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111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-430

======================================================================



 
                    BANKRUPTCY JUDGESHIP ACT OF 2010

                                _______
                                

 March 9, 2010.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4506]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 4506) to authorize the appointment of additional 
bankruptcy judges, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     7
Committee Consideration..........................................     8
Committee Votes..................................................     8
Committee Oversight Findings.....................................     8
New Budget Authority and Tax Expenditures........................     8
Congressional Budget Office Cost Estimate........................     8
Performance Goals and Objectives.................................    11
Constitutional Authority Statement...............................    11
Advisory on Earmarks.............................................    11
Section-by-Section Analysis......................................    11
Changes in Existing Law Made by the Bill, as Reported............    12

                          Purpose and Summary

    H.R. 4506 authorizes 13 new bankruptcy judgeships on a 
permanent basis, converts 22 temporarily authorized bankruptcy 
judgeships to permanent status, and extends the temporary 
authorization for 2 bankruptcy judgeships for another 5 years. 
These additional bankruptcy judgeships reflect the 
recommendations of the Judicial Conference of the United States 
(``Judicial Conference'').\1\ H.R. 4506 also increases 
bankruptcy filing fees by $1.00 for filings under Chapter 7 and 
Chapter 13 of the Bankruptcy Code and by $42.00 for filings 
under Chapter 11 of the Code to pay for the 13 new permanent 
bankruptcy judgeships.
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    \1\The Judicial Conference is charged with making policy concerning 
the administration of the Federal courts. 28 U.S.C. Sec. 331 (2006).
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                Background and Need for the Legislation

             A. AUTHORITY AND FUNCTION OF BANKRUPTCY JUDGES

    Congress conferred jurisdiction over bankruptcy issues upon 
Federal district courts, with bankruptcy courts deriving their 
power from that jurisdictional grant and functioning as units 
of the district court.\2\ Unlike Federal district or circuit 
judges or Supreme Court justices, bankruptcy judges are not 
appointed pursuant to Article III of the Constitution, and 
therefore lack the tenure and salary protections that Article 
III judges enjoy.\3\ Also, unlike Article III judges, 
bankruptcy judges are not chosen by the President subject to 
Senate confirmation.\4\ Instead, bankruptcy judges are 
appointed to 14-year terms by the Court of Appeals for each 
circuit, and serve as judicial officers of the district 
court.\5\ Bankruptcy judges may be reappointed upon the 
expiration of their terms, and can be removed prior to the 
expiration of their terms only for incompetence, misconduct, or 
disability, and only by the judicial council of the circuit in 
which the judge's official duty station is located.\6\ A 
bankruptcy judgeship can be authorized on either a permanent or 
temporary basis.\7\
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    \2\28 U.S.C. Sec. 151 (2006).
    \3\U.S. Const., art. III, Sec. 1.
    \4\See U.S. Const., art. II, Sec. 2 (outlining President's judicial 
appointment power and Senate confirmation requirement).
    \5\28 U.S.C. Sec. 152(a)(1) (2006).
    \6\28 U.S.C. Sec. 152(a)(1), 152(e) (2006).
    \7\See 28 U.S.C. Sec. 152 hist. nn. (2006) (noting temporary 
bankruptcy judgeships authorized in 2005 and 1992). All bankruptcy 
judges are appointed for 14-year terms. The term ``temporary 
judgeships'' refer to offices of bankruptcy judges that are authorized 
on a temporary basis (usually 5 years). During that temporary 
authorization period, any vacancy in that office can be filled. After 
that time period lapses, the first vacancy in the office cannot be 
filled unless Congress extends the temporary authorization or converts 
the temporary authorization to a permanent one. Bankruptcy Judgeship 
Needs: Hearing Before the Subcomm. on Commercial and Admin. Law of the 
H. Comm. on the Judiciary, 111th Cong. 3, n.1 (2009) [hereinafter 
``Bankruptcy Judgeship Hearing''] (statement of the Honorable Barbara 
M.G. Lynn, Chair, Committee on the Administration of the Bankruptcy 
System, Judicial Conference of the United States [hereinafter ``Lynn 
Statement'']).
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    Bankruptcy judges receive compensation that is equal to 92 
percent of a district judge's salary.\8\ They are also 
authorized to hire law clerks and other assistants.\9\
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    \8\28 U.S.C. Sec. 153 (2006).
    \9\28 U.S.C. Sec. 156 (2006).
---------------------------------------------------------------------------
    The scope of issues that a bankruptcy judge must address 
can be somewhat broad. Jurisdiction over bankruptcy matters is 
conferred on Federal district courts by 28 U.S.C. Sec. 1334, 
while 28 U.S.C. Sec. 157 provides for the referral of 
bankruptcy matters from district courts to bankruptcy courts. 
With respect to the bankruptcy case (i.e., the bankruptcy 
petition and its adjudication) and proceedings ``arising 
under'' the Bankruptcy Code or ``arising in'' a bankruptcy 
case, bankruptcy judges can issue final determinations and the 
role of the district court is limited to appellate review.\10\ 
With respect to matters that are ``related to'' a bankruptcy 
case (e.g., determination of lien priority under state law), 
bankruptcy judges can issue recommendations, but only the 
district court can enter a final order or judgment.\11\
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    \10\28 U.S.C. Sec. Sec. 157(b)(1), 158 (2006).
    \11\28 U.S.C. Sec. 157(c)(1) (2006). Parties, however, may consent 
to allow the bankruptcy court to make a final disposition of these 
matters. 28 U.S.C. Sec. 157(c)(2) (2006).
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                B. NEED FOR ADDITIONAL BANKRUPTCY JUDGES

