, contracts, or agreements listed in
subsection (a).
``(3) Construction.--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 that has
been approved by the Commodity Futures Trading
Commission or submitted to the Commodity
Futures Trading Commission under section
5(a)(12)(A) of the Commodity Exchange Act and
has been approved; 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) Definition.--As used in this section, the term
`contractual right' includes a right set forth in a rule or
bylaw of a national securities exchange, a national securities
association, or a securities clearing agency, a right set forth
in a bylaw of a clearing organization or contract market or in
a resolution of the governing board thereof, and a right,
whether or not evidenced in writing, arising under common law,
under law merchant, or by reason of normal business practice.
``(d) Cases Ancillary to Foreign Proceedings.--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 of this title, so that enforcement of
contractual provisions of such contracts and agreements in
accordance with their terms will not be stayed or otherwise
limited by operation of any provision of this title or by order
of a court in any case under this title, and to limit avoidance
powers to the same extent as in a proceeding under chapter 7 or
11 of this title (such enforcement not to be limited based on
the presence or absence of assets of the debtor in the United
States).''.
(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.
(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, securities clearing agencies, swap
participants, repo participants, and master netting
agreement participants
``Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commodity
broker, stockbroker, financial institution, securities clearing
agency, swap participant, repo participant, financial
participant, or master netting agreement participant under this
title shall not affect the priority of any unsecured claim it
may have after the exercise of such rights.''.
(n) Setoff.--Section 553 of title 11, United States Code,
is amended--
(1) 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)(28), 555, 556, 559, 560, or 561 of
this title)''; and
(2) in subsection (b)(1), by striking
``362(b)(14),'' and inserting ``362(b)(17), 362(b)(28),
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,'';
(2) in section 546(e), by inserting ``financial
participant,'' after ``financial institution,'';
(3) in section 548(d)(2)(B), by inserting
``financial participant,'' after ``financial
institution,'';
(4) in section 555--
(A) by inserting ``financial participant,''
after ``financial institution,''; and
(B) by inserting before the period at the
end ``, a right set forth in a bylaw of a
clearing organization or contract market or in
a resolution of the governing board thereof,
and a right, whether or not in writing, arising
under common law, under law merchant, or by
reason of normal business practice''; and
(5) in section 556, by inserting ``, financial
participant,'' after ``commodity broker''.
(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--
(A) by inserting after the item relating to
section 766 the following:
``767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions,
securities clearing agencies, swap participants, repo
participants, and master netting agreement participants.'';
and
(B) by inserting after the item relating to
section 752 the following:
``753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, securities
clearing agencies, swap participants, repo participants, and
master netting agreement participants.''.
SEC. 908. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)) is amended by adding at the end the
following new subparagraph:
``(H) Recordkeeping requirements.--The
Corporation, in consultation with the
appropriate Federal banking agencies, may
prescribe regulations requiring more detailed
recordkeeping with respect to qualified
financial contracts (including market
valuations) by insured depository
institutions.''.
SEC. 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),
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
this Act, the following:
``Sec. 562. Damage measure in connection with swap agreements,
securities contracts, forward contracts, commodity
contracts, repurchase agreements, or master netting
agreements
``If the trustee rejects a swap agreement, securities
contract (as defined in section 741), 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 of such liquidation, termination, or
acceleration.''; and
(2) in the table of sections for chapter 5, by
inserting after the item relating to section 561 (as
added by this Act) the following:
``562. Damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase
agreements, or master netting agreements.''.
(b) Claims Arising From Rejection.--Section 502(g) of title
11, United States Code, is amended--
(1) by inserting ``(1)'' after ``(g)''; and
(2) by adding at the end the following:
``(2) A claim for damages calculated in accordance with
section 562 of this title shall be allowed under subsection
(a), (b), or (c), or disallowed under subsection (d) or (e), as
if such claim had arisen before the date of the filing of the
petition.''.
SEC. 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 and 741 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.''.
