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107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-617

======================================================================
 
    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2002

                                _______
                                

    July 26 (legislative day, July 25), 2002.--Ordered to be printed

                                _______
                                

  Mr. Sensenbrenner, from the committee of conference, submitted the 
                               following

                           CONFERENCE REPORT

                        [To accompany H.R. 333]

        The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the Senate to the bill (H.R. 
333), to amend title 11, United States Code, and for other 
purposes, having met, after full and free conference, have 
agreed to recommend and do recommend to their respective House 
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. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2002''.
    (b) Table of Contents.--The table of contents for this Act 
is as follows:

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

                     TITLE I--NEEDS-BASED BANKRUPTCY

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

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

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

                   Subtitle B--Priority Child Support

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

                 Subtitle C--Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of personally identifiable information.
Sec. 232. Consumer privacy ombudsman.
Sec. 233. Prohibition on disclosure of name of minor children.

                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. Reduction of homestead exemption for fraud.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide 
          required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the 
          plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the 
          Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitations on homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and 
          other property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy 
          professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Nondischargeability of debts incurred through violations of 
          laws relating to the provision of lawful goods and services.
Sec. 331 Delay of discharge during pendency of certain proceedings.

       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.
Sec. 446. Duties with respect to a debtor who is a plan administrator of 
          an employee benefit plan.
Sec. 447. Appointment of committee of retired employees.

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

                        TITLE VI--BANKRUPTCY DATA

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

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

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

                 TITLE IX--FINANCIAL CONTRACT PROVISIONS

Sec. 901. Treatment of certain agreements by conservators or receivers 
          of insured depository institutions.
Sec. 902. Authority of the 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 law amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

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

               TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

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

                     TITLE XII--TECHNICAL AMENDMENTS

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

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a 
          dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance 
          charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent 
          students.
Sec. 1309. Clarification of clear and conspicuous.

      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 so redesignated by 
                subparagraph (A) of this paragraph--
                            (i) in the first sentence--
                                    (I) by striking ``but not 
                                at the request or suggestion 
                                of'' and inserting ``trustee, 
                                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, 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 forcare 
and support of an elderly, chronically ill, or disabled household 
member or member of the debtor's immediate family (including parents, 
grandparents, siblings, children, and grandchildren of the debtor, the 
dependents of the debtor, and the spouse of the debtor in a joint case 
who is not a dependent) and who is unable to pay for such reasonable 
and necessary expenses.
    ``(III) In addition, for a debtor eligible for chapter 13, 
the debtor's monthly expenses may include the actual 
administrative expenses of administering a chapter 13 plan for 
the district in which the debtor resides, up to an amount of 10 
percent of the projected plan payments, as determined under 
schedules issued by the Executive Office for United States 
Trustees.
    ``(IV) In addition, the debtor's monthly expenses may 
include the actual expenses for each dependent child less than 
18 years of age, not to exceed $1,500 per year per child, to 
attend a private or public elementary or secondary school if 
the debtor provides documentation of such expenses and a 
detailed explanation of why such expenses are reasonable and 
necessary, and why such expenses are not already accounted for 
in the National Standards, Local Standards, or Other Necessary 
Expenses referred to in subclause (I).
    ``(V) In addition, the debtor's monthly expenses may 
include an allowance for housing and utilities, in excess of 
the allowance specified by the Local Standards for housing and 
utilities issued by the Internal Revenue Service, based on the 
actual expenses for home energy costs if the debtor provides 
documentation of such actual expenses and demonstrates that 
such actual expenses are reasonable and necessary.
    ``(iii) The debtor's average monthly payments on account of 
secured debts shall be calculated as the sum of--
            ``(I) the total of all amounts scheduled as 
        contractually due to secured creditors in each month of 
        the 60 months following the date of the petition; and
            ``(II) any additional payments to secured creditors 
        necessary for the debtor, in filing a plan under 
        chapter 13 of this title, to maintain possession of the 
        debtor's primary residence, motor vehicle, or other 
        property necessary for the support of the debtor and 
        the debtor's dependents, that serves as collateral for 
        secured debts;
divided by 60.
    ``(iv) The debtor's expenses for payment of all priority 
claims (including priority child support and alimony claims) 
shall be calculated as the total amount of debts entitled to 
priority, divided by 60.
    ``(B)(i) In any proceeding brought under this subsection, 
the presumption of abuse may only be rebutted by demonstrating 
special circumstances that justify additional expenses or 
adjustments of current monthly income for which there is no 
reasonable alternative.
    ``(ii) In order to establish special circumstances, the 
debtor shall be required to itemize each additional expense or 
adjustment of income and to provide--
            ``(I) documentation for such expense or adjustment 
        to income; and
            ``(II) a detailed explanation of the special 
        circumstances that make such expenses or adjustment to 
        income necessary and reasonable.
    ``(iii) The debtor shall attest under oath to the accuracy 
of any information provided to demonstrate that additional 
expenses or adjustments to income are required.
    ``(iv) The presumption of abuse may only be rebutted if the 
additional expenses or adjustments to income referred to in 
clause (i) cause the product of the debtor's current monthly 
income reduced by the amounts determined under clauses (ii), 
(iii), and (iv) of subparagraph (A) when multiplied by 60 to be 
less than the lesser of--
            ``(I) 25 percent of the debtor's nonpriority 
        unsecured claims, or $6,000, whichever is greater; or
            ``(II) $10,000.
    ``(C) As part of the schedule of current income and 
expenditures required under section 521, the debtor shall 
include a statement of the debtor's current monthly income, and 
the calculations that determine whether a presumption arises 
under subparagraph (A)(i), that 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, on its own initiative or on the motion 
of a party in interest, in accordance with the procedures 
described in rule 9011 of the Federal Rules of Bankruptcy 
Procedure, may order the attorney for the debtor to reimburse 
the trustee for all reasonable costs in prosecuting a motion 
filed under section 707(b), including reasonable attorneys' 
fees, if--
            ``(i) a trustee files a motion for dismissal or 
        conversion under this subsection; and
            ``(ii) the court--
                    ``(I) grants such motion; and
                    ``(II) finds that the action of the 
                attorney for the debtor in filing under this 
                chapter violated rule 9011 of the Federal Rules 
                of Bankruptcy Procedure.
    ``(B) If the court finds that the attorney for the debtor 
violated rule 9011 of the Federal Rules of Bankruptcy 
Procedure, the court, on its own initiative or on the motion of 
a party in interest, in accordance with such procedures, may 
order--
            ``(i) the assessment of an appropriate civil 
        penalty against the attorney for the debtor; and
            ``(ii) the payment of such civil penalty to the 
        trustee, the United States trustee, or the bankruptcy 
        administrator.
    ``(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, on its own initiative or on the 
motion of a party in interest, in accordance with the 
procedures described in rule 9011 of the Federal Rules of 
Bankruptcy Procedure, may award a debtor all reasonable costs 
(including reasonable attorneys' fees) in contesting a motion 
filed by a party in interest (other than a trustee, 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 filed 
                the motion violated rule 9011 of the Federal 
                Rules of Bankruptcy Procedure; or
                    ``(II) the attorney (if any) who filed the 
                motion did not comply with the requirements of 
                clauses (i) and (ii) of paragraph (4)(C), and 
                the motion was made solely for the purpose of 
                coercing a debtor into waiving a right 
                guaranteed to the debtor under this title.
    ``(B) A small business that has a claim of an aggregate 
amount less than $1,000 shall not be subject to subparagraph 
(A)(ii)(I).
    ``(C) For purposes of this paragraph--
            ``(i) the term `small business' means an 
        unincorporated business, partnership, corporation, 
        association, or organization that--
                    ``(I) has fewer than 25 full-time employees 
                as determined on the date on which the motion 
                is filed; and
                    ``(II) is engaged in commercial or business 
                activity; and
            ``(ii) the number of employees of a wholly owned 
        subsidiary of a corporation includes the employees of--
                    ``(I) a parent corporation; and
                    ``(II) any other subsidiary corporation of 
                the parent corporation.
    ``(6) Only the judge, United States trustee, or bankruptcy 
administrator may file a motion under section 707(b), if the 
current monthly income of the debtor, or in a joint case, the 
debtor and the debtor's spouse, as of the date of the order for 
relief, when multiplied by 12, is equal to or less than--
            ``(A) in the case of a debtor in a household of 1 
        person, the median family income of the applicable 
        State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 
        3, or 4 individuals, the highest median family income 
        of the applicable State for a family of the same number 
        or fewer individuals; or
            ``(C) in the case of a debtor in a household 
        exceeding 4 individuals, the highest median family 
        income of the applicable State for a family of 4 or 
        fewer individuals, plus $525 per month for each 
        individual in excess of 4.
    ``(7)(A) No judge, United States trustee, trustee, 
bankruptcy administrator, or other party in interest may file 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--
            ``(i) in the case of a debtor in a household of 1 
        person, the median family income of the applicable 
        State for 1 earner;
            ``(ii) in the case of a debtor in a household of 2, 
        3, or 4 individuals, the highest median family income 
        of the applicable State for a family of the same number 
        or fewer individuals; or
            ``(iii) in the case of a debtor in a household 
        exceeding 4 individuals, the highest median family 
        income of the applicable State for a family of 4 or 
        fewer individuals, plus $525 per month for each 
        individual in excess of 4.
    ``(B) In a case that is not a joint case, current monthly 
income of the debtor's spouse shall not be considered for 
purposes of subparagraph (A) if--
            ``(i)(I) the debtor and the debtor's spouse are 
        separated under applicable nonbankruptcy law; or
            ``(II) the debtor and the debtor's spouse are 
        living separate and apart, other than for the purpose 
        of evading subparagraph (A); and
            ``(ii) the debtor files a statement under penalty 
        of perjury--
                    ``(I) specifying that the debtor meets the 
                requirement of subclause (I) or (II) of clause 
                (i); and
                    ``(II) disclosing the aggregate, or best 
                estimate of the aggregate, amount of any cash 
                or money payments received from the debtor's 
                spouse attributed to the debtor's current 
                monthly income.''.
    (b) Definition.--Section 101 of title 11, United States 
Code, is amended by inserting after paragraph (10) the 
following:
            ``(10A) `current monthly income'--
                    ``(A) means the average monthly income from 
                all sources that the debtor receives (or in a 
                joint case the debtor and the debtor's spouse 
                receive) without regard to whether such income 
                is taxable income, derived during the 6-month 
                period ending on--
                            ``(i) the last day of the calendar 
                        month immediately preceding the date of 
                        the commencement of the case if the 
                        debtor files the schedule of current 
                        income required by section 
                        521(a)(1)(B)(ii); or
                            ``(ii) the date on which current 
                        income is determined by the court for 
                        purposes of this title if the debtor 
                        does not file the schedule of current 
                        income required by section 
                        521(a)(1)(B)(ii); and
                    ``(B) includes any amount paid by any 
                entity other than the debtor (or in a joint 
                case the debtor and the debtor's spouse), on a 
                regular basis for the household expenses of the 
                debtor or the debtor's dependents (and in a 
                joint case the debtor's spouse if not otherwise 
                a dependent), but excludes benefits received 
                under the Social Security Act, payments to 
                victims of war crimes or crimes against 
                humanity on account of their status as victims 
                of such crimes, and payments to victims of 
                international terrorism (as defined in section 
                2331 of title 18) or domestic terrorism (as 
                defined in section 2331 of title 18) on account 
                of their status as victims of such 
                terrorism;''.
    (c) United States Trustee and Bankruptcy Administrator 
Duties.--Section 704 of title 11, United States Code, is 
amended--
            (1) by inserting ``(a)'' before ``The trustee 
        shall--''; and
            (2) by adding at the end the following:
    ``(b)(1) With respect to a debtor who is an individual in a 
case 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; or
            ``(B) in the case of a debtor in a household of 2 
        or more individuals, the highest median family income 
        of the applicable State for a family of the same number 
        or fewer individuals .''.
    (d) Notice.--Section 342 of title 11, United States Code, 
is amended by adding at the end the following:
    ``(d) In a case under chapter 7 of this title in which the 
debtor is an individual and 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, is amended by adding at the end the 
following:
    ``(c)(1) In this subsection--
            ``(A) the term `crime of violence' has the meaning 
        given such term in section 16 of title 18; and
            ``(B) the term `drug trafficking crime' has the 
        meaning given such term in section 924(c)(2) of title 
        18.
    ``(2) Except as provided in paragraph (3), after notice and 
a hearing, the court, on a motion by the victim of a crime of 
violence or a drug trafficking crime, may when it is in the 
best interest of the victim dismiss a voluntary case filed 
under this chapter by a debtor who is an individual if such 
individual was convicted of such crime.
    ``(3) The court may not dismiss a case under paragraph (2) 
if the debtor establishes by a preponderance of the evidence 
that the filing of a case under this chapter is necessary to 
satisfy a claim for a domestic support obligation.''.
    (g) Confirmation of Plan.--Section 1325(a) of title 11, 
United States Code, is amended--
            (1) in paragraph (5), by striking ``and'' at the 
        end;
            (2) in paragraph (6), by striking the period and 
        inserting a semicolon; and
            (3) by inserting after paragraph (6) the following:
            ``(7) the action of the debtor in filing the 
        petition was in good faith;''.
    (h) Applicability of Means Test to Chapter 13.--Section 
1325(b) of title 11, United States Code, is amended--
            (1) in paragraph (1)(B), by inserting ``to 
        unsecured creditors'' after ``to make payments''; and
            (2) by striking paragraph (2) and inserting the 
        following:
            ``(2) For purposes of this subsection, the term 
        `disposable income' means current monthly income 
        received by the debtor (other than child support 
        payments, foster care payments, or 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 defined 
                in section 548(d)(4)) in an amount not to 
                exceed 15 percent of gross income of the debtor 
                for the year in which the contributions are 
                made; and
                    ``(B) if the debtor is engaged in business, 
                for the payment of expenditures necessary for 
                the continuation, preservation, and operation 
                of such business.
            ``(3) Amounts reasonably necessary to be expended 
        under paragraph (2) shall be determined in accordance 
        with subparagraphs (A) and (B) of section 707(b)(2), if 
        the debtor has current monthly income, when multiplied 
        by 12, greater than--
                    ``(A) in the case of a debtor in a 
                household of 1 person, the median family income 
                of the applicable State for 1 earner;
                    ``(B) in the case of a debtor in a 
                household of 2, 3, or 4 individuals, the 
                highest median family income of the applicable 
                State for a family of the same number or fewer 
                individuals; or
                    ``(C) in the case of a debtor in a 
                household exceeding 4 individuals, the highest 
                median family income of the applicable State 
                for a family of 4 or fewer individuals, plus 
                $525 per month for each individual in excess of 
                4.''.
    (i) Special Allowance for Health Insurance.--Section 
1329(a) of title 11, United States Code, is amended--
            (1) in paragraph (2) by striking ``or'' at the end;
            (2) in paragraph (3) by striking the period at the 
        end and inserting ``; or''; and
            (3) by adding at the end the following:
            ``(4) reduce amounts to be paid under the plan by 
        the actual amount expended by the debtor to purchase 
        health insurance for the debtor (and for any dependent 
        of the debtor if such dependent does not otherwise have 
        health insurance coverage) if the debtor documents the 
        cost of such insurance and demonstrates that--
                    ``(A) such expenses are reasonable and 
                necessary;
                    ``(B)(i) if the debtor previously paid for 
                health insurance, the amount is not materially 
                larger than the cost the debtor previously paid 
                or the cost necessary to maintain the lapsed 
                policy; or
                    ``(ii) if the debtor did not have health 
                insurance, the amount is not materially larger 
                than the reasonable cost that would be incurred 
                by a debtor who purchases health insurance, who 
                has similar income, expenses, age, and health 
                status, and who lives in the same geographical 
                location with the same number of dependents who 
                do not otherwise have health insurance 
                coverage; and
                    ``(C) the amount is not otherwise allowed 
                for purposes of determining disposable income 
                under section 1325(b) of this title;
        and upon request of any party in interest, files proof 
        that a health insurance policy was purchased.''.
    (j) Adjustment of Dollar Amounts.--Section 104(b) of title 
11, United States Code, is amended by striking ``and 
523(a)(2)(C)'' each place it appears and inserting 
``523(a)(2)(C), 707(b), and 1325(b)(3)''.
    (k) Definition of `Median Family Income'.--Section 101 of 
title 11, United States Code, is amended by inserting after 
paragraph (39) the following:
            ``(39A) `median family income' means for any year--
                    ``(A) the median family income both 
                calculated and reported by the Bureau of the 
                Census in the then most recent year; and
                    ``(B) if not so calculated and reported in 
                the then current year, adjusted annually after 
                such most recent year until the next year in 
                which median family income is both calculated 
                and reported by the Bureau of the Census, to 
                reflect the percentage change in the Consumer 
                Price Index for All Urban Consumers during the 
                period of years occurring after such most 
                recent year and before such current year;''.
    (k) Clerical Amendment.--The table of sections for chapter 
7 of title 11, United States Code, is amended by striking the 
item relating to section 707 and inserting the following:

``707. Dismissal of a case or conversion to a case under chapter 11 or 
          13.''.

SEC. 103. SENSE OF CONGRESS AND STUDY.

    (a) Sense of Congress.--It is the sense of Congress that 
the Secretary of the Treasury has the authority to alter the 
Internal Revenue Service standards established to set 
guidelines for repayment plans as needed to accommodate their 
use under section 707(b) of title 11, United States Code.
    (b) Study.--
            (1) 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 serve in cases under chapter 13 of title 11, 
United States Code, and who operate financial management 
education programs for debtors, and shall develop a financial 
management training curriculum and materials that can be used 
to educate debtors who are individuals on how to better manage 
their finances.
    (b) Test.--
            (1) Selection of districts.--The Director shall 
        select 6 judicial districts of the United States in 
        which to test the effectiveness of the financial 
        management training curriculum and materials developed 
        under subsection (a).
            (2) 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 
agency 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, 
        except that this paragraph shall not apply with respect 
        to a debtor who resides in a district for which the 
        United States trustee or bankruptcy administrator of 
        such district determines that the approved 
        instructional courses are not adequate to service the 
        additional individuals required to complete such 
        instructional courses under this section (Each United 
        States trustee or bankruptcy administrator who makes a 
        determination described in this paragraph shall review 
        such determination not later than 1 year after the date 
        of such determination, and not less frequently than 
        annually thereafter.).''.
    (c) Chapter 13 Discharge.--Section 1328 of title 11, United 
States Code, is amended by adding at the end the following:
    ``(g)(1) The court shall not grant a discharge under this 
section to a debtor unless after filing a petition the debtor 
has completed an instructional course concerning personal 
financial management described in section 111.
    ``(2) Paragraph (1) shall not apply with respect to a 
debtor who resides in a district for which the United States 
trustee or bankruptcy administrator of such district determines 
that the approved instructional courses are not adequate to 
service the additional individuals who would be required to 
complete such instructional course by reason of the 
requirements of this section.
    ``(3) Each United States trustee or bankruptcy 
administrator who makes a determination described in paragraph 
(2) shall review such determination not later than 1 year after 
the date of such determination, and not less frequently than 
annually thereafter.''.
    (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), 
a debtor who is an individual shall file with the court--
            ``(1) a certificate from the approved nonprofit 
        budget and credit counseling agency that provided the 
        debtor services under section 109(h) describing the 
        services provided to the debtor; and
            ``(2) a copy of the debt repayment plan, if any, 
        developed under section 109(h) through the approved 
        nonprofit budget and credit counseling agency referred 
        to in paragraph (1).''.
    (e) General Provisions.--
            (1) In general.--Chapter 1 of title 11, United 
        States Code, is amended by adding at the end the 
        following:

``Sec. 111. Credit counseling agencies; financial management 
                    instructional courses

    ``(a) The clerk 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 instructional course fully 
        satisfies the applicable standards set forth in this 
        section.
            ``(3) When an agency or instructional course is 
        initially approved, such approval shall be for a 
        probationary period not to exceed 6 months. An agency 
        or instructional course 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 instructional course 
        which has demonstrated during the probationary or 
        subsequent period that such agency or instructional 
        course--
                    ``(A) has met the standards set forth under 
                this section during such period; and
                    ``(B) can satisfy such standards in the 
                future.
            ``(5) 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 district court of the United States.
    ``(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 
                instructional course;
                    ``(C) adequate facilities situated in 
                reasonably convenient locations at which such 
                instructional course is offered, except that 
                such facilities may include the provision of 
                such instructional course or program by 
                telephone or through the Internet, if such 
                instructional course 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 
                instructional course or program, including any 
                evaluation of satisfaction of instructional 
                course or program requirements for each debtor 
                attending such instructional course 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 
                instructional course 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 agency may provide to a 
credit reporting agency information concerning whether a debtor 
who has received or sought instruction concerning personal 
financial management from the credit counseling agency.
    ``(2) A credit counseling agency that willfully or 
negligently fails to comply with any requirement under this 
title with respect to a debtor shall be liable for damages in 
an amount equal to the sum of--
            ``(A) any actual damages sustained by the debtor as 
        a result of the violation; and
            ``(B) any court costs or reasonable attorneys' fees 
        (as determined by the court) incurred in an action to 
        recover those damages.''.
            (2) Clerical amendment.--The table of sections for 
        chapter 1 of title 11, United States Code, is amended 
        by adding at the end the following:

``111. Credit counseling agencies; financial management instructional 
          courses.''.

    (f) Limitation.--Section 362 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(i) If a case commenced under chapter 7, 11, or 13 is 
dismissed due to the creation of a debt repayment plan, for 
purposes of subsection (c)(3), any subsequent case commenced by 
the debtor under any such chapter shall not be presumed to be 
filed not in good faith.
    ``(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 an unsecured consumer debt by not more than 20 percent 
of the claim, if--
            ``(A) the claim was filed by a creditor who 
        unreasonably refused to negotiate a reasonable 
        alternative repayment schedule proposed 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, unless the 
order confirming the plan is revoked, the plan is in default, 
or the creditor has not received payments required to be made 
under the plan in the manner required by the plan (including 
crediting the amounts required under the plan), shall 
constitute a violation of an injunction under subsection (a)(2) 
if the act of the creditor to collect and failure to credit 
payments in the manner required by the plan caused material 
injury to the debtor.
    ``(j) Subsection (a)(2) does not operate as an injunction 
against an act by a creditor that is the holder of a secured 
claim, if--
            ``(1) such creditor retains a security interest in 
        real property that is the principal residence of the 
        debtor;
            ``(2) such act is in the ordinary course of 
        business between the creditor and the debtor; and
            ``(3) such act is limited to seeking or obtaining 
        periodic payments associated with a valid security 
        interest in lieu of pursuit of in rem relief to enforce 
        the lien.''.

SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.

    (a) In General.--Section 524 of title 11, United States 
Code, as amended section 202, is amended--
            (1) in subsection (c), by striking paragraph (2) 
        and inserting the following:
            ``(2) the debtor received the disclosures described 
        in subsection (k) at or before the time at which the 
        debtor signed the agreement;''; and
            (2) by adding at the end the following:
    ``(k)(1) The disclosures required under subsection (c)(2) 
shall consist of the disclosure statement described in 
paragraph (3), completed as required in that paragraph, 
together with the agreement, 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 an extension of credit under 
                an open end credit plan, as the terms 
`credit'and `open end credit plan' are defined in section 103 of the 
Truth in Lending Act, then--
                            ``(I) the annual percentage rate 
                        determined under paragraphs (5) and (6) 
                        of section 127(b) of the Truth in 
                        Lending Act, as applicable, as 
                        disclosed to the debtor in the most 
                        recent periodic statement prior to the 
                        agreement or, if no such periodic 
                        statement has been given to the debtor 
                        during the prior 6 months, the annual 
                        percentage rate as it would have been 
                        so disclosed at the time the disclosure 
                        statement is given to the debtor, or to 
                        the extent this annual percentage rate 
                        is not readily available or not 
                        applicable, then
                            ``(II) the simple interest rate 
                        applicable to the amount reaffirmed as 
                        of the date the disclosure statement is 
                        given to the debtor, or if different 
                        simple interest rates apply to 
                        different balances, the simple interest 
                        rate applicable to each such balance, 
                        identifying the amount of each such 
                        balance included in the amount 
                        reaffirmed, or
                            ``(III) if the entity making the 
                        disclosure elects, to disclose the 
                        annual percentage rate under subclause 
                        (I) and the simple interest rate under 
                        subclause (II);
                    ``(ii) if, at the time the petition is 
                filed, the debt is an extension of credit other 
                than under an open end credit plan, as the 
                terms `credit' and `open end credit plan' are 
                defined in section 103 of the Truth in Lending 
                Act, then--
                            ``(I) the annual percentage rate 
                        under section 128(a)(4) of the Truth in 
                        Lending Act, as disclosed to the debtor 
                        in the most recent disclosure statement 
                        given to the debtor prior to the 
                        reaffirmation agreement with respect to 
                        the debt, or, if no such disclosure 
                        statement was given to the debtor, the 
                        annual percentage rate as it would have 
                        been so disclosed at the time the 
                        disclosure statement is given to the 
                        debtor, or to the extent this annual 
                        percentage rate is not readily 
                        available or not applicable, then
                            ``(II) the simple interest rate 
                        applicable to the amount reaffirmed as 
                        of the date the disclosure statement is 
                        given to the debtor, or if different 
                        simple interest rates apply to 
                        different balances, the simple interest 
                        rate applicable to each such balance, 
                        identifying the amount of such balance 
                        included in the amount reaffirmed, or
                            ``(III) if the entity making the 
                        disclosure elects, to disclose the 
                        annual percentage rate under (I) and 
                        the simple interest rate under (II).
            ``(F) If the underlying debt transaction was 
        disclosed as a variable rate transaction on the most 
        recent disclosure given under the Truth in Lending Act, 
        by stating `The interest rate on your loan may be a 
        variable interest rate which changes from time to time, 
        so that the annual percentage rate disclosed here may 
        be higher or lower.'.
            ``(G) If the debt is secured by a security interest 
        which has not been waived in whole or in part or 
        determined to be void by a final order of the court at 
        the time of the disclosure, by disclosing that a 
        security interest or lien in goods or property is 
        asserted over some or all of the obligations the debtor 
        is reaffirming and listing the items and their original 
        purchase price that are subject to the asserted 
        security interest, or if not a purchase-money security 
        interest then listing by items or types and the 
        original amount of the loan.
            ``(H) At the election of the creditor, a statement 
        of the repayment schedule using 1 or a combination of 
        the following--
                    ``(i) by making the statement: `Your first 
                payment in the amount of $______ is due on 
                ______ but the future payment amount may be 
                different. Consult your reaffirmation 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, whicheveris 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 an attorney and is 
reaffirming a debt owed to a creditor defined in section 
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of 
support of the reaffirmation agreement, which the debtor shall 
sign and date prior to filing with the court, shall consist of 
the following:
    `` `I believe this 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.'.
    ``(l) Notwithstanding any other provision of this title the 
following shall apply:
            ``(1) A creditor may accept payments from a debtor 
        before and after the filing of 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 a 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 a hearing to the debtor and 
creditor and such hearing shall be concluded before the entry 
of the debtor's discharge.
    ``(2) This subsection does not apply to reaffirmation 
agreements where the creditor is a credit union, as defined in 
section 19(b)(1)(A)(iv) of the Federal Reserve Act.''.
    (b) Law Enforcement.--
            (1) In general.--Chapter 9 of title 18, United 
        States Code, is amended by adding at the end the 
        following:

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

    ``(a) In General.--The Attorney General of the United 
States shall designate the individuals described in subsection 
(b) to have primary responsibility in carrying out enforcement 
activities in addressing violations of section 152 or 157 
relating to abusive reaffirmations of debt. In addition to 
addressing the violations referred to in the preceding 
sentence, the individuals described under subsection (b) shall 
address violations of section 152 or 157 relating to materially 
fraudulent statements in bankruptcy schedules that are 
intentionally false or intentionally misleading.
    ``(b) United States 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.''.

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

    Section 363 of title 11, United States Code, is amended--
            (1) by redesignating subsection (o) as subsection 
        (p), and
            (2) by inserting after subsection (n) the 
        following:
    ``(o) Notwithstanding subsection (f), if a person purchases 
any interest in a consumer credit transaction that is subject 
to the Truth in Lending Act or any interest in a consumer 
credit contract (as defined in section 433.1 of title 16 of the 
Code of Federal Regulations (January 1, 2001), as amended from 
time to time), and if such interest is purchased through a sale 
under this section, then such person shall remain subject to 
all claims and defenses that are related to such consumer 
credit transaction or such consumer credit contract, to the 
same extent as such person would be subject to such claims and 
defenses of the consumer had such interest been purchased at a 
sale not under this section.''.

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

    (a) Study.--The Comptroller General of the United States 
shall conduct a study of the reaffirmation process that occurs 
under title 11 of the United States Code, to determine the 
overall treatment of consumers within the context of such 
process, and shall include in such study consideration of--
            (1) the policies and activities of creditors with 
        respect to reaffirmation; and
            (2) whether consumers are fully, fairly, and 
        consistently informed of their rights pursuant to such 
        title.
    (b) Report to the Congress.--Not later than 18 months after 
the date of enactment of this Act, the Comptroller General 
shall submit to the President pro tempore of the Senate and the 
Speaker of the House of Representatives a report on the results 
of the study conducted under subsection (a), together with 
recommendations for legislation (if any) to address any abusive 
or coercive tactics found in connection with the reaffirmation 
process that occurs under title 11 of the United States Code.

                   Subtitle B--Priority Child Support

SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

    Section 101 of title 11, United States Code, is amended--
            (1) by striking paragraph (12A); and
            (2) by inserting after paragraph (14) the 
        following:
            ``(14A) `domestic support obligation' means a debt 
        that accrues before 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 so redesignated, by 
        striking ``First'' and inserting ``Second'';
            (4) in paragraph (3), as so redesignated, by 
        striking ``Second'' and inserting ``Third'';
            (5) in paragraph (4), as so redesignated--
                    (A) by striking ``Third'' and inserting 
                ``Fourth''; and
                    (B) by striking the semicolon at the end 
                and inserting a period;
            (6) in paragraph (5), as so redesignated, by 
        striking ``Fourth'' and inserting ``Fifth'';
            (7) in paragraph (6), as so redesignated, by 
        striking ``Fifth'' and inserting ``Sixth'';
            (8) in paragraph (7), as so redesignated, by 
        striking ``Sixth'' and inserting ``Seventh''; and
            (9) by inserting before paragraph (2), as so 
        redesignated, the following:
            ``(1) First:
                    ``(A) Allowed unsecured claims for domestic 
                support obligations that, as of the date of the 
                filing of the petition, 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 the filing of the 
                petition shall be applied and distributed in 
                accordance with applicable nonbankruptcy law.
                    ``(B) Subject to claims under subparagraph 
                (A), allowed unsecured claims for domestic 
                support obligations that, as of the date 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 
                governmental 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 the 
                filing of the petition be applied and 
                distributed in accordance with applicable 
                nonbankruptcy law.
                    ``(C) If a trustee is appointed or elected 
                under section 701, 702, 703, 1104, 1202, or 
                1302, the administrative expenses of the 
                trustee allowed under paragraphs (1)(A), (2), 
                and (6) of section 503(b) shall be paid before 
                payment of claims under subparagraphs (A) and 
                (B), to the extent that the trustee administers 
                assets that are otherwise available for the 
                payment of such claims.''.

SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES 
                    INVOLVING DOMESTIC SUPPORT OBLIGATIONS.

    Title 11, United States Code, is amended--
            (1) in section 1129(a), by adding at the end the 
        following:
            ``(14) If the debtor is required by a judicial or 
        administrative order or 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 1228(a), except that such interest may be paid 
        only to the extent that the debtor has disposable 
        income available to pay such interest after making 
        provision for full payment of all allowed claims;'';
            (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 
        by the plan) have been paid'' after ``completion by the 
        debtor of all payments under the plan'';
            (7) in section 1307(c)--
                    (A) in paragraph (9), by striking ``or'' at 
                the end;
                    (B) in paragraph (10), by striking the 
                period at the end and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(11) failure of the debtor to pay any domestic 
        support obligation that first becomes payable after the 
        date 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 at the end the following:
            ``(4) notwithstanding any other provision of this 
        section, a plan may provide for less than full payment 
        of all amounts owed for a claim entitled to priority 
        under section 507(a)(1)(B) only if the plan provides 
        that all of the debtor's projected disposable income 
        for a 5-year period beginning on the date that the 
        first payment is due under the plan will be applied to 
        make payments under the plan.'';
            (9) in section 1322(b)--
                    (A) in paragraph (9), by striking ``; and'' 
                and inserting a semicolon;
                    (B) by redesignating paragraph (10) as 
                paragraph (11); and
                    (C) inserting after paragraph (9) the 
                following:
            ``(10) provide for the payment of interest accruing 
        after the date of the filing of the petition on 
        unsecured claims that are nondischargeable under 
        section 1328(a), except that such interest may be paid 
        only to the extent that the debtor has disposable 
        income available to pay such interest after making 
        provision for full payment of all allowed claims; 
        and'';
            (10) in section 1325(a), as amended by section 102, 
        by inserting after paragraph (7) the following:
            ``(8) the debtor 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 
        by the plan) have been paid'' after ``completion by the 
        debtor of all payments under the plan''.

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

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

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

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

SEC. 216. CONTINUED LIABILITY OF PROPERTY.

    Section 522 of title 11, United States Code, is amended--
            (1) in subsection (c), by striking paragraph (1) 
        and inserting the following:
            ``(1) a debt of a kind specified in paragraph (1) 
        or (5) of section 523(a) (in which case, 
        notwithstanding any provision of applicable 
        nonbankruptcy law to the contrary, such property shall 
        be liable for a debt of a kind specified in section 
        523(a)(5));'';
            (2) in subsection (f)(1)(A), by striking the dash 
        and all that follows through the end of the 
        subparagraph and inserting ``of a kind that is 
        specified in section 523(a)(5); or''; and
            (3) in subsection (g)(2), by striking ``subsection 
        (f)(2)'' and inserting ``subsection (f)(1)(B)''.

SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL 
                    TRANSFER MOTIONS.

    Section 547(c)(7) of title 11, United States Code, is 
amended to read as follows:
            ``(7) to the extent such transfer was a bona fide 
        payment of a debt for a domestic support obligation;''.

SEC. 218. DISPOSABLE INCOME DEFINED.

    Section 1225(b)(2)(A) of title 11, United States Code, is 
amended by inserting ``or for a domestic support obligation 
that first becomes payable after the date 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 section 102, is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (8), by striking ``and'' 
                at the end;
                    (B) in paragraph (9), by striking the 
                period and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(10) if with respect to the debtor there is a 
        claim for a domestic support obligation, provide the 
        applicable notice specified in subsection (c); and''; 
        and
            (2) by adding at the end the following:
    ``(c)(1) In a case described in subsection (a)(10) to which 
subsection (a)(10) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of 
        the claim described in subsection (a)(10) of such claim 
        and of the right of such holder to use the services of 
        the State child support enforcement agency established 
        under sections 464 and 466 of the Social Security Act 
        for the State in which such holder resides, for 
        assistance in collecting child support during and after 
        the case under this title;
            ``(ii) include in the notice provided under clause 
        (i) the address and telephone number of such State 
        child support enforcement agency; and
            ``(iii) include in the notice provided under clause 
        (i) an explanation of the rights of such holder to 
        payment of such claim under this chapter;
            ``(B)(i) provide written notice to such State child 
        support enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause 
        (i) the name, address, and telephone number of such 
        holder; and
            ``(C) at such time as the debtor is granted a 
        discharge under section 727, provide written notice to 
        such holder and to such State child support enforcement 
        agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the 
                debtor;
                    ``(iii) the last recent known name and 
                address of the debtor's employer; and
                    ``(iv) the name of each creditor that holds 
                a claim that--
                            ``(I) is not discharged under 
                        paragraph (2), (4), or (14A) of section 
                        523(a); or
                            ``(II) was reaffirmed by the debtor 
                        under section 524(c).
    ``(2)(A) The holder of a claim described in subsection 
(a)(10) or the State child support enforcement agency of the 
State in which such holder resides may request from a creditor 
described in paragraph (1)(C)(iv) the last known address of the 
debtor.
    ``(B) Notwithstanding any other provision of law, a 
creditor that makes a disclosure of a last known address of a 
debtor in connection with a request made under subparagraph (A) 
shall not be liable by reason of making such disclosure.''.
    (b) Duties of Trustee Under Chapter 11.--Section 1106 of 
title 11, United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (6), by striking ``and'' 
                at the end;
                    (B) in paragraph (7), by striking the 
                period and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(8) if with respect to the debtor there is a 
        claim for a domestic support obligation, provide the 
        applicable notice specified in subsection (c).''; and
            (2) by adding at the end the following:
    ``(c)(1) In a case described in subsection (a)(8) to which 
subsection (a)(8) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of 
        the claim described in subsection (a)(8) of such claim 
        and of the right of such holder to use the services of 
        the State child support enforcement agency established 
        under sections 464 and 466 of the Social Security Act 
        for the State in which such holder resides, for 
        assistance in collecting child support during and after 
        the case under this title; and
            ``(ii) include in the notice required by clause (i) 
        the address and telephone number of such State child 
        support enforcement agency;
            ``(B)(i) provide written notice to such State child 
        support enforcement agency of such claim; and
            ``(ii) include in the notice required by clasue (i) 
        the name, address, and telephone number of such holder; 
        and
            ``(C) at such time as the debtor is granted a 
        discharge under section 1141, provide written notice to 
        such holder of such claim and to such State child 
        support enforcement agency of--
            ``(i) the granting of the discharge;
            ``(ii) the last recent known address of the debtor;
            ``(iii) the last recent known name and address of 
        the debtor's employer; and
            ``(iv) the name of each creditor that holds a claim 
        that--
            ``(I) is not discharged under paragraph (2), (3), 
        or (14A) of section 523(a); or
            ``(II) was reaffirmed by the debtor under section 
        524(c).
    ``(2)(A) The holder of a claim described in subsection 
(a)(8) or the State child enforcement support agency of the 
State in which such holder resides may request from a creditor 
described in paragraph (1)(C)(iv) the last known address of the 
debtor.
    ``(B) Notwithstanding any other provision of law, a 
creditor that makes a disclosure of a last known address of a 
debtor in connection with a request made under subparagraph (A) 
shall not be liable by reason of making such disclosure.''.
    (c) Duties of Trustee Under Chapter 12.--Section 1202 of 
title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``and'' 
                at the end;
                    (B) in paragraph (5), by striking the 
                period and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) if with respect to the debtor there is a 
        claim for a domestic support obligation, provide the 
        applicable notice specified in subsection (c).''; and
            (2) by adding at the end the following:
    ``(c)(1) In a case described in subsection (b)(6) to which 
subsection (b)(6) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of 
        the claim described in subsection (b)(6) of such claim 
        and of the right of such holder to use the services of 
        the State child support enforcement agency established 
        under sections 464 and 466 of the Social Security Act 
        for the State in which such holder resides, for 
        assistance in collecting child support during and after 
        the case under this title; and
            ``(ii) include in the notice provided under clause 
        (i) the address and telephone number of such State 
        child support enforcement agency;
            ``(B)(i) provide written notice to such State child 
        support enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause 
        (i) the name, address, and telephone number of such 
        holder; and
            ``(C) at such time as the debtor is granted a 
        discharge under section 1228, provide written notice to 
        such holder and to such State child support enforcement 
        agency of--
            ``(i) the granting of the discharge;
            ``(ii) the last recent known address of the debtor;
            ``(iii) the last recent known name and address of 
        the debtor's employer; and
            ``(iv) the name of each creditor that holds a claim 
        that--
            ``(I) is not discharged under paragraph (2), (4), 
        or (14A) of section 523(a); or
            ``(II) was reaffirmed by the debtor under section 
        524(c).
    ``(2)(A) The holder of a claim described in subsection 
(b)(6) or the State child support enforcement agency of the 
State in which such holder resides may request from a creditor 
described in paragraph (1)(C)(iv) the last known address of the 
debtor.
    ``(B) Notwithstanding any other provision of law, a 
creditor that makes a disclosure of a last known address of a 
debtor in connection with a request made under subparagraph (A) 
shall not be liable by reason of making that disclosure.''.
    (d) Duties of Trustee Under Chapter 13.--Section 1302 of 
title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``and'' 
                at the end;
                    (B) in paragraph (5), by striking the 
                period and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) if with respect to the debtor there is a 
        claim for a domestic support obligation, provide the 
        applicable notice specified in subsection (d).''; and
            (2) by adding at the end the following:
    ``(d)(1) In a case described in subsection (b)(6) to which 
subsection (b)(6) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of 
        the claim described in subsection (b)(6) of such claim 
        and of the right of such holder to use the services of 
        the State child support enforcement agency established 
        under sections 464 and 466 of the Social Security Act 
        for the State in which such holder resides, for 
        assistance in collecting child support during and after 
        the case under this title; and
            ``(ii) include in the notice provided under clause 
        (i) the address and telephone number of such State 
        child support enforcement agency;
            ``(B)(i) provide written notice to such State child 
        support enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause 
        (i) the name, address, and telephone number of such 
        holder; and
            ``(C) at such time as the debtor is granted a 
        discharge under section 1328, provide written notice to 
        such holder and to such State child support enforcement 
        agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the 
                debtor;
                    ``(iii) the last recent known name and 
                address of the debtor's employer; and
                    ``(iv) the name of each creditor that holds 
                a claim that--
            ``(I) is not discharged under paragraph (2) or (4) 
        of section 523(a); or
            ``(II) was reaffirmed by the debtor under section 
        524(c).
    ``(2)(A) The holder of a claim described in subsection 
(b)(6) or the State child support enforcement agency of the 
State in which such holder resides may request from a creditor 
described in paragraph (1)(C)(iv) the last known address of the 
debtor.
    ``(B) Notwithstanding any other provision of law, a 
creditor that makes a disclosure of a last known address of a 
debtor in connection with a request made under subparagraph (A) 
shall not be liable by reason of making that disclosure.''.

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

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

                 Subtitle C--Other Consumer Protections

SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY FILINGS.

    Section 110 of title 11, United States Code, is amended--
            (1) in subsection (a)(1), by striking ``or an 
        employee of an attorney'' and inserting ``for the 
        debtor or an employee of such attorney under the direct 
        supervision of such attorney'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by adding at the end 
                the following: ``If a bankruptcy petition 
                preparer is not an individual, then an officer, 
                principal, responsible person, or partner of 
                the 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 the debtor and, under 
                penalty of perjury, by the bankruptcy petition 
                preparer; and
                    ``(II) be filed with any document for 
                filing.'';
            (3) in subsection (c)--
                    (A) in paragraph (2)--
                            (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 
                so redesignated, the following:
    ``(1) The Supreme Court may promulgate rules under section 
2075 of title 28, or the Judicial Conference of the United 
States may prescribe guidelines, for setting a maximum 
allowable fee chargeable by a bankruptcy petition preparer. 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 so 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 so 
                redesignated, and inserting the following:
    ``(3)(A) The court shall disallow and order the immediate 
turnover to the bankruptcy trustee any fee referred to in 
paragraph (2) found to be in excess of the value of any 
services--
            ``(i) rendered by the 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 so 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 the 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 on the 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; and
            (3) by inserting after paragraph (18) the 
        following:
            ``(19) under subsection (a), of withholding of 
        income from a debtor's wages and collection of amounts 
        withheld, under the debtor's agreement authorizing that 
        withholding and collection for the benefit of a 
        pension, profit-sharing, stock bonus, or other plan 
        established under section 401, 403, 408, 408A, 414, 
        457, or 501(c) of the Internal Revenue Code of 1986, 
        that is sponsored by the employer of the debtor, or an 
        affiliate, successor, or predecessor of such employer--
                    ``(A) to the extent that the amounts 
                withheld and collected are used solely for 
                payments relating to a loan from a plan 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;
        but this paragraph may not be construed to provide that 
        any loan made under a governmental plan under section 
        414(d), or a contract or account under section 403(b) 
        of the Internal Revenue Code of 1986 constitutes a 
        claim or a debt under this title;''.
    (c) Exceptions To Discharge.--Section 523(a) of title 11, 
United States Code, as amended by section 215, is amended by 
adding at the end the following:
            ``(19) owed to a pension, profit-sharing, stock 
        bonus, or other plan established under section 401, 
        403, 408, 408A, 414, 457, or 501(c) of the Internal 
        Revenue Code of 1986, 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;
        but nothing in this paragraph may be construed to 
        provide that any loan made under a governmental plan 
        under section 414(d), or a contract or account under 
        section 403(b), of the Internal Revenue Code of 1986 
        constitutes a claim or a debt under this title.''.
    (d) Plan Contents.--Section 1322 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(f) A plan may not materially alter the terms of a loan 
described in section 362(b)(19) and any amounts required to 
repay such loan shall not constitute `disposable income' under 
section 1325.''.
    (e) Asset Limitation.--
            (1) Limitation.--Section 522 of title 11, United 
        States Code, is amended by adding at the end the 
        following:
    ``(n) For assets in individual retirement accounts 
described in section 408 or 408A of the Internal Revenue Code 
of 1986, other than a simplified employee pension under section 
408(k) of 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 sections 402(c), 
402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal 
Revenue Code of 1986, and earnings thereon, shall not exceed 
$1,000,000 in a case filed by a debtor who is an individual, 
except that such amount may be increased if the interests of 
justice so require.''.
            (2) Adjustment of dollar amounts.--Paragraphs (1) 
        and (2) of section 104(b) of title 11, United States 
        Code, are amended by inserting ``522(n),'' after 
        ``522(d),''.

SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

    (a) Exclusions.--Section 541 of title 11, United States 
Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``or'' at 
                the end;
                    (B) by redesignating paragraph (5) as 
                paragraph (9); and
                    (C) by inserting after paragraph (4) the 
                following:
            ``(5) funds placed in an education individual 
        retirement account (as defined in section 530(b)(1) of 
        the Internal Revenue Code of 1986) not later than 365 
        days before the date of 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 section 106, is amended by adding at 
the end the following:
    ``(c) In addition to meeting the requirements under 
subsection (a), a debtor shall file with the court a record of 
any interest that a debtor has in an education individual 
retirement account (as defined in section 530(b)(1) of the 
Internal Revenue Code of 1986) or under a qualified State 
tuition program (as defined in section 529(b)(1) of such 
Code).''.

SEC. 226. DEFINITIONS.

    (a) Definitions.--Section 101 of title 11, United States 
Code, is amended--
            (1) by inserting after paragraph (2) the following:
            ``(3) `assisted person' means any person whose 
        debts consist primarily of consumer debts and the value 
        of whose nonexempt property is less than $150,000;'';
            (2) by inserting after paragraph (4) the following:
            ``(4A) `bankruptcy assistance' means any goods or 
        services sold or otherwise provided to an assisted 
        person with the 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 a person who 
                provides such assistance or of such preparer;
                    ``(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 such assisted person, 
                to the extent that the creditor is assisting 
                such assisted person to restructure any debt 
                owed by such assisted person to the creditor;
                    ``(D) a depository institution (as defined 
                in section 3 of the Federal Deposit Insurance 
                Act) or any Federal credit union or State 
                credit union (as those terms are defined in 
                section 101 of the Federal Credit Union Act), 
                or any affiliate or subsidiary of such 
                depository institution or credit union; or
                    ``(E) an author, publisher, distributor, or 
                seller of works subject to copyright protection 
                under title 17, when acting in such 
                capacity.''.
    (b) Conforming Amendment.--Section 104(b) of title 11, 
United States Code, is amended by inserting ``101(3),'' after 
``sections'' each place it appears.

SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

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

``Sec. 526. Restrictions on debt relief agencies

    ``(a) A debt relief agency shall not--
            ``(1) fail to perform any service that such agency 
        informed an assisted person or prospective assisted 
        person it would provide in connection with a case or 
        proceeding under this title;
            ``(2) make any statement, or counsel or advise any 
        assisted person or prospective assisted person to make 
        a statement in a document filed in a case or proceeding 
        under this title, that is untrue and misleading, or 
        that upon the exercise of reasonable care, should have 
        been known by such agency to be untrue or misleading;
            ``(3) misrepresent to any assisted person or 
        prospective assisted person, directly or indirectly, 
        affirmatively or by material omission, with respect 
        to--
                    ``(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 a hearing, to have--
            ``(A) intentionally or negligently failed to comply 
        with any provision of this section, section 527, or 
        section 528 with respect to a case or proceeding under 
        this title for such assisted person;
            ``(B) provided bankruptcy assistance to an assisted 
        person in a case or proceeding under this title that is 
        dismissed or converted to a case under another chapter 
        of this title because of such agency's intentional or 
        negligent failure to file any required document 
        including those specified in section 521; or
            ``(C) intentionally or negligently disregarded the 
        material requirements of this title or the Federal 
        Rules of Bankruptcy Procedure applicable to such 
        agency.
    ``(3) In addition to such other remedies as are provided 
under State law, whenever the chief law enforcement officer of 
a State, or an official or agency designated by a State, has 
reason to believe that any person has violated or is violating 
this section, the State--
            ``(A) may bring an action to enjoin such violation;
            ``(B) may bring an action on behalf of its 
        residents to recover the actual damages of assisted 
        persons arising from such violation, including any 
        liability under paragraph (2); and
            ``(C) in the case of any successful action under 
        subparagraph (A) or (B), shall be awarded the costs of 
        the action and reasonable attorney fees as determined 
        by the court.
    ``(4) The district court of the United States for any 
district located in the State shall have concurrent 
jurisdiction of any action under subparagraph (A) or (B) of 
paragraph (3).
    ``(5) Notwithstanding any other provision of Federal law 
and in addition to any other remedy provided under Federal or 
State law, if the court, on its own motion or on the motion of 
the United States trustee or the debtor, finds that a person 
intentionally violated this section, or engaged in a clear and 
consistent pattern or practice of violating this section, the 
court may--
            ``(A) enjoin the violation of such section; or
            ``(B) impose an appropriate civil penalty against 
        such person.
    ``(d) No provision of this section, section 527, or section 
528 shall--
            ``(1) annul, alter, affect, or exempt any person 
        subject to such sections from complying with any law of 
        any State except to the extent that such law is 
        inconsistent with those sections, and then only to the 
        extent of the inconsistency; or
            ``(2) be deemed to limit or curtail the authority 
        or ability--
                    ``(A) of a State or subdivision or 
                instrumentality thereof, to determine and 
                enforce qualifications for the practice of law 
                under the laws of that State; or
                    ``(B) of a Federal court to determine and 
                enforce the qualifications for the practice of 
                law before that court.''.
    (b) Conforming Amendment.--The table of sections for 
chapter 5 of title 11, United States Code, is amended by 
inserting after the item relating to section 525, the 
following:

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

SEC. 228. DISCLOSURES.

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

``Sec. 527. Disclosures

    ``(a) A debt relief agency providing bankruptcy assistance 
to an assisted person shall provide--
            ``(1) 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 case 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 
section 227, is amended by inserting after the item relating to 
section 526 the following:

``527. Disclosures.''.

SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

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

``Sec. 528. Requirements for debt relief agencies

    ``(a) A debt relief agency shall--
            ``(1) not later than 5 business days after the 
        first date on which such agency provides any bankruptcy 
        assistance services to an assisted person, but prior to 
        such assisted person's petition under this title being 
        filed, execute a written contract with such assisted 
        person that explains clearly and conspicuously--
                    ``(A) the services such agency will provide 
                to such assisted person; and
                    ``(B) the fees or charges for such 
                services, and the terms of payment;
            ``(2) provide the assisted person with a copy of 
        the fully executed and completed contract;
            ``(3) clearly and conspicuously disclose in any 
        advertisement of bankruptcy assistance services or of 
        the benefits of bankruptcy directed to the general 
        public (whether in general media, seminars or specific 
        mailings, telephonic or electronic messages, or 
        otherwise) that the services or benefits are with 
        respect to bankruptcy relief under this title; and
            ``(4) clearly and conspicuously use the following 
        statement in such advertisement: `We are a debt relief 
        agency. We help people file for bankruptcy relief under 
        the Bankruptcy Code.' or a substantially similar 
        statement.
    ``(b)(1) An advertisement of bankruptcy assistance services 
or of the benefits of bankruptcy directed to the general public 
includes--
            ``(A) descriptions of bankruptcy assistance in 
        connection with a chapter 13 plan whether or not 
        chapter 13 is specifically mentioned in such 
        advertisement; and
            ``(B) statements such as `federally supervised 
        repayment plan' or `Federal debt restructuring help' or 
        other similar statements that could lead a reasonable 
        consumer to believe that debt counseling was being 
        offered when in fact the services were directed to 
        providing bankruptcy assistance with a chapter 13 plan 
        or other form of bankruptcy relief under this title.
    ``(2) An advertisement, directed to the general public, 
indicating that the debt relief agency provides assistance with 
respect to credit defaults, mortgage foreclosures, eviction 
proceedings, excessive debt, debt collection pressure, or 
inability to pay any consumer debt shall--
            ``(A) disclose clearly and conspicuously in such 
        advertisement that the assistance may involve 
        bankruptcy relief under this title; and
            ``(B) include the following statement: `We are a 
        debt relief agency. We help people file for bankruptcy 
        relief under the Bankruptcy Code.' or a substantially 
        similar statement.''.
    (b) Conforming Amendment.--The table of sections for 
chapter 5 of title 11, United States Code, as amended by 
section 227 and 228, is amended by inserting after the item 
relating to section 527, the following:

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

SEC. 230. GAO STUDY.

    (a) Study.--Not later than 270 days after the date of 
enactment of this Act, the Comptroller General of the United 
States shall conduct a study of the feasibility, effectiveness, 
and cost of requiring trustees appointed under title 11, United 
States Code, or the bankruptcy courts, to provide to the Office 
of Child Support Enforcement promptly after the commencement of 
cases by debtors who are individuals under such title, the 
names and social security numbers of such debtors for the 
purposes of allowing such Office to determine whether such 
debtors have outstanding obligations for child support (as 
determined on the basis of information in the Federal Case 
Registry or other national database).
    (b) Report.--Not later than 300 days after the date of 
enactment of this Act, the Comptroller General shall submit to 
the President pro tempore of the Senate and the Speaker of the 
House of Representatives a report containing the results of the 
study required by subsection (a).

SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.

    (a) Limitation.--Section 363(b)(1) of title 11, United 
States Code, is amended by striking the period at the end and 
inserting the following:
``, except that if the debtor in connection with offering a 
product or a service discloses to an individual a policy 
prohibiting the transfer of personally identifiable information 
about individuals to persons that are not affiliated with the 
debtor and if such policy is in effect on the date of the 
commencement of the case, then the trustee may not sell or 
lease personally identifiable information to any person 
unless--
            ``(A) such sale or such lease is consistent with 
        such policy; or
            ``(B) after appointment of a consumer privacy 
        ombudsman in accordance with section 332, and after 
        notice and a hearing, the court approves such sale or 
        such lease--
                    ``(i) giving due consideration to the 
                facts, circumstances, and conditions of such 
                sale or such lease; and
                    ``(ii) finding that no showing was made 
                that such sale or such lease would violate 
                applicable nonbankruptcy law.''.
    (b) Definition.--Section 101 of title 11, United States 
Code, is amended by inserting after paragraph (41) the 
following:
            ``(41A) `personally identifiable information' 
        means--
                    ``(A) if provided by an individual to the 
                debtor in connection with obtaining a product 
                or a service from the debtor primarily for 
                personal, family, or household purposes--
                            ``(i) the first name (or initial) 
                        and last name of such individual, 
                        whether given at birth or time of 
                        adoption, or resulting from a lawful 
                        change of name;
                            ``(ii) the geographical address of 
                        a physical place of residence of such 
                        individual;
                            ``(iii) an electronic address 
                        (including an e-mail address) of such 
                        individual;
                            ``(iv) a telephone number dedicated 
                        to contacting such individual at such 
                        physical place of residence;
                            ``(v) a social security account 
                        number issued to such individual; or
                            ``(vi) the account number of a 
                        credit card issued to such individual; 
                        or
                    ``(B) if identified in connection with 1 or 
                more of the items of information specified in 
                subparagraph (A)--
                            ``(i) a birth date, the number of a 
                        certificate of birth or adoption, or a 
                        place of birth; or
                            ``(ii) any other information 
                        concerning an identified individual 
                        that, if disclosed, will result in 
                        contacting or identifying such 
                        individual physically or 
                        electronically;''.

SEC. 232. CONSUMER PRIVACY OMBUDSMAN.

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

``Sec. 332. Consumer privacy ombudsman

    ``(a) If a hearing is required under section 363(b)(1)(B) 
of this title, the court shall order the United States trustee 
to appoint, not later than 5 days before the commencement of 
the hearing, 1 disinterested person (other than the United 
States trustee) to serve as the consumer privacy ombudsman in 
the case and shall require that notice of such hearing be 
timely given to such ombudsman.
    ``(b) The consumer privacy ombudsman may appear and be 
heard at such hearing and shall provide to the court 
information to assist the court in its consideration of the 
facts, circumstances, and conditions of the proposed sale or 
lease of personally identifiable information under section 
363(b)(1)(B) of this title. Such information may include 
presentation of--
            ``(1) the debtor's privacy policy;
            ``(2) the potential losses or gains of privacy to 
        consumers if such sale or such lease is approved by the 
        court;
            ``(3) the potential costs or benefits to consumers 
        if such sale or such lease is approved by the court; 
        and
            ``(4) the potential alternatives that would 
        mitigate potential privacy losses or potential costs to 
        consumers.
    ``(c) A consumer privacy ombudsman shall not disclose any 
personally identifiable information obtained by the ombudsman 
under this title.''.
    (b) Compensation of Consumer Privacy Ombudsman.--Section 
330(a)(1) of title 11, United States Code, is amended in the 
matter preceding subparagraph (A), by inserting ``a consumer 
privacy ombudsman appointed under section 332,'' before ``an 
examiner''.
    (c) Conforming Amendment.--The table of sections for 
subchapter II of chapter 3 of title 11, United States Code, is 
amended by adding at the end the following:

``332. Consumer privacy ombudsman.''.

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

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

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

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

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

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

                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 debtor who is an individual in a case under 
        chapter 7, 11, or 13, and if a single or joint case of 
        the debtor was pending within the preceding 1-year 
        period but was dismissed, other than a case refiled 
        under a chapter other than chapter 7 after dismissal 
        under section 707(b)--
                    ``(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) on the motion of a party in interest 
                for continuation of the automatic stay and upon 
                notice and a hearing, the court may extend the 
                stay in particular cases as to any or all 
                creditors (subject to such conditions or 
                limitations as the court may then impose) after 
                notice and a hearing completed before the 
                expiration of the 30-day period only if the 
                party in interest demonstrates that the filing 
                of the later case is in good faith as to the 
                creditors to be stayed; and
                    ``(C) for purposes of subparagraph (B), a 
                case is presumptively filed not in good faith 
                (but such presumption may be rebutted by clear 
                and convincing evidence to the contrary)--
                            ``(i) as to all creditors, if--
                                    ``(I) more than 1 previous 
                                case under any of chapters 7, 
                                11, and 13 in which the 
                                individual was a debtor was 
                                pending within the preceding 1-
                                year period;
                                    ``(II) a previous case 
                                under any of chapters 7, 11, 
                                and 13 in which the individual 
                                was a debtor was dismissed 
                                within such 1-year period, 
                                after the debtor failed to--
                                            ``(aa) file or 
                                        amend the petition or 
                                        other documents as 
                                        required by this title 
                                        or the court without 
                                        substantial excuse (but 
                                        mere inadvertence or 
                                        negligence shall not be 
                                        a substantial excuse 
                                        unless the dismissal 
                                        was caused by the 
                                        negligence of the 
                                        debtor's attorney);
                                            ``(bb) provide 
                                        adequate protection as 
                                        ordered by the court; 
                                        or
                                            ``(cc) perform the 
                                        terms of a plan 
                                        confirmed by the court; 
                                        or
                                    ``(III) there has not been 
                                a substantial change in the 
                                financial or personal affairs 
                                of the debtor since the 
                                dismissal of the next most 
                                previous case under chapter 7, 
                                11, or 13 or any other reason 
                                to conclude that the later case 
                                will be concluded--
                                            ``(aa) if a case 
                                        under chapter 7, with a 
                                        discharge; or
                                            ``(bb) if a case 
                                        under chapter 11 or 13, 
                                        with a confirmed plan 
                                        that will be fully 
                                        performed; and
                            ``(ii) as to any creditor that 
                        commenced an action under subsection 
                        (d) in a previous case in which the 
                        individual was a debtor if, as of the 
                        date of dismissal of such case, that 
                        action was still pending or had been 
                        resolved by terminating, conditioning, 
                        or limiting the stay as to actions of 
                        such creditor; and
            ``(4)(A)(i) if a single or joint case is filed by 
        or against a debtor who is an individual under this 
        title, and if 2 or more single or joint cases of the 
        debtor were pending within the previous year but were 
        dismissed, other than a case refiled under section 
        707(b), the stay under subsection (a) shall not go into 
        effect upon the filing of the later case; and
            ``(ii) on request of a party in interest, the court 
        shall promptly enter an order confirming that no stay 
        is in effect;
            ``(B) if, within 30 days after the filing of the 
        later case, a party in interest requests the court may 
        order the stay to take effect in the case as to any or 
        all creditors (subject to such conditions or 
        limitations as the court may impose), after notice and 
        a hearing, only if the party in interest demonstrates 
        that the filing of the later case is in good faith as 
        to the creditors to be stayed;
            ``(C) 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 provide 
                        adequate protection as ordered by the 
                        court, or failed to perform the terms 
                        of a plan confirmed by the court; or
                            ``(III) there has not been a 
                        substantial change in the financial or 
                        personal affairs of the debtor since 
                        the dismissal of the next most previous 
                        case under this title, or any other 
                        reason to conclude that the later case 
                        will not be concluded, if a case under 
                        chapter 7, with a discharge, and if a 
                        case under chapter 11 or 13, with a 
                        confirmed plan that will be fully 
                        performed; or
                    ``(ii) as to any creditor that commenced an 
                action under subsection (d) in a previous case 
                in which the individual was a debtor if, as of 
                the date of dismissal of such case, such action 
                was still pending or had been resolved by 
                terminating, conditioning, or limiting the stay 
                as to 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, as amended by section 224, is amended by inserting 
after paragraph (19), the following:
            ``(20) under subsection (a), of any act to enforce 
        any lien against or security interest in real property 
        following 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 section 
        106--
                    (A) in paragraph (4), by striking ``, and'' 
                at the end and inserting a semicolon;
                    (B) in paragraph (5), by striking the 
                period at the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) in a case under chapter 7 of this title in 
        which the debtor is an individual, not retain 
        possession of personal property as to which a creditor 
        has an allowed claim for the purchase price secured in 
        whole or in part by an interest in that personal 
        property unless the debtor, not later than 45 days 
        after the first meeting of creditors under section 
        341(a), either--
                    ``(A) enters into an agreement with the 
                creditor pursuant to section 524(c) 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 filedbefore the expiration of such 
45-day period, and after notice and a hearing, that such 
property is of consequential value or benefit to the estate, 
orders appropriate adequate protection of the creditor's 
interest, and orders the debtor to deliver any collateral in 
the debtor's possession to the trustee.''; and
            (2) in section 722, by inserting ``in full at the 
        time of redemption'' before the period at the end.

SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT 
                    COMPLETE INTENDED SURRENDER OF CONSUMER DEBT 
                    COLLATERAL.

    Title 11, United States Code, is amended--
            (1) in section 362, as amended by section 106--
                    (A) in subsection (c), by striking ``(e), 
                and (f)'' and inserting ``(e), (f), and (h)'';
                    (B) by redesignating subsection (h) as 
                subsection (k) and transferring such subsection 
                so as to insert it after subjection (j) as 
                added by section 106; and
                    (C) by inserting after subsection (g) the 
                following:
    ``(h)(1) In a case in which the debtor is an individual, 
the stay provided by subsection (a) is terminated with respect 
to personal property of the estate or of the debtor securing in 
whole or in part a claim, or subject to an unexpired lease, and 
such personal property shall no longer be property of the 
estate if the debtor fails within the applicable time set by 
section 521(a)(2) 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 ordersthe 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, as amended by sections 106 and 
        225--
                    (A) in subsection (a)(2) by striking 
                ``consumer'';
                    (B) in subsection (a)(2)(B)--
                            (i) by striking ``forty-five days 
                        after the filing of a notice of intent 
                        under this section'' and inserting ``30 
                        days after the first date set for the 
                        meeting of creditors under section 
                        341(a) of this title''; and
                            (ii) by striking ``forty-five day'' 
                        and inserting ``30-day'';
                    (C) in subsection (a)(2)(C) by inserting 
                ``, except as provided in section 362(h) 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:
``For purposes of paragraph (5), section 506 shall not apply to 
a claim described in that paragraph if the creditor has a 
purchase money security interest securing the debt that is the 
subject of the claim, the debt was incurred within the 910-day 
preceding the filing of the petition, and the collateral for 
that debt consists of a motor vehicle (as defined in section 
30102 of title 49) acquired for the personal use of the debtor, 
or if collateral for that debt consists of any other thing of 
value, if the debt was incurred during the 1-year period 
preceding that filing.''.
    (c) Definitions.--Section 101 of title 11, United States 
Code, is amended--
            (1) by inserting after paragraph (13) the 
        following:
            ``(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) of title 11, United States Code, as so 
designated by section 106, is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``180 days'' and inserting 
                ``730 days''; and
                    (B) by striking ``, or for a longer portion 
                of such 180-day period than in any other 
                place'' and inserting ``or if the debtor's 
                domicile has not been located at a single State 
                for such 730-day period, the place in which the 
                debtor's domicile was located for 180 days 
                immediately preceding the 730-day period or for 
                a longer portion of such 180-day period than in 
                any other place''; and
            (2) by adding at the end the following:
``If the effect of the domiciliary requirement under 
subparagraph (A) is to render the debtor ineligible for any 
exemption, the debtor may elect to exempt property that is 
specified under subsection (d).''.

SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.

    Section 522 of title 11, United States Code, as amended by 
section 224, is amended--
            (1) in subsection (b)(3)(A), as so designated by 
        this Act, by inserting ``subject to subsections (o) and 
        (p),'' before ``any property''; and
            (2) by adding at the end the following:
    ``(o) For purposes of subsection (b)(3)(A), and 
notwithstanding subsection (a), the value of an interest in--
            ``(1) real or personal property that the debtor or 
        a dependent of the debtor uses as a residence;
            ``(2) a cooperative that owns property that the 
        debtor or a dependent of the debtor uses as a 
        residence;
            ``(3) a burial plot for the debtor or a dependent 
        of the debtor; or
            ``(4) real or personal property that the debtor or 
        a dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is attributable 
to any portion of any property that the debtor disposed of in 
the 10-year period ending on the date of the filing of the 
petition with the intent to hinder, delay, or defraud a 
creditor and that the debtor could not exempt, or that portion 
that the debtor could not exempt, under subsection (b), if on 
such date the debtor had held the property so disposed of.''.

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

    (a) Stopping Abusive Conversions From Chapter 13.--Section 
348(f)(1) of title 11, United States Code, is amended--
            (1) in subparagraph (A), by striking ``and'' at the 
        end;
            (2) in subparagraph (B)--
                    (A) by striking ``in the converted case, 
                with allowed secured claims'' and inserting 
                ``only in a case converted to a case under 
                chapter 11 or 12, but not in a case converted 
                to a case under chapter 7, with allowed secured 
                claims in cases under chapters 11 and 12''; and
                    (B) by striking the period and inserting 
                ``; and''; and
            (3) by adding at the end the following:
            ``(C) with respect to cases converted from chapter 
        13--
                    ``(i) the claim of any creditor holding 
                security as of the date of the petition shall 
                continue to be secured by that security unless 
                the full amount of such claim determined under 
                applicable nonbankruptcy law has been paid in 
                full as of the date of conversion, 
                notwithstanding any valuation or determination 
                of the amount of an allowed secured claim made 
                for the purposes of the case under chapter 13; 
                and
                    ``(ii) unless a prebankruptcy default has 
                been fully cured under the plan at the time of 
                conversion, in any proceeding under this title 
                or otherwise, the default shall have the effect 
                given under applicable nonbankruptcy law.''.
    (b) Giving Debtors the Ability To Keep Leased Personal 
Property by Assumption.--Section 365 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(p)(1) If a lease of personal property is rejected or not 
timely assumed by the trustee under subsection (d), the leased 
property is no longer property of the estate and the stay under 
section 362(a) is automatically terminated.
    ``(2)(A) If the debtor in a case under chapter 7 is an 
individual, the debtor may notify the creditor in writing that 
the debtor desires to assume the lease. Upon being so notified, 
the creditor may, at its option, notify the debtor that it is 
willing to have the lease assumed by the debtor and may 
condition such assumption on cure of any outstanding default on 
terms set by the contract.
    ``(B) 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, as amended by section 
        306, is amended--
                    (A) in clause (i), by striking ``and'' at 
                the end;
                    (B) in clause (ii), by striking ``or'' at 
                the end and inserting ``and''; and
                    (C) by adding at the end the following:
                    ``(iii) if--
                            ``(I) property to be distributed 
                        pursuant to this subsection is in the 
                        form of periodic payments, such 
                        payments shall be in equal monthly 
                        amounts; and
                            ``(II) the holder of the claim is 
                        secured by personal property, the 
                        amount of such payments shall not be 
                        less than an amount sufficient to 
                        provide to the holder of such claim 
                        adequate protection during the period 
                        of the plan; or''.
            (2) Payments.--Section 1326(a) of title 11, United 
        States Code, is amended to read as follows:
    ``(a)(1) 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 $500 for luxury goods or services 
                        incurred by an individual debtor on or 
                        within 90 days before the order for 
                        relief under this title are presumed to 
                        be nondischargeable; and
                            ``(II) cash advances aggregating 
                        more than $750 that are extensions of 
                        consumer credit under an open end 
                        credit plan obtained by an individual 
                        debtor on or within 70 days before the 
                        order for relief under this title, are 
                        presumed to be nondischargeable; and
                    ``(ii) for purposes of this subparagraph--
                            ``(I) the terms `consumer', 
                        `credit', and `open end credit plan' 
                        have the same meanings as in section 
                        103 of the Truth in Lending Act; and
                            ``(II) the term `luxury goods or 
                        services' does not include goods or 
                        services reasonably necessary for the 
                        support or maintenance of the debtor or 
                        a dependent of the debtor.''.

SEC. 311. AUTOMATIC STAY.

    (a) In general.--Section 362(b) of title 11, United States 
Code, as amended by sections 224 and 303, is amended by 
inserting after paragraph (21), the following:
            ``(22) subject to subsection (n), under subsection 
        (a)(3), of the continuation of any eviction, unlawful 
        detainer action, or similar proceeding by a lessor 
        against a debtor involving residential property in 
        which the debtor resides as a tenant under a lease or 
        rental agreement and with respect to which the lessor 
        has obtained before the date of the filing of the 
        bankruptcy petition, a judgment for possession of such 
        property against the debtor;
            ``(23) subject to subsection (o), under subsection 
        (a)(3), of an eviction action that seeks possession of 
        the residential property in which the debtor resides as 
        a tenant under a lease or rental agreement based on 
        endangerment of such property or the illegal use of 
        controlled substances on such property, but only if the 
        lessor files with the court, and serves upon the 
        debtor, a certification under penalty of perjury that 
        such an eviction action has been filed, or that the 
        debtor, during the 30-day period preceding the date of 
        the filing of the certification, has endangered 
        property or illegally used or allowed to be used a 
        controlled substance on the property;
            ``(24) under subsection (a), of any transfer that 
        is not avoidable under section 544 and that is not 
        avoidable under section 549;''.
    (b) Limitations.--Section 362 of title 11, United States 
Code, as amended by sections 106 and 305, is amended by adding 
at the end the following:
    ``(n)(1) Except as otherwise provided in this subsection, 
subsection (b)(22) shall apply on the date that is 30 days 
after the date on which the bankruptcy petition is filed, if 
the debtor files with the petition and serves upon the lessor a 
certification under penalty of perjury that--
            ``(A) under nonbankruptcy law applicable in the 
        jurisdiction, there are circumstances under which the 
        debtor would be permitted to cure the entire monetary 
        default that gave rise to the judgment for possession, 
        after that judgment for possession was entered; and
            ``(B) the debtor (or an adult dependent of the 
        debtor) has deposited with the clerk of the court, any 
        rent that would become due during the 30-day period 
        after the filing of the bankruptcy petition.
    ``(2) If, within the 30-day period after the filing of the 
bankruptcy petition, the debtor (or an adult dependent of the 
debtor) complies with paragraph (1) and files with the court 
and serves upon the lessor a further certification under 
penalty of perjury that the debtor (or an adult dependent of 
the debtor) has cured, under nonbankrupcty law applicable in 
the jurisdiction, the entire monetary default that gave rise to 
the judgment under which possession is sought by the lessor, 
subsection (b)(22) shall not apply, unless ordered to apply by 
the court under paragraph (3).
    ``(3)(A) If the lessor files an objection to any 
certification filed by the debtor under paragraph (1) or (2), 
and serves such objection upon the debtor, the court shall hold 
a hearing within 10 days after the filing and service of such 
objection to determine if the certification filed by the debtor 
under paragraph (1) or (2) is true.
    ``(B) If the court upholds the objection of the lessor 
filed under subparagraph (A)--
            ``(i) subsection (b)(22) shall apply immediately 
        and relief from the stay provided under subsection 
        (a)(3) shall not be required to enable the lessor to 
        complete the process to recover full possession of the 
        property; and
            ``(ii) the clerk of the court shall immediately 
        serve upon the lessor and the debtor a certified copy 
        of the court's order upholding the lessor's objection.
    ``(4) If a debtor, in accordance with paragraph (5), 
indicates on the petition that there was a judgment for 
possession of the residential rental property in which the 
debtor resides and does not file a certification under 
paragraph (1) or (2)--
            ``(A) subsection (b)(22) shall apply immediately 
        upon failure to file such certification, and relief 
        from the stay provided under subsection (a)(3) shall 
        not be required to enable the lessor to complete the 
        process to recover full possession of the property; and
            ``(B) the clerk of the court shall immediately 
        serve upon the lessor and the debtor a certified copy 
        of the docket indicating the absence of a filed 
        certification and the applicability of the exception to 
        the stay under subsection (b)(22).
    ``(5)(A) Where a judgment for possession of residential 
property in which the debtor resides as a tenant under a lease 
or rental agreement has been obtained by the lessor, the debtor 
shall so indicate on the bankruptcy petition and shall provide 
the name and address of the lessor that obtained that pre-
petition judgment on the petition and on any certification 
filed under this subsection.
    ``(B) The form of certification filed with the petition, as 
specified in this subsection, shall provide for the debtor to 
certify, and the debtor shall certify--
            ``(i) whether a judgment for possession of 
        residential rental housing in which the debtor resides 
        has been obtained against the debtor before the filing 
        of the petition; and
            ``(ii) whether the debtor is claiming under 
        paragraph (1) that under nonbankruptcy law applicable 
        in the jurisdiction, there are circumstances under 
        which the debtor would be permitted to cure the entire 
        monetary default that gave rise to the judgment for 
        possession, after that judgment of possession was 
        entered, and has made the appropriate deposit with the 
        court.
    ``(C) The standard forms (electronic and otherwise) used in 
a bankruptcy proceeding shall be amended to reflect the 
requirements of this subsection.
    ``(D) The clerk of the court shall arrange for the prompt 
transmittal of the rent deposited in accordance with paragraph 
(1)(B) to the lessor.
    ``(o)(1) Except as otherwise provided in this subsection, 
subsection (b)(23) shall apply on the date that is 15 days 
after the date on which the lessor files and serves a 
certification described in subsection (b)(23).
    ``(2)(A) If the debtor files with the court an objection to 
the truth or legal sufficiency of the certification described 
in subsection (b)(23) and serves such objection upon the 
lessor, subsection (b)(23) shall not apply, unless ordered to 
apply by the court under this subsection.
    ``(B) If the debtor files and serves the objection under 
subparagraph (A), the court shall hold a hearing within 10 days 
after the filing and service of such objection to determine if 
the situation giving rise to the lessor's certification under 
paragraph (1) existed or has been remedied.
    ``(C) If the debtor can demonstrate to the satisfaction of 
the court that the situation giving rise to the lessor's 
certification under paragraph (1) did not exist or has been 
remedied, the stay provided under subsection (a)(3) shall 
remain in effect until the termination of the stay under this 
section.
    ``(D) If the debtor cannot demonstrate to the satisfaction 
of the court that the situation giving rise to the lessor's 
certification under paragraph (1) did not exist or has been 
remedied--
            ``(i) relief from the stay provided under 
        subsection (a)(3) shall not be required to enable the 
        lessor to proceed with the eviction; and
            ``(ii) the clerk of the court shall immediately 
        serve upon the lessor and the debtor a certified copy 
        of the court's order upholding the lessor's 
        certification.
    ``(3) If the debtor fails to file, within 15 days, an 
objection under paragraph (2)(A)--
            ``(A) subsection (b)(23) shall apply immediately 
        upon such failure and relief from the stay provided 
        under subsection (a)(3) shall not be required to enable 
        the lessor to complete the process to recover full 
        possession of the property; and
            ``(B) the clerk of the court shall immediately 
        serve upon the lessor and the debtor a certified copy 
        of the docket indicating such failure.''.

SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

    Title 11, United States Code, is amended--
            (1) in section 727(a)(8), by striking ``six'' and 
        inserting ``8''; and
            (2) in section 1328, by inserting after subsection 
        (e) the following:
    ``(f) Notwithstanding subsections (a) and (b), the court 
shall not grant a discharge of all debts provided for in the 
plan or disallowed under section 502, if the debtor has 
received a discharge--
            ``(1) in a case filed under chapter 7, 11, or 12 of 
        this title during the 4-year period preceding the date 
        of the order for relief under this chapter, or
            ``(2) in a case filed under chapter 13 of this 
        title during the 2-year period preceding the date of 
        such order.''.

SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

    (a) Definition.--Section 522(f) of title 11, United States 
Code, is amended by adding at the end the following:
    ``(4)(A) Subject to subparagraph (B), for purposes of 
paragraph (1)(B), the term `household goods' means--
            ``(i) clothing;
            ``(ii) furniture;
            ``(iii) appliances;
            ``(iv) 1 radio;
            ``(v) 1 television;
            ``(vi) 1 VCR;
            ``(vii) linens;
            ``(viii) china;
            ``(ix) crockery;
            ``(x) kitchenware;
            ``(xi) educational materials and educational 
        equipment primarily for the use of minor dependent 
        children of the debtor;
            ``(xii) medical equipment and supplies;
            ``(xiii) furniture exclusively for the use of minor 
        children, or elderly or disabled dependents of the 
        debtor;
            ``(xiv) personal effects (including the toys and 
        hobby equipment of minor dependent children and wedding 
        rings) of the debtor and the dependents of the debtor; 
        and
            ``(xv) 1 personal computer and related equipment.
    ``(B) The term `household goods' does not include--
            ``(i) works of art (unless by or of the debtor, or 
        any relative of the debtor);
            ``(ii) electronic entertainment equipment with a 
        fair market value of more than $500 in the aggregate 
        (except 1 television, 1 radio, and 1 VCR);
            ``(iii) items acquired as antiques with a fair 
        market value of more than $500 in the aggregate;
            ``(iv) jewelry with a fair market value of more 
        than $500 in the aggregate (except wedding rings); and
            ``(v) a computer (except as otherwise provided for 
        in this section), motor vehicle (including a tractor or 
        lawn tractor), boat, or a motorized recreational 
        device, conveyance, vehicle, watercraft, or 
        aircraft.''.
    (b) 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 section 102, is amended--
            (1) in subsection (c)--
                    (A) by inserting ``(1)'' after ``(c)'';
                    (B) by striking ``, but the failure of such 
                notice to contain such information shall not 
                invalidate the legal effect of such notice''; 
                and
                    (C) by adding at the end the following:
    ``(2)(A) If, within the 90 days before the commencement of 
a voluntary case, a creditor supplies the debtor in at least 2 
communications sent to the debtor with the current account 
number of the debtor and the address at which such creditor 
requests to receive correspondence, then any notice required by 
this title to be sent by the debtor to such creditor shall be 
sent to such address and shall include such account number.
    (B) If a creditor would be in violation of applicable 
nonbankruptcy law by sending any such communication within such 
90-day period and if such creditor supplies the debtor in the 
last 2 communications with the current account number of the 
debtor and the address at which such creditor requests to 
receive correspondence, then any notice required by this title 
to be sent by the debtor to such creditor shall be sent to such 
address and shall include such account number; and
            (2) by adding at the end the following:
    ``(e)(1) In a case under chapter 7 or 13 of this title of a 
debtor who is an individual, a creditor at any time may both 
file with the court and serve on the debtor a notice of address 
to be used to provide notice in such case to such creditor.
    ``(2) Any notice in such case required to be provided to 
such creditor by the debtor or the court later than 5 days 
after the court and the debtor receive such creditor's notice 
of address, shall be provided to such address.
    ``(f)(1) An entity may file with any bankruptcy court a 
notice of address to be used by all the bankruptcy courts or by 
particular bankruptcy courts, as so specified by such entity at 
the time such notice is filed, to provide notice to such entity 
in all cases under chapters 7 and 13 pending in the courts with 
respect to which such notice is filed, in which such entity is 
a creditor.
    ``(2) In any case filed under chapter 7 or 13, any notice 
required to be provided by a court with respect to which a 
notice is filed under paragraph (1), to such entity later than 
30 days after the filing of such notice under paragraph (1) 
shall be provided to such address unless with respect to a 
particular case a different address is specified in a notice 
filed and served in accordance with subsection (e).
    ``(3) A notice filed under paragraph (1) may be withdrawn 
by such entity.
    ``(g)(1) Notice provided to a creditor by the debtor or the 
court other than in accordance with this section (excluding 
this subsection) shall not be effective notice until such 
notice is brought to the attention of such creditor. If such 
creditor designates a person or an organizational subdivision 
of such creditor to be responsible for receiving notices under 
this title and establishes reasonable procedures so that such 
notices receivable by such creditor are to be delivered to such 
person or such subdivision, then a notice provided to such 
creditor other than in accordance with this section (excluding 
this subsection) shall not be considered to have been brought 
to the attention of such creditor until such notice is received 
by such person or such subdivision.
    ``(2) A monetary penalty may not be imposed on a creditor 
for a violation of a stay in effect under section 362(a) of 
this title (including a monetary penalty imposed under section 
362(k) of this title) or for failure to comply with section 542 
or 543 unless the conduct that is the basis of such violation 
or of such failure occurs after such creditor receives notice 
effective under this section of the order for relief.''.
    (b) Debtor's Duties.--Section 521 of title 11, United 
States Code, as amended by sections 106, 225, and 305, is 
amended--
            (1) in subsection (a), as so designated by section 
        106, by amending paragraph (1) to read as follows:
            ``(1) file--
                    ``(A) a list of creditors; and
                    ``(B) unless the court orders otherwise--
                            ``(i) a schedule of assets and 
                        liabilities;
                            ``(ii) a schedule of current income 
                        and current expenditures;
                            ``(iii) a statement of the debtor's 
                        financial affairs and, if section 
                        342(b) applies, a certificate--
                                    ``(I) of an attorney whose 
                                name is indicated on the 
                                petition as the attorney for 
                                the debtor, or any bankruptcy 
                                petition preparer signing the 
                                petition under section 
                                110(b)(1), indicating that such 
                                attorney or such bankruptcy 
                                petition preparer delivered to 
                                the debtor the notice required 
                                by section 342(b); or
                                    ``(II) if no attorney is so 
                                indicated, and no bankruptcy 
                                petition preparer signed the 
                                petition, of the debtor that 
                                such notice was received and 
                                read by the debtor;
                            ``(iv) copies of all payment 
                        advices or other evidence of payment 
                        received within 60 days before the 
                        filing of the petition, by the debtor 
                        from any employer of the debtor;
                            ``(v) a statement of the amount of 
                        monthly net income, itemized to show 
                        how the amount is calculated; and
                            ``(vi) a statement disclosing any 
                        reasonably anticipated increase in 
                        income or expenditures over the 12-
                        month period following the date of the 
                        filing of the petition;''; and
            (2) by adding at the end the following:
    ``(e)(1) If the debtor in a case under chapter 7 or 13 is 
an individual and if a creditor files with the court at any 
time a request to receive a copy of the petition, schedules, 
and statement of financial affairs filed by the debtor, then 
the court shall make such petition, such schedules, and such 
statement available to such creditor.
    ``(2)(A) The debtor shall provide--
            ``(i) not later than 7 days before the date first 
        set for the first meeting of creditors, to the trustee 
        a copy of the Federal income tax return required under 
        applicable law (or at the election of the debtor, a 
        transcript of such return) for the most recent tax year 
        ending immediately before the commencement of the case 
        and for which a Federal income tax return was filed; 
        and
            ``(ii) at the same time the debtor complies with 
        clause (i), a copy of such return (or if elected under 
        clause (i), such transcript) to any creditor that 
        timely requests such copy.
    ``(B) If the debtor fails to comply with clause (i) or (ii) 
of subparagraph (A), the court shall dismiss the case unless 
the debtor demonstrates that the failure to so comply is due to 
circumstances beyond the control of the debtor.
    ``(C) If a creditor requests a copy of such tax return or 
such transcript and if the debtor fails to provide a copy of 
such tax return or such transcript to such creditor at the time 
the debtor provides such tax return or such transcript to the 
trustee, then the court shall dismiss the case unless the 
debtor demonstrates that the failure to provide a copy of such 
tax return or such transcript is due to circumstances beyond 
the control of the debtor.
    ``(3) If a creditor in a case under chapter 13 files with 
the court at any time a request to receive a copy of the plan 
filed by the debtor, then the court shall make available to 
such creditor a copy of such plan--
            ``(A) at a reasonable cost; and
            ``(B) not later than 5 days after such request is 
        filed.
    ``(f) At the request of the court, the United States 
trustee, or any party in interest in a case under chapter 7, 
11, or 13, a debtor who is an individual shall file with the 
court--
            ``(1) at the same time filed with the taxing 
        authority, a copy of each Federal income tax return 
        required under applicable law (or at the election of 
        the debtor, a transcript of such tax return) with 
        respect to each tax year of the debtor ending while the 
        case is pending under such chapter;
            ``(2) at the same time filed with the taxing 
        authority, each Federal income tax return required 
        under applicable law (or at the election of the debtor, 
        a transcript of such tax return) that had not been 
        filed with such authority as of the date of the 
        commencement of the case and that was subsequently 
        filed for any tax year of the debtor ending in the 3-
        year period ending on the date of the commencement of 
        the case;
            ``(3) a copy of each amendment to any Federal 
        income tax return or transcript filed with the court 
        under paragraph (1) or (2); and
            ``(4) in a case under chapter 13--
                    ``(A) on the date that is either 90 days 
                after the end of such tax year or 1 year after 
                the date of the commencement of the case, 
                whichever is later, if a plan is not confirmed 
                before such later date; and
                    ``(B) annually after the plan is confirmed 
                and until the case is closed, not later than 
                the date that is 45 days before the anniversary 
                of the confirmation of such plan;
        a statement, under penalty of perjury, of the income 
        and expenditures of the debtor during the tax year of 
        the debtor most recently concluded before such 
        statement is filed under this paragraph, and of the 
        monthly income of the debtor, that shows how income, 
        expenditures, and monthly income are calculated.
    ``(g)(1) A statement referred to in subsection (f)(4) shall 
disclose--
            ``(A) the amount and sources of the income of the 
        debtor;
            ``(B) the identity of any person responsible with 
        the debtor for the support of any dependent of the 
        debtor; and
            ``(C) the identity of any person who contributed, 
        and the amount contributed, to the household in which 
        the debtor resides.
    ``(2) The tax returns, amendments, and statement of income 
and expenditures described in subsections (e)(2)(A) and (f) 
shall be available to the United States trustee (or the 
bankruptcy administrator, if any), the trustee, and any party 
in interest for inspection and copying, subject to the 
requirements of subsection (h).
    ``(h)(1) Not later than 180 days after the date of the 
enactment of the Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2002, 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 540 days after the date of enactment 
of the Bankruptcy Abuse Prevention and Consumer Protection Act 
of 2002, the Director of the Administrative Office of the 
United States Courts shall prepare and submit to the President 
pro tempore of the Senate and the Speaker of the House of 
Representatives a report that--
            ``(A) assesses the effectiveness of the procedures 
        established under paragraph (1); and
            ``(B) if appropriate, includes proposed legislation 
        to--
                    ``(i) further protect the confidentiality 
                of tax information; and
                    ``(ii) provide penalties for the improper 
                use by any person of the tax information 
                required to be provided under this section.
    ``(i) If requested by the United States trustee or by the 
trustee, the debtor shall provide--
            ``(1) a document that establishes the identity of 
        the debtor, including a driver's license, passport, or 
        other document that contains a photograph of the 
        debtor; or
            ``(2) such other personal identifying information 
        relating to the debtor that establishes the identity of 
        the debtor.''.

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

    Section 521 of title 11, United States Code, as amended by 
sections 106, 225, 305, and 315, is amended by adding at the 
end the following:
    ``(j)(1) Subject to paragraphs (2) and (4) and 
notwithstanding section 707(a), if an individual debtor in a 
voluntary case under chapter 7 or 13 fails to file all of the 
information required under subsection (a)(1) within 45 days 
after the 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) Subject to paragraph (4) and with respect to a case 
described in paragraph (1), any party in interest may request 
the court to enter an order dismissing the case. If requested, 
the court shall enter an order of dismissal not later than 5 
days after such request.
    ``(3) Subject to paragraph (4) and upon request of the 
debtor made within 45 days after the 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.
    ``(4) Notwithstanding any other provision of this 
subsection, on the motion of the trustee filed before the 
expiration of the applicable period of time specified in 
paragraph (1), (2), or (3), and after notice and a hearing, the 
court may decline to dismiss the case if the court finds that 
the debtor attempted in good faith to file all the information 
required by subsection (a)(1)(B)(iv) and that the best 
interests of creditors would be served by administration of the 
case.''.

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

    Section 1324 of title 11, United States Code, is amended--
            (1) by striking ``After'' and inserting the 
        following:
    ``(a) Except as provided in subsection (b) and after''; and
            (2) by adding at the end the following:
    ``(b) The hearing on confirmation of the plan may be held 
not earlier than 20 days and not later than 45 days after the 
date of the meeting of creditors under section 341(a), unless 
the court determines that it would be in the best interests of 
the creditors and the estate to hold such hearing at an earlier 
date and there is no objection to such earlier date.''.

SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN CERTAIN CASES.

    Title 11, United States Code, is amended--
            (1) by amending section 1322(d) to read as follows:
    ``(d)(1) If the current monthly income of the debtor and 
the debtor's spouse combined, when multiplied by 12, is not 
less than--
            ``(A) in the case of a debtor in a household of 1 
        person, the median family income of the applicable 
        State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 
        3, or 4 individuals, the highest median family income 
        of the applicable State for a family of the same number 
        or fewer individuals; or
            ``(C) in the case of a debtor in a household 
        exceeding 4 individuals, the highest median family 
        income of the applicable State for a family of 4 or 
        fewer individuals, plus $525 per month for each 
        individual in excess of 4,
the plan may not provide for payments over a period that is 
longer than 5 years.
    ``(2) If the current monthly income of the debtor and the 
debtor's spouse combined, when multiplied by 12, is less than--
            ``(A) in the case of a debtor in a household of 1 
        person, the median family income of the applicable 
        State for 1 earner last;
            ``(B) in the case of a debtor in a household of 2, 
        3, or 4 individuals, the highest median family income 
        of the applicable State for a family of the same number 
        or fewer individuals; or
            ``(C) in the case of a debtor in a household 
        exceeding 4 individuals, the highest median family 
        income of the applicable State for a family of 4 or 
        fewer individuals, plus $525 per month for each 
        individual in excess of 4,
the plan may not provide for payments over a period that is 
longer than 3 years, unless the court, for cause, approves a 
longer period, but the court may not approve a period that is 
longer than 5 years.'';
            (2) in section 1325(b)(1)(B), by striking ``three-
        year period'' and inserting ``applicable commitment 
        period''; and
            (3) in section 1325(b), as amended by section 102, 
        by adding at the end the following:
    ``(4) For purposes of this subsection, the `applicable 
commitment period'--
            ``(A) subject to subparagraph (B), shall be--
                    ``(i) 3 years; or
                    ``(ii) not less than 5 years, if the 
                current monthly income of the debtor and the 
                debtor's spouse combined, when multiplied by 
                12, is not less than--
                            ``(I) in the case of a debtor in a 
                        household of 1 person, the median 
                        family income of the applicable State 
                        for 1 earner;
                            ``(II) in the case of a debtor in a 
                        household of 2, 3, or 4 individuals, 
                        the highest median family income of the 
                        applicable State for a family of the 
                        same number or fewer individuals; or
                            ``(III) in the case of a debtor in 
                        a household exceeding 4 individuals, 
                        the highest median family income of the 
                        applicable State for a family of 4 or 
                        fewer individuals, plus $525 per month 
                        for each individual in excess of 4; and
            ``(B) may be less than 3 or 5 years, whichever is 
        applicable under subparagraph (A), but only if the plan 
        provides for payment in full of all allowed unsecured 
        claims over a shorter period.''; and
            (4) in section 1329(c), by striking ``three years'' 
        and inserting ``the applicable commitment period under 
        section 1325(b)(1)(B)''.

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

    It is the sense of Congress that rule 9011 of the Federal 
Rules of Bankruptcy Procedure (11 U.S.C. App.) should be 
modified to include a requirement that all documents (including 
schedules), signed and unsigned, submitted to the court or to a 
trustee by debtors who represent themselves and debtors who are 
represented by attorneys be submitted only after the debtors or 
the debtors' attorneys have made reasonable inquiry to verify 
that the information contained in such documents is--
            (1) well grounded in fact; and
            (2) warranted by existing law or a good faith 
        argument for the extension, modification, or reversal 
        of existing law.

SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.

    Section 362(e) of title 11, United States Code, is 
amended--
            (1) by inserting ``(1)'' after ``(e)''; and
            (2) by adding at the end the following:
    ``(2) Notwithstanding paragraph (1), in a case under 
chapter 7, 11, or 13 in which the debtor is an individual, the 
stay under subsection (a) shall terminate on the date that is 
60 days after a request is made by a party in interest under 
subsection (d), unless--
            ``(A) a final decision is rendered by the court 
        during the 60-day period beginning on the date of the 
        request; or
            ``(B) 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 a debtor who is an individual, 
property of the estate includes, in addition to the property 
specified in section 541--
            ``(1) all property of the kind specified in section 
        541 that the debtor acquires after the commencement of 
        the case but before the case is closed, dismissed, or 
        converted to a case under chapter 7, 12, or 13, 
        whichever occurs first; and
            ``(2) earnings from services performed by the 
        debtor after the commencement of the case but before 
        the case is closed, dismissed, or converted to a case 
        under chapter 7, 12, or 13, whichever occurs first.''.
    ``(b) Except as provided in section 1104 or a confirmed 
plan or order confirming a plan, the debtor shall remain in 
possession of all property of the estate.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter I of chapter 11 of title 11, United States 
        Code, is amended by adding at the end the following:

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

    (b) Contents of Plan.--Section 1123(a) of title 11, United 
States Code, is amended--
            (1) in paragraph (6), by striking ``and'' at the 
        end;
            (2) in paragraph (7), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(8) in a case in which the debtor is an 
        individual, provide for the payment to creditors under 
        the plan of all or such portion of earnings from 
        personal services performed by the debtor after the 
        commencement of the case or other future income of the 
        debtor as is necessary for the execution of the 
        plan.''.
    (c) Confirmation of Plan.--
            (1) Requirements relating to value of property.--
        Section 1129(a) of title 11, United States Code, as 
        amended by section 213, is amended by adding at the end 
        the following:
            ``(15) In a case in which the debtor is an 
        individual and in which the holder of an allowed 
        unsecured claim objects to the confirmation of the 
        plan--
                    ``(A) the value, as of the effective date 
                of the plan, of the property to be distributed 
                under the plan on account of such claim is not 
                less than the amount of such claim; or
                    ``(B) the value of the property to be 
                distributed under the plan is not less than the 
                projected disposable income of the debtor (as 
                defined in section 1325(b)(2)) to be received 
                during the 5-year period beginning on the date 
                that the first payment is due under the plan, 
                or during the period for which the plan 
                provides payments, whichever is longer.''.
            (2) Requirement relating to interests in 
        property.--Section 1129(b)(2)(B)(ii) of title 11, 
        United States Code, is amended by inserting before the 
        period at the end the following: ``, except that in a 
        case in which the debtor is an individual, the debtor 
        may retain property included in the estate under 
        section 1115, subject to the requirements of subsection 
        (a)(14) of this section.''.
    (d) Effect of Confirmation.--Section 1141(d) of title 11, 
United States Code, is amended--
            (1) in paragraph (2), by striking ``The 
        confirmation of a plan does not discharge an individual 
        debtor'' and inserting ``A discharge under this chapter 
        does not discharge a debtor who is an individual''; and
            (2) by adding at the end the following:
    ``(5) In a case in which the debtor is an individual--
            ``(A) unless after notice and a hearing the court 
        orders otherwise for cause, confirmation of the plan 
        does not discharge any debt provided for in the plan 
        until the court grants a discharge on completion of all 
        payments under the plan;
            ``(B) at any time after the confirmation of the 
        plan, and after notice and a hearing, the court may not 
        grant a discharge to the debtor who has not completed 
        payments under the plan unless--
                    ``(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 
                section 1127 of this title is not practicable; 
                and''.
    (e) Modification of Plan.--Section 1127 of title 11, United 
States Code, is amended by adding at the end the following:
    ``(e) If the debtor is an individual, the plan may be 
modified at any time after confirmation of the plan but before 
the completion of payments under the plan, whether or not the 
plan has been substantially consummated, upon request of the 
debtor, the trustee, the United States trustee, or the holder 
of an allowed unsecured claim, to--
            ``(1) increase or reduce the amount of payments on 
        claims of a particular class provided for by the plan;
            ``(2) extend or reduce the time period for such 
        payments; or
            ``(3) alter the amount of the distribution to a 
        creditor whose claim is provided for by the plan to the 
        extent necessary to take account of any payment of such 
        claim made other than under the plan.
    ``(f)(1) 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. LIMITATIONS ON HOMESTEAD EXEMPTION.

    (a) Exemptions.--Section 522 of title 11, United States 
Code, as amended by sections 224 and 308, is amended by adding 
at the end the following:
    ``(p)(1)Except as provided in paragraph (2) of this 
subsection and sections 544 and 548 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 1215-day 
period preceding the filing of the petition which exceeds in 
the aggregate $125,000 in value in--
            ``(A) real or personal property that the debtor or 
        a dependent of the debtor uses as a residence;
            ``(B) a cooperative that owns property that the 
        debtor or a dependent of the debtor uses as a 
        residence;
            ``(C) a burial plot for the debtor or a dependent 
        of the debtor; or
            ``(D) real or personal property that the debtor or 
        dependent of the debtor claims as a homestead.
    ``(2)(A) The limitation under paragraph (1) shall not apply 
to an exemption claimed under subsection (b)(3)(A) by a family 
farmer for the principal residence of 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 such 1215-day period) into the debtor's 
current principal residence, if the debtor's previous and 
current residences are located in the same State.
    ``(q)(1) As a result of electing under subsection (b)(3)(A) 
to exempt property under State or local law, a debtor may not 
exempt any amount of an interest in property described in 
subparagraphs (A), (B), and (C) of subsection (p) which exceeds 
in the aggregate $125,000 if--
            ``(A) the court determines, after notice and a 
        hearing, that the debtor has been convicted of a felony 
        (as defined in section 3156 of title 18), which under 
        the circumstances, demonstrates that the filing of the 
        case was an abuse of the provisions of this title; or
            ``(B) the debtor owes a debt arising from--
                    ``(i) any violation of the Federal 
                securities laws (as defined in section 3(a)(47) 
                of the Securities Exchange Act of 1934), any 
                State securities laws, or any regulation or 
                order issued under Federal securities laws or 
                State securities laws;
                    ``(ii) fraud, deceit, or manipulation in a 
                fiduciary capacity or in connection with the 
                purchase or sale of any security registered 
                under section 12 or 15(d) of the Securities 
                Exchange Act of 1934 or under section 6 of the 
                Securities Act of 1933;
                    ``(iii) any civil remedy under section 1964 
                of title 18, United States Code; or
                    ``(iv) any criminal act, intentional tort, 
                or willful or reckless misconduct that caused 
                serious physical injury or death to another 
                individual in the preceding 5 years.
    ``(2) Paragraph (1) shall not apply to the extent the 
amount of an interest in property described in subparagraphs 
(A), (B), and (C) of subsection (p) is reasonably necessary for 
the support of the debtor and any dependent of the debtor.''.
    (b) Adjustment of Dollar Amounts.--Paragraphs (1) and (2) 
of section 104(b) of title 11, United States Code, as amended 
by section 224, are amended by inserting ``522(p), 522(q),'' 
after ``522(n),''.

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

    Section 541(b) of title 11, United States Code, as amended 
by section 225, is amended by adding at the end 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 
                        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 such amount under this clause 
                        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 
                        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 such amount under this clause 
                        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;''.

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 33.87 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) If the debtor is an individual in a case under 
chapter 7 or 13, such value with respect to personal property 
securing an allowed claim shall be determined based on the 
replacement 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 
purposes, replacement value shall mean the price a retail 
merchant would charge for property of that kind considering the 
age and condition of the property at the time value is 
determined.''.

SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

    (a) Executory Contracts and Unexpired Leases.--Section 365 
of title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A), by striking the 
                semicolon at the end and inserting the 
                following: ``other than a default that is a 
                breach of a provision relating to the 
                satisfaction of any provision (other than a 
                penalty rate or penalty provision) relating to 
                a default arising from any failure to perform 
                nonmonetary obligations under an unexpired 
                lease of real property, if it is impossible for 
                the trustee to cure such default by performing 
                nonmonetary acts at and after the time of 
                assumption, except that if such default arises 
                from a failure to operate in accordance with a 
                nonresidential real property lease, then such 
                default shall be cured by performance at and 
                after the time of assumption in accordance with 
                such lease, and pecuniary losses resulting from 
                such default shall be compensated in accordance 
                with the provisions of this paragraph;''; and
                    (B) in paragraph (2)(D), by striking 
                ``penalty rate or provision'' and inserting 
                ``penalty rate or penalty provision'';
            (2) in subsection (c)--
                    (A) in paragraph (2), by inserting ``or'' 
                at the end;
                    (B) in paragraph (3), by striking ``; or'' 
                at the end and inserting a period; and
                    (C) by striking paragraph (4);
            (3) in subsection (d)--
                    (A) by striking paragraphs (5) through (9); 
                and
                    (B) by redesignating paragraph (10) as 
                paragraph (5); and
            (4) in subsection (f)(1) by striking ``; except 
        that'' and all that follows through the end of the 
        paragraph and inserting a period.
    (b) Impairment of Claims or Interests.--Section 1124(2) of 
title 11, United States Code, is amended--
            (1) in subparagraph (A), by inserting ``or of a 
        kind that section 365(b)(2) 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 nonresidential real 
                property lease subject to section 365(b)(1)(A), 
                compensates the holder of such claim or such 
                interest (other than the debtor or an insider) 
                for any actual pecuniary loss incurred by such 
                holder as a result of such failure; and''.

SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

    Section 503(b)(1)(A) of title 11, United States Code, is 
amended to read as follows:
    ``(A) the actual, necessary costs and expenses of 
preserving the estate including--
            ``(i) wages, salaries, or commissions for services 
        rendered after the commencement of the case; and
            ``(ii) wages and benefits awarded pursuant to a 
        judicial proceeding or a proceeding of the National 
        Labor Relations Board as back pay attributable to any 
        period of time occurring after commencement of the case 
        under this title, as a result of a violation of Federal 
        or State law by the debtor, without regard to the time 
        of the occurrence of unlawful conduct on which such 
        award is based or to whether any services were 
        rendered, if the court determines that payment of wages 
        and benefits by reason of the operation of this clause 
        will not substantially increase the probability of 
        layoff or termination of current employees, or of 
        nonpayment of domestic support obligations, during the 
        case under this title;''.

SEC. 330. NONDISCHARGEABILITY OF DEBTS INCURRED THROUGH VIOLATIONS OF 
                    LAWS RELATING TO THE PROVISION OF LAWFUL GOODS AND 
                    SERVICES.

    (a) Debts Incurred Through Violations of Law Relating to 
the Provision of Lawful Goods and Services.--Section 523(a) of 
title 11, United States Code, as amended by section 224, is 
amended--
            (1) in paragraph (18) by striking ``or'' at the 
        end;
            (2) in paragraph (19) by striking the period at the 
        end and inserting ``; or''; and
            (3) by adding at the end the following:
            ``(20) that results from any judgment, order, 
        consent order, or decree entered in any Federal or 
        State court, or contained in any settlement agreement 
        entered into by the debtor (including any court-ordered 
        damages, fine, penalty, or attorney fee or cost owed by 
        the debtor), that arises from--
                    ``(A) the violation by the debtor of any 
                Federal or State statutory law, including but 
                not limited to violations of title 18, that 
                results from intentional actions of the debtor 
                that--
                            ``(i) by force or threat of force 
                        or by physical obstruction, 
                        intentionally injure, intimidate, or 
                        interfere with or attempt to injure, 
                        intimidate or interfere with any person 
                        because that person is or has been, or 
                        in order to intimidate such person or 
                        any other person or any class of 
                        persons from, obtaining or providing 
                        lawful goods or services;
                            ``(ii) by force or threat of force 
                        or by physical obstruction, 
                        intentionally injure, intimidate, or 
                        interfere with or attempt to injure, 
                        intimidate or interfere with any person 
                        lawfully exercising or seeking to 
                        exercise the First Amendment right of 
                        religious freedom at a place of 
                        religious worship; or
                            ``(iii) intentionally damage or 
                        destroy the property of a facility, or 
                        attempt to do so, because such facility 
                        provides lawful goods or services, or 
                        intentionally damage or destroy the 
                        property of a place of religious 
                        worship; or
                    ``(B) a violation of a court order or 
                injunction that protects access to a facility 
                that or a person who provides lawful goods or 
                services or the provision of lawful goods or 
                services if--
                            ``(i) such violation is intentional 
                        or knowing; or
                            ``(ii) such violation occurs after 
                        a court has found that the debtor 
                        previously violated--
                                    ``(I) such court order or 
                                such injunction; or
                                    ``(II) any other court 
                                order or injunction that 
                                protects access to the same 
                                facility or the same person;
        except that nothing in this paragraph shall be 
        construed to affect any expressive conduct (including 
        peaceful picketing, peaceful prayer, or other peaceful 
        demonstration) protected from legal prohibition by the 
        first amendment to the Constitution of the United 
        States.''.
    (b) Restitution.--Section 523(a)(13) of title 11, United 
States Code, is amended by inserting ``or under the criminal 
law of a State'' after ``title 18''.

SEC. 331. DELAY OF DISCHARGE DURING PENDENCY OF CERTAIN PROCEEDINGS.

    (a) Chapter 7.--Section 727(a) of title 11, United States 
Code, as amended by section 106, is amended--
            (1) in paragraph (10), by striking ``or'' at the 
        end;
            (2) in paragraph (11) by striking the period at the 
        end and inserting ``; or''; and
            (3) by inserting after paragraph (11) the 
        following:
            ``(12) the court after notice and a hearing held 
        not more than 10 days before the date of entry of the 
        order granting the discharge finds that there is 
        reasonable cause to believe that--
                    ``(A) section 522(q)(1) may be applicable 
                to the debtor; and
                    ``(B) there is pending any proceeding in 
                which the debtor may be found guilty of a 
                felony of the kind described in section 
                522(q)(1)(A) or liable for a debt of the kind 
                described in section 522(q)(1)(B); or''.
    (b) Chapter 11.--Section 1141(d) of title 11, United States 
Code, as amended by section 321, is amended by adding at the 
end the following:
                    ``(C) unless after notice and a hearing 
                held not more than 10 days before the date of 
                entry of the order granting the discharge, the 
                court finds that there is no reasonable cause 
                to believe that--
                            ``(i) section 522(q)(1) may be 
                        applicable to the debtor; and
                            ``(ii) there is pending any 
                        proceeding in which the debtor may be 
                        found guilty of a felony of the kind 
                        described in section 522(q)(1)(A) or 
                        liable for a debt of the kind described 
                        in section 522(q)(1)(B).''.
    (c) Chapter 12.--Section 1228 of title 11, United States 
Code, is amended--
            (1) in subsection (a) by striking ``As'' and 
        inserting ``Subject to subsection (d), as'',
            (2) in subsection (b) by striking ``At'' and 
        inserting ``Subject to subsection (d), at'', and
            (3) by adding at the end the following:
    ``(f) The court may not grant a discharge under this 
chapter unless the court after notice and a hearing held not 
more than 10 days before the date of entry of the order 
granting the discharge finds that there is no reasonable cause 
to believe that--
            ``(1) section 522(q)(1) may be applicable to the 
        debtor; and
            ``(2) there is pending any proceeding in which the 
        debtor may be found guilty of a felony of the kind 
        described in section 522(q)(1)(A) or liable for a debt 
        of the kind described in section 522(q)(1)(B).''.
    (d) Chapter 13.--Section 1328 of title 11, United States 
Code, as amended by section 106, is amended--
            (1) in subsection (a) by striking ``As'' and 
        inserting ``Subject to subsection (d), as'',
            (2) in subsection (b) by striking ``At'' and 
        inserting ``Subject to subsection (d), at'', and
            (3) by adding at the end the following:
    ``(h) The court may not grant a discharge under this 
chapter unless the court after notice and a hearing held not 
more than 10 days before the date of entry of the order 
granting the discharge finds that there is no reasonable cause 
to believe that--
            ``(1) section 522(q)(1) may be applicable to the 
        debtor; and
            ``(2) there is pending any proceeding in which the 
        debtor may be found guilty of a felony of the kind 
        described in section 522(q)(1)(A) or liable for a debt 
        of the kind described in section 522(q)(1)(B).''.

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.

    (a) Definition.--Section 101 of title 11, United States 
Code, is amended by inserting after paragraph (48) the 
following:
            ``(48A) `securities self regulatory organization' 
        means either a securities association registered with 
        the Securities and Exchange Commission under section 
        15A of the Securities Exchange Act of 1934 or a 
        national securities exchange registered with the 
        Securities and Exchange Commission under section 6 of 
        the Securities Exchange Act of 1934;''.
    (b) Automatic Stay.--Section 362(b) of title 11, United 
States Code, as amended by sections 224, 303, and 311, is 
amended by inserting after paragraph (24) the following:
            ``(25) under subsection (a), of--
                    ``(A) the commencement or continuation of 
                an investigation or action by a securities self 
                regulatory organization to enforce such 
                organization's regulatory power;
                    ``(B) the enforcement of an order or 
                decision, other than for monetary sanctions, 
                obtained in an action by 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), 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 on the motion of the trustee or lessor for 
cause.
    ``(ii) If the court grants an extension under clause (i), 
the court may grant a subsequent extension only upon prior 
written consent of the lessor in each instance.''.
    (b) Exception.--Section 365(f)(1) of title 11, United 
States Code, is amended by striking ``subsection'' the first 
place it appears and inserting ``subsections (b) and''.

SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

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

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

    Section 546 of title 11, United States Code, is amended--
            (1) by redesignating the second subsection (g) (as 
        added by section 222(a) of Public Law 103-394) as 
        subsection (i);
            (2) in subsection (i), as so redesignated, by 
        inserting ``and subject to the prior rights of holders 
        of security interests in such goods or the proceeds of 
        such goods'' after ``consent of a creditor''; and
            (3) by adding at the end the following:
    ``(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 State statute applicable to 
such lien that is similar to section 7-209 of the Uniform 
Commercial Code, as in effect on the date of enactment of the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 
2002, or any successor to such section 7-209.''.

SEC. 407. AMENDMENTS TO SECTION 330(A) OF TITLE 11, UNITED STATES CODE.

    Section 330(a) of title 11, United States Code, is 
amended--
            (1) in paragraph (3)--
                    (A) by striking ``(A) In'' and inserting 
                ``In''; and
                    (B) by inserting ``to an examiner, trustee 
                under chapter 11, or professional person'' 
                after ``awarded''; and
            (2) by adding at the end the following:
    ``(7) In determining the amount of reasonable compensation 
to be awarded to a trustee, the court shall treat such 
compensation as a commission, based on section 326 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, 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) The court shall resolve any dispute arising out of an 
election described in subparagraph (A).''.

SEC. 417. UTILITY SERVICE.

    Section 366 of title 11, United States Code, is amended--
            (1) in subsection (a), by striking ``subsection 
        (b)'' and inserting ``subsections (b) and (c)''; and
            (2) by adding at the end the following:
    ``(c)(1)(A) For purposes of this subsection, the term 
`assurance of payment' means--
            ``(i) a cash deposit;
            ``(ii) a letter of credit;
            ``(iii) a certificate of deposit;
            ``(iv) a surety bond;
            ``(v) a prepayment of utility consumption; or
            ``(vi) another form of security that is mutually 
        agreed on between the utility and the debtor or the 
        trustee.
``(B) For purposes of this subsection an administrative expense 
priority shall not constitute an assurance of payment.
    ``(2) Subject to paragraphs (3) and (4), with respect to a 
case filed under chapter 11, a utility referred to in 
subsection (a) may alter, refuse, or discontinue utility 
service, if during the 30-day period beginning on the date of 
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 individual has income less than 150 percent of the 
income official poverty line (as defined by the Office of 
Management and Budget, and revised annually in accordance with 
section 673(2) of the Omnibus Budget Reconciliation Act of 
1981) applicable to a family of the size involved and is unable 
to pay that fee in installments. For purposes of this 
paragraph, the term `filing fee' means the filing 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, 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 $2,000,000 (excluding debts owed 
                to 1 or more affiliates or insiders) for a case 
                in which the United States trustee has not 
                appointed under section 1102(a)(1) a committee 
                of unsecured creditors or where the court has 
                determined that the committee of unsecured 
                creditors is not sufficiently active and 
                representative to provide effective oversight 
                of the debtor; and
                    ``(B) does not include any member of a 
                group of affiliated debtors that has aggregate 
                noncontingent liquidated secured and unsecured 
                debts in an amount greater than $2,000,000 
                (excluding debt owed to 1 or more affiliates or 
                insiders);''.
    (b) Conforming Amendment.--Section 1102(a)(3) of title 11, 
United States Code, is amended by inserting ``debtor'' after 
``small business''.
    (c) Adjustment of Dollar Amounts.--Section 104(b) of title 
11, United States Code, as amended by section 226, is amended 
by inserting ``101(51D),'' after ``101(3),'' each place it 
appears.

SEC. 433. 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 expenses when due;
            ``(B) if the debtor is not in compliance with the 
        requirements referred to in subparagraph (A)(i) or 
        filing tax returns and other required government 
        filings and making the payments referred to in 
        subparagraph (A)(ii), what the failures are and how, at 
        what cost, and when the debtor intends to remedy such 
        failures; and
            ``(C) such other matters as are in the best 
        interests of the debtor and creditors, and in the 
        public interest in fair and efficient procedures under 
        chapter 11 of this title.''.
            (2) Clerical amendment.--The table of sections for 
        chapter 3 of title 11, United States Code, is amended 
        by inserting after the item relating to section 307 the 
        following:


``308. Debtor reporting requirements.''.

    (b) 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 expenses when 
        due.
    (b) Purpose.--The rules and forms proposed under subsection 
(a) shall be designed to achieve a practical balance among--
            (1) the reasonable needs of the bankruptcy court, 
        the United States trustee, creditors, and other parties 
        in interest for reasonably complete information;
            (2) 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 chapter 11 
of title 11, United States Code, as amended by section 321, is 
amended by adding at the end the following:

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

    ``In a small business case, a trustee or the debtor in 
possession, in addition to the duties provided in this title 
and as otherwise required by law, shall--
            ``(1) 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 a 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 
        taxes entitled to administrative expense priority 
        except those being contested by appropriate proceedings 
        being diligently prosecuted; and
            ``(7) allow the United States trustee, or a 
        designated representative of the United States trustee, 
        to inspect the debtor's business premises, books, and 
        records at reasonable times, after reasonable prior 
        written notice, unless notice is waived by the 
        debtor.''.
    (b) Clerical Amendment.--The table of sections for chapter 
11 of title 11, United States Code, as amended by section 321, 
is amended by inserting after the item relating to section 1115 
the following:

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

SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

    Section 1121 of title 11, United States Code, is amended by 
striking subsection (e) and inserting the following:
    ``(e) In a small business case--
            ``(1) only the debtor may file a plan until after 
        180 days after the date of the order for relief, unless 
        that period is--
                    ``(A) extended as provided by this 
                subsection, after notice and a hearing; or
                    ``(B) the court, for cause, orders 
                otherwise;
            ``(2) the plan, and 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 court shall confirm a 
plan that complies with the applicable provisions of this title 
and that is filed in accordance with section 1121(e) not later 
than 45 days after such plan is filed unless the time for 
confirmation is extended in accordance with section 
1121(e)(3).''.

SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.

    Section 586(a) of title 28, United States Code, is 
amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (G), by striking 
                ``and'' at the end;
                    (B) by redesignating subparagraph (H) as 
                subparagraph (I); and
                    (C) by inserting after subparagraph (G) the 
                following:
                    ``(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 
sections 106, 305, and 311, is amended--
            (1) in subsection (k), as so redesignated by 
        section 305--
                    (A) by striking ``An'' and inserting ``(1) 
                Except as provided in paragraph (2), an''; and
                    (B) by adding at the end the following:
    ``(2) If such violation is based on an action taken by an 
entity in the good faith belief that subsection (h) applies to 
the debtor, the recovery under paragraph (1) of this subsection 
against such entity shall be limited to actual damages.''; and
            (2) by adding at the end the following:
    ``(n)(1) Except as provided in paragraph (2), subsection 
(a) does not apply in a case in which the debtor--
            ``(A) is a debtor in a small business case pending 
        at the time the petition is filed;
            ``(B) was a debtor in a small business case that 
        was dismissed for any reason by an order that became 
        final in the 2-year period ending on the date of the 
        order for relief entered with respect to the petition;
            ``(C) was a debtor in a small business case in 
        which a plan was confirmed in the 2-year period ending 
        on the date of the order for relief entered with 
        respect to the petition; or
            ``(D) is an entity that has acquired substantially 
        all of the assets or business of a small business 
        debtor described in subparagraph (A), (B), or (C), 
        unless such entity establishes by a preponderance of 
        the evidence that such entity acquired substantially 
        all of the assets or business of such small business 
        debtor in good faith and not for the purpose of evading 
        this paragraph.
    ``(2) Paragraph (1) does not apply--
            ``(A) to an involuntary case involving no collusion 
        by the debtor with creditors; or
            ``(B) to the filing of a petition if--
                    ``(i) the debtor proves by a preponderance 
                of the evidence that the filing of 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, absent unusual circumstances specifically 
identified by the court that establish that the requested 
conversion or dismissal is not in the best interests of 
creditors and the estate, the court shall convert a case under 
this chapter to a case under chapter 7 or dismiss a case under 
this chapter, whichever is in the best interests of creditors 
and the estate, if the movant establishes cause.
    ``(2) The relief provided in paragraph (1) shall not be 
granted absent unusual circumstances specifically identified by 
the court that establish that such relief is not in the best 
interests of creditors and the estate, if the debtor or another 
party in interest objects and establishes that--
            ``(A) there is a reasonable likelihood that a plan 
        will be confirmed within the timeframes established in 
        sections 1121(e) and 1129(e) of this title, or if such 
        sections do not apply, within a reasonable period of 
        time; and
            ``(B) the grounds for granting such relief include 
        an act or omission of the debtor other than under 
        paragraph (4)(A)--
                    ``(i) for which there exists a reasonable 
                justification for the act or omission; and
                    ``(ii) that will be cured within a 
                reasonable period of time fixed by the court.
    ``(3) The court shall commence the hearing on a 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 such hearing, unless the movant expressly 
consents to a continuance for a specific period of time or 
compelling circumstances prevent the court from meeting the 
time limits established by this paragraph.
    ``(4) For purposes of this subsection, the term `cause' 
includes--
            ``(A) substantial or continuing loss to or 
        diminution of the estate and the absence of a 
        reasonable likelihood of rehabilitation;
            ``(B) gross mismanagement of the estate;
            ``(C) failure to maintain appropriate insurance 
        that poses a risk to the estate or to the public;
            ``(D) unauthorized use of cash collateral 
        substantially harmful to 1 or more creditors;
            ``(E) failure to comply with an order of the court;
            ``(F) unexcused failure to satisfy timely any 
        filing or reporting requirement established by this 
        title or by any rule applicable to a case under this 
        chapter;
            ``(G) failure to attend the meeting of creditors 
        convened under section 341(a) or an examination ordered 
        under rule 2004 of the Federal Rules of Bankruptcy 
        Procedure without good cause shown by the debtor;
            ``(H) failure timely to provide information or 
        attend meetings reasonably requested by the United 
        States trustee or the bankruptcy administrator;
            ``(I) failure timely to pay taxes owed 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 a 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 such hearing, unless the movant expressly 
consents to a continuance for a specific period of time or 
compelling circumstances prevent the court from meeting the 
time limits established by this paragraph.''.
    (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 
Executive Office for United States Trustees, and the Director 
of the Administrative Office of the United States Courts, 
shall--
            (1) conduct a study to determine--
                    (A) the internal and external factors that 
                cause small businesses, especially sole 
                proprietorships, to become debtors in cases 
                under title 11, United States Code, and that 
                cause certain small businesses to successfully 
                complete cases under chapter 11 of such title; 
                and
                    (B) how Federal laws relating to bankruptcy 
                may be made more effective and efficient in 
                assisting small businesses to remain viable; 
                and
            (2) 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 a penalty 
        provision, for the period of 2 years following the 
        later of the rejection date or the date of actual 
        turnover of the premises, without reduction or setoff 
        for any reason whatsoever except for sums actually 
        received or to be received from 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);''.

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

    (a) In General.--Section 521(a) of title 11, United States 
Code, as amended by section 106, is amended--
            (1) in paragraph (4), by striking ``and'' at the 
        end;
            (2) in paragraph (5), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) unless a trustee is serving in the case, if 
        at the time of filing the debtor served as the 
        administrator (as defined in section 3 of the Employee 
        Retirement Income Security Act of 1974 of an employee 
        benefit plan, continue to perform the obligations 
        required of the administrator.''.
    (b) Duties of Trustees.--Section 704(a) of title 11, United 
States Code, as amended by sections 102 and 219, is amended--
            (1) in paragraph (9), by striking ``and'' at the 
        end;
            (2) in paragraph (10), by striking the period at 
        the end; and
            (3) by adding at the end the following:
            ``(11) if, at the time of the commencement of the 
        case, the debtor served as the administrator (as 
        defined in section 3 of the Employee Retirement Income 
        Security Act of 1974) of an employee benefit plan, 
        continue to perform the obligations required of the 
        administrator; and''.
    (c) Conforming Amendment.--Section 1106(a)(1) of title 11, 
United States Code, is amended to read as follows:
            ``(1) perform the duties of the trustee, as 
        specified in paragraphs (2), (5), (7), (8), (9), (10), 
        and (11) of section 704;''.

SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

    (a) Technical Amendment Relating to Municipalities.--
Section 921(d) of title 11, United States Code, is amended by 
inserting ``notwithstanding section 301(b)'' before the period 
at the end.
    (b) Conforming Amendment.--Section 301 of title 11, United 
States Code, is amended--
            (1) by inserting ``(a)'' before ``A voluntary''; 
        and
            (2) by striking the last sentence and inserting the 
        following:
    ``(b) The commencement of a voluntary case under a chapter 
of this title constitutes an order for relief under such 
chapter.''.

SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.

    Section 901(a) of title 11, United States Code, is 
amended--
            (1) by inserting ``555, 556,'' after ``553,''; and
            (2) by inserting ``559, 560, 561, 562'' after 
        ``557,''.

                       TITLE VI--BANKRUPTCY DATA

SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

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

``Sec. 159. Bankruptcy statistics

    ``(a) The clerk of the district court, or the clerk of the 
bankruptcy court if one is certified pursuant to section 156(b) 
of this title, shall collect statistics regarding debtors who 
are individuals with primarily consumer debts seeking relief 
under chapters 7, 11, and 13 of title 11. Those statistics 
shall be in a standardized format prescribed by the Director of 
the Administrative Office of the United States Courts (referred 
to in this section as the `Director').
    ``(b) The Director shall--
            ``(1) compile the statistics referred to in 
        subsection (a);
            ``(2) make the statistics available to the public; 
        and
            ``(3) not later than June 1, 2005, 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 cases filed during the reporting 
                period, determined as the difference between 
                the total amount of debt and obligations of a 
                debtor reported on the schedules and the amount 
                of such debt reported in categories which are 
                predominantly nondischargeable;
                    ``(D) the average period of time between 
                the filing of the petition and the closing of 
                the case for cases closed during the reporting 
                period;
                    ``(E) for cases closed during the reporting 
                period--
                            ``(i) the number of cases in which 
                        a reaffirmation 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 
                        entered determining the value of 
                        property securing a claim;
                            ``(ii) the number of cases 
                        dismissed, the number of cases 
                        dismissed for failure to make payments 
                        under the plan, the number of cases 
                        refiled after dismissal, and the number 
                        of cases in which the plan was 
                        completed, separately itemized with 
                        respect to the number of modifications 
                        made before completion of the plan, if 
                        any; and
                            ``(iii) the number of cases in 
                        which the debtor filed another case 
                        during the 6-year period preceding the 
                        filing;
                    ``(G) the number of cases in which 
                creditors were fined for misconduct and any 
                amount of punitive damages awarded by the court 
                for creditor misconduct; and
                    ``(H) the number of cases in which 
                sanctions under rule 9011 of the Federal Rules 
                of Bankruptcy Procedure were imposed against 
                debtor's attorney or damages awarded under such 
                Rule.''.
    (b) Clerical Amendment.--The table of sections for chapter 
6 of title 28, United States Code, is amended by adding at the 
end the following:

``159. Bankruptcy statistics.''.

    (c) Effective Date.--The amendments made by this section 
shall take effect 18 months after the date of enactment of this 
Act.

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

    (a) Amendment.--Chapter 39 of title 28, United States Code, 
is amended by adding at the end the following:

``Sec. 589b. Bankruptcy data

    ``(a) Rules.--The Attorney General shall, within a 
reasonable time after the effective date of this section, issue 
rules requiring uniform forms for (and from time to time 
thereafter to appropriately modify and approve)--
            ``(1) final reports by trustees in cases under 
        chapters 7, 12, and 13 of title 11; and
            ``(2) periodic reports by debtors in possession or 
        trustees in cases under chapter 11 of title 11.
    ``(b) 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.--The uniform forms for final reports 
required under subsection (a) for use by trustees under 
chapters 7, 12, and 13 of title 11 shall, in addition to such 
other matters as are required by law or as the Attorney General 
in the discretion of the Attorney General shall propose, 
include with respect to a case under such title--
            ``(1) information about the length of time the case 
        was pending;
            ``(2) assets abandoned;
            ``(3) assets exempted;
            ``(4) receipts and disbursements of the estate;
            ``(5) expenses of administration, including for use 
        under section 707(b), actual costs of administering 
        cases under chapter 13 of title 11;
            ``(6) claims asserted;
            ``(7) claims allowed; and
            ``(8) distributions to claimants and claims 
        discharged without payment,
in each case by appropriate category and, in cases under 
chapters 12 and 13 of title 11, date of confirmation of the 
plan, each modification thereto, and defaults by the debtor in 
performance under the plan.
    ``(e) Periodic Reports.--The uniform forms for periodic 
reports required under subsection (a) for use by trustees or 
debtors in possession under chapter 11 of title 11 shall, in 
addition to such other matters as are required by law or as the 
Attorney General in the discretion of the Attorney General 
shall propose, include--
            ``(1) information about the 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 for chapter 
39 of title 28, United States Code, is amended by adding at the 
end the following:

``589b. Bankruptcy data.''.

SEC. 603. AUDIT PROCEDURES.

    (a) 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, United States Code, and, if applicable, 
        section 111 of such title, in cases filed under chapter 
        7 or 13 of such title in which the debtor is an 
        individual. Such audits shall be in accordance with 
        generally accepted auditing standards and performed by 
        independent certified public accountants or independent 
        licensed public accountants, provided that the Attorney 
        General and the Judicial Conference, as appropriate, 
        may develop alternative auditing standards not later 
        than 2 years after the date of enactment of this Act.
            (2) Procedures.--Those procedures required by 
        paragraph (1) shall--
                    (A) establish a method of selecting 
                appropriate qualified persons to contract to 
                perform those audits;
                    (B) establish a method of randomly 
                selecting cases to be audited, except that not 
                less than 1 out of every 250 cases in each 
                Federal judicial district shall be selected for 
                audit;
                    (C) require audits 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 Abuse Prevention 
        and Consumer Protection Act of 2002;''; 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 
Abuse Prevention and Consumer Protection Act of 2002.
    ``(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 district court 
(or the clerk of the bankruptcy court if one is certified under 
section 156(b) of this title) shall give notice of the 
misstatement to the creditors in the case.
    ``(B) If a material misstatement of income or expenditures 
or of assets is reported, the United States trustee shall--
            ``(i) report the material misstatement, if 
        appropriate, to the United States Attorney pursuant to 
        section 3057 of title 18; and
            ``(ii) if advisable, take appropriate action, 
        including but not limited to commencing an adversary 
        proceeding to revoke the debtor's discharge pursuant to 
        section 727(d) of title 11.''.
    (c) Amendments to Section 521 of Title 11, U.S.C.--Section 
521(a) of title 11, United States Code, as so designated by 
section 106, is amended in each of paragraphs (3) and (4) by 
inserting ``or an auditor 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 (as 
defined in section 31701 of title 49) and, if so filed, shall 
be allowed as a single claim.''.

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

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

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

SEC. 705. PRIORITY OF TAX CLAIMS.

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

SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

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

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

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

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

    Section 1141(d) of title 11, United States Code, as amended 
by section 321, is amended by adding at the end the following:
    ``(6) Notwithstanding paragraph (1), the confirmation of a 
plan does not discharge a debtor that is a corporation from any 
debt--
            ``(A) of a kind specified in paragraph (2)(A) or 
        (2)(B) of section 523(a) that is owed to a domestic 
        governmental unit, or owed to a person as the result of 
        an action filed under subchapter III of chapter 37 of 
        title 31 or any similar State statute; or
            ``(B) for a tax or customs duty with respect to 
        which the debtor--
                    ``(i) made a fraudulent return; or
                    ``(ii) willfully attempted in any manner to 
                evade or to defeat such tax or such customs 
                duty.''.

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

    Section 362(a)(8) of title 11, United States Code, is 
amended by striking ``the debtor'' and inserting ``a corporate 
debtor's tax liability for a taxable period the bankruptcy 
court may determine or concerning the tax liability of a debtor 
who is an individual for a taxable period ending before the 
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 by the plan (other than cash 
                        payments made to a class of creditors 
                        under section 1122(b)); and''; and
            (3) by adding at the end the following:
                    ``(D) with respect to a secured claim which 
                would otherwise meet the description of an 
                unsecured claim of a governmental unit under 
                section 507(a)(8), but for the secured status 
                of that claim, the holder of that claim will 
                receive on account of that claim, cash 
                payments, in the same manner and over the same 
                period, as prescribed in subparagraph (C).''.

SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

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

SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.

    (a) Payment of Taxes Required.--Section 960 of title 28, 
United States Code, is amended--
            (1) by inserting ``(a)'' before ``Any''; and
            (2) by adding at the end the following: ]
    ``(b) A tax under subsection (a) shall be paid on or before 
the due date of the tax under applicable nonbankruptcy law, 
unless--
            ``(1) the tax is a property tax secured by a lien 
        against property that is abandoned 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 sections 215 and 224, is amended--
            (1) in paragraph (1)(B)--
                    (A) in the matter preceding clause (i), by 
                inserting ``or equivalent report or notice,'' 
                after ``a return,'';
                    (B) in clause (i), by inserting ``or 
                given'' after ``filed''; and
                    (C) in clause (ii)--
                            (i) by inserting ``or given'' after 
                        ``filed''; and
                            (ii) by inserting ``, report, or 
                        notice'' after ``return''; and
            (2) by adding at the end the following:
``For purposes of this subsection, the term `return' means a 
return that satisfies the requirements of applicable 
nonbankruptcy law (including applicable filing requirements). 
Such term includes a return prepared pursuant to section 
6020(a) of the Internal Revenue Code of 1986, or similar State 
or local law, or a written stipulation to a judgment or a final 
order entered by a nonbankruptcy tribunal, but does not include 
a return made pursuant to section 6020(b) of the Internal 
Revenue Code of 1986, or a similar State or local law.''.

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

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

SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.

    (a) Filing of Prepetition Tax Returns Required for Plan 
Confirmation.--Section 1325(a) of title 11, United States Code, 
as amended by sections 102, 213, and 306, is amended by 
inserting after paragraph (8) the following:
            ``(9) the debtor has filed all applicable Federal, 
        State, and local tax returns as required by section 
        1308.''.
    (b) Additional Time Permitted for Filing Tax Returns.--
            (1) In general.--Subchapter I of chapter 13 of 
        title 11, United States Code, is amended by adding at 
        the end the following:

``Sec. 1308. 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) After notice and a hearing, and order entered before 
the tolling of any applicable filing period determined under 
this subsection, if the debtor demonstrates by a preponderance 
of the evidence that the failure to file a return as required 
under this subsection is attributable to circumstances beyond 
the control of the debtor, the court may extend the filing 
period established by the trustee under this subsection for--
            ``(A) a period of not more than 30 days for returns 
        described in paragraph (1); and
            ``(B) a period not to extend after the applicable 
        extended due date for a return described in paragraph 
        (2).
    ``(c) For purposes of this section, the term `return' 
includes a return prepared pursuant to subsection (a) or (b) of 
section 6020 of the Internal Revenue Code of 1986, or a similar 
State or local law, or a written stipulation to a judgment or a 
final order entered by a nonbankruptcy tribunal.''.
            (2) Conforming amendment.--The table of sections 
        for subchapter I of chapter 13 of title 11, United 
        States Code, is amended by adding at the end the 
        following:

``1308. Filing of prepetition tax returns.''.

    (c) Dismissal or Conversion on Failure To Comply.--Section 
1307 of title 11, United States Code, is amended--
            (1) by redesignating subsections (e) and (f) as 
        subsections (f) and (g), respectively; and
            (2) by inserting after subsection (d) the 
        following:
    ``(e) Upon the failure of the debtor to file a tax return 
under section 1308, on request of a party in interest or the 
United States trustee and after notice and a hearing, the court 
shall dismiss a case or convert a case under this chapter to a 
case under chapter 7 of this title, whichever is in the best 
interest of the creditors and the estate.''.
    (d) Timely Filed Claims.--Section 502(b)(9) of title 11, 
United States Code, is amended by inserting before the period 
at the end the following: ``, and except that in a case under 
chapter 13, a claim of a governmental unit for a tax with 
respect to a return filed under section 1308 shall be timely if 
the claim is filed on or before the date that is 60 days after 
the date on which such return was filed as required''.
    (e) Rules for Objections to Claims and to Confirmation.--It 
is the sense of Congress that the 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 claim for 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, as amended 
by sections 224, 303, 311, and 401, is amended by inserting 
after paragraph (25) the following:
            ``(26) under subsection (a), of the setoff under 
        applicable nonbankruptcy law of an income tax refund, 
        by a governmental unit, with respect to a taxable 
        period that ended before the 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, on the motion of the trustee and after notice 
        and a hearing, grants the taxing authority adequate 
        protection (within the meaning of section 361) for the 
        secured claim of 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.--
            (1) Special provisions.--Section 346 of title 11, 
        United States Code, is amended to read as follows:

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

    ``(a) Whenever the Internal Revenue Code of 1986 provides 
that a separate taxable estate or entity is created in a case 
concerning a debtor under this title, and the income, gain, 
loss, deductions, and credits of such estate shall be taxed to 
or claimed by the estate, a separate taxable estate is also 
created for purposes of any State and local law imposing a tax 
on or measured by income and such income, gain, loss, 
deductions, and credits shall be taxed to or claimed by the 
estate and may not be taxedto 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.''.
            (2) Clerical Amendment.--The table of sections for 
        chapter 3 of title 11, United States Code, is amended 
        by striking the item relating to section 346 and 
        inserting the following:

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

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

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

    Section 521 of title 11, United States Code, as amended by 
sections 106, 225, 305, 315, and 316, is amended by adding at 
the end the following:
    ``(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) courts of the United States, United 
                States trustees, trustees, examiners, debtors, 
                and debtors in possession; and
                    ``(B) the courts and other competent 
                authorities of foreign countries involved in 
                cross-border insolvency cases;
            ``(2) greater legal certainty for trade and 
        investment;
            ``(3) fair and efficient administration of cross-
        border insolvencies that protects the interests of all 
        creditors, and other interested entities, including the 
        debtor;
            ``(4) protection and maximization of the value of 
        the debtor's assets; and
            ``(5) facilitation of the rescue of financially 
        troubled businesses, thereby protecting investment and 
        preserving employment.
    ``(b) 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 and that the person or body is a foreign 
representative, the court is entitled to so presume.
    ``(b) The court is entitled to presume that documents 
submitted in support of the petition for recognition are 
authentic, whether or not they have been legalized.
    ``(c) In the absence of evidence to the contrary, the 
debtor's registered office, or habitual residence in the case 
of an individual, is presumed to be the center of the debtor's 
main interests.

``Sec. 1517. Order granting recognition

    ``(a) Subject to section 1506, after notice and a hearing, 
an order recognizing a foreign proceeding shall be entered if--
            ``(1) 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; 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 (27) of section 362(b) or pursuant to section 362(n) 
shall not be stayed by any order of a court or administrative 
agency in any proceeding under this chapter.

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

    ``(a) 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 (27) of section 362(b) or pursuant to section 362(n) 
shall not be stayed by any order of a court or administrative 
agency in any proceeding under this chapter.

``Sec. 1522. Protection of creditors and other interested persons

    ``(a) The court may grant relief under section 1519 or 
1521, or may modify or terminate relief under subsection (c), 
only if the interests of the creditors and other interested 
entities, including the debtor, are sufficiently protected.
    ``(b) The court may subject relief granted under section 
1519 or 1521, or the operation of the debtor's business under 
section 1520(a)(3) 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 section 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 section 
                1519 or 1521 shall be reviewed by the court and 
                shall be modified or terminated if inconsistent 
                with the case in the United States; and
                    ``(B) if 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(n), 555 through 557, and 559 through 562 apply 
        in a case under chapter 15''; and
            (2) by adding at the end the following:
    ``(k) Chapter 15 applies only in a case under such chapter, 
except that--
            ``(1) sections 1505, 1513, and 1514 apply in all 
        cases under this title; and
            ``(2) section 1509 applies whether or not a case 
        under this title is pending.''.
    (b) Definitions.--Section 101 of title 11, United States 
Code, is amended by striking paragraphs (23) and (24) and 
inserting the following:
            ``(23) `foreign proceeding' means a collective 
        judicial or administrative proceeding in a foreign 
        country, including an interim proceeding, under a law 
        relating to insolvency or adjustment of debt in which 
        proceeding the assets and affairs of the debtor are 
        subject to control or supervision by a foreign court, 
        for the purpose of reorganization or liquidation;
            ``(24) `foreign representative' means a person or 
        body, including a person or body appointed on an 
        interim basis, authorized in a foreign proceeding to 
        administer the reorganization or the liquidation of the 
        debtor's assets or affairs or to act as a 
        representative of 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 of the United States for the district--
            ``(1) in which the debtor has its principal place 
        of business or principal assets in the United States;
            ``(2) if the debtor does not have a place of 
        business or assets in the United States, in which there 
        is pending against the debtor an action or proceeding 
        in a Federal or State court; or
            ``(3) in a case other than those specified in 
        paragraph (1) or (2), in which venue will be consistent 
        with the interests of justice and the convenience of 
        the parties, having regard to the relief sought by the 
        foreign representative.''.
    (d) Other Sections of Title 11.--Title 11 of the United 
States Code is amended--
            (1) in section 109(b), by striking paragraph (3) 
        and inserting the following:
            ``(3)(A) a foreign insurance company, engaged in 
        such business in the United States; or
            ``(B) a foreign bank, savings bank, cooperative 
        bank, savings and loan association, building and loan 
        association, or credit union, that has a branch or 
        agency (as defined in section 1(b) of the International 
        Banking Act of 1978 in the United States.'';
            (2) in section 303, by striking subsection (k);
            (3) by striking section 304;
            (4) in the table of sections for chapter 3 by 
        striking the item relating to section 304;
            (5) in section 306 by striking ``, 304,'' each 
        place it appears;
            (6) in section 305(a) by striking paragraph (2) and 
        inserting the following:
            ``(2)(A) a petition under section 1515 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.''; and
            (7) in section 508--
                    (A) by striking subsection (a); and
                    (B) in subsection (b), by striking ``(b)''.

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

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

    (a) Definition of Qualified Financial Contract.--Section 
11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)) is amended--
            (1) by striking ``subsection--'' and inserting 
        ``subsection, the following definitions shall apply:''; 
        and
            (2) in clause (i), 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, mortgage loan, 
                                interest, group or index, or 
                                option, and including any 
                                repurchase or reverse 
                                repurchase transaction on any 
                                such security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option;
                                    ``(II) does not include any 
                                purchase, sale, or repurchase 
                                obligation under a 
                                participation in a commercial 
                                mortgage loan unless the 
                                Corporation determines by 
                                regulation, resolution, or 
                                order to include any such 
                                agreement within the meaning of 
                                such term;
                                    ``(III) means any option 
                                entered into on a national 
                                securities exchange relating to 
                                foreign currencies;
                                    ``(IV) means the guarantee 
                                by or to any securities 
                                clearing agency of any 
                                settlement of cash, securities, 
                                certificates of deposit, 
                                mortgage loans or interests 
                                therein, group or index of 
                                securities, certificates of 
                                deposit, or mortgage loans or 
                                interests therein (including 
                                any interest therein or based 
                                on the value thereof) or option 
                                on any of the foregoing, 
                                including any option to 
                                purchase or sell any such 
                                security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option;
                                    ``(V) means any margin 
                                loan;
                                    ``(VI) means any other 
                                agreement or transaction that 
                                is similar to any agreement or 
                                transaction referred to in this 
                                clause;
                                    ``(VII) means any 
                                combination of the agreements 
                                or transactions referred to in 
                                this clause;
                                    ``(VIII) means any option 
                                to enter into any agreement or 
                                transaction referred to in this 
                                clause;
                                    ``(IX) means a master 
                                agreement that provides for an 
                                agreement or transaction 
                                referred to in subclause (I), 
                                (III), (IV), (V), (VI), (VII), 
                                or (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to 
                                whether the master agreement 
                                provides for an agreement or 
                                transaction that is not a 
                                securities contract under this 
                                clause, except that the master 
                                agreement shall be considered 
                                to be a securities contract 
                                under this clause only with 
                                respect to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (III), (IV), 
                                (V), (VI), (VII), or (VIII); 
                                and
                                    ``(X) means any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreement or 
                                transaction referred to in this 
                                clause, including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                this clause.''.
    (c) Definition of Commodity Contract.--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, including any guarantee 
                                or reimbursement obligation in 
                                connection with 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), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                any such subclause.''.
    (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, 
                                mortgage loans, or interests 
                                with a simultaneous agreement 
                                by such transferee to transfer 
                                to the transferor thereof 
                                certificates of deposit, 
                                eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, 
                                at a date certain not later 
                                than 1 year after such 
                                transfers or on demand, against 
                                the transfer of funds, or any 
                                other similar agreement;
                                    ``(II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial 
                                mortgage loan unless the 
                                Corporation determines by 
                                regulation, resolution, or 
                                order to include any such 
                                participation within the 
                                meaning of such term;
                                    ``(III) means any 
                                combination of agreements or 
                                transactions referred to in 
                                subclauses (I) and (IV);
                                    ``(IV) means any option to 
                                enter into any agreement or 
                                transaction referred to in 
                                subclause (I) or (III);
                                    ``(V) means a master 
                                agreement that provides for an 
                                agreement or transaction 
                                referred to in subclause (I), 
                                (III), or (IV), together with 
                                all supplements to any such 
                                master agreement, without 
                                regard to whether the master 
                                agreement provides for an 
                                agreement or transaction that 
                                is not a repurchase agreement 
                                under this clause, except that 
                                the master agreement shall be 
                                considered to be a repurchase 
                                agreement under this subclause 
                                only with respect to each 
                                agreement or transaction under 
                                the master agreement that is 
                                referred to in subclause (I), 
                                (III), or (IV); and
                                    ``(VI) means any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreement or 
                                transaction referred to in 
                                subclause (I), (III), (IV), or 
                                (V), including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                any such subclause.
                        For purposes of this clause, the term 
                        `qualified foreign government security' 
                        means a security that is a direct 
                        obligation of, or that is fully 
                        guaranteed by, thecentral 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 total 
                                return, credit spread or credit 
                                swap, option, future, or 
                                forward agreement; a commodity 
                                index or commodity swap, 
                                option, future, or forward 
                                agreement; or a weather swap, 
                                weather derivative, or weather 
                                option;
                                    ``(II) any agreement or 
                                transaction that is similar to 
                                any other agreement or 
                                transaction referred to in this 
                                clause and that is of a type 
                                that has been, is presently, or 
                                in the future becomes, the 
                                subject of recurrent dealings 
                                in the swap markets (including 
                                terms and conditions 
                                incorporated by reference in 
                                such agreement) and that is a 
                                forward, swap, future, or 
                                option on one or more rates, 
                                currencies, commodities, equity 
                                securities or other equity 
                                instruments, debt securities or 
                                other debt instruments, 
                                quantitative measures 
                                associated with an occurrence, 
                                extent of an occurrence, or 
                                contingency associated with a 
                                financial, commercial, or 
                                economic consequence, or 
                                economic or financial indices 
                                or measures of economic or 
                                financial risk or value;
                                    ``(III) any combination of 
                                agreements or transactions 
                                referred to in this clause;
                                    ``(IV) any option to enter 
                                into any agreement or 
                                transaction referred to in this 
                                clause;
                                    ``(V) a master agreement 
                                that provides for an agreement 
                                or transaction referred to in 
                                subclause (I), (II), (III), or 
                                (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to 
                                whether the master agreement 
                                contains an agreement or 
                                transaction that is not a swap 
                                agreement under this clause, 
                                except that the master 
                                agreement shall be considered 
                                to be a swap agreement under 
                                this clause only with respect 
                                to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (II), (III), 
                                or (IV); and
                                    ``(VI) any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreements or 
                                transactions referred to in 
                                subclause (I), (II), (III), 
                                (IV), or (V), including any 
                                guarantee or reimbursement 
                                obligation in connection with 
                                any agreement or transaction 
                                referred to in any such 
                                subclause.
                        Such term is applicable for purposes of 
                        this subsection only and shall not be 
                        construed or applied so as to challenge 
                        or affect the characterization, 
                        definition, or treatment of any swap 
                        agreement under any other statute, 
                        regulation, or rule, including the 
                        Securities Act of 1933, the Securities 
                        Exchange Act of 1934, the Public 
                        Utility Holding Company Act of 1935, 
                        the Trust Indenture Act of 1939, the 
                        Investment Company Act of 1940, the 
                        Investment Advisers Act of 1940, the 
                        Securities Investor Protection Act of 
                        1970, the Commodity Exchange Act, the 
                        Gramm-Leach-Bliley Act, and the Legal 
                        Certainty for Bank Products Act of 
                        2000.''.
    (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of 
the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(viii)) is amended to read as follows:
                            ``(viii) Transfer.--The term 
                        `transfer' means every mode, direct or 
                        indirect, absolute or conditional, 
                        voluntary or involuntary, of disposing 
                        of or parting with property or with an 
                        interest in property, including 
                        retention of title as a security 
                        interest and foreclosure of the 
                        depository institution's equity of 
                        redemption.''.
    (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 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 contracts 
                and related claims and property under 
                subparagraph (A)(i), the conservator or 
                receiver for the depository institution shall 
                not make such transfer to a foreign bank, 
                financial institution organized under the laws 
                of a foreign country, or a branch or agency of 
                a foreign bank or financial institution unless, 
                under the law applicable to such bank, 
                financial institution, branch or agency, to the 
                qualified financial contracts, and to any 
                netting contract, any security agreement or 
                arrangement or other credit enhancement related 
                to one or more qualified financial contracts, 
                the contractual rights of the parties to such 
                qualified financial contracts, netting 
                contracts, security agreements or arrangements, 
                or other credit enhancements are enforceable 
                substantially to the same extent as permitted 
                under this section.
                    ``(C) Transfer of contracts subject to the 
                rules of a clearing organization.--In the event 
                that a conservator or receiver transfers any 
                qualified financial contract and related 
                claims, property, and credit enhancements 
                pursuant to subparagraph (A)(i) and such 
                contract is cleared by or subject to the rules 
                of a clearing organization, the clearing 
                organization shall not be required to accept 
                the transferee as a member by virtue of the 
                transfer.
                    ``(D) Definitions.--For purposes of this 
                paragraph, the term `financial institution' 
                means a broker or dealer, a depository 
                institution, a futures commission merchant, or 
                any other institution, as determined by the 
                Corporation by regulation to be a financial 
                institution, and the term `clearing 
                organization' has the same meaning as in 
                section 402 of the Federal Deposit Insurance 
                Corporation Improvement Act of 1991.''.
    (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 FederalDeposit 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 
                        section 403 or 404 of the Federal 
                        Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by 
                        reason of or incidental to the 
                        appointment of a conservator for the 
                        depository institution (or the 
                        insolvency or financial condition of 
                        the depository institution for which 
                        the conservator has been appointed).
                            ``(iii) Notice.--For purposes of 
                        this paragraph, the Corporation as 
                        receiver or conservator of an insured 
                        depository institution shall be deemed 
                        to have notified a person who is a 
                        party to a qualified financial contract 
                        with such depository institution if the 
                        Corporation has taken steps reasonably 
                        calculated to provide notice to such 
                        person by the time specified in 
                        subparagraph (A).
                    ``(C) Treatment of bridge banks.--The 
                following institutions shall not be considered 
                to be a financial institution for which a 
                conservator, receiver, trustee in bankruptcy, 
                or other legal custodian has been appointed or 
                which is otherwise the subject of a bankruptcy 
                or insolvency proceeding for purposes of 
                paragraph (9):
                            ``(i) A bridge bank.
                            ``(ii) A depository institution 
                        organized by the Corporation, for which 
                        a conservator is appointed either--
                                    ``(I) immediately upon the 
                                organization of the 
                                institution; or
                                    ``(II) at the time of a 
                                purchase and assumption 
                                transaction between the 
                                depository institution and the 
                                Corporation as receiver for a 
                                depository institution in 
                                default.''.

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;
            (2) by inserting after paragraph (10) the following 
        new paragraph:
            ``(11) Disaffirmance or repudiation of qualified 
        financial contracts.--In exercising the rights of 
        disaffirmance or repudiation of a conservator or 
        receiver with respect to any qualified financial 
        contract to which an insured depository institution is 
        a party, the conservator or receiver for such 
        institution shall either--
                    ``(A) disaffirm or repudiate all qualified 
                financial contracts between--
                            ``(i) any person or any affiliate 
                        of such person; and
                            ``(ii) the depository institution 
                        in default; or
                    ``(B) disaffirm or repudiate none of the 
                qualified financial contracts referred to in 
                subparagraph (A) (with respect to such person 
                or any affiliate of such person).''; and
            (3) by adding at the end the following new 
        paragraph:
            ``(17) Savings clause.--The meanings of terms used 
        in this subsection are applicable for purposes of this 
        subsection only, and shall not be construed or applied 
        so as to challenge or affect the characterization, 
        definition, or treatment of any similar terms under any 
        other statute, regulation, or rule, including the 
        Gramm-Leach-Bliley Act, the Legal Certainty for Bank 
        Products Act of 2000, the securities laws (as that term 
        is defined in section 3(a)(47) of the Securities 
        Exchange Act of 1934), and the Commodity Exchange 
        Act.''.

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 ``, that has been granted an 
                exemption under section 4(c)(1) of the 
                Commodity Exchange Act, or that is a 
                multilateral clearing organization (as defined 
                in section 408 of this Act)'';
            (2) in paragraph (6)--
                    (A) by redesignating subparagraphs (B) 
                through (D) as subparagraphs (C) through (E), 
                respectively;
                    (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) an uninsured national bank or an 
                uninsured State bank that is a member of the 
                Federal Reserve System, if the national bank or 
                State member bank is not eligible to make 
                application to become an insured bank under 
                section 5 of the Federal Deposit Insurance 
                Act;''; and
                    (C) by amending subparagraph (C), so 
                redesignated, to read as follows:
                    ``(C) a branch or agency of a foreign bank, 
                a foreign bank and any branch or agency of the 
                foreign bank, or the foreign bank that 
                established the branch or agency, as those 
                terms are defined in section 1(b) of the 
                International Banking Act of 1978;'';
            (3) in paragraph (11), by inserting before the 
        period ``and any other clearing organization withwhich 
such clearing organization has a netting contract'';
            (4) by amending paragraph (14)(A)(i) to read as 
        follows:
                            ``(i) means a contract or agreement 
                        between 2 or more financial 
                        institutions, clearing organizations, 
                        or members that provides for netting 
                        present or future payment obligations 
                        or payment entitlements (including 
                        liquidation or close out values 
                        relating to such obligations or 
                        entitlements) among the parties to the 
                        agreement; and''; and
            (5) by adding at the end the following new 
        paragraph:
            ``(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, Uninsured Federal Branches and Agencies, Certain 
Uninsured State Member Banks, and Edge Act Corporations.--The 
Federal Deposit Insurance Corporation Improvement Act of 1991 
(12 U.S.C. 4401 et seq.) is amended--
            (1) by redesignating section 407 as section 407A; 
        and
            (2) by inserting after section 406 the following 
        new section:

``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS, 
                    UNINSURED FEDERAL BRANCHES AND AGENCIES, CERTAIN 
                    UNINSURED STATE MEMBER BANKS, AND EDGE ACT 
                    CORPORATIONS.