1. Growing Volume and Complexity of Cases
    In testimony before the House Committee on the Judiciary 
Subcommittee on Commercial and Administrative Law 
(``Subcommittee'') in her capacity as Chair of the Judicial 
Conference's Committee on the Administration of the Bankruptcy 
System (``Bankruptcy Committee''), United States District Judge 
Barbara M.G. Lynn stated that the need for additional 
bankruptcy judgeships is ``critical, with filings increasing to 
near-record levels and the bankruptcy courts in peril of losing 
many of their judicial resources.''\12\ Recent bankruptcy 
statistics appear to confirm the growing volume of cases. 
According to the Administrative Office of the United States 
Courts, bankruptcy filings increased from 1,042,086 in fiscal 
year 2008 to 1,402,816 in fiscal year 2009, a 34.5% 
increase.\13\ Between fiscal year 2007 and fiscal year 2008, 
bankruptcy filings increased by 30.2%.\14\
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    \12\Bankruptcy Judgeship Hearing (Lynn Statement at 2).
    \13\Administrative Office of the United States Courts, Bankruptcy 
Statistics, 2008-2009 Fiscal Year Comparison, available at http://
www.uscourts.gov/bnkrpctystats/statistics.htm#fiscal.
    \14\Id.
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    The enactment of the Bankruptcy Abuse Prevention and 
Consumer Protection Act of 2005 (``BAPCPA'')\15\ further added 
to judges' workload. As Chief Judge David S. Kennedy of the 
United States Bankruptcy Court for the Western District of 
Tennessee testified before the Subcommittee, the workload of 
bankruptcy judges has become ``more complex and more time 
consuming'' in part because of the ``approximately 35 
additional proceedings (i.e., new motions) that have been added 
by virtue of the enactment of [BAPCPA].''\16\ Judge Lynn 
concurred, testifying that ``BAPCPA increased the work required 
of bankruptcy judges in each case'' and that case ``filings 
have increased steadily since BAPCPA took effect.''\17\
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    \15\Pub. L. No. 109-8, 119 Stat. 23 (2005).
    \16\Bankruptcy Judgeship Hearing (statement of the Honorable David 
S. Kennedy, Chief Judge, United States Bankruptcy Court for the Western 
District of Tennessee, on behalf of the National Conference of 
Bankruptcy Judges [hereinafter ``Kennedy Statement''] at 4 and 
attachment A).
    \17\Id. (Lynn Statement at 3).
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    In addition to the growing volume of work, Judge Lynn also 
noted that bankruptcy courts ``now face bankruptcy cases that 
are more complex and time consuming than anything previously 
handled. Cases such as Chrysler, Circuit City, and other 
national and international corporate reorganizations consume a 
tremendous amount of a bankruptcy court's time.''\18\ Similar 
recent examples of complex, high-profile business bankruptcy 
cases include the bankruptcies of CIT Group, General Motors, 
Lehman Brothers, Linens 'n Things, Delphi, and Delta Air 
Lines.\19\
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    \18\Id. at 4.
    \19\Tomoeh Murakami Tse, Taxpayers on Hook as Some Bailed Out Firms 
Prove Frail, Washington Post, Nov. 16, 2009, available at http://
www.washingtonpost.com/wp-dyn/content/article/2009/11/15/
AR2009111502280.html; Bill Vlasic and Nick Bunkley, Obama is Upbeat for 
G.M.'s Future, N.Y. Times, June 1, 2009, available at http://
www.nytimes.com/2009/06/02/business/02auto.html; Andrew Ross Sorkin, 
Lehman Files for Bankruptcy; Merrill is Sold, N.Y. Times, Sept. 14, 
2008, available at http://www.nytimes.com/2008/09/15/business/
15lehman.html?_r=1; Mae Anderson, Linens 'n Things Files for 
Bankruptcy, Associated Press, May 2, 2008, http://www.usatoday.com/
money/industries/retail/2008-05-02-linens_N.htm; Delphi Files for 
Bankruptcy, CNNMoney.com, October 8, 2005, available at http://
money.cnn.com/2005/10/08/news/fortune500/delphi_bankrupt/index.htm; 
Chris Isidore, Delta Air Lines Files for Bankruptcy, CNNMoney.com, 
Sept. 15, 2005, available at http://money.cnn.com/2005/09/14/news/
fortune500/delta/index.htm.
---------------------------------------------------------------------------
    Bankruptcy judges' growing workload ultimately impacts all 
other participants in the bankruptcy process, including other 
court staff, debtors and creditors. As Judge Kennedy noted, a 
``full docket means that court staffs are fielding more 
inquiries from debtors and creditors[,] taking their time away 
from processing the case work that they are each 
assigned.''\20\ Judge Kennedy further noted that the increase 
in consumer bankruptcy cases in particular has led to a growing 
number of pro se debtors, who require more assistance from 
court staff in navigating the bankruptcy process.\21\ Judge 
Kennedy also maintained that even debtors and creditors with 
counsel are impacted by the increased workload on bankruptcy 
courts because final rulings on disputed matters may be 
deferred for an extended time period, delaying payment for 
creditors and financial relief for debtors.\22\
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    \20\Bankruptcy Judgeship Hearing (Kennedy Statement at 9).
    \21\Id.
    \22\Id. at 9-10.
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    While the workload of bankruptcy courts is increasing, the 
authorizations for many bankruptcy judgeships are about to 
lapse. Bankruptcy judgeships were last authorized in 2005 by 
BAPCPA, and Congress authorized those judgeships only on a 
temporary basis.\23\ These judgeships are set to expire 
soon.\24\ The last time Congress authorized permanent 
bankruptcy judgeships was in 1992.\25\
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    \23\28 U.S.C. Sec. 152, hist. n. (2006); Bankruptcy Judgeship 
Hearing (Lynn Statement at 3).
    \24\Bankruptcy Judgeship Hearing (Lynn Statement at 3).
    \25\Id.; Pub. L. No. 102-361, 106 Stat. 965 (1992).
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2. Judicial Conference Recommendations
    Pursuant to 28 U.S.C. Sec. 152(b)(2), the Judicial 
Conference is required periodically to submit to Congress 
recommendations regarding the number of bankruptcy judges 
needed and to identify in which districts they are needed.\26\ 
On February 9, 2009, the Judicial Conference transmitted 
recommendations concerning additional bankruptcy judgeships to 
the Chairman and Ranking Member of the House Judiciary 
Committee and to the Majority and Minority Leaders of the House 
of Representatives.\27\
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    \26\28 U.S.C. Sec. 152(b)(2) (2006).
    \27\Letter from James C. Huff, Secretary of the Judicial Conference 
of the United States, to the Honorable John Conyers, Jr., Chairman of 
the H. Comm. on the Judiciary (February 9, 2009) (on file with 
Subcommittee).
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    The Judicial Conference's bankruptcy judgeship 
recommendations are the result of a thorough process for 
assessing bankruptcy judgeship needs. The process begins with a 
survey of all the Federal judicial circuits and then, applying 
several factors to determine the workload in a given district, 
the Judicial Conference formulates its recommendations for 
Congress.
    The Judicial Conference conducts a survey of all the 
Federal judicial circuits to consider whether a particular 
circuit needs to add new bankruptcy judgeships, convert 
existing temporary judgeships to permanent status, or extend 
the terms of existing temporary judgeships. This survey process 
consists of five steps:

        (1) LEach bankruptcy court seeking additional 
        judgeships, or conversions or extensions of existing 
        temporary judgeships, submits its request to the 
        district court, which then forwards the request to the 
        circuit court; alternatively, the district court may 
        submit a judgeship request to the circuit court on its 
        own.

        (2) LThe circuit's judicial council considers the 
        request; approves, disapproves, or modifies it; and 
        then, if it approves the request, or approves it with 
        modification, submits the request to the Bankruptcy 
        Committee and its Subcommittee on Judgeships.

        (3) LThe Subcommittee on Judgeships reviews the 
        circuit's requests, conducts on-site evaluations, and 
        submits its findings and recommendations to the 
        Bankruptcy Committee.

        (4) LThe Bankruptcy Committee considers the 
        Subcommittee's findings, and makes recommendations to 
        the Judicial Conference.

        (5) LThe Judicial Conference submits its 
        recommendations to Congress.\28\
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    \28\Bankruptcy Judgeship Hearing (Lynn Statement, attachment 4; 
Kennedy Statement at 7-8).

    At every step of the five-step survey process, the Judicial 
Conference applies judicial workload factors in assessing 
bankruptcy judgeship requests. These factors include: (1) 
weighted case filing data; (2) the nature and mix of the 
court's caseload; (3) historical caseload data and filing 
trends; (4) district-specific geographic, demographic, and 
economic factors; (5) the bankruptcy court's case management 
efforts; (6) the availability of alternatives to additional 
judgeships, or converted or extended temporary judgeships; and 
(7) the impact of additional resources on the court's per 
judgeship caseload.\29\
---------------------------------------------------------------------------
    \29\Id. (Lynn Statement, attachment 5; Kennedy Statement at 7).
---------------------------------------------------------------------------
    Of the workload factors, the case weights used to determine 
weighted case filing data are the most significant. The Federal 
Judicial Center devised the case weight formula in 1991 based 
on workload data collected over a 1-year period in 1988-89.\30\ 
The case weights are intended to more faithfully and accurately 
measure judicial work than raw case filing numbers alone would 
indicate. In total, the Judicial Conference categorizes cases 
into one of 17 different case types based on the form of 
bankruptcy relief under which a case is filed, the size of the 
case based on estate assets, and whether the case involves a 
business or non-business bankruptcy.\31\ In testimony before 
the Subcommittee, William Jenkins, Jr., Director of Homeland 
Security and Justice Issues for the Government Accountability 
Office, stated that the 1991 case weights were ``likely to be a 
reasonably accurate means of measuring the case-related 
workload of bankruptcy judges.''\32\
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    \30\Id. (Lynn Statement, attachment 5; statement of William 
Jenkins, Jr., Director, Homeland Security and Justice Issues, 
Government Accountability Office [hereinafter ``Jenkins Statement''] at 
4).
    \31\Id. (Lynn Statement, attachment 5).
    \32\Id. (Jenkins Statement at 2).
---------------------------------------------------------------------------
    To support the creation of a new judgeship or the 
conversion of a temporary judgeship to a permanent one, a 
bankruptcy court should have weighted caseload filings of 1,500 
per judgeship to justify additional resources.\33\ This 1,500 
weighted caseload threshold for additional resources is based 
on the Judicial Conference's estimate of an average weighted 
caseload of 1,280.\34\
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    \33\Id. (Lynn Statement, attachment 5). In the case of temporary 
judgeships, if the per-judgeship weighted caseload in a district would 
exceed 1,500 should the temporary judgeship expire, the Conference 
would recommend conversion of the judgeship from temporary to permanent 
status. If, under the same scenario, the per-judgeship weighted 
caseload would exceed 1,000 but not 1,500, the Conference would 
recommend extension of the temporary judgeship. Id.
    \34\Id.
---------------------------------------------------------------------------
    The Judicial Conference also considers actions taken to 
maximize the use of existing bankruptcy judgeships when 
determining judgeship recommendations. These actions include 
the assignment of bankruptcy judges to districts other than 
their own in order to assist other bankruptcy courts with 
larger caseloads, recalling retired bankruptcy judges to assist 
overburdened districts, sharing judgeships with other 
districts, and employing technology to create better time and 
workload efficiency.\35\ Where these alternatives to additional 
judgeships have been exhausted, additional judgeships or 
converted or extended temporary judgeships may be warranted.