SEC. 912. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is amended--
(1) in subsection (b), by inserting after paragraph
(7), as added by this Act, the following:
``(8) any eligible asset (or proceeds thereof), to
the extent that such eligible asset was transferred by
the debtor, before the date of commencement of the
case, to an eligible entity in connection with an
asset-backed securitization, except to the extent such
asset (or proceeds or value thereof) may be recovered
by the trustee under section 550 by virtue of avoidance
under section 548(a);''; and
(2) by adding at the end the following new
subsection:
``(f) For purposes of this section--
``(1) the term `asset-backed securitization' means
a transaction in which eligible assets transferred to
an eligible entity are used as the source of payment on
securities, including, without limitation, all
securities issued by governmental units, at least one
class or tranche of which was rated investment grade by
one or more nationally recognized securities rating
organizations, when the securities were initially
issued by an issuer;
``(2) the term `eligible asset' means--
``(A) financial assets (including interests
therein and proceeds thereof), either fixed or
revolving, whether or not the same are in
existence as of the date of the transfer,
including residential and commercial mortgage
loans, consumer receivables, trade receivables,
assets of governmental units, including payment
obligations relating to taxes, receipts, fines,
tickets, and other sources of revenue, and
lease receivables, that, by their terms,
convert into cash within a finite time period,
plus any residual interest in property subject
to receivables included in such financial
assets plus any rights or other assets designed
to assure the servicing or timely distribution
of proceeds to security holders;
``(B) cash; and
``(C) securities, including without
limitation, all securities issued by
governmental units;
``(3) the term `eligible entity' means--
``(A) an issuer; or
``(B) a trust, corporation, partnership,
governmental unit, limited liability company
(including a single member limited liability
company), or other entity engaged exclusively
in the business of acquiring and transferring
eligible assets directly or indirectly to an
issuer and taking actions ancillary thereto;
``(4) the term `issuer' means a trust, corporation,
partnership, or other entity engaged exclusively in the
business of acquiring and holding eligible assets,
issuing securities backed by eligible assets, and
taking actions ancillary thereto; and
``(5) the term `transferred' means the debtor,
under a written agreement, represented and warranted
that eligible assets were sold, contributed, or
otherwise conveyed with the intention of removing them
from the estate of the debtor pursuant to subsection
(b)(8) (whether or not reference is made to this title
or any section hereof), irrespective and without
limitation of--
``(A) whether the debtor directly or
indirectly obtained or held an interest in the
issuer or in any securities issued by the
issuer;
``(B) whether the debtor had an obligation
to repurchase or to service or supervise the
servicing of all or any portion of such
eligible assets; or
``(C) the characterization of such sale,
contribution, or other conveyance for tax,
accounting, regulatory reporting, or other
purposes.''.
SEC. 913. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--This title shall take effect on the
date of enactment of this Act.
(b) Application of Amendments.--The amendments made by this
title shall apply with respect to cases commenced or
appointments made under any Federal or State law after the date
of enactment of this Act, but shall not apply with respect to
cases commenced or appointments made under any Federal or State
law before the date of enactment of this Act.
TITLE X--PROTECTION OF FAMILY FARMERS
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.
(a) 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), and
amended by this Act, is reenacted.
(2) Effective date.--Subsection (a) shall take
effect on July 1, 2000.
(b) 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, is amended
by adding at the end the following:
``(4) The dollar amount in section 101(18) shall be
adjusted at the same times and in the same manner as the dollar
amounts in paragraph (1) of this subsection, beginning with the
adjustment to be made on April 1, 2001.''.
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.
(a) Contents of Plan.--Section 1222(a)(2) of title 11,
United States Code, is amended to read as follows:
``(2) provide for the full payment, in deferred
cash payments, of all claims entitled to priority under
section 507, unless--
``(A) the claim is a claim owed to a
governmental unit that arises as a result of
the sale, transfer, exchange, or other
disposition of any farm asset used in the
debtor's farming operation, in which case the
claim shall be treated as an unsecured claim
that is not entitled to priority under section
507, but the debt shall be treated in such
manner only if the debtor receives a discharge;
or
``(B) the holder of a particular claim
agrees to a different treatment of that
claim;''.