    ``(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, a 
corporation chartered under section 25A of the Federal Reserve 
Act, or an uninsured State member bank which operates, or 
operates as, a multilateral clearing organization pursuant to 
section 409 of this Act, except that for such purpose--
            ``(1) any reference to the `Corporation as 
        receiver' or `the receiver or the Corporation' shall 
        refer to the receiver appointed by the Comptroller of 
        the Currency in the case of an uninsured national bank 
        or uninsured Federal branch or agency, or to the 
        receiver appointed by the Board of Governors of the 
        Federal Reserve System in the case of a corporation 
        chartered under section 25A of the Federal Reserve Act 
        or an uninsured State member bank;
            ``(2) any reference to the `Corporation' (other 
        than in section 11(e)(8)(D) of such Act), the 
        `Corporation, whether acting as such or as conservator 
        or receiver', a `receiver', or a `conservator' shall 
        refer to the receiver or conservator appointed by the 
        Comptroller of the Currency in the case of an uninsured 
        national bank or uninsured Federal branch or agency, or 
        to the receiver or conservator appointed by the Board 
        of Governors of the Federal Reserve System in the case 
        of a corporation chartered under section 25A of the 
        Federal Reserve Act or an uninsured State member bank; 
        and
            ``(3) any reference to an `insured depository 
        institution' or `depository institution' shall refer to 
        an uninsured national bank, an uninsured Federal branch 
        or Federal agency, a corporation chartered under 
        section 25A of the Federal Reserve Act, or an uninsured 
        State member bank which operates, or operates as, a 
        multilateral clearing organization pursuant to section 
        409 of this Act.
    ``(b) Liability.--The liability of a receiver or 
conservator of an uninsured national bank, uninsured Federal 
branch or agency, a corporation chartered under section 25A of 
the Federal Reserve Act, or an uninsured State member bank 
which operates, or operates as, a multilateral clearing 
organization pursuant to section 409 of this Act, shall be 
determined in the same manner and subject to the same 
limitations that apply to receivers and conservators of insured 
depository institutions under section 11(e) of the Federal 
Deposit Insurance Act.
    ``(c) Regulatory Authority.--
            ``(1) In general.--The Comptroller of the Currency 
        in the case of an uninsured national bank or uninsured 
        Federal branch or agency and the Board of Governors of 
        the Federal Reserve System in the case of a corporation 
        chartered under section 25A of the Federal Reserve Act, 
        or an uninsured State member bank that operates, or 
        operates as, a multilateral clearing organization 
        pursuant to section 409 of this Act, in consultation 
        with the Federal Deposit Insurance Corporation, may 
        each promulgate regulations solely to implement this 
        section.
            ``(2) Specific requirement.--In promulgating 
        regulations, limited solely to implementing paragraphs 
        (8), (9), (10), and (11) of section 11(e) of the 
        Federal Deposit Insurance Act, the Comptroller of the 
        Currency and the Board of Governors of the Federal 
        Reserve System each shall ensure that the regulations 
        generally are consistent with the regulations and 
        policies of the Federal Deposit Insurance Corporation 
        adopted pursuant to the Federal Deposit Insurance Act.
    ``(d) Definitions.--For purposes of this section, the terms 
`Federal branch', `Federal agency', and `foreign bank' have the 
same meanings as in section 1(b) of the International Banking 
Act of 1978.''.

SEC. 907. BANKRUPTCY LAW AMENDMENTS.

    (a) Definitions of Forward Contract, Repurchase Agreement, 
Securities Clearing Agency, Swap Agreement, Commodity Contract, 
and Securities Contract.--Title 11, United States Code, is 
amended--
            (1) in section 101--
                    (A) in paragraph (25)--
                            (i) by striking ``means a 
                        contract'' and inserting ``means--
                    ``(A) a contract'';
                            (ii) by striking ``, or any 
                        combination thereof or option 
                        thereon;'' and inserting ``, or any 
                        other similar agreement;''; and
                            (iii) by adding at the end the 
                        following:
                    ``(B) any combination of agreements or 
                transactions referred to in subparagraphs (A) 
                and (C);
                    ``(C) any option to enter into an agreement 
                or transaction referred to in subparagraph (A) 
                or (B);
                    ``(D) a master agreement that provides for 
                an agreement or transaction referred to in 
                subparagraph (A), (B), or (C), together with 
                all supplements to any such master agreement, 
                without regard to whether such master agreement 
                provides for an agreement or transaction that 
                is not a forward contract under this paragraph, 
                except that such master agreement shall be 
                considered to be a forward contract under this 
                paragraph only with respect to each agreement 
                or transaction under such master agreement that 
                is referred to in subparagraph (A), (B), or 
                (C); or
                    ``(E) any security agreement or 
                arrangement, or other credit enhancement 
                related to any agreement or transaction 
                referred to in subparagraph (A), (B), (C), or 
                (D), including any guarantee or reimbursement 
                obligation by or to a forward contract merchant 
                or financial participant in connection with any 
                agreement or transaction referred to in any 
                such subparagraph, but not to exceed the 
                damages in connection with any such agreement 
                or transaction, measured in accordance with 
                section 562 of this title;'';
                    (B) in paragraph (46), by striking ``on any 
                day during the period beginning 90 days before 
                the date of'' and inserting ``at any time 
                before'';
                    (C) by amending paragraph (47) to read as 
                follows:
            ``(47) `repurchase agreement' (which definition 
        also applies to a reverse repurchase agreement)--
                    ``(A) means--
                            ``(i) an agreement, including 
                        related terms, which provides for the 
                        transfer of one or more certificates of 
                        deposit, mortgage related securities 
                        (as defined in section 3 of the 
                        Securities Exchange Act of 1934), 
                        mortgage loans, interests in mortgage 
                        related securities or mortgage loans, 
                        eligible bankers' acceptances, 
                        qualified foreign government securities 
                        (defined as a security that is a direct 
                        obligation of, or that is fully 
                        guaranteed by, the central government 
                        of a member of the Organization for 
                        Economic Cooperation and Development), 
                        or securities that are direct 
                        obligations of, or that are fully 
                        guaranteed by, the United States or any 
                        agency of the United States against the 
                        transfer of funds by the transferee of 
                        such certificates of deposit, eligible 
                        bankers' acceptances, securities, 
                        mortgage loans, or interests, with a 
                        simultaneous agreement by such 
                        transferee to transfer to the 
                        transferor thereof certificates of 
                        deposit, eligible bankers' acceptance, 
                        securities, mortgage loans, or 
                        interests of the kind described in this 
                        clause, at a date certain not later 
                        than 1 year after such transfer or on 
                        demand, against the transfer of funds;
                            ``(ii) any combination of 
                        agreements or transactions referred to 
                        in clauses (i) and (iii);
                            ``(iii) an option to enter into an 
                        agreement or transaction referred to in 
                        clause (i) or (ii);
                            ``(iv) a master agreement that 
                        provides for an agreement or 
                        transaction referred to in clause (i), 
                        (ii), or (iii), together with all 
                        supplements to any such master 
                        agreement, without regard to whether 
                        such master agreement provides for an 
                        agreement or transaction that is not a 
                        repurchase agreement under this 
                        paragraph, except that such master 
                        agreement shall be considered to be a 
                        repurchase agreement under this 
                        paragraph only with respect to each 
                        agreement or transaction under the 
                        master agreement that is referred to in 
                        clause (i), (ii), or (iii); or
                            ``(v) any security agreement or 
                        arrangement or other credit enhancement 
                        related to any agreement or transaction 
                        referred to in clause (i), (ii), (iii), 
                        or (iv), including any guarantee or 
                        reimbursement obligation by or to a 
                        repo participant or financial 
                        participant in connection with any 
                        agreement or transaction referred to in 
                        any such clause, but not to exceed the 
                        damages in connection with any such 
                        agreement or transaction, measured in 
                        accordance with section 562 of this 
                        title; and
                    ``(B) does not include a repurchase 
                obligation under a participation in a 
                commercial mortgage loan;'';
                    (D) in paragraph (48), by inserting ``, or 
                exempt from such registration under such 
                section pursuant to an order of the Securities 
                and Exchange Commission,'' after ``1934''; and
                    (E) by amending paragraph (53B) to read as 
                follows:
            ``(53B) `swap agreement'--
                    ``(A) means--
                            ``(i) any agreement, including the 
                        terms and conditions incorporated by 
                        reference in such agreement, which is--
                                    ``(I) an interest rate 
                                swap, option, future, or 
                                forward agreement, including a 
                                rate floor, rate cap, rate 
                                collar, cross-currency rate 
                                swap, and basis swap;
                                    ``(II) a spot, same day-
                                tomorrow, tomorrow-next, 
                                forward, or other foreign 
                                exchange or precious metals 
                                agreement;
                                    ``(III) a currency swap, 
                                option, future, or forward 
                                agreement;
                                    ``(IV) an equity index or 
                                equity swap, option, future, or 
                                forward agreement;
                                    ``(V) a debt index or debt 
                                swap, option, future, or 
                                forward agreement;
                                    ``(VI) a total return, 
                                credit spread or credit swap, 
                                option, future, or forward 
                                agreement;
                                    ``(VII) a commodity index 
                                or a commodity swap, option, 
                                future, or forward agreement; 
                                or
                                    ``(VIII) a weather swap, 
                                weather derivative, or weather 
                                option;
                            ``(ii) any agreement or transaction 
                        that is similar to any other agreement 
                        or transaction referred to in this 
                        paragraph and that--
                                    ``(I) is of a type that has 
                                been, is presently, or in the 
                                future becomes, the subject of 
                                recurrent dealings in the swap 
                                markets (including terms and 
                                conditions incorporated by 
                                reference therein); and
                                    ``(II) is a forward, swap, 
                                future, or option on one or 
                                more rates, currencies, 
                                commodities, equity securities, 
                                or other equity instruments, 
                                debt securities or other debt 
                                instruments, quantitative 
                                measures associated with an 
                                occurrence, extent of an 
                                occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic 
                                consequence, or economic or 
                                financial indices or measures 
                                of economic or financial risk 
                                or value;
                            ``(iii) any combination of 
                        agreements or transactions referred to 
                        in this subparagraph;
                            ``(iv) any option to enter into an 
                        agreement or transaction referred to in 
                        this subparagraph;
                            ``(v) a master agreement that 
                        provides for an agreement or 
                        transaction referred to in clause (i), 
                        (ii), (iii), or (iv), together with all 
                        supplements to any such master 
                        agreement, and without regard to 
                        whether the master agreement contains 
                        an agreement or transaction that is not 
                        a swap agreement under this paragraph, 
                        except that the master agreement shall 
                        be considered to be a swap agreement 
                        under this paragraph only with respect 
                        to each agreement or transaction under 
                        the master agreement that is referred 
                        to in clause (i), (ii), (iii), or (iv); 
                        or
                            ``(vi) any security agreement or 
                        arrangement or other credit enhancement 
                        related to any agreements or 
                        transactions referred to in clause (i) 
                        through (v), including any guarantee or 
                        reimbursement obligation by or to a 
                        swap participant or financial 
                        participant in connection with any 
                        agreement or transaction referred to in 
                        any such clause, but not to exceed the 
                        damages in connection with any such 
                        agreement or transaction, measured in 
                        accordance with section 562 of this 
                        title; 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, the Gramm-Leach-Bliley Act, and the Legal 
                Certainty for Bank Products Act of 2000;'';
            (2) in section 741(7), by striking paragraph (7) 
        and inserting the following:
            ``(7) `securities contract'--
                    ``(A) means--
                            ``(i) a contract for the purchase, 
                        sale, or loan of a security, a 
                        certificate of deposit, a mortgage loan 
                        or any interest in a mortgage loan, a 
                        group or index of securities, 
                        certificates of deposit, or mortgage 
                        loans or interests therein (including 
                        an interest therein or based on the 
                        value thereof), or option on any of the 
                        foregoing, including an option to 
                        purchase or sell any such security, 
                        certificate of deposit, mortgage loan, 
                        interest, group or index, or option, 
                        and including any repurchase or reverse 
                        repurchase transaction on any such 
                        security, certificate of deposit, 
                        mortgage loan, interest, group or 
                        index, or option;
                            ``(ii) any option entered into on a 
                        national securities exchange relating 
                        to foreign currencies;
                            ``(iii) the guarantee by or to any 
                        securities clearing agency of a 
                        settlement of cash, securities, 
                        certificates of deposit, mortgage loans 
                        or interests therein, group or index of 
                        securities, or mortgage loans or 
                        interests therein (including any 
                        interest therein or based on the value 
                        thereof), or option on any of the 
                        foregoing, including an option to 
                        purchase or sell any such security, 
                        certificate of deposit, mortgage loan, 
                        interest, group or index, or option;
                            ``(iv) any margin loan;
                            ``(v) any other agreement or 
                        transaction that is similar to an 
                        agreement or transaction referred to in 
                        this subparagraph;
                            ``(vi) any combination of the 
                        agreements or transactions referred to 
                        in this subparagraph;
                            ``(vii) any option to enter into 
                        any agreement or transaction referred 
                        to in this subparagraph;
                            ``(viii) a master agreement that 
                        provides for an agreement or 
                        transaction referred to in clause (i), 
                        (ii), (iii), (iv), (v), (vi), or (vii), 
                        together with all supplements to any 
                        such master agreement, without regard 
                        to whether the master agreement 
                        provides for an agreement or 
                        transaction that is not a securities 
                        contract under this subparagraph, 
                        except that such master agreement shall 
                        be considered to be a securities 
                        contract under this subparagraph only 
                        with respect to each agreement or 
                        transaction under such master agreement 
                        that is referred to in clause (i), 
                        (ii), (iii), (iv), (v), (vi), or (vii); 
                        or
                            ``(ix) any security agreement or 
                        arrangement or other credit enhancement 
                        related to any agreement or transaction 
                        referred to in this subparagraph, 
                        including any guarantee or 
                        reimbursement obligation by or to a 
                        stockbroker, securities clearing 
                        agency, financial institution, or 
                        financial participant in connection 
                        with any agreement or transaction 
                        referred to in this subparagraph, but 
                        not to exceed the damages in connection 
                        with any such agreement or transaction, 
                        measured in accordance with section 562 
                        of this title; 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, including any guarantee or 
                reimbursement obligation by or to a commodity 
                broker or financial participant in connection 
                with any agreement or transaction referred to 
                in this paragraph, but not to exceed the 
                damages in connection with any such agreement 
                or transaction, measured in accordance with 
                section 562 of this title;''.
    (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--
                    ``(A) an entity that, at the time it enters 
                into a securities contract, commodity contract, 
                swap agreement, repurchase agreement, or 
                forward contract, or at the time of the filing 
                of the petition, has one or more agreements or 
                transactions described in paragraph (1), (2), 
                (3), (4), (5), or (6) of section 561(a) with 
                the debtor or any other entity (other than an 
                affiliate) of a total gross dollar value of not 
                less than $1,000,000,000 in notional or actual 
                principal amount outstanding on any day during 
                the previous 15-month period, or has gross 
                mark-to-market positions of not less than 
                $100,000,000 (aggregated across counterparties) 
                in one or more such agreements or transactions 
                with the debtor or any other entity (other than 
                an affiliate) on any day during the previous 
                15-month period; or
                    ``(B) a clearing organization (as defined 
                in section 402 of the Federal Deposit Insurance 
                Corporation Improvement Act of 1991);''; and
            (3) by striking paragraph (26) and inserting the 
        following:
            ``(26) `forward contract merchant' means a Federal 
        reserve bank, or an entity the business of which 
        consists in whole or in part of entering into forward 
        contracts as or with merchants in a commodity (as 
        defined in section 761) or any similar good, article, 
        service, right, or interest which is presently or in 
        the future becomes the subject of dealing in the 
        forward contract trade;''.
    (c) Definition of Master Netting Agreement and Master 
Netting Agreement Participant.--Section 101 of title 11, United 
States Code, is amended by inserting after paragraph (38) the 
following new paragraphs:
            ``(38A) `master netting agreement'--
                    ``(A) means an agreement providing for the 
                exercise of rights, including rights of 
                netting, setoff, liquidation, termination, 
                acceleration, or close out, under or in 
                connection with one or more contracts that are 
                described in any one or more of paragraphs (1) 
                through (5) of section 561(a), or any security 
                agreement or arrangement or other credit 
                enhancement related to one or more of the 
                foregoing, including any guarantee or 
                reimbursement obligation related to 1 or more 
                of the foregoing; and
                    ``(B) if the agreement contains provisions 
                relating to agreements or transactions that are 
                not contracts described in paragraphs (1) 
                through (5) of section 561(a), shall be deemed 
                to be a master netting agreement only with 
                respect to those agreements or transactions 
                that are described in any one or more of 
                paragraphs (1) through (5) of section 561(a);
            ``(38B) `master netting agreement participant' 
        means an entity that, at any time before the filing of 
        the petition, is a party to an outstanding master 
        netting agreement with the debtor;''.
    (d) Swap Agreements, Securities Contracts, Commodity 
Contracts, Forward Contracts, Repurchase Agreements, and Master 
Netting Agreements Under the Automatic-Stay.--
            (1) In general.--Section 362(b) of title 11, United 
        States Code, as amended by sections 224, 303, 311, 401, 
        and 718, is amended--
                    (A) in paragraph (6), by inserting 
                ``, pledged to, under the control of,'' after 
                ``held by'';
                    (B) in paragraph (7), by inserting 
                ``, pledged to, under the control of,'' after 
                ``held by'';
                    (C) by striking paragraph (17) and 
                inserting the following:
            ``(17) under subsection (a), of the setoff by a 
        swap participant or financial participant of a mutual 
        debt and claim under or in connection with one or more 
        swap agreements that constitutes the setoff of a claim 
        against the debtor for any payment or other transfer of 
        property due from the debtor under or in connection 
        with any swap agreement against any payment due to the 
        debtor from the swap participant or financial 
        participant under or in connection with any swap 
        agreement or against cash, securities, or other 
        property held by, pledged to, under the control of, or 
        due from such swap participant or financial participant 
        to margin, guarantee, secure, or settle any swap 
        agreement;''; and
                    (D) by inserting after paragraph (26) the 
                following:
            ``(27) under subsection (a), of the setoff by a 
        master netting agreement participant of a mutual debt 
        and claim under or in connection with one or more 
        master netting agreements or any contract or agreement 
        subject to such agreements that constitutes the setoff 
        of a claim against the debtor for any payment or other 
        transfer of property due from the debtor under or in 
        connection with such agreements or any contract or 
        agreement subject to such agreements against any 
        payment due to the debtor from such master netting 
        agreement participant under or in connection with such 
        agreements or any contract or agreement subject to such 
        agreements or against cash, securities, or other 
        property held by, pledged to, under the control of, or 
        due from such master netting agreement participant to 
        margin, guarantee, secure, or settle such agreements or 
        any contract or agreement subject to such agreements, 
        to the extent that such participant is eligible to 
        exercise such offset rights under paragraph (6), (7), 
        or (17) for each individual contract covered by the 
        master netting agreement in issue.''.
            (2) Limitation.--Section 362 of title 11, United 
        States Code, as amended by sections 106, 305, 311, and 
        441, is amended by adding at the end the following:
    ``(o) The exercise of rights not subject to the stay 
arising under subsection (a) pursuant to paragraph (6), (7), 
(17), or (27) of subsection (b) shall not be stayed by any 
order of a court or administrative agency in any proceeding 
under this title.''.
    (e) Limitation of Avoidance Powers Under Master Netting 
Agreement.--Section 546 of title 11, United States Code, is 
amended--
            (1) in subsection (g) (as added by section 103 of 
        Public Law 101-311)--
                    (A) by striking ``under a swap agreement'';
                    (B) by striking ``in connection with a swap 
                agreement'' and inserting ``under or in 
                connection with any swap agreement''; and
                    (C) by inserting ``or financial 
                participant'' after ``swap participant'' each 
                place such term appears; and
            (2) by adding at the end the following:
    ``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), 
and 548(b) the trustee may not avoid a transfer made by or to a 
master netting agreement participant under or in connection 
with any master netting agreement or any individual contract 
covered thereby that is made before the commencement of the 
case, except under section 548(a)(1)(A) and except to the 
extent that the trustee could otherwise avoid such a transfer 
made under an individual contract covered by such master 
netting agreement.''.
    (f) Fraudulent Transfers of Master Netting Agreements.--
Section 548(d)(2) of title 11, United States Code, is amended--
            (1) in subparagraph (C), by striking ``and'' at the 
        end;
            (2) in subparagraph (D), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following new 
        subparagraph:
            ``(E) a master netting agreement participant that 
        receives a transfer in connection with a master netting 
        agreement or any individual contract covered thereby 
        takes for value to the extent of such transfer, except 
        that, with respect to a transfer under any individual 
        contract covered thereby, to the extent that such 
        master netting agreement participant otherwise did not 
        take (or is otherwise not deemed to have taken) such 
        transfer for value.''.
    (g) Termination or Acceleration of Securities Contracts.--
Section 555 of title 11, United States Code, is amended--
            (1) by amending the section heading to read as 
        follows:

``Sec. 555. Contractual right to liquidate, terminate, or accelerate a 
                    securities contract'';

        and
            (2) in the first sentence, by striking 
        ``liquidation'' and inserting ``liquidation, 
        termination, or acceleration''.
    (h) Termination or Acceleration of Commodities or Forward 
Contracts.--Section 556 of title 11, United States Code, is 
amended--
            (1) by amending the section heading to read as 
        follows:

``Sec. 556. Contractual right to liquidate, terminate, or accelerate a 
                    commodities contract or forward contract'';

            (2) in the first sentence, by striking 
        ``liquidation'' and inserting ``liquidation, 
        termination, or acceleration''; and
            (3) in the second sentence, by striking ``As used'' 
        and all that follows through ``right,'' and inserting 
        ``As used in this section, the term `contractual right' 
        includes a right set forth in a rule or bylaw of a 
        derivatives clearing organization (as defined in the 
        Commodity Exchange Act), a multilateral clearing 
        organization (as defined in the Federal Deposit 
        Insurance Corporation Improvement Act of 1991), a 
        national securities exchange, a national securities 
        association, a securities clearing agency, a contract 
        market designated under the Commodity Exchange Act, a 
        derivatives transaction execution facility registered 
        under the Commodity Exchange Act, or a board of trade 
        (as defined in the Commodity Exchange Act) or in a 
        resolution of the governing board thereof and a 
        right,''.
    (i) Termination or Acceleration of Repurchase Agreements.--
Section 559 of title 11, United States Code, is amended--
            (1) by amending the section heading to read as 
        follows:

``Sec. 559. Contractual right to liquidate, terminate, or accelerate a 
                    repurchase agreement'';

            (2) in the first sentence, by striking 
        ``liquidation'' and inserting ``liquidation, 
        termination, or acceleration''; and
            (3) in the third sentence, by striking ``As used'' 
        and all that follows through ``right,'' and inserting 
        ``As used in this section, the term `contractual right' 
        includes a right set forth in a rule or bylaw of a 
        derivatives clearing organization (as defined in the 
        Commodity Exchange Act), a multilateral clearing 
        organization (as defined in the Federal Deposit 
        Insurance Corporation Improvement Act of 1991), a 
        national securities exchange, a national securities 
        association, a securities clearing agency, a contract 
        market designated under the Commodity Exchange Act, a 
        derivatives transaction execution facility registered 
        under the Commodity Exchange Act, or a board of trade 
        (as defined in the Commodity Exchange Act) or in a 
        resolution of the governing board thereof and a 
        right,''.
    (j) Liquidation, Termination, or Acceleration of Swap 
Agreements.--Section 560 of title 11, United States Code, is 
amended--
            (1) by amending the section heading to read as 
        follows:

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

            (2) in the first sentence, by striking 
        ``termination of a swap agreement'' and inserting 
        ``liquidation, termination, or acceleration of one or 
        more swap agreements'';
            (3) by striking ``in connection with any swap 
        agreement'' and inserting ``in connection with the 
        termination, liquidation, or acceleration of one or 
        more swap agreements''; and
            (4) in the second sentence, by striking ``As used'' 
        and all that follows through ``right,'' and inserting 
        ``As used in this section, the term `contractual right' 
        includes a right set forth in a rule or bylaw of a 
        derivatives clearing organization (as defined in the 
        Commodity Exchange Act), a multilateral clearing 
        organization (as defined in the Federal Deposit 
        Insurance Corporation Improvement Act of 1991), a 
        national securities exchange, a national securities 
        association, a securities clearing agency, a contract 
        market designated under the Commodity Exchange Act, a 
        derivatives transaction execution facility registered 
        under the Commodity Exchange Act, or a board of trade 
        (as defined in the Commodity Exchange Act) or in a 
        resolution of the governing board thereof and a 
        right,''.
    (k) Liquidation, Termination, Acceleration, or Offset Under 
a Master Netting Agreement and Across Contracts.--
            (1) In general.--Title 11, United States Code, is 
        amended by inserting after section 560 the following:

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

    ``(a) Subject to subsection (b), the exercise of any 
contractual right, because of a condition of the kind specified 
in section 365(e)(1), to cause the termination, liquidation, or 
acceleration of or to offset or net termination values, payment 
amounts, or other transfer obligations arising under or in 
connection with one or more (or the termination, liquidation, 
or acceleration of one or more)--
            ``(1) securities contracts, as defined in section 
        741(7);
            ``(2) commodity contracts, as defined in section 
        761(4);
            ``(3) forward contracts;
            ``(4) repurchase agreements;
            ``(5) swap agreements; or
            ``(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation 
of any provision of this title or by any order of a court or 
administrative agency in any proceeding under this title.
    ``(b)(1) A party may exercise a contractual right described 
in subsection (a) to terminate, liquidate, or accelerate only 
to the extent that such party could exercise such a right under 
section 555, 556, 559, or 560 for each individual contract 
covered by the master netting agreement in issue.
    ``(2) If a debtor is a commodity broker subject to 
subchapter IV of chapter 7--
            ``(A) a party may not net or offset an obligation 
        to the debtor arising under, or in connection with, a 
        commodity contract traded on or subject to the rules of 
        a contract market designated under the Commodity 
        Exchange Act or a derivatives transaction execution 
        facility registered under the Commodity Exchange Act 
        against any claim arising under, or in connection with, 
        other instruments, contracts, or agreements listed in 
        subsection (a) except to the extent that the party has 
        positive net equity in the commodity accounts at the 
        debtor, as calculated under such subchapter; and
            ``(B) another commodity broker may not net or 
        offset an obligation to the debtor arising under, or in 
        connection with, a commodity contract entered into or 
        held on behalf of a customer of the debtor and traded 
        on or subject to the rules of a contract market 
        designated under the Commodity Exchange Act or a 
        derivatives transaction execution facility registered 
        under the Commodity Exchange Act against any claim 
        arising under, or in connection with, other 
        instruments, contracts, or agreements listed in 
        subsection (a).
    ``(3) No provision of subparagraph (A) or (B) of paragraph 
(2) shall prohibit the offset of claims and obligations that 
arise under--
            ``(A) a cross-margining agreement or similar 
        arrangement that has been approved by the Commodity 
        Futures Trading Commission or submitted to the 
        Commodity Futures Trading Commission under paragraph 
        (1) or (2) of section 5c(c) of the Commodity Exchange 
        Act and has not been abrogated or rendered ineffective 
        by the Commodity Futures Trading Commission; or
            ``(B) any other netting agreement between a 
        clearing organization (as defined in section 761) and 
        another entity that has been approved by the Commodity 
        Futures Trading Commission.
    ``(c) As used in this section, the term `contractual right' 
includes a right set forth in a rule or bylaw of a derivatives 
clearing organization (as defined in the Commodity Exchange 
Act), a multilateral clearing organization (as defined in the 
Federal Deposit Insurance Corporation Improvement Act of 1991), 
a national securities exchange, a national securities 
association, a securities clearing agency, a contract market 
designated under the Commodity Exchange Act, a derivatives 
transaction execution facility registered under the Commodity 
Exchange Act, or a board of trade (as defined in the Commodity 
Exchange Act) or in a resolution of the governing board 
thereof, and a right, whether or not evidenced in writing, 
arising under common law, under law merchant, or by reason of 
normal business practice.
    ``(d) Any provisions of this title relating to securities 
contracts, commodity contracts, forward contracts, repurchase 
agreements, swap agreements, or master netting agreements shall 
apply in a case under chapter 15, so that enforcement of 
contractual provisions of such contracts and agreements in 
accordance with their terms will not be stayed or otherwise 
limited by operation of any provision of this title or by order 
of a court in any case under this title, and to limit avoidance 
powers to the same extent as in a proceeding under chapter 7 or 
11 of this title (such enforcement not to be limited based on 
the presence or absence of assets of the debtor in the United 
States).''.
            (2) Conforming amendment.--The table of sections 
        for chapter 5 of title 11, United States Code, is 
        amended by inserting after the item relating to section 
        560 the following:

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

    (l) Commodity Broker Liquidations.--Title 11, United States 
Code, is amended by inserting after section 766 the following:

``Sec. 767. Commodity broker liquidation and forward contract 
                    merchants, commodity brokers, stockbrokers, 
                    financial institutions, financial participants, 
                    securities clearing agencies, swap participants, 
                    repo participants, and master netting agreement 
                    participants

    ``Notwithstanding any other provision of this title, the 
exercise of rights by a forward contract merchant, commodity 
broker, stockbroker, financial institution, financial 
participant, securities clearing agency, swap participant, repo 
participant, or master netting agreement participant under this 
title shall not affect the priority of any unsecured claim it 
may have after the exercise of such rights.''.
    (m) Stockbroker Liquidations.--Title 11, United States 
Code, is amended by inserting after section 752 the following:

``Sec. 753. Stockbroker liquidation and forward contract merchants, 
                    commodity brokers, stockbrokers, financial 
                    institutions, financial participants, securities 
                    clearing agencies, swap participants, repo 
                    participants, and master netting agreement 
                    participants

    ``Notwithstanding any other provision of this title, the 
exercise of rights by a forward contract merchant, commodity 
broker, stockbroker, financial institution, 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)(2)(B)(ii), by inserting 
        before the semicolon the following: ``(except for a 
        setoff of a kind described in section 362(b)(6), 
        362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, 
        or 561)'';
            (2) in subsection (a)(3)(C), by inserting before 
        the period the following: ``(except for a setoff of a 
        kind described in section 362(b)(6), 362(b)(7), 
        362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561 of 
        this title)''; and
            (3) in subsection (b)(1), by striking 
        ``362(b)(14),'' and inserting ``362(b)(17), 362(b)(27), 
        555, 556, 559, 560, 561,''.
    (o) Securities Contracts, Commodity Contracts, and Forward 
Contracts.--Title 11, United States Code, is amended--
            (1) in section 362(b)(6), by striking ``financial 
        institutions,'' each place such term appears and 
        inserting ``financial institution, financial 
        participant,'';
            (2) in sections 362(b)(7) and 546(f), by inserting 
        ``or financial participant'' after ``repo participant'' 
        each place such term appears;
            (3) in section 546(e), by inserting ``financial 
        participant,'' after ``financial institution,'';
            (4) in section 548(d)(2)(B), by inserting 
        ``financial participant,'' after ``financial 
        institution,'';
            (5) in section 548(d)(2)(C), by inserting ``or 
        financial participant'' after ``repo participant'';
            (6) in section 548(d)(2)(D), by inserting ``or 
        financial participant'' after ``swap participant'';
            (7) in section 555--
                    (A) by inserting ``financial participant,'' 
                after ``financial institution,''; and
                    (B) by striking the second sentence and 
                inserting the following: ``As used in this 
                section, the term `contractual right' includes 
                a right set forth in a rule or bylaw of a 
                derivatives clearing organization (as defined 
                in the Commodity Exchange Act), a multilateral 
                clearing organization (as defined in the 
                Federal Deposit Insurance Corporation 
                Improvement Act of 1991), a national securities 
                exchange, a national securities association, a 
                securities clearing agency, a contract market 
                designated under the Commodity Exchange Act, a 
                derivatives transaction execution facility 
                registered under the Commodity Exchange Act, or 
                a board of trade (as defined in the Commodity 
                Exchange Act), or in a resolution of the 
                governing board thereof, and a right, whether 
                or not in writing, arising under common law, 
                under law merchant, or by reason of normal 
                business practice'';
            (8) in section 556, by inserting ``, financial 
        participant,'' after ``commodity broker'';
            (9) in section 559, by inserting ``or financial 
        participant'' after ``repo participant'' each place 
        such term appears; and
            (10) in section 560, by inserting ``or financial 
        participant'' after ``swap participant''.
    (p) Conforming Amendments.--Title 11, United States Code, 
is amended--
            (1) in the table of sections for chapter 5--
                    (A) by amending the items relating to 
                sections 555 and 556 to read as follows:

``555. Contractual right to liquidate, terminate, or accelerate a 
          securities contract.
``556. Contractual right to liquidate, terminate, or accelerate a 
          commodities contract or forward contract.'';

                and
                    (B) by amending the items relating to 
                sections 559 and 560 to read as follows:

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

                and
            (2) in the table of sections for chapter 7--
                    (A) by inserting after the item relating to 
                section 766 the following:

``767. Commodity broker liquidation and forward contract merchants, 
          commodity brokers, stockbrokers, financial institutions, 
          financial participants, securities clearing agencies, swap 
          participants, repo participants, and master netting agreement 
          participants.'';

                and
                    (B) by inserting after the item relating to 
                section 752 the following:

``753. Stockbroker liquidation and forward contract merchants, commodity 
          brokers, stockbrokers, financial institutions, financial 
          participants, securities clearing agencies, swap participants, 
          repo participants, and master netting agreement 
          participants.''.

SEC. 908. RECORDKEEPING REQUIREMENTS.

    Section 11(e)(8) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)) is amended by adding at the end the 
following new subparagraph:
                    ``(H) Recordkeeping requirements.--The 
                Corporation, in consultation with the 
                appropriate Federal banking agencies, may 
                prescribe regulations requiring more detailed 
                recordkeeping by any insured depository 
                institution with respect to qualified financial 
                contracts (including market valuations) only if 
                such insured depository institution is in a 
                troubled condition (as such term is defined by 
                the Corporation pursuant to section 32).''.

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 
        section 907, the following:

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

    ``(a) If the trustee rejects a swap agreement, securities 
contract (as defined in section 741), forward contract, 
commodity contract (as defined in section 761), repurchase 
agreement, or master netting agreement pursuant to section 
365(a), or if a forward contract merchant, stockbroker, 
financial institution, securities clearing agency, repo 
participant, financial participant, master netting agreement 
participant, or swap participant liquidates, terminates, or 
accelerates such contract or agreement, damages shall be 
measured as of the earlier of--
            ``(1) the date of such rejection; or
            ``(2) the date or dates of such liquidation, 
        termination, or acceleration.
    ``(b) If there are not any commercially reasonable 
determinants of value as of any date referred to in paragraph 
(1) or (2) of subsection (a), damages shall be measured as of 
the earliest subsequent date or dates on which there are 
commercially reasonable determinants of value.
    ``(c) For the purposes of subsection (b), if damages are 
not measured as of the date or dates of rejection, liquidation, 
termination, or acceleration, and the forward contract 
merchant, stockbroker, financial institution, securities 
clearing agency, repo participant, financial participant, 
master netting agreement participant, or swap participant or 
the trustee objects to the timing of the measurement of 
damages--
            ``(1) the trustee, in the case of an objection by a 
        forward contract merchant, stockbroker, financial 
        institution, securities clearing agency, repo 
        participant, financial participant, master netting 
        agreement participant, or swap participant; or
            ``(2) the forward contract merchant, stockbroker, 
        financial institution, securities clearing agency, repo 
        participant, financial participant, master netting 
        agreement participant, or swap participant, in the case 
        of an objection by the trustee,
has the burden of proving that there were no commercially 
reasonable determinants of value as of such date or dates.''; 
and
            (2) in the table of sections for chapter 5, by 
        inserting after the item relating to section 561 (as 
        added by section 907) the following new item:

``562. Timing of damage measure in connection with swap agreements, 
          securities contracts, forward contracts, commodity contracts, 
          repurchase agreements, or master netting agreements.''.

    (b) Claims Arising From Rejection.--Section 502(g) of title 
11, United States Code, is amended--
            (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, 741, and 761 
                        of title 11, United States Code, to 
                        offset or net termination values, 
                        payment amounts, or other transfer 
                        obligations arising under or in 
                        connection with one or more of such 
                        contracts or agreements, or to 
                        foreclose on any cash collateral 
                        pledged by the debtor, whether or not 
                        with respect to one or more of such 
                        contracts or agreements.
                            ``(ii) Notwithstanding clause (i), 
                        such application, order, or decree may 
                        operate as a stay of the foreclosure 
                        on, or disposition of, securities 
                        collateral pledged by the debtor, 
                        whether or not with respect to one or 
                        more of such contracts or agreements, 
                        securities sold by the debtor under a 
                        repurchase agreement, or securities 
                        lent under a securities lending 
                        agreement.
                            ``(iii) As used in this 
                        subparagraph, the term `contractual 
                        right' includes a right set forth in a 
                        rule or bylaw of a national securities 
                        exchange, a national securities 
                        association, or a securities clearing 
                        agency, a right set forth in a bylaw of 
                        a clearing organization or contract 
                        market or in a resolution of the 
                        governing board thereof, and a right, 
                        whether or not in writing, arising 
                        under common law, under law merchant, 
                        or by reason of normal business 
                        practice.''.

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

    (a) 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), is 
        hereby reenacted, and as here reenacted is amended by 
        this Act.
            (2) Effective date.--Subsection (a) shall take 
        effect on the date of the enactment of this Act.
    (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, as amended 
by section 226, is amended by inserting ``101(18),'' after 
``101(3),'' each place it appears.

SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

    (a) Contents of Plan.--Section 1222(a)(2) of title 11, 
United States Code, is amended to read as follows:
            ``(2) provide for the full payment, in deferred 
        cash payments, of all claims entitled to priority under 
        section 507, unless--
                    ``(A) the claim is a claim owed to a 
                governmental unit that arises as a result of 
                the sale, transfer, exchange, or other 
                disposition of any farm asset used in the 
                debtor's farming operation, in which case the 
                claim shall be treated as an unsecured claim 
                that is not entitled to priority under section 
                507, but the debt shall be treated in such 
                manner only if the debtor receives a discharge; 
                or
                    ``(B) the holder of a particular claim 
                agrees to a different treatment of that 
                claim;''.
    (b) Special Notice Provisions.--Section 1231(b) of title 
11, United States Code, as so designated by section 719, is 
amended by striking ``a State or local governmental unit'' and 
inserting ``any governmental unit''.
    (c) Effective Date; Application of Amendments.--This 
section and the amendments made by this section shall take 
effect on the date of the enactment of this Act and shall not 
apply with respect to cases commenced under title 11 of the 
United States Code before such date.

SEC. 1004. DEFINITION OF FAMILY FARMER.

    Section 101(18) of title 11, United States Code, is 
amended--
            (1) in subparagraph (A)--
                    (A) by striking ``$1,500,000'' and 
                inserting ``$3,237,000''; and
                    (B) by striking ``80'' and inserting 
                ``50''; and
            (2) in subparagraph (B)(ii)--
                    (A) by striking ``$1,500,000'' and 
                inserting ``$3,237,000''; and
                    (B) by striking ``80'' and inserting 
                ``50''.

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

    Section 101(18)(A) of title 11, United States Code, is 
amended by striking ``for the taxable year preceding the 
taxable year'' and inserting the following:
        ``for--
                    ``(i) the taxable year preceding; or
                    ``(ii) each of the 2d and 3d taxable years 
                preceding;
        the taxable year''.

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

    (a) Confirmation of Plan.--Section 1225(b)(1) of title 11, 
United States Code, is amended--
            (1) in subparagraph (A) by striking ``or'' at the 
        end;
            (2) in subparagraph (B) by striking the period at 
        the end and inserting ``; or''; and
            (3) by adding at the end the following:
            ``(C) the value of the property to be distributed 
        under the plan in the 3-year period, or such longer 
        period as the court may approve under section 1222(c), 
        beginning on the date that the first distribution is 
        due under the plan is not less than the debtor's 
        projected disposable income for such period.''.
    (b) Modification of Plan.--Section 1229 of title 11, United 
States Code, is amended by adding at the end the following:
    ``(d) A plan may not be modified under this section--
            ``(1) to increase the amount of any payment due 
        before the plan as modified becomes the plan;
            ``(2) by anyone except the debtor, based on an 
        increase in the debtor's disposable income, to increase 
        the amount of payments to unsecured creditors required 
        for a particular month so that the aggregate of such 
        payments exceeds the debtor's disposable income for 
        such month; or
            ``(3) in the last year of the plan by anyone except 
        the debtor, to require payments that would leave the 
        debtor with insufficient funds to carry on the farming 
        operation after the plan is completed.''.

SEC. 1007. FAMILY FISHERMEN.

    (a) Definitions.--Section 101 of title 11, United States 
Code, is amended--
            (1) by inserting after paragraph (7) the following:
            ``(7A) `commercial fishing operation' means--
                    ``(A) the catching or harvesting of fish, 
                shrimp, lobsters, urchins, seaweed, shellfish, 
                or other aquatic species or products of such 
                species; or
                    ``(B) for purposes of section 109 and 
                chapter 12, aquaculture activities consisting 
                of raising for market any species or product 
                described in subparagraph (A);
            ``(7B) `commercial fishing vessel' means a vessel 
        used by a family fisherman to carry out a commercial 
        fishing operation;''; and
            (2) by inserting after paragraph (19) the 
        following:
            ``(19A) `family fisherman' means--
                    ``(A) an individual or individual and 
                spouse engaged in a commercial fishing 
                operation--
                            ``(i) whose aggregate debts do not 
                        exceed $1,500,000 and not less than 80 
                        percent of whose aggregate 
                        noncontingent, liquidated debts 
                        (excluding a debt for the principal 
                        residence of such individual or such 
                        individual and spouse, unless such debt 
                        arises out of a commercial fishing 
                        operation), on the date the case is 
                        filed, arise out of a commercial 
                        fishing operation owned or operated by 
                        such individual or such individual and 
                        spouse; and
                            ``(ii) who receive from such 
                        commercial fishing operation more than 
                        50 percent of such individual's or such 
                        individual's and spouse's gross income 
                        for the taxable year preceding the 
                        taxable year in which the case 
                        concerning such individual or such 
                        individual and spouse was filed; or
                    ``(B) a corporation or partnership--
                            ``(i) in which more than 50 percent 
                        of the outstanding stock or equity is 
                        held by--
                                    ``(I) 1 family that 
                                conducts the commercial fishing 
                                operation; or
                                    ``(II) 1 family and the 
                                relatives of the members of 
                                such family, and such family or 
                                such relatives conduct the 
                                commercial fishing operation; 
                                and
                            ``(ii)(I) more than 80 percent of 
                        the value of its assets consists of 
                        assets related to the commercial 
                        fishing operation;
                            ``(II) its aggregate debts do not 
                        exceed $1,500,000 and not less than 80 
                        percent of its aggregate noncontingent, 
                        liquidated debts (excluding a debt for 
                        1 dwelling which is owned by such 
                        corporation or partnership and which a 
                        shareholder or partner maintains as a 
                        principal residence, unless such debt 
                        arises out of a commercial fishing 
                        operation), on the date the case is 
                        filed, arise out of a commercial 
                        fishing operation owned or operated by 
                        such corporation or such partnership; 
                        and
                            ``(III) if such corporation issues 
                        stock, such stock is not publicly 
                        traded;
            ``(19B) `family fisherman with regular annual 
        income' means a family fisherman whose annual income is 
        sufficiently stable and regular to enable such family 
        fisherman to make payments under a plan under chapter 
        12 of this title;''.
    (b) Who May Be a Debtor.--Section 109(f) of title 11, 
United States Code, is amended by inserting ``or family 
fisherman'' after ``family farmer''.
    (c)  Chapter 12.--Chapter 12 of title 11, United States 
Code, is amended--
            (1) in the chapter heading, by inserting ``OR 
        FISHERMAN'' after ``FAMILY FARMER'';
            (2) in section 1203, by inserting ``or commercial 
        fishing operation'' after ``farm''; and
            (3) in section 1206, by striking ``if the property 
        is farmland or farm equipment'' and inserting ``if the 
        property is farmland, farm equipment, or property used 
        to carry out a commercial fishing operation (including 
        a commercial fishing vessel)''.
    (d) Clerical Amendment.--In the table of chapters for title 
11, United States Code, the item relating to chapter 12, is 
amended to read as follows:

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

    (e) Applicability.--Nothing in this section shall change, 
affect, or amend the Fishery Conservation and Management Act of 
1976 (16 U.S.C. 1801, et seq.).

              TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

SEC. 1101. DEFINITIONS.

    (a) Health Care Business Defined.--Section 101 of title 11, 
United States Code, as amended by section 306, is amended--
            (1) by redesignating paragraph (27A) as paragraph 
        (27B); and
            (2) by inserting after paragraph (27) the 
        following:
            ``(27A) `health care business'--
                    ``(A) means any public or private entity 
                (without regard to whether that entity is 
                organized for profit or not for profit) that is 
                primarily engaged in offering to the general 
                public facilities and services for--
                            ``(i) the diagnosis or treatment of 
                        injury, deformity, or disease; and
                            ``(ii) surgical, drug treatment, 
                        psychiatric, or obstetric care; and
                    ``(B) includes--
                            ``(i) any--
                                    ``(I) general or 
                                specialized hospital;
                                    ``(II) ancillary 
                                ambulatory, emergency, or 
                                surgical treatment facility;
                                    ``(III) hospice;
                                    ``(IV) home health agency; 
                                and
                                    ``(V) other health care 
                                institution that is similar to 
                                an entity referred to in 
                                subclause (I), (II), (III), or 
                                (IV); and
                            ``(ii) any long-term care facility, 
                        including any--
                                    ``(I) skilled nursing 
                                facility;
                                    ``(II) intermediate care 
                                facility;
                                    ``(III) assisted living 
                                facility;
                                    ``(IV) home for the aged;
                                    ``(V) domiciliary care 
                                facility; and
                                    ``(VI) health care 
                                institution that is related to 
                                a facility referred to in 
                                subclause (I), (II), (III), 
                                (IV), or (V), if that 
                                institution is primarily 
                                engaged in offering room, 
                                board, laundry, or personal 
                                assistance with activities of 
                                daily living and incidentals to 
                                activities of daily living;''.
    (b) Patient and Patient Records Defined.--Section 101 of 
title 11, United States Code, is amended by inserting after 
paragraph (40) the following:
            ``(40A) `patient' means any 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 most recent known address of that patient, 
                or a family member or contact person for that 
                patient, and to the appropriate insurance 
                carrier an appropriate notice regarding the 
                claiming or disposing of patient records.
            ``(2) If, after providing the notification under 
        paragraph (1), patient records are not claimed during 
        the 365-day period described under that paragraph, the 
        trustee shall mail, by certified mail, at the end of 
        such 365-day period a written request to each 
        appropriate Federal agency to request permission from 
        that agency to deposit the patient records with that 
        agency, except that no Federal agency is required to 
        accept patient records under this paragraph.
            ``(3) If, following the 365-day period described in 
        paragraph (2) and after providing the notification 
        under paragraph (1), patient records are not claimed by 
        a patient or insurance provider, or request is not 
        granted by a Federal agency to deposit such records 
        with that agency, the trustee shall destroy those 
        records by--
                    ``(A) if the records are written, shredding 
                or burning the records; or
                    ``(B) if the records are magnetic, optical, 
                or other electronic records, by otherwise 
                destroying those records so that those records 
                cannot be retrieved.''.
    (b) Clerical Amendment.--The table of sections for 
subchapter III of chapter 3 of title 11, United States Code, is 
amended by adding at the end the following:

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

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

    Section 503(b) of title 11, United States Code, as amended 
by section 445, is amended by adding at the end the following:
            ``(8) the actual, necessary costs and expenses of 
        closing a health care business incurred by a trustee or 
        by a Federal agency (as defined in section 551(1) of 
        title 5) or a department or agency of a State or 
        political subdivision thereof, including any cost or 
        expense incurred--
                    ``(A) in disposing of patient records in 
                accordance with section 351; or
                    ``(B) in connection with transferring 
                patients from the health care business that is 
                in the process of being closed to another 
                health care business; and''.

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

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

``Sec. 333. Appointment of patient care ombudsman

    ``(a)(1) If the debtor in a case under chapter 7, 9, or 11 
is a health care business, the court shall order, not later 
than 30 days after the commencement of the case, the 
appointment of an ombudsman to monitor the quality of patient 
care and to represent the interests of the patients of the 
health care business unless the court finds that the 
appointment of such ombudsman is not necessary for the 
protection of patients under the specific facts of the case.
    ``(2)(A) If the court orders the appointment of an 
ombudsman under paragraph (1), the United States trustee shall 
appoint 1 disinterested person (other than the United States 
trustee) to serve as such ombudsman.
    ``(B) If the debtor is a health care business that provides 
long-term care, then the United States trustee may appoint the 
State Long-Term Care Ombudsman appointed under the Older 
Americans Act of 1965 for the State in which the case is 
pending to serve as the ombudsman required by paragraph (1).
    ``(C) If the United States trustee does not appoint a State 
Long-Term Care Ombudsman under subparagraph (B), the court 
shall notify the State Long-Term Care Ombudsman appointed under 
the Older Americans Act of 1965 for the State in which the case 
is pending, of the name and address of the person who is 
appointed under subparagraph (A).
    ``(b) An ombudsman appointed under subsection (a) shall--
            ``(1) monitor the quality of patient care provided 
        to patients of the debtor, to the extent necessary 
        under the circumstances, including interviewing 
        patients and physicians;
            ``(2) not later than 60 days after the date of 
        appointment, and not less frequently than at 60-day 
        intervals thereafter, report to the court, at a hearing 
        or in writing, regarding the quality of patient care 
        provided to patients of the debtor; and
            ``(3) if such ombudsman determines that the quality 
        of patient care provided to patients of the debtor is 
        declining significantly or is otherwise being 
        materially compromised, file with the court a motion or 
        a written report, with notice to the parties in 
        interest immediately upon making such determination.
    ``(c)(1) An ombudsman appointed under subsection (a) shall 
maintain any information obtained by such ombudsman under this 
section that relates to patients (including information 
relating to patient records) as confidential information. Such 
ombudsman may not review confidential patient records unless 
the court approves such review in advance and imposes 
restrictions on such ombudsman to protect the confidentiality 
of such records.
    ``(2) An ombudsman appointed under subsection (a)(2)(B) 
shall have access to patient records consistent with authority 
of such ombudsman under the Older Americans Act of 1965 and 
under non-Federal laws governing the State Long-Term Care 
Ombudsman program.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter II of chapter 3 of title 11, United States 
        Code, as amended by section 232, is amended by adding 
        at the end the following:

``333. Appointment of ombudsman.''.

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

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

    (a) In General.--Section 704(a) of title 11, United States 
Code, as amended by sections 102, 219, and 446, is amended by 
adding at the end the following:
            ``(12) use all reasonable and best efforts to 
        transfer patients from a health care business that is 
        in the process of being closed to an appropriate health 
        care business that--
                    ``(A) is in the vicinity of the health care 
                business that is closing;
                    ``(B) provides the patient with services 
                that are substantially similar to those 
                provided by the health care business that is in 
                the process of being closed; and
                    ``(C) maintains a reasonable quality of 
                care.''.
    (b) Conforming Amendment.--Section 1106(a)(1) of title 11, 
United States Code, as amended by section 446, is amended by 
striking ``and (11)'' and inserting ``(11), and (12)''.