---------------------------------------------------------------------------
    \35\Id. (Lynn Statement, attachment 3; Kennedy Statement at 7).
---------------------------------------------------------------------------
    Based on this exhaustive process, the Judicial Conference 
proposed the addition of 13 permanent bankruptcy judgeships in 
10 judicial districts and the conversion of 22 existing 
temporary bankruptcy judgeships in 15 judicial districts to 
permanent status.\36\ Additionally, the Judicial Conference 
proposed to extend the temporary authorization for two 
judgeships for an additional 5 years.\37\ Overall, the proposal 
affected 25 judicial districts in 9 of the 12 geographically 
based Federal judicial circuits (all except the Seventh, Tenth, 
and District of Columbia Circuits.)\38\
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    \36\Id. (Lynn Statement, attachment 1).
    \37\Id.
    \38\Id.
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3. H.R. 4506
    H.R. 4506 adopts the Judicial Conference's 2009 bankruptcy 
judgeship recommendations in full. Accordingly, the bill 
creates 13 new permanent judgeships, converts 22 temporary 
judgeships to permanent judgeships, and extends 2 temporary 
judgeships for 5 more years.\39\
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    \39\H.R. 4506, 111th Cong. Sec. Sec. 2, 3, 4.
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    As noted by both Judge Lynn and Judge Kennedy, the Judicial 
Conference's recommendations may, in fact, understate 
bankruptcy judges' workload, because the recommendations rely 
in substantial part on the 1991 case weights, which do not 
account for any increase in workload as a result of BAPCPA's 
enactment in 2005.\40\ While the Judicial Conference is in the 
process of developing new case weights to account for the 
changes in judicial workload imposed by BAPCPA,\41\ the 
Committee takes heed of Judge Lynn's response to the question 
of whether Congress should wait to authorize new bankruptcy 
judgeships until the Judicial Conference adopts new case 
weights. As Judge Lynn noted, ``the judicial districts for 
which the Conference has recommended additional bankruptcy 
judgeships have a sustained and pressing need and cannot wait 
longer for relief.''\42\ Moreover, ``the judgeship needs in the 
districts for which judgeships are recommended are so 
longstanding that many of them existed long before 2005.''\43\ 
Given that the ``current judgeship recommendation is extremely 
conservative'' because it does not account for the increased 
work required by BAPCPA, the Committee concludes that delay in 
authorizing new bankruptcy judgeships is not warranted based on 
the fact that the case weights used in determining the Judicial 
Conference's current recommendations were developed in 
1991.\44\
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    \40\Bankruptcy Judgeship Hearing (Kennedy Statement at 4; responses 
to questions for the record of the Honorable Barbara M.G. Lynn).
    \41\Id. (Jenkins Statement at 9).
    \42\Id. (responses to questions for the record of the Honorable 
Barbara M.G. Lynn).
    \43\Id.
    \44\Id.
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    H.R. 4506 would increase filing fees to pay for the 13 new 
permanent judgeships it creates. Filing fees would be raised by 
$1.00 for Chapter 7 and Chapter 13 cases and by $42.00 for 
Chapter 11 cases.\45\
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    \45\H.R. 4506, 111th Cong. Sec. 5.
---------------------------------------------------------------------------
    The Committee recommends that in the future, a mechanism 
other than a bankruptcy filing fee increase be adopted to pay 
for additional bankruptcy judgeships. The Committee is 
particularly concerned about the already disproportionate 
burden that high filing fees for Chapter 7 and Chapter 13 cases 
place on consumer debtors. Any significant increase in filing 
fees for these types of bankruptcy cases threatens to deny 
honest but financially distressed debtors the opportunity to 
obtain bankruptcy relief.
    In this instance, the Committee concluded that the filing 
fee increases contained in H.R. 4506 were necessary to 
guarantee that bankruptcy courts obtained needed judicial 
resources in a timely manner in order to ensure the continued 
efficiency and effectiveness of the Nation's bankruptcy system. 
As noted, authorizations for numerous temporary judgeships are 
set to lapse in the near future at a moment when the workload 
for bankruptcy judges is increasing. Moreover, Congress has not 
authorized any permanent bankruptcy judgeships since 1992. 
Finally, the $1.00 increase on consumer bankruptcy filing fees 
is relatively minimal. In light of these considerations, the 
Committee determined that, in this case, filing fee increases 
were appropriate. The filing fee increases contained in H.R. 
4506, however, should not be taken as a model for determining 
how to pay for future bankruptcy judgeships. Rather, filing fee 
increases should be avoided if at all possible.

