Permits the bankruptcy court to convert a Chapter 7 case to either Chapter 11 or 13 with a debtor's consent. (Current law requires the debtor's request for such a conversion.)
(Sec. 102) Permits the court upon its own motion, or upon the motion of the bankruptcy trustee, bankruptcy administrator, or any party in interest, to move for a dismissal. (Current law prohibits a party in interest from entering such motions.)
Lowers the "substantial abuse" standard for dismissal or conversion to one of simple abuse.
Replaces the presumption in favor of granting the relief sought by the debtor with a presumption that abuse exists if the debtor's current monthly income exceeds an amount determined according to specified formulae.
Includes within the calculation of debtor's monthly expenses: (1) reasonably necessary expenses incurred to maintain the safety of the debtor and the debtor's family from family violence as identified under the Family Violence Prevention and Services Act; (2) continuation of actual expenses paid by the debtor for the care and support of an elderly, chronically ill, or disabled household or non-dependent immediate family member; and (3) an additional allowance for housing and utilities based upon documented home energy expenses.
Provides that the presumption of abuse may only be rebutted with detailed documentation of special circumstances requiring additional expenses or adjustment of current monthly total income for which there is no reasonable alternative.
Requires the debtor's counsel to reimburse the bankruptcy trustee for legal fees in prosecuting a dismissal or conversion motion if the court finds that counsel's filing under Chapter 7 was in violation of certain bankruptcy rules.
Requires the court, upon motion by the victim of a crime of violence or a drug trafficking crime (or at the request of a party in interest), to dismiss a voluntary case filed by an individual debtor convicted of that crime (unless the debtor establishes that filing of the case is necessary to satisfy a claim for a domestic support obligation).
Redefines "disposable income" of a chapter 13 debtor to exclude a domestic support obligation that first becomes payable after the date the petition is filed.
Cites circumstances under which a chapter 13 wage earner's plan may be modified after confirmation to include a special allowance for health insurance coverage.
(Sec. 103) Expresses the sense of Congress that the Secretary of the Treasury has the authority to alter Internal Revenue Service (IRS) standards established to set guidelines for repayment plans as needed to accommodate their use under the Bankruptcy Code.
Instructs the Director of the Executive Office for U.S. Trustees to report to certain congressional committees regarding the use of IRS standards for determining specified monthly debtor expenses and the impact of such standards upon debtors and the bankruptcy courts.
(Sec. 104) Revises procedural guidelines to mandate a written notice to the individual consumer debtor before commencement of a case stating: (1) the types of services available from credit counseling agencies; (2) the criminal penalties for fraudulent concealment of assets; and (3) that all creditor-supplied information is subject to examination by the Attorney General.
(Sec. 105) Instructs the Director of the Executive Office for U.S. Trustees to: (1) develop a financial management training curriculum and materials to educate individual debtors on how to better manage their finances; and (2) test, evaluate, and report to Congress on the curriculum's efficacy.
(Sec. 106) Precludes an individual debtor from filing under Federal bankruptcy law unless the individual has received a briefing from an approved nonprofit budget and credit counseling service prior to filing a bankruptcy petition, unless the U.S. trustee or bankruptcy administrator determines that the service for the district in which the debtor lives is not reasonably able to provide adequate services to the additional individuals who would otherwise seek credit counseling because of such requirement.
Conditions a Chapter 7 or Chapter 13 discharge in bankruptcy upon the debtor's completion of an approved instructional course concerning personal financial management.
Requires the clerk of each district to maintain a public list of credit counseling agencies and instructional courses concerning personal financial management. Prescribes criteria for approval of such agencies and courses.
Prohibits such a counseling service from informing a credit reporting agency whether an individual debtor has received or sought personal financial management instruction. Establishes civil penalties for noncompliance.
(Sec. 107) Requires the Director of the Executive Office for United States Trustees to 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) Cites circumstances under which the court may reduce a claim based upon unsecured consumer debts by up to 20 percent if the debtor can show by clear and convincing evidence that the claim was filed by a creditor who unreasonably refused to negotiate a reasonable alternative repayment schedule proposed by an approved credit counseling agency acting on the debtor's behalf.
(Sec. 202) States that a creditor's willful failure to credit payments received from a debtor is a violation of a discharge operating as an injunction against a collection action if such failure caused material injury to the debtor (with certain exceptions).
(Sec. 203) Modifies debt reaffirmation guidelines governing wholly unsecured consumer debts to mandate specified detailed disclosures and explanations to the debtor for dischargeable debt agreements. Exempts a Credit Union creditor from such detailed disclosures and explanations.
Amends Federal criminal law to instruct the Attorney General to designate U.S. attorneys and agents of the Federal Bureau of Investigation (FBI) to implement enforcement activities relating to: (1) abusive reaffirmations of debt; and (2) materially fraudulent statements in bankruptcy schedules that are intentionally false or misleading. Directs the bankruptcy court to establish procedures referring those cases to the U.S. attorneys and FBI agents.
(Sec. 204) Preserves consumer claims and defenses against predatory loans that have been sold by the bankruptcy trustee and that are subject to either the Truth in Lending Act or any consumer credit contract.
(Sec. 205) Instructs the General Accounting Office to study and report to Congress on the overall treatment of consumers within the context of the debt reaffirmation process, including recommendations for legislation to address abusive or coercive tactics.
Subtitle B: Priority Child Support - (Sec. 212) Revises priority payment guidelines to place within the first priority claim category certain unsecured claims for domestic support obligations, if the funds received by a governmental unit are applied in a prescribed order. Grants priority over such claims, however, to specified administrative expenses of certain trustees.
(Sec. 213) Conditions court confirmation of a debt repayment plan under Chapters 11, 12 (Debts of a Family Farmer), and 13 upon certification that the debtor has payed in full all adjudicated domestic support obligations that become due after the petition filing date.
(Sec. 214) Excepts from an automatic stay specified choses-in-action pertaining to domestic support obligations proceedings including: (1) child custody or visitation; (2) dissolution of marriage; (3) domestic violence; (4) withholding of income that is property of the bankrupt estate for payment of domestic support obligations; (5) suspension of drivers' licenses and professional licenses; (6) reporting of overdue support owed by a parent to certain consumer reporting agencies; (7) interception of specified tax refunds; and (8) enforcement of medical obligations under title IV, part D (Child Support and Establishment of Paternity) of the Social Security Act.
(Sec. 215) Revamps guidelines governing the nondischargeability of certain debts for alimony, maintenance, and support to repeal the exceptions granted the debtor under specified conditions.
(Sec. 216) Modifies guidelines governing property exempt from the bankruptcy estate to declare such property liable for a debt arising from domestic support obligations.
(Sec. 217) Prohibits the bankruptcy trustee from avoiding a transfer that is a bona fide payment of a debt for a domestic support obligation.
(Sec. 218) Excludes income payments for postpetition domestic support obligations from "disposable income" for purposes of a Chapter 12 confirmation plan.
(Sec. 219) Sets forth the duties of the bankruptcy trustee to notify the claim holder and the appropriate State child support agency of the debtor's last known address.
(Sec. 220) Declares dischargeable debts for certain qualified educational loans which, if not discharged, would impose an undue hardship upon either the debtor or the debtor's dependent.
Subtitle C: Other Consumer Protections - (Sec. 221) Modifies guidelines governing nonattorney bankruptcy petition preparers to mandate that as a prerequisite to any collection of fees for services: (1) such preparers officially disclose to debtors that they cannot practice law or give legal advice; and (2) such disclosure be signed by the debtor and filed with the requisite court documents. Prescribes enforcement and penalty guidelines for preparer noncompliance.
(Sec. 222) Expresses the sense of Congress that States should develop curricula relating to personal finance designed for use in elementary and secondary schools.
(Sec. 223) Places in tenth order of priority death or personal injury claims against the bankrupt estate that arise from debtor's unlawful operation of a motor vehicle or vessel while under the influence of drugs or alcohol.
(Sec. 224) Permits an individual debtor to exempt from the property of the bankrupt estate certain tax-exempt retirement funds that have not been obligated in connection with any extension of credit.
Excepts from an automatic stay certain income withheld from debtor's wages.
Excepts from a discharge in bankruptcy amounts owed by the debtor to certain plans established under the Internal Revenue Code.