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

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

                    TITLE XII--TECHNICAL AMENDMENTS

SEC. 1201. DEFINITIONS.

    Section 101 of title 11, United States Code, as 
hereinbefore 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), (38), and (54A), 
        by striking ``; and'' at the end and inserting a 
        period;
            (5) in paragraph (51B)--
                    (A) by inserting ``who is not a family 
                farmer'' after ``debtor'' the first place it 
                appears; and
                    (B) by striking ``thereto having 
                aggregate'' and all that follows through the 
                end of the paragraph and inserting a semicolon;
            (6) by striking paragraph (54) and inserting the 
        following:
            ``(54) The term `transfer' means--
                    ``(A) the creation of a lien;
                    ``(B) the retention of title as a security 
                interest;
                    ``(C) the foreclosure of a debtor's equity 
                of redemption; or
                    ``(D) each mode, direct or indirect, 
                absolute or conditional, voluntary or 
                involuntary, of disposing of or parting with--
                            ``(i) property; or
                            ``(ii) an interest in property;'';
            (7) by indenting the left margin of paragraph (54A) 
        2 ems to the right; and
            (8) in each of paragraphs (1) through (35), in each 
        of paragraphs (36), (37), (38A), (38B) and (39A), and 
        in each of paragraphs (40) through (55), by striking 
        the semicolon at the end and inserting a period.

SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

    Section 104 of title 11, United States Code, 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 
redesignated by section 221, is amended by striking 
``attorney's'' and inserting ``attorneys' ''.

SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.

    Section 328(a) of title 11, United States Code, is amended 
by inserting ``on a fixed or percentage fee basis,'' after 
``hourly basis,''.

SEC. 1207. EFFECT OF CONVERSION.

    Section 348(f)(2) of title 11, United States Code, is 
amended by inserting ``of the estate'' after ``property'' the 
first place it appears.

SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

    Section 503(b)(4) of title 11, United States Code, is 
amended by inserting ``subparagraph (A), (B), (C), (D), or (E) 
of'' before ``paragraph (3)''.

SEC. 1209. EXCEPTIONS TO DISCHARGE.

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

SEC. 1210. EFFECT OF DISCHARGE.

    Section 524(a)(3) of title 11, United States Code, is 
amended by striking ``section 523'' and all that follows 
through ``or that'' and inserting ``section 523, 1228(a)(1), or 
1328(a)(1), or that''.

SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

    Section 525(c) of title 11, United States Code, is 
amended--
            (1) in paragraph (1), by inserting ``student'' 
        before ``grant'' the second place it appears; and
            (2) in paragraph (2), by striking ``the program 
        operated under part B, D, or E of'' and inserting ``any 
        program operated under''.

SEC. 1212. PROPERTY OF THE ESTATE.

    Section 541(b)(4)(B)(ii) of title 11, United States Code, 
is amended by inserting ``365 or'' before ``542''.

SEC. 1213. PREFERENCES.

    (a) In General.--Section 547 of title 11, United States 
Code, as amended by section 201, is amended--
            (1) in subsection (b), by striking ``subsection 
        (c)'' and inserting ``subsections (c) and (i)''; and
            (2) by adding at the end the following:
    ``(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, is amended 
by inserting ``1123(d),'' after ``1123(b),''.

SEC. 1217. ABANDONMENT OF RAILROAD LINE.

    Section 1170(e)(1) of title 11, United States Code, is 
amended by striking ``section 11347'' and inserting ``section 
11326(a)''.

SEC. 1218. CONTENTS OF PLAN.

    Section 1172(c)(1) of title 11, United States Code, is 
amended by striking ``section 11347'' and inserting ``section 
11326(a)''.

SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS.

    Section 1334(d) of title 28, United States Code, is 
amended--
            (1) by striking ``made under this subsection'' and 
        inserting ``made under subsection (c)''; and
            (2) by striking ``This subsection'' and inserting 
        ``Subsection (c) and this subsection''.

SEC. 1220. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.

    Section 156(a) of title 18, United States Code, is 
amended--
            (1) in the first undesignated paragraph--
                    (A) by inserting ``(1) the term'' before `` 
                `bankruptcy''; and
                    (B) by striking the period at the end and 
                inserting ``; and''; and
            (2) in the second undesignated paragraph--
                    (A) by inserting ``(2) the term'' before `` 
                `document''; and
                    (B) by striking ``this title'' and 
                inserting ``title 11''.

SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.

    (a) Sale of Property of Estate.--Section 363(d) of title 
11, United States Code, is amended by striking ``only'' and all 
that follows through the end of the subsection and inserting 
``only--
            ``(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 sections 
213, 321, and 331, is amended by adding at the end the 
following:
            ``(17) All transfers of property of the plan shall 
        be made in accordance with any applicable provisions of 
        nonbankruptcy law that govern the transfer of property 
        by a corporation or trust that is not a moneyed, 
        business, or commercial corporation or trust.''.
    (c) Transfer of Property.--Section 541 of title 11, United 
States Code, as amended by section 225, is amended by adding at 
the end the following:
    ``(f) Notwithstanding any other provision of this title, 
property that is held by a debtor that is a corporation 
described in section 501(c)(3) of the Internal Revenue Code of 
1986 and exempt from tax under section 501(a) of such Code may 
be transferred to an entity that is not such a corporation, but 
only under the same conditions as would apply if the debtor had 
not filed a case under this title.''.
    (d) 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. 1222. PROTECTION OF VALID PURCHASE MONEY SECURITY INTERESTS.

    Section 547(c)(3)(B) of title 11, United States Code, is 
amended by striking ``20'' and inserting ``30''.

SEC. 1223. BANKRUPTCY JUDGESHIPS.

    (a) Short Title.--This section may be cited as the 
``Bankruptcy Judgeship Act of 2002''.
    (b) Temporary Judgeships.--
            (1) Appointments.--The following bankruptcy judges 
        shall be appointed in the manner prescribed in section 
        152(a)(1) of title 28, United States Code, for the 
        appointment of bankruptcy judges provided for in 
        section 152(a)(2) of such title:
                    (A) One additional bankruptcy judge for the 
                eastern district of California.
                    (B) Three additional bankruptcy judges for 
                the central district of California.
                    (C) Four additional bankruptcy judges for 
                the district of Delaware.
                    (D) Two additional bankruptcy judges for 
                the southern district of Florida.
                    (E) One additional bankruptcy judge for the 
                southern district of Georgia.
                    (F) Three additional bankruptcy judges for 
                the district of Maryland.
                    (G) One additional bankruptcy judge for the 
                eastern district of Michigan.
                    (H) One additional bankruptcy judge for the 
                southern district of Mississippi.
                    (I) One additional bankruptcy judge for the 
                district of New Jersey.
                    (J) One additional bankruptcy judge for the 
                eastern district of New York.
                    (K) One additional bankruptcy judge for the 
                northern district of New York.
                    (L) One additional bankruptcy judge for the 
                southern district of New York.
                    (M) One additional bankruptcy judge for the 
                eastern district of North Carolina.
                    (N) One additional bankruptcy judge for the 
                eastern district of Pennsylvania.
                    (O) One additional bankruptcy judge for the 
                middle district of Pennsylvania.
                    (P) One additional bankruptcy judge for the 
                district of Puerto Rico.
                    (Q) One additional bankruptcy judge for the 
                western district of Tennessee.
                    (R) One additional bankruptcy judge for the 
                eastern district of Virginia.
                    (S) One additional bankruptcy judge for the 
                district of South Carolina.
                    (T) One additional bankruptcy judge for the 
                district of Nevada.
            (2) Vacancies.--
                    (A) Districts with single appointments.--
                Except as provided in subparagraphs (B), (C), 
                (D), and (E), the first vacancy occurring in 
                the office of bankruptcy judge in each of the 
                judicial districts set forth in paragraph (1)--
                            (i) occurring 5 years or more after 
                        the appointment date of the bankruptcy 
                        judge appointed under paragraph (1) to 
                        such office; and
                            (ii) resulting from the death, 
                        retirement, resignation, or removal of 
                        a bankruptcy judge;
                shall not be filled.
                    (B) Central district of california.--The 
                1st, 2d, and 3d vacancies in the office of 
                bankruptcy judge in the central district of 
                California--
                            (i) occurring 5 years or more after 
                        the respective 1st, 2d, and 3d 
                        appointment dates of the bankruptcy 
                        judges appointed under paragraph 
                        (1)(B); and
                            (ii) resulting from the death, 
                        retirement, resignation, or removal of 
                        a bankruptcy judge;
                shall not be filled.
                    (C) District of delaware.--The 1st, 2d, 3d, 
                and 4th vacancies in the office of bankruptcy 
                judge in the district of Delaware--
                            (i) occurring 5 years or more after 
                        the respective 1st, 2d, 3d, and 4th 
                        appointment dates of the bankruptcy 
                        judges appointed under paragraph 
                        (1)(F); and
                            (ii) resulting from the death, 
                        retirement, resignation, or removal of 
                        a bankruptcy judge;
                shall not be filled.
                    (D) Southern district of florida.--The 1st 
                and 2d vacancies in the office of bankruptcy 
                judge in the southern district of Florida--
                            (i) occurring 5 years or more after 
                        the respective 1st and 2d appointment 
                        dates of the bankruptcy judges 
                        appointed under paragraph (1)(D); and
                            (ii) resulting from the death, 
                        retirement, resignation, or removal of 
                        a bankruptcy judge;
                shall not be filled.
                    (E) District of maryland.--The 1st, 2d, and 
                3d vacancies in the office of bankruptcy judge 
                in the district of Maryland--
                            (i) occurring 5 years or more after 
                        the respective 1st, 2d, and 3d 
                        appointment dates of the bankruptcy 
                        judges appointed under paragraph 
                        (1)(F); and
                            (ii) resulting from the death, 
                        retirement, resignation, or removal of 
                        a bankruptcy judge;
                shall not be filled.
    (c) Extensions.--
            (1) In general.--The temporary office of bankruptcy 
        judges authorized for the northern district of Alabama, 
        the district of Delaware, the district of Puerto Rico, 
        and the eastern district of Tennessee under paragraphs 
        (1), (3), (7), and (9) of section 3(a) of the 
        Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) 
        are extended until the first vacancy occurring in the 
        office of a bankruptcy judge in the applicable district 
        resulting from the death, retirement, resignation, or 
        removal of a bankruptcy judge and occurring 5 years 
        after the date of the enactment of this Act.
            (2) Applicability of other provisions.--All other 
        provisions of section 3 of the Bankruptcy Judgeship Act 
        of 1992 (28 U.S.C. 152 note) remain applicable to the 
        temporary office of bankrupcy judges referred to in 
        this subsection.
    (d) Technical Amendments.--Section 152(a) of title 28, 
United States Code, is amended--
            (1) in paragraph (1), by striking the first 
        sentence and inserting the following: ``Each bankruptcy 
        judge to be appointed for a judicial district, as 
        provided in paragraph (2), shall be appointed by the 
        court of appeals of the United States for the circuit 
        in which such district is located.''; and
            (2) in paragraph (2)--
                    (A) in the item relating to the middle 
                district of Georgia, by striking ``2'' and 
                inserting ``3''; and
                    (B) in the collective item relating to the 
                middle and southern districts of Georgia, by 
                striking ``Middle and Southern . . . . . . 1''.
    (e) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act.

SEC. 1224. COMPENSATING TRUSTEES.

    Section 1326 of title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``and'';
                    (B) in paragraph (2), by striking the 
                period at the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) if a chapter 7 trustee has been allowed 
        compensation due to the conversion or dismissal of the 
        debtor's prior case pursuant to section 707(b), and 
        some portion of that compensation remains unpaid in a 
        case converted to this chapter or in the case dismissed 
        under section 707(b) and refiled under this chapter, 
        the amount of any such unpaid compensation, which shall 
        be paid monthly--
                    ``(A) by prorating such amount over the 
                remaining duration of the plan; and
                    ``(B) by monthly payments not to exceed the 
                greater of--
                            ``(i) $25; or
                            ``(ii) the amount payable to 
                        unsecured nonpriority creditors, as 
                        provided by the plan, multiplied by 5 
                        percent, and the result divided by the 
                        number of months in the plan.''; and
            (2) by adding at the end the following:
    ``(d) Notwithstanding any other provision of this title--
            ``(1) compensation referred to in subsection (b)(3) 
        is payable and may be collected by the trustee under 
        that paragraph, even if such amount has been discharged 
        in a prior 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. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED STATES CODE.

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

SEC. 1226. 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. 1227. 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, within 45 days before the date of the commencement 
of a case under this title, but such seller may not reclaim 
such goods unless such seller demands in writing reclamation of 
such goods--
            ``(A) not later than 45 days after the date of 
        receipt of such goods by the debtor; or
            ``(B) not later than 20 days after the date of 
        commencement of the case, if the 45-day period expires 
        after the commencement of the case.
    ``(2) If a seller of goods fails to provide notice in the 
manner described in paragraph (1), the seller still may assert 
the rights contained in section 503(b)(9).''.
    (b) Administrative Expenses.--Section 503(b) of title 11, 
United States Code, as amended by sections 445 and 1103, is 
amended by adding at the end the following:
            ``(9) the value of any goods received by the debtor 
        within 20 days before the date of commencement of a 
        case under this title in which the goods have been sold 
        to the debtor in the ordinary course of such debtor's 
        business.''.

SEC. 1228. 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. 1229. ENCOURAGING CREDITWORTHINESS.

    (a) Sense of the Congress.--It is the sense of the Congress 
that--
            (1) certain lenders may sometimes offer credit to 
        consumers indiscriminately, without taking steps to 
        ensure that consumers are capable of repaying the 
        resulting debt, and in a manner which may encourage 
        certain consumers to accumulate additional debt; and
            (2) resulting consumer debt may increasingly be a 
        major contributing factor to consumer insolvency.
    (b) Study Required.--The Board of Governors of the Federal 
Reserve System (hereafter in this section referred to as the 
``Board'') shall conduct a study of--
            (1) consumer credit industry practices of 
        soliciting and extending credit--
                    (A) indiscriminately;
                    (B) without taking steps to ensure that 
                consumers are capable of repaying the resulting 
                debt; and
                    (C) in a manner that encourages consumers 
                to accumulate additional debt; and
            (2) the effects of such practices on consumer debt 
        and insolvency.
    (c) Report and Regulations.--Not later than 12 months after 
the date of enactment of this Act, the Board--
            (1) shall make public a report on its findings with 
        respect to the indiscriminate solicitation and 
        extension of credit by the credit industry;
            (2) may issue regulations that would require 
        additional disclosures to consumers; and
            (3) may take any other actions, consistent with its 
        existing statutory authority, that the Board finds 
        necessary to ensure responsible industrywide practices 
        and to prevent resulting consumer debt and insolvency.

SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMPTION.

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

SEC. 1231. TRUSTEES.

    (a) Suspension and Termination of Panel Trustees and 
Standing Trustees.--Section 586(d) of title 28, United States 
Code, is amended--
            (1) by inserting ``(1)'' after ``(d)''; and
            (2) by adding at the end the following:
    ``(2) A trustee whose appointment under subsection (a)(1) 
or under subsection (b) is terminated or who ceases to be 
assigned to cases filed under title 11, United States Code, may 
obtain judicial review of the final agency decision by 
commencing an action in the district court of the United States 
for the district for which the panel to which the trustee is 
appointed under subsection (a)(1), or in the district court of 
the United States for the district in which the trustee is 
appointed under subsection (b) resides, after first exhausting 
all available administrative remedies, which if the trustee so 
elects, shall also include an administrative hearing on the 
record. 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 district court of the United States 
for the district where the individual resides. The decision of 
the agency shall be affirmed by the district court unless it is 
unreasonable and without cause based upon the administrative 
record before the agency.
    ``(4) The Attorney General shall prescribe procedures to 
implement this subsection.''.

SEC. 1232. BANKRUPTCY FORMS.

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

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

    (a) Appeals.--Section 158 of title 28, United States Code, 
is amended--
            (1) in subsection (c)(1), by striking ``Subject to 
        subsection (b),'' and inserting ``Subject to 
        subsections (b) and (d)(2),''; and
            (2) in subsection (d)--
                    (A) by inserting ``(1)'' after ``(d)''; and
                    (B) by adding at the end the following:
    ``(2)(A) The appropriate court of appeals shall have 
jurisdiction of appeals described in the first sentence of 
subsection (a) if the bankruptcy court, the district court, or 
the bankruptcy appellate panel involved, acting on its own 
motion or on the request of a party to the judgment, order, or 
decree described in such first sentence, or all the appellants 
and appellees (if any) acting jointly, certify that--
            ``(i) the judgment, order, or decree involves a 
        question of law as to which there is no controlling 
        decision of the court of appeals for the circuit or of 
        the Supreme Court of the United States, or involves a 
        matter of public importance;
            ``(ii) the judgment, order, or decree involves a 
        question of law requiring resolution of conflicting 
        decisions; or
            ``(iii) an immediate appeal from the judgment, 
        order, or decree may materially advance the progress of 
        the case or proceeding in which the appeal is taken;
and if the court of appeals authorizes the direct appeal of the 
judgment, order, or decree.
    ``(B) If the bankruptcy court, the district court, or the 
bankruptcy appellate panel--
            ``(i) on its own motion or on the request of a 
        party, determines that a circumstance specified in 
        clause (i), (ii), or (iii) of subparagraph (A) exists; 
        or
            ``(ii) receives a request made by a majority of the 
        appellants and a majority of appellees (if any) to make 
        the certification described in subparagraph (A);
then the bankruptcy court, the district court, or the 
bankruptcy appellate panel shall make the certification 
described in subparagraph (A).
    ``(C) The parties may supplement the certification with a 
short statement of the basis for the certification.
    ``(D) An appeal under this paragraph does not stay any 
proceeding of the bankruptcy court, the district court, or the 
bankruptcy appellate panel from which the appeal is taken, 
unless the respective bankruptcy court, district court, or 
bankruptcy appellate panel, or the court of appeals in which 
the appeal in pending, issues a stay of such proceeding pending 
the appeal.
    ``(E) Any request under subparagraph (B) for certification 
shall be made not later than 60 days after the entry of the 
judgment, order, or decree.''.
    (b) Procedural Rules.--
            (1) Temporary application.--A provision of this 
        subsection shall apply to appeals under section 
        158(d)(2) of title 28, United States Code, until a rule 
        of practice and procedure relating to such provision 
        and such appeals is promulgated or amended under 
        chapter 131 of such title.
            (2) Certification.--A district court, a bankruptcy 
        court, or a bankruptcy appellate panel may make a 
        certification under section 158(d)(2) of title 28, 
        United States Code, only with respect to matters 
        pending in the respective bankruptcy court, district 
        court, or bankruptcy appellate panel.
            (3) Procedure.--Subject to any other provision of 
        this subsection, an appeal authorized by the court of 
        appeals under section 158(d)(2)(A) of title 28, United 
        States Code, shall be taken in the manner prescribed in 
        subdivisions (a)(1), (b), (c), and (d) of rule 5 of the 
        Federal Rules of Appellate Procedure. For purposes of 
        subdivision (a)(1) of rule 5--
                    (A) a reference in such subdivision to a 
                district court shall be deemed to include a 
                reference to a bankruptcy court and a 
                bankruptcy appellate panel, as appropriate;
                    (B) a reference in such subdivision to the 
                parties requesting permission to appeal to be 
                served with the petition shall be deemed to 
                include a reference to the parties to the 
                judgment, order, or decree from which the 
                appeal is taken.
            (4) Filing of petition with attachment.--A petition 
        requesting permission to appeal, that is based on a 
        certification made under subparagraph (A) or (B) of 
        section 158(d)(2) shall--
                    (A) be filed with the circuit clerk not 
                later than 10 days after the certification is 
                entered on the docket of the bankruptcy court, 
                the district court, or the bankruptcy appellate 
                panel from which the appeal is taken; and
                    (B) have attached a copy of such 
                certification.
            (5) References in rule 5.--For purposes of rule 5 
        of the Federal Rules of Appellate Procedure--
                    (A) a reference in such rule to a district 
                court shall be deemed to include a reference to 
                a bankruptcy court and to a bankruptcy 
                appellate panel; and
                    (B) a reference in such rule to a district 
                clerk shall be deemed to include a reference to 
                a clerk of a bankruptcy court and to a clerk of 
                a bankruptcy appellate panel.
            (6) Application of rules.--The Federal Rules of 
        Appellate Procedure shall apply in the courts of 
        appeals with respect to appeals authorized under 
        section 158(d)(2)(A), to the extent relevant and as if 
        such appeals were taken from final judgments, orders, 
        or decrees of the district courts or bankruptcy 
        appellate panels exercising appellate jurisdiction 
        under subsection (a) or (b) of section 158 of title 28, 
        United States Code.

SEC. 1234. INVOLUNTARY CASES.

    (a) Amendments.--Section 303 of title 11, United States 
Code, is amended--
            (1) in subsection (b)(1), by--
                    (A) inserting ``as to liability or amount'' 
                after ``bona fide dispute''; and
                    (B) striking ``if such claims'' and 
                inserting ``if such noncontingent, undisputed 
                claims''; and
            (2) in subsection (h)(1), by inserting ``as to 
        liability or amount'' before the semicolon at the end.
    (b) Effective Date; Application of Amendments.--This 
section and the amendments made by this section shall take 
effect on the date of the enactment of this Act and shall not 
apply with respect to cases commenced under title 11 of the 
United States Code before such date.

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

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

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

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

    (a) Minimum Payment Disclosures.--Section 127(b) of the 
Truth in Lending Act (15 U.S.C. 1637(b)) is amended by adding 
at the end the following:
            ``(11)(A) In the case of an open end credit plan 
        that requires a minimum monthly payment of not more 
        than 4 percent of the balance on which finance charges 
        are accruing, the following statement, located on the 
        front of the billing statement, disclosed clearly and 
        conspicuously: `Minimum Payment Warning: Making only 
        the minimum payment will increase the interest you pay 
        and the time it takes to repay your balance. For 
        example, making only the typical 2% minimum monthly 
        payment on a balance of $1,000 at an interest rate of 
        17% would 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 atypical 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 Abuse Prevention and 
        Consumer Protection Act of 2002, a toll-free telephone 
        number, or provide a toll-free telephone number 
        established and maintained by a third party, for use by 
        creditors that are depository institutions (as defined 
        in section 3 of the Federal Deposit Insurance Act), 
        including a Federal credit union or State credit union 
        (as defined in section 101 of the Federal Credit Union 
        Act, with total assets not exceeding $250,000,000. The 
        toll-free telephone number may connect consumers to an 
        automated device through which consumers may obtain 
        information described in subparagraph (A) or (B), as 
        applicable, by inputting information using a touch-tone 
        telephone or similar device, if consumers whose 
        telephones are not equipped to use such automated 
        device are provided the opportunity to be connected to 
        an individual from whom the information described in 
        subparagraph (A) or (B), as applicable, may be 
        obtained. A person that receives a request for 
        information described in subparagraph (A) or (B) from 
        an obligor through the toll-free telephone number 
        disclosed under subparagraph (A) or (B), as applicable, 
        shall disclose in response to such request only the 
        information set forth in the table promulgated by the 
        Board under subparagraph (H)(i). The dollar amount 
        contained in this subclause shall be adjusted according 
        to an indexing mechanism established by the Board.
            ``(II) Not later than 6 months prior to the 
        expiration of the 24-month period referenced in 
        subclause (I), the Board shall submit to the Committee 
        on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives a report on the program described in 
        subclause (I).
            ``(G) 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 Solicitations.--Section 127(c) of the 
Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding 
at the end the following:
            ``(7) Internet-based solicitations.--
                    ``(A) In general.--In any solicitation to 
                open a credit card account for any person under 
                an open end consumer credit plan using the 
                Internet or other interactive computer service, 
                the person making the solicitation shall 
                clearly and conspicuously disclose--
                            ``(i) the information described in 
                        subparagraphs (A) and (B) of paragraph 
                        (1); and
                            ``(ii) the information described in 
                        paragraph (6).
                    ``(B) Form of disclosure.--The disclosures 
                required by subparagraph (A) shall be--
                            ``(i) readily accessible to 
                        consumers in close proximity to the 
                        solicitation to open a credit card 
                        account; and
                            ``(ii) updated regularly to reflect 
                        the current policies, terms, and fee 
                        amounts applicable to the credit card 
                        account.
                    ``(C) Definitions.--For purposes of this 
                paragraph--
                            ``(i) the term `Internet' means the 
                        international computer network of both 
                        Federal and non-Federal interoperable 
                        packet switched data networks; and
                            ``(ii) the term `interactive 
                        computer service' means any information 
                        service, system, or access software 
                        provider that provides or enables 
                        computer access by multiple users to a 
                        computer server, including specifically 
                        a service or system that provides 
                        access to the Internet and such systems 
                        operated or services offered by 
                        libraries or educational 
                        institutions.''.
    (b) Regulatory Implementation.--
            (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.

      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.--
            (1) In general.--Except as otherwise provided in 
        this Act and paragraph (2), the amendments made by this 
        Act shall not apply with respect to cases commenced 
        under title 11, United States Code, before the 
        effective date of this Act.
            (2) Limitations on homestead exemption.--The 
        amendments made by sections 308 and 322 shall apply 
        with respect to cases commenced under title 11, United 
        States Code, on or after the date of the enactment of 
        this Act.
      And the Senate agree to the same.

                From the Committee on the Judiciary, for 
                consideration of the House bill and the Senate 
                amendment, and modifications committed to 
                conference:
                                   F. James Sensenbrenner,
                                   Henry J. Hyde,
                                   George W. Gekas,
                                   Lamar Smith,
                                   Steve Chabot,
                                   Bob Barr,
                                   Rick Boucher,
                From the Committee on Financial Services, for 
                consideration of secs. 901-906, 907A-909, 911, 
                and 1301-1309 of the House bill, and secs. 901-
                906, 907A-909, 911, 913-4, and title XIII of 
                the Senate amendment, and modifications 
                committed to conference:
                                   Michael G. Oxley,
                                   Spencer Bachus,
                From the Committee on Energy and Commerce, for 
                consideration of title XIV of the Senate 
                amendment, and modifications committed to 
                conference:
                                   Billy Tauzin,
                                   Joe Barton,
                From the Committee on Education and the 
                Workforce, for consideration of sec. 1403 of 
                the Senate amendment, and modifications 
                committed to conference:
                                   John Boehner,
                                   Michael N. Castle,
                                 Managers on the Part of the House.

                                   Patrick Leahy,
                                   Joe Biden,
                                   Charles Schumer,
                                   Orrin Hatch,
                                   Chuck Grassley,
                                   Jon Kyl,
                                   Mike DeWine,
                                   Jeff Sessions,
                                   Mitch McConnell,
                                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. 333, the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 
2002, 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 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 that is a substitute for the 
House bill and the Senate amendment. The differences between 
the House bill, the Senate amendment, and the substitute agreed 
to in conference are noted below, except for clerical 
corrections, conforming changes made necessary by agreements 
reached by the conferees, and minor drafting and clerical 
changes.
Sec. 1. Short title; references; table of contents
      The short title of this measure is the Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2002.

                    Title I--Needs-Based Bankruptcy

Sec. 101. Conversion
      Section 101 is identical to section 101 of the House bill 
and the Senate amendment. Under current law, section 706(c) of 
the Bankruptcy Code provides that a court may not convert a 
chapter 7 case unless the debtor requests such conversion. 
Section 101 of the conference report amends this provision to 
allow a chapter 7 case to be converted to a case under chapter 
12 or chapter 13 on request or consent of the debtor.
Sec. 102. Dismissal or conversion
      Section 102 of the conference report reflects a 
compromise between section 102 of the House bill and the Senate 
amendment, although many of the components of this provision 
are derived from identical counterparts in the House bill and 
the Senate amendment.
      This provision implements the conference report's 
principal consumer bankruptcy reforms: needs-based debt relief. 
Under section 707(b) of the Bankruptcy Code, a chapter 7 case 
filed by a debtor who is an individual may be dismissed for 
substantial abuse only on motion of the court or the United 
States Trustee. It specifically prohibits such dismissal at the 
suggestion of any party in interest.
      Section 102 of the conference report revises current law 
in several significant respects. First, it amends section 
707(b) of the Bankruptcy Code to permit--in addition to the 
court and the United States trustee--a trustee, bankruptcy 
administrator, or a party in interest to seek dismissal or 
conversion of a chapter 7 case to one under chapter 11 or 13 on 
consent of the debtor, under certain circumstances. In 
addition, section 102 of the conference report changes the 
current standard for dismissal from ``substantial abuse'' to 
``abuse''. Section 102 of the conference report further amends 
Bankruptcy Code section 707(b) to mandate a presumption of 
abuse if the debtor's current monthly income (reduced by 
certain specified amounts) when multiplied by 60 is not less 
than the lesser of 25 percent of the debtor's nonpriority 
unsecured claims or $6,000 (whichever is greater), or $10,000.
      To determine whether the presumption of abuse applies 
under section 707(b) of the Bankruptcy Code, section 102(a) of 
the conference report specifies certain monthly expense amounts 
that are to be deducted from the debtor's ``current monthly 
income'' (a defined term). The House bill and the Senate 
amendment contain similar, but not identical provisions with 
respect to these expenses. Section 102(a) incorporates those 
provisions that are identical in both bills. These include the 
following expense items:
            the applicable monthly expenses for the debtor as 
        well as for the debtor's dependents and spouse in a 
        joint case (if the spouse is not otherwise a dependent) 
        specified under the Internal Revenue Service's National 
        Standards (with provision for an additional 5 percent 
        for food and clothing if the debtor can demonstrate 
        that such additional amount is reasonable and 
        necessary) and the IRS Local Standards;
            the actual monthly expenses for the debtor, the 
        debtor's dependents, and the debtor's spouse in a joint 
        case (if the spouse is not otherwise a dependent) for 
        the categories specified by the Internal Revenue 
        Service as Other Necessary Expenses;
            reasonably necessary expenses incurred to maintain 
        the safety of the debtor and the debtor's family from 
        family violence as specified in section 309 of the 
        Family Violence Prevention and Services Act or other 
        applicable federal law, with provision for the 
        confidentiality of these expenses;
            the debtor's average monthly payments on account of 
        secured debts and priority claims as explained below; 
        and
            if the debtor is eligible to be a debtor under 
        chapter 13, the actual administrative expenses of 
        administering a chapter 13 plan for the district in 
        which the debtor resides, up to 10 percent of projected 
        plan payments, as determined under schedules issued by 
        the Executive Office for United States Trustees.
      With respect to secured debts, Section 102(a)(2)(C) of 
the conference report specifies that the debtor's average 
monthly payments on account of secured debts is calculated as 
the sum of the following divided by 60: (1) all amounts 
scheduled as contractually due to secured creditors for each 
month of the 60-month period following filing of the case; and 
(2) any additional payments necessary, in filing a plan under 
chapter 13, 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. This provision is identical to 
section 102(a)(2)(C) of the House bill and the Senate 
amendment.
      With respect to priority claims, section 102(a)(2)(C) of 
the conference report specifies that the debtor's expenses for 
payment of such claims (including child support and alimony 
claims) is calculated as the total of such debts divided by 60. 
This provision is identical to section 102(a)(2)(C) of the 
House bill and the Senate amendment.
      Although the House bill and the Senate amendment contain 
identical provisions permitting a debtor, if applicable, to 
deduct from current monthly income the continuation of actual 
expenses paid by the debtor that are reasonable and necessary 
for the care and support of an elderly, chronically ill, or 
disabled household member or member of the debtor's immediate 
family (providing such individual is unable to pay for these 
expenses), the bills differ with respect to their respective 
definitions of ``immediate family''. The conference report 
adopts the Senate amendment's position that the term includes, 
in addition to other specified entities, the debtor's children 
and grandchildren.
      Likewise, both the House bill and the Senate amendment 
permit the debtor to deduct the actual expenses for each 
dependent child of a debtor to attend a private or public 
elementary or secondary school of up to $1,500 per child if the 
debtor: (1) documents such expenses, and (2) provides a 
detailed explanation of why such expenses are reasonable and 
necessary. The conference report adopts the Senate amendment's 
additional requirement that the debtor explain why such 
expenses are not already accounted for under any of the 
Internal Revenue Service National and Local Standards, and 
Other Expenses categories as identified in section 
707(b)(2)(I), as amended.
      In addition, the conference report adopts the Senate 
amendment provision permitting a debtor to claim additional 
housing and utilities allowances based on the debtor's actual 
home energy expenses if the debtor documents such expenses and 
demonstrates that they are reasonable and necessary. The House 
bill has no comparable provision.
      While the conference report replaces the current law's 
presumption in favor of granting relief requested by a chapter 
7 debtor with a presumption of abuse (if applicable under the 
income and expense analysis previously described), this 
presumption may be rebutted only under certain circumstances. 
Section 102(a)(2)(C) of the conference report amends Bankruptcy 
Code section 707(b) to provide that the presumption of abuse 
may be rebutted only if: (1) the debtor demonstrates special 
circumstances that justify additional expenses or adjustments 
of current monthly income for which there is no reasonable 
alternative; and (2) the additional expenses or adjustments 
cause the product of the debtor's current monthly income 
(reduced by the specified expenses) when multiplied by 60 to be 
less than the lesser of 25 percent of the debtor's nonpriority 
unsecured claims, or $6,000 (whichever is greater); or $10,000. 
In addition, the debtor must itemize and document each 
additional expense or income adjustment as well as provide a 
detailed explanation of the special circumstances that make 
such expense or adjustment necessary and reasonable. In 
addition, the debtor must attest under oath to the accuracy of 
any information provided to demonstrate that such additional 
expense or adjustment is required. This provision is identical 
to section 102(a)(2)(C) of the House bill and the Senate 
amendment.
      To implement these needs-based reforms, the conference 
report, in section 102(a)(2)(C), requires the debtor to file, 
as part of the schedules of current income and current 
expenditures, a statement of current monthly income. This 
statement must show: (1) the calculations that determine 
whether a presumption of abuse arises under section 707(b) (as 
amended), and (2) how each amount is calculated. This provision 
is identical to section 102(a)(2)(C) of the House bill and the 
Senate amendment.
      In a case where the presumption of abuse does not apply 
or has been rebutted, section 102(a)(2)(C) of the conference 
report amends Bankruptcy Code section 707(b) to require a court 
to consider whether: (1) the debtor filed the chapter 7 case in 
bad faith; or (2) the totality of the circumstances of the 
debtor's financial situation demonstrates abuse, including 
whether the debtor wants to reject a personal services contract 
and the debtor's financial need for such rejection. This 
provision is identical to section 102(a)(2)(C) of the House 
bill and the Senate amendment.
      Under section 102(a)(2)(C) of the conference report, a 
court may on its own initiative or on motion of a party in 
interest in accordance with rule 9011 of the Federal Rules of 
Bankruptcy Procedure, order a debtor's attorney to reimburse 
the trustee for all reasonable costs incurred in prosecuting a 
section 707(b) motion if: (1) a trustee files such motion; (2) 
the motion is granted; and (3) the court finds that the action 
of the debtor's attorney in filing the case under chapter 7 
violated rule 9011. If the court determines that the debtor's 
attorney violated rule 9011, it may on its own initiative or on 
motion of a party in interest in accordance with such rule, 
order the assessment of an appropriate civil penalty against 
debtor's counsel and the payment of such penalty to the 
trustee, United States trustee, or bankruptcy administrator. 
This provision represents a compromise among House and Senate 
conferees. It differs from its antecedents in section 
102(a)(2)(C) of the House bill and the Senate amendment in that 
it changes the mandatory standard to a discretionary standard 
and clarifies that a motion for costs or the imposition of a 
civil penalty must be made by a party in interest or by the 
court itself in accordance with rule 9011.
      Section 102(a)(2)(C) of the conference report provides 
that the signature of an attorney on a petition, pleading or 
written motion shall constitute a certification that the 
attorney has: (1) performed a reasonable investigation into the 
circumstances that gave rise to such document; and (2) 
determined that such document is well-grounded in fact and 
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 section 707(b)(1). In addition, 
such attorney's signature on the petition shall constitute a 
certification that the attorney has no knowledge after an 
inquiry that the information in the schedules filed with the 
petition is incorrect. This provision is identical to section 
102(a)(2)(C) of the House bill and the Senate amendment.
      Section 102(a)(2)(C) of the conference report amends 
section 707(b) of the Bankruptcy Code to permit a court on its 
own initiative or a party in interest in accordance with rule 
9011 of the Federal Rules of Bankruptcy Procedure to award 
reasonable costs (including reasonable attorneys' fees) in 
contesting a motion filed by a party in interest (other than a 
trustee, United States trustee or bankruptcy administrator) if 
the court: (i) does not grant the section 707(b) motion; and 
(ii) finds that either the movant violated rule 9011, or the 
attorney (if any) who filed the motion did not comply with 
subparagraph (4)(C) and the section 707(b) motion was made 
solely for the purpose of coercing a debtor into waiving a 
right guaranteed under the Bankruptcy Code to such debtor. An 
exception applies with respect to a movant that is a ``small 
business'' with a claim in an aggregate amount of less than 
$1,000. A small business, for purposes of this provision, is 
defined as an unincorporated business, partnership, 
corporation, association or organization with less than 25 
full-time employees that is engaged in commercial or business 
activity. The number of employees of a wholly owned subsidiary 
includes the employees of the parent and any other subsidiary 
corporation of the parent. Section 102(a)(2)(C) represents a 
compromise among House and Senate conferees. It differs from 
its antecedents in section 102(a)(2)(C) of the House bill and 
the Senate amendment in that it changes the mandatory standard 
to a discretionary standard and clarifies that the motion for 
costs must be made by aparty in interest or by the court. The 
use of the phraseology in this provision, ``in accordance with rule 
9011 of the Federal Rules of Bankruptcy Procedure'', is intended to 
indicate that the procedures for the motion of a party in interest or a 
court acting on its own initiative are the procedures outlined in rule 
9011(c).
      The conference report includes two ``safe harbors'' with 
respect to its needs-based reforms. Section 102(a)(2)(C) of the 
conference report amends Bankruptcy Code section 707(b) to 
allow only a judge, United States trustee, or bankruptcy 
administrator to file a section 707(b) motion (based on the 
debtor's ability to repay, bad faith, or the totality of the 
circumstances) if the chapter 7 debtor's current monthly income 
(or in a joint case, the income of the debtor and the debtor's 
spouse) falls below the state median family income for a family 
of equal or lesser size (adjusted for larger sized families), 
or the state median family income for one earner in the case of 
a one-person household. This provision is substantively 
identical to section 102(a)(2)(C) of the House bill and the 
Senate amendment.
      The conference report's second safe harbor only pertains 
to a motion under section 707(b)(2), that is, a motion to 
dismiss based on a debtor's ability to repay. Section 
102(a)(2)(C) represents a compromise between the House and the 
Senate positions. The House provision prohibits a judge, United 
States trustee, trustee, bankruptcy administrator or other 
party in interest from filing such motion if the debtor's 
income falls below the state median family income for a family 
of equal or lesser size (adjusted for larger sized families), 
or the state median family income for one earner in the case of 
a one-person household. The Senate amendment takes into 
consideration the spouse's income only in a joint case.
      Section 102(a)(2)(C) of the conference report does not 
consider the nonfiling spouse's income if the debtor and the 
debtor's spouse are separated under applicable nonbankruptcy 
law, or the debtor and the debtor's spouse are living separate 
and apart, other than for the purpose of evading section 
707(b)(2). The debtor must file a statement under penalty of 
perjury specifying that he or she meets one of these criteria. 
In addition, the statement must disclose the aggregate (or best 
estimate) of the amount of any cash or money payments received 
from the debtor's spouse attributed to the debtor's current 
monthly income.
      Section 102(b) of the conference report amends section 
101 of the Bankruptcy Code to define ``current monthly income'' 
as the average monthly income that the debtor receives (or in a 
joint case, the debtor and debtor's spouse receive) from all 
sources, without regard to whether it is taxable income, in a 
specified six-month period preceding the filing of the 
bankruptcy case. The conference report adopts the Senate 
amendment's provision specifying that the six-month period is 
determined as ending on the last day of the calendar month 
immediately preceding the filing of the bankruptcy case, if the 
debtor files the statement of current income required by 
Bankruptcy Code section 521. If the debtor does not file such 
schedule, the court determines the date on which current income 
is calculated.
      The term, ``current monthly income'', pursuant to section 
102(b) of the conference report, includes any amount paid by 
any entity other than the debtor (or, in a joint case, the 
debtor and the debtor's spouse if not otherwise a dependent) on 
a regular basis for the household expenses of the debtor or the 
debtor's dependents (and, the debtor's spouse in a joint case, 
if not otherwise a dependent). It excludes Social Security Act 
benefits and payments to victims of war crimes or crimes 
against humanity on account of their status as victims of such 
crimes. In addition, the conference report provides that 
current monthly income does not include payments to victims of 
international or domestic terrorism as defined in section 2331 
of title 18 of the United States Code on account of their 
status as victims of such terrorism. This provision with 
respect to victims of terrorism reflects a compromise among the 
conferees. It has no counterpart in either the House bill or 
the Senate amendment.
      Section 102(c) of the conference report is substantively 
similar in part to its House and the Senate counterparts. The 
provision amends section 704 of the Bankruptcy Code to require 
the United States trustee or bankruptcy administrator in a 
chapter 7 case where the debtor is an individual to: (1) review 
all materials filed by the debtor; and (2) file a statement 
with the court (within 10 days following the meeting of 
creditors held pursuant to section 341 of the Bankruptcy Code) 
as to whether or not the debtor's case should be presumed to be 
an abuse under section 707(b). The court must provide a copy of 
such statement to all creditors within 5 days after its filing. 
Within 30 days of the filing of such statement, the United 
States trustee or bankruptcy administrator must file either: 
(1) a motion under section 707(b); or (2) a statement setting 
forth the reasons why such motion is not appropriate in any 
case where the debtor's filing should be presumed to be an 
abuse and the debtor's current monthly income exceeds certain 
thresholds. Section 102(c) of the conference report does not 
include a provision contained in the House bill and Senate 
amendment that permits a United States trustee or bankruptcy 
administrator to decline to file a section 707(b)(2) motion 
(pertaining to the debtor's ability to repay) under certain 
circumstances.
      In a chapter 7 case where the presumption of abuse 
applies under section 707(b), section 102(d) of the conference 
report amends Bankruptcy Code section 342 to require the clerk 
to provide written notice to all creditors within ten days 
after commencement of the case stating that the presumption of 
abuse applies in such case. This provision is substantively 
identical to section 102(d) of the House bill and the Senate 
amendment.
      Section 102(e) of the conference report provides that 
nothing in the Bankruptcy Code limits the ability of a creditor 
to give information to a judge (except for information 
communicated ex parte, unless otherwise permitted by applicable 
law), United States trustee, bankruptcy administrator, or 
trustee. This provision is substantively identical to section 
102(e) of the House bill and the Senate amendment.
      Section 102(f) of the conference report adds a provision 
to Bankruptcy Code section 707 to permit the court to dismiss a 
chapter 7 case filed by a debtor who is an individual on motion 
by a victim of a crime of violence (as defined in section 16 of 
title 18 of the United States Code) or a drug trafficking crime 
(as defined in section 924(c)(2) of title 18 of the United 
States Code). The case may be dismissed if the debtor was 
convicted of such crime and dismissal is in the best interest 
of the victims, unless the debtor establishes by a 
preponderance of the evidence that the filing of the case is 
necessary to satisfy a claim for a domestic support obligation. 
This provision is substantively identical to section 102(f) of 
the House bill and the Senate amendment.
      Section 102(g) of the conference report amends section 
1325(a) of the Bankruptcy Code to require the court, as a 
condition of confirming a chapter 13 plan, to find that the 
debtor's action in filing the case was in good faith. This 
provision is substantively identical to section 102(g) of the 
House bill and the Senate amendment.
      Section 102(h) of the conference report amends section 
1325(b)(1) of the Bankruptcy Code to specify that the court 
must find, in confirming a chapter 13 plan to which there has 
been an objection, that the debtor's disposable income will be 
paid to unsecured creditors. It alsoamends section 1325(b)(2)'s 
definition of disposable income. As defined under this provision, the 
term means income received by the debtor (other than child support 
payments, foster care payments, or certain disability payments for a 
dependent child) less amounts reasonably necessary to be expended for: 
(1) the maintenance or support of the debtor or the debtor's dependent; 
(2) a domestic support obligation that first becomes due after the case 
is filed; (3) charitable contributions (as defined in section 
548(d)(3)) to a qualified religious or charitable entity or 
organization (as defined in section 548(d)(4)) in an amount that does 
not exceed 15 percent of the debtor's gross income for the year in 
which the contributions are made; and (4) if the debtor is engaged in 
business, the payment of expenditures necessary for the continuation, 
preservation, and operation of the business. As amended, section 
1325(b)(3) provides that the amounts reasonably necessary to be 
expended under section 1325(b)(2) are determined in accordance with 
section 707(b)(2)(A) and (B) if the debtor's income exceeds certain 
monetary thresholds. This provision is substantively identical to 
section 102(h) of the House bill and the Senate amendment.
      Section 102(i) of the conference report adopts the 
Senate's position in section 102(i) of the Senate amendment, 
which has no counterpart in the House bill. Section 102(i) 
amends Bankruptcy Code section 1329(a) to require the amounts 
paid under a confirmed chapter 13 plan to be reduced by the 
actual amount expended by the debtor to purchase health 
insurance for the debtor and the debtor's dependents (if those 
dependents do not otherwise have such insurance) if the debtor 
documents the cost of such insurance and demonstrates such 
expense is reasonable and necessary, and the amount is not 
otherwise allowed for purposes of determining disposable income 
under section 1325(b). If the debtor previously paid for health 
insurance, the debtor must demonstrate that the amount is not 
materially greater than the amount the debtor previously paid. 
If the debtor did not previously have such insurance, the 
amount is not materially larger than the reasonable cost that 
would be incurred by a debtor having similar characteristics. 
Upon request of any party in interest, the debtor must file 
proof that a health insurance policy was purchased.
      Section 102(j) of the conference report represents a 
compromise between the House and Senate conferees and has no 
antecedent in either the House bill or Senate amendment. The 
provision amends section 104 of the Bankruptcy Code to provide 
for the periodic adjustment of monetary amounts specified in 
sections 707(b) and 1325(b)(3) of the Bankruptcy Code, as 
amended by this Act.
      Section 102(k) adds to section 101 of the Bankruptcy Code 
a definition of ``median family income.'' This provision 
represents a compromise between the House and Senate conferees 
and has no antecedent in either the House bill or Senate 
amendment.
Sec. 103. Sense of Congress and study
      Section 103(a) of the conference report expresses the 
sense of Congress that the Secretary of the Treasury has the 
authority to alter the Internal Revenue Service expense 
standards to set guidelines for repayment plans as needed to 
accommodate their use under section 707(b) of the Bankruptcy 
Code, as amended. Section 103(b) requires the Executive Office 
for United States Trustees to submit a report within 2 years 
from the date of the Act's enactment regarding the utilization 
of the Internal Revenue Service guidelines for determining the 
current monthly expenses of a debtor under section 707(b) and 
the impact that the application of these standards has had on 
debtors and the bankruptcy courts. The report may include 
recommendations for amendments to the Bankruptcy Code that are 
consistent with the report's findings. This provision is 
substantially identical to section 103 of the House bill and 
the Senate amendment.
Sec. 104. Notice of alternatives
      Section 104 of the conference report amends section 
342(b) of the Bankruptcy Code to require the clerk, before the 
commencement of a bankruptcy case by an individual whose debts 
are primarily consumer debts, to supply such individual with a 
written notice containing: (1) a brief description of chapters 
7, 11, 12, and 13 and the general purpose, benefits, and costs 
of proceeding under each of these chapters; (2) the types of 
services available from credit counseling agencies; (3) a 
statement advising that 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 (4) a statement 
warning that all information supplied by a debtor in connection 
with the case is subject to examination by the Attorney 
General. This provision is substantially identical to section 
104 of the House bill and the Senate amendment.
Sec. 105. Debtor financial management training test program
      Section 105 of the conference report requires the 
Director of the Executive Office for United States Trustees to: 
(1) consult with a wide range of debtor education experts who 
operate financial management education programs; and (2) 
develop a financial management training curriculum and 
materials that can be used to teach individual debtors how to 
manage their finances better. The Director must select six 
judicial districts to test the effectiveness of the financial 
management training curriculum and materials for an 18-month 
period beginning not later than 270 days after the Act's 
enactment date. For these six districts, the curricula and 
materials must be used as the instructional personal financial 
management course required under Bankruptcy Code section 111. 
Over the period of the study, the Director must evaluate the 
effectiveness of: (1) the curriculum and materials; and (2) a 
sample of existing consumer education programs (such as those 
described in the Report of the National Bankruptcy Review 
Commission) that are representative of consumer education 
programs sponsored by the credit industry, chapter 13 trustees, 
and consumer counseling groups. Not later than three months 
after concluding such evaluation, the Director must submit to 
Congress a report with findings regarding the effectiveness and 
cost of the curricula, materials, and programs. This provision 
is substantially identical to section 105 of the House bill and 
the Senate amendment.
Sec. 106. Credit counseling
      Section 106(a) of the conference report amends section 
109 of the Bankruptcy Code to require an individual--as a 
condition of eligibility for bankruptcy relief--to receive 
credit counseling within the 180-day period preceding the 
filing of a bankruptcy case by such individual. The credit 
counseling must be provided by an approved nonprofit budget and 
credit counseling agency consisting of either an individual or 
group briefing (which may be conducted telephonically or via 
the Internet) that outlined opportunities for available credit 
counseling and assisted the individual in performing a budget 
analysis. This requirement does not apply to a debtor who 
resides in a district where the United States trustee or 
bankruptcy administrator has determined that approved nonprofit 
budget and credit counseling agencies in that district are 
notreasonably able to provide adequate services to such individuals. 
Although such determination must be reviewed annually, the United 
States trustee or bankruptcy administrator may disapprove a nonprofit 
budget and credit counseling agency at any time.
      A debtor may be temporarily exempted from this 
requirement if he or she submits to the court a certification 
that: (1) describes exigent circumstances meriting a waiver of 
this requirement; (2) states that the debtor requested credit 
counseling services from an approved nonprofit budget and 
credit counseling agency, but was unable to obtain such 
services within the five-day period beginning on the date the 
debtor made the request; and (3) is satisfactory to the court. 
This exemption terminates when the debtor meets the 
requirements for credit counseling participation, but not 
longer than 30 days after the case is filed, unless the court, 
for cause, extends this period up to an additional 15 days. 
This provision is substantively identical to section 106(a) of 
the House bill and the Senate amendment.
      Section 106(b) of the conference report amends section 
727(a) of the Bankruptcy Code to deny a discharge to a chapter 
7 debtor who fails to complete a personal financial management 
instructional course. This provision, however, does not apply 
if the debtor resides in a district where the United States 
trustee or bankruptcy administrator has determined that the 
approved instructional courses in that district are not 
adequate. Such determination must be reviewed annually by the 
United States trustee or bankruptcy administrator. This 
provision is substantively identical to section 106(b) of the 
House bill and the Senate amendment.
      Section 106(c) of the conference report amends section 
1328 of the Bankruptcy Code to deny a discharge to a chapter 13 
debtor who fails to complete a personal financial management 
instructional course. This requirement does not apply if the 
debtor resides in a district where the United States trustee or 
bankruptcy administrator has determined that the approved 
instructional courses in that district are not adequate. Such 
determination must be reviewed annually by the United States 
trustee or bankruptcy administrator. This provision is 
substantively identical to section 106(c) of the House bill and 
the Senate amendment.
      Section 106(d) of the conference report amends section 
521 of the Bankruptcy Code to require a debtor who is an 
individual to file with the court: (1) a certificate from an 
approved nonprofit budget and credit counseling agency 
describing the services it provided the debtor pursuant to 
section 109(h); and (2) a copy of the repayment plan, if any, 
that was developed by the agency pursuant to section 109(h). 
This provision is substantively identical to section 106(d) of 
the House bill and the Senate amendment.
      Section 106(e) of the conference report is substantively 
identical to section 106(e) of the House bill and the Senate 
amendment. It adds section 111 to the Bankruptcy Code requiring 
the clerk to maintain a publically available list of approved: 
(1) credit counseling agencies that provide the services 
described in section 109(h) of the Bankruptcy Code; and (2) 
personal financial management instructional courses. Section 
106(e) further provides that the United States trustee or 
bankruptcy administrator may only approve an agency or course 
provider under this provision pursuant to certain specified 
criteria. If such agency or provider course is approved, the 
approval may only be for a probationary period of up to six 
months. At the conclusion of the probationary period, the 
United States trustee or bankruptcy administrator may only 
approve such agency or instructional course for an additional 
one-year period and, thereafter for successive one-year 
periods, which has demonstrated during such period that it met 
the standards set forth in this provision and can satisfy such 
standards in the future.
      Within 30 days after any final decision occurring after 
the expiration of the initial probationary period or after any 
subsequent two-year period, an interested person may seek 
judicial review of such decision in the appropriate United 
States district court. In addition, the district court, at any 
time, may investigate the qualifications of a credit counseling 
agency and request the production of documents to ensure the 
agency's integrity and effectiveness. The district court may 
remove a credit counseling agency that does not meet the 
specified qualifications from the approved list. The United 
States trustee or bankruptcy administrator must notify the 
clerk that a credit counseling agency or instructional course 
is no longer approved and the clerk must remove such entity 
from the approved list.
      Section 106(e) prohibits a credit counseling agency from 
providing information to a credit reporting agency as to 
whether an individual debtor has received or sought personal 
financial management instruction. A credit counseling agency 
that willfully or negligently fails to comply with any 
requirement under the Bankruptcy Code with respect to a debtor 
shall be liable to the debtor for damages in an amount equal 
to: (1) actual damages sustained by the debtor as a result of 
the violation; and (2) any court costs or reasonable attorneys' 
fees incurred in an action to recover such damages.
      Section 106(f) of the conference report amends section 
362 of the Bankruptcy Code to provide that if a chapter 7, 11, 
or 13 case is dismissed due to the creation of a debt repayment 
plan, the presumption that a case was not filed in good faith 
under section 362(c)(3) shall not apply to any subsequent 
bankruptcy case commenced by the debtor. It also provides that 
the court, on request of a party in interest, must issue an 
order under section 362(c) confirming that the automatic stay 
has terminated. This provision is substantively identical to 
section 106(f) of the House bill and the Senate amendment.
Sec. 107. Schedules of reasonable and necessary expenses
      For purposes of section 707(b) of the Bankruptcy Code, 
section 107 of the conference report requires the Director of 
the Executive Office for United States Trustees to issue 
schedules of reasonable and necessary administrative expenses 
(including reasonable attorneys' fees) relating to the 
administration of a chapter 13 plan for each judicial district 
not later than 180 days after the date of enactment of the Act. 
This provision is substantively identical to section 107 of the 
House bill and the Senate amendment.