                                Hearings

    The Committee's Subcommittee on Commercial and 
Administrative Law held a hearing on ``Bankruptcy Judgeship 
Needs'' on June 16, 2009. At that hearing, the Subcommittee 
considered the Judicial Conference's bankruptcy judgeship 
recommendations, as reflected in H.R. 4506. Testimony was 
received from the Honorable Barbara M.G. Lynn, Judge, United 
States District Court for the Northern District of Texas, on 
behalf of the Judicial Conference of the United States; the 
Honorable David S. Kennedy, Chief Judge of the United States 
Bankruptcy Court for the Western District of Tennessee, on 
behalf of the National Conference of Bankruptcy Judges; William 
Jenkins, Jr., Director, Homeland Security and Justice Issues, 
Government Accountability Office; and Carey D. Ebert, President 
of the National Association of Consumer Bankruptcy Attorneys. 
No separate legislative hearing was held on H.R. 4506.

                        Committee Consideration

    On January 27, 2010, the Committee met in open session and 
ordered the bill H.R. 4506 favorably reported without 
amendment, by voice vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that there 
were no recorded votes during the Committee's consideration of 
H.R. 4506.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 4506, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, February 3, 2010.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4506, the 
Bankruptcy Judgeship Act of 2010.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable Lamar S. Smith.
        Ranking Member
H.R. 4506--Bankruptcy Judgeship Act of 2010.