Sets a cap on debtor's retirement funds that debtor may exempt from the estate in bankruptcy.
(Sec. 225) Sets forth criteria for excluding certain education individual retirement accounts from the property of the bankruptcy estate if the designated beneficiary is the debtor's child or grandchild.
(Sec. 227) Sets forth restrictions on debt relief agency practices. Establishes civil penalties for intentional violations. Requires a debt relief agency providing bankruptcy assistance to provide prescribed disclosures to the assisted person.
(Sec. 230) Instructs the Comptroller General to study and report to Congress on the feasibility, effectiveness, and cost of requiring bankruptcy trustees to promptly provide the Office of Child Support Enforcement with debtor's name, social security account, and address upon commencement of the case.
(Sec. 231) Prohibits a bankruptcy trustee from selling or leasing to unaffiliated third parties, personally identifiable information possessed by the debtor concerning an individual if that is contrary to the debtor's privacy policy, unless specified conditions have been met, or the court approves such sale or lease after a consumer privacy ombudsman has been appointed.
(Sec. 232) Prescribes procedural guidelines for appointment of a consumer privacy ombudsman.
(Sec. 233) States that a debtor may be required to provide information regarding a minor child in a bankruptcy case, but may not be required to disclose the child's name in the public records of the case. Prohibits bankruptcy officials from disclosing the name maintained in a nonpublic record.
Title III: Discouraging Bankruptcy Abuse - (Sec. 301) Modifies exceptions to a discharge in bankruptcy to prohibit discharge of a filing fee imposed by any court upon a prisoner.
(Sec. 302) Terminates the automatic stay 30 days after filing of a petition if a chapter 7, 11, or 13 petition was pending and dismissed within the preceding year, unless the subsequent filing is in good faith. Delineates conditions under which a history of previous petitions in bankruptcy gives rise to a rebuttable presumption that the case is not filed in good faith.
(Sec. 303) Directs the court to grant two-year relief from the automatic stay upon request of a party in interest in connection with certain real property actions if the court finds that filing the bankruptcy petition was part of a scheme to delay, hinder, and defraud creditors.
(Sec. 304) Modifies debtor's duties to mandate specified affirmative actions incumbent upon a chapter 7 debtor, including reaffirmation of the debt, or redemption of the property within 45 days, in order to retain possession of personal property. Allows a creditor to take action with respect to such property under nonbankruptcy law if the debtor fails to act within 45 days, unless the court determines upon trustee motion that such property is of consequential value or benefit to the estate.
(Sec. 305) Terminates the automatic stay governing property of the debtor's estate that secures a claim, or is subject to an unexpired lease, if the debtor fails to complete within a revised, accelerated time frame an intended surrender of consumer debt collateral, or an intended property redemption, or debt reaffirmation to retain such collateral (unless the court determines upon trustee motion that such property is of consequential value or benefit to the estate).
(Sec. 306) Requires the bankruptcy court to confirm a Chapter 13 plan if it provides that the holder of a secured allowed claim shall retain the attendant lien until payment or discharge of all debts.
Provides that if a Chapter 13 proceeding is dismissed or converted without completion of the plan, the holder shall retain such lien to the extent recognized by applicable nonbankruptcy law.
States that statutory guidelines to determine the secured status of a creditor's claim do not apply if: (1) the creditor has a purchase money security interest securing the debt; (2) the underlying debt was incurred within the 910 day period preceding the filing of the petition; and (3) the collateral for that debt consists of a motor vehicle acquired for the debtor's personal use (or if the collateral consists of any other thing of value if the debt was incurred during the one-year period preceding such filing).
(Sec. 307) Increases from 180 days to 730 days the duration of debtor's domicile for purposes of determining which State law governs the debtor's selection of property exempt from the bankrupt estate. Provides for determination of an immediately earlier domicile if the debtor's domicile has not been located in a single State for the 730-day period. Allows a debtor to exempt certain property if the effect of the domiciliary requirement is to render the debtor otherwise ineligible for any exemption.
(Sec. 308) Requires reduction of the value of the homestead exemption to the extent that it is attributable to any portion of property disposed of in the ten-year period before the petition filing date with the intent to hinder, delay, or defraud a creditor.
(Sec. 309) Revises requirements governing the effects of conversion from chapter 13 to another chapter. Declares that: (1) valuations of property and of allowed secured claims in a chapter 13 case shall not apply in a case converted to chapter 7; and (2) with respect to cases converted from Chapter 13, 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 claim amount, as determined under applicable nonbankruptcy law, has been paid in full as of the conversion date. States that a prebankruptcy default shall have the effect given under applicable nonbankruptcy law unless it has been fully cured pursuant to the plan at the time of conversion.
Provides for a Chapter 7 debtor's assumption of unexpired leases of personal property. Declares that in a Chapter 11 case in which the debtor is an individual, and in a Chapter 13 case, if the lease is not assumed in the plan, it is rejected (thus no longer subject to an automatic stay).
Delineates a cash payment plan for chapter 13 debtors for payments to any lessor of personal property and to any creditor holding a claim secured by personal property in order to ensure adequate protection to the claim holder during the payment period. Requires a debtor-in-possession to provide reasonable evidence of any requisite insurance coverage with respect to the use or ownership of such property.
(Sec. 310) Revamps nondischargeability guidelines to narrow the window of dischargeability from $1,075 to $500, for aggregate consumer debts owed to a single creditor on luxury goods incurred within 90 days (currently 60 days) prior to the order for bankruptcy relief. Reduces, likewise, from $1,075 to $750, nondischargeable cash advances that are extensions of consumer credit under an open end credit plan if acquired within 70 days (currently 60 days).
(Sec. 311) Denies an automatic stay of specified residential real property eviction proceedings by a lessor against a debtor if: (1) the lessor obtained judgment for possession prior to the bankruptcy filing date; or (2) lessor furnishes certification of specified debtor offenses.
(Sec. 312) Extends the time between Chapter 7 discharges from six to eight years. Denies a chapter 13 discharge to any debtor who has received a discharge: (1) in a chapter 7, 11, or 12 case within the preceding four years; or (2) in another chapter 13 case within the preceding two years.
(Sec. 313) Defines a debtor's household goods to include specified items. Excludes from such goods: (1) electronic entertainment equipment, antiques or jewelry with more than $500 in aggregate fair market value; (2) works of art; (3) more than one personal computer and related equipment; and (4) motor vehicles, boats, motorized recreational devices, conveyances, vehicles, watercraft, or aircraft. Requires the Director of the Executive Office for U.S. Trustees to report to specified congressional committees about use of this definition of household goods with respect to: (1) the avoidance of nonpossessory, nonpurchase money security interests in household goods; and (2) the impact that such definition has had on debtors and on the bankruptcy courts.
(Sec. 314) Includes as nondischargeable chapter 13 debts those incurred: (1) to pay a tax to a non-Federal governmental unit; (2) for restitution or a criminal fine included in a sentence on the debtor's conviction of a crime; (3) for fraud or defalcation while acting in a fiduciary capacity; 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 or death to an individual.
(Sec. 315) Prescribes notice procedures for Chapter 7 and Chapter 13 creditors.
Expands debtor's duties to require filing with the bankruptcy court of: (1) Federal tax returns; (2) evidence of employer payments received; (3) monthly net income projections; and (4) anticipated income or expenditure increases. Permits a Chapter 7 or chapter 13 creditor to request the debtor's petition, tax schedules, and statement of affairs, including the debt adjustment plan filed by the debtor.
Requires dismissal of a Chapter 7 or 13 case upon debtor's failure to provide to the bankruptcy trustee within seven days before the initial date for the first meeting of creditors a tax return for the latest taxable period prior to filing.
Mandates that, at the time of filing with the taxing authority, a Chapter 7 or 13 debtor file with the bankruptcy court specified tax documentation pertaining to the period from case commencement until case termination.
Requires a Chapter 13 debtor to file with the court a statement of income and expenditures in the preceding tax year, and monthly net income, showing how calculated.
Makes debtor's mandatory documentation available for inspection and copying to certain bankruptcy officers and any party in interest. Requires debtors to furnish driver's license, passport, or other photograph-containing documentation establishing debtor identification.