(b) Special Notice Provisions.--Section 1231(b) of title
11, United States Code, as so designated by this Act, is
amended by striking ``a State or local governmental unit'' and
inserting ``any governmental unit''.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) Health Care Business Defined.--Section 101 of title 11,
United States Code, is amended--
(1) by redesignating paragraph (27A), as added by
this Act, 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 person 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) 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:
``Sec. 351. 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) 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 last 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 chapter
3 of title 11, United States Code, is amended by inserting
after the item relating to section 350 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 this Act, 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 that term is 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--
``(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;
``(9) 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
related to a failure to operate or penalty provisions,
for the period of 2 years following the later of the
rejection date or date of actual turnover of the
premises, without reduction or setoff for any reason
whatsoever except for sums actually received or to be
received from a nondebtor, and the claim for remaining
sums due for the balance of the term of the lease shall
be a claim under section 502(b)(6); and''.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT ADVOCATE.
(a) In General.--
(1) Appointment of ombudsman.--Subchapter II of
chapter 3 of title 11, United States Code, is amended
by inserting after section 331 the following:
``Sec. 332. Appointment of ombudsman
``(a) In General.--
``(1) Authority to appoint.--Not later than 30 days
after a case is commenced by a health care business
under chapter 7, 9, or 11, the court shall order the
appointment of an ombudsman to monitor the quality of
patient care to represent the interests of the patients
of the health care business, unless the court finds
that the appointment of the ombudsman is not necessary
for the protection of patients under the specific facts
of the case.
``(2) Qualifications.--If the court orders the
appointment of an ombudsman, the United States trustee
shall appoint 1 disinterested person, other than the
United States trustee, to serve as an ombudsman,
including a person who is serving as a State Long-Term
Care Ombudsman appointed under title III or VII of the
Older Americans Act of 1965 (42 U.S.C. 3021 et seq.,
3058 et seq.).
``(b) Duties.--An ombudsman appointed under subsection (a)
shall--
``(1) monitor the quality of patient care, to the
extent necessary under the circumstances, including
interviewing patients and physicians;
``(2) not later than 60 days after the date of
appointment, and not less frequently than every 60 days
thereafter, report to the court, at a hearing or in
writing, regarding the quality of patient care at the
health care business involved; and
``(3) if the ombudsman determines that the quality
of patient care is declining significantly or is
otherwise being materially compromised, notify the
court by motion or written report, with notice to
appropriate parties in interest, immediately upon
making that determination.
``(c) Confidentiality.--An ombudsman shall maintain any
information obtained by the ombudsman under this section that
relates to patients (including information relating to patient
records) as confidential information. The ombudsman may not
review confidential patient records, unless the court provides
prior approval, with restrictions on the ombudsman to protect
the confidentiality of patient records.''.
(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 331 the
following:
``332. Appointment of ombudsman.''.
(b) Compensation of Ombudsman.--Section 330(a)(1) of title
11, United States Code, is amended--
(1) in the matter proceeding subparagraph (A), by
inserting ``an ombudsman appointed under section 331,
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 this Act, is amended by adding at the end
the following:
``(11) 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, is amended by striking ``sections 704(2),
704(5), 704(7), 704(8), and 704(9)'' and inserting ``paragraphs
(2), (5), (7), (8), (9), and (11) of section 704(a)''.
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 (28), as added by this Act, the
following:
``(29) 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 (42 U.S.C.
1320a-7b(f)) pursuant to title XI of such Act (42
U.S.C. 1301 et seq.) or title XVIII of such Act (42
U.S.C. 1395 et seq.).''.
TITLE XII--TECHNICAL AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by
this Act, is amended--
(1) by striking ``In this title--'' and inserting
``In this title the following definitions shall
apply:'';
(2) in each paragraph, by inserting ``The term''
after the paragraph designation;
(3) in paragraph (35)(B), by striking ``paragraphs
(21B) and (33)(A)'' and inserting ``paragraphs (23) and
(35)'';
(4) in each of paragraphs (35A) and (38), by
striking ``; and'' at the end and inserting a period;
(5) in paragraph (51B)--
(A) by inserting ``who is not a family
farmer'' after ``debtor'' the first place it
appears; and
(B) by striking ``thereto having
aggregate'' and all that follows through the
end of the paragraph;
(6) by 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.'';
and
(7) in each of paragraphs (1) through (35), in each
of paragraphs (36) and (37), 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 of title 11, United States Code, as amended by
section 322 of this Act, is amended by inserting ``522(f)(3),''
after ``522(d),'' each place it appears.