                 Title II--Enhanced Consumer Protection

          SUBTITLE A--PENALTIES FOR ABUSIVE CREDITOR PRACTICES

Sec. 201. Promotion of alternative dispute resolution
      Section 201 of the conference report is substantively 
identical to section 201 of the House bill and the Senate 
amendment. Subsection (a) amends section 502 of the Bankruptcy 
Code to permit the court, after a hearing on motion of the 
debtor, to reduce a claim based in whole on an unsecured 
consumer debt by up to 20 percent if: (1) the claim was filed 
by a creditor who unreasonably refused to negotiate a 
reasonable alternative repayment schedule proposed by an 
approved credit counseling agency on behalf of the debtor; (2) 
the debtor's offer was made at least 60 days before the filing 
of the case; (3) the offer provided for payment of at least 60 
percent of the debt over a period not exceeding the loan's 
repayment period or a reasonable extension thereof; and (4) no 
part of the debt is nondischargeable. The debtor has the burden 
ofproving by clear and convincing evidence that: (1) the 
creditor unreasonably refused to consider the debtor's proposal; and 
(2) the proposed alternative repayment schedule was made prior to the 
expiration of the 60-day period. Section 201(b) amends section 547 of 
the Bankruptcy Code to prohibit the avoidance as a preferential 
transfer a payment by a debtor to a creditor pursuant to an alternative 
repayment plan created by an approved credit counseling agency.
Sec. 202. Effect of discharge
      Section 202 of the conference report amends section 524 
of the Bankruptcy Code in two respects. First, it provides that 
the willful failure of a creditor to credit payments received 
under a confirmed chapter 11, 12, or 13 plan constitutes a 
violation of the discharge injunction if the creditor's action 
to collect and failure to credit payments in the manner 
required by the plan caused material injury to the debtor. This 
provision does not apply if the order confirming the plan is 
revoked, the plan is in default, or the creditor has not 
received payments required to be made under the plan in the 
manner prescribed by the plan. Second, section 202 amends 
section 524 of the Bankruptcy Code to provide that the 
discharge injunction does not apply to a creditor having a 
claim secured by an interest in real property that is the 
debtor's principal residence if the creditor communicates with 
the debtor in the ordinary course of business between the 
creditor and the debtor and such communication is limited to 
seeking or obtaining periodic payments associated with a valid 
security interest in lieu of the pursuit of in rem relief to 
enforce the lien. Section 202 is substantively identical to 
section 202 of the House bill and the Senate amendment.
Sec. 203. Discouraging abuse of reaffirmation practices
      Section 203 of the conference report effectuates a 
comprehensive overhaul of the law applicable to reaffirmation 
agreements. It is substantively identical to section 203 of the 
House bill and the Senate amendment.
      Section 203(a) amends section 524 of the Bankruptcy Code 
to mandate that certain specified disclosures be provided to a 
debtor at or before the time he or she signs a reaffirmation 
agreement. These specified disclosures, which are the only 
disclosures required in connection with a reaffirmation 
agreement, must be in writing and be made clearly and 
conspicuously. In addition, the disclosure must include certain 
advisories and explanations. At the election of the creditor, 
the disclosure statement may include a repayment schedule. If 
the debtor is represented by counsel, section 203(a) mandates 
that the attorney file a certification stating that the 
agreement represents a fully informed and voluntary agreement 
by the debtor, that the agreement does not impose an undue 
hardship on the debtor or any dependent of the debtor, and that 
the attorney fully advised the debtor of the legal effect and 
consequences of such agreement as well as of any default 
thereunder. In those instances where the presumption of undue 
hardship applies, the attorney must also certify that the 
debtor is able to make the payments required under the 
reaffirmation agreement. Further, the debtor must submit a 
statement setting forth the debtor's monthly income and actual 
current monthly expenditures. If the debtor is represented by 
counsel and the debt being reaffirmed is owed to a credit 
union, a modified version of this statement may be used.
      Notwithstanding any other provision of the Bankruptcy 
Code, section 203(a) permits a creditor to accept payments from 
a debtor: (1) before and after the filing of a reaffirmation 
agreement with the court; or (2) pursuant to a reaffirmation 
agreement that the creditor believes in good faith to be 
effective. It further provides that the requirements specified 
in subsections (c)(2) and (k) of section 524 are satisfied if 
the disclosures required by these provisions are given in good 
faith.
      Where the amount of the scheduled payments due on the 
reaffirmed debt (as disclosed in the debtor's statement) 
exceeds the debtor's available income, it is presumed for 60 
days from the date on which the reaffirmation agreement is 
filed with the court that the agreement presents an undue 
hardship. The court must review such presumption, which can be 
rebutted by the debtor by a written statement explaining the 
additional sources of funds that would enable the debtor to 
make the required payments on the reaffirmed debt. If the 
presumption is not rebutted to the satisfaction of the court, 
the court may disapprove the reaffirmation agreement. No 
reaffirmation agreement may be disapproved without notice and 
hearing to the debtor and creditor. The hearing must be 
concluded before the entry of the debtor's discharge. The 
requirements set forth in this paragraph do not apply to 
reaffirmation agreements if the creditor is a credit union, as 
defined.
      Section 203(b) amends title 18 of the United States Code 
to require the Attorney General to designate a United States 
Attorney for each judicial district and to appoint a Federal 
Bureau of Investigation agent for each field office to have 
primary law enforcement responsibilities for violations of 
sections 152 and 157 of title 18 with respect to abusive 
reaffirmation agreements and materially fraudulent statements 
in bankruptcy schedules that are intentionally false or 
misleading. In addition, section 203(b) provides that the 
designated United States Attorney has primary responsibility 
with respect to bankruptcy investigations under section 3057 of 
title 18. Section 203(b) further provides that the bankruptcy 
courts must establish procedures for referring any case in 
which a materially fraudulent bankruptcy schedule has been 
filed.
Sec. 204. Preservation of claims and defenses upon sale of predatory 
        loans
      Section 204 of the conference report adds a provision to 
section 363 of the Bankruptcy Code with respect to sales of any 
interest in a consumer transaction that is subject to the Truth 
in Lending Act or any interest in a consumer credit contract 
(as defined in section 433.1 of title 16 of the Code of Federal 
Regulations). It provides that the purchaser of such interest 
through a bankruptcy sale under section 363 remains subject to 
all claims and defenses that are related to such assets to the 
same extent as that person would be subject to if the sale was 
not conducted under section 363. Section 204 of the conference 
report is derived from section 204 of the Senate amendment. 
There is no counterpart to this provision in the House bill.
Sec. 205. GAO Study on reaffirmation process
      Section 205 of the conference report directs the 
Comptroller General of the United States to report to Congress 
on how consumers are treated in connection with the 
reaffirmation agreement process. This report must include: (1) 
the policies and activities of creditors with respect to 
reaffirmation agreements; and (2) whether such consumers are 
fully, fairly, and consistently informed of their rights under 
the Bankruptcy Code. The report, which must be completed not 
later than 18 months after the date of enactment of this Act, 
may include recommendations for legislation to address any 
abusive or coercive tactics found in connection with the 
reaffirmation process. Section 205 is derived from section 205 
of the Senateamendment. There is no counterpart to this 
provision in the House bill.

                   SUBTITLE B--PRIORITY CHILD SUPPORT

Sec. 211. Definition of domestic support obligation
      Section 211 of the conference report amends section 101 
of the Bankruptcy Code to define a domestic support obligation 
as a debt that accrues pre- or postpetition (including interest 
that accrues pursuant to applicable nonbankruptcy law) and is 
owed to or recoverable by: (1) a spouse, former spouse, or 
child of the debtor, or such child's parent, legal guardian, or 
responsible relative; or (2) a governmental unit. To qualify as 
a domestic support obligation, the debt must be in the nature 
of alimony, maintenance, or support (including assistance 
provided by a governmental unit), without regard to whether 
such debt is expressly so designated. It must be established or 
subject to establishment either pre- or postpetition pursuant 
to: (1) a separation agreement, divorce decree, or property 
settlement agreement; (2) an order of a court of record; or (3) 
a determination made in accordance with applicable 
nonbankruptcy law by a governmental unit. It does not apply to 
a debt assigned to a nongovernmental entity, unless it was 
assigned voluntarily by the spouse, former spouse, child, or 
parent solely for the purpose of collecting the debt. Section 
211 is identical to section 211 of the House bill and the 
Senate amendment.
Sec. 212. Priorities for claims for domestic support obligations
      Section 212 of the conference report amends section 
507(a) of the Bankruptcy Code to accord first priority in 
payment to allowed unsecured claims for domestic support 
obligations that, as of the petition date, 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 such claim is filed by the 
claimant or by a governmental unit on behalf of such claimant, 
on the condition that funds received by such unit under this 
provision be applied and distributed in accordance with 
nonbankruptcy law. Subject to these claims, section 212 accords 
the same payment priority to allowed unsecured claims for 
domestic support obligations that, as of the petition date, 
were 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 the claimant assigned the claim 
voluntarily for the purpose of collecting the debt), or are 
owed directly to or recoverable by a governmental unit under 
applicable nonbankruptcy law, on the condition that funds 
received by such unit under this provision be applied and 
distributed in accordance with nonbankruptcy law. Where a 
trustee administers assets that may be available for payment of 
domestic support obligations under section 507(a)(1) (as 
amended), administrative expenses of the trustee allowed under 
section 503(b)(1)(A), (2) and (6) of the Bankruptcy Code must 
be paid before such claims to the extent the trustee 
administers assets that are otherwise available for the payment 
of these claims. Section 212 is similar to section 212 of the 
House bill and the Senate amendment. The principal difference 
is the conference report's provision for the payment of trustee 
administrative expenses.
Sec. 213. Requirements to obtain confirmation and discharge in cases 
        involving domestic support obligations
      Section 213 is substantively identical to section 213 of 
the House bill and the Senate amendment. With respect to 
chapter 11 cases, section 213(1) adds a condition for 
confirmation of a plan. It amends section 1129(a) of the 
Bankruptcy Code to provide that if a chapter 11 debtor is 
required by judicial or administrative order or statute to pay 
a domestic support obligation, then the debtor must pay all 
amounts payable under such order or statute that became payable 
postpetition as a prerequisite for confirmation.
      With respect to chapter 12 cases, section 213(2) of the 
conference report amends section 1208(c) of the Bankruptcy Code 
to provide that the failure of a debtor to pay any domestic 
support obligation that first becomes payable postpetition is 
cause for conversion or dismissal of the case. Section 213(3) 
amends Bankruptcy Code section 1222(a) to permit a chapter 12 
debtor to propose a plan that provides for less than full 
payment of all amounts owed for a claim entitled to priority 
under Bankruptcy Code section 507(a)(1)(B) if all of the 
debtor's projected disposable income for a five-year period is 
applied to make payments under the plan. Section 213(4) of the 
conference report amends Bankruptcy Code section 1222(b) to 
permit a chapter 12 debtor to propose a plan that pays 
postpetition interest on claims that are nondischargeable under 
Section 1228(a), but only to the extent that the debtor has 
disposable income available to pay such interest after payment 
of all allowed claims in full. Section 213(5) amends Bankruptcy 
Code section 1225(a) to provide that if a chapter 12 debtor is 
required by judicial or administrative order or statute to pay 
a domestic support obligation, then the debtor must pay such 
obligations pursuant to such order or statute that became 
payable postpetition as a condition of confirmation. Section 
213(6) amends section Bankruptcy Code section 1228(a) to 
condition the granting of a chapter 12 discharge upon the 
debtor's payment of certain postpetition domestic support 
obligations.
      With respect to chapter 13 cases, section 213(7) of the 
conference report amends Bankruptcy Code section 1307(c) to 
provide that the failure of a debtor to pay any domestic 
support obligation that first becomes payable postpetition is 
cause for conversion or dismissal of the debtor's case. Section 
213(8) amends Bankruptcy Code section 1322(a) to permit a 
chapter 13 debtor to propose a plan that pays less than the 
full amount of a claim entitled to priority under Bankruptcy 
Code section 507(a)(1)(B) if the plan provides that all of the 
debtor's projected disposable income over a five-year period 
will be applied to make payments under the plan. Section 213(9) 
amends Bankruptcy Code section 1322(b) to permit a chapter 13 
debtor to propose a plan that pays postpetition interest on 
nondischargeable debts under section 1328(a), but only to the 
extent that the debtor has disposable income available to pay 
such interest after payment in full of all allowed claims. 
Section 213(10) amends Bankruptcy Code section 1325(a) to 
provide that if a chapter 13 debtor is required by judicial or 
administrative order or statute to pay a domestic support 
obligation, then the debtor must pay all such obligations 
pursuant to such order or statute that became payable 
postpetition as a condition of confirmation. Section 213(11) 
amends Bankruptcy Code section 1328(a) to condition the 
granting of a chapter 13 discharge on the debtor's payment of 
certain postpetition domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support proceedings
      Under current law, section 362(b)(2) of the Bankruptcy 
Code excepts from the automatic stay the commencement or 
continuation of an action or proceeding: (1) for the 
establishment of paternity; or (2) the establishment or 
modification of an order for alimony, maintenance or support. 
It also permits the collection of such obligations from 
property that is not property ofthe estate. Section 214 makes 
several revisions to Bankruptcy Code section 362(b)(2). First, it 
replaces the reference to ``alimony, maintenance or support'' with 
``domestic support obligations''. Second, it adds to section 362(b)(2) 
actions or proceedings concerning: (1) child custody or visitation; (2) 
the dissolution of a marriage (except to the extent such proceeding 
seeks division of property that is property of the estate); and (3) 
domestic violence. Third, it permits 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 as 
well as the withholding, suspension, or restriction of a driver's 
license, or a professional, occupational or recreational license under 
state law, pursuant to section 466(a)(16) of the Social Security Act. 
Fourth, it authorizes the reporting of overdue support owed by a parent 
to any consumer reporting agency pursuant to section 466(a)(7) of the 
Social Security Act. Fifth, it permits the interception of tax refunds 
as authorized by sections 464 and 466(a)(3) of the Social Security Act 
or analogous state law. Sixth, it allows medical obligations, as 
specified under title IV of the Social Security Act, to be enforced 
notwithstanding the automatic stay. Section 214 is substantively 
identical to section 214 of the House bill and the Senate amendment.
Sec. 215. Nondischargeability of certain debts for alimony, 
        maintenance, and support
      Section 215 of the conference report amends Bankruptcy 
Code section 523(a)(5) to provide that a ``domestic support 
obligation'' (as defined in section 211 of the conference 
report) is nondischargeable and eliminates Bankruptcy Code 
section 523(a)(18). Section 215(2) amends Bankruptcy Code 
section 523(c) to delete the reference to section 523(a)(15) in 
that provision. Section 215(3) amends section 523(a)(15) to 
provide that obligations to a spouse, former spouse, or a child 
of the debtor (not otherwise described in section 523(a)(5)) 
incurred in connection with a divorce or separation or related 
action are nondischargeable irrespective of the debtor's 
inability to pay such debts. Section 215 is substantively 
identical to section 215 of the House bill and the Senate 
amendment.
Sec. 216. Continued liability of property
      Section 216(1) of the conference report amends section 
522(c) of the Bankruptcy Code to make exempt property liable 
for nondischargeable domestic support obligations 
notwithstanding any contrary provision of applicable 
nonbankruptcy law. Section 216(2) and (3) make conforming 
amendments to sections 522(f)(1)(A) and 522(g)(2) of the 
Bankruptcy Code. Section 216 is substantively identical to 
section 216 of the House bill and the Senate amendment.
Sec. 217. Protection of domestic support claims against preferential 
        transfer motions
      Section 217 of the conference report makes a conforming 
amendment to Bankruptcy Code section 547(c)(7) to provide that 
a bona fide payment of a debt for a domestic support obligation 
may not be avoided as a preferential transfer. This provision 
is substantively identical to section 217 of the House bill and 
the Senate amendment.
Sec. 218. Disposable income defined
      Section 218 of the conference report amends section 
1225(b)(2)(A) of the Bankruptcy Code to provide that disposable 
income in a chapter 12 case does not include payments for 
postpetition domestic support obligations. This provision is 
substantively identical to section 218 of the House bill. Its 
Senate counterpart included a duplicative amendment to section 
1325(b)(2)(A) of the Bankruptcy Code that therefore was deleted 
from section 218 of the conference report.
Sec. 219. Collection of child support
      Section 219 amends sections 704, 1106, 1202, and 1302 of 
the Bankruptcy Code to require trustees in chapter 7, 11, 12, 
and 13 cases to provide certain types of notices to child 
support claimants and governmental enforcement agencies. This 
provision is substantively derived from section 219 of the 
House bill and the Senate amendment. In addition to including a 
provision from the Senate amendment requiring chapter 12 
trustees to give notice of the claim to the claimant, section 
219 extends this requirement to chapter 7, 11 and 13 trustees 
as well. In addition, the conference report conforms internal 
statutory cross references to Bankruptcy Code section 
523(a)(14A) and deletes the reference to Bankruptcy Code 
section 523(a)(14) with respect to chapter 13, as this 
provision is inapplicable to that chapter.
      Section 219(a) requires a chapter 7 trustee to provide 
written notice to a domestic support claimant of the right to 
use the services of a state child support enforcement agency 
established under sections 464 and 466 of the Social Security 
Act in the state where the claimant resides for assistance in 
collecting child support during and after the bankruptcy case. 
The notice must include the agency's address and telephone 
number as well as explain the claimant's right to payment under 
the applicable chapter of the Bankruptcy Code. In addition, the 
trustee mustprovide written notice to the claimant and the 
agency of such claim and include the name, address, and telephone 
number of the child support claimant. At the time the debtor is granted 
a discharge, the trustee must notify both the child support claimant 
and the agency that the debtor was granted a discharge as well as 
supply them with the debtor's last known address, the last known name 
and address of the debtor's employer, and the name of each creditor 
holding a debt that is not discharged under section 523(a)(2), (4) or 
(14A) or holding a debt that was reaffirmed pursuant to Bankruptcy Code 
section 524. A claimant or agency may request the debtor's last known 
address from a creditor holding a debt that is not discharged under 
section 523(a)(2), (4) or (14A) or that is reaffirmed pursuant to 
section 524 of the Bankruptcy Code. A creditor who discloses such 
information, however, is not liable to the debtor or any other person 
by reason of such disclosure. Subsections (b), (c), and (d) of section 
219 of the conference report impose comparable requirements for chapter 
11, 12, and 13 trustees.
Sec. 220. Nondischargeability of certain educational benefits and loans
      Section 220 of the conference report amends section 
523(a)(8) of the Bankruptcy Code to provide that a debt for a 
qualified education loan (as defined in section 221(e)(1) of 
the Internal Revenue Code) is nondischargeable, unless 
excepting such debt from discharge would impose an undue 
hardship on the debtor and the debtor's dependents. This 
provision is substantively identical to section 220 of the 
House bill and the Senate amendment.

                 SUBTITLE C--OTHER CONSUMER PROTECTIONS

Sec. 221. Amendments to discourage abusive bankruptcy filings
      Section 221 of the conference report is substantively 
identical to section 221 of the House bill and the Senate 
amendment. It makes a series of amendments to section 110 of 
the Bankruptcy Code. First, section 221 clarifies that the 
definition of a bankruptcy petition preparer does not include 
an attorney for a debtor or an employee of an attorney under 
the direct supervision of such attorney. Second, it amends 
subsections (b) and (c) of section 110 to provide that if a 
bankruptcy petition preparer is not an individual, then an 
officer, principal, responsible person, or partner of the 
preparer must sign certain documents filed in connection with 
the bankruptcy case as well as state the person's name and 
address on such documents. Third, it requires a bankruptcy 
petition preparer to give the debtor written notice (as 
prescribed by the Judicial Conference of the United States) 
explaining that the preparer is not an attorney and may not 
practice law or give legal advice. The notice may include 
examples of legal advice that a preparer may not provide. Such 
notice must be signed by the preparer under penalty of perjury 
and the debtor and be filed with any document for filing. 
Fourth, the petition preparer is prohibited from giving legal 
advice, including with respect to certain specified items. 
Fifth, it permits the Supreme Court to promulgate rules or the 
Judicial Conference of the United States to issue guidelines 
for setting the maximum fees that a bankruptcy petition 
preparer may charge for services. Sixth, section 221 requires 
the preparer to notify the debtor of such maximum fees. 
Seventh, it specifies that the bankruptcy petition preparer 
must certify that it complied with this notification 
requirement. Eighth, it requires the court to order the 
turnover of any fees in excess of the value of the services 
rendered by the preparer within the 12-month period preceding 
the bankruptcy filing. Ninth, section 221 provides that all 
fees charged by a preparer may be forfeited if the preparer 
fails to comply with certain requirements specified in 
Bankruptcy Code section 110, as amended by this provision. 
Tenth, it allows a debtor to exempt fees recovered under this 
provision pursuant to Bankruptcy Code section 522(b). Eleventh, 
it specifically authorizes the court to enjoin a bankruptcy 
petition preparer who has violated a court order issued under 
section 110. Twelfth, it generally revises section 110's 
penalty provisions and specifies that such penalties are to be 
paid to a special fund of the United States trustee for the 
purpose of funding the enforcement of section 110 on a national 
basis. With respect to Bankruptcy Administrator districts, the 
funds are to be deposited as offsetting receipts pursuant to 
section 1931 of title 28 of the United States Code.
Sec. 222. Sense of Congress
      Section 222 of the conference report expresses the sense 
of Congress that the states should develop personal finance 
curricula for use in elementary and secondary schools. This 
provision is substantively identical to section 222 of the 
House bill and the Senate amendment.
Sec. 223. Additional amendments to title 11, United States Code
      Section 223 of the conference report amends section 
507(a) of the Bankruptcy Code to accord a tenth-level priority 
to claims for death or personal injuries resulting from the 
debtor's operation of a motor vehicle or vessel while 
intoxicated. This provision is substantively identical to 
section 223 of the House bill and the Senate amendment.
Sec. 224. Protection of retirement savings in bankruptcy
      Section 224 of the conference report is substantively 
identical to section 224 of the House bill and the Senate 
amendment. Subsection (a) amends section 522 of the Bankruptcy 
Code to permit a debtor to exempt certain retirement funds to 
the extent those monies 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 and that have received a 
favorable determination pursuant to Internal Revenue Code 
section 7805 that is in effect as of the date of the 
commencement of the case. If the retirement monies are in a 
retirement fund that has not received a favorable 
determination, those monies are exempt if the debtor 
demonstrates that no prior unfavorable determination has been 
made by a court or the Internal Revenue Service, and the 
retirement fund is in substantial compliance with the 
applicable requirements of the Internal Revenue Code. If the 
retirement fund fails to be in substantial compliance with 
applicable requirements of the Internal Revenue Code, the 
debtor may claim the retirement funds as exempt if he or she is 
not materially responsible for such failure. This section also 
applies to certain direct transfers and rollover distributions. 
In addition, this provision ensures that the specified 
retirement funds are exempt under state as well as federal law.
      Section 224(b) amends section 362(b) of the Bankruptcy 
Code to except from the automatic stay the withholding of 
income from a debtor's wages pursuant to an agreement 
authorizing such withholding for the benefit of a pension, 
profit-sharing, stock bonus, or other employer-sponsored plan 
established under Internal Revenue Code section 401, 403, 408, 
408A, 414, 457, or 501(c) to the extent that the amounts 
withheld are used solely to repay a loan from a plan as 
authorized by section 408(b)(1) of the Employee Retirement 
Income Security Act of 1974 or subject to Internal Revenue Code 
section 72(p) or with respect to a loan from certain 
thriftsavings plans. Section 224(b) further provides that this 
exception may not be used to cause 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 to be construed to be a claim or debt 
within the meaning of the Bankruptcy Code.
      Section 224(c) amends Bankruptcy Code section 523(a) to 
except from discharge any amount owed by the debtor to a 
pension, profit-sharing, stock bonus, or other plan established 
under Internal Revenue Code section 401, 403, 408, 408A, 414, 
457, or 501(c) under a loan authorized under section 408(b)(1) 
of the Employee Retirement Income Security Act of 1974 or 
subject to Internal Revenue Code section 72(p) or with respect 
to a loan from certain thrift savings plans. Section 224(c) 
further provides that this exception to discharge may not be 
used to cause 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 to be construed to be a claim or debt 
within the meaning of the Bankruptcy Code.
      Section 224(d) amends Bankruptcy Code section 1322 to 
provide that a chapter 13 plan may not materially alter the 
terms of a loan described in section 362(b)(19) and that any 
amounts required to repay such loan shall not constitute 
``disposable income'' under section 1325 of the Bankruptcy 
Code.
      Section 224(e) amends section 522 of the Bankruptcy Code 
to impose a $1 million cap (periodically adjusted pursuant to 
section 104 of the Bankruptcy Code to reflect changes in the 
Consumer Price Index) on the value of the debtor's interest in 
an individual retirement account established under either 
section 408 or 408A of the Internal Revenue Code (other than a 
simplified employee pension account under section 408(k) or a 
simple retirement account under section 408(p) of the Internal 
Revenue Code) that a debtor may claim as exempt property. This 
limit applies without regard to amounts attributable to 
rollover contributions made pursuant to section 402(c), 
402(e)(6), 403(a)(4), 403(a)(5), or 403(b)(8) of the Internal 
Revenue Code and earnings thereon. The cap may be increased if 
required in the interest of justice.
Sec. 225. Protection of education savings in bankruptcy
      Section 225 of the conference report is substantively 
identical to section 225 of the House bill and the Senate 
amendment. Subsection (a) amends section 541 of the Bankruptcy 
Code to provide that funds placed not later than 365 days 
before the filing of the bankruptcy case in a education 
individual retirement account are not property of the estate if 
certain criteria are met. First, the designated beneficiary of 
such account must be a child, stepchild, grandchild or step-
grandchild of the debtor for the taxable year during which 
funds were placed in the account. A legally adopted child or a 
foster child, under certain circumstances, may also qualify as 
a designated beneficiary. Second, such funds may not be pledged 
or promised to an entity in connection with any extension of 
credit and they may not be excess contributions (as described 
in section 4973(e) of the Internal Revenue Code). Funds 
deposited between 720 days and 365 days before the filing date 
are protected to the extent they do not exceed $5,000. Similar 
criteria apply with respect to funds used to purchase a tuition 
credit or certificate or to funds contributed to a qualified 
state tuition plan under section 529(b)(1)(A) of the Internal 
Revenue Code. Section 225(b) amends Bankruptcy Code section 521 
to require a debtor to file with the court a record of any 
interest that the debtor has in an education individual 
retirement account or qualified state tuition program.
Sec. 226. Definitions
      Section 226 of the conference report is substantively 
identical to section 226 of the House bill and the Senate 
amendment. Subsection (a) amends section 101 of the Bankruptcy 
Code to add certain definitions with respect to debt relief 
agencies. Section 226(a)(1) defines an ``assisted person'' as a 
person whose debts consist primarily of consumer debts and 
whose nonexempt assets are less than $150,000. Section 
226(a)(2) defines ``bankruptcy assistance'' as any goods or 
services sold or otherwise provided with the express or implied 
purpose of giving information, advice, or counsel; preparing 
documents for filing; or attending a meeting of creditors 
pursuant to section 341; appearing in a proceeding on behalf of 
a person; or providing legal representation in a case or 
proceeding under the Bankruptcy Code. Section 226(a)(3) defines 
a ``debt relief agency'' as any person (including a bankruptcy 
petition preparer) who provides bankruptcy assistance to an 
assisted person in return for the payment of money or other 
valuable consideration. The definition specifically excludes 
certain entities. First, it does not apply to a nonprofit 
organization exemption from taxation under section 501(c)(3) of 
the Internal Revenue Code. Second, it is inapplicable to a 
creditor who assisted such person to the extent the assistance 
pertained to the restructuring of any debt owed by the person 
to the creditor. Third, the definition does not apply to a 
depository institution (as defined in section 3 of the Federal 
Deposit Insurance Act), or any federal or state credit union 
(as defined in section 101 of the Federal Credit Union Act), as 
well as any affiliate or subsidiary of such depository 
institution or credit union. Fourth, an author, publisher, 
distributor, or seller of works subject to copyright protection 
under title 17 of the United States Code when acting in such 
capacity are not within the ambit of this definition. Section 
226(b) amends section 104(B)(1) of the Bankruptcy Code to 
permit the monetary amount set forth in the definition of an 
``assisted person'' to be automatically adjusted to reflect the 
change in the Consumer Price Index.
Sec. 227. Restrictions on debt relief agencies
      Section 227 of the conference report is substantively 
identical to section 227 of the House bill and the Senate 
amendment. This provision creates a new provision in the 
Bankruptcy Code intended to proscribe certain activities of a 
debt relief agency. It prohibits such agency from: (1) failing 
to perform any service that it informed an assisted person it 
would provide; (2) advising an assisted person to make an 
untrue and misleading statement (or that upon the exercise of 
reasonable case, should have been known to be untrue or 
misleading) in a document filed in a bankruptcy case; (3) 
misrepresenting the services it provides and the benefits that 
an assisted person may receive as a result of bankruptcy; and 
(4) advising an assisted person or prospective assisted person 
to incur additional debt in contemplation of filing for 
bankruptcy relief or for the purpose of paying fees for 
services rendered by an attorney or petition preparer in 
connection with the bankruptcy case. Any waiver by an assisted 
person of the protections under this provision are 
unenforceable, except against a debt relief agency.
      In addition, section 227 imposes penalties for the 
violation of section 526, 527 or 528 of the Bankruptcy Code. 
First, any contract between a debt relief agency and an 
assisted person that does not comply with these provisions is 
void and may not be enforced by any state or federal court or 
by any person, except an assisted person. Second, a debt relief 
agency is liable to an assisted person, under certain 
circumstances, for any fees or charges paid by such person to 
the agency, actual damages, and reasonable attorneys' fees and 
costs. The chief law enforcementofficer of a state who has 
reason to believe that a person has violated or is violating section 
526 may seek to have such violation enjoined and recover actual 
damages. Third, section 227 provides that the United States district 
court has concurrent jurisdiction of certain actions under section 526. 
Fourth, section 227 provides that sections 526, 527 and 528 preempt 
inconsistent state law. In addition, it provides that these provisions 
do not limit or curtail the authority of a federal court, a state, or a 
subdivision or instrumentality of a state, to determine and enforce 
qualifications for the practice of law before the federal court or 
under the laws of that state.
Sec. 228. Disclosures
      Section 228 of the conference report requires a debt 
relief agency to provide certain specified written notices to 
an assisted person. These include the notice required under 
section 342(b)(1) (as amended by this Act) as well as a notice 
advising that: (1) all information the assisted person provides 
in connection with the case must be complete, accurate and 
truthful; (2) all assets and liabilities must be completely and 
accurately disclosed in the documents filed to commence the 
case, including the replacement value of each asset (if 
required) after reasonable inquiry to establish such value; (3) 
current monthly income, monthly expenses and, in a chapter 13 
case, disposable income, must be stated after reasonable 
inquiry; and (4) the information an assisted person provides 
may be audited and that the failure to provide such information 
may result in dismissal of the case or other sanction 
including, in some instances, criminal sanctions. In addition, 
the agency must supply certain specified advisories and 
explanations regarding the bankruptcy process. Further, this 
provision requires the agency to advise an assisted person (to 
the extent permitted under nonbankruptcy law) concerning asset 
valuation, the calculation of disposable income, and the 
determination of exempt property. Section 228 of the conference 
report is substantively identical to section 228 of the House 
bill and the Senate amendment.
Sec. 229. Requirements for debt relief agencies
      Section 229 adds a new provision to the Bankruptcy Code 
requiring a debt relief agency--not later than five business 
days after the first date on which it provides any bankruptcy 
assistance services to an assisted person (but prior to such 
assisted person's bankruptcy petition being filed)--to execute 
a written contract with the assisted person. The contract must 
specify clearly and conspicuously the services the agency will 
provide, the basis on which fees will be charged for such 
services, and the terms of payment. The assisted person must be 
given a copy of the fully executed and completed contract in a 
form the person can retain. The debt relief agency must include 
certain specified mandatory statements in any advertisement of 
bankruptcy assistance services or regarding the benefits of 
bankruptcy that is directed to the general public whether 
through the general media, seminars, specific mailings, 
telephonic or electronic messages, or otherwise. Section 229 of 
the conference report is substantively identical to section 229 
of the House bill and the Senate amendment.
Sec. 230. GAO study
      Section 230 of the conference report directs the 
Comptroller General of the United States to study and prepare a 
report on the feasibility, efficacy and cost of requiring 
trustees to supply certain specified information about a 
debtor's bankruptcy case to the Office of Child Support 
Enforcement for the purpose of determining whether a debtor has 
outstanding child support obligations. This provision is 
substantively identical to section 230 of the House bill and 
the Senate amendment.
Sec. 231. Protection of personally identifiable information
      Section 231 of the conference report largely reflects 
section 231 of the Senate amendment. It differs from its Senate 
antecedent in that it clarifies that it applies to personally 
identifiable information and does not preempt applicable 
nonbankruptcy law. In addition, the provision specifies that 
court approval must be preceded by the appointment of a privacy 
ombudsman to effectuate the intent of this provision. There is 
no counterpart to Section 231 in the House bill.
      Subsection (a) amends Bankruptcy Code section 363(b)(1) 
to provide that if a debtor, in connection with offering a 
product or service, discloses to an individual a policy 
prohibiting the transfer of personally identifiable information 
to persons unaffiliated with the debtor, and the policy is in 
effect at the time of the bankruptcy filing, then the trustee 
may not sell or lease such information unless either of the 
following conditions is satisfied: (1) the sale is consistent 
with such policy; or (2) the court, after appointment of a 
consumer privacy ombudsman (pursuant to section 332 of the 
Bankruptcy Code, as amended) and notice and hearing, the court 
approves the sale or lease upon due consideration of the facts, 
circumstances, and conditions of the sale or lease.
      Section 231(b) amends Bankruptcy Code section 101 to add 
a definition of ``personally identifiable information.'' The 
term applies to information provided by an individual to the 
debtor in connection with obtaining a product or service from 
the debtor primarily for personal, family, or household 
purposes. It includes the individual's: (1) first name or 
initial and last name (whether given at birth or adoption or 
legally changed); (2) physical home address; (3) electronic 
address, including an e-mail address; (4) home telephone 
number; (5) Social Security number; or (vi) credit card account 
number. The term also includes information if it is identified 
in connection with the above items: (1) an individual's birth 
date, birth or adoption certificate number, or place of birth; 
or (2) any other information concerning an identified 
individual that, if disclosed, will result in the physical or 
electronic contacting or identification of that person.
Sec. 232. Consumer privacy ombudsman
      Section 232 implements the preceding provision of the 
conference report with respect to the appointment and 
responsibilities of a consumer privacy ombudsman. It provides 
that if a hearing is required under section 363(b)(1)(B) (as 
amended), the court must order the United States trustee to 
appoint a disinterested person to serve as the consumer privacy 
ombudsman and to provide timely notice of the hearing to such 
person. It permits the ombudsman to appear and be heard at such 
hearing. The ombudsman must provide the court with information 
to assist its consideration of the facts, circumstances and 
conditions of the proposed sale or lease of personally 
identifiable information. The information may include a 
presentation of the debtor's privacy policy, potential losses 
or gains of privacy to consumers if the sale or lease is 
approved, potential costs or benefits to consumers if the sale 
or lease is approved, and possible alternatives that would 
mitigate potential privacy losses or costs to consumers. 
Section 232 prohibits the ombudsman from disclosing any 
personally identifiable information obtained in the case by 
such individual. In addition, the provision amends Bankruptcy 
Code section 330(a)(1) to permit an ombudsman to be 
compensated.
      This provision largely reflects section 232 of the Senate 
amendment. There is no counterpart to section 232 in the House 
bill. The conference report redrafts the Senate provision to be 
an amendment to the Bankruptcy Code rather than freestanding 
text, deletes the 30-day provision as being deemed to be 
unnecessary; restructures the provision to better integrate its 
components; and clarifies that the court must direct the United 
States trustee to appoint the ombudsman, rather than the court 
making such appointment itself.
Sec. 233. Prohibition on disclosure of name of minor children
      Section 233 of the conference report adds a new provision 
to the Bankruptcy Code (section 112) specifying that a debtor 
may be required to provide information regarding his or her 
minor child in connection with the bankruptcy case, but such 
debtor may not be required to disclose in the public records 
the child's name. It provides, however, that the debtor may be 
required to disclose this information in a nonpublic record 
maintained by the court, which must be available for inspection 
by the United States trustee, trustee or an auditor, if any. 
Section 233 prohibits the court, United States trustee, 
trustee, or auditor from disclosing such minor child's name. 
Section 233 of the conference report generally reflects section 
233 of the Senate amendment. The conference report clarifies 
that the prohibition against disclosure pertains to the minor 
child's name. Section 231 of the House bill is similar, but 
does not include the provision giving the court, United States 
trustee, trustee or audit access to the proscribed information.