(Sec. 316) Mandates automatic dismissal if a voluntary Chapter 7 or 13 debtor fails to furnish all mandatory information, or fails to timely file the requisite schedules within 45 days of filing a petition. Requires the court to order dismissal within five days of a request by a party in interest for debtor's failure to timely submit requisite documentation. Permits the court, upon trustee motion, to decline to dismiss a case if the debtor made a good faith effort to file all required information and the best interests of creditors would be served by administration of the case.
(Sec. 317) Requires a Chapter 13 confirmation hearing to be held not later than 45 days after the first meeting of creditors.
(Sec. 318) Sets forth a statutory formula to determine whether a Chapter 13 debt readjustment payment plan shall be of either three-year or five-year duration.
(Sec. 319) Expresses the sense of the Congress that rule 9011 of the Federal Rules of Bankruptcy Procedure should include a requirement that all debtors' documents be submitted to the court only after debtors have made reasonable inquiry to verify that all information therein is well grounded in fact, and warranted by existing law or a good faith argument for extension, modification, or reversal of existing law.
(Sec. 320) Revises automatic stay guidelines to provide that in the case of an individual filing under Chapters 7, 11, or 13, the automatic stay shall terminate 60 days after a request for its release by a party in interest, unless the court orders, or the parties agree to a longer time.
(Sec. 321) Revamps guidelines governing a Chapter 11 business reorganization case filed by an individual to: (1) identify the property of the estate in bankruptcy; and (2) revise the contents, confirmation, and modification of a reorganization plan.
(Sec. 322) States that a debtor may not exempt a homestead interest acquired during the 1215-day period preceding petition filing which exceeds in the aggregate $125,000 in value in specified real or personal property. Exempts from such limitation the principal residence of a family farmer.
(Sec. 323) Excludes employee benefit plan participant contributions from the property of the bankruptcy estate.
(Sec. 324) Amends the Federal judicial code to grant the district court presiding over a title 11 case exclusive jurisdiction over: (1) property of the debtor and the estate in bankruptcy; and (2) actions pertaining to employment of professionals by the bankruptcy trustee, or related disclosure rules.
(Sec. 325) Revises U.S. Trustee program filing fees (currently $155 for either chapter 7 or chapter 13) to $160 for chapter 7 and $150 for chapter 13. Revises requirements for deposit of portions of such fees as offsetting collections in the United States Trustee System Fund by increasing the current 27.42 percent of such fees to 40.63 percent of the chapter 7 fee and 70 percent of the chapter 13 fee.
(Sec. 326) Exempts from the prohibition against sharing of compensation or reimbursement with respect to administrative expenses of a debtor's estate any 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) States that if the debtor is an individual chapter 7 or 13 debtor the value of personal property securing an allowed claim shall be determined based on its replacement value as of the date of petition filing without deduction for costs of sale or marketing.
(Sec. 328) Revises requirements for the assumption by a trustee of a defaulted executory contract or unexpired lease. Exempts from the requirement that the trustee cure such a default any default that is a breach of a provision relating to the satisfaction of any non-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. Provides, however, 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 specified law.
Makes the same exception to requirements a plan must meet to avoid impairing a class of claims or interests. Requires a plan, to avoid impairment, to compensate a claim holder for any actual pecuniary loss incurred by such holder resulting from a failure to perform a nonmonetary obligation, other than a default arising from failure to operate a non-residential real property lease subject to certain requirements.
(Sec. 329) Expands permissible administrative expenses to include certain wages and benefits awarded as back pay (resulting from a debtor employer's violation of law), if the court determines that the award will not substantially increase the probability of layoff or termination of current employees or nonpayment of domestic support obligations during the case.
(Sec. 330) Instructs the court to withhold a debtor's discharge upon its reasonable belief that a proceeding is pending in which debtor may be found guilty of a felony, or become liable for specified debts.
Title IV: General and Small Business Bankruptcy Provisions - Subtitle A: General Business Bankruptcy Provisions - (Sec. 401) Denies a debtor an automatic stay of: (1) the commencement of an investigation or action by a securities self-regulatory organization to enforce compliance with its regulations; (2) the enforcement of any order or decision obtained by such an organization, other than for monetary sanctions; or (3) 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) Authorizes the bankruptcy court, upon request of a party in interest, to order that the U.S. trustee not convene a meeting of creditors or equity security holders if the debtor has filed a plan for which acceptances have been solicited before commencement of the case.
(Sec. 403) Increases from ten days to 30 days the length of time for the perfection of a transfer of property with respect to a trustee's authority to avoid such a transfer.
(Sec. 404) Amends guidelines for rejection and surrender of executory contracts and unexpired leases.
(Sec. 405) Authorizes a Chapter 11 trustee to increase the membership of a committee of creditors and equity security holders to include a creditor that is a small business concern following the court's determination that such creditor holds claims of the kind represented by the committee, the aggregate amount of which is disproportionately large in comparison to the creditor's annual gross revenue. Requires such committee to provide access to information to certain creditors who are not committee members.
(Sec. 406) Prohibits the bankruptcy trustee from avoiding a warehouseman's lien for costs incidental to the storage and handling of certain goods.
(Sec. 407) Directs the bankruptcy court to treat the compensation awarded a trustee as a commission.
(Sec. 408) States that acceptance or rejection of a chapter 11 plan may be solicited from a holder of a claim or interest if: (1) the solicitation complies with applicable nonbankruptcy law; and (2) it was made before commencement of the case in a manner complying with applicable nonbankruptcy law.
(Sec. 409) Prohibits the bankruptcy trustee from avoiding a transfer 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. 411) Limits the extensions of time permitted for filing a Chapter 11 reorganization plan.
(Sec. 412) Denies a discharge in bankruptcy for a debt for a fee or assessment arising from a debtor's interest in a lot in a homeowners association for as long as the debtor retains specified interests in such lot.
(Sec. 413) Authorizes a creditor holding a consumer debt to participate in a meeting of creditors in a chapter 7 or 13 case, either alone or in conjunction with an attorney.
(Sec. 414) Redefines "disinterested person" to repeal conflict-of-interest proscriptions that disqualify the debtor's pre-bankruptcy investment banker and attendant attorney adviser from continuing advisory services as part of the debtor-in-bankruptcy proceedings.
(Sec. 418) Amends the Federal judicial code to authorize the district court or bankruptcy court to waive the Chapter 7 filing fee and other attendant fees for certain Chapter 7 debtors whom the court has determined to be unable to pay fees in installments.
(Sec. 419) Directs the Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States (Advisory Committee) to propose amended Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms directing chapter 11 debtors to disclose information relating to the value, operations, and profitability of any closely held corporation, partnership, or other entity in which the debtor holds a substantial or controlling interest.
Subtitle B: Small Business Bankruptcy Provisions - (Sec. 431) Sets forth mandatory factors for court consideration in determining whether the disclosure statement regarding a small business reorganization plan provides adequate information.
(Sec. 432) Defines a small business debtor, generally, as a person (including a debtor affiliate) with not more than $2 million in aggregate non-contingent, liquidated secured and unsecured debts as of the date of the petition or the order for relief (excluding debts owed to affiliates or insiders).
(Sec. 433) Directs the Advisory Committee to propose for adoption standardized disclosure statements and plans of reorganization for small business debtors.
(Sec. 434) Sets forth uniform national reporting requirements for small business debtors.
(Sec. 435) Directs the Advisory Committee to propose for adoption revisions to the Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms enabling small business debtors to comply with such uniform national reporting requirements.
(Sec. 436) Sets forth duties and administrative procedures in small business reorganization cases, including serial filer provisions and expanded grounds for dismissal or conversion and appointment of a trustee.
(Sec. 443) Directs the Small Business Administration to study and report to Congress on: (1) the factors that cause small businesses to become debtors in bankruptcy; and (2) how Federal bankruptcy laws can be made more efficient in assisting small businesses to retain their viability.
(Sec. 444) Revises the circumstance precluding relief from an automatic stay of an act against secured single asset real estate by a creditor whose claim is secured by an interest in such real estate. Precludes such relief where a debtor has commenced monthly payments to each such creditor that may, in the debtor's sole discretion, be made from rents or other income generated before or after the commencement of the case by or from the property. Requires such payments to be in an amount equal to the interest at the then-applicable nondefault contract interest rate (currently, at the fair market rate) on the value of the creditor's interest in the real estate.