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
(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
designated by this Act, 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
this Act, 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)(14);
(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 this Act, is amended--
(1) in subsection (b), by striking ``subsection
(c)'' and inserting ``subsections (c) and (i)''; and
(2) by adding at the end the following:
``(i) If the trustee avoids under subsection (b) a transfer
made between 90 days and 1 year before the date of the filing
of the petition, by the debtor to an entity that is not an
insider for the benefit of a creditor that is an insider, such
transfer shall be considered to be avoided under this section
only with respect to the creditor that is an insider.''.
(b) Applicability.--The amendments made by this section
shall apply to any case that is pending or commenced on or
after the date of enactment of this Act.
SEC. 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, as amended
by this Act, 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. DISCHARGE UNDER CHAPTER 12.
Subsections (a) and (c) of section 1228 of title 11, United
States Code, are amended by striking ``1222(b)(10)'' each place
it appears and inserting ``1222(b)(9)''.
SEC. 1220. 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. 1221. 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. 1222. 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--
``(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 for Reorganization.--Section
1129(a) of title 11, United States Code, as amended by this
Act, 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 this Act, is amended by adding at
the end the following:
``(g) Notwithstanding any other provision of this title,
property that is held by a debtor that is a corporation
described in section 501(c)(3) of the Internal Revenue Code of
1986 and exempt from tax under section 501(a) of such Code may
be transferred to an entity that is not such a corporation, but
only under the same conditions as would apply if the debtor had
not filed a case under this title.''.
(d) Applicability.--The amendments made by this section
shall apply to a case pending under title 11, United States
Code, on the date of enactment of this Act, 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 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. 1223. 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. 1224. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United States
Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C.
581 note) is amended--
(1) in subparagraph (A), in the matter following
clause (ii), by striking ``or October 1, 2002,
whichever occurs first''; and
(2) in subparagraph (F)--
(A) in clause (i)--
(i) in subclause (II), by striking
``or October 1, 2002, whichever occurs
first''; and
(ii) in the matter following
subclause (II), by striking ``October
1, 2003, or''; and
(B) in clause (ii), in the matter following
subclause (II)--
(i) by striking ``before October 1,
2003, or''; and
(ii) by striking ``, whichever
occurs first''.
SEC. 1225. BANKRUPTCY JUDGESHIPS.
(a) Short Title.--This section may be cited as the
``Bankruptcy Judgeship Act of 2000''.
(b) Temporary Judgeships.--
(1) Appointments.--The following judgeship
positions shall be filled in the manner prescribed in
section 152(a)(1) of title 28, United States Code, for
the appointment of bankruptcy judges provided for in
section 152(a)(2) of such title:
(A) One additional bankruptcy judgeship for
the eastern district of California.
(B) Four additional bankruptcy judgeships
for the central district of California.
(C) One additional bankruptcy judgeship for
the district of Delaware.
(D) Two additional bankruptcy judgeships
for the southern district of Florida.
(E) One additional bankruptcy judgeship for
the southern district of Georgia.
(F) Two additional bankruptcy judgeships
for the district of Maryland.
(G) One additional bankruptcy judgeship for
the eastern district of Michigan.
(H) One additional bankruptcy judgeship for
the southern district of Mississippi.
(I) One additional bankruptcy judgeship for
the district of New Jersey.
(J) One additional bankruptcy judgeship for
the eastern district of New York.
(K) One additional bankruptcy judgeship for
the northern district of New York.
(L) One additional bankruptcy judgeship for
the southern district of New York.
(M) One additional bankruptcy judgeship for
the eastern district of North Carolina.
(N) One additional bankruptcy judgeship for
the eastern district of Pennsylvania.
(O) One additional bankruptcy judgeship for
the middle district of Pennsylvania.