                Title III--Discouraging Bankruptcy Abuse

Sec. 301. Reinforcement of the fresh start
      Section 301 of the conference report makes a clarifying 
amendment to section 523(a)(17) of the Bankruptcy Code 
concerning the dischargeability of court fees incurred by 
prisoners. Section 523(a)(17) was added to the Bankruptcy Code 
by the Omnibus Consolidated Rescissions and Appropriations Act 
of 1996 \1\ to except from discharge the filing fees and 
related costs and expenses assessed by a court in a civil case 
or appeal. As the result of a drafting error, however, this 
provision might be construed to apply to filing fees, costs or 
expenses incurred by any debtor, not solely by those who are 
prisoners. The amendment eliminates this ambiguity and makes 
other conforming changes to narrow its application in 
accordance with its original intent. This provision is 
substantively identical to section 301 of the House bill and 
the Senate amendment.
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    \1\ Pub. L. No. 104-134, Section 804(b) (1996).
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Sec. 302. Discouraging bad faith repeat filings
      Section 302 of the conference report amends section 
362(c) of the Bankruptcy Code to terminate the automatic stay 
within 30 days in a chapter 7, 11, or 13 case filed by or 
against an individual if such individual was a debtor in a 
previously dismissed case pending within the preceding one-year 
period. The provision does not apply to a case refiled under a 
chapter other than chapter 7 after dismissal of the prior 
chapter 7 case pursuant to section 707(b) of the Bankruptcy 
Code. Upon motion of a party in interest, the court may 
continue the automatic stay after notice and a hearing 
completed prior to the expiration of the 30-day period if such 
party demonstrates that the latter case was filed in good faith 
as to the creditors who are stayed by the filing. For purposes 
of this provision, a case is presumptively not filed in good 
faith as to all creditors (but such presumption may be rebutted 
by clear and convincing evidence) if: (1) more than one 
bankruptcy case under chapter 7, 11 or 13 was previously filed 
by the debtor within the preceding one-year period; (2) the 
prior chapter 7, 11, or 13 case was dismissed within the 
preceding year for the debtor's failure to (a) file or amend 
without substantial excuse a document required under the 
Bankruptcy Code or the court, (b) provide adequate protection 
ordered by the court, or (c) perform the terms of a confirmed 
plan; or (3) there has been no substantial change in the 
debtor's financial or personal affairs since the dismissal of 
the prior case, or there is no reason to conclude that the 
pending case will conclude either with a discharge (if a 
chapter 7 case) or confirmation (if a chapter 11 or 13 case). 
In addition, section 302 provides that a case is presumptively 
deemed not to be filed in good faith as to any creditor who 
obtained relief from the automatic stay in the prior case or 
sought such relief in the prior case and such action was 
pending at the time of the prior case's dismissal. The 
presumption may be rebutted by clear and convincing evidence. A 
similar presumption applies if two or more bankruptcy cases 
were pending in the one-year preceding the filing of the 
pending case. Section 302 is substantively identical to section 
302 of the House bill and the Senate amendment.
Sec. 303. Curbing abusive filings
      Section 303 of the conference report is intended to 
reduce abusive filings. This provision is substantively 
identical to section 303 of the House bill and the Senate 
amendment. Subsection (a) amends Bankruptcy Code section 362(d) 
to add a new ground for relief from the automatic stay. Under 
this provision, cause for relief from the automatic stay may be 
established for a creditor whose claim is secured by an 
interest in real property, if the court finds that the filing 
of the bankruptcy case was part of a scheme to delay, hinder 
and defraud creditors that involved either: (i) a transfer of 
all or part of an ownership interest in real property without 
such creditor's consent or without court approval; or (ii) 
multiple bankruptcy filings affecting the real property. If 
recorded in compliance with applicable state law governing 
notice of an interest in or a lien on real property, an order 
entered under this provision is binding in any other bankruptcy 
case for two years from the date of entry of such order. A 
debtor in a subsequent case may move for relief based upon 
changed circumstances or for good cause shown after notice and 
a hearing. Section 303(a) further provides that any federal, 
state or local governmental unit that accepts a notice of 
interest or a lien in real property, must accept a certified 
copy of an order entered under this provision.
      Section 303(b) amends Bankruptcy Code section 362(b) to 
except from the automatic stay an act to enforce any lien 
against or security interest in real property within two years 
following the entry of an order entered under section 
362(d)(4). A debtor, in a subsequent case, may move for relief 
from such order based upon changed circumstances or for other 
good cause shown after notice and a hearing. Section 303(b) 
also provides that the automatic stay does not apply in a case 
where the debtor: (1) is ineligible to be a debtor in a 
bankruptcy case pursuant to section 109(g) of the Bankruptcy 
Code; or (2) filed the bankruptcy case in violation of an order 
issued in a prior bankruptcy case prohibiting the debtor from 
being a debtor in a subsequent bankruptcy case.
Sec. 304. Debtor retention of personal property security
      Section 304 is substantively identical to section 304 of 
the House bill and Senate amendment. Section 304(1) of the 
conference report amends section 521(a) of the Bankruptcy Code 
to provide that an individual who is a chapter 7 debtor may not 
retain possession of personal property securing, in whole or in 
part, a purchase money security interest unless the debtor, 
within 45 days after the first meeting of creditors, enters 
into a reaffirmation agreement with the creditor, or redeems 
the property. If the debtor fails to so act within the 
prescribed period, the property is not subject to the automatic 
stay and is no longer property of the estate. An exception 
applies if the court: (1) determines on motion of the trustee 
filed before the expiration of the 45-day period that the 
property has consequential value or would benefit the 
bankruptcy estate; (2) orders adequate protection of the 
creditor's interest; and (iii) directs the debtor to deliver 
any collateral in the debtor's possession. Section 304(2) 
amends section 722 to clarify that a chapter 7 debtor must pay 
the redemption value in full at the time of redemption.
Sec. 305. Relief from the automatic stay when the debtor does not 
        complete intended surrender of consumer debt collateral
      Section 305 of the conference report is substantively 
identical to section 305 of the House bill and the Senate 
amendment. Subsection (1) amends Bankruptcy Code section 362 to 
terminate the automatic stay with respect to personal property 
of the estate or of the debtor in a chapter 7, 11, or 13 case 
(where the debtor is an individual) that secures a claim (in 
whole or in part) or is subject to an unexpired lease if the 
debtor fails to: (1) file timely a statement of intention as 
required by section 521(a)(2) of the Bankruptcy Code with 
respect to such property; or (2) indicate in such statement 
whether the property will be surrendered or retained, and if 
retained, whether the debtor will redeem the property or 
reaffirm the debt, or assume an unexpired lease, if the trustee 
does not. Likewise, the automatic stay is terminated if the 
debtor fails to take the action specified in the statement of 
intention in a timely manner, unless the statement specifies 
reaffirmation and the creditor refuses to enter into the 
reaffirmation agreement on the original contract terms. In 
addition to terminating the automatic stay, this provision 
renders such property no longer property of the estate. An 
exception pertains where the court determines, on the motion of 
the trustee made prior to the expiration of the applicable time 
period under section 521(a)(2), and after notice and a hearing, 
that such property is of consequential value or benefit to the 
estate, orders adequate protection of the creditor's interest, 
and directs the debtor to deliver any collateral in the 
debtor's possession.
      Section 305(2) amends section 521 of the Bankruptcy Code 
to make the requirement to file a statement of intention 
applicable to all secured debts, not just secured consumer 
debts. In addition, it requires the debtor to effectuate his or 
her stated intention within 30 days from the first date set for 
the meeting of creditors. If the debtor fails to timely 
undertake certain specified actions with respect to property 
that a lessor or bailor owns and has leased, rented or bailed 
to the debtor or in which a creditor has a security interest 
(not otherwise avoidable under section 522(f), 544, 545, 547, 
548 or 549 of the Bankruptcy Code), then nothing in the 
Bankruptcy Code shall prevent or limit the operation of a 
provision in a lease or agreement that places the debtor in 
default by reason of the debtor's bankruptcy or insolvency.
Sec. 306. Giving secured creditors fair treatment in chapter 13
      Section 306 of the conference report is substantively 
identical to section 306 of the Housebill and Senate amendment, 
except as noted below. Subsection (a) amends Bankruptcy Code section 
1325(a)(5)(B)(i) to require--as a condition of confirmation--that a 
chapter 13 plan provide that a secured creditor retain its lien until 
the earlier of when the underlying debt is paid or the debtor receives 
a discharge. If the case is dismissed or converted prior to completion 
of the plan, the secured creditor is entitled to retain its lien to the 
extent recognized under applicable nonbankruptcy law.
      Section 306(b) adds a new paragraph to section 1325(a) of 
the Bankruptcy Code specifying that Bankruptcy Code section 506 
does not apply to a debt incurred within the two and one-half 
year period preceding the filing of the bankruptcy case if the 
debt is secured by a purchase money security interest in a 
motor vehicle acquired for the personal use of the debtor. 
Where the collateral consists of any other type of property 
having value, section 306(b) provides that section 506 of the 
Bankruptcy Code does not apply if the debt was incurred during 
the one-year period preceding the filing of the bankruptcy 
case. The 910-day period set forth in Section 306(b) of the 
conference report represents a compromise between the House 
bill and Senate amendment. Section 306(b) of the House bill 
provided for a five-year period, while its Senate counterpart 
specified a three-year period.
      Section 306(c)(1) amends section 101 of the Bankruptcy 
Code to define the term ``debtor's principal residence'' as a 
residential structure (including incidental property) without 
regard to whether or not such structure is attached to real 
property. The term includes an individual condominium or 
cooperative unit as well as a mobile or manufactured home, and 
a trailer.
      Section 306(c)(2) amends section 101 of the Bankruptcy 
Code to define the term ``incidental property'' as property 
commonly conveyed with a principal residence in the area where 
the real property is located. The term includes all easements, 
rights, appurtenances, fixtures, rents, royalties, mineral 
rights, oil or gas rights or profits, water rights, escrow 
funds, and insurance proceeds. Further, the term encompasses 
all replacements and additions.
Sec. 307. Domiciliary requirements for exemptions
      Section 307 of the conference report is substantively 
identical to section 307 of the House bill and the Senate 
amendment. This provision amends section 522(b)(2)(A) of the 
Bankruptcy Code to extend the time that a debtor must be 
domiciled in a state from 180 days to 730 days before he or she 
may claim that state's exemptions. If the debtor's domicile has 
not been located in a single state for the 730-day period, then 
the state where the debtor was domiciled in the 180-day period 
preceding the 730-day period (or the longer portion of such 
180-day period) controls. If the effect of this provision is to 
render the debtor ineligible for any exemption, the debtor may 
elect to exempt property of the kind described in the federal 
exemption notwithstanding state opt out.
Sec. 308. Reduction of homestead exemption for fraud
      Section 308 amends section 522 of the Bankruptcy Code to 
reduce the value of a debtor's interest in the following 
property that may be claimed as exempt under certain 
circumstances: (i) real or personal property that the debtor or 
a dependent of the debtor uses as a residence, (ii) a 
cooperative that owns property that the debtor or a dependent 
of the debtor uses as a residence, (iii) a burial plot, or (iv) 
real or personal property that the debtor or dependent of the 
debtor claims as a homestead. Where nonexempt property is 
converted to the above-specified exempt property within the 
ten-year period preceding the filing of the bankruptcy case, 
the exemption must be reduced to the extent such value was 
acquired with the intent to hinder, delay or defraud a 
creditor. Section 308 represents a compromise between the House 
and Senate positions on the issue of homestead exemptions. In 
section 308 of the House bill, the reachback period is seven 
years. Section 308 of the Senate amendment imposes a flat 
$125,000 homestead cap, which does not apply to an exemption 
claimed by a family farmer for the farmer's principal 
residence.
Sec. 309. Protecting secured creditors in chapter 13 cases
      Section 309 of the conference report is substantively 
identical to section 309 of the House bill and the Senate 
amendment. Section 309(a) amends Bankruptcy Code section 
348(f)(1)(B) to provide that valuations of property and allowed 
secured claims in a chapter 13 case only apply if the case is 
subsequently converted to one under chapter 11 or 12. If the 
chapter 13 case is converted to one under chapter 7, then the 
creditor holding security as of the petition date shall 
continue to be secured unless its claim was paid in full as of 
the conversion date. In addition, unless a prebankruptcy 
default has been fully cured at the time of conversion, then 
the default in any bankruptcy proceeding shall have the effect 
given under applicable nonbankruptcy law.
      Section 309(b) amends section 365 of the Bankruptcy Code 
to provide that if a lease of personal property is rejected or 
not assumed by the trustee in a timely manner, such property is 
no longer property of the estate and the automatic stay under 
section 362 with respect to such property is terminated. With 
regard to a chapter 7 case in which the debtor is an 
individual, the debtor may notify the creditor in writing of 
his or her desire to assume the lease. Upon being so notified, 
the creditor may, at its option, inform the debtor that it is 
willing to have the lease assumed and condition such assumption 
on cure of any outstanding default on terms set by the 
contract. If within 30 days after such notice the debtor gives 
written notice to the lessor that the lease is assumed, the 
debtor (not the bankruptcy estate) assumes the liability under 
the lease. Section 309(b) provides that the automatic stay of 
section 362 and the discharge injunction of section 524 are not 
violated if the creditor notifies the debtor and negotiates a 
cure under section 365(p)(2) (as amended). In a chapter 11 or 
13 case where the debtor is an individual lessee with respect 
to a personal property lease and the lease is not assumed in 
the confirmed plan, the lease is deemed rejected as of the 
conclusion of the confirmation hearing. If the lease is 
rejected, the automatic stay under section 362 as well as the 
chapter 13 codebtor stay under section 1301 are automatically 
terminated with respect to such property.
      Section 309(c)(1) amends Bankruptcy Code section 
1325(a)(5)(B) to require that periodic payments pursuant to a 
chapter 13 plan with respect to a secured claim be made in 
equal monthly installments. Where the claim is secured by 
personal property, the amount of such payments shall not be 
less than the amount sufficient to provide adequate protection 
to the holder of such claim. Section 309(c)(2) amends section 
1326(a) of the Bankruptcy Code to require a chapter 13 debtor 
to commence making payments within 30 days after the filing of 
the plan or the order for relief, whichever is earlier. The 
amount of such payment must be the amount which is proposed in 
the plan, scheduled in a personal property lease for that 
portion of the obligation that becomes due postpetition (which 
amount shall reduce the payment required to be made to such 
lessor pursuant to the plan), and which 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 (which amount 
shall reduce the payment required to be made to suchsecured 
creditor pursuant to the plan). Payments made pursuant to a plan must 
be retained by the chapter 13 trustee until confirmation or denial of 
confirmation. Section 309(c)(2) provides that if the plan is confirmed, 
the trustee must distribute payments received from the debtor as soon 
as practicable in accordance with the plan. If the plan is not 
confirmed, the trustee must return to the debtor payments not yet due 
and owing to creditors. Pending confirmation and subject to section 
363, the court, after notice and a hearing, may modify the payments 
required under this provision. Section 309(c)(2) requires the debtor, 
within 60 days following the filing of the bankruptcy case, to provide 
reasonable evidence of any required insurance coverage with respect to 
the use or ownership of leased personal property or property securing, 
in whole or in part, a purchase money security interest.
Sec. 310. Limitation on luxury goods
      Section 310 amends section 523(a)(2)(C) of the Bankruptcy 
Code. Under current law, consumer debts owed to a single 
creditor that, in the aggregate, exceed $1,075 for luxury goods 
or services incurred within 60 days before the commencement of 
the case are presumed to be nondischargeable. As amended, the 
presumption applies if the aggregate amount of consumer debts 
for luxury goods or services is more than $500 for luxury goods 
or services incurred by an individual debtor within 90 days 
before the order for relief. With respect to cash advances, 
current law provides that cash advances aggregating more than 
$1,075 that are extensions of consumer credit under an open-end 
credit plan obtained by an individual debtor within 60 days 
before the case is filed are presumed to be nondischargeable. 
As amended, section 523(a)(2)(C) presumes that cash advances 
aggregating more than $750 and that are incurred within 70 days 
are nondischargeable. 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. In addition, ``an extension of consumer credit under an 
open-end credit plan'' has the same meaning as this term has 
under the Consumer Credit Protection Act. With respect to the 
aggregate amount fixed for luxury goods and services under this 
provision, section 310 of the conference report reflects a 
compromise between the House bill, which has a $250 threshold, 
and the Senate amendment, which has a $750 threshold.
Sec. 311. Automatic stay
      Section 311 of the conference report amends section 
362(b) of the Bankruptcy Code to except from the automatic stay 
a judgment of eviction with respect to a residential leasehold. 
It represents a compromise between House and Senate conferees.
      The House bill excepts the following proceedings from the 
automatic stay: (1) the continuation of any eviction, unlawful 
detainer action, or similar proceeding by a lessor against a 
debtor involving residential real property where the debtor 
resides as a tenant under a rental agreement; (2) the 
commencement of any eviction, unlawful detainer action, or 
similar proceeding by a lessor against a debtor involving 
residential real property where the debtor resides as a tenant 
under a rental agreement that has terminated pursuant to the 
lease agreement or applicable State law; and (3) an eviction 
action based on endangerment to property or person, or the use 
of illegal drugs. With respect to granting relief from the 
automatic stay to residential leaseholds, the Senate provision 
permits an eviction proceeding to continue or to be commenced 
if: (1) the debtor failed to make a rental payment that first 
becomes due under the unexpired term of a rental agreement or 
lease or a tenancy under applicable state or local rent control 
law, after the bankruptcy case was filed or during the ten-day 
period preceding the date of the filing of the petition, 
providing the lessor files with the court a certification that 
the debtor has not made the rent payment; or (2) the debtor has 
a month-to-month tenancy (or a shorter term) other than under 
applicable state or local rent control law where timely 
payments are made pursuant to clause (1) if the lessor files 
with the court a certification that the requirements of this 
clause have been met. In addition, the Senate provision permits 
the commencement or continuation of any eviction, unlawful 
detainer action or similar proceeding by a lessor if during the 
two-year period preceding the date of the filing of the 
petition, the lessee-debtor or another occupant of the 
premises: (1) filed a bankruptcy case during this period; and 
(2) failed to make any rental payment that first became due 
under applicable nonbankruptcy law after the filing of the 
prior case. Further, the Senate amendment permits an eviction 
action to proceed to the extent the proceeding seeks possession 
based on endangerment of property or the illegal use of 
controlled substances on that property, if the lessor files 
with the court a certification that such an eviction has been 
filed or the debtor has endangered the property or illegally 
used or allowed to be used a controlled substance on such 
property during the 30-day period preceding the date of the 
filing of the certification. The Senate amendment specifies 
certain procedural requirements with respect to certain of 
these proceedings.
      It is the intent of section 311 of the conference report 
to create an exception to the automatic stay of section 
362(a)(3) to permit the recovery of possession by rental 
housing providers of their property in certain circumstances 
where a judgment for possession has been obtained against a 
debtor/resident before the filing of the petition for 
bankruptcy. At the same time, the section provides tenants a 
reasonable amount of time after filing the petition to cure the 
default giving rise to the judgment for possession as long as 
there are circumstances in which applicable non-bankruptcy law 
allows a default to be cured after a judgment has been 
obtained. It is also the intent of this section to permit 
eviction actions based on illegal use of controlled substances 
or endangering property to continue or to be commenced after 
the filing of the petition, in certain circumstances.
      Where non-bankruptcy law applicable in the jurisdiction 
does not permit a tenant to cure a monetary default after the 
judgment for possession has been obtained, the automatic stay 
of section 362(a)(3) does not operate to limit action by a 
rental housing provider to proceed with, or a marshal, sheriff, 
or similar local officer to execute, the judgment for 
possession. Where the debtor claims that applicable law permits 
a tenant to cure after the judgment for possession has been 
obtained, the automatic stay operates only where the debtor 
files a certification with the bankruptcy petition asserting 
that applicable law permits such action and that the debtor or 
an adult dependent of the debtor has paid to the court all rent 
that will come due during the 30 days following the filing of 
the petition. If, within thirty days following the filing of 
the petition, the debtor or an adult dependent of the debtor 
certifies that the entire monetary default that gave rise to 
the judgment for possession has been cured, the automatic stay 
remains in effect.
      If a lessor has filed or wishes to file an eviction 
action based on the use of illegal controlled substances or 
property endangerment, the section allows the lessor in certain 
cases to file a certification of such circumstance with the 
court and obtain an exception to the stay.
      For both the judgment based on monetary default and the 
controlled substance orendangerment exceptions, the section 
provides an opportunity for challenge by either the lessor or the 
tenant to certifications filed by the other party and a timely hearing 
for the court to resolve any disputed facts and rule on the factual or 
legal sufficiency of the certifications. Where the court finds for the 
lessor, the clerk shall immediately serve upon the parties a copy of 
the court's order confirming that an exception to the automatic stay is 
applicable. Where the court finds for the tenant, the stay shall remain 
in effect. It is the intent of this section that the clerk's certified 
copy of the docket or order shall be sufficient evidence that the 
exception under paragraph 22 or paragraph 23 is applicable for a 
marshal, sheriff, or similar local officer to proceed immediately to 
execute the judgment for possession if applicable law otherwise permits 
such action, or for an eviction action for use of illegal controlled 
substances or property endangerment to proceed. This section does not 
provide any new right to either landlords or tenants relating to 
evictions or defenses to eviction under otherwise applicable law.
Sec. 312. Extension of period between bankruptcy discharges
      Section 312 of the conference report amends section 
727(a)(8) of the Bankruptcy Code to extend the period before 
which a chapter 7 debtor may receive a subsequent chapter 7 
discharge from six to 8 years. It also amends section 1328 to 
prohibit the issuance of a discharge in a subsequent chapter 13 
case if the debtor received a discharge in a prior chapter 7, 
11, or 12 case within four years preceding the filing of the 
subsequent chapter 13 case. This represents a compromise 
between the House bill, which sets forth a five-year period 
with respect to any case, and the Senate amendment, which sets 
forth a three-year period with respect to a prior chapter 7, 
11, or 12 case. With respect to the extension of the time 
period between subsequent chapter 13 discharges, the conference 
report adopts the two-year period set forth in section 312 of 
the Senate amendment, but excludes the provision permitting the 
court to shorten this period if the debtor demonstrates extreme 
hardship.
Sec. 313. Definition of household goods and antiques
      Section 313 represents a compromise among the House and 
Senate conferees. This provision is substantively similar to 
section 313 of the House bill and the Senate amendment. 
Subsection (a) amends section 522(f) of the Bankruptcy Code to 
codify a modified version of the Federal Trade Commission's 
definition of ``household goods'' for purposes of the avoidance 
of a nonpossessory, nonpurchase money lien in such property. It 
also specifies various items that are expressly not household 
goods. Section 313(b) requires the Director of the Executive 
Office for United States Trustees to prepare a report 
containing findings with respect to the use of this definition. 
The report may include recommendations for amendments to the 
definition of ``household goods'' as codified in section 
522(f)(4). Section 313 of the conference report differs from 
its counterparts in the House bill and Senate amendment in 
three respects: (1) it specifies a monetary threshold for the 
exclusions pertaining to electronic entertainment equipment, 
antiques, and jewelry; (2) it eliminates the restriction in the 
House bill and Senate amendment pertaining to a personal 
computer; and (3) and specifies that works of art are not 
household goods, unless by or of the debtor or by any relative 
of the debtor.
Sec. 314. Debt incurred to pay nondischargeable debts
      Section 314 is substantively identical to section 314 of 
the House bill and Senate amendment. Subsection (a) amends 
section 523(a) of the Bankruptcy Code to make a debt incurred 
to pay a nondischargeable tax owed to a governmental unit 
(other than a tax owed to the United States) nondischargeable. 
Section 314(b) amends section 1328(a) of the Bankruptcy Code to 
make the following additional debts nondischargeable in a 
chapter 13 case: (1) debts for money, property, services, or 
extensions of credit obtained through fraud or by a false 
statement in writing under section 523(a)(2)(A) and (B) of the 
Bankruptcy Code; (2) consumer debts owed to a single creditor 
that aggregate to more than $500 for luxury goods or services 
incurred by an individual debtor within 90 days before the 
filing of the bankruptcy case, and cash advances aggregating 
more than $750 that are extensions of consumer credit obtained 
by a debtor under an open-end credit plan within 70 days before 
the order for relief under section 523(a)(2)(C) (as amended); 
(3) pursuant to section 523(a)(3) of the Bankruptcy Code, debts 
that require timely request for a dischargeability 
determination, if the creditor lacks notice or does not have 
actual knowledge of the case in time to make such request; (4) 
debts resulting from fraud or defalcation by the debtor acting 
as a fiduciary under section 523(a)(4) of the Bankruptcy Code; 
and (5) debts for restitution or damages, awarded in a civil 
action against the debtor as a result of willful or malicious 
conduct 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
      Section 315 of the conference report amends several 
provisions of the Bankruptcy Code. Subsection (a) amends 
Bankruptcy Code section 342(c) to delete the provision 
specifying that the failure of a notice to include certain 
information required to be given by a debtor to a creditor does 
not invalidate the notice's legal effect. It adds a provision 
requiring a debtor to send any notice he or she must provide 
under the Bankruptcy Code to the address stated by the creditor 
and to include in such notice the current account number, if 
within 90 days prior to the date that the debtor filed for 
bankruptcy relief the creditor in at least two communications 
sent to the debtor set forth such address and account number. 
If the creditor would be in violation of applicable 
nonbankruptcy law by sending any such communication during this 
time period, then the debtor must send the notice to the 
address provided by the creditor stated in the last two 
communications containing the creditor's address and such 
notice shall include the current account number. Section 315(a) 
also permits a creditor in a chapter 7 or 13 case (where the 
debtor is an individual) to file with the court and serve on 
the debtor the address to be used to notify such creditor in 
that case. Five days after receipt of such notice, the court 
and the debtor, respectively, must use the address so specified 
to provide notice to such creditor. In addition, section 315(a) 
specifies that if an entity files a notice with the court 
stating an address to be used generally by all bankruptcy 
courts for chapter 7 and 13 cases, or by particular bankruptcy 
courts, as specified by such entity. This address must be used 
by the court to supply notice in such cases within 30 days 
following the filing of such notice where the entity is a 
creditor. Notice given other than as provided in section 342 is 
not effective until it has been brought to the creditor's 
attention. If the creditor has designated a person or 
organizational subdivision to be responsible for receiving 
notices concerning bankruptcy cases and has established 
reasonable procedures so that these notices will be delivered 
to such person or subdivision, a notice will not be deemed to 
have been received by the creditor until it has been received 
by such person or subdivision. This provision also prohibits 
the imposition of any monetary penalty for violation of the 
automatic stay or for the failure to comply with the Bankruptcy 
Code sections 542 and 543 unless the creditor has received effective 
notice under section 342. Section 315(a) of the conference report is 
substantively identical to section 315(a) of the House bill and Senate 
amendment.
      Section 315(b) amends section 521 to specify additional 
duties of a debtor. This provision requires the debtor to file 
a certificate executed by the debtor's attorney or bankruptcy 
petition preparer stating that the attorney or preparer 
supplied the debtor with the notice required under Bankruptcy 
Code section 342(b). If the debtor is not represented by 
counsel and did not use the services of a bankruptcy petition 
preparer, then the debtor must sign a certificate stating that 
he or she obtained and read such notice. In addition, the 
debtor must file: (1) copies of all payment advices or other 
evidence of payment, if any, from any employer within 60 days 
preceding the bankruptcy filing; (2) a statement of the amount 
of monthly net income, itemized to show how such amount is 
calculated; and (3) a statement disclosing any reasonably 
anticipated increase in income or expenditures in the 12-month 
period following the date of filing. Upon request of a 
creditor, section 315(b) of the conference report requires the 
court to make the petition, schedules, and statement of 
financial affairs of an individual who is a chapter 7 or 13 
debtor available to such creditor.
      In addition, section 315(b) requires such debtor to 
provide the trustee not later than seven days before the date 
first set for the meeting of creditors a copy of his or her 
Federal income tax return or transcript (at the election of the 
debtor) for the latest taxable period ending prior to the 
filing of the bankruptcy case for which a tax return was filed. 
Should the debtor fail to comply with this requirement, the 
case must be dismissed unless the debtor demonstrates that such 
failure was due to circumstances beyond the debtor's control. 
In addition, the debtor must file copies of any amendments to 
such tax returns. Upon request, the debtor must provide a copy 
of the tax return or transcript to the requesting creditor at 
the time the debtor supplies the return or transcript to the 
trustee. Should the debtor fail to comply with this 
requirement, the case must be dismissed unless the debtor 
demonstrates that such failure is due to circumstances beyond 
the debtor's control. A creditor in a chapter 13 case may, at 
any time, file a notice with the court requesting a copy of the 
plan. The court must supply a copy of the chapter 13 plan at a 
reasonable cost not later than 5 days after such request. This 
provision represents a compromise between section 315(b) of the 
House bill and the Senate amendment. The House bill was not 
limited to Federal tax returns and did not consistently include 
transcripts as an alternative. In addition, the conference 
report clarifies that this provision applies to Federal income 
tax returns.
      During the pendency of a chapter 7, 11 or 13 case, the 
debtor must file with the court, at the request of the judge, 
United States trustee, or any party in interest, at the time 
filed with the taxing authority, copies of any Federal income 
tax returns (or transcripts thereof) that were not filed for 
the three-year period preceding the date on which the order for 
relief was entered. In addition, the debtor must file copies of 
any amendments to such tax returns.
      In a chapter 13 case, the debtor must file a statement, 
under penalty of perjury, of income and expenditures in the 
preceding tax year and monthly income showing how the amounts 
were calculated. The statement must be filed on the date that 
is the later of 90 days after the close of the debtor's tax 
year or one year after the order for relief, unless a plan has 
been confirmed. Thereafter, the statement must be filed on or 
before the date that is 45 days before the anniversary date of 
the plan's confirmation, until the case is closed. The 
statement must disclose the amount and sources of the debtor's 
income, the identity of any persons responsible with the debtor 
for the support of the debtor's dependents, the identity of any 
persons who contributed to the debtor's household expenses, and 
the amount of any such contributions.
      Section 315(b)(2) mandates that the tax returns, 
amendments thereto, and the statement of income and 
expenditures of an individual who is a chapter 7 or chapter 13 
debtor be made available to the United States trustee or 
bankruptcy administrator, the trustee, and any party in 
interest for inspection and copying, subject to procedures 
established by the Director of the Administrative Office for 
United States Courts within 180 days from the date of enactment 
of this Act. The procedures must safeguard the confidentiality 
of any tax information required under this provision and 
include restrictions on creditor access to such information. In 
addition, the Director must, within 540 days from the Act's 
enactment date, prepare and submit to Congress a report that 
assesses the effectiveness of such procedures and, if 
appropriate, includes recommendations for legislation to 
further protect the confidentiality of such tax information and 
to impose penalties for its improper use. If requested by the 
United States trustee or trustee, the debtor must provide a 
document establishing the debtor's identity, which may include 
a driver's license, passport, or other document containing a 
photograph of the debtor, and such other personal identifying 
information relating to the debtor. Section 315(b) is 
substantively similar to section 315(b) of the House bill and 
the Senate amendment. The conference report makes technical and 
clarifying revisions.
Sec. 316. Dismissal for failure to timely file schedules or provide 
        required information
      Section 316 of the conference report is similar to 
section 316 of the House bill and the Senate amendment. This 
provision amends section 521 of the Bankruptcy Code to provide 
that if an individual debtor in a voluntary chapter 7 or 
chapter 13 case fails to file all of the information required 
under section 521(a)(1) within 45 days of the date on which the 
case is filed, the case must be automatically dismissed, 
effective on the 46th day. The 45-day period may be extended 
for an additional 45-day period providing the debtor requests 
such extension prior to the expiration of the original 45-day 
period and the court finds justification for such extension. 
Upon request of a party in interest, the court must enter an 
order of dismissal within 5 days of such request. Section 316 
of the conference report, unlike its House and Senate 
antecedents, provides that a court may decline to dismiss the 
case if: (1) the trustee files a motion before the stated time 
periods; (2) the court finds, after notice and a hearing, that 
the debtor in good faith attempted to file all the information 
required under section 521(a)(1)(B)(iv); and (3) the court 
finds that the best interests of creditors would be served by 
continued administration of the case.
Sec. 317. Adequate time to prepare for hearing on confirmation of the 
        plan
      Section 317 of the conference report is similar to 
section 317 of the House bill and the Senate amendment. This 
provision amends section 1324 of the Bankruptcy Code to require 
the chapter 13 confirmation hearing to be held not earlier than 
20 days following the first date set for the meeting of 
creditors and not later than 45 days from this date, unless the 
court determines that it would be in the best interests of 
creditor and the estate to hold such hearing at an earlier date 
and there is no objection to such earlier date. The House and 
Senate antecedents to section 317 of the conference report do 
not include this exception.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases
      Section 318 of the conference report is substantially 
identical to section 318 of the House bill and the Senate 
amendment. Subsection (1) amends Bankruptcy Code sections 
1322(d) and 1325(b) to specify that a chapter 13 plan may not 
provide for payments over a period that is not less than five 
years if the current monthly income of the debtor and the 
debtor's spouse combined exceeds certain monetary thresholds.
      If the current monthly income of the debtor and the 
debtor's spouse fall below these thresholds, then the duration 
of the plan may not be longer than three years, unless the 
court, for cause, approves a longer period up to five years. 
The applicable commitment period may be less if the plan 
provides for payment in full of all allowed unsecured claims 
over a shorter period. Section 318(2), (3), and (4) make 
conforming amendments to sections 1325(b) and 1329(c) of the 
Bankruptcy Code.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the 
        Federal Rules of Bankruptcy Procedure
      Section 319 of the conference report expresses a sense of 
the Congress that Federal Rule of Bankruptcy Procedure 9011 be 
modified to require that any document, whether signed or 
unsigned, including schedules, supplied to the court or the 
trustee by a debtor may be submitted only after the debtor or 
the debtor's attorney has made reasonable inquiry to verify 
that the information contained in such documents is well-
grounded in fact and warranted by existing law or a good faith 
argument for the extension, modification, or reversal of 
existing law. Section 319 of the conference report is 
substantially identical to section 319 of the House bill and 
the Senate amendment.
Sec. 320. Prompt relief from stay in individual cases
      Section 320 of the conference report is substantively 
identical to section 320 of the House bill and the Senate 
amendment. This provision amends section 362(e) of the 
Bankruptcy Code to terminate the automatic stay in a chapter 7, 
11, or 13 case of an individual debtor within 60 days following 
a request for relief from the stay, unless the bankruptcy court 
renders a final decision prior to the expiration of the 60-day 
time period, such period is extended pursuant to agreement of 
all parties in interest, or a specific extension of time is 
required for good cause as described in findings made by the 
court.
Sec. 321. Chapter 11 cases filed by individuals
      Section 321(a) of the conference report creates a new 
provision under chapter 11 of the Bankruptcy Code specifying 
that property of the estate of an individual debtor includes, 
in addition to that identified in section 541 of the Bankruptcy 
Code, all property of the kind described in section 541 that 
the debtor acquires after 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). In addition, it 
includes earnings from services performed by the debtor after 
commencement of the case, but before the case is closed, 
dismissed or converted to a case under chapter 7, 12, or 13. 
Except as provided in section 1104 of the Bankruptcy Code or 
the order confirming a chapter 11 plan, section 321(a) provides 
that the debtor remains in possession of all property of the 
estate. Section 321(a) is substantively identical to section 
321(a) of the House bill and the Senate amendment.
      Section 321(b) amends Bankruptcy Code section 1123 to 
require the chapter 11 plan of an individual debtor to provide 
for the payment to creditors of all or such portion of the 
debtor's earnings from personal services performed after 
commencement of the case or other future income that is 
necessary for the plan's execution. This provision is 
substantively identical to section 321(b) of the House bill and 
the Senate amendment.
      Section 321(c) amends Bankruptcy Code section 1129(a) to 
include an additional requirement for confirmation in a chapter 
11 case of an individual debtor upon objection to confirmation 
by a holder of an allowed unsecured claim. In such instance, 
the value of property to be distributed under the plan (1) on 
account of such claim, as of the plan's effective date, must 
not be less than the amount of such claim; or (2) is not less 
than the debtor's projected disposable income (as defined in 
section 1325(b)(2)) to be received during the 5-year period 
beginning on the date that the first payment is due under the 
plan or during the plan's term, whichever is longer. Section 
321(c) also amends section 1129(b)(2)(B)(ii) of the Bankruptcy 
Code to provide that an individual chapter 11 debtor may retain 
property included in the estate under section 1115 (as added by 
the Act), subject to section 1129(a)(14). This provision is 
substantively identical to section 321(c) of the House bill and 
the Senate amendment.
      Section 321(d)(1) of the conference report reflects the 
Senate position represented in section 321(d) of the Senate 
amendment, which amends Bankruptcy Code section 1141(d) to 
provide that a discharge under chapter 11 does not discharge a 
debtor who is an individual from any debt excepted from 
discharge under Bankruptcy Code section 523. The House bill 
provides that a chapter 11 debtor, including a corporation, is 
not discharged from any debt excepted from discharge under 
section 523.
      Section 321(d)(2) of the conference report provides that 
in a chapter 11 individual debtor is not discharged until all 
plan payments have been made. The court may grant a hardship 
discharge if the value of property actually distributed under 
the plan--as of the plan's effective date--is not less than the 
amount that would have been available for distribution if the 
case was liquidated under chapter 7 on such date, and 
modification of the plan is not practicable. This provision is 
substantively identical to its counterparts in the House bill 
and Senate amendment.
      Section 321(e) of the conference report amends section 
1127 to permit a plan in a chapter 11 case of an individual 
debtor to be modified postconfirmation for the purpose of 
increasing or reducing the amount of payments, extending or 
reducing the time period for such payments, or altering the 
amount of distribution to a creditor whose claim is provided 
for by the plan. Such modification may be made at any time on 
request of the debtor, trustee, United States trustee, or 
holder of an allowed unsecured claim, if the plan has not been 
substantially consummated.
      Section 321(f) specifies that sections 1121 through 1129 
apply to such modification. In addition, it provides that the 
modified plan shall become the confirmed plan only if: (a) 
there has been disclosure pursuant to section 1125 (as the 
court directs); (b) notice and a hearing; and (c) such 
modification is approved. Subsections (e) and (f) of section 
321 of the conference report are substantively identical to 
their counterparts in the House bill and the Senate amendment.
Sec. 322. Limitations on homestead exemption
      Section 322(a) amends section 522 of the Bankruptcy Code 
to impose an aggregate monetary limitation of $125,000, subject 
to Bankruptcy Code sections 544 and 548, on the valueof 
property that the debtor may claim as exempt under State or local law 
pursuant to section 522(b)(3)(A) under certain circumstances. The 
monetary cap applies if the debtor acquired such property within the 
1215-day period preceding the filing of the petition and the property 
consists of any of the following: (a) real or personal property of the 
debtor or that a dependent of the debtor uses as a residence; (b) an 
interest in a cooperative that owns property, which the debtor or the 
debtor's dependent uses as a residence; (c) a burial plot for the 
debtor or the debtor's dependent; or (d) real or personal property that 
the debtor or dependent of the debtor claims as a homestead. This 
limitation does not apply to a principal residence claimed as exempt by 
a family farmer. In addition, the limitation does not apply to any 
interest transferred from a debtor's principal residence (which was 
acquired prior to the beginning of the specified time period) to the 
debtor's current principal residence, if both the previous and current 
residences are located in the same State.
      Section 322(a) further amends section 522 to add a 
provision that does not allow a debtor to exempt any amount of 
an interest in property described in the preceding paragraph in 
excess of $125,000 if any of the following applies:
            (a) the court determines, after notice and a 
        hearing, that the debtor has been convicted of a felony 
        (as defined in section 3156 of title 18), which under 
        the circumstances, demonstrates that the filing of the 
        case was an abuse of the provisions of the Bankruptcy 
        Code; or
            (b) the debtor owes a debt arising from:
                    (A) any violation of the federal securities 
                laws defined in section 3(a)(47) of the 
                Securities and Exchange Act of 1934, any state 
                securities laws, or any regulation or order 
                issued under Federal securities laws or state 
                securities laws;
                    (B) fraud, deceit, or manipulation in a 
                fiduciary capacity or in connection with the 
                purchase or sale of any security registered 
                under section 12 or 15(d) of the Securities 
                Exchange Act of 1934, or under section 6 of the 
                Securities Act of 1933;
                    (C) any civil remedy under section 1964 of 
                title 18 of the United States Code; or
                    (D) any criminal act, intentional tort, or 
                willful or reckless misconduct that caused 
                serious physical injury or death to another 
                individual in the preceding five years.
The conferees intend that the language in section 522(q)(1) be 
liberally construed to encompass misconduct that rises above 
mere negligence under applicable state law. An exception to the 
monetary limit applies to the extent the value of the homestead 
property is reasonably necessary for the support of the debtor 
and any dependent of the debtor.
      Section 322(b) makes the monetary limitation set forth in 
section 322(a) subject to automatic adjustment pursuant to 
section 104 of the Bankruptcy Code.
      This provision is substantively different from its House 
and Senate counterparts. Section 322 of the House bill imposes 
an aggregate $100,000 homestead cap, which applies if the 
debtor acquired such property within the two-year period 
preceding the filing of the petition and the property consists. 
As with section 322 of the conference report, the House 
provision includes the exception for a family farmer and the 
transfer of an interest in a principal residence of the debtor 
from a prior principal residence of the debtor acquired prior 
to the beginning of the two-year period. Section 308 of the 
Senate amendment, on the other hand, imposes a flat $125,000 
cap on a homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and 
        other property from the estate
      Section 323 of the conference report is substantively 
identical to section 323 of the House bill and section 322 of 
the Senate amendment. It amends section 541(b) of the 
Bankruptcy Code to exclude as property of the estate funds 
withheld or received by an employer from its employees' wages 
for payment as contributions to specified employee retirement 
plans, deferred compensation plans, and tax-deferred annuities. 
Such contributions do not constitute disposable income as 
defined in section 1325(b)(2) of the Bankruptcy Code. Section 
323 also excludes as property of the estate funds withheld by 
an employer from the wages of its employees for payment as 
contributions to health insurance plans regulated by State law.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy 
        professionals
      Section 324 of the conference report amends section 1334 
of title 28 of the United State Code to give a district court 
exclusive jurisdiction of all claims or causes of action 
involving the construction of section 327 of the Bankruptcy 
Code or rules relating to disclosure requirements under such 
provision. This provision is substantively identical to section 
324 of the House bill and section 323 of the Senate amendment.
Sec. 325. United States trustee program filing fee increase
      Section 325 of the conference report is substantively 
identical to section 325 of the House bill and section 324 of 
the Senate amendment. Section 325(a) amends section 1930(a) of 
title 28 of the United States Code to increase the filing fees 
for chapter 7 and chapter 13 cases respectively to $160 and 
$150. Subsections 325(b) and (c) amend section 589a of title 28 
of the United States Code and section 406(b) of the Judiciary 
Appropriations Act of 1990 to increase the percentage of the 
fees collected under section 1930 of title 28 of the United 
States Code that are paid to the United States Trustee System 
Fund.
Sec. 326. Sharing of compensation
      Section 326 amends Bankruptcy Code section 504 to create 
a limited exception to the prohibition against fee sharing. The 
provision allows the sharing of compensation with bona fide 
public service attorney referral programs that operate in 
accordance with non-federal law regulating attorney referral 
services and with rules of professional responsibility 
applicable to attorney acceptance of referrals. This provision 
is substantively identical to section 326 of the House bill and 
section 325 of the Senate amendment.
Sec. 327. Fair valuation of collateral
      Section 327 of the conference report amends section 
506(a) of the Bankruptcy Code toprovide that the value of an 
allowed claim secured by personal property that is an asset in an 
individual debtor's chapter 7 or 13 case is determined based on the 
replacement value of such property as of the filing date of the 
bankruptcy case without deduction for selling or marketing costs. With 
respect to property acquired for personal, family, or household 
purposes, replacement value is the price a retail merchant would charge 
for property of that kind considering the age and condition of the 
property at the time its value is determined. This provision is 
identical to section 327 of the House bill and section 326 of the 
Senate amendment.
Sec. 328. Defaults based on nonmonetary obligations
      Section 328 is substantively identical to section 328 of 
the House bill and section 327 of the Senate amendment. 
Subsection (a)(1) amends section 365(b) to provide that a 
trustee does not have to cure a default that is a breach of a 
provision (other than a penalty rate or penalty provision) 
relating to a default arising from any failure to perform a 
nonmonetary obligation under an unexpired lease of real 
property, if it is impossible for the trustee to cure the 
default by performing such nonmonetary act at and after the 
time of assumption. If the default arises from a failure to 
operate in accordance with a nonresidential real property 
lease, the default must be cured by performance at and after 
the time of assumption in accordance with the lease. Pecuniary 
losses resulting from such default must be compensated pursuant 
to section 365(b)(1). In addition, section 328(a)(1) amends 
section 365(b)(2)(D) to clarify that it applies to penalty 
provisions. Section 328(a)(2) through (4) make technical 
revisions to section 365(c), (d) and (f) by deleting language 
that is no longer effective pursuant to the Rail Safety 
Enforcement and Review Act.\2\
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    \2\ Pub. L. No. 102-365, 106 Stat. 972 (1992).
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      Section 328(b) amends section 1124(2)(A) of the 
Bankruptcy Code to clarify that a claim is not impaired if 
section 365(b)(2) (as amended by this Act) expressly does not 
require a default with respect to such claim to be cured. In 
addition, it provides that any claim or interest that arises 
from the failure to perform a nonmonetary obligation (other 
than a default arising from the failure to operate a 
nonresidential real property lease subject to section 
365(b)(1)(A)), is impaired unless the holder of such claim or 
interest (other than the debtor or an insider) is compensated 
for any actual pecuniary loss incurred by the holder as a 
result of such failure.
Sec. 329. Clarification of postpetition wages and benefits
      Section 329 amends Bankruptcy Code section 503(b)(1)(A) 
to accord administrative expense status to certain back pay 
awards. This provision applies to a back pay award attributable 
to any period of time occurring postpetition as a result of a 
violation of Federal or state law by the debtor pursuant to an 
action brought in a court or before the National Labor 
Relations Board, providing the bankruptcy court determines that 
the award will not substantially increase the probability of 
layoff or termination of current employees or of nonpayment of 
domestic support obligations. Section 329 of the conference 
report substantively reflects the Senate position as 
represented in section 329 of the Senate amendment. The 
conference report clarifies the provision with respect to the 
timing of the unlawful conduct. There is no counterpart to this 
provision in the House bill.
Sec. 330. Nondischargeability of debts incurred through violations of 
        laws relating to the provision of lawful goods and services
      Section 330(a) amends Bankruptcy Code section 523(a) to 
prohibit the discharge of a debt that results from any 
judgment, order, consent order, or decree entered in any 
Federal or State court, or contained in any settlement 
agreement entered into by the debtor (including any court-
ordered damages, fine, penalty, or attorney fee or cost owed by 
the debtor), that arises from:
            (a) the violation by the debtor of any Federal or 
        State statutory law, including but not limited to 
        violations of title 18 of the United States Code, that 
        results from intentional actions of the debtor that--
                    (i) by force or threat of force or by 
                physical obstruction, intentionally injure, 
                intimidate, or interfere with or attempt to 
                injure, intimidate or interfere with any person 
                because that person is or has been, or in order 
                to intimidate such person or any other person 
                or class of persons from obtaining or providing 
                lawful goods or services;
                    (ii) by force of threat or force or by 
                physical obstruction, intentionally injure, 
                intimidate, or interfere with or attempt to 
                injure, intimidate, or interfere with any 
                person lawfully exercising or seeking to 
                exercise the First Amendment right of religious 
                freedom at a place of religious worship; or
                    (iii) intentionally damage or destroy the 
                property of a facility, or attempt to do so, 
                because such facility provides lawful goods or 
                services, or intentionally damage or destroy 
                the property of a place of religious worship; 
                or
            (b) a violation of a court order or injunction that 
        protects access to a facility that or a person who 
        provides lawful goods or services or the provision of 
        lawful goods or services if such violation--
                    (i) is intentional or knowing; or
                    (ii) occurs after a court has found that 
                the debtor previously violated such court order 
                or injunction, or any other court order or 
                injunction that protects access to the same 
                facility or the same person.
The provision specifies that it shall not be construed to 
affect any expressive conduct, including peaceful picketing, 
peaceful prayer, or other peaceful demonstration, protected 
from legal prohibition by the First Amendment to the 
Constitution of the United States.
      Section 330(b) amends section 523(a)(13) of the 
Bankruptcy Code to make a debt for a criminal restitution order 
entered pursuant to state criminal law nondischargeable.
Sec. 331. Delay of discharge during pendency of certain proceedings
      Section 330 amends section 727(a) of the Bankruptcy Code 
to require the court to withhold the entry of a debtor's 
discharge order if the court, after notice and a hearing, finds 
that there is reasonable cause to believe that there is pending 
a proceeding in which the debtor may be found guilty of a 
felony of the kind described in section 522(q)(1) or liable for 
a debt of the kind described in section 522(q)(2). There is no 
counterpart to this provision in either the House bill or 
Senate amendment.