(Sec. 445) Allows as an administrative expense, for the two-year period following either the later of the rejection date or date of actual turnover of the premises, all monetary obligations due from a nonresidential real property lease previously assumed and subsequently rejected under the requirements governing executory contracts and unexpired leases.
(Sec. 446) Requires a debtor who served as administrator of an employee benefit plan to continue to perform the obligations incumbent upon such service.
(Sec. 447) Confers responsibility upon the bankruptcy trustee to appoint members to a committee of retired employees.
Title V: Municipal Bankruptcy Provisions - (Sec. 501) Makes technical amendments to requirements for a municipal bankruptcy petition.
Title VI: Bankruptcy Data - (Sec. 601) Amends the Federal judicial code to require the clerk of each district, or a specially certified clerk of the bankruptcy court, to compile bankruptcy statistics for individual debtors with primarily consumer debts seeking relief under chapters 7, 11, and 13. Directs the Administrative Office of the United States Courts (Administrative Office) to make such statistics public and to report them annually to Congress.
(Sec. 602) Instructs the Attorney General to issue rules requiring uniform forms for: (1) final reports by trustees in cases under chapters 7, 12, and 13; and (2) periodic reports by chapter 11 debtors or trustees in possession. Prescribes report contents.
(Sec. 603) Prescribes guidelines for procedures to audit debtors.
(Sec. 604) Expresses the sense of Congress that: (1) the national policy should be that all public record data held in electronic form by bankruptcy clerks should be released in electronic form in bulk to the public subject to appropriate privacy concerns and safeguards as Congress and the Judicial Conference of the United States may determine; and (2) a bankruptcy data system should be established that employs a single set of data definitions to collect data nationwide, and that aggregates in the same electronic record all data for any particular bankruptcy case.
Title VII: Bankruptcy Tax Provisions - (Sec. 701) Amends the bankruptcy code to modify the treatment of certain tax liens.
(Sec. 702) Provides that a claim for debtor's liability for fuel tax which is filed by the base jurisdiction designated under the International Fuel Tax Agreement shall be allowed as a single claim.
(Sec. 703) Requires the clerk of each district to maintain a listing under which a governmental entity responsible for the collection of taxes within such district may designate an address for service of requests and describe where further information for filing such requests may be found.
(Sec. 704) Prescribes the rate of interest to be paid on mandatory interest payments on tax claims.
(Sec. 705) Revises the specifications for income tax claims receiving eighth priority (allowed unsecured claims of governmental units). Provides for tolling of the time periods covering such tax claims for stays of proceedings in a prior bankruptcy case, and the pendency or effect of offers in compromise or installment agreements.
(Sec. 707) Prohibits a Chapter 13 discharge of any debt for fraudulent tax payments.
(Sec. 708) States that confirmation of a bankruptcy plan does not discharge a corporate debtor from any debt for: (1) money or credit obtained by false representation owed to a domestic governmental unit or to a person as the result of an action filed with respect to certain claims against the Federal or a State government; or (2) a tax or customs duty with respect to which the debtor made a fraudulent return or willfully attempted to evade or defeat such tax.
(Sec. 709) Limits the automatic stay of U.S. Tax Court proceedings to prepetition taxes.
(Sec. 710) Sets as a prerequisite for court confirmation of a Chapter 11 bankruptcy plan that includes tax claims, that the debtor make regular cash installment payments over a period ending not later than five years after the date of entry of the order for relief, and in a manner not less favorable than the most favored nonpriority unsecured claim provided for in the plan.
(Sec. 711) Prohibits the avoidance of statutory tax liens by certain purchasers.
(Sec. 712) Amends the Federal judicial code to require officers and agents conducting any business under court authority to pay all Federal, State, and local taxes when due in the course of the business, unless it is a property tax secured by a lien against estate property which is abandoned by the bankruptcy trustee, or payment of the tax is excused under a specific bankruptcy law. Cites circumstances in which payment of such taxes may be deferred in a case pending under chapter 7 until final distribution is made.
Entitles to administrative expense priority payment certain secured and postpetition unsecured taxes incurred by the bankruptcy estate, including ad valorem property taxes.
Declares that a governmental unit shall not be required to file a request for the payment of administrative expenses relating to a tax liability or tax penalty.
Allows a trustee to recover from property securing a claim for the payment of all ad valorem property taxes relating to such property.
(Sec. 713) Requires as a condition for payment of tardily filed priority tax claims that they be filed either before the trustee commences distribution, or ten days following the mailing to creditors of the summary of the trustee's final report, whichever is earlier (currently, before the trustee commences distribution of the estate).
(Sec. 716) Conditions court confirmation of a chapter 13 bankruptcy plan upon filing by the debtor: (1) of all prepetition tax returns; and (2) before the day on which the first meeting of the creditors is convened, of all tax returns for taxable periods ending in the four-year period that ends on the date of the filing of the petition. Directs the court to dismiss a plan or convert it to chapter 7, whichever is in the best interests of the creditors and the estate, if a chapter 13 debtor fails to comply with such time frame.
Expresses the sense of Congress that the Judicial Conference of the United States should propose for adoption amended Federal Rules of Bankruptcy Procedure pertaining to objections to tax returns and to plan confirmation.
(Sec. 717) Redefines "adequate disclosure," for Chapter 11 postpetition disclosure and solicitation purposes, to include full discussion of the potential material Federal and State tax consequences of the plan to the debtor and to a hypothetical investor that is representative of the holders of claims or interests in the case.
(Sec. 718) Denies an automatic stay (unless specified conditions are met) to the setoff of an income tax refund for a taxable period which ended before the order for relief against an income tax liability for a taxable period which also ended before the order for relief.
(Sec. 719) Revises special provisions related to the treatment of State and local taxes, including the creation of a separate taxable estate when such is done for Federal tax purposes.
(Sec. 720) Permits a taxing authority to petition the court to convert or dismiss a case if the debtor fails to timely file a tax return or obtain an extension, whichever is in the best interests of creditors and the estate.
Title VIII: Ancillary and Other Cross-Border Cases - (Sec. 801) Expands the scope of bankruptcy law to incorporate the Model Law on Cross-Border Insolvency, and to establish a statutory mechanism for: (1) dealing with cases of cross-border insolvency; and (2) cooperation between U.S. courts, trustees, and debtors and their foreign counterparts. Prescribes guidelines for: (1) access of foreign representatives and creditors to Federal and State courts; (2) recognition of a foreign proceeding and relief; (3) cooperation and direct communication with foreign courts and representatives; and (4) concurrent proceedings and the coordination of foreign and domestic proceedings.
Title IX: Financial Contract Provisions - (Sec. 901) Amends the Federal Deposit Insurance Act (FDIA) to redefine specified contracts, agreements, and transfers entered into with an insolvent insured depository institution before a conservator or receiver was appointed.
States that no person shall be stayed or prohibited from exercising any right to cause the acceleration of any qualified financial contract with an insured depository institution which arises upon the appointment of the Federal Deposit Insurance Corporation (FDIC) as receiver at any time after such appointment.
(Sec. 902) Amends the FDIA and the Federal Credit Union Act to prohibit construction of any provision of law as limiting the right or power of the FDIC, or the National Credit Union Administration Board, respectively, to transfer, disaffirm, or repudiate a qualified financial contract (QFC) of a failed institution, or as authorizing any court or agency, to limit or delay such FDIC action.
Prohibits enforcement of a walkaway clause in the QFC of an insured depository institution in default (a clause that either does not create a payment obligation of a party, or extinguishes it solely because of such party's status as a nondefaulting party).
(Sec. 903) Revises guidelines governing transfers of qualified financial contracts of an insolvent institution to include: (1) transfers to a foreign bank or foreign financial institution (including its branch or agency); and (2) transfers of contracts subject to the rules of a clearing organization. Defines financial institution to include a broker or dealer, a depository institution, a futures commission merchant, or any other institution as determined by FDIC regulation.
Suspends certain termination rights of counterparties to a qualified financial contract with an insolvent insured depository institution until after the receiver's appointment, or after receipt of notice that the contract has been transferred.