                                SUMMARY

    H.R. 4506 would establish 35 permanent bankruptcy 
judgeships, increase fees collected by individuals and 
businesses filing for bankruptcy, and alter how those fees are 
distributed among government entities. The bill would increase 
direct spending, revenues, and costs subject to appropriation.
    CBO estimates that the mandatory pay and benefits for 
judgeships not otherwise provided for under current law would 
increase direct spending by $12 million through 2015 and $24 
million over the 2010-2020 period. We estimate that changes 
made to the collection and disposition of filing fees under the 
bill would increase revenues by about $13 million through 2015 
and by about $27 million over the 2010-2020 period. In total, 
the changes to direct spending and revenue made by H.R. 4506 
would reduce future budget deficits by about $1 million over 
the 2010-2015 period and about $3 million over the 2010-2020 
period.\1\
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    \1\Different time periods apply for enforcing pay-as-you-go rules. 
CBO estimates that the changes in direct spending and revenues from 
enacting the legislation would result in a net decrease of $1 million 
in future budget deficits over the 2010-2014 period and a net decrease 
of $2 million over the 2010-2019 period.
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    CBO estimates that discretionary expenditures for support 
staff and office space associated with the additional 
judgeships would cost $45 million over the 2010-2015 period, 
subject to appropriation of the necessary funds.
    H.R. 4506 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on State, local, or tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 4506 is shown in the 
following table. The costs of this legislation fall within 
budget function 750 (administration of justice).

                                                         By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      2010   2011   2012   2013   2014   2015   2016   2017   2018   2019   2020  2010- 2015  2010- 2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority                               *      2      3      3      3      3      3      3      3      3      3        12          24

Estimated Outlays                                        *      2      3      3      3      3      3      3      3      3      3        12          24

CHANGES IN REVENUES
Estimated Revenues                                       0      2      3      3      3      3      3      3      3      3      3        13          27

NET CHANGE IN THE BUDGET DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Impact on Deficit\1\                                     *      *      *      *      *      *      *      *      *      *      *         1           3

CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level                            0     14      9      7      7      7      7      7      7      7      7        45          81
Estimated Outlays                                        0     12     10      8      7      7      7      7      7      7      7        45          81
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * = less than $500,000. Amounts may not sum to totals because of rounding.
1. Positive numbers indicate decreases in deficits; negative numbers indicate increases in deficits.

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the legislation will be 
enacted during fiscal year 2010, that the additional judgeships 
created by the bill will be filled within one year, and that 
the amounts estimated to be necessary for additional staff and 
support will be appropriated in each fiscal year.
Changes in Direct Spending
    H.R. 4506 would authorize 13 new permanent judgeships to be 
added to the bankruptcy courts. Salaries and benefits of 
bankruptcy judges are provided annually without the need for 
appropriations. Based on the current-law salaries of bankruptcy 
judges (about $160,000) as well as information from the 
Administrative Office of the U.S. Courts (AOUSC) on the cost of 
benefits of Federal judges, CBO estimates that the mandatory 
pay and benefits for those additional judges would total about 
$2.5 million a year once all judges have been confirmed, 
increasing direct spending by $12 million through 2015 and by 
$24 million over the 2010-2020 period.
    H.R. 4506 also would make 22 judgeships on the bankruptcy 
courts that are currently temporary positions permanent. Under 
current law, those temporary judgeships will remain filled for 
five years or until a vacancy occurs, whichever is later. CBO 
cannot predict the timing of vacancies. Therefore, we cannot 
estimate how the conversion of the 22 judgeships into permanent 
positions under the legislation would affect the Federal budget 
over the next 10 years. (The same is true for temporary 
judgeships that are extended but not made permanent under the 
bill.) For this estimate, CBO assumes that there would be no 
effect on the Federal budget from this provision over the next 
10 years. However, if any of the temporary judges were to die, 
retire, resign, or be removed during the next 10 years, the 
bill would require that position be filled at an additional 
cost that would not be incurred under current law.
Changes in Revenues
    H.R. 4506 would increase the amount collected by the 
Federal Government from businesses and individuals filing 
bankruptcy cases. Filing fees for individuals under Chapters 7 
and 13 of the bankruptcy statute would increase by $1 (to $246 
and $236, respectively). Filing fees for Chapter 11 would 
increase by $42 (to $1,042).
    Under current law, amounts collected from those fees are 
distributed among the judiciary, the U.S. trustees system, 
private trustees, and the Treasury. H.R. 4506 would adjust the 
formula that divides the proceeds from filing fees so that 
additional amounts collected as a result of this bill would be 
deposited in the Treasury and recorded in the budget as 
additional revenues. Based on information from the AOUSC, CBO 
estimates that revenues from bankruptcy filings under the bill 
would increase by about $13 million over the 2010-2015 period, 
and by about $27 million over the 2010-2020 period.
Changes in Spending Subject to Appropriation
    Based on information from AOUSC, CBO estimates that 
implementing H.R. 4506 would cost $45 million over the 2010-
2015 period for administrative support and office space for 13 
new judges. Of that amount, about $10 million would be incurred 
in the first few years for startup costs, including office 
construction, furniture, and law books. The remaining amount-
$35 million-would be for annual expenditures (about $560,000 
per judge) for administrative needs, such as support staff and 
court operations.

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    H.R. 4506 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would impose no costs on State, 
local, or tribal governments.