       Title IV--General and Small Business Bankruptcy Provisions

           SUBTITLE A--GENERAL BUSINESS BANKRUPTCY PROVISIONS

Sec. 401. Adequate protection for investors
      Section 401 is substantively identical to section 401 of 
the House bill and Senate amendment. Subsection (a) amends 
section 101 of the Bankruptcy Code to define ``securities self 
regulatory organization'' as a securities association or 
national securities exchange registered with the Securities and 
Exchange Commission. Section 401(b) amends section 362 of the 
Bankruptcy Code to except from the automatic stay certain 
enforcement actions by a securities self regulatory 
organization.
Sec. 402. Meetings of creditors and equity security holders
      Section 402 amends section 341 of the Bankruptcy Code to 
permit a court, on request of a party in interest and after 
notice and a hearing, to order the United States trustee not to 
convene a meeting of creditors or equity security holders if a 
debtor has filed a plan for which the debtor solicited 
acceptances prior to the commencement of the case. This 
provision is substantively identical to section 402 of the 
House bill and the Senate amendment.
Sec. 403. Protection of refinance of security interest
      Section 403 amends section 547(e)(2) of the Bankruptcy 
Code to increase the perfection period from ten to 30 days for 
the purpose of determining whether a transfer is an avoidable 
preference. This provision is substantively identical to 
section 403 of the House bill and the Senate amendment.
Sec. 404. Executory contracts and unexpired leases
      Section 404 is identical to section 404 of the House bill 
and the Senate amendment. Subsection (a) amends section 
365(d)(4) of the Bankruptcy Code to establish a firm, bright 
line deadline by which an unexpired lease of nonresidential 
real property must be assumed or rejected. If such lease is not 
assumed or rejected by such deadline, then such lease shall be 
deemed rejected, and the trustee shall immediately surrender 
such property to the lessor. Section 404(a) permits a 
bankruptcy trustee to assume or reject a lease on a date which 
is the earlier of the date of confirmation of a plan or the 
date which is 120 days after the date of the order for relief. 
A further extension of time may be granted, within the 120 day 
period, for an additional 90 days, for cause, upon motion of 
the trustee or lessor. Any subsequent extension can only be 
granted by the judge upon the prior written consent of the 
lessor: either by the lessor's motion for an extension, or by a 
motion of the trustee, provided that the trustee has the prior 
written approval of the lessor. This provision is designed to 
remove the bankruptcy judge's discretion to grant extensions of 
the time for the retail debtor to decide whether to assume or 
reject a lease after a maximum possible period of 210 days from 
the time of entry of the order of relief. Beyond that maximum 
period, there is no authority in the judge to grant further 
time unless the lessor has agreed in writing to the extension.
      Section 404(b) amends section 365(f)(1) to assure that 
section 365(f) does not override any part of section 365(b). 
Thus, section 404(b) makes a trustee's authority to assign an 
executory contract or unexpired lease subject not only to 
section 365(c), but also to section 365(b), which is given full 
effect. Therefore, for example, assumption or assignment of a 
lease of real property in a shopping center must be subject to 
the provisions of the lease, such as use clauses.
Sec. 405. Creditors and equity security holders committees
      Section 405 is substantively identical to section 405 of 
the House bill and the Senate amendment. Subsection (a) amends 
section 1102(a)(2) of the Bankruptcy Code to permit, after 
notice and a hearing, a court, on its own motion or on motion 
of a party in interest, to order a change in a committee's 
membership to ensure adequate representation of creditors or 
equity security holders in a chapter 11 case. It specifies that 
the court may direct the United States trustee to increase the 
membership of a committee for the purpose of including a small 
business concern if the court determines that such creditor's 
claim is of the kind represented by the committee and that, in 
the aggregate, is disproportionately large when compared to the 
creditor's annual gross revenue. Section 405(b) requires the 
committee to give creditors having claims of the kind 
represented by the committee access to information. In 
addition, the committee must solicit and receive comments from 
these creditors and, pursuant to court order, make additional 
reports or disclosures available to them.
Sec. 406. Amendment to section 546 of title 11, United States Code
      Section 406 reflects the Senate position as represented 
in section 406 of the Senate amendment. The provision corrects 
an erroneous subsection designation in section 546 of the 
Bankruptcy Code. It redesignates the second subsection (g) as 
subsection (i). In addition, section 406 amends section 546(i) 
(as redesignated) to subject that provision to the prior rights 
of security interest holders. The House bill did not include 
this provision. Further, section 406 adds a new provision to 
section 546 that prohibits a trustee from avoiding a warehouse 
lien for storage, transportation, or other costs incidental to 
the storage and handling of goods. It specifies that this 
prohibition must be applied in a manner consistent with any 
applicable state statute that is similar to section 7-209 of 
the Uniform Commercial Code.
Sec. 407. Amendments to section 330(a) of title 11, United States Code
      Section 407 amends section 330(a)(3) of the Bankruptcy 
Code to clarify that this provision applies to examiners, 
chapter 11 trustees, and professional persons. This section 
also amends section 330(a) to add a provision that requires a 
court, in determining the amount of reasonable compensation to 
award to a trustee, to treat such compensation as a commission 
pursuant to section 326 of the Bankruptcy Code. Section 407 is 
substantively identical to section 407 of the House bill and 
the Senate amendment.
Sec. 408. Postpetition disclosure and solicitation
      Section 408 amends section 1125 of the Bankruptcy Code to 
permit an acceptance or rejection of a chapter 11 plan to be 
solicited from the holder of a claim or interest if the holder 
was solicited before the commencement of the case in a manner 
that complied with applicable nonbankruptcy law. Section 408 is 
substantively identical to section 408 of the House bill and 
the Senate amendment.
Sec. 409. Preferences
      Section 409 amends section 547(c)(2) of the Bankruptcy 
Code to provide that a trusteemay not avoid a transfer to the 
extent such transfer was in payment of a debt incurred by the debtor in 
the ordinary course of the business or financial affairs of the debtor 
and the transferee and such transfer was made either: (1) in the 
ordinary course of the debtor's and the transferee's financial affairs 
or business; or (2) in accordance with ordinary business terms. Present 
law requires the recipient of a preferential transfer to establish both 
of these grounds in order to sustain a defense to a preferential 
transfer proceeding. In a case in which the debts are not primarily 
consumer debts, section 409 provides that a transfer may not be avoided 
if the aggregate amount of all property constituting or affected by the 
transfer is less than $5,000. This provision is substantively identical 
to section 409 of the House bill and the Senate amendment.
Sec. 410. Venue of certain proceedings
      Section 410 amends section 1409(b) of title 28 of the 
United States Code to provide that a preferential transfer 
action in the amount of $10,000 or less pertaining to a 
nonconsumer debt against a noninsider defendant must be filed 
in the district where such defendant resides. This amount is 
presently fixed at $1,000. This provision is substantively 
identical to section 410 of the House bill and the Senate 
amendment.
Sec. 411. Period for filing plan under chapter 11
      Section 411 amends section 1121(d) of the Bankruptcy Code 
to mandate that a chapter 11 debtor's exclusive period for 
filing a plan may not be extended beyond a date that is 18 
months after the order for relief. In addition, it provides 
that the debtor's exclusive period for obtaining acceptances of 
the plan may not be extended beyond 20 months after the order 
for relief. This provision is substantively identical to 
section 411 of the House bill and the Senate amendment.
Sec. 412. Fees arising from certain ownership interests
      Section 412 amends section 523(a)(16) of the Bankruptcy 
Code to broaden the protections accorded to community 
associations with respect to fees or assessments arising from 
the debtor's interest in a condominium, cooperative, or 
homeowners' association. Irrespective of whether or not the 
debtor physically occupies such property, fees or assessments 
that accrue during the period the debtor or the trustee has a 
legal, equitable, or possessory ownership interest in such 
property are nondischargeable. This provision is substantively 
identical to section 412 of the House bill and the Senate 
amendment.
Sec. 413. Creditor representation at first meeting of creditors
      Section 413 amends section 341(c) of the Bankruptcy Code 
to permit a creditor holding a consumer debt or any 
representative of such creditor, notwithstanding any local 
court rule, provision of a State constitution, or any other 
Federal or state nonbankruptcy law, to appear and participate 
at the meeting of creditors in chapter 7 and chapter 13 cases 
either alone or in conjunction with an attorney. In addition, 
the provision clarifies that it cannot be construed to require 
a creditor to be represented by counsel at any meeting of 
creditors. This provision is substantively identical to section 
413 of the House bill and the Senate amendment.
Sec. 414. Definition of disinterested person
      Section 414 amends section 101(14) of the Bankruptcy Code 
to eliminate the requirement that an investment banker be a 
disinterested person. This provision is substantively identical 
to section 414 of the House bill and the Senate amendment.
Sec. 415. Factors for compensation of professional persons
      Section 415 amends section 330(a)(3) of the Bankruptcy 
Code to permit the court to consider, in awarding compensation 
to a professional person, whether such person is board 
certified or otherwise has demonstrated skill and experience in 
the practice of bankruptcy law. This provision is substantively 
identical to section 415 of the House bill and the Senate 
amendment.
Sec. 416. Appointment of elected trustee
      Section 416 of the conference report is substantively 
identical to section 416 of the House bill and the Senate 
amendment. This provision amends section 1104(b) of the 
Bankruptcy Code to clarify the procedure for the election of a 
trustee in a chapter 11 case. Section 1104(b) permits creditors 
to elect an eligible, disinterested person to serve as the 
trustee in the case, provided certain conditions are met. 
Section 416 amends this provision to require the United States 
trustee to file a report certifying the election of a chapter 
11 trustee. Upon the filing of the report, the elected trustee 
is deemed to be selected and appointed for purposes of section 
1104 and the service of any prior trustee appointed in the case 
is terminated. Section 416 also clarifies that the court shall 
resolve any dispute arising out of a chapter 11 trustee 
election.
Sec. 417. Utility service
      Section 417 amends section 366 of the Bankruptcy Code to 
provide that assurance of payment, for purposes of this 
provision, includes a cash deposit, letter of credit, 
certificate of deposit, surety bond, prepayment of utility 
consumption, or other form of security that is mutually agreed 
upon by the debtor or trustee and the utility. It also 
specifies that an administrative expense priority does not 
constitute an assurance of payment. With respect to chapter 11 
cases, section 417 permits a utility to alter, refuse or 
discontinue service if it does not receive adequate assurance 
of payment that is satisfactory to the utility within 30 days 
of the filing of the petition. The court, upon request of a 
party in interest, may modify the amount of this payment after 
notice and a hearing. In determining the adequacy of such 
payment, a court may not consider: (i) the absence of security 
before the case was filed; (ii) the debtor's timely payment of 
utility service charges before the case was filed; or (iii) the 
availability of an administrative expense priority. 
Notwithstanding any other provision of law, section 417 permits 
a utility to recover or set off against a security deposit 
provided prepetition by the debtor to the utility without 
notice or court order. This provision is substantively 
identical to section 417 of the House bill and the Senate 
amendment.
Sec. 418. Bankruptcy fees
      Section 418 of the conference report amends section 1930 
of title 28 of the United States Code to permit a district 
court or a bankruptcy court, pursuant to procedures prescribed 
by the Judicial Conference of the United States, to waive the 
chapter 7 filing fee for an individual and certain other fees 
under subsections (b) and (c) of section 1930 if such 
individual's income is less than 150 percent of the official 
poverty level (as defined by the Office of Management 
andBudget) and the individual is unable to pay such fee in 
installments. section 418 also clarifies that section 1930, as amended, 
does not prevent a district or bankruptcy court from waiving other fees 
for creditors and debtors, if in accordance with Judicial Conference 
policy. This provision is substantively identical to section 418 of the 
House bill and the Senate amendment.
Sec. 419. More complete information regarding assets of the estate
      Section 419 of the conference report is substantively 
identical to section 419 of the House bill and the Senate 
amendment. This provision requires the Advisory Committee on 
Bankruptcy Rules, after consideration of the views of the 
Director of the Executive Office for United States Trustees, to 
propose official rules and forms directing chapter 11 debtors 
to disclose information concerning the value, operations, and 
profitability of any closely held corporation, partnership, or 
other entity in which the debtor holds a substantial or 
controlling interest. Section 419 is intended to ensure that 
the debtor's interest in any of these entities 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 431 of the conference report amends section 1125 
of the Bankruptcy Code to streamline the disclosure statement 
process and to provide for more flexibility. This provision is 
substantively identical to section 431 of the House bill and 
the Senate amendment. Section 431(1) amends section 1125(a)(1) 
of the Bankruptcy Code to require a bankruptcy court, in 
determining whether a disclosure statement supplies adequate 
information, to consider the complexity of the case, the 
benefit of additional information to creditors and other 
parties in interest, and the cost of providing such additional 
information. With regard to a small business case, section 
431(2) amends section 1125(f) to permit the court to dispense 
with a disclosure statement if the plan itself supplies 
adequate information. In addition, it provides that the court 
may approve a disclosure statement submitted on standard forms 
approved by the court or adopted under section 2075 of title 28 
of the United States Code. Further, section 431(2) provides 
that the court may conditionally approve a disclosure 
statement, subject to final approval after notice and a 
hearing, and allow the debtor to solicit acceptances of the 
plan based on such disclosure statement. The hearing on the 
disclosure statement may be combined with the confirmation 
hearing.
Sec. 432. Definitions
      Section 432 of the conference report is substantively 
similar to section 431 of the House bill and the Senate 
amendment. This provision amends section 101 of the Bankruptcy 
Code to define a ``small business case'' as a chapter 11 case 
in which the debtor is a small business debtor. Section 432, in 
turn, defines a ``small business debtor'' as a person engaged 
in commercial or business activities (including an affiliate of 
such person that is also a debtor, but excluding a person whose 
primary activity is the business of owning or operating real 
property or activities incidental thereto) having aggregate 
noncontingent, liquidated secured and unsecured debts of not 
more than $2 million (excluding debts owed to affiliates or 
insiders of the debtor) as of the date of the petition or the 
order for relief. This monetary definition is a compromise. The 
House and Senate antecedents specified a $3 million 
definitional limit. This definition applies only in a case 
where the United States trustee has not appointed a creditors' 
committee 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. It 
does not apply to any member of a group of affiliated debtors 
that has aggregate noncontingent, liquidated secured and 
unsecured debts in excess of $2 million (excluding debts owed 
to one or more affiliates or insiders). The conference report 
also requires this monetary figure to be periodically adjusted 
for inflation pursuant to section 104 of the Bankruptcy Code.
Sec. 433. Standard form disclosure statement and plan
      Section 433 of the conference report directs the Advisory 
Committee on Bankruptcy Rules of the Judicial Conference of the 
United States to propose for adoption standard form disclosure 
statements and reorganization plans for small business debtors. 
The provision directs that the forms be designed to achieve a 
practical balance between the needs of the court, case 
administrators, and other parties in interest to have 
reasonably complete information as well as the debtor's need 
for economy and simplicity. This provision is substantively 
identical to section 433 of the House bill and the Senate 
amendment.
Sec. 434. Uniform national reporting requirements
      Section 434 of the conference report is substantively 
identical to section 434 of the House bill and the Senate 
amendment. Subsection (a) adds a new provision to the 
Bankruptcy Code mandating additional reporting requirements for 
small business debtors. It requires a small business debtor to 
file periodic financial reports and other documents containing 
the following information with respect to the debtor's business 
operations: (i) profitability; (ii) reasonable approximations 
of projected cash receipts and disbursements; (iii) comparisons 
of actual cash receipts and disbursements with projections in 
prior reports; (iv) whether the debtor is complying with 
postpetition requirements pursuant to the Bankruptcy Code and 
Federal Rules of Bankruptcy Procedure; (v) whether the debtor 
is timely filing tax returns and other government filings; and 
(vi) whether the debtor is paying taxes and other 
administrative expenses when due. In addition, the debtor must 
report on such other matters that are in the best interests of 
the debtor and the creditors and in the public interest. If the 
debtor is not in compliance with any postpetition requirements 
pursuant to the Bankruptcy Code and Federal Rules of Bankruptcy 
Procedure, or is not filing tax returns or other required 
governmental filings, paying taxes and other administrative 
expenses when due, the debtor must report: (a) what the 
failures are, (b) how they will be cured; (c) the cost of their 
cure; and (d) when they will be cured. Section 434(b) specifies 
that the effective date of this provision is 60 days after the 
date on which the rules required under this provision are 
promulgated.
Sec. 435. Uniform reporting rules and forms for small business cases
      Section 435 of the conference report is substantively 
identical to section 435 of the House bill and the Senate 
amendment. Subsection (a) mandates that the Advisory Committee 
on Bankruptcy Rules of the Judicial Conference of the United 
States propose official rules and forms with respect to the 
periodic financial reports and other information that a small 
businessdebtor must file concerning its profitability, cash 
receipts and disbursements, filing of its tax returns, and payment of 
its taxes and other administrative expenses.
      Section 435(b) requires the rules and forms to achieve a 
practical balance between the need for reasonably complete 
information by the bankruptcy court, United States trustee, 
creditors and other parties in interest, and the small business 
debtor's interest in having such forms be easy and inexpensive 
to complete. The forms should also be designed to help the 
small business debtor better understand its financial condition 
and plan its future.
Sec. 436. Duties in small business cases
      Section 436 of the conference report is substantively 
identical to section 436 of the House bill and the Senate 
amendment. Intended to implement greater administrative 
oversight and controls over small business chapter 11 cases, 
the provision requires a chapter 11 trustee or debtor to:
            (1) file with a voluntary petition (or in an 
        involuntary case, within seven days from the date of 
        the order for relief) the debtor's most recent 
        financial statements (including a balance sheet, 
        statement of operations, cash flow statement, and 
        Federal income tax return) or a statement explaining 
        why such information is not available;
            (2) attend, through its senior management personnel 
        and counsel, meetings scheduled by the bankruptcy court 
        or the United States trustee (including the initial 
        debtor interview and meeting of creditors pursuant to 
        section 341 of the Bankruptcy Code), unless the court 
        waives this requirement after notice and a hearing upon 
        a finding of extraordinary and compelling 
        circumstances;
            (3) timely file all requisite schedules and the 
        statement of financial affairs, unless the court, after 
        notice and a hearing, grants an extension of up to 30 
        days from the order of 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) maintain insurance that is customary and 
        appropriate for the industry, subject to section 
        363(c)(2);
            (6) timely file tax returns and other required 
        government filings;
            (7) timely pay all administrative expense taxes 
        (except for certain contested claims), subject to 
        section 363(c)(2); and
            (8) permit the United States trustee to inspect the 
        debtor's business premises, books, and records at 
        reasonable hours after appropriate prior written 
        notice, unless notice is waived by the debtor.
Sec. 437. Plan filing and confirmation deadlines
      Section 437 of the conference report amends section 
1121(e) of the Bankruptcy Code with respect to the period of 
time within which a small business debtor must file and confirm 
a plan of reorganization. This provision is substantively 
identical to section 437 of the House bill and the Senate 
amendment. It provides that a small business debtor's exclusive 
period to file a plan is 180 days from the date of the order 
for relief, unless the period is extended after notice and a 
hearing, or the court, for cause, orders otherwise. It further 
provides that a small business debtor must file a plan and any 
disclosure statement not later than 300 days after the order 
for relief. These time periods and the time fixed in section 
1129(e) may be extended only if (a) the debtor, after providing 
notice to parties in interest, 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 granting such extension is signed before the 
expiration of the existing deadline.
Sec. 438. Plan confirmation deadline
      Section 438 of the conference report amends Bankruptcy 
Code section 1129 to require the court to confirm a plan not 
later than 45 days after it is filed if the plan complies with 
the applicable provisions of the Bankruptcy Code, unless this 
period is extended pursuant to section 1121(e)(3). This 
provision is a compromise between section 438 of the House bill 
and the Senate amendment. The conference report clarifies that 
the plan must otherwise comply with applicable provisions of 
the Bankruptcy Code and includes a cross-reference to section 
1121(e)(3), as added by section 437 of this Act. The House 
provision specifies that a plan in a small business case must 
be confirmed not later than 175 days from the date of the order 
for relief, unless this period is extended pursuant to section 
1121(e)(3). The Senate amendment requires the plan to be 
confirmed within 45 days from the date on which a plan is 
filed, subject to extension pursuant to certain specified 
criteria.
Sec. 439. Duties of the United States trustee
      Section 439 of the conference report is substantively 
identical to section 439 of the House bill and the Senate 
amendment. This provision amends section 586(a) of title 28 of 
the United States Code to require the United States trustee to 
perform the following additional duties with respect to small 
business debtors:
            (1) conduct an initial debtor interview before the 
        meeting of creditors for the purpose of (a) 
        investigating the debtor's viability, (b) inquiring 
        about the debtor's business plan, (c) explaining the 
        debtor's obligation to file monthly operating reports, 
        (d) attempting to obtain an agreed scheduling order 
        setting various time frames (such as the date for 
        filing a plan and effecting confirmation), and (e) 
        informing the debtor of other obligations;
            (2) if determined to be appropriate and advisable, 
        inspect the debtor's business premises for the purpose 
        of reviewing the debtor's books and records and 
        verifying that the debtor has filed its tax returns;
            (3) review and monitor diligently the debtor's 
        activities to determine as promptly as possiblewhether 
the debtor will be unable to confirm a plan; and
            (4) promptly apply to the court for relief in any 
        case in which the United States trustee finds material 
        grounds for dismissal or conversion of the case.
Sec. 440. Scheduling conferences
      Section 440 amends section 105(d) of the Bankruptcy Code 
to mandate that a bankruptcy court hold status conferences as 
are necessary to further the expeditious and economical 
resolution of a bankruptcy case. This provision is identical to 
section 440 of the House bill and the Senate amendment.
Sec. 441. Serial filer provisions
      Section 441 of the conference report is substantively 
similar to section 441 of the House bill and the Senate 
amendment. Subsection (1) amends section 362 of the Bankruptcy 
Code to provide that a court may award only actual damages for 
a violation of the automatic stay committed by an entity in the 
good faith belief that subsection (h) of section 362 (as added 
by this Act) applies to the debtor. Section 441(2) adds a new 
subsection to section 362 of the Bankruptcy Code specifying 
that the automatic stay does not apply where the chapter 11 
debtor: (1) is a debtor in a small business case pending at the 
time the subsequent case is filed; (2) was a debtor in a small 
business case dismissed for any reason pursuant to an order 
that became final in the two-year period ending on the date of 
the order for relief entered in the pending case; (3) was a 
debtor in small business case in which a plan was confirmed in 
the two-year period ending on the date of the order for relief 
entered in the pending case; or (4) is an entity that has 
acquired substantially all of the assets or business of a small 
business debtor described in the preceding paragraphs, unless 
such entity establishes by a preponderance of the evidence that 
it acquired the assets or business in good faith and not for 
the purpose of evading this provision. This exception was added 
to the conference report as a compromise.
      An exception to this provision applies to a chapter 11 
case that is commenced involuntarily and involves no collusion 
between the debtor and the petitioning creditors. Also, it does 
not apply if the debtor proves by a preponderance of the 
evidence that: (1) the filing of the subsequent case resulted 
from circumstances beyond the debtor's control and which were 
not foreseeable at the time the prior case was filed; and (2) 
it is more likely than not that the court will confirm a 
feasible plan of reorganization (but not a liquidating plan) 
within a reasonable time.
Sec. 442. Expanded grounds for dismissal or conversion and appointment 
        of trustee
      Section 442 largely reflects the Senate position as 
represented in section 442 of the Senate amendment. Subsection 
(a) amends section 1112(b) of the Bankruptcy Code to mandate 
that the court convert or dismiss a chapter 11 case, whichever 
is in the best interests of creditors and the estate, if the 
movant establishes cause, absent unusual circumstances. In this 
regard, the court must specify the circumstances that support 
the court's finding that conversion or dismissal is not in the 
best interests of creditors and the estate. This exception was 
added to the conference report as a compromise.
      In addition, the provision specifies an exception to the 
provision's mandatory requirement applies if: (1) the debtor or 
a party in interest objects and establishes that there is a 
reasonable likelihood that a plan will be confirmed within the 
time period set forth in section 1121(e) and 1129(e), or if 
these provisions are inapplicable, within a reasonable period 
of time; (2) the grounds for granting such relief include an 
act or omission of the debtor for which there exists a 
reasonable justification for such act or omission; and (3) such 
act or omission will be cured within a reasonable period of 
time.
      The court must commence the hearing on a section 1112(b) 
motion within 30 days of its filing and decide the motion not 
later than 15 days after commencement of the hearing unless the 
movant expressly consents to a continuance for a specified 
period of time or compelling circumstances prevent the court 
from meeting these time limits. Section 442 provides that the 
term ``cause'' under section 1112(b), as amended by this 
provision, includes the following:
            (1) substantial or continuing loss to or diminution 
        of the estate and the absence of a reasonable 
        likelihood of rehabilitation;
            (2) gross mismanagement of the estate;
            (3) failure to maintain appropriate insurance that 
        poses a material risk to the estate or the public;
            (4) unauthorized use of cash collateral that is 
        harmful to one or more creditors;
            (5) failure to comply with a court order;
            (6) unexcused failure to timely satisfy any filing 
        or reporting requirement under the Bankruptcy Code or 
        applicable rule;
            (7) failure to attend the section 341 meeting of 
        creditors or an examination pursuant to Rule 2004 of 
        the Federal Rules of Bankruptcy Procedure, without good 
        cause shown by the debtor;
            (8) failure to timely provide information or to 
        attend meetings reasonably requested by the United 
        States trustee or bankruptcy administrator;
            (9) failure to timely pay taxes owed after the 
        order for relief or to file tax returns due 
        postpetition;
            (10) failure to file a disclosure statement or to 
        confirm a plan within the time fixed by the Bankruptcy 
        Code or pursuant to court order;
            (11) failure to pay any requisite fees or charges 
        under chapter 123 of title 28 of the United States 
        Code;
            (12) revocation of a confirmation order;
            (13) inability to effectuate substantial 
        consummation of a confirmed plan;
            (14) material default by the debtor with respect to 
        a confirmed plan;
            (15) termination of a plan by reason of the 
        occurrence of a condition specified in the plan; and
            (16) the debtor's failure to pay any domestic 
        support obligation that first becomes payable 
        postpetition.
This definition of the term ``cause'' represents a compromise 
between the House and Senate conferees.
      Section 442(b) creates additional grounds for the 
appointment of a chapter 11 trustee under section 1104(a). It 
provides that should the bankruptcy court determine cause 
exists toconvert or dismiss a chapter 11 case, it may appoint a 
trustee or examiner if in the best interests of creditors and the 
bankruptcy estate. Section 442 of the conference report represents a 
compromise between the House and Senate conferees. Under the House 
version of this provision, the standard for the exception is a plan 
with a reasonable possibility of being confirmed will be filed within a 
reasonable period of time. The standard under the Senate amendment is 
reasonable likelihood that a plan will be confirmed within specified 
time frames established in sections 1121(e) and 1129(e), or within a 
reasonable period of time in those cases where sections 1121(e) or 
1129(e) do not apply.
Sec. 443. Study of operation of title 11, United States Code, with 
        respect to small businesses
      Section 443 of the conference report is substantively 
identical to section 443 of the House bill and the Senate 
amendment. This provision directs the Administrator of the 
Small Business Administration, in consultation with the 
Attorney General, the Director of the Executive Office for 
United States Trustees, and the Director of the Administrative 
Office of the United States Courts, to conduct a study to 
determine: (i) the internal and external factors that cause 
small businesses (particularly sole proprietorships) to seek 
bankruptcy relief and the factors that cause small businesses 
to successfully complete their chapter 11 cases; and (ii) how 
the bankruptcy laws may be made more effective and efficient in 
assisting small business to remain viable.
Sec. 444. Payment of interest
      Section 444 of the conference report is substantively 
identical to section 444 of the House bill and the Senate 
amendment. Subsection (1) amends section 362(d)(3) of the 
Bankruptcy Code to require a court to grant relief from the 
automatic stay within 30 days after it determines that a single 
asset real estate debtor is subject to this provision. Section 
444(2) amends section 362(d)(3)(B) to specify that relief from 
the automatic stay shall be granted unless the single asset 
real estate debtor has commenced making monthly payments to 
each creditor secured by the debtor's real property (other than 
a claim secured by a judgment lien or unmatured statutory lien) 
in an amount equal to the interest at the then applicable 
nondefault contract rate of interest on the value of the 
creditor's interest in the real estate. It allows a debtor in 
its sole discretion to make the requisite interest payments out 
of rents or other proceeds generated by the real property, 
notwithstanding section 363(c)(2).
Sec. 445. Priority for administrative expenses
      Section 445 of the conference report is substantively 
identical to section 445 of the House bill and the Senate 
amendment. The provision amends section 503(b) of the 
Bankruptcy Code to add a new administrative expense priority 
for a nonresidential real property lease that is assumed under 
section 365 and then subsequently rejected. The amount of the 
priority is the sum of all monetary obligations due under the 
lease (excluding penalties and obligations arising from or 
relating to a failure to operate) for the two-year period 
following the rejection date or actual turnover of the premises 
(whichever is later), without reduction or setoff for any 
reason, except for sums actually received or to be received 
from a nondebtor. Any remaining sums due for the balance of the 
term of the lease are treated as a claim under section 
502(b)(6) of the Bankruptcy Code.
Sec. 446. Duties with respect to a debtor who is a plan administrator 
        of an employee benefit plan
      Section 446 of the conference report reflects the Senate 
position as represented in section 420 of the Senate amendment. 
There is no counterpart to this provision in the House bill. 
Subsection (a) amends Bankruptcy Code section 521(a) to require 
a debtor, unless a trustee is serving in the case, to serve as 
the administrator (as defined in the Employee Retirement Income 
Security Act) of an employee benefit plan if the debtor served 
in such capacity at the time the case was filed. Section 446(b) 
amends Bankruptcy Code section 704 to require the chapter 7 
trustee to perform the obligations of such administrator in a 
case where the debtor was required to perform such obligations. 
Section 446(c) amends Bankruptcy Code section 1106(a) to 
require a chapter 11 trustee to perform these obligations.
Sec. 447. Appointment of committee of retired employees
      This provision amends section 1114(d) of the Bankruptcy 
Code to clarify that it is the responsibility of the United 
States trustee to appoint members to a committee of retired 
employees. There is no antecedent to this provision in either 
the House bill or the Senate amendment.

                Title V--Municipal Bankruptcy Provisions

Sec. 501. Petition and proceedings related to petition
      Section 501 amends sections 921(d) and 301 of the 
Bankruptcy Code to clarify that the court must enter the order 
for relief in a chapter 9 case. This provision is substantively 
identical to section 501 of the House bill and the Senate 
amendment.
Sec. 502. Applicability of other sections to chapter 9
      Section 502 of the conference report is substantively 
identical to section 502 of the House bill and the Senate 
amendment. This provision amends section 901 of the Bankruptcy 
Code to make the following sections applicable to chapter 9 
cases: (1) section 555 (contractual right to liquidate, 
terminate or accelerate a securities contract);
            (2) section 556 (contractual right to liquidate, 
        terminate or accelerate a commodities or forward 
        contract);
            (3) section 559 (contractual right to liquidate, 
        terminate or accelerate a repurchase agreement);
            (4) section 560 (contractual right to liquidate, 
        terminate or accelerate a swap agreement);
            (5) section 561 (contractual right to liquidate, 
        terminate, accelerate, or offset under a master netting 
        agreement and across contracts); and
            (6) section 562 (damage measure in connection with 
        swap agreements, securities contracts, forward 
        contracts, commodity contracts, repurchase agreements, 
        or master netting agreement).

                       Title VI--Bankruptcy Data

Sec. 601. Improved bankruptcy statistics
      Section 601 of the conference report is substantively 
similar to section 601 of the House bill and the Senate 
amendment. In recognition of the delayed effective date of this 
Act, section 601 extends the date by which the report described 
herein must be submitted.
      This provision amends chapter 6 of title 28 of the United 
States Code to require the clerk for each district (or the 
bankruptcy court clerk if one has been certified pursuant to 
section 156(b) of title 28 of the United States Code) to 
collect certain statistics for chapter 7, 11, and 13 cases in a 
standardized format prescribed by the Director of the 
Administrative Office of the United States Courts and to make 
this information available to the public. Not later than June 
1, 2005, the Director must submit a report to Congress 
concerning the statistical information collected and then must 
report annually thereafter. The statistics must be itemized by 
chapter of the Bankruptcy Code and be presented in the 
aggregate for each district. The specific categories of 
information that must be gathered include the following:
            (1) scheduled total assets and liabilities of 
        debtors who are individuals with primarily consumer 
        debts under chapters 7, 11 and 13 by category;
            (2) such debtors' current monthly income, average 
        income, and average expenses;
            (3) the aggregate amount of debts discharged during 
        the reporting period based on the difference between 
        the total amount of scheduled debts and by categories 
        that are predominantly nondischargeable;
            (4) the average time between the filing of the 
        bankruptcy case and the closing of the case;
            (5) the number of cases in which reaffirmation 
        agreements were filed, the total number of 
        reaffirmation agreements filed, the number of cases in 
        which the debtor was pro se and a reaffirmation 
        agreement was filed, and the number of cases in which 
        the reaffirmation agreement was approved by the court;
            (6) for chapter 13 cases, information on the number 
        of (a) orders determining the value of secured property 
        in an amount less than the amount of the secured claim, 
        (b) final orders that determined the value of property 
        securing a claim, (c) cases dismissed, (d) cases 
        dismissed for failure to make payments under the plan, 
        (e) cases refiled after dismissal, (f) cases in which 
        the plan was completed (separately itemized with 
        respect to the number of modifications made before 
        completion of the plan, and (g) cases in which the 
        debtor had previously sought bankruptcy relief within 
        the six years preceding the filing of the present case;
            (7) the number of cases in which creditors were 
        fined for misconduct and the amount of any punitive 
        damages awarded for creditor misconduct; and
            (8) the number of cases in which sanctions under 
        rule 9011 of the Federal Rules of Bankruptcy Procedure 
        were imposed against a debtor's counsel and the damages 
        awarded under this rule.
Section 601 provides that the amendments in this provision take 
effect 18 months after the date of enactment of this Act.
Sec. 602. Uniform rules for the collection of bankruptcy data
      Section 602 of the conference report is substantively 
identical to section 602 of the House bill and the Senate 
amendment. It amends chapter 39 of title 28 of the United 
States Code to add a provision requiring the Attorney General 
to promulgate rules mandating the establishment of uniform 
forms for final reports in chapter 7, 12 and 13 cases and 
periodic reports in chapter 11 cases. This provision also 
specifies that these reports be designed to facilitate 
compilation of data and to provide maximum public access by 
physical inspection at one or more central filing locations and 
by electronic access through the Internet or other appropriate 
media. The information should enable an evaluation of the 
efficiency and practicality of the Federal bankruptcy system. 
In issuing rules, the Attorney General must consider: (1) the 
reasonable needs of the public for information about the 
Federal bankruptcy system; (2) the economy, simplicity, and 
lack of undue burden on persons obligated to file the reports; 
and (3) appropriate privacy concerns and safeguards. Section 
602 provides that final reports by trustees in chapter 7, 12, 
and 13 cases include the following information: (1) the length 
of time the case was pending; (2) assets abandoned; (3) assets 
exempted; (4) receipts and disbursements of the estate; (5) 
administrative expenses, including those associated with 
section 707(b) of the Bankruptcy Code, and the actual costs of 
administering chapter 13 cases; (6) claims asserted; (7) claims 
allowed; and (8) distributions to claimants and claims 
discharged without payment. With regard to chapter 11 cases, 
section 602 provides that periodic reports include the 
following information regarding:
            (1) the standard industry classification for 
        businesses conducted by the debtor, as published by the 
        Department of Commerce;
            (2) the length of time that the case was pending;
            (3) the number of full-time employees as of the 
        date of the order for relief and at the end of each 
        reporting period;
            (4) cash receipts, cash disbursements, and 
        profitability of the debtor for the most recent period 
        and cumulatively from the date of the order for relief;
            (5) the debtor's compliance with the Bankruptcy 
        Code, including whether tax returns have been filed and 
        taxes have been paid;
            (6) professional fees approved by the court for the 
        most recent period and cumulatively from the date of 
        the order for relief; and
            (7) plans filed and confirmed, including the 
        aggregate recoveries of holders by class and as a 
        percentage of total claims of an allowed class.
Sec. 603. Audit procedures
      Section 603 is substantively identical to section 603 of 
the House bill and the Senate amendment. Subsection (a)(1) 
requires the Attorney General (for judicial districts served by 
United States trustees) and the Judicial Conference of the 
United States (for judicial districts served by bankruptcy 
administrators) to establish procedures to determine the 
accuracy, veracity, and completeness of petitions, schedules 
and other information filed by debtors pursuant to sections 
111, 521 and 1322 of the Bankruptcy Code. Section 603(a)(1) 
requires the audits to be conducted in accordance with 
generally accepted auditing standards and performed by 
independent certified public accountants or independent 
licensed public accountants. It permits the Attorney General 
and the Judicial Conference to develop alternative auditing 
standards not later than two years after the date of enactment 
of this Act. Section 603(a)(2) requires these procedures to: 
(1) establish a method of selecting appropriate qualified 
contractors to perform these audits; (2) establish a method of 
randomly selecting cases for audit, and that a minimum of at 
least one case out of every 250 cases be selected for audit; 
(3) require audits in cases where the schedules of income and 
expenses reflect greater than average variances from the 
statistical norm for the district if they occur by reason of 
higher income or higher expenses than the statistical norm in 
which the schedules were filed; and (4) require the aggregate 
results of such audits, including the percentage of cases by 
district in which a material misstatement of income or 
expenditures is reported, to be made available to the public on 
an annual basis.
      Section 603(b) amends section 586 of title 28 of the 
United States Code to require the United States trustee to 
submit reports as directed by the Attorney General, including 
the results of audits performed under section 603(a). In 
addition, it authorizes the United States trustee to contract 
with auditors to perform the audits specified in this 
provision. Further, it requires the report of each audit to be 
filed with the court and transmitted to the United States 
trustee. The report must specify material misstatements of 
income, expenditures or assets. In a case where a material 
misstatement has been reported, the clerk must provide notice 
of such misstatement to creditors and the United States trustee 
must report it to the United States Attorney, if appropriate, 
for possible criminal prosecution. If advisable, the United 
States trustee must also take appropriate action, such as 
revoking the debtor's discharge.
      Section 603(c) amends section 521 of the Bankruptcy Code 
to make it a duty of the debtor to cooperate with an auditor. 
Section 603(d) amends section 727 of the Bankruptcy Code to 
add, as a ground for revocation of a chapter 7 discharge the 
debtor's failure to: (a) satisfactorily explain a material 
misstatement discovered as the result of an audit pursuant to 
this provision; or (b) make available for inspection all 
necessary documents or property belonging to the debtor that 
are requested in connection with such audit. Section 603(e) 
provides that the amendments made by this provision take effect 
18 months after the Act's date of enactment.
Sec. 604. Sense of Congress regarding availability of bankruptcy data
      Section 604 expresses a sense of the Congress that it is 
a national policy of the United States that all data collected 
by bankruptcy clerks in electronic form (to the extent such 
data relates to public records pursuant to section 107 of the 
Bankruptcy Code) should be made available to the public in a 
useable electronic form in bulk, subject to appropriate privacy 
concerns and safeguards as determined by the Judicial 
Conference of the United States. It also states that a uniform 
bankruptcy data system should be established that uses a single 
set of data definitions and forms to collect such data and that 
data for any particular bankruptcy case should be aggregated in 
electronic format. This provision is substantively identical to 
section 604 of the House bill and the Senate amendment.

                  Title VII--Bankruptcy Tax Provisions

Sec. 701. Treatment of certain tax liens
      Section 701 of the conference report is substantively 
identical to section 701 of the House bill and the Senate 
amendment. Subsection (a) makes several amendments to section 
724 of the Bankruptcy Code to provide greater protection for 
holders of ad valorem tax liens on real or personal property of 
the estate. Many school boards obtain liens on real property to 
ensure collection of unpaid ad valorem taxes. Under current 
law, local governments are sometimes unable to collect these 
taxes despite the presence of a lien because they may be 
subordinated to certain claims and expenses as a result of 
section 724. Section 701(a) is intended to protect the holders 
of these tax liens from, among other things, erosion of their 
claims' status by expenses incurred under chapter 11 of the 
Bankruptcy Code. Pursuant to section 701(a), subordination of 
ad valorem tax liens is still possible under section 724(b), 
but limited to the payment of: (1) claims incurred under 
chapter 7 for wages, salaries, or commissions (but not expenses 
incurred under chapter 11); (2) claims for wages, salaries, and 
commissions entitled to priority under section 507(a)(4); and 
(3) claims for contributions to employee benefit plans entitled 
to priority under section 507(a)(5). Before a tax lien on real 
or personal property may be subordinated pursuant to section 
724, the chapter 7 trustee must exhaust all other unencumbered 
estate assets and, consistent with section 506, recover 
reasonably necessary costs and expenses of preserving or 
disposing of such property. Section 701(b) amends section 
505(a)(2) of the Bankruptcy Code to prevent a bankruptcy court 
from determining the amount or legality of an ad valorem tax on 
real or personal property if the applicable period for 
contesting or redetermining the amount of the claim under 
nonbankruptcy law has expired.
Sec. 702. Treatment of fuel tax claims
      Section 702 is substantively identical to section 702 of 
the House bill and the Senate amendment. The provision amends 
section 501 of the Bankruptcy Code to simplify the process for 
filing of claims by states for certain fuel taxes. Rather than 
requiring each state to file a claim for these taxes (as is the 
case under current law), section 702 permits the designated 
``base jurisdiction'' under the International Fuel Tax 
Agreement to file a claim on behalf of all states, which would 
then be allowed as a single claim.
Sec. 703. Notice of request for a determination of taxes
      Under current law, a trustee or debtor in possession may 
request a governmental unit to determine administrative tax 
liabilities in order to receive a discharge of those 
liabilities. There are no requirements as to the content or 
form of such notice to the government. Section 703 of the 
conference report amends section 505(b) of the Bankruptcy Code 
to require the clerk of eachdistrict to maintain a list of 
addresses designated by governmental units for service of section 505 
requests. In addition, the list may also include information concerning 
filing requirements specified by such governmental units. If a 
governmental entity does not designate an address and provide that 
address to the bankruptcy court clerk, any request made under section 
505(b) of the Bankruptcy Code may be served at the address of the 
appropriate taxing authority of that governmental unit. This provision 
is substantively identical to section 703 of the House bill and the 
Senate amendment.
Sec. 704. Rate of interest on tax claims
      Under current law, there is no uniform rate of interest 
applicable to tax claims. As a result, varying standards have 
been used to determine the applicable rate. Section 704 of the 
conference report amends the Bankruptcy Code to add section 511 
for the purpose of simplifying the interest rate calculation. 
It provides that for all tax claims (federal, state, and 
local), including administrative expense taxes, the interest 
rate shall be determined in accordance with applicable 
nonbankruptcy law. With respect to taxes paid under a confirmed 
plan, the rate of interest is determined as of the calendar 
month in which the plan is confirmed. This provision is 
substantively identical to section 704 of the House bill and 
the Senate amendment.
Sec. 705. Priority of tax claims
      Under current law, a tax claim is entitled to be treated 
as a priority claim if it arises within certain specified time 
periods. In the case of income taxes, a priority arises, among 
other time periods, if the tax return was due within 3 years of 
the filing of the bankruptcy petition or if the assessment of 
the tax was made within 240 days of the filing of the petition. 
The 240-day period is tolled during the time that an offer in 
compromise is pending (plus 30 days). Though the statute is 
silent, most courts have also held that the 3-year and 240-day 
time periods are tolled during the pendency of a previous 
bankruptcy case. Section 705 amends section 507(a)(8) of the 
Bankruptcy Code to codify the rule tolling priority periods 
during the pendency of a previous bankruptcy case during that 
240-day period together with an additional 90 days. It also 
includes tolling provisions to adjust for the collection due 
process rights provided by the Internal Revenue Service 
Restructuring and Reform Act of 1998. During any period in 
which the government is prohibited from collecting a tax as a 
result of a request by the debtor for a hearing and an appeal 
of any collection action taken against the debtor, the priority 
is tolled, plus 90 days. Also, during any time in which there 
was a stay of proceedings in a prior bankruptcy case or 
collection of an income tax was precluded by a confirmed 
bankruptcy plan, the priority is tolled, plus 90 days. This 
provision is substantively identical to section 705 of the 
House bill and the Senate amendment.
Sec. 706. Priority property taxes incurred
      Under current law, many provisions of the Bankruptcy Code 
are keyed to the word ``assessed.'' While this term has an 
accepted meaning in the federal system, it is not used in many 
state and local statutes and has created some confusion. To 
eliminate this problem with respect to real property taxes, 
section 706 amends section 507(a)(8)(B) of the Bankruptcy Code 
by replacing the word ``assessed'' with ``incurred''. This 
provision is substantively identical to section 706 of the 
House bill and the Senate amendment.
Sec. 707. No discharge of fraudulent taxes in chapter 13
      Under current law, a debtor's ability to discharge tax 
debts varies depending on whether the debtor is in chapter 7 or 
chapter 13. In a chapter 7 case, taxes from a return due within 
3 years of the petition date, taxes assessed within 240 days, 
or taxes related to an unfiled return or false return are not 
dischargeable. Chapter 13, on the other hand, allows these 
obligations to be discharged. Section 707 of the conference 
report amends Bankruptcy Code section 1328(a)(2) to prohibit 
the discharge of tax claims described in section 523(a)(1)(B) 
and (C) as well as claims for a tax required to be collected or 
withheld and for which the debtor is liable in whatever 
capacity pursuant to section 507(a)(8)(C). This provision is 
substantively identical to section 707 of the House bill and 
the Senate amendment.
Sec. 708. No discharge of fraudulent taxes in chapter 11
      Section 708 of the conference report largely reflects the 
Senate position as represented in section 708 of the Senate 
amendment. Under current law, the confirmation of a chapter 11 
plan discharges a corporate debtor from most debts. Section 708 
amends section 1141(d) of the Bankruptcy Code to except from 
discharge in corporate chapter 11 case a debt specified in 
subsections 523(a)(2)(A) and (B) of the Bankruptcy Code owed to 
a domestic governmental unit. In addition, it excepts from 
discharge a debt owed to a person as the result of an action 
filed under subchapter III of chapter 37 of title 31 of the 
United States Code or any similar state statute. In contrast, 
the House renders any debt under section 523(a)(2) 
nondischargeable in a corporate chapter 11 case. Like the House 
provision and its Senate counterpart, however, section 708 
excepts from discharge a debt for a tax or customs duty with 
respect to which the debtor made a fraudulent tax return or 
willfully attempted in any manner to evade or defeat such tax.
Sec. 709. Stay of tax proceedings limited to prepetition taxes
      Under current law, the filing of a petition for relief 
under the Bankruptcy Code activates an automatic stay that 
enjoins the commencement or continuation of a case in the 
federal tax court. This rule was arguably extended in Halpern 
v. Commissioner,\3\ which held that the tax court did not have 
jurisdiction to hear a case involving a postpetition year. To 
address this issue, section 709 of the conference report amends 
section 362(a)(8) of the Bankruptcy Code to specify that the 
automatic stay is limited to an individual debtor's prepetition 
taxes (taxes incurred before entering bankruptcy). The 
amendment clarifies that the automatic stay does not apply to 
an individual debtor's postpetition taxes. In addition, section 
709 allows the bankruptcy court to determine whether the 
automatic stay applies to the postpetition tax liabilities of a 
corporate debtor. This provision is substantively identical to 
section 709 of the House bill and the Senate amendment.
---------------------------------------------------------------------------
    \3\ 96 T.C. 895 (1991).
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Sec. 710. Periodic payment of taxes in chapter 11 cases
      Section 710 of the conference report amends section 
1129(a)(9) of the Bankruptcy Code to provide that the allowed 
amount of priority tax claims (as of the plan's effective date) 
must be paid in regular cash installments within five years 
from the entry of the order for relief. Themanner of payment 
may not be less favorable than that accorded the most favored 
nonpriority unsecured class of claims under section 1122(b). In 
addition, it requires the same payment treatment to be accorded to 
secured section 507(a)(8) claims of a governmental unit. This provision 
is substantively identical to section 710 of the House bill and the 
Senate amendment.
Sec. 711. Avoidance of statutory liens prohibited
      The Internal Revenue Code gives special protections to 
certain purchasers of securities and motor vehicles 
notwithstanding the existence of a filed tax lien. Section 711 
of the conference report amends section 545(2) of the 
Bankruptcy Code to prevent that provision's special protections 
from being used to avoid an otherwise valid lien. Specifically, 
it prevents the avoidance of unperfected liens against a bona 
fide purchaser, if the purchaser qualifies as such under 
section 6323 of the Internal Revenue Code or a similar 
provision under state or local law. Section 711 is 
substantively identical to section 711 of the House bill and 
the Senate amendment.
Sec. 712. Payment of taxes in the conduct of business
      Although current law generally requires trustees and 
receivers to pay taxes in the ordinary course of the debtor's 
business, the payment of administrative expenses must first be 
authorized by the court. Section 712(a) of the conference 
report amends section 960 of title 28 of the United States Code 
to clarify that postpetition taxes in the ordinary course of 
business must be paid on or before when such tax is due under 
applicable nonbankruptcy law, with certain exceptions. This 
requirement does not apply if the obligation is a property tax 
secured by a lien against property that is abandoned under 
section 554 within a reasonable time after the lien attaches. 
In addition, the requirement does not pertain where the payment 
is excused under the Bankruptcy Code. With respect to chapter 7 
cases, section 712(a) provides that the payment of a tax claim 
may be deferred until final distribution pursuant to section 
726 if the tax was not incurred by a chapter 7 trustee or if 
the court, prior to the due date of the tax, finds that the 
estate has insufficient funds to pay all administrative 
expenses in full. Section 712(b) amends section 503(b)(1)(B)(i) 
of the Bankruptcy Code to clarify that this provision applies 
to secured as well as unsecured tax claims, including property 
taxes based on liability that is in rem, in personam or both. 
Section 712(c) amends section 503(b)(1) to exempt a 
governmental unit from the requirement to file a request for 
payment of an administrative expense. Section 712(d)(1) amends 
section 506(b) to provide that to the extent that an allowed 
claim is oversecured, the holder is entitled to interest and 
any reasonable fees, costs, or charges provided for under state 
law. Section 712(d)(2), in turn, amends section 506(c) to 
permit a trustee to recover from a secured creditor the payment 
of all ad valorem property taxes. Section 712 of the conference 
report is substantively identical to section 712 of the House 
bill and the Senate amendment.
Sec. 713. Tardily filed priority tax claims
      Section 713 of the conference report is substantively 
identical to section 713 of the House bill and the Senate 
amendment. This provision amends section 726(a)(1) of the 
Bankruptcy Code to require a claim under section 507 that is 
not timely filed pursuant to section 501 to be entitled to a 
distribution if such claim is filed the earlier of the date 
that is ten days following the mailing to creditors of the 
summary of the trustee's final report or before the trustee 
commences final distribution.
Sec. 714. Income tax returns prepared by tax authorities
      Section 714 of the conference report is substantively 
identical to section 714 of the House bill and the Senate 
amendment. This provision amends section 523(a) of the 
Bankruptcy Code to provide that a return filed on behalf of a 
taxpayer who has provided information sufficient to complete a 
return constitutes filing a return (and the debt can be 
discharged), but that a return filed on behalf of a taxpayer 
based on information the Secretary obtains through testimony or 
otherwise does not constitute filing a return (and the debt 
cannot be discharged).
Sec. 715. Discharge of the estate's liability for unpaid taxes
      Under the Bankruptcy Code, a trustee or debtor in 
possession may request a prompt audit to determine postpetition 
tax liabilities. If the government does not make a 
determination or request an extension of time to audit, then 
the trustee or debtor in possession's determination of taxes 
will be final. Several court cases have held that while this 
protects the debtor and the trustee, it does not necessarily 
protect the estate. Section 715 of the conference report amends 
section 505(b) of the Bankruptcy Code to clarify that the 
estate is also protected if the government does not request an 
audit of the debtor's tax returns. Therefore, if the government 
does not make a determination of postpetition tax liabilities 
or request extension of time to audit, then the estate's 
liability for unpaid taxes is discharged. This provision is 
substantively identical to section 715 of the House bill and 
the Senate amendment.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans
      Under current law, a debtor may enjoy the benefits of 
chapter 13 even if delinquent in the filing of tax returns. 
Section 716 of the conference report responds to this problem. 
This provision is substantively identical to section 716 of the 
House bill and the Senate amendment. Subsection (a) amends 
section 1325(a) of the Bankruptcy Code to require a chapter 13 
debtor file all applicable Federal, state, and local tax 
returns as a condition of confirmation as required by section 
1308 (as added by section 716(b)). Section 716(b) adds section 
1308 to chapter 13. This provision requires a chapter 13 debtor 
to be current on the filing of tax returns for the four-year 
period preceding the filing of the case. If the returns are not 
filed by the date on which the meeting of creditors is first 
scheduled, the trustee may hold open that meeting for a 
reasonable period of time to allow the debtor to file any 
unfiled returns. The additional period of time may not extend 
beyond 120 days after the date of the meeting of the creditors 
or beyond the date on which the return is due under the last 
automatic extension of time for filing. The debtor, however, 
may obtain an extension of time from the court if the debtor 
demonstrates by a preponderance of the evidence that the 
failure to file was attributable to circumstances beyond the 
debtor's control.
      Section 716(c) amends section 1307 of the Bankruptcy Code 
to provide that if a chapter 13 debtor fails to file a tax 
return as required by section 1308, the court must dismiss the 
case or convert it to one under chapter 7 (whichever is in the 
best interests of creditors and the estate) on request of a 
party in interest or the United States trustee after notice and 
a hearing.
      Section 716(d) amends section 502(b)(9) of the Bankruptcy 
Code to provide that in a chapter 13 case, a governmental 
unit's tax claim based on a return filed under section 1308 
shall be deemed to be timely filed if the claim is filed within 
60 days from the date on which such return is filed. Section 
716(e) states the sense of the Congress that the Advisory 
Committee onBankruptcy Rules of the Judicial Conference of the 
United States should propose for adoption official rules with respect 
an objection by a governmental unit to confirmation of a chapter 13 
plan when such claim pertains to a tax return filed pursuant to section 
1308.
Sec. 717. Standards for tax disclosure
      Before creditors and stockholders may be solicited to 
vote on a chapter 11 plan, the plan proponent must file a 
disclosure statement that provides adequate information to 
holders of claims and interests so they can make a decision as 
to whether or not to vote in favor of the plan. As the tax 
consequences of a plan can have a significant impact on the 
debtor's reorganization prospects, section 717 amends section 
1125(a) of the Bankruptcy Code to require that a chapter 11 
disclosure statement discuss the plan's potential material 
Federal tax consequences to the debtor, any successor to the 
debtor, and to a hypothetical investor that is representative 
of the claimants and interest holders in the case. This 
provision is substantively identical to section 717 of the 
House bill and the Senate amendment.
Sec. 718. Setoff of tax refunds
      Under current law, the filing of a bankruptcy petition 
automatically stays the setoff of a prepetition tax refund 
against a prepetition tax obligation unless the bankruptcy 
court approves the setoff. Interest and penalties that may 
continue to accrue may also be nondischargeable pursuant to 
section 523(a)(1) of the Bankruptcy Code and cause individual 
debtors undue hardship. Section 718 of the conference report 
amends section 362(b) of the Bankruptcy Code to create an 
exception to the automatic stay whereby such setoff could occur 
without court order unless it would not be permitted under 
applicable nonbankruptcy law because of a pending action to 
determine the amount or legality of the tax liability. In that 
circumstance, the governmental authority may hold the refund 
pending resolution of the action, unless the court, on motion 
of the trustee and after notice and a hearing, grants the 
taxing authority adequate protection pursuant to section 361. 
Section 718 is substantively identical to section 718 of the 
House bill and the Senate amendment.
Sec. 719. Special provisions related to the treatment of state and 
        local taxes
      Section 719 of the conference report is substantively 
identical to section 719 of the House bill and the Senate 
amendment. This provision conforms state and local income tax 
administrative issues to the Internal Revenue Code. For 
example, under federal law, a bankruptcy petitioner filing on 
March 5 has two tax years--January 1 to March 4, and March 5 to 
December 31. Under the Bankruptcy Code, however, state and 
local tax years are divided differently--January 1 to March 5, 
and March 6 to December 31. Section 719 requires the states to 
follow the federal convention. It conforms state and local tax 
administration to the Internal Revenue Code in the following 
areas: division of tax liabilities and responsibilities between 
the estate and the debtor, tax consequences with respect to 
partnerships and transfers of property, and the taxable period 
of a debtor. Section 719 does not conform state and local tax 
rates to federal tax rates.
Sec. 720. Dismissal for failure to timely file tax returns
      Under existing law, there is no definitive rule with 
respect to whether a bankruptcy court may dismiss a bankruptcy 
case if the debtor fails to file returns for taxes incurred 
postpetition. Section 720 of the conference report amends 
section 521 of the Bankruptcy Code to allow a taxing authority 
to request that the court dismiss or convert a bankruptcy case 
if the debtor fails to file a postpetition tax return or obtain 
an extension. If the debtor does not file the required return 
or obtain the extension within 90 days from the time of the 
request by the taxing authority to file the return, the court 
must convert or dismiss the case, whichever is in the best 
interest of creditors and the estate. Section 720 is 
substantively identical to section 720 of the House bill and 
the Senate amendment.

           Title VIII--Ancillary and Other Cross-Border Cases

      Title VIII of the conference report adds a new chapter to 
the Bankruptcy Code for transnational bankruptcy cases. It 
incorporates the Model Law on Cross-Border Insolvency to 
encourage cooperation between the United States and foreign 
countries with respect to transnational insolvency cases. Title 
VIII is intended to provide greater legal certainty for trade 
and investment as well as to provide for the fair and efficient 
administration of cross-border insolvencies, which protects the 
interests of creditors and other interested parties, including 
the debtor. In addition, it serves to protect and maximize the 
value of the debtor's assets. Title VIII is substantially 
identical to title VIII of the House bill and the Senate 
amendment.
Sec. 801. Amendment to add chapter 15 to title 11, United States Code
      Section 801 introduces chapter 15 to the Bankruptcy Code, 
which is the Model Law on Cross-Border Insolvency (``Model 
Law'') promulgated by the United Nations Commission on 
International Trade Law (``UNCITRAL'') at its Thirtieth Session 
on May 12-30, 1997.\4\ Cases brought under chapter 15 are 
intended to be ancillary to cases brought in a debtor's home 
country, unless a full United States bankruptcy case is brought 
under another chapter. Even if a full case is brought, the 
court may decide under section 305 to stay or dismiss the 
United States case under the other chapter and limit the United 
States' role to an ancillary case under this chapter.\5\ If the 
full case is not dismissed, it will be subject to the 
provisions of this chapter governing cooperation, communication 
and coordination with the foreign courts and representatives. 
In any case, an order granting recognition is required as a 
prerequisite to the use of sections 301 and 303 by a foreign 
representative.
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    \4\ The text of the Model Law and the Report of UNCITRAL on its 
adoption are found at U.N. G.A., 52d Sess., Supp. No. 17 (A/52/17) 
(``Report''). That Report and the Guide to Enactment of the UNCITRAL 
Model Law on Cross-Border Insolvency, U.N. Gen. Ass., UNCITRAL 30th 
Sess. U.N. Doc. A/CN.9/442 (1997) (``Guide''), which was discussed in 
the negotiations leading to the Model Law and published by UNCITRAL as 
an aid to enacting countries, should be consulted for guidance as to 
the meaning and purpose of its provisions. The development of the 
provisions in the negotiations at UNCITRAL, in which the United States 
was an active participant, is recounted in the interim reports of the 
Working Group that are cited in the Report.
    \5\ See section 1529 and commentary.
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            Sec. 1501. Purpose and scope of application
      Section 1501 combines the Preamble to the Model Law 
(subsection (1)) with its article 1 (subsections (2) and 
(3)).\6\ It largely tracks the language of the Model Law with 
appropriate United States references. However, it adds in 
subsection (3) an exclusion of certain natural persons who may 
be considered ordinary consumers. Although the consumer 
exclusion is not in the text of the Model Law, the discussions 
at UNCITRAL recognized that such exclusion would be necessary 
in countries like the United States where there are special 
provisions for consumer debtors in the insolvency laws.\7\
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    \6\ Guide at 16-19.
    \7\ See id. at 18, para. 60; 19 para. 66.
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      The reference to section 109(e) essentially defines 
``consumer debtors'' for purposes of the exclusion by 
incorporating the debt limitations of that section, but not its 
requirement of regular income. The exclusion adds a requirement 
that the debtor or debtor couple be citizens or long-term legal 
residents of the United States. This ensures that residents of 
other countries will not be able to manipulate this exclusion 
to avoid recognition of foreign proceedings in their home 
countries or elsewhere.
      The first exclusion in subsection (c) constitutes, for 
the United States, the exclusion provided in article 1, 
subsection (2), of the Model Law.\8\ Foreign representatives of 
foreign proceedings which are excluded from the scope of 
chapter 15 may seek comity from courts other than the 
bankruptcy court since the limitations of section 1509(b)(2) 
and (3) would not apply to them.
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    \8\ Id. at 17.
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      The reference to section 109(b) interpolates into chapter 
15 the entities governed by specialized insolvency regimes 
under United States law which are currently excluded from 
liquidation proceedings under title 11. Section 1501 contains 
an exception to the section 109(b) exclusions so that foreign 
proceedings of foreign insurance companies are eligible for 
recognition and relief under chapter 15 as they had been under 
section 304. However, section 1501(d) has the effect of leaving 
to State regulation any deposit, escrow, trust fund or the like 
posted by a foreign insurer under State law.
            Sec. 1502. Definitions
      ``Debtor'' is given a special definition for this 
chapter. This definition does not come from the Model Law, but 
is necessary to eliminate the need to refer repeatedly to ``the 
same debtor as in the foreign proceeding.'' With certain 
exceptions, the term ``person'' used in the Model Law has been 
replaced with ``entity,'' which is defined broadly in section 
101(15) to include natural persons and various legal entities, 
thus matching the intended breadth of the term ``person'' in 
the Model Law. The exceptions include contexts in which a 
natural person is intended and those in which the Model Law 
language already refers to both persons and entities other than 
persons. The definition of ``trustee'' for this chapter ensures 
that debtors in possession and debtors, as well as trustees, 
are included in the term.\9\
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    \9\ See section 1505.
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      The definition of ``within the territorial jurisdiction 
of the United States'' in subsection (7) is not taken from the 
Model Law. It has been added because the United States, like 
some other countries, asserts insolvency jurisdiction over 
property outside its territorial limits under appropriate 
circumstances. Thus a limiting phrase is useful where the Model 
Law and this chapter intend to refer only to property within 
the territory of the enacting state. In addition, a definition 
of ``recognition'' supplements the Model Law definitions and 
merely simplifies drafting of various other sections of chapter 
15.
      Two key definitions of ``foreign proceeding'' and 
``foreign representative,'' are found in sections 101(23) and 
(24), which have been amended consistent with Model Law article 
2.\10\ The definitions of ``establishment,'' ``foreign court,'' 
``foreign main proceeding,'' and ``foreign non-main 
proceeding'' have been taken from Model Law article 2, with 
only minor language variations necessary to comport with United 
States terminology. Additionally, defined terms have been 
placed in alphabetical order.\11\ In order to be recognized as 
a foreign non-main proceeding, the debtor must at least have an 
establishment in that foreign country.\12\
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    \10\ Guide at 19-21, para.para. 67-68.
    \11\ See Guide at 19, (Model Law) 21 para. 75 (concerning 
establishment); 21 para. 74 (concerning foreign court); 21 para.para. 
72, 73 and 75 (concerning foreign main and non-main proceedings).
    \12\ See id. at 21, para. 75.
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            Sec. 1503. International obligations of the United States
      This section is taken exactly from the Model Law with 
only minor adaptations of terminology.\13\ Although this 
section makes an international obligation prevail over chapter 
15, the courts will attempt to read the Model Law and the 
international obligation so as not to conflict, especially if 
the international obligation addresses a subject matter less 
directly related than the Model Law to a case before the court.
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    \13\ See id. at 22, Art. 3.
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            Sec. 1504. Commencement of ancillary case
      Article 4 of the Model Law is designed for designation of 
the competent court which will exercise jurisdiction under the 
Model Law. In United States law, section 1334(a) of title 28 
gives exclusive jurisdiction to the district courts in a 
``case'' under this title.\14\ Therefore, since the competent 
court has been determined in title 28, this section instead 
provides that a petition for recognition commences a ``case,'' 
an approach that also invokes a number of other useful 
procedural provisions. In addition, a new subsection (P) to 
section 157 of title 28 makes cases under this chapter part of 
the core jurisdiction of bankruptcy courts if referred by the 
district courts, thus completing the designation of the 
competent court. Finally, the particular bankruptcy court that 
will rule on the petition is determined pursuant to a revised 
section 1410 of title 28 governing venue and transfer.\15\
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    \14\ See id. at 23, Art. 4.
    \15\ New section 1410 of title 28 provides as follows:
    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 doe