Declares that none of the following institutions shall be considered a financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding: (1) a bridge bank; or (2) an FDIC-organized depository institution for which a conservator is appointed either immediately upon organization, or at the time of a purchase and assumption transaction between such institution and the FDIC as receiver for a depository institution in default (thereby permitting the FDIC to transfer QFCs to such entities).
(Sec. 904) Prescribes guidelines for: (1) the disaffirmance or repudiation of qualified financial contracts by the conservator or receiver for a failed depository institution; and (2) the treatment of a master agreement as a single agreement and as a single qualified financial contract.
(Sec. 906) Amends the Federal Deposit Insurance Corporation Improvement Act of 1991 to make conforming amendments with respect to: (1) bilateral netting contracts; (2) security agreements; (3) clearing organization netting contracts; (4) contracts with uninsured national banks; and (5) contracts with uninsured Federal branches or agencies.
(Sec. 907) Amends the Federal Bankruptcy Code to reflect the changes made by this Act and to: (1) deny an automatic stay to set-offs under certain swap agreements and netting agreements; and (2) restrict the avoidance power of the bankruptcy trustee regarding certain master netting agreement transfers to those transfers that are fraudulent in nature. Defines financial participants.
Sets forth statutory guidelines for: (1) the termination or acceleration of designated contracts and agreements; and (2) commodity broker and stockbroker liquidation with respect to the priority of unsecured claims, or customer property or distributions.
(Sec. 908) Amends the FDIA to authorize the FDIC to prescribe more detailed recordkeeping requirements for QFCs including market valuations, only if an insured depository institution in troubled condition.
(Sec. 909) Exempts specified collateralization agreements from the contemporaneous execution requirement that deems invalid certain agreements against FDIC interests in certain asset acquisitions.
(Sec. 910) Amends Federal bankruptcy law to specify the timing for the measure of damages in connection with: (1) rejection by the bankruptcy trustee of designated contracts and agreements relating to executory contracts and unexpired leases; or (2) the liquidation, acceleration, or termination of such contracts and agreements.
(Sec. 911) Amends the Securities Investor Protection Act of 1970 to provide that neither the filing of a protective decree by the Securities Investor Protection Corporation, nor any court protective order, shall operate as a stay of a creditor's contractual rights to liquidate, terminate, or accelerate designated contracts and agreements. Allows such application, order, or decree, however, to operate as a stay of foreclosure on securities collateral pledged, sold, or lent by the debtor.
Title X: Protection of Family Farmers and Family Fishermen - (Sec. 1001) Amends the Federal bankruptcy code to reenact Chapter 12, Adjustment of Debts of a Family Farmer with Regular Annual Income, as amended by this Act (thereby reinstating permanently family farmer bankruptcy relief).
(Sec. 1002) Provides for triennial adjustments of the debt limit for family farmers.
(Sec. 1003) Cites circumstances under which the claim of a governmental unit that arises from the disposition of a farm asset used in the debtor's farming operation shall be treated as an unsecured claim not entitled to priority.
(Sec. 1004) Increases from $1.5 million to $3.237 million the maximum aggregate debt that qualifies an individual, or individual and spouse engaged in a farming operation as family farmers for debt adjustment purposes. Reduces from 80 percent to 50 percent the minimum percentage of aggregate, noncontingent, liquidated debts arising out of such a farming operation.
(Sec. 1005) Repeals the requirement that the family farmer and spouse receive over 50 percent of income from farming operations in the year before a bankruptcy petition is filed. Allows such income requirement to be met during either the taxable year preceding the year in which the bankruptcy petition is filed, or the taxable year in the second and third taxable years preceding the bankruptcy petition.
(Sec. 1006) Allows the court to confirm a family farmer bankruptcy plan, notwithstanding the objection of the trustee or holder of an allowed unsecured claim, if the value of the property to be distributed under the plan in a specified period is not less than the debtor's projected disposable income for such period.
Prohibits any post-confirmation modification of a bankruptcy plan that would increase the amount of payments that were due before such modification. Provides that, unless the debtor proposes the modification, a modified plan may not: (1) require payments to unsecured creditors in any particular month greater than the debtor's disposable income for that month based on an increase in the debtor's disposable income; or (2) if the modification takes place in the plan's last year, require any payments that would leave the debtor with insufficient funds after plan completion to carry on the farming operation.
(Sec. 1007) Extends Chapter 12 coverage to family fishermen.
Title XI: Health Care and Employee Benefits - (Sec. 1102) Prescribes guidelines for disposal of the patient records of a health care business (not including a health maintenance organization) that commences a proceeding for debtor relief and the trustee does not have sufficient funds to pay for the storage of patient records as required by law.
(Sec. 1103) Allows as an administrative expense claim the costs of closing a health care business, including disposal of patient records and transfer of patients.
(Sec. 1104) Requires the bankruptcy court to appoint an ombudsman to represent the interests of the patients of a health care business within 30 days after commencement of a case under chapters 7 (Liquidation), 9 (Adjustment of Debts of a Municipality), or 11 (Reorganization), unless the court finds that this is not necessary for the protection of patients under the specific facts of the case.
(Sec. 1105) Requires the bankruptcy trustee to use all reasonable and best efforts to transfer patients from the health care business in the process of being closed to an appropriate substitute.
(Sec. 1106) Denies an automatic stay to a debtor's exclusion by the Secretary of Health and Human Services from participation in the Medicare program or any other Federal health care program (thus precluding the debtor's continuation or reinstatement in such a program).
Title XII: Technical Amendments - (Sec. 1201) Makes technical corrections to Federal bankruptcy, judicial, and criminal law.
Redefines single asset real estate to exclude family farms and to repeal the $4 million ceiling on the amount of noncontingent, liquidated secured debts on such property. Defines the term "transfer" to include: (1) creation of a lien; (2) retention of title as a security interest; (3) foreclosure of the debtor's equity of redemption; and (4) every mode of disposing of property or parting with an interest in property.
(Sec. 1202) Requires triennial adjustment of the $5,000 value of certain implements, professional books, tools of the trade, farm animals, and crops which a debtor may exempt from the property of the estate (protecting them from creditors' liens).
(Sec. 1206) Provides that a trustee or a creditors' and equity security holders' committee may pay a professional person they employ on a fixed or percentage fee basis, as well as on other bases already permitted.
(Sec. 1208) Excludes from compensable professional services any expenses incurred for an attorney or an accountant by an individual member of a creditors' and equity security holders' committee.
(Sec. 1209) Declares nondischargeable in bankruptcy a debt for death or personal injury caused by the debtor's operation of a vessel or aircraft while intoxicated from alcohol, a drug, or other substance.
(Sec. 1213) Revises guidelines governing preferences to provide that, if the trustee avoids a security interest given between 90 days and one year before the date of the filing of the petition, by the debtor to a non-insider for the benefit of a creditor that is an insider, then such security interest shall be considered to be avoided only with respect to the insider creditor.
(Sec. 1221) Permits the bankruptcy trustee to sell, use, or lease property in accordance with nonbankruptcy law governing the transfer of property by nonprofit charitable corporations, if doing so is not inconsistent with certain relief granted under the automatic stay.
(Sec. 1222) Extends from 20 to 30 days the length of time after a debtor receives possession of property for perfection of a security interest in such property created by a transfer which the trustee may not avoid.
(Sec. 1223) Bankruptcy Judgeship Act of 2003 - Amends the Federal judicial code to require appointments for additional temporary bankruptcy judgeships in California, Delaware, Florida, Georgia, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Puerto Rico, Tennessee, Virginia, South Carolina, and Nevada.
Provides that the first vacancy occurring in such district five years or more after a judge is appointed under this Act shall not be filled. Applies such prohibition specifically to certain vacancies in the Central District of California, the Southern District of Florida, and the districts of Delaware and Maryland.
Extends temporary bankruptcy judgeship positions authorized for the northern district of Alabama, and the districts of Delaware and Puerto Rico, and the eastern district of Tennessee.
(Sec. 1224) Prescribes compensation guidelines for the services and expenses of a trustee who has petitioned the court to convert or dismiss a chapter 7 case.
(Sec. 1225) Denies an automatic stay with respect to creation or perfection of a statutory lien for a special tax or special assessment on real property whether or not ad valorem, if the tax or assessment comes due after the filing of a petition for debtor relief.