(P) One additional bankruptcy judgeship for
the district of Puerto Rico.
(Q) One additional bankruptcy judgeship for
the western district of Tennessee.
(R) One additional bankruptcy judgeship for
the eastern district of Virginia.
(2) Vacancies.--The first vacancy occurring in the
office of a bankruptcy judge in each of the judicial
districts set forth in paragraph (1) shall not be
filled if the vacancy--
(A) results from the death, retirement,
resignation, or removal of a bankruptcy judge;
and
(B) occurs 5 years or more after the
appointment date of a bankruptcy judge
appointed under paragraph (1).
(c) Extensions.--
(1) In general.--The temporary bankruptcy judgeship
positions authorized for the northern district of
Alabama, the district of Delaware, the district of
Puerto Rico, the district of South Carolina, and the
eastern district of Tennessee under paragraphs (1),
(3), (7), (8), 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--
(A) 8 years or more after November 8, 1993,
with respect to the northern district of
Alabama;
(B) 10 years or more after October 28,
1993, with respect to the district of Delaware;
(C) 8 years or more after August 29, 1994,
with respect to the district of Puerto Rico;
(D) 8 years or more after June 27, 1994,
with respect to the district of South Carolina;
and
(E) 8 years or more after November 23,
1993, with respect to the eastern district of
Tennessee.
(2) Applicability of other provisions.--All other
provisions of section 3 of the Bankruptcy Judgeship Act
of 1992 (28 U.S.C. 152 note) remain applicable to
temporary judgeship positions 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
United States court of appeals 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) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this Act.
SEC. 1226. 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 proceeding 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. 1227. 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 filing of the petition;''.
SEC. 1228. JUDICIAL 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 and reaffirmations
under section 707(b) of title 11, United States Code, as
amended by this Act.
SEC. 1229. 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 subsection (c) of section 507, and subject to the
prior rights of holders of security interests 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, not later than 45 days after 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)(7).''.
(b) Administrative Expenses.--Section 503(b) of title 11,
United States Code, as amended by this Act, is amended by
adding at the end the following:
``(10) the value of any goods received by the
debtor not later than 20 days after 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. 1230. PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT.
(a) Chapter 7 Cases.--The court shall not grant a discharge
in the case of an individual seeking bankruptcy 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) 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 bankruptcy 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. 1231. 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;
(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. 1232. PROPERTY NO LONGER SUBJECT TO REDEMPTION.
Section 541(b) of title 11, United States Code, is amended
by inserting after paragraph (8), as added by this Act, the
following:
``(9) 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) of this title; or''.
SEC. 1233. 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 United States district court for
the district for which the panel to which the trustee is
appointed under subsection (a)(1), or in the United States
district court for the district in which the trustee is
appointed under subsection (b) resides, after first exhausting
all available administrative remedies, which if the trustee so
elects, shall also include an administrative hearing on the
record. Unless the trustee elects to have an administrative
hearing on the record, the trustee shall be deemed to have
exhausted all administrative remedies for purposes of this
paragraph if the agency fails to make a final agency decision
within 90 days after the trustee requests administrative
remedies. The Attorney General shall prescribe procedures to
implement this paragraph. The decision of the agency shall be
affirmed by the district court unless it is unreasonable and
without cause based on the administrative record before the
agency.''.
(b) Expenses of Standing Trustees.--Section 586(e) of title
28, United States Code, is amended by adding at the end the
following:
``(3) After first exhausting all available administrative
remedies, an individual appointed under subsection (b) may
obtain judicial review of final agency action to deny a claim
of actual, necessary expenses under this subsection by
commencing an action in the United States district court in the
district where the individual resides. The decision of the
agency shall be affirmed by the district court unless it is
unreasonable and without cause based upon the administrative
record before the agency.
``(4) The Attorney General shall prescribe procedures to
implement this subsection.''.
SEC. 1234. 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. 1235. EXPEDITED APPEALS OF BANKRUPTCY CASES TO COURTS OF APPEALS.