                         ESTIMATE PREPARED BY:

Federal Costs: Daniel Hoople
Impact on State, Local, and Tribal Governments: Melissa Merrell
Impact on the Private Sector: Paige Piper/Bach

                         ESTIMATE APPROVED BY:

Theresa Gullo
Deputy Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
4506 authorizes 13 new permanent bankruptcy judgeships, 
converts 22 temporary judgeships to permanent judgeships, and 
extends authorization for 2 temporary judgeships for 5 more 
years.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8 of the Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 4506 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9 of Rule XXI.

                      Section-by-Section Analysis

    Section 1. Short Title. Section 1 sets forth the short 
title of the bill as the ``Bankruptcy Judgeship Act of 2010.''
    Section 2. Additional Permanent Offices of Bankruptcy 
Judges. Section 2 amends 28 U.S.C. Sec. 152(a)(2) to reflect 
the creation of 13 new permanent bankruptcy judgeships and the 
conversion of 22 temporary bankruptcy judgeships to permanent 
bankruptcy judgeships, resulting in the following additional 
permanent bankruptcy judgeships: 1 additional judge in the 
Eastern and Western Districts of Arkansas; 2 additional judges 
in the Eastern District of California; 5 additional judges in 
the District of Delaware; 1 additional judge in the Middle 
District of Florida; 1 additional judge in the Northern 
District of Florida; 2 additional judges in the Southern 
District of Florida; 2 additional judges in the Northern 
District of Georgia; 1 additional judge in the Southern 
District of Georgia; 3 additional judges in the District of 
Maryland; 3 additional judges in the Eastern District of 
Michigan; 1 additional judge in the Northern District of 
Mississippi; 2 additional judges in the District of Nevada; 1 
additional judge in the District of New Hampshire; 1 additional 
judge in the District of New Jersey; 1 additional judge in the 
Northern District of New York; 1 additional judge in the 
Southern District of New York; 1 additional judge in the 
Eastern District of North Carolina; 1 additional judge in the 
Western District of North Carolina; 1 additional judge in the 
Middle District of Pennsylvania; 1 additional judge in the 
Eastern District of Tennessee; 1 additional judge in the 
Western District of Tennessee; 1 additional judge in the 
Eastern District of Virginia; and 1 additional judge in the 
Southern District of West Virginia.
    Section 3. Conversion of Certain Temporary Offices of 
Bankruptcy Judges to Permanent Offices. Subsection (a) converts 
a total of 19 temporary bankruptcy judgeships authorized by the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 
(``BAPCPA'') to permanent judgeships. Subsection (b) converts 
three temporary bankruptcy judgeships authorized by the 
Bankruptcy Judgeship Act of 1992 to permanent judgeships. These 
conversions are reflected in the additional judgeships outlined 
in section 2 of the bill.
    Section 4. Extension of Certain Temporary Offices of 
Bankruptcy Judges Established by Public Law 109-8. Subsection 
(a) extends BAPCPA's temporary authorization for two bankruptcy 
judgeships (one in the Eastern District of Pennsylvania, one in 
the Middle District of North Carolina) by another 5 years. 
Subsection (b) clarifies that, except as noted in subsection 
(a), BAPCPA's provisions relating to temporary judgeships 
remain in force.
    Section 5. Paygo Offset. Subsection (a)(1) increases the 
filing fees for Chapter 7 and Chapter 13 filings by $1.00 each 
($245.00 to $246.00 for Chapter 7 filings and $235.00 to 
$236.00 for Chapter 13 filings.) Subsection (a)(2) increases 
the filing fee for Chapter 11 filings by $42.00 (from $1,000.00 
to $1,042.00.) Subsection (b) reduces the percentage allocation 
of filing fees for Chapter 7, Chapter 11, and Chapter 13 cases 
to the United States Trustee System Fund in proportion to the 
increased filing fees so that the actual dollar amounts of the 
allocations remain the same. Similarly, subsection (c) reduces 
the percentage allocation of filing fees to the Federal 
judiciary in proportion to the amount of the filing fee 
increases.
    Section 6. Effective Dates. Subsection (a) sets the 
enactment date as the Act's effective date except with respect 
to section 5, which increases filing fees. Subsection (b) 
specifies that the increase in filing fees pursuant to section 
5 will take effect 180 days after the enactment date.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *


PART I--ORGANIZATION OF COURTS

           *       *       *       *       *       *       *


CHAPTER 6--BANKRUPTCY JUDGES

           *       *       *       *       *       *       *


Sec. 152. Appointment of bankruptcy judges

  (a)(1) * * *
  (2) The bankruptcy judges appointed pursuant to this section 
shall be appointed for the several judicial districts as 
follows:


                           Districts                             Judges

Alabama:
  Northern....................................................         5
  Middle......................................................         2
  Southern....................................................         2
Alaska........................................................         2
Arizona.......................................................         7
Arkansas:
  Eastern and Western.........................................     [3] 4
California:
  Northern....................................................         9
  Eastern.....................................................     [6] 8
  Central.....................................................        21
  Southern....................................................         4
               *      *      *      *      *      *      *
Delaware......................................................     [1] 6
District of Columbia..........................................         1
Florida:
  Northern....................................................     [1] 2
  Middle......................................................     [8] 9
  Southern....................................................     [5] 7
Georgia:
  Northern....................................................    [8] 10
  Middle......................................................         3
  Southern....................................................     [2] 3
               *      *      *      *      *      *      *
Maryland......................................................     [4] 7
               *      *      *      *      *      *      *
Michigan:
  Eastern.....................................................     [4] 7
  Western.....................................................         3
               *      *      *      *      *      *      *
Mississippi:
  Northern....................................................     [1] 2
  Southern....................................................         2
               *      *      *      *      *      *      *
Nevada........................................................     [3] 5
New Hampshire.................................................     [1] 2
New Jersey....................................................     [8] 9
               *      *      *      *      *      *      *
New York:
  Northern....................................................     [2] 3
  Southern....................................................    [9] 10
  Eastern.....................................................         6
  Western.....................................................         3
North Carolina:
  Eastern.....................................................     [2] 3
  Middle......................................................         2
  Western.....................................................     [2] 3
               *      *      *      *      *      *      *
Pennsylvania:
  Eastern.....................................................         5
  Middle......................................................     [2] 3
  Western.....................................................         4
               *      *      *      *      *      *      *
Tennessee:
  Eastern.....................................................     [3] 4
  Middle......................................................         3
  Western.....................................................     [4] 5
               *      *      *      *      *      *      *
Virginia:
  Eastern.....................................................     [5] 6
  Western.....................................................         3
Washington:
  Eastern.....................................................         2
  Western.....................................................         5
West Virginia:
  Northern....................................................         1
  Southern....................................................     [1] 2
               *      *      *      *      *      *      *


PART II--DEPARTMENT OF JUSTICE

           *       *       *       *       *       *       *


CHAPTER 39--UNITED STATES TRUSTEES

           *       *       *       *       *       *       *


Sec. 589a. United States Trustee System Fund

  (a) * * *
  (b) For the purpose of recovering the cost of services of the 
United States Trustee System, there shall be deposited as 
offsetting collections to the appropriation ``United States 
Trustee System Fund'', to remain available until expended, the 
following--
          (1)(A) [40.46] 40.28 percent of the fees collected 
        under section 1930(a)(1)(A); and
          (B) [28.33] 28.15 percent of the fees collected under 
        section 1930(a)(1)(B);
          (2) [55] 52.78 percent of the fees collected under 
        section 1930(a)(3) of this title;

           *       *       *       *       *       *       *


PART V--PROCEDURE

           *       *       *       *       *       *       *


CHAPTER 123--FEES AND COSTS

           *       *       *       *       *       *       *


Sec. 1930. Bankruptcy fees

  (a) The parties commencing a case under title 11 shall pay to 
the clerk of the district court or the clerk of the bankruptcy 
court, if one has been certified pursuant to section 156(b) of 
this title, the following filing fees:
          (1) For a case commenced under--
                  (A) chapter 7 of title 11, [$245] $246; and
                  (B) chapter 13 of title 11, [$235] $236.

           *       *       *       *       *       *       *

          (3) For a case commenced under chapter 11 of title 11 
        that does not concern a railroad, as defined in section 
        101 of title 11, [$1,000] $1,042.

           *       *       *       *       *       *       *

                              ----------                              


                   JUDICIARY APPROPRIATIONS ACT, 1990

                    (Title IV of Public Law 101-162)



           *       *       *       *       *       *       *
TITLE IV--THE JUDICIARY

           *       *       *       *       *       *       *


General Provisions--The Judiciary

           *       *       *       *       *       *       *


  Sec. 406. (a) * * *
  (b) All fees as shall be hereafter collected for any service 
not of a kind described in any of the items enumerated as items 
1 through 7 and as items 9 through 18, as in effect on November 
21, 1989, of the bankruptcy miscellaneous fee schedule 
prescribed by the Judicial Conference of the United States 
under section 1930(b) of title 28, United States Code, [28.87] 
28.74 percent of the fees collected under section 1930(a)(1)(A) 
of that title, [35.00] 34.77 percent of the fees collected 
under section 1930(a)(1)(B) of that title, and [25] 23.99 
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 and shall remain 
available to the Judiciary until expended to reimburse any 
appropriation for the amount paid out of such appropriation for 
expenses of the Courts of Appeals, District Courts, and other 
Judicial Services and the Administrative Office of the United 
States Courts. The Judicial Conference shall report to the 
Committees on Appropriations of the House of Representatives 
and the Senate on a quarterly basis beginning on the first day 
of each fiscal year regarding the sums deposited in said fund.

           *       *       *       *       *       *       *