(Sec. 1226) Requires the Director of the Federal Judicial Center to develop materials and conduct training useful to courts in implementing this Act.
(Sec. 1227) Cites conditions under which the rights of the trustee are subject to the right of the seller to reclaim goods received by the insolvent debtor within 45 days before commencement of the case. Sets a time-frame for seller's written demand for reclamation.
(Sec. 1228) Prohibits a court from granting a discharge in a chapter 7 case, or from confirming a reorganization plan in a chapter 11 or 13 case, unless requested tax documents have been provided to the court.
(Sec. 1229) Expresses the sense of Congress that: (1) consumer credit may sometimes be offered indiscriminately without lender action to ensure consumer repayment capacity, and in a manner which may encourage additional debt accumulation; and (2) resulting consumer debt may increasingly be a major contributing factor to consumer insolvency.
Instructs the Board of Governors of the Federal Reserve System to study indiscriminate solicitation and extension of credit by the credit industry. Authorizes the Board to: (1) promulgate regulations requiring additional disclosures to consumers; and (2) take measures to ensure responsible industrywide practices and to prevent resulting consumer debt and insolvency.
(Sec. 1230) Excludes from property of the estate in bankruptcy certain tangible personal property (other than securities or written or printed evidences of indebtedness or title) pledged or sold by the debtor as collateral for a loan or money advance, where: (1) the pledgee or transferee possesses such property; (2) the debtor has no obligation to repay or redeem; and (3) neither the debtor nor the trustee has exercised any right to redeem in a timely manner.
(Sec. 1231) Amends the Federal judicial code to authorize private trustees and standing trustees, after exhausting administrative remedies, to obtain judicial review in a U.S. district court of: (1) any suspension or termination; or (2) denial of a claim of actual, necessary expenses.
(Sec. 1233) Prescribes procedural guidelines for a court of appeals to exercise appellate jurisdiction over a bankruptcy order or decree following the submission of specified certifications.
(Sec. 1235) Declares debts incurred to pay fines or penalties imposed under Federal election law nondischargeable in bankruptcy.
Title XIII: Consumer Credit Disclosure - (Sec. 1301) Amends the Truth in Lending Act to require: (1) specified minimum payment warnings applicable to an open end credit plan upon which finance charges are accruing; and (2) disclosure of a toll-free number to call for an estimate of the time required to repay the balance making only minimum payments. Requires the Federal Trade Commission (FTC) to establish a toll-free number for the same purpose in the case of a creditor with respect to which the FTC is enforcing compliance with such Act. Directs the Board of Governors of the Federal Reserve System (the Board) to promulgate implementing regulations.
Authorizes the Board to study and report to Congress on the types of information available to potential borrowers from consumer credit lending institutions regarding factors qualifying such borrowers for credit, repayment requirements, and the consequences of default.
(Sec. 1302) Mandates additional disclosures for credit extensions secured by a dwelling that exceed such dwelling's fair market value, including a statement that the interest on the excess portion of such extension is not tax deductible for Federal income tax purposes.
(Sec. 1303) Requires specified additional disclosures for: (1) introductory rates and temporary annual percentage rates of interest; (2) Internet-based credit card solicitations; and (3) late payment deadlines and penalties.
(Sec. 1306) Prohibits a creditor from terminating an open end consumer credit account before its expiration date solely because finance charges have not been incurred on such account.
(Sec. 1307) Authorizes the Board to study and report to Congress on certain consumer protections limiting consumer liability for unauthorized use of a debit card or similar access device.
(Sec. 1308) Instructs the Board to study and report to Congress on the impact that credit extensions to dependent students enrolled in postsecondary educational institutions have upon the rate of Federal bankruptcy cases.
(Sec. 1309) Instructs the Board to promulgate regulations to provide guidance regarding the meaning of the term "clear and conspicuous" as used in the Truth in Lending Act.
Title XIV: General Effective Date; Application of Amendments - Sets forth the effective date of this Act and the application of its amendments.
Title XV: Preventing Corporate Bankruptcy Abuse - (Sec. 1501) Raises the ceiling for employee wages and benefits entitled to third order priority from $4,000 to $10,000. Extends the look-back period for such priority wages and benefits from 90 days to 180 days prior to bankruptcy (or cessation of debtor's business).
(Sec. 1502) Extends from one year to two years the look-back period during which the bankruptcy trustee may avoid fraudulent transfers and obligations incurred by either a debtor or partnership debtor (including any transfer to or for the benefit of an insider, or obligation incurred to or for the benefit of an insider, under an employment contract and not in the ordinary course of business).
(Sec. 1503) Instructs the court, upon motion of a party in interest, to order reinstatement of retiree benefits if the debtor modified them during the 180-day period prior to petition filing, and was insolvent on the date of modification (unless the court finds that the balance of the equities clearly favors such modification).
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 975 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 975
To amend title 11 of the United States Code, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 27, 2003
Mr. Sensenbrenner (for himself, Mr. Boucher, Mr. Cannon, Mr. Andrews,
Mr. Bachus, Mr. Castle, Mr. Chabot, Mr. Coble, Mr. Cramer, Mr. Crowley,
Mr. Dooley of California, Mr. Dreier, Mr. English, Mr. Feeney, Mr.
Flake, Mr. Foley, Mr. Goodlatte, Ms. Hart, Mr. Issa, Mr. Keller, Mr.
Kennedy of Minnesota, Mr. King of Iowa, Mr. Lucas of Kentucky, Mr.
Menendez, Mrs. Myrick, Mr. Ney, Mr. Oxley, Mr. Pence, Mr. Pitts, Ms.
Pryce of Ohio, Mr. Rothman, Mr. Royce, Mr. Ryun of Kansas, Mr.
Sessions, Mr. Smith of Washington, Mr. Smith of Michigan, Mr. Tauzin,
Mr. Terry, Mr. Tiberi, Mr. Toomey, Mr. Frost, Mrs. Biggert, Mr.
Reynolds, Mrs. Northup, Mr. LaTourette, Mrs. Tauscher, Ms. Eddie
Bernice Johnson of Texas, Mr. Gibbons, Mr. Blunt, Mr. Simpson, and Mr.
Kingston) introduced the following bill; which was referred to the
Committee on the Judiciary, and in addition to the Committee on
Financial Services, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend title 11 of the United States Code, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bankruptcy Abuse
Prevention and Consumer Protection Act of 2003''.
(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 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 for care and support of an elderly,
chronically ill, or disabled household member or member of the debtor's
immediate family (including parents, grandparents, siblings, children,
and grandchildren of the debtor, the dependents of the debtor, and the
spouse of the debtor in a joint case who is not a dependent) and who is
unable to pay for such reasonable and necessary expenses.
``(III) In addition, for a debtor eligible for chapter 13, the
debtor's monthly expenses may include the actual administrative
expenses of administering a chapter 13 plan for the district in which
the debtor resides, up to an amount of 10 percent of the projected plan
payments, as determined under schedules issued by the Executive Office
for United States Trustees.
``(IV) In addition, the debtor's monthly expenses may include the
actual expenses for each dependent child less than 18 years of age, not
to exceed $1,500 per year per child, to attend a private or public
elementary or secondary school if the debtor provides documentation of
such expenses and a detailed explanation of why such expenses are
reasonable and necessary, and why such expenses are not already
accounted for in the National Standards, Local Standards, or Other
Necessary Expenses referred to in subclause (I)
``(V) In addition, the debtor's monthly expenses may include an
allowance for housing and utilities, in excess of the allowance
specified by the Local Standards for housing and utilities issued by
the Internal Revenue Service, based on the actual expenses for home
energy costs if the debtor provides documentation of such actual
expenses and demonstrates that such actual expenses are reasonable and
necessary.
``(iii) The debtor's average monthly payments on account of secured
debts shall be calculated as the sum of--
``(I) the total of all amounts scheduled as contractually
due to secured creditors in each month of the 60 months
following the date of the petition; and
``(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, whichever is longer. To rescind or cancel, you must notify the
creditor that the agreement is canceled.
```What are your obligations if you reaffirm the debt? A reaffirmed
debt remains your personal legal obligation. It is not discharged in
your bankruptcy. That means that if you default on your reaffirmed debt
after your bankruptcy is over, your creditor may be able to take your
property or your wages. Otherwise, your obligations will be determined
by the reaffirmation agreement which may have changed the terms of the
original agreement. For example, if you are reaffirming an open end
credit agreement, the creditor may be permitted by that agreement or
applicable law to change the terms of the agreement in the future under
certain conditions.