(a) In General.--Section 158 of title 28, United States
Code, is amended--
(1) by striking subsection (d) and inserting the
following:
``(d)(1) In a case in which the appeal is heard by the
district court, the judgment, decision, order, or decree of the
bankruptcy judge shall be deemed a judgment, decision, order,
or decree of the district court entered 31 days after such
appeal is filed with the district court, unless not later than
30 days after such appeal is filed with the district court--
``(A) the district court--
``(i) files a decision on the appeal from
the judgment, decision, order, or decree of the
bankruptcy judge; or
``(ii) enters an order extending such 30-
day period for cause upon motion of a party or
upon the court's own motion; or
``(B) all parties to the appeal file written
consent that the district court may retain such appeal
until it enters a decision.
``(2) For the purpose of this subsection, an appeal shall
be considered filed with the district court on the date on
which the notice of appeal is filed, except that in a case in
which the appeal is heard by the district court because a party
has made an election under subsection (c)(1)(B), the appeal
shall be considered filed with the district court on the date
on which such election is made.
``(e) The courts of appeals shall have jurisdiction of
appeals from--
``(1) all final judgments, decisions, orders, and
decrees of district courts entered under subsection
(a);
``(2) all final judgments, decisions, orders, and
decrees of bankruptcy appellate panels entered under
subsection (b); and
``(3) all judgments, decisions, orders, and decrees
of district courts entered under subsection (d) to the
extent that such judgments, decisions, orders, and
decrees would be reviewable by a district court under
subsection (a).
``(f) In accordance with rules prescribed by the Supreme
Court of the United States under sections 2072 through 2077,
the court of appeals may, in its discretion, exercise
jurisdiction over an appeal from an interlocutory judgment,
decision, order, or decree under subsection (e)(3).''.
(b) Technical and Conforming Amendments.--
(1) Section 305(c) of title 11, United States Code,
is amended by striking ``section 158(d)'' and inserting
``subsection (e) or (f) of section 158''.
(2) Section 1334(d) of title 28, United States
Code, is amended by striking ``section 158(d)'' and
inserting ``subsection (e) or (f) of section 158''.
(3) Section 1452(b) of title 28, United States
Code, is amended by striking ``section 158(d)'' and
inserting ``subsection (e) or (f) of section 158''.
SEC. 1236. EXEMPTIONS.
Section 522(g)(2) of title 11, United States Code, is
amended by striking ``subsection (f)(2)'' and inserting
``subsection (f)(1)(B)''.
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 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) 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 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) The Board shall establish and maintain
for a period not to exceed 24 months following the
effective date of the Bankruptcy Reform Act of 2000, 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 (12 U.S.C. 1752)), 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) 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 Banking and Financial Services of
the House of Representatives a report on the program
described in subclause (I).
``(G) 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--
``(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) 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) 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) 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--
(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.--
(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) 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--
``(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 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) 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) 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 Applications and 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 applications and
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.--
(1) 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) 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) 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) 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) 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) 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. 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
bankruptcy cases filed under title 11, 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 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 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.
SEC. 1310. ENFORCEMENT OF CERTAIN FOREIGN JUDGMENTS BARRED.
(a) In General.--Notwithstanding any other provision of law
or contract, a court within the United States shall not
recognize or enforce any judgment rendered in a foreign court
if, by clear and convincing evidence, the court in which
recognition or enforcement of the judgment is sought determines
that the judgment gives effect to any purported right or
interest derived, directly or indirectly, from any fraudulent
misrepresentation or fraudulent omission that occurred in the
United States during the period beginning on January 1, 1975,
and ending on December 31, 1993.
(b) Exception.--Subsection (a) shall not prevent
recognition or enforcement of a judgment rendered in a foreign
court if the foreign tribunal rendering judgment giving effect
to the right or interest concerned determines that no
fraudulent misrepresentation or fraudulent omission described
in subsection (a) occurred.
TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1401. EFFECTIVE DATE; APPLICATION OF 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.--Except as otherwise
provided in this Act, 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.
Henry Hyde,
George W. Gekas,
Dick Armey,
Managers on the Part of the House.
Jesse Helms,
Richard G. Lugar,
Rod Grams,
Joe Biden,
Managers on the Part of the Senate.