```Are you required to enter into a reaffirmation agreement by any
law? No, you are not required to reaffirm a debt by any law. Only agree
to reaffirm a debt if it is in your best interest. Be sure you can
afford the payments you agree to make.
```What if your creditor has a security interest or lien? Your
bankruptcy discharge does not eliminate any lien on your property. A
``lien'' is often referred to as a security interest, deed of trust,
mortgage or security deed. Even if you do not reaffirm and your
personal liability on the debt is discharged, because of the lien your
creditor may still have the right to take the security property if you
do not pay the debt or default on it. If the lien is on an item of
personal property that is exempt under your State's law or that the
trustee has abandoned, you may be able to redeem the item rather than
reaffirm the debt. To redeem, you make a single payment to the creditor
equal to the current value of the security property, as agreed by the
parties or determined by the court.'.
``(ii) In the case of a reaffirmation under subsection
(m)(2), numbered paragraph 6 in the disclosures required by
clause (i) of this subparagraph shall read as follows:
```6. If you were represented by an attorney during the
negotiation of the reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court.'.
``(4) The form of reaffirmation agreement required under this
paragraph shall consist of the following:
```Part B: Reaffirmation Agreement. I/we agree to reaffirm the
obligations arising under the credit agreement described below.
```Brief description of credit agreement:
```Description of any changes to the credit agreement made as part
of this reaffirmation agreement:
```Signature: Date:
```Borrower:
```Co-borrower, if also reaffirming:
```Accepted by creditor:
```Date of creditor acceptance:'.
``(5)(A) The declaration shall consist of the following:
```Part C: Certification by Debtor's Attorney (If Any).
```I hereby certify that (1) this agreement represents a fully
informed and voluntary agreement by the debtor(s); (2) this agreement
does not impose an undue hardship on the debtor or any dependent of the
debtor; and (3) I have fully advised the debtor of the legal effect and
consequences of this agreement and any default under this agreement.
```Signature of Debtor's Attorney: Date:'.
``(B) In the case of reaffirmations in which a presumption of undue
hardship has been established, the certification shall state that in
the opinion of the attorney, the debtor is able to make the payment.
``(C) In the case of a reaffirmation agreement under subsection
(m)(2), subparagraph (B) is not applicable.
``(6)(A) The statement in support of reaffirmation agreement, which
the debtor shall sign and date prior to filing with the court, shall
consist of the following:
```Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
```1. I believe this agreement will not impose an undue hardship on
my dependents or me. I can afford to make the payments on the
reaffirmed debt because my monthly income (take home pay plus any other
income received) is $______, and my actual current monthly expenses
including monthly payments on post-bankruptcy debt and other
reaffirmation agreements total $______, leaving $______ to make the
required payments on this reaffirmed debt. I understand that if my
income less my monthly expenses does not leave enough to make the
payments, this reaffirmation agreement is presumed to be an undue
hardship on me and must be reviewed by the court. However, this
presumption may be overcome if I explain to the satisfaction of the
court how I can afford to make the payments here: ______.
```2. I received a copy of the Reaffirmation Disclosure Statement
in Part A and a completed and signed reaffirmation agreement.'.
``(B) Where the debtor is represented by 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 section
402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal
Revenue Code of 1986, and earnings thereon, shall not exceed $1,000,000
in a case filed by a debtor who is an individual, except that such
amount may be increased if the interests of justice so require.''.
(2) Adjustment of dollar amounts.--Paragraphs (1) and (2)
of section 104(b) of title 11, United States Code, are amended
by inserting ``522(n),'' after ``522(d),''.
SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.
(a) Exclusions.--Section 541 of title 11, United States Code, is
amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``or'' at the
end;
(B) by redesignating paragraph (5) as paragraph
(9); and
(C) by inserting after paragraph (4) the following:
``(5) funds placed in an education individual retirement
account (as defined in section 530(b)(1) of the Internal
Revenue Code of 1986) not later than 365 days before the date
of 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 orders
the debtor to deliver any collateral in the debtor's possession to the
trustee. If the court does not so determine, the stay provided by
subsection (a) shall terminate upon the conclusion of the proceeding on
the motion.''; and
(2) in section 521, 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 2003,
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 2003, 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. 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 2003, 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 2003;''; 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 2003.
``(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 taxed to or claimed by the debtor. The preceding
sentence shall not apply if the case is dismissed. The trustee shall
make tax returns of income required under any such State or local law.
``(b) Whenever the Internal Revenue Code of 1986 provides that no
separate taxable estate shall be created in a case concerning a debtor
under this title, and the income, gain, loss, deductions, and credits
of an estate shall be taxed to or claimed by the debtor, such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the
debtor under a State or local law imposing a tax on or measured by
income and may not be taxed to or claimed by the estate. The trustee
shall make such tax returns of income of corporations and of
partnerships as are required under any State or local law, but with
respect to partnerships, shall make said returns only to the extent
such returns are also required to be made under such Code. The estate
shall be liable for any tax imposed on such corporation or partnership,
but not for any tax imposed on partners or members.
``(c) With respect to a partnership or any entity treated as a
partnership under a State or local law imposing a tax on or measured by
income that is a debtor in a case under this title, any gain or loss
resulting from a distribution of property from such partnership, or any
distributive share of any income, gain, loss, deduction, or credit of a
partner or member that is distributed, or considered distributed, from
such partnership, after the commencement of the case, is gain, loss,
income, deduction, or credit, as the case may be, of the partner or
member, and if such partner or member is a debtor in a case under this
title, shall be subject to tax in accordance with subsection (a) or
(b).
``(d) For purposes of any State or local law imposing a tax on or
measured by income, the taxable period of a debtor in a case under this
title shall terminate only if and to the extent that the taxable period
of such debtor terminates under the Internal Revenue Code of 1986.
``(e) The estate in any case described in subsection (a) shall use
the same accounting method as the debtor used immediately before the
commencement of the case, if such method of accounting complies with
applicable nonbankruptcy tax law.
``(f) For purposes of any State or local law imposing a tax on or
measured by income, a transfer of property from the debtor to the
estate or from the estate to the debtor shall not be treated as a
disposition for purposes of any provision assigning tax consequences to
a disposition, except to the extent that such transfer is treated as a
disposition under the Internal Revenue Code of 1986.
``(g) Whenever a tax is imposed pursuant to a State or local law
imposing a tax on or measured by income pursuant to subsection (a) or
(b), such tax shall be imposed at rates generally applicable to the
same types of entities under such State or local law.
``(h) The trustee shall withhold from any payment of claims for
wages, salaries, commissions, dividends, interest, or other payments,
or collect, any amount required to be withheld or collected under
applicable State or local tax law, and shall pay such withheld or
collected amount to the appropriate governmental unit at the time and
in the manner required by such tax law, and with the same priority as
the claim from which such amount was withheld or collected was paid.
``(i)(1) To the extent that any State or local law imposing a tax
on or measured by income provides for the carryover of any tax
attribute from one taxable period to a subsequent taxable period, the
estate shall succeed to such tax attribute in any case in which such
estate is subject to tax under subsection (a).
``(2) After such a case is closed or dismissed, the debtor shall
succeed to any tax attribute to which the estate succeeded under
paragraph (1) to the extent consistent with the Internal Revenue Code
of 1986.
``(3) The estate may carry back any loss or tax attribute to a
taxable period of the debtor that ended before the order for relief
under this title to the extent that--
``(A) applicable State or local tax law provides for a
carryback in the case of the debtor; and
``(B) the same or a similar tax attribute may be carried
back by the estate to such a taxable period of the debtor under
the Internal Revenue Code of 1986.
``(j)(1) For purposes of any State or local law imposing a tax on
or measured by income, income is not realized by the estate, the
debtor, or a successor to the debtor by reason of discharge of
indebtedness in a case under this title, except to the extent, if any,
that such income is subject to tax under the Internal Revenue Code of
1986.
``(2) Whenever the Internal Revenue Code of 1986 provides that the
amount excluded from gross income in respect of the discharge of
indebtedness in a case under this title shall be applied to reduce the
tax attributes of the debtor or the estate, a similar reduction shall
be made under any State or local law imposing a tax on or measured by
income to the extent such State or local law recognizes such
attributes. Such State or local law may also provide for the reduction
of other attributes to the extent that the full amount of income from
the discharge of indebtedness has not been applied.
``(k)(1) Except as provided in this section and section 505, the
time and manner of filing tax returns and the items of income, gain,
loss, deduction, and credit of any taxpayer shall be determined under
applicable nonbankruptcy law.
``(2) For Federal tax purposes, the provisions of this section are
subject to the Internal Revenue Code of 1986 and other applicable
Federal nonbankruptcy law.''.
(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, the central
government of a member of the Organization for
Economic Cooperation and Development (as
determined by regulation or order adopted by
the appropriate Federal banking authority).''.
(f) Definition of Swap Agreement.--Section 11(e)(8)(D)(vi) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended
to read as follows:
``(vi) Swap agreement.--The term `swap
agreement' means--
``(I) any agreement, including the
terms and conditions incorporated by
reference in any such agreement, which
is an interest rate swap, option,
future, or forward agreement, including
a rate floor, rate cap, rate collar,
cross-currency rate swap, and basis
swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other
foreign exchange or precious metals
agreement; a currency swap, option,
future, or forward agreement; an equity
index or equity swap, option, future,
or forward agreement; a debt index or
debt swap, option, future, or forward
agreement; a 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 Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10))
is amended--
(1) by redesignating subparagraph (B) as subparagraph (D);
and
(2) by inserting after subparagraph (A) the following new
subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is a
party to a qualified financial contract with an
insured depository institution may not exercise
any right that such person has to terminate,
liquidate, or net such contract under paragraph
(8)(A) of this subsection or section 403 or 404
of the Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason of or
incidental to the appointment of a receiver for
the depository institution (or the insolvency
or financial condition of the depository
institution for which the receiver has been
appointed)--
``(I) until 5:00 p.m. (eastern
time) on the business day following the
date of the appointment of the
receiver; or
``(II) after the person has
received notice that the contract has
been transferred pursuant to paragraph
(9)(A).
``(ii) Conservatorship.--A person who is a
party to a qualified financial contract with an
insured depository institution may not exercise
any right that such person has to terminate,
liquidate, or net such contract under paragraph
(8)(E) of this subsection or 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 with which such clearing
organization has a netting contract'';
(4) by amending paragraph (14)(A)(i) to read as follows:
``(i) means a contract or agreement between
2 or more financial institutions, clearing
organizations, or members that provides for
netting present or future payment obligations
or payment entitlements (including liquidation
or close out values relating to such
obligations or entitlements) among the parties
to the agreement; and''; and
(5) by adding at the end the following new paragraph:
``(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 1201''.
Fisherman with Regular Annual
Income.
(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 and 321, 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 2003''.
(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 a typical 5% minimum monthly payment on a balance of
$300 at an interest rate of 17% would take 24 months to repay
the balance in full. For an estimate of the time it would take
to repay your balance, making only minimum monthly payments,
call this toll-free number: ____________.' (the blank space to
be filled in by the creditor).
``(C) Notwithstanding subparagraphs (A) and (B), in the
case of a creditor with respect to which compliance with this
title is enforced by the Federal Trade Commission, the
following statement, in a prominent location on the front of
the billing statement, disclosed clearly and conspicuously:
`Minimum Payment Warning: Making only the required minimum
payment will increase the interest you pay and the time it
takes to repay your balance. For example, making only the
typical 5% minimum monthly payment on a balance of $300 at an
interest rate of 17% would take 24 months to repay the balance
in full. For an estimate of the time it would take to repay
your balance, making only minimum monthly payments, call the
Federal Trade Commission at this toll-free number:
____________.' (the blank space to be filled in by the
creditor). A creditor who is subject to this subparagraph shall
not be subject to subparagraph (A) or (B).
``(D) Notwithstanding subparagraph (A), (B), or (C), in
complying with any such subparagraph, a creditor may substitute
an example based on an interest rate that is greater than 17
percent. Any creditor that is subject to subparagraph (B) may
elect to provide the disclosure required under subparagraph (A)
in lieu of the disclosure required under subparagraph (B).
``(E) The Board shall, by rule, periodically recalculate,
as necessary, the interest rate and repayment period under
subparagraphs (A), (B), and (C).
``(F)(i) The toll-free telephone number disclosed by a
creditor or the Federal Trade Commission under subparagraph
(A), (B), or (G), as appropriate, may be a toll-free telephone
number established and maintained by the creditor or the
Federal Trade Commission, as appropriate, or may be a toll-free
telephone number established and maintained by a third party
for use by the creditor or multiple creditors or the Federal
Trade Commission, as appropriate. The toll-free telephone
number may connect consumers to an automated device through
which consumers may obtain information described in
subparagraph (A), (B), or (C), by inputting information using a
touch-tone telephone or similar device, if consumers whose
telephones are not equipped to use such automated device are
provided the opportunity to be connected to an individual from
whom the information described in subparagraph (A), (B), or
(C), as applicable, may be obtained. A person that receives a
request for information described in subparagraph (A), (B), or
(C) from an obligor through the toll-free telephone number
disclosed under subparagraph (A), (B), or (C), as applicable,
shall disclose in response to such request only the information
set forth in the table promulgated by the Board under
subparagraph (H)(i).
``(ii)(I) The Board shall establish and maintain for a
period not to exceed 24 months following the effective date of
the Bankruptcy Abuse Prevention and Consumer Protection Act of
2003, 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.
<all>
DEBATE - Pursuant to House Report 108-42 the Committee proceeded with 10 minutes of debate on the amendment offered by Mr. Cannon.
Pursuant to House Report 108-42 the Committee proceeded with 10 minutes of debate on the amendment offered by Mr. Sherman.
POSTPONED PROCEEDINGS - At the conclusion of the debate the Chair put the question on the amendment and announced that the noes had prevailed. Mr. Sherman objected to the voice vote. The Chair postponed further proceedings on the amendment.
UNANIMOUS CONSENT REQUEST - Mr. Guiterrez moved that the Committee do now rise and the motion was agreed to. He asked unanimous consent that when the Committee of the Whole resumes its consideration of H.R. 975 that he be permitted to offer amendment Numbered 2 printed in House Report 108-42. Agreed to without objection.
DEBATE - Pursuant to House Report 108-42 the Committee proceeded with ten minutes of debate on the amendment offered by Mr. Guiterrez.
DEBATE - Pursuant to House Report 108-42 the Committee proceeded with forty minutes on the amendment offered by Mr. Nadler.
POSTPONED PROCEEDINGS - At the conclusion of the debate the Chair put the question on the Nadler substitute amendment and announced that the noes had prevailed. Mr. Nadler objected to the voice vote. The Chair postponed further proceedings on the amendment.
The House rose from the Committee of the Whole House on the state of the Union to report H.R. 975.
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The House adopted the amendment in the nature of a substitute as agreed to by the Committee of the Whole House on the state of the Union.
The previous question was ordered without objection.
Ms. Jackson-Lee (TX) moved to recommit with instructions to Judiciary. (consideration: CR H2097-2099)
Floor summary: DEBATE - The House proceeded with ten minutes of debate on the Jackson-Lee motion to recommit with instructions. The instructions contained in the motion seek to require the Committee on the Judiciary to report the bill back to the House forthwith with an amendment adding a new section which protects alimony and child support payments from competition with new creditor entitlements.
The previous question on the motion to recommit with instructions was ordered without objection.
On motion to recommit with instructions Failed by recorded vote: 150 - 276, 1 Present (Roll no. 73). (text: CR H2097)
Roll Call #73 (House)Passed/agreed to in House: On passage Passed by the Yeas and Nays: 315 - 113, 1 Present (Roll no. 74).
Roll Call #74 (House)On passage Passed by the Yeas and Nays: 315 - 113, 1 Present (Roll no. 74).
Roll Call #74 (House)Motion to reconsider laid on the table Agreed to without objection.
The Clerk was authorized to correct section numbers, punctuation, and cross references, and to make other necessary technical and conforming corrections in the engrossment of H.R. 975.
Received in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 50.